<PAGE>
Exhibit 4.1
MERRILL LYNCH MORTGAGE INVESTORS, INC.,
Depositor
WELLS FARGO BANK, N.A.,
Master Servicer and Securities Administrator
and
HSBC BANK USA, NATIONAL ASSOCIATION,
Trustee
STACK I POOLING AND SERVICING TERMS,
constituting,
along with the Stack II Pooling and Servicing Terms, the
POOLING AND SERVICING AGREEMENT
Dated as of October 1, 2006
----------
Mortgage Pass-Through Certificates, MLMI Series 2006-AF2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S>
<C>
ARTICLE I
DEFINITIONS....................................................
7
Section 1.02
Accounting..............................................
51
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES..........................................................
52
Section 2.01
Conveyance of Mortgage
Loans to Trustee................. 52
Section 2.02
Acceptance of Mortgage
Loans by Trustee................. 55
Section 2.03
Assignment of Interest
in the Mortgage Loan
Purchase Agreement................................... 58
Section 2.04
Substitution of
Mortgage Loans.......................... 59
Section 2.05
Issuance of
Certificates................................ 61
Section 2.06
Representations and
Warranties Concerning
the Depositor........................................ 61
Section 2.07
Representations and
Warranties Concerning the Master
Servicer and Securities Administrator................ 62
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS............... 64
Section 3.01
Master
Servicer......................................... 64
Section 3.02
REMIC-Related
Covenants................................. 65
Section 3.03
Monitoring of
Servicer.................................. 65
Section 3.04
Fidelity
Bond........................................... 66
Section 3.05
Power to Act;
Procedures................................ 66
Section 3.06
Due-on-Sale Clauses;
Assumption Agreements.............. 67
Section 3.07
Release of Mortgage
Files............................... 67
Section 3.08
Documents, Records and
Funds in Possession of Master
Servicer To Be Held for Trustee...................... 68
Section 3.09
Standard Hazard
Insurance and Flood Insurance Policies.. 69
Section 3.10
Presentment of Claims
and Collection of Proceeds........ 69
Section 3.11
Maintenance of the
Primary Mortgage Insurance Policies.. 70
Section 3.12
Trustee to Retain
Possession of Certain Insurance
Policies and Documents............................... 70
Section 3.13
Realization Upon
Defaulted Mortgage Loans............... 71
Section 3.14
Compensation for the
Master Servicer.................... 71
Section 3.15
REO
Property............................................ 71
Section 3.16
Annual Statement as to
Compliance....................... 72
Section 3.17
Reports on Assessment
of Compliance and Attestation..... 73
Section 3.18
Periodic
Filings........................................ 75
Section 3.19
Compliance with
Regulation AB........................... 82
ARTICLE IV
ACCOUNTS......................................................
83
Section 4.01
Protected
Accounts...................................... 83
Section 4.02
Master Servicer
Collection Account...................... 84
</TABLE>
<PAGE>
<TABLE>
<S>
<C>
Section 4.03
Permitted Withdrawals
and Transfers from the Master
Servicer Collection Account.......................... 85
Section 4.04
Distribution
Account.................................... 86
Section 4.05
Permitted Withdrawals
and Transfers from the
Distribution Account................................. 86
Section 4.06
[Reserved]..............................................
88
ARTICLE V
CERTIFICATES...................................................
90
Section 5.01
The
Certificates........................................ 90
Section 5.02
Certificate Register;
Registration of Transfer and
Exchange of Certificates............................. 90
Section 5.03
Mutilated, Destroyed,
Lost or Stolen Certificates....... 94
Section 5.04
Persons Deemed
Owners................................... 95
Section 5.05
Access to List of
Certificateholders' Names and
Addresses............................................ 95
Section 5.06
Book-Entry
Certificates................................. 95
Section 5.07
Notices to
Depository................................... 96
Section 5.08
Definitive
Certificates................................. 96
Section 5.09
Maintenance of Office
or Agency......................... 97
ARTICLE VI PAYMENTS TO
CERTIFICATEHOLDERS................................ 98
Section 6.01
Distributions on the
Certificates....................... 98
Section 6.02
Allocation of
Losses.................................... 103
Section 6.03
Payments................................................
104
Section 6.04
Statements to
Certificateholders........................ 104
Section 6.05
Monthly
Advances........................................ 107
Section 6.06
Compensating Interest
Payments.......................... 107
ARTICLE VII THE MASTER SERVICER AND THE
DEPOSITOR........................ 108
Section 7.01
Liabilities of the
Master Servicer...................... 108
Section 7.02
Merger or
Consolidation of the Master Servicer.......... 108
Section 7.03
Indemnification from
the Master Servicer and
the Depositor........................................ 108
Section 7.04
Limitations on
Liability of the Master Servicer
and Others........................................... 109
Section 7.05
Master Servicer Not to
Resign........................... 110
Section 7.06
Successor Master
Servicer............................... 110
Section 7.07
Sale and Assignment of
Master Servicing................. 110
ARTICLE VIII
DEFAULT.....................................................
112
Section 8.01
Events of
Default....................................... 112
Section 8.02
Trustee to Act;
Appointment of Successor................ 113
Section 8.03
Notification to
Certificateholders...................... 114
Section 8.04
Waiver of
Defaults...................................... 114
Section 8.05
List of
Certificateholders.............................. 115
ARTICLE IX CONCERNING THE TRUSTEE AND THE SECURITIES
ADMINISTRATOR....... 116
</TABLE>
-iii-
<PAGE>
<TABLE>
<S>
<C>
Section 9.01
Duties of
Trustee....................................... 116
Section 9.02
Certain Matters
Affecting the Trustee and the
Securities Administrator............................. 118
Section 9.03
Trustee and Securities
Administrator Not Liable for
Certificates or Mortgage Loans....................... 120
Section 9.04
Trustee and Securities
Administrator May Own
Certificates......................................... 120
Section 9.05
Trustee's and
Securities Administrator's Fees
and Expenses......................................... 120
Section 9.06
Eligibility
Requirements for Trustee and Securities
Administrator........................................ 121
Section 9.07
Insurance...............................................
122
Section 9.08
Resignation and
Removal of the Trustee and Securities
Administrator........................................ 122
Section 9.09
Successor Trustee and
Successor Securities
Administrator........................................ 123
Section 9.10
Merger or
Consolidation of Trustee or Securities
Administrator........................................ 123
Section 9.11
Appointment of
Co-Trustee or Separate Trustee........... 124
Section 9.12
Federal Information
Returns and Reports to
Certificateholders; REMIC Administration............. 125
ARTICLE X
TERMINATION....................................................
130
Section 10.01
Termination upon Liquidation or Repurchase of all
Mortgage Loans....................................... 130
Section 10.02
Final Distribution on the Certificates..................
131
Section 10.03
Additional Termination Requirements.....................
132
ARTICLE XI MISCELLANEOUS
PROVISIONS...................................... 134
Section 11.01
Intent of Parties.......................................
134
Section 11.02
Amendment...............................................
134
Section 11.03
Recordation of Agreement................................
136
Section 11.04
Limitation on Rights of Certificateholders..............
136
Section 11.05
Acts of Certificateholders..............................
136
Section 11.06
Governing Law...........................................
138
Section 11.07
Notices.................................................
138
Section 11.08
Severability of Provisions..............................
139
Section 11.09 Successors and
Assigns.................................. 139
Section 11.10
Article and Section Headings............................
139
Section 11.11
Counterparts............................................
139
Section 11.12
Notice to Rating Agencies...............................
139
ARTICLE XII REMIC
ADMINISTRATION.........................................
140
Section 12.01
REMIC Administration....................................
140
Section 12.02
Prohibited Transactions and Activities..................
140
Section 12.03
Indemnification with Respect to Prohibited Transactions
or Loss of REMIC Status.............................. 140
Section 12.04
REO Property............................................
141
</TABLE>
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<PAGE>
EXHIBITS
--------
Exhibit A-1 - Form of Class A and Class M Certificates
Exhibit A-2 - Form of Class B Certificates
Exhibit B -
Mortgage Loan Schedule
Exhibit C -
[Reserved]
Exhibit D -
Request for Release of Documents
Exhibit E-1 - Form of Transferee's Letter and Affidavit
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 -
[Reserved]
Exhibit I -
Transfer Agreement
Exhibit J -
Mortgage Loan Purchase Agreement
Exhibit K -
Servicing Criteria To Be Addressed in Assessment of Compliance
Exhibit L - Form
of Sarbanes-Oxley Certification
Exhibit M - Form
of Back-up Sarbanes-Oxley Certification
Exhibit N -
[Reserved]
Exhibit O -
Additional Disclosure Notification
Exhibit P - Form
of Item 1123 Certification of Servicer
Exhibit Q-1 - Additional Form 10-D Disclosure
Exhibit Q-2 - Additional Form 10-K Disclosure
Exhibit Q-3 - Form 8-K Disclosure Information
-v-
<PAGE>
STACK I POOLING AND SERVICING TERMS
These Stack I Pooling and Servicing Terms are dated as of October
1, 2006
(the "Agreement," and, together with the Stack II Pooling and
Servicing Terms
(the "Stack II Agreement") dated as of October 1, 2006, the
"Pooling and
Servicing 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 has acquired the Mortgage Loans from the Seller and at
the
Closing Date is the owner of the Mortgage Loans and the other
related property
being conveyed by the Depositor to the Trustee hereunder on behalf
of the
Issuing Entity for inclusion in the Trust Fund. On the Closing
Date, the
Depositor will acquire the Certificates from the Securities
Administrator as
consideration for the Depositor's transfer to the Issuing Entity of
the Mortgage
Loans and the other related property constituting that portion of
the Trust Fund
relating to the Certificates. The Depositor has duly authorized the
execution
and delivery of this Agreement to provide for the conveyance to the
Issuing
Entity of the Mortgage Loans and the other related property
constituting that
portion of the Trust Fund relating to the Certificates. All
covenants and
agreements made by the Transferor in the Transfer Agreement, the
Seller in the
Mortgage Loan Purchase Agreement and in this Agreement and all
covenants and
agreements made by the Depositor, the Trustee, the Securities
Administrator and
the Master Servicer herein with respect to the Mortgage Loans and
the other
related property constituting the portion of the Trust Fund
relating to the
Certificates are for the benefit of the Holders from time to time
of the
Certificates. The Depositor, the Trustee, the Securities
Administrator and the
Master Servicer are entering into this Agreement, and the Trustee
on behalf of
the Issuing Entity is accepting the Trust Fund created hereby, for
good and
valuable consideration, the receipt and sufficiency of which are
hereby
acknowledged.
In
conjunction herewith, the Depositor has acquired the Stack II
Mortgage
Loans from the Seller and at the Closing Date is the owner of the
Stack II
Mortgage Loans and the other related property being conveyed by the
Depositor to
the Trustee under the Stack II Agreement on behalf of the Issuing
Entity for
inclusion in the Trust Fund. On the Closing Date, the Depositor
will acquire the
Stack II Certificates from the Securities Administrator as
consideration for the
Depositor's transfer to the Issuing Entity of the Stack II Mortgage
Loans and
the other related property constituting that portion of the Trust
Fund relating
to the Stack II Certificates. The Depositor has duly authorized the
execution
and delivery of the Stack II Agreement to provide for the
conveyance to the
Issuing Entity of the Stack II Mortgage Loans and the other related
property
constituting that portion of the Trust Fund relating to the Stack
II
Certificates. The terms and conditions relating to the issuance of
the Stack II
Certificates are set forth in the Stack II Agreement.
As provided herein,
the Securities Administrator shall elect that that
portion of the Trust Fund relating to Stack I be treated for
federal income tax
purposes as comprising a real estate mortgage investment conduit (a
"REMIC" or,
in the alternative, the "Upper Tier REMIC,"
<PAGE>
respectively). The Certificates created under this Agreement shall
represent
ownership of regular interests in the Upper Tier REMIC.
The
Upper Tier REMIC shall hold as its assets the property of the
Trust
Fund relating to Stack I.
Each
Upper Tier REMIC Regular Interest is hereby designated as a
regular
interest in the Upper Tier REMIC for purposes of the REMIC
Provisions.
The
Class UT-R Interest is hereby designated as the sole class of
residual
interest in the Upper Tier REMIC for purposes of the REMIC
Provisions. The Class
A-R Certificate shall represent the Class UT-R Interest and the
residual
interest in any REMIC created under the Stack II Agreement.
THE CERTIFICATES
The
following table sets forth (or describes) the Class
designation,
Certificate Rate, initial Class Certificate Balance or initial
notional amount,
and minimum denomination for each Class of Certificates comprising
interests in
the Trust Fund created hereunder.
<TABLE>
<CAPTION>
Initial Class
Certificate Balance
Class
Certificate or Initial Notional
Minimum
Denominations
Designation Rate
Amount
or Percentage Interest
-----------
-----------
-------------------- ----------------------
<S>
<C>
<C>
<C>
Class AF-1 6.25%
$186,440,000
$25,000.00
Class AF-2 6.25%
$100,000,000
$25,000.00
Class AF-3 6.25%
$ 4,221,000
$25,000.00
Class IO
(1)
(2)
$25,000.00
Class PO
(3)
$ 2,289,228
Class MF-1 6.25%
$ 4,580,000
$25,000.00
Class MF-2 6.25%
$ 2,900,000
$25,000.00
Class MF-3 6.25%
$ 1,527,000
$25,000.00
Class BF-1 6.25%
$ 1,527,000
$25,000.00
Class BF-2 6.25%
$ 1,069,000
$25,000.00
Class BF-3 6.25%
$ 762,360
$25,000.00
</TABLE>
(1) The Certificate
Rate with respect to any Distribution Date (and the related
Accrual Period) will be 6.25%.
(2) The Class IO
Certificates are interest-only certificates. The Class IO
Certificates will accrue interest on their class notional
amount.
(3) The Class PO
Certificates are principal-only certificates and are not
entitled to payments of interest.
With
respect to the first Distribution Date, the notional amount of
the
Class IO Certificates will be $12,453,303.
As
of the Cut-off Date, the Mortgage Loans had an aggregate
Principal
Balance of $305,315,588.57.
-2-
<PAGE>
In
consideration of the mutual agreements herein contained, the
Depositor,
the Trustee, Securities Administrator and the Master Servicer
hereby agree as
follows:
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.
10-K
Filing Deadline: As defined in Section 3.18(h)
ABN
AMRO: ABN AMRO Mortgage Group, Inc.
ABN
AMRO Loans: The Mortgage Loans serviced by ABN AMRO and sold to
MLML
pursuant to the ABN AMRO Sale and Servicing Agreement.
ABN
AMRO Sale and Servicing Agreement: The Master Mortgage Loan Sale
and
Servicing Agreement dated as of October 1, 2006, between ABN AMRO
as seller and
MLML as purchaser, as at any time in effect.
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 the
Servicer), or
(y) as provided in the Servicing Agreement, to the extent
applicable to the
Servicer, but in no event below the standard set forth in clause
(x).
Account: The Master Servicer Collection Account, Distribution
Account and
any Protected Account as the context may require.
Accountant's Attestation: As defined in Section 3.17.
Accrual Period: With respect to any Distribution Date, the calendar
month
immediately preceding the month in which the related Distribution
Date occurs.
Interest shall accrue on all Classes of Certificates and REMIC 1
Regular
Interests on the basis of a 360-day year consisting of twelve
30-day months.
Accrued Certificate Interest: With respect to each Class of
Certificates,
an amount equal to the interest accrued during the related Accrual
Period on the
Class Certificate Balance thereof at the then-applicable
Certificate Rate.
Accrued Certificate Interest on any Class of Certificates will be
reduced by the
amount of (i) Prepayment Interest Shortfalls (to the extent not
offset by the
Servicer or Master Servicer with a payment of Compensating Interest
as provided
in Section 6.06), (ii) the interest portion of Realized Losses
allocated to such
Class of Certificates pursuant to Section 6.02 and (iii) any other
interest
shortfalls not covered by the subordination provided by the Class M
Certificates
and Class B Certificates, including shortfalls as a result of the
Relief
-3-
<PAGE>
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.
Additional Disclosure Notification: As defined in Section
3.18(b).
Additional Form 10-D Disclosure: As defined in Section 3.18(e).
Additional Form 10-K Disclosure: As defined in Section 3.18(h).
Adverse REMIC Event: As defined in Section 9.12(g).
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
Master Servicer
may conclusively presume that a Person is not an Affiliate of
another Person
unless a Responsible Officer of the Master Servicer has actual
knowledge to the
contrary.
Aggregate Subordinated Percentage: Not applicable.
Agreement: This Stack I Pooling and Servicing Terms, 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 S&P or Aaa in the case of Moody's.
For any
short-term deposit or security, a rating of A-l+ in the case of
S&P or P-1 in
the case of Moody's.
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.
Assessment of Compliance: As defined in Section 3.17.
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.
Auction: The one-time auction conducted by the Securities
Administrator, as
described in Section 10.01(b) hereof.
Available Distribution Amount: On any Distribution Date, an amount
equal to
the amount on deposit in the Master Servicer Collection Account as
of the close
of business two Business Days immediately preceding the related
Distribution
Date (but prior to making any deposits into the Certificate Account
on such
date) except:
-4-
<PAGE>
(a)
amounts received on particular Mortgage Loans as late payments or
other
recoveries of principal or interest (including any Subsequent
Recoveries,
Liquidation Proceeds, Insurance Proceeds and condemnation awards)
and respecting
which the Servicer previously made an unreimbursed Advance of such
amounts;
(b)
reimbursement for Nonrecoverable Advances and other amounts
permitted
to be withdrawn by the Servicer pursuant to Section 4.03 from, or
not required
to be deposited in, the Master Servicer Collection Account;
(c)
amounts representing the Servicing Fee with respect to such
Distribution Date;
(d)
amounts representing all or part of a Monthly Payment with respect
to a
Mortgage Loan due (i) after the related Due Period or (ii) on or
prior to the
Cut-off Date;
(e)
all Repurchase Proceeds, Principal Prepayments, Liquidation
Proceeds,
Insurance Proceeds, Subsequent Recoveries and condemnation awards
with respect
to Mortgage received after the related Principal Prepayment Period,
and all
related payments of interest representing interest for any period
of time after
the last day of the related Due Period for such Mortgage Loans;
and
(f)
all income from eligible investments held in the Master
Servicer
Collection Account for the account of the Master Servicer.
Back-Up Certification: As defined in Section 3.18(k).
Bankruptcy Code: The United States Bankruptcy Code, as amended as
codified
in 11 U.S.C. Sections 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 5.06 hereof). On the Closing
Date, the
Certificates (other than the Private Certificates) shall be
Book-Entry
Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or
(ii) a day
on which the New York Stock Exchange or Federal Reserve is closed
or on which
banking institutions in the jurisdiction in which the Trustee, the
Master
Servicer, the Servicer or the Securities Administrator are
authorized or
obligated by law or executive order to be closed.
Carry-Over Subordinated Principal Amount: As of any Distribution
Date, with
respect to any Class of Subordinate Certificates, an amount, if
any, equal to
the amount of principal distributable to such Class on any prior
Distribution
Date that has not been so distributed.
Certificate: Any mortgage pass-through certificate issued pursuant
to this
Agreement, evidencing a beneficial ownership interest in that
portion of the
Trust Fund related to the Mortgage Loans, signed and countersigned
by the
Securities Administrator. For the avoidance of doubt, as defined
below, the term
"Stack II Certificate" shall be used to refer to any mortgage
pass-through
certificate issued pursuant to the Stack II Agreement, evidencing a
beneficial
-5-
<PAGE>
ownership interest in that portion of the Trust Fund related to the
Stack II
Mortgage Loans, signed and countersigned by the Securities
Administrator.
Certificate Owner: With respect to each Book-Entry Certificate,
any
beneficial owner thereof.
Certificate Rate: The per annum rate of interest borne by each
Class of
Certificates (other than the Class PO Certificates), which will be
6.25%.
Certificate Register: The register maintained pursuant to Section
5.02
hereof.
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 the Class
A-R
Certificate for any purpose hereof.
Certification Parties: As defined in Section 3.18(k).
Certifying Person: As defined in Section 3.18(k).
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 AF-1, Class AF-2, Class AF-3,
Class
IO or Class PO Certificates as designated on the face thereof
substantially in
the form annexed hereto as Exhibits 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 AF-1 Certificate: Any one of the Class AF-1 Certificates,
executed by
the Securities Administrator and authenticated and delivered by the
Securities
Administrator, senior in right of payment to the Class M and Class
B
Certificates, substantially in the form of the Class A Certificate
set forth in
Exhibit A-1 hereto.
Class AF-1 Interest Accrual Amount: With respect to any
Distribution Date,
one month's interest at the Certificate Rate on the Class
Certificate Balance of
the Class AF-1 Certificates minus (i) any Compensating Interest
Shortfall
allocated to the Class AF-1 Certificates on such Distribution Date
pursuant to
Section 6.08(a), (ii) any Realized Loss Interest Shortfall
allocated to the
Class AF-1 Certificates on such Distribution Date pursuant to
Section 6.08(b),
and (iii) any interest shortfall resulting from the Relief Act
allocated to the
Class AF-1 Certificates on such Distribution Date pursuant to
Section 6.08(c).
Class AF-1 Shortfall: With respect to any Distribution Date, the
amount
equal to the excess, if any, of the Class AF-1 Interest Accrual
Amount over the
amount actually distributed to the Class AF-1 Certificateholders on
such
Distribution Date pursuant to Section 6.01(I)(b)(i).
Class AF-2 Certificate: Any one of the Class AF-2 Certificates,
executed by
the Securities Administrator and authenticated and delivered by the
Securities
Administrator, senior
-6-
<PAGE>
in right of payment to the Class M and Class B Certificates,
substantially in
the form of the Class A Certificate set forth in Exhibit A-1
hereto.
Class AF-2 Interest Accrual Amount: With respect to any
Distribution Date,
one month's interest at the Certificate Rate on the Class
Certificate Balance of
the Class AF-2 Certificates minus (i) any Compensating Interest
Shortfall
allocated to the Class AF-2 Certificates on such Distribution Date
pursuant to
Section 6.08(a), (ii) any Realized Loss Interest Shortfall
allocated to the
Class AF-2 Certificates on such Distribution Date pursuant to
Section 6.08(b),
and (iii) any interest shortfall resulting from the Relief Act
allocated to the
Class AF-2 Certificates on such Distribution Date pursuant to
Section 6.08(c).
Class AF-2 Shortfall: With respect to any Distribution Date, the
amount
equal to the excess, if any, of the Class AF-2 Interest Accrual
Amount over the
amount actually distributed to the Class AF-2 Certificateholders on
such
Distribution Date pursuant to Section 6.01(I)(b)(i).
Class AF-3 Certificate: Any one of the Class AF-3 Certificates,
executed by
the Securities Administrator and authenticated and delivered by the
Securities
Administrator, senior in right of payment to the Class M and Class
B
Certificates, substantially in the form of the Class A Certificate
set forth in
Exhibit A-1 hereto.
Class AF-3 Interest Accrual Amount: With respect to any
Distribution Date,
one month's interest at the Certificate Rate on the Class
Certificate Balance of
the Class AF-3 Certificates minus (i) any Compensating Interest
Shortfall
allocated to the Class AF-3 Certificates on such Distribution Date
pursuant to
Section 6.08(a), (ii) any Realized Loss Interest Shortfall
allocated to the
Class AF-3 Certificates on such Distribution Date pursuant to
Section 6.08(b),
and (iii) any interest shortfall resulting from the Relief Act
allocated to the
Class AF-3 Certificates on such Distribution Date pursuant to
Section 6.08(c).
Class AF-3 Shortfall: With respect to any Distribution Date, the
amount
equal to the excess, if any, of the Class AF-3 Interest Accrual
Amount over the
amount actually distributed to the Class AF-3 Certificateholders on
such
Distribution Date pursuant to Section 6.01(I)(b)(i).
Class A-R Certificate: The Class A-R Certificate created and issued
under
the Stack II Agreement.
Class B Certificate: Any one of the Class BF-1, Class BF-2 or Class
BF-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: As of any Distribution Date, the difference
between
100% and the sum of (i) the Class A Percentage and (ii) the Class M
Percentage
for such Distribution Date.
Class BF-1 Certificate: Any one of the Class BF-1 Certificates
executed by
the Securities Administrator and authenticated and delivered by the
Securities
Administrator, subordinated in
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right of payment to the Class A and Class M Certificates,
substantially in the
form of the Class B Certificate set forth in Exhibit A-2
hereto.
Class BF-1 Interest Accrual Amount: With respect to any
Distribution Date,
one month's interest at the Certificate Rate on the Class
Certificate Balance of
the Class BF-1 Certificates minus (i) any Compensating Interest
Shortfall
allocated to the Class BF-1 Certificates on such Distribution Date
pursuant to
Section 6.08(a), (ii) any Realized Loss Interest Shortfall
allocated to the
Class BF-1 Certificates on such Distribution Date pursuant to
Section 6.08(b)
and (iii) any interest shortfall resulting from the Relief Act
allocated to the
Class BF-1 Certificates on such Distribution Date pursuant to
Section 6.08(c).
Class BF-1 Shortfall: With respect to any Distribution Date, the
amount
equal to the excess, if any, of the Class BF-1 Interest Accrual
Amount over the
amount actually distributed to the Class BF-1 Certificates on such
Distribution
Date pursuant to Section 6.01(I)(d)(i).
Class BF-2 Certificate: Any one of the Class BF-2 Certificates
executed by
the Securities Administrator and authenticated and delivered by the
Securities
Administrator, subordinated in right of payment to the Class A,
Class M and
Class BF-1 Certificates, substantially in the form of the Class B
Certificate
set forth in Exhibit A-2 hereto.
Class BF-2 Interest Accrual Amount: With respect to any
Distribution Date,
one month's interest at the Certificate Rate on the Class
Certificate Balance of
the Class BF-2 Certificates minus (i) any Compensating Interest
Shortfall
allocated to the Class BF-2 Certificates on such Distribution Date
pursuant to
Section 6.08(a), (ii) any Realized Loss Interest Shortfall
allocated to the
Class BF-2 Certificates on such Distribution Date pursuant to
Section 6.08(b)
and (iii) any interest shortfall resulting from the Relief Act
allocated to the
Class BF-2 Certificates on such Distribution Date pursuant to
Section 6.08(c).
Class BF-2 Shortfall: With respect to any Distribution Date, the
amount
equal to the excess, if any, of the Class BF-2 Interest Accrual
Amount over the
amount actually distributed to the Class BF-2 Certificates on such
Distribution
Date pursuant to Section 6.01(I)(d)(ii).
Class BF-3 Certificate: Any one of the Class BF-3 Certificates
executed by
the Securities Administrator and authenticated and delivered by the
Securities
Administrator, subordinated in right of payment to the Class A,
Class M, Class
BF-1 and Class BF-2 Certificates, substantially in the form of the
Class B
Certificate set forth in Exhibit A-2 hereto.
Class BF-3 Interest Accrual Amount: With respect to any
Distribution Date,
one month's interest at the Certificate Rate on the Class
Certificate Balance of
the Class BF-3 Certificates minus (i) any Compensating Interest
Shortfall
allocated to the Class BF-3 Certificates on such Distribution Date
pursuant to
Section 6.08(a), (ii) any Realized Loss Interest Shortfall
allocated to the
Class BF-3 Certificates on such Distribution Date pursuant to
Section 6.08(b)
and (iii) any interest shortfall resulting from the Relief Act
allocated to the
Class BF-3 Certificates on such Distribution Date pursuant to
Section 6.08(c).
Class BF-3 Shortfall: With respect to any Distribution Date, the
amount
equal to the excess, if any, of the Class BF-3 Interest Accrual
Amount over the
amount actually distributed to the Class BF-3 Certificates on such
Distribution
Date pursuant to Section 6.01(I)(d)(iii).
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Class Certificate Balance: With respect to any Certificate (other
than the
Class IO Certificates) 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 any Subsequent Recoveries added to the
Class
Certificate Balance of such Certificate, 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 Principal Balance of the
Mortgage
Loans over (B) the then aggregate Class Certificate Balance of all
other Classes
of Certificates then outstanding.
Class IO Certificate: Any one of the Class IO Certificates,
executed by the
Securities Administrator and authenticated and delivered by the
Securities
Administrator, senior in right of payment to the Class M and Class
B
Certificates, substantially in the form of the Class A Certificate
set forth in
Exhibit A-1 hereto.
Class IO Interest Accrual Amount: With respect to any Distribution
Date,
one month's interest at the Class IO Certificate Rate on the Class
IO Notional
Amount minus (i) any Compensating Interest Shortfall allocated to
Class IO on
such Distribution Date pursuant to Section 6.08(a), (ii) any
Realized Loss
Interest Shortfall allocated to Class IO on such Distribution Date
pursuant to
Section 6.08(b) and (iii) any interest shortfall resulting from
the
Servicemembers Civil Relief Act allocated to the Class IO on such
Distribution
Date pursuant to Section 6.08(c).
Class IO Notional Amount: With respect to any Distribution Date, an
amount
equal to the product of the aggregate Principal Balance of the
Non-Discount
Mortgage Loans and a fraction the numerator of which is the
Stripped Interest
Rate and the denominator of which is 6.25%. The Class IO Notional
Amount for the
first Distribution Date will be $12,453,303.
Class IO Shortfall: With respect to any Distribution Date the
amount equal
to the excess, if any, of the Class IO Interest Accrual Amount over
the amount
actually distributed to the Class IO Certificateholders on such
Distribution
Date pursuant to Section 6.01(I)(b)(i).
Class M Certificate: Any one of the Class MF-1, Class MF-2 or Class
MF-3
Certificates as designated on the face thereof substantially in the
form annexed
hereto as Exhibit A-1, executed by the Securities Administrator
and
authenticated and delivered by the Securities Administrator,
representing the
right to distributions as set forth herein and therein.
Class M Certificateholder: Any Holder of a Class M Certificate.
Class M Interest Accrual Amount: With respect to any Distribution
Date, one
(1) month's interest at the Certificate Rate on the Class
Certificate Balance of
the Class M
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<PAGE>
Certificates minus (i) any Compensating Interest Shortfall
allocated to the
Class M Certificates on such Distribution Date pursuant to Section
6.08(a), (ii)
any Realized Loss Interest Shortfall allocated to the Class M
Certificates on
such Distribution Date pursuant to Section 6.08(b) and (iii) any
interest
shortfall resulting from the Relief Act allocated to the Class M
Certificates on
such Distribution Date pursuant to Section 6.08(c).
Class M Percentage: The Class MF-1 Percentage, Class MF-2
Percentage or
Class MF-3 Percentage.
Class M Principal Balance: As of any Distribution Date, (a) the
Class M
Principal Balance for the immediately preceding Distribution Date
less (b)
amounts distributed to the Class M Certificateholders on such
preceding
Distribution Date allocable to principal (including the principal
portion of
Advances of the Servicer made pursuant to Section 6.06 and Realized
Losses
allocated to the Class M Certificates pursuant to Section 6.02);
provided that
the Class M Principal Balance on the first Distribution Date shall
be the
Original Class M Principal Balance, and provided further that if
the aggregate
Class Certificate Balance of the Class B Certificates has been
reduced to zero,
as of any Distribution Date, the Class M Principal Balance will
equal the excess
of the Mortgage Pool Principal Balance (together with the portion
of any Monthly
Payment due but not paid with respect to which an Advance has not
been made)
over the Class A Principal Balance.
Class MF-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 MF-1 Certificates
immediately
prior to such date and the denominator of which is the aggregate
Principal
Balance of all of the Mortgage Loans (or related REO Properties)
immediately
prior to such Distribution Date.
Class MF-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 MF-2 Certificates
immediately
prior to such date and the denominator of which is the aggregate
Principal
Balance of all of the Mortgage Loans (or related REO Properties)
immediately
prior to such Distribution Date.
Class MF-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 MF-3 Certificates
immediately
prior to such date and the denominator of which is the aggregate
Principal
Balance of all of the Mortgage Loans (or related REO Properties)
immediately
prior to such Distribution Date.
Class PO Amount: With respect to any Distribution Date, the PO
Percentage
of (i) all principal received on or in respect of each Discount
Mortgage Loan
(exclusive of any amounts in respect of any Monthly Payment) during
the related
Principal Prepayment Period and (ii) all principal received as part
of a Monthly
Payment on or in respect of a Discount Mortgage Loan during the
related Due
Period.
Class PO Certificate: Any one of the Class PO Certificates,
executed by the
Securities Administrator and authenticated and delivered by the
Securities
Administrator, senior in right of
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payment to the Class M and Class B Certificates, substantially in
the form of
the Class A Certificate set forth in Exhibit A-1 hereto.
Class PO Shortfall Amount: With respect to any Distribution Date
prior to
and including the Credit Support Depletion Date, to the extent of
amounts
available to pay the Subordinated Optimal Principal Amount (without
regard to
clause (2) of the definition of such term), an amount equal to the
sum of (i)
the applicable PO Percentage of the principal portion of any
Realized Loss with
respect to a Discount Mortgage Loan and (ii) the sum of amounts, if
any, by
which the amounts specified in clause (i) with respect to each
prior
Distribution Date exceeded the amount actually distributed in
respect thereof on
such prior Distribution Date and not subsequently distributed to
the Class PO
Certificateholders.
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.
Class UT-R Interest: The sole class of residual interest in the
Upper Tier
REMIC for purposes of the REMIC Provisions. The Class UT-R Interest
shall have
neither a principal amount nor an interest rate. The Class UT-R
Interest shall
be represented by the Class A-R Certificate.
Closing Date: October 31, 2006.
Code: The Internal Revenue Code of 1986, as amended.
Commission: The Securities and Exchange Commission.
Compensating Interest Payments: As defined in Section 6.07.
Compensating Interest Shortfall: As defined in Section 6.08(a).
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.
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<PAGE>
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: With respect to the Trustee, 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: Issuer Services - Merrill Lynch Mortgage
Investors, Inc.,
MLMI Series 2006-AF2, 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 and with respect to the Securities Administrator, for
Certificate
transfer purposes, Wells Fargo Center, Sixth Street and Marquette
Avenue,
Minneapolis, Minnesota 55479, Attn: Client Service Manager - MLMI
2006-AF2, and
for all other purposes, 9062 Old Annapolis Road, Columbia,
Maryland, 21045,
Attn: Corporate Trust Services - MLMI 2006-AF2.
Corresponding Class or Classes of Certificates: With respect to
each REMIC
2 Regular Interest, the Class or Classes of Certificates appearing
opposite such
REMIC 2 Regular Interest as described in the Preliminary Statement
hereto.
Credit Support: With respect to each Class of Subordinate
Certificates
(other than the Class BF-3 Certificates), the level of credit
support supporting
such Class, expressed as a percentage of the aggregate outstanding
Class
Certificate Balance of all Classes of Certificates. With respect to
each
Distribution Date, Credit Support for each such Class will equal in
each case
the percentage, rounded to two decimal places, obtained by dividing
the
aggregate outstanding Class Certificate Balance immediately prior
to such
Distribution Date of all Classes of Subordinate Certificates having
higher
numerical Class designations than such Class by the aggregate
outstanding Class
Certificate Balance of all Classes of Certificates immediately
prior to such
Distribution Date. For purposes of this defined term, the Class B
Certificates
shall be considered as having higher numerical Class designations
than the Class
M Certificates.
Credit Support Depletion Date: The first Distribution Date on which
the
aggregate Class Certificate Balance of the Subordinate Certificates
is reduced
to zero.
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 Securities Administrator, the
Trustee and
the Custodian in substantially the form of Exhibit G hereto.
Custodian: Wells Fargo Bank, N.A., including any successors in
interest, or
any successor custodian appointed pursuant to the provisions hereof
and of the
Custodial Agreement.
Cut-off Date: October 1, 2006.
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Debt
Service Reduction: Any reduction of the Monthly Payments which
a
Mortgagor is obligated to pay with respect to a Mortgage Loan as a
result of any
proceeding under the Bankruptcy Code or any other similar state law
or other
proceeding.
Defective Mortgage Loan: A Mortgage Loan replaced or to be replaced
by one
or more Substitute Mortgage Loans.
Deficient Valuation: With respect to any Mortgage Loan, a valuation
of the
related Mortgaged Property by a court of competent jurisdiction in
an amount
less than the then outstanding principal balance of the Mortgage
Loan, which
valuation results from a proceeding initiated under the Bankruptcy
Code.
Definitive Certificates: As defined in Section 5.06.
Depositor: Merrill Lynch Mortgage Investors, Inc., a Delaware
corporation,
or any successor in interest.
Depository: The Depository Trust Company, the nominee of which is
Cede &
Co., or any successor thereto.
Depository Participant: A broker, dealer, bank or other
financial
institution or other Person for whom from time to time the
Depository effects
book-entry transfers and pledges of securities deposited with the
Depository.
Designated Depository Institution: A depository institution
(commercial
bank, federal savings bank, mutual savings bank or savings and loan
association)
or trust company (which may include the Trustee), the deposits of
which are
fully insured by the FDIC to the extent provided by law.
Determination Date: With
respect to each Mortgage Loan, the Determination
Date as defined in the Servicing Agreement.
Discount Mortgage Loan: A Mortgage Loan having a Net Mortgage Rate
less
than the Remittance Rate.
Disqualified Organization: A "disqualified organization" as defined
in
Section 860 E(e)(5) of the Code.
Distribution Account: The trust account or accounts created and
maintained
pursuant to Section 4.04, which shall be denominated "Wells Fargo
Bank, National
Association, as Securities Administrator for HSBC Bank USA,
National
Association, as Trustee f/b/o holders of Merrill Lynch Mortgage
Investors, Inc.,
Mortgage Pass-Through Certificates, MLMI Series 2006-AF2 -
Distribution Account
(Stack I)." The Distribution Account shall be an Eligible
Account.
Distribution Account Deposit Date: The Business Day prior to
each
Distribution Date.
Distribution Date: The 25th day of any month, beginning in November
2006,
or, if such 25th day is not a Business Day, the Business Day
immediately
following.
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Due
Date: With respect to each Mortgage Loan, the date in each month
on
which its Monthly Payment is due if such due date is the first day
of a month
and otherwise is deemed to be the first day of the following month
or such other
date specified in the Servicing Agreement.
Due
Period: With respect to any Distribution Date and each Mortgage
Loan,
the period commencing on the second day of the month preceding the
month in
which the Distribution Date occurs and ending at the close of
business on the
first day of the month in which the Distribution Date occurs.
Eligible Account: Any of (i) 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 (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
Certificates then rated by the Rating Agencies) 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 Securities Administrator prior to the establishment of such
account, the
Certificateholders will have a claim with respect to the funds in
such account
and a perfected first priority security interest against any
collateral (which
shall be limited to Permitted Investments, each of which shall
mature not later
than the Business Day immediately preceding the Distribution Date
next following
the date of investment in such collateral or the Distribution Date
if such
Permitted Investment is an obligation of the institution that
maintains the
Distribution Account) securing such funds that is superior to
claims of any
other depositors or general creditors of the depository institution
with which
such account is maintained, (ii) a segregated trust account or
accounts
maintained with a federal or state chartered depository institution
or trust
company with trust powers acting in its fiduciary capacity or (iii)
a segregated
account or accounts of a depository institution acceptable to the
Rating
Agencies (as evidenced in writing by the Rating Agencies that use
of any such
account as the Distribution Account will not have an adverse effect
on the
then-current ratings assigned to the Classes of the Certificates
then rated by
the Rating Agencies). Eligible Accounts may bear interest.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that would satisfy the
requirements of
Prohibited Transaction Exemption 90-29, Exemption Application No.
D-8012, 55
Fed. Reg. 21459 (1990), as amended, granted to the Underwriter by
the United
States Department of Labor (or any other applicable underwriter's
exemption
granted by the United States Department of Labor), except, in
relevant part, for
the requirement that the certificates have received a rating at the
time of
acquisition that is in one of the three (or four, in the case of a
"designated
transaction") highest generic rating categories by at least one of
the Rating
Agencies.
ERISA Restricted Certificates: Any of the Class BF-1, Class BF-2 or
Class
BF-3 Certificates, and any other Certificate, as long as the
acquisition and
holding of such Certificate is not covered by and exempt under an
underwriter's
exemption.
Event of Default: An event of default described in Section
8.01.
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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.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Extended Period: As defined in Section 12.04(b).
Extraordinary Loss: Any Realized Loss or portion thereof caused by
or
resulting from:
(i) nuclear or chemical reaction or nuclear radiation or
radioactive or chemical contamination, all whether controlled or
uncontrolled
and whether such loss be direct or indirect, proximate or
remote;
(ii) hostile or warlike action in time of peace or war,
including
action in hindering, combating or defending against an actual,
impending or
expected attack by any government or sovereign power, de jure or de
facto, or by
any authority maintaining or using military, naval or air forces,
or by
military, naval or air forces, or by an agent of any such
government, power,
authority or forces;
(iii) any weapon of war employing atomic fission or radioactive
forces whether in time of peace or war, and
(iv) insurrection, rebellion, revolution, civil war, usurped
power or action taken by governmental authority in hindering,
combating or
defending against such an occurrence, seizure or destruction under
quarantine or
customs regulations, confiscation by order of any government or
public
authority, or risks of contraband or illegal transactions or
trade.
Extraordinary Trust Fund Expenses: Any amounts reimbursable to the
Master
Servicer or the Depositor pursuant to this Agreement, including but
not limited
to Sections 4.03, 4.05 and 7.04, any amounts reimbursable to the
Trustee and the
Securities Administrator from the Trust Fund pursuant to this
Agreement,
including but not limited to Section 9.05, and any other costs,
expenses,
liabilities and losses borne by the Trust Fund (exclusive of any
cost, expense,
liability or loss that is specific to a particular Mortgage Loan or
REO Property
and is taken into account in calculating a Realized Loss in respect
thereof) for
which the Trust Fund has not and, in the reasonable good faith
judgment of the
Securities Administrator, shall not, obtain reimbursement or
indemnification
from any other Person.
Fannie Mae: Federal National Mortgage Association or any successor
thereto.
FDIC: Federal Deposit Insurance Corporation or any successor
thereto.
Final Certification: The certification substantially in the form of
Exhibit
Two to the Custodial Agreement.
Fitch: Fitch Ratings or its successor in interest.
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Form
8-K Disclosure Information: As defined in Section 3.18(a).
Freddie Mac: Freddie Mac, formerly the Federal Home Loan
Mortgage
Corporation, or any successor thereto.
Global Certificate: Any Private Certificate registered in the name
of the
Depository or its nominee, beneficial interests in which are
reflected on the
books of the Depository or on the books of a Person maintaining an
account with
such Depository (directly or as an indirect participant in
accordance with the
rules of such depository).
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 MF-1, Class MF-2,
Class MF-3,
Class BF-1, Class BF-2 and Class BF-3 Certificates.
Indemnified Persons: The Trustee, the Master Servicer, the
Depositor and
the Securities Administrator and their officers, directors, agents
and employees
and, with respect to the Trustee, any separate co-trustee and its
officers,
directors, agents and employees.
Independent: When used with respect to any specified Person, any
such
Person who (a) is in fact independent of the Depositor, the Master
Servicer and
their respective Affiliates, (b) does not have any direct financial
interest in
or any material indirect financial interest in the Depositor or the
Master
Servicer or any Affiliate thereof, and (c) is not connected with
the Depositor
or the Master Servicer or any Affiliate thereof as an officer,
employee,
promoter, underwriter, trustee, partner, director or Person
performing similar
functions; provided, however, that a Person shall not fail to be
Independent of
the Depositor or the Master Servicer or any Affiliate thereof
merely because
such Person is the beneficial owner of 1% or less of any class of
securities
issued by the Depositor or the Master Servicer or any Affiliate
thereof, as the
case may be.
Index: The index, if any, specified in a Mortgage Note by reference
to
which the related Mortgage Interest Rate will be adjusted from time
to time.
Individual Certificate: Any Private Certificate registered in the
name of
the Holder other than the Depository or its nominee.
Initial Certification: The certification substantially in the form
of
Exhibit One to the Custodial Agreement.
Initial Class Certificate Balance: With respect to any Regular
Certificate,
the amount designated "Initial Class Certificate Balance" on the
face thereof.
Initial Optional Termination Date: The first Distribution Date
following
the date on which the aggregate Principal Balance of the Mortgage
Loans is less
than 10% of the aggregate Principal Balance of the Mortgage Loans
as of the
Cut-off Date.
Initial Subordinated Class Percentage: With respect to each Class
of
Subordinate Certificates, an amount which is equal to the initial
aggregate
Class Certificate Balance of such
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Class of Subordinate Certificates divided by the aggregate
Principal Balance of
all the Mortgage Loans as of the Cut-off Date as follows:
Class MF-1: 1.50%
Class MF-2: 0.95%
Class MF-3: 0.50%
Class BF-1: 0.50%
Class BF-2: 0.35%
Class BF-3: 0.25%
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 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.
Investor Representation Letter: As defined in Section 5.02(b).
IRS:
As defined in Section 9.12(i).
Issuing Entity: Merrill Lynch Mortgage Investors Trust, Series
2006-AF2.
Late
Collections: With respect to any Mortgage Loan, all amounts
received
during any Due Period, whether as late payments of Monthly Payments
or as
Liquidation Proceeds, condemnation proceeds, Insurance Proceeds, or
with respect
to a disposition of a Mortgaged Property (or stock allocated to a
dwelling unit,
in the case of a Co-op Loan) which has been acquired by foreclosure
or deed in
lieu of foreclosure or otherwise, which represent late payments or
collections
of Monthly Payments due but delinquent for a previous Due Period
and not
previously recovered.
Latest Possible Maturity Date: With respect to the Certificates,
the
Distribution Date in October 2036.
Liquidated Mortgage Loan: Any defaulted Mortgage Loan (including
any REO
Property) as to which the Servicer has determined that all amounts
it expects to
recover from or on account of such Mortgage Loan have been
recovered.
Liquidation Date: With respect to any Liquidated Mortgage Loan, the
date on
which the Servicer has certified that such Mortgage Loan has become
a Liquidated
Mortgage Loan.
Liquidation Expenses: With respect to a Mortgage Loan in
liquidation,
unreimbursed expenses paid or incurred by or for the account of the
Master
Servicer or the Servicer in connection with the liquidation of such
Mortgage
Loan and the related Mortgaged Property, such expenses including
(a) property
protection expenses, (b) property sales expenses, (c)
foreclosure
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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 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.
Losses: As defined in Section 12.03.
Lost
Notes: The original Mortgage Notes that have been lost, as
indicated
on the Mortgage Loan Schedule.
Lower Priority: As of any date of determination and with respect to
any
Class of Subordinate Certificates, any other Class of Subordinate
Certificates
then outstanding with a later priority for payments pursuant to
Section 6.01.
Lower Tier Regular Interests: Any of the REMIC 1 Regular Interests
or the
REMIC 2 Regular Interests.
Lower Tier REMIC Interests: Any of the REMIC 1 Interests or the
REMIC 2
Interests.
Lowest Priority: As of any date of determination, the Class of
Subordinate
Certificates then outstanding with the latest priority for payments
pursuant to
Section 6.01, in the following order: Class BF-3, Class BF-2, Class
BF-1, Class
MF-3, Class MF-2 and Class MF-1 Certificates.
Majority Certificateholders: The Holders of Certificates evidencing
at
least 51% of the Voting Rights.
Master Servicer: Wells Fargo Bank, N.A. including any successors
in
interest who meet the qualifications for a master servicer set
forth in this
Agreement, and any successor master servicer appointed
hereunder.
Master Servicer Collection Account: The trust account or accounts
created
and maintained pursuant to Section 4.02, which shall be denominated
"Wells Fargo
Bank, National Association as Master Servicer for HSBC Bank USA,
National
Association, as Trustee f/b/o holders of Merrill Lynch Mortgage
Investors, Inc.,
Mortgage Pass-Through Certificates, MLMI Series 2006-AF2 - Master
Servicer
Collection Account (Stack I)." 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.
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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.
MLML: Merrill Lynch Mortgage Lending, Inc., a Delaware corporation,
or any
successor in interest.
Monthly Advance: An advance of principal or interest required to be
made by
the Servicer pursuant to the Servicing Agreement or the Master
Servicer pursuant
to Section 6.06.
Monthly Payment: With respect to any Mortgage Loan, the scheduled
monthly
payment of principal and interest on such Mortgage Loan which is
payable by the
related Mortgagor from time to time under the related Mortgage
Note, determined:
(a) after giving effect to (i) any Deficient Valuation and/or Debt
Service
Reduction with respect to such Mortgage Loan and (ii) any reduction
in the
amount of interest collectible from the related Mortgagor pursuant
to the Relief
Act; (b) without giving effect to any extension granted or agreed
to by the
Servicer pursuant to Servicing Agreement; and (c) on the assumption
that all
other amounts, if any, due under such Mortgage Loan are paid when
due.
Monthly Principal: The principal portion of any Monthly
Payment.
Monthly Statement: The statement distributed to Certificateholders
pursuant
to Section 6.05.
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. For the
avoidance of doubt,
as defined below, the term "Stack II Mortgage Loan" shall be used
within this
Agreement to refer to a mortgage loan transferred and assigned to
the Trustee
pursuant to Section 2.01 or Section 2.04 of the Stack II Agreement
and held as a
part of the Trust Fund, as identified in the Stack II Mortgage Loan
Schedule,
including a mortgage loan the property securing which has become an
REO
Property.
Mortgage Loan Purchase Agreement: The Mortgage Loan Sale and
Assignment
Agreement dated as of October 1, 2006, between the Seller and the
Depositor, as
purchaser, and all amendments thereof and supplements thereto,
attached hereto
as Exhibit J.
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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.
Mortgage Pool Principal Balance: As of any date of determination,
the
aggregate of the Principal Balances of each Outstanding Mortgage
Loan on such
date of determination less the principal portion of any Monthly
Payment due but
not paid with respect to which a Monthly Advance has not been
made.
Mortgaged Property: Land and improvements securing the indebtedness
of a
Mortgagor under the related Mortgage Loan or, in the case of REO
Property, such
REO Property.
Mortgagor: The obligor on a Mortgage Note.
Net
Liquidation Proceeds: As to any Liquidated Mortgage Loan,
Liquidation
Proceeds net of (i) Liquidation Expenses which are payable
therefrom by the
Servicer or the Master Servicer in accordance with the Servicing
Agreement or
this Agreement and (ii) unreimbursed advances by the Servicer or
the Master
Servicer and Monthly Advances.
Net
Mortgage Rate: With respect to each Mortgage Loan, the Mortgage
Interest Rate in effect from time to time less the Servicing Fee
Rate (expressed
as a per annum rate).
Non-Discount Mortgage Loan: A Mortgage Loan having a Net Mortgage
Rate
greater than or equal to the Remittance Rate.
Non-PO Allocated Amount: At the time of any determination, the
amount
derived by (i) multiplying the outstanding Principal Balance of
each Mortgage
Loan on such date of determination by the Non-PO Percentage with
respect to such
Mortgage Loan and (ii) summing the results.
Non-PO Senior Optimal Principal Amount: With respect to any
Distribution
Date, the lesser of (a) the Non-PO Senior Principal Balance and (b)
the sum of:
(i)
the Non-PO Senior Percentage of the applicable Non-PO Percentage of
the
principal portion of all Monthly Payments, whether or not received,
which were
due during the related Due Period on the Mortgage Loans which were
outstanding
during such Due Period;
(ii)
the Non-PO Senior Prepayment Percentage of the applicable
Non-PO
Percentage of all Principal Prepayments made on any Mortgage Loan
during the
related Principal Prepayment Period;
(iii) with respect to each Mortgage Loan not described in (iv)
below, the
Non-PO Senior Percentage of the applicable Non-PO Percentage of the
principal
portion of all Insurance
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Proceeds, condemnation awards and any other cash proceeds from a
source other
than the applicable Mortgagor, to the extent required to be
deposited in the
Master Servicer Collection Account and which were received during
the related
Principal Prepayment Period with respect to a Mortgage Loan, net of
related
unreimbursed Servicing Advances and net of any portion thereof
which, as to any
such Mortgage Loan, constitutes Late Collections that have been the
subject of
an Advance on any prior Distribution Date;
(iv)
with respect to each Mortgage Loan which has become a
Liquidated
Mortgage Loan during the related Principal Prepayment Period, the
lesser of (A)
the Non-PO Senior Percentage of the applicable Non-PO Percentage of
an amount
equal to the Principal Balance of such Liquidated Mortgage Loan as
of the Due
Date immediately preceding the date on which it became a Liquidated
Mortgage
Loan and (B) the Non-PO Senior Prepayment Percentage of the
applicable Non-PO
Percentage of the Net Liquidation Proceeds with respect to such
liquidated
Mortgage Loan (net of any unreimbursed Advances);
(v)
with respect to each Mortgage Loan repurchased during the
related
Principal Prepayment Period, an amount equal to the Non-PO Senior
Prepayment
Percentage of the applicable Non-PO Percentage of the principal
portion of the
Purchase Price (net of amounts with respect to which a distribution
of principal
has previously been made to the Non-PO Senior
Certificateholders);
(vi)
on or after the Credit Support Depletion Date, the excess of
the
Non-PO Senior Principal Balance (calculated after giving effect to
reductions
thereof on such Distribution Date with respect to the amounts
described in (i) -
(v) above) over the Non-PO Allocated Amount, as of the preceding
Distribution
Date; and
(vii) Subsequent Recoveries.
Non-PO Senior Percentage: As of any Distribution Date, a
fraction,
expressed as a percentage (which shall never exceed 100%), the
numerator of
which is the Non-PO Senior Principal Balance and the denominator of
which is the
Non-PO Allocated Amount as of the immediately preceding Due
Date.
Non-PO Senior Prepayment Percentage: As of any Distribution Date up
to and
including the Distribution Date in October 2011, 100%; as of any
Distribution
Date in the first year thereafter, the Non-PO Senior Percentage
plus 70% of the
Subordinated Percentage for such Distribution Date; as of any
Distribution Date
in the second year thereafter, the Non-PO Senior Percentage plus
60% of the
Subordinated Percentage for such Distribution Date; as of any
Distribution Date
in the third year thereafter, the Non-PO Senior Percentage plus 40%
of the
Subordinated Percentage for such Distribution Date; as of any
Distribution Date
in the fourth year thereafter, the Non-PO Senior Percentage plus
20% of the
Subordinated Percentage for such Distribution Date; and as of any
Distribution
Date after the fourth year thereafter, the Non-PO Senior
Percentage; provided
that, if the Non-PO Senior Percentage as of any such Distribution
Date is
greater than the Non-PO Senior Percentage on the first Distribution
Date, the
Non-PO Senior Prepayment Percentage shall be 100%; and provided
further,
however, that whenever the Non-PO Senior Percentage equals 0%, the
Non-PO Senior
Prepayment Percentage shall equal 0%; and provided further that no
reduction of
the Non-PO Senior Prepayment Percentage below the level in effect
for the most
recent period shall occur with respect to any
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Distribution Date unless, as of the last day of the month preceding
such
Distribution Date, (i) the aggregate outstanding Principal Balance
of Mortgage
Loans each taken individually, delinquent 60 days or more
(including for this
purpose any Mortgage Loans in foreclosure and Mortgage Loans with
respect to
which the related Mortgaged Property has been acquired by the Trust
Fund) does
not exceed 50% of the Subordinated Percentage of the Mortgage Pool
Principal
Balance as of such date and (ii) cumulative Realized, do not exceed
(a) 30% of
the related Subordinated Percentage of the Mortgage Pool Principal
Balance as of
the date of issuance of the Certificates (the related Original
Subordinated
Principal Balance) if such Distribution Date occurs between and
including
November 2011 and October 2012, (b) 35% of the related Original
Subordinated
Principal Balance if such Distribution Date occurs between and
including
November 2012 and October 2013, (c) 40% of the related Original
Subordinated
Principal Balance if such Distribution Date occurs between and
including
November 2013 and October 2014, (d) 45% of the related Original
Subordinated
Principal Balance if such Distribution Date occurs between and
including
November 2014 and October 2015, and (e) 50% of the related Original
Subordinated
Principal Balance if such Distribution Date occurs during or after
November
2015.
Non-PO Senior Principal Balance: As of any Distribution Date, (a)
the
Non-PO Senior Principal Balance for the immediately preceding
Distribution Date
less (b) amounts distributed (or deemed distributed) to the Non-PO
Senior
Certificates on such preceding Distribution Date allocable to
principal
(including the principal portion of Advances of the Servicer made
pursuant to
Section 6.06 and Realized Losses allocated to the Non-PO Senior
Certificates
pursuant to Section 6.02); provided that the Non-PO Senior
Principal Balance on
the first Distribution Date shall be the Original Non-PO Senior
Principal
Balance.
Non-PO Senior Principal Payment Rules: With respect to any
Distribution
Date, distributions to the Class AF-1, Class AF-2 and Class AF-3
Certificates
pursuant to Section 6.01(I)(b)(ii) shall be made to the Class AF-1,
Class AF-2
and Class AF-3 Certificates pro rata, until the Class Certificate
Balance of
such class has been reduced to zero.
Non-PO Percentage: With respect to each Mortgage Loan, the
fraction,
expressed as a percentage (but not greater than 100%), the
numerator of which
equals the applicable Net Mortgage Rate and the denominator of
which equals the
applicable Remittance Rate.
Non-PO Principal Balance: In the case of a Non-Discount Mortgage
Loan, the
Principal Balance of such Mortgage Loan and, in the case of a
Discount Mortgage
Loan, the product of (i) the Principal Balance of such Mortgage
Loan and (ii)
the Non-PO Percentage for 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
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
Servicer, the Master Servicer or the Trustee, will not or, in the
case of a
proposed advance or Monthly Advance, would not, be ultimately
recoverable by the
Servicer, the Master Servicer or the Trustee (as successor Master
Servicer) from
Liquidation Proceeds, Insurance Proceeds or future payments on the
Mortgage Loan
for which such advance or Monthly Advance was made.
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Offered Certificate: Any Senior Certificate or Offered
Subordinate
Certificate issued hereunder, along with the Class AV-1, Class
AV-2A, Class
AV-2B, Class AV-2C, Class AV-2D, Class A-R, Class MV-1, Class MV-2,
Class MV-3,
Class MV-4, Class MV-5, Class MV-6, Class BV-1, Class BV-2, Class
BV-3
Certificates defined and issued pursuant to the terms and
conditions of the
Stack II Agreement.
Offered Subordinate Certificates: The Class M Certificates.
Officer's Certificate: A certificate signed by the Chairman of the
Board,
the Vice Chairman of the Board, the President or a Vice President
or Assistant
Vice President or other authorized officer of the Master Servicer
or the
Depositor, as applicable, and delivered to the Trustee, as required
by this
Agreement.
Opinion of Counsel: A written opinion of counsel who is or are
acceptable
to the Trustee and who, unless required to be Independent (an
"Opinion of
Independent Counsel"), may be internal counsel for the Master
Servicer or the
Depositor.
Optional Termination: The termination hereunder of that portion of
the
Trust Fund related to the Certificates pursuant to Section 10.01(b)
hereof.
Optional Termination Amount: The amount received by the
Securities
Administrator in connection with any purchase of all of the
Mortgage Loans and
REO Properties pursuant to Section 10.01(b) hereof.
Optional Termination Price: On any date after the Initial
Optional
Termination Date, an amount equal to the sum of (A) the aggregate
Principal
Balance of each Mortgage Loan (other than any Mortgage Loan that
has become an
REO Property) as of the Distribution Date on which the proceeds of
the Optional
Termination are distributed to the Certificateholders, plus accrued
interest
thereon at the applicable Mortgage Interest Rate as of the Due Date
preceding
the Distribution Date on which the proceeds of the Optional
Termination are
distributed to Certificateholders and the fair market value of any
REO Property,
plus accrued interest thereon as of the Distribution Date on which
the proceeds
of the Optional Termination are distributed to Certificateholders,
(B) any
unreimbursed out-of-pocket costs and expenses owed to the Master
Servicer, the
Trustee or the Securities Administrator (including any amounts
incurred by the
Securities Administrator in connection with conducting the
Auction), the
Servicer or the Master Servicer and any unpaid or unreimbursed
Servicing Fees,
Monthly Advances and Servicing Advances, (C) any unreimbursed
costs, penalties
and/or damages incurred by the Trust Fund in connection with any
violation
relating to any of the Mortgage Loans of any predatory or abusive
lending law
and (D) in the event an Auction has been conducted, all reasonable
fees and
expenses incurred by the Securities Administrator to conduct the
Auction.
Original Class IO Notional Amount: The Class Certificate Balance of
the
Class IO Certificates on the Closing Date, as set forth opposite
such Class in
the Preliminary Statement.
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Original Credit Support: With respect to any Class of
Subordinate
Certificates (other than the Class BF-3 Certificates), the level of
Credit
Support indicated below:
Class A:
4.05%
Class MF-1: 2.55%
Class MF-2: 1.60%
Class MF-3: 1.10%
Class BF-1: 0.60%
Class BF-2: 0.25%
Original Subordinated Principal Balance: The sum of the aggregate
Class
Certificate Balances of each Class of Subordinate Certificates as
of the Closing
Date.
Original Value: The lesser of (i) the Appraised Value or (ii) the
sales
price of a Mortgaged Property at the time of origination of a
Mortgage Loan,
except in instances where either clauses (i) or (ii) is
unavailable, the other
may be used to determine the Original Value, or if both clauses (i)
and (ii) are
unavailable, Original Value may be determined from other sources
reasonably
acceptable to the Depositor.
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.
Paying Agent: The Securities Administrator or any successor Paying
Agent
appointed by the Securities Administrator.
Percentage Interest: With respect to any Certificate, a fraction,
expressed
as a percentage, the numerator of which is the Initial Class
Certificate Balance
(or Class IO Notional Amount in the case of the Class IO
Certificates)
represented by such Certificate and the denominator of which is the
Initial
Class Certificate Balance (or Class IO Notional Amount in the case
of the Class
IO Certificates) of the related Class.
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 (provided that such obligation or security must
be a
"permitted investment" within the meaning of such term as provided
for in
Section 860G(a)(5) of the Code):
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(i) direct obligations of, and obligations the timely payment
of
which are fully guaranteed by the United States of America or any
agency or
instrumentality of the United States of America the obligations of
which are
backed by the full faith and credit of the United States of
America;
(ii) (a) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust company
incorporated
under the laws of the United States of America or any state thereof
(including
the Trustee or the Master Servicer or its Affiliates acting in its
commercial
banking capacity) and subject to supervision and examination by
federal and/or
state banking authorities, provided that the commercial paper
and/or the
short-term debt rating and/or the long-term unsecured debt
obligations of such
depository institution or trust company at the time of such
investment or
contractual commitment providing for such investment have the
Applicable Credit
Rating or better from each Rating Agency and (b) any other demand
or time
deposit or certificate of deposit that is fully insured by the
Federal Deposit
Insurance Corporation;
(iii) repurchase obligations with respect to (a) any security
described in clause (i) above or (b) any other security issued or
guaranteed by
an agency or instrumentality of the United States of America, the
obligations of
which are backed by the full faith and credit of the United States
of America,
in either case entered into with a depository institution or trust
company
(acting as principal) described in clause (ii)(a) above where the
Trustee holds
the security therefor;
(iv) securities bearing interest or sold at a discount issued
by
any corporation (including the Trustee, 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
Issuing Entity
to exceed 10% of the aggregate Outstanding Principal Balances of
all the
Mortgage Loans and Permitted Investments held as part of the
Issuing Entity;
(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, the 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),
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including any such fund for which the Trustee, the Securities
Administrator or
Master Servicer or any affiliate of the Trustee, the 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 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.
Principal Prepayment Period: With respect to any Distribution Date,
the
period beginning on the first day of the month preceding the month
in which such
Distribution Date occurs and ending on the last day of such
month.
Physical Certificate: The Residual Certificate.
Plan: As defined in Section 5.02(b).
Pooling and Servicing Agreement: The Pooling and Servicing
Agreement
relating to the Mortgage Pass-Through Certificates, MLMI Series
2006-AF2,
jointly comprised of the Stack II Agreement and this Agreement.
Prepayment Assumption: A rate or rates of prepayment, as described
in the
Prospectus Supplement related to the Offered 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 or part during the
related
Prepayment Period, an amount equal to the excess of one month's
interest at the
Net Mortgage Rate on the 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 part 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.
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Prepayment Penalty: With respect to any Prepayment Period, any
prepayment
premium, charge or penalty payable by a Mortgagor in connection
with any
Principal Prepayment on the Prepayment Penalty Mortgage Loans.
Prepayment Penalty Mortgage Loans: Any of the Mortgage Loans that
are
subject to existing prepayment premiums.
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 Accrual Period for such Class
relating to a
Distribution Date.
Principal Balance: At the time of any determination, the principal
balance
of a Mortgage Loan remaining to be paid at the close of business on
the Cut-off
Date (after deduction of all principal payments due on or before
the Cut-off
Date whether or not paid) (or, in the case of a substitute Mortgage
Loan
included in the Trust Fund pursuant to the Mortgage Loan Purchase
Agreement or
Section 2.04, the close of business as of the date of substitution)
reduced by
all amounts previously distributed to Certificateholders that are
allocable to
payments of principal on such Mortgage Loan (including the
principal portion of
Advances of the Servicer made pursuant to Section 6.06).
Principal Prepayment: Any Principal Prepayment in full or
Curtailment 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 Certificates.
Prospectus Supplement: The Prospectus Supplement dated October 30,
2006,
relating to the public offering of the Offered Certificates.
Protected Account: An account established and maintained for the
benefit of
Certificateholders by the Servicer with respect to the related
Mortgage Loans
and with respect to REO Property pursuant to the respective
Servicing Agreement.
The Protected Account shall be an Eligible Account.
PTCE: As defined in Section 5.02(b).
Purchase Price: With respect to any Mortgage Loan or REO Property
to be
purchased pursuant to or as contemplated by Section 2.03 or 10.02,
and as
confirmed by an Officers'
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Certificate from the Master Servicer to the Trustee, an amount
equal to the sum
of (i) 100% of the Principal Balance thereof as of the date of
purchase (or such
other price as provided in Section 10.02), (ii) accrued interest on
such
Principal Balance at the applicable Mortgage Interest Rate in
effect from time
to time from the Due Date as to which interest was last covered by
a payment by
the Mortgagor or an advance by the Servicer or Master Servicer,
which payment or
advance had as of the date of purchase been distributed to
Certificateholders,
through the end of the calendar month in which the purchase is to
be effected
less any unreimbursed Monthly Advances and any unpaid Servicing
Fees payable to
the purchaser of the Mortgage Loan and (iii) any costs and damages
incurred by
the Issuing Entity 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: Moody's and S&P.
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.
Realized Loss Interest Shortfall: As defined in Section
6.08(b).
Record Date: With respect to each Distribution Date and each class
of
Offered Certificates, the close of business on the last Business
Day of the
month immediately preceding the month in which the related
Distribution Date
occurs.
Reference Banks: Those banks (i) with an established place of
business in
London, England, (ii) not controlling, under the control of or
under common
control with the Depositor or the Securities Administrator, (iii)
that have been
designated as such by the Securities Administrator and (iv) that
are engaged in
transactions in the London interbank market.
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 AF-1, Class AF-2, Class
AF-3, Class
IO, Class PO, Class MF-1, Class MF-2, Class MF-3, Class BF-1, Class
BF-2 or
Class BF-3 Certificates.
Regulation AB: Subpart 22.1100 - Asset Backed Securities
(Regulation AB),
17 C.F.R. Sections 229.1100-229.1123, as such may be amended from
time to time,
and subject to such clarification and interpretation as have been
provided by
the Commission in the adopting release
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(Asset-Backed Securities, Securities Act Release No. 33-8518, 70
Fed Reg.
1,506-1,631 (January 7, 2005) or by the staff of the Commission, or
as may be
provided by the Commission or its staff from time to time.
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).
Relevant Servicing Criteria: The Servicing Criteria applicable to
the
various parties, as set forth on Exhibit K hereto. For
clarification purposes,
multiple parties can have responsibility for the same Relevant
Servicing
Criteria. With respect to a Servicing Function Participant engaged
by the Master
Servicer, the Securities Administrator, the Trustee, the Custodian
or the
Servicer, the term "Relevant Servicing Criteria" may refer to one
or more
discrete functions specified in the Relevant Servicing Criteria
applicable to
such parties.
Relief Act: The Servicemembers Civil Relief Act, as amended.
Relief Act Mortgage Loan: Any Mortgage Loan as to which the Monthly
Payment
thereof has been reduced due to the application of the Relief
Act.
REMIC: Each pool of assets in the Trust Fund designated as a REMIC
as
described in the Preliminary Statement.
REMIC Interests: Any regular or residual interest in any of REMIC
1, REMIC
2 or the Upper Tier REMIC, as described in the Preliminary
Statement.
REMIC Opinion: An Opinion of Counsel to the effect that a
contemplated
action will neither adversely affect the status as a REMIC of any
REMIC created
hereunder nor subject any such REMIC to any tax under the REMIC
Provisions.
REMIC Provisions: The provisions of the federal income tax law
relating to
real estate mortgage investment conduits, which appear at Sections
860A through
860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and
regulations, including proposed regulations and rulings, and
administrative
pronouncements promulgated thereunder, as the foregoing may be in
effect from
time to time.
REMIC 1: Not applicable.
REMIC 1 Interest: Not applicable.
REMIC 1 Regular Interest: Not applicable.
REMIC 1 Subordinate Balance Ratio: Not applicable.
REMIC 2: Not applicable.
REMIC 2 Interest: Not applicable.
REMIC 2 Regular Interest: Not applicable.
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Remittance Rate: 6.25% per annum.
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 3.15 in connection with a
defaulted
Mortgage Loan.
Reportable Event: As defined in Section 3.18(a).
Reporting Servicer: As defined in Section 3.18(h).
Repurchase Proceeds: The repurchase price in connection with any
repurchase
of a Mortgage Loan by the Seller and any cash deposit in connection
with the
substitution of a Mortgage Loan.
Request for Release: A request for release in the form attached
hereto as
Exhibit D.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance
policy which is required to be maintained from time to time under
this Agreement
with respect to such Mortgage Loan.
Residual Certificate: The Class A-R Certificate.
Residual Interest: Not applicable.
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 because of such officers familiarity with
the subject
matter thereof.
Rule
144A Letter: The certificate to be furnished, pursuant to
Section
5.02(b), 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.
Sarbanes-Oxley Act: The Sarbanes-Oxley Act of 2002 and the rules
and
regulations of the Commission promulgated thereunder (including
any
interpretations thereof by the Commission's staff).
Sarbanes-Oxley Certification: A written certification signed by an
officer
of the Master Servicer that complies with (i) the Sarbanes-Oxley
Act, and (ii)
Exchange Act Rules 13a-14(d) and 15d-14(d), as in effect from time
to time;
provided that if, after the Closing Date (a) the Sarbanes-Oxley Act
is amended,
(b) the Rules referred to in clause (ii) are modified or superseded
by any
subsequent statement, rule or regulation of the Commission or any
statement of a
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, which in any such case affects the form or substance of the
required
certification and results in the required certification
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being, in the reasonable judgment of the Master Servicer,
materially more
onerous that then form of the required certification as of the
Closing Date, the
Sarbanes-Oxley Certification shall be as agreed to by the Master
Servicer and
the Depositor following a negotiation in good faith to determine
how to comply
with any such new requirements.
S&P: Standard and Poor's, a division of The McGraw-Hill
Companies, Inc. or
its successor in interest.
Scheduled Payment: With respect to any Mortgage Loan and any month,
the
scheduled payment or payments of principal and interest due during
such month on
such Mortgage Loan which either is payable by a Mortgagor in such
month under
the related Mortgage Note or, in the case of REO Property, would
otherwise have
been payable under the related Mortgage Note.
Scheduled Principal: The principal portion of any Scheduled
Payment.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Wells Fargo Bank, N.A., or any successor
in
interest, or any successor securities administrator appointed as
herein
provided.
Security Agreement: With respect to a Cooperative Loan, the
agreement
creating a security interest in favor of the originator in the
related
Cooperative Stock.
Security Instrument: A written instrument creating a valid first
lien on a
Mortgaged Property securing a Mortgage Note, which may be any
applicable form of
mortgage, deed of trust, deed to secure debt or security deed,
including any
riders or addenda thereto.
Seller: Merrill Lynch Mortgage Lending, Inc., a Delaware
corporation, or
any successor in interest.
Senior Certificates: The Class AF-1, Class AF-2, Class AF-3, Class
IO and
Class PO Certificates.
Servicer: With respect to each Mortgage Loan, ABN AMRO and its
successors
and assigns as specified on the Mortgage Loan Schedule.
Servicer Remittance Date: With respect to each Mortgage Loan, the
date set
forth in the 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 Agreement: The ABN AMRO Sale and Servicing Agreement.
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Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing Fee: As to any Mortgage Loan and Distribution Date, an
amount
equal to the product of (i) the Principal Balance of such Mortgage
Loan as of
the Due Date in the preceding calendar month and (ii) the Servicing
Fee Rate.
Such fee shall be payable monthly, computed on the basis of the
same principal
amount and period respectively which any related interest payment
on a Mortgage
Loan is computed.
Servicing Fee Rate: As to any Mortgage Loan, a per annum rate as
set forth
in the Mortgage Loan Schedule.
Servicing Function Participant: Any Sub-Servicer, Subcontractor or
any
other Person, engaged by the Servicer, the Custodian, the Master
Servicer, the
Paying Agent, the Securities Administrator and the Trustee.
Servicing Officer: Any officer of the Master Servicer involved in,
or
responsible for, the administration and servicing of the Mortgage
Loans whose
names and specimen signatures 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.
Similar Law: As defined in Section 5.02(b).
Stack I: That portion of the Trust Fund transferred and assigned
pursuant
to the terms of this Agreement.
Stack II Agreement: The Stack II Pooling and Servicing Terms dated
as of
October 1, 2006.
Stack II Certificate: Any mortgage pass-through certificate issued
pursuant
to the Stack II Agreement, evidencing a beneficial ownership
interest in that
portion of the Trust Fund related to the Stack II Mortgage Loans
set forth on
the Stack II Mortgage Loan Schedule, signed and countersigned by
the Securities
Administrator.
Stack II Mortgage Loan: A mortgage loan transferred and assigned to
the
Trustee pursuant to Section 2.01 or Section 2.04 of the Stack II
Agreement and
held as a part of the Trust Fund, as identified in the Stack II
Mortgage Loan
Schedule, including a mortgage loan the property securing which has
become an
REO Property.
Stack II Mortgage Loan Schedule: The schedule, attached to the
Stack II
Agreement as Exhibit B with respect to the Stack II Mortgage Loans
and as
amended from time to time to reflect the repurchase or substitution
of Stack II
Mortgage Loans pursuant to the Stack II Agreement.
Startup Day: The Closing Date.
Stripped Interest Rate: The excess of the weighted average Net
Mortgage
Rate of the Mortgage Loans that are Non-Discount Mortgage Loans
over the
Remittance Rate.
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Subcontractor: Any vendor, subcontractor or other Person that is
not
responsible for the overall servicing of Mortgage Loans but
performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with
respect to
Mortgage Loans under the direction or authority of the Servicer (or
a
Sub-Servicer of the Servicer), the Master Servicer, the Trustee,
the Custodian
or the Securities Administrator.
Subordinate Certificates: The Class MF-1, Class MF-2, Class MF-3,
Class
BF-1, Class BF-2 and Class BF-3 Certificates.
Subordinated Amount: For any Distribution Date, the excess of the
Non-PO
Allocated Amount immediately following the preceding Distribution
Date (or as of
the Cut-off Date if there is no preceding Distribution Date) over
the aggregate
outstanding Class Certificate Principal Balance of the Class A
Certificates
(prior to giving effect to distributions to be made on such
Distribution Date
and allocation of losses to be made on such Distribution Date).
Subordinated Optimal Principal Amount: Generally as of any
Distribution
Date, an amount, not in excess of the aggregate outstanding
principal balance of
the Subordinate Certificates, equal to (1) the sum of (a) an amount
equal to the
applicable Subordinated Percentage of the applicable Non-PO
Percentage of the
principal portion of all Scheduled Payments whether or not
received, which were
due on the related Due Date on outstanding Mortgage Loans as of
such Due Date;
(b) an amount equal to the applicable Subordinated Prepayment
Percentage of the
applicable Non-PO Percentage of all principal prepayments received
during the
related principal Prepayment Period; (c) with respect to each
Mortgage Loan not
described in (d) below, an amount equal to the applicable
Subordinated
Percentage of the applicable Non-PO Percentage of the sum of the
principal
portion of all insurance proceeds, condemnation awards and any
other cash
proceeds from a source other than the Mortgagor, to the extent
required to be
deposited in the Master Servicer Collection Account, which were
received during
the related principal Prepayment Period, net of related
unreimbursed servicing
Advances and net of any portion thereof which, as to any Mortgage
Loan,
constitutes a late collection with respect to which an Advance has
previously
been made; (d) with respect to each Mortgage Loan which has become
a Liquidated
Mortgage Loan during the related principal Prepayment Period, an
amount equal to
the portion (if any) of the net liquidation proceeds with respect
to such
Liquidated Mortgage Loan (net of any unreimbursed Advances) that
was not
included in the Class PO Certificate Distribution Amount or the
Non-PO Senior
Optimal Principal Amount with respect to such Distribution Date;
(e) Subsequent
Recoveries; and (f) with respect to each Mortgage Loan repurchased
during the
related principal Prepayment Period, an amount equal to the
applicable
Subordinated Prepayment Percentage of the applicable Non-PO
Percentage of the
principal portion of the purchase price thereof (net of amounts
with respect to
which a distribution has previously been made to the
Subordinate
Certificateholders), minus (2) the Class PO Shortfall Amount with
respect to
such Distribution Date.
Subordinated Percentage: As of any Distribution Date, the
difference
between 100% and the Non-PO Senior Percentage.
Subordinated Prepayment Percentage: As of any Distribution Date,
the
difference between 100% and the Non-PO Senior Prepayment
Percentage.
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Subsequent Recoveries: Any amount recovered by the 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.
Sub-Servicer: Any Person that services Mortgage Loans on behalf of
the
Servicer, and is responsible for the performance (whether directly
or through
sub-servicers or Subcontractors) of servicing functions required to
be performed
under this Agreement, the Servicing Agreement or any sub-servicing
agreement
that are identified in Item 1122(d) of Regulation AB.
Substitute Mortgage Loan: With respect to any Mortgage Loan, which
is
tendered to the Trustee pursuant to the Servicing Agreement, the
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; and (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.
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 the Residual Certificates
shall be the Tax
Matters Person for the related REMIC, as more particularly set
forth in Section
9.12 hereof.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest
in a certificate.
Transfer Agreement: The Assignment, Assumption and Recognition
Agreement,
dated as of October 1, 2006, among ABN AMRO, the Depositor and the
Seller
pursuant to which the ABN AMRO Sale and Servicing Agreement and the
rights of
the Seller thereunder were assigned to the Depositor for the
benefit of the
Certificateholders, and which is attached hereto as Exhibit I.
Transferor: ABN AMRO and its successors and assigns under the
Transfer
Agreement.
Transferor Representation Letter: As defined in Section
5.02(b).
Trustee: HSBC Bank USA, National Association, or its successor in
interest,
or any successor trustee appointed as herein provided.
Trust Fund: The corpus of the Issuing Entity created pursuant to
Article II
of this Agreement and Article II of the Stack II Agreement.
Undercollateralized Senior Certificates: Not applicable.
Underlying Seller: With respect to each Mortgage Loan, ABN AMRO,
as
indicated on the Mortgage Loan Schedule.
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Uninsured Cause: Any cause of damage to a Mortgaged Property or
related REO
Property such that the complete restoration of such Mortgaged
Property or
related REO Property is not fully reimbursable by the hazard
insurance policies
required to be maintained pursuant the Servicing Agreement, without
regard to
whether or not such policy is maintained.
United States Person: A citizen or resident of the United States,
a
corporation or partnership (including an entity treated as a
corporation or
partnership for federal income tax purposes) created or organized
in, or under
the laws of, the United States or any state thereof or the District
of Columbia
(except, in the case of a partnership, to the extent provided in
regulations),
provided that, for purposes solely of the Class A-R Certificate, 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.
Upper Tier REMIC: As described in the Preliminary Statement.
Upper Tier REMIC Regular Interest: Each class of the Class A
Certificates,
Class M Certificates and Class B Certificates.
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. 100.00% of all Voting Rights will be allocated among
all holders of
the Certificates in proportion to their then outstanding Class
Certificate
Balances; provided, however, that any Certificate registered in the
name of the
Master Servicer, the Depositor or the Securities Administrator or
any of their
respective affiliates shall not be included in the calculation of
Voting Rights.
Wells Fargo: Wells Fargo Bank, N.A., or any successor thereto.
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.
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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 Issuing Entity
without recourse
all its right, title and interest in and to (i) the Mortgage Loans
identified in
the Mortgage Loan Schedule, including all interest and principal
due with
respect to the Mortgage Loans after the Cut-off Date, but excluding
any payments
of principal and interest due on or prior to the Cut-off Date; (ii)
such assets
as shall from time to time be credited or are required by the terms
of this
Agreement to be credited to the Master Servicer Collection Account,
(iii) such
assets relating to the Mortgage Loans as from time to time may be
held by the
Servicer in Protected Accounts, the Master Servicer in the Master
Servicer
Collection Account and the 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 Agreement to the extent
provided in
Subsection 2.03(a), (vii) the rights with respect to the Servicing
Agreement as
assigned to the Depositor on behalf of the Certificateholders by
the Transfer
Agreement, (viii) the rights of the Depositor under the Transfer
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 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 2006-AF2, 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 2006-AF2."
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(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:
(x) 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 2006-AF2, 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;
(xi) the original duly executed assignment of Security
Agreement
to the Trustee;
(xii) 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;
(xiii) 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;
(xiv) the stock certificate representing the Cooperative Assets
allocated to the cooperative unit, with a stock power in blank
attached;
(xv) the original collateral assignment of the proprietary
lease
by Mortgagor to the originator;
(xvi) a copy of the recognition agreement;
(xvii) 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
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(xviii) 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
its
Custodian, as applicable, 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 or its Custodian,
as applicable,
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 or its Custodian, as applicable, promptly after they are
received. As of
the date hereof, recordation of the assignment of the Mortgage
Loans to the
Trustee or the Custodian, as applicable, is not required in any
state by either
Rating Agency to obtain the initial rating on the Certificates
(upon which
statement the Master Servicer, the Trustee and the Custodian may
each
conclusively rely).
If
any original Mortgage Note referred to in Section 2.01(b)(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 or its
Custodian,
as applicable, 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 or its Custodian, as
applicable, is
subsequently located, such original Mortgage Note shall be
delivered to the
Trustee or its Custodian, as applicable, within three Business
Days.
(c) The parties hereto agree that it is not intended that any
mortgage
loan be included in the Trust Fund that is, without limitation, a
"High Cost
Loan" as defined by the Home Ownership and Equity Protection Act of
1994 or any
other applicable anti-predatory lending laws, including but not
limited to (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.
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(d) Notwithstanding anything to the contrary contained herein,
the
parties hereto acknowledge that the functions of the Trustee with
respect to the
custody, acceptance, inspection and release of Mortgage Files,
including but not
limited to certain insurance policies and documents contemplated by
Section 3.12
of this Agreement, and preparation and delivery of the
certifications shall be
performed by the Custodian(s) pursuant to the terms and conditions
of the
Custodial Agreement(s).
Section 2.02. Acceptance of Mortgage Loans by Trustee.
(a) The Trustee acknowledges the sale, transfer and assignment of
the
Trust Fund to it by the Depositor and its receipt thereof, subject
to further
review and the exceptions which may be noted pursuant to the
procedures
described below, and declares that it, or the Custodian on its
behalf, holds the
documents (or certified copies thereof) delivered to it pursuant to
Section
2.01, and declares that it will continue to hold those documents
and any
amendments, replacements or supplements thereto and all other
assets of the
Trust Fund delivered to it as Trustee in trust for the use and
benefit of all
present and future Holders of the Certificates. On or before the
Closing Date
(or, with respect to any Substitute Mortgage Loan, within five
Business Days
after the receipt by the Trustee or Custodian thereof), the Trustee
agrees, for
the benefit of the Certificateholders, to review or cause to be
reviewed by the
Custodian on its behalf (under the Custodial Agreement), each
Mortgage File
delivered to it and to execute and deliver, or cause to be executed
and
delivered, to the Depositor on the Closing Date an Initial
Certification. In
conducting such review, the Trustee or Custodian will certify as to
each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan
paid in full or any Mortgage Loan specifically identified in the
exception
report annexed thereto as not being covered by such certification),
(i) all
documents constituting part of such Mortgage File (other than such
documents
described in Section 2.01(b)(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)(v), (vi), (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.
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(b) If the Trustee or the Custodian, as its agent, finds any
document
constituting part of the Mortgage File not to have been executed or
received, or
to be unrelated to the Mortgage Loans identified in Exhibit B or to
appear to be
defective on its face, the Trustee or the Custodian, as its agent,
shall
promptly notify the Seller. In accordance with the Transfer
Agreement, the
Transferor shall correct or cure any such defect within ninety (90)
days from
the date of notice from the Trustee or the Custodian, as its agent,
of the
defect and if the Transferor 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
Transferor's obligation pursuant to the Transfer Agreement, within
90 days from
the Trustee's or the Custodian's notification, to purchase such
Mortgage Loan at
the Purchase Price; provided that, if such defect would cause the
Mortgage Loan
to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the
Code, any such cure or repurchase must occur within 90 days from
the date such
breach was discovered; provided, however, that if such defect
relates solely to
the inability of the Transferor 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 Transferor shall not be required to purchase such
Mortgage
Loan if the Transferor 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
Transferor 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
Transferor 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 Transferor within
thirty days
of its receipt of the original recorded document.
(c) 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)(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)(v), (vi), (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
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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
Transferor. In
accordance with the Transfer Agreement, the Transferor shall
correct or cure any
such defect within 90 days from the date of notice from the Trustee
of the
defect and if the Transferor 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
Transferor's obligation under the Transfer Agreement to purchase
such Mortgage
Loan at the Purchase Price, provided, however, that if such defect
relates
solely to the inability of the Transferor 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 Transferor shall not be required to
purchase such
Mortgage Loan, if the Transferor delivers such original documents
or certified
copy promptly upon receipt, but in no event later than 360 days
after the
Closing Date.
(d) In the event that a Mortgage Loan is purchased by the
Transferor
in accordance with Subsections 2.02(a) or (b) above, the Transferor
shall remit
to the Master Servicer the Purchase Price for deposit in the Master
Servicer
Collection Account and the Transferor 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
give written notice thereof to 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 Transferor the related Mortgage File and the Trustee shall
execute and
deliver all instruments of transfer or assignment, without
recourse, furnished
to it by the Transferor as are necessary to vest in the Transferor
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 Depositor or Master Servicer shall amend the Mortgage
Loan
Schedule, to reflect such repurchase and shall promptly notify the
Rating
Agencies and the Master Servicer of such amendment. The obligation
of the
Transferor 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
Agreement.
(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 Agreement, including but not limited to Depositor's rights
pursuant to
the Servicing Agreement (noting that the 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 Servicer under the
Servicing
Agreement to enforce the provisions thereof and to seek all or any
available
remedies). The
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obligations of the Transferor 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 the Mortgage Loan Purchase Agreement that
are made to
the best of the Transferor's knowledge, if it is discovered by any
of the
Depositor, the Transferor, the Master Servicer, the Securities
Administrator 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 Transferor'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 Mortgage Loan Purchase 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
Transferor,
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 Mortgage Loan Purchase 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 Mortgage Loan
Purchase
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 Transferor 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 Transferor to the extent not required by law to be paid to
the borrower.)
Any such purchase by the Transferor 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 in writing
of the deposit
of the Purchase Price 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 Transferor the related Mortgage
File and the
Trustee shall execute and deliver all instruments of transfer or
assignment
furnished to it by the Transferor, without recourse, as are
necessary to vest in
the Transferor 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
Master Servicer. The Depositor 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 Transferor 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.
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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 Mortgage Loan Purchase Agreement or Sections 2.02 or 2.03 of
this
Agreement, the Transferor may, no later than the date by which such
purchase by
the Transferor would otherwise be required, tender to the Trustee a
Substitute
Mortgage Loan accompanied by a certificate of an authorized officer
of the
Transferor that such Substitute Mortgage Loan conforms to the
requirements set
forth in the definition of "Substitute Mortgage Loan" in the
Mortgage Loan
Purchase Agreement or this Agreement, as applicable; provided,
however, that
substitution pursuant to the 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
Transferor, 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 Transferor shall provide to the Securities
Administrator
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 Transferor of the
Purchase Price for
the purchase of a Mortgage Loan by the Transferor. After such
notification to
the Transferor and, if any such excess exists, upon written
notification of the
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 Issuing
Entity 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 Transferor. The Scheduled Principal on a
Substitute Mortgage
Loan due on the Due Date in the month of substitution shall be the
property of
the Transferor 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 Issuing
Entity. 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 Transferor the related Mortgage File
related to any
Mortgage Loan released pursuant to the Mortgage Loan Purchase
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 Transferor title to and rights
under any
Mortgage Loan released pursuant to the Mortgage Loan Purchase
Agreement or
Section 2.04 of this Agreement, as applicable. The Transferor shall
deliver the
documents related to the Substitute Mortgage Loan in accordance
with the
provisions of the Mortgage Loan Purchase 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 Mortgage Loan
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Purchase Agreement shall be deemed to have been made by the
Transferor 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.
Notwithstanding any other provision of this Agreement, the right
to
substitute Mortgage Loans pursuant to this Article II shall be
subject to the
additional limitations that no substitution of a Mortgage Loan
shall be made
unless the Securities Administrator and the Trustee shall have
received an
Opinion of Counsel (at the expense of the party seeking to make
the
substitution) that, under current law, such substitution will not
(A) affect
adversely the status of any REMIC established hereunder as a REMIC,
or of the
related "regular interests" as "regular interests" in any such
REMIC, or (B)
cause any such REMIC to engage in a "prohibited transaction" or
prohibited
contribution pursuant to the REMIC provisions.
Section 2.05. Issuance of Certificates. The Trustee acknowledges
the
assignment to it on behalf of the Issuing Entity of the Mortgage
Loans and the
other assets comprising the Trust Fund and, concurrently therewith,
the
Securities Administrator 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.
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;
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(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. Representations and Warranties Concerning the Master
Servicer
and Securities Administrator. Wells Fargo Bank, N.A., in its
capacity as Master
Servicer and Securities Administrator hereby represents and
warrants to the
Seller, the Depositor and the Trustee as follows, as of the Closing
Date:
(i) It is a national banking association duly formed, validly
existing and in good standing under the laws of the United States
of America and
is duly authorized and qualified to transact any and all business
contemplated
by this Agreement to be conducted by the Master Servicer and the
Securities
Administrator, to the extent necessary to ensure its ability to
master service
the Mortgage Loans in accordance with the terms of this Agreement
and to perform
any of its other obligations under this Agreement in accordance
with the terms
hereof;
(ii) It has the full corporate power and authority to execute,
deliver and perform, and to enter into and consummate the
transactions
contemplated by this Agreement and has duly authorized by all
necessary
corporate action on its part the execution, delivery and
performance of this
Agreement; and this Agreement, assuming the due authorization,
execution and
delivery hereof by the other parties hereto, constitutes its legal,
valid and
binding obligation, enforceable against it in accordance with its
terms, except
that (a) the enforceability hereof may be limited by bankruptcy,
insolvency,
moratorium, receivership and other similar laws relating to
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creditors' rights generally and (b) the remedy of specific
performance and
injunctive and other forms of equitable relief may be subject to
equitable
defenses and to the discretion of the court before which any
proceeding therefor
may be brought.
(iii) The execution and delivery of this Agreement by it, the
consummation of any other of the transactions contemplated by this
Agreement,
and the fulfillment of or compliance with the terms hereof are in
its ordinary
course of business and will not (A) result in a material breach of
any term or
provision of its charter or by-laws or (B) materially conflict
with, result in a
material breach, violation or acceleration of, or result in a
material default
under, the terms of any other material agreement or instrument to
which it is a
party or by which it may be bound, or (C) constitute a material
violation of any
statute, order or regulation applicable to it of any court,
regulatory body,
administrative agency or governmental body having jurisdiction over
it; and it
is not in breach or violation of any material indenture or other
material
agreement or instrument, or in violation of any statute, order or
regulation of
any court, regulatory body, administrative agency or governmental
body having
jurisdiction over it which breach or violation may materially
impair its ability
to perform or meet any of its obligations under this Agreement.
(iv) No litigation is pending or, to the best of its knowledge,
threatened, against it that would materially and adversely affect
the execution,
delivery or enforceability of this Agreement or its ability to
perform any of
its other obligations under this Agreement in accordance with the
terms hereof.
(v) No consent, approval, authorization or order of any court
or
governmental agency or body is required for its execution, delivery
and
performance of, or compliance with, this Agreement or the
consummation of the
transactions contemplated hereby, or if any such consent,
approval,
authorization or order is required, it has obtained the same.
ARTICLE III.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Master Servicer. The Master Servicer shall supervise,
monitor
and oversee the obligation of the Servicer to service and
administer the
Mortgage Loans in accordance with the terms of the Servicing
Agreement and shall
have full power and authority to do any and all things which it may
deem
necessary or desirable in connection with such master servicing
and
administration. In performing its obligations hereunder, the Master
Servicer
shall act in a manner consistent with Accepted Master Servicing
Practices.
Furthermore, the Master Servicer shall oversee and consult with the
Servicer as
necessary from time-to-time to carry out the Master Servicer's
obligations
hereunder, shall receive, review and evaluate all reports,
information and other
data provided to the Master Servicer by the Servicer and shall
cause the
Servicer to perform and observe the covenants, obligations and
conditions to be
performed or observed by such Servicer under the Servicing
Agreement. The Master
Servicer shall independently and separately monitor the Servicer's
servicing
activities with respect to each related Mortgage Loan, reconcile
the results of
such monitoring with such information provided in the previous
sentence on a
monthly basis and coordinate corrective adjustments to the
Servicer's and Master
Servicer's records, and based on such reconciled and corrected
information, the
Master Servicer shall provide such information to the Securities
Administrator
as shall be necessary in order for it to prepare the statements
specified in
Section 6.05, and
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prepare any other information and statements required to be
forwarded by the
Master Servicer hereunder. The Master Servicer shall reconcile the
results of
its monitoring with the actual remittances of the Servicer to the
Master
Servicer Collection Account pursuant to the Servicing
Agreement.
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 Servicer and the Master Servicer with
any
limited powers of attorney and other documents in form acceptable
to it
necessary or appropriate to enable the Servicer and the Master
Servicer to
service and administer the related Mortgage Loans and REO Property.
The Trustee
shall have no liability with respect to the use of any such limited
power of
attorney.
The
Trustee or the Custodian shall provide access to the records
and
documentation in possession of the Trustee or the Custodian
regarding the
related Mortgage Loans and REO Property and the servicing thereof
to the
Certificateholders, the FDIC, and the supervisory agents and
examiners of the
FDIC, such access being afforded only upon reasonable prior written
request and
during normal business hours at the office of the Trustee or the
Custodian;
provided, however, that, unless otherwise required by law, the
Trustee or the
Custodian shall not be required to provide access to such records
and
documentation if the provision thereof would violate the legal
right to privacy
of any Mortgagor. The Trustee or the Custodian shall allow
representatives of
the above entities to photocopy any of the records and
documentation and shall
provide equipment for that purpose at a charge that covers the
Trustee's or the
Custodian's actual costs.
The
Trustee shall execute and deliver to the Servicer and the
Master
Servicer upon request any court pleadings, requests for trustee's
sale or other
documents necessary or desirable to (i) the foreclosure or
trustee's sale with
respect to a Mortgaged Property; (ii) any legal action brought to
obtain
judgment against any Mortgagor on the Mortgage Note or Security
Instrument;
(iii) obtain a deficiency judgment against the Mortgagor; or (iv)
enforce any
other rights or remedies provided by the Mortgage Note or Security
Instrument or
otherwise available at law or equity.
Section 3.02. REMIC-Related Covenants. For as long as each REMIC
shall
exist, the Trustee and the Securities Administrator shall act in
accordance
herewith to assure continuing treatment of such REMIC as a REMIC,
and the
Trustee and the Securities Administrator shall comply with any
directions of the
Depositor, the Servicer or the Master Servicer to assure such
continuing
treatment. In particular, the Trustee shall not (a) sell or permit
the sale of
all or any portion of the Mortgage Loans or of any investment of
deposits in an
Account unless such sale is as a result of a repurchase of the
Mortgage Loans
pursuant to this Agreement or the Trustee and the Securities
Administrator has
received a REMIC Opinion prepared at the expense of the Issuing
Entity; and (b)
other than with respect to a substitution pursuant to the 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 Servicer.
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(a) The Master Servicer shall be responsible for reporting to
the
Trustee and the Depositor the compliance by the Servicer with its
duties under
the Servicing Agreement. In the review of the Servicer's
activities, the Master
Servicer may rely upon an officer's certificate of the Servicer
with regard to
such Servicer's compliance with the terms of the Servicing
Agreement. In the
event that the Master Servicer, in its judgment, determines that
the Servicer
should be terminated in accordance with its Servicing Agreement, or
that a
notice should be sent pursuant to such Servicing Agreement with
respect to the
occurrence of an event that, unless cured, would constitute grounds
for such
termination, the Master Servicer shall notify the Depositor and the
Trustee
thereof and the Master Servicer shall issue such notice or take
such other
action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of the Servicer
under the
Servicing Agreement, and shall, in the event that the Servicer
fails to perform
its obligations in accordance with the Servicing Agreement, subject
to the
preceding paragraph, terminate the rights and obligations of such
Servicer
thereunder and act as servicer of the related Mortgage Loans or, if
the Master
Servicer is unwilling or unable to act as the Servicer, the Master
Servicer
shall cause the Trustee to enter in to a new Servicing Agreement
with a
successor Servicer selected by the Master Servicer that is eligible
in
accordance with the criteria specified in this Agreement; 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. In either event,
such
enforcement, including, without limitation, the legal prosecution
of claims,
termination of the Servicing Agreement and the pursuit of other
appropriate
remedies, shall be in such form and carried out to such an extent
and at such
time as the Master Servicer, in its good faith business judgment,
would require
were it the owner of the related Mortgage Loans. The Master
Servicer shall pay
the costs of such enforcement at its own expense subject to Section
3.03(c),
provided that the Master Servicer shall not be required to
prosecute or defend
any legal action except to the extent that the Master Servicer
shall have
received reasonable indemnity for its costs and expenses in
pursuing such
action.
(c) To the extent that the costs and expenses of the Master
Servicer
related to any termination of the Servicer, appointment of a
successor Servicer
or the transfer and assumption of servicing by the Master Servicer
with respect
to the Servicing Agreement (including, without limitation, (i) all
legal costs
and expenses and all due diligence costs and expenses associated
with an
evaluation of the potential termination of the Servicer as a result
of an event
of default by such Servicer and (ii) all costs and expenses
associated with the
complete transfer of servicing, including all servicing files and
all servicing
data and the completion, correction or manipulation of such
servicing data as
may be required by the successor servicer to correct any errors
or
insufficiencies in the servicing data or otherwise to enable the
successor
service to service the Mortgage Loans in accordance with the
Servicing
Agreement) are not fully and timely reimbursed by the terminated
Servicer, the
Master Servicer shall be entitled to reimbursement of such costs
and expenses
from the Master Servicer Collection Account pursuant to Section
4.03(b).
(d) The Master Servicer shall require the Servicer to comply with
the
remittance requirements and other obligations set forth in the
Servicing
Agreement.
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(e) If the Master Servicer acts as Servicer, it will not assume
liability for the representations and warranties of such Servicer,
if any, that
it replaces.
Section 3.04. Fidelity Bond. The Master Servicer, at its expense,
shall
maintain in effect a blanket fidelity bond and an errors and
omissions insurance
policy, affording coverage with respect to all directors, officers,
employees
and other Persons acting on such Master Servicer's behalf, and
covering errors
and omissions in the performance of the Master Servicer's
obligations hereunder.
The errors and omissions insurance policy and the fidelity bond
shall be in such
form and amount generally acceptable for entities serving as master
servicers or
trustees.
Section 3.05. Power to Act; Procedures. The Master Servicer shall
master
service the Mortgage Loans and shall have full power and authority,
subject to
the REMIC Provisions and the provisions of Article X hereof, to do
any and all
things that it may deem necessary or desirable in connection with
the master
servicing and administration of the Mortgage Loans, including but
not limited to
the power and authority (i) to execute and deliver, on behalf of
the
Certificateholders and the Trustee, customary consents or waivers
and other
instruments and documents, (ii) to consent to transfers of any
Mortgaged
Property and assumptions of the Mortgage Notes and related
Mortgages, (iii) to
collect any Insurance Proceeds and Liquidation Proceeds, and (iv)
to effectuate
foreclosure or other conversion of the ownership of the Mortgaged
Property
securing any Mortgage Loan, in each case, in accordance with the
provisions of
this Agreement and the Servicing Agreement, as applicable;
provided, however,
that the Master Servicer shall not (and, consistent with its
responsibilities
under Section 3.03, shall not permit the Servicer to) knowingly or
intentionally
take any action, or fail to take (or fail to cause to be taken) any
action
reasonably within its control and the scope of duties more
specifically set
forth herein, that, under the REMIC Provisions, if taken or not
taken, as the
case may be, would cause any REMIC created hereunder to fail to
qualify as a
REMIC or result in the imposition of a tax upon the Issuing Entity
(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 any REMIC created
hereunder to fail
to qualify as a REMIC or result in the imposition of a tax upon any
REMIC
created hereunder. The Trustee shall furnish the Master Servicer,
upon written
request from a Servicing Officer, with any limited powers of
attorney (in form
acceptable to the Trustee) empowering the Master Servicer or the
Servicer to
execute and deliver instruments of satisfaction or cancellation, or
of partial
or full release or discharge, and to foreclose upon or otherwise
liquidate
Mortgaged Property, and to appeal, prosecute or defend in any court
action
relating to the Mortgage Loans or the Mortgaged Property, in
accordance with the
Servicing Agreement and this Agreement, and the Trustee shall
execute and
deliver such other documents, as the Master Servicer may request,
to enable the
Master Servicer to master service and administer the Mortgage Loans
and carry
out its duties hereunder, in each case in accordance with Accepted
Master
Servicing Practices (and the Trustee shall have no liability for
misuse of any
such powers of attorney by the Master Servicer or the Servicer). If
the Master
Servicer or the Trustee has been advised that it is likely that the
laws of the
state in which action is to be taken prohibit such action if taken
in the name
of the Trustee or that the Trustee would be adversely affected
under the "doing
business" or tax laws of such state if such action is taken in its
name, the
Master Servicer shall join with the Trustee in the appointment of a
co-trustee
pursuant to Section 9.11 hereof. In the performance of its
duties
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hereunder, the Master Servicer shall be an independent contractor
and shall not,
except in those instances where it is taking action in the name of
the Trustee,
be deemed to be the agent of the Trustee.
Section 3.06. Due-on-Sale Clauses; Assumption Agreements. To the
extent
provided in the Servicing Agreement, to the extent Mortgage Loans
contain
enforceable due-on-sale clauses, the Master Servicer shall cause
the Servicer to
enforce such clauses in accordance with the Servicing Agreement. If
applicable
law prohibits the enforcement of a due-on-sale clause or such
clause is
otherwise not enforced in accordance with the Servicing Agreement,
and, as a
consequence, a Mortgage Loan is assumed, the original Mortgagor may
be released
from liability in accordance with the Servicing Agreement.
Section 3.07. Release of Mortgage Files.
(a) Upon becoming aware of the payment in full of any Mortgage
Loan,
or the receipt by the Servicer of a notification that payment in
full has been
escrowed in a manner customary for such purposes for payment to
Certificateholders on the next Distribution Date, the Servicer or
the Master
Servicer will, if required under the 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 Servicer pursuant to its Servicing Agreement have been or will
be so
deposited) and shall request that the Custodian, on behalf of the
Trustee,
deliver to the Servicer the related Mortgage File. Upon receipt of
such
certification and request, the Custodian, on behalf of the Trustee,
shall no
later than five Business Days (or, to the extent that the Servicer
notifies the
Seller that a document is not in the Servicer's possession as part
of the
servicing file which is needed for purposes of the Servicer
complying with any
applicable law, within such shorter period as may be necessary to
enable the
Servicer to comply with such law), release the related Mortgage
File to the
Servicer and the Trustee and Custodian shall have no further
responsibility with
regard to such Mortgage File. Upon any such payment in full, the
Servicer is
authorized, to give, as agent for the Trustee, as the mortgagee
under the
Mortgage that secured the Mortgage Loan, an instrument of
satisfaction (or
assignment of mortgage without recourse) regarding the Mortgaged
Property
subject to the Mortgage, which instrument of satisfaction or
assignment, as the
case may be, shall be delivered to the Person or Persons entitled
thereto
against receipt therefor of such payment, it being understood and
agreed that no
expenses incurred in connection with such instrument of
satisfaction or
assignment, as the case may be, shall be chargeable to the
Protected Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in accordance with the
Servicing Agreement,
the Trustee shall execute such documents as requested and as shall
be prepared
and furnished to the Trustee by the Servicer or the Master Servicer
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
the 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
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face, originate from a Servicing Officer), release the related
Mortgage File
held in its possession or control to the Servicer or the Master
Servicer, as
applicable. Such trust receipt shall obligate the Servicer or the
Master
Servicer to return the Mortgage File to the Custodian on behalf of
the Trustee,
when the need therefor by the Servicer or the Master Servicer no
longer exists
unless the Mortgage Loan shall be liquidated, in which case, upon
receipt of a
certificate of a Servicing Officer similar to that hereinabove
specified, the
Mortgage File shall be released by the Custodian, on behalf of the
Trustee, to
the Servicer or the Master Servicer.
Section 3.08. Documents, Records and Funds in Possession of Master
Servicer
To Be Held for Trustee.
(a) The Master Servicer shall transmit and the Servicer (to the
extent
required by the Servicing Agreement) shall transmit to the Trustee
or Custodian
such documents and instruments coming into the possession of the
Master Servicer
or such Servicer from time to time as are required by the terms
hereof, or in
the case of the Servicer, the Servicing Agreement, to be delivered
to the
Trustee or Custodian. Any funds received by the Master Servicer or
by the
Servicer in respect of any Mortgage Loan or which otherwise are
collected by the
Master Servicer or by the Servicer as Liquidation Proceeds or
Insurance Proceeds
in respect of any Mortgage Loan shall be held for the benefit of
the Trustee and
the Certificateholders subject to the Master Servicer's right to
retain or
withdraw from the Master Servicer Collection Account the Master
Servicing
Compensation and other amounts provided in this Agreement, and to
the right of
the Servicer to retain its Servicing Fee and other amounts as
provided in the
Servicing Agreement. The Master Servicer shall, and (to the extent
provided in
the Servicing Agreement) shall cause the Servicer to, provide
access to
information and documentation regarding the Mortgage Loans to the
Trustee, its
agents and accountants at any time upon reasonable request and
during normal
business hours, and to Certificateholders that are savings and
loan
associations, banks or insurance companies, the Office of Thrift
Supervision,
the FDIC and the supervisory agents and examiners of such Office
and Corporation
or examiners of any other federal or state banking or insurance
regulatory
authority if so required by applicable regulations of the Office of
Thrift
Supervision or other regulatory authority, such access to be
afforded without
charge but only upon reasonable request in writing and during
normal business
hours at the offices of the Master Servicer designated by it. In
fulfilling such
a request, the Master Servicer shall not be responsible for
determining the
sufficiency of such information.
(b) All Mortgage Files and funds collected or held by, or under
the
control of, the Master Servicer, in respect of any Mortgage Loans,
whether from
the collection of principal and interest payments or from
Liquidation Proceeds
or Insurance Proceeds, shall be held by the Master Servicer for and
on behalf of
the Trustee and the Certificateholders and shall be and remain the
sole and
exclusive property of the Trustee; provided, however, that the
Master Servicer
and the Servicer shall be entitled to setoff against, and deduct
from, any such
funds any amounts that are properly due and payable to the Master
Servicer or
the Servicer under this Agreement or the Servicing Agreement.
Section 3.09. Standard Hazard Insurance and Flood Insurance
Policies.
(a) For each Mortgage Loan, the Master Servicer shall enforce
any
obligation of the Servicer under the Servicing Agreement to
maintain or cause to
be maintained standard fire and casualty insurance and, where
applicable, flood
insurance, all in accordance with the
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provisions of the Servicing Agreement. It is understood and agreed
that such
insurance shall be with insurers meeting the eligibility
requirements set forth
in the Servicing Agreement and that no earthquake or other
additional insurance
is to be required of any Mortgagor or to be maintained on property
acquired in
respect of a defaulted loan, other than pursuant to such applicable
laws and
regulations as shall at any time be in force and as shall require
such
additional insurance.
(b) Pursuant to Sections 4.01 and 4.02, any amounts collected by
the
Servicer or the Master Servicer, under any insurance policies
(other than
amounts to be applied to the restoration or repair of the property
subject to
the related Mortgage or released to the Mortgagor in accordance
with the
Servicing Agreement) shall be deposited into the Master Servicer
Collection
Account, subject to withdrawal pursuant to Sections 4.02 and 4.03
in accordance
with the terms and conditions of the Servicing Agreement. Any cost
incurred by
the Master Servicer or the Servicer in maintaining any such
insurance if the
Mortgagor defaults in its obligation to do so shall be added to the
amount owing
under the Mortgage Loan where the terms of the Mortgage Loan so
permit;
provided, however, that the addition of any such cost shall not be
taken into
account for purposes of calculating the distributions to be made
to
Certificateholders and shall be recoverable by the Master Servicer
or the
Servicer pursuant to Sections 4.02 and 4.03.
Section 3.10. Presentment of Claims and Collection of Proceeds. The
Master
Servicer shall (to the extent provided in the Servicing Agreement)
cause the
Servicer to, prepare and present on behalf of the Trustee and
the
Certificateholders all claims under the Insurance Policies and take
such actions
(including the negotiation, settlement, compromise or enforcement
of the
insured's claim) as shall be necessary to realize recovery under
such policies.
Any proceeds disbursed to the Master Servicer (or disbursed to the
Servicer and
remitted to the Master Servicer) in respect of such policies, bonds
or contracts
shall be promptly deposited in the Master Servicer Collection
Account upon
receipt, except that any amounts realized that are to be applied to
the repair
or restoration of the related Mortgaged Property as a condition
precedent to the
presentation of claims on the related Mortgage Loan to the insurer
under any
applicable Insurance Policy need not be so deposited (or
remitted).
Section 3.11. Maintenance of the Primary Mortgage Insurance
Policies.
(a) The Master Servicer shall not take, or permit the Servicer (to
the
extent such action is prohibited under the Servicing Agreement) to
take, any
action that would result in noncoverage under any applicable
Primary Mortgage
Insurance Policy of any loss which, but for the actions of such
Master Servicer
or Servicer, would have been covered thereunder. The Master
Servicer shall use
its best reasonable efforts to cause the Servicer (to the extent
required under
the Servicing Agreement) to keep in force and effect (to the extent
that the
Mortgage Loan requires the Mortgagor to maintain such insurance),
primary
mortgage insurance applicable to each Mortgage Loan in accordance
with the
provisions of this Agreement and the Servicing Agreement, as
applicable. The
Master Servicer shall not, and shall not permit the Servicer (to
the extent
required under the Servicing Agreement) to, cancel or refuse to
renew any such
Primary Mortgage Insurance Policy that is in effect at the date of
the initial
issuance of the Mortgage Note and is required to be kept in force
hereunder
except in accordance with the provisions of this Agreement and the
Servicing
Agreement, as applicable.
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(b) The Master Servicer agrees to present, or to cause the
Servicer
(to the extent required under the Servicing Agreement) to present,
on behalf of
the Trustee and the Certificateholders, claims to the insurer under
any Primary
Mortgage Insurance Policies and, in this regard, to take such
reasonable action
as shall be necessary to permit recovery under any Primary Mortgage
Insurance
Policies respecting defaulted Mortgage Loans. Pursuant to Section
4.02, any
amounts collected by the Master Servicer or the Servicer under any
Primary
Mortgage Insurance Policies shall be deposited in the Master
Servicer Collection
Account, subject to withdrawal pursuant to Section 4.03.
Section 3.12. Trustee to Retain Possession of Certain Insurance
Policies
and Documents. The Trustee or the Custodian shall retain possession
and custody
of the originals (to the extent available) of any Primary Mortgage
Insurance
Policies, or certificate of insurance if applicable, and any
certificates of
renewal as to the foregoing as may be issued from time to time as
contemplated
by this Agreement. Until all amounts distributable in respect of
the
Certificates have been distributed in full and the Master Servicer
otherwise has
fulfilled its obligations under this Agreement, the Trustee or its
Custodian
shall also retain possession and custody of each Mortgage File in
accordance
with and subject to the terms and conditions of this Agreement. The
Master
Servicer shall promptly deliver or cause to be delivered to the
Trustee or the
Custodian upon the execution or receipt thereof the originals of
any Primary
Mortgage Insurance Policies, any certificates of renewal, and such
other
documents or instruments that constitute portions of the Mortgage
File that come
into the possession of the Master Servicer from time to time.
Section 3.13. Realization Upon Defaulted Mortgage Loans. The
Master
Servicer shall cause the Servicer (to the extent required under the
Servicing
Agreement) to foreclose upon, repossess or otherwise comparably
convert the
ownership of Mortgaged Properties securing such of the Mortgage
Loans as come
into and continue in default and as to which no satisfactory
arrangements can be
made for collection of delinquent payments, all in accordance with
the terms and
conditions of the Servicing Agreement.
Section 3.14. Compensation for the Master Servicer. The Master
Servicer
will be entitled to all income and gain realized from any
investment of funds in
the Master Servicer Collection Account, pursuant to Article IV, for
the
performance of its activities hereunder. Servicing compensation in
the form of
assumption fees, if any, late payment charges, as collected, if
any, or
otherwise (but not including any prepayment premium or penalty)
shall be
retained by the Servicer and shall not be deposited in the
Protected Account.
The Master Servicer shall be required to pay all expenses incurred
by it in
connection with its activities hereunder and shall not be entitled
to
reimbursement therefor except as provided in this Agreement.
Section 3.15. REO Property.
(a) In the event the Issuing Entity acquires ownership of any
REO
Property in respect of any related Mortgage Loan, the deed or
certificate of
sale shall be issued to the Trustee, or to its nominee, on behalf
of the related
Certificateholders. The Master Servicer shall, to the extent
provided in the
Servicing Agreement, cause the Servicer to sell, any REO Property
as
expeditiously as possible and in accordance with the provisions of
this
Agreement and the Servicing Agreement, as applicable. Pursuant to
its efforts to
sell such REO Property, the Master
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Servicer shall cause the Servicer to protect and conserve, such REO
Property in
the manner and to the extent required by the Servicing Agreement,
in accordance
with the REMIC Provisions and in a manner that does not result in a
tax on "net
income from foreclosure property" or cause such REO Property to
fail to qualify
as "foreclosure property" within the meaning of Section 860G(a)(8)
of the Code.
(b) The Master Servicer shall, to the extent required by the
Servicing
Agreement, cause the Servicer to deposit all funds collected and
received in
connection with the operation of any REO Property in the Protected
Account.
(c) The Master Servicer and the Servicer, upon the final
disposition
of any REO Property, shall be entitled to reimbursement for any
related
unreimbursed Monthly Advances and other unreimbursed advances as
well as any
unpaid Servicing Fees from Liquidation Proceeds received in
connection with the
final disposition of such REO Property; provided, that any such
unreimbursed
Monthly Advances as well as any unpaid Servicing Fees may be
reimbursed or paid,
as the case may be, prior to final disposition, out of any net
rental income or
other net amounts derived from such REO Property.
(d) To the extent provided in the Servicing Agreement, the
Liquidation
Proceeds from the final disposition of the REO Property, net of any
payment to
the Master Servicer and the Servicer as provided above shall be
deposited in the
Protected Account on or prior to the Determination Date in the
month following
receipt thereof and be remitted by wire transfer in immediately
available funds
to the Master Servicer for deposit into the related Master Servicer
Collection
Account on the next succeeding Servicer Remittance Date.
Section 3.16. Annual Statement as to Compliance.
Not
later than March 1 of each calendar year (other than the calendar
year
during which the Closing Date occurs), the Servicer shall deliver
(or otherwise
make available) and the Servicer shall cause any Servicing Function
Participant
engaged by it to deliver to the Master Servicer, the Securities
Administrator
and the Depositor, an Officer's Certificate in the form attached
hereto as
Exhibit P stating, as to each signatory thereof, that (i) a review
of the
activities of such signatory during the preceding calendar year, or
portion
thereof, and of the performance of such signatory under the
Servicing Agreement
or such other applicable agreement in the case of a Servicing
Function
Participant has been made under such officer's supervision, and
(ii) to the best
of such officer's knowledge, based on such review, such signatory
has fulfilled
all its obligations under this Agreement, the Servicing Agreement
or such other
applicable agreement in all material respects throughout such year
or a portion
thereof, or, if there has been a failure to fulfill any such
obligation in any
material respect, specifying each such failure known to such
officer and the
nature and status thereof.
The
Master Servicer and the Securities Administrator shall deliver
(or
otherwise make available) (and the Master Servicer and Securities
Administrator
shall cause any Servicing Function Participant engaged by it to
deliver) to the
Depositor and the Securities Administrator on or before March 1
(with a
ten-calendar day cure period) of each year, commencing in March
2007, an
Officer's Certificate stating, as to the signer thereof, that (A) a
review of
such party's activities during the preceding calendar year or
portion thereof
and of such party's performance under this Agreement, or such other
applicable
agreement in the case of a Servicing Function
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Participant, has been made under such officer's supervision and (B)
to the best
of such officer's knowledge, based on such review, such party has
fulfilled all
its obligations under this Agreement, or such other applicable
agreement in the
case of a Servicing Function Participant, in all material respects
throughout
such year or portion thereof, or, if there has been a failure to
fulfill any
such obligation in any material respect, specifying each such
failure known to
such officer and the nature and status thereof.
The
Master Servicer shall include all annual statements of
compliance
received by it from the Servicer with its own annual statement of
compliance to
be submitted to the Securities Administrator pursuant to this
Section. For the
avoidance of doubt, the Master Servicer and the Securities
Administrator may
satisfy the requirements of this Section 3.16 and Section 3.16 of
the Stack II
Agreement by each delivering a single annual statement of
compliance containing
all of the information required pursuant to this Section 3.16 and
Section 3.16
of the Stack II Agreement.
In
the event the Master Servicer, the Securities Administrator or
any
Servicing Function Participant engaged by any such party is
terminated, assigns
its rights and obligations under or resigns pursuant to the terms
of this
Agreement, or such other applicable agreement in the case of a
Servicing
Function Participant, as the case may be, such party shall provide,
an annual
statement of compliance pursuant to this Section 3.16 or to such
applicable
agreement, as the case may be, notwithstanding any such
termination, assignment
or resignation.
Section 3.17. Reports on Assessment of Compliance and
Attestation.
(a) Not later than March 1 of each calendar year (other than
the
calendar year during which the Closing Date occurs) the Servicer at
its own
expense, shall furnish, and shall cause any Servicing Function
Participant
engaged by it to furnish (unless in the case of a Subcontractor,
the Servicer
has notified the Depositor and the Master Servicer in writing that
such
compliance statement is not required for the Subcontractor) to the
Master
Servicer, the Securities Administrator and the Depositor an
officer's assessment
of its compliance with the Relevant Servicing Criteria during the
preceding
calendar year as required by Rules 13a-18 and 15d-18 of the
Exchange Act and
Item 1122 of Regulation AB (the "Assessment of Compliance"), which
assessment
shall contain (A) a statement by such party of its responsibility
for assessing
compliance with the Relevant Servicing Criteria, (B) a statement
that such party
used the Relevant Servicing Criteria to assess compliance with the
Relevant
Servicing Criteria, (C) such party's assessment of compliance with
the Relevant
Servicing Criteria as of and for the fiscal year covered by the
Form 10-K
required to be filed pursuant to Section 3.18, including, if there
has been any
material instance of noncompliance with the Relevant Servicing
Criteria, a
discussion of each such failure and the nature and status thereof,
which
assessment shall be based on the activities it performs with
respect to
asset-backed securities transactions taken as a whole involving
such party that
are backed by the same asset type as the Mortgage Loans, and (D) a
statement
that a registered public accounting firm has issued an attestation
report on
such party's assessment of compliance with the Relevant Servicing
Criteria as of
and for such period.
By
March 1 (with a ten-calendar day cure period) of each year,
commencing
in March 2007, the Master Servicer, the Securities Administrator
and the
Custodian each at its own expense, shall furnish or otherwise make
available,
and each such party shall cause any Servicing Function Participant
engaged by it
to furnish, each at its own expense, to the Securities
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Administrator and the Depositor, a report on an assessment of
compliance with
the Relevant Servicing Criteria that contains (A) a statement by
such party of
its responsibility for assessing compliance with the Relevant
Servicing
Criteria, (B) a statement that such party used the Relevant
Servicing Criteria
to assess compliance with the Relevant Servicing Criteria, (C) such
party's
assessment of compliance with the Relevant Servicing Criteria as of
and for the
fiscal year covered by the Form 10-K required to be filed pursuant
to Sections
3.18(h), (i), (j) and (k), including, if there has been any
material instance of
noncompliance with the Relevant Servicing Criteria, a discussion of
each such
failure and the nature and status thereof, and (D) a statement that
a registered
public accounting firm has issued an attestation report on such
party's
assessment of compliance with the Relevant Servicing Criteria as of
and for such
period.
No
later than the end of each fiscal year for the Issuing Entity for
which
a 10-K is required to be filed, the Master Servicer and the
Custodian shall each
forward to the Securities Administrator and the Depositor the name
of each
Servicing Function Participant engaged by it and what Relevant
Servicing
Criteria will be addressed in the report on assessment of
compliance prepared by
such Servicing Function Participant (provided, however, that the
Master Servicer
need not provide such information to the Securities Administrator
so long as the
Master Servicer and the Securities Administrator are the same
Person). When the
Master Servicer, and the Securities Administrator (or any Servicing
Function
Participant engaged by them) submit their assessments to the
Securities
Administrator, such parties will also at such time include the
assessment and
attestation pursuant to this Section 3.17 of each Servicing
Function Participant
engaged by it.
Promptly after receipt of each report on assessment of compliance,
(i) the
Depositor shall review each such report and, if applicable, consult
with the
Servicer, the Master Servicer, the Securities Administrator and any
Servicing
Function Participant engaged by any such party as to the nature of
any material
instance of noncompliance with the Relevant Servicing Criteria by
the Servicer
by each such party, and (ii) the Securities Administrator shall
confirm that the
assessments individually address the Relevant Servicing Criteria
for each party
as set forth on Exhibit K or any similar exhibit set forth in the
Servicing
Agreement in respect of the Servicer and notify the Depositor of
any exceptions.
The
Master Servicer shall include all annual reports on assessment
of
compliance received by it from the Servicer with its own assessment
of
compliance to be submitted to the Securities Administrator pursuant
to this
Section. For the avoidance of doubt, the Master Servicer and the
Securities
Administrator may satisfy the requirements of this Section 3.17 and
Section 3.17
of the Stack II Agreement relating to reports on assessment of
compliance by
each delivering a single annual report on assessment of compliance
containing
all of the information required pursuant to this Section 3.17 and
Section 3.17
of the Stack II Agreement.
In
the event the Master Servicer, the Securities Administrator or
any
Servicing Function Participant engaged by any such party is
terminated, assigns
its rights and obligations under or resigns pursuant to the terms
of this
Agreement, or any other applicable agreement, as the case may be,
such party
shall provide, an assessment of compliance pursuant to this Section
3.17,
coupled with an attestation as required in this Section 3.17, or
such applicable
agreement notwithstanding any such termination, assignment or
resignation.
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<PAGE>
(b) Not later than March 1 of each calendar year (other than
the
calendar year during which the Closing Date occurs) the Servicer at
its own
expense, shall cause, and shall cause any Servicing Function
Participant engaged
by it to cause (unless in the case of a Subcontractor, the Servicer
has notified
the Depositor and the Master Servicer in writing that such report
is not
required for the Subcontractor) a nationally or regionally
recognized firm of
independent registered public accountants (who may also render
other services to
the Servicer, the Master Servicer or any affiliate thereof) which
is a member of
the American Institute of Certified Public Accountants to furnish a
report (the
"Accountant's Attestation") to the Master Servicer, the Securities
Administrator
and the Depositor to the effect that (i) it has obtained a
representation
regarding certain matters from the management of such party, which
includes an
assertion that such party has complied with the Relevant Servicing
Criteria, and
(ii) on the basis of an examination conducted by such firm in
accordance with
standards for attestation engagements issued or adopted by the
Public Company
Accounting Oversight Board, it is expressing an opinion as to
whether such
party's compliance with the Relevant Servicing Criteria was fairly
stated in all
material respects, or it cannot express an overall opinion
regarding such
party's assessment of compliance with the Relevant Servicing
Criteria. In the
event that an overall opinion cannot be expressed, such registered
public
accounting firm shall state in such report why it was unable to
express such an
opinion. Such report must be available for general use and not
contain
restricted use language. Such Accountant's Attestation shall be in
accordance
with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the
Securities Act and
the Exchange Act.
By
March 1 (with a ten-calendar day cure period) of each year,
commencing
in March 2007, the Master Servicer, the Securities Administrator
and the
Custodian, each at its own expense, shall cause, and each such
party shall cause
any Servicing Function Participant engaged by it to cause, each at
its own
expense, a registered public accounting firm (which may also render
other
services to the Master Servicer, the Trustee, the Securities
Administrator, or
such other Servicing Function Participants, as the case may be) and
that is a
member of the American Institute of Certified Public Accountants to
furnish an
attestation report to the Securities Administrator and the
Depositor, to the
effect that (i) it has obtained a representation regarding certain
matters from
the management of such party, which includes an assertion that such
party has
complied with the Relevant Servicing Criteria, and (ii) on the
basis of an
examination conducted by such firm in accordance with standards for
attestation
engagements issued or adopted by the Public Company Accounting
Oversight Board,
it is expressing an opinion as to whether such party's compliance
with the
Relevant Servicing Criteria was fairly stated in all material
respects, or it
cannot express an overall opinion regarding such party's assessment
of
compliance with the Relevant Servicing Criteria. In the event that
an overall
opinion cannot be expressed, such registered public accounting firm
shall state
in such report why it was unable to express such an opinion. Such
report must be
available for general use and not contain restricted use
language.
(c) Promptly after receipt of each assessment of compliance and
attestation report, the Securities Administrator shall confirm that
each
assessment submitted pursuant to Section 3.17(a) is coupled with an
attestation
meeting the requirements of Section 3.17(b) and notify the
Depositor of any
exceptions.
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The
Master Servicer shall include each such attestation furnished to it
by
the Servicer with its own attestation to be submitted to the
Securities
Administrator pursuant to this Section. For the avoidance of doubt,
the Master
Servicer and the Securities Administrator may satisfy the
requirements of this
Section 3.17 and Section 3.17 of the Stack II Agreement relating to
attestations
by each delivering a single attestation containing all of the
information
required pursuant to this Section 3.17 and Section 3.17 of the
Stack II
Agreement.
In
the event the Master Servicer, the Securities Administrator,
the
Custodian, the Servicer or any Servicing Function Participant
engaged by any
such party, is terminated, assigns its rights and duties under, or
resigns
pursuant to the terms of, this Agreement, or any applicable
Custodial Agreement,
Servicing Agreement or sub-servicing agreement, as the case may be,
such party
shall cause a registered public accounting firm to provide an
attestation
pursuant to this Section 3.17, or such other applicable
agreement,
notwithstanding any such termination, assignment or
resignation.
Section 3.18. Periodic Filings.
(a) Within four (4) Business Days after the occurrence of an
event
requiring disclosure on Form 8-K (each such event, a "Reportable
Event"), and if
requested by the Depositor, the Securities Administrator shall
prepare and file
on behalf of the Issuing Entity a Form 8-K, as required by the
Exchange Act,
provided that the Depositor shall file the initial Form 8-K in
connection with
the issuance of the Certificates. Any disclosure or information
related to a
Reportable Event or that is otherwise required to be included on
Form 8-K (other
than the initial Form 8-K) ("Form 8-K Disclosure Information")
shall be reported
by the parties set forth on Exhibit Q-3 to the Depositor and the
Securities
Administrator and directed and approved by the Depositor, and the
Securities
Administrator will have no duty or liability for any failure
hereunder to
determine or prepare any Form 8-K Disclosure Information or any
Form 8-K except
as set forth in the next paragraph.
(b) For so long as the Issuing Entity is subject to the
reporting
requirements of the Exchange Act, following the occurrence of a
Reportable Event
(A) each party listed on Exhibit Q-3 hereto shall use commercially
reasonable
best efforts to provide immediate notice to the Master Servicer,
the Securities
Administrator and the Depositor, by fax and by phone or by e-mail
and by phone,
(B) each such party shall be required to provide to the Securities
Administrator
and the Depositor, to the extent known, in EDGAR-compatible format
or in such
other format as agreed upon by the Securities Administrator and
such party, the
form and substance of any Form 8-K Disclosure Information if
applicable,
together with the form set forth on Exhibit O (the "Additional
Disclosure
Notification") by the close of business New York City time on the
2nd Business
Day following the occurrence of such Reportable Event and (C) the
Depositor,
shall approve, as to form and substance, or disapprove, as the case
may be, the
inclusion of the Form 8-K Disclosure Information on Form 8-K. The
Securities
Administrator has no duty under this Agreement to monitor or
enforce the
performance by the parties listed on Exhibit Q-3 of their duties
under this
paragraph or proactively solicit or procure from such parties any
Form 8-K
Disclosure Information. The Depositor will be responsible for any
reasonable
fees and expenses assessed or incurred by the Securities
Administrator in
connection with including any Form 8-K Disclosure Information on
Form 8-K
pursuant to this paragraph.
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(c) After
preparing the Form 8-K, the Securities Administrator shall,
upon request, forward electronically a copy of the Form 8-K to the
Depositor.
Promptly, but no later than the close of business on the third
Business Day
after the Reportable Event, the Depositor shall notify the
Securities
Administrator in writing (which may be furnished electronically) of
any changes
to or approval of such Form 8-K. In the absence of receipt of any
written
changes or approval, or if the Depositor does not request a copy of
a Form 8-K,
the Securities Administrator shall be entitled to assume that such
Form 8-K is
in final form and the Securities Administrator may proceed with the
process for
execution and filing of the Form 8-K. A duly authorized
representative of the
Master Servicer shall sign each Form 8-K. If a Form 8-K cannot be
filed on time
or if a previously filed Form 8-K needs to be amended, the
Securities
Administrator will follow the procedures set forth in Section
3.18(n).
(d) Promptly (but no later than one Business Day) after filing
with
the Commission, the Securities Administrator will make available on
its internet
website a final executed copy of each Form 8-K prepared and filed
by the
Securities Administrator. The parties to this Agreement acknowledge
that the
performance by the Master Servicer and the Securities Administrator
of its
duties under this Section 3.18 related to the timely preparation,
execution and
filing of Form 8-K is contingent upon the other parties hereto
strictly
observing all applicable deadlines in the performance of their
duties under this
Section 3.18. The Depositor acknowledges that the performance by
the Master
Servicer and the Securities Administrator of its duties under this
Section 3.18
related to the timely preparation, execution and filing of Form 8-K
is also
contingent upon the Servicer, the Custodian and any Servicing
Function
Participant strictly observing deadlines no later than those set
forth in this
paragraph that are applicable to the parties to this Agreement in
the delivery
to the Securities Administrator of any necessary Form 8-K
Disclosure Information
pursuant to the Servicing Agreement, the Custodial Agreement or any
other
applicable agreement. Neither the Master Servicer nor the
Securities
Administrator shall have any liability for any loss, expense,
damage or claim
arising out of or with respect to any failure to properly prepare,
execute
and/or timely file such Form 8-K, where such failure results from
the Securities
Administrator's inability or failure to obtain or receive, on a
timely basis,
any information from any other party hereto or the Servicer,
Custodian or
Servicing Function Participant needed to prepare, arrange for
execution or file
such Form 8-K.
(e) Within fifteen (15) days after each Distribution Date (subject
to
permitted extensions under the Exchange Act), the Securities
Administrator
shall, on behalf of the Issuing Entity and in accordance with
industry
standards, prepare and file with the Commission via the Electronic
Data
Gathering and Retrieval System (EDGAR), a Form 10-D with a copy of
the Monthly
Statement for such Distribution Date as an exhibit thereto. Any
disclosure in
addition to the Monthly Statement that is required to be included
on Form 10-D
("Additional Form 10-D Disclosure") shall be reported by the
parties set forth
on Exhibit Q-1 to the Depositor and the Securities Administrator
and directed
and approved by the Depositor pursuant to the following paragraph,
and the
Securities Administrator will have no duty or liability for any
failure
hereunder to determine or prepare any Additional Form 10-D
Disclosure except as
set forth in the next paragraph.
(f) As set forth in Exhibit Q-1 hereto, for so long as the
Issuing
Entity is subject to the reporting requirements of the Exchange
Act, within five
(5) calendar days after the related Distribution Date (i) each
party listed on
Exhibit Q-1 hereto shall be required to provide
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to the Depositor and the Securities Administrator, to the extent
known, in
EDGAR-compatible format or in such other format as agreed upon by
the Securities
Administrator and such party, the form and substance of any
Additional Form 10-D
Disclosure if applicable together with an Additional Disclosure
Notification,
and (ii) the Depositor will approve, as to form and substance, or
disapprove, as
the case may be, the inclusion of the Additional Form 10-D
Disclosure on Form
10-D. The Securities Administrator has no duty under this Agreement
to monitor
or enforce the performance by the parties listed on Exhibit Q-1 of
their duties
under this paragraph or proactively solicit or procure from such
parties any
Additional Form 10-D Disclosure Information. The Depositor will be
responsible
for any reasonable fees and expenses incurred by the Securities
Administrator in
connection with including any Additional Form 10-D Disclosure on
Form 10-D
pursuant to this paragraph.
(g) After preparing the Form 10-D, the Securities Administrator
shall,
upon request, forward electronically a copy of the Form 10-D to the
Depositor
(provided that such Form 10-D includes any Additional Form 10-D
Disclosure).
Within two Business Days after receipt of such copy, but no later
than the 12th
calendar day after the Distribution Date, the Depositor shall
notify the
Securities Administrator in writing (which may be furnished
electronically) of
any changes to or approval of such Form 10-D. In the absence of
receipt of any
written changes or approval, or if the Depositor does not request a
copy of a
Form 10-D, the Securities Administrator shall be entitled to assume
that such
Form 10-D is in final form and the Securities Administrator may
proceed with the
process for execution and filing of the Form 10-D. A duly
authorized
representative of the Master Servicer shall sign each Form 10-D. If
a Form 10-D
cannot be filed on time or if a previously filed Form 10-D needs to
be amended,
the Securities Administrator will follow the procedures set forth
in Section
3.18(n). Promptly (but not later than one Business Day) after
filing with the
Commission, the Securities Administrator will make available on its
internet
website a final executed copy of each Form 10-D prepared and filed
by the
Securities Administrator. Form 10-D requires the registrant to
indicate (by
checking "yes" or "no") that it "(1) has filed all reports required
to be filed
by Section 13 or 15(d) of the Exchange Act during the preceding 12
months (or
for such shorter period that the registrant was required to file
such reports),
and (2) has been subject to such filing requirements for the past
90 days." The
Depositor hereby represents to the Securities Administrator that
the Depositor
has filed all such required reports during the preceding 12 months
and that it
has been subject to such filing requirement for the past 90 days.
The Depositor
shall notify the Securities Administrator in writing, no later than
the fifth
calendar day after the related Distribution Date with respect to
the filing of a
report on Form 10-D, if the answer to the questions should be "no."
The
Securities Administrator shall be entitled to rely on such
representations in
preparing, executing and/or filing any such Form 10-D. The parties
to this
Agreement acknowledge that the performance by the Master Servicer
and the
Securities Administrator of its respective duties under this
Section 3.18
related to the timely preparation, execution and filing of Form
10-D is
contingent upon the other parties hereto strictly observing all
applicable
deadlines in the performance of their duties under this Section
3.18. The
Depositor acknowledges that the performance by the Master Servicer
and the
Securities Administrator of its duties under this Section 3.18
related to the
timely preparation, execution and filing of Form 10-D is also
contingent upon
the Servicer, the Custodian and any Servicing Function Participant
strictly
observing deadlines no later than those set forth in this paragraph
that are
applicable to the parties to this Agreement in the delivery to the
Securities
Administrator of any necessary Additional Form 10-D Disclosure
pursuant to the
Servicing Agreement, the Custodial Agreement or any other
applicable agreement.
Neither the
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Master Servicer nor the Securities Administrator will have any
liability for any
loss, expense, damage or claim arising out of or with respect to
any failure to
properly prepare, execute and/or timely file such Form 10-D
resulting from the
Securities Administrator's inability or failure to obtain or
receive any
information needed to prepare, arrange for execution or file such
Form 10-D on a
timely basis.
(h) On or prior to the 90th calendar day after the end of the
fiscal
year for the Issuing Entity or such earlier date as may be required
by the
Exchange Act (the "10-K Filing Deadline") (it being understood that
the fiscal
year for the Issuing Entity ends on December 31st of each year)
commencing in
March 2007, the Securities Administrator shall, on behalf of the
Issuing Entity
and in accordance with industry standards, prepare and file with
the Commission
via EDGAR a Form 10-K with respect to the Issuing Entity. Such Form
10-K shall
include the following items, in each case, as applicable, to the
extent they
have been delivered to the Securities Administrator within the
applicable time
frames set forth in this Agreement, the Servicing Agreement and
Custodial
Agreement: (i) an annual compliance statement for the Master
Servicer, the
Servicer, the Securities Administrator and any Servicing Function
Participant
engaged by any such party (together with the Custodian, each a
"Reporting
Servicer"), as described in Section 3.16 of this Agreement, the
Servicing
Agreement and the Custodial Agreement; provided, however, that the
Securities
Administrator, at its discretion, may omit from the Form 10-K any
annual
compliance statement that is not required to be filed with such
Form 10-K
pursuant to Regulation AB; (ii)(A) the annual reports on assessment
of
compliance with Servicing Criteria for each Reporting Servicer
(unless the
Depositor has determined that such compliance statement is not
required by
Regulation AB), as described in Section 3.17 of this Agreement, the
Servicing
Agreement and the Custodial Agreement, and (B) if any Reporting
Servicer's
report on assessment of compliance with Servicing Criteria
described in Section
3.17 identifies any material instance of noncompliance, disclosure
identifying
such instance of noncompliance, or if any Reporting Servicer's
report on
assessment of compliance with Servicing Criteria described in
Section 3.17 of
this Agreement is not included as an exhibit to such Form 10-K,
disclosure that
such report is not included and an explanation why such report is
not included;
provided, however, that the Securities Administrator, at its
discretion, may
omit from the Form 10-K any assessment of compliance or attestation
report
described in clause (iii) below that is not required to be filed
with such Form
10-K pursuant to Regulation AB; (iii)(A) the registered public
accounting firm
attestation report for each Reporting Servicer, as described in
Section 3.17 of
this Agreement, the Servicing Agreement and the Custodial
Agreement, and (B) if
any registered public accounting firm attestation report described
under Section
3.17 of this Agreement identifies any material instance of
noncompliance,
disclosure identifying such instance of noncompliance, or if any
such registered
public accounting firm attestation report is not included as an
exhibit to such
Form 10-K, disclosure that such report is not included and an
explanation why
such report is not included, and (iv) a Sarbanes-Oxley
Certification in the form
attached hereto as Exhibit L, executed by the senior officer in
charge of
securitizations of the Master Servicer. Any disclosure or
information in
addition to (i) through (iv) above that is required to be included
on Form 10-K
("Additional Form 10-K Disclosure") shall be reported by the
parties as set
forth in Exhibit Q-2 to the Depositor and the Securities
Administrator and
directed and approved by the Depositor pursuant to the following
paragraph and
the Securities Administrator will have no duty or liability for any
failure
hereunder to determine or prepare any Additional Form 10-K
Disclosure except or
set forth in the next paragraph.
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(i) As set forth in Exhibit Q-2 hereto, no later than March 1 (with
a
ten calendar day cure period) of each year that the Issuing Entity
is subject to
the Exchange Act reporting requirements, commencing in March 2007,
(i) the
parties listed on Exhibit Q-2 hereto shall be required to provide
to the
Depositor and the Securities Administrator, to the extent known,
in
EDGAR-compatible format or in such other format as agreed upon by
the Securities
Administrator and such party, the form and substance of any
Additional Form 10-K
Disclosure, if applicable together with an Additional Disclosure
Notification,
and (ii) the Depositor will approve, as to form and substance, or
disapprove, as
the case may be, the inclusion of the Additional Form 10-K
Disclosure and shall
forward such Additional Form 10-K Disclosure. The Securities
Administrator has
no duty under this Agreement to monitor or enforce the performance
by the
parties listed on Exhibit Q-2 of their duties under this paragraph
or
proactively solicit or procure from such parties any Additional
Form 10-K
Disclosure Information. The Depositor will be responsible for any
reasonable
fees and expenses incurred by the Securities Administrator in
connection with
including any Additional Form 10-K Disclosure on Form 10-K pursuant
to this
paragraph.
(j) After preparing the Form 10-K, the Securities Administrator
shall,
upon request, forward electronically a copy of the Form 10-K to the
Depositor.
Within three Business Days after receipt of such copy, but no later
than March
25th, the Depositor shall notify the Securities Administrator in
writing (which
may be furnished electronically) of any changes to or approval of
such Form
10-K. In the absence of receipt of any written changes or approval,
or if the
Depositor does not request a copy of a Form 10-K, the Securities
Administrator
shall be entitled to assume that such Form 10-K is in final form
and the
Securities Administrator may proceed with the process for execution
and filing
of the Form 10-K. A senior officer of the Master Servicer in charge
of the
master servicing function shall sign the Form 10-K. If a Form 10-K
cannot be
filed on time or if a previously filed Form 10-K needs to be
amended, the
Securities Administrator will follow the procedures set forth in
Section
3.18(n). Promptly (but no later than one Business Day) after filing
with the
Commission, the Securities Administrator will make available on its
internet
website a final executed copy of each Form 10-K prepared and filed
by the
Securities Administrator. Form 10-K requires the registrant to
indicate (by
checking "yes" or "no") that it "(1) has filed all reports required
to be filed
by Section 13 or 15(d) of the Exchange Act during the preceding 12
months (or
for such shorter period that the registrant was required to file
such reports),
and (2) has been subject to such filing requirements for the past
90 days." The
Depositor hereby represents to the Securities Administrator that
the Depositor
has filed all such required reports during the preceding 12 months
and that it
has been subject to such filing requirement for the past 90 days.
The Depositor
shall notify the Securities Administrator in writing, no later than
the 15th
calendar day of March in any year in which the Trust is subject to
the reporting
requirements of the Exchange Act, if the answer to the questions
should be "no."
The Securities Administrator shall be entitled to rely on such
representations
in preparing, executing and/or filing any such Form 10-D. The
parties to this
Agreement acknowledge that the performance by the Master Servicer
and the
Securities Administrator of its duties under this Section 3.18
related to the
timely preparation, execution and filing of Form 10-K is contingent
upon such
parties (and any Servicing Function Participant) strictly observing
all
applicable deadlines in the performance of their duties under this
Section 3.18,
Section 3.16 and Section 3.17. The Depositor acknowledges that the
performance
by the Master Servicer and the Securities Administrator of its
duties under this
Section 3.18 related to the timely preparation, execution and
filing of Form
10-K is also contingent upon the Servicer, the Custodian and
any
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Servicing Function Participant strictly observing deadlines no
later than those
set forth in this paragraph that are applicable to the parties to
this Agreement
in the delivery to the Securities Administrator of any necessary
Additional Form
10-K Disclosure, any annual statement of compliance and any
assessment of
compliance and attestation pursuant to the Servicing Agreement, the
Custodial
Agreement or any other applicable agreement. Neither the Master
Servicer nor the
Securities Administrator shall have any liability for any loss,
expense, damage
or claim arising out of or with respect to any failure to properly
prepare,
execute and/or timely file such Form 10-K resulting from the
Securities
Administrator's inability or failure to obtain or receive any
information from
any other party hereto or the Servicer, Custodian or Servicing
Function
Participant needed to prepare, execute or file such Form 10-K.
(k) Each Form 10-K shall include a Sarbanes-Oxley Certification,
which
shall be in the form attached hereto as Exhibit L. Each Servicer
shall sign and
provide, and each of the Servicer, the Master Servicer and the
Securities
Administrator shall cause any Servicing Function Participant
engaged by it to
sign and provide, to the person who signs the Sarbanes-Oxley
Certification (the
"Certifying Person") by March 1 (with a ten day cure period) of
each year in
which the Issuing Entity is subject to the reporting requirements
of the
Exchange Act and otherwise within a reasonable period of time upon
request, a
certification (a "Back-Up Certification") (in the form attached
hereto as
Exhibit M) upon which the Certifying Person, the entity for which
the Certifying
Person acts as an officer and such entity's officers, directors and
affiliates
(collectively, with the Certifying Person, the "Certification
Parties") can
reasonably rely. The senior officer of the Master Servicer in
charge of the
master servicing function shall serve as the Certifying Person on
behalf of the
Issuing Entity. Such officer of the Certifying Person can be
contacted by e-mail
at cts.sec.notifications@wellsfargo.com or by facsimile at
410-715-2380. In the
event any such party or Servicing Function Participant engaged by
any such party
is terminated or resigns pursuant to the terms of this Agreement,
or any other
applicable agreement, as the case may be, such party shall provide
a Back-Up
Certification to the Master Servicer pursuant to this Section 3.18
with respect
to the period of time it was subject to this Agreement or any other
applicable
agreement, as the case may be. Notwithstanding the foregoing, (i)
the Master
Servicer and the Securities Administrator shall not be required to
deliver a
Back-Up Certification to each other if both are the same Person and
the Master
Servicer is the Certifying Person and (ii) the Master Servicer
shall not be
obligated to sign the Sarbanes-Oxley Certification in the event
that it does not
receive any Back-Up Certification required to be furnished to it
pursuant to
this section or the Servicing Agreement or Custodial Agreement.
(l) The Securities Administrator shall have no responsibility to
file
any items with the Commission other than those specified in this
section and the
Master Servicer shall execute any and all Form 10-Ds, 8-Ks and
10-Ks required
hereunder.
(m) On or prior to January 30 of the first year in which the
Securities Administrator is able to do so under applicable law, the
Securities
Administrator shall prepare and file a Form 15 Suspension
Notification relating
to the automatic suspension of reporting in respect of the Issuing
Entity under
the Exchange Act.
(n) In the event that the Securities Administrator is unable to
timely
file with the Commission all or any required portion of any Form
8-K, 10-D or
10-K required to be filed by this Agreement because required
disclosure
information was either not delivered to it or delivered to it after
the delivery
deadlines set forth in this Agreement or for any other reason,
the
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Securities Administrator will promptly notify electronically the
Depositor of
such inability to make a timely filing with the Commission. In the
case of Form
10-D and 10-K, the parties to this Agreement will cooperate to
prepare and file
a Form 12b-25 and a 10-D/A and 10K/A, as applicable, pursuant to
Rule 12b-25 of
the Exchange Act. In the case of Form 8-K, the Securities
Administrator will,
upon receipt of all required Form 8-K Disclosure Information and
upon the
approval and direction of the Depositor, include such disclosure
information on
the next succeeding Form 10-D to be filed for the Issuing Entity.
In the event
that any previously filed Form 8-K, 10-D or 10-K needs to be
amended, in
connection with any Additional Form 10-D Disclosure (other than, in
the case of
Form 10-D, for the purpose of restating any Monthly Statement),
Additional Form
10-K Disclosure or Form 8-K Disclosure Information, the Securities
Administrator
will electronically notify the Depositor and such other parties to
the
transaction as are affected by such amendment, and such parties
will cooperate
to prepare any necessary 8-K/A, 10-D/A or 10-K/A. Any Form 15, Form
12b-25 or
any amendment to Form 8-K, 10-D or 10-K shall be signed by duly
authorized
representative or a senior officer in charge of master servicing,
as applicable,
of the Master Servicer. The parties to this Agreement acknowledge
that the
performance by the Master Servicer of its duties under this Section
3.18 related
to the timely preparation, execution and filing of Form 15, a Form
12b-25 or any
amendment to Form 8-K, 10-D or 10-K is contingent upon each such
party
performing its duties under this Section. Neither the Master
Servicer nor the
Securities Administrator shall have any liability for any loss,
expense, damage
or claim arising out of or with respect to any failure to properly
prepare,
execute and/or timely file any such Form 15, Form 12b-25 or any
amendments to
Forms 8-K, 10-D or 10-K, where such failure results from the
Securities
Administrator's inability or failure to receive, on a timely basis,
any
information from any other party hereto or the Servicer, any
Custodian or any
Servicing Function Participant needed to prepare, arrange for
execution or file
such Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D or
10-K.
(o) The Depositor and the Securities Administrator agree to use
their
good faith efforts to cooperate in complying with the requirements
of this
Section 3.18.
(p) Each of the parties agrees to provide to the Securities
Administrator such additional information related to such party as
the
Securities Administrator may reasonably request, including evidence
of the
authorization of the person signing any certificate or statement,
financial
information and reports, and such other information related to such
party or its
performance hereunder.
(q) Any notice or notification required to be delivered by the
Securities Administrator or Master Servicer to the Depositor
pursuant to this
Section 3.18, may be delivered via facsimile to (212) 449-2700, via
email to
paul_park@ml.com or telephonically by calling Paul Park at (212)
449-6380.
(r) For the avoidance of doubt, any filings or deliverables
required
under this Section 3.18 and Section 3.18 of the Stack II Agreement,
may be
prepared, delivered and filed in a consolidated manner. The Master
Servicer, the
Securities Administrator and the Depositor may satisfy the
requirements of this
Section 3.18 and Section 3.18 of the Stack II Agreement with a
single set of
filings and deliverables addressing the requirements of both this
Section 3.18
and Section 3.18 of the Stack II Agreement.
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Section 3.19. Compliance with Regulation AB. Each of the parties
hereto
acknowledges and agrees that the purpose of Sections 3.16, 3.17 and
3.18 is to
facilitate compliance by the Depositor with the provisions of
Regulation AB, as
such may be amended or clarified from time to time. Therefore, each
of the
parties agrees that the parties' obligations hereunder will be
supplemented and
modified as necessary to be consistent with any such amendments,
interpretive
advice or guidance, convention or consensus among active
participants in the
asset-backed securities markets, advice of counsel, or otherwise in
respect of
the requirements of Regulation AB and the parties shall comply with
requests
made by the Depositor for delivery of additional or different
information as the
Depositor may determine in good faith is necessary to comply with
the provisions
of Regulation AB. Any such supplementation or modification shall be
made in
accordance with Section 11.02 without the consent of the
Certificateholders, and
may result in a change in the reports filed by the Securities
Administrator on
behalf of the Issuing Entity under the Exchange Act.
ARTICLE IV.
ACCOUNTS
Section 4.01. Protected Accounts.
(a) The
Master Servicer shall enforce the obligation of the Servicer
to establish and maintain a Protected Account in accordance with
the Servicing
Agreement, with records to be kept with respect thereto on a
Mortgage Loan by
Mortgage Loan basis, into which accounts shall be deposited within
two Business
Days (or as of such other time specified in the Servicing
Agreement) of receipt
all collections of principal and interest on any Mortgage Loan and
with respect
to any REO Property received by the Servicer, including Principal
Prepayments,
Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries and
advances
made from the Servicer's own funds (less servicing compensation as
permitted by
the Servicing Agreement in the case of the Servicer) and all other
amounts to be
deposited in the Protected Account. The Servicer is hereby
authorized to make
withdrawals from and deposits to the related Protected Account for
purposes
required or permitted by this Agreement. To the extent provided in
the Servicing
Agreement, the Protected Account shall be held in a Designated
Depository
Institution and segregated on the books of such institution in the
name of the
Trustee for the benefit of Certificateholders.
(b) To the extent provided in the Servicing Agreement, amounts
on
deposit in a Protected Account may be invested in Permitted
Investments in the
name of the Trustee for the benefit of Certificateholders and,
except as
provided in the preceding paragraph, not commingled with any other
funds, such
Permitted Investments to mature, or to be subject to redemption or
withdrawal,
no later than the date on which such funds are required to be
withdrawn for
deposit in the Master Servicer Collection Account, and shall be
held until
required for such deposit. The income earned from Permitted
Investments made
pursuant to this Section 4.01 shall be paid to the Servicer under
the Servicing
Agreement, and the risk of loss of moneys required to be
distributed to the
Certificateholders resulting from such investments shall be borne
by and be the
risk of the Servicer, as set forth in the Servicing Agreement. The
Servicer (to
the extent provided in the Servicing Agreement) shall deposit the
amount of any
such loss in the Protected Account within two Business Days of
receipt of
notification of such loss but not later than the second Business
Day prior to
the Distribution Date on which the moneys so invested are required
to be
distributed to the Certificateholders.
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(c) To the
extent provided in the Servicing Agreement and subject to
this Article IV, on or before the Servicer Remittance Date, the
Servicer shall
withdraw or shall cause to be withdrawn from the Protected Accounts
and shall
immediately deposit or cause to be deposited in the Master Servicer
Collection
Account amounts representing the following collections and payments
(other than
with respect to principal of or interest on the Mortgage Loans due
on or before
the Cut-off Date):
(i) Monthly Payments on the Mortgage Loans received or any
related portion thereof advanced by the Servicer pursuant to the
Servicing
Agreement which were due on or before the related Due Date, net of
the amount
thereof comprising the Servicing Fees;
(ii) Principal
Prepayments in Full and any Liquidation Proceeds
received by the Servicer with respect to such Mortgage Loans in the
related
Prepayment Period, with interest to the date of prepayment or
liquidation, net
of the amount thereof comprising the Servicing Fees;
(iii) Curtailments received by the Servicer for such Mortgage
Loans in the related Prepayment Period; and
(iv) Any amount to be used as a Monthly Advance.
(d) Withdrawals by the Master Servicer may be made from an
Account
only to make remittances as provided in Section 4.01(c), 4.02 and
4.03; to
reimburse the Master Servicer or the Servicer for Monthly Advances
which have
been recovered by subsequent collection from the related Mortgagor;
to remove
amounts deposited in error; to remove fees, charges or other such
amounts
deposited on a temporary basis; or to clear and terminate the
account at the
termination of this Agreement in accordance with Section 10.01. As
provided in
Sections 4.01(c) and 4.02(b) certain amounts otherwise due to the
Servicer may
be retained by them as set forth in the Servicing Agreement and
need not be
deposited in the Master Servicer Collection Account.
Section 4.02. Master Servicer Collection Account.
(a) The Master Servicer shall establish and maintain in the name
of
the Trustee, for the benefit of the Certificateholders, the Master
Servicer
Collection Account as a segregated trust account or accounts. The
Master
Servicer Collection Account may be a sub-account of the
Distribution Account.
The Master Servicer will deposit in the Master Servicer Collection
Account as
identified by the Master Servicer and as received by the Master
Servicer, the
following amounts:
(i) Any amounts withdrawn from a Protected Account or other
permitted account;
(ii) Any Monthly Advance and any Compensating Interest
Payments;
(iii) Any Insurance Proceeds, Liquidation Proceeds or
Subsequent
Recoveries received by or on behalf of the Master Servicer or which
were not
deposited in a Protected Account or other permitted account;
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(iv) The repurchase price with respect to any Mortgage Loans
repurchased and all proceeds of any Mortgage Loans or property
acquired in
connection with the optional termination of the trust;
(v) Any amounts required to be deposited with respect to losses
on investments of deposits in an Account; and
(vi) Any other amounts received by or on behalf of the Master
Servicer and required to be deposited in the Master Servicer
Collection Account
pursuant to this Agreement.
(b) All amounts deposited to the Master Servicer Collection
Account
shall be held by the Master Servicer in the name of the Trustee in
trust for the
benefit of the Certificateholders in accordance with the terms and
provisions of
this Agreement. The requirements for crediting the Master Servicer
Collection
Account or the Distribution Account shall be exclusive, it being
understood and
agreed that, without limiting the generality of the foregoing,
payments in the
nature of (i) prepayment or late payment charges or assumption, tax
service,
statement account or payoff, substitution, satisfaction, release
and other like
fees and charges and (ii) the items enumerated in Subsections
4.05(a)(i), (ii),
(iii), (iv), (vi), (vii), (viii), (ix), (xi) and (xii) with respect
to the
Securities Administrator, need not be credited by the Master
Servicer or the
Servicer to the Distribution Account or the Master Servicer
Collection Account,
as applicable. In the event that the Master Servicer shall deposit
or cause to
be deposited to the Distribution Account any amount not required to
be credited
thereto, the Securities Administrator, 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.
(d) For the avoidance of doubt, it is agreed that the Master
Servicer
shall establish and maintain in the name of the Trustee, for the
benefit of the
holders of the Stack II Certificates, a separate segregated trust
account or
accounts pursuant to Section 4.02 of the Stack II Agreement.
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Section 4.03. Permitted Withdrawals and Transfers from the Master
Servicer
Collection Account.
(a) The Master Servicer will, from time to time on demand of
the
Master Servicer, the Trustee or the Securities Administrator, make
or cause to
be made such withdrawals or transfers from the Master Servicer
Collection
Account as the Master Servicer has designated for such transfer or
withdrawal
pursuant to the Servicing Agreement. The Master Servicer may clear
and terminate
the Master Servicer Collection Account pursuant to Section 10.01
and remove
amounts from time to time deposited in error.
(b) On an ongoing basis, the Master Servicer shall withdraw from
the
Master Servicer Collection Account (i) any expenses recoverable by
the Trustee,
the Master Servicer or the Securities Administrator pursuant to
this Agreement,
including but not limited to Sections 2.01(b), 3.03, 7.04 and 9.05
and (ii) any
amounts payable to the Master Servicer as set forth in Section
3.14.
(c) In addition, on or before each Distribution Account Deposit
Date,
the Master Servicer shall deposit in the Distribution Account (or
remit to the
Securities Administrator 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 the Available
Distribution
Amount 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, the Trustee or the Master Servicer
(whether made
directly, or indirectly through a liquidator or receiver of the
Securities
Administrator, the Trustee or the Master Servicer). The
Distribution Account
shall be an Eligible Account. The amount at any time credited to
the
Distribution Account shall be (i) fully insured by the FDIC to the
maximum
coverage provided thereby or (ii) invested in the name of the
Trustee, in such
Permitted Investments selected by the Master Servicer or deposited
in demand
deposits with such depository institutions as selected by the
Master Servicer,
provided that time deposits of such
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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 Master Servicer 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 Securities
Administrator. The Securities Administrator 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 Securities Administrator shall
deposit such
amount in the Distribution Account. With respect to the
Distribution Account and
the funds deposited therein, the Securities Administrator 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 Trust) as provided by 12 U.S.C. Section 92a(e),
and applicable
regulations pursuant thereto, if applicable, or any applicable
comparable state
statute applicable to state chartered banking corporations.
(d) For the avoidance of doubt, the Securities Administrator
shall
establish and maintain in the name of the Trustee, for the benefit
of the
holders of the Stack II Certificates, a separate segregated trust
account or
accounts pursuant to Section 4.04 of the Stack II Agreement.
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, make or cause to be made such withdrawals or
transfers from
the Distribution Account as the Master Servicer has designated for
such transfer
or withdrawal pursuant to the Servicing Agreement 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 the Servicer for any
Monthly Advance of its own funds or any advance of the Servicer's
own funds, the
right of the Master Servicer or the 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 the Servicer from
Insurance Proceeds or Liquidation Proceeds relating to a particular
Mortgage
Loan for amounts expended by the Master Servicer or the Servicer in
good faith
as a Servicing Advance 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 the 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 the Servicer from Liquidation Proceeds from a particular
Mortgage Loan for
Liquidation Expenses incurred with respect to
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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 4.05(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 the Servicer, as
appropriate,
from Liquidation Proceeds or Insurance Proceeds received in
connection with the
liquidation of any Mortgage Loan, the amount which it or the
Servicer would have
been entitled to receive under subclause (ix) of this Subsection
4.05(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 the Servicer from the
Purchase
Price for any Mortgage Loan, the amount which it or the Servicer
would have been
entitled to receive under subclause (ix) of this Subsection 4.05(a)
as servicing
compensation;
(vi) to reimburse the Master Servicer or the 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 the 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
Servicer;
(xi) to reimburse or pay the Servicer any such amounts as are
due
thereto under the Servicing Agreement and have not been retained by
or paid to
the Servicer, to the extent provided in the 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 9.01.
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(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 Distribution Amount to the Holders of the
Certificates
in accordance with Section 6.01.
ARTICLE V.
CERTIFICATES
Section 5.01. The Certificates. The Certificates shall be executed
by
manual or facsimile signature on behalf of the Securities
Administrator by an
authorized 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
Issuing Entity,
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 authentication and
delivery. No
Certificate shall be entitled to any benefit under this Agreement,
or be valid
for any purpose, unless there appears on such Certificate a
certificate of
authentication substantially in the form set forth as attached
hereto executed
by the Securities Administrator by manual signature, and such
certificate of
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. On
the Closing Date, the Securities Administrator shall authenticate
the
Certificates to be issued at the written direction of the
Depositor, or any
Affiliate thereof.
Section 5.02. Certificate Register; Registration of Transfer and
Exchange
of Certificates.
(a) The Securities Administrator shall maintain, or cause to be
maintained in accordance with the provisions of Section 5.09
hereof, a
Certificate Register for the Trust Fund in which, subject to the
provisions of
subsections (b) and (c) below and to such reasonable regulations as
it may
prescribe, the Securities Administrator shall provide for the
registration of
Certificates and of Transfers and exchanges of Certificates as
herein provided.
Upon surrender for registration of Transfer of any Certificate, the
Securities
Administrator shall authenticate and deliver, in the name of the
designated
transferee or transferees, one or more new Certificates of the same
Class and of
like aggregate Percentage Interest.
At
the option of a Certificateholder, Certificates may be exchanged
for
other Certificates of the same Class in authorized denominations
and evidencing
the same aggregate Percentage Interest upon surrender of the
Certificates to be
exchanged at the office or agency of the Securities Administrator.
Whenever any
Certificates are so surrendered for exchange, the Securities
Administrator shall
execute, authenticate and deliver the Certificates that the
Certificateholder
making the exchange is entitled to receive. Every Certificate
presented or
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surrendered for registration of Transfer or exchange shall be
accompanied by a
written instrument of Transfer in form satisfactory to the
Securities
Administrator duly executed by the holder thereof or his attorney
duly
authorized in writing.
No
service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but 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 may be
required. All
Certificates surrendered for registration of Transfer or exchange
shall be
canceled and subsequently destroyed by the Securities Administrator
in
accordance with such Securities Administrator's customary
procedures.
(b) No Transfer of a Class B Certificate shall be made unless
such
Transfer is made pursuant to an effective registration statement
under the
Securities Act and any applicable state securities laws or is
exempt from the
registration requirements under the Securities Act and such state
securities
laws. In the event that a Transfer is to be made in reliance upon
an exemption
from the Securities Act and such laws, in order to assure
compliance with the
Securities Act and such laws, the Certificateholder desiring to
effect such
Transfer and such Certificateholder's prospective transferee shall
(except with
respect to the initial transfer of a Class B Certificate by Merrill
Lynch & Co.)
each certify to each Securities Administrator in writing the facts
surrounding
the Transfer in substantially the form set forth in Exhibit F-1
(the "Transferor
Representation Letter") and (i) deliver a letter in substantially
the form of
either Exhibit F-2 (the "Investor Representation Letter") or
Exhibit F-3 (the
"Rule 144A Letter") or (ii) there shall be delivered to the
Securities
Administrator an Opinion of Counsel that such Transfer may be made
pursuant to
an exemption from the Securities Act, which Opinion of Counsel
shall not be an
expense of the Depositor or the Securities Administrator. The
Depositor shall
provide to any Holder of a Class B Certificate and any prospective
transferee
designated by any such Holder, information regarding the related
Certificates
and the Mortgage Loans and such other information as shall be
necessary to
satisfy the condition to eligibility set forth in Rule 144A(d)(4)
for Transfer
of any such Certificate without registration thereof under the
Securities Act
pursuant to the registration exemption provided by Rule 144A. The
Securities
Administrator shall cooperate with the Depositor in providing the
Rule 144A
information referenced in the preceding sentence, including
providing to the
Depositor such information in the possession of the Securities
Administrator
regarding the Certificates, the Mortgage Loans and other matters
regarding the
Trust Fund as the Depositor shall reasonably request to meet its
obligation
under the preceding sentence. Each Holder of a Class B Certificate
desiring to
effect such Transfer shall, and does hereby agree to, indemnify the
Depositor
and the Securities Administrator 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 an ERISA Restricted Certificate will be registered
unless
the Securities Administrator has received (A) a representation to
the effect
that such transferee is not an employee benefit plan subject to
Title I of
ERISA, a plan subject to Section 4975 of the Code or a plan subject
to any
state, local, federal, non-U.S. or other law substantively similar
to the
foregoing provisions of ERISA or the Code ("Similar Law")
(collectively, a
"Plan"), and is not directly or indirectly acquiring such
Certificate for, on
behalf of, or with any assets of any such Plan, or (B) solely in
the case of an
ERISA Restricted Certificate (I) if the Certificate has been the
subject of an
ERISA-Qualifying Underwriting, a representation to the effect that
such
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transferee is an insurance company that is acquiring the
Certificate with assets
contained in an "insurance company general account," as defined in
Section V(e)
of Prohibited Transaction Class Exemption ("PTCE") 95-60, and the
acquisition
and holding of the Certificate are covered and exempt under
Sections I and III
of PTCE 95-60, or (II) solely in the case of a Definitive
Certificate, an
Opinion of Counsel satisfactory to the Securities Administrator,
and upon which
the Securities Administrator shall be entitled to rely, to the
effect that the
acquisition and holding of such Certificate will not constitute or
result in a
nonexempt prohibited transaction under Title I of ERISA or Section
4975 of the
Code, or a violation of Similar Law, and will not subject the
Securities
Administrator, the Master Servicer, the Trustee or the Depositor to
any
obligation in addition to those expressly undertaken in this
Agreement, which
Opinion of Counsel shall not be an expense of the Securities
Administrator, the
Master Servicer, the Trustee or the Depositor.
Except in the case of a Definitive Certificate, the representations
set
forth in the immediately preceding paragraph of this Subsection
5.02(b), other
than clause (B)(II) in the immediately preceding paragraph, 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 Class of ERISA Restricted
Certificates).
Notwithstanding any other provision herein to the contrary, any
purported
transfer of an ERISA Restricted Certificate to or on behalf of a
Plan without
the delivery to the Securities Administrator of a representation or
an Opinion
of Counsel satisfactory to the Securities Administrator as
described above shall
be void and of no effect. The Securities Administrator shall not be
under any
liability to any Person for any registration or transfer of any
ERISA Restricted
Certificate that is in fact not permitted by this Section 5.02(b),
nor shall the
Trustee or the Securities Administrator be under any liability for
making any
payments due on such 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 transfer was registered by the Securities Administrator
in
accordance with the foregoing requirements. The Trustee or the
Securities
Administrator shall be entitled, but not obligated, to recover from
any Holder
of any ERISA Restricted Certificate that was in fact a Plan and
that held such
Certificate in violation of this Section 5.02(b) all payments made
on such ERISA
Restricted Certificate at and after the time it commenced such
holding. Any such
payments so recovered shall be paid and delivered to the last
preceding Holder
of such Certificate that is not a Plan.
(c) [Reserved]
(d) [Reserved]
(e) The preparation and delivery of all certificates, opinions
and
other writings referred to above in this Section 5.02 shall not be
an expense of
the Issuing Entity, the Depositor or the Securities
Administrator.
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any
mutilated Certificate is surrendered to the Securities
Administrator or the
Securities Administrator receives evidence to its satisfaction of
the
destruction, loss or theft of any Certificate and of the ownership
thereof and
(b) there is delivered to the Securities Administrator such
security or
indemnity as may be required by them to save each of them harmless,
then, in the
absence of notice to the
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Securities Administrator that such Certificate has been acquired by
a bona fide
purchaser, the Securities Administrator shall execute, authenticate
and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen
Certificate, a new Certificate of like Class, tenor and Percentage
Interest. In
connection with the issuance of any new Certificate under this
Section 5.03, the
Securities Administrator 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
Securities
Administrator) connected therewith. Any replacement Certificate
issued pursuant
to this Section 5.03 shall constitute complete and indefeasible
evidence of
ownership in the Trust Fund, as if originally issued, whether or
not the lost,
stolen or destroyed Certificate shall be found at any time. All
Certificates
surrendered to the Securities Administrator under the terms of this
Section 5.03
shall be canceled and destroyed by the Securities Administrator in
accordance
with its standard procedures without liability on its part.
Section 5.04. Persons Deemed Owners. The Securities Administrator
and any
agent of the Securities Administrator may treat the Person in whose
name any
Certificate is registered as the owner of such Certificate for the
purpose of
receiving distributions as provided in this Agreement and for all
other purposes
whatsoever, and neither the Securities Administrator, nor any agent
of the
Securities Administrator shall be affected by any notice to the
contrary.
Section 5.05. Access to List of Certificateholders' Names and
Addresses. If
three or more Certificateholders (a) request such information in
writing from
the Securities Administrator, (b) state that such
Certificateholders desire to
communicate with other Certificateholders with respect to their
rights under
this Agreement or under the Certificates, and (c) provide a copy of
the
communication that such Certificateholders propose to transmit or
if the
Depositor shall request such information in writing from the
Securities
Administrator, then the Securities Administrator shall, within ten
Business Days
after the receipt of such request, provide the Depositor or
such
Certificateholders at such recipients' expense the most recent list
of the
Certificateholders of the Trust Fund held by the Securities
Administrator, if
any. The Depositor and every Certificateholder, by receiving and
holding a
Certificate, agree that the Securities Administrator shall not be
held
accountable by reason of the disclosure of any such information as
to the list
of the Certificateholders hereunder, regardless of the source from
which such
information was derived.
Section 5.06. Book-Entry Certificates. The Regular Certificates,
upon
original issuance, shall be issued in the form of one or more
typewritten
Certificates representing the Book-Entry Certificates, to be
delivered to the
Depository by or on behalf of the Depositor. The Book-Entry
Certificates shall
initially be registered on the Certificate Register in the name of
the
Depository or its nominee, and no Certificate Owner of a Book-Entry
Certificate
will receive a definitive certificate representing such Certificate
Owner's
interest in such Certificates, except as provided in Section 5.08.
Unless and
until definitive, fully registered Certificates ("Definitive
Certificates") have
been issued to the Certificate Owners of the Book-Entry
Certificates pursuant to
Section 5.08:
(a) the provisions of this Section shall be in full force and
effect;
(b) the Depositor and the Securities Administrator may deal with
the
Depository and the Depository Participants for all purposes
(including the
making of
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distributions) as the authorized representative of the respective
Certificate
Owners of the Book-Entry Certificates;
(c) registration of the Book-Entry Certificates may not be
transferred
by the Securities Administrator except to another Depository;
(d) the rights of the respective Certificate Owners of the
Book-Entry
Certificates shall be exercised only through the Depository and the
Depository
Participants and shall be limited to those established by law and
agreements
between the Owners of the Book-Entry Certificates and the
Depository and/or the
Depository Participants. Pursuant to the Depository Agreement,
unless and until
Definitive Certificates are issued pursuant to Section 5.08, the
Depository will
make book-entry transfers among the Depository Participants and
receive and
transmit distributions of principal and interest on the related
Certificates to
such Depository Participants;
(e) the Depository may collect its usual and customary fees,
charges
and expenses from its Depository Participants;
(f) 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
(g) to the extent that the provisions of this Section conflict
with
any other provisions of this Agreement, the provisions of this
Section shall
control.
For purposes of any
provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of,
Certificateholders
evidencing a specified percentage of the aggregate unpaid principal
amount of
any Class of Certificates, such direction or consent may be given
by Certificate
Owners (acting through the Depository and the Depository
Participants) owning
Book-Entry Certificates evidencing the requisite percentage of
principal amount
of such Class of Certificates.
Section 5.07. Notices to Depository. Whenever any notice or
other
communication is required to be given to Certificateholders of the
Class with
respect to which Book-Entry Certificates have been issued, unless
and until
Definitive Certificates shall have been issued to the related
Certificate
Owners, the Securities Administrator shall give all such notices
and
communications to the Depository.
Section 5.08. Definitive Certificates. If, after Book-Entry
Certificates
have been issued with respect to any Certificates, (a) the
Depository or the
Depositor advises the Securities Administrator that the Depository
is no longer
willing, qualified or able to discharge properly its
responsibilities under the
Depository Agreement with respect to such Certificates and the
Securities
Administrator or the Depositor is unable to locate a qualified
successor, (b)
the Depositor notifies the Securities Administrator and the
Depository of its
intent to terminate the book-entry system through the Depository
and, upon
receipt of notice of such intent from the Depository, the
Certificate Owners of
the Book-Entry Certificates agree to initiate such termination or
(c) after the
occurrence and continuation of an Event of Default, Certificate
Owners of such
Book-Entry Certificates having not less than 51% of the Voting
Rights
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evidenced by any Class of Book-Entry Certificates advise the
Securities
Administrator and the Depository in writing through the Depository
Participants
that the continuation of a book-entry system with respect to
Certificates of
such Class through the Depository (or its successor) is no longer
in the best
interests of the Certificate Owners of such Class, then the
Securities
Administrator shall notify all Certificate Owners of such
Book-Entry
Certificates, through the Depository, of the occurrence of any such
event and of
the availability of Definitive Certificates to Certificate Owners
of such Class
requesting the same. The Depositor shall provide the Securities
Administrator
with an adequate inventory of certificates to facilitate the
issuance and
transfer of Definitive Certificates. Upon surrender to the
Securities
Administrator of any such Certificates by the Depository,
accompanied by
registration instructions from the Depository for registration, the
Securities
Administrator shall authenticate and deliver such Definitive
Certificates.
Neither the Depositor nor the Securities Administrator shall be
liable for any
delay in delivery of such instructions and each may conclusively
rely on, and
shall be protected in relying on, such instructions. Upon the
issuance of such
Definitive Certificates, all references herein to obligations
imposed upon or to
be performed by the Depository shall be deemed to be imposed upon
and performed
by the Securities Administrator, to the extent applicable with
respect to such
Definitive Certificates and the Securities Administrator shall
recognize the
Holders of such Definitive Certificates as Certificateholders
hereunder.
Section 5.09. Maintenance of Office or Agency. The Securities
Administrator
will maintain or cause to be maintained at its expense an office or
offices or
agency or agencies where Certificates may be surrendered for
registration of
transfer or exchange. The Securities Administrator initially
designates its
offices at Sixth Street and Marquette Avenue, Minneapolis,
Minnesota 55479,
Attention: Corporate Trust Services - Merrill Lynch Mortgage
Investors Trust,
Series 2006-AF2 as offices for such purposes. The Securities
Administrator will
give prompt written notice to the Certificateholders of any change
in such
location of any such office or agency. For the avoidance of doubt,
the
Securities Administrator may satisfy the requirements of both this
Section 5.09
and Section 5.09 of the Stack II Agreement by maintaining a single
office or
agency.
ARTICLE VI.
PAYMENTS TO CERTIFICATEHOLDERS
Section 6.01. Distributions. Interest and principal on the
Certificates
will be distributed by the Securities Administrator monthly on each
Distribution
Date, commencing in November 2006, as instructed by the Master
Servicer, in an
aggregate amount equal to the sum of the Available Distribution
Amount for such
Distribution Date.
(I) Prior to the Credit Support Depletion Date, the Available
Distribution
Amount shall be applied as follows:
(a) On each Distribution Date, the Securities Administrator
shall
apply an amount equal to the Available Distribution Amount in the
following
order of priority:
(i) Concurrently to the Class AF-1, Class AF-2, Class AF-3 and
the Class IO Certificates, all amounts distributable pursuant to
(I)(b)(i) and
(I)(b)(iv);
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(ii) the balance, if any, of the Available Distribution Amount
shall be distributed concurrently, (A) to the Class AF-1, Class
AF-2, Class AF-3
and Class IO Certificates in the amounts distributable pursuant to
(I)(b)(ii)
below, up to the Non-PO Senior Optimal Principal Amount and (B) to
Class PO
Certificates, the Class PO Amount pursuant to (I)(b)(ii) below;
(iii) to the Class PO Certificates, the Class PO Shortfall
Amount, in accordance with paragraph (I)(b)(iii) below;
(iv)
subject to subsection (b) below, to the Class M
Certificateholders, the balance, if any, of the Available
Distribution Amount
after making the distributions provided for in paragraphs (i) and
(iii) above,
in accordance with, and up to the amount calculated pursuant to,
Section
6.01(I)(c) below;
(v) subject to subsection (b) below, to the Class B
Certificateholders, the balance, if any, of the Available
Distribution Amount
after making the distributions provided for in paragraphs (i)
through (iv)
above, in accordance with, and up to the amounts calculated
pursuant to, Section
6.01(I)(d) below; and
(vi) to the Class A-R Certificateholders, the balance, if any,
of
the Available Distribution Amount remaining after the distributions
provided for
in paragraphs (i) through (v) above.
(b) Amounts payable to the Class A Certificateholders on any
Distribution Date shall be distributed as follows:
(i) to the extent the amount available for distribution
pursuant
to paragraph (a)(i) above is sufficient:
(1) to the Class AF-1 Certificateholders, (1) the Class AF-1
Interest Accrual Amount plus (2) the Class AF-1 Shortfall from the
preceding
Distribution Date;
(2) to the Class AF-2 Certificateholders, (1) the Class AF-2
Interest Accrual Amount plus (2) the Class AF-2 Shortfall from the
preceding
Distribution Date;
(3) to the Class AF-3 Certificateholders, (1) the Class AF-1
Interest Accrual Amount plus (2) the Class AF-3 Shortfall from the
preceding
Distribution Date; and;
(4) to the Class IO Certificateholders, the sum of (a) the
Class IO Interest Accrual Amount plus (b) the Class IO Shortfall
from the
preceding Distribution Date;
(ii) concurrently, (A) to the Class AF-1, Class AF-2, Class
AF-3
and Class IO Certificates, up to the Non-PO Senior Optimal
Principal Amount,
allocated among the Class AF-1, Class AF-2, Class AF-3 and Class IO
Certificates
in accordance with the Non-PO Senior Principal Payment Rules and
(B) to the
Class PO Certificates, the Class PO Amount ;
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(iii) to the Class PO Certificateholders the Class PO Shortfall
Amount provided, however, that any amount distributed pursuant to
this Section
6.01(I)(b)(iii) shall not cause a further reduction in the
principal balance of
the Class PO Certificates; and
(iv) If the Available Distribution Amount is insufficient to
make
the distributions set forth in paragraphs (I)(b)(i) above, the
Securities
Administrator shall distribute the Available Distribution Amount to
the Class
AF-1, Class AF-2, Class AF-3 and Class IO Certificates pro rata in
accordance
with the amounts otherwise distributable to them pursuant to
paragraph (I)(b)(i)
above.
(c) Amounts payable on any Distribution Date to the Class M
Certificateholders pursuant to Section 6.01(I)(a)(iv) shall be
distributed in
the following priority:
(i) first, to the Class MF-1 Certificateholders, up to an
amount
equal to (A) the Class MF-1 Interest Accrual Amount plus (B) the
Class MF-1
Shortfall from the preceding Distribution Date plus (C) the pro
rata portion, if
any, of the Subordinated Optimal Principal Amount allocable to the
Class MF-1
Certificates in accordance with Section 6.01(I)(e) plus (D) any
Carry-over
Subordinated Principal Amounts with respect to the Class MF-1
Certificates;
(ii) second, to the Class MF-2 Certificateholders, up to an
amount equal to (A) the Class MF-2 Interest Accrual Amount plus (B)
the Class
MF-2 Shortfall from the preceding Distribution Date plus (C) the
pro rata
portion, if any, of the Subordinated Optimal Principal Amount
allocable to the
Class MF-2 Certificates in accordance with Section 6.01(I)(e) plus
(D) any
Carry-over Subordinated Principal Amounts with respect to the Class
MF-2
Certificates plus (E) any portion of the Subordinated Optimal
Principal Amount
allocated to the Class MF-1 Certificates in excess of the Class
Certificate
Balance of such Class;
(iii) third, to the Class MF-3 Certificateholders, up to an
amount equal to (A) the Class MF-3 Interest Accrual Amount plus (B)
the Class
MF-3 Shortfall from the preceding Distribution Date plus (C) the
pro rata
portion, if any, of the Subordinated Optimal Principal Amount
allocable to the
Class MF-3 Certificates in accordance with Section 6.01(I)(e) plus
(D) any
Carry-over Subordinated Principal Amounts with respect to the Class
MF-3
Certificates plus (E) any portion of the Subordinated Optimal
Principal Amount
allocated to the Class MF-2 Certificates in excess of the Class
Certificate
Balance of such Class;
(d) Amounts payable on any Distribution Date to the Class B
Certificateholders pursuant to Section 6.01(I)(a)(v) shall be
distributed in the
following priority:
(i) first, to the Class BF-1 Certificateholders, up to an
amount
equal to (A) the Class BF-1 Interest Accrual Amount plus (B) the
Class BF-1
Shortfall from the preceding Distribution Date plus (C) the pro
rata portion, if
any, of the Subordinated Optimal Principal Amount allocable to the
Class BF-1
Certificates in accordance with Section 6.01(I)(e) plus (D) any
Carry-over
Subordinated Principal Amounts with respect to the Class BF-1
Certificates plus
(E) any portion of the Subordinated Optimal Principal Amount
allocated to the
Class M Certificates in excess of the Class Certificate Balance of
such Class;
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(ii) second, to the Class BF-2 Certificateholders, up to an
amount equal to (A) the Class BF-2 Interest Accrual Amount plus (B)
the Class
BF-2 Shortfall from the preceding Distribution Date plus (C) the
pro rata
portion, if any, of the Subordinated Optimal Principal Amount
allocable to the
Class BF-2 Certificates in accordance with Section 6.01(I)(e) plus
(D) any
Carry-over Subordinated Principal Amounts with respect to the Class
BF-2
Certificates plus (E) any portion of the Subordinated Optimal
Principal Amount
allocated to the Class BF-1 Certificates in excess of the Class
Certificate
Balance of such Class; and
(iii) third, to the Class BF-3 Certificateholders, up to an
amount equal to (A) the Class BF-3 Interest Accrual Amount plus (B)
the Class
BF-3 Shortfall from the preceding Distribution Date plus (C) the
pro rata
portion, if any, of the Subordinated Optimal Principal Amount
allocable to the
Class BF-3 Certificates in accordance with Section 6.01(I)(e) plus
(D) any
Carry-over Subordinated Principal Amounts with respect to the Class
BF-3
Certificates plus (E) any portion of the Subordinated Optimal
Principal Amount
allocated to the Class BF-2 Certificates in excess of the Class
Certificate
Balance of such Class.
(e) On each Distribution Date, the Subordinated Optimal
Principal
Amount shall be allocated among the Classes of Subordinate
Certificates
entitled, pursuant to the next succeeding sentence, to an
allocation of
principal on such Distribution Date, pro rata based upon the Class
Certificate
Balances of all such Classes so entitled. With respect to the
Subordinate
Certificates, on each Distribution Date, principal shall be
distributable to (1)
any Class of Subordinate Certificates which has current Credit
Support (before
giving effect to any distribution of principal and any Realized
Losses allocable
on such Distribution Date) greater than or equal to the Original
Credit Support
for such Class; (2) the Class having the lowest numerical class
designation of
any outstanding Class of Subordinate Certificates which does not
meet the
criteria in (1) above; and (3) the Class BF-3 Certificates if all
other
outstanding Classes of Subordinate Certificates meet the criteria
in (1) above
or if no other Class of Subordinate Certificates is outstanding;
provided,
however, that no Class of Subordinate Certificates shall receive
any
distributions of principal if any Class of Subordinate Certificates
having a
lower numerical class designation than such Class fails to meet the
criteria in
(1) above. For purposes of this paragraph, the Class M Certificates
shall be
deemed to have a lower numerical class designation than each Class
of Class B
Certificates.
(II) On or after the Credit Support Depletion Date, the Available
Distribution
Amount shall be applied, first, in respect of interest in
accordance with
Section 6.01(I)(b)(i), second, in respect of principal to each
Class of the
Class A Certificates, pro rata, based upon their respective
outstanding
balances, and, third, the balance remaining after such
distributions, if any, to
the Class A-R Certificate.
Section 6.02. Allocation of Realized Losses.
(a) Prior to each Determination Date, the Servicer shall determine
(i)
the total amount of Realized Losses, if any, incurred during the
related
Principal Prepayment Period; and (ii) the respective portions of
such Realized
Losses allocable to interest and to principal.
(b) The principal portion of any Realized Losses shall be allocated
as
follows: first, to the Class BF-3 Certificates until the Class
Certificate
Balance of the Class BF-3 Certificates has been reduced to zero;
second, to the
Class BF-2 Certificates until the Class
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Certificate Balance of
the Class BF-2 Certificates has been reduced to zero;
third, to Class BF-1 Certificates until the Class Certificate
Balance of the
Class BF-1 Certificates has been reduced to zero; fourth, to the
Class MF-3
Certificates until the Class Certificate Balance of the Class MF-3
Certificates
has been reduced to zero; fifth, to the Class MF-2 Certificates
until the Class
Certificate Balance of the Class MF-2 Certificates has been reduced
to zero;
sixth, to the Class MF-1 Certificates until the Class Certificate
Balance of the
Class MF-1 Certificates has been reduced to zero; and seventh, to
the Senior
Certificates (other than the PO Certificates), on a pro rata basis
based on
their outstanding Certificate Balance (i) to the Class AF-1
Certificates and
(ii) first, to the Class AF-3 Certificates, until the Class
Certificate Balance
of the Class AF-3 Certificates has been reduced to zero; and then
to the Class
AF-2 Certificates, until the Class Certificate Balance of such
class has been
reduced to zero provided, however, that if a Realized Loss occurs
with respect
to a Discount Mortgage Loan (a) the amount of such Realized Loss
equal to the
product of (i) the amount of such Realized Loss and (ii) the PO
Percentage with
respect to such Discount Mortgage Loan will be allocated to Class
PO
Certificates and (b) the remainder of such Realized Loss will be
allocated as
described above.
(c) As used herein, an allocation of a Realized Loss on a "pro
rata
basis" among two or more specified Classes of Certificates means an
allocation
on a pro rata basis, among the various Classes so specified, to
each such Class
of Certificates on the basis of their Class Certificate Balances
prior to giving
effect to distributions to be made on such Distribution Date. All
Realized
Losses and all other losses allocated to a Class of Certificates
hereunder will
be allocated among the Certificates of such Class in proportion to
the
Percentage Interests evidenced thereby.
(d) In the event that a recovery is made with respect to any
Realized
Loss, the amount of such recovery shall be treated as a Principal
Prepayment and
deposited into the Master Servicer Collection Account and
distributed on the
applicable Distribution Date.
Section 6.03. Subordination. The rights of the Class B
Certificateholders
to receive distributions in respect of the Class B Certificates on
any
Distribution Date shall be subordinated to the rights of the Class
A and Class M
Certificateholders to receive distributions in respect of the Class
A and Class
M Certificates. The rights of the Class M Certificateholders to
receive
distributions in respect of the Class M Certificates on any
Distribution Date
shall be subordinated to the rights of the Class A
Certificateholders to receive
distributions in respect of the Class A Certificates. The rights of
the Class
BF-1 Certificateholders to receive distributions in respect of the
Class BF-1
Certificates on any Distribution Date shall be subordinate to the
rights of the
Class A and Class M Certificateholders to receive distributions in
respect of
such Class A and Class M Certificates. Each Class of Class B
Certificates (other
than the Class BF-1 Certificates) is subordinated to the Class A
Certificates,
the Class M Certificates and each Class of Class B Certificates
having a lower
numerical class designation than such Class of Class B
Certificates. The rights
of the Class MF-1 Certificateholders to receive distributions in
respect of the
Class MF-1 Certificates on any Distribution Date shall be
subordinate to the
rights of the Class A Certificateholders to receive distributions
in respect of
such Class A Certificates. Each Class of Class M Certificates
(other than the
Class MF-1 Certificates) is subordinated to the Class A
Certificates and each
Class of Class M Certificates having a lower numerical class
designation than
such Class of Class M Certificates.
Section 6.04. Payments.
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(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. 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 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 6.05. 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 (such information the
"Monthly
Statement"):
(i) the amount of the distribution made on such Distribution
Date
to the Holders of each Class of Certificates, separately
identified;
(ii) the amount of distributions made on such Distribution Date
allocable to principal, separately identifying the aggregate amount
of any
Principal Prepayment or other unscheduled receivers of principal
included in
that amount 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 amount the Servicing Fee during the related Due
Period
;
(iv) the amount of Monthly Advances for the related Due Period;
(v) the aggregate Principal Balance at the close of business at
the end of the related Due Period;
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(vi) the number, Principal Balance, weighted average remaining
term to maturity and weighted average Mortgage Interest Rate of the
Mortgage
Loans as of the related Due Date;
(vii) the number and aggregate unpaid principal balance of the
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 determined in
accordance with
the MBA method;
(viii) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number and
the Principal
Balance of such Mortgage Loan as of the last day of the related Due
Period and
the date of acquisition of the 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 amount of Realized Losses incurred during the related
Due Period and the cumulative amount of Realized Losses since the
Closing Date;
(xii) the amount of Realized Losses, if any, allocated to each
class of Certificates on that Distribution Date;
(xiii) the aggregate amount of Extraordinary Trust Fund
Expenses
withdrawn from the Master Servicer Collection Account for such
Distribution
Date;
(xiv) the Class Certificate Balance or Notional Amount, as
applicable, of each Class of Certificates, after giving effect to
the
distributions made on such Distribution Date;
(xv) the amount of any Prepayment Interest Shortfalls for such
Distribution Date to the extent not covered by Compensating
Interest Payments by
the Servicer or the Master Servicer pursuant to the Servicing
Agreement or
Section 6.06 and the related accrued interest thereon, with respect
to each
Class of Certificates;
(xvi) the Available Distribution Amount;
(xvii) the Certificate Rate for each Class of Certificates for
such Distribution Date; and
(xviii) the Pro Rata Senior Percentage, Senior Percentage and
Subordinate Percentage for the Mortgage Loans for the following
Distribution
Date;
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(xix) the amount of compensating interest shortfalls, if any,
allocated to each Class of Certificates on such Distribution
Date;
(xx) the aggregate Principal Balance of Mortgage Loans from
purchased by the Seller 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 2007, if so requested
in
writing, 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 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 pursuant to the requirements of the Code.
(c) The Securities Administrator may satisfy the requirements of
this
Section 6.05 and Section 6.03 of the Stack II Agreement via a
single Monthly
Statement, provided that such Monthly Statement adequately
addresses all of the
content and delivery requirements contained in both this Section
6.05 and
Section 6.03 of the Stack II Agreement.
Section 6.06. 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 Servicer was
required to make an
advance pursuant to the Servicing Agreement exceeds the amount
deposited in the
Master Servicer Collection Account that 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
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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, subject to applicable law and its
determination
of recoverability, 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. Subject to the
foregoing, the
Master Servicer shall continue to make such Monthly Advances
through the date
that the 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 Securities Administrator
(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 6.07. 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 Servicer under the Servicing Agreement
with respect
to subclause (a) of the definition of Prepayment Interest Shortfall
with respect
to the Mortgage Loans for the related Distribution Date, and not so
paid by the
Servicer (such amount, the "Compensating Interest Payment"). The
Master Servicer
shall not be entitled to any reimbursement of any Compensating
Interest Payment;
provided, however, the aggregate compensating interest payments
made by the
Master Servicer shall not exceed the Master Servicing
Compensation.
Section 6.08. Allocation of Certain Interest Shortfalls.
(a) On any Distribution Date, the excess, if any, of (X) the
aggregate
amounts required to be paid by the Servicer under the Servicing
Agreement with
respect to subclause (a) of the definition of Prepayment Interest
Shortfall with
respect to the Mortgage Loans for the related Distribution Date,
and not so paid
by the Servicer over (Y) the Compensating Interest Payment actually
paid into
the Master Servicer Collection Account pursuant to Section 6.06 for
such
Distribution Date shall equal the "Compensating Interest Shortfall"
with respect
to such Distribution Date. On any Distribution Date, the
Compensating Interest
Shortfall shall be allocated pro rata among the outstanding Classes
of Class A,
Class M and Class B Certificates based on the amount of interest to
which each
such Class would otherwise be paid on such Distribution Date had
there been no
such Compensating Interest Shortfall.
(b) On any Distribution Date, the interest portion of any
Realized
Losses ("Realized Loss Interest Shortfall") shall be allocated to
the Class of
Subordinate Certificates then outstanding having the highest
numerical class
designation or, if no Class of Subordinate Certificates is then
outstanding, to
the Class A Certificates (other than the Class PO Certificates) pro
rata among
the outstanding Classes of Class A Certificates (other than the
Class PO
Certificates) based on the amount of interest to which each such
Class would
otherwise be entitled on such Distribution Date had there been no
such Realized
Loss Interest Shortfall.
(c) Any interest shortfall resulting from the Relief Act or any
similar state legislation, as amended shall be allocated pro rata
among the
outstanding Classes of Certificates based upon the amount of
interest to which
each such Class would otherwise be paid on such Distribution
Date.
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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) Each of 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 from the Master Servicer and the
Depositor.
(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 or the
Securities Administrator shall have given the Master Servicer and
the Depositor
written notice of such claim or legal action promptly after the
Trustee or the
Securities Administrator shall have received 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:
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(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 Issuing Entity 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 Issuing Entity 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
the Servicing
Agreement (except to the extent that the Master Servicer or the
Custodian, as
the case may be, 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 Issuing Entity, 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 Section 3.01.
(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 Issuing Entity 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.
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(f) The Master Servicer shall not be liable for any acts or
omissions
of the 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 MLML 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. 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.
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, MLML or the Trustee may make such arrangements for the
compensation of
such successor master servicer out of payments on the Mortgage
Loans as MLML 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.
Notwithstanding anything herein to the contrary, in no event shall
the
Trustee be liable for any Servicing Fee or master servicing fee or
for any
differential in the amount of the Servicing Fee or master servicing
fee paid
hereunder and the amount necessary to induce any successor servicer
or successor
master servicer to act as successor servicer or successor master
servicer, as
applicable, under this Agreement and the transactions set forth or
provided for
herein.
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
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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.
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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 66 2/3% of the Class Certificate Balance of the Certificates,
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
the Seller, 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
Issuing Entity or which thereafter become part of the Issuing
Entity; 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 MLML 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
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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 (as
successor
Master Servicer) 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.
Neither the Trustee nor any other successor Master Servicer shall
be deemed to
be in default hereunder by reason of any failure to make, or any
delay in
making, any distribution hereunder or any portion thereof or any
failure to
perform, or any delay in performing, any duties or responsibilities
hereunder,
in either case caused solely by the failure of the Master Servicer
to deliver or
provide, or any delay in delivering or providing, any cash,
information,
documents or records required to be provided to it by the Master
Servicer.
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 and meeting such other standards for a
successor Master
Servicer as are set forth in this Agreement, 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. 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.
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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 66 2/3%
of the Class Certificate Balance of the Certificates 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 reasonable, prior
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. If any such instrument is found not to conform to
the
requirements of this Agreement in a material manner, the Trustee
shall take such
action as it deems appropriate to have the instrument corrected and
if the
instrument is not corrected to its satisfaction, the Trustee
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will provide notice thereof to the Certificateholders and take such
further
action as directed by the Certificateholders.
(c) On each Distribution Date, the Securities Administrator 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 Master Servicer and the
Servicer.
(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 Class Certificate Balance of the Certificates, 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);
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(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, the 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
Agreement,
except during such time, if any, as the Trustee shall be the
successor to, and
be vested with the rights, duties, powers and privileges of, the
Master Servicer
in accordance with the terms of this Agreement.
(e) All funds received by the Master Servicer and the
Securities
Administrator 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 Securities
Administrator.
(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;
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(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 Class Certificate
Balance of the
Certificates 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 Securities
Administrator, 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 Securities Administrator;
(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;
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(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 the
Seller
pursuant to this Agreement or the Mortgage Loan Purchase Agreement,
as
applicable, or the eligibility of any Mortgage Loan for purposes of
this
Agreement.
(xi) Any
permissive right of the Trustee or Securities
Administrator hereunder shall not be construed as a duty.
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
Securities
Administrator 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
Securities
Administrator 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
Securities
Administrator's signature and countersignature (or countersignature
of its
agent) on the Certificates shall be solely in its capacity as
Securities
Administrator of the Trust Fund and shall not constitute the
Certificates an
obligation of the Securities Administrator 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 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.
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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 or Securities Administrator
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
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)
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 "Aaa1" or higher
by Moody's with
respect to their long-term rating and rated "BBB" or higher by
S&P and "Baa1" or
higher by Moody's 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
originator, 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
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to exercise corporate trust powers under the laws of its
jurisdiction of
organization, and (iii) must be rated at least "A" by S&P or
"A" Moody's. 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
either (i) perform the duties of the Securities Administrator
pursuant to this
Agreement until such time as a new Securities Administrator is
appointed or (ii)
petition a court of competent jurisdiction to appoint a successor
securities
administrator. The Trustee shall notify the Rating Agencies of any
change of
Securities Administrator.
Section 9.07. Insurance. The Securities Administrator, at its 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
Securities
Administrator as to the Securities Administrator's 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 are 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.
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(c) The Holders of Certificates evidencing Percentage Interests
aggregating not less than 66 2/3% 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
Trustee, 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, the Master Servicer and 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,
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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-Master Servicer 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
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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) REMIC elections as set forth in the Preliminary Statement shall
be
made on Forms 1066 or other appropriate federal tax or information
return for
the taxable year ending on the last day of the calendar year in
which the
Certificates are issued. The regular interests and residual
interest in each
REMIC shall be as designated in the Preliminary Statement.
(b) The Closing Date is hereby designated as the "Startup Day" of
each
REMIC within the meaning of section 860G(a)(9) of the Code. The
latest possible
maturity date for purposes of Treasury Regulation 1.860G-1(a)(4)
will be the
Latest Possible Maturity Date.
(c) The Securities Administrator shall, for federal income tax
purposes, maintain books and records with respect to each REMIC on
a calendar
year and on an accrual basis.
(d) The Securities Administrator shall represent the Trust Fund in
any
administrative or judicial proceeding relating to an examination or
audit by any
governmental taxing authority with respect thereto. The Securities
Administrator
shall pay any and all tax-related expenses (not including taxes) of
each REMIC,
including but not limited to any professional fees or expenses
related to audits
or any administrative or judicial proceedings with respect to such
REMIC that
involve the Internal Revenue Service or state tax authorities, but
only to the
extent that (i) such expenses are ordinary or routine expenses,
including
expenses of a routine audit but not expenses of litigation (except
as described
in (ii)); or (ii) such expenses or liabilities (including taxes and
penalties)
are attributable to the negligence or willful misconduct of the
Securities
Administrator in fulfilling its duties hereunder (including its
duties as tax
return preparer). The Securities Administrator shall be entitled
to
reimbursement of expenses to the extent provided in clause (i)
above from the
Distribution Account, provided, however, the Securities
Administrator shall not
be entitled to reimbursement for expenses incurred in connection
with the
preparation of tax returns and other reports as required by this
Section.
(e) The Securities Administrator shall prepare and file, and
the
Trustee shall sign, all of each REMIC's and the Trust Fund's
federal and
appropriate state tax and information
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returns as such REMIC's direct representative. The expenses of
preparing and
filing such returns shall be borne by the Securities
Administrator.
(f) The Securities Administrator or its designee shall perform
on
behalf of each REMIC all reporting and other tax compliance duties
that are the
responsibility of such REMIC under the Code, the REMIC Provisions,
or other
compliance guidance issued by the Internal Revenue Service or any
state or local
taxing authority. Among its other duties, if required by the Code,
the REMIC
Provisions, or other such guidance, the Securities Administrator
shall provide,
upon receipt of additional reasonable compensation, to the Treasury
or other
governmental authority such information as is necessary for the
application of
any tax relating to the transfer of a Residual Certificate to any
disqualified
person or organization pursuant to Treasury Regulation
1.860E-2(a)(5) and any
person designated in Section 860E(e)(3) of the Code.
(g) The Securities Administrator and the Holders of Certificates
shall
take any action or cause any REMIC to take any action necessary to
create or
maintain the status of any REMIC as a REMIC under the REMIC
Provisions and shall
assist each other as necessary to create or maintain such status.
Neither the
Securities Administrator nor the Holder of any Residual Certificate
shall
knowingly take any action, cause any REMIC to take any action or
fail to take
(or fail to cause to
