Document:

MERRILL LYNCH MORTGAGE INVESTORS, INC.,

Depositor

 

WELLS FARGO BANK, N.A.

Master Servicer and Securities Administrator

and

HSBC BANK USA, NATIONAL ASSOCIATION,

Trustee

 

POOLING AND SERVICING AGREEMENT

 

Dated as of December 1, 2005

 

_________________________________

 

Mortgage Pass-Through Certificates, Series MLMI 2005-A10

 

 

TABLE OF CONTENTS

 

ARTICLE I

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 Mortgage Loan Purchase Agreements. 
 

	
             
 	
            Section 2.04
 	
            Substitution of Mortgage Loans
 

	
             
 	
            Section 2.05
 	
            Issuance of Certificates. 
 

	
             
 	
            Section 2.06
 	
            Representations and Warranties Concerning the Depositor
 

	
             
 	
            Section 2.07
 	
            Conveyance of the Subsequent Mortgage Loans. 
 

ARTICLE III

ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

 

	
             
 	
            Section 3.01
 	
            Master Servicer
 

	
             
 	
            Section 3.02
 	
            REMIC-Related Covenants
 

	
             
 	
            Section 3.03
 	
            Monitoring of Servicers
 

	
             
 	
            Section 3.04
 	
            Fidelity Bond
 

	
             
 	
            Section 3.05
 	
            Power to Act; Procedures
 

	
             
 	
            Section 3.06
 	
            Due-on-Sale Clauses; Assumption Agreements
 

	
             
 	
            Section 3.07
 	
            Release of Mortgage Files
 

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

	
             
 	
            Section 3.09
 	
            Standard Hazard Insurance and Flood Insurance Policies. 
 

	
             
 	
            Section 3.10
 	
            Presentment of Claims and Collection of Proceeds
 

	
             
 	
            Section 3.11
 	
            Maintenance of the Primary Mortgage Insurance Policies. 
 

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

	
             
 	
            Section 3.13
 	
            Realization Upon Defaulted Mortgage Loans
 

	
             
 	
            Section 3.14
 	
            Compensation for the Master Servicer. 
 

	
             
 	
            Section 3.15
 	
            REO Property. 
 

	
             
 	
            Section 3.16
 	
            Annual Officer's Certificate as to Compliance. 
 

	
             
 	
            Section 3.17
 	
            Annual Independent Accountant's Servicing Report
 

	
             
 	
            Section 3.18
 	
            Reports Filed with Securities and Exchange Commission. 
 

ARTICLE IV

ACCOUNTS

 

	
             
 	
            Section 4.01
 	
            Protected Accounts
 

	
             
 	
            Section 4.02
 	
            Master Servicer Collection Account
 

	
             
 	
            Section 4.03
 	
            Permitted Withdrawals and Transfers from the Master Servicer Collection Account
 

 

 

	
             
 	
            Section 4.04
 	
            Distribution Account
 

	
             
 	
            Section 4.05
 	
            Permitted Withdrawals and Transfers from the Distribution Account
 

	
             
 	
            Section 4.06
 	
            Derivative Contracts. 
 

	
             
 	
            Section 4.07
 	
            Pre-Funding Accounts. 
 

ARTICLE V

CERTIFICATES

 

	
             
 	
            Section 5.01
 	
            The Certificates. 
 

	
             
 	
            Section 5.02
 	
            Registration of Transfer and Exchange of Certificates. 
 

	
             
 	
            Section 5.03
 	
            Mutilated, Destroyed, Lost or Stolen Certificates. 
 

	
             
 	
            Section 5.04
 	
            Persons Deemed Owners. 
 

ARTICLE VI

PAYMENTS TO CERTIFICATEHOLDERS

 

	
             
 	
            Section 6.01
 	
            Distributions on the Certificates
 

	
             
 	
            Section 6.02
 	
            Allocation of Losses
 

	
             
 	
            Section 6.03
 	
            Payments
 

	
             
 	
            Section 6.04
 	
            Statements to Certificateholders
 

	
             
 	
            Section 6.05
 	
            Monthly Advances
 

	
             
 	
            Section 6.06
 	
            Compensating Interest Payments
 

	
             
 	
            Section 6.07
 	
            Distributions and Allocation of Losses on the REMIC I Regular Interests. 
 

	
             
 	
            Section 6.08
 	
            Reserve Fund. 
 

ARTICLE VII

THE MASTER SERVICER AND THE DEPOSITOR

 

	
             
 	
            Section 7.01
 	
            Liabilities of the Master Servicer
 

	
             
 	
            Section 7.02
 	
            Merger or Consolidation of the Master Servicer. 
 

	
             
 	
            Section 7.03
 	
            Indemnification of the Trustee, the Master Servicer and the Securities Administrator
 

	
             
 	
            Section 7.04
 	
            Limitations on Liability of the Master Servicer and Others
 

	
             
 	
            Section 7.05
 	
            Master Servicer Not to Resign
 

	
             
 	
            Section 7.06
 	
            Successor Master Servicer
 

	
             
 	
            Section 7.07
 	
            Sale and Assignment of Master Servicing
 

ARTICLE VIII

DEFAULT

 

	
             
 	
            Section 8.01
 	
            Events of Default
 

	
             
 	
            Section 8.02
 	
            Trustee to Act; Appointment of Successor
 

	
             
 	
            Section 8.03
 	
            Notification to Certificateholders
 

	
             
 	
            Section 8.04
 	
            Waiver of Defaults
 

	
             
 	
            Section 8.05
 	
            List of Certificateholders
 

 

 

ARTICLE IX

CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR

 

	
             
 	
            Section 9.01
 	
            Duties of Trustee
 

	
             
 	
            Section 9.02
 	
            Certain Matters Affecting the Trustee and the Securities Administrator
 

	
             
 	
            Section 9.03
 	
            Trustee and Securities Administrator Not Liable for Certificates or Mortgage Loans
 

	
             
 	
            Section 9.04
 	
            Trustee and Securities Administrator May Own Certificates
 

	
             
 	
            Section 9.05
 	
            Trustee’s and Securities Administrator's Fees and Expenses
 

	
             
 	
            Section 9.06
 	
            Eligibility Requirements for Trustee and Securities Administrator. 
 

	
             
 	
            Section 9.07
 	
            Insurance
 

	
             
 	
            Section 9.08
 	
            Resignation and Removal of the Trustee and Securities Administrator
 

	
             
 	
            Section 9.09
 	
            Successor Trustee and Successor Securities Administrator
 

	
             
 	
            Section 9.10
 	
            Merger or Consolidation of Trustee or Securities Administrator
 

	
             
 	
            Section 9.11
 	
            Appointment of Co-Trustee or Separate Trustee
 

	
             
 	
            Section 9.12
 	
            Federal Information Returns and Reports to Certificateholders; REMIC Administration
 

ARTICLE X

TERMINATION

 

	
             
 	
            Section 10.01
 	
            Termination. 
 

	
             
 	
            Section 10.02
 	
            Additional Termination Requirements
 

ARTICLE XI

MISCELLANEOUS PROVISIONS

 

	
             
 	
            Section 11.01
 	
            Intent of Parties
 

	
             
 	
            Section 11.02
 	
            Amendment
 

	
             
 	
            Section 11.03
 	
            Recordation of Agreement
 

	
             
 	
            Section 11.04
 	
            Limitation on Rights of Certificateholders
 

	
             
 	
            Section 11.05
 	
            Acts of Certificateholders
 

	
             
 	
            Section 11.06
 	
            Governing Law
 

	
             
 	
            Section 11.07
 	
            Notices
 

	
             
 	
            Section 11.08
 	
            Severability of Provisions
 

	
             
 	
            Section 11.09
 	
            Successors and Assigns
 

	
             
 	
            Section 11.10
 	
            Article and Section Headings
 

	
             
 	
            Section 11.11
 	
            Counterparts
 

	
             
 	
            Section 11.12
 	
            Notice to Rating Agencies
 

 

 

 

EXHIBITS

 

	
            Exhibit A-1
 	
            -
 	
            Form of Class A Certificates and Class M Certificates
 	
             

	
            Exhibit A-2
 	
            -
 	
            Form of Class B Certificates
 	
             

	
            Exhibit A-3
 	
            -
 	
            Form of Class R Certificates
 	
             

	
            Exhibit B
 	
            -
 	
            Mortgage Loan Schedule
 	
             

	
            Exhibit C
 	
            -
 	
            [Reserved]
 	
             

	
            Exhibit D
 	
            -
 	
            Request for Release of Documents
 	
             

	
            Exhibit E-1
 	
            -
 	
            Form of Transfer Affidavit pursuant to Section 860E(e)(4)
 	
             

	
            Exhibit E-2
 	
            -
 	
            Form of Transferor Certificate
 	
             

	
            Exhibit F-1
 	
            -
 	
            Form of Transferor Representation Letter
 	
             

	
            Exhibit F-2
 	
            -
 	
            Form of Investor Representation Letter
 	
             

	
            Exhibit F-3
 	
            -
 	
            Form of Rule 144A Letter
 	
             

	
            Exhibit G
 	
            -
 	
            Form of Custodial Agreement
 	
             

	
            Exhibit H-1 to H-4
 	
            -
 	
            Servicing Agreements
 	
             

	
            Exhibit I-1 to I-4
 	
            -
 	
            Assignment Agreements
 	
             

	
            Exhibit J-1 to J-4
 	
            -
 	
            Mortgage Loan Purchase Agreements and Sale and Assignment Agreement
 
	
            Exhibit K
 	
            -
 	
            Form Certification to be Provided by the Master Servicer with Form 10-K

			
																	

	
            Exhibit L-1 to L-3                -
 	
            Subsequent Mortgage Loan Purchase Agreements and Subsequent Sale and Assignment Agreement
 

	
            Exhibit M-1 to M-2
 	
            -
 	
            Subsequent Transfer Instruments
 

 

 

 

POOLING AND SERVICING AGREEMENT

This Pooling and Servicing Agreement is dated as of December 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 HSBC BANK USA, 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).  On or prior to any Subsequent Transfer Date, the Depositor acquired the Subsequent Mortgage Loans, which will be sold to the Trust on the related Subsequent Transfer Date.  

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, Class A-IO, Class M-1, Class M-2, Class M-3, Class M-IO-1 Interest, Class M-IO-2 Interest and Class M-IO-3 Interest (the Class M-IO-1 Interest, Class M-IO-2 Interest and Class M-IO-3 Interest is beneficially owned by the holders of the Class M-IO Certificates), 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.

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

 

	
            
REMIC I

Regular Interest

Designation

          
 	
            
REMIC I
 Pass-Through Rate
 
 	
            
Initial
 Uncertificated
 Principal Balance
 
 	
            
Latest Possible
 Maturity Date(1)
 
 
	
            A
 	
            Variable (2)
 	
             
 	
            $           745,092,400.00 
 	
            February 25, 2036
 
	
            M-1
 	
            Variable (2)
 	
             
 	
            $              16,120,000.00 
 	
            February 25, 2036
 
	
            M-2
 	
            Variable (2)
 	
             
 	
            $                  9,829,000.00 
 	
            February 25, 2036
 
	
            M-3
 	
            Variable (2)
 	
             
 	
            $                  5,111,000.00 
 	
            February 25, 2036
 
	
            B-1
 	
            Variable (2)
 	
             
 	
            $                  3,538,000.00 
 	
            February 25, 2036
 
	
            B-2
 	
            Variable (2)
 	
             
 	
            $                  1,965,000.00 
 	
            February 25, 2036
 
	
            B-3
 	
            Variable (2)
 	
             
 	
            $                  4,721,863.93 
 	
            February 25, 2036
 

_________________

 

 

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

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

The following table sets forth the designation, type, Pass-Through Rate, aggregate Initial Certificate Principal Balance, Assumed Final Distribution Date, initial ratings and certain features for each Class of Certificates comprising the interests in the Trust Fund created hereunder:

 

	
            
Class
 
 	
            
Original
 Class Certificate Balance 
 or Notional Amount
 
 	
            
Initial Pass-
 Through Rate
 
 	
            
Assumed Final
 Distribution Date(1)
 
 
	
            A
 	
            $
 	
            745,092,400.00
 	
            Variable (2)
 	
            February 25, 2036
 
	
            A-IO
 	
            $
 	
            745,092,400.00
 	
            Variable (2)
 	
            February 25, 2036
 
	
            M-1
 	
            $
 	
            16,120,000.00
 	
            Variable (2)
 	
            February 25, 2036
 
	
            M-2
 	
            $
 	
            9,829,000.00
 	
            Variable (2)
 	
            February 25, 2036
 
	
            M-3
 	
            $
 	
            5,111,000.00
 	
            Variable (2)
 	
            February 25, 2036
 
	
            M-IO
 	
            $
 	
            31,060,000.00
 	
            Variable (2)
 	
            February 25, 2036
 
	
            B-1
 	
            $
 	
            3,538,000.00
 	
            Variable (2)
 	
            February 25, 2036
 
	
            B-2
 	
            $
 	
            1,965,000.00
 	
            Variable (2)
 	
            February 25, 2036
 
	
            B-3
 	
            $
 	
            4,721,863.93
 	
            Variable (2)
 	
            February 25, 2036
 
	
            R-I
 	
             
 	
            N/A
 	
            N/A
 	
            February 25, 2036
 
	
            R-II
 	
             
 	
            N/A
 	
            N/A
 	
            February 25, 2036
 

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

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

 

 

ARTICLE I

DEFINITIONS

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

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

Account: The Master Servicer Collection Account, Distribution Account, Pre-funding Account, Interest Coverage Account and any Protected Account as the context may require.

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

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

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

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

 

 

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

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

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

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

Assignment Agreements: The Countrywide Assignment Agreement, the EverHome Assignment Agreement, the First Republic Assignment Agreement, the PHH Assignment Agreement and Wachovia Assignment Agreement which are attached hereto as Exhibit I.

Assumed Final Distribution Date: For all Classes of Certificates, February 25, 2036, 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 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 related Servicer or the Master Servicer in respect of related Prepayment Interest Shortfalls for such Distribution Date and (e) the
aggregate of any related Monthly Advances made by the related Servicer or the Master Servicer for such Distribution Date, over (ii) the sum of (a) related amounts reimbursable or payable to the related Servicer or the Master Servicer pursuant to Sections 4.03 and 4.05, (b) related Stayed Funds, (c) related amounts deposited in the Master Servicer Collection Account or the Distribution Account, as the case may be, in error and (d) any Extraordinary Trust Fund Expenses.

 

 

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

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

Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a day on which the New York Stock Exchange or Federal Reserve is closed or on which banking institutions in the jurisdiction in which the Trustee, the Master Servicer, any Servicer or the Securities Administrator are authorized or obligated by law or executive order to be closed.

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

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

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

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

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

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

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

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

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

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

 

 

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

Class B-2 Percentage: With respect to any Distribution Date, the lesser of 100% and a fraction, expressed as a percentage, the numerator of which is the aggregate Class Certificate Balance of the Class B-2 Certificates immediately prior to such Distribution Date and the denominator of which is the aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO Properties) immediately prior to such Distribution Date.

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

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

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

Class 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-IO-1 Interest:  For federal income tax purposes, the Class M-IO-1 Interest is a “regular interest” in REMIC II and is one of three regular interests beneficially owned by the Class M-IO Certificates.

 

Class M-IO-2 Interest:  For federal income tax purposes, the Class M-IO-2 Interest is a “regular interest” in REMIC II and is one of three regular interests beneficially owned by the Class M-IO Certificates.

 

Class M-IO-3 Interest:  For federal income tax purposes, the Class M-IO-3 Interest is a “regular interest” in REMIC II and is one of three regular interests beneficially owned by the Class M-IO Certificates.

 

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

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

Closing Date: December 22, 2005.

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

Commission: The Securities and Exchange Commission.

 

 

Compensating Interest Payment: As defined in Section 6.06.

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

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

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

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

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

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

Corporate Trust Office: The principal corporate trust office of the Trustee at which at any particular time its corporate trust business in connection with this Agreement shall be administered, which office at the date of the execution of this instrument is located at HSBC Bank USA, National Association, 452 Fifth Avenue, New York, New York  10018, Attention: Corporate Trust Group - Merrill Lynch Mortgage Investors, Inc., Series MLMI 2005-A10, or at such other address as the Trustee may designate from time to time by notice to the Certificateholders, the Depositor and the Master Servicer.  With respect to the Securities Administrator, Master Servicer and Certificate Registrar and the presentment of Certificates for registration of transfer, exchange or final payment, Wells Fargo Bank, N.A., Sixth Street and
Marquette Avenue, Minneapolis, Minnesota 55479, Attention: Corporate Trust/Series MLCC 2005-3, and for all other purposes, P.O. Box 98, Columbia, Maryland 21046 (or for overnight deliveries, 9062 Old Annapolis Road, Columbia, Maryland 21045), Attention: Corporate Trust/MLCC Series 2005-3.

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

Countrywide: Countrywide Home Loans Servicing LP.

Countrywide Assignment Agreement: Shall mean the Assignment, Assumption and Recognition Agreement, dated as of December 22, 2005, among Countrywide Home Loans, Inc., Countrywide, the Depositor and EMC pursuant to which the Countrywide Servicing Agreement and the rights of EMC thereunder (other than the rights to enforce the representations and 

 

warranties with respect to the Countrywide Loans) were assigned to the Depositor for the benefit of the Certificateholders.

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

Countrywide Servicing Agreement: Shall mean the Seller’s Warranties and Servicing Agreement, dated as of September 1, 2002, as amended by Amendment Number One, dated as of January 1, 2003 and Amendment Number Two, dated as of September 1, 2004 among EMC and Countrywide Home Loans Inc.

Current Interest:  With respect to each Class of Certificates and any Distribution Date will equal the amount of interest accrued during the related Interest Accrual Period on the related Class Certificate Balance immediately prior to that Distribution Date (or, in the case of the Interest Only Certificates, the related Notional Amount for that Distribution Date) at such class’s Pass-Through Rate.

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: December 1, 2005.

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

Deficient Valuation: With respect to any Mortgage Loan, a valuation of the related Mortgaged Property by a court of competent jurisdiction in an amount less than the then outstanding principal balance of the Mortgage Loan, which valuation results from a proceeding initiated under the Bankruptcy Code.

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

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

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

 

 

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

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

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

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

Disqualified Organization: Any of the following: (i) the United States, any State or political subdivision thereof, any possession of the United States, or any agency or instrumentality of any of the foregoing (other than an instrumentality which is a corporation if all of its activities are subject to tax and, except for Freddie Mac or any successor thereto, a majority of its board of directors is not selected by such governmental unit), (ii) any foreign government, any international organization, or any agency or instrumentality of any of the foregoing, (iii) any organization (other than certain farmers' cooperatives described in Section 521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on unrelated business taxable income), (iv) rural electric and telephone cooperatives
described in Section 1381(a)(2)(C) of the Code or (v) any other Person so designated by the Trustee based upon an Opinion of Counsel that the holding of an ownership interest in a Residual Certificate by such Person may cause any REMIC contained in the Trust or any Person having an ownership interest in the Residual Certificate (other than such Person) to incur a liability for any federal tax imposed under the Code that would not otherwise be imposed but for the transfer of an ownership interest in a Residual Certificate to such Person. The terms “United States,” “State” and “international organization” shall have the meanings set forth in Section 7701 of the Code or successor provisions.

Distribution Account: The trust account or accounts created and maintained pursuant to Section 4.04, which shall be denominated “HSBC Bank USA, National Association, as Trustee f/b/o holders of Merrill Lynch Mortgage Investors, Inc., Mortgage Pass-Through Certificates, Series MLMI 2005-A10 - 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 January 2006, or, if such 25th day is not a Business Day, the Business Day immediately following.

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

 

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

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

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

EMC:  EMC Mortgage Corporation, or any successor in interest.  

EMC Mortgage Loan Purchase Agreement: Shall mean the Mortgage Loan Purchase Agreement dated as of December 22, 2005, between EMC, as seller, and the Depositor, as purchaser, and all amendments thereof and supplements thereto, attached as Exhibit J-1.

EMC Servicing Agreement:  Shall mean the Servicing Agreement dated as of December 1, 2005, between the Depositor and EMC.

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.

EverHome: EverHome Mortgage Company.

 

 

EverHome Assignment Agreement: Shall mean the Assignment, Assumption and Recognition Agreement, dated as of December 22, 2005, among EverHome, the Depositor and EMC pursuant to which the EverHome Servicing Agreement and the rights of EMC thereunder were assigned to the Depositor for the benefit of the Certificateholders.

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

EverHome Servicing Agreement: Shall mean the Subservicing Agreement, dated as of August 1, 2002, between EMC and EverHome.

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

Expiration Notice: The notice to be delivered by the Master Servicer to the related Servicer and the Controlling Class Holder (pursuant to the related Servicing Agreement), stating that it has received notice from the Investor that (i) all of the Classes of Subordinate Certificates are no longer held by the Investor or an Affiliate of the Investor or (ii) the Investor has forfeited its rights set forth in the related Servicing Agreement.

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

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

FDIC: Federal Deposit Insurance Corporation or any successor thereto.

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

First Republic: First Republic Bank.

First Republic Assignment Agreement: Shall mean the Assignment, Assumption and Recognition Agreement, dated as of December 22, 2005, among KKR, the Depositor and First Republic, and acknowledged and agreed by the Master Servicer, pursuant to which the First Republic Servicing Agreement and the rights of KKR thereunder (other than the rights to enforce 

 

the representations and warranties with respect to the Countrywide Loans) were assigned to the Depositor for the benefit of the Certificateholders.

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

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

Fitch: Fitch Ratings or its successor in interest.

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

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

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.

 

 

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

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

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

Initial Subordinate Class Percentage: With respect to each Class of Subordinate Certificates, an amount which is equal to the initial aggregate Class Certificate Balance of such Class of Subordinate Certificates divided by the aggregate Stated Principal Balance of all the Mortgage Loans as of the Cut-off Date as follows:

	
             
 	
            Class M-1: 2.05%
 	
             
 	
            Class B-1: 0.45%
 	
             
 
	
             
 	
            Class M-2: 1.25%
 	
             
 	
            Class B-2: 0.25%
 	
             
 
	
             
 	
            Class M-3: 0.65%
 	
             
 	
            Class B-3: 0.60%
 	
             
 

 

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

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

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

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

Interest Determination Date:  With respect to the Certificates, (i) for any Interest Accrual Period other than the first Interest Accrual Period, the second LIBOR Business Day preceding the commencement of such Interest Accrual Period and (ii) for the first Interest Accrual Period, January 25, 2006.

Interest Only Certificates: Any of the Class A-IO Certificates and Class M-IO Certificates.

 

 

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

KKR:  KKR Financial Mortgage Corporation.

KKR Financial:  KKR Financial Corp.  

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

KKR Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement dated as of December 22, 2005, between KKR, as seller, and the Depositor, as purchaser, and all amendments thereof and supplements thereto, attached as Exhibit J-2.

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

LIBOR Certificates: Any of the Class A, Class M-1, Class M-2 or Class M-3 Certificates.

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

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

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

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

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

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

 

 

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

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

Master Servicer Collection Account: The trust account or accounts created and maintained pursuant to Section 4.02, which shall be denominated “HSBC Bank USA, National Association, as Trustee f/b/o holders of Merrill Lynch Mortgage Investors, Inc., Mortgage Pass-Through Certificates, Series MLMI 2005-A10 - Master Servicer Collection Account.”  The Master Servicer Collection Account shall be an Eligible Account.

Master Servicing Compensation: The meaning specified in Section 3.14.

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

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

MLCC: Merrill Lynch Credit Corporation.

MLCC Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement dated as of December 22, 2005, between MLCC, as seller, and the Depositor, as purchaser, and all amendments thereof and supplements thereto, attached as Exhibit J-3.

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

MLMCI: Merrill Lynch Mortgage Capital Inc.

MLMLI: Merrill Lynch Mortgage Lending Inc.

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

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

Monthly Principal: The principal portion of any Monthly Payment.

 

 

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

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

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

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

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

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

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

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

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

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

Mortgagor: The obligor on a Mortgage Note.

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

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

Net WAC Pass-Through Rate: With respect to each Class of LIBOR Certificates and any Distribution Date will be a per annum rate equal to the weighted average of the Net Mortgage 

 

Rates of the Mortgage Loans as of the first day of the month preceding the month in which such Distribution Date occurs.

Net WAC Shortfalls: With respect to each Class of LIBOR Certificates and any Distribution Date will equal the sum of:

(i)           the excess, if any, of an amount that would have been the Current Interest for such class if the Pass-Through Rate for such class were calculated without regard to Net WAC Pass-Through Rate for that Distribution Date, over the actual Current Interest for such class for such Distribution Date;

(ii)          any excess described in clause (i) above remaining unpaid from prior Distribution Dates; and

(iii)       interest for the applicable Interest Accrual Period on the amount described in clause (ii) above based on the applicable Pass-Through Rate for such class of LIBOR Certificates (determined without regard to the Net WAC Pass-Through Rate).

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

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

Notional Amount: With respect to the Class A-IO as of any Distribution Date, an amount equal to the Class Certificate Balance of the Class A Certificates.  For federal income tax purposes, however, the equivalent of the foregoing, expressed as the Uncertificated Principal Balance of REMIC I Regular Interest A.  With respect to the Class M-IO Certificates as of any Distribution Date an amount equal to the aggregate Class Certificate Balance of the Class M-1, Class M-2 and Class M-3 Certificates.  For federal income tax purposes, however, the Class M-IO Certificates will not have a Notional Amount but shall represent beneficial ownership of three regular interests in REMIC II, the Class M-IO-1 Interest, the Class M-IO-2 Interest and Class M-IO-3 interest.   For federal income tax purposes, the Notional Amount with respect to the Class M-IO-1 Interest, Class M-IO-2
Interest and Class M-IO-3 Interest shall be an amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest M-1, REMIC I Regular Interest M-2 and REMIC I Regular Interest M-3, respectively.  

 

 

 

Offered Certificate: Any Senior Certificate or Offered Subordinate Certificate.

 

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

 

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

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

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

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

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

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

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

Original Notional Amount: With respect to the Class A-IO, $745,092,400.00.  With respect to the Class M-IO, $31,060,000.00.

Original Value: The lesser of (i) the Appraised Value or (ii) the sales price of a Mortgaged Property at the time of origination of a Mortgage Loan, except in instances where 

 

either clauses (i) or (ii) is unavailable, the other may be used to determine the Original Value, or if both clauses (i) and (ii) are unavailable, Original Value may be determined from other sources reasonably acceptable to the Depositor.

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

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

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

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

(i)           For the Class A Certificates on each Distribution Date, a per annum rate equal to the lesser of (i) prior to the Optional Termination Date, One-Month LIBOR plus 0.21%, or on or after the Optional Termination Date, On-One-Month LIBOR plus 0.42% and (ii) the weighted average of the Net Mortgage Rates of the Mortgage Loans.  The Pass-Through Rate with respect to the first Interest Accrual Period is expected to be approximately 4.4083% per annum.  For federal income tax purposes, the Pass-Through Rate with respect to the Class A-IO Certificates shall be equal the excess of (i) the REMIC I Pass-Through Rate on REMIC I Regular Interest A over (ii) the Pass-Through Rate on the Class A Certificates.

(ii)          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, over the (B) the lesser of (i) prior to the Optional Termination Date, One-Month LIBOR plus 0.21% or on or after the Optional Termination Date, One-Month LIBOR plus 0.42% and (ii) the weighted average of the Net Mortgage Rates on the Mortgage Loans.  The Class A-IO Certificates will accrue interest based on a Notional Amount equal to the Class Certificate Balance of the Class A Certificates.  The Pass-Through Rate with respect to the first Interest Accrual Period is expected to be zero.  

 

 

(iii)        For each class of Class M-1, Class M-2 and Class M-3 Certificates on each Distribution Date, will be a per annum rate equal to the lesser of (i) prior to the Optional Termination Date, One-Month LIBOR plus 0.45%, 0.68% and 1.25%, respectively, and on or after the Optional Termination Date, One-Month LIBOR plus 0.675%, 1.020% and 1.875%, respectively, and (ii) the weighted average of the Net Mortgage Rates on the Mortgage Loans.  The Pass-Through Rate with respect to each of the Class M-1, Class M-2 and Class M-3 Certificates and the first interest accrual period is expected to be approximately 4.4083% per annum, respectively.  For federal income tax purposes, the Class M-IO Certificates will not have a Pass-Through Rate but will represent
beneficial ownership of three REMIC regular interests in REMIC II: the Class M-IO-1 Interest, the Class M-IO-2 Interest and the Class M-IO-3 Interest.  For federal income tax purposes, the Class M-IO-1 Interest shall have a Pass-Through Rate equal to the excess of (i) the REMIC I Pass-Through Rate on REMIC I Regular Interest M-1 over (ii) the Pass-Through Rate on the Class M-1 Certificates.  The Class M-IO-2 Interest shall have a Pass-Through Rate equal to the excess of (i) the REMIC I Pass-Through Rate on REMIC I Regular Interest M-2 over (ii) the Pass-Through Rate on the Class M-2 Certificates.  The Class M-IO-3 Interest shall have a Pass-Through Rate equal to the excess of (i) the REMIC I Pass-Through Rate on REMIC I Regular Interest M-3 over (ii) the Pass-Through Rate on the Class M-3 Certificates.

 

(iii)         For each class of Class M-IO Certificates for each Distribution Date will be a per annum rate equal to the excess, if any, of (A) the weighted average of the Net Mortgage Rates on the Mortgage Loans, over (B) the weighted average of the Pass-Through Rates of the Class M-1, Class M-2 and Class M-3 Certificates, weighted on the basis of the Class Certificate Balances thereof.  The Pass-Through Rate with respect to the Class M-IO Certificates and the first Interest Accrual Period is expected to be zero.

 

(iv)        For each class of Class B Certificates for each Distribution Date will equal the weighted average of the Net Mortgage Rates on the Mortgage Loans.  The Pass-Through Rate with respect to the first Interest Accrual Period is expected to be approximately 4.8491% per annum.

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

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

 

 

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

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

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

(ii)          (a) demand or time deposits, federal funds or bankers' acceptances issued by any depository institution or trust company incorporated under the laws of the United States of America or any state thereof (including the Trustee, the Securities Administrator or the Master Servicer or its Affiliates acting in its commercial banking capacity) and subject to supervision and examination by federal and/or state banking authorities, provided that the commercial paper and/or the short-term debt rating and/or the long-term unsecured debt obligations of such depository institution or trust company at the time of such investment or contractual commitment providing for such investment have the Applicable Credit Rating or better from each Rating Agency and (b) any other demand or
time deposit or certificate of deposit that is fully insured by the Federal Deposit Insurance Corporation;

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

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

(v)          commercial paper (including both non-interest-bearing discount obligations and interest-bearing obligations payable on demand or on a specified date not more than one year after the date of issuance thereof) having the Applicable Credit Rating or better from each Rating Agency at the time of such investment;

 

 

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

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

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

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

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

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

PHH:  PHH Mortgage Corporation.

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

PHH Assignment Agreement: Shall mean either (i) the Assignment, Assumption and Recognition Agreement, dated as of December 22, 2005, among PHH, the Depositor and MLCC, and acknowledged and agreed by the Master Servicer pursuant to which the PHH Servicing Agreement and the rights of MLCC thereunder were assigned to the Depositor for the benefit of the Certificateholders. or (ii) the Assignment, Assumption and Recognition Agreement, dated as of December 22, 2005, among PHH, the Depositor and KKR, pursuant to which the PHH Servicing Agreement and the rights of KKR thereunder were assigned to the Depositor for the benefit of the Certificateholders.

 

 

PHH Servicing Agreement: Shall mean the Mortgage Loan Flow Purchase, Sale & Servicing Agreement, dated as of March 27, 2001 among MLMCI, PHH (formerly known as Cendant Mortgage Corporation) and Bishop's Gate Residential Mortgage Trust, as assigned to either (i) MLCC pursuant to the Assignment, Assumption and Recognition Agreement, dated as of December 22, 2005 among PHH, the Depositor and MLCC or (ii) KKR pursuant to the Assignment, Assumption and Recognition Agreement, dated as of December 22, 2005 among PHH, the Depositor and KKR.

Physical Certificates: The Residual Certificates.

Pre-Funded Amount: The amount deposited by the Depositor in the Pre-Funding Account on the Closing Date for the Subsequent Mortgage Loans, which amount is, with respect to the Mortgage Loans, $150,760,227.56.

Pre-Funding Account: The account or sub-account established and maintained pursuant to Section 5.10(a) and which shall be an Eligible Account or a sub-account of an Eligible Account.

Pre-Funding Period: The period from the Closing Date until the earliest of (i) the date on which the amount on deposit in the Pre-Funding Account (exclusive of investment income) is reduced to zero or (ii) December 30, 2005.

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

Prepayment Interest Shortfall: As to any Distribution Date and any Mortgage Loan (other than a Mortgage Loan relating to an REO Property) that was the subject of (a) a Principal Prepayment in Full during the related Prepayment Period, an amount equal to the excess of one month's interest at the Net Mortgage Rate on the Stated Principal Balance of such Mortgage Loan over the amount of interest (adjusted to the Net Mortgage Rate) paid by the Mortgagor for such Prepayment Period to the date of such Principal Prepayment in Full or (b) a Curtailment during the prior calendar month, an amount equal to one month's interest at the Net Mortgage Rate on the amount of such Curtailment. The obligations of the Master Servicer in respect of any Prepayment Interest Shortfall are set forth in Section 6.06.

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

Primary Mortgage Insurance Policy: Any primary mortgage guaranty insurance policy issued in connection with a Mortgage Loan which provides compensation to a Mortgage Note holder in the event of default by the obligor under such Mortgage Note or the related Security 

 

Instrument, if any or any replacement policy therefor through the related Interest Accrual Period for such Class relating to a Distribution Date.

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

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

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

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

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

Qualified Insurer: Any insurance company duly qualified as such under the laws of the state or states in which the related Mortgaged Property or Mortgaged Properties is or are located, duly authorized and licensed in such state or states to transact the type of insurance business in which it is engaged and approved as an insurer by the Master Servicer, so long as the claims paying ability of which is acceptable to the Rating Agencies for pass-through certificates having the same rating as the Certificates rated by the Rating Agencies as of the Closing Date.

Rating Agencies: S&P and Moody’s.

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

 

are applied to reduce the Class Certificate Balance of any Class of Certificates on any Distribution Date.

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

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

Regular Certificates: Any of the Class A, Class A-IO, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 or Class B-3 Certificates and Class M Certificates (as beneficial owner of the Class M-IO-1 Interest, Class M-IO-2 Interest and Class M-IO-3 Interest, each a regular interest in REMIC II).

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

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

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

Remaining Pre-Funded Amount:  An amount equal to the Pre-Funding Amount minus the amount equal to 100% of the aggregate Scheduled Principal Balance of the Subsequent Mortgage Loans transferred to the Trust Fund during the Pre-Funding Period.

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

REMIC I: The segregated pool of assets, with respect to which a REMIC election is to be made, consisting of: (i) each Mortgage Loan (exclusive of payments of principal and interest due on or before the Cut-off Date, if any, received by the Master Servicer which shall not constitute an asset of the Trust Fund) as from time to time are subject to this Agreement and all payments under and proceeds of such Mortgage Loans (exclusive of any prepayment fees and late payment charges received on the Mortgage Loans), together with all documents included in the related Mortgage File, subject to Section 2.01; (ii) such funds or assets as from time to time are deposited in the Master Servicer Collection Account or the Distribution Account and belonging to the Trust Fund; (iii) any REO Property; (iv) the primary hazard insurance policies, if any, the Primary Mortgage
Insurance Policies, if any, and all other Insurance Policies with respect to the Mortgage Loans; and (v) the Depositor's interest in respect of the representations and warranties made by the related Seller in the Mortgage Loan Purchase Agreements as assigned to the Trustee pursuant to Section 2.04 hereof.

 

 

REMIC I Pass-Through Rate: With respect to REMIC I Regular Interests A, M-1, M-2, M-3, B-1, B-2 and B-3, 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: 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 Regular Certificates and the Class R-II Certificates, with respect to which a separate REMIC election is to be made.

REMIC II Certificates: Any of the Class A, Class A-IO, Class M-1, Class M-2, Class M-3, Class M-IO (which represents beneficial ownership of three regular interests in REMIC II, the Class M-IO-1 Interest, the Class M-IO-2 Interest and the Class M-IO-3 Interest), Class B-1, Class B-2 Class B-3 and Class R-II Certificates.

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

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

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

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

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

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

Required Reserve Fund Deposit:  With respect to the Class A-IO Certificates, an amount equal to the lesser of (i) the Current Interest for the Class A-IO Certificates for such Distribution Date and (ii) the amount required to bring the balance on deposit in the Reserve Fund up to an amount equal to the sum of (a) the aggregate Net WAC Shortfalls for the Class A Certificates for such Distribution Date remaining unpaid on that Distribution Date and (b) $10,000.  With respect to the Class M-IO Certificates, an amount equal to the lesser of (i) the Current Interest for the Class M-IO Certificates for such Distribution Date and (ii) the amount required to bring the balance on deposit in the Reserve Fund up to an amount equal to the sum of (a) the aggregate Net WAC Shortfalls for the Class M-1, Class M-2 and Class M-3 Certificates for such Distribution Date remaining
unpaid on that Distribution Date and (b) $10,000.  

 

 

Reserve Fund:  A fund created as part of the Trust Fund pursuant to Section 6.08 of this Agreement but which is not an asset of any of the REMICs.

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

Residual Certificates: Any of the Class R Certificates.

Residual Interest: The sole class of “residual interests” in a REMIC within the meaning of Section 860G(a)(2) of the Code.

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

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

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

Sale and Assignment Agreement: The Sale and Assignment Agreement dated as of December 22, 2005, between KKR Financial, as seller, and KKR, as purchaser, and all amendments thereof and supplements thereto, attached as Exhibit J-4.

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

Scheduled Principal: The principal portion of any Scheduled Payment.

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

 

 

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

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

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

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

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

	
            
Distribution Date
 
 	
            
Senior Accelerated
 Distribution Percentage
 
 
	
            January 2006 through December 2015
 	
            100%
 
	
            January 2016 through December 2016
 	
            Senior Percentage, plus 70% of the Subordinate Percentage
 
	
            January 2017 through December 2017
 	
            Senior Percentage, plus 60% of the Subordinate Percentage
 
	
            January 2018 through December 2018
 	
            Senior Percentage, plus 40% of the Subordinate Percentage
 
	
            January 2019 through December 2019
 	
            Senior Percentage, plus 20% of the Subordinate Percentage
 
	
            January 2020 and thereafter
 	
            Senior Percentage
 

 

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

 

and (2) Realized Losses on the Mortgage Loans on or prior to such Distribution Date if occurring during the eleventh, twelfth, thirteenth, fourteenth or fifteenth year (or any year thereafter) after the Closing Date are less than 10%, 15%, 20%, 25% or 30%, respectively, of the sum of the Initial Class Certificate Balances of the Class M Certificates and Class B Certificates and (ii) that for any Distribution Date on which the Senior Percentage is greater than the original Senior Percentage, the Senior Accelerated Distribution Percentage for such Distribution Date shall be 100%. Notwithstanding the foregoing, upon the reduction of the aggregate Class Certificate Balance of the Class A Certificates to zero, the Senior Accelerated Distribution Percentage will equal 0%.

In addition, on any Distribution Date prior to or including the Distribution Date occurring in January 2016, if the current weighted average of the Subordinate Percentages for the Certificates is equal to or greater than two times the initial weighted average of the Subordinate Percentages for the Certificates, and (a) the outstanding principal balance of the Mortgage Loans delinquent 60 days or more (including for this purpose any such Mortgage Loans in foreclosure or bankruptcy and such Mortgage Loans with respect to which the related Mortgaged Property has been acquired by the Trust), averaged over the last six months, as a percentage of the Subordinate Percentage for that Distribution Date times the aggregate Stated Principal Balance of the Mortgage Loans, does not exceed 50% and (b) cumulative Realized Losses on the Mortgage Loans do not exceed 20% of the initial Subordinate
Percentage times the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, then, in each case, the Senior Accelerated Distribution Percentage for such Distribution Date will equal the Senior Percentage plus 50% of the related Subordinate Percentage.

On any Distribution Date after the Distribution Date occurring in January 2016, if the current weighted average of the Subordinate Percentages for the Certificates is equal to or greater than two times the initial weighted average of the Subordinate Percentages for the Certificates, and (a) the outstanding principal balance of the Mortgage Loans delinquent 60 days or more (including for this purpose any such Mortgage Loans in foreclosure or bankruptcy and such Mortgage Loans with respect to which the related Mortgaged Property has been acquired by the Trust), averaged over the last six months, as a percentage of the Subordinate Percentage for that Distribution Date times the aggregate Stated Principal Balance of the Mortgage Loans, does not exceed 50% and (b) cumulative Realized Losses on the Mortgage Loans do not exceed 20% of the initial Subordinate Percentage times the aggregate
Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, then, in each case, the Senior Accelerated Distribution Percentage for such Distribution Date will equal the Senior Percentage.

Senior Certificates: The Class A Certificates and Class V-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 Funds remaining after the distribution of all amounts required to be 

 

distributed pursuant to subclause first and second of Section 6.01(A) and (b) the sum of the following:

(A)         the 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;

(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 related Servicing Agreement; and

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

(B)         with respect to the liquidation or other disposition of a Mortgage Loan which occurred during the related Prepayment Period, 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 related Servicer or the Master Servicer as recoveries of principal of the related Mortgage Loan pursuant to the related Servicing Agreement or this Agreement;

(C)         the 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; and

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, Countrywide, PHH, First Republic, EverHome or Wachovia, as applicable.

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

 

 

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

Servicing Agreements: The Countrywide Servicing Agreement, PHH Servicing Agreement, First Republic Servicing Agreement, EverHome Servicing Agreement and the EMC Servicing Agreement.

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

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

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

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

Startup Day: December 22, 2005.

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

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

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

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

 

 

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

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

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

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

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

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

 

 

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

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

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

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

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

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

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

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

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

Subordination: As defined in Section 6.02(c).

 

 

Subsequent Cut-off Date: With respect to the Subsequent Mortgage Loans sold to the Trust pursuant to a Subsequent Transfer Instrument, the later of (i) the first day of the month in which the related Subsequent Transfer Date occurs or (ii) the date of origination of such Mortgage Loan.

Subsequent Mortgage Loans: The Mortgage Loans which will be acquired by the Trust during the Pre-Funding Period with amounts on deposit in the Pre-Funding Account, which Mortgage Loans will be held as part of the Trust Fund.

Subsequent Mortgage Loan Purchase Agreement: Any of (i) the subsequent mortgage loan purchase agreement dated as of the Subsequent Transfer Date, between EMC, as seller, and Merrill Lynch Mortgage Investors, Inc., as purchaser, and all amendments thereof and supplements thereto, regarding the transfer of the Subsequent Mortgage Loans by EMC to Merrill Lynch Mortgage Investors, Inc., attached as Exhibit L-1, (ii) the subsequent sale and assignment agreement dated as of the Subsequent Transfer Date, between KKR Financial, as seller, and KKR, as purchaser, and all amendments thereof and supplements thereto, regarding the transfer of the Subsequent Mortgage Loans by KKR Financial to KKR, attached as Exhibit L-2, or (iii) the subsequent mortgage loan purchase agreement dated as of the Subsequent Transfer Date, between KKR, as seller, and Merrill Lynch Mortgage
Investors, Inc., as purchaser, and all amendments thereof and supplements thereto, regarding the transfer of the Subsequent Mortgage Loans by KKR to Merrill Lynch Mortgage Investors, Inc., a form of which is attached as Exhibit L-3.

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.

Subsequent Transfer Date: With respect to each Subsequent Transfer Instrument, the date on which the related Subsequent Mortgage Loans are sold to the Trust.

Subsequent Transfer Instrument: Each Subsequent Transfer Instrument, dated as of a Subsequent Transfer Date, executed by the Depositor at the written direction of the Seller, attached hereto as Exhibit M-1 and Exhibit M-2, by which Subsequent Mortgage Loans are transferred to the Trust Fund.

Substitute Mortgage Loan: With respect to any Mortgage Loan, which is tendered to the Trustee pursuant to the related Servicing Agreement, the related Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as applicable, in each case, (i) which has an Outstanding Principal Balance not greater nor materially less than the Mortgage Loan for which it is to be substituted; (ii) which has a Mortgage Interest Rate and Net Rate not less than, and not materially greater than, such Mortgage Loan; (iii) which has a maturity date not materially earlier or later than such Mortgage Loan and not later than the latest maturity date of any Mortgage Loan; (iv) which is of the same property type and occupancy type as such Mortgage Loan; (v) which has a Loan-to-Value Ratio not greater than the Loan-to-Value Ratio of such Mortgage Loan; (vi) which is current in payment
of principal and interest as of the date of substitution; (vii) as to which the payment terms do not vary in any material respect from the payment terms of the Mortgage Loan for which it is to be substituted and (viii) which has a 

 

Gross Margin, Periodic Rate Cap and Maximum Lifetime Mortgage Rate no less than those of such Mortgage Loan, has the same Index and interval between Interest Adjustment Dates as such Mortgage Loan, and a Minimum Lifetime Mortgage Rate no lower than that of such Mortgage Loan.  

 

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

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

Trust Fund:  REMIC I, REMIC II and the Reserve Fund.

Uncertificated Principal Balance:  With respect to each Uncertificated REMIC Regular Interest on any date of determination, the amount set forth in the Preliminary Statement hereto minus the sum of (x) the aggregate of all amounts previously deemed distributed with respect to such interest and applied to reduce the Uncertificated Principal Balance thereof pursuant to Section 6.01 and (y) the aggregate of all reductions in Class Certificate Balance deemed to have occurred in connection with Realized Losses that were previously deemed allocated to the Uncertificated Principal Balance of such Uncertificated REMIC Regular Interest pursuant to Section 6.07.

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

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

Uncertificated REMIC Regular Interests: Any REMIC I Regular Interests.

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(F).

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

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

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

Voting Rights: The portion of the voting rights of all of the Certificates which is allocated to any Certificate. The Voting Rights allocated among Holders of such Certificates outstanding shall be the fraction, expressed as a percentage, the numerator of which is the aggregate Class Certificate Balance of all the Certificates of such Class then outstanding and the denominator of which is the aggregate Class Certificate Balance of all the Certificates then outstanding (other than the Interest Only Certificates and Class R Certificates). 97.00% of all Voting Rights will be allocated among all holders of the Certificates (other than the Interest Only Certificates and Class R Certificates) in proportion to their then outstanding Class Certificate Balances, 1.00% and 1.00% of all Voting Rights will be allocated among the holders of the Class A-IO Certificates and
Class M-IO Certificates, respectively, and 0.5% and 0.5% 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.

 

 

Wachovia: Wachovia Mortgage Corporation.

Wachovia Assignment Agreement: Shall mean the Assignment, Assumption and Recognition Agreement, dated as of December 22, 2005, among Wachovia, the Depositor and EMC pursuant to which the Wachovia Servicing Agreement and the rights of EMC thereunder were assigned to the Depositor for the benefit of the Certificateholders.

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

Wachovia Servicing Agreement.  Shall mean the Seller’s Purchase Warranties and Servicing Agreement, dated as of July 1, 2005 among EMC and Wachovia.

	
             
  	
            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 Servicers in Protected Accounts, the
Master Servicer in the Master Servicer Collection Account and the Securities Administrator in the Distribution Account for the benefit of the Trustee on behalf of the Certificateholders, (iv) any REO Property, (v) the Required Insurance Policies and any amounts paid or payable by the insurer under any Insurance Policy (to the extent the mortgagee has a claim thereto), (vi) the Mortgage Loan Purchase Agreements to the extent provided in Subsection 2.03(a), (vii) the rights with respect to the Servicing Agreements as assigned to the Depositor on behalf of the Certificateholders by the Assignment Agreements (viii) the rights with respect to the EMC Servicing Agreement and (ix) 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 HSBC Bank USA, National Association, as Trustee for the registered holders of the Merrill Lynch Mortgage Investors, Inc., Mortgage Pass-Through Certificates, Series MLMI 2005-A10, 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: “HSBC Bank USA, National Association, as Trustee for the registered holders of the Merrill Lynch Mortgage Investors, Inc., Mortgage Pass-Through Certificates, Series MLMI 2005-A10.

 

 

(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 HSBC Bank USA, National Association, as Trustee for the registered holders of the Merrill Lynch Mortgage Investors, Inc., Mortgage Pass-Through Certificates, Series MLMI 2005-A10, without recourse,” with all prior and intervening endorsements showing a complete chain of endorsement from the originator to the Person so endorsing to the Trustee;

(ii)          the original duly executed assignment of Security Agreement to the Trustee;

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

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

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

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

	
             
  	
            (vii)
 	
            a copy of the recognition agreement;
 

 

 

 

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

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

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

 

Mortgagor under the related Mortgage. Notwithstanding the foregoing, if the Depositor fails to pay the cost of recording the assignments, such expense will be paid by the Trust Fund.

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

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

	
             
  	
            Section 2.02
 	
            Acceptance of Mortgage Loans by Trustee.
 

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

 

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

 

 

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

 

 

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

	
             
  	
            Section 2.03
 	
            Assignment of Interest in the Mortgage Loan Purchase Agreements.
 

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

(b)          If the Depositor, the Master Servicer, Securities Administrator or the Trustee discovers a breach of any of the representations and warranties set forth in the related Mortgage 

 

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

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

 

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

	
             
  	
            Section 2.05
 	
            Issuance of Certificates.
 

(a)          The Trustee acknowledges the assignment to it on behalf of the Trust Fund of the Mortgage Loans and the other assets comprising the Trust Fund and, concurrently therewith, has signed, and countersigned and delivered to the Depositor, in exchange therefor, Certificates in 

 

such authorized denominations representing such Percentage Interests as the Depositor has requested. The Trustee agrees that it will hold the Mortgage Loans and such other assets as may from time to time be delivered to it segregated on the books of the Trustee in trust for the benefit of the Certificateholders.

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

(c)          The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey in trust to the Trustee without recourse all the right, title and interest of the Depositor in and to the REMIC I Regular Interests and the other assets of REMIC II for the benefit of the holders of the REMIC II 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.

	
             
  	
            Section 2.07
 	
            Conveyance of the Subsequent Mortgage Loans.
 

(a)          Subject to the conditions set forth in paragraph (b) below, in consideration of the Securities Administrator’s delivery, on behalf of the Trustee, on the Subsequent Transfer Dates to or upon the written order of the Depositor of all or a portion of the balance of funds in the Pre-Funding Account, the Depositor shall, on such Subsequent Transfer Date, sell, transfer, assign, set over and convey without recourse to the Trust Fund (subject to the other terms and provisions of this Agreement) all its right, title and interest in and to (i) the Subsequent Mortgage Loans identified on the Mortgage Loan Schedule attached to the related Subsequent Transfer Instrument delivered by the Seller on such Subsequent Transfer Date, (ii) all interest accruing thereon on and after the Subsequent
Cut-off Date and all collections in respect of interest and principal due after the Subsequent Cut-off Date and (iii) all items with respect to such Subsequent Mortgage Loans to be delivered pursuant to Section 2.01 and the other items in the related Mortgage Files; provided, however, that the Seller reserves and retains all right, title and interest in and to principal received and interest accruing on such Subsequent Mortgage Loans prior to the related Subsequent Cut-off Date. The transfer to the Trustee for deposit in the Trust Fund by the Depositor of the Subsequent Mortgage Loans identified on the Mortgage Loan 

 

Schedule shall be absolute and is intended by the Depositor, the Seller, the Master Servicer, the Securities Administrator, the Trustee and the Certificateholders to constitute and to be treated as a sale of the Subsequent Mortgage Loans by the Depositor to the Trust. The related Mortgage File for each Subsequent Mortgage Loan shall be delivered to the Trustee or the Custodian, on behalf of the Trustee, as soon as reasonably possible prior to the related Subsequent Transfer Date.

The purchase price paid by the Trustee from amounts released from the Pre-Funding Account shall be 100% of the aggregate Scheduled Principal Balance of the Subsequent Mortgage Loans so transferred (as identified on the Mortgage Loan Schedule provided by the Depositor). This Agreement shall constitute a fixed price purchase contract in accordance with Section 860G(a)(3)(A)(ii) of the Code.

(b)          The Depositor shall transfer to the Trustee for deposit in the Trust Fund, the Subsequent Mortgage Loans, and the other property and rights related thereto as described in paragraph (a) above, and the Securities Administrator, on behalf of the Trustee, shall release funds from the Pre-Funding Account only upon the satisfaction of each of the following conditions on or prior to the related Subsequent Transfer Date:

(i)           the Depositor shall have delivered to the Trustee, with a copy to the Securities Administrator, a duly executed Subsequent Transfer Instrument, which shall include a Mortgage Loan Schedule listing the Subsequent Mortgage Loans, and the Seller shall cause to be delivered a computer file containing such Mortgage Loan Schedule to the Trustee, the Securities Administrator and the Master Servicer at least two Business Days prior to the related Subsequent Transfer Date;

(ii)          the Depositor shall have furnished to the Master Servicer, no later than three Business Days prior to the related Subsequent Transfer Date, (x) if the servicer or servicers of such Subsequent Mortgage Loans are existing Servicers, then a written acknowledgement of each such Servicer that it is servicing such Subsequent Mortgage Loans pursuant to the related Servicing Agreement, or (y) if the servicer or servicers are not existing Servicers, then a Servicing Agreement and Assignment Agreements with respect to such servicer or servicers in form and substance reasonably satisfactory to the Master Servicer;

(iii)         as of each Subsequent Transfer Date, as evidenced by delivery of the related Subsequent Transfer Instrument, each attached hereto as Exhibit M-1 and Exhibit M-2, the Depositor shall not be insolvent nor shall it have been rendered insolvent by such transfer nor shall it be aware of any pending insolvency with respect to it:

(iv)         such sale and transfer shall not result in a material adverse tax consequence to the Trust or the Certificateholders;

	
             
  	
            (v)
 	
            the Pre-Funding Period shall not have terminated;
 

(vi)         the Depositor shall not have selected the Subsequent Mortgage Loans in a manner that it believed to be adverse to the interests of the Certificateholders; and

 

 

(vii)       the Depositor shall have delivered to the Trustee and the Securities Administrator a Subsequent Transfer Instrument confirming the satisfaction of the conditions precedent specified in this Section 2.07 and, pursuant to the Subsequent Transfer Instrument, assigned to the Trustee without recourse for the benefit of the Certificateholders all the right, title and interest of the Depositor, in, to and under the Subsequent Mortgage Loan Purchase Agreement, to the extent of the Subsequent Mortgage Loans.

(c)          Any conveyance of Subsequent Mortgage Loans on a Subsequent Transfer Date is subject to certain conditions including, but not limited to the following:

(i)           Each such Subsequent Mortgage Loan must satisfy the representations and warranties specified in the related Subsequent Transfer Instrument and this Agreement;

(ii)          The Depositor will not select such Subsequent Mortgage Loans in a manner that it believes to be adverse to the interests of the Certificateholders;

(iii)        the Trustee, the Securities Administrator and the Rating Agencies are provided with an Opinion of Counsel or Opinions of Counsel, at the expense of the Depositor, stating that each REMIC in the Trust Fund is and shall continue to qualify as a REMIC following the transfer of the Subsequent Mortgage Loans, to be delivered as provided pursuant to this Section 2.07;

(iv)         the Rating Agencies and the Trustee are provided with an Opinion of Counsel or Opinions of Counsel, at the expense of the Depositor, confirming that the transfer of the Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date is a true sale, to be delivered as provided pursuant to this Section 2.07;

(d)          The Trustee and the Securities Administrator shall be entitled to rely upon the confirmation made by the Depositor pursuant to the related Subsequent Transfer Instrument and the Opinions of Counsel delivered pursuant to clauses (c)(iii) and (iv) above in determining that the condition precedents are met for the release of funds from the Pre-Funding Account.

 

 

 

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 Servicers to service and administer their respective Mortgage Loans in accordance with the terms of the applicable 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 each 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 each Servicer and shall cause each Servicer to perform and observe the covenants, obligations and conditions to be performed or observed by such Servicer under the applicable Servicing Agreement. The Master Servicer shall independently and separately monitor each 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 Servicers' 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. The Master Servicer shall reconcile the results of its Mortgage Loan
monitoring with the actual remittances of the Servicers to the Protected Account pursuant to the applicable Servicing Agreements.

If the Master Servicer and the Securities Administrator are the same entity, then at any time the Master Servicer is terminated as Master Servicer, the Securities Administrator shall likewise be removed as securities administrator.

The Trustee shall furnish the Servicers and the Master Servicer with any limited powers of attorney and other documents in form acceptable to it necessary or appropriate to enable the Servicers 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 related 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 related 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 related Mortgage Loan Purchase 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 Servicers.  (a) The Master Servicer shall be responsible for reporting to the Trustee and the Depositor the compliance by each Servicer with its duties under the related Servicing Agreement. In the review of each 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 each Servicer under the related Servicing Agreement, and shall, in the event that a Servicer fails to perform its obligations in accordance with the related 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 to cause the Trustee to enter in to 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 Servicing Agreements 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 any 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 related 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 each Servicer to comply with the remittance requirements and other obligations set forth in the related 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 related Servicing Agreement, as applicable; provided, however, that the Master Servicer shall not (and, consistent with its responsibilities under Section 3.03, shall not permit any 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 (in form acceptable to Trustee) empowering the Master Servicer or any 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
applicable Servicing Agreement and this Agreement, and the Trustee shall execute and deliver such other documents, as the Master Servicer may request (in form acceptable to Trustee), 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 any 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 applicable Servicing Agreement, to the extent Mortgage Loans contain enforceable due-on-sale clauses, the Master Servicer shall cause the Servicers to enforce such clauses in accordance with the applicable 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 applicable Servicing Agreement, and, as a consequence, a Mortgage Loan is assumed, the original Mortgagor may be released from liability in accordance with the applicable 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 any 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, if required under the applicable Servicing Agreement, promptly 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 applicable Servicer pursuant to Section 4.01 or by the applicable 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 applicable Servicer the related Mortgage File. Upon receipt of such certification and request, the Custodian, on behalf of the Trustee, shall no later than five Business Days (or, to the extent that the applicable Servicer notifies the related 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 applicable Servicer and the Trustee and Custodian shall have no further responsibility with regard to such Mortgage File. Upon any such payment in full, each 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 applicable 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 each Servicer (to the extent required by the related 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 Servicers, the applicable 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 each Servicer to retain its Servicing Fee and other amounts as provided in the applicable Servicing Agreement. The Master Servicer shall, and (to the extent provided in the applicable Servicing Agreement) shall cause each 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 each 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 applicable 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 Servicers under the related Servicing Agreements 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 related Servicing Agreements. It is understood and agreed that such insurance shall be with insurers meeting the eligibility requirements set forth in the applicable 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 Servicers or the Master Servicer, or by any 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 applicable 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 related Servicing Agreement. Any cost incurred by the Master Servicer or any 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 applicable Servicing Agreement) cause the related 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 any Servicer (to the extent such action is prohibited under the applicable 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 each Servicer (to the extent required under the related 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 related Servicing Agreement, as applicable. The
Master Servicer shall not, and shall not permit any Servicer (to the extent required under the related 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 related Servicing Agreement, as applicable.

(b)          The Master Servicer agrees to present, or to cause each Servicer (to the extent required under the related 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 any 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 each Servicer (to the extent required under the related 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 applicable 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, prepayment charges, late payment charges, as collected, if any, or otherwise shall be retained by the applicable 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 the fees of the Trustee  and any Custodian as agreed on by each such party and the Master Servicer 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 applicable Servicing Agreement, cause the applicable Servicer to sell, any REO Property as expeditiously as possible and in accordance with the provisions of this Agreement and the related Servicing Agreement, as applicable. Pursuant to its efforts to sell such REO Property, the Master Servicer shall cause the applicable Servicer to protect and conserve, such REO Property in the manner and to the extent required by the applicable 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 related Servicing Agreement, cause the applicable 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 applicable 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 related Servicing Agreement, the Liquidation Proceeds from the final disposition of the REO Property, net of any payment to the Master Servicer and the applicable 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 March 15 of each year, commencing on March 15, 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 Master Servicer has failed to perform any of its duties, responsibilities and obligations under this 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 March 15 of each year, commencing on March 15, 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.

Delivery of such reports, information and documents to the Trustee is for informational purposes only, and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Master Servicer’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to conclusively rely exclusively on an Officer’s Certificate).  

	
             
  	
            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 Securities Administrator 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 31, 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 each Servicer's annual statement of compliance and annual accountant's report as described in the related 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 applicable 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 30th 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.

	
             
 	
            Section 3.19
 	
            Foreclosure Proceedings.
 

For so long as the Investor or an Affiliate thereof, (i) holds all of the Classes of the Subordinate Certificates and (ii) has not forfeited its rights set forth in the related Servicing Agreements, the Master Servicer (A) shall promptly notify the Investor, as Controlling Class Holder, of its receipt of any Foreclosure Notice and any Non-Foreclosure Notice and (B) shall promptly notify the Investor of the Fair Value Prices (as defined in the related Servicing Agreements) and related calculations of the purchase price of the Mortgage Loans determined pursuant to the related Servicing Agreements. In the event that the Investor has notified the Master Servicer in writing that the Investor no longer holds all of the Subordinate Certificates and the related Servicer, as applicable, and that has forfeited its rights set forth in the related Servicing Agreement, the Master Servicer shall
provide the related Servicer with an Expiration Notice indicating such event.

	
             
 	
            Section 3.20
 	
            Additional Collateral Mortgage Loans
 

Immediately upon the default of any Additional Collateral Mortgage Loan, the Master Servicer shall cause the applicable Servicer to sell any related Additional Collateral for cash and 

 

cause such Liquidation Proceeds to be deposited into the Distribution Account.  In no event will any Additional Collateral be an asset of any REMIC.  

 

 

ARTICLE IV

ACCOUNTS

Section 4.01         Protected Accounts. (a) The Master Servicer shall enforce the obligation of each Servicer to establish and maintain a Protected Account in accordance with the applicable 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 related 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 applicable Servicing Agreement
in the case of any 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 related 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 related 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 related Servicer under the applicable 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 related Servicer, as set forth in the applicable Servicing Agreement. The related 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 related Servicing Agreement and subject to this Article IV, on or before each Servicer Remittance Date, the related 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 Servicers pursuant to the Servicing Agreements 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 Servicers 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 Servicers 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 Servicers may be retained by them as set forth in the related Servicing Agreements 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  (which may be a sub-account of the Distribution 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 or  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 related 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 Collection 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 Agreements. 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 Securities Administrator for deposit in the Distribution Account.

Section 4.04         Distribution Account. (a) The Securities Administrator 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 Securities Administrator 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 Securities Administrator and held by the Securities Administrator 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 Securities Administrator or the Master Servicer (whether made directly, or indirectly through a liquidator or receiver of the Securities Administrator 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 Securities Administrator, in such Permitted Investments selected by the Master Servicer or deposited in demand deposits with such depository institutions as selected by the Master Servicer, provided that time deposits of such depository institutions would be a Permitted Investment. All Permitted Investments shall mature or be subject to redemption or withdrawal on or before, and shall be held until, the next succeeding Distribution Date if the obligor for such Permitted Investment is the Securities Administrator or, if such obligor is any other Person, the Business Day preceding such Distribution Date. All investment earnings on amounts on deposit in the Distribution Account or benefit from funds uninvested therein from time to time shall be for the account of the Master Servicer. The Master Servicer shall be permitted to withdraw or receive distribution of any and all investment earnings from the Distribution Account on
each Distribution Date. If there is any loss on a Permitted Investment or demand deposit, the Master Servicer shall remit the amount of the loss to the Trustee who shall deposit such amount in the Distribution Account. With respect to the Distribution Account and the funds deposited therein, the Master Servicer shall take such action as may be necessary to ensure that the Certificateholders shall be entitled to the priorities afforded to such a trust account (in addition to a claim against the estate of the Securities Administrator) as provided by 12 U.S.C. § 92a(e), and applicable regulations pursuant thereto, if applicable, or any applicable comparable state statute applicable to state chartered banking corporations.

Section 4.05         Permitted Withdrawals and Transfers from the Distribution Account. (a) The Securities Administrator will, from time to time on demand of the Master Servicer or the Securities Administrator, make or cause to be made such withdrawals or transfers from the Distribution Account as the Master Servicer or the Securities Administrator has designated for such transfer or withdrawal pursuant to the Servicing Agreements or as the Securities Administrator has instructed hereunder for the following purposes (limited in the case of amounts 

 

due the Master Servicer to those not withdrawn from the Master Servicer Collection Account in accordance with the terms of this Agreement):

(i)           to reimburse the Master Servicer or any Servicer for any Monthly Advance of its own funds or any advance of such Servicer's own funds, the right of the Master Servicer or a Servicer to reimbursement pursuant to this subclause (i) being limited to amounts received on a particular Mortgage Loan (including, for this purpose, the Purchase Price therefor, Insurance Proceeds and Liquidation Proceeds) which represent late payments or recoveries of the principal of or interest on such Mortgage Loan respecting which such Monthly Advance or advance was made;

(ii)          to reimburse the Master Servicer or any Servicer from Insurance Proceeds or Liquidation Proceeds relating to a particular Mortgage Loan for amounts expended by the Master Servicer or such Servicer in good faith in connection with the restoration of the related Mortgaged Property which was damaged by an Uninsured Cause or in connection with the liquidation of such Mortgage Loan;

(iii)        to reimburse the Master Servicer or any Servicer from Insurance Proceeds relating to a particular Mortgage Loan for insured expenses incurred with respect to such Mortgage Loan and to reimburse the Master Servicer or such Servicer from Liquidation Proceeds from a particular Mortgage Loan for Liquidation Expenses incurred with respect to such Mortgage Loan; provided that the Master Servicer shall not be entitled to reimbursement for Liquidation Expenses with respect to a Mortgage Loan to the extent that (i) any amounts with respect to such Mortgage Loan were paid as Excess Liquidation Proceeds pursuant to clause (xi) of this Subsection 4.03 (a) to the Master Servicer; and (ii) such Liquidation Expenses were not included in the computation of such Excess Liquidation Proceeds;

(iv)         to pay the Master Servicer or any Servicer, as appropriate, from Liquidation Proceeds or Insurance Proceeds received in connection with the liquidation of any Mortgage Loan, the amount which it or such Servicer would have been entitled to receive under subclause (ix) of this Subsection 4.03(a) as servicing compensation on account of each defaulted scheduled payment on such Mortgage Loan if paid in a timely manner by the related Mortgagor;

(v)          to pay the Master Servicer or any Servicer from the Purchase Price for any Mortgage Loan, the amount which it or such Servicer would have been entitled to receive under subclause (ix) of this Subsection 4.03 (a) as servicing compensation;

(vi)         to reimburse the Master Servicer or any Servicer for advances of funds pursuant to Sections, and the right to reimbursement pursuant to this subclause being limited to amounts received on the related Mortgage Loan (including, for this purpose, the Purchase Price therefor, Insurance Proceeds and Liquidation Proceeds) which represent late recoveries of the payments for which such advances were made;

(vii)       to reimburse the Master Servicer or any Servicer for any Monthly Advance or advance, after a Realized Loss has been allocated with respect to the related 

 

Mortgage Loan if the Monthly Advance or advance has not been reimbursed pursuant to clauses (i) and (vi);

	
             
  	
            (viii)
 	
            to pay the Master Servicer as set forth in Section 3.14;
 

(ix)         to reimburse the Master Servicer for expenses, costs and liabilities incurred by and reimbursable to it pursuant to this Agreement, including but not limited to Sections 3.03, 7.04(c) and (d);

(x)          to pay to the Master Servicer, as additional servicing compensation, any Excess Liquidation Proceeds to the extent not retained by the related Servicer;

(xi)         to reimburse or pay any Servicer any such amounts as are due thereto under the applicable Servicing Agreement and have not been retained by or paid to the Servicer, to the extent provided in the related Servicing Agreement;

(xii)       to reimburse the Trustee or the Securities Administrator for expenses, costs and liabilities incurred by or reimbursable to it pursuant to this Agreement;

	
             
  	
            (xiii)
 	
            to remove amounts deposited in error; and
 	
             

	
             
  	
            (xiv)
 	
            to clear and terminate the Distribution Account pursuant to Section 10.01.
 

(b)          The Master Servicer shall keep and maintain separate accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any reimbursement from the Distribution Account pursuant to subclauses (i) through (vi), inclusive, and (viii) or with respect to any such amounts which would have been covered by such subclauses had the amounts not been retained by the Master Servicer without being deposited in the Distribution Account under Section 4.02(b).

(c)          On each Distribution Date, the Securities Administrator shall distribute the Available Funds to the Holders of the Certificates as instructed by the Master Servicer or the Securities Administrator in accordance with Section 6.01.

	
             
  	
            Section 4.06
 	
            Derivative Contracts.
 

At the direction of the holder of a majority of the most subordinate class of Subordinate Certificates then outstanding (the “Controlling Class Holder”), the Securities Administrator shall, on behalf of the Trust Fund, enter into Derivative Contracts for the benefit of the most subordinate class of REMIC regular certificates then outstanding. Any acquisition of a Derivative Contract shall be accompanied by (i) an appropriate amendment to this Agreement, (ii) an Opinion of Counsel, (iii) Written confirmation by each of the Rating Agencies that the Derivative Contract will not result in the downgrade, withdrawal or suspension of the rating on any certificate and (iv) the consent of Controlling Class Holder to the acquisition of such Derivative Contract.

 

All collections, proceeds and other amounts in respect of the Derivative Contracts payable by the Derivative Counterparty shall be distributed to the most subordinate class of 

 

REMIC regular certificates then outstanding on the Payment Date following receipt thereof by the Securities Administrator on behalf of the Trustee.

 

Any Derivative Contract that provides for any payment obligation on the part of the Trust Estate must (i) be without recourse to the assets of the Trust Estate, (ii) contain a nonpetition covenant provision from the Derivative Counterparty, (iii) limit payment dates thereunder to Payment Dates and (iv) contain a provision limiting any cash payments due to the Derivative Counterparty on any day under such Derivative Contract solely to funds available therefore in the Payment Account available to make payments to the holder of the most subordinate class of REMIC regular certificates then outstanding on such Payment Date.

 

Each Derivative Contract must (i) provide for the direct payment of any amounts by the Derivative Counterparty thereunder to the Payment Account at least one Business Day prior to the related Payment Date, (ii) contain an assignment of all of the Trust Estate’s rights (but none of its obligations) under such Derivative Contract to the Trustee on behalf the holder of the most subordinate class of REMIC regular certificates then outstanding and shall include an express consent to the Derivative Counterparty to such assignment, (iii) provide that in the event of the occurrence of an event of default under the indenture, such Derivative Contract shall terminate upon the direction of the Controlling Class Holder and (iv) prohibit the Derivative Counterparty from “settingoff’ or “netting” other obligations of the Trust Estate and its Affiliates against such Derivative
Counterparty’s payment obligations thereunder.

 

	
             
  	
            Section 4.07
 	
            Pre-Funding Accounts.
 

(a)          No later than the Closing Date, the Securities Administrator shall establish and maintain a segregated trust account or sub-account of a trust account, which shall be titled “Pre-Funding Account, Wells Fargo Bank, National Association, as Securities Administrator for the benefit of holders of Merrill Lynch Mortgage Investors, Mortgage Pass-Through Certificates, MLMI 2005-A10” (the “Pre-Funding Account”). The Pre-Funding Account shall be an Eligible Account or a sub account of an Eligible Account. The Securities Administrator shall, promptly upon receipt, deposit in the Pre-Funding Account and retain therein the Pre-Funding Amount remitted on the Closing Date to the Securities Administrator by the Depositor. Funds deposited in the Pre-Funding Account shall be held in
trust by the Securities Administrator for the Holders of the Certificates for the uses and purposes set forth herein.

(b)          The Securities Administrator shall invest funds deposited in the Pre-Funding Account as directed by the Depositor or its designee in writing in Permitted Investments with a maturity date no later than the Business Day immediately preceding the date on which such funds are required to be withdrawn from such account pursuant to this Agreement, or, if no written direction is received by the Securities Administrator from the Depositor, then funds in such account shall remain uninvested. For federal income tax purposes, the Depositor or its designee shall be the owner of the Pre-Funding Account and shall report all items of income, deduction, gain or loss arising therefrom. All income and gain realized from investment of funds deposited in the Pre-Funding Account shall be transferred to the
Interest Coverage Account on the Business Day immediately preceding each Distribution Date. Such transferred funds shall not constitute income and gain for purposes of Section 5.10(b) hereof. The Depositor or its designee 

 

shall deposit in the Pre-Funding Account the amount of any net loss incurred in respect of any such Permitted Investment immediately upon realization of such loss without any right of reimbursement therefor. At no time will the Pre-Funding Account be an asset of any REMIC created hereunder.

 

(c)          Amounts on deposit in the Pre-Funding Account shall be withdrawn by the Securities Administrator as follows:

(i)           On any Subsequent Transfer Date, the Securities Administrator shall withdraw from the Pre-Funding Account an amount equal to 100% of the Scheduled Principal Balances of the Subsequent Mortgage Loans transferred and assigned to the Trustee for deposit in the Trust Fund on such Subsequent Transfer Date and remit (a) such amount to the Depositor;

(ii)          If the amount on deposit in the Pre-Funding Account (exclusive of investment income) has not been reduced to zero by the close of business on the date of termination of the Pre-Funding Period, then at the close of business on such date, the Securities Administrator shall deposit into the Distribution Account any amounts remaining in the Pre-Funding Account (exclusive of investment income) for distribution in accordance with Section 6.01;

(iii)        To withdraw any amount not required to be deposited in the Pre-Funding Account or deposited therein in error; and

(iv)         Upon the earliest of (i) the reduction of the Current Principal Amounts of the Certificates to zero or (ii) the termination of this Agreement in accordance with Section 10.01, to withdraw any amount remaining on deposit in the Pre-Funding Account for payment to the related Certificateholders then entitled to distributions in respect of principal until the Current Principal Amount of the Certificates has been reduced to zero, and any remaining amount to the Depositor.

Withdrawals pursuant to clauses (i), (ii) and (iv) shall be treated as contributions of cash to REMIC II on the date of withdrawal.

 

 

 

ARTICLE V

CERTIFICATES

	
             
  	
            Section 5.01
 	
            The Certificates.
 

Each of the Class A, Class A-IO, Class M-1, Class M-2, Class M-3, Class M-IO, Class B-1, Class B-2, Class B-3, Class R-I and Class R-II Certificates shall be substantially in the forms annexed hereto as exhibits, and shall, on original issue, be executed, authenticated and delivered by the Securities Administrator to or upon the receipt of a written order to Authenticate from the Depositor concurrently with the sale and assignment to the Trustee of the Trust Fund. Each Class of the Certificates (other than the Residual Certificates) shall be initially evidenced by one or more Certificates representing a Percentage Interest with a minimum dollar denomination of $100,000 and integral dollar multiples of $1 in excess thereof, provided, however, that one Certificate of each such Class of Certificates may be in a different denomination so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Class Certificate Balance or Notional Amount of such Class on the Closing Date. The Residual Certificates will be issued in registered, certificated form in minimum denominations of a 25% Percentage Interest.

The Certificates shall be executed on behalf of the Trust Fund by manual or facsimile signature on behalf of the Securities Administrator by a Responsible Officer. Certificates bearing the manual or facsimile signatures of individuals who were, at the time when such signatures were affixed, authorized to sign on behalf of the Securities Administrator shall bind the Trust Fund, notwithstanding that such individuals or any of them have ceased to be so authorized prior to the authentication and delivery of such Certificates or did not hold such offices at the date of such Certificate. No Certificate shall be entitled to any benefit under this Agreement or be valid for any purpose, unless such Certificate shall have been manually authenticated by the Securities Administrator substantially in the form provided for herein, and such authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly authenticated and delivered hereunder. All Certificates shall be dated the date of their authentication. Subject to Section 5.02(c), the Certificates, other than the Residual Certificates (collectively, the “Private Certificates”), shall be Book-Entry Certificates.

	
             
  	
            Section 5.02
 	
            Registration of Transfer and Exchange of Certificates.
 

(a)          The Certificate Registrar shall cause to be kept at the Corporate Trust Office a Certificate Register in which, subject to such reasonable regulations as it may prescribe, the Certificate Registrar shall provide for the registration of Certificates and of transfers and exchanges of Certificates as herein provided. The Securities Administrator shall initially serve as Certificate Registrar for the purpose of registering Certificates and transfers and exchanges of Certificates as herein provided.

Upon surrender for registration of transfer of any Certificate at any office or agency of the Certificate Registrar maintained for such purpose pursuant to the foregoing paragraph and, in the case of a Class R Certificate, upon satisfaction of the conditions set forth below, the Securities Administrator on behalf of the Securities Administrator shall execute, authenticate and 

 

deliver, in the name of the designated transferee or transferees, one or more new Certificates of the same aggregate Percentage Interest.

At the option of the Certificateholders, Certificates may be exchanged for other Certificates in authorized denominations and the same aggregate Percentage Interests, upon surrender of the Certificates to be exchanged at any such office or agency. Whenever any Certificates are so surrendered for exchange, the Securities Administrator shall execute on behalf of the Trust and authenticate and deliver the Certificates which the Certificateholder making the exchange is entitled to receive. Every Certificate presented or surrendered for registration of transfer or exchange shall (if so required by the Securities Administrator or the Certificate Registrar) be duly endorsed by, or be accompanied by a written instrument of transfer satisfactory to the Securities Administrator and the Certificate Registrar duly executed by, the Holder thereof or his attorney duly authorized in writing.

(b)          Except as provided in paragraph (c) below, the Book-Entry Certificates shall at all times remain registered in the name of the Depository or its nominee and at all times: (i) registration of such Certificates may not be transferred by the Securities Administrator except to another Depository; (ii) the Depository shall maintain book-entry records with respect to the Certificate Owners and with respect to ownership and transfers of such Certificates; (iii) ownership and transfers of registration of such Certificates on the books of the Depository shall be governed by applicable rules established by the Depository; (iv) the Depository may collect its usual and customary fees, charges and expenses from its Depository Participants; (v) the Securities Administrator shall for all purposes deal
with the Depository as representative of the Certificate Owners for purposes of exercising the rights of Holders under this Agreement, and requests and directions for and votes of such representative shall not be deemed to be inconsistent if they are made with respect to different Certificate Owners; (vi) the Securities Administrator may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its Depository Participants and furnished by the Depository Participants with respect to indirect participating firms and Persons shown on the books of such indirect participating firms as direct or indirect Certificate Owners; and (vii) the direct participants of the Depository shall have no rights under this Agreement under or with respect to any of the Certificates held on their behalf by the Depository, and the Depository may be treated by the Securities Administrator and its agents, employees, officers and directors as the absolute owner of
the Certificates for all purposes whatsoever.

All transfers by Certificate Owners of Book-Entry Certificates shall be made in accordance with the procedures established by the Depository Participant or brokerage firm representing such Certificate Owners. Each Depository Participant shall only transfer Book-Entry Certificates of Certificate Owners that it represents or of brokerage firms for which it acts as agent in accordance with the Depository's normal procedures. The parties hereto are hereby authorized to execute a representation letter with the Depository or take such other action as may be necessary or desirable to register a Book-Entry Certificate to the Depository. In the event of any conflict between the terms of any such representation letter and this Agreement, the terms of this Agreement shall control.

(c)          If (i)(x) the Depository or the Depositor advises the Securities Administrator in writing that the Depository is no longer willing or able to discharge properly its responsibilities 

 

as Depository and (y) the Securities Administrator or the Depositor is unable to locate a qualified successor, (ii) the Depositor, at its sole option, with the consent of the Securities Administrator, elects to terminate the book-entry system through the Depository or (iii) after the occurrence of an Event of Default, the Certificate Owners of each Class of Book-Entry Certificates representing Percentage Interests of such Classes aggregating not less than 51% advises the Securities Administrator and the Depository Participants in writing that the continuation of a book-entry system through the Depository to the exclusion of definitive, fully registered certificates (the “Definitive Certificates”) to Certificate Owners is no longer in the best interests of the Certificate Owners. Upon surrender to the Certificate Registrar of the Book-Entry Certificates by the Depository, accompanied by
registration instructions from the Depository for registration, the Securities Administrator shall, at the Depositor's expense, execute on behalf of the Trust and authenticate the Definitive Certificates. Neither the Depositor nor the Securities Administrator shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. Upon the issuance of Definitive Certificates, the Trustee, Securities Administrator, the Certificate Registrar, the Servicer, any Paying Agent and the Depositor shall recognize the Holders of the Definitive Certificates as Certificateholders hereunder.

(d)          Except with respect to the initial transfer of the Private Certificates by the Depositor, no transfer, sale, pledge or other disposition of any Private Certificate shall be made unless such disposition is exempt from the registration requirements of the Securities Act of 1933, as amended (the “1933 Act”), and any applicable state securities laws or is made in accordance with the 1933 Act and laws. In the event of any such transfer, made in reliance upon an exemption from the 1933 Act, (i) the Securities Administrator and the Depositor shall require (a) the transferor to execute a representation letter (in substantially the form attached hereto as Exhibit F-1) and the transferee to execute an investor representation letter (in substantially the form attached hereto as Exhibit
F-2) and (b) a written Opinion of Counsel (which may be in-house counsel) acceptable to and in form and substance reasonably satisfactory to the Securities Administrator and the Depositor that such transfer may be made pursuant to an exemption, describing the applicable exemption and the basis therefor, from the 1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel shall not be an expense of the Trustee, the Securities Administrator or the Depositor or (ii) the Securities Administrator shall require the transferee to execute a Rule 144A Letter (in substantially the form attached hereto as Exhibit F-3) acceptable to and in form and substance reasonably satisfactory to the Depositor and the Securities Administrator certifying to the Depositor and the Securities Administrator the facts surrounding such transfer, which certificate shall not be an expense of the Securities Administrator or the Depositor. The Holder of a Private Certificate desiring to effect such
transfer shall, and does hereby agree to, indemnify the Securities Administrator and the Depositor against any liability that may result if the transfer is not so exempt or is not made in accordance with such federal and state laws.

Notwithstanding the foregoing, no certification or Opinion of Counsel described in this Section 5.02(d) will be required in connection with the first transfer by the Depositor or an Affiliate thereof of any Class R Certificate, and the Depositor or such Affiliate hereby agree only to make such a transfer to, to an “accredited investor” within the meaning of Rule 501(d) of the 1933  Act.

 

 

No transfer of an ERISA-Restricted Certificate shall be made unless the Securities Administrator shall have received either (i) a representation from the transferee of such Certificate, acceptable to and in form and substance satisfactory to the Securities Administrator and the Depositor, (such requirement is satisfied only by the Securities Administrator’s receipt of a representation letter from the transferee substantially in the form of Exhibit F-2 or F-3 hereto, as appropriate, on which the Securities Administrator and Depositor is authorized to rely), to the effect that either (A) such transferee is not an employee benefit plan or arrangement subject to Section 406 of ERISA or a plan subject to Section 4975 of the Code (collectively, a “Plan”), nor a person acting on behalf of any such Plan or arrangement nor using the assets of any such Plan or arrangement to effect
such transfer (a “Plan Investor”), or (B) the proposed transfer and holding of such a Certificate and the servicing, management and operation of the Trust: (I) will not result in a prohibited transaction under Section 406 of ERISA or Section 4975 of the Code which is not covered under an individual or class prohibited transaction exemption including but not limited to Department of Labor Prohibited Transaction Class Exemption (“PTCE”) 84-14 (Class Exemption for Plan Asset Transactions Determined by Independent Qualified Professional Asset Managers); PTCE 91-38 (Class Exemption for Certain Transactions Involving Bank Collective Investment Funds); PTCE 90-1 (Class Exemption for Certain Transactions Involving Insurance Company Pooled Separate Accounts), PTCE 95-60 (Class Exemption for Certain Transactions Involving Insurance Company General Accounts), and PTCE 96-23 (Class Exemption for Plan Asset Transactions Determined by In-House Asset Managers) and (II) will not
subject the Depositor, the Securities Administrator, the Servicer, the Trustee or the Controlling Class Holder to any obligation in addition to those undertaken in the Agreement or (ii) in the case of any such ERISA-Restricted Certificate presented for registration in the name of a Plan or a Plan Investor, an Opinion of Counsel satisfactory to the Securities Administrator which Opinion of Counsel shall not be an expense of either the Securities Administrator or the Trust, addressed to the Securities Administrator, to the effect that the purchase or holding of such Certificate will not result in the assets of the Trust being deemed to be “Plan assets” and subject to the prohibited transaction provisions of ERISA and the Code, will not result in such a prohibited transaction, and will not subject the Trustee, the Securities Administrator, the Servicer, the Depositor or the Controlling Class Holder to any obligation in addition to those expressly undertaken in this Agreement or
to any liability. For purposes of clause (i) of the preceding sentence, such representations shall be deemed to have been made to the Securities Administrator by the transferee's acceptance of an ERISA-Restricted Certificate (or the acceptance by a Certificate Owner of the beneficial interest in any such Class of Certificates) unless the Securities Administrator shall have received from the transferee an alternative representation acceptable in form and substance to the Depositor. Notwithstanding anything else to the contrary herein, any purported transfer of a ERISA-Restricted Certificate to or on behalf of a Plan or Plan Investor in violation of this paragraph shall be void and of no effect.

Any transferee of an ERISA-Restricted Certificate which is a Book-Entry Certificate will be deemed to have represented by virtue of its purchase or holding of such Certificate (or interest therein) that either (a) such transferee is not a Plan Investor or (b) such transferee meets the requirements in (i)(B) of the immediately preceding paragraph.

Each beneficial owner of a Class M Certificate or any interest therein shall be deemed to have represented, by virtue of its acquisition or holding of that certificate or interest therein, that 

 

either (i) it is not a Plan or a Plan Investor or investing with Plan assets, (ii) it has acquired and is holding such certificate in reliance on the Prohibited Transaction Exemption 90-29 issued by the Department of Labor, as amended (“Exemption”), and that it understands that there are certain conditions to the availability of the Exemption, including that the  certificate must be rated, at the time of purchase, not lower than “BBB-” (or its equivalent) by Fitch, Moody's or S&P, or (iii) (1) it is an insurance company, (2) the source of funds used to acquire or hold the certificate or interest therein is an “insurance company general account,” as such term is defined in PTCE 95-60, and (3) the conditions in Sections I and III of PTCE 95-60 have been satisfied.

If any Book-Entry Certificate (or any interest therein) is acquired or held in violation of the provisions of Section 5.02(d) above, then the last preceding transferee that is in compliance with such provisions shall be restored, to the extent permitted by law, to all rights and obligations as Certificate Owner thereof retroactive to the date of such Transfer of such Certificate. The Securities Administrator shall be under no liability to any Person for making any payments due on such Certificate to such preceding transferee.

Any purported Certificate Owner whose acquisition or holding of any Book-Entry Certificate (or interest therein) was effected in violation of the restrictions in this Section 5.02(d) shall indemnify and hold harmless the Depositor, the Trustee, Securities Administrator, the Servicer, the Trust Fund and the Controlling Class Holder from and against any and all liabilities, claims, costs or expenses incurred by such parties as a result of such acquisition or holding.

Each Person who has or who acquires any Ownership Interest in a Class R Certificate shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the following provisions and to have irrevocably appointed the Depositor or its designee as its attorney-in-fact to negotiate the terms of any mandatory sale under clause (v) below and to execute all instruments of transfer and to do all other things necessary in connection with any such sale, and the rights of each Person acquiring any Ownership Interest in a Class R Certificate are expressly subject to the following provisions:

(i)           Each Person holding or acquiring any Ownership Interest in a Class R Certificate shall be a Permitted Transferee and shall promptly notify the Securities Administrator of any change or impending change in its status as a Permitted Transferee.

(ii)          No Person shall acquire an Ownership Interest in a Class R Certificate unless such Ownership Interest is a pro rata undivided interest.

(iii)        In connection with any proposed transfer of any Ownership Interest in a Class R Certificate, the Securities Administrator shall as a condition to registration of the transfer, require delivery to it, in form and substance satisfactory to it, of each of the following:

(A)         an affidavit in the form of Exhibit E-1 hereto from the proposed transferee to the effect that such transferee is a Permitted Transferee and that it is not acquiring its Ownership Interest in the Class R Certificate that is the subject of the proposed transfer as a nominee, trustee or agent for any Person who is not a 

 

Permitted Transferee, and an affidavit in the form of Exhibit E-2 hereto from the proposed transferor, representing and warranting, among other things, that no proposed transfer is to impede the assessment or collection of tax;

(B)         a covenant of the proposed transferee to the effect that the proposed transferee agrees to be bound by and to abide by the transfer restrictions applicable to the Class R Certificates.

(C)         Any attempted or purported transfer of any Ownership Interest in a Class R Certificate in violation of the provisions of this Section shall be absolutely null and void and shall vest no rights in the purported transferee. If any purported transferee shall, in violation of the provisions of this Section, become a Holder of a Class R Certificate, then the prior Holder of such Class R Certificate that is a Permitted Transferee shall, upon discovery that the registration of transfer of such Class R Certificate was not in fact permitted by this Section, be restored to all rights as Holder thereof retroactive to the date of registration of transfer of such Class R Certificate. The Securities Administrator shall be under no liability to any Person for any registration of transfer of
a Class R Certificate that is in fact not permitted by this Section or for making any distributions due on such Class R Certificate to the Holder thereof or taking any other action with respect to such Holder under the provisions of this Agreement  so long as the Securities Administrator received the documents specified in this clause (iii). The Securities Administrator shall be entitled to recover from any Holder of a Class R Certificate that was in fact not a Permitted Transferee at the time such distributions were made all distributions made on such Class R Certificate. Any such distributions so recovered by the Securities Administrator shall be distributed and delivered by the Securities Administrator to the prior Holder of such Class R Certificate that is a Permitted Transferee.

(iv)         If any Person other than a Permitted Transferee acquires any Ownership Interest in a Class R Certificate in violation of the restrictions in this Section, then the Trustee shall have the right but not the obligation, without notice to the Holder of such Class R Certificate or any other Person having an Ownership Interest therein, to notify the Depositor to arrange for the sale of such Class R Certificate. The proceeds of such sale, net of commissions (which may include commissions payable to the Depositor or its affiliates in connection with such sale), expenses and taxes due, if any, will be remitted by the Securities Administrator to the previous Holder of such Class R Certificate that is a Permitted Transferee, except that in the event that the Securities Administrator
determines that the Holder of such Class R Certificate may be liable for any amount due under this Section or any other provisions of this Agreement, the Securities Administrator may withhold a corresponding amount from such remittance as security for such claim. The terms and conditions of any sale under this clause (iv) shall be determined in the sole discretion of the Securities Administrator and it shall not be liable to any Person having an Ownership Interest in a Class R Certificate as a result of its exercise of such discretion.

 

 

(v)          If any Person other than a Permitted Transferee acquires any Ownership Interest in a Class R Certificate in violation of the restrictions in this Section, then the Securities Administrator upon receipt of reasonable compensation will provide to the Internal Revenue Service, and to the persons specified in Sections 860E(e)(3) and (6) of the Code, information needed to compute the tax imposed under Section 860E(e)(5) of the Code on transfers of residual interests to disqualified organizations.

The foregoing provisions of this Section shall cease to apply to transfers occurring on or after the date on which there shall have been delivered to the Securities Administrator, in form and substance satisfactory to the Securities Administrator, (i) written notification from each Rating Agency that the removal of the restrictions on Transfer set forth in this Section will not cause such Rating Agency to downgrade its rating of the Certificates and (ii) an Opinion of Counsel to the effect that such removal will not cause any REMIC hereunder to fail to qualify as a REMIC.

(e)          No service charge shall be made for any registration of transfer or exchange of Certificates of any Class, but the Certificate Registrar may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Certificates.

All Certificates surrendered for registration of transfer or exchange shall be cancelled by the Certificate Registrar and disposed of pursuant to its standard procedures.

	
             
  	
            Section 5.03
 	
            Mutilated, Destroyed, Lost or Stolen Certificates.
 

If (i) any mutilated Certificate is surrendered to the Certificate Registrar or the Certificate Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Certificate and (ii) there is delivered to the Trustee, the Depositor, the Securities Administrator and the Certificate Registrar such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Trustee, the Securities Administrator or the Certificate Registrar that such Certificate has been acquired by a bona fide purchaser, the Securities Administrator shall execute on behalf of the Trust, authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like tenor and Percentage Interest. Upon the issuance of any new Certificate under this Section, the Trustee, the Securities
Administrator or the Certificate Registrar may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee, the Securities Administrator and the Certificate Registrar) in connection therewith. Any duplicate Certificate issued pursuant to this Section, shall constitute complete and indefeasible evidence of ownership in the Trust, as if originally issued, whether or not the lost, stolen or destroyed Certificate shall be found at any time.

	
             
  	
            Section 5.04
 	
            Persons Deemed Owners.
 

Each Servicer, the Master Servicer, the Depositor, the Trustee, the Certificate Registrar, the Securities Administrator, any Paying Agent and any agent of each Servicer, the Master Servicer, the Depositor, the Certificate Registrar, the Securities Administrator, any Paying Agent or the Trustee may treat the Person, including a Depository, in whose name any Certificate is 

 

registered as the owner of such Certificate for the purpose of receiving distributions pursuant to Section 4.01 and for all other purposes whatsoever, and none of the Servicers, the Master Servicer, the Trust, the Trustee, the Securities Administrator nor any agent of any of them shall be affected by notice to the contrary.

To the extent the Securities Administrator, Certificate Registrar or any Paying Agent is required pursuant to this Agreement to determine the identity of the beneficial owner of a Book-Entry Certificate, any costs assessed by the Depository in making such determination shall be an expense of the party making such request, but in no event shall such cost be an expense of the Trust Fund. Section 5.05 Appointment of Paying Agent.

The Paying Agent shall make distributions to Certificateholders from the Distribution Account pursuant to Section 4.01 and shall report the amounts of such distributions to the Trustee. The duties of the Paying Agent may include the obligation (i) to withdraw funds from the Distribution Account pursuant to Section 3.11 and for the purpose of making the distributions referred to above and (ii) to distribute statements and provide information to Certificateholders as required hereunder. The Paying Agent hereunder shall at all times be an entity duly incorporated and validly existing under the laws of the United States of America or any state thereof, authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authorities. The Paying Agent shall initially be the Securities Administrator. The Trustee may appoint a successor to
act as Paying Agent, which appointment shall be reasonably satisfactory to the Depositor and the Rating Agencies.

The Securities Administrator shall cause the Paying Agent (if other than the Securities Administrator) to execute and deliver to the Securities Administrator an instrument in which such Paying Agent shall agree with the Securities Administrator that such Paying Agent shall hold all sums, if any, held by it for payment to the Certificateholders in trust the benefit of the Certificateholders entitled thereto until such sums shall be paid to such Certificateholders and shall agree that it shall comply with all requirements of the Code regarding the withholding of payments in respect of federal income taxes due from Certificate Owners and otherwise comply with the provisions of this Agreement applicable to it.

 

 

 

ARTICLE VI

PAYMENTS TO CERTIFICATEHOLDERS

Section 6.01       Distributions on the Certificates. (a) Interest and principal on the Certificates will be distributed by the Securities Administrator monthly on each Distribution Date, commencing in January 2006, as instructed by the Master Servicer or the Securities Administrator, in an aggregate amount equal to the sum of the Available Funds for such Distribution Date.  On each Distribution Date, the Available Funds shall be distributed as follows:

(A)         On each Distribution Date, the Available Funds will be distributed in the following order of priority among the Senior Certificates except as otherwise noted:

first, to the Class A Certificates and Class A-IO Certificates, pro rata, the Accrued Certificate Interest on each class of Senior Certificates for such Distribution Date.  As described below, Accrued Certificate Interest on the Senior Certificates is subject to reduction in the event of certain interest shortfalls allocable thereto. Any interest shortfalls shall be allocated among the Certificates as described below; provided, however, that with respect to the Senior Certificates on each Distribution Date, the interest distribution amount that would otherwise be distributed to the Class A-IO Certificates will be reduced by the Required Reserve Fund Deposit (as defined below) and will not be distributed to the Class A-IO Certificates;

second, to the Class A Certificates and Class A-IO Certificates, pro rata, any Accrued Certificate Interest thereon remaining undistributed from previous Distribution Dates, to the extent of remaining Available Funds, any shortfall in available amounts being allocated to the Senior Certificates in proportion to the amount of such Accrued Certificate Interest remaining undistributed for each Class of Senior Certificates for such Distribution Date; and

third, to the Class A Certificates, in reduction of the Class Certificate Balance thereof, the Senior Principal Distribution Amount for such Distribution Date to the extent of remaining Available Funds, until the Class Certificate Balance of such Class has been reduced to zero.

(B)         On each Distribution Date on or prior to the Distribution Date on which the Class Certificate Balances of the Subordinate Certificates are reduced to zero (the “Credit Support Depletion Date”), an amount equal to the remaining Available Funds after the distributions in clause (A) above will be distributed sequentially, in the following order:

first, to the Class M-1, Class M-2, Class M-3 and Class M-IO Certificates, in each case up to an amount equal to and in the following order: (a) the Accrued Certificate Interest thereon for such Distribution Date; provided, however, that with respect to the Class M Certificates on each Distribution Date, the interest 

 

distribution amount that would otherwise be distributed to the Class M-IO Certificates will be reduced by the Required Reserve Fund Deposit and will not be distributed to the Class M-IO Certificates, (b) any Accrued Certificate Interest thereon remaining undistributed from previous Distribution Dates and (c) such Class’s (other than the Class M-IO Certificates) Subordinate Principal Distribution Amount for such Distribution Date, in each case to the extent of the remaining Available Funds

second, from the Reserve Fund, to the classes of LIBOR Certificates, Class A-IO Certificates and Class M-IO Certificates, in the manner, order and priority 

third, to the Class B-1, Class B-2 and Class B-3 Certificates, in each case up to an amount equal to and in the following order: (a) the Accrued Certificate Interest thereon for such Distribution Date, (b) any Accrued Certificate Interest thereon remaining undistributed from previous Distribution Dates and (c) such Class’s Subordinate Principal Distribution Amount for such Distribution Date, in each case to the extent of the remaining Available Funds.

(C)         On each Distribution Date, any Available Funds remaining after payment of interest and principal to the Classes of Certificates entitled thereto, as described above, will be distributed to the Class R-II Certificates.  It is not anticipated that there will be any significant amounts remaining for such distribution.

(D)         In addition to the foregoing distributions, with respect to any Subsequent Recoveries, the Master Servicer shall deposit such amounts into the Protected Account pursuant to Section 4.01(a).  If, after taking into account such Subsequent Recoveries, the amount of a Realized Loss is reduced, the amount of such Subsequent Recoveries will be applied to increase the Class Certificate Balance of the Class of Subordinate Certificates with the highest payment priority to which Realized Losses have been allocated, but not by more than the amount of Realized Losses previously allocated to that Class of Certificates pursuant to Section 6.02(a). The amount of any remaining Subsequent Recoveries will be applied to increase the Class Certificate Balance of the Class of Certificates with the next highest
payment priority, up to the amount of such Realized Losses previously allocated to that Class of Certificates pursuant to Section 6.02(a), and so on. Holders of such Certificates will not be entitled to any payment in respect of Current Interest on the amount of such increases for any Interest Accrual Period preceding the Distribution Date on which such increase occurs. Any such increases shall be applied to the Class Certificate Balance of each Certificate of such Class in accordance with its respective Percentage Interest.

 

 

Section 6.02        Allocation of Losses. (a) On or prior to each Determination Date, the Master Servicer shall determine the amount of any Realized Loss in respect of each Mortgage Loan that occurred during the immediately preceding calendar month.

(b)          With respect to any Certificates on any Distribution Date, the principal portion of each Realized Loss on a Mortgage Loan shall be allocated as follows:

first, to the Class B-3 Certificates until the Class Certificate Balance thereof has been reduced to zero;

second, to the Class B-2 Certificates until the Class Certificate Balance thereof has been reduced to zero;

third, to the Class B-1 Certificates until the Class Certificate Balance thereof has been reduced to zero;

fourth, to the Class M-3 Certificates until the Class Certificate Balance thereof has been reduced to zero;

fifth, to the Class M-2 Certificates until the Class Certificate Balance thereof has been reduced to zero;

sixth, to the Class M-1 Certificates until the Class Certificate Balance thereof has been reduced to zero;

seventh, to the Senior Certificates (other than the Class A-IO Certificates) until the Class Certificate Balances thereof have been reduced to zero.

(c)          Any allocation of a Realized Loss (other than a Debt Service Reduction) to a Certificate will be made by reducing the Class Certificate Balance thereof, in the case of the principal portion of such Realized Loss, in each case until the Class Certificate Balance of such Class has been reduced to zero, and the Accrued Certificate Interest thereon, in the case of the interest portion of such Realized Loss, by the amount so allocated as of the Distribution Date occurring in the month following the calendar month in which such Realized Loss was incurred. In addition, any such allocation of a Realized Loss to a Class M Certificate or Class B Certificate may also be made by operation of the payment priority to the Senior Certificates set forth under “—Principal Distributions on the
Senior Certificates” and any Class of Class M Certificates or Class B Certificates with a higher payment priority. As used herein, “Debt Service Reduction” means a reduction in the amount of the monthly payment due to certain bankruptcy proceedings, but does not include any permanent forgiveness of principal. As used herein, “Subordination” refers to the provisions discussed above for the sequential allocation of Realized Losses among the various Classes, as well as all provisions effecting such allocations including the priorities for distribution of cash flows in the amounts described herein.

(d)          Allocations of the principal portion of Debt Service Reductions to the Class M Certificates and Class B Certificates will result from the priority of distributions of the Available Funds as described herein, which distributions shall be made first to the Senior Certificates, 

 

second to the Class M Certificates in the order of their payment priority and third to the Class B Certificates in the order of their payment priority. An allocation of the interest portion of a Realized Loss as well as the principal portion of Debt Service Reductions will not reduce the level of Subordination, as such term is defined herein, until an amount in respect thereof has been actually disbursed to the Senior Certificateholders, the Class M Certificateholders or the Class B Certificateholders, as applicable. The holders of the Offered Certificates will not be entitled to any additional payments with respect to Realized Losses from amounts otherwise distributable on any Classes of Certificates subordinate thereto. Accordingly, the Subordination provided to the Senior Certificates and to each Class of Class M Certificates and Class B Certificates by the respective Classes of Certificates subordinate
thereto with respect to Realized Losses allocated on any Distribution Date will be effected primarily by increasing the Senior Percentage, or the respective Class M Percentage, of future distributions of principal of the remaining Mortgage Loans. Thus, the Senior Certificates will bear the entire amount of losses that are not allocated to the Class M Certificates and Class B Certificates, which losses will be allocated among all Classes of Senior Certificates as described herein.

Section 6.03         Payments. (a) On each Distribution Date, other than the final Distribution Date, the Securities Administrator shall distribute to each Certificateholder of record on the directly preceding Record Date the Certificateholder’s pro rata share of its Class (based on the aggregate Percentage Interest represented by such Holder's Certificates) of all amounts required to be distributed on such Distribution Date to such Class, based solely on information provided to the Securities Administrator by the Master Servicer or the Securities Administrator. The Securities Administrator shall calculate the amount to be distributed to each Class and, based on such amounts, the Securities Administrator shall determine the amount to be distributed to each
Certificateholder. All of the Securities Administrator's calculations of payments shall be based solely on information provided to the Securities Administrator by the Master Servicer or the applicable Servicer.  The Securities Administrator shall not be required to confirm, verify or recompute any such information but shall be entitled to rely conclusively on such information.

(b)          Payment of the above amounts to each Certificateholder shall be made (i) by check mailed to each Certificateholder entitled thereto at the address appearing in the Certificate Register or (ii) upon receipt by the Securities Administrator on or before the fifth Business Day preceding the Record Date of written instructions from a Certificateholder by wire transfer to a United States dollar account maintained by the payee at any United States depository institution with appropriate facilities for receiving such a wire transfer; provided, however, that the final payment in respect of each Class of Certificates will be made only upon presentation and surrender of such respective Certificates at the office or agency of the Securities Administrator specified in the notice to
Certificateholders of such final payment.

Section 6.04         Statements to Certificateholders. (a) Concurrently with each distribution to Certificateholders, the Securities Administrator shall make available to the parties hereto and each Certificateholder via the Securities Administrator's internet website as set forth below, the following information:

(i)           the amount of the distribution made on such Distribution Date to the Holders of each Class of Certificates, separately identified, allocable to principal;

 

 

(ii)          the amount of the distribution made on such Distribution Date to the Holders of each Class of Certificates allocable to interest, separately identified;

(iii)        the aggregate amount the Servicing Fee during the related Due Period and such other customary information as the Trustee deems necessary or desirable, or which a Certificateholder reasonably requests, to enable Certificateholders to prepare their tax returns;

	
             
  	
            (iv)
 	
            the aggregate amount of Monthly Advances for the related Due Period;
 

(v)          the aggregate Stated Principal Balance of the Mortgage Loans at the close of business at the end of the related Due Period;

(vi)         the number, weighted average remaining term to maturity and weighted average Mortgage Interest Rate of Mortgage Loans as of the related Due Date;

(vii)       the number and aggregate unpaid principal balance of Mortgage Loans (a) one month, two months or three months delinquent on a contractual basis, (b) as to which foreclosure proceedings have been commenced and (c) in bankruptcy as of the close of business on the last day of the calendar month preceding such Distribution Date;

(viii)      with respect to any Mortgage Loan that became an REO Property during the preceding calendar month, the Stated Principal Balance of such Mortgage Loan as of the date it became an REO Property;

(ix)         the book value of any REO Property as of the close of business on the last Business Day of the calendar month preceding the Distribution Date, and, cumulatively, the total number and cumulative principal balance of all REO Properties as of the close of business of the last day of the preceding due period;

(x)          the aggregate amount of Principal Prepayments made during the related Prepayment Period;

(xi)         the aggregate amount of Realized Losses incurred during the related Due Period and the cumulative amount of Realized Losses;

(xii)       the aggregate amount of Extraordinary Trust Fund Expenses withdrawn from the Master Servicer Collection Account for such Distribution Date;

(xiii)      the Class Certificate Balance or Notional Amount of each Class of Certificates, after giving effect to the distributions made on such Distribution Date;

(xiv)      the aggregate amount of interest accrued at the related Pass-Through Rate with respect to each Class during the related Interest Accrual Period and the respective portions thereof, if any, remaining unpaid following the distributions made in respect of such Certificates on such Distribution Date;

 

 

(xv)        the aggregate amount of any Prepayment Interest Shortfalls for such Distribution Date, to the extent not covered by Compensating Interest Payments by the related Servicer or the Master Servicer pursuant to the related Servicing Agreement or Section 6.06;

	
             
  	
            (xvi)
 	
            the Available Funds;
 

(xvii)     the Pass-Through Rate for each Class of Certificates for such Distribution Date; and

(xviii)    the aggregate Stated Principal Balance of Mortgage Loans purchased by the Sellers during the related Due Period and indicating the Section of this Agreement requiring or allowing the purchase of each such Mortgage Loan.

The information set forth above shall be calculated or reported, as the case may be, by the Securities Administrator, based solely on, and to the extent of, information provided to the Securities Administrator by the Master Servicer. The Securities Administrator may conclusively rely on such information and shall not be required to confirm, verify or recalculate any such information.

The Securities Administrator may make available each month, to any interested party , the monthly statement to Certificateholders via the Securities Administrator's website initially located at “www.ctslink.com.” Assistance in using the website can be obtained by calling the Securities Administrator's customer service desk at (301) 815-6600. Parties that are unable to use the above distribution option are entitled to have a paper copy mailed to them via first class mail by calling the customer service desk and indicating such. The Securities Administrator shall have the right to change the way such reports are distributed in order to make such distribution more convenient and/or more accessible to the parties, and the Securities Administrator shall provide timely and adequate notification to all parties regarding any such change.

(b)          By January 30 of each year beginning in 2006, the Securities Administrator will furnish such report to each Holder of the Certificates of record at any time during the prior calendar year as to the aggregate of amounts reported pursuant to subclauses (a)(ii) and (a)(v) above with respect to the Certificates, plus information with respect to the amount of servicing compensation and such other customary information as the Securities Administrator may determine and advises the Trustee to be necessary and/or to be required by the Internal Revenue Service or by a federal or state law or rules or regulations to enable such Holders to prepare their tax returns for such calendar year. Such obligations shall be deemed to have been satisfied to the extent that substantially comparable information
shall be provided by the Securities Administrator or the Trustee pursuant to the requirements of the Code.

Section 6.05         Monthly Advances. If the Monthly Payment on a Mortgage Loan that was due on a related Due Date and is delinquent other than as a result of application of the Relief Act and for which the related Servicer was required to make an advance pursuant to the related Servicing Agreement exceeds the amount deposited in the Master Servicer Collection Account which will be used for a Monthly Advance with respect to such Mortgage Loan, the Master Servicer will deposit in the Master Servicer Collection Account not later than the Distribution 

 

Account Deposit Date immediately preceding the related Distribution Date an amount equal to such deficiency, net of the Servicing Fee for such Mortgage Loan, except to the extent the Master Servicer determines any such  Monthly Advance to be nonrecoverable from Liquidation Proceeds, Insurance Proceeds or future payments on the Mortgage Loan for which such Monthly Advance was made. If the Master Servicer has not deposited the amount described above as of the related Distribution Account Deposit Date, the Trustee will deposit in the Master Servicer Collection Account not later than the related Distribution Date, an amount equal to the remaining deficiency as of the Distribution Account Deposit Date; provided, however, no such deposit shall be made by the Trustee if the deficiency has been determined to be non-recoverable by either the Master Servicer or the Trustee.  Subject to the foregoing, the Master
Servicer shall continue to make such Monthly Advances through the date that the related Servicer is required to do so under its Servicing Agreement. If applicable, on the Distribution Account Deposit Date, the Master Servicer shall present an Officer's Certificate to the Trustee (i) stating that the Master Servicer elects not to make a Monthly Advance in a stated amount and (ii) detailing the reason it deems the advance to be nonrecoverable.

Section 6.06         Compensating Interest Payments. The Master Servicer shall deposit in the Master Servicer Collection Account not later than each Distribution Account Deposit Date an amount equal to the aggregate amounts required to be paid by the Servicers under the Servicing Agreements with respect to subclauses (a) and (b), as applicable, of the definition of Prepayment Interest Shortfall with respect to the Mortgage Loans for the related Distribution Date, and not so paid by the related Servicers (such amount, the “Compensating Interest Payment”). The Master Servicer shall not be entitled to any reimbursement of any Compensating Interest Payment.

	
             
  	
            Section 6.07
 	
            Distributions and Allocation of Losses on the REMIC I Regular Interests.
 

(i)           On each Distribution Date the Trustee shall be deemed to distribute to itself, as the holder of the REMIC I Regular Interests, Uncertificated REMIC Accrued Interest on the REMIC I Regular Interests for such Distribution Date, plus any Uncertificated REMIC Accrued Interest thereon remaining unpaid from any previous Distribution Date.

(ii)          On each Distribution Date the Trustee shall be deemed to distribute to itself, as the holder of the REMIC I Regular Interests, an amount equal to the sum of the amounts in respect of principal distributable on the Class A, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates under Section 6.01 with such amount deemed distributed to each REMIC I Regular Interest in the same amount and priority as allocated to the Corresponding Class.

(iii)         On each Distribution Date, Realized Losses allocated to Class A, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates under Section 6.02 shall be deemed distributed to each REMIC I Regular Interest in the same amount and priority as allocated to the Corresponding Class.

(iv)         Notwithstanding the deemed distributions on the REMIC I Regular Interests described in this Section 6.07, distributions of funds from the Distribution  Account shall be made only in accordance with Section 6.01.

 

 

	
             
  	
            Section 6.08
 	
            Reserve Fund.
 

(a)          On the Closing Date, the Securities Administrator shall establish and maintain in the Trustee’s name, in trust for the benefit of the holders of the LIBOR Certificates and the Interest Only Certificates, a Reserve Fund.  The Reserve Fund shall be an Eligible Account, and funds on deposit therein shall be held separate and apart from, and shall not be commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement.  The Reserve Fund shall not be an asset of any REMIC established hereby.

(b)          Current Interest that would otherwise be distributable with respect to the Class A-IO Certificates and Class M-IO Certificates will be deposited instead in the Reserve Fund, to the extent of the related Required Reserve Fund Deposit. 

(c)          On any Distribution Date for which a Net WAC Shortfall exists with respect to one or more Classes of LIBOR Certificates, the Securities Administrator shall withdraw, to the extent of available funds therein, from the Reserve Fund the amount of such Net WAC Shortfall for distribution on such Distribution Date pursuant to Section 5.10(e) hereof.

	
             
  	
            (d)
 	
            [Reserved].
 

(e)          On any Distribution Date for which a Net WAC Shortfall exists with respect to the Class A Certificates, the Securities Administrator will withdraw the amounts on deposit in the Reserve Fund and distribute them to the holders of the Class A Certificates, in an amount up to its remaining accrued and unpaid Net WAC Shortfalls.  On any Distribution Date for which a Net WAC Shortfall exists with respect to the Class M-1, Class M-2 or Class M-3 Certificates, the Securities Administrator will withdraw the amounts on deposit in the Reserve Fund and distribute them sequentially to the holders of the Class M-1, Class M-2 and Class M-3 Certificates, in that order, in an amount up to their remaining respective accrued and unpaid Net WAC Shortfalls.

(f)           Funds in the Reserve Fund shall be invested in Permitted Investments as directed in writing by the Interest Only Certificateholder.  Any earnings on amounts in the Reserve Fund shall be for the benefit of the Interest Only Certificateholders.  The Interest Only Certificates shall evidence ownership of the Reserve Fund for federal income tax purposes and the Holders thereof shall direct the Securities Administrator, in writing, as to investment of amounts on deposit therein.  The applicable Interest Only Certificateholder(s) shall be liable for any losses incurred on such investments.  In the absence of written instructions from the applicable Interest Only Certificateholder to the Securities Administrator as to investment of funds on deposit in the related Sub Account, such funds
shall be invested in the [                              ].  For all Federal income tax purposes, amounts transferred by the REMIC to the Reserve Fund shall be treated as amounts distributed by the REMIC to the applicable Interest Only Certificateholders.

(g)          If, immediately after any Distribution Date, the amount on deposit in the Reserve Fund exceeds the initial deposit therein, the Securities Administrator will distribute such excess to the Holders of the related Interest Only Certificates.

 

 

(h)          Upon termination of the Trust Fund any amounts remaining in the Reserve Fund shall be distributed to the holders of the LIBOR Certificates and the Interest Only Certificates.

 

 

 

ARTICLE VII

THE MASTER SERVICER AND THE DEPOSITOR

Section 7.01        Liabilities of the Master Servicer. The Master Servicer shall be liable in accordance herewith only to the extent of the obligations specifically imposed upon and undertaken by the Master Servicer, as the case may be, herein. The Depositor shall be liable in accordance herewith only to the extent of the obligations specifically imposed upon and undertaken by the Depositor.

	
             
  	
            Section 7.02
 	
            Merger or Consolidation of the Master Servicer.
 

(a)          The Master Servicer and the Depositor will keep in full force and effect its existence, rights and franchises as a corporation under the laws of the state of its incorporation, and will obtain and preserve its qualification to do business as a foreign corporation in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Agreement, the Certificates or any of the Mortgage Loans and to perform its duties under this Agreement.

(b)          Any Person into which the Master Servicer or the Depositor may be merged or consolidated, or any corporation resulting from any merger or consolidation to which the Master Servicer shall be a party, or any Person succeeding to the business of the Master Servicer, shall be the successor of the Master Servicer hereunder, without the execution or filing of any paper or further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

Section 7.03        Indemnification of the Trustee, the Master Servicer and the Securities Administrator. (a) The Master Servicer agrees to indemnify the Indemnified Persons for, and to hold them harmless against, any loss, liability or expense (including reasonable legal fees and disbursements of counsel) incurred on their part that may be sustained in connection with, arising out of, or relating to, any claim or legal action (including any pending or threatened claim or legal action) relating to this Agreement or the Certificates (i) related to the Master Servicer's failure to perform its duties in compliance with this Agreement (except as any such loss, liability or expense shall be otherwise reimbursable pursuant to this Agreement) or (ii) incurred by reason of the Master
Servicer's willful misfeasance, bad faith or gross negligence in the performance of duties hereunder or by reason of reckless disregard of obligations and duties hereunder, provided, in each case, that with respect to any such claim or legal action (or pending or threatened claim or legal action), the Trustee shall have given the Master Servicer and the Depositor written notice thereof promptly after the Trustee shall have with respect to such claim or legal action knowledge thereof. This indemnity shall survive the resignation or removal of the Trustee, Master Servicer or the Securities Administrator and the termination of this Agreement.

(b)          The Depositor will indemnify any Indemnified Person for any loss, liability or expense of any Indemnified Person not otherwise referred to in Subsection (a) above.

 

 

Section 7.04         Limitations on Liability of the Master Servicer and Others. Subject to the obligation of the Master Servicer to indemnify the Indemnified Persons pursuant to Section 7.03:

(a)          Neither the Master Servicer nor any of the directors, officers, employees or agents of the Master Servicer shall be under any liability to the Indemnified Persons, the Depositor, the Trust Fund or the Certificateholders for taking any action or for refraining from taking any action in good faith pursuant to this Agreement, or for errors in judgment; provided, however, that this provision shall not protect the Master Servicer or any such Person against any breach of warranties or representations made herein or any liability which would otherwise be imposed by reason of such Person's willful misfeasance, bad faith or gross negligence in the performance of duties or by reason of reckless disregard of obligations and duties hereunder.

(b)          The Master Servicer and any director, officer, employee or agent of the Master Servicer may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person respecting any matters arising hereunder.

(c)          The Master Servicer, the Custodian and any director, officer, employee or agent of the Master Servicer or the Custodian shall be indemnified by the Trust and held harmless thereby against any loss, liability or expense (including reasonable legal fees and disbursements of counsel) incurred on their part that may be sustained in connection with, arising out of, or related to, any claim or legal action (including any pending or threatened claim or legal action) relating to this Agreement, the Certificates or any Servicing Agreement (except to the extent that the Master Servicer is indemnified by the Servicer thereunder), other than (i) any such loss, liability or expense related to the Master Servicer's failure to perform its duties in compliance with this Agreement (except as any such
loss, liability or expense shall be otherwise reimbursable pursuant to this Agreement), or to the Custodian's failure to perform its duties under the Custodial Agreement, respectively, or (ii) any such loss, liability or expense incurred by reason of the Master Servicer's or the Custodian's willful misfeasance, bad faith or gross negligence in the performance of duties hereunder or under the Custodial Agreement, as applicable, or by reason of reckless disregard of obligations and duties hereunder or under the Custodial Agreement, as applicable.

(d)          The Master Servicer shall not be under any obligation to appear in, prosecute or defend any legal action that is not incidental to its duties under this Agreement and that in its opinion may involve it in any expense or liability; provided, however, the Master Servicer may in its discretion, undertake any such action which it may deem necessary or desirable with respect to this Agreement and the rights and duties of the parties hereto and the interests of the Certificateholders hereunder. In such event, the legal expenses and costs of such action and any liability resulting therefrom shall be expenses, costs and liabilities of the Trust Fund, and the Master Servicer shall be entitled to be reimbursed therefor out of the Master Servicer Collection Account as provided by Section 4.03.
Nothing in this Subsection 7.04(d) shall affect the Master Servicer's obligation to supervise, or to take such actions as are necessary to ensure, the servicing and administration of the Mortgage Loans pursuant to Subsection 3.01(a).

(e)          In taking or recommending any course of action pursuant to this Agreement, unless specifically required to do so pursuant to this Agreement, the Master Servicer shall not be required to investigate or make recommendations concerning potential liabilities which the Trust 

 

Fund might incur as a result of such course of action by reason of the condition of the Mortgaged Properties but shall give notice to the Trustee if it has notice of such potential liabilities.

(f)           The Master Servicer shall not be liable for any acts or omissions of any Servicer, except as otherwise expressly provided herein.

Section 7.05        Master Servicer Not to Resign. Except as provided in Section 7.07, the Master Servicer shall not resign from the obligations and duties hereby imposed on it except upon a determination that any such duties hereunder are no longer permissible under applicable law and such impermissibility cannot be cured. Any such determination permitting the resignation of the Master Servicer shall be evidenced by an Opinion of Independent Counsel to such effect delivered to the Trustee. No such resignation by the Master Servicer shall become effective until MLMLI or the Trustee or a successor to the Master Servicer reasonably satisfactory to the Trustee shall have assumed the responsibilities and obligations of the Master Servicer in accordance with Section 8.02 hereof. The
Trustee shall notify the Rating Agencies of the resignation of the Master Servicer.

Section 7.06        Successor Master Servicer. In connection with the appointment of any successor Master Servicer or the assumption of the duties of the Master Servicer, MLMLI or the Trustee may make such arrangements for the compensation of such successor master servicer out of payments on the Mortgage Loans as MLMLI or the Trustee and such successor master servicer shall agree. If the successor master servicer does not agree that such market value is a fair price, such successor master servicer shall obtain two quotations of market value from third parties actively engaged in the servicing of single-family mortgage loans.

Section 7.07         Sale and Assignment of Master Servicing. The Master Servicer may sell and assign its rights and delegate its duties and obligations in its entirety as Master Servicer under this Agreement; provided, however, that: (i) the purchaser or transferee accepting such assignment and delegation (a) shall be a Person which shall be qualified to service mortgage loans for Fannie Mae or Freddie Mac; (b) shall have a net worth of not less than $10,000,000 (unless otherwise approved by each Rating Agency pursuant to clause (ii) below); (c) shall be reasonably satisfactory to the Trustee (as evidenced in a writing signed by the Trustee); and (d) shall execute and deliver to the Trustee an agreement, in form and substance reasonably satisfactory to the Trustee, which
contains an assumption by such Person of the due and punctual performance and observance of each covenant and condition to be performed or observed by it as master servicer under this Agreement, any custodial agreement from and after the effective date of such agreement; (ii) each Rating Agency shall be given prior written notice of the identity of the proposed successor to the Master Servicer and each Rating Agency's rating of the Certificates in effect immediately prior to such assignment, sale and delegation will not be downgraded, qualified or withdrawn as a result of such assignment, sale and delegation, as evidenced by a letter to such effect delivered to the Master Servicer and the Trustee; and (iii) the Master Servicer assigning and selling the master servicing shall deliver to the Trustee an Officer's Certificate and an Opinion of Independent Counsel, each stating that all conditions precedent to such action under this Agreement have been completed and such action is
permitted by and complies with the terms of this Agreement.  No such assignment or delegation shall affect any liability of the Master Servicer arising prior to the effective date thereof.

 

 

ARTICLE VIII

DEFAULT

Section 8.01        Events of Default. “Event of Default,” wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body) and only with respect to the defaulting Master Servicer:

(i)           The Master Servicer fails to cause to be deposited in the Distribution Account any amount so required to be deposited pursuant to this Agreement, and such failure continues unremedied for a period of three Business Days after the date upon which written notice of such failure, requiring the same to be remedied, shall have been given to the Master Servicer; or

(ii)          The Master Servicer fails to observe or perform in any material respect any other material covenants and agreements set forth in this Agreement to be performed by it, which covenants and agreements materially affect the rights of Certificateholders, and such failure continues unremedied for a period of 60 days after the date on which written notice of such failure, properly requiring the same to be remedied, shall have been given to the Master Servicer by the Trustee or to the Master Servicer and the Trustee by the Holders of Certificates evidencing Percentage Interests aggregating not less than 25% of the Trust Fund; or

(iii)        There is entered against the Master Servicer a decree or order by a court or agency or supervisory authority having jurisdiction in the premises for the appointment of a conservator, receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding up or liquidation of its affairs, and the continuance of any such decree or order is unstayed and in effect for a period of 60 consecutive days, or an involuntary case is commenced against the Master Servicer under any applicable insolvency or reorganization statute and the petition is not dismissed within 60 days after the commencement of the case; or

(iv)         The Master Servicer consents to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings of or relating to the Master Servicer or substantially all of its property; or the Master Servicer admits in writing its inability to pay its debts generally as they become due, files a petition to take advantage of any applicable insolvency or reorganization statute, makes an assignment for the benefit of its creditors, or voluntarily suspends payment of its obligations; or

(v)          The Master Servicer assigns or delegates its duties or rights under this Agreement in contravention of the provisions permitting such assignment or delegation under Sections 7.05 or 7.07.

In each and every such case, so long as such Event of Default with respect to the Master Servicer shall not have been remedied, either the Trustee or the Holders of Certificates evidencing 

 

Percentage Interests aggregating not less than 51% of the principal of the Trust Fund, by notice in writing to the Master Servicer (and to the Trustee if given by such Certificateholders), with a copy to the Rating Agencies, and with the consent of MLMLI, may terminate all of the rights and obligations (but not the liabilities) of the Master Servicer under this Agreement and in and to the Mortgage Loans and/or the REO Property serviced by the Master Servicer and the proceeds thereof. Upon the receipt by the Master Servicer of the written notice, all authority and power of the Master Servicer under this Agreement, whether with respect to the Certificates, the Mortgage Loans, REO Property or under any other related agreements (but only to the extent that such other agreements relate to the Mortgage Loans or related REO Property) shall, subject to Section 8.02, automatically and without further action pass to
and be vested in the Trustee pursuant to this Section 8.01; and, without limitation, the Trustee is hereby authorized and empowered to execute and deliver, on behalf of the Master Servicer as attorney-in-fact or otherwise, any and all documents and other instruments and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and endorsement or assignment of the Mortgage Loans and related documents, or otherwise. The Master Servicer agrees to cooperate with the Trustee in effecting the termination of the Master Servicer's rights and obligations hereunder, including, without limitation, the transfer to the Trustee of (i) the property and amounts which are then or should be part of the Trust or which thereafter become part of the Trust; and (ii) originals or copies of all documents of the Master Servicer reasonably requested by the Trustee to enable it to assume the Master Servicer's
duties thereunder. In addition to any other amounts which are then, or, notwithstanding the termination of its activities under this Agreement, may become payable to the Master Servicer under this Agreement, the Master Servicer shall be entitled to receive, out of any amount received on account of a Mortgage Loan or related REO Property, that portion of such payments which it would have received as reimbursement under this Agreement if notice of termination had not been given. The termination of the rights and obligations of the Master Servicer shall not affect any obligations incurred by the Master Servicer prior to such termination.

Section 8.02        Trustee to Act; Appointment of Successor. (a) Upon the receipt by the Master Servicer of a notice of termination pursuant to Section 8.01 or an Opinion of Independent Counsel pursuant to Section 7.05 to the effect that the Master Servicer is legally unable to act or to delegate its duties to a Person which is legally able to act, the Trustee shall automatically become the successor in all respects to the Master Servicer in its capacity under this Agreement and the transactions set forth or provided for herein and shall thereafter be subject to all the responsibilities, duties, liabilities and limitations on liabilities relating thereto placed on the Master Servicer by the terms and provisions hereof; provided, however, that MLMLI shall have the right to either
(a) immediately assume the duties of the Master Servicer or (b) select a successor Master Servicer; provided further, however, that the Trustee shall have no obligation whatsoever with respect to any liability (other than advances deemed recoverable and not previously made) incurred by the Master Servicer at or prior to the time of termination. As compensation therefor, the Trustee shall be entitled to all funds relating to the Mortgage Loans which the Master Servicer would have been entitled to retain if the Master Servicer had continued to act hereunder, except for those amounts due the Master Servicer as reimbursement permitted under this Agreement for advances previously made or expenses previously incurred.  Notwithstanding the above, or anything herein to the contrary, the Trustee, if it becomes Master Servicer, shall have no responsibility or obligation (i) to repurchase or substitute any Mortgage Loan, (ii) for any 

 

representation or warranty of the Master Servicer hereunder, and (iii) for any act or omission of either a predecessor or successor Master Servicer other than the Trustee.  The Trustee may conduct any activity required of it as Master Servicer hereunder through an Affiliate or through an agent.  Neither the Trustee nor any other successor Master Servicer shall be deemed to be in default hereunder due to any act or omission of a predecessor Master Servicer, including but not limited to failure to timely deliver to the Trustee distribution instructions, any funds required to be deposited to the Trust Fund, or any breach of its duty to cooperate with a transfer of master servicing.  Notwithstanding the above, the Trustee may, if it shall be unwilling so to act, or shall, if it is legally unable so to act, appoint or petition a court of competent jurisdiction to appoint, any established housing and home
finance institution which is a Fannie Mae- or Freddie Mac-approved servicer, and with respect to a successor to the Master Servicer only, having a net worth of not less than $10,000,000, as the successor to the Master Servicer hereunder in the assumption of all or any part of the responsibilities, duties or liabilities of the Master Servicer hereunder; provided, that the Trustee shall obtain a letter from each Rating Agency that the ratings, if any, on each of the Certificates will not be lowered as a result of the selection of the successor to the Master Servicer. Pending appointment of a successor to the Master Servicer hereunder, the Trustee shall act in such capacity as hereinabove provided. In connection with such appointment and assumption, the Trustee may make such arrangements for the compensation of such successor out of payments on the Mortgage Loans as it and such successor shall agree; provided, however, in the event that the provisions of Section 7.06 shall apply, no such
compensation shall be in excess of that permitted the Trustee under this Subsection 8.02(a), and that such successor shall undertake and assume the obligations of the Trustee to pay compensation to any third Person acting as an agent or independent contractor in the performance of master servicing responsibilities hereunder. The Trustee and such successor shall take such action, consistent with this Agreement, as shall be necessary to effectuate any such succession.

(b)          If the Trustee shall succeed to any duties of the Master Servicer respecting the Mortgage Loans as provided herein, it shall do so in a separate capacity and not in its capacity as Trustee and, accordingly, the provisions of Article IX shall be inapplicable to the Trustee in its duties as the successor to the Master Servicer in the servicing of the Mortgage Loans (although such provisions shall continue to apply to the Trustee in its capacity as Trustee); the provisions of Article VII, however, shall apply to it in its capacity as successor master servicer.

Section 8.03         Notification to Certificateholders. Upon any termination or appointment of a successor to the Master Servicer, the Trustee shall give prompt written notice thereof to Certificateholders at their respective addresses appearing in the Certificate Register and to the Rating Agencies.

Section 8.04      Waiver of Defaults. The Trustee shall transmit by mail to all Certificateholders, within 60 days after the occurrence of any Event of Default known to the Trustee, unless such Event of Default shall have been cured, notice of each such Event of Default hereunder known to the Trustee. The Holders of Certificates evidencing Percentage Interests aggregating not less than 51% of the Trust Fund may, on behalf of all Certificateholders, waive any default by the Master Servicer in the performance of its obligations hereunder and the consequences thereof, except a default in the making of or the causing to be made any required distribution on the Certificates. Upon any such waiver of a past default, such default shall be 

 

deemed to cease to exist, and any Event of Default arising therefrom shall be deemed to have been timely remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereon except to the extent expressly so waived. The Trustee shall give notice of any such waiver to the Rating Agencies.

Section 8.05       List of Certificateholders. Upon written request of three or more Certificateholders of record, for purposes of communicating with other Certificateholders with respect to their rights under this Agreement, the Trustee will afford such Certificateholders access during business hours to the most recent list of Certificateholders held by the Trustee.

 

 

ARTICLE IX

CONCERNING THE TRUSTEE AND
THE SECURITIES ADMINISTRATOR

Section 9.01         Duties of Trustee. (a) The Trustee, prior to the occurrence of an Event of Default and after the curing or waiver of all Events of Default which may have occurred, and the Securities Administrator each undertake to perform such duties and only such duties as are specifically set forth in this Agreement as duties of the Trustee and the Securities Administrator, respectively. If an Event of Default has occurred and has not been cured or waived, the Trustee shall exercise such of the rights and powers vested in it by this Agreement, and subject to Section 8.02(b) use the same degree of care and skill in their exercise, as a prudent person would exercise under the circumstances in the conduct of his own affairs.

(b)          Upon receipt of all resolutions, certificates, statements, opinions, reports, documents, orders or other instruments which are specifically required to be furnished to the Trustee and the Securities Administrator pursuant to any provision of this Agreement, the Trustee and the Securities Administrator, respectively, shall examine them to determine whether they are in the form required by this Agreement; provided, however, that neither the Trustee nor the Securities Administrator shall be responsible for the accuracy or content of any resolution, certificate, statement, opinion, report, document, order or other instrument furnished by the Master Servicer; provided, further, that neither the Trustee nor the Securities Administrator shall be responsible for the accuracy or verification of any calculation
provided to it pursuant to this Agreement.

(c)          On each Distribution Date, the Trustee shall make monthly distributions and the final distribution to the Certificateholders from funds in the Distribution Account as provided in Sections 6.01 and 10.01 herein based solely on the report of the Securities Administrator.

(d)          No provision of this Agreement shall be construed to relieve the Trustee or the Securities Administrator from liability for its own negligent action, its own negligent failure to act or its own willful misconduct; provided, however, that:

(i)           Prior to the occurrence of an Event of Default, and after the curing or waiver of all such Events of Default which may have occurred, the duties and obligations of the Trustee and the Securities Administrator shall be determined solely by the express provisions of this Agreement, neither the Trustee nor the Securities Administrator shall be liable except for the performance of their respective duties and obligations as are specifically set forth in this Agreement, no implied covenants or obligations shall be read into this Agreement against the Trustee or the Securities Administrator and, in the absence of bad faith on the part of the Trustee or the Securities Administrator, respectively, the Trustee or the Securities Administrator, respectively, may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee or the Securities Administrator, respectively, and conforming to the requirements of this Agreement;

(ii)          Neither the Trustee nor the Securities Administrator shall be liable in its individual capacity for an error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee or an officer of the Securities Administrator, 

 

respectively, unless it shall be proved that the Trustee or the Securities Administrator, respectively, was negligent in ascertaining the pertinent facts;

(iii)         Neither the Trustee nor the Securities Administrator shall be liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with the directions of the Holders of Certificates evidencing Percentage Interests aggregating not less than 25% of the Trust Fund, if such action or non-action relates to the time, method and place of conducting any proceeding for any remedy available to the Trustee or the Securities Administrator, respectively, or exercising any trust or other power conferred upon the Trustee or the Securities Administrator, respectively, under this Agreement;

(iv)         The Trustee shall not be required to take notice or be deemed to have notice or knowledge of any default or Event of Default unless a Responsible Officer of the Trustee's Corporate Trust Office shall have actual knowledge thereof. In the absence of such notice, the Trustee may conclusively assume there is no such default or Event of Default;

(v)          The Trustee shall not in any way be liable by reason of any insufficiency in any Account held by or in the name of Trustee unless it is determined by a court of competent jurisdiction that the Trustee's gross negligence or willful misconduct was the primary cause of such insufficiency (except to the extent that the Trustee is obligor and has defaulted thereon);

(vi)         Anything in this Agreement to the contrary notwithstanding, in no event shall the Trustee or the Securities Administrator be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Trustee or the Securities Administrator, respectively, has been advised of the likelihood of such loss or damage and regardless of the form of action; and

(vii)       None of the Securities Administrator, the Depositor, the Master Servicer, any Servicer or the Trustee shall be responsible for the acts or omissions of the other, it being understood that this Agreement shall not be construed to render them partners, joint venturers or agents of one another.

Neither the Trustee nor the Securities Administrator shall be required to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if there is reasonable ground for believing that the repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it, and none of the provisions contained in this Agreement shall in any event require the Trustee or the Securities Administrator to perform, or be responsible for the manner of performance of, any of the obligations of the Master Servicer hereunder or under the Servicing Agreements, except during such time, if any, as the Trustee shall be the successor to, and be vested with the rights, duties, powers and privileges of, the Master Servicer in accordance with the terms of this Agreement.

 

 

(e)          All funds received by the Master Servicer and the Trustee and required to be deposited in the Master Servicer Collection Account or Distribution Account pursuant to this Agreement will be promptly so deposited by the Master Servicer and the Trustee.

(f)           Except for those actions that the Trustee or the Securities Administrator is required to take hereunder, neither the Trustee nor the Securities Administrator shall have any obligation or liability to take any action or to refrain from taking any action hereunder in the absence of written direction as provided hereunder.

Section 9.02        Certain Matters Affecting the Trustee and the Securities Administrator. Except as otherwise provided in Section 9.01:

(i)           The Trustee and the Securities Administrator may rely and shall be protected in acting or refraining from acting in reliance on any resolution, certificate of a Depositor, Master Servicer or Servicer, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

(ii)          The Trustee and the Securities Administrator may consult with counsel and any advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection with respect to any action taken or suffered or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;

(iii)         Neither the Trustee nor the Securities Administrator shall be under any obligation to exercise any of the trusts or powers vested in it by this Agreement, other than its obligation to give notices pursuant to this Agreement, or to institute, conduct or defend any litigation hereunder or in relation hereto at the request, order or direction of any of the Certificateholders pursuant to the provisions of this Agreement, unless such Certificateholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby. Nothing contained herein shall, however, relieve the Trustee of the obligation, upon the occurrence of an Event of Default of which a Responsible Officer of the Trustee's Corporate Trust Office has
actual knowledge (which has not been cured or waived), subject to Section 8.02(b), to exercise such of the rights and powers vested in it by this Agreement, and to use the same degree of care and skill in their exercise, as a prudent person would exercise under the circumstances in the conduct of his own affairs;

(iv)         Prior to the occurrence of an Event of Default hereunder and after the curing or waiver of all Events of Default which may have occurred, neither the Trustee nor the Securities Administrator shall be liable in its individual capacity for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Agreement;

(v)          Neither the Trustee nor the Securities Administrator shall be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document, unless requested in writing to do so by Holders of Certificates 

 

evidencing Percentage Interests aggregating not less than 25% of the Trust Fund and provided that the payment within a reasonable time to the Trustee or the Securities Administrator, as applicable, of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee or the Securities Administrator, as applicable, reasonably assured to the Trustee or the Securities Administrator, as applicable, by the security afforded to it by the terms of this Agreement. The Trustee or the Securities Administrator may require reasonable indemnity against such expense or liability as a condition to taking any such action. The reasonable expense of every such examination shall be paid by the Certificateholders requesting the investigation;

(vi)         The Trustee and the Securities Administrator may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or through Affiliates, agents or attorneys; provided, however, that the Trustee may not appoint any agent to perform its custodial functions with respect to the Mortgage Files or paying agent functions under this Agreement without the express written consent of the Master Servicer, which consent will not be unreasonably withheld. Neither the Trustee nor the Securities Administrator shall be liable or responsible for the misconduct or negligence of any of the Trustee's or the Securities Administrator's agents or attorneys or a custodian or paying agent appointed hereunder by the Trustee or the Securities Administrator with due care and, when required,
with the consent of the Master Servicer;

(vii)       Should the Trustee or the Securities Administrator deem the nature of any action required on its part, other than a payment or transfer under Subsection 4.01(b) or Section 4.02, to be unclear, the Trustee or the Securities Administrator, respectively, may require prior to such action that it be provided by the Depositor with reasonable further instructions;

(viii)      The right of the Trustee or the Securities Administrator to perform any discretionary act enumerated in this Agreement shall not be construed as a duty, and neither the Trustee nor the Securities Administrator shall be accountable for other than its negligence or willful misconduct in the performance of any such act;

(ix)         Neither the Trustee nor the Securities Administrator shall be required to give any bond or surety with respect to the execution of the trust created hereby or the powers granted hereunder, except as provided in Subsection 9.07; and

(x)          Neither the Trustee nor the Securities Administrator shall have any duty to conduct any affirmative investigation as to the occurrence of any condition requiring the repurchase of any Mortgage Loan by MLCC, KKR Financial, the Underlying Seller or EMC pursuant to this Agreement, the related Mortgage Loan Purchase Agreement or related Servicing Agreement, as applicable, or the eligibility of any Mortgage Loan for purposes of this Agreement.

Section 9.03       Trustee and Securities Administrator Not Liable for Certificates or Mortgage Loans. The recitals contained herein and in the Certificates (other than the signature and countersignature of the Trustee on the Certificates) shall be taken as the statements of the Depositor, and neither the Trustee nor the Securities Administrator shall have any responsibility 

 

for their correctness. Neither the Trustee nor the Securities Administrator makes any representation as to the validity or sufficiency of the Certificates (other than the signature and countersignature of the Trustee on the Certificates) or of any Mortgage Loan except as expressly provided in Sections 2.02 and 2.05 hereof; provided, however, that the foregoing shall not relieve the Trustee or the Custodian of the obligation to review the Mortgage Files pursuant to Sections 2.02 and 2.04. The Trustee's signature and countersignature (or countersignature of its agent) on the Certificates shall be solely in its capacity as Trustee of the Trust Fund and shall not constitute the Certificates an obligation of the Trustee in any other capacity. Neither the Trustee or the Securities Administrator shall be accountable for the use or application by the Depositor of any of the Certificates or of the proceeds of such
Certificates, or for the use or application of any funds paid to the Depositor with respect to the Mortgage Loans. Subject to the provisions of Section 2.05, neither the Trustee nor the Securities Administrator shall not be responsible for the legality or validity of this Agreement or any document or instrument relating to this Agreement, the validity of the execution of this Agreement or of any supplement hereto or instrument of further assurance, or the validity, priority, perfection or sufficiency of the security for the Certificates issued hereunder or intended to be issued hereunder. Neither the Trustee nor the Securities Administrator shall at any time have any responsibility or liability for or with respect to the legality, validity and enforceability of any Mortgage or any Mortgage Loan, or the perfection and priority of any Mortgage or the maintenance of any such perfection and priority, or for or with respect to the sufficiency of the Trust Fund or its ability to generate
the payments to be distributed to Certificateholders, under this Agreement. Neither the Trustee nor the Securities Administrator shall have any responsibility for filing any financing or continuation statement in any public office at any time or to otherwise perfect or maintain the perfection of any security interest or lien granted to it hereunder or to record this Agreement other than any continuation statements filed by the Trustee pursuant to Section 3.20.

Section 9.04        Trustee and Securities Administrator May Own Certificates. The Trustee and the Securities Administrator in its individual capacity or in any capacity other than as Trustee hereunder may become the owner or pledgee of any Certificates with the same rights it would have if it were not Trustee or the Securities Administrator, as applicable, and may otherwise deal with the parties hereto.

Section 9.05         Trustee’s and Securities Administrator's Fees and Expenses. The fees and expenses of the Trustee and the Securities Administrator shall be paid by the Master Servicer in accordance with a side letter agreement. In addition, the Trustee and the Securities Administrator will be indemnified by the Trust Fund for, and entitled to recover from the Master Servicer Collection Account pursuant to Section 4.03(b), all reasonable out-of-pocket expenses, disbursements and advances and the expenses of the Trustee and the Securities Administrator, respectively, in connection with any Event of Default, any breach of this Agreement or any claim or legal action (including any pending or threatened claim or legal action) or any other liability incurred or made by the Trustee or the
Securities Administrator, respectively, in the administration of the trusts hereunder (including the reasonable compensation, expenses and disbursements of its counsel) except any such expense, disbursement or advance as may arise from its negligence or intentional misconduct or which is the responsibility of the Certificateholders or the Trust Fund hereunder. If funds in the Master Servicer Collection Account are insufficient therefor, the Trustee and the Securities Administrator shall recover such expenses from the Depositor. Such 

 

compensation and reimbursement obligation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust.

	
             
  	
            Section 9.06
 	
            Eligibility Requirements for Trustee and Securities Administrator.
 

(a)          The Trustee and any successor Trustee and the Securities Administrator and any successor Securities Administrator shall during the entire duration of this Agreement be a state bank or trust company or a national banking association organized and doing business under the laws of such state or the United States of America, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus and undivided profits of at least $40,000,000 or, in the case of a successor Trustee, $50,000,000, subject to supervision or examination by federal or state authority and, in the case of the Trustee, rated “BBB” or higher by S&P and Fitch with respect to their long-term rating and rated “BBB” or higher by S&P and Fitch with respect to any outstanding long-term
unsecured unsubordinated debt, and, in the case of a successor Trustee or successor Securities Administrator other than pursuant to Section 9.10, rated in one of the two highest long-term debt categories of, or otherwise acceptable to, each of the Rating Agencies. If the Trustee publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section 9.06 the combined capital and surplus of such corporation shall be deemed to be its total equity capital (combined capital and surplus) as set forth in its most recent report of condition so published. In case at any time the Trustee or the Securities Administrator shall cease to be eligible in accordance with the provisions of this Section 9.06, the Trustee or the Securities Administrator shall resign immediately in the manner and with the effect specified in Section 9.08.

(b)          In addition, the Securities Administrator (i) may not be an Underlying Seller, Master Servicer, Servicer, the Depositor or an affiliate of the Depositor unless the Securities Administrator is in an institutional trust department of the relevant entity, (ii) must be authorized to exercise corporate trust powers under the laws of its jurisdiction of organization, and (iii) must be rated at least “A/F1” by Fitch, if Fitch is a Rating Agency, or the equivalent rating by S&P or Moody's, or such other rating as is acceptable to Fitch as provided in an Rating Agency Confirmation.  If no successor Securities Administrator shall have been appointed and shall have accepted appointment within 60 days after the Securities Administrator ceases to be the Securities Administrator pursuant to Section 9.08,
then the Trustee shall perform the duties of the Securities Administrator pursuant to this Agreement until such time as a new Securities Administrator is appointed.  The Trustee shall notify the Rating Agencies of any change of Securities Administrator.

 

 

Section 9.07        Insurance. The Trustee and the Securities Administrator, at their own expense, shall at all times maintain and keep in full force and effect: (i) fidelity insurance, (ii) theft of documents insurance and (iii) forgery insurance (which may be collectively satisfied by a “Financial Institution Bond” and/or a “Bankers' Blanket Bond”). All such insurance shall be in amounts, with standard coverage and subject to deductibles, as are customary for insurance typically maintained by banks or their affiliates which act as custodians for investor-owned mortgage pools. A certificate of an officer of the Trustee or the Securities Administrator as to the Trustee's or the Securities Administrator's, respectively, compliance with this Section 9.07 shall be furnished to any
Certificateholder upon reasonable written request.

Section 9.08         Resignation and Removal of the Trustee and Securities Administrator. (a) The Trustee and the Securities Administrator may at any time resign and be discharged from the Trust hereby created by giving written notice thereof to the Depositor and the Master Servicer, with a copy to the Rating Agencies. Upon receiving such notice of resignation, the Depositor shall promptly appoint a successor Trustee or successor Securities Administrator, as applicable, by written instrument, in triplicate, one copy of which instrument shall be delivered to each of the resigning Trustee or Securities Administrator, as applicable, the successor Trustee or Securities Administrator, as applicable. If no successor Trustee or Securities Administrator shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the resigning Trustee or Securities Administrator may petition any court of competent jurisdiction for the appointment of a successor Trustee or Securities Administrator.  If the Securities Administrator and the Master Servicer and the same entity, then at any time the Securities Administrator resigns or is removed as Securities Administrator, the Master Servicer shall likewise be terminated as Master Servicer.

(b)          If at any time the Trustee or the Securities Administrator shall cease to be eligible in accordance with the provisions of Section 9.06 and shall fail to resign after written request therefor by the Depositor or if at any time the Trustee or the Securities Administrator shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or the Securities Administrator, as applicable, or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or the Securities Administrator, as applicable, or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then the Depositor shall promptly remove the Trustee, or shall be entitled to remove the Securities Administrator, as applicable, and appoint
a successor Trustee or Securities Administrator, as applicable, by written instrument, in triplicate, one copy of which instrument shall be delivered to each of the Trustee or Securities Administrator, as applicable, so removed, the successor Trustee or Securities Administrator, as applicable.

(c)          The Holders of Certificates evidencing Percentage Interests aggregating not less than 51% of the Trust Fund may at any time remove the Trustee or the Securities Administrator and appoint a successor Trustee or Securities Administrator by written instrument or instruments, in quadruplicate, signed by such Holders or their attorneys-in-fact duly authorized, one complete set of which instruments shall be delivered to the Depositor, the Master Servicer, the Securities Administrator (if the Trustee is removed), the Trustee (if the Securities Administrator is removed), and the Trustee or Securities Administrator so removed and the successor so appointed.

 

 

(d)          No resignation or removal of the Trustee or the Securities Administrator and appointment of a successor Trustee or Securities Administrator pursuant to any of the provisions of this Section 9.08 shall become effective except upon appointment of and acceptance of such appointment by the successor Trustee or Securities Administrator as provided in Section 9.09.

Section 9.09       Successor Trustee and Successor Securities Administrator. (a) Any successor Trustee or Securities Administrator appointed as provided in Section 9.08 shall execute, acknowledge and deliver to the Depositor and to its predecessor Trustee or Securities Administrator an instrument accepting such appointment hereunder. The resignation or removal of the predecessor Trustee or Securities Administrator shall then become effective and such successor Trustee or Securities Administrator, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties and obligations of its predecessor hereunder, with like effect as if originally named as Trustee or Securities Administrator herein. The predecessor Trustee or Securities Administrator shall after payment of
its outstanding fees and expenses promptly deliver to the successor Trustee or Securities Administrator, as applicable, all assets and records of the Trust held by it hereunder, and the Depositor and the predecessor Trustee or Securities Administrator, as applicable, shall execute and deliver such instruments and do such other things as may reasonably be required for more fully and certainly vesting and confirming in the successor Trustee or Securities Administrator, as applicable, all such rights, powers, duties and obligations.

(b)          No successor Trustee or Securities Administrator shall accept appointment as provided in this Section 9.09 unless at the time of such acceptance such successor Trustee or Securities Administrator shall be eligible under the provisions of Section 9.06.

(c)          Upon acceptance of appointment by a successor Trustee or Securities Administrator as provided in this Section 9.09, the successor Trustee or Securities Administrator shall mail notice of the succession of such Trustee or Securities Administrator hereunder to all Certificateholders at their addresses as shown in the Certificate Register and to the Rating Agencies. The Depositor shall pay the cost of any mailing by the successor Trustee or Securities Administrator.

Section 9.10         Merger or Consolidation of Trustee or Securities Administrator. Any state bank or trust company or national banking association into which the Trustee or the Securities Administrator may be merged or converted or with which it may be consolidated or any state bank or trust company or national banking association resulting from any merger, conversion or consolidation to which the Trustee or the Securities Administrator, respectively, shall be a party, or any state bank or trust company or national banking association succeeding to all or substantially all of the corporate trust business of the Trustee or the Securities Administrator, respectively, shall be the successor of the Trustee or the Securities Administrator, respectively, hereunder, provided such state bank or trust
company or national banking association shall be eligible under the provisions of Section 9.06. Such succession shall be valid without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

Section 9.11         Appointment of Co-Trustee or Separate Trustee. (a) Notwithstanding any other provisions hereof, at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any part of the Trust or property constituting the same may at the time be 

 

located, the Depositor and the Trustee acting jointly shall have the power and shall execute and deliver all instruments to appoint one or more Persons approved by the Trustee and the Depositor to act as co-trustee or co-trustees, jointly with the Trustee, or separate trustee or separate trustees, of all or any part of the Trust, and to vest in such Person or Persons, in such capacity, such title to the Trust, or any part thereof, and, subject to the other provisions of this Section 9.11, such powers, duties, obligations, rights and trusts as the Depositor and the Trustee may consider necessary or desirable.

(b)          If the Depositor shall not have joined in such appointment within 15 days after the receipt by it of a written request so to do, the Trustee shall have the power to make such appointment without the Depositor.

(c)          No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor Trustee under Section 9.06 hereunder and no notice to Certificateholders of the appointment of co-trustee(s) or separate trustee(s) shall be required under Section 9.08 hereof.

(d)          In the case of any appointment of a co-trustee or separate trustee pursuant to this Section 9.11, all rights, powers, duties and obligations conferred or imposed upon the Trustee and required to be conferred on such co-trustee shall be conferred or imposed upon and exercised or performed by the Trustee and such separate trustee or co-trustee jointly, except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed (whether as Trustee hereunder or as successor to the Master Servicer hereunder), the Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Trust or any portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.

(e)          Any notice, request or other writing given to the Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article IX. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Trustee or separately, as may be provided therein, subject to all the provisions of this Agreement, specifically including every provision of this Agreement relating to the conduct of, affecting the liability of, or affording protection to, the Trustee. Every such instrument shall be filed with the Trustee.

(f)           To the extent not prohibited by law, any separate trustee or co-trustee may, at any time, request the Trustee, its agent or attorney-in-fact, with full power and authority, to do any lawful act under or with respect to this Agreement on its behalf and in its name. If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties rights, remedies and trusts shall vest in and be exercised by the Trustee, to the extent permitted by law, without the appointment of a new or successor Trustee.

(g)          No trustee under this Agreement shall be personally liable by reason of any act or omission of another trustee under this Agreement. The Depositor and the Trustee acting jointly may at any time accept the resignation of or remove any separate trustee or co-trustee.

 

 

Section 9.12        Federal Information Returns and Reports to Certificateholders; REMIC Administration. (a) For federal income tax purposes, the taxable year of each of REMIC I and REMIC II shall be a calendar year and the Securities Administrator shall maintain or cause the maintenance of the books of each such REMIC on the accrual method of accounting.

(b)          The Securities Administrator shall prepare and file or cause to be filed with the Internal Revenue Service, and the Trustee shall sign, federal tax information returns or elections required to be made hereunder with respect to each of REMIC I and REMIC II, the Trust Fund, if applicable, and the Certificates containing such information and at the times and in the manner as may be required by the Code or applicable Treasury regulations, and shall furnish to each Holder of Certificates at any time during the calendar year for which such returns or reports are made such statements or information at the times and in the manner as may be required thereby, including, without limitation, reports relating to interest, original issue discount and market discount or premium (using a constant prepayment assumption of
25% CPR for the Mortgage Loans).  The Securities Administrator will apply for an Employee Identification Number from the IRS under Form SS-4 or any other acceptable method for all tax entities. In connection with the foregoing, the Securities Administrator shall timely prepare and file, and the Trustee shall sign, IRS Form 8811, which shall provide the name and address of the person who can be contacted to obtain information required to be reported to the holders of regular interests in each of REMIC I and REMIC II (the “REMIC Reporting Agent”). The Trustee shall make elections to treat each of REMIC I and REMIC II as a REMIC (which elections shall apply to the taxable period ending December 31, 2005 and each calendar year thereafter) in such manner as the Code or applicable Treasury regulations may prescribe, and as described by the Securities Administrator. The Trustee shall sign all tax information returns filed pursuant to this Section and any other returns as may be
required by the Code.  The Holder of the Class R-I Certificate is hereby designated as the “Tax Matters Person” (within the meaning of Treas. Reg. §§1.860F-4(d)) for REMIC I, the Holder of the Class R-II Certificate is hereby designated as the “Tax Matters Person” for REMIC II.  The Securities Administrator is hereby designated and appointed as the agent of each such Tax Matters Person. Any Holder of a Residual Certificate will by acceptance thereof appoint the Securities Administrator as agent and attorney-in-fact for the purpose of acting as Tax Matters Person for each of REMIC I and REMIC II during such time as the Securities Administrator does not own any such Residual Certificate. In the event that the Code or applicable Treasury regulations prohibit the Trustee from signing tax or information returns or other statements, or the Securities Administrator from acting as agent for the Tax Matters Person, the Trustee and the Securities Administrator
shall take whatever action that in its sole good faith judgment is necessary for the proper filing of such information returns or for the provision of a tax matters person, including designation of the Holder of a Residual Certificate to sign such returns or act as tax matters person. Each Holder of a Residual Certificate shall be bound by this Section.

(c)          The Securities Administrator shall provide upon request and receipt of reasonable compensation, such information as required in Section 860D(a)(6)(B) of the Code to the Internal Revenue Service, to any Person purporting to transfer a Residual Certificate to a Person other than a transferee permitted by Section 5.05(b), and to any regulated investment company, real estate investment trust, common trust fund, partnership, trust, estate, organization described in Section 1381 of the Code, or nominee holding an interest in a pass-through entity described in 

 

Section 860E(e)(6) of the Code, any record holder of which is not a transferee permitted by Section 5.05(b) (or which is deemed by statute to be an entity with a disqualified member).

(d)          The Securities Administrator shall prepare and file or cause to be filed, and the Trustee shall sign, any state income tax returns required under Applicable State Law with respect to each of REMIC I and REMIC II or the Trust Fund.

(e)          Notwithstanding any other provision of this Agreement, the Trustee and the Securities Administrator shall comply with all federal withholding requirements respecting payments to Certificateholders of interest or original issue discount on the Mortgage Loans, that the Trustee or the Securities Administrator reasonably believes are applicable under the Code. The consent of Certificateholders shall not be required for such withholding. In the event the Trustee or the Securities Administrator withholds any amount from interest or original issue discount payments or advances thereof to any Certificateholder pursuant to federal withholding requirements, the Trustee or the Securities Administrator shall, together with its monthly report to such Certificateholders, indicate such amount withheld.

(f)           The Trustee and the Securities Administrator agree to indemnify the Trust Fund and the Depositor for any taxes and costs including, without limitation, any reasonable attorneys fees imposed on or incurred by the Trust Fund, the Depositor or the Master Servicer, as a result of a breach of the Trustee's covenants and the Securities Administrator's covenants, respectively, set forth in this Section 9.12; provided, however, such liability and obligation to indemnify in this paragraph shall not be joint and several and neither the Trustee nor the Securities Administrator shall be liable or be obligated to indemnify the Trust Fund for the failure by the other to perform any duty under this Agreement or the breach by the other of any covenant in this Agreement.

 

 

ARTICLE X 

TERMINATION

	
             
  	
            Section 10.01
 	
            Termination.
 

(a)          The respective obligations and responsibilities of the Master Servicer, the Depositor, the Securities Administrator and the Trustee created hereby (other than the obligation of the Securities Administrator to make certain payments to Certificateholders after the final Distribution Date and the obligation of the Master Servicer to send certain notices as hereinafter set forth) shall terminate upon notice to the Securities Administrator upon the earliest of (i) the Distribution Date on which the Class Certificate Balance of each Class of Certificates has been reduced to zero, (ii) the final payment or other liquidation of the last Mortgage Loan in the Trust, and (iii) the optional purchase by the Controlling Class Holder of the Mortgage Loans as described below.  Notwithstanding the foregoing, in no event
shall the trust created hereby continue beyond the earlier of (i) the Assumed Final Distribution Date and (ii) the expiration of 21 years from the death of the last survivor of the descendants of Joseph P. Kennedy, the late ambassador of the United States to the Court of St. James’s, living on the date hereof.

The Controlling Class Holder may, at its option, terminate this Agreement on any date on which the aggregate Stated Principal Balance of the Mortgage Loans is 10% or less of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, or by purchasing, on the next succeeding Distribution Date, all of the outstanding Mortgage Loans and REO Properties at a price equal to the sum of: (i) the outstanding Stated Principal Balance of the Mortgage Loans and accrued and unpaid interest thereon at the weighted average of the Mortgage Interest Rates through the end of the Due Period preceding the final Distribution Date and (ii) any unreimbursed Servicing Advances, Monthly Advances and any unpaid Servicing Fees allocable to such Mortgage Loans and REO Properties and all amounts due to the Master Servicer and the Securities Administrator hereunder (the “Termination Price”). 

In connection with any such purchase by the Controlling Class Holder pursuant to the preceding paragraph, the Controlling Class Holder shall pay to the Master Servicer for deposit in the Master Servicer Collection Account the Termination Price on the Business Day preceding the Termination Date.  In connection with any such purchase pursuant to the preceding paragraph, the Master Servicer shall deposit in the Distribution Account all amounts then on deposit in the Master Servicer Collection Account (less amounts permitted to be withdrawn by the Master Servicer pursuant to Section 4.03), which deposit shall be deemed to have occurred immediately preceding such purchase.

 

Any such purchase shall be accomplished by deposit into the Distribution Account on the Business Day before such Distribution Date of the Termination Price and the delivery of an opinion of counsel that such termination is a “qualified liquidation” under Section 860F of the Code.

 

(b)          Notice of any termination, specifying the Distribution Date (which shall be a date that would otherwise be a Distribution Date) upon which the Certificateholders may surrender their Certificates to the Securities Administrator for payment of the final distribution and cancellation, shall be given promptly by the Securities Administrator upon the Securities Administrator receiving notice of such date from the Master Servicer, by letter to the 

 

Certificateholders mailed not earlier than the 15th day and not later than the 25th day of the month next preceding the month of such final distribution specifying (1) the Distribution Date upon which final distribution of the Certificates will be made upon presentation and surrender of such Certificates at the office or agency of the Securities Administrator therein designated, (2) the amount of any such final distribution and (3) that the Record Date otherwise applicable to such Distribution Date is not applicable, distributions being made only upon presentation and surrender of the Certificates at the office or agency of the Securities Administrator therein specified.

(c)          Upon presentation and surrender of the Certificates, the Securities Administrator shall cause to be distributed to the Holders of the Certificates on the Distribution Date for such final distribution, in proportion to the Percentage Interests of their respective Class and to the extent that funds are available for such purpose, an amount equal to the amount required to be distributed to such Holders in accordance with the provisions of Section 6.01 for such Distribution Date.

(d)          In the event that all Certificateholders shall not surrender their Certificates for final payment and cancellation on or before such final Distribution Date, the Securities Administrator shall promptly following such date cause all funds in the Distribution Account not distributed in final distribution to Certificateholders to be withdrawn therefrom and credited to the remaining Certificateholders by depositing such funds in a separate servicing account for the benefit of such Certificateholders, and the Master Servicer (if the Master Servicer has exercised its right to purchase the Mortgage Loans) or the Securities Administrator (in any other case) shall give a second written notice to the remaining Certificateholders, to surrender their Certificates for cancellation and receive the final distribution
with respect thereto.  If within nine months after the second notice all the Certificates shall not have been surrendered for cancellation, the Class R Certificateholders shall be entitled to all unclaimed funds and other assets which remain subject hereto, and the Securities Administrator upon transfer of such funds shall be discharged of any responsibility for such funds, and the Certificateholders shall look to the Class R Certificateholders for payment.

Section 10.02         Additional Termination Requirements. (a) In the event that the Controlling Class Holder exercises its purchase option as provided in Section 10.01, the Trust Fund shall be terminated in accordance with the following additional requirements, unless the Trustee shall have been furnished with an Opinion of Counsel to the effect that the failure of the Trust to comply with the requirements of this Section will not (i) result in the imposition of taxes on “prohibited transactions” of the Trust as defined in Section 860F of the Code or (ii) cause any REMIC constituting part of the Trust Fund to fail to qualify as a REMIC at any time that any Certificates are outstanding:

(i)           Within 90 days prior to the final Distribution Date, the Trustee shall adopt and sign a plan of complete liquidation of the Trust Fund as provided to it by the Controlling Class Holder, meeting the requirements of a “qualified liquidation” under Section 860F of the Code and any regulations thereunder; and

(ii)          At or after the time of adoption of such a plan of complete liquidation and at or prior to the final Distribution Date, the Trustee shall sell all of the assets of the Trust to the Master Servicer for cash pursuant to the terms of the plan of complete liquidation.

 

 

(iii)        At or after the time of adoption of such a plan of complete liquidation of any of REMIC I and REMIC II, and at or prior to the final Distribution Date relating thereto, the Trustee shall sell for cash all of the assets of the Trust, to or at the direction of the Depositor, and REMIC I and REMIC II shall terminate at such time.

(b)          By their acceptance of Certificates, the Holders thereof hereby agree to appoint the Trustee as their attorney in fact to: (i) adopt such a plan of complete liquidation (and the Certificateholders hereby appoint the Trustee as their attorney in fact to sign such plan) as appropriate and (ii) to take such other action in connection therewith as may be reasonably required to carry out such plan of complete liquidation all in accordance with the terms hereof.

 

 

ARTICLE XI

MISCELLANEOUS PROVISIONS

Section 11.01         Intent of Parties. The parties intend that each of REMIC I and REMIC II shall be treated as a REMIC for federal income tax purposes and that the provisions of this Agreement should be construed in furtherance of this intent.

Section 11.02        Amendment. (a) This Agreement may be amended from time to time by the Depositor, the Master Servicer, the Securities Administrator and the Trustee, and the Assignment Agreements may be amended from time to time by the Depositor, the Master Servicer and the Trustee, without notice to or the consent of any of the Certificateholders, to cure any ambiguity, to correct or supplement any provisions herein or therein that may be defective or inconsistent with any other provisions herein or therein, to comply with any changes in the Code or to make any other provisions with respect to matters or questions arising under this Agreement which shall not be inconsistent with the provisions of this Agreement; provided, however, that such action shall not, as evidenced by an Opinion of Independent
Counsel, addressed to the Trustee, adversely affect in any material respect the interests of any Certificateholder or adversely affect the status of any REMIC created hereunder as a REMIC.

(b)          This Agreement may also be amended from time to time by the Master Servicer, the Depositor, the Securities Administrator and the Trustee, and the Assignment Agreements may also be amended from time to time by the Master Servicer and the Trustee, with the consent of the Holders of Certificates evidencing Percentage Interests aggregating not less than 51% of the Trust Fund or of the applicable Class or Classes, if such amendment affects only such Class or Classes, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Certificateholders; provided, however, that no such amendment shall (i) reduce in any manner the amount of, or delay the timing of, payments received on Mortgage Loans which are
required to be distributed on any Regular Certificate without the consent of the Holder of such Regular Certificate, (ii) reduce the aforesaid percentage of Certificates the Holders of which are required to consent to any such amendment, without the consent of the Holders of all Certificates then outstanding, or (iii) cause REMIC I or REMIC II to fail to qualify as a REMIC for federal income tax purposes, as evidenced by an Opinion of Independent Counsel which shall be provided to the Trustee other than at the Trustee's expense. Notwithstanding any other provision of this Agreement, for purposes of the giving or withholding of consents pursuant to Section 11.02(b), Certificates registered in the name of or held for the benefit of the Depositor, the Securities Administrator, the Master Servicer, or the Trustee or any Affiliate thereof shall be entitled to vote their Percentage Interests with respect to matters affecting such Certificates.

(c)          Promptly after the execution of any such amendment, the Trustee shall furnish a copy of such amendment or written notification of the substance of such amendment to each Certificateholder, with a copy to the Rating Agencies.

(d)          In the case of an amendment under Subsection 11.02(b) above, it shall not be necessary for the Certificateholders to approve the particular form of such an amendment. Rather, it shall be sufficient if the Certificateholders approve the substance of the amendment. The manner of obtaining such consents and of evidencing the authorization of the execution 

 

thereof by Certificateholders shall be subject to such reasonable regulations as the Trustee may prescribe.

(e)          Prior to the execution of any amendment to this Agreement, the Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and will not adversely affect the status of any REMIC created hereunder. The Trustee and the Securities Administrator may, but shall not be obligated to, enter into any such amendment which affects the Trustee's or the Securities Administrator's own respective rights, duties or immunities under this Agreement.

Section 11.03         Recordation of Agreement. To the extent permitted by applicable law, this Agreement is subject to recordation in all appropriate public offices for real property records in all the counties or other comparable jurisdictions in which any or all of the Mortgaged Properties are situated, and in any other appropriate public recording office or elsewhere. The Depositor shall effect such recordation, at the expense of the Trust upon the request in writing of a Certificateholder, but only if such direction is accompanied by an Opinion of Counsel (provided at the expense of the Certificateholder requesting recordation) to the effect that such recordation would materially and beneficially affect the interests of the Certificateholders or is required by law.

Section 11.04        Limitation on Rights of Certificateholders. (a) The death or incapacity of any Certificateholder shall not terminate this Agreement or the Trust, nor entitle such Certificateholder's legal representatives or heirs to claim an accounting or to take any action or proceeding in any court for a partition or winding up of the Trust, nor otherwise affect the rights, obligations and liabilities of the parties hereto or any of them.

(b)          Except as expressly provided in this Agreement, no Certificateholders shall have any right to vote or in any manner otherwise control the operation and management of the Trust, or the obligations of the parties hereto, nor shall anything herein set forth, or contained in the terms of the Certificates, be construed so as to establish the Certificateholders from time to time as partners or members of an association; nor shall any Certificateholders be under any liability to any third Person by reason of any action taken by the parties to this Agreement pursuant to any provision hereof.

(c)          No Certificateholder shall have any right by virtue of any provision of this Agreement to institute any suit, action or proceeding in equity or at law upon, under or with respect to this Agreement against the Depositor, the Securities Administrator, the Master Servicer or any successor to any such parties unless (i) such Certificateholder previously shall have given to the Trustee a written notice of a continuing default, as herein provided, (ii) the Holders of Certificates evidencing Percentage Interests aggregating not less than 51% of the Trust Fund shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder and shall have offered to the Trustee such reasonable indemnity as it may require against the costs and expenses and
liabilities to be incurred therein or thereby, and (iii) the Trustee, for 60 days after its receipt of such notice, request and offer of indemnity, shall have neglected or refused to institute any such action, suit or proceeding.

 

 

(d)          No one or more Certificateholders shall have any right by virtue of any provision of this Agreement to affect the rights of any other Certificateholders or to obtain or seek to obtain priority or preference over any other such Certificateholder, or to enforce any right under this Agreement, except in the manner herein provided and for the equal, ratable and common benefit of all Certificateholders. For the protection and enforcement of the provisions of this Section 11.04, each and every Certificateholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.

Section 11.05       Acts of Certificateholders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Agreement to be given or taken by Certificateholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Certificateholders in person or by an agent duly appointed in writing. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is expressly required, to the Depositor. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Agreement and conclusive in favor of the Trustee and the Depositor, if made in the manner provided in
this Section 11.05.

(b)          The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his or her individual capacity, such certificate or affidavit shall also constitute sufficient proof of his or her authority. The fact and date of the execution of any such instrument or writing, or the authority of the individual executing the same, may also be proved in any other manner which the Trustee deems sufficient.

(c)          The ownership of Certificates (notwithstanding any notation of ownership or other writing on such Certificates, except an endorsement in accordance with Section 5.02 made on a Regular Certificate presented in accordance with Section 5.04) shall be proved by the Certificate Register, and neither the Trustee, the Securities Administrator, the Depositor, the Master Servicer nor any successor to any such parties shall be affected by any notice to the contrary.

(d)          Any request, demand, authorization, direction, notice, consent, waiver or other action of the holder of any Regular Certificate shall bind every future holder of the same Regular Certificate and the holder of every Regular Certificate issued upon the registration of transfer or exchange thereof, if applicable, or in lieu thereof with respect to anything done, omitted or suffered to be done by the Trustee, the Securities Administrator, the Depositor, the Master Servicer or any successor to any such party in reliance thereon, whether or not notation of such action is made upon such Certificates.

(e)          In determining whether the Holders of the requisite percentage of Certificates evidencing Percentage Interests have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Certificates owned by the Trustee, the Securities Administrator, the Depositor, the Master Servicer or any Affiliate thereof shall be disregarded, except as otherwise provided in Section 11.02(b) and except that, in determining whether the Trustee shall be 

 

protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Certificates which a Responsible Officer of the Trustee knows to be so owned shall be so disregarded. Certificates which have been pledged in good faith to the Trustee, the Securities Administrator, the Depositor, the Master Servicer or any Affiliate thereof may be regarded as outstanding if the pledgor establishes to the satisfaction of the Trustee the pledgor's right to act with respect to such Certificates and that the pledgor is not an Affiliate of the Trustee, the Securities Administrator, the Depositor, or the Master Servicer, as the case may be.

Section 11.06       Governing Law. THIS AGREEMENT AND THE CERTIFICATES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAWS RULES (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW) AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Section 11.07         Notices. All demands and notices hereunder shall be in writing and shall be deemed given when delivered at (including delivery by facsimile) or mailed by registered mail, return receipt requested, postage prepaid, or by recognized overnight courier, to (i) in the case of the Depositor, 4 World Financial Center, New York, New York 10281, Attention: Vice President-Servicing, telecopier number: (212) 449-1000, or to such other address as may hereafter be furnished to the other parties hereto in writing; (ii) in the case of the Trustee, at its Corporate Trust Office, 452 Fifth Avenue, New York, New York 10018, or such other address as may hereafter be furnished to the other parties hereto in writing; (iii) in the case of the MLCC, 4802 Deer Lake Drive, Jacksonville, FL 32246,
Attention: Vice President-Servicing, telecopier number: (212) 735-1110, or to such other address as may hereafter be furnished to the other parties hereto in writing; (iv) in the case of the Master Servicer or Securities Administrator, Wells Fargo Bank, N.A., P.O. Box 98, Columbia, Maryland 21046, Attention: Series MLMI 2005-A10, or, in the case of overnight deliveries, 9062 Old Annapolis Road, Columbia, Maryland 21045-1951, Attention: Series MLMI 2005-A10, facsimile no.: (410) 715-2380, or such other address as may hereafter be furnished to the other parties hereto in writing; (v) in the case of the Custodian, Wells Fargo Bank, N.A., 1015 10th Avenue Southeast, MS 0031, Minneapolis, Minnesota 55414, Attention: Series MLMI 2005-A10; or such other address as may hereafter be furnished to the other parties hereto in writing; or (vi) in the case of the Rating Agencies, Moody’s Investors Service, Inc., 99 Church Street, New York, New York 10007 and Standard & Poor's, a
division of The McGraw-Hill Companies, Inc., 55 Water Street, New York, New York 10041.  Any notice delivered to the Depositor, the Master Servicer, the Securities Administrator or the Trustee under this Agreement shall be effective only upon receipt. Any notice required or permitted to be mailed to a Certificateholder, unless otherwise provided herein, shall be given by first-class mail, postage prepaid, at the address of such Certificateholder as shown in the Certificate Register. Any notice so mailed within the time prescribed in this Agreement shall be conclusively presumed to have been duly given when mailed, whether or not the Certificateholder receives such notice.

Section 11.08       Severability of Provisions. If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severed from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect 

 

the validity or enforceability of the other provisions of this Agreement or of the Certificates or the rights of the holders thereof.

Section 11.09         Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of the parties hereto.

Section 11.10         Article and Section Headings. The article and section headings herein are for convenience of reference only, and shall not limit or otherwise affect the meaning hereof.

Section 11.11       Counterparts. This Agreement may be executed in two or more counterparts each of which when so executed and delivered shall be an original but all of which together shall constitute one and the same instrument.

Section 11.12         Notice to Rating Agencies. The article and section headings herein are for convenience of reference only, and shall not limited or otherwise affect the meaning hereof. The Trustee shall promptly provide notice to each Rating Agency with respect to each of the following of which it has actual knowledge:

1.            Any material change or amendment to this Agreement or the Servicing Agreements;

	
             
 	
            2.
 	
            The occurrence of any Event of Default that has not been cured;
 

3.            The resignation or termination of the Master Servicer, the Trustee or the Securities Administrator;

	
             
 	
            4.
 	
            The repurchase or substitution of Mortgage Loans;
 
	
             
 	
            5.
 	
            The final payment to Certificateholders; and
 	
             

6.            Any change in the location of the Master Servicer Collection Account or the Distribution Account.

	
             
 	
            Section 11.13
 	
            [Reserved].
 	
             

	
             
 	
            Section 11.14
 	
            Activities of the Trust.
 

After its formation, the Trust will not engage in any activity other than (i) issuing the Certificates, (ii) making payments on the Certificates and (iii) engaging in other activities that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith.  Notwithstanding the foregoing, the Trust, at the direction of the Controlling Class Holder, may amend its permitted activities by (i) an appropriate amendment to the applicable agreement, (ii) any opinion of counsel reasonably requested by the Underwriter, the rating agencies, the Trustee and the Securities Administrator (including to the effect that such amendment will not cause the Trust Fund’s REMIC elections to fail to qualify as a REMIC for federal income tax purposes) and a bring down opinion relating to the true sale of the Mortgage Loans from KKR, as Seller, (iii) in the
case of S&P, written confirmation that such amendment will not result in the rating of any Certificate to be downgraded, withdrawn or suspended, and in 

 

the case of Moody’s, written notice of such amendment to Moody’s, and (iv) the consent of the Controlling Class Holder to the amendment of such permitted activities.

 

 

IN WITNESS WHEREOF, the Depositor, the Trustee, the Master Servicer and the Securities Administrator have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the day and year first above written.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            MERRILL LYNCH MORTGAGE 
 INVESTORS, INC., 
 as Depositor
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
/s/ Paul Clark
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
            Paul Clark
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
            Authorized Signatory
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            HSBC BANK USA, NATIONAL 
 ASSOCIATION, 
 as Trustee
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
/s/ Elena Zheng
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
            Elena Zheng
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
            Assistant Vice President
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	

             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            WELLS FARGO BANK, N.A., 
 as Master Servicer
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
/s/ Michael Pinzon
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
            Michael Pinzon
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
            Assistant Vice President
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            WELLS FARGO BANK, N.A., 
 as Securities Administrator
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
/s/ Michael Pinzon
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
            Michael Pinzon
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
            Assistant Vice President
 
																

 

 

 

	
            STATE OF NEW YORK
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF NEW YORK
 	
            )
 	
             
 

 

On the 22nd day of December, 2005 before me, a notary public in and for said State, personally appeared Paul Clark, known to me to be an Authorized Signatory of Merrill Lynch Mortgage Investors, Inc., the corporation that executed the within instrument, and also known to me to be the person who executed it on behalf of said corporation, and acknowledged to me that such corporation executed the within instrument. 

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

 

	
             
 	
            
 
 
 
	
             
 	
            Notary Public
 

 

[Notarial Seal]

 

 

	
            STATE OF NEW YORK
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF _______________
 	
            )
 	
             
 

 

On the 22nd day of December, 2005 before me, a notary public in and for said State, personally appeared Elena Zheng, known to me to be an Assistant Vice President of HSBC Bank USA, National Association, the entity that executed the within instrument, and also known to me to be the person who executed it on behalf of said entity, and acknowledged to me that such entity executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

 

	
             
 	
            
 
 
 
	
             
 	
            Notary Public
 

 

[Notarial Seal]

 

 

	
            STATE OF NEW YORK
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF NEW YORK
 	
            )
 	
             
 

 

On the 22nd day of December, 2005 before me, a notary public in and for said State, personally appeared Michael Pinzon, known to me to be an Assistant Vice President of Wells Fargo Bank, N.A., the entity that executed the within instrument, and also known to me to be the person who executed it on behalf of said entity, and acknowledged to me that such entity executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

 

	
             
 	

            
 
 
 
	
             
 	
            Notary Public
 

 

[Notarial Seal]

 

 

	
            STATE OF NEW YORK
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF NEW YORK
 	
            )
 	
             
 

 

On the 22nd day of December, 2005 before me, a notary public in and for said State, personally appeared Michael Pinzon, known to me to be an Assistant Vice President of Wells Fargo Bank, N.A., the entity that executed the within instrument, and also known to me to be the person who executed it on behalf of said entity, and acknowledged to me that such entity executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

 

	
             
 	
            
 
 
 
	
             
 	
            Notary Public
 

 

[Notarial Seal]

 

 

EXHIBIT A-1

FORM OF CLASS A-[_][M-_] CERTIFICATE

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT”, AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE “CODE”).

[THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES] [THE CLASS M-1 CERTIFICATES] [AND] [THE CLASS M-2 CERTIFICATES] [AND THE RESIDUAL CERTIFICATES TO THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

[EACH BENEFICIAL OWNER OF A CLASS M CERTIFICATE OR ANY INTEREST THEREIN SHALL BE DEEMED TO HAVE MADE THE REPRESENTATIONS SET FORTH IN SECTION 5.02(d) OF THE AGREEMENT.]

[IF ANY BOOK-ENTRY CERTIFICATE (OR ANY INTEREST THEREIN) IS ACQUIRED OR HELD IN VIOLATION OF THE PROVISIONS OF SECTION 5.02(D) OF THE POOLING AND SERVICING AGREEMENT, THEN THE LAST PRECEDING TRANSFEREE THAT IS IN COMPLIANCE WITH SUCH PROVISIONS SHALL BE RESTORED, TO THE EXTENT PERMITTED BY LAW, TO ALL RIGHTS AND OBLIGATIONS AS CERTIFICATE OWNER THEREOF RETROACTIVE TO THE DATE OF SUCH TRANSFER OF SUCH CERTIFICATE. THE TRUSTEE SHALL BE UNDER NO LIABILITY TO ANY PERSON FOR MAKING ANY PAYMENTS DUE ON SUCH CERTIFICATE TO SUCH PRECEDING TRANSFEREE.]

[ANY PURPORTED CERTIFICATE OWNER WHOSE ACQUISITION OR HOLDING OF ANY BOOK-ENTRY CERTIFICATE (OR INTEREST THEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS IN SECTION 5.02(D) OF THE AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE DEPOSITOR, THE TRUSTEE, THE SERVICER, THE TRUST FUND AND THE CONTROLLING CLASS HOLDER FROM AND AGAINST ANY AND ALL LIABILITIES, CLAIMS, COSTS OR EXPENSES INCURRED BY SUCH PARTIES AS A RESULT OF SUCH ACQUISITION OR HOLDING.]

 

 

	
            Series MLMI 2005-A10, Class A[-_][M-_]
 	
             
 	
            Aggregate [Class Certificate Balance] [Notional Amount] of the Class A[-_][M-_] Certificates as of the Issue Date:  $__________  
 
	
            Pass-Through Rate: __________
 	
             
 	
            Initial [Class Certificate Balance] [Notional Amount]  of this Class A[-_][M-_] Certificate as of the Issue Date
 $__________  
 
	
            Date of Agreement and Cut-off Date:
 December 1, 2005  
 	
             
 	
            Master Servicer:
 Wells Fargo Bank, N.A.
 
	
            First Distribution Date: January 25, 2006
 	
             
 	
            Trustee: Wachovia Bank, National Association  
 
	
            No. __
 	
             
 	
            Issue Date: December 22, 2005  
 
	
             
 	
             
 	
            CUSIP: ___________
 

 

 

 

DISTRIBUTIONS IN REDUCTION OF THE [CLASS CERTIFICATE BALANCE] [NOTIONAL AMOUNT] OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING [CLASS CERTIFICATE BALANCE] [NOTIONAL AMOUNT] HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.

MORTGAGE PASS-THROUGH CERTIFICATE

SERIES MLMI 2005-A10

evidencing a beneficial ownership interest in a Trust Fund (the “Trust Fund”) consisting primarily of a pool of one- to four-family, fixed-rate and adjustable-rate mortgage loans secured by first liens on residential property (the “Mortgage Loans”) formed and sold by

MERRILL LYNCH MORTGAGE INVESTORS, INC.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MERRILL LYNCH MORTGAGE INVESTORS, INC., THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

This certifies that Cede & Co. is the registered owner of a Percentage Interest obtained by dividing the denomination of this Certificate by the aggregate [Class Certificate Balance] [Notional Amount] of the Class A[-_][M-_] Certificates as of the Issue Date in that certain beneficial ownership interest evidenced by all the Class A[-_][M-_] Certificates in the Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as specified above (the “Agreement”), among Merrill Lynch Mortgage Investors, Inc. (hereinafter called the “Depositor,” which term includes any successor entity under the Agreement), Wells Fargo Bank, N.A. as master servicer (in such capacity, the “Master Servicer”) and securities administrator (in such capacity, the “Securities Administrator”), and Wachovia Bank, National Association (the “Trustee”), a
summary of certain of the pertinent provisions of which is set forth hereafter. To the extent not defined herein, the capitalized terms used herein have the meanings assigned in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of the acceptance hereof assents and by which such Holder is bound.

Interest on this Certificate will accrue during the period specified in the Agreement on the [Class Certificate Balance] [Notional Amount] hereof at a per annum rate equal to the Pass-Through Rate set forth above and as further described in the Agreement.

Pursuant to the terms of the Agreement, distributions will be made on the 25th day of each month or, if such 25th day is not a Business Day, the Business Day immediately 

 

following (each, a “Distribution Date”), commencing on the First Distribution Date specified above, to the Person in whose name this Certificate is registered on the Record Date, in an amount equal to the product of the Percentage Interest evidenced by this Certificate and the amount required to be distributed to the Holders of Class A[-_][M-_] Certificates on such Distribution Date pursuant to the Agreement.

All distributions to the Holder of this Certificate under the Agreement will be made or caused to be made by or on behalf of the Securities Administrator by wire transfer in immediately available funds to the account of the Person entitled thereto if such Person shall have so notified the Securities Administrator in writing at least five Business Days prior to the Record Date immediately prior to such Distribution Date and is the registered owner of Class A[-_][M-_] Certificates, or otherwise by check mailed by first class mail to the address of the Person entitled thereto, as such name and address shall appear on the Certificate Register. Notwithstanding the above, the final distribution on this Certificate will be made after due notice by the Securities Administrator of the pendency of such distribution and only upon the presentation and surrender of this Certificate at the office or
agency appointed by the Securities Administrator for that purpose as provided in the Agreement.

[Each transferee of a Certificate or any interest therein shall be deemed to have made the representations set forth in Section 5.02(d) of the Agreement.]

[If any Book-Entry Certificate (or any interest therein) is acquired or held in violation of the provisions of Section 5.02(d) of the Agreement, then the last preceding Transferee that is in compliance with such provisions shall be restored, to the extent permitted by law, to all rights and obligations as Certificate Owner thereof retroactive to the date of such Transfer of such Certificate. The Securities Administrator shall be under no liability to any Person for making any payments due on such Certificate to such preceding Transferee.]

[Any purported Certificate Owner whose acquisition or holding of any Book-Entry Certificate (or interest therein) was effected in violation of the restrictions in Section 5.02(d) of the Agreement shall indemnify and hold harmless the Depositor, the Trustee, the Securities Administrator, the Servicer, the Trust Fund and the Controlling Class Holder from and against any and all liabilities, claims, costs or expenses incurred by such parties as a result of such acquisition or holding.]

This Certificate is one of a duly authorized issue of Certificates designated as Mortgage Pass-Through Certificates of the Series specified on the face hereof (hereinafter called the “Certificates”) and representing a Percentage Interest in the Class of Certificates specified on the face hereof equal to the denomination specified on the face hereof divided by the aggregate [Class Certificate Balance] of the Class of Certificates specified on the face hereof.

The Certificates are limited in right of payment to certain collections and recoveries respecting the Mortgage Loans, all as more specifically set forth herein and in the Agreement. As provided in the Agreement, withdrawals from the Master Servicer Collection Account and the Distribution Account may be made from time to time for purposes other than distributions to Holders of the Certificates, such purposes including reimbursement of advances made, or certain expenses incurred, with respect to the Mortgage Loans.

 

 

The Agreement permits, with certain exceptions and conditions provided therein, the amendment thereof and the modification of the rights and obligations of the Depositor, the Master Servicer, the Securities Administrator and the Trustee and the rights of the Holders of the Certificates under the Agreement at any time by the Depositor, the Master Servicer and the Trustee, with the consent of the Holders of Certificates evidencing Percentage Interests aggregating not less than 51% of the Trust Fund or of the applicable Class or Classes, if such amendment affects only such Class or Classes, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Certificateholders. Any such consent by the Holder of this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent is made upon this Certificate. The Agreement also permits the amendment thereof, in certain limited circumstances, without the consent of the Holders of any of the Certificates.

As provided in the Agreement and subject to certain limitations set forth therein, the transfer of this Certificate is registrable in the Certificate Register upon surrender of this Certificate for registration of transfer at the offices or agencies appointed by the Securities Administrator as provided in the Agreement, duly endorsed by, or accompanied by an assignment in the form below or other written instrument of transfer in form satisfactory to the Securities Administrator and the Certificate Registrar duly executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Certificates of the same Class in authorized denominations evidencing the same aggregate Percentage Interest will be issued to the designated transferee or transferees.

The Certificates are issuable in fully registered form only without coupons in Classes and denominations representing Percentage Interests specified in the Agreement. As provided in the Agreement and subject to certain limitations set forth therein, Certificates are exchangeable for new Certificates of the same Class in authorized denominations evidencing the same aggregate Percentage Interest, as requested by the Holder surrendering the same.

No service charge will be made for any such registration of transfer or exchange of Certificates, but the Certificate Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Certificates.

The Depositor, the Master Servicer, the Trustee, the Securities Administrator and the Certificate Registrar and any agent of the Depositor, the Master Servicer, the Trustee, the Securities Administrator or the Certificate Registrar may treat the Person in whose name this Certificate is registered as the owner hereof for all purposes, and none of the Depositor, the Master Servicer, the Trustee, Securities Administrator, the Certificate Registrar nor any such agent shall be affected by notice to the contrary.

This certificate shall be governed by and construed in accordance with the laws of the state of New York.

 

 

The obligations created by the Agreement and the Trust Fund created thereby shall terminate upon payment (or provision for payment) to the Holders of the Certificates of all amounts held by or on behalf of the Trustee and required to be paid to them pursuant to the Agreement following the earlier of (i) the final payment (or any advance with respect thereto) on or other liquidation of the last Mortgage Loan remaining in the Trust Fund and (ii) the optional purchase by the party designated in the Agreement at a price determined as provided in the Agreement from the Trust Fund of all the Mortgage Loans and all property acquired in respect of such Mortgage Loans remaining therein. The Agreement permits, but does not require, the party designated in the Agreement to purchase from the Trust Fund all the Mortgage Loans and all property acquired in respect of any Mortgage Loan remaining therein
at a price determined as provided in the Agreement. The exercise of such right will effect early retirement of the Certificates; however, such right to purchase is subject to the aggregate Loan Balance of the Mortgage Loans at the time of purchase being 10% or less of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

The recitals contained herein shall be taken as statements of the Depositor and neither the Trustee nor the Securities Administrator assumes responsibility for their correctness.

Unless the certificate of authentication hereon has been executed by the Securities Administrator, by manual signature, this Certificate shall not be entitled to any benefit under the Agreement or be valid for any purpose.

 

 

IN WITNESS WHEREOF, the Securities Administrator has caused this Certificate to be duly executed.

 

Dated: _____________, 2005

	
             
 	
            WELLS FARGO BANK, N.A.,
 Not in its individual capacity but solely as Securities Administrator
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Authorized Officer
 

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the Class A[-_][M-_] Certificates referred to in the within-mentioned Agreement.

	
             
 	
            WELLS FARGO BANK, N.A.,
 Not in its individual capacity but solely as Securities Administrator
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Authorized Officer
 

 

 

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:

	
            TEN COM    -
  	
            as tenants in common
  	
            UNIF GIFT MIN ACT -
  	
                    Custodian         

(Cust)        (Minor)

under Uniform Gifts 

to Minors Act
  
	
            TEN ENT     -
 	
            as tenants by the entireties
 	
             
 	
            ________________

(State)
 
	
            JT TEN         -
 	
            as joint tenants with right 

if survivorship and not as 

tenants in common
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 
	
            Additional abbreviations may also be used though not in the above list.
 

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto 

 

	
             
 

(Please print or typewrite name, address including postal zip code, and Taxpayer Identification Number of assignee)

the Percentage Interest evidenced by the Mortgage Pass-Through Certificate and hereby authorize(s) the registration of transfer of such interest to assignee on the Certificate Register of the Trust Fund.

I (we) further direct the Certificate Registrar to issue a new Certificate of a like Percentage Interest and Class to the above named assignee and deliver such Certificate to the following address:

 

	
             
 	
            .
 

 

	
            Dated:
 	
             
 
	
             
 	
            Signature by or on behalf of assignor
 
	
             
 	
             
 
	
             
 	
             
 
	
             
 	
            Signature Guaranteed
 

 

 

 

DISTRIBUTION INSTRUCTIONS

The assignee should include the following for purposes of distribution:

Distributions shall be made, by wire transfer or otherwise, in immediately available funds 

	
            to
 	
            
 
 
 	
            ,
 
	
            for the account of
 	
            
 
 
 	
            ,
 
	
            account number___________, or, if mailed by check, to
 	
            
 
 
 	
            ,
 
	
            Applicable statements should be mailed to
 	
            
 
 
 	
            ,
 
	
            
 
 
 	
            .
 
						

 

	
            This information is provided by
 	
            
 
 
 	
            ,
 
	
            the assignee named above, or
 	
            
 
 
 	
            ,
 
	
            as its agent.
 	
             
 	
             
 
					

 

 

 

 

 

	
             
 	
            EXHIBIT A-2
 

FORM OF CLASS [B-_] CERTIFICATE

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT”, AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE “CODE”).

THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES AND THE CLASS M CERTIFICATES TO THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER  RETIREMENT ARRANGEMENT (EACH A “PLAN”) SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR THE CODE WILL BE REGISTERED EXCEPT IN ACCORDANCE WITH SECTION 5.02(d) OF THE AGREEMENT.

THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.

 

 

	
            Series MLMI 2005-A10, Class [B-_]
 	
             
 	
            Aggregate Certificate Principal Balance of Class [B-_] Certificates as of the Issue Date:

$__________________

 
 
	
            Pass Through Rate: __________
 	
             
 	
            Denomination: $__________
 
	
            Date of Agreement and Cut-off Date:
 December 1, 2005
 	
             
 	
            Master Servicer:
 Wells Fargo Bank, N.A.

 
 
	
            First Distribution Date: January 25, 2006
 	
             
 	
            Trustee: Wachovia Bank, National Association

 
 
	
            No. __
 	
             
 	
            Issue Date: December 22, 2005
 
	
             
 	
             
 	
            CUSIP: __________
 

 

DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.

 

 

MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the “Trust Fund”) consisting primarily of a pool of conventional, one- to four-family, fixed-rate and adjustable-rate mortgage loans secured by first liens on residential property (the “Mortgage Loans”) formed and sold by

MERRILL LYNCH MORTGAGE INVESTORS, INC.

SERIES MLMI 2005-A10

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MERRILL LYNCH MORTGAGE INVESTORS, INC., THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

This certifies that ____________________ is the registered owner of a Percentage Interest (obtained by dividing the denomination of this Certificate by the aggregate Certificate Principal Balance of the Class [B-_] Certificates as of the Issue Date) in that certain beneficial ownership interest evidenced by all the Class [B-_] Certificates in the Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as specified above (the “Agreement”), among Merrill Lynch Mortgage Investors, Inc. (hereinafter called the “Depositor,” which term includes any successor entity under the Agreement), Wells Fargo Bank, N.A. as master servicer (in such capacity, the “Master Servicer”) and securities administrator (in such capacity, the “Securities Administrator”), and Wachovia Bank, National Association (the “Trustee”), a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not defined herein, the capitalized terms used herein have the meanings assigned in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of the acceptance hereof assents and by which such Holder is bound.

Pursuant to the terms of the Agreement, distributions will be made on the 25th day of each month or, if such 25th day is not a Business Day, the Business Day immediately following (a “Distribution Date”), commencing on the First Distribution Date specified above, to the Person in whose name this Certificate is registered on the Record Date, in an amount equal to the product of the Percentage Interest evidenced by this Certificate and the amount required to be distributed to the Holders of Class [B-_] Certificates on such Distribution Date pursuant to the Agreement.

All distributions to the Holder of this Certificate under the Agreement will be made or caused to be made by or on behalf of the Securities Administrator by wire transfer in immediately available funds to the account of the Person entitled thereto if such Person shall have so notified the Securities Administrator in writing at least five Business Days prior to the Record Date immediately prior to such Distribution Date and is the registered owner of Class [B-_]  Certificates, or otherwise by check mailed by first class mail to the address of the Person entitled thereto, as such name and address shall appear on the Certificate Register. 

 

Notwithstanding the above, the final distribution on this Certificate will be made after due notice by the Securities Administrator of the pendency of such distribution and only upon the presentation and surrender of this Certificate at the office or agency appointed by the Trustee for that purpose as provided in the Agreement.

This Certificate is one of a duly authorized issue of Certificates designated as Mortgage Pass-Through Certificates of the Series specified on the face hereof (hereinafter called the “Certificates”) and representing a Percentage Interest in the Class of Certificates specified on the face hereof equal to the denomination specified on the face hereof divided by the aggregate Certificate Principal Balance of the Class of Certificates specified on the face hereof.

The Certificates are limited in right of payment to certain collections and recoveries respecting the Mortgage Loans, all as more specifically set forth herein and in the Agreement. As provided in the Agreement, withdrawals from the Master Servicer Collection Account and the Distribution Account may be made from time to time for purposes other than distributions to Holders of the Certificates, such purposes including reimbursement of advances made, or certain expenses incurred, with respect to the Mortgage Loans.

The Agreement permits, with certain exceptions and conditions provided therein, the amendment thereof and the modification of the rights and obligations of the Depositor, the Master Servicer, the Securities Administrator and the Trustee and the rights of the Holders of the Certificates under the Agreement at any time by the Depositor, the Master Servicer, the Securities Administrator and the Trustee, with the consent of the Holders of Certificates evidencing Percentage Interests aggregating not less than 51% of the Trust Fund or of the applicable Class or Classes, if such amendment affects only such Class or Classes, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Certificateholders. Any such consent by the Holder of this Certificate shall be conclusive and binding
on such Holder and upon all future Holders of this Certificate and of any Certificate issued upon the transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent is made upon this Certificate. The Agreement also permits the amendment thereof, in certain limited circumstances, without the consent of the Holders of any of the Certificates.

As provided in the Agreement and subject to certain limitations set forth therein, the transfer of this Certificate is registrable in the Certificate Register upon surrender of this Certificate for registration of transfer at the offices or agencies appointed by the Securities Administrator as provided in the Agreement, duly endorsed by, or accompanied by an assignment in the form below or other written instrument of transfer in form satisfactory to the Securities Administrator and the Certificate Registrar duly executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Certificates of the same Class in authorized denominations evidencing the same aggregate Percentage Interest will be issued to the designated transferee or transferees.

The Certificates are issuable in fully registered form only without coupons in Classes and denominations representing Percentage Interests specified in the Agreement. As provided in the Agreement and subject to certain limitations set forth therein, Certificates are 

 

exchangeable for new Certificates of the same Class in authorized denominations evidencing the same aggregate Percentage Interest, as requested by the Holder surrendering the same.

No transfer of this Certificate shall be made unless the transfer is made pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “1933 Act”), and an effective registration or qualification under applicable state securities laws, or is made in a transaction that does not require such registration or qualification. In the event that such a transfer of this Certificate is to be made without registration or qualification, (i) unless such transfer is made in reliance upon Rule 144A (as evidenced by the investment letter delivered to the Securities Administrator, in substantially the form attached to the Agreement as Exhibit F-3) under the 1933 Act, the Securities Administrator and the Depositor shall require a written Opinion of Counsel (which may be in-house counsel) acceptable to and in form and substance reasonably satisfactory to the
Securities Administrator and the Depositor that such transfer may be made pursuant to an exemption, describing the applicable exemption and the basis therefor, from the 1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel shall not be an expense of the Securities Administrator or the Depositor or (ii) the Securities Administrator shall require the transferor to execute a transferor certificate (in substantially the form attached to the Agreement as Exhibit F-2) and the transferee to execute an investment letter (in substantially the form attached to the Agreement as Exhibit F-2) acceptable to and in form and substance reasonably satisfactory to the Depositor and the Securities Administrator certifying to the Depositor and the Securities Administrator the facts surrounding such transfer, which investment letter shall not be an expense of the Securities Administrator or the Depositor. None of the Depositor, the Certificate Registrar, the Securities Administrator
or the Trustee is obligated to register or qualify the Class of Certificates specified on the face hereof under the 1933 Act or any other securities law or to take any action not otherwise required under the Agreement to permit the transfer of such Certificates without registration or qualification. Any Holder desiring to effect a transfer of this Certificate shall be required to indemnify the Trustee, the Depositor, the Securities Administrator, the Certificate Registrar and the Master Servicer against any liability that may result if the transfer is not so exempt or is not made in accordance with such federal and state laws.

No transfer of this Certificate to a Plan subject to ERISA or Section 4975 of the Code, any Person acting, directly or indirectly, on behalf of any such Plan or any person using Plan Assets to acquire this Certificate shall be made except in accordance with Section 5.02(d) of the Agreement.  No service charge will be made for any such registration of transfer or exchange of Certificates, but the Certificate Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Certificates.

The Depositor, the Master Servicer, the Trustee, the Securities Administrator and the Certificate Registrar and any agent of the Depositor, the Master Servicer, the Trustee, the Securities Administrator or the Certificate Registrar may treat the Person in whose name this Certificate is registered as the owner hereof for all purposes, and none of the Depositor, the Master Servicer, the Trustee, the Securities Administrator, the Certificate Registrar nor any such agent shall be affected by notice to the contrary.

 

 

The obligations created by the Agreement and the Trust Fund created thereby shall terminate upon payment (or provision for payment) to the Holders of the Certificates of all amounts held by or on behalf of the Securities Administrator and required to be paid to them pursuant to the Agreement following the earlier of (i) the Distribution Date on which the Certificate Principal Balance of each Class of Certificates has been reduced to zero, (ii) the final payment (or any advance with respect thereto) on or other liquidation of the last Mortgage Loan remaining in the Trust Fund and (iii) the optional purchase by the party designated in the Agreement at a price determined as provided in the Agreement from the Trust Fund of all the Mortgage Loans and all property acquired in respect of such Mortgage Loans remaining therein. The Agreement permits, but does not require, the party designated in
the Agreement to purchase from the Trust Fund all the Mortgage Loans and all property acquired in respect of any Mortgage Loan remaining therein at a price determined as provided in the Agreement. The exercise of such right will effect early retirement of the Certificates; however, such right to purchase is subject to the aggregate Loan Balance of the Mortgage Loans at the time of purchase being 10% or less of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

The recitals contained herein shall be taken as statements of the Depositor and the Trustee assumes no responsibility for their correctness.

Unless the certificate of authentication hereon has been executed by the Certificate Registrar, by manual signature, this Certificate shall not be entitled to any benefit under the Agreement or be valid for any purpose.

 

 

IN WITNESS WHEREOF, the Securities Administrator has caused this Certificate to be duly executed.

Dated: ______________, 2005

	
             
 	
            WELLS FARGO BANK, N.A.,
 Not in its individual capacity but solely as Securities Administrator
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Authorized Officer
 

 

CERTIFICATE OF AUTHENTICATION

This is one of the Class [B-_] Certificates referred to in the within-mentioned Agreement.

	
             
 	
            WELLS FARGO BANK, N.A.,
 Not in its individual capacity but solely as Securities Administrator
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Authorized Officer
 

 

 

 

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:

	
            TEN  COM    -
  	
            as tenants in common
  	
            UNIF GIFT MIN ACT -
  	
                    Custodian         

(Cust)        (Minor)

under Uniform Gifts 

to Minors Act
  
	
            TEN ENT     -
 	
            as tenants by the entireties
 	
             
 	
            ________________

(State)
 
	
            JT TEN         -
 	
            as joint tenants with right 

if survivorship and not as 

tenants in common
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 
	
            Additional abbreviations may also be used though not in the above list.
 

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto 

 

	
             
 

(Please print or typewrite name, address including postal zip code, and Taxpayer Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through Certificate and hereby authorize(s) the registration of transfer of such interest to assignee on the Certificate Register of the Trust Fund.

I (we) further direct the Securities Administrator to issue a new Certificate of a like Percentage Interest and Class to the above named assignee and deliver such Certificate to the following address:

	
             
 

 

	
            Dated:
 	
             
 
	
             
 	
            Signature by or on behalf of assignor
 
	
             
 	
             
 
	
             
 	
             
 

	
             
 	
            Signature Guaranteed
 

 

 

DISTRIBUTION INSTRUCTIONS

The assignee should include the following for purposes of distribution:

Distributions shall be made, by wire transfer or otherwise, in immediately available funds 

	
            to
 	
            
 
 
 	
            ,
 
	
            for the account of
 	
            
 
 
 	
            ,
 
	
            account number___________, or, if mailed by check, to
 	
            
 
 
 	
            ,
 
	
            Applicable statements should be mailed to
 	
            
 
 
 	
            ,
 
	
            
 
 
 	
            .
 
						

 

	
            This information is provided by
 	
            
 
 
 	
            ,
 
	
            the assignee named above, or
 	
            
 
 
 	
            ,
 
	
            as its agent.
 	
             
 	
             
 
					

 

 

 

 

	
             
 	
            EXHIBIT A-3
 

FORM OF CLASS [R-_] CERTIFICATE

THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “RESIDUAL INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT” (“REMIC”), AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE “CODE”).

ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT (EACH A “PLAN”) SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR THE CODE WILL BE REGISTERED EXCEPT IN ACCORDANCE WITH SECTION 5.02(d) OF THE AGREEMENT.

THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.

ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES OR ANY POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE, (3) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3) SHALL HEREINAFTER BE REFERRED TO AS A “DISQUALIFIED ORGANIZATION”) OR (4) AN AGENT OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF
SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR 

 

COLLECTION OF TAX, AND (II) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS OF SECTION 5.02(d) OF THE AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.

 

 

	
            Series MLMI 2005-A10, Class [R-_]
 	
            Percentage Interest: 100%
 
	
            Date of Agreement and Cut-off Date:
 December 1, 2005
 	
            Master Servicer:  Wells Fargo Bank, N.A.

 

 
 
	
            First Distribution Date: January 25, 2006
 	
            Trustee: Wachovia Bank, National Association
 
	
            No. __
 	
            Issue Date: December 22, 2005
 
	
             
 	
            CUSIP: __________
 

MORTGAGE PASS-THROUGH CERTIFICATE

SERIES MLMI 2005-A10

evidencing a beneficial ownership interest in a Trust Fund (the “Trust Fund”) consisting primarily of a pool of one-to four-family, fixed-rate and adjustable-rate mortgage loans secured by first liens on residential property (the “Mortgage Loans”) formed and sold by

MERRILL LYNCH MORTGAGE INVESTORS, INC.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MERRILL LYNCH MORTGAGE INVESTORS, INC., THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

This certifies that ____________________, is a registered owner of a 100% Percentage Interest specified above in that certain beneficial ownership interest evidenced by all the Class [R-_] Certificates in the Trust Fund created pursuant to a Pooling and Servicing 

 

Agreement, dated as specified above (the “Agreement”), among Merrill Lynch Mortgage Investors, Inc. (hereinafter called the “Depositor,” which term includes any successor entity under the Agreement), Wells Fargo Bank, N.A. as master servicer (in such capacity, the “Master Servicer”) and securities administrator (in such capacity, the “Securities Administrator”), and Wachovia Bank, National Association (the “Trustee”), a summary of certain of the pertinent provisions of which is set forth hereafter. To the extent not defined herein, the capitalized terms used herein have the meanings assigned in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of the acceptance hereof assents and by which such Holder is bound.

Pursuant to the terms of the Agreement, distributions will be made on the 25th day of each month or, if such 25th day is not a Business Day, the Business Day immediately following (each, a “Distribution Date”), commencing on the First Distribution Date specified above, to the Person in whose name this Certificate is registered on the Record Date, in an amount equal to the product of the Percentage Interest evidenced by this Certificate and the amount required to be distributed to the Holders of the Class [R-_] Certificates on such Distribution Date pursuant to the Agreement.

This Certificate does not have a Class Certificate Balance or Pass-Through Rate and will be entitled to distributions only to the extent set forth in the Agreement. In addition, any distribution of the proceeds of any remaining assets of the Trust will be made only upon presentment and surrender of this Certificate at the Corporate Trust Office.

This Certificate is one of a duly authorized issue of Certificates designated as Mortgage Pass-Through Certificates of the Series specified on the face hereof (hereinafter called the “Certificates”) and representing a Percentage Interest in the Class of Certificates specified on the face hereof.

The Certificates are limited in right of payment to certain collections and recoveries respecting the related Mortgage Loans, all as more specifically set forth herein and in the Agreement. As provided in the Agreement, withdrawals from the Master Servicer Collection Account and the Distribution Account may be made from time to time for purposes other than distributions to Holders of the Certificates, such purposes including reimbursement of advances made, or certain expenses incurred, with respect to the related Mortgage Loans.

The Agreement permits, with certain exceptions and conditions provided therein, the amendment thereof and the modification of the rights and obligations of the Depositor, the Master Servicer, the Securities Administrator and the Trustee and the rights of the Holders of the Certificates under the Agreement at any time by the Depositor, the Master Servicer, the Securities Administrator and the Trustee, with the consent of the Holders of Certificates evidencing Percentage Interests aggregating not less than 51% of the Trust Fund or of the applicable Class or Classes, if such amendment affects only such Class or Classes, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Agreement or of modifying in any manner the rights of the Certificateholders. Any such consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any Certificate issued upon the transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent is 

 

made upon this Certificate. The Agreement also permits the amendment thereof, in certain limited circumstances, without the consent of the Holders of any of the Certificates.

As provided in the Agreement and subject to certain limitations set forth therein, the transfer of this Certificate is registrable in the Certificate Register upon surrender of this Certificate for registration of transfer at the offices or agencies appointed by the Securities Administrator as provided in the Agreement, duly endorsed by, or accompanied by an assignment in the form below or other written instrument of transfer in form satisfactory to the Securities Administrator and the Certificate Registrar duly executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Certificates of the same Class in authorized denominations evidencing the same aggregate Percentage Interest will be issued to the designated transferee or transferees.

The Certificates are issuable in fully registered form only without coupons in Classes and denominations representing Percentage Interests specified in the Agreement. As provided in the Agreement and subject to certain limitations set forth therein, Certificates are exchangeable for new Certificates of the same Class in authorized denominations evidencing the same aggregate Percentage Interest, as requested by the Holder surrendering the same.

No transfer, sale, pledge or other disposition of this Class [R-_] Certificate shall be made unless such disposition is exempt from the registration requirements of the Securities Act of 1933, as amended (the “1933 Act”), and any applicable state securities laws or is made in accordance with the 1933 Act and laws. In the event of any such transfer, made in reliance upon an exemption from the 1933 Act, (i) the Securities Administrator and the Depositor shall require (a) the transferor to certify in writing the facts surrounding the transfer (in substantially the form attached to the Agreement as Exhibit E-2), and the transferee to execute an investment letter (in substantially the form attached to the Agreement as Exhibit E-1) and (b) a written Opinion of Counsel (which may be in-house counsel) acceptable to and in form and substance reasonably satisfactory to the Securities
Administrator and the Depositor that such transfer may be made pursuant to an exemption, describing the applicable exemption and the basis therefor, from the 1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel shall not be an expense of the Trustee, the Securities Administrator or the Depositor. The Holder of this Class [R-_] Certificate desiring to effect such transfer shall, and does hereby agree to, indemnify the Trustee, the Securities Administrator and the Depositor against any liability that may result if the transfer is not so exempt or is not made in accordance with such federal and state laws.

No transfer of this Certificate to a Plan subject to ERISA or Section 4975 of the Code, any Person acting, directly or indirectly, on behalf of any such Plan or any person using Plan Assets to acquire this Certificate shall be made except in accordance with Section 5.02(d) of the Agreement.

Prior to registration of any transfer, sale or other disposition of this Certificate, the proposed transferee shall provide to the Securities Administrator (i) an affidavit to the effect that such transferee is any Person other than a Disqualified Organization or the agent (including a broker, nominee or middleman) of a Disqualified Organization, and (ii) a certificate that acknowledges that (A) the Class R Certificates have been designated as a residual interest in a REMIC, (B) it will include in its income a pro rata share of the net income of the Trust Fund and 

 

that such income may be an “excess inclusion,” as defined in the Code, that, with certain exceptions, cannot be offset by other losses or benefits from any tax exemption, and (C) it expects to have the financial means to satisfy all of its tax obligations including those relating to holding the Class R Certificates. Notwithstanding the registration in the Certificate Register of any transfer, sale or other disposition of this Certificate to a Disqualified Organization or an agent (including a broker, nominee or middleman) of a Disqualified Organization, such registration shall be deemed to be of no legal force or effect whatsoever and such Person shall not be deemed to be a Certificateholder for any purpose, including, but not limited to, the receipt of distributions in respect of this Certificate.

The Holder of this Certificate, by its acceptance hereof, shall be deemed to have consented to the provisions of Section 5.02 of the Agreement and to any amendment of the Agreement deemed necessary by counsel of the Depositor to ensure that the transfer of this Certificate to any Person other than a Permitted Transferee or any other Person will not cause the REMIC to cease to qualify as a REMIC or cause the imposition of a tax upon the REMIC.

No service charge will be made for any such registration of transfer or exchange of Certificates, but the Certificate Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Certificates.

The Depositor, the Master Servicer, the Trustee, the Securities Administrator and the Certificate Registrar and any agent of the Depositor, the Master Servicer, the Trustee, the Securities Administrator or the Certificate Registrar may treat the Person in whose name this Certificate is registered as the owner hereof for all purposes, and none of the Depositor, the Master Servicer, the Trustee, the Securities Administrator, the Certificate Registrar nor any such agent shall be affected by notice to the contrary.

This certificate shall be governed by and construed in accordance with the laws of the state of New York.

The obligations created by the Agreement and the Trust Fund created thereby shall terminate upon payment (or provision for payment) to the Holders of the Certificates of all amounts held by or on behalf of the Securities Administrator and required to be paid to them pursuant to the Agreement following the earlier of (i) the final payment (or any advance with respect thereto) on or other liquidation of the last Mortgage Loan remaining in the Trust Fund and (ii) the optional purchase by the party designated in the Agreement at a price determined as provided in the Agreement from the Trust Fund of all the Mortgage Loans and all property acquired in respect of such Mortgage Loans remaining therein. The Agreement permits, but does not require, the party designated in the Agreement to purchase from the Trust Fund all the Mortgage Loans and all property acquired in respect of any Mortgage Loan
remaining therein at a price determined as provided in the Agreement. The exercise of such right will effect early retirement of the Certificates; however, such right to purchase is subject to the aggregate Loan Balance of the Mortgage Loans at the time of purchase being 10% or less of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

 

 

The recitals contained herein shall be taken as statements of the Depositor and the Trustee assumes no responsibility for their correctness.

Unless the certificate of authentication hereon has been executed by the Securities Administrator, by manual signature, this Certificate shall not be entitled to any benefit under the Agreement or be valid for any purpose.

 

 

IN WITNESS WHEREOF, the Securities Administrator has caused this Certificate to be duly executed.

Dated: _____________, 2005

	
             
 	
            WELLS FARGO BANK, N.A.,
 Not in its individual capacity but solely as Securities Administrator
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Authorized Officer
 

 

CERTIFICATE OF AUTHENTICATION

This is one of the Class [R-_] Certificates referred to in the within-mentioned Agreement.

	
             
 	
            WELLS FARGO BANK, N.A.,
 Not in its individual capacity but solely as Securities Administrator
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Authorized Officer
 

 

 

 

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:

	
            TEN  COM    -
  	
            as tenants in common
  	
            UNIF GIFT MIN ACT -
  	
                    Custodian         

(Cust)        (Minor)

under Uniform Gifts 

to Minors Act
  
	
            TEN ENT     -
 	
            as tenants by the entireties
 	
             
 	
            ________________

(State)
 
	
            JT TEN         -
 	
            as joint tenants with right 

if survivorship and not as 

tenants in common
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 
	
            Additional abbreviations may also be used though not in the above list.
 

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

 

	
             
 

(Please print or typewrite name, address including postal zip code, and Taxpayer Identification Number of assignee)

the Percentage Interest evidenced by the Mortgage Pass-Through Certificate and hereby authorize(s) the registration of transfer of such interest to assignee on the Certificate Register of the Trust Fund.

I (we) further direct the Certificate Registrar to issue a new Certificate of a like Percentage Interest and Class to the above named assignee and deliver such Certificate to the following address:

	
             
 	
            .
 

 

	
            Dated:
 	
             
 
	
             
 	
            Signature by or on behalf of assignor
 
	
             
 	
             
 
	
             
 	
             
 

	
             
 	
            Signature Guaranteed
 

 

 

DISTRIBUTION INSTRUCTIONS

The assignee should include the following for purposes of distribution:

Distributions shall be made, by wire transfer or otherwise, in immediately available funds 

	
            to
 	
            
 
 
 	
            ,
 
	
            for the account of
 	
            
 
 
 	
            ,
 
	
            account number___________, or, if mailed by check, to
 	
            
 
 
 	
            ,
 
	
            Applicable statements should be mailed to
 	
            
 
 
 	
            ,
 
	
            
 
 
 	
            .
 
						

 

	
            This information is provided by
 	
            
 
 
 	
            ,
 
	
            the assignee named above, or
 	
            
 
 
 	
            ,
 
	
            as its agent.
 	
             
 	
             
 
					

 

 

 

 

EXHIBIT B

MORTGAGE LOAN SCHEDULE

[Provided Upon Request]

 

 

EXHIBIT C

[RESERVED]

 

 

 

	
             
 	
            EXHIBIT D
 

REQUEST FOR RELEASE OF DOCUMENTS

	
            To:
 	
            Wells Fargo Bank, N.A.
 

1015 10th Avenue S.E.

Minneapolis Minnesota 55414

Attn: ______________________

 

	
             
 	
            Re:
 	
            
Custodial Agreement dated as of _________, among _________________, _____, and Wells Fargo Bank, N.A., as Custodian
 
 

 

In connection with the administration of the Mortgage Loans held by you as Custodian for the Owner pursuant to the above-captioned Custody Agreement, we request the release, and hereby acknowledge receipt, of the Custodian’s Mortgage File for the Mortgage Loan described below, for the reason indicated.

Mortgage Loan Number:

Mortgagor Name, Address & Zip Code:

Reason for Requesting Documents (check one):

 

	
             
 	
            1.  Mortgage Paid in full
 	
             
 
	
             
 	
            2.  Foreclosure
 	
             
 
	
             
 	
            3.  Substitution
 	
             
 
	
             
 	
            4. Other Liquidation (Repurchases, etc.)
 	
             
 
	
             
 	
            5. Nonliquidation 
 	
            Reason:_______________________
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
            By:___________________________

(authorized signer)
 
	
             
 	
             
 	
            Issuer:________________________
 
	
             
 	
             
 	
            Address:_______________________

________________________
 
	
             
 	
             
 	
            Date:   ________________________
 

 

 

 

 

	
             
 	
             
 	
             
 

 

Custodian

Wells Fargo Bank, N.A.

Please acknowledge the execution of the above request by your signature and date below:

Please acknowledge the execution of the above request by your signature and date below:

	
             
 	
             
 	
             
 	
             
 
	
            Signature
 	
             
 	
            Date
 	
             
 
	
            Documents returned to Custodian:
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 
	
            Custodian
 	
             
 	
            Date
 	
             
 

 

 

 

EXHIBIT E-1

FORM OF TRANSFER AFFIDAVIT

Affidavit pursuant to Section 

860E(e)(4) of the Internal Revenue

Code of 1986, as amended, and for other purposes

 

	
            STATE OF _____________
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF ___________
 	
            )
 	
             
 

 

[NAME OF OFFICER], being first duly sworn, deposes and says:

1.            That he is [Title of Officer] of [Name of Investor] (the “Investor”), a [savings institution] [corporation] duly organized and existing under the laws of [the State of _____] [the United States], on behalf of which he makes this affidavit.

2.            That (i) the Investor is not a “disqualified organization” as defined in Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended (the “Code”), and will not be a disqualified organization as of [Closing Date] [date of purchase]; (ii) it is not acquiring the Merrill Lynch Mortgage Investors, Inc. Mortgage Pass-Through Certificates, Series MLMI 2005-A10, Class R-I Certificates and Class R-II Certificates (together, the “Residual Certificates”) for the account of a disqualified organization; (iii) it consents to any amendment of the Pooling and Servicing Agreement that shall be deemed necessary by Merrill Lynch Mortgage Investors, Inc. (upon advice of counsel) to constitute a reasonable arrangement to ensure that the Residual Certificates
will not be owned directly or indirectly by a disqualified organization; and (iv) it will not transfer such Residual Certificates unless (a) it has received from the transferee an affidavit in substantially the same form as this affidavit containing these same four 

 

representations and (b) as of the time of the transfer, it does not have actual knowledge that such affidavit is false.

3.            That the Investor is one of the following: (i) a citizen or resident of the United States, (ii) 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 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, (iii) an estate
whose income is subject to United States federal income tax regardless of its source, or (iv) a trust other than a “foreign trust,” as defined in Section 7701 (a)(31) of the Code.

	
             
 	
            4.
 	
            That the Investor’s taxpayer identification number is ______________________.
 

5.            That no purpose of the acquisition of the Residual Certificates is to avoid or impede the  assessment or collection of tax.

6.            That the Investor understands that, as the holder of the Residual Certificates, the Investor may incur tax liabilities in excess of any cash flows generated by such Residual Certificates.

7.            That the Investor intends to pay taxes associated with holding the Residual Certificates as they become due.

IN WITNESS WHEREOF, the Investor has caused this instrument to be executed on its behalf, pursuant to authority of its Board of Directors, by its [Title of Officer] this ____ day  of  _________, 20__.

	
             
 	
            [NAME OF INVESTOR]
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            [Name of Officer]
 
	
             
 	
            [Title of Officer]
 

 

 

 

 

	
             
 	
             
 	
            [Address of Investor for receipt of distributions]
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
            Address of Investor for receipt of tax information
 

 

 

 

EXHIBIT E-2

FORM OF TRANSFEROR CERTIFICATE

__________ , 20__

Merrill Lynch Mortgage Investors, Inc.

4 World Financial Center

New York, New York 10281

Wells Fargo Bank, N.A.

Sixth Street and Marquette Avenue

Minneapolis, Minnesota 55479

 

Attention: Merrill Lynch Mortgage Investors, Inc, Series _______

	
             
 	
            Re:
 	
            
Merrill Lynch Mortgage Investors, Inc.,
 Mortgage Pass-Through Certificates, Series MLMI 2005-A10, Class [  _]
 
 

 

Ladies and Gentlemen:

This letter is delivered to you in connection with the transfer by _____________________ (the “Seller”) to _____________________(the “Purchaser”) of $______________ Initial Certificate Principal Balance of Mortgage Pass-Through Certificates, MLCC Series ________, Class R-I and Class R-II (together, the “Class R Certificates”), pursuant to Section 5.02 of the Pooling and Servicing Agreement, dated as of December 1, 2005 among Merrill Lynch Mortgage Investors, Inc., (the “Depositor”), Wells Fargo Bank, N.A. as master servicer (in such capacity, the “Master Servicer”) and securities administrator (in such capacity, the “Securities Administrator”), and Wachovia Bank, National Association, as trustee (the “Trustee”). All terms used herein and not otherwise defined shall have the meanings set forth in the Pooling and
Servicing Agreement. The Seller hereby certifies, represents and warrants to, and covenants with, the Company and the Trustee that:

1.            No purpose of the Seller relating to the transfer of the Class R Certificates by the Seller to the Purchaser is or will be to impede the assessment or collection of any tax.

2.            The Seller understands that the Purchaser has delivered to the Trustee and the Master Servicer a transfer affidavit and agreement in the form attached to the Pooling and Servicing Agreement as Exhibit E-1. The Seller does not know or believe that any representation contained therein is false.

 

 

3.            The Seller has at the time of the transfer conducted a reasonable investigation of the financial condition of the Purchaser as contemplated by Treasury Regulations Section 1.860E- 1(c)(4)(i) and, as a result of that investigation, the Seller has determined that the Purchaser has historically paid its debts as they become due and has found no significant evidence to indicate that the Purchaser will not continue to pay its debts as they become due in the future. The Seller understands that the transfer of a Class R Certificate may not be respected for United States income tax purposes (and the Seller may continue to be liable for United States income taxes Associated therewith) unless the Seller has conducted such an investigation.

4.            The Seller has no actual knowledge that the proposed Transferee is not both a United States Person and a Permitted Transferee.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Very truly yours,
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            (Seller)
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
            
 
 
 

 

 

 

 

EXHIBIT F-1

FORM OF TRANSFEROR REPRESENTATION LETTER

 

______________, 200___

 

Merrill Lynch Mortgage Investors, Inc.

4 World Financial Center

New York, New York 10281

Wells Fargo Bank, N.A.

Sixth Street and Marquette Avenue

Minneapolis, Minnesota 55479

 

	
             
 	
            Re:
 	
            
Merrill Lynch Mortgage Investors, Inc.,
 Mortgage Pass-Through Certificates, Series MLMI 2005-A10, Class [  _]
 
 

 

Ladies and Gentlemen:

In connection with the sale by ___________ (the “Seller”) to ________ (the “Purchaser”) of $_________ Initial Certificate Principal Balance of Mortgage Pass-Through Certificates, Series MLMI 2005-A10, Class _____ (the “Certificates”), issued pursuant to the Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”), dated as of December 1, 2005 among Merrill Lynch Mortgage Investors, Inc., (the “Depositor”), Wells Fargo Bank, N.A. as master servicer (in such capacity, the “Master Servicer”) and securities administrator (in such capacity, the “Securities Administrator”), and Wachovia Bank, National Association, as trustee (the “Trustee”).  The Seller hereby certifies, represents and warrants to, and covenants with, the Depositor and the Trustee that:

Neither the Seller nor anyone acting on its behalf has (a) offered, pledged, sold, disposed of or otherwise transferred any Certificate, any interest in any Certificate or any other similar security to any person in any manner, (b) has solicited any offer to buy or to accept a pledge, disposition or other transfer of any Certificate, any interest in any Certificate or any other similar security from any person in any manner, (c) has otherwise approached or negotiated with respect to any Certificate, any interest in any Certificate or any other similar security with any person in any manner, (d) has made any general solicitation by means of general advertising or in any other manner, or (e) has taken any other action, that (as to any of (a) through (e) above) would 

 

constitute a distribution of the Certificates under the Securities Act of 1933 (the “Act”), that would render the disposition of any Certificate a violation of Section 5 of the Act or any state securities law, or that would require registration or qualification pursuant thereto. The Seller will not act in any manner set forth in the foregoing sentence with respect to any Certificate. The Seller has not and will not sell or otherwise transfer any of the Certificates, except in compliance with the provisions of the Pooling and Servicing Agreement.

 

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Very truly yours,
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            (Seller)
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
            
 
 
 

 

 

 

 

EXHIBIT F-2

FORM OF INVESTOR REPRESENTATION LETTER (NON-RULE 144A)

__________, 200__

Merrill Lynch Mortgage Investors, Inc.

4 World Financial Center

New York, New York 10281

Wells Fargo Bank, N.A.

Sixth Street and Marquette Avenue

Minneapolis, Minnesota 55479

 

	
             
 	
            Re:
 	
            
Merrill Lynch Mortgage Investors, Inc.,
 Mortgage Pass-Through Certificates, Series MLMI 2005-A10, Class R-I Certificates and Class R-II Certificates
 
 

 

Ladies and Gentlemen:

In connection with our acquisition of the above Certificates we certify that (a) we understand that the Certificates are not being registered under the Securities Act of 1933, as amended (The “Act”), or any state securities laws and are being transferred to us in a transaction that is exempt from the registration requirements of the Act and any such laws, (b) we are an institutional “accredited investor,” as defined in Regulation D under the Act, and have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of investments in the Certificates, (c) we have had the opportunity to ask questions of and receive answers from the Depositor concerning the purchase of the Certificates and all matters relating thereto or any additional information deemed necessary to our decision to purchase the Certificates, (d)
either (i) we are not an employee benefit plan that is subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or a plan or arrangement that is subject to Section 4975 of the Internal Revenue Code of 1986, as amended (“Code”), nor are we acting on behalf of any such plan or arrangement nor are we using the assets of any such plan or arrangement to effect such acquisition or (ii) the proposed transfer and holding of such a Certificate and the servicing, management and operation of the Trust: (I) will not result in a prohibited transaction under Section 406 of ERISA or Section 4975 of the Code which is not covered under an individual or class prohibited transaction exemption including but not limited to Department of Labor Prohibited Transaction Class Exemption (“PTCE”) 84-14 

 

(Class Exemption for Plan Asset Transactions Determined by Independent Qualified Professional Asset Managers); PTCE 91-38 (Class Exemption for Certain Transactions Involving Bank Collective Investment Funds); PTCE 90-1 (Class Exemption for Certain Transactions Involving Insurance Company Pooled Separate Accounts), PTCE 95-60 (Class Exemption for Certain Transactions Involving Insurance Company General Accounts), and PTCE 96-23 (Class Exemption for Plan Asset Transactions Determined by In-House Asset Managers) and (II) will not subject the Depositor, the Servicer, the Master Servicer, the Securities Administrator or the Trustee to any obligation in addition to those undertaken in the Agreement, (e) we are acquiring the Certificates for investment for our own account and not with a view to any distribution of such Certificates (but without prejudice to our right at all times to sell or otherwise dispose of
the Certificates in accordance with clause (g) below), (f) we have not offered or sold any Certificates to, or solicited offers to buy any Certificates from, any person, or otherwise approached or negotiated with any person with respect thereto, or taken any other action which would result in a violation of Section 5 of the Act, and (g) we will not sell, transfer or otherwise dispose of any Certificates unless (1) such sale, transfer or other disposition is made pursuant to an effective registration statement under the Act or is exempt from such registration requirements, and if requested, we will at our expense provide an opinion of counsel satisfactory to the addressees of this Certificate that such sale, transfer or other disposition may be made pursuant to an exemption from the Act, (2) The purchaser or transferee of such Certificate has executed and delivered to you a certificate to substantially the same effect as this certificate, and (3) The purchaser or transferee has
otherwise complied with any conditions for transfer set forth in the Pooling and Servicing Agreement.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Very truly yours,
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Print Name of Transferee
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	 	
            
Authorized Officer
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            
 
 
 

 

 

 

 

EXHIBIT F-3

FORM OF RULE 144A LETTER

____________, 2005

Merrill Lynch Mortgage Investors, Inc.

4 World Financial Center

New York, New York 10281

Wells Fargo Bank, N.A.

Sixth Street and Marquette Avenue

Minneapolis, Minnesota 55479

 

	
             
 	
            Re:
 	
            
Merrill Lynch Mortgage Investors, Inc.,
 Mortgage Pass-Through Certificates, Series MLMI 2005-A10, Class R-I and Class R-II Certificates
 
 

 

Ladies and Gentlemen:

In connection with our acquisition of the above Certificates we certify that (a) we understand that the Certificates are not being registered under the Securities Act of 1933, as amended (The “Act”), or any state securities laws and are being transferred to us in a transaction that is exempt from the registration requirements of the Act and any such laws, (b) we have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of investments in the Certificates, (c) we have had the opportunity to ask questions of and receive answers from the Depositor concerning the purchase of the Certificates and all matters relating thereto or any additional information deemed necessary to our decision to purchase the Certificates, (d) either we are not an employee benefit plan that is subject to the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), or a plan or arrangement that is subject to Section 4975 of the Internal Revenue Code of 1986, as amended (“Code”), nor are we acting on behalf of any such plan or arrangement nor using the assets of any such plan or arrangement to effect such acquisition or the proposed transfer and holding of such a Certificate and the servicing, management and operation of the Trust: (I) will not result in a prohibited transaction under Section 406 of ERISA or Section 4975 of the Code which is not covered under an individual or class prohibited transaction exemption including but not limited to Department of Labor Prohibited Transaction Class Exemption (“PTCE”) 84-14 (Class Exemption for Plan Asset Transactions Determined by Independent Qualified Professional Asset Managers); PTCE 91-38 (Class Exemption for Certain Transactions Involving Bank Collective Investment Funds); PTCE 90-1 (Class Exemption for Certain Transactions
Involving Insurance 

 

Company Pooled Separate Accounts), PTCE 95-60 (Class Exemption for Certain Transactions Involving Insurance Company General Accounts), and PTCE 96-23 (Class Exemption for Plan Asset Transactions Determined by In-House Asset Managers) and (II) will not subject the Depositor, the Servicer, the Master Servicer, the Securities Administrator or the Trustee to any obligation in addition to those undertaken in the Agreement, (e) we have not, nor has anyone acting on our behalf offered, transferred, pledged, sold or otherwise disposed of the Certificates, any interest in the Certificates or any other similar security to, or solicited any offer to buy or accept a transfer, pledge or other disposition of the Certificates, any interest in the Certificates or any other similar security from, or otherwise approached or negotiated with respect to the Certificates, any interest in the Certificates or any other similar
security with, any person in any manner, or made any general solicitation by means of general advertising or in any other manner, or taken any other action, that would constitute a distribution of the Certificates under the Act or that would render the disposition of the Certificates a violation of Section 5 of the Act or require registration pursuant thereto, nor will act, nor has authorized or will authorize any person to act, in such manner with respect to the Certificates, (f) we are a “qualified institutional buyer” as that term is defined in Rule 144A under the Act (“Rule 144A”) and have completed either of the forms of certification to that effect attached hereto as Annex 1 or Annex 2, (g) we are aware that the sale to us is being made in reliance on Rule 144A, and (h) we are acquiring the Certificates for our own account or for resale pursuant to Rule 144A and further, understand that such Certificates may be resold, pledged or transferred only (A) to a
person reasonably believed to be a qualified institutional buyer that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A, or (B) pursuant to another exemption from registration under the Act.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Very truly yours,
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Print Name of Transferee
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	 	
            
Authorized Officer
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            
 
 
 

 

 

 

ANNEX I TO EXHIBIT F-2

QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

[For Transferees Other Than Registered Investment Companies]

The undersigned (The “Buyer”) hereby certifies as follows to the parties listed in the Rule 144A Transferee Certificate to which this certification relates with respect to the Certificates described therein:

1.            As indicated below, The undersigned is the President, Chief Financial Officer, Senior Vice President or other executive officer of the Buyer.

2.            In connection with purchases by the Buyer, The Buyer is a “qualified institutional buyer” as that term is defined in Rule 144A under the Securities Act of 1933, as amended (“Rule 144A”) because (i) The Buyer owned and/or invested on a discretionary basis $___________1 in securities (except for the 1 excluded securities referred to below) as of the end of the Buyer’s most recent fiscal year (such amount being calculated in accordance with Rule 144A and (ii) The Buyer satisfies the criteria in the category marked below.

___ Corporation, etc. The Buyer is a corporation (other than a bank, savings and loan association or similar institution), Massachusetts or similar business trust, partnership, or charitable organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended.

___ Bank. The Buyer (a) is a national bank or banking institution organized under the laws of any State, territory or the District of Columbia, The business of which is substantially confined to banking and is supervised by the State or territorial banking commission or similar official or is a foreign bank or equivalent institution, and (b) has an audited net worth of at least $25,000,000 as demonstrated in its latest annual financial statements, a copy of which is attached hereto.

___ Savings and Loan. The Buyer (a) is a savings and loan association, building and loan association, cooperative bank, homestead association or similar institution, which is supervised and examined by a State or Federal authority having supervision over any such institutions or is a foreign savings and loan association or equivalent institution and (b) has an audited net worth of at least $25,000,000 as demonstrated in its latest annual financial statements, a copy of which is attached hereto.

___ Broker-dealer. The Buyer is a dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934.

___ Insurance Company. The Buyer is an insurance company whose primary and predominant business activity is the writing of insurance or the reinsuring of risks

_________________________

	
            [1] 
 	
            Buyer must own and/or invest on a discretionary basis at least $100,000,000 in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or invest on a discretionary basis at least $10,000,000 in securities.
 

 

underwritten by insurance companies and which is subject to supervision by the insurance commissioner or a similar official or agency of a State, territory or the District of Columbia.

___ State or Local Plan. The Buyer is a plan established and maintained by a State, its political subdivisions, or any agency or instrumentality of the State or its political subdivisions, for the benefit of its employees.

___ ERISA Plan. The Buyer is an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974.

___ Investment Advisor. The Buyer is an investment advisor registered under the Investment Advisors Act of 1940.

___ Small Business Investment Company. Buyer is a small business investment company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958.

___ Business Development Company. Buyer is a business development company as defined in Section 202(a)(22) of the Investment Advisors Act of 1940.

3.            The term “securities” as used herein does not include (i) securities of issuers that are affiliated with the Buyer, (ii) securities that are part of an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer, (iii) securities issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank deposit notes and certificates of deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities owned but subject to a repurchase agreement and (viii) currency, interest rate and commodity swaps.

4.            For purposes of determining the aggregate amount of securities owned and/or invested on a discretionary basis by the Buyer, The Buyer used the cost of such securities to the Buyer and did not include any of the securities referred to in the preceding paragraph, except (i) where the Buyer reports its securities holdings in its financial statements on the basis of their market value, and (ii) no current information with respect to the cost of those securities has been published. If clause (ii) in the preceding sentence applies, The securities may be valued at market. Further, in determining such aggregate amount, The Buyer may have included securities owned by subsidiaries of the Buyer, but only if such subsidiaries are consolidated with the Buyer in its financial statements
prepared in accordance with generally accepted accounting principles and if the investments of such subsidiaries are managed under the Buyer’s direction. However, such securities were not included if the Buyer is a majority-owned, consolidated subsidiary of another enterprise and the Buyer is not itself a reporting company under the Securities Exchange Act of 1934, as amended.

5.            The Buyer acknowledges that it is familiar with Rule 144A and understands that the seller to it and other parties related to the Certificates are relying and will continue to rely on the statements made herein because one or more sales to the Buyer may be in reliance on Rule 144A.

 

 

6.            Until the date of purchase of the Rule 144A Securities, The Buyer will notify each of the parties to which this certification is made of any changes in the information and conclusions herein. Until such notice is given, The Buyer’s purchase of the Certificates will constitute a reaffirmation of this certification as of the date of such purchase. In addition, if the Buyer is a bank or savings and loan is provided above, The Buyer agrees that it will furnish to such parties updated annual financial statements promptly after they become available.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Print Name of Buyer
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
            
 
 
 
	 
	 
	 
	 
	 
	 
	Title:
	
           

      

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Date:
 	
            
 
 
 

 

 

 

 

ANNEX II TO EXHIBIT F-2

QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

[For Transferees That are Registered Investment Companies]

The undersigned (The “Buyer”) hereby certifies as follows to the parties listed in the Rule 144A Transferee Certificate to which this certification relates with respect to the Certificates described therein:

1.            As indicated below, The undersigned is the President, Chief Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a “qualified institutional buyer” as that term is defined in Rule 144A under the Securities Act of 1933, as amended (“Rule 144A”) because Buyer is part of a Family of Investment Companies (as defined below), is such an officer of the Adviser.

2.            In connection with purchases by Buyer, The Buyer is a “qualified institutional buyer” as defined in SEC Rule 144A because (i) The Buyer is an investment company registered under the Investment Company Act of 1940, as amended and (ii) as marked below, The Buyer alone, or the Buyer’s Family of Investment Companies, owned at least $100,000,000 in securities (other than the excluded securities referred to below) as of the end of the Buyer’s most recent fiscal year. For purposes of determining the amount of securities owned by the Buyer or the Buyer’s Family of Investment Companies, The cost of such securities was used, except (i) where the Buyer or the Buyer’s Family of Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect to the cost of those securities has been published. If clause (ii) in the preceding sentence applies, The securities may be valued at market.

___ The Buyer owned $ in securities (other than the excluded securities referred to below) as of the end of the Buyer’s most recent fiscal year (such amount being calculated in accordance with Rule 144A).

___ The Buyer is part of a Family of Investment Companies which owned in the aggregate $ in securities (other than the excluded securities referred to below) as of the end of the Buyer’s most recent fiscal year (such amount being calculated in accordance with Rule 144A).

3.            The term “Family of Investment Companies” as used herein means two or more registered investment companies (or series thereof) that have the same investment adviser or investment advisers that are affiliated (by virtue of being majority owned subsidiaries of the same parent or because one investment adviser is a majority owned subsidiary of the other).

4.            The term “securities” as used herein does not include (i) securities of issuers that are affiliated with the Buyer or are part of the Buyer’s Family of Investment Companies, (ii) securities issued or guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes and certificates of deposit, (iv) loan participations, (v) repurchase 

 

agreements, (vi) securities owned but subject to a repurchase agreement and (vii) currency, interest rate and commodity swaps.

5.            The Buyer is familiar with Rule 144A and understands that the parties listed in the Rule 144A Transferee Certificate to which this certification relates are relying and will continue to rely on the statements made herein because one or more sales to the Buyer will be in reliance on Rule 144A. In addition, The Buyer will only purchase for the Buyer’s own account.

6.            Until the date of purchase of the Certificates, The undersigned will notify the parties listed in the Rule 144A Transferee Certificate to which this certification relates of any changes in the information and conclusions herein. Until such notice is given, The Buyer’s purchase of the Certificates will constitute a reaffirmation of this certification by the undersigned as of the date of such purchase.

 

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Print Name of Buyer or Advisor
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            IF AN ADVISOR:
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Print Name of Buyer 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Date: ____________________________________
 

 

 

 

 

EXHIBIT G

FORM OF CUSTODIAL AGREEMENT

THIS CUSTODIAL AGREEMENT (as amended and supplemented from time to time, the “Agreement”), dated as of December 22, 2005, by and among WACHOVIA BANK, NATIONAL ASSOCIATION, as trustee (including its successors under the Pooling and Servicing Agreement defined below, the “Trustee”), MERRILL LYNCH MORTGAGE INVESTORS, INC., as company (together with any successor in interest, the “Company”), WELLS FARGO BANK, N.A., as master servicer and securities administrator (together with any successor in interest or successor under the Pooling and Servicing Agreement referred to below, the “Master Servicer”) and WELLS FARGO BANK, N.A., as custodian (together with any successor in interest or any successor appointed hereunder, the “Custodian”).

WITNESSETH THAT:

WHEREAS, the Company, the Master Servicer and the Trustee have entered into a Pooling and Servicing Agreement, dated as of December 1, 2005, relating to the issuance of Mortgage Pass-Through Certificates, Series MLMI 2005-A10 (as in effect on the date of this agreement, the “Original Pooling and Servicing Agreement,” and as amended and supplemented from time to time, the “Pooling and Servicing Agreement”); and

WHEREAS, the Custodian has agreed to act as agent for the Trustee for the purposes of receiving and holding certain documents and other instruments delivered by the Company or the Master Servicer under the Pooling and Servicing Agreement and the Servicers under their respective Servicing Agreements, all upon the terms and conditions and subject to the limitations hereinafter set forth;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter set forth, the Trustee, the Company, the Master Servicer and the Custodian hereby agree as follows:

 

DEFINITIONS

Capitalized terms used in this Agreement and not defined herein shall have the meanings assigned in the Original Pooling and Servicing Agreement, unless otherwise required by the context herein.

 

CUSTODY OF MORTGAGE DOCUMENTS

Section 1.          Custodian to Act as Agent: Acceptance of Mortgage Files.  The Custodian, as the duly appointed agent of the Trustee for these purposes, acknowledges (subject to any exceptions noted in the Initial Certification referred to in Section 2.3(a) receipt of the Mortgage Files relating to the Mortgage Loans identified on the schedule attached hereto (the “Mortgage Files”) and declares that it holds and will hold such Mortgage Files as agent for the Trustee, in trust, for the use and benefit of all present and future Certificateholders.

 

 

Section 2.           Recordation of Assignments.  If any Mortgage File includes one or more assignments of Mortgage to the Trustee in a state which is specifically excluded from the Opinion of Counsel delivered by the Seller to the Trustee (with a copy to the Custodian) pursuant to the provisions of Section 2.01 of the Pooling and Servicing Agreement, the Custodian shall deliver each such assignment to the Company for the purpose of recording it in the appropriate public office for real property records, and the Company, at no expense to the Custodian, shall promptly cause to be recorded in the appropriate public office for real property records each such assignment of Mortgage and, upon receipt thereof from such public office, shall return each such assignment of Mortgage to the Custodian.

	
             
  	
            Section 3.
 	
            Review of Mortgage Files.
 

(a)          On or prior to the Closing Date, the Custodian agrees, for the benefit of Certificateholders, to review, in accordance with the provisions of Section 2.02 of the Pooling and Servicing Agreement, each such document, and shall deliver to the Trustee an Initial Certification in the form annexed hereto as Exhibit One evidencing receipt (subject to any exceptions noted therein) of a Mortgage File for each of the Mortgage Loans listed on the Schedule attached hereto (the “Mortgage Loan Schedule”) and certifying that all such documents have been executed and received and that such documents relate to the Mortgage Loans identified on the Mortgage Loan Schedule, except for any exceptions listed on Schedule A attached to such Initial Certification. The Custodian shall be under no duty or obligation to
inspect, review or examine said documents, instruments, certificates or other papers to determine that the same are genuine, enforceable, or appropriate for the represented purpose or that they have actually been recorded or that they are other than what they purport to be on their face.

(b)          Not later than 180 days after the Closing Date, the Custodian shall review the Mortgage Files as provided in Section 2.02 of the Pooling and Servicing Agreement and deliver to the Trustee a Final Certification in the form annexed hereto as Exhibit Two evidencing the completeness of the Mortgage Files (subject to any exceptions noted therein).

(c)          In reviewing the Mortgage Files as provided herein and in the Pooling and Servicing Agreement, the Custodian shall make no representation as to and shall not be responsible to verify (i) the validity, legality, enforceability, due authorization, recordability, sufficiency or genuineness of any of the documents included in any Mortgage File or (ii) the collectibility, insurability, effectiveness or suitability of any of the documents in any Mortgage File.

Upon receipt of written request from the Trustee, the Custodian shall as soon as practicable supply the Trustee with a list of all of the documents relating to the Mortgage Loans then contained in the Mortgage Files.

Section 4.           Notification of Breaches of Representations and Warranties.  Upon discovery by the Custodian of a breach of any representation or warranty made by the Company as set forth in the Pooling and Servicing Agreement with respect to a Mortgage Loan relating to a Mortgage File, the Custodian shall give prompt written notice to the Company, the related Servicer and the Trustee.

 

 

Section 5.           Custodian to Cooperate: Release of Mortgage Files.  Upon receipt of written notice from the Master Servicer that the Mortgage Loan Seller has repurchased a Mortgage Loan pursuant to Article II of the Pooling and Servicing Agreement, and that the purchase price therefore has been deposited in the Master Servicer Collection Account or the Distribution Account, then the Custodian agrees to promptly release to the Mortgage Loan Seller the related Mortgage File.

Upon the Custodian’s receipt of a request for release (a “Request for Release”) substantially in the form of Exhibit D to the Pooling and Servicing Agreement signed by a Servicing Officer of the related Servicer stating that it has received payment in full of a Mortgage Loan or that payment in full will be escrowed in a manner customary for such purposes, the Custodian agrees promptly to release to the related Servicer the related Mortgage File. The Company shall deliver to the Custodian and the Custodian agrees to accept the Mortgage Note and other documents constituting the Mortgage File with respect to any Substitute Mortgage Loan.

From time to time as is appropriate for the servicing or foreclosure of any Mortgage Loan, including, for this purpose, collection under any Primary Insurance Policy, the related Servicer shall deliver to the Custodian a Request for Release signed by a Servicing Officer requesting that possession of all of the Mortgage File be released to the related Servicer and certifying as to the reason for such release and that such release will not invalidate any insurance coverage provided in respect of the Mortgage Loan under any of the Insurance Policies. Upon receipt of the foregoing, the Custodian shall deliver the Mortgage File to the related Servicer. The related Servicer shall cause each Mortgage File or any document therein so released to be returned to the Custodian when the need therefore by the related Servicer no longer exists, unless (i) the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the Master Servicer Collection Account or the Distribution Account or (ii) the Mortgage File or such document has been delivered to an attorney, or to a public trustee or other public official as required by law, for purposes of initiating or pursuing legal action or other proceedings for the foreclosure of the Mortgaged Property either judicially or non-judicially, and the related Servicer has delivered to the Custodian a certificate of a Servicing Officer certifying as to the name and address of the Person to which such Mortgage File or such document was delivered and the purpose or purposes of such delivery.

At any time that a Servicer is required to deliver to the Custodian a Request for Release, the Servicer shall deliver two copies of the Request for Release if delivered in hard copy or the Servicer may furnish such Request for Release electronically to the Custodian, in which event the Servicing Officer transmitting the same shall be deemed to have signed the Request for Release. In connection with any Request for Release of a Mortgage File because of a repurchase of a Mortgage Loan, the Serviced shall send to the Trustee an assignment of mortgage, without recourse, representation or warranty from the Trustee to the Mortgage Loan Seller and the related Mortgage Note which shall be endorsed without recourse, representation or warranty by the Trustee and the Trustee shall forward such documents to the Mortgage Loan Seller. In connection with any Request for Release of a Mortgage File because
of the payment in full of a Mortgage Loan, the Serviced shall send to the Trustee a certificate of satisfaction or 

 

other similar instrument to be executed by or on behalf of the Trustee and returned to the related Servicer.

Section 6.         Assumption Agreements.  In the event that any assumption agreement or substitution of liability agreement is entered into with respect to any Mortgage Loan subject to this Agreement in accordance with the terms and provisions of the Pooling and Servicing Agreement, the Master Servicer, to the extent provided in the related Servicing Agreement, shall cause the related Servicer to notify the Custodian that such assumption or substitution agreement has been completed by forwarding to the Custodian the original of such assumption or substitution agreement, which shall be added to the related Mortgage File and, for all purposes, shall be considered a part of such Mortgage File to the same extent as all other documents and instruments constituting parts thereof.

 

CONCERNING THE CUSTODIAN

Section 1.           Custodian a Bailee and Agent of the Trustee.  With respect to each Mortgage Note, Mortgage and other documents constituting each Mortgage File which are delivered to the Custodian, the Custodian is exclusively the bailee and agent of the Trustee and has no instructions to hold any Mortgage Note or Mortgage for the benefit of any person other than the Trustee and the Certificateholders and undertakes to perform such duties and only such duties as are specifically set forth in this Agreement. Except upon compliance with the provisions of Section 2.5 of this Agreement, no Mortgage Note, Mortgage or Mortgage File shall be delivered by the Custodian to the Company, the Servicers or the Master Servicer or otherwise released from the possession of the Custodian.

	
             
  	
            Section 2.
 	
            Reserved.
 

Section 3.           Custodian May Own Certificates.  The Custodian in its individual or any other capacity may become the owner or pledgee of Certificates with the same rights it would have if it were not Custodian.

Section 4.          Master Servicer to Pay Custodian’s Fees and Expenses.  The Master Servicer covenants and agrees to pay to the Custodian from time to time, and the Custodian shall be entitled to, reasonable compensation for all services rendered by it in the exercise and performance of any of the powers and duties hereunder of the Custodian, and the Master Servicer will pay or reimburse the Custodian upon its request for all reasonable expenses, disbursements and advances incurred or made by the Custodian in accordance with any of the provisions of this Agreement (including the reasonable compensation and the expenses and disbursements of its counsel and of all persons not regularly in its employ), except any such expense, disbursement or advance as may arise from its negligence or bad
faith or to the extent that such cost or expense is indemnified by the Company pursuant to the Pooling and Servicing Agreement.

Section 5.          Custodian May Resign; Trustee May Remove Custodian.  The Custodian may resign from the obligations and duties hereby imposed upon it as such obligations and duties relate to its acting as Custodian of the Mortgage Loans. Upon receiving such notice of 

 

resignation, the Trustee shall either take custody of the Mortgage Files itself and give prompt notice thereof to the Company, the Master Servicer and the Custodian, or promptly appoint a successor Custodian by written instrument, in duplicate, one copy of which instrument shall be delivered to the resigning Custodian and one copy to the successor Custodian. If the Trustee shall not have taken custody of the Mortgage Files and no successor Custodian shall have been so appointed and have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Custodian may petition any court of competent jurisdiction for the appointment of a successor Custodian.

The Trustee may remove the Custodian at any time with the consent of the Master Servicer. In such event, the Trustee shall appoint, or petition a court of competent jurisdiction to appoint, a successor Custodian hereunder. Any successor Custodian shall be a depository institution subject to supervision or examination by federal or state authority, shall be able to satisfy the other requirements contained in Section 3.7 and shall be unaffiliated with the Servicer or the Company.

Any resignation or removal of the Custodian and appointment of a successor Custodian pursuant to any of the provisions of this Section 3.5 shall become effective upon acceptance of appointment by the successor Custodian. The Trustee shall give prompt notice to the Company and the Master Servicer of the appointment of any successor Custodian. No successor Custodian shall be appointed by the Trustee without the prior approval of the Company and the Master Servicer.

Section 6.           Merger or Consolidation of Custodian.  Any Person into which the Custodian may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Custodian shall be a party, or any Person succeeding to the business of the Custodian, shall be the successor of the Custodian hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

Section 7.          Representations of the Custodian.  The Custodian hereby represents that it is a depository institution subject to supervision or examination by a federal or state authority, has a combined capital and surplus of at least $15,000,000 and is qualified to do business in the jurisdictions in which it will hold any Mortgage File.

 

MISCELLANEOUS PROVISIONS

Section 1.          Notices.  All notices, requests, consents and demands and other communications required under this Agreement or pursuant to any other instrument or document delivered hereunder shall be in writing and, unless otherwise specifically provided, may be delivered personally, by telegram or telex, or by registered or certified mail, postage prepaid, return receipt requested, at the addresses specified on the signature page hereof (unless changed by the particular party whose address is stated herein by similar notice in writing), in which case the notice will be deemed delivered when received.

 

 

Section 2.           Amendments.  No modification or amendment of or supplement to this Agreement shall be valid or effective unless the same is in writing and signed by all parties hereto, and neither the Company, the Master Servicer nor the Trustee shall enter into any amendment hereof except as permitted by the Pooling and Servicing Agreement. The Trustee shall give prompt notice to the Custodian of any amendment or supplement to the Pooling and Servicing Agreement and furnish the Custodian with written copies thereof.

Section 3.          GOVERNING LAW.  THIS AGREEMENT SHALL BE DEEMED A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

Section 4.          Recordation of Agreement.  To the extent permitted by applicable law, this Agreement is subject to recordation in all appropriate public offices for real property records in all the counties or other comparable jurisdictions in which any or all of the properties subject to the Mortgages are situated, and in any other appropriate public recording office or elsewhere, such recordation to be effected by the Company and at the Trust’s expense on direction by the Trustee, but only upon direction accompanied by an Opinion of Counsel reasonably satisfactory to the Company to the effect that the failure to effect such recordation is likely to materially and adversely affect the interests of the Certificateholders.

For the purpose of facilitating the recordation of this Agreement as herein provided and for other purposes, this Agreement may be executed simultaneously in any number of counterparts, each of which counterparts shall be deemed to be an original, and such counterparts shall constitute but one and the same instrument.

Section 5.          Severability of Provisions.  If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement or of the Certificates or the rights of the holders thereof.

 

 

IN WITNESS WHEREOF, this Agreement is executed as of the date first above written.

 

	
            Address:

401 South Tryon Street, 12th Floor

Charlotte, NC 28288-1179

Attention:

Telecopy:

Confirmation:
 	
            WACHOVIA BANK, NATIONAL ASSOCIATION, as Trustee

By:__________________________________

Name:

Title:                   
 
	
            Address:

4 World Financial Center

New York, NY 10281
 	
            MERRILL LYNCH MORTGAGE INVESTORS, INC.

By:__________________________________

Name:

Title:                   

 
 
	
            Address:

9062 Old Annapolis Road

Columbia, Maryland 21045-1951

 
 	
            WELLS FARGO BANK, N.A.,

as Master Servicer

By:__________________________________

Name:

Title:

 
 
	
            Address:

1015 10th Avenue Southeast, MS 0031

Minneapolis, MN  55414

 
 	
            WELLS FARGO BANK, N.A.,

as Custodian

By:__________________________________

Name:

Title:                   
 

 

 

 

 

	
            STATE OF NORTH CAROLINA
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF MECKLENBURG
 	
            )
 	
             
 

 

On the 22nd day of December 2005 before me, a notary public in and for said State, personally appeared ___________________________, known to me to be an _____________________ of Wachovia Bank, National Association, a national banking association that executed the within instrument, and also known to me to be the person who executed it on behalf of said national banking association, and acknowledged to me that such national banking association executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

	
             
 	
            
 
 
 
	
             
 	
            Notary Public
 

 

[SEAL]

 

 

	
            STATE OF NEW YORK
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF NEW YORK
 	
            )
 	
             
 

On the 22nd day of December 2005 before me, a notary public in and for said State, personally appeared _____________________, known to me to be a ________________of Merrill Lynch Mortgage Investors, Inc., one of the corporations that executed the within instrument, and also known to me to be the person who executed it on behalf of said corporation, and acknowledged to me that such corporation executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

	
             
 	
            
 
 
 
	
             
 	
            Notary Public
 

 

 

[Notarial Seal]

 

 

	
            STATE OF MARYLAND
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF HOWARD
 	
            )
 	
             
 

On the 22nd day of December 2005 before me, a notary public in and for said State, personally appeared ________________, known to me to be an _________________________ of Wells Fargo Bank, N.A., a national banking association that executed the within instrument, and also known to me to be the person who executed it on behalf of said national banking association, and acknowledged to me that such national banking association executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

	
             
 	
            
 
 
 
	
             
 	
            Notary Public
 

 

 

[SEAL]

 

 

	
            STATE OF MINNESOTA
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF HENNEPIN
 	
            )
 	
             
 

On the 22nd day of December 2005 before me, a notary public in and for said State, personally appeared ___________________, known to me to be an ____________________ of Wells Fargo Bank, N.A., a national banking association that executed the within instrument, and also known to me to be the person who executed it on behalf of said national banking association, and acknowledged to me that such corporation executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

	
             
 	
            
 
 
 
	
             
 	
            Notary Public
 

 

 

[Notarial Seal]

 

 

EXHIBIT ONE

FORM OF CUSTODIAN INITIAL CERTIFICATION

December __, 2005

Merrill Lynch Mortgage Investors, Inc.

4 World Financial Center, 10th Floor

New York, New York 10281

Wachovia Bank, National Association

401 South Tryon Street, 12th Floor

Charlotte, NC 28288-1179

	
             
 	
            Re:
 	
            
Pooling and Servicing Agreement, dated as of December 1, 2005, among Merrill Lynch Mortgage Investors, Inc., as depositor, Wells Fargo Bank, N.A., as master servicer and securities administrator, and Wachovia Bank, National Association, as trustee, Mortgage Pass-Through Certificates, Series MLMI 2005-A10
 
 

 

Ladies and Gentlemen:

Attached is the Custodian’s preliminary exception report delivered in accordance with Section 2.02 of the referenced Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”).  Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Pooling and Servicing Agreement.

The Custodian has made no independent examination of any documents contained in each Mortgage File beyond the review specifically required in the Pooling and Servicing Agreement.  The Custodian makes no representations as to (i) the validity, legality, sufficiency, enforceability or genuineness of any of the documents contained in the Mortgage File pertaining to the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the collectability, insurability, effectiveness or suitability of any such Mortgage Loan or (iii) the existence of any assumption, modification, written assurance, or substitution agreement, with respect to any Mortgage File if no such documents appear in the Mortgage File delivered to the Custodian.

 

 

 

 

	
             
 	
            WELLS FARGO BANK, N.A.,
 as Custodian
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Name:        
 
	
             
 	
            Title:                   
 

 

 

 

EXHIBIT TWO

FORM OF CUSTODIAN FINAL CERTIFICATION

____________, 2005

Merrill Lynch Mortgage Investors, Inc.

World Financial Center--North Tower

250 Vesey Street

New York, NY 10281

Attention: Paul Park

Wachovia Bank, National Association

401 South Tryon Street, 12th Floor

Charlotte, NC 28288-1179

	
             
 	
            Re:
 	
            
Pooling and Servicing Agreement, dated as of December 1, 2005, among Merrill Lynch Mortgage Investors, Inc., as depositor, Wells Fargo Bank, N.A., as master servicer and securities administrator and Wachovia Bank, National Association, as trustee, Mortgage Pass-Through Certificates, Series MLMI 2005-A10
 
 

 

Ladies and Gentlemen:

In accordance with Section 2.02 of the above-captioned Pooling and Servicing Agreement, the undersigned, hereby certifies that, except as noted on the Schedule of Exceptions attached hereto, for each Mortgage Loan listed on the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on the attachment hereto), it has received a complete Mortgage File which includes the documents required to be included in the Mortgage File as set forth in the Pooling and Servicing Agreement.

The undersigned has made no independent examination of any documents contained in each Mortgage File beyond the review specifically required in the above-referenced Pooling and Servicing Agreement.  The undersigned makes no representation as to: (i) the validity, legality, 

 

sufficiency, enforceability or genuineness of any documents contained in any Mortgage File for any of the Mortgage Loans listed on the Mortgage Loan Schedule to the Pooling and Servicing Agreement, (ii) the collectability, insurability, effectiveness or suitability of any such Mortgage Loan or (iii) whether any Mortgage File should include any flood insurance policy, any rider, addends, surety or guaranty agreement, power of attorney, buy down agreement, assumption agreement, modification agreement, written assurance or substitution agreement.

 

 

Capitalized words and phrases used herein shall have the respective meanings assigned to them in the above-captioned Pooling and Servicing Agreement.

	
             
 	
            WELLS FARGO BANK, N.A.,
 as Custodian
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Name:        
 
	
             
 	
            Title:                   
 

 

 

 

REQUEST FOR RELEASE OF DOCUMENTS

	
            To:
 	
            Wells Fargo Bank, N.A.
 

1015 10th Avenue S.E.

Minneapolis, Minnesota 55414

Attn: MLMI 2005-A10

	
             
 	
            Re:
 	
            
Custodial Agreement dated as of December 22, 2005, among Wachovia Bank, National Association, as Trustee, Merrill Lynch Mortgage Investors, Inc., as Company, Wells Fargo Bank, N.A., as Master Servicer and Securities Administrator, and Wells Fargo Bank, N.A., as Custodian
 
 

 

In connection with the administration of the Mortgage Loans held by you as Custodian for the Owner pursuant to the above-captioned Custody Agreement, we request the release, and hereby acknowledge receipt, of the Custodian’s Mortgage File for the Mortgage Loan described below, for the reason indicated.

Mortgage Loan Number:

Mortgagor Name, Address & Zip Code:

Reason for Requesting Documents (check one):

	
             
 	
            1.  Mortgage Paid in full
 	
             
 
	
             
 	
            2.  Foreclosure
 	
             
 
	
             
 	
            3.  Substitution
 	
             
 
	
             
 	
            4. Other Liquidation (Repurchases, etc.)
 	
             
 
	
             
 	
            5. Nonliquidation 
 	
            Reason:_______________________
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
            By: __________________________

(authorized singer)
 

 

 

 

 

	
             
 	
             
 	
            Issuer:________________________
 
	
             
 	
             
 	
            Address:______________________

_______________________
 
	
             
 	
             
 	
            Date:   _______________________
 
	
             
 	
             
 	
             
 

 

Custodian

Wells Fargo Bank, N.A.

Please acknowledge the execution of the above request by your signature and date below:

 

	
            ______________________________
 	
             
 	
            __________________________
 
	
            Signature
 	
             
 	
            Date
 
	
            Documents returned to Custodian:
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
            ______________________________
 	
             
 	
            __________________________
 
	
            Custodian
 	
             
 	
            Date
 

 

 

 

EXHIBIT H-1

SERVICING AGREEMENT

PHH MORTGAGE CORPORATION

(PROVIDED UPON REQUEST)

 

 

EXHIBIT H-2

SERVICING AGREEMENT

GMAC

(PROVIDED UPON REQUEST)

 

 

EXHIBIT H-3

SERVICING AGREEMENT

FIRST REPUBLIC BANK

(PROVIDED UPON REQUEST)

 

 

EXHIBIT I-1

ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT

PHH MORTGAGE CORP.

(PROVIDED UPON REQUEST)

 

 

EXHIBIT I-2

ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT

GMAC

(PROVIDED UPON REQUEST)

 

 

EXHIBIT I-3

ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT

FIRST REPUBLIC BANK

(PROVIDED UPON REQUEST)

 

 

EXHIBIT J-1

MLMLI MORTGAGE LOAN PURCHASE AGREEMENT

MORTGAGE LOAN PURCHASE AGREEMENT, dated as of December 22, 2005, as amended and supplemented by any and all amendments hereto (collectively, the “Agreement”), by and between MERRILL LYNCH MORTGAGE LENDING, INC., a Delaware corporation (the “Seller”), and MERRILL LYNCH MORTGAGE INVESTORS, INC., a Delaware corporation (the “Purchaser”).

Upon the terms and subject to the conditions of this Agreement, the Seller agrees to sell, and the Purchaser agrees to purchase, certain first lien, fixed-rate and adjustable-rate mortgage loans secured by one- to four-family residences, individual condominiums, co-op units and units in planned unit developments (collectively, the “Mortgage Loans”) as described on Annex I. The Purchaser intends to deposit the Mortgage Loans into a trust fund (the “Trust Fund”) and create Mortgage Pass-Through Certificates, Series MLMI 2005-A10 (the “Certificates”), under a pooling and servicing agreement, to be dated as of October 1, 2005 (the “Pooling and Servicing Agreement”),
between the Purchaser, as seller, Wachovia Bank, National Association, as trustee (the “Trustee”) and Wells Fargo Bank, N.A., as master servicer and securities administrator (the “Master Servicer”).

The Purchaser has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (Number 333-127233) relating to its Mortgage Pass-Through Certificates and the offering of certain series thereof (including certain classes of the Certificates) from time to time in accordance with Rule 415 under the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder (the “Securities Act”). Such registration statement, when it became effective under the Securities Act, and the prospectus relating to the public offering of certain classes of the Certificates by the Purchaser (the “Public Offering”), as from time to time each is amended or
supplemented pursuant to the Securities Act or otherwise, are referred to herein as the “Registration Statement” and the “Prospectus,” respectively. The “Prospectus Supplement” shall mean that supplement, dated December 21, 2005 to the Prospectus, dated August 26, 2005, relating to certain classes of the Certificates. With respect to the Public Offering of certain classes of the Certificates, the Purchaser and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) have entered into a terms agreement dated as of December 21, 2005 to an underwriting agreement dated September 27, 2005, between the Purchaser and Merrill Lynch (together, the “Underwriting Agreement”).

Now, therefore, in consideration of the premises and the mutual agreements set forth herein, the parties hereto agree as follows:

Section 1.          Definitions. Certain terms are defined herein. Capitalized terms used herein but not defined herein shall have the meanings specified in the Pooling and Servicing Agreement. The following other terms are defined as follows:

Additional Collateral:  (i) With respect to any Mortgage 100sm Loan, the Securities Account and the financial assets held therein subject to a security interest pursuant to 

 

the related Mortgage 100sm Pledge Agreement, or (ii) with respect to any Parent Power® Mortgage Loan, the related Parent Power® Agreement.

Additional Collateral Mortgage Loan:  Each Mortgage Loan, as identified on the Mortgage Loan Schedule, as to which Additional Collateral was required to be provided at the closing thereof.

Additional Collateral Agreements:  Each Mortgage 100 Pledge Agreement, Parent Power® Guaranty and Security Agreement for Securities Account, Parent Power® Guaranty Agreement for Real Estate, Control Agreement, Equity Access® Agreement and Equity Access® Mortgage, as applicable, for each Additional Collateral Mortgage Loan.

Closing Date: December 22, 2005.

Co-op Lease:  With respect to a Co-op Loan, the lease with respect to a dwelling unit occupied by the Mortgagor and relating to the stock allocated to the related dwelling unit.

Co-op Loan:  A Mortgage Loan secured by the pledge of stock allocated to a dwelling unit in a residential cooperative housing corporation and a collateral assignment of the related Co-op Lease.

Co-op Stock:  With respect to a Co-op Loan, the single outstanding class of stock, partnership interest or other ownership instrument in the related residential cooperative housing corporation.

Cut-off Date: December 1, 2005.

Cut-off Date Balance: $786,377,264

Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a Substitute Mortgage Loan.

	
             
 	
            Due Date: With respect to each Mortgage Loan, the first day in each month.
 

Master Servicer: Wells Fargo Bank, N.A.

Merrill Lynch: Merrill Lynch, Pierce, Fenner & Smith Incorporated.

Moody’s: Moody’s Investors Service, Inc., or its successors in interest.

Mortgage: The mortgage or deed of trust creating a first lien on an interest in real property securing a Mortgage Note.

Mortgage File: The items referred to in Exhibit 1 and Exhibit 2 pertaining to a particular Mortgage Loan and any additional documents required to be added to such documents pursuant to this Agreement.

Mortgage Interest Rate: The annual rate of interest borne by a Mortgage Note as stated therein.

 

 

Mortgagor: The obligor(s) on a Mortgage Note.

Net Rate: For each Mortgage Loan, the Mortgage Interest Rate for such Mortgage Loan less the Master Servicing Fee Rate and the Trustee Fee Rate.

Offered Certificates: Shall mean the Class A, Class A-IO, Class M-1, Class M-2 and Class M-3 Certificates issued pursuant to the Pooling and Servicing Agreement.

Opinion of Counsel: A written opinion of counsel, who may be counsel for the Seller or the Purchaser, reasonably acceptable to the Trustee.

Person: Any legal person, including any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

Pledge Agreement:  Any Mortgage 100sm Pledge Agreement or Parent Power® Guaranty and Security Agreement for Securities Account related to an Additional Collateral Mortgage Loan.

Purchase Price: With respect to any Mortgage Loan required to be purchased by the Seller pursuant to the applicable provisions of this Agreement, an amount equal to the sum of (i) 100% of the principal remaining unpaid on such Mortgage Loan as of the date of purchase (including if a foreclosure has already occurred, the principal balance of the related Mortgage Loan at the time the Mortgaged Property was acquired), and (ii) accrued and unpaid interest thereon at the Mortgage Interest Rate through and including the last day of the month of purchase (iii) any costs and damages incurred by the Trust in connection with any violation by such Mortgage Loan of any predatory or abusive-lending law.

Rating Agencies: S&P and Moody’s, each a “Rating Agency.”

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

Securities Account:  With respect to any Additional Collateral Mortgage Loans, the account, together with the financial assets held therein, that are the subject of the related Pledge Agreement.

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

Substitute Mortgage Loan: A mortgage loan substituted for a Deleted Mortgage Loan which must meet on the date of such substitution the requirements stated herein and in the Pooling and Servicing Agreement; upon such substitution, such mortgage loan shall be a “Mortgage Loan” hereunder.

Surety Bond: The limited purpose surety bond (Policy No. AB0039BE), dated February 28, 1996, in respect to Mortgage Loans originated by Merrill Lynch Credit Corporation, issued by the Surety Bond Issuer for the benefit of certain beneficiaries, but only to the extent that such Surety Bond covers any Additional Collateral Mortgage Loan.

 

 

Value: The value of the Mortgaged Property at the time of origination of the related Mortgage Loan, such value being the lesser of (i) the value of such property set forth in an appraisal accepted by the Originator or (ii) the sales price of such property at the time of origination.

Section 2.          Purchase and Sale of the Mortgage Loans and Related Rights. (a)Upon satisfaction of the conditions set forth in Section 10 hereof, the Seller agrees to sell, and the Purchaser agrees to purchase Mortgage Loans having an aggregate Cut-off Date Balance of $786,377,264.

(b)          The closing for the purchase and sale of the Mortgage Loans and the closing for the issuance of the Certificates will take place on the Closing Date at the office of the Purchaser’s counsel in New York, New York or such other place as the parties shall agree.

(b)          Upon the satisfaction of the conditions set forth in Section 10 hereof, on the Closing Date, in consideration of the purchase of the Mortgage Loans, the Purchaser shall (i) pay to the Seller an amount equal to the net sale proceeds of the Offered Certificates plus accrued interest (the “Purchase Price”) in immediately available funds by wire transfer to such account or accounts as shall be designated by the Seller and (ii) deliver to the Seller the Class B.

Section 3.          Mortgage Loan Schedules.  The Seller agrees to provide to the Purchaser as of the date hereof a preliminary listing of the Mortgage Loans (the “Preliminary Mortgage Loan Schedule”) setting forth the information listed on Exhibit 3 to this Agreement with respect to each of the Mortgage Loans being sold by the Seller. If there are changes to the Preliminary Mortgage Loan Schedule, the Seller shall provide to the Purchaser as of the Closing Date a final schedule (the “Final Mortgage Loan Schedule”) setting forth the information listed on Exhibit 3 to this Agreement with respect to each of the Mortgage Loans being sold by the Seller to the Purchaser. The Final Mortgage Loan Schedule shall be delivered to the Purchaser on the Closing Date, shall be attached to
an amendment to this Agreement to be executed on the Closing Date by the parties hereto and shall be in form and substance mutually agreed to by the Seller and the Purchaser (the “Amendment”). If there are no changes to the Preliminary Mortgage Loan Schedule, the Preliminary Mortgage Loan Schedule shall be the Final Mortgage Loan Schedule for all purposes hereof.

	
             
  	
            Section 4.
 	
            Mortgage Loan Transfer.
 

(a)          The Purchaser will be entitled to all scheduled payments of principal and interest on the Mortgage Loans due after the Cut-off Date (regardless of when actually collected) and all payments thereof other than scheduled principal and interest received after the Cut-off Date. The Seller will be entitled to all scheduled payments of principal and interest on the Mortgage Loans due on or before the Cut-off Date (including payments collected after the Cut-off Date) and all payments thereof other than scheduled principal and interest on the Mortgage Loans received on or before the Cut-off Date. Such principal amounts and any interest thereon belonging to the Seller as described above will not be included in the aggregate outstanding principal balance of the Mortgage Loans as of the Cut-off Date as set forth on the
Final Mortgage Loan Schedule.

 

 

(b)          Pursuant to various conveyancing documents to be executed on the Closing Date and pursuant to the Pooling and Servicing Agreement, the Purchaser will assign on the Closing Date all of its right, title and interest in and to the Mortgage Loans to the Trustee for the benefit of the Certificateholders. In connection with the transfer and assignment of the Mortgage Loans, the Seller has delivered or will deliver or cause to be delivered to the Trustee by the Closing Date or such later date as is agreed to by the Purchaser and the Seller (each of the Closing Date and such later date is referred to as a “Mortgage File Delivery Date”), the items of each Mortgage File, provided, however, that in lieu of the foregoing, the Seller may deliver the following documents, under the circumstances set forth below:
(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 in time to permit their delivery as specified above, the Seller may deliver a true copy thereof with a certification by the Seller or the Originator, 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;” (y) in lieu of the Mortgage, assignments to the Trustee or intervening assignments thereof, if the applicable jurisdiction retains the originals of such documents or if the originals are lost (in each case, as evidenced by a certification from the Seller to such effect), the Seller 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 (z) in lieu of the Mortgage Notes relating to the Mortgage Loans, each identified in the list delivered by the Purchaser to the Trustee on the Closing Date and attached hereto as Exhibit 6 the Seller may deliver lost note affidavits and indemnities of the Seller; 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 Seller, in lieu of delivering the above documents, may deliver to the Trustee a certification by the Seller to such effect. The Seller shall deliver such original documents (including any original documents as to which certified copies had previously been delivered) or such certified copies to the Trustee promptly after they are received. The Seller shall cause the Mortgage and intervening assignments, if any, and the assignment of the Mortgage to be
recorded not later than 180 days after the Closing Date, or, in lieu of such assignments, shall provide an Opinion of Counsel pursuant to Section 6(a) hereof to the effect that the recordation of such assignment is not necessary to protect the Trustee’s interest in the related Mortgage Loan. Upon the request of the Purchaser, the Seller will assist the Purchaser in effecting the assignment referred to above.

(c)          The Seller and the Purchaser acknowledge hereunder that all of the Mortgage Loans and the related servicing will ultimately be assigned to Wachovia Bank, National Association, as Trustee for the Certificateholders, on the date hereof.

	
             
  	
            Section 5.
 	
            Examination of Mortgage Files.
 

(a)          On or before the Mortgage File Delivery Date, the Seller will have made the Mortgage Files available to the Purchaser or its agent for examination which may be at the offices of the Trustee or the Seller and/or the Seller’s custodian. The fact that the Purchaser or its agent has conducted or has failed to conduct any partial or complete examination of the Mortgage Files shall not affect the Purchaser’s rights to demand cure, repurchase, substitution or other relief as provided in this Agreement. In furtherance of the foregoing, the Seller shall make 

 

the Mortgage Files available to the Purchaser or its agent from time to time so as to permit the Purchaser to confirm the Seller’s compliance with the delivery and recordation requirements of this Agreement and the Pooling and Servicing Agreement. In addition, upon request of the Purchaser, the Seller agrees to provide to the Purchaser, Merrill Lynch and to any investors or prospective investors in the Certificates information regarding the Mortgage Loans and their servicing, to make the Mortgage Files available to the Purchaser, Merrill Lynch and to such investors or prospective investors (which may be at the offices of the Seller and/or the Seller’s custodian) and to make available personnel knowledgeable about the Mortgage Loans for discussions with the Purchaser, Merrill Lynch and such investors or prospective investors, upon reasonable request during regular business hours, sufficient to
permit the Purchaser, Merrill Lynch and such investors or potential investors to conduct such due diligence as any such party reasonably believes is appropriate.

(b)          Pursuant to the Pooling and Servicing Agreement, on the Closing Date the Trustee, for the benefit of the Certificateholders, will review items of the Mortgage Files as set forth on Exhibit 1 and will deliver to the Seller a certification in the form attached as Exhibit One to the Custodial Agreement.

(c)          Pursuant to the Pooling and Servicing Agreement, the Trustee will review the Mortgage Files within 180 days of the Closing Date and will deliver to the Purchaser a final certification substantially in the form of Exhibit Two to the Custodial Agreement. If the Trustee is unable to deliver a final certification with respect to the items listed in Exhibit 2 due to any document that is missing, has not been executed, is unrelated, determined on the basis of the Mortgagor name, original principal balance and loan number, to the Mortgage Loans identified in the Final Mortgage Loan Schedule (a “Material Defect”), the Trustee shall notify the Seller of such Material Defect. The Seller shall correct or cure any such Material Defect within 90 days from the date of notice from the Trustee of the Material
Defect and if the Seller does not correct or cure such Material Defect within such period and such defect materially and adversely affects the interests of the Certificateholders in the related Mortgage Loan, the Seller will, in accordance with the terms of the Pooling and Servicing Agreement, within 90 days of the date of notice, provide the Trustee with a Substitute Mortgage Loan (if within two years of the Closing Date) or purchase the related Mortgage Loan at the applicable 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, repurchase or substitution 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 of the Seller confirming that such documents have been accepted for recording, and delivery to the Trustee shall be effected by the Seller within thirty days of its receipt of the original recorded document.

 

 

(d)          At the time of any substitution, the Seller shall deliver or cause to be delivered the Substitute Mortgage Loan, the related Mortgage File and any other documents and payments required to be delivered in connection with a substitution pursuant to the Pooling and Servicing Agreement. At the time of any purchase or substitution, the Trustee shall (i) assign to the Seller and cause the Trustee to release the documents (including, but not limited to, the Mortgage, Mortgage Note and other contents of the Mortgage File) in the possession of the Trustee relating to the Deleted Mortgage Loan and (ii) execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be necessary to vest in the Seller title to such Deleted Mortgage Loan.

	
             
  	
            Section 6.
 	
            Recordation of Assignments of Mortgage.
 

(a)          The Seller will, promptly after the Closing Date, cause each Mortgage and each assignment of Mortgage from the Seller to the Trustee, and all unrecorded intervening assignments, if any, delivered on or prior to the Closing Date, to be recorded in all recording offices in the jurisdictions where the related Mortgaged Properties are located; provided, however, the Seller need not cause to be recorded any assignment which relates to a Mortgage Loan in any jurisdiction under the laws of which, as evidenced by an Opinion of Counsel delivered by the Seller 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 of
Mortgage shall be submitted for recording by the Seller in the manner described above, at no expense to the Trust Fund or Trustee, upon the earliest to occur of (i) reasonable direction by the Holders of Certificates evidencing, in the aggregate, not less than 25% of the Voting Rights, (ii) the occurrence of a Master Servicer Event of Termination, (iii) the occurrence of a bankruptcy, insolvency or foreclosure relating to the Seller, (iv) the occurrence of a servicing transfer as described in Section 7.02 of the Pooling and Servicing Agreement or (v) with respect to any one assignment of Mortgage, the occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor under the related Mortgage.

While each such Mortgage or assignment is being recorded, if necessary, the Seller shall leave or cause to be left with the Trustee a certified copy of such Mortgage or assignment. In the event that, within 180 days of the Closing Date, the Trustee has not provided an Opinion of Counsel as described above or received evidence of recording with respect to each Mortgage Loan delivered to the Purchaser pursuant to the terms hereof or as set forth above, the failure to provide evidence of recording or such Opinion of Counsel shall be considered a Material Defect, and the provisions of Section 5(c) and (d) shall apply. All customary recording fees and reasonable expenses relating to the recordation of the assignments of mortgage to the Trustee or the Opinion of Counsel, as the case may be, shall be borne by the Seller.

(b)          It is the express intent of the parties hereto that the conveyance of the Mortgage Loans by the Seller to the Purchaser, as contemplated by this Agreement be, and be treated as, a sale. It is, further, not the intention of the parties that such conveyance be deemed a pledge of the Mortgage Loans by the Seller to the Purchaser to secure a debt or other obligation of the Seller. However, in the event that, notwithstanding the intent of the parties, the Mortgage Loans are held by a court of competent jurisdiction to continue to be property of the Seller, then (i) this Agreement shall also be deemed to be a security agreement within the meaning of 

 

Articles 8 and 9 of the applicable Uniform Commercial Code; (ii) the transfer of the Mortgage Loans provided for herein shall be deemed to be a grant by the Seller to the Purchaser of a security interest in all of the Seller’s right, title and interest in and to the Mortgage Loans and all amounts payable to the holders of the Mortgage Loans in accordance with the terms thereof and all proceeds of the conversion, voluntary or involuntary, of the foregoing into cash, instruments, securities or other property, to the extent the Purchaser would otherwise be entitled to own such Mortgage Loans and proceeds pursuant to Section 4 hereof, including all amounts, other than investment earnings, from time to time held or invested in any accounts created pursuant to the Pooling and Servicing Agreement, whether in the form of cash, instruments, securities or other property; (iii) the possession by the Purchaser or
the Trustee of Mortgage Notes and such other items of property as constitute instruments, money, negotiable documents or chattel paper shall be deemed to be “possession by the secured party” for purposes of perfecting the security interest pursuant to Section 9-305 (or comparable provision) of the applicable Uniform Commercial Code; and (iv) notifications to persons holding such property, and acknowledgments, receipts or confirmations from persons holding such property, shall be deemed notifications to, or acknowledgments, receipts or confirmations from, financial intermediaries, bailees or agents (as applicable) of the Purchaser for the purpose of perfecting such security interest under applicable law. Any assignment of the interest of the Purchaser pursuant to any provision hereof or pursuant to the Pooling and Servicing Agreement shall also be deemed to be an assignment of any security interest created hereby. The Seller and the Purchaser shall, to the extent consistent
with this Agreement, take such actions as may be reasonably necessary to ensure that, if this Agreement were deemed to create a security interest in the Mortgage Loans, such security interest would be deemed to be a perfected security interest of first priority under applicable law and will be maintained as such throughout the term of the Pooling and Servicing Agreement.

Section 7.           Representations and Warranties of Seller Concerning the Mortgage Loans.  The Seller hereby represents and warrants to the Purchaser as of the Closing Date or such other date as may be specified below with respect to each Mortgage Loan being sold by it:

(i)           the information set forth in the Mortgage Loan Schedule hereto is true and correct in all material respects;

(ii)          immediately prior to the transfer to the Purchaser, the Seller was the sole owner of beneficial title and holder of each Mortgage and Mortgage Note relating to the Mortgage Loans and is conveying the same free and clear of any and all liens, claims, encumbrances, participation interests, equities, pledges, charges or security interests of any nature and the Seller has full right and authority to sell or assign the same pursuant to this Agreement;

(iii)        no selection procedure reasonably believed by the Seller to be adverse to the interests of the Certificateholders was utilized in selecting the Mortgage Loans;

(iv)         each Mortgage Loan constitutes a “qualified mortgage” under Section 860G(a)(3)(A) of the Code and Treasury Regulation Section 1.8600-2(a)(1);

(v)          the information set forth under the caption “Description of the Mortgage Pool—General”, “—Tabular Characteristics of the Mortgage Pool”, “—Tabular 

 

Characteristics of the Mortgage Loans” in the Prospectus Supplement is true and correct in all material respects;

(vi)         as of the Cut-off Date, no Mortgage Loan is more than 30 days past due. The Seller has not advanced funds, or induced, solicited or knowingly received any advance of funds from a party other than the owner of the related Mortgaged Property, directly or indirectly, for the payment of any amount required by the Mortgage Note or Mortgage;

(vii)       to the best of the Seller’s knowledge, there are no delinquent taxes, ground rents, water charges, sewer rents, assessments, insurance premiums, leasehold payments, including assessments payable in future installments or other outstanding charges affecting the related Mortgaged Property;

(viii)      to the best of the Seller’s knowledge, there is no default, breach, violation or event of acceleration existing under the Mortgage or the Mortgage Note and no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration, and the Seller has not waived any default, breach, violation or event of acceleration;

(ix)         to the best of the Seller’s knowledge, the Mortgaged Property is free of damage and waste and there is no proceeding pending for the total or partial condemnation thereof;

(x)          to the best of the Seller’s knowledge, the Mortgaged Property is lawfully occupied under applicable law at time of origination; all inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy, have been made or obtained from the appropriate authorities;

(xi)         all requirements of any federal, state or local law (including usury, truth in lending, real estate settlement procedures, consumer credit protection, equal credit opportunity, disclosure or recording, predatory and abusive lending laws) applicable to the origination and servicing of such Mortgage Loan have been complied with in all material respects;

(xii)       to the best of the Seller’s knowledge, as of the date of transfer of the Mortgage Loans, there is no mechanics’ lien or claim for work, labor or material affecting the Mortgaged Property except those which are insured against by the title insurance policy;

(xiii)      to the best of the Seller’s knowledge, as of the date of the transfer of the Mortgage Loans to the Purchaser, there is no valid offset, defense or counterclaim to any Mortgage Note or Mortgage;

(xiv)      to the best of the Seller’s knowledge, as of the date of closing, the physical property subject to any mortgage is free of material damage and is in good repair;

 

 

(xv)        at the time of origination, no improvement located on or being part of the Mortgaged Property was in violation of any applicable zoning and subdivision laws or ordinances;

(xvi)      each Mortgage Loan is and will be a mortgage loan arising out of the originator’s practice in accordance with the seller/originator’s underwriting guidelines.  The seller has no knowledge of any fact that should have led it to expect at the time of the initial creation of an interest in the mortgage loan that such mortgage loan would not be paid in full when due;

(xvii)     each original mortgage has been recorded or is in the process of being recorded in the appropriate jurisdictions wherein such recordation is required to perfect the lien thereof for the benefit of the trust;

(xviii)    the related mortgage file contains each of the documents and instruments specified;

(xix)      loans originated are being serviced according to the seller/servicer guidelines;

(xx)        the mortgage note and the mortgage have not been impaired, altered or modified in any material respect, except by a written instrument which has been recorded or is in the process of being recorded;

(xxi)      a lender’s title policy or binder, or other assurance of title insurance customary in a form acceptable to FNMA or FHLMC was issued at origination and each policy or binder is valid and remains in full force and effect;

	
             
  	
            (xxii)
 	
            none of the Mortgage Loans are secured by a leasehold interest;
 

(xxiii)   none of the Mortgage Loans are subject to the Georgia Fair Lending Act, as amended;

(xxiv)    none of the Mortgage Loans is subject to the Home Ownership and Equity Protection Act of 1994 or is a “high cost” or “predatory” loan as defined by applicable local, state and federal predatory and abusive lending laws; 

(xxv)     no Mortgage Loan is a High Cost Loan or Covered Loan, as applicable (as such terms are defined in  Appendix E of the then current Standard & Poor's Glossary For File Format For LEVELS® Version 5.6b Revised (attached hereto as Exhibit 7); 

(xxvi)    with respect to each Additional Collateral Mortgage Loan, prior to its assignment to the Purchaser, the Mortgage Loan Seller had a first priority perfected security interest in each Securities Account, subject to the rights of Merrill Lynch, Pierce, Fenner & Smith Incorporated, and following the Mortgage Loan Seller’s assignment of the Pledge Agreements and related security interest and Merrill Lynch Credit Corporation’s acknowledgement that it shall administer the Control Agreement for the benefit of the Purchaser, the Purchaser has a first priority perfected security interest in 

 

each Securities Account, subject to the rights of Merrill Lynch, Pierce, Fenner & Smith Incorporated;

(xxvii)   with respect to each Additional Collateral Mortgage Loan, the Additional Collateral Mortgage Loan is insured under the terms and provisions of the Surety Bond, subject to the limitations set forth therein;

(xxviii) with respect to each Additional Collateral Mortgage Loan, the assignment of rights to the Purchaser under the Surety Bond, as described herein, will not result in the Purchaser assuming any obligations or liabilities of the Mortgage Loan Seller with respect thereto, and that all such rights assigned to the Purchaser are fully and freely assignable by the Mortgage Loan Seller to the Purchaser, subject to the terms of the Surety Bond;

(xxix)    with respect to each Additional Collateral Mortgage Loan, the forms of each Additional Collateral Agreement with respect to the Additional Collateral have not been impaired, waived, altered or modified in any material respect, and each Additional Collateral Agreement is in full force and effect; 

(xxx)     with respect to each Additional Collateral Mortgage Loan, each Additional Collateral Agreement is not subject to any right of rescission, setoff or defense with respect to the Additional Collateral, including the defense of usury, nor will the operation of any of the terms of such Additional Collateral Agreement, or the exercise of any right thereunder, render such Additional Collateral Agreement unenforceable, in whole or in part, or subject it to any right of rescission, setoff or defense, including the defense of usury, and no such right of rescission, setoff or defense has been asserted with respect thereto with respect to the Additional Collateral; 

(xxxi)    with respect to each Additional Collateral Mortgage Loan, there is no default, breach, violation or event of acceleration existing under any Additional Collateral Agreement with respect to the Additional Collateral; there is no event that, with the lapse of time, the giving of notice, or both, would constitute such a default, breach, violation or event of acceleration; and in no event has the Mortgage Loan Seller waived any of its material rights or remedies in respect of any default, breach, violation or event of acceleration under any Additional Collateral Agreement with respect to the Additional Collateral; and

(xxxii)   with respect to each Co-op Loan, the security instruments create a valid, enforceable and subsisting first priority security interest in the Co-op Lease and Co-op Stock securing the related Mortgage Note subject to only to (a) the lien of the related cooperative for unpaid assessments representing the Mortgagor’s pro rata share of payments for a blanket mortgage, if any, current and future real property taxes, insurance premiums, maintenance fees and other assessments to which like collateral is commonly subject, and (b) other matters to which the collateral is commonly subject which do not materially interfere with the benefits of the security intended to be provided; provided, however, that the related Co-op Loan may be subordinated or otherwise subject to the lien of a Mortgage on the cooperative building..

 

 

It is understood and agreed that the representations and warranties set forth in this Section 7 will inure to the benefit of the Purchaser, its successors and assigns, notwithstanding any restrictive or qualified endorsement on any Mortgage Note or assignment of Mortgage or the examination of any Mortgage File. Upon any substitution for a Mortgage Loan, the representations and warranties set forth above shall be deemed to be made by the Seller as to any Substitute Mortgage Loan as of the date of substitution.

Upon discovery or receipt of notice by the Seller, the Purchaser or the Trustee of a breach of any representation or warranty of the Seller set forth in this Section 7 which materially and adversely affects the value of the interests of the Purchaser, the Certificateholders or the Trustee in any of the Mortgage Loans delivered to the Purchaser pursuant to this Agreement, the party discovering or receiving notice of such breach shall give prompt written notice to the others. In the case of any such breach of a representation or warranty set forth in this Section 7, within 90 days from the date of discovery by the Seller, or the date the Seller is notified by the party discovering or receiving notice of such breach (whichever occurs earlier), the Seller will (i) cure such breach in all material respects, (ii) purchase the affected Mortgage Loan at the applicable Purchase Price or (iii) if
within two years of the Closing Date, substitute a qualifying Substitute Mortgage Loan in exchange for such Mortgage Loan. The obligations of the Seller to cure, purchase or substitute a qualifying Substitute Mortgage Loan shall constitute the Purchaser’s, the Trustee’s and the Certificateholder’s sole and exclusive remedy under this Agreement or otherwise respecting a breach of representations or warranties hereunder with respect to the Mortgage Loans, except for the obligation of the Seller to indemnify the Purchaser for such breach as set forth in and limited by Section 14 hereof.  With respect to the representations and warranties described in the Agreement which are made to the best of the Seller’s knowledge, if it is discovered by any of the Depositor, the Seller or the Trustee that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan, then notwithstanding
the seller’s lack of knowledge with respect to the substance of such representation and warranty, such inaccuracy shall be deemed a breach of the applicable representation or warranty.

Any cause of action against the Seller or relating to or arising out of a breach by the Seller of any representations and warranties made in this Section 7 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by the Seller or notice thereof by the party discovering such breach and (ii) failure by the Seller to cure such breach, purchase such Mortgage Loan or substitute a qualifying Substitute Mortgage Loan pursuant to the terms hereof.

Section 8.          Representations and Warranties Concerning the Seller.  As of the date hereof and as of the Closing Date, the Seller represents and warrants to the Purchaser as to itself in the capacity indicated as follows:

(i)           the Seller (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and (ii) is qualified and in good standing 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 Seller’s business as presently conducted or on the Seller’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

 

 

(ii)          the Seller has full 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 Seller of this Agreement have been duly authorized by all necessary action on the part of the Seller; 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 Seller or its properties or the charter or by-laws of the Seller, except those conflicts, breaches or defaults which would not reasonably be expected to have a material adverse effect on the Seller’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(iv)         the execution, delivery and performance by the Seller 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 and, in connection with the recordation of the Mortgages, powers of attorney or assignments of Mortgages not yet completed;

(v)          this Agreement has been duly executed and delivered by the Seller and, assuming due authorization, execution and delivery by the Purchaser, constitutes a valid and binding obligation of the Seller 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 Seller, threatened against the Seller, 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 Seller will be determined adversely to the Seller and will if determined adversely to the Seller materially and adversely affect the Seller’s ability to perform its obligations under this Agreement; and the Seller 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)       the Seller’s Information (as defined in Section 13(a) hereof) does not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

Section 9.          Representations and Warranties Concerning the Purchaser.  As of the date hereof and as of the Closing Date, the Purchaser represents and warrants to the Seller as follows:

 

 

(i)           the Purchaser (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and (ii) 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 Purchaser’s business as presently conducted or on the Purchaser’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(ii)          the Purchaser 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 Purchaser of this Agreement have been duly authorized by all necessary corporate action on the part of the Purchaser; 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 Purchaser or its properties or the articles of incorporation or by-laws of the Purchaser, except those conflicts, breaches or defaults which would not reasonably be expected to have a material adverse effect on the Purchaser’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(iv)         the execution, delivery and performance by the Purchaser 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 Purchaser and, assuming due authorization, execution and delivery by the Seller, constitutes a valid and binding obligation of the Purchaser 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 Purchaser, threatened against the Purchaser, 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 Purchaser will be determined adversely to the Purchaser and will if determined adversely to the Purchaser materially and adversely affect the Purchaser’s ability to perform its obligations under this Agreement; and the Purchaser 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)       the Purchaser’s Information (as defined in Section 13(b) hereof) does not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

	
             
  	
            Section 10.
 	
            Conditions to Closing.
 

(a)          The obligations of the Purchaser under this Agreement will be subject to the satisfaction, on or prior to the Closing Date, of the following conditions:

(1)          Each of the obligations of the Seller required to be performed at or prior to the Closing Date pursuant to the terms of this Agreement shall have been duly performed and complied with in all material respects; all of the representations and warranties of the Seller under this Agreement shall be true and correct as of the date or dates specified in all material respects; and no event shall have occurred which, with notice or the passage of time, would constitute a default under this Agreement, or the Pooling and Servicing Agreement; and the Purchaser shall have received certificates to that effect signed by authorized officers of the Seller.

(2)          The Purchaser shall have received all of the following closing documents, in such forms as are agreed upon and reasonably acceptable to the Purchaser, duly executed by all signatories other than the Purchaser as required pursuant to the respective terms thereof:

(i)           If  required pursuant to Section 3 hereof, the Amendment dated as of the Closing Date and any documents referred to therein;

(ii)          If required pursuant to Section 3 hereof, the Final Mortgage Loan Schedule containing the information set forth on Exhibit 3 hereto, one copy to be attached to each counterpart of the Amendment;

(iii)        The Pooling and Servicing Agreement, in form and substance reasonably satisfactory to the Trustee and the Purchaser, and all documents required thereby duly executed by all signatories;

(iv)         A certificate of an officer of the Seller dated as of the Closing Date, in a form reasonably acceptable to the Purchaser, and attached thereto the resolutions of the Seller’s authorizing the transactions contemplated by this Agreement, together with copies of the charter and by-laws of the Seller;

(v)          One or more opinions of counsel from the Seller’s counsel otherwise in form and substance reasonably satisfactory to the Purchaser, the Trustee and each Rating Agency;

(vi)         A letter from each of the Rating Agencies giving each Class of Certificates set forth on Schedule A the rating set forth on Schedule A; and

 

 

(vii)       Such other documents, certificates (including additional representations and warranties) and opinions as may be reasonably necessary to secure the intended ratings from each Rating Agency for the Certificates.

(3)          The Certificates to be sold to Merrill Lynch pursuant to the Underwriting Agreement shall have been issued and sold to Merrill Lynch.

(4)          The Seller shall have furnished to the Purchaser such other certificates of its officers or others and such other documents and opinions of counsel to evidence fulfillment of the conditions set forth in this Agreement and the transactions contemplated hereby as the Purchaser and its counsel may reasonably request.

(b)          The obligations of the Seller under this Agreement shall be subject to the satisfaction, on or prior to the Closing Date, of the following conditions:

(1)          The obligations of the Purchaser required to be performed by it on or prior to the Closing Date pursuant to the terms of this Agreement shall have been duly performed and complied with in all material respects, and all of the representations and warranties of the Purchaser under this Agreement shall be true and correct in all material respects as of the date hereof and as of the Closing Date, and no event shall have occurred which would constitute a breach by it of the terms of this Agreement, and the Seller shall have received a certificate to that effect signed by an authorized officer of the Purchaser.

(2)          The Seller shall have received copies of all of the following closing documents, in such forms as are agreed upon and reasonably acceptable to the Seller, duly executed by all signatories other than the Seller as required pursuant to the respective terms thereof:

(i)           If  required pursuant to Section 3 hereof, the Amendment dated as of the Closing Date and any documents referred to therein;

(ii)          The Pooling and Servicing Agreement, in form and substance reasonably satisfactory to the Seller, and all documents required thereby duly executed by all signatories;

(iii)        A certificate of an officer of the Purchaser dated as of the Closing Date, in a form reasonably acceptable to the Seller, and attached thereto the resolutions of the Purchaser authorizing the transactions contemplated by this Agreement and the Pooling and Servicing Agreement, together with copies of the Purchaser’s articles of incorporation, and evidence as to the good standing of the Purchaser dated as of a recent date;

(iv)         One or more opinions of counsel from the Purchaser’s counsel in form and substance reasonably satisfactory to the Seller; and

(v)          Such other documents, certificates (including additional representations and warranties) and opinions as may be reasonably necessary to secure the intended rating from each Rating Agency for the Certificates;

 

 

	
             
  	
            Section 11.
 	
            Fees and Expenses.  
 

Subject to Section 17 hereof, the Seller shall pay on the Closing Date or such later date as may be agreed to by the Purchaser (i) the fees and expenses of the Seller’s attorneys and the reasonable fees and expenses of the Purchaser’s attorneys, (ii) the fees and expenses of Deloitte & Touche LLP, (iii) the filing fee charged by the Commission for the registration of the Certificates, (iv) the fees and expenses including counsel’s fees and expenses in connection with any “blue sky” and legal investment matters, (v) the fees and expenses of the Trustee which shall include without limitation the fees and expenses of the Trustee (and the fees and disbursements of its counsel) with respect to (A) legal and document review of this Agreement, the Pooling and Servicing Agreement, the Certificates and related agreements, (B) attendance at the Closing and (C) review of
the Mortgage Loans to be performed by the Trustee, (vi) the expenses for printing or otherwise reproducing the Certificates, the Prospectus and the Prospectus Supplement, (vii) the fees and expenses of each Rating Agency (both initial and ongoing), (viii) the fees and expenses relating to the preparation and recordation of mortgage assignments (including intervening assignments, if any and if available, to evidence a complete chain of title from the originator to the Trustee) from the Seller to the Trustee or the expenses relating to the Opinion of Counsel referred to in Section 6(a) hereof, as the case may be, and (ix) Mortgage File due diligence expenses and other out-of-pocket expenses incurred by the Purchaser in connection with the purchase of the Mortgage Loans and by Merrill Lynch in connection with the sale of the Offered Certificates. The Seller additionally agrees to pay directly to any third party on a timely basis the fees provided for above which are charged by such third
party and which are billed periodically.

	
             
  	
            Section 12.
 	
            Accountants’ Letters.
 

(a)          Deloitte & Touche LLP will review the characteristics of a sample of the Mortgage Loans described in the Final Mortgage Loan Schedule and will compare those characteristics to the description of the Mortgage Loans contained in the Prospectus Supplement under the captions “Summary of Prospectus Supplement—The Mortgage Loans” and “Description of the Mortgage Pool—General” and “—Tabular Characteristics of the Mortgage Pool”. The Mortgage Loan Seller will cooperate with the Purchaser in making available all information and taking all steps reasonably necessary to permit such accountants to complete the review and to deliver the letters required of them under the Underwriting Agreement. Deloitte & Touche LLP will also confirm certain calculations as set forth
under the caption “Yield on the Certificates” in the Prospectus Supplement.

(b)          To the extent statistical information with respect to the Master Servicer’s servicing portfolio is included in the Prospectus Supplement under the caption “Servicing of the Mortgage Loans—The Master Servicer,” a letter from the certified public accountant for the Master Servicer will be delivered to the Purchaser dated the date of the Prospectus Supplement, in the form previously agreed to by the Seller and the Purchaser, with respect to such statistical information.

 

 

	
             
  	
            Section 13.
 	
            Indemnification.
 

(a)          The Seller shall indemnify and hold harmless the Purchaser and its directors, officers and controlling persons (as defined in Section 15 of the Securities Act) from and against any loss, claim, damage or liability or action in respect thereof, to which they or any of them may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon (i) any untrue statement of a material fact contained in the Seller’s Information as identified in Exhibit 4, the omission to state in the Prospectus Supplement or Prospectus (or any amendment thereof or supplement thereto approved by the Seller and in which additional Seller’s Information is identified), in reliance upon and in conformity with Seller’s Information a material fact
required to be stated therein or necessary to make the statements therein in light of the circumstances in which they were made, not misleading, (ii) any representation or warranty assigned or made by the Seller in Section 7 or Section 8 hereof being, or alleged to be, untrue or incorrect, or (iii) any failure by the Seller to perform its obligations under this Agreement; and the Seller shall reimburse the Purchaser and each other indemnified party for any legal and other expenses reasonably incurred by them in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability or action. 

(b)          The Seller shall indemnify and hold harmless the Purchaser, the Trust Fund and the Trustee against any documented out-of-pocket losses, penalties, fines, forfeitures, reasonable and necessary legal fees and related costs, judgments, and other costs and expenses resulting from any claim, demand, defense or assertion by any third party that results from, a material breach of the representations and warranties set forth in Section 7 of this Agreement; provided, however, indemnification shall not be available for any economic losses of the Purchaser due to reinvestment losses, loss of investment income or any other special, indirect or consequential losses.  The Seller shall indemnify and hold harmless the Purchaser, the Trust Fund and the Trustee against any losses, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and other costs and expenses resulting from any claim, demand, defense or assertion by any third party in connection with the Georgia Fair Lending Act; provided, however, indemnification shall not be available for any economic losses of the Purchaser due to reinvestment losses, loss of investment income or any other special, indirect or consequential losses.

The foregoing indemnity agreement is in addition to any liability which the Seller otherwise may have to the Purchaser or any other such indemnified party.

(c)          The Purchaser shall indemnify and hold harmless the Seller and its respective directors, officers and controlling persons (as defined in Section 15 of the Securities Act) from and against any loss, claim, damage or liability or action in respect thereof, to which they or any of them may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon (i) any untrue statement of a material fact contained in the Purchaser’s Information as identified in Exhibit 5, the omission to state in the Prospectus Supplement or Prospectus (or any amendment thereof or supplement thereto approved by the Purchaser and in which additional Purchaser’s Information is identified), in reliance upon and in conformity with the Purchaser’s
Information, a material fact required to be stated therein or necessary to make the statements therein in light of the circumstances in 

 

which they were made, not misleading, (ii) any representation or warranty made by the Purchaser in Section 9 hereof being, or alleged to be, untrue or incorrect, or (iii) any failure by the Purchaser to perform its obligations under this Agreement; and the Purchaser shall reimburse the Seller, and each other indemnified party for any legal and other expenses reasonably incurred by them in connection with investigating or defending or preparing to defend any such loss, claim, damage, liability or action. The foregoing indemnity agreement is in addition to any liability which the Purchaser otherwise may have to the Seller, or any other such indemnified party,

(d)          Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify each party against whom indemnification is to be sought in writing of the commencement thereof (but the failure so to notify an indemnifying party shall not relieve it from any liability which it may have under this Section 13 except to the extent that it has been prejudiced in any material respect by such failure or from any liability which it may have otherwise). In case any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent it may elect by written notice delivered to the indemnified party promptly (but, in any event, within 30 days) after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party. Notwithstanding the foregoing, the indemnified party or parties shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless (i) the employment of such counsel shall have been authorized in writing by one of the indemnifying parties in connection with the defense of such action, (ii) the indemnifying parties shall not have employed counsel to have charge of the defense of such action within a reasonable time after notice of commencement of the action, or (iii) such indemnified party or parties shall have reasonably concluded that there is a conflict of interest between
itself or themselves and the indemnifying party in the conduct of the defense of any claim or that the interests of the indemnified party or parties are not substantially co-extensive with those of the indemnifying party (in which case the indemnifying parties shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses shall be borne by the indemnifying parties (provided, however, that the indemnifying party shall be liable only for the fees and expenses of one counsel in addition to one local counsel in the jurisdiction involved. Anything in this subsection to the contrary notwithstanding, an indemnifying party shall not be liable for any settlement or any claim or action effected without its written consent; provided, however, that such consent was not unreasonably withheld.

(e)          If the indemnification provided for in paragraphs (a) and (b) of this Section 13 shall for any reason be unavailable to an indemnified party in respect of any loss, claim, damage or liability, or any action in respect thereof, referred to in Section 13, then the indemnifying party shall in lieu of indemnifying the indemnified party contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, in such proportion as shall be appropriate to reflect the relative benefits received by the Seller on the one hand and the Purchaser on the other from the purchase and sale of the Mortgage Loans, the offering of the Certificates and the other transactions contemplated 

 

hereunder. No person found liable for a fraudulent misrepresentation shall be entitled to contribution from any person who is not also found liable for such fraudulent misrepresentation.

(f)           The parties hereto agree that reliance by an indemnified party on any publicly available information or any information or directions furnished by an indemnifying party shall not constitute negligence, bad faith or willful misconduct by such indemnified party.

Section 14.        Notices.  All demands, notices and communications hereunder shall be in writing but may be delivered by facsimile transmission subsequently confirmed in writing. Notices to the Seller shall be directed to Merrill Lynch Mortgage Lending Inc., 4 World Financial Center, New York, New York 10281, (Telecopy: 212-449-6710), and notices to the Purchaser shall be directed to Merrill Lynch Mortgage Investors, Inc., 4 World Financial Center, New York, New York 10281, (Telecopy: 212-449-6710), Attention: Brian Brennan; or to any other address as may hereafter be furnished by one party to the other party by like notice. Any such demand, notice or communication hereunder shall be deemed to have been received on the date received at the premises of the addressee (as evidenced, in the case of
registered or certified mail, by the date noted on the return receipt) provided that it is received on a business day during normal business hours and, if received after normal business hours, then it shall be deemed to be received on the next business day.

Section 15.       Transfer of Mortgage Loans.  The Purchaser retains the right to assign the Mortgage Loans and any or all of its interest under this Agreement to the Trustee without the consent of the Seller, and, upon such assignment, the Trustee shall succeed to the applicable rights and obligations of the Purchaser hereunder; provided, however, the Purchaser shall remain entitled to the benefits set forth in Sections 11, 13 and 17 hereto and as provided in Section 2(a). Notwithstanding the foregoing, the sole and exclusive right and remedy of the Trustee with respect to a breach of representation or warranty of the Seller shall be the purchase or substitution obligations of the Seller contained in Sections 5 and 7 hereof.

Section 16.        Termination.  This Agreement may be terminated (a) by the mutual consent of the parties hereto prior to the Closing Date, (b) by the Purchaser, if the conditions to the Purchaser’s obligation to close set forth under Section 10(a) hereof are not fulfilled as and when required to be fulfilled or (c) by the Seller, if the conditions to the Seller’s obligation to close set forth under Section 10(b) hereof are not fulfilled as and when required to be fulfilled. In the event of termination pursuant to clause (b), the Seller shall pay, and in the event of termination pursuant to clause (c), the Purchaser shall pay, all reasonable out-of-pocket expenses incurred by the other in connection with the transactions contemplated by this Agreement. In the event of a termination pursuant to
clause (a), each party shall be responsible for its own expenses.

Section 17.        Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and agreements contained in this Agreement, or contained in certificates of officers of the Seller submitted pursuant hereto, shall remain operative and in full force and effect and shall survive delivery of the Mortgage Loans to the Purchaser (and by the Purchaser to the Trustee). Subsequent to the delivery of the Mortgage Loans to the Purchaser, the Seller’s representations and warranties contained herein with respect to the Mortgage Loans shall be deemed to relate to the Mortgage Loans actually delivered to the Purchaser and included in 

 

the Final Mortgage Loan Schedule and any Substitute Mortgage Loan and not to those Mortgage Loans deleted from the Preliminary Mortgage Loan Schedule pursuant to Section 3 hereof prior to the Closing.

Section 18.       Mandatory Delivery; Grant of Security Interest. The sale and delivery on the Closing Date of the Mortgage Loans described on the Mortgage Loan Schedule in accordance with the terms and conditions of this Agreement is mandatory. It is specifically understood and agreed that each Mortgage Loan is unique and identifiable on the date hereof and that an award of money damages would be insufficient to compensate the Purchaser for the losses and damages incurred by the Purchaser in the event of the Seller’s failure to deliver the Mortgage Loans on or before the Closing Date. The Seller hereby grants to the Purchaser a lien on and a continuing security interest in the Seller’s interest in each Mortgage Loan and each document and instrument evidencing each such Mortgage Loan to secure the
performance by the Seller of its obligation hereunder, and the Seller agrees that it holds such Mortgage Loans in custody for the Purchaser, subject to the Purchaser’s obligation to deliver or cause to be delivered the consideration for the Mortgage Loans pursuant to Section 2 hereof. The Seller agrees that, upon acceptance of the Mortgage Loans by the Purchaser or its designee and delivery of payment to the Seller, that its security interest in the Mortgage Loans shall be released. All rights and remedies of the Purchaser under this Agreement are distinct from, and cumulative with, any other rights or remedies under this Agreement or afforded by law or equity and all such rights and remedies may be exercised concurrently, independently or successively.

Notwithstanding the foregoing, if on the Closing Date, each of the conditions set forth in Section 10 hereof shall have been satisfied and the Purchaser shall not have paid or caused to be paid the purchase price as described in Section 2 hereof, or any such condition shall not have been waived or satisfied and the Purchaser determines not to pay or cause to be paid the purchase price, the Purchaser shall immediately effect the redelivery of the Mortgage Loans, if delivery to the Purchaser has occurred and the security interest created by this Section 18 shall be deemed to have been released.

Section 19.        Severability.  Any part, provision, representation or warranty of this Agreement which is prohibited or which is held to be void or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any part, provision, representation or warranty of this Agreement which is prohibited or unenforceable or is held to be void or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by
applicable law, the parties hereto waive any provision of law which prohibits or renders void or unenforceable any provision hereof.

Section 20.        Counterparts.  This Agreement may be executed in counterparts, each of which will be an original, but which together shall constitute one and the same agreement.

 

 

Section 21.        Amendment.  This Agreement cannot be amended or modified in any manner without the prior written consent of each party.

Section 22.        GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE AND PERFORMED IN THE STATE OF NEW YORK AND SHALL BE INTERPRETED IN ACCORDANCE WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES OF SUCH STATE.

Section 23.       Further Assurances. Each of the parties agrees to execute and deliver such instruments and take such actions as another party may, from time to time, reasonably request in order to effectuate the purpose and to carry out the terms of this Agreement including any amendments hereto which may be required by either Rating Agency.

	
             
  	
            Section 24.
 	
            Successors and Assigns.
 

This Agreement shall bind and inure to the benefit of and be enforceable by the Seller and the Purchaser and their permitted successors and assigns and, to the extent specified in Section 13 hereof, Merrill Lynch, and their directors, officers and controlling persons (within the meaning of federal securities laws). The Seller acknowledges and agrees that the Purchaser may assign its rights under this Agreement (including, without limitation, with respect to the Seller’s representations and warranties respecting the Mortgage Loans) to the Trustee. Any person into which the Seller may be merged or consolidated (or any person resulting from any merger or consolidation involving the Seller), any person resulting from a change in form of the Seller or any person succeeding to the business of the Seller, shall be considered the “successor” of the Seller hereunder and shall be
considered a party hereto without the execution or filing of any paper or any further act or consent on the part of any party hereto. Except as provided in the two preceding sentences, this Agreement cannot be assigned, pledged or hypothecated by either party hereto without the written consent of the other parties to this Agreement and any such assignment or purported assignment shall be deemed null and void.

Section 25.       The Seller.  The Seller will keep in full effect all rights as are necessary to perform their respective obligations under this Agreement.

Section 26.        Entire Agreement.  This Agreement contains the entire agreement and understanding between the parties with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof.

Section 27.       No Partnership.  Nothing herein contained shall be deemed or construed to create a partnership or joint venture between the parties hereto.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

IN WITNESS WHEREOF, the parties hereto have caused their names to be signed hereto by their respective duly authorized officers as of the date first above written.

	
             
 	
            MERRILL LYNCH MORTGAGE LENDING, INC.
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Name:        
 
	
             
 	
            Title:                   
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
            MERRILL LYNCH MORTGAGE
 INVESTORS, INC.
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Name:        
 
	
             
 	
            Title:                   
 

 

 

 

ANNEX I

 

LIST OF MORTGAGE LOANS

 

(Available Upon Request)

 

 

EXHIBIT 1

CONTENTS OF MORTGAGE FILE

With respect to each Mortgage Loan, the Mortgage File shall include each of the following items, which shall be available for inspection by the Purchaser or its designee, and which shall be delivered to the Purchaser or its designee pursuant to the terms of the Agreement.

	
             
  	
            (a)
 	
            With respect to each Mortgage Loan:
 

(i)           The original Mortgage Note, including any riders thereto, endorsed by the Seller or the originator, as applicable, without recourse in proper form to the order of the Trustee, at the direction of the Purchaser, with any intervening endorsements showing an unbroken chain of title from the originator to the Trustee or with respect to the Mortgage Loans as to which the Mortgage Note has been lost, lost note affidavits and if available, a copy of the lost Mortgage Note;

(ii)          An original duly executed assignment of Mortgage in recordable form from the originator to the Trustee;

(iii)        The original recorded Mortgage, if available. If, in connection with any Mortgage Loan, the Seller cannot deliver the original Mortgage with evidence of recording thereon on or prior to the Closing Date because of its delivery to, or a delay caused by, the public recording office where such Mortgage has been delivered for recordation, or if such original Mortgage Loan has been retained by the public recording office as a matter of policy, or has been lost, the Seller shall deliver or cause to be delivered to the Trustee a photocopy thereof, if available (certified by the Seller to be a true and correct copy of the original which has been transmitted for recordation), together with an officer’s certificate of the Seller stating that such Mortgage has been dispatched to the appropriate
recording official for recordation, has been retained by such recording office as a matter of policy or has been lost, as applicable;

(iv)         If applicable and available, all original intervening recorded assignments, if any, showing an unbroken chain of title to the Mortgage from the originator to the Seller or the Trustee;

(v)          The originals of each assumption, modification or substitution agreement, if any and if available, relating to the Mortgage Loan. If in connection with any Mortgage Loan the Seller cannot deliver the assumption, modification or substitution agreement with evidence of recording thereon on or prior to the Closing Date because of a delay caused by the public recording office where such assumption, modification or substitution agreement has been delivered for recordation, the Seller shall deliver or cause to be delivered to the Trustee a photocopy of such assumption, modification or substitution agreement (certified by the Seller to be a true and correct copy of the original which has been transmitted for recordation), together with a certificate of an officer of the Seller stating that such
assumption, modification or substitution agreement has been dispatched to the appropriate recording official for recordation, if available; 

 

 

(vi)         the original mortgagee’s title insurance policy or a written commitment to issue such title insurance policy; 

(vii)       with respect to each Additional Collateral Mortgage Loan (as indicated in the Mortgage Loan Schedule) (1) a copy of the related Mortgage 100K Pledge Agreement or Parent Power® Agreement, as the case may be, (2) a copy of the UCC-1, to the extent MLCC was required to deliver such UCC-1 to Cendant, and an original form UCC-3, if applicable, to the extent MLCC was required to deliver such UCC-3 to Cendant, together with a copy of the applicable notice of assignment to and acknowledgment by Merrill Lynch, Pierce, Fenner & Smith Incorporated and (3) in connection with a Parent Power® Mortgage Loan supported by a Parent Power® Guaranty Agreement for real estate, a copy of the related Equity Access® Mortgage.

	
             
  	
            (a)
 	
            With respect to each Cooperative Loan so assigned;
 

(i)           The original Mortgage Note, endorsed without recourse to the order of the Trustee and showing an unbroken chain of endorsements from the originator thereof to the Person endorsing it to the Trustee, or lost note affidavit, together with a copy of the related Mortgage Note;

(ii)          A counterpart of the Cooperative Lease and the Assignment of Proprietary Lease to the originator of the Cooperative Loan with intervening assignments showing an unbroken chain of title from such originator to the Trustee;

(iii)         The related Cooperative Stock Certificate, representing the related Cooperative Stock pledged with respect to such Cooperative Loan, together with an undated stock power (or other similar instrument) executed in blank;

(iv)         The original recognition agreement by the Cooperative of the interests of the mortgagee with respect to the related Cooperative Loan and any transfer documents related to the recognition agreement;

	
             
  	
            (v)
 	
            The Security Agreement;
 

(vi)         Copies of the original UCC-1 financing statement, and any continuation statements, filed by the originator of such Cooperative Loan as secured party, each with evidence of recording thereof, evidencing the interest of the originator under the Security Agreement and the Assignment of Proprietary Lease;

(vii)        Copies of the filed UCC-3 assignments of the security interest referenced in clause (vi) above showing an unbroken chain of title from the originator to the Trustee, each with evidence of recording thereof, evidencing the interest of the originator under the Security Agreement and the Assignment of Proprietary Lease;

(viii)       An executed assignment of the interest of the originator in the Security Agreement and Assignment of Proprietary Lease, showing an unbroken chain of title from the originator to the Trustee; and

 

 

(ix)         The original of each modification, assumption agreement or preferred loan agreement, if any, relating to such Cooperative Loan.

 

 

EXHIBIT 2

CONTENTS OF FINAL MORTGAGE FILE

(A)         With respect to each Mortgage Loan, the Mortgage File shall include each of the following items, which shall be available for inspection by the Purchaser or its agent, and which shall be delivered to the Purchaser pursuant to the terms of the Agreement.

(i)           The original Mortgage Note, including any riders thereto, endorsed by the Seller or the originator, as applicable, without recourse in proper form to the order of the Trustee, at the direction of the Purchaser, with any intervening endorsements showing an unbroken chain of title from the originator to the Trustee, or with respect to the Mortgage Loans as to which the Mortgage Note has been lost, lost note affidavits and if available, a copy of the lost Mortgage Note;

(ii)          An original duly executed assignment of Mortgage in recordable form from the Seller or the originator, as applicable, to the Trustee, with evidence of recording indicated thereon; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office;

(iii)        The original recorded Mortgage, if available, with evidence of recording indicated thereon; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation or such office as a matter of policy does not return the original of such document or if such original Mortgage has been lost, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office, if available;

(iv)         The original intervening assignments, including warehousing assignments, if any and if available, with evidence of recording thereon, showing an unbroken chain of title to the Mortgage from the Seller or the originator, as the case may be, to the Seller or the Trustee; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation or such office as a matter of policy does not return the original of such document, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office, if available;

(v)          The originals of each assumption, modification or substitution agreement, if any and if available, relating to the Mortgage Loan; and

(vi)         the original mortgagee’s title insurance policy or, if a master title policy has been issued by the title insurer, a mortgagee’s certificate of title insurance or a written commitment to issue such title insurance policy.

 

 

EXHIBIT 3

MORTGAGE LOAN SCHEDULE INFORMATION

The Preliminary and Final Mortgage Loan Schedules shall set forth the following information with respect to each Mortgage Loan:

	
             
  	
            (i)
 	
            the loan number of the mortgage loan;
 	
             

	
             
  	
            (ii)
 	
            the city, state and zip code of the Mortgage Property;
 	
             

	
             
  	
            (ii)
 	
            a code indicating whether the Mortgaged Property is owner-occupied;
 	
             

	
             
  	
            (iii)
 	
            the type of Residential Dwelling constituting the Mortgaged Property;
 
	
             
  	
            (iv)
 	
            the original months to maturity;
 	
             

	
             
  	
            (v)
 	
            the original date of the mortgage;
 	
             

	
             
  	
            (vi)
 	
            the Loan-to-Value Ratio at origination;
 	
             

	
             
  	
            (vii)
 	
            the Mortgage Interest Rate;
 	
             

										

(viii)      the date on which the first Monthly Payment was due on the Mortgage Loan;

	
             
  	
            (ix)
 	
            the stated maturity date;
 	
             

	
             
  	
            (x)
 	
            the amount of the Monthly Payment at origination;
 	
             

	
             
  	
            (xi)
 	
            the amount of the Monthly Payment as of the Cut-off Date;
 
					

(xii)       the last Due Date on which a Monthly Payment was actually applied to the unpaid Stated Principal Balance;

	
             
  	
            (xiii)
 	
            the original principal amount of the Mortgage Loan;
 

(xiv)      the Stated Principal Balance of the Mortgage Loan as of the close of business on the Cut-off Date;

(xv)        a code indicating the purpose of the Mortgage Loan (i.e., purchase financing, Rate/Term Refinancing, Cash-Out Refinancing);

(xvi)      a code indicating the documentation style (i.e., full, alternative or reduced);

	
             
  	
            (xvii)
 	
            [reserved];
 	
             

	
             
  	
            (xviii)
 	
            the Value of the Mortgaged Property;
 

 

 

 

	
             
  	
            (xix)
 	
            the sale price of the Mortgaged Property, if applicable;
 

(xx)        the actual unpaid principal balance of the Mortgage Loan as of the Cut-off Date;

	
             
  	
            (xxi)
 	
            the Servicing Fee;
 
	
             
  	
            (xxii)
 	
            [reserved];
 	
             

(xxiii)    with respect to each adjustable-rate Mortgage Loan, the next Interest Rate Adjustment Date;

	
             
  	
            (xxiv)
 	
            with respect to each adjustable-rate Mortgage Loan, the Gross Margin;
 

(xxv)     with respect to each adjustable-rate Mortgage Loan, the Minimum and Maximum Mortgage Rate under the terms of the Mortgage Note;

	
             
  	
            (xxvi)
 	
            with respect to each adjustable-rate Mortgage Loan, the First Rate Cap;
 

(xxvii)   with respect to each adjustable-rate Mortgage Loan, the related Periodic Rate Cap;

(xxviii) with respect to each adjustable-rate Mortgage Loan, whether additional collateral exists;

(xxix)    with respect to each adjustable-rate Mortgage Loan, whether it is interest-only; and

	
             
  	
            (xxx)
 	
            with respect to each adjustable-rate Mortgage Loan, the Seller.
 

Such schedule shall set forth the following information with respect to the Mortgage Loans in the aggregate as of the Cut-off Date: (1) the number of Mortgage Loans; (2) the current principal balance of the Mortgage Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans; and (4) the weighted average maturity of the Mortgage Loans.

 

 

EXHIBIT 4

SELLER'S INFORMATION

All information in the Prospectus Supplement described under the following Sections: “SUMMARY OF PROSPECTUS SUPPLEMENT — The Mortgage Loans,” “DESCRIPTION OF THE MORTGAGE POOL”.

 

 

EXHIBIT 5

PURCHASER'S INFORMATION

All information in the Prospectus Supplement and the Prospectus, except the Seller’s Information.

 

 

EXHIBIT 6

SCHEDULE OF LOST NOTES

Available Upon Request

 

 

EXHIBIT 7

 

REVISED August 1, 2005

 

APPENDIX E - STANDARD & POOR'S PREDATORY LENDING CATEGORIES 

Standard & Poor’s has categorized loans governed by anti-predatory lending laws in the Jurisdictions listed below into three categories based upon a combination of factors that include (a) the risk exposure associated with the assignee liability and (b) the tests and thresholds set forth in those laws. Note that certain loans classified by the relevant statute as Covered are included in Standard & Poor’s High Cost Loan Category because they included thresholds and tests that are typical of what is generally considered High Cost by the industry. 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Arkansas 
 	
            Arkansas Home Loan Protection Act, Ark. Code Ann. §§ 23-53-101 et seq. 

Effective July 16, 2003 
 	
            High Cost Home Loan 
 
	
            Cleveland Heights, OH 
 	
            Ordinance No. 72-2003 (PSH), Mun. Code §§ 757.01 et seq. 

Effective June 2, 2003 
 	
            Covered Loan 
 
	
            Colorado 
 	
            Consumer Equity Protection, Colo. Stat. Ann. §§ 5-3.5-101 et seq. 

Effective for covered loans offered or entered into on or after January 1, 2003. Other provisions of the Act took effect on June 7, 2002 
 	
            Covered Loan 
 
	
            Connecticut 
 	
            Connecticut Abusive Home Loan Lending Practices Act, Conn. Gen. Stat. §§ 36a-746 et seq. 

Effective October 1, 2001 
 	
            High Cost Home Loan 
 
	
            District of Columbia 
 	
            Home Loan Protection Act, D.C. Code §§ 26-1151.01 et seq. 

Effective for loans closed on or after January 28, 2003 
 	
            Covered Loan 
 
	
            Florida 
 	
            Fair Lending Act, Fla. Stat. Ann. §§ 494.0078 et seq. 

Effective October 2, 2002 
 	
            High Cost Home Loan 
 

 

 

 

 

	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 
 	
            High Cost Home Loan 
 

 

 

 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Effective October 1, 2002 – March 6, 2003 
 	
             
 
	
            Georgia as amended (Mar. 7, 2003 – current) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 

Effective for loans closed on or after March 7, 2003 
 	
            High Cost Home Loan 
 
	
            HOEPA Section 32 
 	
            Home Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1639, 12 C.F.R. §§ 226.32 and 226.34 

Effective October 1, 1995, amendments October 1, 2002 
 	
            High Cost Loan 
 
	
            Illinois 
 	
            High Risk Home Loan Act, Ill. Comp. Stat. tit. 815, §§ 137/5 et seq. 

Effective January 1, 2004 (prior to this date, regulations under Residential Mortgage License Act effective from May 14, 2001) 
 	
            High Risk Home Loan 
 
	
            Kansas 
 	
            Consumer Credit Code, Kan. Stat. Ann. §§ 16a-1-101 et seq. 

Sections 16a-1-301 and 16a-3-207 became effective April 14, 1999; Section 16a-3-308a became effective July 1, 1999 
 	
            High Loan to Value Consumer Loan (id. § 16a-3-207) and; 
 
	
            High APR Consumer Loan (id. § 16a-3-308a) 
 
	
            Kentucky 
 	
            2003 KY H.B. 287 – High Cost Home Loan Act, Ky. Rev. Stat. §§ 360.100 et seq. 

Effective June 24, 2003 
 	
            High Cost Home Loan 
 
	
            Maine 
 	
            Truth in Lending, Me. Rev. Stat. tit. 9-A, §§ 8-101 et seq. 

Effective September 29, 1995 and as amended from time to time 
 	
            High Rate High Fee Mortgage 
 
	
            Massachusetts 
 	
            Part 40 and Part 32, 209 C.M.R. §§ 32.00 et seq. and 209 C.M.R. §§ 40.01 et seq. 
 	
            High Cost Home Loan 
 

 

 

 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Effective March 22, 2001 and amended from time to time 
 	
             
 
	
            Nevada 
 	
            Assembly Bill No. 284, Nev. Rev. Stat. §§ 598D.010 et seq. 

Effective October 1, 2003 
 	
            Home Loan 
 
	
            New Jersey 
 	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. 

Effective for loans closed on or after November 27, 2003 
 	
            High Cost Home Loan 
 
	
            New Mexico 
 	
            Home Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq. 

Effective as of January 1, 2004; Revised as of February 26, 2004 
 	
            High Cost Home Loan 
 
	
            New York 
 	
            N.Y. Banking Law Article 6-l 

Effective for applications made on or after April 1, 2003 
 	
            High Cost Home Loan 
 
	
            North Carolina 
 	
            Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E et seq. 

Effective July 1, 2000; amended October 1, 2003 (adding open-end lines of credit) 
 	
            High Cost Home Loan 
 
	
            Ohio 
 	
            H.B. 386 (codified in various sections of the Ohio Code), Ohio Rev. Code Ann. §§ 1349.25 et seq. 

Effective May 24, 2002 
 	
            Covered Loan 
 
	
            Oklahoma 
 	
            Consumer Credit Code (codified in various sections of Title 14A) 

Effective July 1, 2000; amended effective January 1, 2004 
 	
            Subsection 10 Mortgage 
 
	
            South Carolina 
 	
            South Carolina High Cost and Consumer Home Loans Act, S.C. Code 
 	
            High Cost Home Loan 
 

 

 

 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Ann. §§ 37-23-10 et seq. 

Effective for loans taken on or after January 1, 2004 
 	
             
 
	
            West Virginia 
 	
            West Virginia Residential Mortgage Lender, Broker and Servicer Act, W. Va. Code Ann. §§ 31-17-1 et seq. 

Effective June 5, 2002 
 	
            West Virginia Mortgage Loan Act Loan 
 

 

STANDARD & POOR'S COVERED LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 

Effective October 1, 2002 – March 6, 2003 
 	
            Covered Loan 
 
	
            New Jersey 
 	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. 

Effective November 27, 2003 – July 5, 2004 
 	
            Covered Home Loan 
 

 

STANDARD & POOR'S HOME LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 

Effective October 1, 2002 – March 6, 2003 
 	
            Home Loan 
 
	
            New Jersey 
 	
            New Jersey Home Ownership Security 
 	
            Home Loan 
 

 

 

 

STANDARD & POOR'S HOME LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. 

Effective for loans closed on or after November 27, 2003 
 	
             
 
	
            New Mexico 
 	
            Home Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq. 

Effective as of January 1, 2004; Revised as of February 26, 2004 
 	
            Home Loan 
 
	
            North Carolina 
 	
            Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E et seq. 

Effective July 1, 2000; amended October 1, 2003 (adding open-end lines of credit) 
 	
            Consumer Home Loan 
 
	
            South Carolina 
 	
            South Carolina High Cost and Consumer Home Loans Act, S.C. Code Ann. §§ 37-23-10 et seq. 

Effective for loans taken on or after January 1, 2004 
 	
            Consumer Home Loan 
 

 

 

 

SCHEDULE A

REQUIRED RATINGS FOR EACH CLASS OF CERTIFICATES

Offered Certificates

 

	
            
Class
 
 	
            
Moody’s
 
 	
            
S&P
 
 
	
            Class A
 	
            AAA
 	
            AAA
 
	
            Class A-IO
 	
            AAA
 	
            AAA
 
	
            Class M-1
 	
            Aa2
 	
            AA
 
	
            Class M-2
 	
            A2
 	
            A
 
	
            Class M-3

Calss M-IO 
 	
            Baa2

Baa2
 	
            BBB

BBB
 

 

None of the above ratings has been lowered since the respective dates of such letters.

 

 

EXHIBIT J-2

KKR SALE AND ASSIGNMENT AGREEMENT

SALE AND ASSIGNMENT AGREEMENT, dated as of December 22, 2005, as amended and supplemented by any and all amendments hereto (collectively, the “Agreement”), by and between KKR FINANCIAL CORP., a Maryland corporation (the “Seller”), and KKR FINANCIAL MORTGAGE CORP., a Maryland corporation (the “Purchaser”).

Upon the terms and subject to the conditions of this Agreement, the Seller agrees to sell, and the Purchaser agrees to purchase, certain first lien, fixed-rate and adjustable-rate mortgage loans secured by one- to four-family residences, individual condominiums, co-op units and units in planned unit developments (collectively, the “Mortgage Loans”) as described herein. The Purchaser intends to sell the Mortgage Loans to Merrill Lynch Mortgage Investors, Inc. (the “Depositor”), which intends, in turn, to deposit the Mortgage Loans into a trust fund (the “Trust Fund”) and create Mortgage Pass-Through Certificates, Series MLMI 2005-A10 (the “Certificates”), under a pooling and servicing agreement, to be dated as of
December 1, 2005 (the “Pooling and Servicing Agreement”), between the Purchaser, as seller, HSBC Bank USA, National Association, as trustee (the “Trustee”) and Wells Fargo Bank, N.A., as master servicer and securities administrator (the “Master Servicer”).

The Depositor has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (Number 333-127233) relating to its Mortgage Pass-Through Certificates and the offering of certain series thereof (including certain classes of the Certificates) from time to time in accordance with Rule 415 under the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder (the “Securities Act”). Such registration statement, when it became effective under the Securities Act, and the prospectus relating to the public offering of certain classes of the Certificates by the Purchaser (the “Public Offering”), as from time to time each is amended or
supplemented pursuant to the Securities Act or otherwise, are referred to herein as the “Registration Statement” and the “Prospectus,” respectively. The “Prospectus Supplement” shall mean that supplement, dated December 21, 2005 to the Prospectus, dated August 26, 2005, relating to certain classes of the Certificates. With respect to the Public Offering of certain classes of the Certificates, the Depositor and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) have entered into a terms agreement dated as of December 21, 2005 to an underwriting agreement dated September 27, 2005, between the Depositor and Merrill Lynch (together, the “Underwriting Agreement”).

Now, therefore, in consideration of the premises and the mutual agreements set forth herein, the parties hereto agree as follows:

Section 1.          Definitions. Certain terms are defined herein. Capitalized terms used herein but not defined herein shall have the meanings specified in the Pooling and Servicing Agreement. The following other terms are defined as follows:

 

 

Additional Collateral:  (i) With respect to any Mortgage 100sm Loan, the Securities Account and the financial assets held therein subject to a security interest pursuant to the related Mortgage 100sm Pledge Agreement, or (ii) with respect to any Parent Power® Mortgage Loan, the related Parent Power® Agreement.

Additional Collateral Mortgage Loan:  Each Mortgage Loan, as identified on the Mortgage Loan Schedule, as to which Additional Collateral was required to be provided at the closing thereof.

Additional Collateral Agreements:  Each Mortgage 100 Pledge Agreement, Parent Power® Guaranty and Security Agreement for Securities Account, Parent Power® Guaranty Agreement for Real Estate, Control Agreement, Equity Access® Agreement and Equity Access® Mortgage, as applicable, for each Additional Collateral Mortgage Loan.

Closing Date: December 22, 2005.

Co-op Lease:  With respect to a Co-op Loan, the lease with respect to a dwelling unit occupied by the Mortgagor and relating to the stock allocated to the related dwelling unit.

Co-op Loan:  A Mortgage Loan secured by the pledge of stock allocated to a dwelling unit in a residential cooperative housing corporation and a collateral assignment of the related Co-op Lease.

Co-op Stock:  With respect to a Co-op Loan, the single outstanding class of stock, partnership interest or other ownership instrument in the related residential cooperative housing corporation.

Cut-off Date: December 1, 2005.

Cut-off Date Balance: $786,377,264.

Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a Substitute Mortgage Loan.

Due Date: With respect to each Mortgage Loan, the first day of each month.                

Master Servicer: Wells Fargo Bank, N.A.

Merrill Lynch: Merrill Lynch, Pierce, Fenner & Smith Incorporated.

Moody’s: Moody’s Investors Service, Inc., or its successors in interest.

Mortgage: The mortgage or deed of trust creating a first lien on an interest in real property securing a Mortgage Note.

 

 

Mortgage File: The items referred to in Exhibit 1 and Exhibit 2 pertaining to a particular Mortgage Loan and any additional documents required to be added to such documents pursuant to this Agreement.

Mortgage Interest Rate: The annual rate of interest borne by a Mortgage Note as stated therein.

Mortgagor: The obligor(s) on a Mortgage Note.

Net Rate: For each Mortgage Loan, the Mortgage Interest Rate for such Mortgage Loan less the Master Servicing Fee Rate and the Trustee Fee Rate.

Offered Certificates: Shall mean the Class A, Class A-IO, Class M-1, Class M-2, Class M-3 and Class M-IO Certificates issued pursuant to the Pooling and Servicing Agreement.

Opinion of Counsel: A written opinion of counsel, who may be counsel for the Seller or the Purchaser, reasonably acceptable to the Trustee.

Person: Any legal person, including any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

Pledge Agreement:  Any Mortgage 100sm Pledge Agreement or Parent Power® Guaranty and Security Agreement for Securities Account related to an Additional Collateral Mortgage Loan.

Purchase Price: With respect to any Mortgage Loan required to be purchased by the Seller pursuant to the applicable provisions of this Agreement, an amount equal to the sum of (i) 100% of the principal remaining unpaid on such Mortgage Loan as of the date of purchase (including if a foreclosure has already occurred, the principal balance of the related Mortgage Loan at the time the Mortgaged Property was acquired), and (ii) accrued and unpaid interest thereon at the Mortgage Interest Rate through and including the last day of the month of purchase (iii) any costs and damages incurred by the Trust in connection with any violation by such Mortgage Loan of any predatory or abusive-lending law.

Rating Agencies: S&P and Moody’s, each a “Rating Agency.”

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

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

Substitute Mortgage Loan: A mortgage loan substituted for a Deleted Mortgage Loan which must meet on the date of such substitution the requirements stated herein and in the Pooling and Servicing Agreement; upon such substitution, such mortgage loan shall be a “Mortgage Loan” hereunder.

 

 

Surety Bond: The limited purpose surety bond (Policy No. AB0039BE), dated February 28, 1996, in respect to Mortgage Loans originated by Merrill Lynch Credit Corporation, issued by the Surety Bond Issuer for the benefit of certain beneficiaries, but only to the extent that such Surety Bond covers any Additional Collateral Mortgage Loan.

Value: The value of the Mortgaged Property at the time of origination of the related Mortgage Loan, such value being the lesser of (i) the value of such property set forth in an appraisal accepted by the Originator or (ii) the sales price of such property at the time of origination.

Section 2.          Purchase and Sale of the Mortgage Loans and Related Rights. (a) Upon satisfaction of the conditions set forth in Section 10 hereof, the Seller agrees to sell, and the Purchaser agrees to purchase Mortgage Loans having an aggregate Cut-off Date Balance of $786,377,264.

(a)          The closing for the purchase and sale of the Mortgage Loans and the closing for the issuance of the Certificates will take place on the Closing Date at the office of the Depositor’s counsel in New York, New York or such other place as the parties shall agree.

(b)          Upon the satisfaction of the conditions set forth in Section 10 hereof, on the Closing Date, in consideration of the purchase of the Mortgage Loans, the Purchaser shall (i) pay to the Seller an amount equal to the net sale proceeds of the Offered Certificates plus accrued interest (the “Purchase Price”) in immediately available funds by wire transfer to such account or accounts as shall be designated by the Seller.

(c)          In addition to the foregoing, on the Closing Date the Seller assigns to the Purchaser without recourse all of its right, title and interest in (i) the Master Mortgage Loan Purchase and Servicing Agreement, dated as of December 1, 2004, between First Republic Bank and the Purchaser, amended and restated as of January 31, 2005 and (ii) Master Mortgage Loan Purchase and Servicing Agreement, dated as of December 1, 2004, between Merrill Lynch Credit Corporation, as seller and the Seller, as purchaser.

Section 3.           Mortgage Loan Schedules.  The Seller agrees to provide to the Purchaser as of the date hereof a preliminary listing of the Mortgage Loans (the “Preliminary Mortgage Loan Schedule”) setting forth the information listed on Exhibit 3 to this Agreement with respect to each of the Mortgage Loans being sold by the Seller. If there are changes to the Preliminary Mortgage Loan Schedule, the Seller shall provide to the Purchaser as of the Closing Date a final schedule (the “Final Mortgage Loan Schedule”) setting forth the information listed on Exhibit 3 to this Agreement with respect to each of the Mortgage Loans being sold by the Seller to the Purchaser. The Final Mortgage Loan Schedule shall be delivered to the Purchaser on the Closing Date, shall be
attached to an amendment to this Agreement to be executed on the Closing Date by the parties hereto and shall be in form and substance mutually agreed to by the Seller and the Purchaser (the “Amendment”). If there are no changes to the Preliminary 

 

Mortgage Loan Schedule, the Preliminary Mortgage Loan Schedule shall be the Final Mortgage Loan Schedule for all purposes hereof.

	
             
  	
            Section 4.
 	
            Mortgage Loan Transfer.
 

(a)          The Purchaser will be entitled to all scheduled payments of principal and interest on the Mortgage Loans due after the Cut-off Date (regardless of when actually collected) and all payments thereof other than scheduled principal and interest received after the Cut-off Date. The Seller will be entitled to all scheduled payments of principal and interest on the Mortgage Loans due on or before the Cut-off Date (including payments collected after the Cut-off Date) and all payments thereof other than scheduled principal and interest on the Mortgage Loans received on or before the Cut-off Date. Such principal amounts and any interest thereon belonging to the Seller as described above will not be included in the aggregate outstanding principal balance of the Mortgage Loans as of the Cut-off Date as set forth on the
Final Mortgage Loan Schedule.

(b)          Pursuant to various conveyancing documents to be executed on the Closing Date and pursuant to the Pooling and Servicing Agreement, the Purchaser will assign on the Closing Date all of its right, title and interest in and to the Mortgage Loans to the Trustee for the benefit of the Certificateholders. In connection with the transfer and assignment of the Mortgage Loans, the Seller has delivered or will deliver or cause to be delivered to the Trustee by the Closing Date or such later date as is agreed to by the Purchaser and the Seller (each of the Closing Date and such later date is referred to as a “Mortgage File Delivery Date”), the items of each Mortgage File, provided, however, that in lieu of the foregoing, the Seller may deliver the following documents, under the circumstances set forth below:
(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 in time to permit their delivery as specified above, the Seller may deliver a true copy thereof with a certification by the Seller or the Originator, 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;” (y) in lieu of the Mortgage, assignments to the Trustee or intervening assignments thereof, if the applicable jurisdiction retains the originals of such documents or if the originals are lost (in each case, as evidenced by a certification from the Seller to such effect), the Seller 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 (z) in lieu of the Mortgage Notes relating to the Mortgage Loans, each identified in the list delivered by the Purchaser to the Trustee on the Closing Date and attached hereto as Exhibit 6 the Seller may deliver lost note affidavits and indemnities of the Seller; 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 Seller, in lieu of delivering the above documents, may deliver to the Trustee a certification by the Seller to such effect. The Seller shall deliver such original documents (including any original documents as to which certified copies had previously been delivered) or such certified copies to the Trustee promptly after they are received. The Seller shall cause the Mortgage and intervening assignments, if any, 

 

and the assignment of the Mortgage to be recorded not later than 180 days after the Closing Date, or, in lieu of such assignments, shall provide an Opinion of Counsel pursuant to Section 6(a) hereof to the effect that the recordation of such assignment is not necessary to protect the Trustee’s interest in the related Mortgage Loan. Upon the request of the Purchaser, the Seller will assist the Purchaser in effecting the assignment referred to above.

(c)          The Seller and the Purchaser acknowledge hereunder that all of the Mortgage Loans and the related servicing will ultimately be assigned to HSBC Bank USA, National Association, as Trustee for the Certificateholders, on the date hereof.

(d)          The parties hereto intend that the transaction set forth herein constitutes a sale by the Seller to the Purchaser of all the Seller’s right, title and interest in and to the Mortgage Loans (other than with respect to the related servicing rights) and other property as and to the extent described above.  In the event the transaction set forth herein is deemed not to be a sale, the Seller hereby grants to the Purchaser a security interest in all of the Seller’s right, title and interest in, to and under the Mortgage Loans (other than with respect to the related servicing rights) and such other property, to secure all of the Seller’s obligations hereunder, and this Agreement shall constitute a security agreement under applicable law.  The Seller agrees to take or cause to be taken such actions
and to execute such documents, including, without limitation, the filing of all necessary UCC1 financing statements filed in the State of Maryland, any continuation statements with respect thereto and any amendments thereto required to reflect a change in the name or corporate structure of the Seller or the filing of any additional UCC1 financing statements due to the change in the principal office of the Seller, as are necessary to perfect and protect the Purchaser’s interests in each Mortgage Loan and the proceeds thereof.

	
             
  	
            Section 5.
 	
            Examination of Mortgage Files.
 

(a)          On or before the Mortgage File Delivery Date, the Seller will have made the Mortgage Files available to the Purchaser or its agent for examination which may be at the offices of the Trustee or the Seller and/or the Seller’s custodian. The fact that the Purchaser or its agent has conducted or has failed to conduct any partial or complete examination of the Mortgage Files shall not affect the Purchaser’s rights to demand cure, repurchase, substitution or other relief as provided in this Agreement. In furtherance of the foregoing, the Seller shall make the Mortgage Files available to the Purchaser or its agent from time to time so as to permit the Purchaser to confirm the Seller’s compliance with the delivery and recordation requirements of this Agreement and the Pooling and Servicing Agreement.
In addition, upon request of the Purchaser, the Seller agrees to provide to the Purchaser, Merrill Lynch and to any investors or prospective investors in the Certificates information regarding the Mortgage Loans and their servicing, to make the Mortgage Files available to the Purchaser, Merrill Lynch and to such investors or prospective investors (which may be at the offices of the Seller and/or the Seller’s custodian) and to make available personnel knowledgeable about the Mortgage Loans for discussions with the Purchaser, Merrill Lynch and such investors or prospective investors, upon reasonable request during regular business hours, sufficient to 

 

permit the Purchaser, Merrill Lynch and such investors or potential investors to conduct such due diligence as any such party reasonably believes is appropriate.

(b)          Pursuant to the Pooling and Servicing Agreement, on the Closing Date the Trustee, for the benefit of the Certificateholders, will review items of the Mortgage Files as set forth on Exhibit 1 and will deliver to the Seller a certification in the form attached as Exhibit One to the Custodial Agreement.

(c)          Pursuant to the Pooling and Servicing Agreement, the Custodian, on behalf of the Trustee will review or shall cause the Custodian to review items of the Mortgage Files within 180 days of the Closing Date and will deliver to the Purchaser a final certification substantially in the form of Exhibit Two to the Custodial Agreement. If the Custodian is unable to deliver a final certification with respect to the items listed in Exhibit 2 due to any document that is missing, has not been executed, is unrelated, determined on the basis of the Mortgagor name, original principal balance and loan number, to the Mortgage Loans identified in the Final Mortgage Loan Schedule (a “Material Defect”), the Trustee or the Custodian, as its agent, shall notify the Seller of such Material Defect. The Seller shall correct
or cure any such Material Defect within 90 days from the date of notice from the Trustee or the Custodian, as its agent, of the Material Defect and if the Seller does not correct or cure such Material Defect within such period and such defect materially and adversely affects the interests of the Certificateholders in the related Mortgage Loan, the Seller will, in accordance with the terms of the Pooling and Servicing Agreement, within 90 days of the date of notice, provide the Trustee with a Substitute Mortgage Loan (if within two years of the Closing Date) or purchase the related Mortgage Loan at the applicable 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, repurchase or substitution 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 of the Seller confirming that such documents have been accepted for recording, and delivery to the Trustee shall be effected by the Seller within thirty
days of its receipt of the original recorded document.

(d)          At the time of any substitution, the Seller shall deliver or cause to be delivered the Substitute Mortgage Loan, the related Mortgage File and any other documents and payments required to be delivered in connection with a substitution pursuant to the Pooling and Servicing Agreement. At the time of any purchase or substitution, the Trustee shall (i) assign to the Seller and cause the Custodian to release 

 

the documents (including, but not limited to, the Mortgage, Mortgage Note and other contents of the Mortgage File) in the possession of the Custodian relating to the Deleted Mortgage Loan and (ii) execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be necessary to vest in the Seller title to such Deleted Mortgage Loan.

	
             
  	
            Section 6.
 	
            Recordation of Assignments of Mortgage.
 

(a)          The Seller will, promptly after the Closing Date, cause each Mortgage and each assignment of Mortgage from the Seller to the Trustee, and all unrecorded intervening assignments, if any, delivered on or prior to the Closing Date, to be recorded in all recording offices in the jurisdictions where the related Mortgaged Properties are located; provided, however, the Seller need not cause to be recorded any assignment which relates to a Mortgage Loan in any jurisdiction under the laws of which, as evidenced by an Opinion of Counsel delivered by the Seller to the Trustee and the Rating Agencies, which states that the recordation of such assignment is not necessary to protect the Certificateholder’s interest in the related Mortgage Loan; provided, however, notwithstanding the delivery of any Opinion of
Counsel, each assignment of Mortgage shall be submitted for recording by the Seller in the manner described above, at no expense to the Trust Fund or Trustee, upon the earliest to occur of (i) reasonable direction by the Holders of Certificates evidencing, in the aggregate, not less than 25% of the Voting Rights, (ii) the occurrence of a Master Servicer Event of Termination, (iii) the occurrence of a bankruptcy, insolvency or foreclosure relating to the Seller, (iv) the occurrence of a servicing transfer as described in Section 7.07 of the Pooling and Servicing Agreement or (v) with respect to any one assignment of Mortgage, the occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor under the related Mortgage.

While each such Mortgage or assignment is being recorded, if necessary, the Seller shall leave or cause to be left with the Trustee a certified copy of such Mortgage or assignment. In the event that, within 180 days of the Closing Date, the Trustee has not provided an Opinion of Counsel as described above or received evidence of recording with respect to each Mortgage Loan delivered to the Purchaser pursuant to the terms hereof or as set forth above, the failure to provide evidence of recording or such Opinion of Counsel shall be considered a Material Defect, and the provisions of Section 5(c) and (d) shall apply. All customary recording fees and reasonable expenses relating to the recordation of the assignments of mortgage to the Trustee or the Opinion of Counsel, as the case may be, shall be borne by the Seller.

(b)          It is the express intent of the parties hereto that the conveyance of the Mortgage Loans by the Seller to the Purchaser, as contemplated by this Agreement be, and be treated as, a sale. It is, further, not the intention of the parties that such conveyance be deemed a pledge of the Mortgage Loans by the Seller to the Purchaser to secure a debt or other obligation of the Seller. However, in the event that, notwithstanding the intent of the parties, the Mortgage Loans are held by a court of competent jurisdiction to continue to be property of the Seller, then (i) this Agreement shall also be deemed to be a security agreement within the meaning of Articles 8 and 9 of 

 

the applicable Uniform Commercial Code; (ii) the transfer of the Mortgage Loans provided for herein shall be deemed to be a grant by the Seller to the Purchaser of a security interest in all of the Seller’s right, title and interest in and to the Mortgage Loans and all amounts payable to the holders of the Mortgage Loans in accordance with the terms thereof and all proceeds of the conversion, voluntary or involuntary, of the foregoing into cash, instruments, securities or other property, to the extent the Purchaser would otherwise be entitled to own such Mortgage Loans and proceeds pursuant to Section 4 hereof, including all amounts, other than investment earnings, from time to time held or invested in any accounts created pursuant to the Pooling and Servicing Agreement, whether in the form of cash, instruments, securities or other property; (iii) the possession by the Purchaser or the Trustee of
Mortgage Notes and such other items of property as constitute instruments, money, negotiable documents or chattel paper shall be deemed to be “possession by the secured party” for purposes of perfecting the security interest pursuant to Section 9-313 (or comparable provision) of the applicable Uniform Commercial Code; and (iv) notifications to persons holding such property, and acknowledgments, receipts or confirmations from persons holding such property, shall be deemed notifications to, or acknowledgments, receipts or confirmations from, financial intermediaries, bailees or agents (as applicable) of the Purchaser for the purpose of perfecting such security interest under applicable law. Any assignment of the interest of the Purchaser pursuant to any provision hereof or pursuant to the Pooling and Servicing Agreement shall also be deemed to be an assignment of any security interest created hereby. The Seller and the Purchaser shall, to the extent consistent with this
Agreement, take such actions as may be reasonably necessary to ensure that, if this Agreement were deemed to create a security interest in the Mortgage Loans, such security interest would be deemed to be a perfected security interest of first priority under applicable law and will be maintained as such throughout the term of the Pooling and Servicing Agreement.

Section 7.          Representations and Warranties of Seller Concerning the Mortgage Loans. The Seller hereby represents and warrants to the Purchaser as of the Closing Date or such other date as may be specified below with respect to each Mortgage Loan being sold by it:

(i)             the information set forth in the Mortgage Loan Schedule hereto is true and correct in all material respects;

(ii)            immediately prior to the transfer to the Purchaser, the Seller was the sole owner of beneficial title and holder of each Mortgage and Mortgage Note relating to the Mortgage Loans and is conveying the same free and clear of any and all liens, claims, encumbrances, participation interests, equities, pledges, charges or security interests of any nature and the Seller has full right and authority to sell or assign the same pursuant to this Agreement;

(iii)           no selection procedure reasonably believed by the Seller to be adverse to the interests of the Certificateholders was utilized in selecting the Mortgage Loans;

 

 

(iv)           each Mortgage Loan constitutes a “qualified mortgage” under Section 860G(a)(3)(A) of the Code and Treasury Regulation Section 1.8600-2(a)(1);

(v)             as of the Cut-off Date, no Mortgage Loan is more than 30 days past due. The Seller has not advanced funds, or induced, solicited or knowingly received any advance of funds from a party other than the owner of the related Mortgaged Property, directly or indirectly, for the payment of any amount required by the Mortgage Note or Mortgage;

(vi)           to the best of the Seller’s knowledge, there are no delinquent taxes, ground rents, water charges, sewer rents, assessments, insurance premiums, leasehold payments, including assessments payable in future installments or other outstanding charges affecting the related Mortgaged Property;

(vii)          to the best of the Seller’s knowledge, there is no default, breach, violation or event of acceleration existing under the Mortgage or the Mortgage Note and no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration, and the Seller has not waived any default, breach, violation or event of acceleration;

(viii)        to the best of the Seller’s knowledge and with respect to the Mortgage Loans originated by First Republic Bank, the related Mortgaged Property was lawfully occupied under applicable law at time of origination; all inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy, have been made or obtained from the appropriate authorities;

(ix)           all requirements of any federal, state or local law (including usury, truth in lending, real estate settlement procedures, consumer credit protection, equal credit opportunity, disclosure or recording, predatory and abusive lending laws) applicable to the origination and servicing of Mortgage Loans of a type similar to the Mortgage Loans have been complied with in all material respects;

(x)            to the best of the Seller’s knowledge, as of the date of transfer of the Mortgage Loans, there is no mechanics’ lien or claim for work, labor or material affecting the premises subject to any Mortgage which is or may be a lien prior to, or equal with, the lien of such Mortgage except those which are insured against by the title insurance policy;

(xi)           to the best of the Seller’s knowledge, as of the date of the transfer of the Mortgage Loans to the Purchaser, there is no valid offset, defense or counterclaim to any Mortgage Note or Mortgage;

 

 

(xii)          to the best of the Seller’s knowledge, as of the date of closing, the physical property subject to any mortgage is free of material damage and is in good repair;

(xiii)        with respect to the Mortgage Loans originated by Merrill Lynch Credit Corp., at the time of origination, no improvement located on or being part of the Mortgaged Property was in violation of any applicable zoning and subdivision laws or ordinances;

(xiv)         each original mortgage has been recorded or is in the process of being recorded in the appropriate jurisdictions wherein such recordation is required to perfect the lien thereof for the benefit of the trust;

(xv)          loans originated are being serviced according to acceptable servicing practices;

(xvi)         the mortgage note and the mortgage have not been impaired, altered or modified in any material respect, except by a written instrument which has been recorded or is in the process of being recorded;

(xvii)       a lender’s title policy or binder, or other assurance of title insurance customary in a form acceptable to FNMA or FHLMC was issued at origination and each policy or binder is valid and remains in full force and effect;

(xviii)      none of the Mortgage Loans are subject to the Georgia Fair Lending Act, as amended;

(xix)         none of the Mortgage Loans is subject to the Home Ownership and Equity Protection Act of 1994 or is a “high cost” or “predatory” loan as defined by applicable local, state and federal predatory and abusive lending laws; 

(xx)          no Mortgage Loan is a High Cost Loan or Covered Loan, as applicable (as such terms are defined in  Appendix E of the then current Standard & Poor's Glossary For File Format For LEVELS® Version 5.6b Revised (attached hereto as Exhibit 7);

(xxi)         each Mortgage Loan was originated with an initial mortgagee of record, or was originated in conformity with the underwriting standards of and purchased by a subsequent mortgagee, that was either (x) a savings and loan association, savings bank, commercial bank, credit union, insurance company, or similar institution which is supervised and examined by a Federal or State authority or (y) a mortgagee approved by the Secretary of Housing and Urban Development pursuant to sections 203 and 211 of the National Housing Act;

(xxii)       with respect to each Additional Collateral Mortgage Loan, prior to its assignment to the Purchaser, the Seller had a first priority perfected security interest in each Securities Account, subject to the rights of Merrill Lynch, Pierce, Fenner & Smith Incorporated, and following the Seller’s assignment of the Pledge 

 

Agreements and related security interest and Merrill Lynch Credit Corporation’s acknowledgement that it shall administer the Control Agreement for the benefit of the Purchaser, the Purchaser has a first priority perfected security interest in each Securities Account, subject to the rights of Merrill Lynch, Pierce, Fenner & Smith Incorporated;

(xxiii)      with respect to each Additional Collateral Mortgage Loan, the Additional Collateral Mortgage Loan is insured under the terms and provisions of the Surety Bond, subject to the limitations set forth therein;

(xxiv)      with respect to each Additional Collateral Mortgage Loan, the assignment of rights to the Purchaser under the Surety Bond, as described herein, will not result in the Purchaser assuming any obligations or liabilities of the Seller with respect thereto, and that all such rights assigned to the Purchaser are fully and freely assignable by the Seller to the Purchaser, subject to the terms of the Surety Bond;

(xxv)        with respect to each Additional Collateral Mortgage Loan, the forms of each Additional Collateral Agreement with respect to the Additional Collateral have not been impaired, waived, altered or modified in any material respect, and each Additional Collateral Agreement is in full force and effect; 

(xxvi)      with respect to each Additional Collateral Mortgage Loan, each Additional Collateral Agreement is not subject to any right of rescission, setoff or defense with respect to the Additional Collateral, including the defense of usury, nor will the operation of any of the terms of such Additional Collateral Agreement, or the exercise of any right thereunder, render such Additional Collateral Agreement unenforceable, in whole or in part, or subject it to any right of rescission, setoff or defense, including the defense of usury, and no such right of rescission, setoff or defense has been asserted with respect thereto with respect to the Additional Collateral; 

(xxvii)     with respect to each Additional Collateral Mortgage Loan, there is no default, breach, violation or event of acceleration existing under any Additional Collateral Agreement with respect to the Additional Collateral; there is no event that, with the lapse of time, the giving of notice, or both, would constitute such a default, breach, violation or event of acceleration; and in no event has the Seller waived any of its material rights or remedies in respect of any default, breach, violation or event of acceleration under any Additional Collateral Agreement with respect to the Additional Collateral; and

(xxviii)    with respect to each Co-op Loan, the security instruments create a valid, enforceable and subsisting first priority security interest in the Co-op Lease and Co-op Stock securing the related Mortgage Note subject to only to (a) the lien of the related cooperative for unpaid assessments representing the Mortgagor’s pro rata share of payments for a blanket mortgage, if any, current and future real property taxes, insurance premiums, maintenance fees and other assessments to 

 

which like collateral is commonly subject, and (b) other matters to which the collateral is commonly subject which do not materially interfere with the benefits of the security intended to be provided; provided, however, that the related Co-op Loan may be subordinated or otherwise subject to the lien of a Mortgage on the cooperative building.

It is understood and agreed that the representations and warranties set forth in this Section 7 will inure to the benefit of the Purchaser, its successors and assigns, notwithstanding any restrictive or qualified endorsement on any Mortgage Note or assignment of Mortgage or the examination of any Mortgage File. Upon any substitution for a Mortgage Loan, the representations and warranties set forth above shall be deemed to be made by the Seller as to any Substitute Mortgage Loan as of the date of substitution.

Upon discovery or receipt of notice by the Seller, the Purchaser or the Trustee of a breach of any representation or warranty of the Seller set forth in this Section 7 which materially and adversely affects the value of the interests of the Purchaser, the Certificateholders or the Trustee in any of the Mortgage Loans delivered to the Purchaser pursuant to this Agreement, the party discovering or receiving notice of such breach shall give prompt written notice to the others. In the case of any such breach of a representation or warranty set forth in this Section 7, within 90 days from the date of discovery by the Seller, or the date the Seller is notified by the party discovering or receiving notice of such breach (whichever occurs earlier), the Seller will (i) cure such breach in all material respects, (ii) purchase the affected Mortgage Loan at the applicable Purchase Price or (iii) if
within two years of the Closing Date, substitute a qualifying Substitute Mortgage Loan in exchange for such Mortgage Loan. The obligations of the Seller to cure, purchase or substitute a qualifying Substitute Mortgage Loan shall constitute the Purchaser’s, the Trustee’s and the Certificateholder’s sole and exclusive remedy under this Agreement or otherwise respecting a breach of representations or warranties hereunder with respect to the Mortgage Loans, except for the obligation of the Seller to indemnify the Purchaser for such breach as set forth in and limited by Section 13 hereof.  With respect to the representations and warranties described in the Agreement which are made to the best of the Seller’s knowledge, if it is discovered by any of the Depositor, the Seller or the Trustee that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan, then notwithstanding
the seller’s lack of knowledge with respect to the substance of such representation and warranty, such inaccuracy shall be deemed a breach of the applicable representation or warranty.

Any cause of action against the Seller or relating to or arising out of a breach by the Seller of any representations and warranties made in this Section 7 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by the Seller or notice thereof by the party discovering such breach and (ii) failure by the Seller to cure such breach, purchase such Mortgage Loan or substitute a qualifying Substitute Mortgage Loan pursuant to the terms hereof.

 

 

Section 8.          Representations and Warranties Concerning the Seller.  As of the date hereof and as of the Closing Date, the Seller represents and warrants to the Purchaser as to itself in the capacity indicated as follows:

(a)          the Seller (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Maryland and (ii) is qualified and in good standing 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 Seller’s business as presently conducted or on the Seller’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

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

(c)          the execution and delivery by the Seller of this Agreement have been duly authorized by all necessary action on the part of the Seller; 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 Seller or its properties or the charter or by-laws of the Seller, except those conflicts, breaches or defaults which would not reasonably be expected to have a material adverse effect on the Seller’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(d)          the execution, delivery and performance by the Seller 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 and, in connection with the recordation of the Mortgages, powers of attorney or assignments of Mortgages not yet completed;

(e)          this Agreement has been duly executed and delivered by the Seller and, assuming due authorization, execution and delivery by the Purchaser, constitutes a valid and binding obligation of the Seller 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);

(f)           there are no actions, suits or proceedings pending or, to the knowledge of the Seller, threatened against the Seller, 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 Seller will be determined adversely to the Seller and will if determined adversely to the Seller materially and adversely affect the Seller’s ability to perform its obligations under this Agreement; and the Seller 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

Section 9.          Representations and Warranties Concerning the Purchaser.  As of the date hereof and as of the Closing Date, the Purchaser represents and warrants to the Seller as follows:

(a)          the Purchaser (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Maryland and (ii) 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 Purchaser’s business as presently conducted or on the Purchaser’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(b)          the Purchaser 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;

(c)          the execution and delivery by the Purchaser of this Agreement have been duly authorized by all necessary corporate action on the part of the Purchaser; 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 Purchaser or its properties or the articles of incorporation or by-laws of the Purchaser, except those conflicts, breaches or defaults which would not reasonably be expected to have a material adverse effect on the Purchaser’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(d)          the execution, delivery and performance by the Purchaser 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;

(e)          this Agreement has been duly executed and delivered by the Purchaser and, assuming due authorization, execution and delivery by the Seller, constitutes a valid and binding obligation of the Purchaser 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);

(f)           there are no actions, suits or proceedings pending or, to the knowledge of the Purchaser, threatened against the Purchaser, 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 Purchaser will be determined adversely to the Purchaser and will if determined adversely to the Purchaser materially and adversely affect the Purchaser’s ability to perform its obligations under this Agreement; and the Purchaser 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

	
             
  	
            Section 10.
 	
            Conditions to Closing.
 

(a)          The obligations of the Purchaser under this Agreement will be subject to the satisfaction, on or prior to the Closing Date, of the following conditions:

(1)          Each of the obligations of the Seller required to be performed at or prior to the Closing Date pursuant to the terms of this Agreement shall have been duly performed and complied with in all material respects; all of the representations and warranties of the Seller under this Agreement shall be true and correct as of the date or dates specified in all material respects; and no event shall have occurred which, with notice or the passage of time, would constitute a default under this Agreement, or the Pooling and Servicing Agreement; and the Purchaser shall have received certificates to that effect signed by authorized officers of the Seller.

(2)          The Purchaser shall have received all of the following closing documents, in such forms as are agreed upon and reasonably acceptable to the Purchaser, duly executed by all signatories other than the Purchaser as required pursuant to the respective terms thereof:

a.            If  required pursuant to Section 3 hereof, the Amendment dated as of the Closing Date and any documents referred to therein;

b.            If required pursuant to Section 3 hereof, the Final Mortgage Loan Schedule containing the information set forth on Exhibit 3 hereto, one copy to be attached to each counterpart of the Amendment;

c.            The Pooling and Servicing Agreement, in form and substance reasonably satisfactory to the Trustee and the Purchaser, and all documents required thereby duly executed by all signatories;

d.            A certificate of an officer of the Seller dated as of the Closing Date, in a form reasonably acceptable to the Purchaser, and attached thereto the resolutions of the Seller’s authorizing the transactions contemplated by this Agreement, together with copies of the charter and by-laws of the Seller;

e.            One or more opinions of counsel from the Seller’s counsel otherwise in form and substance reasonably satisfactory to the Purchaser, the Trustee and each Rating Agency;

 

 

f.             A letter from each of the Rating Agencies giving each Class of Certificates set forth on Schedule A the rating set forth on Schedule A; and

g.            Such other documents, certificates (including additional representations and warranties) and opinions as may be reasonably necessary to secure the intended ratings from each Rating Agency for the Certificates.

(3)          The Certificates to be sold to Merrill Lynch pursuant to the Underwriting Agreement shall have been issued and sold to Merrill Lynch.

(4)          The Seller shall have furnished to the Purchaser such other certificates of its officers or others and such other documents and opinions of counsel to evidence fulfillment of the conditions set forth in this Agreement and the transactions contemplated hereby as the Purchaser and its counsel may reasonably request.

(b)          The obligations of the Seller under this Agreement shall be subject to the satisfaction, on or prior to the Closing Date, of the following conditions:

(5)          The obligations of the Purchaser required to be performed by it on or prior to the Closing Date pursuant to the terms of this Agreement shall have been duly performed and complied with in all material respects, and all of the representations and warranties of the Purchaser under this Agreement shall be true and correct in all material respects as of the date hereof and as of the Closing Date, and no event shall have occurred which would constitute a breach by it of the terms of this Agreement, and the Seller shall have received a certificate to that effect signed by an authorized officer of the Purchaser.

(6)          The Seller shall have received copies of all of the following closing documents, in such forms as are agreed upon and reasonably acceptable to the Seller, duly executed by all signatories other than the Seller as required pursuant to the respective terms thereof:

a.            If  required pursuant to Section 3 hereof, the Amendment dated as of the Closing Date and any documents referred to therein;

b.            The Pooling and Servicing Agreement, in form and substance reasonably satisfactory to the Seller, and all documents required thereby duly executed by all signatories;

c.            A certificate of an officer of the Purchaser dated as of the Closing Date, in a form reasonably acceptable to the Seller, and attached thereto the resolutions of the Purchaser authorizing the transactions contemplated by this Agreement and the Pooling and Servicing Agreement, together with copies of the Purchaser’s articles of incorporation, and evidence as to the good standing of the Purchaser dated as of a recent date;

 

 

d.            One or more opinions of counsel from the Purchaser’s counsel in form and substance reasonably satisfactory to the Seller; and

e.            Such other documents, certificates (including additional representations and warranties) and opinions as may be reasonably necessary to secure the intended rating from each Rating Agency for the Certificates;

Section 11.        Fees and Expenses.  Subject to Section 16 hereof, the Seller shall pay on the Closing Date or such later date as may be agreed to by the Purchaser (i) the fees and expenses of the Seller’s attorneys and the reasonable fees and expenses of the Purchaser’s attorneys, (ii) the fees and expenses of Deloitte & Touche LLP, (iii) the filing fee charged by the Commission for the registration of the Certificates, (iv) the fees and expenses including counsel’s fees and expenses in connection with any “blue sky” and legal investment matters, (v) the fees and expenses of the Trustee which shall include without limitation the fees and expenses of the Trustee (and the fees and disbursements of its counsel) with respect to (A) legal and document review of this Agreement,
the Pooling and Servicing Agreement, the Certificates and related agreements, (B) attendance at the Closing and (C) review of the Mortgage Loans to be performed by the Custodian, (vi) the expenses for printing or otherwise reproducing the Certificates, the Prospectus and the Prospectus Supplement, (vii) the fees and expenses of each Rating Agency (both initial and ongoing), (viii) the fees and expenses relating to the preparation and recordation of mortgage assignments (including intervening assignments, if any and if available, to evidence a complete chain of title from the originator to the Trustee) from the Seller to the Trustee or the expenses relating to the Opinion of Counsel referred to in Section 6(a) hereof, as the case may be, and (ix) Mortgage File due diligence expenses and other out-of-pocket expenses incurred by the Purchaser in connection with the purchase of the Mortgage Loans and by Merrill Lynch in connection with the sale of the Offered Certificates. The Seller
additionally agrees to pay directly to any third party on a timely basis the fees provided for above which are charged by such third party and which are billed periodically.

	
             
  	
            Section 12.
 	
            Accountants’ Letters.
 

(a)          Deloitte & Touche LLP will review the characteristics of a sample of the Mortgage Loans described in the Final Mortgage Loan Schedule and will compare those characteristics to the description of the Mortgage Loans contained in the Prospectus Supplement under the captions “Summary of Prospectus Supplement—The Mortgage Loans” and “Description of the Mortgage Pool—General” and “—Tabular Characteristics of the Mortgage Pool”. The Seller will cooperate with the Purchaser in making available all information and taking all steps reasonably necessary to permit such accountants to complete the review and to deliver the letters required of them under the Underwriting Agreement. Deloitte & Touche LLP will also confirm certain calculations as set forth under the
caption “Yield on the Certificates” in the Prospectus Supplement.

 

 

(b)          To the extent statistical information with respect to the Master Servicer’s and a Servicer’s servicing portfolio is included in the Prospectus Supplement under the caption “Servicing of the Mortgage Loans,” a letter from the certified public accountant for such Servicer will be delivered to the Purchaser dated the date of the Prospectus Supplement, in the form previously agreed to by the Seller and the Purchaser, with respect to such statistical information.

	
             
  	
            Section 13.
 	
            Indemnification.
 

(a)          The Seller shall indemnify and hold harmless the Purchaser and its directors, officers and controlling persons (as defined in Section 15 of the Securities Act) from and against any loss, claim, damage or liability or action in respect thereof, to which they or any of them may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon (i) any representation or warranty assigned or made by the Seller in Section 7 or Section 8 hereof being, or alleged to be, untrue or incorrect, or (ii) any failure by the Seller to perform its obligations under this Agreement; and the Seller shall reimburse the Purchaser and each other indemnified party for any legal and other expenses reasonably incurred by them in connection with
investigating or defending or preparing to defend against any such loss, claim, damage, liability or action.

The foregoing indemnity agreement is in addition to any liability which the Seller otherwise may have to the Purchaser or any other such indemnified party.

Section 14.      Notices.  All demands, notices and communications hereunder shall be in writing but may be delivered by facsimile transmission subsequently confirmed in writing. Notices to the Seller shall be directed to KKR Financial Corp., Four Embarcadero Center, Suite 2050, San Francisco, CA 94111, and notices to the Purchaser shall be directed to KKR Financial Mortgage Corp., Four Embarcadero Center, Suite 2050, San Francisco, CA 94111, Attention: Chief Operating Office; or to any other address as may hereafter be furnished by one party to the other party by like notice. Any such demand, notice or communication hereunder shall be deemed to have been received on the date received at the premises of the addressee (as evidenced, in the case of registered or certified mail, by the date noted on the return
receipt) provided that it is received on a business day during normal business hours and, if received after normal business hours, then it shall be deemed to be received on the next business day.

Section 15.       Transfer of Mortgage Loans.  The Purchaser retains the right to assign the Mortgage Loans and any or all of its interest under this Agreement to the Trustee without the consent of the Seller, and, upon such assignment, the Trustee shall succeed to the applicable rights and obligations of the Purchaser hereunder; provided, however, the Purchaser shall remain entitled to the benefits set forth in Sections 11, 13 and 17 hereto and as provided in Section 2(a). Notwithstanding the foregoing, the sole and exclusive right and remedy of the Trustee with respect to a breach of representation or warranty of the Seller shall be the purchase or substitution obligations of the Seller contained in Sections 5 and 7 hereof.

 

 

Section 16.        Termination.  This Agreement may be terminated (a) by the mutual consent of the parties hereto prior to the Closing Date, (b) by the Purchaser, if the conditions to the Purchaser’s obligation to close set forth under Section 10(a) hereof are not fulfilled as and when required to be fulfilled or (c) by the Seller, if the conditions to the Seller’s obligation to close set forth under Section 10(b) hereof are not fulfilled as and when required to be fulfilled. In the event of termination pursuant to clause (b), the Seller shall pay, and in the event of termination pursuant to clause (c), the Purchaser shall pay, all reasonable out-of-pocket expenses incurred by the other in connection with the transactions contemplated by this Agreement. In the event of a termination pursuant to
clause (a), each party shall be responsible for its own expenses.

Section 17.       Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and agreements contained in this Agreement, or contained in certificates of officers of the Seller submitted pursuant hereto, shall remain operative and in full force and effect and shall survive delivery of the Mortgage Loans to the Purchaser (and by the Purchaser to the Trustee). Subsequent to the delivery of the Mortgage Loans to the Purchaser, the Seller’s representations and warranties contained herein with respect to the Mortgage Loans shall be deemed to relate to the Mortgage Loans actually delivered to the Purchaser and included in the Final Mortgage Loan Schedule and any Substitute Mortgage Loan and not to those Mortgage Loans deleted from the Preliminary Mortgage Loan Schedule
pursuant to Section 3 hereof prior to the Closing.

Section 18.        Mandatory Delivery; Grant of Security Interest. The sale and delivery on the Closing Date of the Mortgage Loans described on the Mortgage Loan Schedule in accordance with the terms and conditions of this Agreement is mandatory. It is specifically understood and agreed that each Mortgage Loan is unique and identifiable on the date hereof and that an award of money damages would be insufficient to compensate the Purchaser for the losses and damages incurred by the Purchaser in the event of the Seller’s failure to deliver the Mortgage Loans on or before the Closing Date. The Seller hereby grants to the Purchaser a lien on and a continuing security interest in the Seller’s interest in each Mortgage Loan and each document and instrument evidencing each such Mortgage Loan to secure
the performance by the Seller of its obligation hereunder, and the Seller agrees that it holds such Mortgage Loans in custody for the Purchaser, subject to the Purchaser’s obligation to deliver or cause to be delivered the consideration for the Mortgage Loans pursuant to Section 2 hereof. The Seller agrees that, upon acceptance of the Mortgage Loans by the Purchaser or its designee and delivery of payment to the Seller, that its security interest in the Mortgage Loans shall be released. All rights and remedies of the Purchaser under this Agreement are distinct from, and cumulative with, any other rights or remedies under this Agreement or afforded by law or equity and all such rights and remedies may be exercised concurrently, independently or successively.

Notwithstanding the foregoing, if on the Closing Date, each of the conditions set forth in Section 10 hereof shall have been satisfied and the Purchaser shall not have paid or caused to be paid the purchase price as described in Section 2 hereof, or any such condition shall not have been waived or satisfied and the Purchaser determines 

 

not to pay or cause to be paid the purchase price, the Purchaser shall immediately effect the redelivery of the Mortgage Loans, if delivery to the Purchaser has occurred and the security interest created by this Section 18 shall be deemed to have been released.

Section 19.       Severability.  Any part, provision, representation or warranty of this Agreement which is prohibited or which is held to be void or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any part, provision, representation or warranty of this Agreement which is prohibited or unenforceable or is held to be void or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by
applicable law, the parties hereto waive any provision of law which prohibits or renders void or unenforceable any provision hereof.

Section 20.      Counterparts.  This Agreement may be executed in counterparts, each of which will be an original, but which together shall constitute one and the same agreement.

Section 21.      Amendment.  This Agreement cannot be amended or modified in any manner without the prior written consent of each party.

Section 22.       GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5.1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Section 23.        Further Assurances. Each of the parties agrees to execute and deliver such instruments and take such actions as another party may, from time to time, reasonably request in order to effectuate the purpose and to carry out the terms of this Agreement including any amendments hereto which may be required by either Rating Agency.

	
             
  	
            Section 24.
 	
            Successors and Assigns.
 

This Agreement shall bind and inure to the benefit of and be enforceable by the Seller and the Purchaser and their permitted successors and assigns and, to the extent specified in Section 13 hereof, Merrill Lynch, and their directors, officers and controlling persons (within the meaning of federal securities laws). The Seller acknowledges and agrees that the Purchaser may assign its rights under this Agreement (including, without limitation, with respect to the Seller’s representations and warranties respecting the Mortgage Loans) to the Trustee. Any person into which the Seller may be merged or consolidated (or any person resulting from any merger or consolidation involving the Seller), any person resulting from a change in form of the Seller or any person succeeding 

 

to the business of the Seller, shall be considered the “successor” of the Seller hereunder and shall be considered a party hereto without the execution or filing of any paper or any further act or consent on the part of any party hereto. Except as provided in the two preceding sentences, this Agreement cannot be assigned, pledged or hypothecated by either party hereto without the written consent of the other parties to this Agreement and any such assignment or purported assignment shall be deemed null and void.

Section 25.        The Seller.  The Seller will keep in full effect all rights as are necessary to perform their respective obligations under this Agreement.

Section 26.       Entire Agreement.  This Agreement contains the entire agreement and understanding between the parties with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof.

Section 27.        No Partnership.  Nothing herein contained shall be deemed or construed to create a partnership or joint venture between the parties hereto.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

IN WITNESS WHEREOF, the parties hereto have caused their names to be signed hereto by their respective duly authorized officers as of the date first above written.

	
             
 	
            KKR FINANCIAL CORP.
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Name:        
 
	
             
 	
            Title:                   
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
            KKR FINANCIAL MORTGAGE CORP.
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Name:        
 
	
             
 	
            Title:                   
 

 

 

 

ANNEX I

 

LIST OF MORTGAGE LOANS

 

(Available Upon Request)

 

 

EXHIBIT 1

CONTENTS OF MORTGAGE FILE

With respect to each Mortgage Loan, the Mortgage File shall include each of the following items, which shall be available for inspection by the Purchaser or its designee, and which shall be delivered to the Purchaser or its designee pursuant to the terms of the Agreement.

	
             
  	
            (a)
 	
            With respect to each Mortgage Loan:
 

(i)           The original Mortgage Note, including any riders thereto, endorsed by the Seller or the originator, as applicable, without recourse in proper form to the order of the Trustee, at the direction of the Purchaser, with any intervening endorsements showing an unbroken chain of title from the originator to the Trustee or with respect to the Mortgage Loans as to which the Mortgage Note has been lost, lost note affidavits and if available, a copy of the lost Mortgage Note;

(ii)          An original duly executed assignment of Mortgage in recordable form from the originator to the Trustee;

(iii)        The original recorded Mortgage, if available. If, in connection with any Mortgage Loan, the Seller cannot deliver the original Mortgage with evidence of recording thereon on or prior to the Closing Date because of its delivery to, or a delay caused by, the public recording office where such Mortgage has been delivered for recordation, or if such original Mortgage Loan has been retained by the public recording office as a matter of policy, or has been lost, the Seller shall deliver or cause to be delivered to the Trustee a photocopy thereof, if available (certified by the Seller to be a true and correct copy of the original which has been transmitted for recordation), together with an officer’s certificate of the Seller stating that such Mortgage has been dispatched to the appropriate
recording official for recordation, has been retained by such recording office as a matter of policy or has been lost, as applicable;

(iv)         If applicable and available, all original intervening recorded assignments, if any, showing an unbroken chain of title to the Mortgage from the originator to the Seller or the Trustee;

(v)          The originals of each assumption, modification or substitution agreement, if any and if available, relating to the Mortgage Loan. If in connection with any Mortgage Loan the Seller cannot deliver the assumption, modification or substitution agreement with evidence of recording thereon on or prior to the Closing Date because of a delay caused by the public recording office where such assumption, modification or substitution agreement has been delivered for recordation, the Seller shall deliver or cause to be delivered to the Trustee a photocopy of such assumption, modification or substitution agreement (certified by the Seller to be a true and correct copy of the original which has been transmitted for recordation), together with a certificate of an officer of the Seller stating that such
assumption, modification or substitution agreement has been dispatched to the appropriate recording official for recordation, if available; 

 

 

(vi)         the original mortgagee’s title insurance policy or a written commitment to issue such title insurance policy; 

(vii)       with respect to each Additional Collateral Mortgage Loan (as indicated in the Mortgage Loan Schedule) (1) a copy of the related Mortgage 100K Pledge Agreement or Parent Power® Agreement, as the case may be, (2) a copy of the UCC-1, to the extent MLCC was required to deliver such UCC-1 to Cendant, and an original form UCC-3, if applicable, to the extent MLCC was required to deliver such UCC-3 to Cendant, together with a copy of the applicable notice of assignment to and acknowledgment by Merrill Lynch, Pierce, Fenner & Smith Incorporated and (3) in connection with a Parent Power® Mortgage Loan supported by a Parent Power® Guaranty Agreement for real estate, a copy of the related Equity Access® Mortgage.

	
             
  	
            (b)
 	
            With respect to each Cooperative Loan so assigned;
 

(i)           The original Mortgage Note, endorsed without recourse to the order of the Trustee and showing an unbroken chain of endorsements from the originator thereof to the Person endorsing it to the Trustee, or lost note affidavit, together with a copy of the related Mortgage Note;

(ii)          A counterpart of the Cooperative Lease and the Assignment of Proprietary Lease to the originator of the Cooperative Loan with intervening assignments showing an unbroken chain of title from such originator to the Trustee;

(iii)        The related Cooperative Stock Certificate, representing the related Cooperative Stock pledged with respect to such Cooperative Loan, together with an undated stock power (or other similar instrument) executed in blank;

(iv)         The original recognition agreement by the Cooperative of the interests of the mortgagee with respect to the related Cooperative Loan and any transfer documents related to the recognition agreement;

	
             
  	
            (v)
 	
            The Security Agreement;
 

(vi)         Copies of the original UCC-1 financing statement, and any continuation statements, filed by the originator of such Cooperative Loan as secured party, each with evidence of recording thereof, evidencing the interest of the originator under the Security Agreement and the Assignment of Proprietary Lease;

(vii)       Copies of the filed UCC-3 assignments of the security interest referenced in clause (vi) above showing an unbroken chain of title from the originator to the Trustee, each with evidence of recording thereof, evidencing the interest of the originator under the Security Agreement and the Assignment of Proprietary Lease;

(viii)      An executed assignment of the interest of the originator in the Security Agreement and Assignment of Proprietary Lease, showing an unbroken chain of title from the originator to the Trustee; and

 

 

(ix)         The original of each modification, assumption agreement or preferred loan agreement, if any, relating to such Cooperative Loan.

 

 

EXHIBIT 2

CONTENTS OF FINAL MORTGAGE FILE

(A)         With respect to each Mortgage Loan, the Mortgage File shall include each of the following items, which shall be available for inspection by the Purchaser or its agent, and which shall be delivered to the Purchaser pursuant to the terms of the Agreement.

(i)           The original Mortgage Note, including any riders thereto, endorsed by the Seller or the originator, as applicable, without recourse in proper form to the order of the Trustee, at the direction of the Purchaser, with any intervening endorsements showing an unbroken chain of title from the originator to the Trustee, or with respect to the Mortgage Loans as to which the Mortgage Note has been lost, lost note affidavits and if available, a copy of the lost Mortgage Note;

(ii)          An original duly executed assignment of Mortgage in recordable form from the Seller or the originator, as applicable, to the Trustee, with evidence of recording indicated thereon; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office;

(iii)        The original recorded Mortgage, if available, with evidence of recording indicated thereon; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation or such office as a matter of policy does not return the original of such document or if such original Mortgage has been lost, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office, if available;

(iv)         The original intervening assignments, including warehousing assignments, if any and if available, with evidence of recording thereon, showing an unbroken chain of title to the Mortgage from the Seller or the originator, as the case may be, to the Seller or the Trustee; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation or such office as a matter of policy does not return the original of such document, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office, if available;

(v)          The originals of each assumption, modification or substitution agreement, if any and if available, relating to the Mortgage Loan; and

(vi)         the original mortgagee’s title insurance policy or, if a master title policy has been issued by the title insurer, a mortgagee’s certificate of title insurance or a written commitment to issue such title insurance policy.

 

 

EXHIBIT 3

MORTGAGE LOAN SCHEDULE INFORMATION

The Preliminary and Final Mortgage Loan Schedules shall set forth the following information with respect to each Mortgage Loan:

	
             
  	
            (i)
 	
            the loan number of the mortgage loan;
 	
             

	
             
  	
            (ii)
 	
            the city, state and zip code of the Mortgaged Property;
 	
             

	
             
  	
            (iii)
 	
            a code indicating whether the Mortgaged Property is owner-occupied;
 	
             

	
             
  	
            (iv)
 	
            the type of Residential Dwelling constituting the Mortgaged Property;
 
	
             
  	
            (v)
 	
            the original months to maturity;
 	
             

	
             
  	
            (vi)
 	
            the original date of the mortgage;
 	
             

	
             
  	
            (vii)
 	
            the Loan-to-Value Ratio at origination;
 	
             

	
             
  	
            (viii)
 	
            the Mortgage Interest Rate;
 	
             

										

(ix)           the date on which the first Monthly Payment was due on the Mortgage Loan;

	
             
  	
            (x)
 	
            the stated maturity date;
 	
             

	
             
  	
            (xi)
 	
            the amount of the Monthly Payment at origination;
 	
             

	
             
  	
            (xii)
 	
            the amount of the Monthly Payment as of the Cut-off Date;
 
					

(xiii)        the last Due Date on which a Monthly Payment was actually applied to the unpaid Stated Principal Balance;

	
             
  	
            (xiv)
 	
            the original principal amount of the Mortgage Loan;
 

(xv)          the Stated Principal Balance of the Mortgage Loan as of the close of business on the Cut-off Date;

(xvi)         a code indicating the purpose of the Mortgage Loan (i.e., purchase financing, Rate/Term Refinancing, Cash-Out Refinancing);

(xvii)       a code indicating the documentation style (i.e., full, alternative or reduced);

	
             
  	
            (xviii)
 	
            [reserved];
 	
             

	
             
  	
            (xix)
 	
            the Value of the Mortgaged Property;
 

 

 

 

	
             
  	
            (xx)
 	
            the sale price of the Mortgaged Property, if applicable;
 

(xxi)         the actual unpaid principal balance of the Mortgage Loan as of the Cut-off Date;

	
             
  	
            (xxii)
 	
            the Servicing Fee;
 
	
             
  	
            (xxiii)
 	
            [reserved];
 	
             

(xxiv)      with respect to each adjustable-rate Mortgage Loan, the next Interest Rate Adjustment Date;

	
             
  	
            (xxv)
 	
            with respect to each adjustable-rate Mortgage Loan, the Gross Margin;
 

(xxvi)      with respect to each adjustable-rate Mortgage Loan, the Minimum and Maximum Mortgage Rate under the terms of the Mortgage Note;

	
             
  	
            (xxvii)
 	
            with respect to each adjustable-rate Mortgage Loan, the First Rate Cap;
 

(xxviii)    with respect to each adjustable-rate Mortgage Loan, the related Periodic Rate Cap;

(xxix)      with respect to each adjustable-rate Mortgage Loan, whether additional collateral exists;

(xxx)        with respect to each adjustable-rate Mortgage Loan, whether it is interest-only; and

	
             
  	
            (xxxi)
 	
            with respect to each adjustable-rate Mortgage Loan, the Seller.
 

Such schedule shall set forth the following information with respect to the Mortgage Loans in the aggregate as of the Cut-off Date: (1) the number of Mortgage Loans; (2) the current principal balance of the Mortgage Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans; and (4) the weighted average maturity of the Mortgage Loans.

 

 

EXHIBIT 4

SCHEDULE OF LOST NOTES

Available Upon Request

 

 

EXHIBIT 5

 

REVISED August 1, 2005

 

APPENDIX E - STANDARD & POOR'S PREDATORY LENDING CATEGORIES 

Standard & Poor’s has categorized loans governed by anti-predatory lending laws in the Jurisdictions listed below into three categories based upon a combination of factors that include (a) the risk exposure associated with the assignee liability and (b) the tests and thresholds set forth in those laws. Note that certain loans classified by the relevant statute as Covered are included in Standard & Poor’s High Cost Loan Category because they included thresholds and tests that are typical of what is generally considered High Cost by the industry. 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Arkansas 
 	
            Arkansas Home Loan Protection Act, Ark. Code Ann. §§ 23-53-101 et seq. 

Effective July 16, 2003 
 	
            High Cost Home Loan 
 
	
            Cleveland Heights, OH 
 	
            Ordinance No. 72-2003 (PSH), Mun. Code §§ 757.01 et seq. 

Effective June 2, 2003 
 	
            Covered Loan 
 
	
            Colorado 
 	
            Consumer Equity Protection, Colo. Stat. Ann. §§ 5-3.5-101 et seq. 

Effective for covered loans offered or entered into on or after January 1, 2003. Other provisions of the Act took effect on June 7, 2002 
 	
            Covered Loan 
 
	
            Connecticut 
 	
            Connecticut Abusive Home Loan Lending Practices Act, Conn. Gen. Stat. §§ 36a-746 et seq. 

Effective October 1, 2001 
 	
            High Cost Home Loan 
 
	
            District of Columbia 
 	
            Home Loan Protection Act, D.C. Code §§ 26-1151.01 et seq. 

Effective for loans closed on or after January 28, 2003 
 	
            Covered Loan 
 
	
            Florida 
 	
            Fair Lending Act, Fla. Stat. Ann. §§ 494.0078 et seq. 

Effective October 2, 2002 
 	
            High Cost Home Loan 
 

 

 

 

 

	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 
 	
            High Cost Home Loan 
 

 

 

 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Effective October 1, 2002 – March 6, 2003 
 	
             
 
	
            Georgia as amended (Mar. 7, 2003 – current) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 

Effective for loans closed on or after March 7, 2003 
 	
            High Cost Home Loan 
 
	
            HOEPA Section 32 
 	
            Home Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1639, 12 C.F.R. §§ 226.32 and 226.34 

Effective October 1, 1995, amendments October 1, 2002 
 	
            High Cost Loan 
 
	
            Illinois 
 	
            High Risk Home Loan Act, Ill. Comp. Stat. tit. 815, §§ 137/5 et seq. 

Effective January 1, 2004 (prior to this date, regulations under Residential Mortgage License Act effective from May 14, 2001) 
 	
            High Risk Home Loan 
 
	
            Kansas 
 	
            Consumer Credit Code, Kan. Stat. Ann. §§ 16a-1-101 et seq. 

Sections 16a-1-301 and 16a-3-207 became effective April 14, 1999; Section 16a-3-308a became effective July 1, 1999 
 	
            High Loan to Value Consumer Loan (id. § 16a-3-207) and; 
 
	
            High APR Consumer Loan (id. § 16a-3-308a) 
 
	
            Kentucky 
 	
            2003 KY H.B. 287 – High Cost Home Loan Act, Ky. Rev. Stat. §§ 360.100 et seq. 

Effective June 24, 2003 
 	
            High Cost Home Loan 
 
	
            Maine 
 	
            Truth in Lending, Me. Rev. Stat. tit. 9-A, §§ 8-101 et seq. 

Effective September 29, 1995 and as amended from time to time 
 	
            High Rate High Fee Mortgage 
 
	
            Massachusetts 
 	
            Part 40 and Part 32, 209 C.M.R. §§ 32.00 et seq. and 209 C.M.R. §§ 40.01 et seq. 
 	
            High Cost Home Loan 
 

 

 

 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Effective March 22, 2001 and amended from time to time 
 	
             
 
	
            Nevada 
 	
            Assembly Bill No. 284, Nev. Rev. Stat. §§ 598D.010 et seq. 

Effective October 1, 2003 
 	
            Home Loan 
 
	
            New Jersey 
 	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. 

Effective for loans closed on or after November 27, 2003 
 	
            High Cost Home Loan 
 
	
            New Mexico 
 	
            Home Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq. 

Effective as of January 1, 2004; Revised as of February 26, 2004 
 	
            High Cost Home Loan 
 
	
            New York 
 	
            N.Y. Banking Law Article 6-l 

Effective for applications made on or after April 1, 2003 
 	
            High Cost Home Loan 
 
	
            North Carolina 
 	
            Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E et seq. 

Effective July 1, 2000; amended October 1, 2003 (adding open-end lines of credit) 
 	
            High Cost Home Loan 
 
	
            Ohio 
 	
            H.B. 386 (codified in various sections of the Ohio Code), Ohio Rev. Code Ann. §§ 1349.25 et seq. 

Effective May 24, 2002 
 	
            Covered Loan 
 
	
            Oklahoma 
 	
            Consumer Credit Code (codified in various sections of Title 14A) 

Effective July 1, 2000; amended effective January 1, 2004 
 	
            Subsection 10 Mortgage 
 
	
            South Carolina 
 	
            South Carolina High Cost and Consumer Home Loans Act, S.C. Code 
 	
            High Cost Home Loan 
 

 

 

 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Ann. §§ 37-23-10 et seq. 

Effective for loans taken on or after January 1, 2004 
 	
             
 
	
            West Virginia 
 	
            West Virginia Residential Mortgage Lender, Broker and Servicer Act, W. Va. Code Ann. §§ 31-17-1 et seq. 

Effective June 5, 2002 
 	
            West Virginia Mortgage Loan Act Loan 
 

 

STANDARD & POOR'S COVERED LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 

Effective October 1, 2002 – March 6, 2003 
 	
            Covered Loan 
 
	
            New Jersey 
 	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. 

Effective November 27, 2003 – July 5, 2004 
 	
            Covered Home Loan 
 

 

STANDARD & POOR'S HOME LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 

Effective October 1, 2002 – March 6, 2003 
 	
            Home Loan 
 
	
            New Jersey 
 	
            New Jersey Home Ownership Security 
 	
            Home Loan 
 

 

 

 

STANDARD & POOR'S HOME LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. 

Effective for loans closed on or after November 27, 2003 
 	
             
 
	
            New Mexico 
 	
            Home Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq. 

Effective as of January 1, 2004; Revised as of February 26, 2004 
 	
            Home Loan 
 
	
            North Carolina 
 	
            Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E et seq. 

Effective July 1, 2000; amended October 1, 2003 (adding open-end lines of credit) 
 	
            Consumer Home Loan 
 
	
            South Carolina 
 	
            South Carolina High Cost and Consumer Home Loans Act, S.C. Code Ann. §§ 37-23-10 et seq. 

Effective for loans taken on or after January 1, 2004 
 	
            Consumer Home Loan 
 

 

 

 

SCHEDULE A

REQUIRED RATINGS FOR EACH CLASS OF CERTIFICATES

Offered Certificates

 

	
            
Class
 
 	
            
Moody’s
 
 	
            
S&P
 
 
	
            Class A
 	
            AAA
 	
            AAA
 
	
            Class A-IO
 	
            AAA
 	
            AAA
 
	
            Class M-1
 	
            Aa2
 	
            AA
 
	
            Class M-2
 	
            A2
 	
            A
 
	
            Class M-3
 	
            Baa2
 	
            BBB
 

	
             
 	
            Class M-IO
 	
            Baa2
 	
            BBB
 

None of the above ratings has been lowered since the respective dates of such letters.

 

 

EXHIBIT J-3

KKR MORTGAGE LOAN PURCHASE AGREEMENT

MORTGAGE LOAN PURCHASE AGREEMENT, dated as of December 22, 2005, as amended and supplemented by any and all amendments hereto (collectively, the “Agreement”), by and between KKR FINANCIAL MORTGAGE CORP., a Maryland corporation (the “Seller”), and MERRILL LYNCH MORTGAGE INVESTORS, INC., a Delaware corporation (the “Purchaser”).

Upon the terms and subject to the conditions of this Agreement, the Seller agrees to sell, and the Purchaser agrees to purchase, certain first lien, fixed-rate and adjustable-rate mortgage loans secured by one- to four-family residences, individual condominiums, co-op units and units in planned unit developments (collectively, the “Mortgage Loans”) as described on Annex I. The Purchaser intends to deposit the Mortgage Loans into a trust fund (the “Trust Fund”) and create Mortgage Pass-Through Certificates, Series MLMI 2005-A10 (the “Certificates”), under a pooling and servicing agreement, to be dated as of December 1, 2005 (the “Pooling and Servicing Agreement”),
between the Purchaser, as seller, HSBC Bank USA, National Association, as trustee (the “Trustee”) and Wells Fargo Bank, N.A., as master servicer and securities administrator (the “Master Servicer”).

The Purchaser has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (Number 333-127233) relating to its Mortgage Pass-Through Certificates and the offering of certain series thereof (including certain classes of the Certificates) from time to time in accordance with Rule 415 under the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder (the “Securities Act”). Such registration statement, when it became effective under the Securities Act, and the prospectus relating to the public offering of certain classes of the Certificates by the Purchaser (the “Public Offering”), as from time to time each is amended or
supplemented pursuant to the Securities Act or otherwise, are referred to herein as the “Registration Statement” and the “Prospectus,” respectively. The “Prospectus Supplement” shall mean that supplement, dated December 21, 2005 to the Prospectus, dated August 26, 2005, relating to certain classes of the Certificates. With respect to the Public Offering of certain classes of the Certificates, the Purchaser and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) have entered into a terms agreement dated as of December 21, 2005 to an underwriting agreement dated September 27, 2005, between the Purchaser and Merrill Lynch (together, the “Underwriting Agreement”).

Now, therefore, in consideration of the premises and the mutual agreements set forth herein, the parties hereto agree as follows:

Section 1.          DEFINITIONS. Certain TERMS are defined herein. capitalized terms used herein but not defined herein shall have the meanings specified in the pooling and servicing agreement. the following other terms are defined as follows:

Additional Collateral:  (i) With respect to any Mortgage 100sm Loan, the Securities Account and the financial assets held therein subject to a security interest pursuant to 

 

the related Mortgage 100sm Pledge Agreement, or (ii) with respect to any Parent Power® Mortgage Loan, the related Parent Power® Agreement.

Additional Collateral Mortgage Loan:  Each Mortgage Loan, as identified on the Mortgage Loan Schedule, as to which Additional Collateral was required to be provided at the closing thereof.

Additional Collateral Agreements:  Each Mortgage 100 Pledge Agreement, Parent Power® Guaranty and Security Agreement for Securities Account, Parent Power® Guaranty Agreement for Real Estate, Control Agreement, Equity Access® Agreement and Equity Access® Mortgage, as applicable, for each Additional Collateral Mortgage Loan.

Closing Date: December 22, 2005.

Co-op Lease:  With respect to a Co-op Loan, the lease with respect to a dwelling unit occupied by the Mortgagor and relating to the stock allocated to the related dwelling unit.

Co-op Loan:  A Mortgage Loan secured by the pledge of stock allocated to a dwelling unit in a residential cooperative housing corporation and a collateral assignment of the related Co-op Lease.

Co-op Stock:  With respect to a Co-op Loan, the single outstanding class of stock, partnership interest or other ownership instrument in the related residential cooperative housing corporation.

Cut-off Date: December 1, 2005.

Cut-off Date Balance: $786,377,264.

Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a Substitute Mortgage Loan.

	
             
 	
            Due Date: With respect to each Mortgage Loan, the first day of each month.
 

Master Servicer: Wells Fargo Bank, N.A.

Merrill Lynch: Merrill Lynch, Pierce, Fenner & Smith Incorporated.

Moody’s: Moody’s Investors Service, Inc., or its successors in interest.

Mortgage: The mortgage or deed of trust creating a first lien on an interest in real property securing a Mortgage Note.

Mortgage File: The items referred to in Exhibit 1 and Exhibit 2 pertaining to a particular Mortgage Loan and any additional documents required to be added to such documents pursuant to this Agreement.

Mortgage Interest Rate: The annual rate of interest borne by a Mortgage Note as stated therein.

 

 

Mortgagor: The obligor(s) on a Mortgage Note.

Net Rate: For each Mortgage Loan, the Mortgage Interest Rate for such Mortgage Loan less the Master Servicing Fee Rate and the Trustee Fee Rate.

Offered Certificates: Shall mean the Class A, Class A-IO, Class M-1, Class M-2, Class M-3 and Class M-IO Certificates issued pursuant to the Pooling and Servicing Agreement.

Opinion of Counsel: A written opinion of counsel, who may be counsel for the Seller or the Purchaser, reasonably acceptable to the Trustee.

Person: Any legal person, including any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

Pledge Agreement:  Any Mortgage 100sm Pledge Agreement or Parent Power® Guaranty and Security Agreement for Securities Account related to an Additional Collateral Mortgage Loan.

Purchase Price: With respect to any Mortgage Loan required to be purchased by the Seller pursuant to the applicable provisions of this Agreement, an amount equal to the sum of (i) 100% of the principal remaining unpaid on such Mortgage Loan as of the date of purchase (including if a foreclosure has already occurred, the principal balance of the related Mortgage Loan at the time the Mortgaged Property was acquired), and (ii) accrued and unpaid interest thereon at the Mortgage Interest Rate through and including the last day of the month of purchase (iii) any costs and damages incurred by the Trust in connection with any violation by such Mortgage Loan of any predatory or abusive-lending law.

Rating Agencies: S&P and Moody’s, each a “Rating Agency.”

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

Securities Account:  With respect to any Additional Collateral Mortgage Loans, the account, together with the financial assets held therein, that are the subject of the related Pledge Agreement.

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

Substitute Mortgage Loan: A mortgage loan substituted for a Deleted Mortgage Loan which must meet on the date of such substitution the requirements stated herein and in the Pooling and Servicing Agreement; upon such substitution, such mortgage loan shall be a “Mortgage Loan” hereunder.

Surety Bond: The limited purpose surety bond (Policy No. AB0039BE), dated February 28, 1996, in respect to Mortgage Loans originated by Merrill Lynch Credit Corporation, issued by the Surety Bond Issuer for the benefit of certain beneficiaries, but only to the extent that such Surety Bond covers any Additional Collateral Mortgage Loan.

 

 

Value: The value of the Mortgaged Property at the time of origination of the related Mortgage Loan, such value being the lesser of (i) the value of such property set forth in an appraisal accepted by the Originator or (ii) the sales price of such property at the time of origination.

	
             
  	
            Section 2.
 	
            Purchase And Sale Of The Mortgage Loans And Related Rights.
 

(a)          Upon satisfaction of the conditions set forth in Section 10 hereof, the Seller agrees to sell, and the Purchaser agrees to purchase Mortgage Loans having an aggregate outstanding principal balance as of the Cut-off Date equal to the Cut-off Date Balance.

(b)          The closing for the purchase and sale of the Mortgage Loans will take place on the Closing Date at the office of the Purchaser’s counsel in New York, New York or such other place as the parties shall agree.

(c)          Upon the satisfaction of the conditions set forth in Section 10 hereof, on the Closing Date, in consideration of the purchase of the Mortgage Loans purchased from the Seller, the Purchaser shall (i) pay to the Seller an amount equal to the Seller’s allocated portion of the net sale proceeds of the Offered Certificates plus accrued interest (the “Purchase Price”) in immediately available funds by wire transfer to such account or accounts as shall be designated by the Seller.

(d)          In addition to the foregoing, on the Closing Date, the Seller assigns to the Purchaser all of its right, title and interest in the Sale and Assignment Agreement, dated as of December 22, 2005 (the “Sale and Assignment Agreement”), between the Seller and KKR Financial Corp.

Section 3.          Mortgage Loan Schedules.  The Seller agrees to provide to the Purchaser as of the date hereof a preliminary listing of the Mortgage Loans (the “Preliminary Mortgage Loan Schedule”) setting forth the information listed on Exhibit 3 to this Agreement with respect to each of the Mortgage Loans being sold by the Seller. If there are changes to the Preliminary Mortgage Loan Schedule, the Seller shall provide to the Purchaser as of the Closing Date a final schedule (the “Final Mortgage Loan Schedule”) setting forth the information listed on Exhibit 3 to this Agreement with
respect to each of the Mortgage Loans being sold by the Seller to the Purchaser. The Final Mortgage Loan Schedule shall be delivered to the Purchaser on the Closing Date, shall be attached to an amendment to this Agreement to be executed on the Closing Date by the parties hereto and shall be in form and substance mutually agreed to by the Seller and the Purchaser (the “Amendment”). If there are no changes to the Preliminary Mortgage Loan Schedule, the Preliminary Mortgage Loan Schedule shall be the Final Mortgage Loan Schedule for all purposes hereof.

	
             
  	
            Section 4.
 	
            Mortgage Loan Transfer.
 

(a)          The Purchaser will be entitled to all scheduled payments of principal and interest on the Mortgage Loans due after the Cut-off Date (regardless of when actually collected) and all payments thereof other than scheduled principal and interest received after the Cut-off Date. The Seller will be entitled to all scheduled payments of principal and interest on the Mortgage Loans due on or before the Cut-off Date (including payments collected after the Cut-

 

off Date) and all payments thereof other than scheduled principal and interest on the Mortgage Loans received on or before the Cut-off Date. Such principal amounts and any interest thereon belonging to the Seller as described above will not be included in the aggregate outstanding principal balance of the Mortgage Loans as of the Cut-off Date as set forth on the Final Mortgage Loan Schedule.

(b)          Pursuant to various conveyancing documents to be executed on the Closing Date and pursuant to the Pooling and Servicing Agreement, the Purchaser will assign on the Closing Date all of its right, title and interest in and to the Mortgage Loans to the Trustee for the benefit of the Certificateholders. In connection with the transfer and assignment of the Mortgage Loans, the Seller has delivered or will deliver or cause to be delivered to the Trustee by the Closing Date or such later date as is agreed to by the Purchaser and the Seller (each of the Closing Date and such later date is referred to as a “Mortgage File Delivery Date”), the items of each Mortgage File, provided, however, that in lieu of the foregoing, the Seller may deliver the following documents, under the circumstances set forth below:
(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 in time to permit their delivery as specified above, the Seller may deliver a true copy thereof with a certification by the Seller or the Originator, 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;” (y) in lieu of the Mortgage, assignments to the Trustee or intervening assignments thereof, if the applicable jurisdiction retains the originals of such documents or if the originals are lost (in each case, as evidenced by a certification from the Seller to such effect), the Seller 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 (z) in lieu of the Mortgage Notes relating to the Mortgage Loans, each identified in the list delivered by the Purchaser to the Trustee on the Closing Date and attached hereto as Exhibit 6 the Seller may deliver lost note affidavits and indemnities of the Seller; 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 Seller, in lieu of delivering the above documents, may deliver to the Trustee a certification by the Seller to such effect. The Seller shall deliver such original documents (including any original documents as to which certified copies had previously been delivered) or such certified copies to the Trustee promptly after they are received. The Seller shall cause the Mortgage and intervening assignments, if any, and the assignment of the Mortgage to be
recorded not later than 180 days after the Closing Date, or, in lieu of such assignments, shall provide an Opinion of Counsel pursuant to Section 6(a) hereof to the effect that the recordation of such assignment is not necessary to protect the Trustee’s interest in the related Mortgage Loan. Upon the request of the Purchaser, the Seller will assist the Purchaser in effecting the assignment referred to above.

(c)          The Seller and the Purchaser acknowledge hereunder that all of the Mortgage Loans and the related servicing will ultimately be assigned to HSBC Bank USA, National Association, as Trustee for the Certificateholders, on the date hereof.

(d)          The parties hereto intend that the transaction set forth herein constitutes a sale by the Seller to the Purchaser of all the Seller’s right, title and interest in and to the 

 

Mortgage Loans (other than with respect to the related servicing rights) and other property as and to the extent described above.  In the event the transaction set forth herein is deemed not to be a sale, the Seller hereby grants to the Purchaser a security interest in all of the Seller’s right, title and interest in, to and under the Mortgage Loans (other than with respect to the related servicing rights) and such other property, to secure all of the Seller’s obligations hereunder, and this Agreement shall constitute a security agreement under applicable law.  The Seller agrees to take or cause to be taken such actions and to execute such documents, including, without limitation, the filing of all necessary UCC1 financing statements filed in the State of Maryland, any continuation statements with respect thereto and any amendments thereto required to reflect a change in the name or corporate
structure of the Seller or the filing of any additional UCC1 financing statements due to the change in the principal office of the Seller, as are necessary to perfect and protect the Purchaser’s interests in each Mortgage Loan and the proceeds thereof.

	
             
  	
            Section 5.
 	
            Examination of Mortgage Files.
 

(a)          On or before the Mortgage File Delivery Date, the Seller will have made the Mortgage Files available to the Purchaser or its agent for examination which may be at the offices of the Trustee or the Seller and/or the Seller’s custodian. The fact that the Purchaser or its agent has conducted or has failed to conduct any partial or complete examination of the Mortgage Files shall not affect the Purchaser’s rights to demand cure, repurchase, substitution or other relief as provided in this Agreement. In furtherance of the foregoing, the Seller shall make the Mortgage Files available to the Purchaser or its agent from time to time so as to permit the Purchaser to confirm the Seller’s compliance with the delivery and recordation requirements of this Agreement and the Pooling and Servicing Agreement.
In addition, upon request of the Purchaser, the Seller agrees to provide to the Purchaser, Merrill Lynch and to any investors or prospective investors in the Certificates information regarding the Mortgage Loans and their servicing, to make the Mortgage Files available to the Purchaser, Merrill Lynch and to such investors or prospective investors (which may be at the offices of the Seller and/or the Seller’s custodian) and to make available personnel knowledgeable about the Mortgage Loans for discussions with the Purchaser, Merrill Lynch and such investors or prospective investors, upon reasonable request during regular business hours, sufficient to permit the Purchaser, Merrill Lynch and such investors or potential investors to conduct such due diligence as any such party reasonably believes is appropriate.

(b)          Pursuant to the Pooling and Servicing Agreement, on the Closing Date the Trustee, for the benefit of the Certificateholders, will review items of the Mortgage Files as set forth on Exhibit 1 and will deliver to the Seller a certification in the form attached as Exhibit One to the Custodial Agreement.

(c)          Pursuant to the Pooling and Servicing Agreement, the Custodian, on behalf of the Trustee will review or shall cause the Custodian to review items of the Mortgage Files within 180 days of the Closing Date and will deliver to the Purchaser a final certification substantially in the form of Exhibit Two to the Custodial Agreement. If the Custodian is unable to deliver a final certification with respect to the items listed in Exhibit 2 due to any document that is missing, has not been executed, is unrelated, determined on the basis of the Mortgagor name, original principal balance and loan number, to the Mortgage Loans identified in the Final Mortgage Loan Schedule (a “Material Defect”), the Trustee or the Custodian, as its agent, shall 

 

notify the Seller of such Material Defect. The Seller shall correct or cure any such Material Defect within 90 days from the date of notice from the Trustee or the Custodian, as its agent, of the Material Defect and if the Seller does not correct or cure such Material Defect within such period and such defect materially and adversely affects the interests of the Certificateholders in the related Mortgage Loan, the Seller will, in accordance with the terms of the Pooling and Servicing Agreement, within 90 days of the date of notice, provide the Trustee with a Substitute Mortgage Loan (if within two years of the Closing Date) or purchase the related Mortgage Loan at the applicable 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, repurchase or substitution 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 of the
Seller confirming that such documents have been accepted for recording, and delivery to the Trustee shall be effected by the Seller within thirty days of its receipt of the original recorded document.

(d)          At the time of any substitution, the Seller shall deliver or cause to be delivered the Substitute Mortgage Loan, the related Mortgage File and any other documents and payments required to be delivered in connection with a substitution pursuant to the Pooling and Servicing Agreement. At the time of any purchase or substitution, the Trustee shall (i) assign to the Seller and cause the Custodian to release the documents (including, but not limited to, the Mortgage, Mortgage Note and other contents of the Mortgage File) in the possession of the Custodian relating to the Deleted Mortgage Loan and (ii) execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be necessary to vest in the Seller title to such Deleted Mortgage Loan.

	
             
  	
            Section 6.
 	
            Recordation Of Assignments Of Mortgage.
 

(a)          The Seller will, promptly after the Closing Date, cause each Mortgage and each assignment of Mortgage from the Seller to the Trustee, and all unrecorded intervening assignments, if any, delivered on or prior to the Closing Date, to be recorded in all recording offices in the jurisdictions where the related Mortgaged Properties are located; provided, however, the Seller need not cause to be recorded any assignment which relates to a Mortgage Loan in any jurisdiction under the laws of which, as evidenced by an Opinion of Counsel delivered by the Seller to the Trustee and the Rating Agencies, which states that the recordation of such assignment is not necessary to protect the Certificateholder’s interest in the related Mortgage Loan; provided, however, notwithstanding the delivery of any Opinion of
Counsel, each assignment of Mortgage shall be submitted for recording by the Seller in the manner described above, at no expense to the Trust Fund or Trustee, upon the earliest to occur of (i) 

 

reasonable direction by the Holders of Certificates evidencing, in the aggregate, not less than 25% of the Voting Rights, (ii) the occurrence of a Master Servicer Event of Termination, (iii) the occurrence of a bankruptcy, insolvency or foreclosure relating to the Seller, (iv) the occurrence of a servicing transfer as described in Section 7.07 of the Pooling and Servicing Agreement or (v) with respect to any one assignment of Mortgage, the occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor under the related Mortgage.

While each such Mortgage or assignment is being recorded, if necessary, the Seller shall leave or cause to be left with the Trustee a certified copy of such Mortgage or assignment. In the event that, within 180 days of the Closing Date, the Trustee has not provided an Opinion of Counsel as described above or received evidence of recording with respect to each Mortgage Loan delivered to the Purchaser pursuant to the terms hereof or as set forth above, the failure to provide evidence of recording or such Opinion of Counsel shall be considered a Material Defect, and the provisions of Section 5(c) and (d) shall apply. All customary recording fees and reasonable expenses relating to the recordation of the assignments of mortgage to the Trustee or the Opinion of Counsel, as the case may be, shall be borne by the Seller.

(b)          It is the express intent of the parties hereto that the conveyance of the Mortgage Loans by the Seller to the Purchaser, as contemplated by this Agreement be, and be treated as, a sale. It is, further, not the intention of the parties that such conveyance be deemed a pledge of the Mortgage Loans by the Seller to the Purchaser to secure a debt or other obligation of the Seller. However, in the event that, notwithstanding the intent of the parties, the Mortgage Loans are held by a court of competent jurisdiction to continue to be property of the Seller, then (i) this Agreement shall also be deemed to be a security agreement within the meaning of Articles 8 and 9 of the applicable Uniform Commercial Code; (ii) the transfer of the Mortgage Loans provided for herein shall be deemed to be a grant by the Seller to
the Purchaser of a security interest in all of the Seller’s right, title and interest in and to the Mortgage Loans and all amounts payable to the holders of the Mortgage Loans in accordance with the terms thereof and all proceeds of the conversion, voluntary or involuntary, of the foregoing into cash, instruments, securities or other property, to the extent the Purchaser would otherwise be entitled to own such Mortgage Loans and proceeds pursuant to Section 4 hereof, including all amounts, other than investment earnings, from time to time held or invested in any accounts created pursuant to the Pooling and Servicing Agreement, whether in the form of cash, instruments, securities or other property; (iii) the possession by the Purchaser or the Trustee of Mortgage Notes and such other items of property as constitute instruments, money, negotiable documents or chattel paper shall be deemed to be “possession by the secured party” for purposes of perfecting the security
interest pursuant to Section 9-313 (or comparable provision) of the applicable Uniform Commercial Code; and (iv) notifications to persons holding such property, and acknowledgments, receipts or confirmations from persons holding such property, shall be deemed notifications to, or acknowledgments, receipts or confirmations from, financial intermediaries, bailees or agents (as applicable) of the Purchaser for the purpose of perfecting such security interest under applicable law. Any assignment of the interest of the Purchaser pursuant to any provision hereof or pursuant to the Pooling and Servicing Agreement shall also be deemed to be an assignment of any security interest created hereby. The Seller and the Purchaser shall, to the extent consistent with this Agreement, take such actions as may be reasonably necessary to ensure that, if this Agreement were deemed to create a security interest in the Mortgage Loans, such security interest would be 

 

deemed to be a perfected security interest of first priority under applicable law and will be maintained as such throughout the term of the Pooling and Servicing Agreement.

Section 7.           Representations and Warranties of Seller Concerning the Mortgage Loans. The Seller hereby represents and warrants to the Purchaser as of the Closing Date or such other date as may be specified below with respect to each Mortgage Loan being sold by it, that:

Immediately prior to the transfer to the Purchaser, the Seller was the sole owner of beneficial title and holder of each Mortgage and Mortgage Note relating to the Mortgage Loans and is conveying the same free and clear of any and all liens, claims, encumbrances, participation interests, equities, pledges, charges or security interests of any nature and the Seller has full right and authority to sell or assign the same pursuant to this Agreement.

It is understood and agreed that the representations and warranties set forth in this Section 7 will inure to the benefit of the Purchaser, its successors and assigns, notwithstanding any restrictive or qualified endorsement on any Mortgage Note or assignment of Mortgage or the examination of any Mortgage File. Upon any substitution for a Mortgage Loan, the representations and warranties set forth above shall be deemed to be made by the Seller as to any Substitute Mortgage Loan as of the date of substitution.

Upon discovery or receipt of notice by the Seller, the Purchaser or the Trustee of a breach of any representation or warranty of the Seller set forth in this Section 7 which materially and adversely affects the value of the interests of the Purchaser, the Certificateholders or the Trustee in any of the Mortgage Loans delivered to the Purchaser pursuant to this Agreement, the party discovering or receiving notice of such breach shall give prompt written notice to the others. In the case of any such breach of a representation or warranty set forth in this Section 7, within 90 days from the date of discovery by the Seller, or the date the Seller is notified by the party discovering or receiving notice of such breach (whichever occurs earlier), the Seller will (i) cure such breach in all material respects, (ii) purchase the affected Mortgage Loan at the applicable Purchase Price or (iii) if
within two years of the Closing Date, substitute a qualifying Substitute Mortgage Loan in exchange for such Mortgage Loan. The obligations of the Seller to cure, purchase or substitute a qualifying Substitute Mortgage Loan shall constitute the Purchaser’s, the Trustee’s and the Certificateholder’s sole and exclusive remedy under this Agreement or otherwise respecting a breach of representations or warranties hereunder with respect to the Mortgage Loans.  With respect to the representations and warranties described in the Agreement which are made to the best of the Seller’s knowledge, if it is discovered by any of the Depositor, the Seller or the Trustee that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan, then notwithstanding the seller’s lack of knowledge with respect to the substance of such representation and warranty, such inaccuracy shall be deemed
a breach of the applicable representation or warranty.

Any cause of action against the Seller or relating to or arising out of a breach by the Seller of any representations and warranties made in this Section 7 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by the Seller or notice thereof by the party discovering such breach and (ii) failure by the Seller to cure such breach, purchase such Mortgage Loan or substitute a qualifying Substitute Mortgage Loan pursuant to the terms hereof.

 

 

Section 8.          Representations and Warranties Concerning the Seller.  As of the date hereof and as of the Closing Date, the Seller represents and warrants to the Purchaser as to itself in the capacity indicated as follows:

(a)          the Seller (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Maryland and (ii) is qualified and in good standing 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 Seller’s business as presently conducted or on the Seller’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

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

(c)          the execution and delivery by the Seller of this Agreement have been duly authorized by all necessary action on the part of the Seller; 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 Seller or its properties or the charter or by-laws of the Seller, except those conflicts, breaches or defaults which would not reasonably be expected to have a material adverse effect on the Seller’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(d)          the execution, delivery and performance by the Seller 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 and, in connection with the recordation of the Mortgages, powers of attorney or assignments of Mortgages not yet completed;

(e)          this Agreement has been duly executed and delivered by the Seller and, assuming due authorization, execution and delivery by the Purchaser, constitutes a valid and binding obligation of the Seller 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);

(f)           there are no actions, suits or proceedings pending or, to the knowledge of the Seller, threatened against the Seller, 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 Seller will be determined adversely to the Seller and will if determined adversely to the Seller materially and adversely affect the Seller’s ability to perform its obligations under this Agreement; and the Seller 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

 

 

Section 9.          Representations and Warranties Concerning the Purchaser.  As of the date hereof and as of the Closing Date, the Purchaser represents and warrants to the Seller as follows:

(a)          the Purchaser (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and (ii) 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 Purchaser’s business as presently conducted or on the Purchaser’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(b)          the Purchaser 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;

(c)          the execution and delivery by the Purchaser of this Agreement have been duly authorized by all necessary corporate action on the part of the Purchaser; 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 Purchaser or its properties or the articles of incorporation or by-laws of the Purchaser, except those conflicts, breaches or defaults which would not reasonably be expected to have a material adverse effect on the Purchaser’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(d)          the execution, delivery and performance by the Purchaser 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;

(e)          this Agreement has been duly executed and delivered by the Purchaser and, assuming due authorization, execution and delivery by the Seller, constitutes a valid and binding obligation of the Purchaser 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);

(f)           there are no actions, suits or proceedings pending or, to the knowledge of the Purchaser, threatened against the Purchaser, 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 Purchaser will be determined adversely to the Purchaser and will if determined adversely to the Purchaser materially and adversely affect the Purchaser’s ability to perform its obligations under this Agreement; and the Purchaser 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

 

 

(g)          the Purchaser’s Information (as defined in Section 13(b) hereof) does not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

	
             
  	
            Section 10.
 	
            Conditions to Closing.
 

(a)          The obligations of the Purchaser under this Agreement will be subject to the satisfaction, on or prior to the Closing Date, of the following conditions:

(1)          Each of the obligations of the Seller required to be performed at or prior to the Closing Date pursuant to the terms of this Agreement shall have been duly performed and complied with in all material respects; all of the representations and warranties of the Seller under this Agreement shall be true and correct as of the date or dates specified in all material respects; and no event shall have occurred which, with notice or the passage of time, would constitute a default under this Agreement, or the Pooling and Servicing Agreement; and the Purchaser shall have received certificates to that effect signed by authorized officers of the Seller.

(2)          The Purchaser shall have received all of the following closing documents, in such forms as are agreed upon and reasonably acceptable to the Purchaser, duly executed by all signatories other than the Purchaser as required pursuant to the respective terms thereof:

(i)           If  required pursuant to Section 3 hereof, the Amendment dated as of the Closing Date and any documents referred to therein;

(ii)          If required pursuant to Section 3 hereof, the Final Mortgage Loan Schedule containing the information set forth on Exhibit 3 hereto, one copy to be attached to each counterpart of the Amendment;

(iii)        The Pooling and Servicing Agreement, in form and substance reasonably satisfactory to the Trustee and the Purchaser, and all documents required thereby duly executed by all signatories;

(iv)         A certificate of an officer of the Seller dated as of the Closing Date, in a form reasonably acceptable to the Purchaser, and attached thereto the resolutions of the Seller’s authorizing the transactions contemplated by this Agreement, together with copies of the charter and by-laws of the Seller;

(v)          One or more opinions of counsel from the Seller’s counsel otherwise in form and substance reasonably satisfactory to the Purchaser, the Trustee and each Rating Agency;

(vi)         A letter from each of the Rating Agencies giving each Class of Certificates set forth on Schedule A the rating set forth on Schedule A; and

 

 

(vii)       Such other documents, certificates (including additional representations and warranties) and opinions as may be reasonably necessary to secure the intended ratings from each Rating Agency for the Certificates.

(3)          The Certificates to be sold to Merrill Lynch pursuant to the Underwriting Agreement shall have been issued and sold to Merrill Lynch.

(4)          The Seller shall have furnished to the Purchaser such other certificates of its officers or others and such other documents and opinions of counsel to evidence fulfillment of the conditions set forth in this Agreement and the transactions contemplated hereby as the Purchaser and its counsel may reasonably request.

(b)          The obligations of the Seller under this Agreement shall be subject to the satisfaction, on or prior to the Closing Date, of the following conditions:

(5)          The obligations of the Purchaser required to be performed by it on or prior to the Closing Date pursuant to the terms of this Agreement shall have been duly performed and complied with in all material respects, and all of the representations and warranties of the Purchaser under this Agreement shall be true and correct in all material respects as of the date hereof and as of the Closing Date, and no event shall have occurred which would constitute a breach by it of the terms of this Agreement, and the Seller shall have received a certificate to that effect signed by an authorized officer of the Purchaser.

(6)          The Seller shall have received copies of all of the following closing documents, in such forms as are agreed upon and reasonably acceptable to the Seller, duly executed by all signatories other than the Seller as required pursuant to the respective terms thereof:

(i)           If  required pursuant to Section 3 hereof, the Amendment dated as of the Closing Date and any documents referred to therein;

(ii)          The Pooling and Servicing Agreement, in form and substance reasonably satisfactory to the Seller, and all documents required thereby duly executed by all signatories;

(iii)        A certificate of an officer of the Purchaser dated as of the Closing Date, in a form reasonably acceptable to the Seller, and attached thereto the resolutions of the Purchaser authorizing the transactions contemplated by this Agreement and the Pooling and Servicing Agreement, together with copies of the Purchaser’s articles of incorporation, and evidence as to the good standing of the Purchaser dated as of a recent date;

(iv)         One or more opinions of counsel from the Purchaser’s counsel in form and substance reasonably satisfactory to the Seller; and

(v)          Such other documents, certificates (including additional representations and warranties) and opinions as may be reasonably necessary to secure the intended rating from each Rating Agency for the Certificates;

 

 

Section 11.        Fees and Expenses.  Subject to Section 16 hereof, the Seller shall pay on the Closing Date or such later date as may be agreed to by the Purchaser (i) the fees and expenses of the Seller’s attorneys and the reasonable fees and expenses of the Purchaser’s attorneys, (ii) the fees and expenses of Deloitte & Touche LLP, (iii) the filing fee charged by the Commission for the registration of the Certificates, (iv) the fees and expenses including counsel’s fees and expenses in connection with any “blue sky” and legal investment matters, (v) the fees and expenses of the Trustee which shall include without limitation the fees and expenses of the Trustee (and the fees and disbursements of its counsel) with respect to (A) legal and document review of this Agreement,
the Pooling and Servicing Agreement, the Certificates and related agreements, (B) attendance at the Closing and (C) review of the Mortgage Loans to be performed by the Custodian, (vi) the expenses for printing or otherwise reproducing the Certificates, the Prospectus and the Prospectus Supplement, (vii) the fees and expenses of each Rating Agency (both initial and ongoing), (viii) the fees and expenses relating to the preparation and recordation of mortgage assignments (including intervening assignments, if any and if available, to evidence a complete chain of title from the originator to the Trustee) from the Seller to the Trustee or the expenses relating to the Opinion of Counsel referred to in Section 6(a) hereof, as the case may be, and (ix) Mortgage File due diligence expenses and other out-of-pocket expenses incurred by the Purchaser in connection with the purchase of the Mortgage Loans and by Merrill Lynch in connection with the sale of the Offered Certificates. The Seller
additionally agrees to pay directly to any third party on a timely basis the fees provided for above which are charged by such third party and which are billed periodically.

	
             
  	
            Section 12.
 	
            Accountants’ Letters.
 

(a)          Deloitte & Touche LLP will review the characteristics of a sample of the Mortgage Loans described in the Final Mortgage Loan Schedule and will compare those characteristics to the description of the Mortgage Loans contained in the Prospectus Supplement under the captions “Summary of Prospectus Supplement—The Mortgage Loans” and “Description of the Mortgage Pool—General” and “—Tabular Characteristics of the Mortgage Pool”. The Seller will cooperate with the Purchaser in making available all information and taking all steps reasonably necessary to permit such accountants to complete the review and to deliver the letters required of them under the Underwriting Agreement. Deloitte & Touche LLP will also confirm certain calculations as set forth under the
caption “Yield on the Certificates” in the Prospectus Supplement.

(b)          To the extent statistical information with respect to the Servicer’s servicing portfolio is included in the Prospectus Supplement under the caption “Servicing of the Mortgage Loans—The Servicers,” a letter from the certified public accountant for the Servicer will be delivered to the Purchaser dated the date of the Prospectus Supplement, in the form previously agreed to by the Seller and the Purchaser, with respect to such statistical information.

	
             
  	
            Section 13.
 	
            [Reserved].
 

Section 14.        Notices.  All demands, notices and communications hereunder shall be in writing but may be delivered by facsimile transmission subsequently confirmed in writing. Notices to the Seller shall be directed to KKR Financial Mortgage Corp., Four Embarcadero Center, Suite 2050, San Francisco, California, 94111, and notices to the Purchaser 

 

shall be directed to Merrill Lynch Mortgage Investors, Inc., 4 World Financial Center, New York, New York 10281, (Telecopy: 212-449-6710), Attention: Brian Brennan; or to any other address as may hereafter be furnished by one party to the other party by like notice. Any such demand, notice or communication hereunder shall be deemed to have been received on the date received at the premises of the addressee (as evidenced, in the case of registered or certified mail, by the date noted on the return receipt) provided that it is received on a business day during normal business hours and, if received after normal business hours, then it shall be deemed to be received on the next business day.

Section 15.       Transfer of Mortgage Loans.  The Purchaser retains the right to assign the Mortgage Loans and any or all of its interest under this Agreement to the Trustee without the consent of the Seller, and, upon such assignment, the Trustee shall succeed to the applicable rights and obligations of the Purchaser hereunder; provided, however, the Purchaser shall remain entitled to the benefits set forth in Sections 11 and 17 hereto and as provided in Section 2(a). Notwithstanding the foregoing, the sole and exclusive right and remedy of the Trustee with respect to a breach of representation or warranty of the Seller shall be the purchase or substitution obligations of the Seller contained in Sections 5 and 7 hereof.

Section 16.        Termination.  This Agreement may be terminated (a) by the mutual consent of the parties hereto prior to the Closing Date, (b) by the Purchaser, if the conditions to the Purchaser’s obligation to close set forth under Section 10(a) hereof are not fulfilled as and when required to be fulfilled or (c) by the Seller, if the conditions to the Seller’s obligation to close set forth under Section 10(b) hereof are not fulfilled as and when required to be fulfilled. In the event of termination pursuant to clause (b), the Seller shall pay, and in the event of termination pursuant to clause (c), the Purchaser shall pay, all reasonable out-of-pocket expenses incurred by the other in connection with the transactions contemplated by this Agreement. In the event of a termination pursuant to
clause (a), each party shall be responsible for its own expenses.

Section 17.        Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and agreements contained in this Agreement, or contained in certificates of officers of the Seller submitted pursuant hereto, shall remain operative and in full force and effect and shall survive delivery of the Mortgage Loans to the Purchaser (and by the Purchaser to the Trustee). Subsequent to the delivery of the Mortgage Loans to the Purchaser, the Seller’s representations and warranties contained herein with respect to the Mortgage Loans shall be deemed to relate to the Mortgage Loans actually delivered to the Purchaser and included in the Final Mortgage Loan Schedule and any Substitute Mortgage Loan and not to those Mortgage Loans deleted from the Preliminary Mortgage Loan Schedule
pursuant to Section 3 hereof prior to the Closing.

Section 18.       Mandatory Delivery; Grant of Security Interest. The sale and delivery on the Closing Date of the Mortgage Loans described on the Mortgage Loan Schedule in accordance with the terms and conditions of this Agreement is mandatory. It is specifically understood and agreed that each Mortgage Loan is unique and identifiable on the date hereof and that an award of money damages would be insufficient to compensate the Purchaser for the losses and damages incurred by the Purchaser in the event of the Seller’s failure to deliver the Mortgage Loans on or before the Closing Date. The Seller hereby grants to the Purchaser a lien 

 

on and a continuing security interest in the Seller’s interest in each Mortgage Loan and each document and instrument evidencing each such Mortgage Loan to secure the performance by the Seller of its obligation hereunder, and the Seller agrees that it holds such Mortgage Loans in custody for the Purchaser, subject to the Purchaser’s obligation to deliver or cause to be delivered the consideration for the Mortgage Loans pursuant to Section 2 hereof. The Seller agrees that, upon acceptance of the Mortgage Loans by the Purchaser or its designee and delivery of payment to the Seller, that its security interest in the Mortgage Loans shall be released. All rights and remedies of the Purchaser under this Agreement are distinct from, and cumulative with, any other rights or remedies under this Agreement or afforded by law or equity and all such rights and remedies may be exercised concurrently,
independently or successively.

Notwithstanding the foregoing, if on the Closing Date, each of the conditions set forth in Section 10 hereof shall have been satisfied and the Purchaser shall not have paid or caused to be paid the purchase price as described in Section 2 hereof, or any such condition shall not have been waived or satisfied and the Purchaser determines not to pay or cause to be paid the purchase price, the Purchaser shall immediately effect the redelivery of the Mortgage Loans, if delivery to the Purchaser has occurred and the security interest created by this Section 18 shall be deemed to have been released.

Section 19.        Severability.  Any part, provision, representation or warranty of this Agreement which is prohibited or which is held to be void or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any part, provision, representation or warranty of this Agreement which is prohibited or unenforceable or is held to be void or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by
applicable law, the parties hereto waive any provision of law which prohibits or renders void or unenforceable any provision hereof.

Section 20.        Counterparts.  This Agreement may be executed in counterparts, each of which will be an original, but which together shall constitute one and the same agreement.

Section 21.        Amendment.  This Agreement cannot be amended or modified in any manner without the prior written consent of each party.

Section 22.    GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5.1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Section 23.       Further Assurances. Each of the parties agrees to execute and deliver such instruments and take such actions as another party may, from time to time, 

 

reasonably request in order to effectuate the purpose and to carry out the terms of this Agreement including any amendments hereto which may be required by either Rating Agency.

	
             
  	
            Section 24.
 	
            Successors and Assigns.
 

This Agreement shall bind and inure to the benefit of and be enforceable by the Seller and the Purchaser and their permitted successors and assigns. The Seller acknowledges and agrees that the Purchaser may assign its rights under this Agreement (including, without limitation, with respect to the Seller’s representations and warranties respecting the Mortgage Loans) to the Trustee. Any person into which the Seller may be merged or consolidated (or any person resulting from any merger or consolidation involving the Seller), any person resulting from a change in form of the Seller or any person succeeding to the business of the Seller, shall be considered the “successor” of the Seller hereunder and shall be considered a party hereto without the execution or filing of any paper or any further act or consent on the part of any party hereto. Except as provided in the two
preceding sentences, this Agreement cannot be assigned, pledged or hypothecated by either party hereto without the written consent of the other parties to this Agreement and any such assignment or purported assignment shall be deemed null and void.

Section 25.       The Seller.  The Seller will keep in full effect all rights as are necessary to perform their respective obligations under this Agreement.

Section 26.        Entire Agreement.  This Agreement contains the entire agreement and understanding between the parties with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof.

Section 27.       No Partnership.  Nothing herein contained shall be deemed or construed to create a partnership or joint venture between the parties hereto.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

IN WITNESS WHEREOF, the parties hereto have caused their names to be signed hereto by their respective duly authorized officers as of the date first above written.

	
             
 	
            KKR FINANCIAL MORTGAGE CORP.
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Name:        
 
	
             
 	
            Title:                   
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
            MERRILL LYNCH MORTGAGE
 INVESTORS, INC.
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Name:        
 
	
             
 	
            Title:                   
 

 

 

 

ANNEX I

 

LIST OF MORTGAGE LOANS

 

(Available Upon Request)

 

 

EXHIBIT 1

CONTENTS OF MORTGAGE FILE

With respect to each Mortgage Loan, the Mortgage File shall include each of the following items, which shall be available for inspection by the Purchaser or its designee, and which shall be delivered to the Purchaser or its designee pursuant to the terms of the Agreement.

	
             
  	
            (a)
 	
            With respect to each Mortgage Loan:
 

(i)           The original Mortgage Note, including any riders thereto, endorsed by the Seller or the originator, as applicable, without recourse in proper form to the order of the Trustee, at the direction of the Purchaser, with any intervening endorsements showing an unbroken chain of title from the originator to the Trustee or with respect to the Mortgage Loans as to which the Mortgage Note has been lost, lost note affidavits and if available, a copy of the lost Mortgage Note;

(ii)          An original duly executed assignment of Mortgage in recordable form from the originator to the Trustee;

(iii)        The original recorded Mortgage, if available. If, in connection with any Mortgage Loan, the Seller cannot deliver the original Mortgage with evidence of recording thereon on or prior to the Closing Date because of its delivery to, or a delay caused by, the public recording office where such Mortgage has been delivered for recordation, or if such original Mortgage Loan has been retained by the public recording office as a matter of policy, or has been lost, the Seller shall deliver or cause to be delivered to the Trustee a photocopy thereof, if available (certified by the Seller to be a true and correct copy of the original which has been transmitted for recordation), together with an officer’s certificate of the Seller stating that such Mortgage has been dispatched to the appropriate
recording official for recordation, has been retained by such recording office as a matter of policy or has been lost, as applicable;

(iv)         If applicable and available, all original intervening recorded assignments, if any, showing an unbroken chain of title to the Mortgage from the originator to the Seller or the Trustee;

(v)          The originals of each assumption, modification or substitution agreement, if any and if available, relating to the Mortgage Loan. If in connection with any Mortgage Loan the Seller cannot deliver the assumption, modification or substitution agreement with evidence of recording thereon on or prior to the Closing Date because of a delay caused by the public recording office where such assumption, modification or substitution agreement has been delivered for recordation, the Seller shall deliver or cause to be delivered to the Trustee a photocopy of such assumption, modification or substitution agreement (certified by the Seller to be a true and correct copy of the original 

 

which has been transmitted for recordation), together with a certificate of an officer of the Seller stating that such assumption, modification or substitution agreement has been dispatched to the appropriate recording official for recordation, if available; 

(vi)         the original mortgagee’s title insurance policy or a written commitment to issue such title insurance policy; 

(vii)       with respect to each Additional Collateral Mortgage Loan (as indicated in the Mortgage Loan Schedule) (1) a copy of the related Mortgage 100K Pledge Agreement or Parent Power® Agreement, as the case may be, (2) a copy of the UCC-1, to the extent MLCC was required to deliver such UCC-1 to Cendant, and an original form UCC-3, if applicable, to the extent MLCC was required to deliver such UCC-3 to Cendant, together with a copy of the applicable notice of assignment to and acknowledgment by Merrill Lynch, Pierce, Fenner & Smith Incorporated and (3) in connection with a Parent Power® Mortgage Loan supported by a Parent Power® Guaranty Agreement for real estate, a copy of the related Equity Access® Mortgage.

	
             
  	
            (b)
 	
            With respect to each Cooperative Loan so assigned;
 

(i)           The original Mortgage Note, endorsed without recourse to the order of the Trustee and showing an unbroken chain of endorsements from the originator thereof to the Person endorsing it to the Trustee, or lost note affidavit, together with a copy of the related Mortgage Note;

(ii)          A counterpart of the Cooperative Lease and the Assignment of Proprietary Lease to the originator of the Cooperative Loan with intervening assignments showing an unbroken chain of title from such originator to the Trustee;

(iii)        The related Cooperative Stock Certificate, representing the related Cooperative Stock pledged with respect to such Cooperative Loan, together with an undated stock power (or other similar instrument) executed in blank;

(iv)         The original recognition agreement by the Cooperative of the interests of the mortgagee with respect to the related Cooperative Loan and any transfer documents related to the recognition agreement;

	
             
  	
            (v)
 	
            The Security Agreement;
 

(vi)         Copies of the original UCC-1 financing statement, and any continuation statements, filed by the originator of such Cooperative Loan as secured party, each with evidence of recording thereof, evidencing the interest of the originator under the Security Agreement and the Assignment of Proprietary Lease;

 

 

(vii)       Copies of the filed UCC-3 assignments of the security interest referenced in clause (vi) above showing an unbroken chain of title from the originator to the Trustee, each with evidence of recording thereof, evidencing the interest of the originator under the Security Agreement and the Assignment of Proprietary Lease;

(viii)      An executed assignment of the interest of the originator in the Security Agreement and Assignment of Proprietary Lease, showing an unbroken chain of title from the originator to the Trustee; and

(ix)         The original of each modification, assumption agreement or preferred loan agreement, if any, relating to such Cooperative Loan.

 

 

EXHIBIT 2

CONTENTS OF FINAL MORTGAGE FILE

(A)           With respect to each Mortgage Loan, the Mortgage File shall include each of the following items, which shall be available for inspection by the Purchaser or its agent, and which shall be delivered to the Purchaser pursuant to the terms of the Agreement.

(i)           The original Mortgage Note, including any riders thereto, endorsed by the Seller or the originator, as applicable, without recourse in proper form to the order of the Trustee, at the direction of the Purchaser, with any intervening endorsements showing an unbroken chain of title from the originator to the Trustee, or with respect to the Mortgage Loans as to which the Mortgage Note has been lost, lost note affidavits and if available, a copy of the lost Mortgage Note;

(ii)          An original duly executed assignment of Mortgage in recordable form from the Seller or the originator, as applicable, to the Trustee, with evidence of recording indicated thereon; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office;

(iii)        The original recorded Mortgage, if available, with evidence of recording indicated thereon; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation or such office as a matter of policy does not return the original of such document or if such original Mortgage has been lost, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office, if available;

(iv)         The original intervening assignments, including warehousing assignments, if any and if available, with evidence of recording thereon, showing an unbroken chain of title to the Mortgage from the Seller or the originator, as the case may be, to the Seller or the Trustee; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation or such office as a matter of policy does not return the original of such document, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office, if available;

(v)          The originals of each assumption, modification or substitution agreement, if any and if available, relating to the Mortgage Loan; and

(vi)         the original mortgagee’s title insurance policy or, if a master title policy has been issued by the title insurer, a mortgagee’s certificate of title insurance or a written commitment to issue such title insurance policy.

 

 

EXHIBIT 3

MORTGAGE LOAN SCHEDULE INFORMATION

The Preliminary and Final Mortgage Loan Schedules shall set forth the following information with respect to each Mortgage Loan:

	
             
  	
            (i)
 	
            the loan number of the mortgage loan;
 	
             

	
             
  	
            (ii)
 	
            the city, state and zip code of the Mortgaged Property;
 

(iii)         a code indicating whether the Mortgaged Property is owner-occupied;

(iv)         the type of Residential Dwelling constituting the Mortgaged Property;

	
             
  	
            (v)
 	
            the original months to maturity;
 	
             

	
             
  	
            (vi)
 	
            the original date of the mortgage;
 	
             

	
             
  	
            (vii)
 	
            the Loan-to-Value Ratio at origination;
 
	
             
  	
            (viii)
 	
            the Mortgage Interest Rate;
 	
             

						

(ix)         the date on which the first Monthly Payment was due on the Mortgage Loan;

	
             
  	
            (x)
 	
            the stated maturity date;
 	
             

	
             
  	
            (xi)
 	
            the amount of the Monthly Payment at origination;
 	
             

	
             
  	
            (xii)
 	
            the amount of the Monthly Payment as of the Cut-off Date;
 
					

(xiii)      the last Due Date on which a Monthly Payment was actually applied to the unpaid Stated Principal Balance;

	
             
  	
            (xiv)
 	
            the original principal amount of the Mortgage Loan;
 

(xv)        the Stated Principal Balance of the Mortgage Loan as of the close of business on the Cut-off Date;

(xvi)      a code indicating the purpose of the Mortgage Loan (i.e., purchase financing, Rate/Term Refinancing, Cash-Out Refinancing);

(xvii)     a code indicating the documentation style (i.e., full, alternative or reduced);

	
             
  	
            (xviii)
 	
            [reserved];
 

 

 

 

	
             
  	
            (xix)
 	
            the Value of the Mortgaged Property;
 	
             

	
             
  	
            (xx)
 	
            the sale price of the Mortgaged Property, if applicable;
 

(xxi)      the actual unpaid principal balance of the Mortgage Loan as of the Cut-off Date;

	
             
  	
            (xxii)
 	
            the Servicing Fee;
 
	
             
  	
            (xxiii)
 	
            [reserved];
 	
             

(xxiv)    with respect to each adjustable-rate Mortgage Loan, the next Interest Rate Adjustment Date;

(xxv)     with respect to each adjustable-rate Mortgage Loan, the Gross Margin;

(xxvi)    with respect to each adjustable-rate Mortgage Loan, the Minimum and Maximum Mortgage Rate under the terms of the Mortgage Note;

(xxvii)   with respect to each adjustable-rate Mortgage Loan, the First Rate Cap;

(xxviii) with respect to each adjustable-rate Mortgage Loan, the related Periodic Rate Cap;

(xxix)    with respect to each adjustable-rate Mortgage Loan, whether additional collateral exists;

(xxx)     with respect to each adjustable-rate Mortgage Loan, whether it is interest-only; and

	
             
  	
            (xxxi)
 	
            with respect to each adjustable-rate Mortgage Loan, the Seller.
 

Such schedule shall set forth the following information with respect to the Mortgage Loans in the aggregate as of the Cut-off Date: (1) the number of Mortgage Loans; (2) the current principal balance of the Mortgage Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans; and (4) the weighted average maturity of the Mortgage Loans.

 

 

EXHIBIT 4

SCHEDULE OF LOST NOTES

Available Upon Request

 

 

EXHIBIT 5

 

REVISED August 1, 2005

 

APPENDIX E - STANDARD & POOR'S PREDATORY LENDING CATEGORIES 

Standard & Poor’s has categorized loans governed by anti-predatory lending laws in the Jurisdictions listed below into three categories based upon a combination of factors that include (a) the risk exposure associated with the assignee liability and (b) the tests and thresholds set forth in those laws. Note that certain loans classified by the relevant statute as Covered are included in Standard & Poor’s High Cost Loan Category because they included thresholds and tests that are typical of what is generally considered High Cost by the industry. 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Arkansas 
 	
            Arkansas Home Loan Protection Act, Ark. Code Ann. §§ 23-53-101 et seq. 

Effective July 16, 2003 
 	
            High Cost Home Loan 
 
	
            Cleveland Heights, OH 
 	
            Ordinance No. 72-2003 (PSH), Mun. Code §§ 757.01 et seq. 

Effective June 2, 2003 
 	
            Covered Loan 
 
	
            Colorado 
 	
            Consumer Equity Protection, Colo. Stat. Ann. §§ 5-3.5-101 et seq. 

Effective for covered loans offered or entered into on or after January 1, 2003. Other provisions of the Act took effect on June 7, 2002 
 	
            Covered Loan 
 
	
            Connecticut 
 	
            Connecticut Abusive Home Loan Lending Practices Act, Conn. Gen. Stat. §§ 36a-746 et seq. 

Effective October 1, 2001 
 	
            High Cost Home Loan 
 
	
            District of Columbia 
 	
            Home Loan Protection Act, D.C. Code §§ 26-1151.01 et seq. 

Effective for loans closed on or after January 28, 2003 
 	
            Covered Loan 
 
	
            Florida 
 	
            Fair Lending Act, Fla. Stat. Ann. §§ 494.0078 et seq. 

Effective October 2, 2002 
 	
            High Cost Home Loan 
 

 

 

 

 

	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 
 	
            High Cost Home Loan 
 

 

 

 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Effective October 1, 2002 – March 6, 2003 
 	
             
 
	
            Georgia as amended (Mar. 7, 2003 – current) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 

Effective for loans closed on or after March 7, 2003 
 	
            High Cost Home Loan 
 
	
            HOEPA Section 32 
 	
            Home Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1639, 12 C.F.R. §§ 226.32 and 226.34 

Effective October 1, 1995, amendments October 1, 2002 
 	
            High Cost Loan 
 
	
            Illinois 
 	
            High Risk Home Loan Act, Ill. Comp. Stat. tit. 815, §§ 137/5 et seq. 

Effective January 1, 2004 (prior to this date, regulations under Residential Mortgage License Act effective from May 14, 2001) 
 	
            High Risk Home Loan 
 
	
            Kansas 
 	
            Consumer Credit Code, Kan. Stat. Ann. §§ 16a-1-101 et seq. 

Sections 16a-1-301 and 16a-3-207 became effective April 14, 1999; Section 16a-3-308a became effective July 1, 1999 
 	
            High Loan to Value Consumer Loan (id. § 16a-3-207) and; 
 
	
            High APR Consumer Loan (id. § 16a-3-308a) 
 
	
            Kentucky 
 	
            2003 KY H.B. 287 – High Cost Home Loan Act, Ky. Rev. Stat. §§ 360.100 et seq. 

Effective June 24, 2003 
 	
            High Cost Home Loan 
 
	
            Maine 
 	
            Truth in Lending, Me. Rev. Stat. tit. 9-A, §§ 8-101 et seq. 

Effective September 29, 1995 and as amended from time to time 
 	
            High Rate High Fee Mortgage 
 
	
            Massachusetts 
 	
            Part 40 and Part 32, 209 C.M.R. §§ 32.00 et seq. and 209 C.M.R. §§ 40.01 et seq. 
 	
            High Cost Home Loan 
 

 

 

 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Effective March 22, 2001 and amended from time to time 
 	
             
 
	
            Nevada 
 	
            Assembly Bill No. 284, Nev. Rev. Stat. §§ 598D.010 et seq. 

Effective October 1, 2003 
 	
            Home Loan 
 
	
            New Jersey 
 	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. 

Effective for loans closed on or after November 27, 2003 
 	
            High Cost Home Loan 
 
	
            New Mexico 
 	
            Home Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq. 

Effective as of January 1, 2004; Revised as of February 26, 2004 
 	
            High Cost Home Loan 
 
	
            New York 
 	
            N.Y. Banking Law Article 6-l 

Effective for applications made on or after April 1, 2003 
 	
            High Cost Home Loan 
 
	
            North Carolina 
 	
            Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E et seq. 

Effective July 1, 2000; amended October 1, 2003 (adding open-end lines of credit) 
 	
            High Cost Home Loan 
 
	
            Ohio 
 	
            H.B. 386 (codified in various sections of the Ohio Code), Ohio Rev. Code Ann. §§ 1349.25 et seq. 

Effective May 24, 2002 
 	
            Covered Loan 
 
	
            Oklahoma 
 	
            Consumer Credit Code (codified in various sections of Title 14A) 

Effective July 1, 2000; amended effective January 1, 2004 
 	
            Subsection 10 Mortgage 
 
	
            South Carolina 
 	
            South Carolina High Cost and Consumer Home Loans Act, S.C. Code 
 	
            High Cost Home Loan 
 

 

 

 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Ann. §§ 37-23-10 et seq. 

Effective for loans taken on or after January 1, 2004 
 	
             
 
	
            West Virginia 
 	
            West Virginia Residential Mortgage Lender, Broker and Servicer Act, W. Va. Code Ann. §§ 31-17-1 et seq. 

Effective June 5, 2002 
 	
            West Virginia Mortgage Loan Act Loan 
 

 

STANDARD & POOR'S COVERED LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 

Effective October 1, 2002 – March 6, 2003 
 	
            Covered Loan 
 
	
            New Jersey 
 	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. 

Effective November 27, 2003 – July 5, 2004 
 	
            Covered Home Loan 
 

 

STANDARD & POOR'S HOME LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 

Effective October 1, 2002 – March 6, 2003 
 	
            Home Loan 
 
	
            New Jersey 
 	
            New Jersey Home Ownership Security 
 	
            Home Loan 
 

 

 

 

STANDARD & POOR'S HOME LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. 

Effective for loans closed on or after November 27, 2003 
 	
             
 
	
            New Mexico 
 	
            Home Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq. 

Effective as of January 1, 2004; Revised as of February 26, 2004 
 	
            Home Loan 
 
	
            North Carolina 
 	
            Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E et seq. 

Effective July 1, 2000; amended October 1, 2003 (adding open-end lines of credit) 
 	
            Consumer Home Loan 
 
	
            South Carolina 
 	
            South Carolina High Cost and Consumer Home Loans Act, S.C. Code Ann. §§ 37-23-10 et seq. 

Effective for loans taken on or after January 1, 2004 
 	
            Consumer Home Loan 
 

 

 

 

SCHEDULE A

REQUIRED RATINGS FOR EACH CLASS OF CERTIFICATES

Offered Certificates

 

	
            
Class
 
 	
            
Moody’s
 
 	
            
S&P
 
 
	
            Class A
 	
            AAA
 	
            AAA
 
	
            Class A-IO
 	
            AAA
 	
            AAA
 
	
            Class M-1
 	
            Aa2
 	
            AA
 
	
            Class M-2
 	
            A2
 	
            A
 
	
            Class M-3
 	
            Baa2
 	
            BBB
 
	
            Class M-IO
 	
            Baa2
 	
            BBB
 

 

None of the above ratings has been lowered since the respective dates of such letters.

 

 

EXHIBIT J-4

EMC MORTGAGE LOAN PURCHASE AGREEMENT

MORTGAGE LOAN PURCHASE AGREEMENT, dated as of December 22, 2005, as amended and supplemented by any and all amendments hereto (collectively, the “Agreement”), by and between EMC MORTGAGE CORPORATION, a Delaware corporation (the “Seller”), and MERRILL LYNCH MORTGAGE INVESTORS, INC., a Delaware corporation (the “Purchaser”).

Upon the terms and subject to the conditions of this Agreement, the Seller agrees to sell, and the Purchaser agrees to purchase, certain first lien, fixed-rate and adjustable-rate mortgage loans secured by one- to four-family residences, individual condominiums, co-op units and units in planned unit developments (collectively, the “Mortgage Loans”) as described on Annex I. The Purchaser intends to deposit the Mortgage Loans into a trust fund (the “Trust Fund”) and create Mortgage Pass-Through Certificates, Series MLMI 2005-A10 (the “Certificates”), under a pooling and servicing agreement, to be dated as of December 1, 2005 (the “Pooling and Servicing Agreement”),
between the Purchaser, as seller, HSBC Bank USA, National Association, as trustee (the “Trustee”) and Wells Fargo Bank, N.A., as master servicer and securities administrator (the “Master Servicer”).

The Purchaser has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (Number 333-127233) relating to its Mortgage Pass-Through Certificates and the offering of certain series thereof (including certain classes of the Certificates) from time to time in accordance with Rule 415 under the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder (the “Securities Act”). Such registration statement, when it became effective under the Securities Act, and the prospectus relating to the public offering of certain classes of the Certificates by the Purchaser (the “Public Offering”), as from time to time each is amended or
supplemented pursuant to the Securities Act or otherwise, are referred to herein as the “Registration Statement” and the “Prospectus,” respectively. The “Prospectus Supplement” shall mean that supplement, dated December 21, 2005 to the Prospectus, dated August 26, 2005, relating to certain classes of the Certificates. With respect to the Public Offering of certain classes of the Certificates, the Purchaser and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) have entered into a terms agreement dated as of December 21, 2005 to an underwriting agreement dated September 27, 2005, between the Purchaser and Merrill Lynch (together, the “Underwriting Agreement”).

Now, therefore, in consideration of the premises and the mutual agreements set forth herein, the parties hereto agree as follows:

Section 1.          Definitions. Certain terms are defined herein. The following other terms are defined as follows:

Closing Date: December 22, 2005.

Co-op Lease:  With respect to a Co-op Loan, the lease with respect to a dwelling unit occupied by the Mortgagor and relating to the stock allocated to the related dwelling unit.

 

 

Co-op Loan:  A Mortgage Loan secured by the pledge of stock allocated to a dwelling unit in a residential cooperative housing corporation and a collateral assignment of the related Co-op Lease.

Co-op Stock:  With respect to a Co-op Loan, the single outstanding class of stock, partnership interest or other ownership instrument in the related residential cooperative housing corporation.

Cut-off Date: December 1, 2005.

Cut-off Date Balance: $786,377,264

Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a Substitute Mortgage Loan.

	
             
 	
            Due Date: With respect to each Mortgage Loan, the first day in each month.
 

Master Servicer: Wells Fargo Bank, N.A.

Merrill Lynch: Merrill Lynch, Pierce, Fenner & Smith Incorporated.

Moody’s: Moody’s Investors Service, Inc., or its successors in interest.

Mortgage: The mortgage or deed of trust creating a first lien on an interest in real property securing a Mortgage Note.

Mortgage File: The items referred to in Exhibit 1 and Exhibit 2 pertaining to a particular Mortgage Loan and any additional documents required to be added to such documents pursuant to this Agreement.

Mortgage Interest Rate: The annual rate of interest borne by a Mortgage Note as stated therein.

Mortgagor: The obligor(s) on a Mortgage Note.

Net Rate: For each Mortgage Loan, the Mortgage Interest Rate for such Mortgage Loan less the Master Servicing Fee Rate and the Trustee Fee Rate.

Offered Certificates: Shall mean the Class A, Class A-IO, Class M-1, Class M-2, Class M-3 and Class M-IO Certificates issued pursuant to the Pooling and Servicing Agreement.

Opinion of Counsel: A written opinion of counsel, who may be counsel for the Seller or the Purchaser, reasonably acceptable to the Trustee.

Person: Any legal person, including any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

 

 

Purchase Price: With respect to any Mortgage Loan required to be purchased by the Seller pursuant to the applicable provisions of this Agreement, an amount equal to the sum of (i) 100% of the principal remaining unpaid on such Mortgage Loan as of the date of purchase (including if a foreclosure has already occurred, the principal balance of the related Mortgage Loan at the time the Mortgaged Property was acquired), and (ii) accrued and unpaid interest thereon at the Mortgage Interest Rate through and including the last day of the month of purchase (iii) any costs and damages incurred by the Trust in connection with any violation by such Mortgage Loan of any predatory or abusive-lending law.

Rating Agencies: S&P and Moody’s, each a “Rating Agency.”

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

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

Substitute Mortgage Loan: A mortgage loan substituted for a Deleted Mortgage Loan which must meet on the date of such substitution the requirements stated herein; upon such substitution, such mortgage loan shall be a “Mortgage Loan” hereunder.

Value: The value of the Mortgaged Property at the time of origination of the related Mortgage Loan, such value being the lesser of (i) the value of such property set forth in an appraisal accepted by the Originator or (ii) the sales price of such property at the time of origination.

Section 2.          Purchase and Sale of the Mortgage Loans and Related Rights. (a)Upon satisfaction of the conditions set forth in Section 10 hereof, the Seller agrees to sell, and the Purchaser agrees to purchase Mortgage Loans having an aggregate Cut-off Date Balance of $786,377,264.

(b)          The closing for the purchase and sale of the Mortgage Loans will take place on the Closing Date at the office of the Purchaser’s counsel in New York, New York or such other place as the parties shall agree.

(c)          Upon the satisfaction of the conditions set forth in Section 10 hereof, on the Closing Date, in consideration of the purchase of the Mortgage Loans purchased from the Seller, the Purchaser shall (i) pay to the Seller an amount equal to the Seller’s allocated portion of the net sale proceeds of the Offered Certificates plus accrued interest (the “Purchase Price”) in immediately available funds by wire transfer to such account or accounts as shall be designated by the Seller.

(d)          In addition to the foregoing, on the Closing Date the Seller assigns to the Purchaser without recourse all of its right, title and interest in the various purchase and servicing agreements.

Section 3.          Mortgage Loan Schedules.  The Seller agrees to provide to the Purchaser as of the date hereof a preliminary listing of the Mortgage Loans (the “Preliminary Mortgage Loan Schedule”) setting forth the information listed on Exhibit 3 to this Agreement 

 

with respect to each of the Mortgage Loans being sold by the Seller. If there are changes to the Preliminary Mortgage Loan Schedule, the Seller shall provide to the Purchaser as of the Closing Date a final schedule (the “Final Mortgage Loan Schedule”) setting forth the information listed on Exhibit 3 to this Agreement with respect to each of the Mortgage Loans being sold by the Seller to the Purchaser. The Final Mortgage Loan Schedule shall be delivered to the Purchaser on the Closing Date, shall be attached to an amendment to this Agreement to be executed on the Closing Date by the parties hereto and shall be in form and substance mutually agreed to by the Seller and the Purchaser (the “Amendment”). If there are no changes to the Preliminary
Mortgage Loan Schedule, the Preliminary Mortgage Loan Schedule shall be the Final Mortgage Loan Schedule for all purposes hereof.

	
             
  	
            Section 4.
 	
            Mortgage Loan Transfer.
 

(a)          The Purchaser will be entitled to all scheduled payments of principal and interest on the Mortgage Loans due after the Cut-off Date (regardless of when actually collected) and all payments thereof other than scheduled principal and interest received after the Cut-off Date. The Seller will be entitled to all scheduled payments of principal and interest on the Mortgage Loans due on or before the Cut-off Date (including payments collected after the Cut-off Date) and all payments thereof other than scheduled principal and interest on the Mortgage Loans received on or before the Cut-off Date. Such principal amounts and any interest thereon belonging to the Seller as described above will not be included in the aggregate outstanding principal balance of the Mortgage Loans as of the Cut-off Date as set forth on the
Final Mortgage Loan Schedule.

(b)          Pursuant to various conveyancing documents to be executed on the Closing Date and pursuant to the Pooling and Servicing Agreement, the Purchaser will assign on the Closing Date all of its right, title and interest in and to the Mortgage Loans to the Trustee for the benefit of the Certificateholders. In connection with the transfer and assignment of the Mortgage Loans, the Seller has delivered or will deliver or cause to be delivered to the Trustee by the Closing Date or such later date as is agreed to by the Purchaser and the Seller (each of the Closing Date and such later date is referred to as a “Mortgage File Delivery Date”), the items of each Mortgage File, provided, however, that in lieu of the foregoing, the Seller may deliver the following documents, under the circumstances set forth below:
(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 in time to permit their delivery as specified above, the Seller may deliver a true copy thereof with a certification by the Seller or the Originator, 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;” (y) in lieu of the Mortgage, assignments to the Trustee or intervening assignments thereof, if the applicable jurisdiction retains the originals of such documents or if the originals are lost (in each case, as evidenced by a certification from the Seller to such effect), the Seller 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 (z) in lieu of the Mortgage Notes relating to the Mortgage Loans, each identified in the list delivered by the Purchaser to the Trustee on the Closing Date and attached hereto as Exhibit 6 the Seller may deliver lost note affidavits and indemnities of the Seller; 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 Seller, in lieu of delivering the above documents, may deliver to the Trustee a certification by the Seller to such effect. The Seller shall deliver such original documents (including any original documents as to which certified copies had previously been delivered) or such certified copies to the Trustee promptly after they are received. The Seller shall cause the Mortgage and intervening assignments, if any, and the assignment of the Mortgage to be recorded not later than 180 days after the Closing Date, or, in lieu of such assignments, shall provide an Opinion of Counsel pursuant to Section 6(a) hereof to the effect that the recordation of such assignment is not necessary to protect the Trustee’s interest in the related Mortgage Loan. Upon the request of the
Purchaser, the Seller will assist the Purchaser in effecting the assignment referred to above.

(c)          The Seller and the Purchaser acknowledge hereunder that all of the Mortgage Loans will ultimately be assigned to HSBC Bank USA, National Association, as Trustee for the Certificateholders, on the date hereof.

	
             
  	
            Section 5.
 	
            Examination of Mortgage Files.
 

(a)          On or before the Mortgage File Delivery Date, the Seller will have made the Mortgage Files available to the Purchaser or its agent for examination which may be at the offices of the Trustee or the Seller and/or the Seller’s custodian. The fact that the Purchaser or its agent has conducted or has failed to conduct any partial or complete examination of the Mortgage Files shall not affect the Purchaser’s rights to demand cure, repurchase, substitution or other relief as provided in this Agreement. In furtherance of the foregoing, the Seller shall make the Mortgage Files available to the Purchaser or its agent from time to time so as to permit the Purchaser to confirm the Seller’s compliance with the delivery and recordation requirements of this Agreement. In addition, upon request of the
Purchaser, the Seller agrees to provide to the Purchaser, Merrill Lynch and to any investors or prospective investors in the Certificates information regarding the Mortgage Loans and their servicing, to make the Mortgage Files available to the Purchaser, Merrill Lynch and to such investors or prospective investors (which may be at the offices of the Seller and/or the Seller’s custodian) and to make available personnel knowledgeable about the Mortgage Loans for discussions with the Purchaser, Merrill Lynch and such investors or prospective investors, upon reasonable request during regular business hours, sufficient to permit the Purchaser, Merrill Lynch and such investors or potential investors to conduct such due diligence as any such party reasonably believes is appropriate.

(b)          Pursuant to the Pooling and Servicing Agreement, on the Closing Date the Trustee, for the benefit of the Certificateholders, will review items of the Mortgage Files as set forth on Exhibit 1 and will deliver to the Seller a certification in the form attached as Exhibit 6 hereto.

(c)          Pursuant to the Pooling and Servicing Agreement, the Trustee will review the Mortgage Files within 180 days of the Closing Date and will deliver to the Purchaser a final certification substantially in the form of Exhibit 7 hereto. If the Trustee is unable to deliver a final certification with respect to the items listed in Exhibit 2 due to any document that is missing, has not been executed, is unrelated, determined on the basis of the Mortgagor name, original principal balance and loan number, to the Mortgage Loans identified in the Final 

 

Mortgage Loan Schedule (a “Material Defect”), the Trustee shall notify the Seller of such Material Defect. The Seller shall correct or cure any such Material Defect within 90 days from the date of notice from the Trustee of the Material Defect and if the Seller does not correct or cure such Material Defect within such period and such defect materially and adversely affects the interests of the Certificateholders in the related Mortgage Loan, the Seller will within 90 days of the date of notice, provide the Trustee with a Substitute Mortgage Loan (if within two years of the Closing Date) or purchase the related Mortgage Loan at the applicable 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, repurchase or
substitution 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 of the Seller confirming that such documents have been accepted for recording, and delivery to the Trustee shall be effected by the Seller within thirty days of its receipt of the original recorded document.

(d)          At the time of any substitution, the Seller shall deliver or cause to be delivered the Substitute Mortgage Loan, the related Mortgage File and any other documents and payments required to be delivered in connection with a substitution. At the time of any purchase or substitution, the Trustee shall (i) assign to the Seller and cause the Trustee to release the documents (including, but not limited to, the Mortgage, Mortgage Note and other contents of the Mortgage File) in the possession of the Trustee relating to the Deleted Mortgage Loan and (ii) execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be necessary to vest in the Seller title to such Deleted Mortgage Loan.

	
             
  	
            Section 6.
 	
            Recordation of Assignments of Mortgage.
 

(a)          The Seller will, promptly after the Closing Date, cause each Mortgage and each assignment of Mortgage from the Seller to the Trustee, and all unrecorded intervening assignments, if any, delivered on or prior to the Closing Date, to be recorded in all recording offices in the jurisdictions where the related Mortgaged Properties are located; provided, however, the Seller need not cause to be recorded any assignment which relates to a Mortgage Loan in any jurisdiction under the laws of which as evidenced by an Opinion of Counsel delivered by the Seller 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 of Mortgage shall be submitted for recording by the Seller in the manner described above, at no expense to the Trust Fund or Trustee, within 30 days notice to the Seller of the earliest to occur of (i) reasonable direction by the Holders of Certificates evidencing, in the aggregate, not less than 25% of the Voting Rights, (ii) the occurrence of a Master Servicer Event of Termination, 

 

(iii) the occurrence of a bankruptcy, insolvency or foreclosure relating to the Seller, (iv) the occurrence of a servicing transfer as described in Section 7.02 of the Pooling and Servicing Agreement or (v) with respect to any one assignment of Mortgage, the occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor under the related Mortgage.

While each such Mortgage or assignment is being recorded, if necessary, the Seller shall leave or cause to be left with the Trustee a certified copy of such Mortgage or assignment. In the event that, within 180 days of the Closing Date, the Trustee has not provided an Opinion of Counsel as described above or received evidence of recording with respect to each Mortgage Loan delivered to the Purchaser pursuant to the terms hereof or as set forth above, the failure to provide evidence of recording or such Opinion of Counsel shall be considered a Material Defect, and the provisions of Section 5(c) and (d) shall apply. All customary recording fees and reasonable expenses relating to the recordation of the assignments of mortgage to the Trustee or the Opinion of Counsel, as the case may be, shall be borne by the Seller.

(b)          It is the express intent of the parties hereto that the conveyance of the Mortgage Loans by the Seller to the Purchaser, as contemplated by this Agreement be, and be treated as, a sale. It is, further, not the intention of the parties that such conveyance be deemed a pledge of the Mortgage Loans by the Seller to the Purchaser to secure a debt or other obligation of the Seller. However, in the event that, notwithstanding the intent of the parties, the Mortgage Loans are held by a court of competent jurisdiction to continue to be property of the Seller, then (i) this Agreement shall also be deemed to be a security agreement within the meaning of Articles 8 and 9 of the applicable Uniform Commercial Code; (ii) the transfer of the Mortgage Loans provided for herein shall be deemed to be a grant by the Seller to
the Purchaser of a security interest in all of the Seller’s right, title and interest in and to the Mortgage Loans and all amounts payable to the holders of the Mortgage Loans in accordance with the terms thereof and all proceeds of the conversion, voluntary or involuntary, of the foregoing into cash, instruments, securities or other property, to the extent the Purchaser would otherwise be entitled to own such Mortgage Loans and proceeds pursuant to Section 4 hereof, including all amounts, other than investment earnings, from time to time held or invested in any accounts created pursuant to the Pooling and Servicing Agreement, whether in the form of cash, instruments, securities or other property; (iii) the possession by the Purchaser or the Trustee of Mortgage Notes and such other items of property as constitute instruments, money, negotiable documents or chattel paper shall be deemed to be “possession by the secured party” for purposes of perfecting the security
interest pursuant to Section 9-305 (or comparable provision) of the applicable Uniform Commercial Code; and (iv) notifications to persons holding such property, and acknowledgments, receipts or confirmations from persons holding such property, shall be deemed notifications to, or acknowledgments, receipts or confirmations from, financial intermediaries, bailees or agents (as applicable) of the Purchaser for the purpose of perfecting such security interest under applicable law. Any assignment of the interest of the Purchaser pursuant to any provision hereof or pursuant to the Pooling and Servicing Agreement shall also be deemed to be an assignment of any security interest created hereby. The Seller and the Purchaser shall, to the extent consistent with this Agreement, take such actions as may be reasonably necessary to ensure that, if this Agreement were deemed to create a security interest in the Mortgage Loans, such security interest would be deemed to be a perfected security
interest of first priority under applicable law and will be maintained as such throughout the term of the Pooling and Servicing Agreement.

 

 

Section 7.           Representations and Warranties of Seller Concerning the Mortgage Loans. (a)  The Seller hereby represents and warrants to the Purchaser as of the Closing Date or such other date as may be specified below with respect to each Mortgage Loan being sold by it:

(i)           the information set forth in the Mortgage Loan Schedule hereto is true and correct in all material respects; and

(ii)          no selection procedure reasonably believed by the Seller to be adverse to the interests of the Certificateholders was utilized in selecting the Mortgage Loans.

(b)          The Seller hereby represents and warrants to the Purchaser as of the Closing Date or such other date as may be specified below with respect to each Mortgage Loan being sold by it (other than those Mortgage Loans purchased by the Seller from Countrywide Home Loans LP and Wachovia Mortgage Corporation):

(iii)        immediately prior to the transfer to the Purchaser, the Seller was the sole owner of beneficial title and holder of each Mortgage and Mortgage Note relating to the Mortgage Loans and is conveying the same free and clear of any and all liens, claims, encumbrances, participation interests, equities, pledges, charges or security interests of any nature and the Seller has full right and authority to sell or assign the same pursuant to this Agreement;

(iv)         each Mortgage Loan constitutes a “qualified mortgage” under Section 860G(a)(3)(A) of the Code and Treasury Regulation Section 1.8600-2(a)(1);

(v)          as of the Cut-off Date, no Mortgage Loan is more than 30 days past due. The Seller has not advanced funds, or induced, solicited or knowingly received any advance of funds from a party other than the owner of the related Mortgaged Property, directly or indirectly, for the payment of any amount required by the Mortgage Note or Mortgage;

(vi)         to the best of the Seller’s knowledge, there are no delinquent taxes, ground rents, water charges, sewer rents, assessments, insurance premiums, leasehold payments, including assessments payable in future installments or other outstanding charges affecting the related Mortgaged Property;

(vii)       to the best of the Seller’s knowledge, there is no default, breach, violation or event of acceleration existing under the Mortgage or the Mortgage Note and no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration, and the Seller has not waived any default, breach, violation or event of acceleration;

(viii)      as of the date of origination, the Mortgaged Property was free of material damage and waste and there is no proceeding pending for the total or partial condemnation thereof;

(ix)         as of the date of origination, the Mortgaged Property was lawfully occupied under applicable law at time of origination; all inspections, licenses and 

 

certificates required to be made or issued at origination with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy, have been made or obtained from the appropriate authorities;

(x)          all requirements of any federal, state or local law (including usury, truth in lending, real estate settlement procedures, consumer credit protection, equal credit opportunity, disclosure or recording, predatory and abusive lending laws) applicable to the origination of such Mortgage Loan have been complied with in all material respects;

(xi)         to the best of the Seller’s knowledge, as of the date of transfer of the Mortgage Loans, there is no mechanics’ lien or claim for work, labor or material affecting the Mortgaged Property except those which are insured against by the title insurance policy;

(xii)       to the best of the Seller’s knowledge, as of the date of the transfer of the Mortgage Loans to the Purchaser, there is no valid offset, defense or counterclaim to any Mortgage Note or Mortgage;

(xiii)      at the time of origination, no improvement located on or being part of the Mortgaged Property was in violation of any applicable zoning and subdivision laws or ordinances;

(xiv)      each original mortgage has been recorded or is in the process of being recorded in the appropriate jurisdictions wherein such recordation is required to perfect the lien thereof for the benefit of the trust;

(xv)        the related mortgage file contains each of the documents and instruments specified;

(xvi)      neither the Seller nor any prior holder of any Mortgage Loan has impaired, altered or modified the Mortgage or Mortgage Note in any material respect, except by a written instrument which has been recorded or is in the process of being recorded;

(xvii)     a lender’s title policy or binder, or other assurance of title insurance customary in a form acceptable to FNMA or FHLMC was issued at origination and each policy or binder is valid and remains in full force and effect;

	
             
  	
            (xviii)
 	
            none of the Mortgage Loans are secured by a leasehold interest;
 

(xix)      none of the Mortgage Loans are subject to the Georgia Fair Lending Act, as amended;

(xx)       none of the Mortgage Loans is subject to the Home Ownership and Equity Protection Act of 1994 or is a “high cost” or “predatory” loan as defined by applicable local, state and federal predatory and abusive lending laws; 

 

 

(xxi)      no Mortgage Loan is a High Cost Loan or Covered Loan, as applicable (as such terms are defined in Appendix E of the then current Standard & Poor's Glossary For File Format For LEVELS® Version 5.6b Revised (attached hereto as Exhibit 7); and

(xxii)     with respect to each Co-op Loan, the security instruments create a valid, enforceable and subsisting first priority security interest in the Co-op Lease and Co-op Stock securing the related Mortgage Note subject to only to (a) the lien of the related cooperative for unpaid assessments representing the Mortgagor’s pro rata share of payments for a blanket mortgage, if any, current and future real property taxes, insurance premiums, maintenance fees and other assessments to which like collateral is commonly subject, and (b) other matters to which the collateral is commonly subject which do not materially interfere with the benefits of the security intended to be provided; provided, however, that the related Co-op Loan may be subordinated or otherwise subject to the lien of a Mortgage on the cooperative building. 

It is understood and agreed that the representations and warranties set forth in this Section 7 will inure to the benefit of the Purchaser, its successors and assigns, notwithstanding any restrictive or qualified endorsement on any Mortgage Note or assignment of Mortgage or the examination of any Mortgage File. Upon any substitution for a Mortgage Loan, the representations and warranties set forth above shall be deemed to be made by the Seller as to any Substitute Mortgage Loan as of the date of substitution.

Upon discovery or receipt of notice by the Seller, the Purchaser or the Trustee of a breach of any representation or warranty of the Seller set forth in this Section 7 which materially and adversely affects the value of the interests of the Purchaser, the Certificateholders or the Trustee in any of the Mortgage Loans delivered to the Purchaser pursuant to this Agreement, the party discovering or receiving notice of such breach shall give prompt written notice to the others. In the case of any such breach of a representation or warranty set forth in this Section 7, within 90 days from the date of discovery by the Seller, or the date the Seller is notified by the party discovering or receiving notice of such breach (whichever occurs earlier), the Seller will (i) cure such breach in all material respects, (ii) purchase the affected Mortgage Loan at the applicable Purchase Price or (iii) if
within two years of the Closing Date, substitute a qualifying Substitute Mortgage Loan in exchange for such Mortgage Loan. The obligations of the Seller to cure, purchase or substitute a qualifying Substitute Mortgage Loan shall constitute the Purchaser’s, the Trustee’s and the Certificateholder’s sole and exclusive remedy under this Agreement or otherwise respecting a breach of representations or warranties hereunder with respect to the Mortgage Loans, except for the obligation of the Seller to indemnify the Purchaser for such breach as set forth in and limited by Section 14 hereof.  With respect to the representations and warranties described in the Agreement which are made to the best of the Seller’s knowledge, if it is discovered by any of the Depositor, the Seller or the Trustee that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan, then notwithstanding
the seller’s lack of knowledge with respect to the substance of such representation and warranty, such inaccuracy shall be deemed a breach of the applicable representation or warranty.

Any cause of action against the Seller or relating to or arising out of a breach by the Seller of any representations and warranties made in this Section 7 shall accrue as to any 

 

Mortgage Loan upon (i) discovery of such breach by the Seller or notice thereof by the party discovering such breach and (ii) failure by the Seller to cure such breach, purchase such Mortgage Loan or substitute a qualifying Substitute Mortgage Loan pursuant to the terms hereof.

Section 8.          Representations and Warranties Concerning the Seller.  As of the date hereof and as of the Closing Date, the Seller represents and warrants to the Purchaser as to itself in the capacity indicated as follows:

(i)           the Seller (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and (ii) is qualified and in good standing 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 Seller’s business as presently conducted or on the Seller’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(ii)          the Seller has full 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 Seller of this Agreement have been duly authorized by all necessary action on the part of the Seller; 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 Seller or its properties or the charter or by-laws of the Seller, except those conflicts, breaches or defaults which would not reasonably be expected to have a material adverse effect on the Seller’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(iv)         the execution, delivery and performance by the Seller 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 and, in connection with the recordation of the Mortgages, powers of attorney or assignments of Mortgages not yet completed;

(v)          this Agreement has been duly executed and delivered by the Seller and, assuming due authorization, execution and delivery by the Purchaser, constitutes a valid and binding obligation of the Seller 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); and

(vi)         there are no actions, suits or proceedings pending or, to the knowledge of the Seller, threatened against the Seller, 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 Seller will be determined adversely to the Seller and will if determined adversely to the 

 

Seller materially and adversely affect the Seller’s ability to perform its obligations under this Agreement; and the Seller 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.

Section 9.          Representations and Warranties Concerning the Purchaser.  As of the date hereof and as of the Closing Date, the Purchaser represents and warrants to the Seller as follows:

(i)           the Purchaser (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and (ii) 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 Purchaser’s business as presently conducted or on the Purchaser’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(ii)          the Purchaser 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 Purchaser of this Agreement have been duly authorized by all necessary corporate action on the part of the Purchaser; 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 Purchaser or its properties or the articles of incorporation or by-laws of the Purchaser, except those conflicts, breaches or defaults which would not reasonably be expected to have a material adverse effect on the Purchaser’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(iv)         the execution, delivery and performance by the Purchaser 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 Purchaser and, assuming due authorization, execution and delivery by the Seller, constitutes a valid and binding obligation of the Purchaser 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 Purchaser, threatened against the Purchaser, 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 Purchaser will be determined adversely to the Purchaser and will if determined adversely to the Purchaser materially and adversely affect the Purchaser’s ability to perform its obligations under this Agreement; and the Purchaser 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)       the Purchaser’s Information (as defined in Section 13(b) hereof) does not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

	
             
  	
            Section 10.
 	
            Conditions to Closing.
 

(a)          The obligations of the Purchaser under this Agreement will be subject to the satisfaction, on or prior to the Closing Date, of the following conditions:

(1)          Each of the obligations of the Seller required to be performed at or prior to the Closing Date pursuant to the terms of this Agreement shall have been duly performed and complied with in all material respects; all of the representations and warranties of the Seller under this Agreement shall be true and correct as of the date or dates specified in all material respects; and no event shall have occurred which, with notice or the passage of time, would constitute a default under this Agreement; and the Purchaser shall have received certificates to that effect signed by authorized officers of the Seller.

(2)          The Purchaser shall have received all of the following closing documents, in such forms as are agreed upon and reasonably acceptable to the Purchaser, duly executed by all signatories other than the Purchaser as required pursuant to the respective terms thereof:

(i)           If  required pursuant to Section 3 hereof, the Amendment dated as of the Closing Date and any documents referred to therein;

(ii)          If required pursuant to Section 3 hereof, the Final Mortgage Loan Schedule containing the information set forth on Exhibit 3 hereto, one copy to be attached to each counterpart of the Amendment;

(iii)        A certificate of an officer of the Seller dated as of the Closing Date, in a form reasonably acceptable to the Purchaser, and attached thereto the resolutions of the Seller’s authorizing the transactions contemplated by this Agreement, together with copies of the charter and by-laws of the Seller; and

(iv)         One or more opinions of counsel from the Seller’s counsel otherwise in form and substance reasonably satisfactory to the Purchaser, the Trustee and each Rating Agency.

 

 

(3)          The Seller shall have furnished to the Purchaser such other certificates of its officers or others and such other documents and opinions of counsel to evidence fulfillment of the conditions set forth in this Agreement and the transactions contemplated hereby as the Purchaser and its counsel may reasonably request.

(b)          The obligations of the Seller under this Agreement shall be subject to the satisfaction, on or prior to the Closing Date, of the following conditions:

(1)          The obligations of the Purchaser required to be performed by it on or prior to the Closing Date pursuant to the terms of this Agreement shall have been duly performed and complied with in all material respects, and all of the representations and warranties of the Purchaser under this Agreement shall be true and correct in all material respects as of the date hereof and as of the Closing Date, and no event shall have occurred which would constitute a breach by it of the terms of this Agreement, and the Seller shall have received a certificate to that effect signed by an authorized officer of the Purchaser.

(2)          The Seller shall have received copies of all of the following closing documents, in such forms as are agreed upon and reasonably acceptable to the Seller, duly executed by all signatories other than the Seller as required pursuant to the respective terms thereof:

(i)           If  required pursuant to Section 3 hereof, the Amendment dated as of the Closing Date and any documents referred to therein;

(ii)          A certificate of an officer of the Purchaser dated as of the Closing Date, in a form reasonably acceptable to the Seller, and attached thereto the resolutions of the Purchaser authorizing the transactions contemplated by this Agreement, together with copies of the Purchaser’s articles of incorporation, and evidence as to the good standing of the Purchaser dated as of a recent date; and 

(iii)         One or more opinions of counsel from the Purchaser’s counsel in form and substance reasonably satisfactory to the Seller.

Section 11.        Fees and Expenses.  Subject to Section 17 hereof, the Seller shall pay on the Closing Date or such later date as may be agreed to by the Purchaser (i) the fees and expenses relating to the preparation and recordation of mortgage assignments (including intervening assignments, if any and if available, to evidence a complete chain of title from the originator to the Trustee) from the Seller to the Trustee and (ii) Mortgage File due diligence expenses and other out-of-pocket expenses incurred by the Purchaser in connection with the purchase of the Mortgage Loans.

	
             
  	
            Section 12.
 	
            [Reserved].
 	
             

	
             
  	
            Section 13.
 	
            Indemnification.
 

(i)           The Seller shall indemnify and hold harmless the Purchaser and its directors, officers and controlling persons (as defined in Section 15 of the Securities Act) from and against any loss, claim, damage or liability or action in respect thereof, to which 

 

they or any of them may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon (i) any representation or warranty assigned or made by the Seller in Section 7 or Section 8 hereof being, or alleged to be, untrue or incorrect, or (ii) any failure by the Seller to perform its obligations under this Agreement; and the Seller shall reimburse the Purchaser and each other indemnified party for any legal and other expenses reasonably incurred by them in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability or action. 

(ii)          The Seller shall indemnify and hold harmless the Purchaser, the Trust Fund and the Trustee against any documented out-of-pocket losses, penalties, fines, forfeitures, reasonable and necessary legal fees and related costs, judgments, and other costs and expenses resulting from any claim, demand, defense or assertion by any third party that results from, a material breach of the representations and warranties set forth in Section 7 of this Agreement; provided, however, indemnification shall not be available for any economic losses of the Purchaser due to reinvestment losses, loss of investment income or any other special, indirect or consequential losses.  The Seller shall indemnify and hold harmless the Purchaser, the Trust Fund and the Trustee against any losses, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments, and other costs and expenses resulting from any claim, demand, defense or assertion by any third party in connection with the Georgia Fair Lending Act; provided, however, indemnification shall not be available for any economic losses of the Purchaser due to reinvestment losses, loss of investment income or any other special, indirect or consequential losses.

The foregoing indemnity agreement is in addition to any liability which the Seller otherwise may have to the Purchaser or any other such indemnified party.

(iii)        The Purchaser shall indemnify and hold harmless the Seller and its respective directors, officers and controlling persons (as defined in Section 15 of the Securities Act) from and against any loss, claim, damage or liability or action in respect thereof, to which they or any of them may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon (i) any untrue statement of a material fact contained in the Purchaser’s Information as identified in Exhibit 5, the omission to state in the Prospectus Supplement or Prospectus (or any amendment thereof or supplement thereto approved by the Purchaser and in which additional
Purchaser’s Information is identified), in reliance upon and in conformity with the Purchaser’s Information, a material fact required to be stated therein or necessary to make the statements therein in light of the circumstances in which they were made, not misleading, (ii) any representation or warranty made by the Purchaser in Section 9 hereof being, or alleged to be, untrue or incorrect, or (iii) any failure by the Purchaser to perform its obligations under this Agreement; and the Purchaser shall reimburse the Seller, and each other indemnified party for any legal and other expenses reasonably incurred by them in connection with investigating or defending or preparing to defend any such loss, claim, damage, liability or action. The foregoing indemnity agreement is in addition to any liability which the Purchaser otherwise may have to the Seller, or any other such indemnified party,

 

 

(iv)         Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify each party against whom indemnification is to be sought in writing of the commencement thereof (but the failure so to notify an indemnifying party shall not relieve it from any liability which it may have under this Section 13 except to the extent that it has been prejudiced in any material respect by such failure or from any liability which it may have otherwise). In case any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled
to participate therein and, to the extent it may elect by written notice delivered to the indemnified party promptly (but, in any event, within 30 days) after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party. Notwithstanding the foregoing, the indemnified party or parties shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless (i) the employment of such counsel shall have been authorized in writing by one of the indemnifying parties in connection with the defense of such action, (ii) the indemnifying parties shall not have employed counsel to have charge of the defense of such action within a reasonable time after notice of commencement of the action, or (iii) such indemnified party or parties shall have reasonably concluded that there is a conflict of
interest between itself or themselves and the indemnifying party in the conduct of the defense of any claim or that the interests of the indemnified party or parties are not substantially co-extensive with those of the indemnifying party (in which case the indemnifying parties shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses shall be borne by the indemnifying parties (provided, however, that the indemnifying party shall be liable only for the fees and expenses of one counsel in addition to one local counsel in the jurisdiction involved. Anything in this subsection to the contrary notwithstanding, an indemnifying party shall not be liable for any settlement or any claim or action effected without its written consent; provided, however, that such consent was not unreasonably withheld.

(v)          If the indemnification provided for in paragraphs (a) and (b) of this Section 13 shall for any reason be unavailable to an indemnified party in respect of any loss, claim, damage or liability, or any action in respect thereof, referred to in Section 13, then the indemnifying party shall in lieu of indemnifying the indemnified party contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, in such proportion as shall be appropriate to reflect the relative benefits received by the Seller on the one hand and the Purchaser on the other from the purchase and sale of the Mortgage Loans, the offering of the Certificates and the other transactions contemplated hereunder. No person found liable for a
fraudulent misrepresentation shall be entitled to contribution from any person who is not also found liable for such fraudulent misrepresentation.

(vi)         The parties hereto agree that reliance by an indemnified party on any publicly available information or any information or directions furnished by an 

 

indemnifying party shall not constitute negligence, bad faith or willful misconduct by such indemnified party.

Section 14.        Notices.  All demands, notices and communications hereunder shall be in writing but may be delivered by facsimile transmission subsequently confirmed in writing. Notices to the Seller shall be directed to EMC Mortgage Corporation, 2780 Lake Vista Drive, Lewisville, TX 75067-3884, (Facsimile: 972-831-2997 and notices to the Purchaser shall be directed to Merrill Lynch Mortgage Investors, Inc., 4 World Financial Center, New York, New York 10281, (Telecopy: 212-449-6710), Attention: Brian Brennan; or to any other address as may hereafter be furnished by one party to the other party by like notice. Any such demand, notice or communication hereunder shall be deemed to have been received on the date received at the premises of the addressee (as evidenced, in the case of registered or
certified mail, by the date noted on the return receipt) provided that it is received on a business day during normal business hours and, if received after normal business hours, then it shall be deemed to be received on the next business day.

Section 15.       Transfer of Mortgage Loans.  The Purchaser retains the right to assign the Mortgage Loans and any or all of its interest under this Agreement to the Trustee without the consent of the Seller, and, upon such assignment, the Trustee shall succeed to the applicable rights and obligations of the Purchaser hereunder; provided, however, the Purchaser shall remain entitled to the benefits set forth in Sections 11, 13 and 17 hereto and as provided in Section 2(a). Notwithstanding the foregoing, the sole and exclusive right and remedy of the Trustee with respect to a breach of representation or warranty of the Seller shall be the purchase or substitution obligations of the Seller contained in Sections 5 and 7 hereof.

Section 16.        Termination.  This Agreement may be terminated (a) by the mutual consent of the parties hereto prior to the Closing Date, (b) by the Purchaser, if the conditions to the Purchaser’s obligation to close set forth under Section 10(a) hereof are not fulfilled as and when required to be fulfilled or (c) by the Seller, if the conditions to the Seller’s obligation to close set forth under Section 10(b) hereof are not fulfilled as and when required to be fulfilled. In the event of termination pursuant to clause (b), the Seller shall pay, and in the event of termination pursuant to clause (c), the Purchaser shall pay, all reasonable out-of-pocket expenses incurred by the other in connection with the transactions contemplated by this Agreement. In the event of a termination pursuant to
clause (a), each party shall be responsible for its own expenses.

Section 17.        Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and agreements contained in this Agreement, or contained in certificates of officers of the Seller submitted pursuant hereto, shall remain operative and in full force and effect and shall survive delivery of the Mortgage Loans to the Purchaser (and by the Purchaser to the Trustee). Subsequent to the delivery of the Mortgage Loans to the Purchaser, the Seller’s representations and warranties contained herein with respect to the Mortgage Loans shall be deemed to relate to the Mortgage Loans actually delivered to the Purchaser and included in the Final Mortgage Loan Schedule and any Substitute Mortgage Loan and not to those Mortgage Loans deleted from the Preliminary Mortgage Loan Schedule
pursuant to Section 3 hereof prior to the Closing.

 

 

Section 18.       Mandatory Delivery; Grant of Security Interest. The sale and delivery on the Closing Date of the Mortgage Loans described on the Mortgage Loan Schedule in accordance with the terms and conditions of this Agreement is mandatory. It is specifically understood and agreed that each Mortgage Loan is unique and identifiable on the date hereof and that an award of money damages would be insufficient to compensate the Purchaser for the losses and damages incurred by the Purchaser in the event of the Seller’s failure to deliver the Mortgage Loans on or before the Closing Date. The Seller hereby grants to the Purchaser a lien on and a continuing security interest in the Seller’s interest in each Mortgage Loan and each document and instrument evidencing each such Mortgage Loan to secure the
performance by the Seller of its obligation hereunder, and the Seller agrees that it holds such Mortgage Loans in custody for the Purchaser, subject to the Purchaser’s obligation to deliver or cause to be delivered the consideration for the Mortgage Loans pursuant to Section 2 hereof. The Seller agrees that, upon acceptance of the Mortgage Loans by the Purchaser or its designee and delivery of payment to the Seller, that its security interest in the Mortgage Loans shall be released. All rights and remedies of the Purchaser under this Agreement are distinct from, and cumulative with, any other rights or remedies under this Agreement or afforded by law or equity and all such rights and remedies may be exercised concurrently, independently or successively.

Notwithstanding the foregoing, if on the Closing Date, each of the conditions set forth in Section 10 hereof shall have been satisfied and the Purchaser shall not have paid or caused to be paid the purchase price as described in Section 2 hereof, or any such condition shall not have been waived or satisfied and the Purchaser determines not to pay or cause to be paid the purchase price, the Purchaser shall immediately effect the redelivery of the Mortgage Loans, if delivery to the Purchaser has occurred and the security interest created by this Section 18 shall be deemed to have been released.

Section 19.        Severability.  Any part, provision, representation or warranty of this Agreement which is prohibited or which is held to be void or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any part, provision, representation or warranty of this Agreement which is prohibited or unenforceable or is held to be void or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by
applicable law, the parties hereto waive any provision of law which prohibits or renders void or unenforceable any provision hereof.

Section 20.        Counterparts.  This Agreement may be executed in counterparts, each of which will be an original, but which together shall constitute one and the same agreement.

Section 21.        Amendment.  This Agreement cannot be amended or modified in any manner without the prior written consent of each party.

Section 22.        GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE AND PERFORMED IN THE STATE OF NEW YORK 

 

AND SHALL BE INTERPRETED IN ACCORDANCE WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES OF SUCH STATE.

Section 23.       Further Assurances. Each of the parties agrees to execute and deliver such instruments and take such actions as another party may, from time to time, reasonably request in order to effectuate the purpose and to carry out the terms of this Agreement including any amendments hereto which may be required by either Rating Agency.

	
             
  	
            Section 24.
 	
            Successors and Assigns.
 

This Agreement shall bind and inure to the benefit of and be enforceable by the Seller and the Purchaser and their permitted successors and assigns and, to the extent specified in Section 13 hereof, Merrill Lynch, and their directors, officers and controlling persons (within the meaning of federal securities laws). The Seller acknowledges and agrees that the Purchaser may assign its rights under this Agreement (including, without limitation, with respect to the Seller’s representations and warranties respecting the Mortgage Loans) to the Trustee. Any person into which the Seller may be merged or consolidated (or any person resulting from any merger or consolidation involving the Seller), any person resulting from a change in form of the Seller or any person succeeding to the business of the Seller, shall be considered the “successor” of the Seller hereunder and shall be
considered a party hereto without the execution or filing of any paper or any further act or consent on the part of any party hereto. Except as provided in the two preceding sentences, this Agreement cannot be assigned, pledged or hypothecated by either party hereto without the written consent of the other parties to this Agreement and any such assignment or purported assignment shall be deemed null and void.

Section 25.       The Seller.  The Seller will keep in full effect all rights as are necessary to perform their respective obligations under this Agreement.

Section 26.        Entire Agreement.  This Agreement contains the entire agreement and understanding between the parties with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof.

Section 27.       No Partnership.  Nothing herein contained shall be deemed or construed to create a partnership or joint venture between the parties hereto.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

IN WITNESS WHEREOF, the parties hereto have caused their names to be signed hereto by their respective duly authorized officers as of the date first above written.

	
             
 	
            EMC MORTGAGE CORPORATION
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Name:        
 
	
             
 	
            Title:                   
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
            MERRILL LYNCH MORTGAGE
 INVESTORS, INC.
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Name:        
 
	
             
 	
            Title:                   
 

 

 

 

ANNEX I

 

LIST OF MORTGAGE LOANS

 

(Available Upon Request)

 

 

EXHIBIT 1

CONTENTS OF MORTGAGE FILE

With respect to each Mortgage Loan, the Mortgage File shall include each of the following items, which shall be available for inspection by the Purchaser or its designee, and which shall be delivered to the Purchaser or its designee pursuant to the terms of the Agreement.

	
             
  	
            (a)
 	
            With respect to each Mortgage Loan:
 

(i)           The original Mortgage Note, including any riders thereto, endorsed by the Seller or the originator, as applicable, without recourse in proper form to the order of the Trustee, at the direction of the Purchaser, with any intervening endorsements showing an unbroken chain of title from the originator to the Trustee or with respect to the Mortgage Loans as to which the Mortgage Note has been lost, lost note affidavits and if available, a copy of the lost Mortgage Note;

(ii)          An original duly executed assignment of Mortgage from the originator to _____________;

(iii)        The original recorded Mortgage, if available. If, in connection with any Mortgage Loan, the Seller cannot deliver the original Mortgage with evidence of recording thereon on or prior to the Closing Date because of its delivery to, or a delay caused by, the public recording office where such Mortgage has been delivered for recordation, or if such original Mortgage Loan has been retained by the public recording office as a matter of policy, or has been lost, the Seller shall deliver or cause to be delivered to the Trustee a photocopy thereof, if available (certified by the Seller to be a true and correct copy of the original which has been transmitted for recordation), together with an officer’s certificate of the Seller stating that such Mortgage has been dispatched to the appropriate recording
official for recordation, has been retained by such recording office as a matter of policy or has been lost, as applicable; 

(iv)         If applicable and available, all original intervening recorded assignments, if any, showing an unbroken chain of title to the Mortgage from the originator to the Seller or the Trustee; 

(v)          The originals of each assumption, modification or substitution agreement, if any and if available, relating to the Mortgage Loan. If in connection with any Mortgage Loan the Seller cannot deliver the assumption, modification or substitution agreement with evidence of recording thereon on or prior to the Closing Date because of a delay caused by the public recording office where such assumption, modification or substitution agreement has been delivered for recordation, the Seller shall deliver or cause to be delivered to the Trustee a photocopy of such assumption, modification or substitution agreement (certified by the Seller to be a true and correct copy of the original which has been transmitted for recordation), together with a certificate of an officer of the Seller 

 

stating that such assumption, modification or substitution agreement has been dispatched to the appropriate recording official for recordation, if available; 

(vi)         the original mortgagee’s title insurance policy or a written commitment to issue such title insurance policy; . 

	
             
  	
            (b)
 	
            With respect to each Cooperative Loan so assigned;
 

(i)           The original Mortgage Note, endorsed without recourse to the order of the Trustee and showing an unbroken chain of endorsements from the originator thereof to the Person endorsing it to the Trustee, or lost note affidavit, together with a copy of the related Mortgage Note; 

(ii)          A counterpart of the Cooperative Lease and the Assignment of Proprietary Lease to the originator of the Cooperative Loan with intervening assignments showing an unbroken chain of title from such originator to the Trustee; 

(iii)        The related Cooperative Stock Certificate, representing the related Cooperative Stock pledged with respect to such Cooperative Loan, together with an undated stock power (or other similar instrument) executed in blank; 

(iv)         The original recognition agreement by the Cooperative of the interests of the mortgagee with respect to the related Cooperative Loan and any transfer documents related to the recognition agreement; 

	
             
  	
            (v)
 	
            The Security Agreement;
 

(vi)         Copies of the original UCC-1 financing statement, and any continuation statements, filed by the originator of such Cooperative Loan as secured party, each with evidence of recording thereof, evidencing the interest of the originator under the Security Agreement and the Assignment of Proprietary Lease; 

(vii)       Copies of the filed UCC-3 assignments of the security interest referenced in clause (vi) above showing an unbroken chain of title from the originator to the Trustee, each with evidence of recording thereof, evidencing the interest of the originator under the Security Agreement and the Assignment of Proprietary Lease; 

(viii)      An executed assignment of the interest of the originator in the Security Agreement and Assignment of Proprietary Lease, showing an unbroken chain of title from the originator to the Trustee; and

(ix)         The original of each modification, assumption agreement or preferred loan agreement, if any, relating to such Cooperative Loan. 

 

 

EXHIBIT 2

CONTENTS OF FINAL MORTGAGE FILE

(A)         With respect to each Mortgage Loan, the Mortgage File shall include each of the following items, which shall be available for inspection by the Purchaser or its agent, and which shall be delivered to the Purchaser pursuant to the terms of the Agreement.

(i)           The original Mortgage Note, including any riders thereto, endorsed by the originator to _____________, as applicable, without recourse in proper form to the order of the Trustee, at the direction of the Purchaser, with any intervening endorsements showing an unbroken chain of title from the originator to the Trustee, or with respect to the Mortgage Loans as to which the Mortgage Note has been lost, lost note affidavits and if available, a copy of the lost Mortgage Note;

(ii)          An original duly executed assignment of Mortgage in recordable form from the Seller or the originator, as applicable, to the Trustee, with evidence of recording indicated thereon; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office;

(iii)        The original recorded Mortgage, if available, with evidence of recording indicated thereon; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation or such office as a matter of policy does not return the original of such document or if such original Mortgage has been lost, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office, if available;

(iv)         The original intervening assignments, including warehousing assignments, if any and if available, with evidence of recording thereon, showing an unbroken chain of title to the Mortgage from the Seller or the originator, as the case may be, to the Seller or the Trustee; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation or such office as a matter of policy does not return the original of such document, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office, if available;

(v)          The originals of each assumption, modification or substitution agreement, if any and if available, relating to the Mortgage Loan; and

(vi)         the original mortgagee’s title insurance policy or, if a master title policy has been issued by the title insurer, a mortgagee’s certificate of title insurance or a written commitment to issue such title insurance policy.

 

 

EXHIBIT 3

MORTGAGE LOAN SCHEDULE INFORMATION

The Preliminary and Final Mortgage Loan Schedules shall set forth the following information with respect to each Mortgage Loan:

	
             
  	
            (a)
 	
            the loan number of the mortgage loan;
 	
             

	
             
  	
            (i)
 	
            the city, state and zip code of the Mortgage Property;
 
					

(ii)          a code indicating whether the Mortgaged Property is owner-occupied; 

(iii)        the type of Residential Dwelling constituting the Mortgaged Property; 

	
             
  	
            (iv)
 	
            the original months to maturity;
 	
             

	
             
  	
            (v)
 	
            the original date of the mortgage;
 	
             

	
             
  	
            (vi)
 	
            the Loan-to-Value Ratio at origination;
 
	
             
  	
            (vii)
 	
            the Mortgage Interest Rate;
 	
             

						

(viii)      the date on which the first Monthly Payment was due on the Mortgage Loan; 

	
             
  	
            (ix)
 	
            the stated maturity date;
 	
             

	
             
  	
            (x)
 	
            the amount of the Monthly Payment at origination;
 	
             

	
             
  	
            (xi)
 	
            the amount of the Monthly Payment as of the Cut-off Date;
 
					

(xii)       the last Due Date on which a Monthly Payment was actually applied to the unpaid Stated Principal Balance; 

	
             
  	
            (xiii)
 	
            the original principal amount of the Mortgage Loan;
 

(xiv)      the Stated Principal Balance of the Mortgage Loan as of the close of business on the Cut-off Date; 

(xv)        a code indicating the purpose of the Mortgage Loan (i.e., purchase financing, Rate/Term Refinancing, Cash-Out Refinancing); 

(xvi)      a code indicating the documentation style (i.e., full, alternative or reduced); 

	
             
  	
            (xvii)
 	
            [reserved];
 

 

 

 

	
             
  	
            (xviii)
 	
            the Value of the Mortgaged Property;
 	
             

	
             
  	
            (xix)
 	
            the sale price of the Mortgaged Property, if applicable;
 

(xx)        the actual unpaid principal balance of the Mortgage Loan as of the Cut-off Date; 

	
             
  	
            (xxi)
 	
            the Servicing Fee;
 
	
             
  	
            (xxii)
 	
            [reserved];
 	
             

(xxiii)    with respect to each adjustable-rate Mortgage Loan, the next Interest Rate Adjustment Date; 

(xxiv)    with respect to each adjustable-rate Mortgage Loan, the Gross Margin; 

(xxv)     with respect to each adjustable-rate Mortgage Loan, the Minimum and Maximum Mortgage Rate under the terms of the Mortgage Note; 

(xxvi)    with respect to each adjustable-rate Mortgage Loan, the First Rate Cap; 

(xxvii)   with respect to each adjustable-rate Mortgage Loan, the related Periodic Rate Cap; 

(xxviii) with respect to each adjustable-rate Mortgage Loan, whether it is interest-only; and

	
             
  	
            (xxix)
 	
            with respect to each adjustable-rate Mortgage Loan, the Seller.
 

Such schedule shall set forth the following information with respect to the Mortgage Loans in the aggregate as of the Cut-off Date: (1) the number of Mortgage Loans; (2) the current principal balance of the Mortgage Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans; and (4) the weighted average maturity of the Mortgage Loans.

 

 

EXHIBIT 4

PURCHASER'S INFORMATION

All information in the Prospectus Supplement and the Prospectus, except the Seller’s Information.

 

 

EXHIBIT 5

SCHEDULE OF LOST NOTES

Available Upon Request

 

 

EXHIBIT 6

FORM OF CUSTODIAN INITIAL CERTIFICATION

December __, 2005

Merrill Lynch Mortgage Investors, Inc.

4 World Financial Center, 10th Floor

New York, New York 10281

HSBC Bank USA, National Association

Corporate Trust & Loan Agency

452 Fifth Avenue

New York, New York  10018

 

	
             
 	
            Re:
 	
            
Pooling and Servicing Agreement, dated as of December 1, 2005, among Merrill Lynch Mortgage Investors, Inc., as depositor, Wells Fargo Bank, N.A., as master servicer and securities administrator and HSBC Bank USA, National Association, as trustee, Mortgage Pass-Through Certificates, Series MLMI 2005-A10
 
 

 

Ladies and Gentlemen:

Attached is the Custodian’s preliminary exception report delivered in accordance with Section 2.02 of the referenced Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”).  Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Pooling and Servicing Agreement.

The Custodian has made no independent examination of any documents contained in each Mortgage File beyond the review specifically required in the Pooling and Servicing Agreement.  The Custodian makes no representations as to (i) the validity, legality, sufficiency, enforceability or genuineness of any of the documents contained in the Mortgage File pertaining to the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the collectability, insurability, effectiveness or suitability of any such Mortgage Loan or (iii) the existence of any 

 

assumption, modification, written assurance, or substitution agreement, with respect to any Mortgage File if no such documents appear in the Mortgage File delivered to the Custodian.

	
             
 	
            WELLS FARGO BANK, N.A.,
 as Custodian
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Name:        
 
	
             
 	
            Title:                   
 

 

 

 

EXHIBIT 7

FORM OF CUSTODIAN FINAL CERTIFICATION

____________, 2005

Merrill Lynch Mortgage Investors, Inc.

World Financial Center--North Tower

250 Vesey Street

New York, NY 10281

Attention: Paul Park

HSBC Bank USA, National Association

Corporate Trust & Loan Agency

452 Fifth Avenue

New York, New York  10018

 

	
             
 	
            Re:
 	
            
Pooling and Servicing Agreement, dated as of December 1, 2005, among Merrill Lynch Mortgage Investors, Inc., as depositor, Wells Fargo Bank, N.A., as master servicer and securities administrator and HSBC Bank USA, National Association, as trustee, Mortgage Pass-Through Certificates, Series MLMI 2005-A10
 
 

 

Ladies and Gentlemen:

In accordance with Section 2.02 of the above-captioned Pooling and Servicing Agreement, the undersigned, hereby certifies that, except as noted on the Schedule of Exceptions attached hereto, for each Mortgage Loan listed on the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on the attachment hereto), it has received a complete Mortgage File which includes the documents required to be included in the Mortgage File as set forth in the Pooling and Servicing Agreement.

The undersigned has made no independent examination of any documents contained in each Mortgage File beyond the review specifically required in the above-referenced Pooling and Servicing Agreement.  The undersigned makes no representation as to: (i) the validity, legality, 

 

sufficiency, enforceability or genuineness of any documents contained in any Mortgage File for any of the Mortgage Loans listed on the Mortgage Loan Schedule to the Pooling and Servicing Agreement, (ii) the collectability, insurability, effectiveness or suitability of any such Mortgage Loan or (iii) whether any Mortgage File should include any flood insurance policy, any rider, addends, surety or guaranty agreement, power of attorney, buy down agreement, assumption agreement, modification agreement, written assurance or substitution agreement.

 

 

Capitalized words and phrases used herein shall have the respective meanings assigned to them in the above-captioned Pooling and Servicing Agreement.

	
             
 	
            WELLS FARGO BANK, N.A.,
 as Custodian
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Name:        
 
	
             
 	
            Title:                   
 

 

 

 

EXHIBIT 8

 

REVISED August 1, 2005

 

APPENDIX E - STANDARD & POOR'S PREDATORY LENDING CATEGORIES 

Standard & Poor’s has categorized loans governed by anti-predatory lending laws in the Jurisdictions listed below into three categories based upon a combination of factors that include (a) the risk exposure associated with the assignee liability and (b) the tests and thresholds set forth in those laws. Note that certain loans classified by the relevant statute as Covered are included in Standard & Poor’s High Cost Loan Category because they included thresholds and tests that are typical of what is generally considered High Cost by the industry. 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Arkansas 
 	
            Arkansas Home Loan Protection Act, Ark. Code Ann. §§ 23-53-101 et seq. 

Effective July 16, 2003 
 	
            High Cost Home Loan 
 
	
            Cleveland Heights, OH 
 	
            Ordinance No. 72-2003 (PSH), Mun. Code §§ 757.01 et seq. 

Effective June 2, 2003 
 	
            Covered Loan 
 
	
            Colorado 
 	
            Consumer Equity Protection, Colo. Stat. Ann. §§ 5-3.5-101 et seq. 

Effective for covered loans offered or entered into on or after January 1, 2003. Other provisions of the Act took effect on June 7, 2002 
 	
            Covered Loan 
 
	
            Connecticut 
 	
            Connecticut Abusive Home Loan Lending Practices Act, Conn. Gen. Stat. §§ 36a-746 et seq. 

Effective October 1, 2001 
 	
            High Cost Home Loan 
 
	
            District of Columbia 
 	
            Home Loan Protection Act, D.C. Code §§ 26-1151.01 et seq. 

Effective for loans closed on or after January 28, 2003 
 	
            Covered Loan 
 
	
            Florida 
 	
            Fair Lending Act, Fla. Stat. Ann. §§ 494.0078 et seq. 

Effective October 2, 2002 
 	
            High Cost Home Loan 
 

 

 

 

 

	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 
 	
            High Cost Home Loan 
 

 

 

 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Effective October 1, 2002 – March 6, 2003 
 	
             
 
	
            Georgia as amended (Mar. 7, 2003 – current) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 

Effective for loans closed on or after March 7, 2003 
 	
            High Cost Home Loan 
 
	
            HOEPA Section 32 
 	
            Home Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1639, 12 C.F.R. §§ 226.32 and 226.34 

Effective October 1, 1995, amendments October 1, 2002 
 	
            High Cost Loan 
 
	
            Illinois 
 	
            High Risk Home Loan Act, Ill. Comp. Stat. tit. 815, §§ 137/5 et seq. 

Effective January 1, 2004 (prior to this date, regulations under Residential Mortgage License Act effective from May 14, 2001) 
 	
            High Risk Home Loan 
 
	
            Kansas 
 	
            Consumer Credit Code, Kan. Stat. Ann. §§ 16a-1-101 et seq. 

Sections 16a-1-301 and 16a-3-207 became effective April 14, 1999; Section 16a-3-308a became effective July 1, 1999 
 	
            High Loan to Value Consumer Loan (id. § 16a-3-207) and; 
 
	
            High APR Consumer Loan (id. § 16a-3-308a) 
 
	
            Kentucky 
 	
            2003 KY H.B. 287 – High Cost Home Loan Act, Ky. Rev. Stat. §§ 360.100 et seq. 

Effective June 24, 2003 
 	
            High Cost Home Loan 
 
	
            Maine 
 	
            Truth in Lending, Me. Rev. Stat. tit. 9-A, §§ 8-101 et seq. 

Effective September 29, 1995 and as amended from time to time 
 	
            High Rate High Fee Mortgage 
 
	
            Massachusetts 
 	
            Part 40 and Part 32, 209 C.M.R. §§ 32.00 et seq. and 209 C.M.R. §§ 40.01 et seq. 
 	
            High Cost Home Loan 
 

 

 

 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Effective March 22, 2001 and amended from time to time 
 	
             
 
	
            Nevada 
 	
            Assembly Bill No. 284, Nev. Rev. Stat. §§ 598D.010 et seq. 

Effective October 1, 2003 
 	
            Home Loan 
 
	
            New Jersey 
 	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. 

Effective for loans closed on or after November 27, 2003 
 	
            High Cost Home Loan 
 
	
            New Mexico 
 	
            Home Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq. 

Effective as of January 1, 2004; Revised as of February 26, 2004 
 	
            High Cost Home Loan 
 
	
            New York 
 	
            N.Y. Banking Law Article 6-l 

Effective for applications made on or after April 1, 2003 
 	
            High Cost Home Loan 
 
	
            North Carolina 
 	
            Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E et seq. 

Effective July 1, 2000; amended October 1, 2003 (adding open-end lines of credit) 
 	
            High Cost Home Loan 
 
	
            Ohio 
 	
            H.B. 386 (codified in various sections of the Ohio Code), Ohio Rev. Code Ann. §§ 1349.25 et seq. 

Effective May 24, 2002 
 	
            Covered Loan 
 
	
            Oklahoma 
 	
            Consumer Credit Code (codified in various sections of Title 14A) 

Effective July 1, 2000; amended effective January 1, 2004 
 	
            Subsection 10 Mortgage 
 
	
            South Carolina 
 	
            South Carolina High Cost and Consumer Home Loans Act, S.C. Code 
 	
            High Cost Home Loan 
 

 

 

 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Ann. §§ 37-23-10 et seq. 

Effective for loans taken on or after January 1, 2004 
 	
             
 
	
            West Virginia 
 	
            West Virginia Residential Mortgage Lender, Broker and Servicer Act, W. Va. Code Ann. §§ 31-17-1 et seq. 

Effective June 5, 2002 
 	
            West Virginia Mortgage Loan Act Loan 
 

 

STANDARD & POOR'S COVERED LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 

Effective October 1, 2002 – March 6, 2003 
 	
            Covered Loan 
 
	
            New Jersey 
 	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. 

Effective November 27, 2003 – July 5, 2004 
 	
            Covered Home Loan 
 

 

STANDARD & POOR'S HOME LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 

Effective October 1, 2002 – March 6, 2003 
 	
            Home Loan 
 
	
            New Jersey 
 	
            New Jersey Home Ownership Security 
 	
            Home Loan 
 

 

 

 

STANDARD & POOR'S HOME LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. 

Effective for loans closed on or after November 27, 2003 
 	
             
 
	
            New Mexico 
 	
            Home Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq. 

Effective as of January 1, 2004; Revised as of February 26, 2004 
 	
            Home Loan 
 
	
            North Carolina 
 	
            Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E et seq. 

Effective July 1, 2000; amended October 1, 2003 (adding open-end lines of credit) 
 	
            Consumer Home Loan 
 
	
            South Carolina 
 	
            South Carolina High Cost and Consumer Home Loans Act, S.C. Code Ann. §§ 37-23-10 et seq. 

Effective for loans taken on or after January 1, 2004 
 	
            Consumer Home Loan 
 

 

EXHIBIT K

FORM OF BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE

This certificate is being delivered pursuant to Section 3.16 of the Pooling and Servicing Agreement, dated as of October 1, 2005 (the “Agreement”), among Bear Stearns Asset Backed Securities I LLC, as depositor (the “Depositor”), EMC Mortgage Corporation as a seller (in that capacity, a “Seller”) and as master servicer (in that capacity, the “Master Servicer”) and LaSalle Bank National Association as trustee (the “Trustee”). Capitalized terms used herein and not otherwise defined have the meanings set forth in the Agreement.

I, [identify the certifying individual], on behalf of LaSalle Bank National Association, as trustee (the “Trustee”) certify that:

1.            I have reviewed the annual report on Form 10-K for the fiscal year [___], and all reports on Form 8-K containing distribution or servicing reports filed in respect of periods included in the year covered by that annual report, of the trust (the “Trust”) created pursuant to the Agreement; and

2.            Based on my knowledge, the distribution information in these reports and any other information provided by the Trustee for inclusion in these reports, taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which the statements were made, not misleading as of the last day of the period covered by that annual report.

	
             
 	
            Date:
 	
             
 	
             
 	 	 	 	 
	
             
 	
             
 	
             
 	
             
 	 	 	 	 
	
             
 	
            [Signature]
 	
             
 
	
             
 	
            Name:
 	
             
 
	
             
 	
            Title:
 	
             
 
									

 

 

 

EXHIBIT L-1

 

KKR SUBSEQUENT SALE AND ASSIGNMENT AGREEMENT

SUBSEQUENT SALE AND ASSIGNMENT AGREEMENT, dated as of December 28, 2005, as amended and supplemented by any and all amendments hereto (collectively, the “Agreement”), by and between KKR FINANCIAL CORP., a Maryland corporation (the “Seller”), and KKR FINANCIAL MORTGAGE CORP., a Maryland corporation (the “Purchaser”).

Upon the terms and subject to the conditions of this Agreement, the Seller agrees to sell, and the Purchaser agrees to purchase, certain first lien, fixed-rate and adjustable-rate mortgage loans secured by one- to four-family residences, individual condominiums, co-op units and units in planned unit developments (collectively, the “Subsequent Mortgage Loans”) as described herein. The Purchaser intends to sell the Subsequent Mortgage Loans to Merrill Lynch Mortgage Investors, Inc. (the “Depositor”), which intends, in turn, to deposit the Subsequent Mortgage Loans into a trust fund (the “Trust Fund”) and create Mortgage Pass-Through Certificates, Series MLMI 2005-A10 (the “Certificates”), under a pooling and
servicing agreement, to be dated as of December 1, 2005 (the “Pooling and Servicing Agreement”), between the Purchaser, as seller, HSBC Bank USA, National Association, as trustee (the “Trustee”) and Wells Fargo Bank, N.A., as master servicer and securities administrator (the “Master Servicer”).

The Depositor has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (Number 333-127233) relating to its Mortgage Pass-Through Certificates and the offering of certain series thereof (including certain classes of the Certificates) from time to time in accordance with Rule 415 under the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder (the “Securities Act”). Such registration statement, when it became effective under the Securities Act, and the prospectus relating to the public offering of certain classes of the Certificates by the Purchaser (the “Public Offering”), as from time to time each is amended or
supplemented pursuant to the Securities Act or otherwise, are referred to herein as the “Registration Statement” and the “Prospectus,” respectively. The “Prospectus Supplement” shall mean that supplement, dated December 21, 2005 to the Prospectus, dated August 26, 2005, relating to certain classes of the Certificates. With respect to the Public Offering of certain classes of the Certificates, the Depositor and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) have entered into a terms agreement dated as of December 21, 2005 to an underwriting agreement dated September 27, 2005, between the Depositor and Merrill Lynch (together, the “Underwriting Agreement”).

Now, therefore, in consideration of the premises and the mutual agreements set forth herein, the parties hereto agree as follows:

Section 1.          Definitions. Certain terms are defined herein. Capitalized terms used herein but not defined herein shall have the meanings specified in the Pooling and Servicing Agreement. The following other terms are defined as follows:

 

 

Co-op Lease:  With respect to a Co-op Loan, the lease with respect to a dwelling unit occupied by the Mortgagor and relating to the stock allocated to the related dwelling unit.

Co-op Loan:  A Subsequent Mortgage Loan secured by the pledge of stock allocated to a dwelling unit in a residential cooperative housing corporation and a collateral assignment of the related Co-op Lease.

Co-op Stock:  With respect to a Co-op Loan, the single outstanding class of stock, partnership interest or other ownership instrument in the related residential cooperative housing corporation.

Deleted Mortgage Loan: A Subsequent Mortgage Loan replaced or to be replaced by a Substitute Mortgage Loan.

Due Date: With respect to each Subsequent Mortgage Loan, the first day of each month.     

Master Servicer: Wells Fargo Bank, N.A.

Merrill Lynch: Merrill Lynch, Pierce, Fenner & Smith Incorporated.

Moody’s: Moody’s Investors Service, Inc., or its successors in interest.

Mortgage: The mortgage or deed of trust creating a first lien on an interest in real property securing a Mortgage Note.

Mortgage File: The items referred to in Exhibit 1 and Exhibit 2 pertaining to a particular Subsequent Mortgage Loan and any additional documents required to be added to such documents pursuant to this Agreement.

Mortgage Interest Rate: The annual rate of interest borne by a Mortgage Note as stated therein.

Mortgagor: The obligor(s) on a Mortgage Note.

Net Rate: For each Subsequent Mortgage Loan, the Mortgage Interest Rate for such Subsequent Mortgage Loan less the Master Servicing Fee Rate and the Trustee Fee Rate.

Offered Certificates: Shall mean the Class A, Class A-IO, Class M-1, Class M-2, Class M-3 and Class M-IO Certificates issued pursuant to the Pooling and Servicing Agreement.

Opinion of Counsel: A written opinion of counsel, who may be counsel for the Seller or the Purchaser, reasonably acceptable to the Trustee.

Person: Any legal person, including any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

 

 

Purchase Price: With respect to any Subsequent Mortgage Loan required to be purchased by the Seller pursuant to the applicable provisions of this Agreement, an amount equal to the sum of (i) 100% of the principal remaining unpaid on such Subsequent Mortgage Loan as of the date of purchase (including if a foreclosure has already occurred, the principal balance of the related Subsequent Mortgage Loan at the time the Mortgaged Property was acquired), and (ii) accrued and unpaid interest thereon at the Mortgage Interest Rate through and including the last day of the month of purchase (iii) any costs and damages incurred by the Trust in connection with any violation by such Subsequent Mortgage Loan of any predatory or abusive-lending law.

Rating Agencies: S&P and Moody’s, each a “Rating Agency.”

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

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

Subsequent Closing Date: December 28, 2005.

Subsequent Cut-off Date: December 1, 2005.

	
             
 	
            Subsequent Cut-off Date Balance: $[  
 	
            ].
 

Substitute Mortgage Loan: A mortgage loan substituted for a Deleted Mortgage Loan which must meet on the date of such substitution the requirements stated herein and in the Pooling and Servicing Agreement; upon such substitution, such mortgage loan shall be a “Subsequent Mortgage Loan” hereunder.

Value: The value of the Mortgaged Property at the time of origination of the related Subsequent Mortgage Loan, such value being the lesser of (i) the value of such property set forth in an appraisal accepted by the Originator or (ii) the sales price of such property at the time of origination.

Section 2.           Purchase and Sale of the Subsequent Mortgage Loans and Related Rights. (a) Upon satisfaction of the conditions set forth in Section 10 hereof, the Seller agrees to sell, and the Purchaser agrees to purchase Subsequent Mortgage Loans having an aggregate Subsequent Cut-off Date Balance of $[              ].

(b)          The closing for the purchase and sale of the Subsequent Mortgage Loans and the closing for the issuance of the Certificates will take place on the Subsequent Closing Date at the office of the Depositor’s counsel in New York, New York or such other place as the parties shall agree.

(c)          Upon the satisfaction of the conditions set forth in Section 10 hereof, on the Subsequent Closing Date, in consideration of the purchase of the Subsequent Mortgage Loans, the Purchaser shall (i) pay to the Seller an amount equal to the net sale proceeds of the Offered Certificates plus accrued interest (the “Purchase Price”) in immediately available funds by wire transfer to such account or accounts as shall be designated by the Seller.

 

 

(d)          In addition to the foregoing, on the Subsequent Closing Date the Seller assigns to the Purchaser without recourse all of its right, title and interest in the Master Mortgage Loan Purchase and Servicing Agreement, dated as of December 1, 2004, between First Republic Bank and the Purchaser, amended and restated as of January 31, 2005.

Section 3.         Subsequent Mortgage Loan Schedules.  The Seller agrees to provide to the Purchaser as of the date hereof a preliminary listing of the Subsequent Mortgage Loans (the “Preliminary Subsequent Mortgage Loan Schedule”) setting forth the information listed on Exhibit 3 to this Agreement with respect to each of the Subsequent Mortgage Loans being sold by the Seller. If there are changes to the Preliminary Subsequent Mortgage Loan Schedule, the Seller shall provide to the Purchaser as of the Subsequent Closing Date a final schedule (the “Final Subsequent Mortgage Loan Schedule”) setting forth the information listed on Exhibit 3 to this Agreement with respect to each of the Subsequent Mortgage Loans being sold by the Seller to the Purchaser. The Final Subsequent
Mortgage Loan Schedule shall be delivered to the Purchaser on the Subsequent Closing Date, shall be attached to an amendment to this Agreement to be executed on the Subsequent Closing Date by the parties hereto and shall be in form and substance mutually agreed to by the Seller and the Purchaser (the “Amendment”). If there are no changes to the Preliminary Subsequent Mortgage Loan Schedule, the Preliminary Subsequent Mortgage Loan Schedule shall be the Final Subsequent Mortgage Loan Schedule for all purposes hereof.

 

	
             
  	
            Section 4.
 	
            Subsequent Mortgage Loan Transfer.
 

(a)          The Purchaser will be entitled to all scheduled payments of principal and interest on the Subsequent Mortgage Loans due after the Subsequent Cut-off Date (regardless of hen actually collected) and all payments thereof other than scheduled principal and interest received after the Subsequent Cut-off Date. The Seller will be entitled to all scheduled payments of principal and interest on the Subsequent Mortgage Loans due on or before the Subsequent Cut-off Date (including payments collected after the Subsequent Cut-off Date) and all payments thereof other than scheduled principal and interest on the Subsequent Mortgage Loans received on or before the Subsequent Cut-off Date. Such principal amounts and any interest thereon belonging to the Seller as described above will not be included in the aggregate
outstanding principal balance of the Subsequent Mortgage Loans as of the Subsequent Cut-off Date as set forth on the Final Subsequent Mortgage Loan Schedule.

(b)          Pursuant to various conveyancing documents to be executed on the Subsequent Closing Date and pursuant to the Pooling and Servicing Agreement, the Purchaser will assign on the Subsequent Closing Date all of its right, title and interest in and to the Subsequent Mortgage Loans to the Trustee for the benefit of the Certificateholders. In connection with the transfer and assignment of the Subsequent Mortgage Loans, the Seller has delivered or will deliver or cause to be delivered to the Trustee by the Subsequent Closing Date or such later date as is agreed to by the Purchaser and the Seller (each of the Subsequent Closing Date and such later date is referred to as a “Mortgage File Delivery Date”), the items of each Mortgage File, provided, however, that in lieu of the foregoing, the Seller may deliver
the following documents, under the circumstances set forth below: (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 in time to permit their delivery as specified above, the Seller may deliver a true copy thereof with a certification by the Seller or the Originator, 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;” (y) in lieu of the Mortgage, assignments to the Trustee or intervening assignments thereof, if the applicable jurisdiction retains the originals of such documents or if the originals are lost (in each case, as evidenced by a certification from the Seller to such effect), the Seller 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 (z) in lieu of the
Mortgage Notes relating to the Subsequent Mortgage Loans, each identified in the list delivered by the Purchaser to the Trustee on the Subsequent Closing Date and attached hereto as Exhibit 6 the Seller may deliver lost note affidavits and indemnities of the Seller; and provided further, however, that in the case of Subsequent Mortgage Loans which have been prepaid in full after the Subsequent Cut-off Date and prior to the Subsequent Closing Date, the Seller, in lieu of delivering the above documents, may deliver to the Trustee a certification by the Seller to such effect. The Seller shall deliver such original documents (including any original documents as to which certified copies had previously been delivered) or such certified copies to the Trustee promptly after they are received. The Seller shall cause the Mortgage and intervening assignments, if any, and the assignment of the Mortgage to be recorded not later than 180 days after the Subsequent Closing Date, or, in lieu of such
assignments, shall provide an Opinion of Counsel pursuant to Section 6(a) hereof to the effect that the recordation of such assignment is not necessary to protect the Trustee’s interest in the related Subsequent Mortgage Loan. Upon the request of the Purchaser, the Seller will assist the Purchaser in effecting the assignment referred to above.

(c)          The Seller and the Purchaser acknowledge hereunder that all of the Subsequent Mortgage Loans and the related servicing will ultimately be assigned to HSBC Bank USA, National Association, as Trustee for the Certificateholders, on the date hereof.

(d)          The parties hereto intend that the transaction set forth herein constitutes a sale by the Seller to the Purchaser of all the Seller’s right, title and interest in and to the Subsequent Mortgage Loans (other than with respect to the related servicing rights) and other property as and to the extent described above.  In the event the transaction set forth herein is deemed not to be a sale, the Seller hereby grants to the Purchaser a security interest in all of the Seller’s right, title and interest in, to and under the Subsequent Mortgage Loans (other than with respect to the related servicing rights) and such other property, to secure all of the Seller’s obligations hereunder, and this Agreement shall constitute a security agreement under applicable law.  The Seller agrees to take or cause to be
taken such actions and to execute such documents, including, without limitation, the filing of all necessary UCC1 financing statements filed in the State of Maryland, any continuation statements with respect thereto and any amendments thereto required to reflect a change in the name or corporate structure of the Seller or the filing of any additional UCC1 financing statements due to the change in the principal office of the Seller, as are necessary to perfect and protect the Purchaser’s interests in each Subsequent Mortgage Loan and the proceeds thereof.

 

 

	
             
  	
            Section 5.
 	
            Examination of Mortgage Files.
 

(a)          On or before the Mortgage File Delivery Date, the Seller will have made the Mortgage Files available to the Purchaser or its agent for examination which may be at the offices of the Trustee or the Seller and/or the Seller’s custodian. The fact that the Purchaser or its agent has conducted or has failed to conduct any partial or complete examination of the Mortgage Files shall not affect the Purchaser’s rights to demand cure, repurchase, substitution or other relief as provided in this Agreement. In furtherance of the foregoing, the Seller shall make the Mortgage Files available to the Purchaser or its agent from time to time so as to permit the Purchaser to confirm the Seller’s compliance with the delivery and recordation requirements of this Agreement and the Pooling and Servicing Agreement.
In addition, upon request of the Purchaser, the Seller agrees to provide to the Purchaser, Merrill Lynch and to any investors or prospective investors in the Certificates information regarding the Subsequent Mortgage Loans and their servicing, to make the Mortgage Files available to the Purchaser, Merrill Lynch and to such investors or prospective investors (which may be at the offices of the Seller and/or the Seller’s custodian) and to make available personnel knowledgeable about the Subsequent Mortgage Loans for discussions with the Purchaser, Merrill Lynch and such investors or prospective investors, upon reasonable request during regular business hours, sufficient to permit the Purchaser, Merrill Lynch and such investors or potential investors to conduct such due diligence as any such party reasonably believes is appropriate.

(b)          Pursuant to the Pooling and Servicing Agreement, on the Subsequent Closing Date the Trustee, for the benefit of the Certificateholders, will review items of the Mortgage Files as set forth on Exhibit 1 and will deliver to the Seller a certification in the form attached as Exhibit One to the Custodial Agreement.

(c)          Pursuant to the Pooling and Servicing Agreement, the Custodian, on behalf of the Trustee will review or shall cause the Custodian to review items of the Mortgage Files within 180 days of the Subsequent Closing Date and will deliver to the Purchaser a final certification substantially in the form of Exhibit Two to the Custodial Agreement. If the Custodian is unable to deliver a final certification with respect to the items listed in Exhibit 2 due to any document that is missing, has not been executed, is unrelated, determined on the basis of the Mortgagor name, original principal balance and loan number, to the Subsequent Mortgage Loans identified in the Final Subsequent Mortgage Loan Schedule (a “Material Defect”), the Trustee or the Custodian, as its agent, shall notify the Seller of such Material
Defect. The Seller shall correct or cure any such Material Defect within 90 days from the date of notice from the Trustee or the Custodian, as its agent, of the Material Defect and if the Seller does not correct or cure such Material Defect within such period and such defect materially and adversely affects the interests of the Certificateholders in the related Subsequent Mortgage Loan, the Seller will, in accordance with the terms of the Pooling and Servicing Agreement, within 90 days of the date of notice, provide the Trustee with a Substitute Mortgage Loan (if within two years of the Subsequent Closing Date) or purchase the related Subsequent Mortgage Loan at the applicable Purchase Price; provided that, if such defect would cause the Subsequent Mortgage Loan to be other than a “qualified mortgage” as defined in Section 860G(a)(3) of the Code, any such cure, repurchase or substitution 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 Subsequent 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 Subsequent 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 of the Seller confirming that such documents have been accepted for recording, and delivery to the Trustee shall be effected by the Seller within
thirty days of its receipt of the original recorded document.

(d)          At the time of any substitution, the Seller shall deliver or cause to be delivered the Substitute Mortgage Loan, the related Mortgage File and any other documents and payments required to be delivered in connection with a substitution pursuant to the Pooling and Servicing Agreement. At the time of any purchase or substitution, the Trustee shall (i) assign to the Seller and cause the Custodian to release the documents (including, but not limited to, the Mortgage, Mortgage Note and other contents of the Mortgage File) in the possession of the Custodian relating to the Deleted Mortgage Loan and (ii) execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be necessary to vest in the Seller title to such Deleted Mortgage Loan.

	
             
  	
            Section 6.
 	
            Recordation of Assignments of Mortgage.
 

(a)          The Seller will, promptly after the Subsequent Closing Date, cause each Mortgage and each assignment of Mortgage from the Seller to the Trustee, and all unrecorded intervening assignments, if any, delivered on or prior to the Subsequent Closing Date, to be recorded in all recording offices in the jurisdictions where the related Mortgaged Properties are located; provided, however, the Seller need not cause to be recorded any assignment which relates to a Subsequent Mortgage Loan in any jurisdiction under the laws of which, as evidenced by an Opinion of Counsel delivered by the Seller to the Trustee and the Rating Agencies, which states that the recordation of such assignment is not necessary to protect the Certificateholder’s interest in the related Subsequent Mortgage Loan; provided, however,
notwithstanding the delivery of any Opinion of Counsel, each assignment of Mortgage shall be submitted for recording by the Seller in the manner described above, at no expense to the Trust Fund or Trustee, upon the earliest to occur of (i) reasonable direction by the Holders of Certificates evidencing, in the aggregate, not less than 25% of the Voting Rights, (ii) the occurrence of a Master Servicer Event of Termination, (iii) the occurrence of a bankruptcy, insolvency or foreclosure relating to the Seller, (iv) the occurrence of a servicing transfer as described in Section 7.07 of the Pooling and Servicing Agreement or (v) with respect to any one assignment of Mortgage, the occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor under the related Mortgage.

While each such Mortgage or assignment is being recorded, if necessary, the Seller shall leave or cause to be left with the Trustee a certified copy of such Mortgage or assignment. In the event that, within 180 days of the Subsequent Closing Date, the Trustee has not provided an Opinion of Counsel as described above or received evidence of recording with 

 

respect to each Subsequent Mortgage Loan delivered to the Purchaser pursuant to the terms hereof or as set forth above, the failure to provide evidence of recording or such Opinion of Counsel shall be considered a Material Defect, and the provisions of Section 5(c) and (d) shall apply. All customary recording fees and reasonable expenses relating to the recordation of the assignments of mortgage to the Trustee or the Opinion of Counsel, as the case may be, shall be borne by the Seller.

(b)          It is the express intent of the parties hereto that the conveyance of the Subsequent Mortgage Loans by the Seller to the Purchaser, as contemplated by this Agreement be, and be treated as, a sale. It is, further, not the intention of the parties that such conveyance be deemed a pledge of the Subsequent Mortgage Loans by the Seller to the Purchaser to secure a debt or other obligation of the Seller. However, in the event that, notwithstanding the intent of the parties, the Subsequent Mortgage Loans are held by a court of competent jurisdiction to continue to be property of the Seller, then (i) this Agreement shall also be deemed to be a security agreement within the meaning of Articles 8 and 9 of the applicable Uniform Commercial Code; (ii) the transfer of the Subsequent Mortgage Loans provided for herein
shall be deemed to be a grant by the Seller to the Purchaser of a security interest in all of the Seller’s right, title and interest in and to the Subsequent Mortgage Loans and all amounts payable to the holders of the Subsequent Mortgage Loans in accordance with the terms thereof and all proceeds of the conversion, voluntary or involuntary, of the foregoing into cash, instruments, securities or other property, to the extent the Purchaser would otherwise be entitled to own such Subsequent Mortgage Loans and proceeds pursuant to Section 4 hereof, including all amounts, other than investment earnings, from time to time held or invested in any accounts created pursuant to the Pooling and Servicing Agreement, whether in the form of cash, instruments, securities or other property; (iii) the possession by the Purchaser or the Trustee of Mortgage Notes and such other items of property as constitute instruments, money, negotiable documents or chattel paper shall be deemed to be
“possession by the secured party” for purposes of perfecting the security interest pursuant to Section 9-313 (or comparable provision) of the applicable Uniform Commercial Code; and (iv) notifications to persons holding such property, and acknowledgments, receipts or confirmations from persons holding such property, shall be deemed notifications to, or acknowledgments, receipts or confirmations from, financial intermediaries, bailees or agents (as applicable) of the Purchaser for the purpose of perfecting such security interest under applicable law. Any assignment of the interest of the Purchaser pursuant to any provision hereof or pursuant to the Pooling and Servicing Agreement shall also be deemed to be an assignment of any security interest created hereby. The Seller and the Purchaser shall, to the extent consistent with this Agreement, take such actions as may be reasonably necessary to ensure that, if this Agreement were deemed to create a security interest in the
Subsequent Mortgage Loans, such security interest would be deemed to be a perfected security interest of first priority under applicable law and will be maintained as such throughout the term of the Pooling and Servicing Agreement.

Section 7.        Representations and Warranties of Seller Concerning the Subsequent Mortgage Loans. The Seller hereby represents and warrants to the Purchaser as of the Subsequent Closing Date or such other date as may be specified below with respect to each Subsequent Mortgage Loan being sold by it:

(i)           the information set forth in the Subsequent Mortgage Loan Schedule hereto is true and correct in all material respects;

 

 

(ii)          immediately prior to the transfer to the Purchaser, the Seller was the sole owner of beneficial title and holder of each Mortgage and Mortgage Note relating to the Subsequent Mortgage Loans and is conveying the same free and clear of any and all liens, claims, encumbrances, participation interests, equities, pledges, charges or security interests of any nature and the Seller has full right and authority to sell or assign the same pursuant to this Agreement;

(iii)        no selection procedure reasonably believed by the Seller to be adverse to the interests of the Certificateholders was utilized in selecting the Subsequent Mortgage Loans;

(iv)         each Subsequent Mortgage Loan constitutes a “qualified mortgage” under Section 860G(a)(3)(A) of the Code and Treasury Regulation Section 1.8600-2(a)(1);

(v)          as of the Subsequent Cut-off Date, no Subsequent Mortgage Loan is more than 30 days past due. The Seller has not advanced funds, or induced, solicited or knowingly received any advance of funds from a party other than the owner of the related Mortgaged Property, directly or indirectly, for the payment of any amount required by the Mortgage Note or Mortgage;

(vi)         to the best of the Seller’s knowledge, there are no delinquent taxes, ground rents, water charges, sewer rents, assessments, insurance premiums, leasehold payments, including assessments payable in future installments or other outstanding charges affecting the related Mortgaged Property;

(vii)       to the best of the Seller’s knowledge, there is no default, breach, violation or event of acceleration existing under the Mortgage or the Mortgage Note and no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration, and the Seller has not waived any default, breach, violation or event of acceleration;

(viii)      to the best of the Seller’s knowledge, the related Mortgaged Property was lawfully occupied under applicable law at time of origination; all inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy, have been made or obtained from the appropriate authorities;

(ix)         all requirements of any federal, state or local law (including usury, truth in lending, real estate settlement procedures, consumer credit protection, equal credit opportunity, disclosure or recording, predatory and abusive lending laws) applicable to the origination and servicing of Subsequent Mortgage Loans of a type similar to the Subsequent Mortgage Loans have been complied with in all material respects;

(x)          to the best of the Seller’s knowledge, as of the date of transfer of the Subsequent Mortgage Loans, there is no mechanics’ lien or claim for work, labor or material affecting the premises subject to any Mortgage which is or may be a lien prior 

 

to, or equal with, the lien of such Mortgage except those which are insured against by the title insurance policy;

(xi)         to the best of the Seller’s knowledge, as of the date of the transfer of the Subsequent Mortgage Loans to the Purchaser, there is no valid offset, defense or counterclaim to any Mortgage Note or Mortgage;

(xii)       to the best of the Seller’s knowledge, as of the date of closing, the physical property subject to any mortgage is free of material damage and is in good repair;

(xiii)      each original mortgage has been recorded or is in the process of being recorded in the appropriate jurisdictions wherein such recordation is required to perfect the lien thereof for the benefit of the trust;

(xiv)      loans originated are being serviced according to acceptable servicing practices;

(xv)        the mortgage note and the mortgage have not been impaired, altered or modified in any material respect, except by a written instrument which has been recorded or is in the process of being recorded;

(xvi)      a lender’s title policy or binder, or other assurance of title insurance customary in a form acceptable to FNMA or FHLMC was issued at origination and each policy or binder is valid and remains in full force and effect;

(xvii)     none of the Subsequent Mortgage Loans are subject to the Georgia Fair Lending Act, as amended;

(xviii)   none of the Subsequent Mortgage Loans is subject to the Home Ownership and Equity Protection Act of 1994 or is a “high cost” or “predatory” loan as defined by applicable local, state and federal predatory and abusive lending laws; 

(xix)      no Subsequent Mortgage Loan is a High Cost Loan or Covered Loan, as applicable (as such terms are defined in  Appendix E of the then current Standard & Poor's Glossary For File Format For LEVELS® Version 5.6b Revised (attached hereto as Exhibit 7);

(xx)        each Subsequent Mortgage Loan was originated with an initial mortgagee of record, or was originated in conformity with the underwriting standards of and purchased by a subsequent mortgagee, that was either (x) a savings and loan association, savings bank, commercial bank, credit union, insurance company, or similar institution which is supervised and examined by a Federal or State authority or (y) a mortgagee approved by the Secretary of Housing and Urban Development pursuant to sections 203 and 211 of the National Housing Act; and

(xxi)      with respect to each Co-op Loan, the security instruments create a valid, enforceable and subsisting first priority security interest in the Co-op Lease and Co-op Stock securing the related Mortgage Note subject to only to (a) the lien of the related 

 

cooperative for unpaid assessments representing the Mortgagor’s pro rata share of payments for a blanket mortgage, if any, current and future real property taxes, insurance premiums, maintenance fees and other assessments to which like collateral is commonly subject, and (b) other matters to which the collateral is commonly subject which do not materially interfere with the benefits of the security intended to be provided; provided, however, that the related Co-op Loan may be subordinated or otherwise subject to the lien of a Mortgage on the cooperative building.

It is understood and agreed that the representations and warranties set forth in this Section 7 will inure to the benefit of the Purchaser, its successors and assigns, notwithstanding any restrictive or qualified endorsement on any Mortgage Note or assignment of Mortgage or the examination of any Mortgage File. Upon any substitution for a Subsequent Mortgage Loan, the representations and warranties set forth above shall be deemed to be made by the Seller as to any Substitute Mortgage Loan as of the date of substitution.

Upon discovery or receipt of notice by the Seller, the Purchaser or the Trustee of a breach of any representation or warranty of the Seller set forth in this Section 7 which materially and adversely affects the value of the interests of the Purchaser, the Certificateholders or the Trustee in any of the Subsequent Mortgage Loans delivered to the Purchaser pursuant to this Agreement, the party discovering or receiving notice of such breach shall give prompt written notice to the others. In the case of any such breach of a representation or warranty set forth in this Section 7, within 90 days from the date of discovery by the Seller, or the date the Seller is notified by the party discovering or receiving notice of such breach (whichever occurs earlier), the Seller will (i) cure such breach in all material respects, (ii) purchase the affected Subsequent Mortgage Loan at the applicable
Purchase Price or (iii) if within two years of the Subsequent Closing Date, substitute a qualifying Substitute Mortgage Loan in exchange for such Subsequent Mortgage Loan. The obligations of the Seller to cure, purchase or substitute a qualifying Substitute Mortgage Loan shall constitute the Purchaser’s, the Trustee’s and the Certificateholder’s sole and exclusive remedy under this Agreement or otherwise respecting a breach of representations or warranties hereunder with respect to the Subsequent Mortgage Loans, except for the obligation of the Seller to indemnify the Purchaser for such breach as set forth in and limited by Section 13 hereof.  With respect to the representations and warranties described in the Agreement which are made to the best of the Seller’s knowledge, if it is discovered by any of the Depositor, the Seller or the Trustee that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects
the value of the related Subsequent Mortgage Loan, then notwithstanding the seller’s lack of knowledge with respect to the substance of such representation and warranty, such inaccuracy shall be deemed a breach of the applicable representation or warranty.

Any cause of action against the Seller or relating to or arising out of a breach by the Seller of any representations and warranties made in this Section 7 shall accrue as to any Subsequent Mortgage Loan upon (i) discovery of such breach by the Seller or notice thereof by the party discovering such breach and (ii) failure by the Seller to cure such breach, purchase such Subsequent Mortgage Loan or substitute a qualifying Substitute Mortgage Loan pursuant to the terms hereof.

 

 

Section 8.          Representations and Warranties Concerning the Seller.  As of the date hereof and as of the Subsequent Closing Date, the Seller represents and warrants to the Purchaser as to itself in the capacity indicated as follows:

(a)          the Seller (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Maryland and (ii) is qualified and in good standing 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 Seller’s business as presently conducted or on the Seller’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

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

(c)          the execution and delivery by the Seller of this Agreement have been duly authorized by all necessary action on the part of the Seller; 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 Seller or its properties or the charter or by-laws of the Seller, except those conflicts, breaches or defaults which would not reasonably be expected to have a material adverse effect on the Seller’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(d)          the execution, delivery and performance by the Seller 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 and, in connection with the recordation of the Mortgages, powers of attorney or assignments of Mortgages not yet completed;

(e)          this Agreement has been duly executed and delivered by the Seller and, assuming due authorization, execution and delivery by the Purchaser, constitutes a valid and binding obligation of the Seller 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);

(f)           there are no actions, suits or proceedings pending or, to the knowledge of the Seller, threatened against the Seller, 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 Seller will be determined adversely to the Seller and will if determined adversely to the Seller materially and adversely affect the Seller’s ability to perform its obligations under this Agreement; and the Seller 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

 

 

Section 9.          Representations and Warranties Concerning the Purchaser.  As of the date hereof and as of the Subsequent Closing Date, the Purchaser represents and warrants to the Seller as follows:

(a)          the Purchaser (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Maryland and (ii) 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 Purchaser’s business as presently conducted or on the Purchaser’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(b)          the Purchaser 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;

(c)          the execution and delivery by the Purchaser of this Agreement have been duly authorized by all necessary corporate action on the part of the Purchaser; 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 Purchaser or its properties or the articles of incorporation or by-laws of the Purchaser, except those conflicts, breaches or defaults which would not reasonably be expected to have a material adverse effect on the Purchaser’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(d)          the execution, delivery and performance by the Purchaser 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;

(e)          this Agreement has been duly executed and delivered by the Purchaser and, assuming due authorization, execution and delivery by the Seller, constitutes a valid and binding obligation of the Purchaser 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);

(f)           there are no actions, suits or proceedings pending or, to the knowledge of the Purchaser, threatened against the Purchaser, 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 Purchaser will be determined adversely to the Purchaser and will if determined adversely to the Purchaser materially and adversely affect the Purchaser’s ability to perform its obligations under this Agreement; and the Purchaser 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

 

 

	
             
  	
            Section 10.
 	
            Conditions to Closing.
 

(a)          The obligations of the Purchaser under this Agreement will be subject to the satisfaction, on or prior to the Subsequent Closing Date, of the following conditions:

(1)          Each of the obligations of the Seller required to be performed at or prior to the Subsequent Closing Date pursuant to the terms of this Agreement shall have been duly performed and complied with in all material respects; all of the representations and warranties of the Seller under this Agreement shall be true and correct as of the date or dates specified in all material respects; and no event shall have occurred which, with notice or the passage of time, would constitute a default under this Agreement, or the Pooling and Servicing Agreement; and the Purchaser shall have received certificates to that effect signed by authorized officers of the Seller.

(2)          The Purchaser shall have received all of the following closing documents, in such forms as are agreed upon and reasonably acceptable to the Purchaser, duly executed by all signatories other than the Purchaser as required pursuant to the respective terms thereof:

a.            If  required pursuant to Section 3 hereof, the Amendment dated as of the Subsequent Closing Date and any documents referred to therein;

b.            If required pursuant to Section 3 hereof, the Final Subsequent Mortgage Loan Schedule containing the information set forth on Exhibit 3 hereto, one copy to be attached to each counterpart of the Amendment;

c.            The Pooling and Servicing Agreement, in form and substance reasonably satisfactory to the Trustee and the Purchaser, and all documents required thereby duly executed by all signatories;

d.            A certificate of an officer of the Seller dated as of the Subsequent Closing Date, in a form reasonably acceptable to the Purchaser, and attached thereto the resolutions of the Seller’s authorizing the transactions contemplated by this Agreement, together with copies of the charter and by-laws of the Seller;

e.            One or more opinions of counsel from the Seller’s counsel otherwise in form and substance reasonably satisfactory to the Purchaser, the Trustee and each Rating Agency; and

f.             Such other documents, certificates (including additional representations and warranties) and opinions as may be reasonably necessary to secure the intended ratings from each Rating Agency for the Certificates.

(3)          The Certificates to be sold to Merrill Lynch pursuant to the Underwriting Agreement shall have been issued and sold to Merrill Lynch.

(4)          The Seller shall have furnished to the Purchaser such other certificates of its officers or others and such other documents and opinions of counsel to 

 

evidence fulfillment of the conditions set forth in this Agreement and the transactions contemplated hereby as the Purchaser and its counsel may reasonably request.

(b)          The obligations of the Seller under this Agreement shall be subject to the satisfaction, on or prior to the Subsequent Closing Date, of the following conditions:

(1)          The obligations of the Purchaser required to be performed by it on or prior to the Subsequent Closing Date pursuant to the terms of this Agreement shall have been duly performed and complied with in all material respects, and all of the representations and warranties of the Purchaser under this Agreement shall be true and correct in all material respects as of the date hereof and as of the Subsequent Closing Date, and no event shall have occurred which would constitute a breach by it of the terms of this Agreement, and the Seller shall have received a certificate to that effect signed by an authorized officer of the Purchaser.

(2)          The Seller shall have received copies of all of the following closing documents, in such forms as are agreed upon and reasonably acceptable to the Seller, duly executed by all signatories other than the Seller as required pursuant to the respective terms thereof:

a.            If  required pursuant to Section 3 hereof, the Amendment dated as of the Subsequent Closing Date and any documents referred to therein;

b.            The Pooling and Servicing Agreement, in form and substance reasonably satisfactory to the Seller, and all documents required thereby duly executed by all signatories;

c.            A certificate of an officer of the Purchaser dated as of the Subsequent Closing Date, in a form reasonably acceptable to the Seller, and attached thereto the resolutions of the Purchaser authorizing the transactions contemplated by this Agreement and the Pooling and Servicing Agreement, together with copies of the Purchaser’s articles of incorporation, and evidence as to the good standing of the Purchaser dated as of a recent date;

d.            One or more opinions of counsel from the Purchaser’s counsel in form and substance reasonably satisfactory to the Seller; and

e.            Such other documents, certificates (including additional representations and warranties) and opinions as may be reasonably necessary to secure the intended rating from each Rating Agency for the Certificates;

Section 11.        Fees and Expenses.  Subject to Section 16 hereof, the Seller shall pay on the Subsequent Closing Date or such later date as may be agreed to by the Purchaser (i) the fees and expenses of the Seller’s attorneys and the reasonable fees and expenses of the Purchaser’s attorneys, (ii) the filing fee charged by the Commission for the registration of the Certificates, (iii) the fees and expenses including counsel’s fees and expenses in connection with any “blue sky” and legal investment matters, (iv) the fees and expenses of the Trustee which shall include without limitation the fees and expenses of the Trustee (and the fees and disbursements of its counsel) with respect to (A) legal and document review of this Agreement, 

 

the Pooling and Servicing Agreement, the Certificates and related agreements, (B) attendance at the Closing and (C) review of the Subsequent Mortgage Loans to be performed by the Custodian, (v) the expenses for printing or otherwise reproducing the Certificates, the Prospectus and the Prospectus Supplement, (vi) the fees and expenses of each Rating Agency (both initial and ongoing), (vii) the fees and expenses relating to the preparation and recordation of mortgage assignments (including intervening assignments, if any and if available, to evidence a complete chain of title from the originator to the Trustee) from the Seller to the Trustee or the expenses relating to the Opinion of Counsel referred to in Section 6(a) hereof, as the case may be, and (viii) Mortgage File due diligence expenses and other out-of-pocket expenses incurred by the Purchaser in connection with the purchase of the Subsequent
Mortgage Loans and by Merrill Lynch in connection with the sale of the Offered Certificates. The Seller additionally agrees to pay directly to any third party on a timely basis the fees provided for above which are charged by such third party and which are billed periodically.

	
             
  	
            Section 12.
 	
            [Reserved]
 	
             

	
             
  	
            Section 13.
 	
            Indemnification.
 

(a)          The Seller shall indemnify and hold harmless the Purchaser and its directors, officers and controlling persons (as defined in Section 15 of the Securities Act) from and against any loss, claim, damage or liability or action in respect thereof, to which they or any of them may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon (i) any representation or warranty assigned or made by the Seller in Section 7 or Section 8 hereof being, or alleged to be, untrue or incorrect, or (ii) any failure by the Seller to perform its obligations under this Agreement; and the Seller shall reimburse the Purchaser and each other indemnified party for any legal and other expenses reasonably incurred by them in connection with
investigating or defending or preparing to defend against any such loss, claim, damage, liability or action.

The foregoing indemnity agreement is in addition to any liability which the Seller otherwise may have to the Purchaser or any other such indemnified party.

Section 14.        Notices.  All demands, notices and communications hereunder shall be in writing but may be delivered by facsimile transmission subsequently confirmed in writing. Notices to the Seller shall be directed to KKR Financial Corp., Four Embarcadero Center, Suite 2050, San Francisco, CA 94111, and notices to the Purchaser shall be directed to KKR Financial Mortgage Corp., Four Embarcadero Center, Suite 2050, San Francisco, CA 94111, Attention: Chief Operating Office; or to any other address as may hereafter be furnished by one party to the other party by like notice. Any such demand, notice or communication hereunder shall be deemed to have been received on the date received at the premises of the addressee (as evidenced, in the case of registered or certified mail, by the date noted on the
return receipt) provided that it is received on a business day during normal business hours and, if received after normal business hours, then it shall be deemed to be received on the next business day.

Section 15.        Transfer of Subsequent Mortgage Loans.  The Purchaser retains the right to assign the Subsequent Mortgage Loans and any or all of its interest under this 

 

Agreement to the Trustee without the consent of the Seller, and, upon such assignment, the Trustee shall succeed to the applicable rights and obligations of the Purchaser hereunder; provided, however, the Purchaser shall remain entitled to the benefits set forth in Sections 11, 13 and 17 hereto and as provided in Section 2(a). Notwithstanding the foregoing, the sole and exclusive right and remedy of the Trustee with respect to a breach of representation or warranty of the Seller shall be the purchase or substitution obligations of the Seller contained in Sections 5 and 7 hereof.

Section 16.        Termination.  This Agreement may be terminated (a) by the mutual consent of the parties hereto prior to the Subsequent Closing Date, (b) by the Purchaser, if the conditions to the Purchaser’s obligation to close set forth under Section 10(a) hereof are not fulfilled as and when required to be fulfilled or (c) by the Seller, if the conditions to the Seller’s obligation to close set forth under Section 10(b) hereof are not fulfilled as and when required to be fulfilled. In the event of termination pursuant to clause (b), the Seller shall pay, and in the event of termination pursuant to clause (c), the Purchaser shall pay, all reasonable out-of-pocket expenses incurred by the other in connection with the transactions contemplated by this Agreement. In the event of a termination
pursuant to clause (a), each party shall be responsible for its own expenses.

Section 17.        Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and agreements contained in this Agreement, or contained in certificates of officers of the Seller submitted pursuant hereto, shall remain operative and in full force and effect and shall survive delivery of the Subsequent Mortgage Loans to the Purchaser (and by the Purchaser to the Trustee). Subsequent to the delivery of the Subsequent Mortgage Loans to the Purchaser, the Seller’s representations and warranties contained herein with respect to the Subsequent Mortgage Loans shall be deemed to relate to the Subsequent Mortgage Loans actually delivered to the Purchaser and included in the Final Subsequent Mortgage Loan Schedule and any Substitute Mortgage Loan and not to those Subsequent
Mortgage Loans deleted from the Preliminary Subsequent Mortgage Loan Schedule pursuant to Section 3 hereof prior to the Closing.

Section 18.       Mandatory Delivery; Grant of Security Interest. The sale and delivery on the Subsequent Closing Date of the Subsequent Mortgage Loans described on the Subsequent Mortgage Loan Schedule in accordance with the terms and conditions of this Agreement is mandatory. It is specifically understood and agreed that each Subsequent Mortgage Loan is unique and identifiable on the date hereof and that an award of money damages would be insufficient to compensate the Purchaser for the losses and damages incurred by the Purchaser in the event of the Seller’s failure to deliver the Subsequent Mortgage Loans on or before the Subsequent Closing Date. The Seller hereby grants to the Purchaser a lien on and a continuing security interest in the Seller’s interest in each Subsequent Mortgage Loan and
each document and instrument evidencing each such Subsequent Mortgage Loan to secure the performance by the Seller of its obligation hereunder, and the Seller agrees that it holds such Subsequent Mortgage Loans in custody for the Purchaser, subject to the Purchaser’s obligation to deliver or cause to be delivered the consideration for the Subsequent Mortgage Loans pursuant to Section 2 hereof. The Seller agrees that, upon acceptance of the Subsequent Mortgage Loans by the Purchaser or its designee and delivery of payment to the Seller, that its security interest in the Subsequent Mortgage Loans shall be released. All rights and remedies of the Purchaser under 

 

this Agreement are distinct from, and cumulative with, any other rights or remedies under this Agreement or afforded by law or equity and all such rights and remedies may be exercised concurrently, independently or successively.

Notwithstanding the foregoing, if on the Subsequent Closing Date, each of the conditions set forth in Section 10 hereof shall have been satisfied and the Purchaser shall not have paid or caused to be paid the purchase price as described in Section 2 hereof, or any such condition shall not have been waived or satisfied and the Purchaser determines not to pay or cause to be paid the purchase price, the Purchaser shall immediately effect the redelivery of the Subsequent Mortgage Loans, if delivery to the Purchaser has occurred and the security interest created by this Section 18 shall be deemed to have been released.

Section 19.        Severability.  Any part, provision, representation or warranty of this Agreement which is prohibited or which is held to be void or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any part, provision, representation or warranty of this Agreement which is prohibited or unenforceable or is held to be void or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction as to any Subsequent Mortgage Loan shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereto waive any provision of law which prohibits or renders void or unenforceable any provision hereof.

Section 20.        Counterparts.  This Agreement may be executed in counterparts, each of which will be an original, but which together shall constitute one and the same agreement.

Section 21.        Amendment.  This Agreement cannot be amended or modified in any manner without the prior written consent of each party.

Section 22.    GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5.1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Section 23.       Further Assurances. Each of the parties agrees to execute and deliver such instruments and take such actions as another party may, from time to time, reasonably request in order to effectuate the purpose and to carry out the terms of this Agreement including any amendments hereto which may be required by either Rating Agency.

	
             
  	
            Section 24.
 	
            Successors and Assigns.
 

This Agreement shall bind and inure to the benefit of and be enforceable by the Seller and the Purchaser and their permitted successors and assigns and, to the extent specified in Section 13 hereof, Merrill Lynch, and their directors, officers and controlling persons (within the 

 

meaning of federal securities laws). The Seller acknowledges and agrees that the Purchaser may assign its rights under this Agreement (including, without limitation, with respect to the Seller’s representations and warranties respecting the Subsequent Mortgage Loans) to the Trustee. Any person into which the Seller may be merged or consolidated (or any person resulting from any merger or consolidation involving the Seller), any person resulting from a change in form of the Seller or any person succeeding to the business of the Seller, shall be considered the “successor” of the Seller hereunder and shall be considered a party hereto without the execution or filing of any paper or any further act or consent on the part of any party hereto. Except as provided in the two preceding sentences, this Agreement cannot be assigned, pledged or hypothecated by either party hereto without the written
consent of the other parties to this Agreement and any such assignment or purported assignment shall be deemed null and void.

Section 25.       The Seller.  The Seller will keep in full effect all rights as are necessary to perform their respective obligations under this Agreement.

Section 26.        Entire Agreement.  This Agreement contains the entire agreement and understanding between the parties with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof.

Section 27.       No Partnership.  Nothing herein contained shall be deemed or construed to create a partnership or joint venture between the parties hereto.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

IN WITNESS WHEREOF, the parties hereto have caused their names to be signed hereto by their respective duly authorized officers as of the date first above written.

	
             
 	
            KKR FINANCIAL CORP.
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Name:        
 
	
             
 	
            Title:                   
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
            KKR FINANCIAL MORTGAGE CORP.
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Name:        
 
	
             
 	
            Title:                   
 

 

 

 

ANNEX I

 

LIST OF SUBSEQUENT MORTGAGE LOANS

 

(Available Upon Request)

 

 

EXHIBIT 1

CONTENTS OF MORTGAGE FILE

With respect to each Subsequent Mortgage Loan, the Mortgage File shall include each of the following items, which shall be available for inspection by the Purchaser or its designee, and which shall be delivered to the Purchaser or its designee pursuant to the terms of the Agreement.

	
             
  	
            (a)
 	
            With respect to each Subsequent Mortgage Loan:
 

(i)           The original Mortgage Note, including any riders thereto, endorsed by the Seller or the originator, as applicable, without recourse in proper form to the order of the Trustee, at the direction of the Purchaser, with any intervening endorsements showing an unbroken chain of title from the originator to the Trustee or with respect to the Subsequent Mortgage Loans as to which the Mortgage Note has been lost, lost note affidavits and if available, a copy of the lost Mortgage Note;

(ii)          An original duly executed assignment of Mortgage in recordable form from the originator to the Trustee;

(iii)        The original recorded Mortgage, if available. If, in connection with any Subsequent Mortgage Loan, the Seller cannot deliver the original Mortgage with evidence of recording thereon on or prior to the Subsequent Closing Date because of its delivery to, or a delay caused by, the public recording office where such Mortgage has been delivered for recordation, or if such original Subsequent Mortgage Loan has been retained by the public recording office as a matter of policy, or has been lost, the Seller shall deliver or cause to be delivered to the Trustee a photocopy thereof, if available (certified by the Seller to be a true and correct copy of the original which has been transmitted for recordation), together with an officer’s certificate of the Seller stating that such Mortgage has been
dispatched to the appropriate recording official for recordation, has been retained by such recording office as a matter of policy or has been lost, as applicable;

(iv)         If applicable and available, all original intervening recorded assignments, if any, showing an unbroken chain of title to the Mortgage from the originator to the Seller or the Trustee;

(v)          The originals of each assumption, modification or substitution agreement, if any and if available, relating to the Subsequent Mortgage Loan. If in connection with any Subsequent Mortgage Loan the Seller cannot deliver the assumption, modification or substitution agreement with evidence of recording thereon on or prior to the Subsequent Closing Date because of a delay caused by the public recording office where such assumption, modification or substitution agreement has been delivered for recordation, the Seller shall deliver or cause to be delivered to the Trustee a photocopy of such assumption, modification or substitution agreement (certified by the Seller to be a true and correct copy of the original which has been transmitted for recordation), together with a certificate of an
officer of the Seller stating that such assumption, modification or 

 

substitution agreement has been dispatched to the appropriate recording official for recordation, if available; 

(vi)         the original mortgagee’s title insurance policy or a written commitment to issue such title insurance policy; 

	
             
  	
            (b)
 	
            With respect to each Cooperative Loan so assigned;
 

(i)           The original Mortgage Note, endorsed without recourse to the order of the Trustee and showing an unbroken chain of endorsements from the originator thereof to the Person endorsing it to the Trustee, or lost note affidavit, together with a copy of the related Mortgage Note;

(ii)          A counterpart of the Cooperative Lease and the Assignment of Proprietary Lease to the originator of the Cooperative Loan with intervening assignments showing an unbroken chain of title from such originator to the Trustee;

(iii)        The related Cooperative Stock Certificate, representing the related Cooperative Stock pledged with respect to such Cooperative Loan, together with an undated stock power (or other similar instrument) executed in blank;

(iv)         The original recognition agreement by the Cooperative of the interests of the mortgagee with respect to the related Cooperative Loan and any transfer documents related to the recognition agreement;

	
             
  	
            (v)
 	
            The Security Agreement;
 

(vi)         Copies of the original UCC-1 financing statement, and any continuation statements, filed by the originator of such Cooperative Loan as secured party, each with evidence of recording thereof, evidencing the interest of the originator under the Security Agreement and the Assignment of Proprietary Lease;

(vii)       Copies of the filed UCC-3 assignments of the security interest referenced in clause (vi) above showing an unbroken chain of title from the originator to the Trustee, each with evidence of recording thereof, evidencing the interest of the originator under the Security Agreement and the Assignment of Proprietary Lease;

(viii)      An executed assignment of the interest of the originator in the Security Agreement and Assignment of Proprietary Lease, showing an unbroken chain of title from the originator to the Trustee; and

(ix)         The original of each modification, assumption agreement or preferred loan agreement, if any, relating to such Cooperative Loan.

 

 

EXHIBIT 2

CONTENTS OF FINAL MORTGAGE FILE

(A)         With respect to each Subsequent Mortgage Loan, the Mortgage File shall include each of the following items, which shall be available for inspection by the Purchaser or its agent, and which shall be delivered to the Purchaser pursuant to the terms of the Agreement.

(i)           The original Mortgage Note, including any riders thereto, endorsed by the Seller or the originator, as applicable, without recourse in proper form to the order of the Trustee, at the direction of the Purchaser, with any intervening endorsements showing an unbroken chain of title from the originator to the Trustee, or with respect to the Subsequent Mortgage Loans as to which the Mortgage Note has been lost, lost note affidavits and if available, a copy of the lost Mortgage Note;

(ii)          An original duly executed assignment of Mortgage in recordable form from the Seller or the originator, as applicable, to the Trustee, with evidence of recording indicated thereon; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office;

(iii)        The original recorded Mortgage, if available, with evidence of recording indicated thereon; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation or such office as a matter of policy does not return the original of such document or if such original Mortgage has been lost, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office, if available;

(iv)         The original intervening assignments, including warehousing assignments, if any and if available, with evidence of recording thereon, showing an unbroken chain of title to the Mortgage from the Seller or the originator, as the case may be, to the Seller or the Trustee; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation or such office as a matter of policy does not return the original of such document, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office, if available;

(v)          The originals of each assumption, modification or substitution agreement, if any and if available, relating to the Subsequent Mortgage Loan; and

(vi)         the original mortgagee’s title insurance policy or, if a master title policy has been issued by the title insurer, a mortgagee’s certificate of title insurance or a written commitment to issue such title insurance policy.

 

 

EXHIBIT 3

SUBSEQUENT MORTGAGE LOAN SCHEDULE INFORMATION

The Preliminary and Final Subsequent Mortgage Loan Schedules shall set forth the following information with respect to each Subsequent Mortgage Loan:

	
             
  	
            (i)
 	
            the loan number of the Subsequent Mortgage Loan;
 	
             

	
             
  	
            (ii)
 	
            the city, state and zip code of the Mortgaged Property;
 	
             

	
             
  	
            (iii)
 	
            a code indicating whether the Mortgaged Property is owner-occupied;
 	
             

	
             
  	
            (iv)
 	
            the type of Residential Dwelling constituting the Mortgaged Property;
 
	
             
  	
            (v)
 	
            the original months to maturity;
 	
             

	
             
  	
            (vi)
 	
            the original date of the mortgage;
 	
             

	
             
  	
            (vii)
 	
            the Loan-to-Value Ratio at origination;
 	
             

	
             
  	
            (viii)
 	
            the Mortgage Interest Rate;
 	
             

											

(ix)             the date on which the first Monthly Payment was due on the Subsequent Mortgage Loan;

	
             
  	
            (x)
 	
            the stated maturity date;
 	
             

	
             
  	
            (xi)
 	
            the amount of the Monthly Payment at origination;
 	
             

	
             
  	
            (xii)
 	
            the amount of the Monthly Payment as of the Subsequent Cut-off Date;
 
					

(xiii)           the last Due Date on which a Monthly Payment was actually applied to the unpaid Stated Principal Balance;

	
             
  	
            (xiv)
 	
            the original principal amount of the Subsequent Mortgage Loan;
 

(xv)            the Stated Principal Balance of the Subsequent Mortgage Loan as of the close of business on the Subsequent Cut-off Date;

(xvi)           a code indicating the purpose of the Subsequent Mortgage Loan (i.e., purchase financing, Rate/Term Refinancing, Cash-Out Refinancing);

(xvii)          a code indicating the documentation style (i.e., full, alternative or reduced);

	
             
  	
            (xviii)
 	
            [reserved];
 	
             

	
             
  	
            (xix)
 	
            the Value of the Mortgaged Property;
 

 

 

 

	
             
  	
            (xx)
 	
            the sale price of the Mortgaged Property, if applicable;
 

(xxi)           the actual unpaid principal balance of the Subsequent Mortgage Loan as of the Subsequent Cut-off Date;

	
             
  	
            (xxii)
 	
            the Servicing Fee;
 
	
             
  	
            (xxiii)
 	
            [reserved];
 	
             

(xxiv)         with respect to each adjustable-rate Subsequent Mortgage Loan, the next Interest Rate Adjustment Date;

(xxv)          with respect to each adjustable-rate Subsequent Mortgage Loan, the Gross Margin;

(xxvi)         with respect to each adjustable-rate Subsequent Mortgage Loan, the Minimum and Maximum Mortgage Rate under the terms of the Mortgage Note;

(xxvii)       with respect to each adjustable-rate Subsequent Mortgage Loan, the First Rate Cap;

(xxviii)      with respect to each adjustable-rate Subsequent Mortgage Loan, the related Periodic Rate Cap;

(xxix)         with respect to each adjustable-rate Subsequent Mortgage Loan, whether it is interest-only; and

(xxx)          with respect to each adjustable-rate Subsequent Mortgage Loan, the Seller.

Such schedule shall set forth the following information with respect to the Subsequent Mortgage Loans in the aggregate as of the Subsequent Cut-off Date: (1) the number of Subsequent Mortgage Loans; (2) the current principal balance of the Subsequent Mortgage Loans; (3) the weighted average Mortgage Rate of the Subsequent Mortgage Loans; and (4) the weighted average maturity of the Subsequent Mortgage Loans.

 

 

EXHIBIT 4

SCHEDULE OF LOST NOTES

Available Upon Request

 

 

EXHIBIT 5

 

REVISED August 1, 2005

 

APPENDIX E - STANDARD & POOR'S PREDATORY LENDING CATEGORIES 

Standard & Poor’s has categorized loans governed by anti-predatory lending laws in the Jurisdictions listed below into three categories based upon a combination of factors that include (a) the risk exposure associated with the assignee liability and (b) the tests and thresholds set forth in those laws. Note that certain loans classified by the relevant statute as Covered are included in Standard & Poor’s High Cost Loan Category because they included thresholds and tests that are typical of what is generally considered High Cost by the industry. 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Arkansas 
 	
            Arkansas Home Loan Protection Act, Ark. Code Ann. §§ 23-53-101 et seq. 

Effective July 16, 2003 
 	
            High Cost Home Loan 
 
	
            Cleveland Heights, OH 
 	
            Ordinance No. 72-2003 (PSH), Mun. Code §§ 757.01 et seq. 

Effective June 2, 2003 
 	
            Covered Loan 
 
	
            Colorado 
 	
            Consumer Equity Protection, Colo. Stat. Ann. §§ 5-3.5-101 et seq. 

Effective for covered loans offered or entered into on or after January 1, 2003. Other provisions of the Act took effect on June 7, 2002 
 	
            Covered Loan 
 
	
            Connecticut 
 	
            Connecticut Abusive Home Loan Lending Practices Act, Conn. Gen. Stat. §§ 36a-746 et seq. 

Effective October 1, 2001 
 	
            High Cost Home Loan 
 
	
            District of Columbia 
 	
            Home Loan Protection Act, D.C. Code §§ 26-1151.01 et seq. 

Effective for loans closed on or after January 28, 2003 
 	
            Covered Loan 
 

 

 

 

 

	
            Florida 
 	
            Fair Lending Act, Fla. Stat. Ann. §§ 494.0078 et seq. 

Effective October 2, 2002 
 	
            High Cost Home Loan 
 
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 
 	
            High Cost Home Loan 
 

 

 

 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Effective October 1, 2002 – March 6, 2003 
 	
             
 
	
            Georgia as amended (Mar. 7, 2003 – current) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 

Effective for loans closed on or after March 7, 2003 
 	
            High Cost Home Loan 
 
	
            HOEPA Section 32 
 	
            Home Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1639, 12 C.F.R. §§ 226.32 and 226.34 

Effective October 1, 1995, amendments October 1, 2002 
 	
            High Cost Loan 
 
	
            Illinois 
 	
            High Risk Home Loan Act, Ill. Comp. Stat. tit. 815, §§ 137/5 et seq. 

Effective January 1, 2004 (prior to this date, regulations under Residential Mortgage License Act effective from May 14, 2001) 
 	
            High Risk Home Loan 
 
	
            Kansas 
 	
            Consumer Credit Code, Kan. Stat. Ann. §§ 16a-1-101 et seq. 

Sections 16a-1-301 and 16a-3-207 became effective April 14, 1999; Section 16a-3-308a became effective July 1, 1999 
 	
            High Loan to Value Consumer Loan (id. § 16a-3-207) and; 
 
	
            High APR Consumer Loan (id. § 16a-3-308a) 
 
	
            Kentucky 
 	
            2003 KY H.B. 287 – High Cost Home Loan Act, Ky. Rev. Stat. §§ 360.100 et seq. 

Effective June 24, 2003 
 	
            High Cost Home Loan 
 
	
            Maine 
 	
            Truth in Lending, Me. Rev. Stat. tit. 9-A, §§ 8-101 et seq. 

Effective September 29, 1995 and as amended from time to time 
 	
            High Rate High Fee Mortgage 
 
	
            Massachusetts 
 	
            Part 40 and Part 32, 209 C.M.R. §§ 32.00 et seq. and 209 C.M.R. §§ 40.01 et seq. 
 	
            High Cost Home Loan 
 

 

 

 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Effective March 22, 2001 and amended from time to time 
 	
             
 
	
            Nevada 
 	
            Assembly Bill No. 284, Nev. Rev. Stat. §§ 598D.010 et seq. 

Effective October 1, 2003 
 	
            Home Loan 
 
	
            New Jersey 
 	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. 

Effective for loans closed on or after November 27, 2003 
 	
            High Cost Home Loan 
 
	
            New Mexico 
 	
            Home Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq. 

Effective as of January 1, 2004; Revised as of February 26, 2004 
 	
            High Cost Home Loan 
 
	
            New York 
 	
            N.Y. Banking Law Article 6-l 

Effective for applications made on or after April 1, 2003 
 	
            High Cost Home Loan 
 
	
            North Carolina 
 	
            Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E et seq. 

Effective July 1, 2000; amended October 1, 2003 (adding open-end lines of credit) 
 	
            High Cost Home Loan 
 
	
            Ohio 
 	
            H.B. 386 (codified in various sections of the Ohio Code), Ohio Rev. Code Ann. §§ 1349.25 et seq. 

Effective May 24, 2002 
 	
            Covered Loan 
 
	
            Oklahoma 
 	
            Consumer Credit Code (codified in various sections of Title 14A) 

Effective July 1, 2000; amended effective January 1, 2004 
 	
            Subsection 10 Mortgage 
 
	
            South Carolina 
 	
            South Carolina High Cost and Consumer Home Loans Act, S.C. Code 
 	
            High Cost Home Loan 
 

 

 

 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Ann. §§ 37-23-10 et seq. 

Effective for loans taken on or after January 1, 2004 
 	
             
 
	
            West Virginia 
 	
            West Virginia Residential Mortgage Lender, Broker and Servicer Act, W. Va. Code Ann. §§ 31-17-1 et seq. 

Effective June 5, 2002 
 	
            West Virginia Mortgage Loan Act Loan 
 

 

STANDARD & POOR'S COVERED LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 

Effective October 1, 2002 – March 6, 2003 
 	
            Covered Loan 
 
	
            New Jersey 
 	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. 

Effective November 27, 2003 – July 5, 2004 
 	
            Covered Home Loan 
 

 

STANDARD & POOR'S HOME LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 

Effective October 1, 2002 – March 6, 2003 
 	
            Home Loan 
 
	
            New Jersey 
 	
            New Jersey Home Ownership Security 
 	
            Home Loan 
 

 

 

 

STANDARD & POOR'S HOME LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. 

Effective for loans closed on or after November 27, 2003 
 	
             
 
	
            New Mexico 
 	
            Home Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq. 

Effective as of January 1, 2004; Revised as of February 26, 2004 
 	
            Home Loan 
 
	
            North Carolina 
 	
            Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E et seq. 

Effective July 1, 2000; amended October 1, 2003 (adding open-end lines of credit) 
 	
            Consumer Home Loan 
 
	
            South Carolina 
 	
            South Carolina High Cost and Consumer Home Loans Act, S.C. Code Ann. §§ 37-23-10 et seq. 

Effective for loans taken on or after January 1, 2004 
 	
            Consumer Home Loan 
 

 

 

 

EXHIBIT L-2

 

KKR SUBSEQUENT MORTGAGE LOAN PURCHASE AGREEMENT

SUBSEQUENT MORTGAGE LOAN PURCHASE AGREEMENT, dated as of December 28, 2005, as amended and supplemented by any and all amendments hereto (collectively, the “Agreement”), by and between KKR FINANCIAL MORTGAGE CORP., a Maryland corporation (the “Seller”), and MERRILL LYNCH MORTGAGE INVESTORS, INC., a Delaware corporation (the “Purchaser”).

Upon the terms and subject to the conditions of this Agreement, the Seller agrees to sell, and the Purchaser agrees to purchase, certain first lien, fixed-rate and adjustable-rate mortgage loans secured by one- to four-family residences, individual condominiums, co-op units and units in planned unit developments (collectively, the “Subsequent Mortgage Loans”) as described on Annex I. The Purchaser intends to deposit the Subsequent Mortgage Loans into a trust fund (the “Trust Fund”) and create Mortgage Pass-Through Certificates, Series MLMI 2005-A10 (the “Certificates”), under a pooling and servicing agreement, to be dated as of December 1, 2005 (the “Pooling and Servicing
Agreement”), between the Purchaser, as seller, HSBC Bank USA, National Association, as trustee (the “Trustee”) and Wells Fargo Bank, N.A., as master servicer and securities administrator (the “Master Servicer”).

The Purchaser has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (Number 333-127233) relating to its Mortgage Pass-Through Certificates and the offering of certain series thereof (including certain classes of the Certificates) from time to time in accordance with Rule 415 under the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder (the “Securities Act”). Such registration statement, when it became effective under the Securities Act, and the prospectus relating to the public offering of certain classes of the Certificates by the Purchaser (the “Public Offering”), as from time to time each is amended or
supplemented pursuant to the Securities Act or otherwise, are referred to herein as the “Registration Statement” and the “Prospectus,” respectively. The “Prospectus Supplement” shall mean that supplement, dated December 21, 2005 to the Prospectus, dated August 26, 2005, relating to certain classes of the Certificates. With respect to the Public Offering of certain classes of the Certificates, the Purchaser and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) have entered into a terms agreement dated as of December 21, 2005 to an underwriting agreement dated September 27, 2005, between the Purchaser and Merrill Lynch (together, the “Underwriting Agreement”).

Now, therefore, in consideration of the premises and the mutual agreements set forth herein, the parties hereto agree as follows:

Section 1.          Definitions. Certain terms are defined herein. Capitalized terms used herein but not defined herein shall have the meanings specified in the Pooling and Servicing Agreement. The following other terms are defined as follows:

Co-op Lease:  With respect to a Co-op Loan, the lease with respect to a dwelling unit occupied by the Mortgagor and relating to the stock allocated to the related dwelling unit.

 

 

Co-op Loan:  A Subsequent Mortgage Loan secured by the pledge of stock allocated to a dwelling unit in a residential cooperative housing corporation and a collateral assignment of the related Co-op Lease.

Co-op Stock:  With respect to a Co-op Loan, the single outstanding class of stock, partnership interest or other ownership instrument in the related residential cooperative housing corporation.

Deleted Mortgage Loan: A Subsequent Mortgage Loan replaced or to be replaced by a Substitute Mortgage Loan.

Due Date: With respect to each Subsequent Mortgage Loan, the first day of each month.     

Master Servicer: Wells Fargo Bank, N.A.

Merrill Lynch: Merrill Lynch, Pierce, Fenner & Smith Incorporated.

Moody’s: Moody’s Investors Service, Inc., or its successors in interest.

Mortgage: The mortgage or deed of trust creating a first lien on an interest in real property securing a Mortgage Note.

Mortgage File: The items referred to in Exhibit 1 and Exhibit 2 pertaining to a particular Subsequent Mortgage Loan and any additional documents required to be added to such documents pursuant to this Agreement.

Mortgage Interest Rate: The annual rate of interest borne by a Mortgage Note as stated therein.

Mortgagor: The obligor(s) on a Mortgage Note.

Net Rate: For each Subsequent Mortgage Loan, the Mortgage Interest Rate for such Subsequent Mortgage Loan less the Master Servicing Fee Rate and the Trustee Fee Rate.

Offered Certificates: Shall mean the Class A, Class A-IO, Class M-1, Class M-2, Class M-3 and Class M-IO Certificates issued pursuant to the Pooling and Servicing Agreement.

Opinion of Counsel: A written opinion of counsel, who may be counsel for the Seller or the Purchaser, reasonably acceptable to the Trustee.

Person: Any legal person, including any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

Purchase Price: With respect to any Subsequent Mortgage Loan required to be purchased by the Seller pursuant to the applicable provisions of this Agreement, an amount equal to the sum of (i) 100% of the principal remaining unpaid on such Subsequent Mortgage Loan as 

 

of the date of purchase (including if a foreclosure has already occurred, the principal balance of the related Subsequent Mortgage Loan at the time the Mortgaged Property was acquired), and (ii) accrued and unpaid interest thereon at the Mortgage Interest Rate through and including the last day of the month of purchase (iii) any costs and damages incurred by the Trust in connection with any violation by such Subsequent Mortgage Loan of any predatory or abusive-lending law.

Rating Agencies: S&P and Moody’s, each a “Rating Agency.”

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

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

Subsequent Closing Date: December 28, 2005.

Subsequent Cut-off Date: December 1, 2005.

	
             
 	
            Subsequent Cut-off Date Balance: [  
 	
            ].
 

Substitute Mortgage Loan: A Subsequent Mortgage Loan substituted for a Deleted Mortgage Loan which must meet on the date of such substitution the requirements stated herein and in the Pooling and Servicing Agreement; upon such substitution, such Subsequent Mortgage Loan shall be a “Subsequent Mortgage Loan” hereunder.

Value: The value of the Mortgaged Property at the time of origination of the related Subsequent Mortgage Loan, such value being the lesser of (i) the value of such property set forth in an appraisal accepted by the Originator or (ii) the sales price of such property at the time of origination.

Section 2.           Purchase and Sale of the Subsequent Mortgage Loans and Related Rights. 

(a)          Upon satisfaction of the conditions set forth in Section 10 hereof, the Seller agrees to sell, and the Purchaser agrees to purchase Subsequent Mortgage Loans having an aggregate outstanding principal balance as of the Subsequent Cut-off Date equal to the Subsequent Cut-off Date Balance.

(b)          The closing for the purchase and sale of the Subsequent Mortgage Loans will take place on the Subsequent Closing Date at the office of the Purchaser’s counsel in New York, New York or such other place as the parties shall agree.

(c)          Upon the satisfaction of the conditions set forth in Section 10 hereof, on the Subsequent Closing Date, in consideration of the purchase of the Subsequent Mortgage Loans purchased from the Seller, the Purchaser shall (i) pay to the Seller an amount equal to the Seller’s allocated portion of the net sale proceeds of the Offered Certificates plus accrued interest (the “Purchase Price”) in immediately available funds by wire transfer to such account or accounts as shall be designated by the Seller.

 

 

(d)          In addition to the foregoing, on the Subsequent Closing Date, the Seller assigns to the Purchaser all of its right, title and interest in the Subsequent Sale and Assignment Agreement, dated as of December 28, 2005 (the “Subsequent Sale and Assignment Agreement”), between the Seller and KKR Financial Corp.

Section 3.         Subsequent Mortgage Loan Schedules.  The Seller agrees to provide to the Purchaser as of the date hereof a preliminary listing of the Subsequent Mortgage Loans (the “Preliminary Subsequent Mortgage Loan Schedule”) setting forth the information listed on Exhibit 3 to this Agreement with respect to each of the Subsequent Mortgage Loans being sold by the Seller. If there are changes to the Preliminary Subsequent Mortgage Loan Schedule, the Seller shall provide to the Purchaser as of the Subsequent Closing Date a final schedule (the “Final Subsequent Mortgage Loan Schedule”) setting forth the information listed on Exhibit 3 to this Agreement with respect to each of the Subsequent Mortgage Loans being sold by the Seller to the Purchaser. The Final Subsequent
Mortgage Loan Schedule shall be delivered to the Purchaser on the Subsequent Closing Date, shall be attached to an amendment to this Agreement to be executed on the Subsequent Closing Date by the parties hereto and shall be in form and substance mutually agreed to by the Seller and the Purchaser (the “Amendment”). If there are no changes to the Preliminary Subsequent Mortgage Loan Schedule, the Preliminary Subsequent Mortgage Loan Schedule shall be the Final Subsequent Mortgage Loan Schedule for all purposes hereof.

 

	
             
  	
            Section 4.
 	
            Subsequent Mortgage Loan Transfer.
 

(a)          The Purchaser will be entitled to all scheduled payments of principal and interest on the Subsequent Mortgage Loans due after the Subsequent Cut-off Date (regardless of hen actually collected) and all payments thereof other than scheduled principal and interest received after the Subsequent Cut-off Date. The Seller will be entitled to all scheduled payments of principal and interest on the Subsequent Mortgage Loans due on or before the Subsequent Cut-off Date (including payments collected after the Subsequent Cut-off Date) and all payments thereof other than scheduled principal and interest on the Subsequent Mortgage Loans received on or before the Subsequent Cut-off Date. Such principal amounts and any interest thereon belonging to the Seller as described above will not be included in the aggregate
outstanding principal balance of the Subsequent Mortgage Loans as of the Subsequent Cut-off Date as set forth on the Final Subsequent Mortgage Loan Schedule.

(b)          Pursuant to various conveyancing documents to be executed on the Subsequent Closing Date and pursuant to the Pooling and Servicing Agreement, the Purchaser will assign on the Subsequent Closing Date all of its right, title and interest in and to the Subsequent Mortgage Loans to the Trustee for the benefit of the Certificateholders. In connection with the transfer and assignment of the Subsequent Mortgage Loans, the Seller has delivered or will deliver or cause to be delivered to the Trustee by the Subsequent Closing Date or such later date as is agreed to by the Purchaser and the Seller (each of the Subsequent Closing Date and such later date is referred to as a “Mortgage File Delivery Date”), the items of each Mortgage File, provided, however, that in lieu of the foregoing, the Seller may deliver
the following documents, under the circumstances set forth below: (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 in time to permit their delivery as specified above, the Seller may deliver a true copy thereof with a certification by the Seller or the Originator, 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;” (y) in lieu of the Mortgage, assignments to the Trustee or intervening assignments thereof, if the applicable jurisdiction retains the originals of such documents or if the originals are lost (in each case, as evidenced by a certification from the Seller to such effect), the Seller 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 (z) in lieu of the
Mortgage Notes relating to the Subsequent Mortgage Loans, each identified in the list delivered by the Purchaser to the Trustee on the Subsequent Closing Date and attached hereto as Exhibit 6 the Seller may deliver lost note affidavits and indemnities of the Seller; and provided further, however, that in the case of Subsequent Mortgage Loans which have been prepaid in full after the Subsequent Cut-off Date and prior to the Subsequent Closing Date, the Seller, in lieu of delivering the above documents, may deliver to the Trustee a certification by the Seller to such effect. The Seller shall deliver such original documents (including any original documents as to which certified copies had previously been delivered) or such certified copies to the Trustee promptly after they are received. The Seller shall cause the Mortgage and intervening assignments, if any, and the assignment of the Mortgage to be recorded not later than 180 days after the Subsequent Closing Date, or, in lieu of such
assignments, shall provide an Opinion of Counsel pursuant to Section 6(a) hereof to the effect that the recordation of such assignment is not necessary to protect the Trustee’s interest in the related Subsequent Mortgage Loan. Upon the request of the Purchaser, the Seller will assist the Purchaser in effecting the assignment referred to above.

(c)          The Seller and the Purchaser acknowledge hereunder that all of the Subsequent Mortgage Loans and the related servicing will ultimately be assigned to HSBC Bank USA, National Association, as Trustee for the Certificateholders, on the date hereof.

(d)          The parties hereto intend that the transaction set forth herein constitutes a sale by the Seller to the Purchaser of all the Seller’s right, title and interest in and to the Subsequent Mortgage Loans (other than with respect to the related servicing rights) and other property as and to the extent described above.  In the event the transaction set forth herein is deemed not to be a sale, the Seller hereby grants to the Purchaser a security interest in all of the Seller’s right, title and interest in, to and under the Subsequent Mortgage Loans (other than with respect to the related servicing rights) and such other property, to secure all of the Seller’s obligations hereunder, and this Agreement shall constitute a security agreement under applicable law.  The Seller agrees to take or cause to be
taken such actions and to execute such documents, including, without limitation, the filing of all necessary UCC1 financing statements filed in the State of Maryland, any continuation statements with respect thereto and any amendments thereto required to reflect a change in the name or corporate structure of the Seller or the filing of any additional UCC1 financing statements due to the change in the principal office of the Seller, as are necessary to perfect and protect the Purchaser’s interests in each Subsequent Mortgage Loan and the proceeds thereof.

 

 

	
             
  	
            Section 5.
 	
            Examination of Mortgage Files.
 

(a)          On or before the Mortgage File Delivery Date, the Seller will have made the Mortgage Files available to the Purchaser or its agent for examination which may be at the offices of the Trustee or the Seller and/or the Seller’s custodian. The fact that the Purchaser or its agent has conducted or has failed to conduct any partial or complete examination of the Mortgage Files shall not affect the Purchaser’s rights to demand cure, repurchase, substitution or other relief as provided in this Agreement. In furtherance of the foregoing, the Seller shall make the Mortgage Files available to the Purchaser or its agent from time to time so as to permit the Purchaser to confirm the Seller’s compliance with the delivery and recordation requirements of this Agreement and the Pooling and Servicing Agreement.
In addition, upon request of the Purchaser, the Seller agrees to provide to the Purchaser, Merrill Lynch and to any investors or prospective investors in the Certificates information regarding the Subsequent Mortgage Loans and their servicing, to make the Mortgage Files available to the Purchaser, Merrill Lynch and to such investors or prospective investors (which may be at the offices of the Seller and/or the Seller’s custodian) and to make available personnel knowledgeable about the Subsequent Mortgage Loans for discussions with the Purchaser, Merrill Lynch and such investors or prospective investors, upon reasonable request during regular business hours, sufficient to permit the Purchaser, Merrill Lynch and such investors or potential investors to conduct such due diligence as any such party reasonably believes is appropriate.

(b)          Pursuant to the Pooling and Servicing Agreement, on the Subsequent Closing Date the Trustee, for the benefit of the Certificateholders, will review items of the Mortgage Files as set forth on Exhibit 1 and will deliver to the Seller a certification in the form attached as Exhibit One to the Custodial Agreement.

(c)          Pursuant to the Pooling and Servicing Agreement, the Custodian, on behalf of the Trustee will review or shall cause the Custodian to review items of the Mortgage Files within 180 days of the Subsequent Closing Date and will deliver to the Purchaser a final certification substantially in the form of Exhibit Two to the Custodial Agreement. If the Custodian is unable to deliver a final certification with respect to the items listed in Exhibit 2 due to any document that is missing, has not been executed, is unrelated, determined on the basis of the Mortgagor name, original principal balance and loan number, to the Subsequent Mortgage Loans identified in the Final Subsequent Mortgage Loan Schedule (a “Material Defect”), the Trustee or the Custodian, as its agent, shall notify the Seller of such Material
Defect. The Seller shall correct or cure any such Material Defect within 90 days from the date of notice from the Trustee or the Custodian, as its agent, of the Material Defect and if the Seller does not correct or cure such Material Defect within such period and such defect materially and adversely affects the interests of the Certificateholders in the related Subsequent Mortgage Loan, the Seller will, in accordance with the terms of the Pooling and Servicing Agreement, within 90 days of the date of notice, provide the Trustee with a Substitute Mortgage Loan (if within two years of the Subsequent Closing Date) or purchase the related Subsequent Mortgage Loan at the applicable Purchase Price; provided that, if such defect would cause the Subsequent Mortgage Loan to be other than a “qualified mortgage” as defined in Section 860G(a)(3) of the Code, any such cure, repurchase or substitution 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 Subsequent 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 Subsequent 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 of the Seller confirming that such documents have been accepted for recording, and delivery to the Trustee shall be effected by the Seller within
thirty days of its receipt of the original recorded document.

(d)          At the time of any substitution, the Seller shall deliver or cause to be delivered the Substitute Mortgage Loan, the related Mortgage File and any other documents and payments required to be delivered in connection with a substitution pursuant to the Pooling and Servicing Agreement. At the time of any purchase or substitution, the Trustee shall (i) assign to the Seller and cause the Custodian to release the documents (including, but not limited to, the Mortgage, Mortgage Note and other contents of the Mortgage File) in the possession of the Custodian relating to the Deleted Mortgage Loan and (ii) execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be necessary to vest in the Seller title to such Deleted Mortgage Loan.

	
             
  	
            Section 6.
 	
            Recordation of Assignments of Mortgage.
 

(a)          The Seller will, promptly after the Subsequent Closing Date, cause each Mortgage and each assignment of Mortgage from the Seller to the Trustee, and all unrecorded intervening assignments, if any, delivered on or prior to the Subsequent Closing Date, to be recorded in all recording offices in the jurisdictions where the related Mortgaged Properties are located; provided, however, the Seller need not cause to be recorded any assignment which relates to a Subsequent Mortgage Loan in any jurisdiction under the laws of which, as evidenced by an Opinion of Counsel delivered by the Seller to the Trustee and the Rating Agencies, which states that the recordation of such assignment is not necessary to protect the Certificateholder’s interest in the related Subsequent Mortgage Loan; provided, however,
notwithstanding the delivery of any Opinion of Counsel, each assignment of Mortgage shall be submitted for recording by the Seller in the manner described above, at no expense to the Trust Fund or Trustee, upon the earliest to occur of (i) reasonable direction by the Holders of Certificates evidencing, in the aggregate, not less than 25% of the Voting Rights, (ii) the occurrence of a Master Servicer Event of Termination, (iii) the occurrence of a bankruptcy, insolvency or foreclosure relating to the Seller, (iv) the occurrence of a servicing transfer as described in Section 7.07 of the Pooling and Servicing Agreement or (v) with respect to any one assignment of Mortgage, the occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor under the related Mortgage.

While each such Mortgage or assignment is being recorded, if necessary, the Seller shall leave or cause to be left with the Trustee a certified copy of such Mortgage or assignment. In the event that, within 180 days of the Subsequent Closing Date, the Trustee has not provided an Opinion of Counsel as described above or received evidence of recording with 

 

respect to each Subsequent Mortgage Loan delivered to the Purchaser pursuant to the terms hereof or as set forth above, the failure to provide evidence of recording or such Opinion of Counsel shall be considered a Material Defect, and the provisions of Section 5(c) and (d) shall apply. All customary recording fees and reasonable expenses relating to the recordation of the assignments of mortgage to the Trustee or the Opinion of Counsel, as the case may be, shall be borne by the Seller.

(b)          It is the express intent of the parties hereto that the conveyance of the Subsequent Mortgage Loans by the Seller to the Purchaser, as contemplated by this Agreement be, and be treated as, a sale. It is, further, not the intention of the parties that such conveyance be deemed a pledge of the Subsequent Mortgage Loans by the Seller to the Purchaser to secure a debt or other obligation of the Seller. However, in the event that, notwithstanding the intent of the parties, the Subsequent Mortgage Loans are held by a court of competent jurisdiction to continue to be property of the Seller, then (i) this Agreement shall also be deemed to be a security agreement within the meaning of Articles 8 and 9 of the applicable Uniform Commercial Code; (ii) the transfer of the Subsequent Mortgage Loans provided for herein
shall be deemed to be a grant by the Seller to the Purchaser of a security interest in all of the Seller’s right, title and interest in and to the Subsequent Mortgage Loans and all amounts payable to the holders of the Subsequent Mortgage Loans in accordance with the terms thereof and all proceeds of the conversion, voluntary or involuntary, of the foregoing into cash, instruments, securities or other property, to the extent the Purchaser would otherwise be entitled to own such Subsequent Mortgage Loans and proceeds pursuant to Section 4 hereof, including all amounts, other than investment earnings, from time to time held or invested in any accounts created pursuant to the Pooling and Servicing Agreement, whether in the form of cash, instruments, securities or other property; (iii) the possession by the Purchaser or the Trustee of Mortgage Notes and such other items of property as constitute instruments, money, negotiable documents or chattel paper shall be deemed to be
“possession by the secured party” for purposes of perfecting the security interest pursuant to Section 9-313 (or comparable provision) of the applicable Uniform Commercial Code; and (iv) notifications to persons holding such property, and acknowledgments, receipts or confirmations from persons holding such property, shall be deemed notifications to, or acknowledgments, receipts or confirmations from, financial intermediaries, bailees or agents (as applicable) of the Purchaser for the purpose of perfecting such security interest under applicable law. Any assignment of the interest of the Purchaser pursuant to any provision hereof or pursuant to the Pooling and Servicing Agreement shall also be deemed to be an assignment of any security interest created hereby. The Seller and the Purchaser shall, to the extent consistent with this Agreement, take such actions as may be reasonably necessary to ensure that, if this Agreement were deemed to create a security interest in the
Subsequent Mortgage Loans, such security interest would be deemed to be a perfected security interest of first priority under applicable law and will be maintained as such throughout the term of the Pooling and Servicing Agreement.

Section 7.        Representations and Warranties of Seller Concerning the Subsequent Mortgage Loans. The Seller hereby represents and warrants to the Purchaser as of the Subsequent Closing Date or such other date as may be specified below with respect to each Subsequent Mortgage Loan being sold by it, that:

Immediately prior to the transfer to the Purchaser, the Seller was the sole owner of beneficial title and holder of each Mortgage and Mortgage Note relating to the Subsequent 

 

Mortgage Loans and is conveying the same free and clear of any and all liens, claims, encumbrances, participation interests, equities, pledges, charges or security interests of any nature and the Seller has full right and authority to sell or assign the same pursuant to this Agreement.

It is understood and agreed that the representations and warranties set forth in this Section 7 will inure to the benefit of the Purchaser, its successors and assigns, notwithstanding any restrictive or qualified endorsement on any Mortgage Note or assignment of Mortgage or the examination of any Mortgage File. Upon any substitution for a Subsequent Mortgage Loan, the representations and warranties set forth above shall be deemed to be made by the Seller as to any Substitute Mortgage Loan as of the date of substitution.

Upon discovery or receipt of notice by the Seller, the Purchaser or the Trustee of a breach of any representation or warranty of the Seller set forth in this Section 7 which materially and adversely affects the value of the interests of the Purchaser, the Certificateholders or the Trustee in any of the Subsequent Mortgage Loans delivered to the Purchaser pursuant to this Agreement, the party discovering or receiving notice of such breach shall give prompt written notice to the others. In the case of any such breach of a representation or warranty set forth in this Section 7, within 90 days from the date of discovery by the Seller, or the date the Seller is notified by the party discovering or receiving notice of such breach (whichever occurs earlier), the Seller will (i) cure such breach in all material respects, (ii) purchase the affected Subsequent Mortgage Loan at the applicable
Purchase Price or (iii) if within two years of the Subsequent Closing Date, substitute a qualifying Substitute Mortgage Loan in exchange for such Subsequent Mortgage Loan. The obligations of the Seller to cure, purchase or substitute a qualifying Substitute Mortgage Loan shall constitute the Purchaser’s, the Trustee’s and the Certificateholder’s sole and exclusive remedy under this Agreement or otherwise respecting a breach of representations or warranties hereunder with respect to the Subsequent Mortgage Loans.  With respect to the representations and warranties described in the Agreement which are made to the best of the Seller’s knowledge, if it is discovered by any of the Depositor, the Seller or the Trustee that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Subsequent Mortgage Loan, then notwithstanding the seller’s lack of knowledge with respect to the
substance of such representation and warranty, such inaccuracy shall be deemed a breach of the applicable representation or warranty.

Any cause of action against the Seller or relating to or arising out of a breach by the Seller of any representations and warranties made in this Section 7 shall accrue as to any Subsequent Mortgage Loan upon (i) discovery of such breach by the Seller or notice thereof by the party discovering such breach and (ii) failure by the Seller to cure such breach, purchase such Subsequent Mortgage Loan or substitute a qualifying Substitute Mortgage Loan pursuant to the terms hereof.

Section 8.          Representations and Warranties Concerning the Seller.  As of the date hereof and as of the Subsequent Closing Date, the Seller represents and warrants to the Purchaser as to itself in the capacity indicated as follows:

 

 

(a)          the Seller (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Maryland and (ii) is qualified and in good standing 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 Seller’s business as presently conducted or on the Seller’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

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

(c)          the execution and delivery by the Seller of this Agreement have been duly authorized by all necessary action on the part of the Seller; 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 Seller or its properties or the charter or by-laws of the Seller, except those conflicts, breaches or defaults which would not reasonably be expected to have a material adverse effect on the Seller’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(d)          the execution, delivery and performance by the Seller 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 and, in connection with the recordation of the Mortgages, powers of attorney or assignments of Mortgages not yet completed;

(e)          this Agreement has been duly executed and delivered by the Seller and, assuming due authorization, execution and delivery by the Purchaser, constitutes a valid and binding obligation of the Seller 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);

(f)           there are no actions, suits or proceedings pending or, to the knowledge of the Seller, threatened against the Seller, 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 Seller will be determined adversely to the Seller and will if determined adversely to the Seller materially and adversely affect the Seller’s ability to perform its obligations under this Agreement; and the Seller 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

Section 9.          Representations and Warranties Concerning the Purchaser.  As of the date hereof and as of the Subsequent Closing Date, the Purchaser represents and warrants to the Seller as follows:

 

 

(a)          the Purchaser (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and (ii) 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 Purchaser’s business as presently conducted or on the Purchaser’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(b)          the Purchaser 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;

(c)          the execution and delivery by the Purchaser of this Agreement have been duly authorized by all necessary corporate action on the part of the Purchaser; 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 Purchaser or its properties or the articles of incorporation or by-laws of the Purchaser, except those conflicts, breaches or defaults which would not reasonably be expected to have a material adverse effect on the Purchaser’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(d)          the execution, delivery and performance by the Purchaser 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;

(e)          this Agreement has been duly executed and delivered by the Purchaser and, assuming due authorization, execution and delivery by the Seller, constitutes a valid and binding obligation of the Purchaser 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);

(f)           there are no actions, suits or proceedings pending or, to the knowledge of the Purchaser, threatened against the Purchaser, 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 Purchaser will be determined adversely to the Purchaser and will if determined adversely to the Purchaser materially and adversely affect the Purchaser’s ability to perform its obligations under this Agreement; and the Purchaser 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

 

 

	
             
  	
            Section 10.
 	
            Conditions to Closing.
 

(a)          The obligations of the Purchaser under this Agreement will be subject to the satisfaction, on or prior to the Subsequent Closing Date, of the following conditions:

(1)          Each of the obligations of the Seller required to be performed at or prior to the Subsequent Closing Date pursuant to the terms of this Agreement shall have been duly performed and complied with in all material respects; all of the representations and warranties of the Seller under this Agreement shall be true and correct as of the date or dates specified in all material respects; and no event shall have occurred which, with notice or the passage of time, would constitute a default under this Agreement, or the Pooling and Servicing Agreement; and the Purchaser shall have received certificates to that effect signed by authorized officers of the Seller.

(2)          The Purchaser shall have received all of the following closing documents, in such forms as are agreed upon and reasonably acceptable to the Purchaser, duly executed by all signatories other than the Purchaser as required pursuant to the respective terms thereof:

a.            If  required pursuant to Section 3 hereof, the Amendment dated as of the Subsequent Closing Date and any documents referred to therein;

b.            If required pursuant to Section 3 hereof, the Final Subsequent Mortgage Loan Schedule containing the information set forth on Exhibit 3 hereto, one copy to be attached to each counterpart of the Amendment;

c.            The Pooling and Servicing Agreement, in form and substance reasonably satisfactory to the Trustee and the Purchaser, and all documents required thereby duly executed by all signatories;

d.            A certificate of an officer of the Seller dated as of the Subsequent Closing Date, in a form reasonably acceptable to the Purchaser, and attached thereto the resolutions of the Seller’s authorizing the transactions contemplated by this Agreement, together with copies of the charter and by-laws of the Seller;

e.            One or more opinions of counsel from the Seller’s counsel otherwise in form and substance reasonably satisfactory to the Purchaser, the Trustee and each Rating Agency; and

f.             Such other documents, certificates (including additional representations and warranties) and opinions as may be reasonably necessary to secure the intended ratings from each Rating Agency for the Certificates.

(3)          The Certificates to be sold to Merrill Lynch pursuant to the Underwriting Agreement shall have been issued and sold to Merrill Lynch.

(4)          The Seller shall have furnished to the Purchaser such other certificates of its officers or others and such other documents and opinions of counsel to 

 

evidence fulfillment of the conditions set forth in this Agreement and the transactions contemplated hereby as the Purchaser and its counsel may reasonably request.

(b)          The obligations of the Seller under this Agreement shall be subject to the satisfaction, on or prior to the Subsequent Closing Date, of the following conditions:

(1)          The obligations of the Purchaser required to be performed by it on or prior to the Subsequent Closing Date pursuant to the terms of this Agreement shall have been duly performed and complied with in all material respects, and all of the representations and warranties of the Purchaser under this Agreement shall be true and correct in all material respects as of the date hereof and as of the Subsequent Closing Date, and no event shall have occurred which would constitute a breach by it of the terms of this Agreement, and the Seller shall have received a certificate to that effect signed by an authorized officer of the Purchaser.

(2)          The Seller shall have received copies of all of the following closing documents, in such forms as are agreed upon and reasonably acceptable to the Seller, duly executed by all signatories other than the Seller as required pursuant to the respective terms thereof:

a.            If  required pursuant to Section 3 hereof, the Amendment dated as of the Subsequent Closing Date and any documents referred to therein;

b.            The Pooling and Servicing Agreement, in form and substance reasonably satisfactory to the Seller, and all documents required thereby duly executed by all signatories;

c.            A certificate of an officer of the Purchaser dated as of the Subsequent Closing Date, in a form reasonably acceptable to the Seller, and attached thereto the resolutions of the Purchaser authorizing the transactions contemplated by this Agreement and the Pooling and Servicing Agreement, together with copies of the Purchaser’s articles of incorporation, and evidence as to the good standing of the Purchaser dated as of a recent date;

d.            One or more opinions of counsel from the Purchaser’s counsel in form and substance reasonably satisfactory to the Seller; and

e.            Such other documents, certificates (including additional representations and warranties) and opinions as may be reasonably necessary to secure the intended rating from each Rating Agency for the Certificates;

Section 11.        Fees and Expenses.  Subject to Section 16 hereof, the Seller shall pay on the Subsequent Closing Date or such later date as may be agreed to by the Purchaser (i) the fees and expenses of the Seller’s attorneys and the reasonable fees and expenses of the Purchaser’s attorneys, (ii) the filing fee charged by the Commission for the registration of the Certificates, (iii) the fees and expenses including counsel’s fees and expenses in connection with any “blue sky” and legal investment matters, (iv) the fees and expenses of the Trustee which shall include without limitation the fees and expenses of the Trustee (and the fees and disbursements of its counsel) with respect to (A) legal and document review of this Agreement, 

 

the Pooling and Servicing Agreement, the Certificates and related agreements, (B) attendance at the Closing and (C) review of the Subsequent Mortgage Loans to be performed by the Custodian, (v) the expenses for printing or otherwise reproducing the Certificates, the Prospectus and the Prospectus Supplement, (vi) the fees and expenses of each Rating Agency (both initial and ongoing), (vii) the fees and expenses relating to the preparation and recordation of mortgage assignments (including intervening assignments, if any and if available, to evidence a complete chain of title from the originator to the Trustee) from the Seller to the Trustee or the expenses relating to the Opinion of Counsel referred to in Section 6(a) hereof, as the case may be, and (viii) Mortgage File due diligence expenses and other out-of-pocket expenses incurred by the Purchaser in connection with the purchase of the Subsequent
Mortgage Loans and by Merrill Lynch in connection with the sale of the Offered Certificates. The Seller additionally agrees to pay directly to any third party on a timely basis the fees provided for above which are charged by such third party and which are billed periodically.

	
             
  	
            Section 12.
 	
            [Reserved].
 
	
             
  	
            Section 13.
 	
            [Reserved].
 

Section 14.        Notices.  All demands, notices and communications hereunder shall be in writing but may be delivered by facsimile transmission subsequently confirmed in writing. Notices to the Seller shall be directed to KKR Financial Mortgage Corp., Four Embarcadero Center, Suite 2050, San Francisco, California, 94111, and notices to the Purchaser shall be directed to Merrill Lynch Mortgage Investors, Inc., 4 World Financial Center, New York, New York 10281, (Telecopy: 212-449-6710), Attention: Brian Brennan; or to any other address as may hereafter be furnished by one party to the other party by like notice. Any such demand, notice or communication hereunder shall be deemed to have been received on the date received at the premises of the addressee (as evidenced, in the case of registered or
certified mail, by the date noted on the return receipt) provided that it is received on a business day during normal business hours and, if received after normal business hours, then it shall be deemed to be received on the next business day.

Section 15.        Transfer of Subsequent Mortgage Loans.  The Purchaser retains the right to assign the Subsequent Mortgage Loans and any or all of its interest under this Agreement to the Trustee without the consent of the Seller, and, upon such assignment, the Trustee shall succeed to the applicable rights and obligations of the Purchaser hereunder; provided, however, the Purchaser shall remain entitled to the benefits set forth in Sections 11 and 17 hereto and as provided in Section 2(a). Notwithstanding the foregoing, the sole and exclusive right and remedy of the Trustee with respect to a breach of representation or warranty of the Seller shall be the purchase or substitution obligations of the Seller contained in Sections 5 and 7 hereof.

Section 16.        Termination.  This Agreement may be terminated (a) by the mutual consent of the parties hereto prior to the Subsequent Closing Date, (b) by the Purchaser, if the conditions to the Purchaser’s obligation to close set forth under Section 10(a) hereof are not fulfilled as and when required to be fulfilled or (c) by the Seller, if the conditions to the Seller’s obligation to close set forth under Section 10(b) hereof are not fulfilled as and when required to be fulfilled. In the event of termination pursuant to clause (b), the Seller shall pay, and in the 

 

event of termination pursuant to clause (c), the Purchaser shall pay, all reasonable out-of-pocket expenses incurred by the other in connection with the transactions contemplated by this Agreement. In the event of a termination pursuant to clause (a), each party shall be responsible for its own expenses.

Section 17.        Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and agreements contained in this Agreement, or contained in certificates of officers of the Seller submitted pursuant hereto, shall remain operative and in full force and effect and shall survive delivery of the Subsequent Mortgage Loans to the Purchaser (and by the Purchaser to the Trustee). Subsequent to the delivery of the Subsequent Mortgage Loans to the Purchaser, the Seller’s representations and warranties contained herein with respect to the Subsequent Mortgage Loans shall be deemed to relate to the Subsequent Mortgage Loans actually delivered to the Purchaser and included in the Final Subsequent Mortgage Loan Schedule and any Substitute Mortgage Loan and not to those Subsequent
Mortgage Loans deleted from the Preliminary Subsequent Mortgage Loan Schedule pursuant to Section 3 hereof prior to the Closing.

Section 18.       Mandatory Delivery; Grant of Security Interest. The sale and delivery on the Subsequent Closing Date of the Subsequent Mortgage Loans described on the Subsequent Mortgage Loan Schedule in accordance with the terms and conditions of this Agreement is mandatory. It is specifically understood and agreed that each Subsequent Mortgage Loan is unique and identifiable on the date hereof and that an award of money damages would be insufficient to compensate the Purchaser for the losses and damages incurred by the Purchaser in the event of the Seller’s failure to deliver the Subsequent Mortgage Loans on or before the Subsequent Closing Date. The Seller hereby grants to the Purchaser a lien on and a continuing security interest in the Seller’s interest in each Subsequent Mortgage Loan and
each document and instrument evidencing each such Subsequent Mortgage Loan to secure the performance by the Seller of its obligation hereunder, and the Seller agrees that it holds such Subsequent Mortgage Loans in custody for the Purchaser, subject to the Purchaser’s obligation to deliver or cause to be delivered the consideration for the Subsequent Mortgage Loans pursuant to Section 2 hereof. The Seller agrees that, upon acceptance of the Subsequent Mortgage Loans by the Purchaser or its designee and delivery of payment to the Seller, that its security interest in the Subsequent Mortgage Loans shall be released. All rights and remedies of the Purchaser under this Agreement are distinct from, and cumulative with, any other rights or remedies under this Agreement or afforded by law or equity and all such rights and remedies may be exercised concurrently, independently or successively.

Notwithstanding the foregoing, if on the Subsequent Closing Date, each of the conditions set forth in Section 10 hereof shall have been satisfied and the Purchaser shall not have paid or caused to be paid the purchase price as described in Section 2 hereof, or any such condition shall not have been waived or satisfied and the Purchaser determines not to pay or cause to be paid the purchase price, the Purchaser shall immediately effect the redelivery of the Subsequent Mortgage Loans, if delivery to the Purchaser has occurred and the security interest created by this Section 18 shall be deemed to have been released.

Section 19.        Severability.  Any part, provision, representation or warranty of this Agreement which is prohibited or which is held to be void or unenforceable shall be 

 

ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any part, provision, representation or warranty of this Agreement which is prohibited or unenforceable or is held to be void or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction as to any Subsequent Mortgage Loan shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereto waive any provision of law which prohibits or renders void or unenforceable any provision hereof.

Section 20.        Counterparts.  This Agreement may be executed in counterparts, each of which will be an original, but which together shall constitute one and the same agreement.

Section 21.        Amendment.  This Agreement cannot be amended or modified in any manner without the prior written consent of each party.

Section 22.    GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5.1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Section 23.       Further Assurances. Each of the parties agrees to execute and deliver such instruments and take such actions as another party may, from time to time, reasonably request in order to effectuate the purpose and to carry out the terms of this Agreement including any amendments hereto which may be required by either Rating Agency.

 

	
             
  	
            Section 24.
 	
            Successors and Assigns.
 

This Agreement shall bind and inure to the benefit of and be enforceable by the Seller and the Purchaser and their permitted successors and assigns. The Seller acknowledges and grees that the Purchaser may assign its rights under this Agreement (including, without limitation, with respect to the Seller’s representations and warranties respecting the Subsequent Mortgage Loans) to the Trustee. Any person into which the Seller may be merged or consolidated (or any person resulting from any merger or consolidation involving the Seller), any person resulting from a change in form of the Seller or any person succeeding to the business of the Seller, shall be considered the “successor” of the Seller hereunder and shall be considered a party hereto without the execution or filing of any paper or any further act or consent on the part of any party hereto. Except as provided in the
two preceding sentences, this Agreement cannot be assigned, pledged or hypothecated by either party hereto without the written consent of the other parties to this Agreement and any such assignment or purported assignment shall be deemed null and void.

Section 25.       The Seller.  The Seller will keep in full effect all rights as are necessary to perform their respective obligations under this Agreement.

 

 

Section 26.        Entire Agreement.  This Agreement contains the entire agreement and understanding between the parties with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof.

Section 27.       No Partnership.  Nothing herein contained shall be deemed or construed to create a partnership or joint venture between the parties hereto.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

IN WITNESS WHEREOF, the parties hereto have caused their names to be signed hereto by their respective duly authorized officers as of the date first above written.

	
             
 	
            KKR FINANCIAL MORTGAGE CORP.
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Name:        
 
	
             
 	
            Title:                   
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
            MERRILL LYNCH MORTGAGE
 INVESTORS, INC.
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Name:        
 
	
             
 	
            Title:                   
 

 

 

 

ANNEX I

 

LIST OF SUBSEQUENT MORTGAGE LOANS

 

(Available Upon Request)

 

 

EXHIBIT 1

CONTENTS OF MORTGAGE FILE

With respect to each Subsequent Mortgage Loan, the Mortgage File shall include each of the following items, which shall be available for inspection by the Purchaser or its designee, and which shall be delivered to the Purchaser or its designee pursuant to the terms of the Agreement.

	
             
  	
            (a)
 	
            With respect to each Subsequent Mortgage Loan:
 

(i)           The original Mortgage Note, including any riders thereto, endorsed by the Seller or the originator, as applicable, without recourse in proper form to the order of the Trustee, at the direction of the Purchaser, with any intervening endorsements showing an unbroken chain of title from the originator to the Trustee or with respect to the Subsequent Mortgage Loans as to which the Mortgage Note has been lost, lost note affidavits and if available, a copy of the lost Mortgage Note;

(ii)          An original duly executed assignment of Mortgage in recordable form from the originator to the Trustee;

(iii)        The original recorded Mortgage, if available. If, in connection with any Subsequent Mortgage Loan, the Seller cannot deliver the original Mortgage with evidence of recording thereon on or prior to the Subsequent Closing Date because of its delivery to, or a delay caused by, the public recording office where such Mortgage has been delivered for recordation, or if such original Subsequent Mortgage Loan has been retained by the public recording office as a matter of policy, or has been lost, the Seller shall deliver or cause to be delivered to the Trustee a photocopy thereof, if available (certified by the Seller to be a true and correct copy of the original which has been transmitted for recordation), together with an officer’s certificate of the Seller stating that such Mortgage has been
dispatched to the appropriate recording official for recordation, has been retained by such recording office as a matter of policy or has been lost, as applicable;

(iv)         If applicable and available, all original intervening recorded assignments, if any, showing an unbroken chain of title to the Mortgage from the originator to the Seller or the Trustee;

(v)          The originals of each assumption, modification or substitution agreement, if any and if available, relating to the Subsequent Mortgage Loan. If in connection with any Subsequent Mortgage Loan the Seller cannot deliver the assumption, modification or substitution agreement with evidence of recording thereon on or prior to the Subsequent Closing Date because of a delay caused by the public recording office where such assumption, modification or substitution agreement has been delivered for recordation, the Seller shall deliver or cause to be delivered to the Trustee a photocopy of such assumption, modification or substitution agreement (certified by the Seller to be a true and correct copy of the original which has been transmitted for recordation), together with a certificate of an
officer of the Seller stating that such assumption, modification or 

 

substitution agreement has been dispatched to the appropriate recording official for recordation, if available; 

(vi)         the original mortgagee’s title insurance policy or a written commitment to issue such title insurance policy; 

	
             
  	
            (b)
 	
            With respect to each Cooperative Loan so assigned;
 

(i)           The original Mortgage Note, endorsed without recourse to the order of the Trustee and showing an unbroken chain of endorsements from the originator thereof to the Person endorsing it to the Trustee, or lost note affidavit, together with a copy of the related Mortgage Note;

(ii)          A counterpart of the Cooperative Lease and the Assignment of Proprietary Lease to the originator of the Cooperative Loan with intervening assignments showing an unbroken chain of title from such originator to the Trustee;

(iii)        The related Cooperative Stock Certificate, representing the related Cooperative Stock pledged with respect to such Cooperative Loan, together with an undated stock power (or other similar instrument) executed in blank;

(iv)         The original recognition agreement by the Cooperative of the interests of the mortgagee with respect to the related Cooperative Loan and any transfer documents related to the recognition agreement;

	
             
  	
            (v)
 	
            The Security Agreement;
 

(vi)         Copies of the original UCC-1 financing statement, and any continuation statements, filed by the originator of such Cooperative Loan as secured party, each with evidence of recording thereof, evidencing the interest of the originator under the Security Agreement and the Assignment of Proprietary Lease;

(vii)       Copies of the filed UCC-3 assignments of the security interest referenced in clause (vi) above showing an unbroken chain of title from the originator to the Trustee, each with evidence of recording thereof, evidencing the interest of the originator under the Security Agreement and the Assignment of Proprietary Lease;

(viii)      An executed assignment of the interest of the originator in the Security Agreement and Assignment of Proprietary Lease, showing an unbroken chain of title from the originator to the Trustee; and

(ix)         The original of each modification, assumption agreement or preferred loan agreement, if any, relating to such Cooperative Loan.

 

 

EXHIBIT 2

CONTENTS OF FINAL MORTGAGE FILE

(A)         With respect to each Subsequent Mortgage Loan, the Mortgage File shall include each of the following items, which shall be available for inspection by the Purchaser or its agent, and which shall be delivered to the Purchaser pursuant to the terms of the Agreement.

(i)           The original Mortgage Note, including any riders thereto, endorsed by the Seller or the originator, as applicable, without recourse in proper form to the order of the Trustee, at the direction of the Purchaser, with any intervening endorsements showing an unbroken chain of title from the originator to the Trustee, or with respect to the Subsequent Mortgage Loans as to which the Mortgage Note has been lost, lost note affidavits and if available, a copy of the lost Mortgage Note;

(ii)          An original duly executed assignment of Mortgage in recordable form from the Seller or the originator, as applicable, to the Trustee, with evidence of recording indicated thereon; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office;

(iii)        The original recorded Mortgage, if available, with evidence of recording indicated thereon; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation or such office as a matter of policy does not return the original of such document or if such original Mortgage has been lost, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office, if available;

(iv)         The original intervening assignments, including warehousing assignments, if any and if available, with evidence of recording thereon, showing an unbroken chain of title to the Mortgage from the Seller or the originator, as the case may be, to the Seller or the Trustee; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation or such office as a matter of policy does not return the original of such document, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office, if available;

(v)          The originals of each assumption, modification or substitution agreement, if any and if available, relating to the Subsequent Mortgage Loan; and

(vi)         the original mortgagee’s title insurance policy or, if a master title policy has been issued by the title insurer, a mortgagee’s certificate of title insurance or a written commitment to issue such title insurance policy.

 

 

EXHIBIT 3

SUBSEQUENT MORTGAGE LOAN SCHEDULE INFORMATION

The Preliminary and Final Subsequent Mortgage Loan Schedules shall set forth the following information with respect to each Subsequent Mortgage Loan:

	
             
  	
            (i)
 	
            the loan number of the Subsequent Mortgage Loan;
 	
             

	
             
  	
            (ii)
 	
            the city, state and zip code of the Mortgaged Property;
 	
             

	
             
  	
            (iii)
 	
            a code indicating whether the Mortgaged Property is owner-occupied;
 	
             

	
             
  	
            (iv)
 	
            the type of Residential Dwelling constituting the Mortgaged Property;
 
	
             
  	
            (v)
 	
            the original months to maturity;
 	
             

	
             
  	
            (vi)
 	
            the original date of the mortgage;
 	
             

	
             
  	
            (vii)
 	
            the Loan-to-Value Ratio at origination;
 	
             

	
             
  	
            (viii)
 	
            the Mortgage Interest Rate;
 	
             

										

(ix)         the date on which the first Monthly Payment was due on the Subsequent Mortgage Loan;

	
             
  	
            (x)
 	
            the stated maturity date;
 	
             

	
             
  	
            (xi)
 	
            the amount of the Monthly Payment at origination;
 	
             

	
             
  	
            (xii)
 	
            the amount of the Monthly Payment as of the Subsequent Cut-off Date;
 
					

(xiii)      the last Due Date on which a Monthly Payment was actually applied to the unpaid Stated Principal Balance;

	
             
  	
            (xiv)
 	
            the original principal amount of the Subsequent Mortgage Loan;
 

(xv)        the Stated Principal Balance of the Subsequent Mortgage Loan as of the close of business on the Subsequent Cut-off Date;

(xvi)      a code indicating the purpose of the Subsequent Mortgage Loan (i.e., purchase financing, Rate/Term Refinancing, Cash-Out Refinancing);

(xvii)     a code indicating the documentation style (i.e., full, alternative or reduced);

	
             
  	
            (xviii)
 	
            [reserved];
 	
             

	
             
  	
            (xix)
 	
            the Value of the Mortgaged Property;
 

 

 

 

	
             
  	
            (xx)
 	
            the sale price of the Mortgaged Property, if applicable;
 

(xxi)      the actual unpaid principal balance of the Subsequent Mortgage Loan as of the Subsequent Cut-off Date;

	
             
  	
            (xxii)
 	
            the Servicing Fee;
 
	
             
  	
            (xxiii)
 	
            [reserved];
 	
             

(xxiv)    with respect to each adjustable-rate Subsequent Mortgage Loan, the next Interest Rate Adjustment Date;

(xxv)     with respect to each adjustable-rate Subsequent Mortgage Loan, the Gross Margin;

(xxvi)    with respect to each adjustable-rate Subsequent Mortgage Loan, the Minimum and Maximum Mortgage Rate under the terms of the Mortgage Note;

(xxvii)   with respect to each adjustable-rate Subsequent Mortgage Loan, the First Rate Cap;

(xxviii) with respect to each adjustable-rate Subsequent Mortgage Loan, the related Periodic Rate Cap;

(xxix)    with respect to each adjustable-rate Subsequent Mortgage Loan, whether it is interest-only; and

	
             
  	
            (xxx)
 	
            with respect to each adjustable-rate Subsequent Mortgage Loan, the Seller.
 

Such schedule shall set forth the following information with respect to the Subsequent Mortgage Loans in the aggregate as of the Subsequent Cut-off Date: (1) the number of Subsequent Mortgage Loans; (2) the current principal balance of the Subsequent Mortgage Loans; (3) the weighted average Mortgage Rate of the Subsequent Mortgage Loans; and (4) the weighted average maturity of the Subsequent Mortgage Loans.

 

 

EXHIBIT 4

SCHEDULE OF LOST NOTES

Available Upon Request

 

 

EXHIBIT 5

 

REVISED August 1, 2005

 

APPENDIX E - STANDARD & POOR'S PREDATORY LENDING CATEGORIES 

Standard & Poor’s has categorized loans governed by anti-predatory lending laws in the Jurisdictions listed below into three categories based upon a combination of factors that include (a) the risk exposure associated with the assignee liability and (b) the tests and thresholds set forth in those laws. Note that certain loans classified by the relevant statute as Covered are included in Standard & Poor’s High Cost Loan Category because they included thresholds and tests that are typical of what is generally considered High Cost by the industry. 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Arkansas 
 	
            Arkansas Home Loan Protection Act, Ark. Code Ann. §§ 23-53-101 et seq. 

Effective July 16, 2003 
 	
            High Cost Home Loan 
 
	
            Cleveland Heights, OH 
 	
            Ordinance No. 72-2003 (PSH), Mun. Code §§ 757.01 et seq. 

Effective June 2, 2003 
 	
            Covered Loan 
 
	
            Colorado 
 	
            Consumer Equity Protection, Colo. Stat. Ann. §§ 5-3.5-101 et seq. 

Effective for covered loans offered or entered into on or after January 1, 2003. Other provisions of the Act took effect on June 7, 2002 
 	
            Covered Loan 
 
	
            Connecticut 
 	
            Connecticut Abusive Home Loan Lending Practices Act, Conn. Gen. Stat. §§ 36a-746 et seq. 

Effective October 1, 2001 
 	
            High Cost Home Loan 
 
	
            District of Columbia 
 	
            Home Loan Protection Act, D.C. Code §§ 26-1151.01 et seq. 

Effective for loans closed on or after January 28, 2003 
 	
            Covered Loan 
 

 

 

 

 

	
            Florida 
 	
            Fair Lending Act, Fla. Stat. Ann. §§ 494.0078 et seq. 

Effective October 2, 2002 
 	
            High Cost Home Loan 
 
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 
 	
            High Cost Home Loan 
 

 

 

 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Effective October 1, 2002 – March 6, 2003 
 	
             
 
	
            Georgia as amended (Mar. 7, 2003 – current) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 

Effective for loans closed on or after March 7, 2003 
 	
            High Cost Home Loan 
 
	
            HOEPA Section 32 
 	
            Home Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1639, 12 C.F.R. §§ 226.32 and 226.34 

Effective October 1, 1995, amendments October 1, 2002 
 	
            High Cost Loan 
 
	
            Illinois 
 	
            High Risk Home Loan Act, Ill. Comp. Stat. tit. 815, §§ 137/5 et seq. 

Effective January 1, 2004 (prior to this date, regulations under Residential Mortgage License Act effective from May 14, 2001) 
 	
            High Risk Home Loan 
 
	
            Kansas 
 	
            Consumer Credit Code, Kan. Stat. Ann. §§ 16a-1-101 et seq. 

Sections 16a-1-301 and 16a-3-207 became effective April 14, 1999; Section 16a-3-308a became effective July 1, 1999 
 	
            High Loan to Value Consumer Loan (id. § 16a-3-207) and; 
 
	
            High APR Consumer Loan (id. § 16a-3-308a) 
 
	
            Kentucky 
 	
            2003 KY H.B. 287 – High Cost Home Loan Act, Ky. Rev. Stat. §§ 360.100 et seq. 

Effective June 24, 2003 
 	
            High Cost Home Loan 
 
	
            Maine 
 	
            Truth in Lending, Me. Rev. Stat. tit. 9-A, §§ 8-101 et seq. 

Effective September 29, 1995 and as amended from time to time 
 	
            High Rate High Fee Mortgage 
 
	
            Massachusetts 
 	
            Part 40 and Part 32, 209 C.M.R. §§ 32.00 et seq. and 209 C.M.R. §§ 40.01 et seq. 
 	
            High Cost Home Loan 
 

 

 

 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Effective March 22, 2001 and amended from time to time 
 	
             
 
	
            Nevada 
 	
            Assembly Bill No. 284, Nev. Rev. Stat. §§ 598D.010 et seq. 

Effective October 1, 2003 
 	
            Home Loan 
 
	
            New Jersey 
 	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. 

Effective for loans closed on or after November 27, 2003 
 	
            High Cost Home Loan 
 
	
            New Mexico 
 	
            Home Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq. 

Effective as of January 1, 2004; Revised as of February 26, 2004 
 	
            High Cost Home Loan 
 
	
            New York 
 	
            N.Y. Banking Law Article 6-l 

Effective for applications made on or after April 1, 2003 
 	
            High Cost Home Loan 
 
	
            North Carolina 
 	
            Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E et seq. 

Effective July 1, 2000; amended October 1, 2003 (adding open-end lines of credit) 
 	
            High Cost Home Loan 
 
	
            Ohio 
 	
            H.B. 386 (codified in various sections of the Ohio Code), Ohio Rev. Code Ann. §§ 1349.25 et seq. 

Effective May 24, 2002 
 	
            Covered Loan 
 
	
            Oklahoma 
 	
            Consumer Credit Code (codified in various sections of Title 14A) 

Effective July 1, 2000; amended effective January 1, 2004 
 	
            Subsection 10 Mortgage 
 
	
            South Carolina 
 	
            South Carolina High Cost and Consumer Home Loans Act, S.C. Code 
 	
            High Cost Home Loan 
 

 

 

 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Ann. §§ 37-23-10 et seq. 

Effective for loans taken on or after January 1, 2004 
 	
             
 
	
            West Virginia 
 	
            West Virginia Residential Mortgage Lender, Broker and Servicer Act, W. Va. Code Ann. §§ 31-17-1 et seq. 

Effective June 5, 2002 
 	
            West Virginia Mortgage Loan Act Loan 
 

 

STANDARD & POOR'S COVERED LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 

Effective October 1, 2002 – March 6, 2003 
 	
            Covered Loan 
 
	
            New Jersey 
 	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. 

Effective November 27, 2003 – July 5, 2004 
 	
            Covered Home Loan 
 

 

STANDARD & POOR'S HOME LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 

Effective October 1, 2002 – March 6, 2003 
 	

            Home Loan 
 
	
            New Jersey 
 	
            New Jersey Home Ownership Security 
 	
            Home Loan 
 

 

 

 

STANDARD & POOR'S HOME LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. 

Effective for loans closed on or after November 27, 2003 
 	
             
 
	
            New Mexico 
 	
            Home Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq. 

Effective as of January 1, 2004; Revised as of February 26, 2004 
 	
            Home Loan 
 
	
            North Carolina 
 	
            Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E et seq. 

Effective July 1, 2000; amended October 1, 2003 (adding open-end lines of credit) 
 	
            Consumer Home Loan 
 
	
            South Carolina 
 	
            South Carolina High Cost and Consumer Home Loans Act, S.C. Code Ann. §§ 37-23-10 et seq. 

Effective for loans taken on or after January 1, 2004 
 	
            Consumer Home Loan 
 

 

 

 

EXHIBIT L-3

 

EMC SUBSEQUENT MORTGAGE LOAN PURCHASE AGREEMENT

SUBSEQUENT MORTGAGE LOAN PURCHASE AGREEMENT, dated as of December 30, 2005, as amended and supplemented by any and all amendments hereto (collectively, the “Agreement”), by and between EMC MORTGAGE CORPORATION, a Delaware corporation (the “Seller”), and MERRILL LYNCH MORTGAGE INVESTORS, INC., a Delaware corporation (the “Purchaser”).

Upon the terms and subject to the conditions of this Agreement, the Seller agrees to sell, and the Purchaser agrees to purchase, certain first lien, fixed-rate and adjustable-rate mortgage loans secured by one- to four-family residences, individual condominiums, co-op units and units in planned unit developments (collectively, the “Subsequent Mortgage Loans”) as described on Annex I. The Purchaser intends to deposit the Subsequent Mortgage Loans into a trust fund (the “Trust Fund”) and create Mortgage Pass-Through Certificates, Series MLMI 2005-A10 (the “Certificates”), under a pooling and servicing agreement, to be dated as of December 1, 2005 (the “Pooling and Servicing
Agreement”), between the Purchaser, as seller, HSBC Bank USA, National Association, as trustee (the “Trustee”) and Wells Fargo Bank, N.A., as master servicer and securities administrator (the “Master Servicer”).

The Purchaser has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (Number 333-127233) relating to its Mortgage Pass-Through Certificates and the offering of certain series thereof (including certain classes of the Certificates) from time to time in accordance with Rule 415 under the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder (the “Securities Act”). Such registration statement, when it became effective under the Securities Act, and the prospectus relating to the public offering of certain classes of the Certificates by the Purchaser (the “Public Offering”), as from time to time each is amended or
supplemented pursuant to the Securities Act or otherwise, are referred to herein as the “Registration Statement” and the “Prospectus,” respectively. The “Prospectus Supplement” shall mean that supplement, dated December 21, 2005 to the Prospectus, dated August 26, 2005, relating to certain classes of the Certificates. With respect to the Public Offering of certain classes of the Certificates, the Purchaser and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) have entered into a terms agreement dated as of December 21, 2005 to an underwriting agreement dated September 27, 2005, between the Purchaser and Merrill Lynch (together, the “Underwriting Agreement”).

Now, therefore, in consideration of the premises and the mutual agreements set forth herein, the parties hereto agree as follows:

Section 1.           Definitions. Certain terms are defined herein. The following other terms are defined as follows:

 

 

Co-op Lease:  With respect to a Co-op Loan, the lease with respect to a dwelling unit occupied by the Mortgagor and relating to the stock allocated to the related dwelling unit.

Co-op Loan:  A Subsequent Mortgage Loan secured by the pledge of stock allocated to a dwelling unit in a residential cooperative housing corporation and a collateral assignment of the related Co-op Lease.

Co-op Stock:  With respect to a Co-op Loan, the single outstanding class of stock, partnership interest or other ownership instrument in the related residential cooperative housing corporation.

Deleted Mortgage Loan: A Subsequent Mortgage Loan replaced or to be replaced by a Substitute Mortgage Loan.

Due Date: With respect to each Subsequent Mortgage Loan, the first day in each month.        

Master Servicer: Wells Fargo Bank, N.A.

Merrill Lynch: Merrill Lynch, Pierce, Fenner & Smith Incorporated.

Moody’s: Moody’s Investors Service, Inc., or its successors in interest.

Mortgage: The mortgage or deed of trust creating a first lien on an interest in real property securing a Mortgage Note.

Mortgage File: The items referred to in Exhibit 1 and Exhibit 2 pertaining to a particular Subsequent Mortgage Loan and any additional documents required to be added to such documents pursuant to this Agreement.

Mortgage Interest Rate: The annual rate of interest borne by a Mortgage Note as stated therein.

Mortgagor: The obligor(s) on a Mortgage Note.

Net Rate: For each Subsequent Mortgage Loan, the Mortgage Interest Rate for such Subsequent Mortgage Loan less the Master Servicing Fee Rate and the Trustee Fee Rate.

Offered Certificates: Shall mean the Class A, Class A-IO, Class M-1, Class M-2, Class M-3 and Class M-IO Certificates issued pursuant to the Pooling and Servicing Agreement.

Opinion of Counsel: A written opinion of counsel, who may be counsel for the Seller or the Purchaser, reasonably acceptable to the Trustee.

 

 

Person: Any legal person, including any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

Purchase Price: With respect to any Subsequent Mortgage Loan required to be purchased by the Seller pursuant to the applicable provisions of this Agreement, an amount equal to the sum of (i) 100% of the principal remaining unpaid on such Subsequent Mortgage Loan as of the date of purchase (including if a foreclosure has already occurred, the principal balance of the related Subsequent Mortgage Loan at the time the Mortgaged Property was acquired), and (ii) accrued and unpaid interest thereon at the Mortgage Interest Rate through and including the last day of the month of purchase (iii) any costs and damages incurred by the Trust in connection with any violation by such Subsequent Mortgage Loan of any predatory or abusive-lending law.

Rating Agencies: S&P and Moody’s, each a “Rating Agency.”

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

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

Subsequent Closing Date: December 30, 2005.

Subsequent Cut-off Date: December 1, 2005.

Subsequent Cut-off Date Balance: [___________]

Substitute Mortgage Loan: A Subsequent Mortgage Loan substituted for a Deleted Mortgage Loan which must meet on the date of such substitution the requirements stated herein; upon such substitution, such Subsequent Mortgage Loan shall be a “Subsequent Mortgage Loan” hereunder.

Value: The value of the Mortgaged Property at the time of origination of the related Subsequent Mortgage Loan, such value being the lesser of (i) the value of such property set forth in an appraisal accepted by the Originator or (ii) the sales price of such property at the time of origination.

Section 2.          Purchase and Sale of the Mortgage Loans and Related Rights. (a) Upon satisfaction of the conditions set forth in Section 10 hereof, the Seller agrees to sell, and the Purchaser agrees to purchase Subsequent Mortgage Loans having an aggregate Subsequent Cut-off Date Balance of $[___________].

(a)          The closing for the purchase and sale of the Subsequent Mortgage Loans will take place on the Subsequent Closing Date at the office of the Purchaser’s counsel in New York, New York or such other place as the parties shall agree.

(b)          Subsequent Closing Date, in consideration of the purchase of the Subsequent Mortgage Loans purchased from the Seller, the Purchaser shall (i) pay to the 

 

Seller an amount equal to the Seller’s allocated portion of the net sale proceeds of the Offered Certificates plus accrued interest (the “Purchase Price”) in immediately available funds by wire transfer to such account or accounts as shall be designated by the Seller.

(c)          In addition to the foregoing, on the Subsequent Closing Date the Seller assigns to the Purchaser without recourse all of its right, title and interest in the various purchase and servicing agreements.

Section 3.           Subsequent Mortgage Loan Schedules.  The Seller agrees to provide to the Purchaser as of the date hereof a preliminary listing of the Subsequent Mortgage Loans (the “Preliminary Subsequent Mortgage Loan Schedule”) setting forth the information listed on Exhibit 3 to this Agreement with respect to each of the Subsequent Mortgage Loans being sold by the Seller. If there are changes to the Preliminary Subsequent Mortgage Loan Schedule, the Seller shall provide to the Purchaser as of the Closing Date a final schedule (the “Final Mortgage Loan Schedule”) setting forth the information listed on Exhibit 3 to this Agreement with respect to each of the Subsequent Mortgage Loans being sold by the Seller to the Purchaser. The Final Subsequent Mortgage Loan
Schedule shall be delivered to the Purchaser on the Subsequent Closing Date, shall be attached to an amendment to this Agreement to be executed on the Subsequent Closing Date by the parties hereto and shall be in form and substance mutually agreed to by the Seller and the Purchaser (the “Amendment”). If there are no changes to the Preliminary Subsequent Mortgage Loan Schedule, the Preliminary Subsequent Mortgage Loan Schedule shall be the Final Subsequent Mortgage Loan Schedule for all purposes hereof.

	
             
  	
            Section 4.
 	
            Mortgage Loan Transfer.
 

(a)          The Purchaser will be entitled to all scheduled payments of principal and interest on the Subsequent Mortgage Loans due after the Subsequent Cut-off Date (regardless of when actually collected) and all payments thereof other than scheduled principal and interest received after the Subsequent Cut-off Date. The Seller will be entitled to all scheduled payments of principal and interest on the Subsequent Mortgage Loans due on or before the Subsequent Cut-off Date (including payments collected after the Subsequent Cut-off Date) and all payments thereof other than scheduled principal and interest on the Subsequent Mortgage Loans received on or before the Subsequent Cut-off Date. Such principal amounts and any interest thereon belonging to the Seller as described above will not be included in the aggregate
outstanding principal balance of the Subsequent Mortgage Loans as of the Subsequent Cut-off Date as set forth on the Final Subsequent Mortgage Loan Schedule.

(b)          Pursuant to various conveyancing documents to be executed on the Subsequent Closing Date and pursuant to the Pooling and Servicing Agreement, the Purchaser will assign on the Subsequent Closing Date all of its right, title and interest in and to the Subsequent Mortgage Loans to the Trustee for the benefit of the Certificateholders. In connection with the transfer and assignment of the Subsequent Mortgage Loans, the Seller has delivered or will deliver or cause to be delivered to the Trustee by the Subsequent Closing Date or such later date as is agreed to by the 

 

Purchaser and the Seller (each of the Subsequent Closing Date and such later date is referred to as a “Mortgage File Delivery Date”), the items of each Mortgage File, provided, however, that in lieu of the foregoing, the Seller may deliver the following documents, under the circumstances set forth below: (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 in time to permit their delivery as specified above, the Seller may deliver a true copy thereof with a certification by the Seller or the Originator, 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;” (y) in lieu of the Mortgage, assignments to the Trustee or intervening assignments thereof, if the applicable jurisdiction retains the originals of such documents or if the originals are lost (in each case, as evidenced by a certification from the Seller to such effect), the Seller 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 (z) in lieu of the Mortgage Notes relating to the Subsequent Mortgage Loans, each identified in the list delivered by the Purchaser to the Trustee on the Subsequent Closing Date and attached hereto as Exhibit 6 the Seller may deliver lost note affidavits and indemnities of the Seller; and provided further, however, that in the case of Subsequent Mortgage Loans which have been prepaid in full after the Subsequent Cut-off Date and prior to the Subsequent Closing Date, the Seller, in lieu
of delivering the above documents, may deliver to the Trustee a certification by the Seller to such effect. The Seller shall deliver such original documents (including any original documents as to which certified copies had previously been delivered) or such certified copies to the Trustee promptly after they are received. The Seller shall cause the Mortgage and intervening assignments, if any, and the assignment of the Mortgage to be recorded not later than 180 days after the Subsequent Closing Date, or, in lieu of such assignments, shall provide an Opinion of Counsel pursuant to Section 6(a) hereof to the effect that the recordation of such assignment is not necessary to protect the Trustee’s interest in the related Subsequent Mortgage Loan. Upon the request of the Purchaser, the Seller will assist the Purchaser in effecting the assignment referred to above.

(c)          The Seller and the Purchaser acknowledge hereunder that all of the Subsequent Mortgage Loans will ultimately be assigned to HSBC Bank USA, National Association, as Trustee for the Certificateholders, on the date hereof.

	
             
  	
            Section 5.
 	
            Examination of Mortgage Files.
 

(a)          On or before the Mortgage File Delivery Date, the Seller will have made the Mortgage Files available to the Purchaser or its agent for examination which may be at the offices of the Trustee or the Seller and/or the Seller’s custodian. The fact that the Purchaser or its agent has conducted or has failed to conduct any partial or complete examination of the Mortgage Files shall not affect the Purchaser’s rights to demand cure, repurchase, substitution or other relief as provided in this Agreement. In furtherance of the foregoing, the Seller shall make the Mortgage Files available to the Purchaser or its agent from time to time so as to permit the Purchaser to confirm the 

 

Seller’s compliance with the delivery and recordation requirements of this Agreement. In addition, upon request of the Purchaser, the Seller agrees to provide to the Purchaser, Merrill Lynch and to any investors or prospective investors in the Certificates information regarding the Subsequent Mortgage Loans and their servicing, to make the Mortgage Files available to the Purchaser, Merrill Lynch and to such investors or prospective investors (which may be at the offices of the Seller and/or the Seller’s custodian) and to make available personnel knowledgeable about the Subsequent Mortgage Loans for discussions with the Purchaser, Merrill Lynch and such investors or prospective investors, upon reasonable request during regular business hours, sufficient to permit the Purchaser, Merrill Lynch and such investors or potential investors to conduct such due diligence as any such party reasonably
believes is appropriate.

(b)          Pursuant to the Pooling and Servicing Agreement, on the Subsequent Closing Date the Trustee, for the benefit of the Certificateholders, will review items of the Mortgage Files as set forth on Exhibit 1 and will deliver to the Seller a certification in the form attached as Exhibit 6 hereto.

(c)          Pursuant to the Pooling and Servicing Agreement, the Trustee will review the Mortgage Files within 180 days of the Subsequent Closing Date and will deliver to the Purchaser a final certification substantially in the form of Exhibit 7 hereto. If the Trustee is unable to deliver a final certification with respect to the items listed in Exhibit 2 due to any document that is missing, has not been executed, is unrelated, determined on the basis of the Mortgagor name, original principal balance and loan number, to the Subsequent Mortgage Loans identified in the Final Subsequent Mortgage Loan Schedule (a “Material Defect”), the Trustee shall notify the Seller of such Material Defect. The Seller shall correct or cure any such Material Defect within 90 days from the date of notice from the Trustee of the
Material Defect and if the Seller does not correct or cure such Material Defect within such period and such defect materially and adversely affects the interests of the Certificateholders in the related Subsequent Mortgage Loan, the Seller will within 90 days of the date of notice, provide the Trustee with a Substitute Mortgage Loan (if within two years of the Subsequent Closing Date) or purchase the related Subsequent Mortgage Loan at the applicable Purchase Price; provided that, if such defect would cause the Subsequent Mortgage Loan to be other than a “qualified mortgage” as defined in Section 860G(a)(3) of the Code, any such cure, repurchase or substitution 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 Subsequent 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 Subsequent 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 of the Seller confirming that such documents have been accepted for recording, and delivery to the 

 

Trustee shall be effected by the Seller within thirty days of its receipt of the original recorded document.

(d)          At the time of any substitution, the Seller shall deliver or cause to be delivered the Substitute Mortgage Loan, the related Mortgage File and any other documents and payments required to be delivered in connection with a substitution. At the time of any purchase or substitution, the Trustee shall (i) assign to the Seller and cause the Trustee to release the documents (including, but not limited to, the Mortgage, Mortgage Note and other contents of the Mortgage File) in the possession of the Trustee relating to the Deleted Mortgage Loan and (ii) execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be necessary to vest in the Seller title to such Deleted Mortgage Loan.

	
             
  	
            Section 6.
 	
            Recordation of Assignments of Mortgage.
 

(a)          The Seller will, promptly after the Subsequent Closing Date, cause each Mortgage and each assignment of Mortgage from the Seller to the Trustee, and all unrecorded intervening assignments, if any, delivered on or prior to the Subsequent Closing Date, to be recorded in all recording offices in the jurisdictions where the related Mortgaged Properties are located; provided, however, the Seller need not cause to be recorded any assignment which relates to a Subsequent Mortgage Loan in any jurisdiction under the laws of which, as evidenced by an Opinion of Counsel delivered by the Purchaser to the Trustee and the Rating Agencies, the recordation of such assignment is not necessary to protect the Trustee’s interest in the related Subsequent Mortgage Loan; provided, however, notwithstanding the delivery of any
Opinion of Counsel, each assignment of Mortgage shall be submitted for recording by the Seller in the manner described above, at no expense to the Trust Fund or Trustee, within 30 days notice to the Seller of the earliest to occur of (i) reasonable direction by the Holders of Certificates evidencing, in the aggregate, not less than 25% of the Voting Rights, (ii) the occurrence of a Master Servicer Event of Termination, (iii) the occurrence of a bankruptcy, insolvency or foreclosure relating to the Seller, (iv) the occurrence of a servicing transfer as described in Section 7.02 of the Pooling and Servicing Agreement or (v) with respect to any one assignment of Mortgage, the occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor under the related Mortgage.

While each such Mortgage or assignment is being recorded, if necessary, the Seller shall leave or cause to be left with the Trustee a certified copy of such Mortgage or assignment. In the event that, within 180 days of the Subsequent Closing Date, the Trustee has not provided an Opinion of Counsel as described above or received evidence of recording with respect to each Subsequent Mortgage Loan delivered to the Purchaser pursuant to the terms hereof or as set forth above, the failure to provide evidence of recording or such Opinion of Counsel shall be considered a Material Defect, and the provisions of Section 5(c) and (d) shall apply. All customary recording fees and reasonable expenses relating to the recordation of the assignments of mortgage to the Trustee or the Opinion of Counsel, as the case may be, shall be borne by the Seller.

 

 

(b)          It is the express intent of the parties hereto that the conveyance of the Subsequent Mortgage Loans by the Seller to the Purchaser, as contemplated by this Agreement be, and be treated as, a sale. It is, further, not the intention of the parties that such conveyance be deemed a pledge of the Subsequent Mortgage Loans by the Seller to the Purchaser to secure a debt or other obligation of the Seller. However, in the event that, notwithstanding the intent of the parties, the Subsequent Mortgage Loans are held by a court of competent jurisdiction to continue to be property of the Seller, then (i) this Agreement shall also be deemed to be a security agreement within the meaning of Articles 8 and 9 of the applicable Uniform Commercial Code; (ii) the transfer of the Subsequent Mortgage Loans provided for herein
shall be deemed to be a grant by the Seller to the Purchaser of a security interest in all of the Seller’s right, title and interest in and to the Subsequent Mortgage Loans and all amounts payable to the holders of the Subsequent Mortgage Loans in accordance with the terms thereof and all proceeds of the conversion, voluntary or involuntary, of the foregoing into cash, instruments, securities or other property, to the extent the Purchaser would otherwise be entitled to own such Subsequent Mortgage Loans and proceeds pursuant to Section 4 hereof, including all amounts, other than investment earnings, from time to time held or invested in any accounts created pursuant to the Pooling and Servicing Agreement, whether in the form of cash, instruments, securities or other property; (iii) the possession by the Purchaser or the Trustee of Mortgage Notes and such other items of property as constitute instruments, money, negotiable documents or chattel paper shall be deemed to be
“possession by the secured party” for purposes of perfecting the security interest pursuant to Section 9-305 (or comparable provision) of the applicable Uniform Commercial Code; and (iv) notifications to persons holding such property, and acknowledgments, receipts or confirmations from persons holding such property, shall be deemed notifications to, or acknowledgments, receipts or confirmations from, financial intermediaries, bailees or agents (as applicable) of the Purchaser for the purpose of perfecting such security interest under applicable law. Any assignment of the interest of the Purchaser pursuant to any provision hereof or pursuant to the Pooling and Servicing Agreement shall also be deemed to be an assignment of any security interest created hereby. The Seller and the Purchaser shall, to the extent consistent with this Agreement, take such actions as may be reasonably necessary to ensure that, if this Agreement were deemed to create a security interest in the
Subsequent Mortgage Loans, such security interest would be deemed to be a perfected security interest of first priority under applicable law and will be maintained as such throughout the term of the Pooling and Servicing Agreement.

Section 7.          Representations and Warranties of Seller Concerning the Subsequent Mortgage Loans. (a)  The Seller hereby represents and warrants to the Purchaser as of the Subsequent Closing Date or such other date as may be specified below with respect to each Subsequent Mortgage Loan being sold by it:

(i)           the information set forth in the Subsequent Mortgage Loan Schedule hereto is true and correct in all material respects; and

(ii)          no selection procedure reasonably believed by the Seller to be adverse to the interests of the Certificateholders was utilized in selecting the Subsequent Mortgage Loans.

 

 

(iii)        The Seller hereby represents and warrants to the Purchaser as of the Subsequent Closing Date or such other date as may be specified below with respect to each Subsequent Mortgage Loan being sold by it (other than those Subsequent Mortgage Loans purchased by the Seller from Countrywide Home Loans LP and Wachovia Mortgage Corporation):

(iv)         immediately prior to the transfer to the Purchaser, the Seller was the sole owner of beneficial title and holder of each Mortgage and Mortgage Note relating to the Subsequent Mortgage Loans and is conveying the same free and clear of any and all liens, claims, encumbrances, participation interests, equities, pledges, charges or security interests of any nature and the Seller has full right and authority to sell or assign the same pursuant to this Agreement;

(v)          each Subsequent Mortgage Loan constitutes a “qualified mortgage” under Section 860G(a)(3)(A) of the Code and Treasury Regulation Section 1.8600-2(a)(1);

(vi)         as of the Subsequent Cut-off Date, no Subsequent Mortgage Loan is more than 30 days past due. The Seller has not advanced funds, or induced, solicited or knowingly received any advance of funds from a party other than the owner of the related Mortgaged Property, directly or indirectly, for the payment of any amount required by the Mortgage Note or Mortgage;

(vii)       to the best of the Seller’s knowledge, there are no delinquent taxes, ground rents, water charges, sewer rents, assessments, insurance premiums, leasehold payments, including assessments payable in future installments or other outstanding charges affecting the related Mortgaged Property;

(viii)      to the best of the Seller’s knowledge, there is no default, breach, violation or event of acceleration existing under the Mortgage or the Mortgage Note and no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration, and the Seller has not waived any default, breach, violation or event of acceleration;

(ix)         as of the date of origination, the Mortgaged Property was free of material damage and waste and there is no proceeding pending for the total or partial condemnation thereof;

(x)          as of the date of origination, the Mortgaged Property was lawfully occupied under applicable law at time of origination; all inspections, licenses and certificates required to be made or issued at origination with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy, have been made or obtained from the appropriate authorities;

(xi)         all requirements of any federal, state or local law (including usury, truth in lending, real estate settlement procedures, consumer credit protection, 

 

equal credit opportunity, disclosure or recording, predatory and abusive lending laws) applicable to the origination of such Subsequent Mortgage Loan have been complied with in all material respects;

(xii)       to the best of the Seller’s knowledge, as of the date of transfer of the Subsequent Mortgage Loans, there is no mechanics’ lien or claim for work, labor or material affecting the Mortgaged Property except those which are insured against by the title insurance policy;

(xiii)      to the best of the Seller’s knowledge, as of the date of the transfer of the Subsequent Mortgage Loans to the Purchaser, there is no valid offset, defense or counterclaim to any Mortgage Note or Mortgage;

(xiv)      at the time of origination, no improvement located on or being part of the Mortgaged Property was in violation of any applicable zoning and subdivision laws or ordinances;

(xv)        each original mortgage has been recorded or is in the process of being recorded in the appropriate jurisdictions wherein such recordation is required to perfect the lien thereof for the benefit of the trust;

(xvi)      the related mortgage file contains each of the documents and instruments specified;

(xvii)     neither the Seller nor any prior holder of any Subsequent Mortgage Loan has impaired, altered or modified the Mortgage or Mortgage Note in any material respect, except by a written instrument which has been recorded or is in the process of being recorded;

(xviii)    a lender’s title policy or binder, or other assurance of title insurance customary in a form acceptable to FNMA or FHLMC was issued at origination and each policy or binder is valid and remains in full force and effect;

(xix)       none of the Subsequent Mortgage Loans are secured by a leasehold interest;

(xx)       none of the Subsequent Mortgage Loans are subject to the Georgia Fair Lending Act, as amended;

(xxi)      none of the Subsequent Mortgage Loans is subject to the Home Ownership and Equity Protection Act of 1994 or is a “high cost” or “predatory” loan as defined by applicable local, state and federal predatory and abusive lending laws; 

(xxii)     no Subsequent Mortgage Loan is a High Cost Loan or Covered Loan, as applicable (as such terms are defined in Appendix E of the then current Standard & Poor's Glossary For File Format For LEVELS® Version 5.6b Revised (attached hereto as Exhibit 7); and

 

 

(xxiii)    with respect to each Co-op Loan, the security instruments create a valid, enforceable and subsisting first priority security interest in the Co-op Lease and Co-op Stock securing the related Mortgage Note subject to only to (a) the lien of the related cooperative for unpaid assessments representing the Mortgagor’s pro rata share of payments for a blanket mortgage, if any, current and future real property taxes, insurance premiums, maintenance fees and other assessments to which like collateral is commonly subject, and (b) other matters to which the collateral is commonly subject which do not materially interfere with the benefits of the security intended to be provided; provided, however, that the related Co-op Loan may be subordinated or otherwise subject to the lien of a Mortgage on the cooperative building. 

It is understood and agreed that the representations and warranties set forth in this Section 7 will inure to the benefit of the Purchaser, its successors and assigns, notwithstanding any restrictive or qualified endorsement on any Mortgage Note or assignment of Mortgage or the examination of any Mortgage File. Upon any substitution for a Subsequent Mortgage Loan, the representations and warranties set forth above shall be deemed to be made by the Seller as to any Substitute Mortgage Loan as of the date of substitution.

Upon discovery or receipt of notice by the Seller, the Purchaser or the Trustee of a breach of any representation or warranty of the Seller set forth in this Section 7 which materially and adversely affects the value of the interests of the Purchaser, the Certificateholders or the Trustee in any of the Subsequent Mortgage Loans delivered to the Purchaser pursuant to this Agreement, the party discovering or receiving notice of such breach shall give prompt written notice to the others. In the case of any such breach of a representation or warranty set forth in this Section 7, within 90 days from the date of discovery by the Seller, or the date the Seller is notified by the party discovering or receiving notice of such breach (whichever occurs earlier), the Seller will (i) cure such breach in all material respects, (ii) purchase the affected Subsequent Mortgage Loan at the applicable
Purchase Price or (iii) if within two years of the Subsequent Closing Date, substitute a qualifying Substitute Mortgage Loan in exchange for such Subsequent Mortgage Loan. The obligations of the Seller to cure, purchase or substitute a qualifying Substitute Mortgage Loan shall constitute the Purchaser’s, the Trustee’s and the Certificateholder’s sole and exclusive remedy under this Agreement or otherwise respecting a breach of representations or warranties hereunder with respect to the Subsequent Mortgage Loans, except for the obligation of the Seller to indemnify the Purchaser for such breach as set forth in and limited by Section 14 hereof.  With respect to the representations and warranties described in the Agreement which are made to the best of the Seller’s knowledge, if it is discovered by any of the Depositor, the Seller or the Trustee that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects
the value of the related Subsequent Mortgage Loan, then notwithstanding the seller’s lack of knowledge with respect to the substance of such representation and warranty, such inaccuracy shall be deemed a breach of the applicable representation or warranty.

 

 

Any cause of action against the Seller or relating to or arising out of a breach by the Seller of any representations and warranties made in this Section 7 shall accrue as to any Subsequent Mortgage Loan upon (i) discovery of such breach by the Seller or notice thereof by the party discovering such breach and (ii) failure by the Seller to cure such breach, purchase such Subsequent Mortgage Loan or substitute a qualifying Substitute Mortgage Loan pursuant to the terms hereof.

Section 8.          Representations and Warranties Concerning the Seller.  As of the date hereof and as of the Subsequent Closing Date, the Seller represents and warrants to the Purchaser as to itself in the capacity indicated as follows:

(a)          the Seller (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and (ii) is qualified and in good standing 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 Seller’s business as presently conducted or on the Seller’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

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

(c)          the execution and delivery by the Seller of this Agreement have been duly authorized by all necessary action on the part of the Seller; 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 Seller or its properties or the charter or by-laws of the Seller, except those conflicts, breaches or defaults which would not reasonably be expected to have a material adverse effect on the Seller’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(d)          the execution, delivery and performance by the Seller 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 and, in connection with the recordation of the Mortgages, powers of attorney or assignments of Mortgages not yet completed;

(e)          this Agreement has been duly executed and delivered by the Seller and, assuming due authorization, execution and delivery by the Purchaser, constitutes a valid and binding obligation of the Seller 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); and

 

 

(f)           there are no actions, suits or proceedings pending or, to the knowledge of the Seller, threatened against the Seller, 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 Seller will be determined adversely to the Seller and will if determined adversely to the Seller materially and adversely affect the Seller’s ability to perform its obligations under this Agreement; and the Seller 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.

Section 9.          Representations and Warranties Concerning the Purchaser.  As of the date hereof and as of the Subsequent Closing Date, the Purchaser represents and warrants to the Seller as follows:

(a)          the Purchaser (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and (ii) 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 Purchaser’s business as presently conducted or on the Purchaser’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(b)          the Purchaser 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;

(c)          the execution and delivery by the Purchaser of this Agreement have been duly authorized by all necessary corporate action on the part of the Purchaser; 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 Purchaser or its properties or the articles of incorporation or by-laws of the Purchaser, except those conflicts, breaches or defaults which would not reasonably be expected to have a material adverse effect on the Purchaser’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(d)          the execution, delivery and performance by the Purchaser 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;

(e)          this Agreement has been duly executed and delivered by the Purchaser and, assuming due authorization, execution and delivery by the Seller, constitutes a valid and binding obligation of the Purchaser 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);

(f)           there are no actions, suits or proceedings pending or, to the knowledge of the Purchaser, threatened against the Purchaser, 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 Purchaser will be determined adversely to the Purchaser and will if determined adversely to the Purchaser materially and adversely affect the Purchaser’s ability to perform its obligations under this Agreement; and the Purchaser 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

(g)          the Purchaser’s Information (as defined in Section 13(b) hereof) does not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

	
             
  	
            Section 10.
 	
            Conditions to Closing.
 

(a)          The obligations of the Purchaser under this Agreement will be subject to the satisfaction, on or prior to the Subsequent Closing Date, of the following conditions:

(1)          Each of the obligations of the Seller required to be performed at or prior to the Subsequent Closing Date pursuant to the terms of this Agreement shall have been duly performed and complied with in all material respects; all of the representations and warranties of the Seller under this Agreement shall be true and correct as of the date or dates specified in all material respects; and no event shall have occurred which, with notice or the passage of time, would constitute a default under this Agreement; and the Purchaser shall have received certificates to that effect signed by authorized officers of the Seller.

(2)          The Purchaser shall have received all of the following closing documents, in such forms as are agreed upon and reasonably acceptable to the Purchaser, duly executed by all signatories other than the Purchaser as required pursuant to the respective terms thereof:

a.            If  required pursuant to Section 3 hereof, the Amendment dated as of the Subsequent Closing Date and any documents referred to therein;

b.            If required pursuant to Section 3 hereof, the Final Subsequent Mortgage Loan Schedule containing the information set forth on Exhibit 3 hereto, one copy to be attached to each counterpart of the Amendment;

 

 

c.            A certificate of an officer of the Seller dated as of the Subsequent Closing Date, in a form reasonably acceptable to the Purchaser, and attached thereto the resolutions of the Seller’s authorizing the transactions contemplated by this Agreement, together with copies of the charter and by-laws of the Seller; and

d.            One or more opinions of counsel from the Seller’s counsel otherwise in form and substance reasonably satisfactory to the Purchaser, the Trustee and each Rating Agency.

(3)          The Seller shall have furnished to the Purchaser such other certificates of its officers or others and such other documents and opinions of counsel to evidence fulfillment of the conditions set forth in this Agreement and the transactions contemplated hereby as the Purchaser and its counsel may reasonably request.

(b)          The obligations of the Seller under this Agreement shall be subject to the satisfaction, on or prior to the Subsequent Closing Date, of the following conditions:

(1)          The obligations of the Purchaser required to be performed by it on or prior to the Subsequent Closing Date pursuant to the terms of this Agreement shall have been duly performed and complied with in all material respects, and all of the representations and warranties of the Purchaser under this Agreement shall be true and correct in all material respects as of the date hereof and as of the Subsequent Closing Date, and no event shall have occurred which would constitute a breach by it of the terms of this Agreement, and the Seller shall have received a certificate to that effect signed by an authorized officer of the Purchaser.

(2)          The Seller shall have received copies of all of the following closing documents, in such forms as are agreed upon and reasonably acceptable to the Seller, duly executed by all signatories other than the Seller as required pursuant to the respective terms thereof:

a.            If  required pursuant to Section 3 hereof, the Amendment dated as of the Subsequent Closing Date and any documents referred to therein;

b.            A certificate of an officer of the Purchaser dated as of the Subsequent Closing Date, in a form reasonably acceptable to the Seller, and attached thereto the resolutions of the Purchaser authorizing the transactions contemplated by this Agreement, together with copies of the Purchaser’s articles of incorporation, and evidence as to the good standing of the Purchaser dated as of a recent date; and

c.            One or more opinions of counsel from the Purchaser’s counsel in form and substance reasonably satisfactory to the Seller.

 

 

Section 11.        Fees and Expenses.  Subject to Section 17 hereof, the Seller shall pay on the Subsequent Closing Date or such later date as may be agreed to by the Purchaser (i) the fees and expenses relating to the preparation and recordation of mortgage assignments (including intervening assignments, if any and if available, to evidence a complete chain of title from the originator to the Trustee) from the Seller to the Trustee and (ii) Mortgage File due diligence expenses and other out-of-pocket expenses incurred by the Purchaser in connection with the purchase of the Mortgage Loans.

	
             
  	
            Section 12.
 	
            [Reserved].
 	
             

	
             
  	
            Section 13.
 	
            Indemnification.
 

(a)          The Seller shall indemnify and hold harmless the Purchaser and its directors, officers and controlling persons (as defined in Section 15 of the Securities Act) from and against any loss, claim, damage or liability or action in respect thereof, to which they or any of them may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon (i) any representation or warranty assigned or made by the Seller in Section 7 or Section 8 hereof being, or alleged to be, untrue or incorrect, or (ii) any failure by the Seller to perform its obligations under this Agreement; and the Seller shall reimburse the Purchaser and each other indemnified party for any legal and other expenses reasonably incurred by them in connection with
investigating or defending or preparing to defend against any such loss, claim, damage, liability or action. 

(b)          The Seller shall indemnify and hold harmless the Purchaser, the Trust Fund and the Trustee against any documented out-of-pocket losses, penalties, fines, forfeitures, reasonable and necessary legal fees and related costs, judgments, and other costs and expenses resulting from any claim, demand, defense or assertion by any third party that results from, a material breach of the representations and warranties set forth in Section 7 of this Agreement; provided, however, indemnification shall not be available for any economic losses of the Purchaser due to reinvestment losses, loss of investment income or any other special, indirect or consequential losses.  The Seller shall indemnify and hold harmless the Purchaser, the Trust Fund and the Trustee against any losses, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and other costs and expenses resulting from any claim, demand, defense or assertion by any third party in connection with the Georgia Fair Lending Act; provided, however, indemnification shall not be available for any economic losses of the Purchaser due to reinvestment losses, loss of investment income or any other special, indirect or consequential losses.

The foregoing indemnity agreement is in addition to any liability which the Seller otherwise may have to the Purchaser or any other such indemnified party.

(c)          The Purchaser shall indemnify and hold harmless the Seller and its respective directors, officers and controlling persons (as defined in Section 15 of the Securities Act) from and against any loss, claim, damage or liability or action in respect 

 

thereof, to which they or any of them may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon (i) any untrue statement of a material fact contained in the Purchaser’s Information as identified in Exhibit 5, the omission to state in the Prospectus Supplement or Prospectus (or any amendment thereof or supplement thereto approved by the Purchaser and in which additional Purchaser’s Information is identified), in reliance upon and in conformity with the Purchaser’s Information, a material fact required to be stated therein or necessary to make the statements therein in light of the circumstances in which they were made, not misleading, (ii) any representation or warranty made by the Purchaser in Section 9 hereof being, or alleged to be, untrue or incorrect, or (iii) any failure by the Purchaser to perform
its obligations under this Agreement; and the Purchaser shall reimburse the Seller, and each other indemnified party for any legal and other expenses reasonably incurred by them in connection with investigating or defending or preparing to defend any such loss, claim, damage, liability or action. The foregoing indemnity agreement is in addition to any liability which the Purchaser otherwise may have to the Seller, or any other such indemnified party,

(d)          Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify each party against whom indemnification is to be sought in writing of the commencement thereof (but the failure so to notify an indemnifying party shall not relieve it from any liability which it may have under this Section 13 except to the extent that it has been prejudiced in any material respect by such failure or from any liability which it may have otherwise). In case any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent it may elect by written notice delivered to the indemnified party promptly (but, in any event, within 30 days) after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party. Notwithstanding the foregoing, the indemnified party or parties shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless (i) the employment of such counsel shall have been authorized in writing by one of the indemnifying parties in connection with the defense of such action, (ii) the indemnifying parties shall not have employed counsel to have charge of the defense of such action within a reasonable time after notice of commencement of the action, or (iii) such indemnified party or parties shall have reasonably concluded that there is a conflict of interest between
itself or themselves and the indemnifying party in the conduct of the defense of any claim or that the interests of the indemnified party or parties are not substantially co-extensive with those of the indemnifying party (in which case the indemnifying parties shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses shall be borne by the indemnifying parties (provided, however, that the indemnifying party shall be liable only for the fees and expenses of one counsel in addition to one local counsel in the jurisdiction involved. Anything in this subsection to the contrary notwithstanding, an indemnifying party shall not be liable for any settlement or any claim 

 

or action effected without its written consent; provided, however, that such consent was not unreasonably withheld.

(e)          If the indemnification provided for in paragraphs (a) and (b) of this Section 13 shall for any reason be unavailable to an indemnified party in respect of any loss, claim, damage or liability, or any action in respect thereof, referred to in Section 13, then the indemnifying party shall in lieu of indemnifying the indemnified party contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, in such proportion as shall be appropriate to reflect the relative benefits received by the Seller on the one hand and the Purchaser on the other from the purchase and sale of the Subsequent Mortgage Loans, the offering of the Certificates and the other transactions contemplated hereunder. No person found liable for a fraudulent
misrepresentation shall be entitled to contribution from any person who is not also found liable for such fraudulent misrepresentation.

(f)           The parties hereto agree that reliance by an indemnified party on any publicly available information or any information or directions furnished by an indemnifying party shall not constitute negligence, bad faith or willful misconduct by such indemnified party.

Section 14.      Notices.  All demands, notices and communications hereunder shall be in writing but may be delivered by facsimile transmission subsequently confirmed in writing. Notices to the Seller shall be directed to EMC Mortgage Corporation, 2780 Lake Vista Drive, Lewisville, TX 75067-3884, (Facsimile: 972-831-2997 and notices to the Purchaser shall be directed to Merrill Lynch Mortgage Investors, Inc., 4 World Financial Center, New York, New York 10281, (Telecopy: 212-449-6710), Attention: Brian Brennan; or to any other address as may hereafter be furnished by one party to the other party by like notice. Any such demand, notice or communication hereunder shall be deemed to have been received on the date received at the premises of the addressee (as evidenced, in the case of registered or certified mail, by
the date noted on the return receipt) provided that it is received on a business day during normal business hours and, if received after normal business hours, then it shall be deemed to be received on the next business day.

Section 15.       Transfer of Subsequent Mortgage Loans.  The Purchaser retains the right to assign the Subsequent Mortgage Loans and any or all of its interest under this Agreement to the Trustee without the consent of the Seller, and, upon such assignment, the Trustee shall succeed to the applicable rights and obligations of the Purchaser hereunder; provided, however, the Purchaser shall remain entitled to the benefits set forth in Sections 11, 13 and 17 hereto and as provided in Section 2(a). Notwithstanding the foregoing, the sole and exclusive right and remedy of the Trustee with respect to a breach of representation or warranty of the Seller shall be the purchase or substitution obligations of the Seller contained in Sections 5 and 7 hereof.

Section 16.        Termination.  This Agreement may be terminated (a) by the mutual consent of the parties hereto prior to the Subsequent Closing Date, (b) by the Purchaser, if the conditions to the Purchaser’s obligation to close set forth under Section 

 

10(a) hereof are not fulfilled as and when required to be fulfilled or (c) by the Seller, if the conditions to the Seller’s obligation to close set forth under Section 10(b) hereof are not fulfilled as and when required to be fulfilled. In the event of termination pursuant to clause (b), the Seller shall pay, and in the event of termination pursuant to clause (c), the Purchaser shall pay, all reasonable out-of-pocket expenses incurred by the other in connection with the transactions contemplated by this Agreement. In the event of a termination pursuant to clause (a), each party shall be responsible for its own expenses.

Section 17.       Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and agreements contained in this Agreement, or contained in certificates of officers of the Seller submitted pursuant hereto, shall remain operative and in full force and effect and shall survive delivery of the Subsequent Mortgage Loans to the Purchaser (and by the Purchaser to the Trustee). Subsequent to the delivery of the Subsequent Mortgage Loans to the Purchaser, the Seller’s representations and warranties contained herein with respect to the Subsequent Mortgage Loans shall be deemed to relate to the Subsequent Mortgage Loans actually delivered to the Purchaser and included in the Final Subsequent Mortgage Loan Schedule and any Substitute Mortgage Loan and not to those Subsequent
Mortgage Loans deleted from the Preliminary Mortgage Loan Schedule pursuant to Section 3 hereof prior to the Closing.

Section 18.        Mandatory Delivery; Grant of Security Interest. The sale and delivery on the Subsequent Closing Date of the Subsequent Mortgage Loans described on the Mortgage Loan Schedule in accordance with the terms and conditions of this Agreement is mandatory. It is specifically understood and agreed that each Subsequent Mortgage Loan is unique and identifiable on the date hereof and that an award of money damages would be insufficient to compensate the Purchaser for the losses and damages incurred by the Purchaser in the event of the Seller’s failure to deliver the Subsequent Mortgage Loans on or before the Subsequent Closing Date. The Seller hereby grants to the Purchaser a lien on and a continuing security interest in the Seller’s interest in each Subsequent Mortgage Loan and each
document and instrument evidencing each such Subsequent Mortgage Loan to secure the performance by the Seller of its obligation hereunder, and the Seller agrees that it holds such Subsequent Mortgage Loans in custody for the Purchaser, subject to the Purchaser’s obligation to deliver or cause to be delivered the consideration for the Subsequent Mortgage Loans pursuant to Section 2 hereof. The Seller agrees that, upon acceptance of the Subsequent Mortgage Loans by the Purchaser or its designee and delivery of payment to the Seller, that its security interest in the Subsequent Mortgage Loans shall be released. All rights and remedies of the Purchaser under this Agreement are distinct from, and cumulative with, any other rights or remedies under this Agreement or afforded by law or equity and all such rights and remedies may be exercised concurrently, independently or successively.

Notwithstanding the foregoing, if on the Subsequent Closing Date, each of the conditions set forth in Section 10 hereof shall have been satisfied and the Purchaser shall not have paid or caused to be paid the purchase price as described in Section 2 hereof, or any such condition shall not have been waived or satisfied and the Purchaser determines not to pay or cause to be paid the purchase price, the Purchaser shall immediately effect the redelivery of the Subsequent Mortgage Loans, if delivery to the 

 

Purchaser has occurred and the security interest created by this Section 18 shall be deemed to have been released.

Section 19.       Severability.  Any part, provision, representation or warranty of this Agreement which is prohibited or which is held to be void or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any part, provision, representation or warranty of this Agreement which is prohibited or unenforceable or is held to be void or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction as to any Subsequent Mortgage Loan shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits or renders void or unenforceable any provision hereof.

Section 20.      Counterparts.  This Agreement may be executed in counterparts, each of which will be an original, but which together shall constitute one and the same agreement.

Section 21.      Amendment.  This Agreement cannot be amended or modified in any manner without the prior written consent of each party.

Section 22.       GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE AND PERFORMED IN THE STATE OF NEW YORK AND SHALL BE INTERPRETED IN ACCORDANCE WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES OF SUCH STATE.

Section 23.        Further Assurances. Each of the parties agrees to execute and deliver such instruments and take such actions as another party may, from time to time, reasonably request in order to effectuate the purpose and to carry out the terms of this Agreement including any amendments hereto which may be required by either Rating Agency.

	
             
  	
            Section 24.
 	
            Successors and Assigns.
 

This Agreement shall bind and inure to the benefit of and be enforceable by the Seller and the Purchaser and their permitted successors and assigns and, to the extent specified in Section 13 hereof, Merrill Lynch, and their directors, officers and controlling persons (within the meaning of federal securities laws). The Seller acknowledges and agrees that the Purchaser may assign its rights under this Agreement (including, without limitation, with respect to the Seller’s representations and warranties respecting the Subsequent Mortgage Loans) to the Trustee. Any person into which the Seller may be merged or consolidated (or any person resulting from any merger or consolidation involving the Seller), any person resulting from a change in form of the Seller or any person succeeding to the business of the Seller, shall be considered the “successor” of the 

 

Seller hereunder and shall be considered a party hereto without the execution or filing of any paper or any further act or consent on the part of any party hereto. Except as provided in the two preceding sentences, this Agreement cannot be assigned, pledged or hypothecated by either party hereto without the written consent of the other parties to this Agreement and any such assignment or purported assignment shall be deemed null and void.

Section 25.        The Seller.  The Seller will keep in full effect all rights as are necessary to perform their respective obligations under this Agreement.

Section 26.       Entire Agreement.  This Agreement contains the entire agreement and understanding between the parties with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof.

Section 27.        No Partnership.  Nothing herein contained shall be deemed or construed to create a partnership or joint venture between the parties hereto.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

IN WITNESS WHEREOF, the parties hereto have caused their names to be signed hereto by their respective duly authorized officers as of the date first above written.

	
             
 	
            EMC MORTGAGE CORPORATION
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Name:        
 
	
             
 	
            Title:                   
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
            MERRILL LYNCH MORTGAGE
 INVESTORS, INC.
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Name:        
 
	
             
 	
            Title:                   
 

 

 

 

ANNEX I

LIST OF SUBSEQUENT MORTGAGE LOANS

 

(Available Upon Request)

 

 

EXHIBIT 1

CONTENTS OF MORTGAGE FILE

With respect to each Subsequent Mortgage Loan, the Mortgage File shall include each of the following items, which shall be available for inspection by the Purchaser or its designee, and which shall be delivered to the Purchaser or its designee pursuant to the terms of the Agreement.

	
             
  	
            (a)
 	
            With respect to each Subsequent Mortgage Loan:
 

(i)           The original Mortgage Note, including any riders thereto, endorsed by the Seller or the originator, as applicable, without recourse in proper form to the order of the Trustee, at the direction of the Purchaser, with any intervening endorsements showing an unbroken chain of title from the originator to the Trustee or with respect to the Subsequent Mortgage Loans as to which the Mortgage Note has been lost, lost note affidavits and if available, a copy of the lost Mortgage Note;

(ii)          An original duly executed assignment of Mortgage from the originator to _____________;

(iii)        The original recorded Mortgage, if available. If, in connection with any Subsequent Mortgage Loan, the Seller cannot deliver the original Mortgage with evidence of recording thereon on or prior to the Subsequent Closing Date because of its delivery to, or a delay caused by, the public recording office where such Mortgage has been delivered for recordation, or if such original Subsequent Mortgage Loan has been retained by the public recording office as a matter of policy, or has been lost, the Seller shall deliver or cause to be delivered to the Trustee a photocopy thereof, if available (certified by the Seller to be a true and correct copy of the original which has been transmitted for recordation), together with an officer’s certificate of the Seller stating that such Mortgage has been
dispatched to the appropriate recording official for recordation, has been retained by such recording office as a matter of policy or has been lost, as applicable;

(iv)         If applicable and available, all original intervening recorded assignments, if any, showing an unbroken chain of title to the Mortgage from the originator to the Seller or the Trustee;

(v)          The originals of each assumption, modification or substitution agreement, if any and if available, relating to the Subsequent Mortgage Loan. If in connection with any Subsequent Mortgage Loan the Seller cannot deliver the assumption, modification or substitution agreement with evidence of recording thereon on or prior to the Subsequent Closing Date because of a delay caused by the public recording office where such assumption, modification or substitution agreement has been delivered for recordation, the Seller shall deliver or cause to be delivered to the Trustee a photocopy of such assumption, modification or substitution agreement (certified by the Seller to be a true and correct copy of the original which has been transmitted for recordation), together with a certificate of an
officer of the Seller stating that such assumption, modification or 

 

substitution agreement has been dispatched to the appropriate recording official for recordation, if available; 

(vi)         the original mortgagee’s title insurance policy or a written commitment to issue such title insurance policy; .

	
             
  	
            (b)
 	
            With respect to each Cooperative Loan so assigned;
 

(i)           The original Mortgage Note, endorsed without recourse to the order of the Trustee and showing an unbroken chain of endorsements from the originator thereof to the Person endorsing it to the Trustee, or lost note affidavit, together with a copy of the related Mortgage Note;

(ii)          A counterpart of the Cooperative Lease and the Assignment of Proprietary Lease to the originator of the Cooperative Loan with intervening assignments showing an unbroken chain of title from such originator to the Trustee;

(iii)        The related Cooperative Stock Certificate, representing the related Cooperative Stock pledged with respect to such Cooperative Loan, together with an undated stock power (or other similar instrument) executed in blank;

(iv)         The original recognition agreement by the Cooperative of the interests of the mortgagee with respect to the related Cooperative Loan and any transfer documents related to the recognition agreement;

	
             
  	
            (v)
 	
            The Security Agreement;
 

(vi)         Copies of the original UCC-1 financing statement, and any continuation statements, filed by the originator of such Cooperative Loan as secured party, each with evidence of recording thereof, evidencing the interest of the originator under the Security Agreement and the Assignment of Proprietary Lease;

(vii)       Copies of the filed UCC-3 assignments of the security interest referenced in clause (vi) above showing an unbroken chain of title from the originator to the Trustee, each with evidence of recording thereof, evidencing the interest of the originator under the Security Agreement and the Assignment of Proprietary Lease;

(viii)      An executed assignment of the interest of the originator in the Security Agreement and Assignment of Proprietary Lease, showing an unbroken chain of title from the originator to the Trustee; and

(ix)         The original of each modification, assumption agreement or preferred loan agreement, if any, relating to such Cooperative Loan.

 

 

EXHIBIT 2

CONTENTS OF FINAL MORTGAGE FILE

(A)         With respect to each Subsequent Mortgage Loan, the Mortgage File shall include each of the following items, which shall be available for inspection by the Purchaser or its agent, and which shall be delivered to the Purchaser pursuant to the terms of the Agreement.

(i)           The original Mortgage Note, including any riders thereto, endorsed by the originator to _____________, as applicable, without recourse in proper form to the order of the Trustee, at the direction of the Purchaser, with any intervening endorsements showing an unbroken chain of title from the originator to the Trustee, or with respect to the Subsequent Mortgage Loans as to which the Mortgage Note has been lost, lost note affidavits and if available, a copy of the lost Mortgage Note;

(ii)          An original duly executed assignment of Mortgage in recordable form from the Seller or the originator, as applicable, to the Trustee, with evidence of recording indicated thereon; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office;

(iii)        The original recorded Mortgage, if available, with evidence of recording indicated thereon; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation or such office as a matter of policy does not return the original of such document or if such original Mortgage has been lost, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office, if available;

(iv)         The original intervening assignments, including warehousing assignments, if any and if available, with evidence of recording thereon, showing an unbroken chain of title to the Mortgage from the Seller or the originator, as the case may be, to the Seller or the Trustee; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation or such office as a matter of policy does not return the original of such document, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office, if available;

(v)          The originals of each assumption, modification or substitution agreement, if any and if available, relating to the Subsequent Mortgage Loan; and

(vi)         the original mortgagee’s title insurance policy or, if a master title policy has been issued by the title insurer, a mortgagee’s certificate of title insurance or a written commitment to issue such title insurance policy.

 

 

EXHIBIT 3

SUBSEQUENT MORTGAGE LOAN SCHEDULE INFORMATION

The Preliminary and Final Subsequent Mortgage Loan Schedules shall set forth the following information with respect to each Subsequent Mortgage Loan:

	
             
  	
            (i)
 	
            the loan number of the Subsequent Mortgage Loan;
 	
             

	
             
  	
            (ii)
 	
            the city, state and zip code of the Mortgage Property;
 	
             

	
             
  	
            (iii)
 	
            a code indicating whether the Mortgaged Property is owner-occupied;
 	
             

	
             
  	
            (iv)
 	
            the type of Residential Dwelling constituting the Mortgaged Property;
 
	
             
  	
            (v)
 	
            the original months to maturity;
 	
             

	
             
  	
            (vi)
 	
            the original date of the mortgage;
 	
             

	
             
  	
            (vii)
 	
            the Loan-to-Value Ratio at origination;
 	
             

	
             
  	
            (viii)
 	
            the Mortgage Interest Rate;
 	
             

											

(ix)           the date on which the first Monthly Payment was due on the Subsequent Mortgage Loan;

	
             
  	
            (x)
 	
            the stated maturity date;
 	
             

	
             
  	
            (xi)
 	
            the amount of the Monthly Payment at origination;
 	
             

	
             
  	
            (xii)
 	
            the amount of the Monthly Payment as of the Subsequent Cut-off Date;
 
					

(xiii)        the last Due Date on which a Monthly Payment was actually applied to the unpaid Stated Principal Balance;

	
             
  	
            (xiv)
 	
            the original principal amount of the Subsequent Mortgage Loan;
 

(xv)          the Stated Principal Balance of the Subsequent Mortgage Loan as of the close of business on the Cut-off Date;

(xvi)         a code indicating the purpose of the Subsequent Mortgage Loan (i.e., purchase financing, Rate/Term Refinancing, Cash-Out Refinancing);

(xvii)       a code indicating the documentation style (i.e., full, alternative or reduced);

	
             
  	
            (xviii)
 	
            [reserved];
 	
             

	
             
  	
            (xix)
 	
            the Value of the Mortgaged Property;
 

 

 

 

	
             
  	
            (xx)
 	
            the sale price of the Mortgaged Property, if applicable;
 

(xxi)         the actual unpaid principal balance of the Subsequent Mortgage Loan as of the Cut-off Date;

	
             
  	
            (xxii)
 	
            the Servicing Fee;
 
	
             
  	
            (xxiii)
 	
            [reserved];
 	
             

(xxiv)      with respect to each adjustable-rate Subsequent Mortgage Loan, the next Interest Rate Adjustment Date;

(xxv)        with respect to each adjustable-rate Subsequent Mortgage Loan, the Gross Margin;

(xxvi)      with respect to each adjustable-rate Subsequent Mortgage Loan, the Minimum and Maximum Mortgage Rate under the terms of the Mortgage Note;

(xxvii)     with respect to each adjustable-rate Subsequent Mortgage Loan, the First Rate Cap;

(xxviii)    with respect to each adjustable-rate Subsequent Mortgage Loan, the related Periodic Rate Cap;

(xxix)      with respect to each adjustable-rate Subsequent Mortgage Loan, whether it is interest-only; and

(xxx)        with respect to each adjustable-rate Subsequent Mortgage Loan, the Seller.

Such schedule shall set forth the following information with respect to the Subsequent Mortgage Loans in the aggregate as of the Cut-off Date: (1) the number of Subsequent Mortgage Loans; (2) the current principal balance of the Subsequent Mortgage Loans; (3) the weighted average Mortgage Rate of the Subsequent Mortgage Loans; and (4) the weighted average maturity of the Subsequent Mortgage Loans.

 

 

EXHIBIT 4

[RESERVED]

 

 

EXHIBIT 5

SCHEDULE OF LOST NOTES

Available Upon Request

 

 

EXHIBIT 6

FORM OF CUSTODIAN INITIAL CERTIFICATION

December __, 2005

Merrill Lynch Mortgage Investors, Inc.

4 World Financial Center, 10th Floor

New York, New York 10281

HSBC Bank USA, National Association

Corporate Trust & Loan Agency

452 Fifth Avenue

New York, New York  10018

 

	
             
 	
            Re:
 	
            
Pooling and Servicing Agreement, dated as of December 1, 2005, among Merrill
 Lynch Mortgage Investors, Inc., as depositor, Wells Fargo Bank, N.A., as master
 servicer and securities administrator and HSBC Bank USA, National Association,
 as trustee, Mortgage Pass-Through Certificates, Series MLMI 2005-A10
 
 

 

Ladies and Gentlemen:

Attached is the Custodian’s preliminary exception report delivered in accordance with Section 2.02 of the referenced Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”).  Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Pooling and Servicing Agreement.

The Custodian has made no independent examination of any documents contained in each Mortgage File beyond the review specifically required in the Pooling and Servicing Agreement.  The Custodian makes no representations as to (i) the validity, legality, sufficiency, enforceability or genuineness of any of the documents contained in the Mortgage File pertaining to the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the collectability, insurability, effectiveness or suitability of any such Mortgage Loan or (iii) the existence of any assumption, modification, written assurance, or substitution agreement, with respect to any Mortgage File if no such documents appear in the Mortgage File delivered to the Custodian.

	
             
 	
            WELLS FARGO BANK, N.A.,
 as Custodian
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Name:        
 
	
             
 	
            Title:                   
 

 

 

 

 

 

EXHIBIT 7

FORM OF CUSTODIAN FINAL CERTIFICATION

____________, 2005

Merrill Lynch Mortgage Investors, Inc.

World Financial Center--North Tower

250 Vesey Street

New York, NY 10281

Attention: Paul Park

HSBC Bank USA, National Association

Corporate Trust & Loan Agency

452 Fifth Avenue

New York, New York  10018

 

	
             
 	
            Re:
 	
            
Pooling and Servicing Agreement, dated as of December 1, 2005, among Merrill
 Lynch Mortgage Investors, Inc., as depositor, Wells Fargo Bank, N.A., as master
 servicer and securities administrator and HSBC Bank USA, National Association,
 as trustee, Mortgage Pass-Through Certificates, Series MLMI 2005-A10
 
 

 

Ladies and Gentlemen:

In accordance with Section 2.02 of the above-captioned Pooling and Servicing Agreement, the undersigned, hereby certifies that, except as noted on the Schedule of Exceptions attached hereto, for each Mortgage Loan listed on the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on the attachment hereto), it has received a complete Mortgage File which includes the documents required to be included in the Mortgage File as set forth in the Pooling and Servicing Agreement.

The undersigned has made no independent examination of any documents contained in each Mortgage File beyond the review specifically required in the above-referenced Pooling and Servicing Agreement.  The undersigned makes no representation as to: (i) the validity, legality, sufficiency, enforceability or genuineness of any documents contained in any Mortgage File for any of the Mortgage Loans listed on the Mortgage Loan Schedule to the Pooling and Servicing Agreement, (ii) the collectability, insurability, effectiveness or suitability of any such Mortgage Loan or (iii) whether any Mortgage File should include any flood insurance policy, any rider, addends, surety or guaranty agreement, power of attorney, buy down agreement, assumption agreement, modification agreement, written assurance or substitution agreement.

 

 

Capitalized words and phrases used herein shall have the respective meanings assigned to them in the above-captioned Pooling and Servicing Agreement.

	
             
 	
            WELLS FARGO BANK, N.A.,
 as Custodian
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Name:        
 
	
             
 	
            Title:                   
 

 

 

 

EXHIBIT 8

 

REVISED August 1, 2005

 

APPENDIX E - STANDARD & POOR'S PREDATORY LENDING CATEGORIES 

Standard & Poor’s has categorized loans governed by anti-predatory lending laws in the Jurisdictions listed below into three categories based upon a combination of factors that include (a) the risk exposure associated with the assignee liability and (b) the tests and thresholds set forth in those laws. Note that certain loans classified by the relevant statute as Covered are included in Standard & Poor’s High Cost Loan Category because they included thresholds and tests that are typical of what is generally considered High Cost by the industry. 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Arkansas 
 	
            Arkansas Home Loan Protection Act, Ark. Code Ann. §§ 23-53-101 et seq. 

Effective July 16, 2003 
 	
            High Cost Home Loan 
 
	
            Cleveland Heights, OH 
 	
            Ordinance No. 72-2003 (PSH), Mun. Code §§ 757.01 et seq. 

Effective June 2, 2003 
 	
            Covered Loan 
 
	
            Colorado 
 	
            Consumer Equity Protection, Colo. Stat. Ann. §§ 5-3.5-101 et seq. 

Effective for covered loans offered or entered into on or after January 1, 2003. Other provisions of the Act took effect on June 7, 2002 
 	
            Covered Loan 
 
	
            Connecticut 
 	
            Connecticut Abusive Home Loan Lending Practices Act, Conn. Gen. Stat. §§ 36a-746 et seq. 

Effective October 1, 2001 
 	
            High Cost Home Loan 
 
	
            District of Columbia 
 	
            Home Loan Protection Act, D.C. Code §§ 26-1151.01 et seq. 

Effective for loans closed on or after January 28, 2003 
 	
            Covered Loan 
 

 

 

 

 

	
            Florida 
 	
            Fair Lending Act, Fla. Stat. Ann. §§ 494.0078 et seq. 

Effective October 2, 2002 
 	
            High Cost Home Loan 
 
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 
 	
            High Cost Home Loan 
 

 

 

 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Effective October 1, 2002 – March 6, 2003 
 	
             
 
	
            Georgia as amended (Mar. 7, 2003 – current) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 

Effective for loans closed on or after March 7, 2003 
 	
            High Cost Home Loan 
 
	
            HOEPA Section 32 
 	
            Home Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1639, 12 C.F.R. §§ 226.32 and 226.34 

Effective October 1, 1995, amendments October 1, 2002 
 	
            High Cost Loan 
 
	
            Illinois 
 	
            High Risk Home Loan Act, Ill. Comp. Stat. tit. 815, §§ 137/5 et seq. 

Effective January 1, 2004 (prior to this date, regulations under Residential Mortgage License Act effective from May 14, 2001) 
 	
            High Risk Home Loan 
 
	
            Kansas 
 	
            Consumer Credit Code, Kan. Stat. Ann. §§ 16a-1-101 et seq. 

Sections 16a-1-301 and 16a-3-207 became effective April 14, 1999; Section 16a-3-308a became effective July 1, 1999 
 	
            High Loan to Value Consumer Loan (id. § 16a-3-207) and; 
 
	
            High APR Consumer Loan (id. § 16a-3-308a) 
 
	
            Kentucky 
 	
            2003 KY H.B. 287 – High Cost Home Loan Act, Ky. Rev. Stat. §§ 360.100 et seq. 

Effective June 24, 2003 
 	
            High Cost Home Loan 
 
	
            Maine 
 	
            Truth in Lending, Me. Rev. Stat. tit. 9-A, §§ 8-101 et seq. 

Effective September 29, 1995 and as amended from time to time 
 	
            High Rate High Fee Mortgage 
 
	
            Massachusetts 
 	
            Part 40 and Part 32, 209 C.M.R. §§ 32.00 et seq. and 209 C.M.R. §§ 40.01 et seq. 
 	
            High Cost Home Loan 
 

 

 

 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Effective March 22, 2001 and amended from time to time 
 	
             
 
	
            Nevada 
 	
            Assembly Bill No. 284, Nev. Rev. Stat. §§ 598D.010 et seq. 

Effective October 1, 2003 
 	
            Home Loan 
 
	
            New Jersey 
 	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. 

Effective for loans closed on or after November 27, 2003 
 	
            High Cost Home Loan 
 
	
            New Mexico 
 	
            Home Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq. 

Effective as of January 1, 2004; Revised as of February 26, 2004 
 	
            High Cost Home Loan 
 
	
            New York 
 	
            N.Y. Banking Law Article 6-l 

Effective for applications made on or after April 1, 2003 
 	
            High Cost Home Loan 
 
	
            North Carolina 
 	
            Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E et seq. 

Effective July 1, 2000; amended October 1, 2003 (adding open-end lines of credit) 
 	
            High Cost Home Loan 
 
	
            Ohio 
 	
            H.B. 386 (codified in various sections of the Ohio Code), Ohio Rev. Code Ann. §§ 1349.25 et seq. 

Effective May 24, 2002 
 	
            Covered Loan 
 
	
            Oklahoma 
 	
            Consumer Credit Code (codified in various sections of Title 14A) 

Effective July 1, 2000; amended effective January 1, 2004 
 	
            Subsection 10 Mortgage 
 
	
            South Carolina 
 	
            South Carolina High Cost and Consumer Home Loans Act, S.C. Code 
 	
            High Cost Home Loan 
 

 

 

 

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Ann. §§ 37-23-10 et seq. 

Effective for loans taken on or after January 1, 2004 
 	
             
 
	
            West Virginia 
 	
            West Virginia Residential Mortgage Lender, Broker and Servicer Act, W. Va. Code Ann. §§ 31-17-1 et seq. 

Effective June 5, 2002 
 	
            West Virginia Mortgage Loan Act Loan 
 

 

STANDARD & POOR'S COVERED LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 

Effective October 1, 2002 – March 6, 2003 
 	
            Covered Loan 
 
	
            New Jersey 
 	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. 

Effective November 27, 2003 – July 5, 2004 
 	
            Covered Home Loan 
 

 

STANDARD & POOR'S HOME LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 

Effective October 1, 2002 – March 6, 2003 
 	
            Home Loan 
 
	
            New Jersey 
 	
            New Jersey Home Ownership Security 
 	
            Home Loan 
 

 

 

 

STANDARD & POOR'S HOME LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. 

Effective for loans closed on or after November 27, 2003 
 	
             
 
	
            New Mexico 
 	
            Home Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq. 

Effective as of January 1, 2004; Revised as of February 26, 2004 
 	
            Home Loan 
 
	
            North Carolina 
 	
            Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E et seq. 

Effective July 1, 2000; amended October 1, 2003 (adding open-end lines of credit) 
 	
            Consumer Home Loan 
 
	
            South Carolina 
 	
            South Carolina High Cost and Consumer Home Loans Act, S.C. Code Ann. §§ 37-23-10 et seq. 

Effective for loans taken on or after January 1, 2004 
 	
            Consumer Home Loan 
 

 

 

 

EXHIBIT M-1

EMC SUBSEQUENT TRANSFER INSTRUMENT

SUBSEQUENT TRANSFER INSTRUMENT

Pursuant to this Subsequent Transfer Instrument, dated December 30, 2005 (the “Instrument”), between Merrill Lynch Mortgage Investors, Inc. as seller (the “Seller”), and HSBC Bank USA, National Association, not individually but solely as trustee (in such capacity, the “Trustee”) under the Pooling and Servicing Agreement, dated as of December 1, 2005 (the “Agreement”), among Merrill Lynch Mortgage Investors, Inc. (the “Depositor”) as depositor, Wells Fargo Bank, N.A., (“Wells Fargo”) as master servicer and securities administrator (the “Master Servicer” or “Securities Administrator”, as applicable) and HSBC Bank USA, National Association as trustee (“HSBC” or the “Trustee”).

Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Agreement.

	
             
  	
            Section 1.
 	
            Conveyance of Subsequent Mortgage Loans.
 

(a)          The Seller does hereby sell, transfer, assign, set over and convey to the Trustee in trust, on behalf of the Trust, without recourse, all of its right, title and interest in and to the subsequent mortgage loans identified on the Final Subsequent Mortgage Loan Schedule attached hereto as Exhibit 1 (the “Subsequent Mortgage Loans”), including all amounts due or accruing on the Subsequent Mortgage Loans on and after the related Subsequent Cut-off Date, and all items with respect to the Subsequent Mortgage Loans to be delivered pursuant to Section 2.07 of the Agreement; provided, however, that the Seller reserves and retains all right, title and interest in and to amounts due on the Subsequent Mortgage Loans prior to the related Subsequent Cut-off Date. The Seller, contemporaneously with the delivery
of this Agreement, has delivered or caused to be delivered to the Trustee each item with respect to the Subsequent Mortgage Loans set forth in Section 2.01 of the Pooling and Servicing Agreement and the other items in the related Mortgage Files.  The transfer to the Trustee by the Seller of the Subsequent Mortgage Loans shall be absolute and is intended by the Seller, the Mortgage Loan Seller, the Master Servicer, the Securities Administrator, the Trustee and the Certificateholders to constitute and to be treated as a sale of the Subsequent Mortgage Loans by the Seller to the Trust Fund.

(b)          The Seller, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey to the Trustee without recourse for the benefit of the Certificateholders all the right, title and interest of the Seller in, to and under the Subsequent Mortgage Loan Purchase Agreement, dated as of December 30, 2005, between EMC Mortgage Corporation, as seller, and the Seller, as purchaser (the “Purchase Agreement”).  

	
             
  	
            Section 2.
 	
            Representations and Warranties; Conditions Precedent.
 

(a)          The Seller hereby confirms that each of the conditions precedent and the representations and warranties set forth in Section 2.07 of the Agreement are satisfied as of the date hereof.

 

 

(b)          All terms and conditions of the Agreement are hereby ratified and confirmed; provided, however, that in the event of any conflict, the provisions of this Instrument shall control over the conflicting provisions of the Agreement.

Section 3.          Recordation of Instrument.  To the extent permitted by applicable law, this Instrument, or a memorandum thereof if permitted under applicable law, is subject to recordation in all appropriate public offices for real property records in all of the counties or other comparable jurisdictions in which any or all of the properties subject to the Mortgages are situated, and in any other appropriate public recording office or elsewhere, such recordation to be effected by the Master Servicer at the Certificateholders’ expense on direction of the related Certificateholders, but only when accompanied by an Opinion of Counsel to the effect that such recordation materially and beneficially affects the interests of the Certificateholders or is necessary for the administration or
servicing of the Subsequent Mortgage Loans.

Section 4.          Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Section 5.          Counterparts.  This Instrument may be executed in one or more counterparts and by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed to be an original; such counterparts, together, shall constitute one and the same instrument.

Section 6.           Successors and Assigns.  This Instrument shall inure to the benefit of and be binding upon the Seller and the Trustee and their respective successors and assigns.

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.

	
             
 	
            MERRILL LYNCH MORTGAGE INVESTORS, INC., as Seller
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Name:        
 
	
             
 	
            Title:                   
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
            HSBC BANK USA, NATIONAL ASSOCIATION, not individually but solely as Trustee, as aforesaid.
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Name:        
 
	
             
 	
            Title:                   
 

 

 

 

EXHIBIT 1

 

FINAL SUBSEQUENT MORTGAGE LOAN SCHEDULE

 

(Provided Upon Request)

 

 

EXHIBIT M-2

KKR SUBSEQUENT TRANSFER INSTRUMENT

SUBSEQUENT TRANSFER INSTRUMENT

Pursuant to this Subsequent Transfer Instrument, dated December 28, 2005 (the “Instrument”), between Merrill Lynch Mortgage Investors, Inc. as seller (the “Seller”), and HSBC Bank USA, National Association, not individually but solely as trustee (in such capacity, the “Trustee”) under the Pooling and Servicing Agreement, dated as of December 1, 2005 (the “Agreement”), among Merrill Lynch Mortgage Investors, Inc. (the “Depositor”) as depositor, Wells Fargo Bank, N.A., (“Wells Fargo”) as master servicer and securities administrator (the “Master Servicer” or “Securities Administrator”, as applicable) and HSBC Bank USA, National Association as trustee (“HSBC Bank” or the “Trustee”).

Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Agreement.

	
             
  	
            Section 1.
 	
            Conveyance of Subsequent Mortgage Loans.
 

(a)          The Seller does hereby sell, transfer, assign, set over and convey to the Trustee in trust, on behalf of the Trust, without recourse, all of its right, title and interest in and to the subsequent mortgage loans identified on the Final Subsequent Mortgage Loan Schedule attached hereto as Exhibit 1 (the “Subsequent Mortgage Loans”), including all amounts due or accruing on the Subsequent Mortgage Loans on and after the related Subsequent Cut-off Date, and all items with respect to the Subsequent Mortgage Loans to be delivered pursuant to Section 2.07 of the Agreement; provided, however, that the Seller reserves and retains all right, title and interest in and to amounts due on the Subsequent Mortgage Loans prior to the related Subsequent Cut-off Date. The Seller, contemporaneously with the delivery
of this Agreement, has delivered or caused to be delivered to the Trustee each item with respect to the Subsequent Mortgage Loans set forth in Section 2.01 of the Pooling and Servicing Agreement and the other items in the related Mortgage Files.  The transfer to the Trustee by the Seller of the Subsequent Mortgage Loans shall be absolute and is intended by the Seller, the Mortgage Loan Seller, the Master Servicer, the Securities Administrator, the Trustee and the Certificateholders to constitute and to be treated as a sale of the Subsequent Mortgage Loans by the Seller to the Trust Fund.

(b)          The Seller, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey to the Trustee without recourse for the benefit of the Certificateholders all the right, title and interest of the Seller in, to and under the Subsequent Mortgage Loan Purchase Agreement, dated as of December 28, 2005, between KKR Financial Mortgage Corp., as seller, and the Seller, as purchaser (the “Purchase Agreement”).  

	
             
  	
            Section 2.
 	
            Representations and Warranties; Conditions Precedent.
 

(a)          The Seller hereby confirms that each of the conditions precedent and the representations and warranties set forth in Section 2.07 of the Agreement are satisfied as of the date hereof.

 

 

(b)          All terms and conditions of the Agreement are hereby ratified and confirmed; provided, however, that in the event of any conflict, the provisions of this Instrument shall control over the conflicting provisions of the Agreement.

Section 3.          Recordation of Instrument.  To the extent permitted by applicable law, this Instrument, or a memorandum thereof if permitted under applicable law, is subject to recordation in all appropriate public offices for real property records in all of the counties or other comparable jurisdictions in which any or all of the properties subject to the Mortgages are situated, and in any other appropriate public recording office or elsewhere, such recordation to be effected by the Master Servicer at the Certificateholders’ expense on direction of the related Certificateholders, but only when accompanied by an Opinion of Counsel to the effect that such recordation materially and beneficially affects the interests of the Certificateholders or is necessary for the administration or
servicing of the Subsequent Mortgage Loans.

Section 4.          Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Section 5.          Counterparts.  This Instrument may be executed in one or more counterparts and by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed to be an original; such counterparts, together, shall constitute one and the same instrument.

Section 6.           Successors and Assigns.  This Instrument shall inure to the benefit of and be binding upon the Seller and the Trustee and their respective successors and assigns.

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.

	
             
 	
            MERRILL LYNCH MORTGAGE INVESTORS, INC., as Seller
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Name:        
 
	
             
 	
            Title:                   
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
            HSBC BANK USA, NATIONAL ASSOCIATION, not individually but solely as Trustee, as aforesaid.
 
	
             
 
	
             
 
	
            By:
 	
            
 
 
 
	
             
 	
            Name:        
 
	
             
 	
            Title:                   
 

 

 

 

EXHIBIT 1

 

FINAL SUBSEQUENT MORTGAGE LOAN SCHEDULE

 

(Provided Upon Request)<PAGE>
                                                                    EXHIBIT 10.4

                                INDUSTRIAL LEASE
                                 -MODIFIED NET-

1. PARTIES, This Lease, dated, for reference purposes only, July 17, 1984, is
made by and between Dexter Avenue Associates (herein called "Landlord") and
Korry Electronics Co., a division of Criton Technologies (herein called
"Tenant").

2. PREMISES, Landlord hereby leases to Tenant and Tenant leases from Landlord
for the term, at the rental, and upon all of the conditions set forth herein,
that certain real property situated in the City of Seattle, County of King,
State of Washington, commonly known as 901 Dexter Avenue North and described as
Approximately 29,000 sq. ft. at the southend of the 1st and 2nd floors and the
2nd floor of the middle building, said space being over the space now occupied
by Calcom, Inc. Said real property, including the land and all improvements
thereon, is herein called "the Premises".

3. TERM.

     3.1 TERM. The term of this Lease shall be for three (3) years, commencing
on July 18, 1984 and ending on July 17, 1987 unless sooner terminated pursuant
to any provision hereof.

     3.2 DELAY IN COMMENCEMENT. Notwithstanding said commencement date, if for
any reason Landlord cannot deliver possession of the Premises to Tenant on said
date, Landlord shall not be subject to any liability therefor, nor shall such
failure affect the validity of this Lease or the obligations of Tenant hereunder
or extend the term hereof, but in such case Tenant shall not be obligated to pay
rent until possession of the Premises is transferred to Tenant; provided,
however, that if Landlord shall not have delivered possession of the Premises
within ninety (90) days from said commencement date, Tenant may, at Tenant's
option, by notice in writing to Landlord within ten (10) days thereafter, cancel
this Lease. If Landlord shall not have delivered possession of the Premises
within one (1) year from said commencement date, Landlord may, by notice in
writing to the Tenant within ten (10) days thereafter, cancel the Lease. If
either party cancels as hereinabove provided. Landlord shall return any monies
previously deposited by Tenant and the parties shall be discharged from all
obligations hereunder.

     3.3 EARLY POSSESSION. In the event that landlord shall permit Tenant to
occupy the premises prior to the commencement date of the term, such occupancy
shall be subject to all of the provisions of this Lease. Said early possession
shall not advance the termination date of this Lease.

     3.4 DELIVERY OF POSSESSION. Tenant shall be deemed to have taken possession
of the Premises when any of the following occur: (a) Landlord deliver possession
of the premises to tenant and a Certificate of Occupancy is granted by the
proper governmental agency, or (b) upon a Certificate from the Landlords
architect or contractor that the Premises are ready for occupancy.

4. RENT. Tenant shall pay to Landlord as rent for the Premises equal monthly
installments of Fourteen Thousand Five Hundred And No/100's Dollars
($14,500.00) Dollars, in advance, on the first day of each month of the term
hereof. Tenant shall pay Landlord upon the execution hereof the sum of Twenty
Nine Thousand And No/100's Dollars ($29,000.00) Dollars as rent for First and
last months. Landlord will credit Tenants rent. Rent for any period during the
term hereof which is for less than one month shall be a pro rata portion of the
monthly installment. Rent shall be payable without notice or demand and without
any deduction, offset, or abatement in lawful money of the United States of
America to Landlord at the address stated herein or to such other persons or at
such other places as Landlord may designate in writing.

5. SECURITY DEPOSIT. Tenant shall deposit with Landlord upon execution hereof
the sum of _________________________________________________________ ($ ______)
Dollars as security for Tenant's faithful performance of Tenant's obligations
hereunder. If Tenant fails to pay rent or other charges due hereunder, or
otherwise default with respect to any provision of this Lease, Landlord may use,
apply or retain all or any portion of said deposit for the payment of any rent
or other charge in default or for the payment of any other sum to which Landlord
may become obligated by reason of Tenant's default, or to compensate Landlord
for any loss or damage which Landlord may suffer thereby. If Landlord so uses or
applies all or any portion of the said deposits, Tenant shall within (10) days
after written demand therefor deposit cash with Landlord in an amount sufficient
to restore said deposit to the full amount hereinabove stated and Tenant's
failure to do so shall be a breach of this Lease, and Landlord may at his option
terminate the Lease. Landlord shall not be required to keep said deposit
separate from its general accounts. If Tenant performs all of Tenant's
obligations hereunder, said deposit or so much thereof as had nor therefore been
applied by Landlord, shall be returned, without payment of interest or other
increment for its use, to Tenant (or, at Landlords option, to the last assignee,
if any, of Tenant's interest hereunder) within fifteen (15) days after the
expiration of the term hereof, or after Tenant has vacated the Premises,
whichever is later.

6. USE.

     6.1 USE. The Premises shall be used an occupied only for Office &
Manufacturing Purposes.

     6.2 COMPLIANCE WITH LAW. Tenant shall, at Tenant's expense, comply promptly
with all applicable statutes, ordinances, rules, regulations, orders and
requirement in effect during the term or any part of the term hereof regulating
the use by Tenant of the Premises. Tenant shall not use or permit the use of the
Premises in any manner that will lend to create waste or a nuisance, or if there
shall be more than one Tenant of the Building containing the Premises, which
shall tend to unreasonably disturb such other tenants.

     6.3 CONDITION OF PREMISES. Tenant hereby accepts the Premises in their
condition existing as of the date of the possession hereunder, subject to all
applicable zoning, municipal, county and state laws, ordinances and regulations
governing and regulating the use of the Premises, and accepts this Lease subject
thereto and to all matters disclosed thereby and by any exhibits attached
hereto. Tenant acknowledges that either Landlord nor Tenant's agent has made any
representation or warranty as to the suitability of the Premises for the conduct
of Tenant's business.

     6.4 INSURANCE CANCELLATION. Notwithstanding the provisions of Article 6.1
hereinabove, no use shall be made or permitted to be made of the premises nor
acts done which will cause the cancellation of any insurance policy covering
said Premises or any building of which the Premises may be a part, and if
Tenant's use of the Premises causes an increase in said insurance rates Tenant
shall pay any such increase.

     6.5 LANDLORD'S RULES AND REGULATIONS. Tenant shall faithfully observe and
comply with the rules and regulations that Landlord shall from time

                              (PAGE 1 - MODIFIED NET)

<PAGE>

to time promulgate. A copy of said rules and regulations is attached hereto.
Landlord reserves the right from time to time to make all reasonable
modifications to said rules and regulations. The additions and modifications to
those rules and regulations shall be binding upon Tenant upon delivery of a copy
of them to Tenant. Landlord shall not be responsible to Tenant for the
nonperformance of any of said rules and regulations by any other tenants or
occupants.

7. MAINTENANCE, REPAIRS AND ALTERATIONS.

     7.1 LANDLORD'S OBLIGATIONS. Subject to the provisions of Article 9, and
except for damage caused by any negligent or international act or omission of
Tenant, Tenant's agents, employees, or invitees, Landlord, at Landlord's
expense, shall keep in good order, conditions and repair the foundation,
interior walls and the exterior roof of the Premises. Landlord shall not,
however be obligated to paint such exterior, nor shall Landlord be required to
maintain the interior surface or exterior walls, windows, doors or plate glass.
Landlord shall have no obligation to make repairs under this Article 7.1 until
reasonable time after receipt or written notice of the need for such repairs.
Tenant expressly wavies the benefits of any statute now or hereafter in effect
which would otherwise afford Tenant the right to make repairs at Landlord's
expense.

     7.2 TENANT'S OBLIGATIONS. Subject to the provisions of Article 7.1 and
Article 9, Tenant, at Tenant's expense, shall keep in good order, condition and
repair the Premises and every part thereof (regardless of whether the damaged
portion of the Premises or the means of repairing the same are accessible to
Tenant, including without limiting the generality of the foregoing, all
plumbing, heating, air conditioning, ventilating, electrical and lighting
facilities and equipment within the Premises, fixtures, interior walls,
ceilings, windows, doors, plate glass, and skylights, located within the
Premises.

     7.3 SURRENDER. On the last day of the term hereof, or on any sooner
termination, Tenant shall surrender the Premises to Landlord in good condition,
broom clean, ordinary wear and tear excepted. Tenant shall repair any damage to
the Premises occasioned by its use thereof, or by the removal of Tenant's trade
fixtures, furnishings and equipment pursuant to Article 7.5, which repair shall
include the patching and filling of holes and repair of structural damage.

     7.4 LANDLORD'S RIGHTS. If Tenant fails to perform Tenant's obligations
under this Article 7, Landlord may at its option but shall not be required to
enter upon the Premises, after ten (10) days prior written notice to Tenant, and
put the same in good order, condition and repair, and the cost thereof together
with interest thereon at the rate of ten (10%) percent per annum shall become
due and payable as additional rental to Landlord together with Tenant's next
rental installment.

     7.5 ALTERATIONS AND ADDITIONS.

          (a) Tenant shall not, without Landlord's prior written consent, make
any alterations, improvements, or additions, on or about the Premises, except
for non structural alterations not exceeding $1,000 in cost. As a condition to
giving such consent, Landlord may require that Tenant remove any such
alterations, improvements, additions or utility installations at the expiration
of the term, and to restore the Premises to their prior condition.

          (b) Before commencing any work relating to alterations, additions and
improvements affecting the Premises, Tenant shall notify Landlord in writing of
the expected date of commencement thereof. Landlord shall then have the right at
any time and from time to time to post and maintain on the Premises such notices
as Landlord reasonably deems necessary to protect the Premises and Landlord from
mechanics' liens, materialmen's liens or any other liens. In any event, Tenant
shall pay, when due, all claims for labor or materials furnished to or for
Tenant at or for use in the Premises. Tenant shall not permit any mechanics or
materialmen's liens to be levied against the Premises for any labor or material
furnished to Tenant or claimed to have been furnished to Tenant or to Tenant's
agents or contractors in connection with work of any character performed or
claimed to have been performed on the Premises by or at the direction of Tenant.

          (c) Unless Landlord requires the approval, as set forth in Article
7.5(a), all alterations, improvements or additions which may be made on the
Premises, shall become the property of Landlord and remain upon and be
surrendered with the Premises at the expiration of the term. Notwithstanding the
provisions of this Article 7.5(c), Tenants machinery, equipment and trade
fixtures, other than that which is alloted to the Premises so that it cannot be
removed without material damage to the Premises, shall remain the property of
Tenant and may be removed by Tenant subject to the provisions of Article 7.3.

8. INSURANCE; INDEMNITY.

     8.1 INSURING PARTY. As used in this Article 8, the term "insuring party"
shall mean the party who has the obligation to obtain the insurance required
hereunder. The insuring party in this case shall be designated in Article 20.
Whether the insuring party is the Landlord or the Tenant, Tenant shall, as
additional rent for the Premises, pay the cost of all insurance required
hereunder. If Landlord is the insuring party Tenant shall, within ten (10) days
following demand by Landlord, reimburse Landlord for the cost of the insurance
so obtained.

     8.2 LIABILITY INSURANCE. The Tenant shall obtain and keep in force during
the term of this Lease a policy of comprehensive public liability insurance
insuring the Landlord and Tenant against any liability arising out of the
ownership, use occupancy or maintenance of the Premises and all areas
appurtenant thereto. Such insurance shall be in an amount of not less than
$300,000 for injury to or death of one person in any one accident or occurence
and in amount of not less than $500,000 for injury to or death of more than one
person in any one accident or occurence. Such insurance shall further insure
Landlord and Tenant against liability for property damage of at least $50,000.
The limits of said insurance shall have a Landlord's Protective Liability
endorsement attached thereto. If the tenant shall fail to procure and maintain
said insurance the Landlord may, but shall not be required to procure and
maintain the same, but at the expense of Tenant.

     8.3 PROPERTY INSURANCE. The insuring party shall obtain and keep in force
during the term of this Lease a policy or policies of insurance covering loss or
damage to the Premises, in the amount of the full replacement value thereof,
providing protection against all perils included within the classification of
fire, extended coverage, vandalism, malicious mischief, special extended perils
(all risk) and spinkler leakage. Said insurance shall provide for payment for
loss thereunder to Landlord or to the holder of a first mortgage or deed of
trust the Premises. If the insuring party shall fail to procure and maintain
said insurance the other party may, but shall not be required to, procure and
maintain the same, but at the expense of Tenant.

     8.4 INSURANCE POLICIES. Insurance required hereunder shall be in companies
rated A+ AAA or better in "Best's Insurance Guide". The insuring party shall
deliver prior to possession to the other party copies of policies of such
insurance or certificates evidencing the existence and amounts of such insurance
with loss payable clauses satisfactory to Landlord. No such policy shall be
cancellable or subject to reduction of coverage or other modification except
after ten (10) days' prior written notice to Landlord. If Tenant is the insuring
party, Tenant shall, within ten (10) days prior to the expiration of such
policies, furnish Landlord with renewals thereof, or Landlord may order such
insurance and charge the cost thereof to Tenant, which amount shall be payable
by Tenant upon demand. Tenant shall not do or permit to be done anything which
shall invalidate the insurance policies referred to in Article 8.3. Tenant shall
forthwith, upon Landlord's demand, reimburse Landlord for any additional
premiums attributable to any act or omission or operation of Tenant causing such
increase in the cost of insurance. If Landlord is the insuring party, and if the
insurance policies maintained hereunder cover other improvements in addition to
the Premises. Landlord shall deliver to Tenant a written statement setting forth
the amount of any such cost increase and showing in reasonable detail the manner
in which it has been computed.

     8.5 WAIVER OF SUBROGATION. Tenant and Landlord each waives any and all
rights of recovery against the other, or against the officers, employees, agents
and representatives of the other, for loss or damage to such waiving party or
its property or the property of others under its control, where such loss or
damage is insured against under any insurance policy in force at the time of
such loss or damage. Tenant and Landlord shall upon obtaining the policies of
insurance required hereunder, give notice to the insurance carriers that the
foregoing mutual waiver of subrogation is contained in this Lease.

     8.6 HOLD HARMLESS. Tenant shall indemnify, defend and hold Landlord
harmless from any and all claims arising from Tenant's use of the Premises or
from the conduct of its business or from any activity, worth or things which may
be permitted or suffered by Tenant in or about the Premises and shall further
indemnity, defend and hold Landlord harmless from and against any and all claims
arising from any breach or default in the performance of any obligation on
Tenant's part to be performed under the provision of this Lease or arising from
any negligence of Tenant or any of its agents, contractor, employees or invitees
and from any and all costs attorneys' fees, expenses and liabilities incurred in
the defense of any such claim or any action or proceeding brought thereon.
Tenant hereby assumes all risk of damage to property or injury to persons in or
about the Premises from any cause, and Tenant hereby waivers all claims in
respect thereof against Landlord, excepting where said damage arises out of
negligence of Landlord.

     8.7 EXEMPTION OF LANDLORD FROM LIABILITY. Tenant hereby agrees that
Landlord shall not be liable for injury to Tenant's business or any loss of
income therefrom on for damage to the goods, wores, merchandise or other
property of Tenant, Tenant's employees, invitees, customers, or any other person
in or about the Premises, nor, unless through its negligence, shall Landlord be
liable for injury to the person of Tenant, Tenant's employees, agents or
contractors and invitees, whether such damage or injury is caused by or results
from fire, steam, electricity, gas, water or rain or from breakage, leakage,
obstruction or other defects of pipes, spinklers, wires appliances, plumbing,
air conditioning or lighting fixtures, or from any other cause whether the said
damage or injury results from conditions arising upon the Premises or upon other
portions of the building of which the Premises are a part, or from other sources
or places, and regardless of whether the cause of such damage or injury or the
means of repairing the same is inaccessible to

                             (PAGE 2 - MODIFIED NET)

<PAGE>

Landlord or Tenant, Landlord shall not be liable for any damages arising from
any act of neglect of any other tenant, if any, of the building in which the
Premises are located.

9. DAMAGE ON DESTRUCTION.

     9.1 PARTIAL DAMAGE - INSURED. Subject to the provisions of Article 9.1, if
the Premises are damaged and such damage was caused by a casualty covered under
an insurance policy required to be maintained pursuant to Article 8.3. Landlord
shall at Landlord's expense repair such damage as soon as reasonably possible
and this Lease shall continue in full force and effect. Notwithstanding the
above, if the Tenant is the insuring party, and if the insurance proceeds
received by Landlord are not sufficient to effect such repair. Landlord shall
give notice to Tenant of the amount required in addition to the insurance
proceeds to affect such repair. Tenant may, at Tenant's option, contribute the
required amount, but upon failure to do so within thirty (30) days following
such notice. Landlord's sole remedy shall be, at Landlord's option and with no
liability to Tenant, to cancel and terminate this Lease. If Tenant shall
contribute such amount to Landlord within said thirty (30) days period, Landlord
shall make such repairs as soon as reasonably possible and this Lease shall
continue in full force and effect. Tenant shall in no event have any right to
reimbursement for nay such amount so contributed.

     9.2 DAMAGE - UNINSURED. In the event the Premises may be damaged or
destroyed by a casualty which is not covered by fire and extended coverage
insurance carried by Landlord, then Landlord shall restore same, provided that
if the damage or destruction is to an extent greater than ten (10%) per cent of
the then replacement cost of improvements on the Premises (exclusive of Tenant's
trade fixtures and equipment and exclusive of foundations) then Landlord may
elect not to restore and to terminate this Lease. Landlord must give Tenant
written notice of its election not to restore within thirty (30) days from the
date of damage and if, not given, Landlord shall be deemed to have elected to
restore and in such event shall repair any damage as soon as reasonably
possible. In the event Landlord elects to give such notice of Landlord's
intention to cancel and terminate the Lease, Tenant shall have the right within
ten (10) days after the receipt of such notice to give written notice to
Landlord of Tenant's intention to repair such damage of Tenant's expense,
without reimbursement from Landlord, in which event this Lease shall continue in
full force and effect and Tenant shall proceed to make such repair as soon as
reasonably possible. If Tenant does not give such notice within such ten (10)
day period, this Lease shall be cancelled and terminated as of the date of the
occurrence of such damage.

     9.3 TOTAL DESTRUCTION. If at any time during the term hereof the Premises
are totally destroyed from any cause whether or not covered by the insurance
required to be maintained by Landlord pursuant to Article 8.3 (including any
total destruction required by any authorized public authority) this Lease shall
automatically terminate as of the date of such total destruction.

     9.4 DAMAGE NEAR END OF TERM. If the Premises are partially destroyed or
damaged during the last six (6) months of the term of this Lease. Landlord may,
at Landlord's option, cancel and terminate this Lease as of the date of
occurrence of such damage by giving written notice to Tenant of Landlord's
election to do so within thirty (30) days after the date of occurrence of such
damage.

     9.5 ABATEMENT OF RENT.

          (a) If the Premises are partially destroyed or damaged and Landlord or
Tenant repairs or restores them pursuant to the provisions of this Article 9,
the rent payable hereunder for the period during which such damage, repair or
restoration continues shall be abated in proportion to the degree to which
Tenant's reasonable use of the Premises is impaired. Except for abatement of
rent, if any, Tenant shall have no claim against Landlord for any damage
suffered by reason of any such damage, destruction, repair or restoration.

          (b) If Landlord shall be obligated to repair or restore the Premises
under the provisions of this Article 9 and shall not commence such repair or
restoration within ninety (90) days after such obligations shall accrue. Tenant
may at Tenant's option cancel and terminate this Lease by giving Landlord
written notice of Tenant's election to do so at any time prior to the
commencement of such repair or restoration. In such event this Lease shall
terminate as of the date of such notice. Any abatement in rent shall be computed
as provided in Article 9.5(a).

10. REAL PROPERTY TAXES.

     10.1 PAYMENT OF TAXES. Tenant shall pay all real property taxes applicable
to the Premises during the term of this Lease. All such payments shall be made
at least ten (10) days prior to the delinquency date of such payment. Tenant
shall promptly furnish Landlord with satisfactory evidence that such taxes have
been paid. If any such taxes paid by Tenant shall cover any period of the time
prior to or after the expiration of the term hereof. Tenant's share of such
taxes shall be equitably prorated to cover only the period of time within the
tax fiscal year during which this Lease shall be in effect, and Landlord shall
reimburse Tenant to the extent required. If Tenant shall fail to pay any such
taxes, Landlord shall have the right to pay the same, in which case Tenant shall
repay such amount to Landlord with Tenant's next rent installment together with
interest at the rate of ten (10%) percent per annum.

     10.2 DEFINITION OF "REAL PROPERTY TAXES." As used herein, the term "real
property tax" shall include any form of assessment, license fee, rent, tax,
levy, penalty, or tax (other than inheritance or estate taxes), imposed by any
authority having the direct or indirect power to tax, including any city,
county, state or federal government, or any school, agricultural, lighting,
drainage or other improvement distinct thereof, as against any legal or
equitable interest of Landlord in the Premises or in the real property of which
the Premises are a part, as against Landlord's right to rent or other income
therefrom, or as against Landlord's business of leasing the Premises, and,
Tenant shall pay and all charges and fees which may be imposed by the EPA or
other similar government regulations or authorities.

     10.3 JOINT ASSESSMENT. If the Premises are not separately assessed,
Tenant's liability shall be an equitable proportion of the real property taxes
for all of the land and improvements included within the tax parcel assessed,
such proportion to be determined by Landlord from the respective valuations
assigned in the assessor's work sheets or such other information as may be
reasonably available. Landlord's reasonable determination thereof, in good
faith, shall be conclusive.

     10.4 PERSONAL PROPERTY TAXES.

          (a) Tenant shall pay prior to delinquency all taxes assessed against
and levied upon leasehold improvements, fixtures, furnishings, equipment and all
other personal property of Tenant contained in the Premises or elsewhere. Tenant
shall cause said leasehold improvements, trade fixtures, furnishings, equipment
and all other personal property to be assessed and billed separately from the
real property of Landlord.

          (b) If any of Tenant's said personal property shall be assessed with
Landlord's real property, Tenant shall pay Landlord the taxes attributable to
Tenant within ten (10) days after receipt of a written statement setting forth
the taxes applicable to Tenant's property.

     10.5 NOTWITHSTANDING THE PROVISIONS OF ARTICLE 10 HEREINABOVE. Tenant shall
pay any increase in "real property taxes" resulting from any and all improvement
of any kind whatsoever placed on or in the Premises for the benefit of or at the
request of Tenant regardless of whether said improvements were installed or
constructed either by Landlord or Tenant, except those items included with the
original Premises.

11. COMMON AREAS. When, in fact, there are Common Areas, then the following
shall apply:

     11.1 DEFINITIONS. The phrase "Common Areas" means all areas and facilities
outside the Premises that are provided and designated for general use and
convenience of Tenant and other tenants and their respective officers, agents
and employees, customers, and invitees. Common Areas include (but are not
limited to) pedestrian sidewalks, landscaped areas, roadways, parking areas and
railroad tracks, if any. Landlord reserves the right from time to time to make
changes in the shape, size, location, number, and extent of the Land and
improvements constituting the Common Areas. Landlord may designate from time to
time additional parcels of land for use as a part thereof; and any additional
land so designated by Landlord for such use shall be included until such
designation is revoked by Landlord.

     11.2 MAINTENANCE. During the term of this Lease, Landlord shall operate,
manage, and maintain the Common Areas so that they are clean and free from
accumulations of debris, filth, rubbish and garbage. The manner in which such
Common Areas shall be so maintained, and the expenditure for such maintenance,
shall be at the sole discretion of Landlord, and the use of the Common Areas
shall be subject to such reasonable regulations and changes therein as Landlord
shall make from time to time, including (but not by way of limitations) the
right to close from time to time, if necessary, all or any portion of the Common
Areas to such extent or may be legally sufficient, in the opinion of Landlord's
counsel, to prevent a dedication thereof or the accrual of rights of any person
or of the public therein, or to close temporarily all or any portion of such
Common Areas for such purposes.

     11.3 TENANT'S RIGHTS AND OBLIGATIONS. Landlord hereby grants to Tenant,
during the term of this Lease, the license to use, for the benefit of Tenant and
its officers, agents, employees, customers, and invitees, in common with the
others entitled to such use, the Common Areas as they from time to time exist,
subject to the rights, powers, and privileges herein reserved to Landlord.
Storage, either permanent or temporary, of any materials, supplies or equipment
in the Common Areas is strictly prohibited. Should Tenant violate this provision
of the Lease, than in such event, Landlord may, at his option either terminate
this Lease or, without notice to Tenant, remove said materials, supplies or
equipment from the Common Areas and place such items in storage, the cost
thereof to be reimbursed by Tenant within (10) days from receipt of a statement
submitted by Landlord. All subsequent costs in connection with the storage of
said items shall be paid to the Landlord by Tenant as accrued. Failure of Tenant
to pay these charges within ten (10) days from receipt of a statement shall
constitute a breach of this Lease. Tenant and its officers, agents, employees,
customers and invitees shall park their motor vehicles only in areas designated
by Landlord for that purpose from time to time. Within five (5) days after
request from Landlord, Tenant shall furnish to Landlord a list of the license
numbers assigned to its motor vehicles and those of its officers, agents, and
employees. Tenant shall not at any time park or permit the parking of motor
vehicles, belonging to it or to others, so as to interfere with the pedestrian
sidewalk, roadways and loading areas, or in any portion of the parking areas not
designed by Landlord for such use by Tenant. Tenant agrees that receiving and
shipping of goods and merchandise and all removal of refuse shall be made only
by way of the loading areas constituting part of the Premises. Tenant shall
repair, at its cost, all deteriorations or damages to the Common Areas,
occasioned by its lack of ordinary care.

                             (PAGE 3 - MODIFIED NET)

<PAGE>

     11.4 CONSTRUCTION. Landlord, while engaged in constructing improvements or
making repairs or alterations in or about the Premises or in their vicinity,
shall have the right to make reasonable use of the Common Areas.

12. UTILITIES. Tenant shall pay for all water, gas, heat, light, power,
telephone and other utilities and services supplied to the Premises, together
with any taxes thereon. If any such services are not separately metered to
Tenant, Tenant shall pay a reasonable proportion to be determined by Landlord of
all charges jointly metered with other premises

13. ASSIGNMENT AND SUBLETTING.

     13.1 LANDLORD'S CONSENT REQUIRED. Tenant shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet, or otherwise transfer or
encumber all of any part of Tenant's interest in this Lease or in the Premises
without Landlord's prior written consent, which Landlord shall not unreasonably
withhold. Any attempted assignment, transfer, mortgage, encumbrance, or
subletting without such consent shall be void and shall constitute a breach of
the Lease. Any transfer of Tenant's interest in this Lease or in the Premises
from Tenant by merger, consolidation, or liquidation or by any subsequent change
in the ownership of thirty (30%) percent or more of the capital stock of Tenant
shall be deemed a prohibited assignment within the meaning of this Article 13.

     13.2 NO RELEASE OF TENANT. Regardless of Landlord's consent, no subletting
or assignment shall release Tenant of Tenant's obligation to pay the rent and to
perform all other obligations to be performed by Tenant hereunder for the term
of this Lease. The acceptance of rent by Landlord from any other person shall
not be deemed to be a waiver by Landlord of any provision hereof. Consent to one
assignment or subletting shall not be deemed consent to any subsequent
assignment or subletting.

     13.3 ASSIGNMENT FEE. In the event that Landlord shall consent to a sublease
or assignment under Article 13.1, Tenant shall pay Landlord reasonable fees not
to exceed One Hundred and no/100th ($100,00) Dollars incurred in connection with
giving such consent.

14. DEFAULTS; REMEDIES.

     14.1 DEFAULTS. The occurrence of any one or more of the following events
shall constitute a default and breach of this Lease by Tenant

          (a) The vacating or abandonment of the Premises by Tenant.

          (b) The failure by Tenant to make any payment of rent or any other
payment required to be made by Tenant hereunder, as and when due, where such
failure shall continue for a period of three (3) days after written notice
thereof from Landlord to Tenant

          (c) The failure by Tenant to observe or perform any of the covenants,
conditions or provisions of this Lease to be observed or performed by Tenant,
other than described in Paragraph (b) above, where such failure shall continue
for a period of thirty (30) days after written notice thereof from Landlord to
Tenant; provided, however, that if the nature of Tenant's default is such that
more than thirty (30) days are reasonably required for its cure, then Tenant
shall not be deemed to be in default if Tenant commenced such cure within said
thirty (30) day period and thereafter diligently prosecutes such cure to
completion.

          (d) (i) The making by Tenant of any general assignment, or general
arrangement for the benefit of creditors; (ii) the filing by or against Tenant
of a petition to have Tenant adjudged a bankrupt or a petition for
reorganization or arrangement under any law relating to bankruptcy (unless, in
the case of a petition filed against Tenant, the same is dismissed within sixty
(60) days); (iii) the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within thirty
(30) days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within thirty (30)
days.

     14.2 REMEDIES IN DEFAULT. In the event of any such default or breach by
Tenant, Landlord may at any time thereafter, with or without notice or demand
and without limiting Landlord in the exercise of any right or remedy which
Landlord may have by reason of such default or breach.

          (a) Terminate Tenant's right to possession of the Premises by any
lawful means, in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Premises to Landlord. In such event
Landlord shall be entitled to recover from Tenant all damages incurred by
Landlord by reason of Tenant's default including, but not limited to, the cost
of recovering possession of the Premises; expenses of reletting, including
necessary renovation and alteration of the Premises, reasonable attorney's fees,
and any real estate commission actually paid; the worth at the time of award by
the court having jurisdiction thereof of the amount by which the unpaid rent for
the balance of the term after the time of such award exceeds the amount of such
rental loss for the same period that Tenant proves could be reasonably avoided;
and that portion of the leasing commission paid by Landlord applicable to the
unexpired term of this Lease. Unpaid installments of rent or other sums shall
bear interest from the date due at the rate of ten (10%) percent per annum. In
the event Tenant shall have abandoned the Premises, Landlord shall have the
option of (i) retaking possession of the Premises and recovering from Tenant the
amount specified in this Article 14.2(a), or (ii) proceeding under Article
14.2(b).

          (b) Maintain Tenant's right to possession, in which case this Lease
shall continue in effect whether or not Tenant shall have abandoned the
Premises, in such event, Landlord shall be entitled to enforce all of Landlord's
rights and remedies under this Lease, including the right to recover the rent as
it becomes due hereunder.

          (c) Pursue any other remedy now or hereafter available to Landlord
under the laws or judicial decisions of the state in which the Premises are
located.

     14.3 DEFAULT BY LANDLORD. Landlord shall not be in default unless Landlord
fails to perform obligations required of Landlord within a reasonable time, but
in no event later than thirty (30) days after written notice by Tenant to
Landlord and to the holder of any first mortgage or deed of trust covering the
Premises whose name and address shall have theretofore been furnished to Tenant
in writing, specifying wherein Landlord has failed to perform such obligation;
provided, however, that if the nature of Landlord's obligation is such that more
than thirty (30) days are required for performance then Landlord shall not be in
default if Landlord commences performance within such thirty (30) day period and
thereafter diligently prosecutes the same to completion.

     14.4 LATE CHARGES. Tenant hereby acknowledges that late payment by Tenant
to Landlord of rent and other sums due hereunder will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to
processing and accounting charges, and late charges which may be imposed on
Landlord by the terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or any other sum due from Tenant shall
not be received by Landlord or Landlord's designee within ten (10) days after
written notice that said amount is past due, then Tenant shall pay to Landlord a
late charge equal to ten (10%) percent of such overdue amount. The parties
hereby agree that such late charge represents a fair and reasonable estimate of
the cost Landlord will incur by reason of late payment by Tenant. Acceptance of
such late charge by Landlord shall in no event constitute a waiver of Tenant's
default with respect to such overdue amount, nor prevent Landlord from
exercising any of the other rights and remedies granted hereunder.

15. CONDEMNATION. If the Premises or any portion thereof are taken under the
power of eminent domain, or sold by Landlord under the threat of the exercise of
said power (all of which is herein referred to as "condemnation"), this Lease
shall terminate as to the part so taken as of the date the condemning authority
takes title of possession, whichever occurs first, if more than twenty-five
(25%) percent of the floor area of any buildings on the Premises, or more than
twenty-five (25%) percent of the land area of the Premises not covered with
buildings, is taken by condemnation, either Landlord or Tenant may terminate
this Lease as of the date the condemning authority takes possession by notice in
writing of such election within twenty (20) days after Landlord shall have
notified Tenant of the taking or, in the absence of such notice, then within
twenty (20) days after the condemning authority shall have taken possession.

     If this Lease is not terminated by either Landlord or Tenant then it shall
remain in full force and effect as to the portion of the Premises remaining,
provided the rental shall be reduced in proportion to the floor area of the
buildings taken within the Premises as bears to the total floor area of all
buildings located on the Premises. In the event this Lease is not so terminated
then Landlord agrees, at Landlord's sole cost, to as soon as reasonably possible
restore the Premises to a complete unit of like quality and character as existed
prior to the condemnation. All awards for the taking of any part of the Premises
or any payment made under the threat of the exercise of power of eminent domain
shall be the property of Landlord, whether made as compensation for diminution
of value of the leasehold or for the taking of the fee or as severance damages;
provided, however, that Tenant shall be entitled to any award for loss of or
damage to Tenant's trade fixtures and removable personal property.

16. GENERAL PROVISIONS.

     16.1 OFFSET STATEMENT.

          (a) Tenant shall at any time upon not less than ten (10) days' prior
written notice from Landlord execute, acknowledge and deliver to Landlord a
statement in writing (i) certifying that this Lease is unmodified and in full
force and effect for, if modified, stating the nature of such modification and
certifying that this Lease, as so modified, is in full force and effect and the
date to which the rent, security deposit, and other charges are paid in advance,
if any, and (ii) acknowledging that there are not, to Tenant's knowledge, any
uncured defaults on the part of Landlord hereunder, or specifying such defaults,
if any, which are claimed. Any such statement may be conclusively relied upon by
any prospective purchaser or encumbrances of the premises.

          (b) Tenant's failure to deliver such statement within such time shall
be conclusive upon Tenant (i) that this Lease is in full force and effect,
without modification except as may be represented by Landlord, (ii) that there
are no uncured defaults in Landlord's performance and (iii) that

                             (PAGE 4 - MODIFIED NET)

<PAGE>

not more than one (1) month's rent has been paid in advance.

          (c) If Landlord desires to finance or refinance the Premises, or any
part thereof, Tenant hereby agrees to deliver to any lender designated by
Landlord such financial statements of Tenant as may be reasonably required by
such lender. Such statements shall include the past three (3) years' financial
statements of Tenant. All such financial statements shall be received by
Landlord in confidence and shall be used only for the purposes herein set forth.

     16.2 LANDLORD'S INTERESTS. The term "Landlord" as used herein shall mean
only the owner or owners at the time in question of the title or a tenant's
interest in a ground lease of the Premises. In the event of any transfer of such
title or interest, Landlord herein named (and in case of any subsequent
transfers the then grantor) shall be relieved from and after the date of such
transfer of all liability as respects Landlord's obligations thereafter to be
performed, provided that any funds in the hands of Landlord or the then grantor
at the time of such transfer. In which Tenant has an interest, shall be
delivered to the grantee. The obligations contained in this Lease to be
performed by Landlord shall, subject as aforesaid, be binding on Landlord's
successors and assigns, only during their respective periods of ownership.

     16.3 SEVERABILITY. The invalidity of any provision of this Lease, as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.

     16.4 INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein provided,
any amount due to Landlord not paid when due shall bear interest at ten (10%)
percent per annum from the date due. Payment of such interest shall not excuse
or cure any default by Tenant under this Lease.

     16.5 TIME OF ESSENCE. Time is of the essence.

     16.6 CAPTIONS. Article and paragraph captions are not a part hereof.

     16.7 INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS. This Lease contains all
agreements of the parties with respect to any master mentioned herein. No prior
agreement or understanding pertaining to any such matter shall be effective.
This Lease may be modified in writing only, signed by the parties in interest at
the time of the modification.

     16.8 WAIVERS. No waiver by Landlord of any provision hereof shall be deemed
a waiver of any other provision hereof or of any subsequent breach by Tenant of
the same or any other provision. Landlord's consent to or approval of any act
shall not be deemed to render unnecessary the obtaining of Landlord's consent to
or approval of any subsequent act by Tenant. The acceptance of rent hereunder by
Landlord shall not be a waiver of any preceding breach by Tenant of any
provision hereof, other than the failure of Tenant to pay the particular rent so
accepted, regardless of Landlord's knowledge of such preceding breach at the
time of acceptance of such rent.

     16.9 RECORDING. Tenant shall not record this Lease. Any such recordation
shall be a breach under this Lease.

     16.10 HOLDING OVER. If Tenant remains in possession of the Premises or any
part thereof after the expiration of the term hereof with the express written
content of Landlord, such occupancy shall be a tenancy from month to month at a
rental in the amount of the last monthly rental plus all other charges payable
hereunder, and upon the terms hereof applicable to month-to-month tenancy.

     16.11 CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive, but shall wherever possible, be cumulative with all other remedies at
law or in equity.

     16.12 COVENANTS AND CONDITIONS. Each provision of this Lease performable by
Tenant shall be deemed both a covenant and a condition.

     16.13 BINDING EFFECT; CHOICE OF LAW. Subject to any provisions hereof
restricting assignment or subletting by Tenant and subject to the provisions of
Article 16.2, this Lease shall bind the parties, their personal representatives,
successors and assigns. This Lease shall be governed by the laws of the state
where the Premises are located.

     16.14 SUBORDINATION.

          (a) That Lease, at Landlord's option, shall be subordinate to any
ground lease, mortgage, deed of trust, or any other hypothecation for security
now or hereafter placed upon the real property of which the Premises are a part
and to any and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof.
Notwithstanding such subordination, Tenant's right to quiet possession of the
Premises shall not be disturbed if Tenant is not in default and so long as
Tenant shall pay the rent and observe and perform all of the provisions of this
Lease, unless this Lease is otherwise terminated pursuant to its terms. If any
mortgages, trustee or ground lesse shall elect to have this Lease prior to the
lien of its mortgage, deed of trust or ground lease, and shall give written
notice thereof to Tenant, this Lease shall be deemed prior to such mortgage,
deed of trust, or ground lease, whether this Lease is dated prior or subsequent
to the date of said mortgage, deed of trust or ground lease or the date of
recording thereof.

          (b) Tenant agrees to execute any documents required to effectuate such
subordination or to make this Lease prior to the lien of any mortgage, deed of
trust or ground lease, as the case may be, and failing to do so within ten (10)
days after written demand, does hereby make, constitute and irrevocably appoint
Landlord as Tenant's attorney in fact and in Tenant's name, place and stead, to
do so.

     16.15 ATTORNEY'S FEES. If either party named herein brings an action to
enforce the terms hereof or declare rights hereunder, the prevailing party in
any such action, on trial or appeal, shall be entitled to his reasonable
attorney's fees to be paid by the losing party as fixed by the court.

     16.16 LANDLORD'S ACCESS. Landlord and Landlord's agents shall have the
right to enter the Premises at reasonable times for the purpose of inspecting
the same, showing the same to prospective purchasers, or tenders, and making
such alterations, repairs, improvements or additions to the Premises or to the
building of which they are a part as Landlord may deem necessary or desirable.
Landlord may at any time place on or about the Premises any ordinary "For Sale"
signs and Landlord may at any time during the last one hundred twenty (120) days
of the term hereof place on or about the Premises any ordinary "For Sale or
Lease" signs, all without rebate of rent or liability to Tenant.

     16.17 AUCTIONS. Tenant shall not place any auction sign upon the Premises
or conduct any auction thereon without Landlord's prior written consent.

     16.18 MERGER. The voluntary or other surrender of this Lease by Tenant, or
a mutual cancellation thereof, shall not work a merger, and shall, at the option
of Landlord, terminate all or any existing subtenancies or may, at the option of
Landlord, operate as an assignment to Landlord of any or all of such
subtenancies.

     16.19 CORPORATE AUTHORITY. If Tenant is a corporation, each individual
executing this Lease on behalf of said corporation represents and warrants that
he is duly authorized to execute and deliver this Lease on behalf of said
corporation in accordance with a duly adopted resolution of the Board of
Directors of said corporation or in accordance with the Bylaws of said
corporation, and that this Lease is binding upon said corporation in accordance
with its terms.

     16.20 LANDLORD'S LIABILITY. If Landlord is a limited partnership, the
liability of the partners of the Landlord pursuant to this Lease shall be
limited to the assets of the partnership; and Tenant, its successors and assigns
hereby waive all rights to proceed against any of the parteners, or the
officers, shareholders, or directors of any corporate partner of Landlord except
to the extent of their interest in the partnership. The term "Landlord", as used
in this Article, shall mean only the owner or owners at the time in question of
the fee title or its interest in a ground lease of the Premises, and in the
event of any transfer of such title or interest. Landlord herein named land in
case of any subsequent transfers the then grantor shall be relieved from and
after the date of such transfer of all liability as respects Landlord's
obligations thereafter to be performed, provided that any funds in this hands of
Landlord or the then grantor at the time of such transfer, in which Tenant has
an interest, shall be delivered to the grantee. The obligations contained in
this Lease to be performed by Landlord shall, subject as aforesaid, be binding
on Landlord's successors and assigns, only during their respective periods of
ownership.

17. PERFORMANCE BOND. At any time Tenant either desires to or is required to
make any repairs, alterations, additions, improvements or utility installation
thereon pursuant to Articles 7.5 or 9.2 herein, or otherwise, Landlord may at
his sole option require Tenant, at Tenant's sole cost and expense, to obtain and
provide to Landlord a lien and completion bond in an amount equal to one and
one-half (1 1/2) times the estimated cost of such improvements, to insure
Landlord against liability for mechanics' and materialmen's liens and to insure
completion of the work.

                             (PAGE 5 - MODIFIED NET)

<PAGE>

18. BROKERS. The parties hereto acknowledge that Kidder, Mathews & Segner, Inc.
were the real estate brokers that represented the parties herein, and that no
other commissions are due to any brokers whatsoever, other than the above named
brokers.

19. NOTICES. Whenever under this Lease provision is made for any demand, notice
or declaration of any kind, or where it is deemed desirable or necessary by
either party to give or serve any such notice, demand or declaration to the
other party, it shall be in writing and served either personally or send by
United States mail, postage prepaid, addressed at the addresses set forth
hereinbelow.

     To Landlord at   802 Dexter Associates, 710 Cherry St., Seattle, WA 98104

     To Tenant at     R.W. Stevenson, Criton Technologies
                      10800 N.E. 8th, Bellevue, Wa 98004
                      Copy to: Bogle and Gates, Bank of California Center,
                               Seattle, WA 98164
                               Attn: Michael Courtnage

20. INSURING PARTY. The insuring party under this Lease shall be the Landlord

See Exhibit "A", Addendum to Lease, attached hereto and by this reference is
made a part hereof.

The parties hereto have executed this Lease at the place and on the dates
specified immediately adjacent to their respective signatures.

                                        Dexter Avenue Associates

Executed at
            -------------------------   ----------------------------------------

on                                      By /s/ Delton Bonds              7/18/84
   ----------------------------------      -----------------------------
                                           Delton Bonds, Its Managing Partner

                                        By
                                           -------------------------------------
                                                         "LANDLORD"

                                        Korry Electronics Company, A Division of
Executed at                             Criton Technologies
            -------------------------

on                                      By /s/ Lee Zuker                  7/17/4
   ----------------------------------      ------------------------------
                                           Lee Zuker, President

                                        By
                                           -------------------------------------
                                                          "TENANT"

     If this Lease has been filled in it has been prepared for submission to
your attorney for his approval. No representation or recommendation is made by
the real estate broker or its agents or employees as to the legal sufficiency,
legal effect, or tax consequences of this Lease or the transaction relating
thereto.

                             (PAGE 6 - MODIFIED NET)

<PAGE>

                            FIRST AMENDMENT TO LEASE

          THIS AGREEMENT, entered into as of this 10th day of May, 1985, between
DEXTER AVENUE ASSOCIATES, a Washington general partnership ("Landlord"), and
KORRY ELECTRONICS CO., a Division of Criton Technologies ("Tenant"),

                                    RECITALS

          A. Landlord and Tenant are parties to a Lease dated July 17, 1984 with
respect to certain premises (the "Existing 901 Premises") located at 901 Dexter
Avenue North, Seattle, Washington (the "901 Lease"), as described more
particularly in the 901 Lease.

          B. The parties wish to expand the area of the Existing 901 Premises
and extend and modify the Lease in certain other respects.

          NOW, THEREFORE, the parties covenant and agree as follows:

          1. The 901 Lease is modified as follows:

               1.1 The Existing 901 Premises are expanded to include the
remainder of the building in which the Existing 901 Premises are located, other
than the facility with the street address of 945 Dexter Avenue North. Thus added
to the Existing 901 Premises are a facility with the street address of 925
Dexter Avenue North (the "925 Premises") and the shed which lies to the rear of
the 925 Premises (collectively, the "Expanded 901 Premises"), effective as of
September 1, 1985.

               1.2 The monthly rental shall be increased to Nineteen Thousand
Five Hundred Dollars ($19,500), effective as of September 1, 1985. The $19,500
rental rate is predicated on the assumption that the usable area of the 925
Premises, exclusive of shed, is ten thousand (10,000) square feet. The actual
area shall be measured in a manner acceptable to both parties, and the rent
shall be adjusted by fifty cents ($.50) per square foot, upward or downward, as
appropriate, to reflect any difference between the measured area and 10,000
square feet. In addition to Landlord's impovements specified herein, Landlord
shall give Tenant a $10,000 credit against the September 1, 1985 rent for
Tenant's renovation of the 925 Premises.

               1.3 Landlord shall improve the 925 Premises in the same manner as
is specified in paragraph 4 of Exhibit A to the 901 Lease; shall finish and
paint the walls of the 925 Premises to match the Existing 901 Premises; shall
upgrade the electrical system of the 925 Premises in the manner described in
Exhibit 1 hereto; shall renovate the front of the 925 Premises to match the
existing 901 Premises; and shall install a heating, ventilating and air
conditioning system capable of satisfying the requirements of paragraph 5.11 of
Exhibit A to the 901 Lease, all by no later than August 31, 1985.

               1.4 Landlord shall build additional men's and women's restrooms
on the first and second floors of the Extended 901 Premises and in the 925
Premises and shall completely renovation of the existing second floor men's and
women's restrooms in the Existing 901 Premises, all in accordance with Tenant's
specifications, by no later than August 31, 1985. All work performed by Landlord
within the Existing 901 Premises shall be performed in a manner which minimizes
its impact on Tenant's operations. The enclosure of the new bathrooms in the
Existing 901 Premises shall be accomplished on a weekend.

                                      -1-

<PAGE>

               1.5 If the work specified in paragraphs 1.3 and 1.4 hereof is not
completed by September 1, 1985 and a permanent certificate of occupancy for the
Expanded 901 Premises has not been obtained by such date, then Tenant shall
receive a $l0,000-per-month credit against rent for each such month or partial
month period that completion of the work or the obtaining of the certificate is
delayed.

               1.6 Landlord shall be required to provide Tenant with the
following parking on an exclusive basis without additional charge: forty (40)
spaces in the lot lying to the north of the Premises; fifty (50) spaces in the
two lots currently leased by Landlord on Aurora Avenue; and, if Landlord
acquires Lots 7 and 8, Block 21, which lie between the Aurora Avenue parking
lots, all parking spaces on such new site. These parking areas are depicted on
Exhibit 2 hereto. Landlord has indicated its intention to construct a facility,
including parking garage, on property which includes the lot to the north of the
Premises which presently affords Tenant forty (40) parking spaces. If Landlord
proceeds to develop the parking garage, it shall provide Tenant, during the
construction period, with forty (40) substitute parking spaces in close
proximity to the Premises and shall provide Tenant with one hundred twenty (120)
spaces in the parking garage once construction thereof has been completed.

          2. The duration of the 901 Lease is modified as follows:

               2.1 The basic Lease term is extended through August 31, 1990.

               2.2 Paragraph 1 of Exhibit A to the 901 Lease is deleted in its
entirety. Tenant shall have an option to extend the term of the 901 Lease for up
to ten (10) consecutive two (2) year periods. To exercise a renewal option,
Tenant must give Landlord written notice thereof not less than one hundred
eighty (180) days prior to the end of the lease term then in effect. If Tenant
fails to exercise a renewal option with respect to the 901 Lease, all subsequent
renewal options with respect to the 901 Lease shall terminate.

               2.3 If the first renewal option is exercised under the 901 Lease,
then the monthly rent for the first renewal period shall be the monthly rent
payable during the base period, increased by the percentage increase in the cost
of living, as indicated by the Consumer Price Index for All Urban Consumers -
All Items, for the Seattle Metropolitan Area, as published by the U.S.
Department of Labor's Bureau of Labor Statistics (the "Index") during the
immediately preceding twelve (12) month period, up to a maximum percentage
increase of two and one-half percent (2-1/2%). If subsequent renewal options are
exercised, then the monthly rent for each such renewal period shall be equal to
the monthly rent payable during the prior renewal period, increased by the
percentage increase in the Index during the prior two (2) year period, up to a
maximum percentage increase of two and one-half percent (2-1/2%) in any one year
and a maximum of five percent (5%) increase for the two-year period. (By way of
illustration only, if the monthly rent under the 901 Lease were $20,000 for the
September 1, 1990 - August 31, 1992 period and the Index increased four percent
(4%) during the September 1, 1990 - August 31, 1991 period and one percent (1%)
during the September 1, 1991 - August 31, 1992 period, then the monthly rent for
the September 1, 1992 - August 31, 1994 period would be increased by three and
one-half percent (3-1/2%), or Seven Hundred Dollars ($700.00), based on the
2-1/2% ceiling for the increase in the September 1, 1990 - August 31, 1991
period and the actual 1% increase during the following twelve-month period.) If
the Index is discontinued,

                                      -2-

<PAGE>

the parties shall substitute a comparable index of consumer prices.

          3. This is made expressly contingent upon Tenant and 801 Dexter
Associates executing a first amendment to their lease extending the term thereof
in the same manner as is described in paragraph 2 above. If such amendment has
not been executed by May 15, 1985, then this Amendment shall terminate, unless
Tenant waives such contingency.

          4. The parties shall promptly execute and record a memorandum of the
901 Lease.

          5. The 901 Lease shall otherwise continue in full force and effect as
written.

          6. If after the date hereof, Landlord intends to offer for lease any
other portion of the real property of which the Expanded 901 Premises forms a
part at the date of execution of this First Amendment to Lease, it shall not do
so without first offering such premises to Tenant. If Landlord and Tenant are
not able to reach agreement thereon within 60 days, the Landlord may proceed to
offer such premises to a third party. If Landlord receives a lease proposal from
a third party which Landlord wishes to accept, it shall not accept such without
first providing Tenant with a copy of such offer and offering to lease such
premises to Tenant on the same terms and conditions. If the Tenant does not
accept such proposal within five days of its receipt thereof, the Landlord shall
be free to enter into the lease with the third party on the offered terms and
conditions.

          IN WITNESS WHEREOF, the parties have executed this First Amendment as
of the day and year first above written.

                                        DEXTER AVENUE ASSOCIATES
                                        ("Landlord")

                                        By /s/ Delton Bonds
                                           -------------------------------------
                                           Delton Bonds,
                                        Its Managing Partner

                                        KORRY ELECTRONICS CO.,
                                        a Division of Criton Technologies
                                        ("Tenant")

                                        By /s/ R. W. Stevenson
                                           -------------------------------------
                                        Its V P. Criton Technologies

                                       -3-

<PAGE>

STATE OF OF WASHINGTON   )
                         ) ss.
COUNTY OF KING           )

          On this 14th day of May, 1985, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Delton Bonds, to me known to be the Managing Partner of the
general partnership that executed the foregoing instrument, and acknowledged the
said instrument to be the free and voluntary act and deed of said general
partnership for the uses and purposes therein mentioned, and on oath stated that
he was authorized to execute the said instrument.

          WITNESS my hand and official seal hereto affixed the day and year
first above written.

                                        /s/ Illegible
                                        ----------------------------------------
                                        NOTARY PUBLIC, in and for the State of
                                        Washington, residing at Illegible

STATE OF OF WASHINGTON   )
                         ) ss.
COUNTY OF KING           )

          On this 10th day of May, 1985, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared R. W. Stevenson, to me known to be the Vice President of
Criton Technologies, the company that executed the foregoing instrument, and
acknowledged the said instrument to be the free and voluntary act and deed of
said company for the uses and purposes therein mentioned, and on oath stated
that he was authorized to execute the said instrument.

          WITNESS my hand and official seal hereto affixed the day and year
first above written.

                                        /s/ Illegible
                                        ----------------------------------------
                                        NOTARY PUBLIC, in and for the State of
                                        Washington residing at Redmond

                                       -3-

<PAGE>

                            SECOND AMENDMENT TO LEASE

          THIS AGREEMENT entered into as of this 20th day of June, 1986 between
DEXTER AVENUE ASSOCIATES, a Washington general partnership ("Landlord") and
KORRY ELECTRONICS CO., a division of Criton Technologies ("Tenant").

                                    RECITALS

          A. Landlord and Tenant are parties to a lease dated July 17, 1984, as
amended by First Amendment dated May 10th, 1985 (collectively the "Lease") with
respect to premises located at 901 and 925 Dexter Avenue North, Seattle,
Washington as described more particularly in the Lease (the "Premises").

          B. Landlord is obligated to Tenant for certain sums in connection with
the Lease, and the parties wish to modify the Lease to deal with that and
related matters.

          NOW, THEREFORE, the parties covenant and agree as follows:

          1. Landlord acknowledges that it is indebted to Tenant in the amount
of one Hundred and Fifty Thousand Dollars ($150,000), and that it has requested
that Tenant pay Seventy-Five Thousand Dollars ($75,000) of the cost of the
improvements described in Exhibit 1 hereto (the "Improvements"). In
consideration of Tenant's agreement to forgive the $150,000 and to advance
$75,000 of the Improvement costs, as and when due, Landlord agrees that:

               1.1 The monthly rental due under the Lease is reduced to Fourteen
Thousand Four Hundred Ninety Five Dollars ($14,495) per month, commencing on
August 1, 1936 and continuing at such rate through July 31, 1991; and

               l.2 The basic Lease term is extended through July 31, 1991;

          2. Landlord agrees that it will complete construction of the forty
(40) parking spaces referenced in paragraph 1.6 of the First Amendment to Lease
on or before 20 Dec, 1986, and it if fails to do so, Tenant shall receive a
credit against the rent due under the Lease of $150.00 per day for each day
thereafter that completion of construction is so delayed.

          3. Landlord agrees that it will pay the first Fifty Thousand Dollars
($50,000) of the cost of the Improvements and, in addition, all costs and
expenses of the Improvements in excess of the first One Hundred and Twenty Five
Thousand

                                                                       (6/17/86)

                                       -1-

<PAGE>

Dollars ($125,000). These sums will be paid by permitting Tenant to offset
against the rents next accruing under the Lease the first $50,000 paid by Tenant
in costs and expenses in connection with the construction of the Improvements
and for all costs and expenses of the Improvements in excess of $125,000, as
such costs and expenses are incurred. Tenant shall present Landlord on each'
rental payment date hereafter with a schedule reflecting the Improvements costs
incurred by Tenant during the preceding month and shall reduce the rental
payment by the total thereof until such time as it has been reimbursed for the
$50,000 in Improvements costs and for all costs and expenses of the Improvements
in excess of $125,000. If Tenant's Improvements expenditures in any month exceed
the rental amount due for the succeeding month, Tenant may deduct the excess
from the next rent payment due from it thereafter.

          4. If improvements to the 925 Premises (as described in the First
Amendment to Lease) are not completed by July 31, 1986, then effective August 1,
1986 monthly rent shall be reduced by Five Thousand Dollars ($5,000) per month
to Nine Thousand Four Hundred Ninety-Five Dollars ($9,495) per month until such
time as such improvements are completed and accepted by Tenant. In addition, if
the improvements to the 925 Premises are not completed by August 15, 1986, then
for each day thereafter until the improvements to the 925 Premises are completed
and accepted by Tenant, Tenant shall receive a credit of One Hundred Sixty-Seven
Dollars ($167) per day against the rent otherwise due under the Lease.

          5. Landlord agrees that Tenant may select the contractor and contract
for the Improvements and such additional work as Tenant elects to have performed
for its own account.

          6. This Second Amendment is made expressly contingent upon Tenant and
801 Dexter Associates executing a second amendment to the 801 Dexter Associates
lease extending the term thereof in the same manner as is described in paragraph
1.2 above. If such amendment has not been executed by June 23, 1986, then this
Second Amendment shall terminate, unless Tenant waives such contingency.

          7. If Landlord fails to perform its obligations under the Lease as
required thereunder, Tenant may elect to do so on Landlord's behalf and offset
the cost thereof against rents next coming due under the Lease or pursue any
other remedy available to it at law or in equity for Landlord's default.

          8. The Lease shall otherwise continue in full force and effect as
written.

                                       -2-

<PAGE>

          IN WITNESS WHEREOF, the parties have executed this Second Amendment as
of the date and year first above written.

                                        DEXTER AVENUE ASSOCIATES
                                        ("Landlord")

                                        By: /s/ Delton Bonds
                                            ------------------------------------
                                            Delton Bonds
                                        Its Managing Partner

                                        KORRY ELECTRONICS CO., a Division of
                                        Criton Technologies
                                        ("Tenant")

                                        By: /s/ Illegible
                                            ------------------------------------
                                        Its: President

                                       -3-

<PAGE>

STATE OF WASHINGTON   )
                      )  ss.
COUNTY OF KING        )

          On this 20th day of June, 1986, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn
personally appeared DELTON BONDS, known to me to be the Managing Partner of
DEXTER AVENUE ASSOCIATES, the partnership that executed the foregoing
instrument, and acknowledged the said instrument to be the free and voluntary
act and deed of said partnership, for the purposes therein mentioned, and on
oath stated that he was authorized to execute said instrument.

          WITNESS my hand and official seal hereto affixed the day and year in
the certificate above written.

                                       /s/ Illegible
                                       -----------------------------------------
                                       NOTARY PUBLIC in and for the State of
                                       Washington, residing at Illegible County.
                                       My commission expires 6-1-86.

STATE OF WASHINGTON   )
                      ) ss.
COUNTY OF KING        )

          On this 20th day of June, 1986, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn
personally appeared A. LEE ZUKER, known to me to be the PRESIDENT of KORRY
ELECTRONICS CO., the company that executed the foregoing instrument, and
acknowledged the said instrument to be the free and voluntary act and deed of
said company, for the purposes therein mentioned, and on oath stated that
_________ he was authorized to execute said instrument.

          WITNESS my hand and official seal hereto affixed the day and year in
the certificate above written.

                                       /s/ Illegible
                                       -----------------------------------------
                                       NOTARY PUBLIC in and for the state of
                                       Washington, residing at Illegible County.
                                       My commission expires 6-1-86.

                                       -4-

<PAGE>

                     THIRD LEASE AMENDMENT AGREEMENT
                                      (901)

     THIS AGREEMENT is made this 1st day of September, 1987 by and between Korry
Electronics Co. ("Korry"), a division of Criton Technologies, a New York general
partnership, and Dexter Avenue Associates, a Washington general partnership
referred to herein as the "Partnership."

                                    RECITALS

     A. Korry and Dexter Avenue Associates entered into an Industrial Lease on
or about July 17, 1984 for certain commercial premises located in King County,
Washington, which premises is commonly known and is referred to herein as "901
Dexter Avenue North." Said Industrial Lease was subsequently amended by First
and Second Lease Amendment agreements dated May 10, 1985 and June 20, 1986,
respectively. Said Industrial Lease and the First and Second Lease Amendment
agreements shall be collectively referred to herein as the "901 Lease."

     B. The parties now desire to amend the 901 Lease in certain material
respects as set forth herein.

     NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

     1. The Partnership shall immediately paint over the "Calcom" signage area
on the building located at 925 Dexter Avenue North and perform any other
required work so the signage area blends with the color and texture of the
surrounding wall area. Such work and the materials to be used in connection with
such work shall be to a standard and of a quality to the reasonable satisfaction
of Korry.

     2. In return for the agreement of Dexter Avenue Associates listed above,
Korry agrees that the Landlord's maintenance and replacement obligations under
the 901 Lease shall hereafter be limited to (1) the maintenance of the
utilities located outside of the leased premises, the foundations, the exterior
side of the roofs, and the exterior side of the exterior walls and (2) boiler,
heat pump/compressor replacement costs in excess of Five Thousand Dollars
($5,000.00) per calendar year. Dexter Avenue Associates hereby agrees that it
shall be responsible for the repair and maintenance of the exterior walls, roof
and foundation of both the 801 building, and 901-925 building to the extent that
(1) the Landlord for the 801 building is not responsible for such repair and
maintenance; and (2) insurance proceeds do not cover the same.

     3. Korry represents and acknowledges to the

                                     Page 1

<PAGE>

Partnerships that the right of first refusal provisions as contained in Section
4 of Exhibit A to the Lease, as existing and as modified below, shall not and do
not extend to the air rights over and above the 801, 901 and 925 Dexter Avenue
North premises or the parking lot used by Korry and located immediately to the
north of the 945 Dexter Avenue North premises ("Air Rights"); provided, however,
the Lease shall be and is hereby amended to substitute the following right of
first refusal provision for the right of first refusal provisions contained in
Section 4 of Exhibit A to the Lease, which new provision shall be applicable,
according to its terms, to all future proposed purchase and exchange
transactions, and any proposed transactions concerning any of the Air Rights:

     Landlord shall not sell or exchange the Property at any time during the
     term of this Lease, including any extensions thereof, without first
     complying with the terms of this paragraph. If at any time during the term
     of this Lease (including any extensions thereof), Landlord receives any
     bona fide offer for the purchase or exchange of the Property, which
     Landlord intends to accept, (an "Offer"), Landlord shall promptly advise
     Tenant of the receipt and acceptability of the Offer and provide to Tenant
     a copy of all documents pertaining to said sale or exchange and information
     on all the material terms and conditions thereof. Tenant shall have ten
     (10) business days following the receipt of all such documents and
     information within which to advise Landlord whether Tenant is willing to
     purchase the Property on the same terms and conditions as the Offer,
     subject to receipt of the approval of its governing Board or if Tenant is a
     corporation, its Board of Directors. If Tenant so notifies Landlord of
     Tenant's decision to purchase the Property, and further advises Landlord of
     its Board's approval within ten (10) business days thereafter, then
     Landlord shall sell the Property to Tenant, and Tenant shall purchase the
     Property from Landlord, on the same terms and conditions as the Offer;
     provided, however, that in the case of an exchange transaction described in
     Section 1031(a) or (b) of the Internal Revenue Code of 1986 (an "Exchange"
     and the "Code," respectively, Tenant shall have the right to purchase the
     except tax benefits,

                                     Page 2

<PAGE>

     If Tenant elects not to exercise its right of first refusal, Landlord may
     sell the Property to the party making the Offer on the terms and conditions
     stated in the Offer. If the sale or exchange transaction is not closed
     within ninety (90) days in accordance with the terms and conditions of the
     Offer, then Landlord must again notify Tenant as provided herein. This
     right of first refusal shall run with the Property during the term of this
     Lease, including any extensions thereof.

     4. The phrase "in close proximity to," as contained in Line 14 of Section
1.6 of the First Amendment to the 901 Dexter Avenue North Lease, shall be
construed to mean parking located within a 500 yard radius of the center of the
building at 901 Dexter Avenue North. When construction of the improvements to
the parking lot property located to the north of 945 Dexter Avenue North has
been completed, the Partnership shall immediately thereafter provide Korry with
one hundred twenty (120) parking spaces in the parking garage built as part of
the improvements to the parking lot, which parking spaces may be used by Korry
without charge to Korry and shall be at locations in the parking garage which
are the most convenient to Korry and its employees.

     5. Korry shall pay to Dexter Avenue Associates, during the term of the 901
Lease, 30% of the reasonable maintenance costs actually incurred by Dexter
Avenue Associates for the parking lots located at North of 945 Dexter No.

     6. All other terms, conditions and covenants of the Lease shall otherwise
remain in full force and effect.

     Dated this 1st day of September, 1987.

                                        KORRY ELECTRONICS CO

                                        By /s/ R. W. Stevenson
                                           -------------------------------------
                                           Sr. V. P. of Criton Technologies

                                        DEXTER AVENUE ASSOCIATES

                                        /s/ Delton J. Bonds
                                        ----------------------------------------
                                        By Delton J. Bonds
                                        Managing Partner

                                     Page 3

<PAGE>

STATE OF WASHINGTON   )
                      ) ss
COUNTY OF KING        )

ON this 1st day of September, 1987, before me, a Notary Public in and for the
State of Washington, duly commissioned and sworn, personally appeared R. W.
Stevenson, to me known to be the Sr. V. P. of Criton Technologies named in and
which executed the foregoing instrument; and he acknowledged to me that he
signed the same as the free and voluntary act and deed of said corporation for
the uses and purposes therein mentioned, being authorized so to do, and that the
corporate seal affixed thereto is the seal of said corporation.

     WITNESS my hand and official seal the day and year in this certificate
above written.

(SEAL)                                  /s/ Penelope B. Brenton
                                        ----------------------------------------
                                        Notary Public in and for the State of
                                        Washington, residing at Illegible
                                        My appointment expires Sept 5, 1989

STATE OF WASHINGTON   )
                      ) ss
COUNTY OF KING        )

ON this 1st day of September, 1987, before me, a Notary Public in and for the
State of Washington, duly commissioned and sworn, personally appeared Delton J.
Bonds, to me known to be the Managing Partner of Dexter Avenue Associates, the
Partnership named in and which executed the foregoing instrument; and he
acknowledged to me that he signed the same as the free and voluntary act and
deed of said partnership for the uses and purposes therein mentioned, being
authorized so to do, and that the partnership seal, if any, affixed thereto is
the seal of said partnership.

     WITNESS my hand and official seal the day and year in this certificate
above written.

(SEAL)                                  /s/ Penelope B. Brenton
                                        ----------------------------------------
                                        Notary Public in and for the State of
                                        Washington, residing  at Illegible
                                        My appointment expires Sept 5, 1989

                                     Page 4

<PAGE>

(CRITON LOGO)   (KORRY LOGO)

                                 CRITON TECHNOLOGIES   KORRY ELECTRONICS CO.
                                 Electronics and       901 Dexter Avenue North
                                 Defense Group         Seattle, Washington 98109
                                                       206 281-1300

January 7, 1991

Houg Family Partnership
c/o Dr. Andrew Houg
11066 - 5th Avenue, Suite 101
Seattle, Washington 98125

Subject: Lease Renewal

Dear Dr. Houg:

This letter is to notify you that Korry Electronics Company is exercising its
option to renew its lease on facilities located at 901 (and 925) Dexter Avenue
North, Seattle, Washington, 98109, for the two year period Beginning August 1,
1991. The Second Amendment to Lease, dated June 20, 1986, extends the basic
period of the lease through July 31, 1991. The rental rate during the option
period will be calculated in accordance with Paragraph 2.3 of the First
Amendment to Lease, dated May 10, 1985, which was unchanged by subsequent
amendments.

Sincerely,

KORRY ELECTONICS CO.

/s/ Stephen R. Larson
-------------------------------------
Stephen R. Larson
President

SRL/cp

cc: Del Bond

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