<PAGE>
EXECUTION COPY
MERRILL LYNCH MORTGAGE INVESTORS, INC.
Depositor
LITTON LOAN SERVICING LP
Servicer
and
LASALLE BANK NATIONAL ASSOCIATION
Trustee
----------
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2006
----------
OWNIT MORTGAGE LOAN TRUST,
MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2006-3
<PAGE>
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS....................................................
1
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES.. 53
SECTION 2.01.
Conveyance
of Mortgage Loans......................... 53
SECTION 2.02.
Acceptance
by the Trustee of the Mortgage Loans...... 56
SECTION 2.03.
Representations, Warranties and Covenants of the
Depositor............................................ 58
SECTION 2.04.
Representations and Warranties of the Servicer....... 62
SECTION 2.05.
Substitutions and Repurchases of Mortgage Loans that
are not "Qualified Mortgages."....................... 65
SECTION 2.06.
Authentication and Delivery of Certificates.......... 65
SECTION 2.07.
REMIC
Elections...................................... 65
SECTION 2.08.
[RESERVED]........................................... 69
SECTION 2.09. Covenants of the
Servicer............................ 69
SECTION 2.10.
[RESERVED]........................................... 70
SECTION 2.11.
Permitted
Activities of the Trust.................... 70
SECTION 2.12.
Qualifying
Special Purpose Entity.................... 70
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS............... 70
SECTION 3.01.
Servicer
to Service Mortgage Loans................... 70
SECTION 3.02.
Servicing
and Subservicing; Enforcement of the
Obligations of Servicer.............................. 72
SECTION 3.03.
Rights of
the Depositor and the Trustee in Respect of
the Servicer......................................... 73
SECTION 3.04.
Trustee to
Act as Servicer........................... 73
SECTION 3.05.
Collection
of Mortgage Loan Payments; Collection
Account; Certificate Account......................... 74
SECTION 3.06.
Collection
of Taxes, Assessments and Similar Items;
Escrow Accounts...................................... 77
SECTION 3.07.
Access to
Certain Documentation and Information
Regarding the Mortgage Loans......................... 78
SECTION 3.08.
Permitted
Withdrawals from the Collection Account and
Certificate Account.................................. 78
SECTION 3.09.
[RESERVED]........................................... 80
SECTION 3.10.
Maintenance of Hazard Insurance...................... 80
SECTION 3.11.
Enforcement of Due-On-Sale Clauses; Assumption
Agreements........................................... 81
SECTION 3.12.
Realization Upon Defaulted Mortgage Loans;
Determination of Excess Proceeds..................... 82
SECTION 3.13.
Trustee to
Cooperate; Release of Mortgage Files...... 86
SECTION 3.14.
Documents,
Records and Funds in Possession of
Servicer to be Held for the Trustee.................. 87
SECTION 3.15.
Servicing
Compensation............................... 87
SECTION 3.16.
Access to
Certain Documentation...................... 88
SECTION 3.17.
Annual
Statement as to Compliance.................... 88
SECTION 3.18.
Reports on
Assessment of Compliance and Attestation.. 88
SECTION 3.19.
Rights of
the NIMs Insurer........................... 89
SECTION 3.20.
[RESERVED]........................................... 89
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SECTION 3.21.
[RESERVED]........................................... 89
SECTION 3.22.
[RESERVED]........................................... 89
SECTION 3.23.
Prepayment
Charge Reporting Requirements............. 90
SECTION 3.24.
Statements
to Trustee................................ 90
SECTION 3.25.
Indemnification...................................... 90
SECTION 3.26.
Nonsolicitation...................................... 92
SECTION 3.27.
Periodic
Filings..................................... 92
ARTICLE IV
DISTRIBUTIONS.................................................
92
SECTION 4.01.
Advances............................................. 92
SECTION 4.02.
Reduction
of Servicing Compensation in Connection
with Prepayment Interest Shortfalls.................. 93
SECTION 4.03.
Distributions on the REMIC Interests................. 94
SECTION 4.04.
Distributions........................................ 94
SECTION 4.05.
Monthly
Statements to Certificateholders............. 100
ARTICLE V THE
CERTIFICATES...............................................
104
SECTION 5.01.
The
Certificates..................................... 104
SECTION 5.02.
Certificate Register; Registration of Transfer and
Exchange of Certificates............................. 105
SECTION 5.03.
Mutilated,
Destroyed, Lost or Stolen Certificates.... 113
SECTION 5.04.
Persons
Deemed Owners................................ 113
SECTION 5.05.
Access to
List of Certificateholders' Names and
Addresses............................................ 113
SECTION 5.06.
Book-Entry
Certificates.............................. 113
SECTION 5.07.
Notices to
Depository................................ 114
SECTION 5.08.
Definitive
Certificates.............................. 114
SECTION 5.09.
Maintenance of Office or Agency...................... 115
SECTION 5.10.
Authenticating Agent................................. 115
ARTICLE VI THE DEPOSITOR AND THE
SERVICER................................ 115
SECTION 6.01.
Respective
Liabilities of the Depositor and the
Servicer............................................. 115
SECTION 6.02.
Merger or
Consolidation of the Depositor or the
Servicer............................................. 116
SECTION 6.03.
Limitation
on Liability of the Depositor, the
Servicer and Others.................................. 116
SECTION 6.04.
Limitation
on Resignation of Servicer................ 117
SECTION 6.05.
Errors and
Omissions Insurance; Fidelity Bonds....... 118
ARTICLE VII DEFAULT; TERMINATION OF
SERVICER............................. 119
SECTION 7.01.
Events of
Default.................................... 119
SECTION 7.02.
Servicer
Trigger Event............................... 120
SECTION 7.03.
Trustee to
Act; Appointment of Successor............. 121
SECTION 7.04.
Notification to Certificateholders................... 123
ARTICLE VIII CONCERNING THE
TRUSTEE...................................... 123
SECTION 8.01.
Duties of
the Trustee................................ 123
SECTION 8.02.
Certain
Matters Affecting the Trustee................ 124
SECTION 8.03.
Trustee
Not Liable for Certificates or Mortgage
Loans................................................ 126
</TABLE>
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SECTION 8.04.
Trustee
May Own Certificates......................... 126
SECTION 8.05.
Trustee's
Fees and Expenses.......................... 126
SECTION 8.06.
Indemnification and Expenses of Trustee.............. 126
SECTION 8.07.
Eligibility Requirements for Trustee................. 127
SECTION 8.08.
Resignation and Removal of Trustee................... 128
SECTION 8.09.
Successor
Trustee.................................... 128
SECTION 8.10.
Merger or
Consolidation of Trustee................... 129
SECTION 8.11.
Appointment of Co-Trustee or Separate Trustee........ 129
SECTION 8.12.
Tax
Matters.......................................... 130
ARTICLE IX
TERMINATION...................................................
132
SECTION 9.01.
Termination upon Liquidation or Auction of all
Mortgage Loans....................................... 132
SECTION 9.02.
Final
Distribution on the Certificates............... 133
SECTION 9.03.
Additional
Termination Requirements.................. 134
ARTICLE X MISCELLANEOUS
PROVISIONS....................................... 135
SECTION 10.01.
Amendment............................................ 135
SECTION 10.02.
Counterparts......................................... 136
SECTION 10.03.
Governing
Law........................................ 136
SECTION 10.04.
Intention of
Parties................................. 137
Section 10.05.
Notices.............................................. 137
SECTION 10.06.
Severability of
Provisions........................... 138
SECTION 10.07.
Assignment........................................... 138
SECTION 10.08.
Limitation on
Rights of Certificateholders........... 138
SECTION 10.09.
Inspection and
Audit Rights.......................... 139
SECTION 10.10.
Certificates
Nonassessable and Fully Paid............ 139
SECTION 10.11.
Third Party
Rights................................... 139
SECTION 10.12.
Additional
Rights of the NIMs Insurer................ 139
SECTION 10.13. Assignment; Sales; Advance
Facilities................ 140
SECTION 10.14.
Compliance with
Regulation AB........................ 140
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EXHIBIT A FORMS OF
CERTIFICATES
EXHIBIT B-1
MORTGAGE LOAN SCHEDULE - MORTGAGE POOL
EXHIBIT B-2
MORTGAGE LOAN SCHEDULE - GROUP ONE MORTGAGE LOANS
EXHIBIT B-3
MORTGAGE LOAN SCHEDULE - GROUP TWO MORTGAGE LOANS
EXHIBIT C [RESERVED]
EXHIBIT D FORM OF TRUSTEE
CERTIFICATION
EXHIBIT E-1 FORM
OF CLASS R TRANSFEREE'S LETTER AND AFFIDAVIT
EXHIBIT E-2 FORM
OF CLASS TRANSFEROR'S AFFIDAVIT
EXHIBIT F FORM OF
TRANSFEROR CERTIFICATE
EXHIBIT G FORM OF
INVESTMENT LETTER (ACCREDITED INVESTOR)
EXHIBIT H FORM OF RULE
144A LETTER (QUALIFIED INSTITUTIONAL BUYER)
EXHIBIT I FORM OF REQUEST
FOR RELEASE
EXHIBIT J [RESERVED]
EXHIBIT K [RESERVED]
EXHIBIT L [RESERVED]
EXHIBIT M-1
[RESERVED]
EXHIBIT M-2
[RESERVED]
EXHIBIT M-3
[RESERVED]
EXHIBIT N-1 FORM
OF CLASS A-1 CAP CONTRACT
EXHIBIT N-2 FORM
OF CLASS A-2 CAP CONTRACT
EXHIBIT N-3 FORM
OF FLOATING RATE SUBORDINATE CERTIFICATES CAP CONTRACT
EXHIBIT O-1
ONE-MONTH LIBOR CAP TABLE - CLASS A-1 CAP CONTRACT
EXHIBIT O-2
ONE-MONTH LIBOR CAP TABLE - CLASS A-2 CAP CONTRACT
EXHIBIT O-3
ONE-MONTH LIBOR CAP TABLE - FLOATING RATE SUBORDINATE
CERTIFICATES CAP CONTRACT
EXHIBIT P FORM OF POWER OF
ATTORNEY
EXHIBIT Q FORM OF
TRANSFEROR REPRESENTATION LETTER
FOR TRANSFER TO REGULATION S BOOK-ENTRY CERTIFICATE
FROM A HOLDER OF A RULE 144A BOOK-ENTRY CERTIFICATE OR
DEFINITIVE CERTIFICATE
EXHIBIT R FORM OF
TRANSFEROR REPRESENTATION LETTER
FOR TRANSFER PURSUANT TO RULE 144A FROM A HOLDER OF
A REGULATION S BOOK-ENTRY CERTIFICATE OR DEFINITIVE
CERTIFICATE
EXHIBIT S FORM OF SWAP
AGREEMENT
EXHIBIT T-1 FORM
OF ASSESSMENT OF COMPLIANCE
EXHIBIT T-2
SERVICING CRITERIA (EXHIBIT A TO FORM OF ASSESSMENT OF
COMPLIANCE)
EXHIBIT T-3 FORM
OF SARBANES-OXLEY CERTIFICATION (SERVICER)
EXHIBIT T-4 FORM
OF ITEM 1123 CERTIFICATION (SERVICER)
EXHIBIT T-5 FORM
OF OFFICER'S CERTIFICATE (TRUSTEE)
EXHIBIT U [RESERVED]
EXHIBIT V [RESERVED]
EXHIBIT W [RESERVED]
EXHIBIT X ITEMS FOR FORM
8-K
EXHIBIT Y ITEMS FOR FORM
10-D
EXHIBIT Z ITEMS FOR FORM
10-K
EXHIBIT Z-1
ADDITIONAL DISCLOSURE INFORMATION
</TABLE>
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vi
<PAGE>
POOLING AND SERVICING AGREEMENT (the "Agreement"), dated as of
March 1,
2006, among MERRILL LYNCH MORTGAGE INVESTORS, INC., a Delaware
corporation, as
depositor (the "Depositor"), LITTON LOAN SERVICING LP, a Delaware
limited
partnership, as servicer (the "Servicer") and LASALLE BANK NATIONAL
ASSOCIATION,
a national banking association, as trustee (the "Trustee").
The
Depositor is the owner of the Trust Fund that is hereby conveyed to
the
Trustee in return for the Certificates. The Trust Fund for federal
income tax
purposes will consist of (i) three real estate mortgage investment
conduits,
(ii) the right to receive payments distributable to the Class P
Certificates
pursuant to Section 4.04(b)(i) hereof, (iii) each Cap Contract and
the Cap
Contract Account, (iv) the grantor trusts described in Section 2.07
hereof and
(v) the Supplemental Interest Trust, which in turn will hold the
Swap Agreement.
The SWAP REMIC will consist of all of the assets constituting the
Trust Fund
(other than the assets described in clauses (ii), (iii), (iv) and
(v) above,
other than the SWAP REMIC Regular Interests and other than the
Lower Tier REMIC
Regular Interests) and will be evidenced by the SWAP REMIC Regular
Interests
(which will be uncertificated and will represent the "regular
interests" in the
SWAP REMIC) and the Class SWR Interest as the single "residual
interest" in the
SWAP REMIC. The Lower Tier REMIC will consist of SWAP REMIC Regular
Interests
and will be evidenced by the Lower Tier REMIC Regular Interests
(which will be
uncertificated and will represent the "regular interests" in the
Lower Tier
REMIC) and the Class LTR Interest as the single "residual interest"
in the Lower
Tier REMIC. The Trustee will hold the Lower Tier REMIC Regular
Interests. The
Upper Tier REMIC will consist of the Lower Tier REMIC Regular
Interests and will
be evidenced by the REMIC Regular Interests (which will represent
the "regular
interests" in the Upper Tier REMIC) and the Residual Interest as
the single
"residual interest" in the Upper Tier REMIC. The Class R
Certificate will
represent beneficial ownership of the Class SWR Interest, the Class
LTR Interest
and the Residual Interest. The "latest possible maturity date" for
federal
income tax purposes of all interests created hereby will be the
Latest Possible
Maturity Date.
All
covenants and agreements made by the Transferor in the Transfer
Agreement, by the Sponsor in the Sale Agreement and by the
Depositor and the
Trustee herein with respect to the Mortgage Loans and the other
property
constituting the Trust Fund are for the benefit of the Holders from
time to time
of the Certificates and, to the extent provided herein, the NIMs
Insurer.
THE SWAP REMIC
The following table sets forth the designations, initial principal
balances and
interest rates for each interest in the SWAP REMIC:
<TABLE>
<CAPTION>
Class Initial
Principal Balance Interest Rate
-----
------------------------- -------------
<S>
<C>
<C>
1-SW1
$38,169,623.698
(1)
1-SW1A
$ 2,792,182.039
(2)
1-SW1B
$ 2,792,182.039
(3)
1-SW2A
$ 3,274,317.616
(2)
1-SW2B
$ 3,274,317.616
(3)
1-SW3A
$ 3,646,909.236
(2)
1-SW3B
$ 3,646,909.236
(3)
1-SW4A
$ 4,010,720.306
(2)
1-SW4B
$ 4,010,720.306
(3)
1-SW5A
$ 4,350,288.097
(2)
</TABLE>
<PAGE>
<TABLE>
<S>
<C>
<C>
1-SW5B
$ 4,350,288.097
(3)
1-SW6A
$ 4,577,008.741
(2)
1-SW6B
$ 4,577,008.741
(3)
1-SW7A
$ 4,563,145.766
(2)
1-SW7B
$ 4,563,145.766
(3)
1-SW8A
$ 4,324,909.530
(2)
1-SW8B
$ 4,324,909.530
(3)
1-SW9A
$ 4,066,048.913
(2)
1-SW9B
$ 4,066,048.913
(3)
1-SW10A
$ 3,826,114.089
(2)
1-SW10B
$ 3,826,114.089
(3)
1-SW11A
$ 3,599,843.357
(2)
1-SW11B
$ 3,599,843.357
(3)
1-SW12A
$ 3,373,124.937
(2)
1-SW12B
$ 3,373,124.937
(3)
1-SW13A
$ 3,166,382.911
(2)
1-SW13B
$ 3,166,382.911
(3)
1-SW14A
$ 2,969,653.136
(2)
1-SW14B
$ 2,969,653.136
(3)
1-SW15A
$ 2,825,479.938
(2)
1-SW15B
$ 2,825,479.938
(3)
1-SW16A
$ 2,817,228.730
(2)
1-SW16B
$ 2,817,228.730
(3)
1-SW17A
$ 2,967,362.144
(2)
1-SW17B
$ 2,967,362.144
(3)
1-SW18A
$ 3,149,838.860
(2)
1-SW18B
$ 3,149,838.860
(3)
1-SW19A
$ 2,987,388.866
(2)
1-SW19B
$ 2,987,388.866
(3)
1-SW20A
$ 2,571,525.499
(2)
1-SW20B
$ 2,571,525.499
(3)
1-SW21A
$ 2,225,609.832
(2)
1-SW21B
$ 2,225,609.832
(3)
1-SW22A
$ 1,959,665.231
(2)
1-SW22B
$ 1,959,665.231
(3)
1-SW23A
$ 1,746,851.421
(2)
1-SW23B
$ 1,746,851.421
(3)
1-SW24A
$ 1,587,852.972
(2)
1-SW24B
$ 1,587,852.972
(3)
1-SW25A
$ 1,464,663.720
(2)
1-SW25B
$ 1,464,663.720
(3)
1-SW26A
$ 847,582.578
(2)
1-SW26B
$ 847,582.578
(3)
1-SW27A
$ 562,402.946
(2)
1-SW27B
$ 562,402.946
(3)
</TABLE>
2
<PAGE>
<TABLE>
<S>
<C>
<C>
1-SW28A
$
33,085.879
(2)
1-SW28B
$
33,085.879
(3)
1-SW29A
$ 1,536,315.869
(2)
1-SW29B
$ 1,536,315.869
(3)
1-SW30A
$ 1,404,608.414
(2)
1-SW30B
$ 1,404,608.414
(3)
1-SW31A
$ 1,142,671.987
(2)
1-SW31B
$ 1,142,671.987
(3)
1-SW32A
$ 945,894.714
(2)
1-SW32B
$ 945,894.714
(3)
1-SW33A
$ 820,444.788
(2)
1-SW33B
$ 820,444.788
(3)
1-SW34A
$ 728,057.094
(2)
1-SW34B
$ 728,057.094
(3)
1-SW35A
$ 649,924.885
(2)
1-SW35B
$ 649,924.885
(3)
1-SW36A
$ 582,407.435
(2)
1-SW36B
$ 582,407.435
(3)
1-SW37A
$ 523,812.826
(2)
1-SW37B
$ 523,812.826
(3)
1-SW38A
$ 474,304.974
(2)
1-SW38B
$ 474,304.974
(3)
1-SW39A
$ 432,475.936
(2)
1-SW39B
$ 432,475.936
(3)
1-SW40A
$ 396,791.444
(2)
1-SW40B
$ 396,791.444
(3)
1-SW41A
$ 366,126.517
(2)
1-SW41B
$ 366,126.517
(3)
1-SW42A
$ 339,190.642
(2)
1-SW42B
$ 339,190.642
(3)
1-SW43A
$ 315,305.716
(2)
1-SW43B
$ 315,305.716
(3)
1-SW44A
$ 293,945.025
(2)
1-SW44B
$ 293,945.025
(3)
1-SW45A
$ 5,953,912.428
(2)
1-SW45B
$ 5,953,912.428
(3)
2-SW2
$56,255,144.262
(4)
2-SW1A
$ 4,115,172.961
(5)
2-SW1B
$ 4,115,172.961
(6)
2-SW2A
$ 4,825,753.884
(5)
2-SW2B
$ 4,825,753.884
(6)
2-SW3A
$ 5,374,886.764
(5)
2-SW3B
$ 5,374,886.764
(6)
2-SW4A
$ 5,911,078.694
(5)
2-SW4B
$ 5,911,078.694
(6)
</TABLE>
3
<PAGE>
<TABLE>
<S>
<C>
<C>
2-SW5A
$ 6,411,540.403
(5)
2-SW5B
$ 6,411,540.403
(6)
2-SW6A
$ 6,745,685.759
(5)
2-SW6B
$ 6,745,685.759
(6)
2-SW7A
$ 6,725,254.234
(5)
2-SW7B
$ 6,725,254.234
(6)
2-SW8A
$ 6,374,136.970
(5)
2-SW8B
$ 6,374,136.970
(6)
2-SW9A
$ 5,992,623.087
(5)
2-SW9B
$ 5,992,623.087
(6)
2-SW10A
$ 5,639,002.411
(5)
2-SW10B
$ 5,639,002.411
(6)
2-SW11A
$ 5,305,520.143
(5)
2-SW11B
$ 5,305,520.143
(6)
2-SW12A
$ 4,971,378.063
(5)
2-SW12B
$ 4,971,378.063
(6)
2-SW13A
$ 4,666,677.589
(5)
2-SW13B
$ 4,666,677.589
(6)
2-SW14A
$ 4,376,733.364
(5)
2-SW14B
$ 4,376,733.364
(6)
2-SW15A
$ 4,164,248.062
(5)
2-SW15B
$ 4,164,248.062
(6)
2-SW16A
$ 4,152,087.270
(5)
2-SW16B
$ 4,152,087.270
(6)
2-SW17A
$ 4,373,356.856
(5)
2-SW17B
$ 4,373,356.856
(6)
2-SW18A
$ 4,642,294.640
(5)
2-SW18B
$ 4,642,294.640
(6)
2-SW19A
$ 4,402,872.634
(5)
2-SW19B
$ 4,402,872.634
(6)
2-SW20A
$ 3,789,965.001
(5)
2-SW20B
$ 3,789,965.001
(6)
2-SW21A
$ 3,280,147.668
(5)
2-SW21B
$ 3,280,147.668
(6)
2-SW22A
$ 2,888,193.269
(5)
2-SW22B
$ 2,888,193.269
(6)
2-SW23A
$ 2,574,544.079
(5)
2-SW23B
$ 2,574,544.079
(6)
2-SW24A
$ 2,340,209.028
(5)
2-SW24B
$ 2,340,209.028
(6)
2-SW25A
$ 2,158,650.280
(5)
2-SW25B
$ 2,158,650.280
(6)
2-SW26A
$ 1,249,183.922
(5)
2-SW26B
$ 1,249,183.922
(6)
2-SW27A
$ 828,880.554
(5)
</TABLE>
4
<PAGE>
<TABLE>
<S>
<C>
<C>
2-SW27B
$ 828,880.554
(6)
2-SW28A
$
48,762.621
(5)
2-SW28B
$
48,762.621
(6)
2-SW29A
$ 2,264,252.631
(5)
2-SW29B
$ 2,264,252.631
(6)
2-SW30A
$ 2,070,139.586
(5)
2-SW30B
$ 2,070,139.586
(6)
2-SW31A
$ 1,684,092.513
(5)
2-SW31B
$ 1,684,092.513
(6)
2-SW32A
$ 1,394,078.286
(5)
2-SW32B
$ 1,394,078.286
(6)
2-SW33A
$ 1,209,187.712
(5)
2-SW33B
$ 1,209,187.712
(6)
2-SW34A
$ 1,073,024.906
(5)
2-SW34B
$ 1,073,024.906
(6)
2-SW35A
$ 957,872.115
(5)
2-SW35B
$ 957,872.115
(6)
2-SW36A
$ 858,363.565
(5)
2-SW36B
$ 858,363.565
(6)
2-SW37A
$ 772,005.674
(5)
2-SW37B
$ 772,005.674
(6)
2-SW38A
$ 699,040.026
(5)
2-SW38B
$ 699,040.026
(6)
2-SW39A
$ 637,391.564
(5)
2-SW39B
$ 637,391.564
(6)
2-SW40A
$ 584,799.056
(5)
2-SW40B
$ 584,799.056
(6)
2-SW41A
$ 539,604.483
(5)
2-SW41B
$ 539,604.483
(6)
2-SW42A
$ 499,905.858
(5)
2-SW42B
$ 499,905.858
(6)
2-SW43A
$ 464,703.784
(5)
2-SW43B
$ 464,703.784
(6)
2-SW44A
$ 433,221.975
(5)
2-SW44B
$ 433,221.975
(6)
2-SW45A
$ 8,774,993.572
(5)
2-SW45B
$ 8,774,993.572
(6)
SWR
(7)
(7)
</TABLE>
(1) The interest rate
on the Class 1-SW1 Interest shall be a per annum rate
equal to the Group One Net WAC.
(2) For any
Distribution Date, the interest rate on each SWAP REMIC Regular
Interest beginning with the designation "1" and ending with the
designation
"A"
shall be a per annum rate equal to 2 times the Group One Net
WAC,
subject to a maximum rate of 2 times the REMIC Swap Rate for
such
Distribution Date.
5
<PAGE>
(3) For any
Distribution Date, the interest rate on each SWAP REMIC Regular
Interest beginning with the designation "1" and ending with the
designation
"B"
shall be a per annum rate equal to the greater of (x) the excess,
if
any,
of (i) 2 times the Group One Net WAC over (ii) 2 times the REMIC
Swap
Rate
for such Distribution Date and (y) 0.00%.
(4) The interest rate
on the Class 2-SW2 Interest shall be a per annum rate
equal to the Group Two Net WAC.
(5) For any
Distribution Date, the interest rate on each SWAP REMIC Regular
Interest beginning with the designation "2" and ending with the
designation
"A"
shall be a per annum rate equal to 2 times the Group Two Net
WAC,
subject to a maximum rate of 2 times the REMIC Swap Rate for
such
Distribution Date.
(6) For any
Distribution Date, the interest rate on each SWAP REMIC Regular
Interest beginning with the designation "2" and ending with the
designation
"B"
shall be a per annum rate equal to the greater of (x) the excess,
if
any,
of (i) 2 times the Group Two Net WAC over (ii) 2 times the REMIC
Swap
Rate
for such Distribution Date and (y) 0.00%.
(7) The Class SWR
Interest shall have no principal amount and shall bear no
interest.
THE LOWER TIER REMIC
The following table sets forth the designations, initial principal
balances,
interest rates, Corresponding Classes of Certificates and related
Mortgage Group
for each interest in the Lower Tier REMIC:
<TABLE>
<CAPTION>
Initial
Class(es) of Corresponding
Principal
Interest Certificates or
Related
Class Balance
Rate
Mortgage Group
------ ---------
--------
--------------------------
<S> <C>
<C>
<C>
LTA-1
(1)
(8)
A-1, R
LTA-2A (1)
(8)
A-2A
LTA-2B (1)
(8)
A-2B
LTA-2C (1)
(8)
A-2C
LTA-2D (1)
(8)
A-2D
LTM-1
(1)
(8)
M-1
LTM-2
(1)
(8)
M-2
LTM-3
(1)
(8)
M-3
LTM-4
(1)
(8)
M-4
LTM-5
(1)
(8)
M-5
LTM-6
(1)
(8)
M-6
LTB-1
(1)
(8)
B-1
LTB-2
(1)
(8)
B-2
LTB-3
(1)
(8)
B-3
LTB-4
(1)
(8)
B-4
LTIX
(2)
(8)
N/A
LTII1A (3)
(8)
Group One
LTII1B (4)
(9)
Group One
LTII2A (5)
(8)
Group Two
LTII2B (6)
(10)
Group Two
LTIIX
(7)
(8)
N/A
LT-IO (11)
(11)
N/A
</TABLE>
6
<PAGE>
<TABLE>
<S>
<C>
<C>
<C>
LTR
(12) (12)
N/A
</TABLE>
(1) The initial
principal balance of each of these Lower Tier REMIC Regular
Interests shall equal 1/4 of the initial Certificate Principal
Balance of
its
Corresponding Certificates.
(2) The initial
principal balance of the Class LTIX Interest shall equal the
excess of (i) 50% of the aggregate Cut-off Date Principal Balance
of the
Mortgage Loans over (ii) the initial principal balance of the Lower
Tier
REMIC I Marker Interests.
(3) The initial
principal balance of the Class LTII1A Interest shall equal
0.05% of the excess of (i) the aggregate Cut-off Date Principal
Balance of
the
Group One Mortgage Loans over (ii) the aggregate of the initial
Certificate Principal Balances of Certificate Group One.
(4) The initial
principal balance of the Class LTII1B Interest shall equal
0.05% of the aggregate Cut-off Date Principal Balance of the Group
One
Mortgage Loans.
(5) The initial
principal balance of the Class LTII2A Interest shall equal
0.05% of the excess of (i) the aggregate Cut-off Date Principal
Balance of
the
Group Two Mortgage Loans over (ii) the aggregate of the initial
Certificate Principal Balances of Certificate Group Two.
(6) The initial
principal balance of the Class LTII2B Interest shall equal
0.05% of the aggregate Cut-off Date Principal Balance of the Group
Two
Mortgage Loans.
(7) The initial
principal balance of the Class LTIIX Interest shall equal the
excess of (i) 50% of the aggregate Cut-off Date Principal Balance
of the
Mortgage Loans over (ii) the initial principal balance of the Lower
Tier
REMIC II Marker Interests.
(8) For each
Distribution Date, the interest rate for each of the Lower Tier
REMIC Regular Interests (other than the Class LTII1B, the Class
LTII2B and
the
Class LT-IO Interests) shall be a per annum rate (but not less
than
zero) equal to the product of (i) the weighted average of the
interest
rates on the SWAP REMIC Regular Interests for such Distribution
Date and
(ii)
a fraction the numerator of which is 30 and the denominator of
which
is
the actual number of days in the Accrual Period for the LIBOR
Certificates, provided however, that for any Distribution Date on
which the
Class LT-IO Interest is entitled to a portion of interest accruals
on a
SWAP
REMIC Regular Interest ending with a designation "A" as described
in
footnote 11 below, such weighted average shall be computed by
first
subjecting the rate on such SWAP REMIC Regular Interest to a cap
equal to
Swap
LIBOR for such Distribution Date.
(9) For each
Distribution Date, the interest rate for the Class LTII1B
Interest
shall be a per annum rate equal to the product of (i) the weighted
average
of
the interest rates on the SWAP REMIC Regular Interests beginning
with
the
designation "1" for such Distribution Date and (ii) a fraction
the
numerator of which is 30 and the denominator of which is the actual
number
of
days in the Accrual Period for the LIBOR Certificates,
provided,
however, that for any Distribution Date on which the Class LT-IO
Interest
is
entitled to a portion of interest accruals on a SWAP REMIC
Regular
Interest ending with a
designation "A" as described in footnote 11 below,
such
weighted average shall be computed by first subjecting the rate
on
such
SWAP REMIC Regular Interest to a cap equal to Swap LIBOR for
such
Distribution Date.
(10) For each Distribution Date, the interest rate for the Class
LTII2B Interest
shall be a per annum rate equal to the product of (i) the weighted
average
of
the interest rates on the SWAP REMIC Regular Interests beginning
with
the
designation "2" for such Distribution Date and (ii) a fraction
the
numerator of which is 30 and the denominator of which is the actual
number
of
days in the Accrual Period for the LIBOR Certificates,
provided,
however, that for any Distribution Date on which the Class LT-IO
Interest
is
entitled to a portion of interest accruals on a SWAP REMIC
Regular
Interest ending with a designation "A" as described in footnote 11
below,
such
weighted average shall be computed by first subjecting the rate
on
such
SWAP REMIC Regular Interest to a cap equal to Swap LIBOR for
such
Distribution Date.
7
<PAGE>
(11) The Class LT-IO Interest is an interest-only class that does
not have a
principal balance. For only those Distribution Dates listed in the
first column
of the table below, the Class LT1-IO shall be entitled to interest
accrued on
the SWAP REMIC Regular Interest listed in the second column below
at a per annum
rate equal to the excess, if any, of (i) the interest rate for such
SWAP REMIC
Regular Interest for such Distribution Date over (ii) Swap LIBOR
for such
Distribution Date.
<TABLE>
<CAPTION>
Distribution Date. SWAP REMIC Regular
Interest
------------------
---------------------------
<S>
<C>
7
Class 1-SW1A
Class 2-SW1A
7-8
Class 1-SW2A
Class 2-SW2A
7-9
Class 1-SW3A
Class
2-SW3A
7-10
Class 1-SW4A
Class 2-SW4A
7-11
Class 1-SW5A
Class 2-SW5A
7-12
Class 1-SW6A
Class 2-SW6A
7-13
Class 1-SW7A
Class 2-SW7A
7-14
Class 1-SW8A
Class 2-SW8A
7-15
Class 1-SW9A
Class 2-SW9A
7-16
Class 1-SW10A
Class 2-SW10A
7-17
Class 1-SW11A
Class 2-SW11A
7-18
Class 1-SW12A
Class 2-SW12A
7-19
Class 1-SW13A
Class 2-SW13A
7-20
Class 1-SW14A
Class 2-SW14A
7-21
Class 1-SW15A
Class 2-SW15A
7-22
Class 1-SW16A
Class 2-SW16A
7-23
Class 1-SW17A
Class 2-SW17A
7-24
Class 1-SW18A
Class
2-SW18A
7-25
Class 1-SW19A
Class 2-SW19A
7-26
Class 1-SW20A
Class 2-SW20A
7-27
Class 1-SW21A
Class 2-SW21A
7-28
Class 1-SW22A
Class 2-SW22A
7-29
Class 1-SW23A
Class 2-SW23A
7-30
Class 1-SW24A
</TABLE>
8
<PAGE>
<TABLE>
<S>
<C>
Class 2-SW24A
7-31
Class 1-SW25A
Class 2-SW25A
7-32
Class 1-SW26A
Class 2-SW26A
7-35
Class 1-SW27A
Class 2-SW27A
7-36
Class 1-SW28A
Class 2-SW28A
7-37
Class 1-SW29A
Class 2-SW29A
7-38
Class 1-SW30A
Class 2-SW30A
7-39
Class 1-SW31A
Class 2-SW31A
7-40
Class 1-SW32A
Class 2-SW32A
7-41
Class 1-SW33A
Class 2-SW33A
7-42
Class 1-SW34A
Class 2-SW34A
7-43
Class 1-SW35A
Class 2-SW35A
7-44
Class 1-SW36A
Class 2-SW36A
7-45
Class 1-SW37A
Class 2-SW37A
7-46
Class 1-SW38A
Class 2-SW38A
7-47
Class 1-SW39A
Class 2-SW39A
7-48
Class 1-SW40A
Class 2-SW40A
7-49
Class 1-SW41A
Class 2-SW41A
7-50
Class 1-SW42A
Class 2-SW42A
7-51
Class 1-SW43A
Class 2-SW43A
7-52
Class 1-SW44A
Class 2-SW44A
7-53
Class 1-SW45A
Class 2-SW45A
</TABLE>
(12) The Class LTR Interest shall have no principal amount and
shall bear no
interest.
UPPER TIER REMIC
The following table sets forth the designation, the initial
principal balances,
the interest rates and Classes of Related Certificates for each of
the interests
in the Upper Tier REMIC.
9
<PAGE>
<TABLE>
<CAPTION>
Initial
Class of
Class
Principal Balance Rate Related Certificates
-----
----------------- ---- --------------------
<S>
<C>
<C>
<C>
UTA-1
(1)
(2)
A-1
UTA-2A
(1)
(2)
A-2A
UTA-2B
(1)
(2)
A-2B
UTA-2C
(1)
(2)
A-2C
UTA-2D
(1)
(2)
A-2D
UTM-1
(1)
(2)
M-1
UTM-2
(1)
(2)
M-2
UTM-3
(1)
(2)
M-3
UTM-4
(1)
(2)
M-4
UTM-5
(1)
(2)
M-5
UTM-6
(1)
(2)
M-6
UTB-1
(1)
(2)
B-1
UTB-2
(1)
(2)
B-2
UTB-3
(1)
(2)
B-3
UTB-4
(1)
(2)
B-4
Uncertificated Class C Interest
(3)
(3)
N/A
UT-IO
(4)
(4)
N/A
Residual Interest
(1)
(2)
R
</TABLE>
(1) The initial
principal balance of each of these REMIC Regular Interests
shall equal the initial principal balance of its Class of
Related
Certificates.
(2) The interest rates
on each of these REMIC Regular Interests shall be an
annual rate equal to the Pass-Through Rate for the Class of
Related
Certificates, provided that in lieu of the applicable Available
Funds Caps
set
forth in the definition of an applicable Pass-Through Rate, the
applicable Upper Tier REMIC Net WAC Cap shall be used.
(3) The Uncertificated
Class C Interest shall have an initial principal balance
equal to the initial Overcollateralization Amount. The
Uncertificated Class
C
Interest shall accrue interest on a notional balance set forth in
the
definition of Class C Current Interest at a rate equal to the Class
C
Distributable Interest Rate. The Uncertificated Class C Interest
shall be
represented by the Class C Certificates.
(4) The Class UT-IO
Interest shall have no principal amount and will not have
an
interest rate, but will be entitled to 100% of the interest accrued
with
respect to the Class LT-IO Interest. The Class UT-IO Interest shall
be
represented by the Class C Certificates.
THE CERTIFICATES
The following table sets forth the Class designation, interest rate
and initial
Class principal amount for each Class of Certificates comprising
interests in
the Trust Fund.
<TABLE>
<CAPTION>
Initial Class
Class Principal
Amount Interest
Rate
-----
----------------
-------------
<S> <C>
<C>
A-1
(1)
(2)
A-2A
(1)
(2)
A-2B
(1)
(2)
A-2C
(1)
(2)
A-2D
(1)
(2)
M-1
(1)
(2)
M-2
(1)
(2)
M-3
(1)
(2)
</TABLE>
10
<PAGE>
<TABLE>
<S> <C>
<C>
M-4
(1)
(2)
M-5
(1)
(2)
M-6
(1)
(2)
B-1
(1)
(2)
B-2
(1)
(2)
B-3
(1)
(2)
B-4
(1)
(2)
C
(3)
(3)
P
(4)
(4)
R
(1)
(2)(5)
</TABLE>
(1) Each of these
Classes of Certificates shall have initial principal balances
as
set forth in Section 5.01 hereof.
(2) Each of these
Classes of Certificates shall bear interest at a per annum
rate
equal to the Pass-Through Rate for such Certificates set forth in
the
definitions herein.
(3) For federal income
tax purposes, the Class C Certificate shall represent
(i)
the right to receive all distributions with respect to the
REMIC
Regular Interests represented by the Uncertificated Class C
Interest and
the
Class UT-IO Interest and (ii) certain rights and obligations
with
respect to notional principal contracts as described in Section
2.07.
(4) The Class P
Certificates shall be entitled to the amounts distributable
pursuant to Section 4.04(b) hereof and shall not represent a REMIC
regular
interest.
(5) The Class R
Interest represents ownership of the Class SWR Interest, the
Class LTR Interest and the Residual Interest.
In
consideration of the mutual agreements herein contained, the
Depositor,
the Servicer and the Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless
the context otherwise requires, shall have the following
meanings:
Accepted Servicing
Practices: The Servicer's normal servicing practices,
which will conform to the mortgage servicing practices of prudent
mortgage
lending institutions that service for their own account mortgage
loans of the
same type as the Mortgages Loans in the jurisdictions in which the
related
Mortgaged Properties (or Underlying Mortgaged Properties in the
case of Co-op
Loans) are located.
Accountant's Attestation: As defined in Section 3.18.
Accrual Period: With respect to each Class of Certificates and
their
Corresponding REMIC Regular Interests (other than the Class B-1,
Class B-2 and
Class B-3 Certificates and their Corresponding REMIC Regular
Interests) and the
Lower Tier REMIC Interests and any Distribution Date, the period
commencing on
the immediately preceding Distribution Date (or, in the case of the
first
Distribution Date, the Closing Date) and ending on the day
immediately preceding
such Distribution Date. With respect to the Class B-1, Class B-2
and Class B-3
Certificates, their Corresponding REMIC Regular Interests and the
SWAP REMIC
Regular Interests and any Distribution Date, the calendar month
immediately
preceding the month in which such Distribution Date occurs. All
calculations of
interest on
11
<PAGE>
each Class of Certificates and their Corresponding REMIC Regular
Interests
(other than the Class B-1, Class B-2 and Class B-3 Certificates and
their
Corresponding REMIC Regular Interests) and the Lower Tier REMIC
Interests will
be made on the basis of the actual number of days elapsed in the
related Accrual
Period and a 360 day year. All calculations of interest on the
Class B-1, Class
B-2 and Class B-3 Certificates, their Corresponding REMIC Regular
Interests and
the SWAP REMIC Regular Interests will be made on the basis of a
360-day year
consisting of twelve 30-day months.
Additional Disclosure Notification: the form of notification to be
included
with any Additional Form 10-D Disclosure, Additional Form 10-K
Disclosure or
Form 8-K Disclosure Information, which is attached hereto as
Exhibit Z-1.
Additional Form 10-D Disclosure: Has the meaning set forth in
Section 3.27.
Additional Form 10-K Disclosure: Has the meaning set forth in
Section 3.27.
Adjustable Rate Mortgage Loan: A Mortgage Loan identified in the
Mortgage
Loan Schedule as having a Mortgage Rate that is adjustable.
Adjustment Date: As to each Adjustable Rate Mortgage Loan, each
date on
which the related Mortgage Rate is subject to adjustment, as
provided in the
related Mortgage Note.
Advance: The aggregate of the advances required to be made by the
Servicer
with respect to any Distribution Date pursuant to Section 4.01, the
amount of
any such advances being equal to the sum of the aggregate amount of
all payments
of principal and interest (net of the Servicing Fee) on the
Mortgage Loans that
were due during the applicable Due Period and not received as of
the close of
business on the related Determination Date (other than the
principal portion of
any Balloon Amount), less the aggregate amount of any such
Delinquent payments
that the Servicer has determined would constitute a Non-Recoverable
Advance were
an advance to be made with respect thereto; provided, however, that
with respect
to any Mortgage Loan that has been converted to an REO Property,
the obligation
to make advances shall be limited to payments of interest.
Advance Facility: A financing or other facility as described in
Section
10.13.
Advance Facility Notice: As defined in Section 10.13(b).
Advance Financing Person: As defined in Section 10.13(a).
Advance Reimbursement Amount: As defined in Section 10.13(b).
Affiliate: With respect to any specified Person, any other
Person
controlling, controlled by or under common control with such
Person. For the
purposes of this definition, "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; and the terms
"controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Certificate Principal Balance: For any date of
determination, the
sum of the Class A-1 Certificate Principal Balance, the Class A-2A
Certificate
Principal Balance, the Class A-2B Certificate Principal Balance,
the Class A-2C
Certificate Principal Balance, the Class A-2D Certificate Principal
Balance, the
Class R Certificate Principal Balance, the Class M-1 Certificate
Principal
Balance, the Class M-2 Certificate Principal Balance, the Class M-3
Certificate
Principal Balance, the Class M-4 Certificate Principal Balance, the
Class M-5
Certificate Principal Balance, the Class M-6 Certificate
Principal
12
<PAGE>
Balance, the Class B-1 Certificate Principal Balance, the Class B-2
Certificate
Principal Balance, the Class B-3 Certificate Principal Balance and
the Class B-4
Certificate Principal Balance, in each case as of such date of
determination.
Agreement: This Pooling and Servicing Agreement and any and all
amendments
or supplements hereto made in accordance with the terms herein.
Applied Realized Loss Amount: With respect to any Distribution
Date, the
amount, if any, by which, the sum of (i) the Aggregate Certificate
Principal
Balance and (ii) the Class C Certificate Principal Balance after
distributions
of principal on such Distribution Date exceeds the aggregate Stated
Principal
Balance of the Mortgage Loans as of such Distribution Date.
Appraised Value: With respect to a Mortgage Loan the proceeds of
which were
used to purchase the related Mortgaged Property (or the related
residential
dwelling unit in the Underlying Mortgaged Property in the case of a
Co-op Loan),
the "Appraised Value" of a Mortgaged Property (or the related
residential
dwelling unit in the Underlying Mortgaged Property in the case of a
Co-op Loan)
is the lesser of (1) the appraised value based on an appraisal made
for the
Sponsor by an independent fee appraiser at the time of the
origination of the
related Mortgage Loan, and (2) the sales price of such Mortgaged
Property (or
the related residential dwelling unit in the Underlying Mortgaged
Property in
the case of a Co-op Loan) at such time of origination. With respect
to a
Mortgage Loan the proceeds of which were used to refinance an
existing mortgage
loan, the "Appraised Value" is the appraised value of the Mortgaged
Property (or
the related residential dwelling unit in the Underlying Mortgaged
Property in
the case of a Co-op Loan) based upon the appraisal obtained at the
time of
refinancing.
Assessment of Compliance: As defined in Section 3.18.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer
(or UCC-3 assignment (or equivalent instrument) with respect to
each Co-op Loan)
or equivalent instrument, in recordable form (except in the case of
a Co-op
Loan) (except for the name of the assignee if such Mortgage Loan is
endorsed in
blank), sufficient under the laws of the jurisdiction where the
related
Mortgaged Property (or Underlying Mortgaged Property, in the case
of a Co-op
Loan) is located to reflect of record the sale and assignment of
the Mortgage
Loan to the Trustee, which assignment, notice of transfer or
equivalent
instrument may, if permitted by law, be in the form of one or more
blanket
assignments covering Mortgages secured by Mortgaged Properties
located in the
same county.
Authenticating Agent: As defined in Section 5.10.
Available Funds Cap: Any of the Class A-1 Available Funds Cap, the
Class
A-2 Available Funds Cap or the Weighted Average Available Funds
Cap.
Back-Up Certification: Has the meaning set forth in Section
3.27(k).
Balloon Loan: A Mortgage Loan having an original term to stated
maturity of
approximately 30 years, which provides for level monthly payments
of principal
and interest based on a 40-year or 45-year amortization schedule,
with a balloon
payment of the remaining outstanding principal balance due on such
Mortgage Loan
at its stated maturity.
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
13
<PAGE>
Section 5.06). As of the Closing Date, each of the Class A (other
than the Class
R Certificate), Class M and Class B Certificates constitutes a
Class of
Book-Entry Certificates.
Bring Down Letter: Those certain letter agreements, dated as of
April 13,
2006 between Ownit and the Sponsor, with respect to the Mortgage
Loans.
Business Day: Any day other than (1) a Saturday or a Sunday, or (2)
a day
on which banking institutions in the State of California, State of
Illinois,
State of Texas and in the City of New York, New York are authorized
or obligated
by law or executive order to be closed.
Cap
Contract: Any of the Class A-1 Cap Contract, the Class A-2 Cap
Contract
or the Floating Rate Subordinate Certificates Cap Contract.
Cap
Contract Account: The separate Eligible Account created and
maintained
by the Trustee pursuant to Section 4.04(k)(i) in the name of the
Trustee for the
benefit of the Trust Fund and designated "LaSalle Bank National
Association, as
trustee, in trust for registered holders of Ownit Mortgage Loan
Trust, Mortgage
Loan Asset-Backed Certificates, Series 2006-3." Funds in the Cap
Contract
Account shall be held in trust for the Trust Fund for the uses and
purposes set
forth in this Agreement.
Cap
Contract Counterparty: The Bank of New York.
Cap
Contract Notional Balance: Any of the Class A-1 Cap Contract
Notional
Balance, the Class A-2 Cap Contract Notional Balance or the
Floating Rate
Subordinate Certificates Cap Contract Notional Balance.
Cap
Contract Termination Date: Any of the Class A-1 Cap Contract
Termination Date, the Class A-2 Cap Contract Termination Date or
the Floating
Rate Subordinate Certificates Cap Contract Termination Date.
Certificate: Any one of the certificates of any Class executed by
the
Trustee and authenticated by the Authenticating Agent in
substantially the forms
attached hereto as Exhibit A.
Certificate Account: The separate Eligible Account created and
maintained
by the Trustee pursuant to Section 3.05(e) in the name of the
Trustee for the
benefit of the Certificateholders and designated "LaSalle Bank
National
Association, as trustee, in trust for registered holders of Ownit
Mortgage Loan
Trust, Mortgage Loan Asset-Backed Certificates, Series 2006-3."
Funds in the
Certificate Account shall be held in trust for the
Certificateholders for the
uses and purposes set forth in this Agreement.
Certificate Group: Either of Certificate Group One or Certificate
Group
Two.
Certificate Group One: The Class A-1 and Class R Certificates. For
purposes
of Section 2.07 hereof, Certificate Group One shall be related to
Group One.
Certificate Group Two: The Class A-2A, Class A-2B Certificates,
Class A-2C
Certificates and Class A-2D Certificates. For purposes of Section
2.07 hereof,
Certificate Group Two shall be related to Group Two.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person
that is the beneficial owner of such Book-Entry Certificate.
14
<PAGE>
Certificate Principal Balance: As to any Certificate and as of
any
Distribution Date, the Initial Certificate Principal Balance of
such Certificate
less the sum of (1) all amounts distributed with respect to such
Certificate in
reduction of the Certificate Principal Balance thereof on previous
Distribution
Dates pursuant to Section 4.04, and (2) any Applied Realized Loss
Amounts
allocated to such Certificate on previous Distribution Dates
pursuant to Section
4.04(i). On each Distribution Date, after all distributions of
principal on such
Distribution Date, a portion of the Class C Interest Carry Forward
Amount in an
amount equal to the excess of the Overcollateralization Amount on
such
Distribution Date over the Overcollateralization Amount as of the
preceding
Distribution Date (or, in the case of the first Distribution Date,
the initial
Overcollateralization Amount) will be added to the aggregate
Certificate
Principal Balance of the Class C Certificates (on a pro rata
basis).
Notwithstanding the foregoing on any Distribution Date relating to
a Due Period
in which a Subsequent Recovery has been received by the Servicer,
the
Certificate Principal Balance of any Class of Certificates then
outstanding for
which any Applied Realized Loss Amount has been allocated will be
increased, in
order of seniority, by an amount equal to the lesser of (i) the
Unpaid Realized
Loss Amount for such Class of Certificates and (ii) the total of
any Subsequent
Recovery distributed on such date to the Certificateholders
(reduced by the
amount of the increase in the Certificate Principal Balance of any
more senior
Class of Certificates pursuant to this sentence on such
Distribution Date).
Certificate Register: The register maintained pursuant to Section
5.02
hereof.
Certificateholder or Holder: The Person in whose name a Certificate
is
registered in the Certificate Register (initially, Cede & Co.,
as nominee for
the Depository) in the case of any Class of Regular Certificates or
the Class R
Certificate, except that solely for the purpose of giving any
consent pursuant
to this Agreement, any Certificate registered in the name of the
Depositor or
any Affiliate of the Depositor shall be deemed not to be
Outstanding and the
Percentage Interest evidenced thereby shall not be taken into
account in
determining whether the requisite amount of Percentage Interests
necessary to
effect such consent has been obtained; provided, however, that if
any such
Person (including the Depositor) owns 100% of the Percentage
Interests evidenced
by a Class of Certificates, such Certificates shall be deemed to be
Outstanding
for purposes of any provision hereof that requires the consent of
the Holders of
Certificates of a particular Class as a condition to the taking of
any action
hereunder. The Trustee is entitled to rely conclusively on a
certification of
the Depositor or any Affiliate of the Depositor in determining
which
Certificates are registered in the name of an Affiliate of the
Depositor.
Certification Parties: Has the meaning set forth in Section
3.27(k).
Certifying Person: Has the meaning set forth in Section
3.27(k).
Class: All Certificates bearing the same Class designation as set
forth in
Section 5.01 hereof.
Class A Certificate Principal Balance: As of any date of
determination, the
sum of the Class A-1 Certificate Principal Balance, the Class A-2A
Certificate
Principal Balance, the Class A-2B Certificate Principal Balance,
the Class A-2C
Certificate Principal Balance, the Class A-2D Certificate Principal
Balance and
the Class R Certificate Principal Balance.
Class A Certificates:
Any of the Class A-1 Certificates, the Class A-2
Certificates and the Class R Certificates.
Class A Principal Distribution Amount: With respect to any
Distribution
Date (1) prior to the related Stepdown Date or any Distribution
Date on which a
Stepdown Trigger Event exists, 100% of the Principal Distribution
Amount for
such Distribution Date and (2) on or after the Stepdown Date where
a Stepdown
Trigger Event does not exist, the excess of (A) the Class A
Certificate
Principal Balance
15
<PAGE>
immediately prior to such Distribution Date over (B) the lesser of
(i) 54.90% of
the aggregate Stated Principal Balance of the Mortgage Loans as of
such
Distribution Date and (ii) the excess of the aggregate Stated
Principal Balance
of the Mortgage Loans as of such Distribution Date over the Minimum
Required
Overcollateralization Amount; provided, however, that in no event
will the Class
A Principal Distribution Amount with respect to any Distribution
Date exceed the
aggregate Certificate Principal Balance of the Class A
Certificates.
Class A-1 Available Funds Cap: With respect to a Distribution Date,
the per
annum rate equal to the product of (i) 12, (ii) the quotient of (x)
the total
scheduled interest on the Mortgage Loans in Group One based on the
Net Mortgage
Rates, less the pro rata portion (calculated based on the ratio of
the Group One
Mortgage Loans to the total pool of Mortgage Loans) allocable to
the Group One
Mortgage Loans of any Net Swap Payments or Swap Termination
Payments (other than
Defaulted Swap Termination Payments) owed to the Swap Counterparty
for such
Distribution Date in effect on the related Due Date divided by (y)
the aggregate
Stated Principal Balance of the Mortgage Loans in Group One as of
the first day
of the related Accrual Period (or, in the case of the first
Distribution Date,
as of the Cut-off Date) and (iii) a fraction, the numerator of
which is 30, and
the denominator of which is the actual number of days in the
related Accrual
Period.
Class A-1 Cap Contract: The confirmation and agreement between the
Trustee
on behalf of the Issuing Entity and the Cap Contract Counterparty
(in the form
of Exhibit N-1 hereto).
Class A-1 Cap Contract Notional Balance: With respect to any
Distribution
Date, the Class A-1 Cap Contract Notional Balance set forth for
such
Distribution Date in the Class A-1 One-Month LIBOR Cap Table
attached hereto as
Exhibit O-1.
Class A-1 Cap Contract Termination Date: The Distribution Date in
September
2006.
Class A-1 Certificates: Any Certificate designated as a "Class
A-1
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class A-1 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class A-1
Certificates.
Class A-1 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class A-1
Pass-Through Rate on
the Class A-1 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or a Class A-1 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-1
Certificates.
Class A-1 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class A-1 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
A-1 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class A-1 Pass-Through Rate for the related Accrual Period.
Class A-1 Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.180% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.360% per
annum.
16
<PAGE>
Class A-1 Maximum Rate Cap: With respect to a Distribution Date,
the per
annum rate equal to the product of (i) 12, (ii) the quotient of (x)
the total
scheduled interest that would have been due on the Group One
Mortgage Loans had
the Adjustable Rate Mortgage Loans provided for interest at their
maximum
lifetime Net Mortgage Rates and the Fixed Rate Mortgage Loans
provided for
interest at their Net Mortgage Rates less the pro rata portion
(calculated based
on the ratio of the Group One Mortgage Loans to the total pool of
Mortgage
Loans) allocable to the Group One Mortgage Loans of any Net Swap
Payments or
Swap Termination Payments owed to the Swap Counterparty for such
Distribution
Date (other than Defaulted Swap Termination Payments), divided by
(y) the
aggregate Stated Principal Balance of the Group One Mortgage Loans
as of the
first day of the related Accrual Period and (iii) a fraction, the
numerator of
which is 30 and the denominator of which is the actual number of
days in the
related Accrual Period.
Class A-1 Pass-Through Rate: For the first Distribution Date,
5.0600% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class A-1 Margin, (2) the Class A-1 Available Funds Cap
for such
Distribution Date and (3) the Class A-1 Maximum Rate Cap for such
Distribution
Date.
Class A-1 Upper Collar: With respect to each Distribution Date with
respect
to which payments are received on the Class A-1 Cap Contract, a
rate equal to
the lesser of One-Month LIBOR and 10.3200% per annum.
Class A-2 Available Funds Cap: With respect to a Distribution Date,
the per
annum rate equal to the product of (i) 12, (ii) the quotient of (x)
the total
scheduled interest on the Group Two Mortgage Loans based on the Net
Mortgage
Rates in effect on the related Due Date, less the pro rata portion
(calculated
based on the ratio of the Group Two Mortgage Loans to the total
pool of Mortgage
Loans) allocable to the Group Two Mortgage Loans of any Net Swap
Payments or
Swap Termination Payments (other than Defaulted Swap Termination
Payments) owed
to the Swap Counterparty for such Distribution Date, divided by (y)
the
aggregate Stated Principal Balance of the Group Two Mortgage Loans
as of the
first day of the related Accrual Period and (iii) a fraction, the
numerator of
which is 30 and the denominator of which is the actual number of
days in the
related Accrual Period.
Class A-2 Cap Contract: The confirmation and agreement between the
Trustee
on behalf of the Issuing Entity and the Cap Contract Counterparty
(in the form
of Exhibit N-2 hereto).
Class A-2 Cap Contract Notional Balance: With respect to any
Distribution
Date, the Class A-2 Cap Contract Notional Balance set forth for
such
Distribution Date in the Class A-2 One-Month LIBOR Cap Table
attached hereto as
Exhibit O-2.
Class A-2 Cap Contract Termination Date: The Distribution Date in
September
2006.
Class A-2 Certificates: Any of the Class A-2A, Class A-2B, Class
A-2C and
Class A-2D Certificates.
Class A-2 Maximum Rate Cap: With respect to a Distribution Date,
the per
annum rate equal to the product of (i) 12, (ii) the quotient of (x)
the total
scheduled interest that would have been due on the Group Two
Mortgage Loans had
the Adjustable Rate Mortgage Loans provided for interest at their
maximum
lifetime Net Mortgage Rates and the Fixed Rate Mortgage Loans
provided for
interest at their Net Mortgage Rates less the pro rata portion
(calculated based
on the ratio of the Group Two Mortgage Loans to the total pool of
Mortgage
Loans) allocable to the Group Two Mortgage Loans of any Net Swap
Payments or
Swap Termination Payments owed to the Swap Counterparty for such
Distribution
Date (other than Defaulted Swap Termination Payments), divided by
(y) the
aggregate Stated Principal
17
<PAGE>
Balance of the Group Two Mortgage Loans as of the first day of the
related
Accrual Period and (iii) a fraction, the numerator of which is 30
and the
denominator of which is the actual number of days in the related
Accrual Period.
Class A-2 Upper Collar: With respect to each Distribution Date with
respect
to which payments are received on the Class A-2 Cap Contract, a
rate equal to
the lesser of One-Month LIBOR and 10.2800% per annum.
Class A-2A Certificate: Any Certificate designated as a "Class
A-2A
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class A-2A Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class A-2A
Certificates.
Class A-2A Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class A-2A
Pass-Through Rate on
the Class A-2A Certificate Principal Balance as of such
Distribution Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or a Class A-2A Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2A
Certificates.
For purposes of calculating interest, principal distributions on a
Distribution
Date will be deemed to have been made on the first day of the
Accrual Period in
which such Distribution Date occurs.
Class A-2A Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class A-2A Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
A-2A Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class A-2A Pass-Through Rate for the related Accrual Period.
Class A-2A Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.060% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.120% per
annum.
Class A-2A Pass-Through Rate: For the first Distribution Date,
4.9400% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class A-2A Margin, (2) the Class A-2 Available Funds Cap
for such
Distribution Date and (3) the Class A-2 Maximum Rate Cap for such
Distribution
Date.
Class A-2B Certificate: Any Certificate designated as a "Class
A-2B
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class A-2B Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class A-2B
Certificates.
Class A-2B Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class A-2B
Pass-Through Rate on
the Class A-2B Certificate Principal Balance as of such
Distribution Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or a Class A-2B Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2B
Certificates.
For purposes of calculating interest, principal
18
<PAGE>
distributions on a Distribution Date will be deemed to have been
made on the
first day of the Accrual Period in which such Distribution Date
occurs.
Class A-2B Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class A-2B Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
A-2B Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class A-2B Pass-Through Rate for the related Accrual Period.
Class A-2B Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.120% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.240% per
annum.
Class A-2B Pass-Through Rate: For the first Distribution Date,
5.0000% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class A-2B Margin, (2) the Class A-2 Available Funds Cap
for such
Distribution Date and (3) the Class A-2 Maximum Rate Cap for such
Distribution
Date.
Class A-2C Certificate: Any Certificate designated as a "Class
A-2C
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class A-2C Certificate
Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-2C
Certificates.
Class A-2C Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class A-2C
Pass-Through Rate on
the Class A-2C Certificate Principal Balance as of such
Distribution Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or a Class A-2C Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2C
Certificates.
For purposes of calculating interest, principal distributions on a
Distribution
Date will be deemed to have been made on the first day of the
Accrual Period in
which such Distribution Date occurs.
Class A-2C Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class A-2C Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
A-2C Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class A-2C Pass-Through Rate for the related Accrual Period.
Class A-2C Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.170% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.340% per
annum.
Class A-2C Pass-Through Rate: For the first Distribution Date,
5.0500% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class A-2C Margin, (2) the Class A-2 Available Funds Cap
for such
Distribution Date and (3) the Class A-2 Maximum Rate Cap for such
Distribution
Date.
Class A-2D Certificate: Any Certificate designated as a "Class
A-2D
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
19
<PAGE>
Class A-2D Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class A-2D
Certificates.
Class A-2D Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class A-2D
Pass-Through Rate on
the Class A-2D Certificate Principal Balance as of such
Distribution Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or a Class A-2D Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2D
Certificates.
For purposes of calculating interest, principal distributions on a
Distribution
Date will be deemed to have been made on the first day of the
Accrual Period in
which such Distribution Date occurs.
Class A-2D Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class A-2D Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
A-2D Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class A-2D Pass-Through Rate for the related Accrual Period.
Class A-2D Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.270% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.540% per
annum.
Class A-2D Pass-Through Rate: For the first Distribution Date,
5.1500% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class A-2D Margin, (2) the Class A-2 Available Funds Cap
for such
Distribution Date and (3) the Class A-2 Maximum Rate Cap for such
Distribution
Date.
Class B Certificates: Any of the Class B-1, Class B-2, Class B-3
and Class
B-4 Certificates.
Class B-1 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class B-1 Certificates.
Class B-1 Certificate: Any Certificate designated as "Class B-1
Certificate
"on the face thereof in the form of Exhibit A hereto, representing
the right to
distributions as set forth herein.
Class B-1 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class B-1
Certificates.
Class B-1 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class B-1
Pass-Through Rate on
the Class B-1 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or Class B-1 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-1
Certificates.
Class B-1 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class B-1 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
B-1 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class B-1 Pass-Through Rate for the related Accrual Period.
20
<PAGE>
Class B-1 Pass-Through Rate: For any Distribution Date on or before
the
Initial Optional Termination Date, the least of (1) 6.250%, (2) the
Weighted
Average Available Funds Cap for such Distribution Date and (3) the
Weighted
Average Maximum Rate Cap for such Distribution Date; and for any
Distribution
Date after the Initial Optional Termination Date, the least of (1)
6.750%, (2)
the Weighted Average Available Funds Cap for such Distribution Date
and (3) the
Weighted Average Maximum Rate Cap for such Distribution Date.
Class B-1 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance and the
Class M Certificate Principal Balance, have been reduced to zero
and a Stepdown
Trigger Event exists, or as long as a Stepdown Trigger Event does
not exist, the
excess of (1) the sum of (A) the Class A Certificate Principal
Balance (after
taking into account distributions of the Class A Principal
Distribution Amount
on such Distribution Date), (B) the Class M-1 Certificate Principal
Balance
(after taking into account distributions of the Class M-1 Principal
Distribution
Amount on such Distribution Date), (C) the Class M-2 Certificate
Principal
Balance (after taking into account distributions of the Class M-2
Principal
Distribution Amount on such Distribution Date), (D) the Class M-3
Certificate
Principal Balance (after taking into account distributions of the
Class M-3
Principal Distribution Amount on such Distribution Date), (E) the
Class M-4
Certificate Principal Balance (after taking into account
distributions of the
Class M-4 Principal Distribution Amount on such Distribution Date,
(F) the Class
M-5 Certificate Principal Balance (after taking into account
distributions of
the Class M-5 Principal Distribution Amount on such Distribution
Date, (G) the
Class M-6 Certificate Principal Balance (after taking into account
distributions
of the Class M-6 Principal Distribution Amount on such Distribution
Date and (H)
the Class B-1 Certificate Principal Balance immediately prior to
such
Distribution Date over (2) the lesser of (A) 86.60% of the Stated
Principal
Balance of the Mortgage Loans as of such Distribution Date and (B)
the excess of
the Stated Principal Balance of the Mortgage Loans as of such
Distribution Date
over the Minimum Required Overcollateralization Amount.
Notwithstanding the
foregoing, (I) on any Distribution Date prior to the Stepdown Date
on which the
Certificate Principal Balance of each Class of Class A Certificates
and Class M
Certificates has been reduced to zero, the Class B-1 Principal
Distribution
Amount will equal the lesser of (x) the outstanding Certificate
Principal
Balance of the Class B-1 Certificates and (y) 100% of the Principal
Distribution
Amount remaining after any distributions on such Class A and Class
M
Certificates and (II) in no event will the Class B-1 Principal
Distribution
Amount with respect to any Distribution Date exceed the Class B-1
Certificate
Principal Balance.
Class B-1 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class B-1 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class B-1 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of the Class B-1 Certificates pursuant to the
last sentence of
the definition of "Certificate Principal Balance."
Class B-2 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class B-2 Certificates.
Class B-2 Certificate: Any Certificate designated as a "Class
B-2
Certificate" on the face thereof in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class B-2 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class B-2
Certificates.
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<PAGE>
Class B-2 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class B-2
Pass-Through Rate on
the Class B-2 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or Class B-2 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-2
Certificates.
Class B-2 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class B-2 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
B-2 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class B-2 Pass-Through Rate for the related Accrual Period.
Class B-2 Pass-Through Rate: For any Distribution Date on or before
the
Initial Optional Termination Date, the least of (1) 6.250%, (2) the
Weighted
Average Available Funds Cap for such Distribution Date and (3) the
Weighted
Average Maximum Rate Cap for such Distribution Date; and for any
Distribution
Date after the Initial Optional Termination Date, the least of (1)
6.750%, (2)
the Weighted Average Available Funds Cap for such Distribution Date
and (3) the
Weighted Average Maximum Rate Cap for such Distribution Date.
Class B-2 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance, the
Class M Certificate Principal Balance and the Class B-1 Certificate
Principal
Balance have been reduced to zero and a Stepdown Trigger Event
exists, or as
long as a Stepdown Trigger Event does not exist, the excess of (1)
the sum of
(A) the Class A Certificate Principal Balance (after taking into
account
distributions of the Class A Principal Distribution Amount on such
Distribution
Date), (B) the Class M-1 Certificate Principal Balance (after
taking into
account distributions of the Class M-1 Principal Distribution
Amount on such
Distribution Date), (C) the Class M-2 Certificate Principal Balance
(after
taking into account distributions of the Class M-2 Principal
Distribution Amount
on such Distribution Date), (D) the Class M-3 Certificate Principal
Balance
(after taking into account distributions of the Class M-3 Principal
Distribution
Amount on such Distribution Date), (E) the Class M-4 Certificate
Principal
Balance (after taking into account distributions of the Class M-4
Principal
Distribution Amount on such Distribution Date), (F) the Class M-5
Certificate
Principal Balance (after taking into account distributions of the
Class M-5
Principal Distribution Amount on such Distribution Date), (G) the
Class M-6
Certificate Principal Balance (after taking into account
distributions of the
Class M-6 Principal Distribution Amount on such Distribution Date),
(H) the
Class B-1 Certificate Principal Balance (after taking into account
distributions
of the Class B-1 Principal Distribution Amount on such Distribution
Date) and
(I) the Class B-2 Certificate Principal Balance immediately prior
to such
Distribution Date over (2) the lesser of (A) 89.70% of the Stated
Principal
Balance of the Mortgage Loans as of such Distribution Date and (B)
the excess of
the Stated Principal Balance of the Mortgage Loans as of such
Distribution Date
over the Minimum Required Overcollateralization Amount.
Notwithstanding the
foregoing, (I) on any Distribution Date prior to the Stepdown Date
on which the
Certificate Principal Balance of each Class of Class A, Class M and
Class B-1
Certificates has been reduced to zero, the Class B-2 Principal
Distribution
Amount will equal the lesser of (x) the outstanding Certificate
Principal
Balance of the Class B-2 Certificates and (y) 100% of the Principal
Distribution
Amount remaining after any distributions on such Class A, Class M
and Class B-1
Certificates and (II) in no event will the Class B-2 Principal
Distribution
Amount with respect to any Distribution Date exceed the Class B-2
Certificate
Principal Balance.
Class B-2 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class B-2 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the
22
<PAGE>
Class B-2 Unpaid Realized Loss Amounts on all previous Distribution
Dates and
(y) all increases in the Certificate Principal Balance of the Class
B-2
Certificates pursuant to the last sentence of the definition of
"Certificate
Principal Balance."
Class B-3 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class B-3 Certificates.
Class B-3 Certificate: Any Certificate designated as a "Class
B-3
Certificate" on the face thereof in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class B-3 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class B-3
Certificates.
Class B-3 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class B-3
Pass-Through Rate on
the Class B-3 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or Class B-3 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-3
Certificates.
Class B-3 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class B-3 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
B-3 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class B-3 Pass-Through Rate for the related Accrual Period.
Class B-3 Pass-Through Rate: For any Distribution Date on or before
the
Initial Optional Termination Date, the least of (1) 6.250%, (2) the
Weighted
Average Available Funds Cap for such Distribution Date and (3) the
Weighted
Average Maximum Rate Cap for such Distribution Date; and for any
Distribution
Date after the Initial Optional Termination Date, the least of (1)
6.750%, (2)
the Weighted Average Available Funds Cap for such Distribution Date
and (3) the
Weighted Average Maximum Rate Cap for such Distribution Date.
Class B-3 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance, the
Class M Certificate Principal Balance, the Class B-1 Certificate
Principal
Balance and the Class B-2 Certificate Principal Balance have been
reduced to
zero and a Stepdown Trigger Event exists, or as long as a Stepdown
Trigger Event
does not exist, the excess of (1) the sum of (A) the Class A
Certificate
Principal Balance (after taking into account distributions of the
Class A
Principal Distribution Amount on such Distribution Date), (B) the
Class M-1
Certificate Principal Balance (after taking into account
distributions of the
Class M-1 Principal Distribution Amount on such Distribution Date),
(C) the
Class M-2 Certificate Principal Balance (after taking into account
distributions
of the Class M-2 Principal Distribution Amount on such Distribution
Date), (D)
the Class M-3 Certificate Principal Balance (after taking into
account
distributions of the Class M-3 Principal Distribution Amount on
such
Distribution Date), (E) the Class M-4 Certificate Principal Balance
(after
taking into account distributions of the Class M-4 Principal
Distribution Amount
on such Distribution Date), (F) the Class M-5 Certificate Principal
Balance
(after taking into account distributions of the Class M-5 Principal
Distribution
Amount on such Distribution Date), (G) the Class M-6 Certificate
Principal
Balance (after taking into account distributions of the Class M-6
Principal
Distribution Amount on such Distribution Date), (H) the Class B-1
Certificate
Principal Balance (after taking into account distributions of the
Class
23
<PAGE>
B-1 Principal Distribution Amount on such Distribution Date), (I)
the Class B-2
Certificate Principal Balance (after taking into account
distributions of the
Class B-2 Principal Distribution Amount on such Distribution Date)
and (J) the
Class B-3 Certificate Principal Balance immediately prior to such
Distribution
Date over (2) the lesser of (A) 91.60% of the Stated Principal
Balance of the
Mortgage Loans as of such Distribution Date and (B) the excess of
the Stated
Principal Balance of the Mortgage Loans as of such Distribution
Date over the
Minimum Required Overcollateralization Amount. Notwithstanding the
foregoing,
(I) on any Distribution Date prior to the Stepdown Date on which
the Certificate
Principal Balance of each Class of Class A, Class M, Class B-1 and
Class B-2
Certificates has been reduced to zero, the Class B-3 Principal
Distribution
Amount will equal the lesser of (x) the outstanding Certificate
Principal
Balance of the Class B-3 Certificates and (y) 100% of the Principal
Distribution
Amount remaining after any distributions on such Class A, Class M,
Class B-1 and
Class B-2 Certificates and (II) in no event will the Class B-3
Principal
Distribution Amount with respect to any Distribution Date exceed
the Class B-3
Certificate Principal Balance.
Class B-3 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class B-3 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class B-3 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of the Class B-3 Certificates pursuant to the
last sentence of
the definition of "Certificate Principal Balance".
Class B-4 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class B-4 Certificates.
Class B-4 Certificate: Any Certificate designated as a "Class
B-4
Certificate" on the face thereof in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class B-4 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class B-4
Certificates.
Class B-4 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class B-4
Pass-Through Rate on
the Class B-4 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or Class B-4 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-4
Certificates.
Class B-4 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class B-4 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
B-4 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class B-4 Pass-Through Rate for the related Accrual Period.
Class B-4 Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 2.500% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 3.750% per
annum.
Class B-4 Pass-Through Rate: For the first Distribution Date,
7.3800% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class B-4 Margin, (2) the Weighted Average Available Funds
Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for
such
Distribution Date.
24
<PAGE>
Class B-4 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance, the
Class M Certificate Principal Balance, the Class B-1 Certificate
Principal
Balance, the Class B-2 Certificate Principal Balance and the Class
B-3
Certificate Principal Balance have been reduced to zero and a
Stepdown Trigger
Event exists, or as long as a Stepdown Trigger Event does not
exist, the excess
of (1) the sum of (A) the Class A Certificate Principal Balance
(after taking
into account distributions of the Class A Principal Distribution
Amount on such
Distribution Date), (B) the Class M-1 Certificate Principal Balance
(after
taking into account distributions of the Class M-1 Principal
Distribution Amount
on such Distribution Date), (C) the Class M-2 Certificate Principal
Balance
(after taking into account distributions of the Class M-2 Principal
Distribution
Amount on such Distribution Date), (D) the Class M-3 Certificate
Principal
Balance (after taking into account distributions of the Class M-3
Principal
Distribution Amount on such Distribution Date), (E) the Class M-4
Certificate
Principal Balance (after taking into account distributions of the
Class M-4
Principal Distribution Amount on such Distribution Date), (F) the
Class M-5
Certificate Principal Balance (after taking into account
distributions of the
Class M-5 Principal Distribution Amount on such Distribution Date),
(G) the
Class M-6 Certificate Principal Balance (after taking into account
distributions
of the Class M-6 Principal Distribution Amount on such Distribution
Date), (H)
the Class B-1 Certificate Principal Balance (after taking into
account
distributions of the Class B-1 Principal Distribution Amount on
such
Distribution Date), (I) the Class B-2 Certificate Principal Balance
(after
taking into account distributions of the Class B-2 Principal
Distribution Amount
on such Distribution Date), (J) the Class B-3 Certificate Principal
Balance
(after taking into account distributions of the Class B-3 Principal
Distribution
Amount on such Distribution Date) and (K) the Class B-4 Certificate
Principal
Balance immediately prior to such Distribution Date over (2) the
lesser of (A)
93.60% of the Stated Principal Balance of the Mortgage Loans as of
such
Distribution Date and (B) the excess of the Stated Principal
Balance of the
Mortgage Loans as of such Distribution Date over the Minimum
Required
Overcollateralization Amount. Notwithstanding the foregoing, (I) on
any
Distribution Date prior to the Stepdown Date on which the
Certificate Principal
Balance of each Class of Class A, Class M, Class B-1, Class B-2 and
Class B-3
Certificates has been reduced to zero, the Class B-4 Principal
Distribution
Amount will equal the lesser of (x) the outstanding Certificate
Principal
Balance of the Class B-4 Certificates and (y) 100% of the Principal
Distribution
Amount remaining after any distributions on such Class A, Class M,
Class B-1,
Class B-2 and Class B-3 Certificates and (II) in no event will the
Class B-4
Principal Distribution Amount with respect to any Distribution Date
exceed the
Class B-4 Certificate Principal Balance.
Class B-4 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class B-4 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class B-4 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of the Class B-4 Certificates pursuant to the
last sentence of
the definition of "Certificate Principal Balance".
Class C Applied Realized Loss Amount: As of any Distribution Date,
the sum
of all Applied Realized Loss Amounts with respect to the Mortgage
Loans which
have been applied to the reduction of the Certificate Principal
Balance of the
Class C Certificates.
Class C Certificate: Any Certificate designated as a "Class C
Certificate"
on the face thereof, in the form of Exhibit A hereto, representing
the right to
distributions as set forth herein.
Class C Certificate Principal Balance: As of any date of
determination, the
aggregate Certificate Principal Balance of the Class C
Certificates.
Class C Current Interest: As of any Distribution Date, the interest
accrued
during the related Accrual Period at the Class C Distributable
Interest Rate on
a notional amount equal to the aggregate
25
<PAGE>
principal balance of the Lower Tier REMIC Regular Interests
immediately prior to
such Distribution Date, plus the interest portion of any previous
distributions
on such Class that is recovered as a voidable preference by a
trustee in
bankruptcy, less any Non-Supported Interest Shortfall allocated on
such
Distribution Date to the Class C Certificates.
Class C Distributable Interest Rate: The excess, if any, of (a)
the
weighted average of the interest rates on the Lower Tier REMIC
Regular Interests
(other than the Class LT-IO Interest) over (b) two times the
weighted average of
the interest rates on the Lower Tier REMIC I Marker Interests and
the Class LTIX
Interest (treating for purposes of this clause (b) the interest
rate on each of
the Lower Tier REMIC I Marker Interests as being subject to a cap
and a floor
equal to the interest rate of the Corresponding REMIC Regular
Interest of the
Corresponding Certificates (as adjusted to reflect the length of
the Accrual
Period for the LIBOR Certificates) and treating the Class LTIX
Interest as being
capped at zero). The averages described in the preceding sentence
shall be
weighted on the basis of the respective principal balances of the
Lower Tier
REMIC Regular Interests immediately prior to any date of
determination.
Class C Interest Carry Forward Amount: As of any Distribution Date,
the
excess of (A) the Class C Current Interest with respect to prior
Distribution
Dates over (B) the amount actually distributed to the Class C
Certificates with
respect to interest on such prior Distribution Dates or added to
the aggregate
Certificate Principal Balance of the Class C Certificates.
Class C Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class C Applied Realized Loss Amount over (2) the
sum of (x)
all distributions in reduction of the Class C Unpaid Realized Loss
Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class C Certificates pursuant to the last
sentence of
the definition of "Certificate Principal Balance."
Class LTA-1 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificates and an interest rate
equal to the Net
Rate.
Class LTA-2A Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTA-2B Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTA-2C Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTA-2D Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTB-1 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
26
<PAGE>
Class LTB-2 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTB-3 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTB-4 Interest:
An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LT-IO Interest: An uncertificated regular interest in the
Lower Tier
REMIC with the characteristics set forth in the description of the
Lower Tier
REMIC in the Preliminary Statement.
Class LTIX Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to the excess of (i)
50% of the
aggregate Cut-off Date Principal Balance of the Mortgage Loans over
(ii) the
initial principal balance of the Lower Tier REMIC I Marker
Interests, and with
an interest rate equal to the Net Rate.
Class LTIIX Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to the excess of (i)
50% of the
aggregate Cut-off Date Principal Balance of the Mortgage Loans over
(ii) the
initial principal balance of the Lower Tier REMIC II Marker
Interests, and with
an interest rate equal to the Net Rate.
Class LTII1A Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 0.05% of the
excess of (i) the
aggregate Cut-off Date Principal Balance of the Group One Mortgage
Loans over
(ii) the aggregate of the initial Certificate Principal Balances of
Certificate
Group One, and with an interest rate equal to the Net Rate.
Class LTII1B Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 0.05% the
aggregate Cut-off
Date Principal Balance of the Group One Mortgage Loans, and with an
interest
rate equal to the rate set forth in footnote 9 to the description
of the Lower
Tier REMIC in the Preliminary Statement.
Class LTII2A Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 0.05% of the
excess of (i) the
aggregate Cut-off Date Principal Balance of the Group Two Mortgage
Loans over
(ii) the aggregate of the initial Certificate Principal Balances of
Certificate
Group Two, and with an interest rate equal to the Net Rate.
Class LTII2B Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 0.05% of the
aggregate Cut-off
Date Principal Balance of the Group Two Mortgage Loans and with an
interest rate
equal to the rate set forth in footnote 10 to the description of
the Lower Tier
REMIC in the Preliminary Statement.
Class LTM-1 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
27
<PAGE>
Class LTM-2 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTM-3 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTM-4 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTM-5 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTM-6 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTR Interest: The sole class of "residual interest" in the
Lower Tier
REMIC.
Class M Certificates: Any of the Class M-1, Class M-2, Class M-3,
Class
M-4, Class M-5 and Class M-6 Certificates.
Class M Certificate
Principal Balance: For any date of determination, the
sum of the Class M-1 Certificate Principal Balance, Class M-2
Certificate
Principal Balance, Class M-3 Certificate Principal Balance, Class
M-4
Certificate Principal Balance, Class M-5 Certificate Principal
Balance and Class
M-6 Certificate Principal Balance.
Class M-1 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class M-1 Certificates.
Class M-1 Certificate: Any Certificate designated as a "Class
M-1
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class M-1 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class M-1
Certificates.
Class M-1 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class M-1
Pass-Through Rate on
the Class M-1 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or Class M-1 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-1
Certificates.
Class M-1 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-1 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-1 Certificates with respect to interest on such prior
Distribution Dates
28
<PAGE>
and (2) interest on such excess (to the extent permitted by
applicable law) at
the Class M-1 Pass-Through Rate for the related Accrual Period.
Class M-1 Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.330% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.395% per
annum.
Class M-1 Pass-Through Rate: For the first Distribution Date,
5.2100% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class M-1 Margin, (2) the Weighted Average Available Funds
Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for
such
Distribution Date.
Class M-1 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance has been
reduced to zero and a Stepdown Trigger Event exists, or as long as
a Stepdown
Trigger Event does not exist, the excess of (1) the sum of (A) the
Class A
Certificate Principal Balance (after taking into account
distributions of the
Class A Principal Distribution Amount on such Distribution Date)
and (B) the
Class M-1 Certificate Principal Balance immediately prior to such
Distribution
Date over (2) the lesser of (A) 62.20% of the Stated Principal
Balances of the
Mortgage Loans as of such Distribution Date and (B) the excess of
the Stated
Principal Balances for the Mortgage Loans as of such Distribution
Date over the
Minimum Required Overcollateralization Amount. Notwithstanding the
foregoing,
(I) on any Distribution Date prior to the Stepdown Date on which
the Certificate
Principal Balance of each Class of Class A Certificates has been
reduced to
zero, the Class M-1 Principal Distribution Amount will equal the
lesser of (x)
the outstanding Certificate Principal Balance of the Class M-1
Certificates and
(y) 100% of the Principal Distribution Amount remaining after any
distributions
on such Class A Certificates and (II) in no event will the Class
M-1 Principal
Distribution Amount with respect to any Distribution Date exceed
the Class M-1
Certificate Principal Balance.
Class M-1 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class M-1 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class M-1 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-1 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class M-2 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class M-2 Certificates.
Class M-2 Certificate: Any Certificate designated as a "Class
M-2
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class M-2 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class M-2
Certificates.
Class M-2 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class M-2
Pass-Through Rate on
the Class M-2 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or Class M-2 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-2
Certificates.
29
<PAGE>
Class M-2 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-2 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-2 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class M-2 Pass-Through Rate for the related Accrual Period.
Class M-2 Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.340% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.510 % per
annum.
Class M-2 Pass-Through Rate: For the first Distribution Date,
5.2200% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class M-2 Margin, (2) the Weighted Average Available Funds
Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for
such
Distribution Date.
Class M-2 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance and the
Class M-1 Certificate Principal Balance have been reduced to zero
and a Stepdown
Trigger Event exists, or as long as a Stepdown Trigger Event does
not exist, the
excess of (1) the sum of (A) the Class A Certificate Principal
Balance (after
taking into account distributions of the Class A Principal
Distribution Amount
on such Distribution Date), (B) the Class M-1 Certificate Principal
Balance
(after taking into account distributions of the Class M-1 Principal
Distribution
Amount on such Distribution Date) and (C) the Class M-2 Certificate
Principal
Balance immediately prior to such Distribution Date over (2) the
lesser of (A)
68.90% of the Stated Principal Balances of the Mortgage Loans as of
such
Distribution Date and (B) the excess of the Stated Principal
Balances of the
Mortgage Loans as of the end of such Distribution Date over the
Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, (I) on
any
Distribution Date prior to the Stepdown Date on which the
Certificate Principal
Balance of each Class of Class A Certificates and the Class M-1
Certificates has
been reduced to zero, the Class M-2 Principal Distribution Amount
will equal the
lesser of (x) the outstanding Certificate Principal Balance of the
Class M-2
Certificates and (y) 100% of the Principal Distribution Amount
remaining after
any distributions on such Class A and Class M-1 Certificates and
(II) in no
event will the Class M-2 Principal Distribution Amount with respect
to any
Distribution Date exceed the Class M-2 Certificate Principal
Balance.
Class M-2 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class M-2 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class M-2 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-2 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class M-3 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class M-3 Certificates.
Class M-3 Certificate: Any Certificate designated as a "Class
M-3
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class M-3 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class M-3
Certificates.
30
<PAGE>
Class M-3 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class M-3
Pass-Through Rate on
the Class M-3 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or Class M-3 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-3
Certificates.
Class M-3 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-3 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-3 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class M-3 Pass-Through Rate for the related Accrual Period.
Class M-3 Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.370% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.555% per
annum.
Class M-3 Pass-Through Rate: For the first Distribution Date,
5.2500% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class M-3 Margin, (2) the Weighted Average Available Funds
Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for
such
Distribution Date.
Class M-3 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance, Class
M-1 Certificate Principal Balance and Class M-2 Certificate
Principal Balance
have been reduced to zero and a Stepdown Trigger Event exists, or
as long as a
Stepdown Trigger Event does not exist, the excess of (1) the sum of
(A) the
Class A Certificate Principal Balance (after taking into account
distributions
of the Class A Principal Distribution Amount on such Distribution
Date), (B) the
Class M-1 Certificate Principal Balance (after taking into account
distributions
of the Class M-1 Principal Distribution Amount on such Distribution
Date), (C)
the Class M-2 Certificate Principal Balance (after taking into
account
distributions of the Class M-2 Principal Distribution Amount on
such
Distribution Date) and (D) the Class M-3 Certificate Principal
Balance
immediately prior to such Distribution Date over (2) the lesser of
(A) 72.80% of
the Stated Principal Balances of the Mortgage Loans as of such
Distribution Date
and (B) the excess of the Stated Principal Balances for the
Mortgage Loans as of
such Distribution Date over the Minimum Required
Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any Distribution Date prior
to the
Stepdown Date on which the Certificate Principal Balance of each
Class of Class
A Certificates, the Class M-1 Certificates and the Class M-2
Certificates has
been reduced to zero, the Class M-3 Principal Distribution Amount
will equal the
lesser of (x) the outstanding Certificate Principal Balance of the
Class M-3
Certificates and (y) 100% of the Principal Distribution Amount
remaining after
any distributions on such Class A, Class M-1 and Class M-2
Certificates and (II)
in no event will the Class M-3 Principal Distribution Amount with
respect to any
Distribution Date exceed the Class M-3 Certificate Principal
Balance.
Class M-3 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class M-3 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class M-3 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-3 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
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<PAGE>
Class M-4 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class M-4 Certificates.
Class M-4 Certificate: Any Certificate designated as a "Class
M-4
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class M-4 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class M-4
Certificates.
Class M-4 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class M-4
Pass-Through Rate on
the Class M-4 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or Class M-4 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-4
Certificates.
Class M-4 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-4 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-4 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class M-4 Pass-Through Rate for the related Accrual Period.
Class M-4 Margin: As
of any Distribution Date up to and including the
Initial Optional Termination Date, 0.460% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.690% per
annum.
Class M-4 Pass-Through Rate: For the first Distribution Date,
5.3400% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class M-4 Margin, (2) the Weighted Average Available Funds
Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for
such
Distribution Date.
Class M-4 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance, Class
M-1 Certificate Principal Balance, Class M-2 Certificate Principal
Balance and
Class M-3 Certificate Principal Balance have been reduced to zero
and a Stepdown
Trigger Event exists, or as long as a Stepdown Trigger Event does
not exist, the
excess of (1) the sum of (A) the Class A Certificate Principal
Balance (after
taking into account distributions of the Class A Principal
Distribution Amount
on such Distribution Date), (B) the Class M-1 Certificate Principal
Balance
(after taking into account distributions of the Class M-1 Principal
Distribution
Amount on such Distribution Date), (C) the Class M-2 Certificate
Principal
Balance (after taking into account distributions of the Class M-2
Principal
Distribution Amount on such Distribution Date), (C) the Class M-3
Certificate
Principal Balance (after taking into account distributions of the
Class M-3
Principal Distribution Amount on such Distribution Date) and (D)
the Class M-4
Certificate Principal Balance immediately prior to such
Distribution Date over
(2) the lesser of (A) 76.40% of the Stated Principal Balances of
the Mortgage
Loans as of such Distribution Date and (B) the excess of the Stated
Principal
Balances for the Mortgage Loans as of such Distribution Date over
the Minimum
Required Overcollateralization Amount. Notwithstanding the
foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the
Certificate Principal
Balance of each Class of Class A Certificates, the Class M-1
Certificates, the
Class M-2 Certificates and the Class M-3 Certificates has been
reduced to zero,
the Class M-4 Principal Distribution Amount will equal the lesser
of (x) the
outstanding Certificate Principal Balance of the Class
32
<PAGE>
M-4 Certificates and (y) 100% of the Principal Distribution Amount
remaining
after any distributions on such Class A, Class M-1, Class M-2 and
Class M-3
Certificates and (II) in no event will the Class M-4 Principal
Distribution
Amount with respect to any Distribution Date exceed the Class M-4
Certificate
Principal Balance.
Class M-4 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class M-4 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class M-4 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-4 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class M-5 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class M-5 Certificates.
Class M-5 Certificate:
Any Certificate designated as a "Class M-5
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class M-5 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class M-5
Certificates.
Class M-5 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class M-5
Pass-Through Rate on
the Class M-5 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or Class M-5 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-5
Certificates.
Class M-5 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-5 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-5 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class M-5 Pass-Through Rate for the related Accrual Period.
Class M-5 Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.480% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.720% per
annum.
Class M-5 Pass-Through Rate: For the first Distribution Date,
5.3600% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class M-5 Margin, (2) the Weighted Average Available Funds
Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for
such
Distribution Date.
Class M-5 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance, Class
M-1 Certificate Principal Balance, Class M-2 Certificate Principal
Balance,
Class M-3 Certificate Principal Balance and Class M-4 Certificate
Principal
Balance have been reduced to zero and a Stepdown Trigger Event
exists, or as
long as a Stepdown Trigger Event does not exist, the excess of (1)
the sum of
(A) the Class A Certificate Principal Balance (after taking into
account
distributions of the Class A Principal Distribution Amount on such
Distribution
Date), (B) the Class M-1 Certificate Principal Balance (after
taking into
account distributions of the Class M-1 Principal
33
<PAGE>
Distribution Amount on such Distribution Date), (C) the Class M-2
Certificate
Principal Balance (after taking into account distributions of the
Class M-2
Principal Distribution Amount on such Distribution Date), (D) the
Class M-3
Certificate Principal Balance (after taking into account
distributions of the
Class M-3 Principal Distribution Amount on such Distribution Date),
(E) the
Class M-4 Certificate Principal Balance (after taking into account
distributions
of the Class M-4 Principal Distribution Amount on such Distribution
Date) and
(F) the Class M-5 Certificate Principal Balance immediately prior
to such
Distribution Date over (2) the lesser of (A) 79.80% of the Stated
Principal
Balances of the Mortgage Loans as of such Distribution Date and (B)
the excess
of the Stated Principal Balances for the Mortgage Loans as of such
Distribution
Date over the Minimum Required Overcollateralization Amount.
Notwithstanding the
foregoing, (I) on any Distribution Date prior to the Stepdown Date
on which the
Certificate Principal Balance of each Class of Class A
Certificates, the Class
M-1 Certificates, the Class M-2 Certificates, the Class M-3
Certificates an the
Class M-4 Certificates has been reduced to zero, the Class M-5
Principal
Distribution Amount will equal the lesser of (x) the outstanding
Certificate
Principal Balance of the Class M-5 Certificates and (y) 100% of the
Principal
Distribution Amount remaining after any distributions on such Class
A, Class
M-1, Class M-2, Class M-3 and Class M-4 Certificates and (II) in no
event will
the Class M-5 Principal Distribution Amount with respect to any
Distribution
Date exceed the Class M-5 Certificate Principal Balance.
Class M-5 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class M-5 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class M-5 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-5 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class M-6 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class M-6 Certificates.
Class M-6 Certificate: Any Certificate designated as a "Class
M-6
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class M-6 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class M-6
Certificates.
Class M-6 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class M-6
Pass-Through Rate on
the Class M-6 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or Class M-6 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-6
Certificates.
Class M-6 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-6 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-6 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class M-6 Pass-Through Rate for the related Accrual Period.
Class M-6 Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.560% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.840% per
annum.
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<PAGE>
Class M-6 Pass-Through Rate: For the first Distribution Date,
5.4400% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class M-6 Margin, (2) the Weighted Average Available Funds
Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for
such
Distribution Date.
Class M-6 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance, Class
M-1 Certificate Principal Balance, Class M-2 Certificate Principal
Balance,
Class M-3 Certificate Principal Balance, Class M-4 Certificate
Principal Balance
and Class M-5 Certificate Principal Balance have been reduced to
zero and a
Stepdown Trigger Event exists, or as long as a Stepdown Trigger
Event does not
exist, the excess of (1) the sum of (A) the Class A Certificate
Principal
Balance (after taking into account distributions of the Class A
Principal
Distribution Amount on such Distribution Date), (B) the Class M-1
Certificate
Principal Balance (after taking into account distributions of the
Class M-1
Principal Distribution Amount on such Distribution Date), (C) the
Class M-2
Certificate Principal Balance (after taking into account
distributions of the
Class M-2 Principal Distribution Amount on such Distribution Date),
(D) the
Class M-3 Certificate Principal Balance (after taking into account
distributions
of the Class M-3 Principal Distribution Amount on such Distribution
Date), (E)
the Class M-4 Certificate Principal Balance (after taking into
account
distributions of the Class M-4 Principal Distribution Amount on
such
Distribution Date), (F) the Class M-5 Certificate Principal Balance
(after
taking into account distributions of the Class M-5 Principal
Distribution Amount
on such Distribution Date), and (G) the Class M-6 Certificate
Principal Balance
immediately prior to such Distribution Date over (2) the lesser of
(A) 83.00% of
the Stated Principal Balances of the Mortgage Loans as of such
Distribution Date
and (B) the excess of the Stated Principal Balances for the
Mortgage Loans as of
such Distribution Date over the Minimum Required
Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any Distribution Date prior
to the
Stepdown Date on which the Certificate Principal Balance of each
Class of Class
A Certificates, the Class M-1 Certificates, the Class M-2
Certificates, the
Class M-3 Certificates, the Class M-4 Certificates and the Class
M-5
Certificates has been reduced to zero, the Class M-6 Principal
Distribution
Amount will equal the lesser of (x) the outstanding Certificate
Principal
Balance of the Class M-6 Certificates and (y) 100% of the Principal
Distribution
Amount remaining after any distributions on such Class A, Class
M-1, Class M-2,
Class M-3, Class M-4 and Class M-5 Certificates and (II) in no
event will the
Class M-6 Principal Distribution Amount with respect to any
Distribution Date
exceed the Class M-6 Certificate Principal Balance.
Class M-6 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class M-6 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class M-6 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-6 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class P Certificate: Any Certificate designated as a Class P
Certificate on
the face thereof, executed by the Trustee and authenticated by the
Trustee in
substantially the form set forth in Exhibit A, representing the
right to
distributions as set forth herein.
Class R Certificate: The Class R Certificate executed by the
Trustee and
authenticated by the Trustee in substantially the form set forth in
Exhibit A.
Class R Certificate Principal Balance: As of any date of
determination, the
aggregate Certificate Principal Balance of the Class R
Certificate.
Class R Current Interest: As of any Distribution Date, the interest
accrued
during the related Accrual Period at the Class R Pass-Through Rate
on the Class
R Certificate Principal Balance as of such
35
<PAGE>
Distribution Date plus the portion of any previous distributions on
such Class
in respect of Current Interest or a Class R Interest Carry Forward
Amount that
is recovered as a voidable preference by a trustee in bankruptcy,
less any
Non-Supported Interest Shortfall allocated on such Distribution
Date to the
Class R Certificate. For purposes of calculating interest,
principal
distributions on a Distribution Date will be deemed to have been
made on the
first day of the Accrual Period in which such Distribution Date
occurs.
Class R Interest Carry Forward Amount: As of any Distribution Date,
the sum
of (1) the excess of (A) the Class R Current Interest with respect
to prior
Distribution Dates over (B) the amount actually distributed to the
Class R
Certificate with respect to interest on such prior Distribution
Dates and (2)
interest on such excess (to the extent permitted by applicable law)
at the Class
R Pass-Through Rate for the related Accrual Period.
Class R Margin: As of any Distribution Date up to and including the
Initial
Optional Termination Date for the Certificates, 0.180% per annum
and, as of any
Distribution Date after the Initial Optional Termination Date,
0.360% per annum.
Class R Pass-Through Rate: For the first Distribution Date, 5.0600%
per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class R Margin, (2) the Class A-1 Available Funds Cap for
such
Distribution Date and (3) the Class A-1 Maximum Rate Cap for such
Distribution
Date.
Class SWR Interest: The sole class of "residual interest" in the
SWAP
REMIC.
Closing Date: April 13, 2006.
Code: The Internal Revenue Code of 1986, including any successor
or
amendatory provisions.
Collection Account: The separate Eligible Account created and
initially
maintained by the Servicer pursuant to Section 3.05(d) in the name
of the
Trustee for the benefit of the Certificateholders and designated
"Litton Loan
Servicing LP, as servicer for the holders of Ownit Mortgage Loan
Trust, Mortgage
Loan Asset-Backed Certificates, Series 2006-3." Funds in the
Collection Account
shall be held in trust for the Certificateholders for the uses and
purposes set
forth in this Agreement.
Compensating Interest: With respect to any Mortgage Loan and
any
Distribution Date, an amount equal to the portion of any Prepayment
Interest
Shortfalls required to be deposited in the Collection Account by
the Servicer
pursuant to Section 4.02 hereof, provided that such amount shall
not exceed
one-half of the product of (x) one-twelfth of the Servicing Fee
Rate and (y) the
aggregate Stated Principal Balance of the Mortgage Loans.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged
Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan),
whether permanent or temporary, partial or entire, by exercise of
the power of
eminent domain or condemnation, to the extent not required to be
released either
to a Mortgagor in accordance with the terms of the related mortgage
loan
documents or to the holder of a senior lien on the Mortgaged
Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan).
Co-op Lease: With respect to a Co-op Loan, the lease with respect
to a
dwelling unit occupied by the Mortgagor and relating to the stock
allocated to
the related dwelling unit.
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<PAGE>
Co-op Loan: A Mortgage Loan secured by the pledge of stock
allocated to a
dwelling unit in a residential cooperative housing corporation and
a collateral
assignment of the related Co-op Lease.
Corresponding Certificates: With respect to the Class LTA-1
Interest, the
Class A-1 and Class R Certificates. With respect to the Class
LTA-2A Interest,
the Class A-2A Certificates. With respect to the Class LTA-2B
Interest, the
Class A-2B Certificates. With respect to the Class LTA-2C Interest,
the Class
A-2C Certificates. With respect to the Class LTA-2D Interest, the
Class A-2D
Certificates. With respect to the Class LTM-1 Interest, the Class
M-1
Certificates. With respect to the Class LTM-2 Interest, the Class
M-2
Certificates. With respect to the Class LTM-3 Interest, the Class
M-3
Certificates. With respect to the Class LTM-4 Interest, the Class
M-4
Certificates. With respect to the Class LTM-5 Interest, the Class
M-5
Certificates. With respect to the Class LTM-6 Interest, the Class
M-6
Certificates. With respect to the Class LTB-1 Interest, the Class
B-1
Certificates. With respect to the Class LTB-2 Interest, the Class
B-2
Certificates. With respect to the Class LTB-3 Interest, the Class
B-3
Certificates. With respect to the Class LTB-4 Interest, the Class
B-4
Certificates.
Corresponding REMIC Regular Interest: For each Class of
Certificates, the
interest in the Upper Tier REMIC listed on the same row in the
table entitled
"Upper Tier REMIC" in the Preliminary Statement.
Current Interest: Any of the
Class A-1 Current Interest, the Class A-2A
Current Interest, the Class A-2B Current Interest, the Class A-2C
Current
Interest, the Class A-2D Current Interest, the Class R Current
Interest, the
Class M-1 Current Interest, the Class M-2 Current Interest, the
Class M-3
Current Interest, the Class M-4 Current Interest, the Class M-5
Current
Interest, the Class M-6 Current Interest, the Class B-1 Current
Interest, the
Class B-2 Current Interest, the Class B-3 Current Interest, the
Class B-4
Current Interest and the Class C Current Interest.
Custodian: LaSalle Bank National Association, on behalf of the
Trustee.
Cut-off Date: March 1, 2006.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
unpaid
principal balance thereof as of the close of business on the
calendar day
immediately preceding the Cut-off Date after application of all
payments of
principal due on or prior to the Cut-off Date, whether or not
received, and all
Principal Prepayments received prior to the Cut-off Date, but
without giving
effect to any installments of principal received in respect of Due
Dates after
the Cut-off Date.
Defaulted Swap Termination Payment: Any payment required to be made
by the
Supplemental Interest Trust to the Swap Counterparty pursuant to
the Swap
Agreement as a result of an event of default under the Swap
Agreement with
respect to which the Swap Counterparty is the defaulting party or a
termination
event (including a Downgrade Termination Event) under that
agreement (other than
illegality or a tax event) with respect to which the Swap
Counterparty is the
sole Affected Party (as defined in the Swap Agreement).
Definitive Certificates: As defined in Section 5.06.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced
by a
Replacement Mortgage Loan.
Delinquent: A Mortgage Loan is "delinquent" if any payment due
thereon is
not made pursuant to the terms of such Mortgage Loan by the close
of business on
the day such payment is scheduled to be due. A Mortgage Loan is "30
days
delinquent" if such payment has not been received by the close
of
37
<PAGE>
business on the corresponding day of the month immediately
succeeding the month
in which such payment was due, or, if there is no such
corresponding day (e.g.,
as when a 30-day month follows a 31-day month in which a payment
was due on the
31st day of such month), then on the last day of such immediately
succeeding
month. Similarly for "60 days delinquent," "90 days delinquent" and
so on.
Denomination: With respect to each Certificate, the amount set
forth on the
face thereof as the "Initial Principal Balance of this
Certificate."
Depositor: Merrill Lynch Mortgage Investors, Inc., a Delaware
corporation,
or any successor in interest.
Depository: The initial Depository shall be The Depository Trust
Company
("DTC"), the nominee of which is Cede & Co., or any other
organization
registered as a "clearing agency" pursuant to Section 17A of the
Securities
Exchange Act of 1934, as amended. The Depository shall initially be
the
registered Holder of the Book-Entry Certificates. The Depository
shall at all
times be a "clearing corporation" as defined in Section 8-102(3) of
the Uniform
Commercial Code of the State of New York.
Depository Agreement: With respect to Classes of Book-Entry
Certificates,
the agreement between the Trustee and the initial Depository.
Depository Participant: A broker, dealer, bank or other
financial
institution or other Person for whom from time to time a Depository
effects
book-entry transfers and pledges of securities deposited with the
Depository.
Designated Transaction: A transaction in which the assets
underlying the
Certificates consist of single-family residential, multi-family
residential,
home equity, manufactured housing and/or commercial mortgage
obligations that
are secured by single-family residential, multi-family residential,
commercial
real property or leasehold interests therein.
Determination Date: With respect to any Distribution Date, the 16th
day of
the month of such Distribution Date or, if such 16th day is not a
Business Day,
the next succeeding Business Day.
Disqualified Organization: (1) the United States, any state or
political
subdivision thereof, any foreign government, any international
organization, or
any agency or instrumentality of any of the foregoing, (2) any
organization
(other than a cooperative described in Section 521 of the Code)
which is exempt
from tax under Chapter 1 of Subtitle A of the Code unless such
organization is
subject to the tax imposed by Section 511 of the Code and (3) any
organization
described in Section 1381(a)(2)(C) of the Code.
Distribution Date: The 25th day of each calendar month, or if such
25th day
is not a Business Day, the next succeeding Business Day, commencing
in April
2006.
Downgrade Termination Event: An event whereby (x) the Swap
Counterparty (or
its guarantor) ceases to have short term unsecured and/or long term
debt ratings
at least equal to the levels specified in the Swap Agreement, and
(y) at least
one of the following events has not occurred (except to the extent
otherwise
approved by the Rating Agencies): (i) within the time period
specified in the
Swap Agreement with respect to such downgrade, the Swap
Counterparty shall
transfer the Swap Agreement, in whole, but not in part, to a
substitute swap
counterparty that satisfies the requirements set forth in the Swap
Agreement,
subject to the satisfaction of the Rating Agency Condition or (ii)
within the
time period specified in the Swap Agreement with respect to such
downgrade, the
Swap Counterparty shall collateralize its exposure to the Trust
Fund pursuant to
an ISDA Credit Support Annex, subject to the
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satisfaction of the Rating Agency Condition; provided that such
ISDA Credit
Support Annex shall be made a credit support document for the Swap
Counterparty
pursuant to an amendment to the Swap Agreement.
Due
Date: With respect to any Distribution Date and any Mortgage Loan,
the
day during the related Due Period on which a Scheduled Payment is
due.
Due
Period: With respect to any Distribution Date, the period beginning
on
the second day of the calendar month preceding the calendar month
in which such
Distribution Date occurs and ending on the first day of the month
in which such
Distribution Date occurs.
Eligible Account: An account that is (i) maintained with a
depository
institution the long-term unsecured debt obligations of which are
rated by each
Rating Agency in one of its two highest rating categories, or (ii)
maintained
with the corporate trust department of a bank which (A) has a
rating of at least
Baa3 or P-3 by Moody's and (B) is either the Depositor or the
corporate trust
department of a national bank or banking corporation which has a
rating of at
least A-1 by S&P or F1 by Fitch, or (iii) an account or
accounts the deposits in
which are fully insured by the FDIC, or (iv) an account or
accounts, acceptable
to each Rating Agency without reduction or withdrawal of the rating
of any Class
of Certificates, as evidenced in writing, by a depository
institution in which
such accounts are insured by the FDIC (to the limit established by
the FDIC),
the uninsured deposits in which accounts are otherwise secured such
that, as
evidenced by an Opinion of Counsel delivered to and acceptable to
the Trustee
and each Rating Agency, the Certificateholders have a claim with
respect to the
funds in such account and a perfected first security interest
against any
collateral (which shall be limited to Permitted Investments)
securing such funds
that is superior to claims of any other depositors or creditors of
the
depository institution with which such account is maintained, or
(v) maintained
at an eligible institution whose commercial paper, short-term debt
or other
short-term deposits are rated at least A-1+ by S&P and F-1+ by
Fitch, or (vi)
maintained with a federal or state chartered depository institution
the deposits
in which are insured by the FDIC to the applicable limits and the
short-term
unsecured debt obligations of which (or, in the case of a
depository institution
that is a subsidiary of a holding company, the short-term unsecured
debt
obligations of such holding company) are rated A-1 by S&P or
Prime-1 by Moody's
at the time any deposits are held on deposit therein, or (vii)
otherwise
acceptable to each Rating Agency, as evidenced by a letter from
each Rating
Agency to the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974,
including any
successor or amendatory provisions.
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: The Class C and Class P Certificates
and any
other Certificate, as long as the acquisition and holding of such
Certificate is
not covered by and exempt under the Underwriter's exemption.
Event of Default: As defined in Section 7.01 hereof.
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Excess Interest: On any Distribution Date, for each Class of the
Class A,
Class M and Class B Certificates, the excess, if any, of (1) the
amount of
interest such Class of Certificates is entitled to receive on such
Distribution
Date over (2) the amount of interest such Class of Certificates
would have been
entitled to receive on such Distribution Date at an interest rate
equal to the
REMIC Pass-Through Rate.
Excess Proceeds: With respect to any Liquidated Loan, any
Liquidation
Proceeds that are in excess of the sum of (1) the unpaid principal
balance of
such Liquidated Loan as of the date of such liquidation plus (2)
interest at the
Mortgage Rate from the Due Date as to which interest was last paid
or advanced
to Certificateholders (and not reimbursed to the Servicer) up to
the Due Date in
the month in which such Liquidation Proceeds are required to be
distributed on
the unpaid principal balance of such Liquidated Loan outstanding
during each Due
Period as to which such interest was not paid or advanced.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Extra Principal Distribution Amount: With respect to any
Distribution Date,
(1) prior to the Stepdown Date, the excess of (A) the sum of (i)
the Aggregate
Certificate Principal Balance immediately preceding such
Distribution Date
reduced by the Principal Funds with respect to such Distribution
Date and (ii)
$18,409,682 and over (B) the aggregate Stated Principal Balance of
the Mortgage
Loans as of such Distribution Date and (2) on and after the
Stepdown Date, (A)
the sum of (x) the Aggregate Certificate Principal Balance
immediately preceding
such Distribution Date, reduced by the Principal Funds with respect
to such
Distribution Date and (y) the greater of (a) 6.40% of the aggregate
Stated
Principal Balance of the Mortgage Loans and (b) the Minimum
Required
Overcollateralization Amount less (B) the aggregate Stated
Principal Balance of
the Mortgage Loans as of such Distribution Date; provided, however,
that if on
any Distribution Date a Stepdown Trigger Event is in effect, the
Extra Principal
Distribution Amount will not be reduced to the applicable
percentage of the
then-current aggregate Stated Principal Balance of the Mortgage
Loans (and will
remain fixed at the applicable percentage of the aggregate Stated
Principal
Balance of the Mortgage Loans as of the Due Date immediately prior
to the
Stepdown Trigger Event) until the next Distribution Date on which
the Stepdown
Trigger Event is not in effect.
Fannie Mae: A federally chartered and privately owned corporation
organized
and existing under the Federal National Mortgage Association
Charter Act, or any
successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Fitch: Fitch, Inc., or any successor in interest.
Fixed Rate Mortgage Loan: A Mortgage Loan identified in the
Mortgage Loan
Schedule as having a Mortgage Rate that is fixed.
Floating Rate Certificate Carryover: With respect to a Distribution
Date,
in the event that the Pass-Through Rate for a class of Class A,
Class M or Class
B Certificates is based upon the related Available Funds Cap, the
excess of (1)
the amount of interest that such Class would have been entitled to
receive on
such Distribution Date had the Pass-Through Rate for that Class not
been
calculated based on the related Available Funds Cap, up to but not
exceeding
greater of (x) the related Maximum Rate Cap or (y) the sum of (i)
the related
Available Funds Cap and (ii) the product of (A) a fraction, the
numerator of
which is 360 and the denominator of which is the actual number of
days in the
related Accrual Period and (B) the quotient obtained by dividing
(I) an amount
equal to the proceeds, if any, payable under the related Cap
Contract with
respect to such Distribution Date by (II) the aggregate Certificate
Principal
Balance of each of the Classes of Certificates to which such Cap
Contract
relates for such Distribution Date over (2) the amount of interest
such class
was entitled to receive on such Distribution Date based on
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the related Available Funds Cap, together with (i) the unpaid
portion of any
such excess from prior Distribution Dates (and interest accrued
thereon at the
then applicable Pass-Through Rate, without giving effect to the
applicable
Available Funds Cap) and (ii) any amount previously distributed
with respect to
Floating Rate Certificate Carryover for such class that is
recovered as a
voidable preference by a trustee in bankruptcy.
Floating Rate Subordinate Certificates: The Class M and Class
B-4
Certificates.
Floating Rate Subordinate Certificates Cap Contract: The
confirmation and
agreement between the Trust Fund or the Trustee and the Cap
Contract
Counterparty (in the form of Exhibit N-4 hereto).
Floating Rate Subordinate Certificates Cap Contract Notional
Balance: With
respect to any Distribution Date, the Floating Rate Subordinate
Certificates Cap
Contract Notional Balance set forth for such Distribution Date in
the Floating
Rate Subordinate Certificates One-Month LIBOR Cap Table attached
hereto as
Exhibit O-4.
Floating Rate Subordinate Certificates Cap Contract Termination
Date: The
Distribution Date in September 2006.
Floating Rate Subordinate Certificates Upper Collar: With respect
to each
Distribution Date with respect to which payments are received on
the Subordinate
Certificate Cap Contract, a rate equal to the lesser of One-Month
LIBOR and
8.9400% per annum.
Form
8-K Disclosure Information: Has the meaning set forth in Section
3.27.
Freddie Mac: A corporate instrumentality of the United States
created and
existing under Title III of the Emergency Home Finance Act of 1970,
as amended,
or any successor thereto.
Grantor Trusts: The grantor trusts described in Section 2.07
hereof.
Gross Margin: The percentage set forth in the related Mortgage Note
for
each of the Adjustable Rate Mortgage Loans which is to be added to
the
applicable index for use in determining the Mortgage Rate on each
Adjustment
Date, and which is set forth in the Mortgage Loan Schedule for each
Adjustable
Rate Mortgage Loan.
Group One: The portion of the Mortgage Pool identified as "Group
One" in
the Prospectus Supplement.
Group One Mortgage Loan: Any Mortgage Loan at any time identified
in the
Group One Mortgage Loan Schedule attached hereto as Exhibit
B-2.
Group One Net WAC: The Net WAC of Group One.
Group One Principal Distribution Amount: As of any Distribution
Date, the
amount equal to the lesser of (i) the aggregate Certificate
Principal Balance of
the Class A-1 and Class R Certificates and (ii) the product of (x)
the Group One
Principal Distribution Percentage and (y) the Class A Principal
Distribution
Amount; provided, however, that with respect to any Distribution
Date on which
the Class A-1 and Class R Certificates are outstanding and the
Certificate
Principal Balance of the Class A-2 Certificates has been reduced to
zero, the
Group One Principal Distribution Amount will equal the Class A
Principal
Distribution Amount.
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Group One Principal Distribution Percentage: With respect to
any
Distribution Date, a fraction expressed as a percentage, the
numerator of which
is the amount of Principal Funds received with respect to Mortgage
Loans in
Group One and the denominator of which is the amount of Principal
Funds received
from all of the Mortgage Loans in the mortgage pool.
Group Two: The portion of the Mortgage Pool identified as "Group
Two" in
the Prospectus Supplement.
Group Two Mortgage Loan: Any Mortgage Loan at any time identified
in the
Group Two Mortgage Loan Schedule attached hereto as Exhibit
B-3.
Group Two Net WAC: The Net WAC of Group Two.
Group Two Principal Distribution Amount: As of any Distribution
Date, the
amount equal to the lesser of (i) the aggregate Certificate
Principal Balance of
the Class A-2 Certificates and (ii) the product of (x) the Group
Two Principal
Distribution Percentage and (y) the Class A Principal Distribution
Amount;
provided, however, that with respect to any Distribution Date on
which the Class
A-2 Certificates are outstanding and the Certificate Principal
Balances of the
Class A-1 and Class R Certificates have been reduced to zero, the
Group Two
Principal Distribution Amount will equal the Class A Principal
Distribution
Amount.
Group Two Principal Distribution Percentage: With respect to
any
Distribution Date, a fraction expressed as a percentage, the
numerator of which
is the amount of Principal Funds received with respect to Mortgage
Loans in
Group Two and the denominator of which is the amount of Principal
Funds received
from all of the Mortgage Loans in the mortgage pool.
Indenture: An indenture relating to the issuance of notes
guaranteed by the
NIMs Insurer.
Initial Adjustment Date: As to any Adjustable Rate Mortgage Loan,
the first
Adjustment Date following the origination of such Mortgage
Loan.
Initial Certificate Principal Balance: With respect to any
Certificate, the
Certificate Principal Balance of such Certificate or any
predecessor Certificate
on the Closing Date as set forth in Section 5.01 hereof.
Initial Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate
in
effect prior to the Initial Adjustment Date.
Initial Optional Termination Date: The first Distribution Date on
which the
aggregate Stated Principal Balance of the Mortgage Loans (or if
such Mortgage
Loan is an REO Property, the fair market value of such REO
Property) is equal to
or less than 10% of the aggregate Stated Principal Balance of the
Mortgage Loans
as of the Cut-off Date.
Insurance Policy: With respect to any Mortgage Loan or the
related
Mortgaged Property (or the related Underlying Mortgaged Property,
in the case of
a Co-op Loan) included in the Trust Fund, any insurance policy,
including all
riders and endorsements thereto in effect with respect to such
Mortgage Loan or
Mortgaged Property (or related Underlying Mortgage Property, in the
case of a
Co-op Loan), including any replacement policy or policies for any
insurance
policies.
Insurance Proceeds: Proceeds paid in respect of a Mortgage Loan or
the
related Mortgaged Property (or the related Underlying Mortgaged
Property, in the
case of a Co-op Loan) pursuant to any
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<PAGE>
Insurance Policy or any other insurance policy covering such
Mortgage Loan or
Mortgaged Property (or Underlying Mortgaged Property, in the case
of a Co-op
Loan), to the extent such proceeds are payable to the mortgagee
under the
Mortgage, the Servicer or the trustee under the deed of trust and
are not
applied to the restoration of the related Mortgaged Property (or
the related
Underlying Mortgaged Property, in the case of a Co-op Loan) or
released either
to the Mortgagor or to the holder of a senior lien on the related
Mortgaged
Property (or the related Underlying Mortgaged Property in the case
of a Co-op
Loan) in accordance with the procedures that the Servicer would
follow in
servicing mortgage loans held for its own account, in each case
other than any
amount included in such Insurance Proceeds in respect of Insured
Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or any
other
insurance policy with respect to a Mortgage Loan or the related
Mortgaged
Property (or the related Underlying Mortgaged Property, in the case
of a Co-op
Loan).
Interest Carry Forward Amount: Any of the Class A-1 Interest Carry
Forward
Amount, the Class A-2A Interest Carry Forward Amount, the Class
A-2B Interest
Carry Forward Amount, the Class A-2C Interest Carry Forward Amount,
the Class
A-2D Interest Carry Forward Amount, the Class R Interest Carry
Forward Amount,
the Class M-1 Interest Carry Forward Amount, the Class M-2 Interest
Carry
Forward Amount, the Class M-3 Interest Carry Forward Amount, the
Class M-4
Interest Carry Forward Amount, the Class M-5 Interest Carry Forward
Amount, the
Class M-6 Interest Carry Forward Amount, the Class B-1 Interest
Carry Forward
Amount, the Class B-2 Interest Carry Forward Amount, the Class B-3
Interest
Carry Forward Amount, the B-4 Interest Carry Forward Amount or the
Class C
Interest Carry Forward Amount, as the case may be.
Interest Determination Date: With respect to the LIBOR
Certificates, (i)
for any Accrual Period other than the first Accrual Period, the
second LIBOR
Business Day preceding the commencement of such Accrual Period and
(ii) for the
first Accrual Period, April 11, 2006.
Interest Funds: With respect to any Distribution Date, the sum,
without
duplication, of (1) all scheduled interest due during the related
Due Period and
received before the related Servicer Remittance Date or advanced on
or before
the related Servicer Remittance Date less the Servicing Fee and the
Trustee Fee,
(2) all Advances relating to interest with respect to the Mortgage
Loans and
such Distribution Date, (3) all Compensating Interest with respect
to the
Mortgage Loans and such Distribution Date, (4) Liquidation Proceeds
with respect
to the Mortgage Loans (to the extent such Liquidation Proceeds
relate to
interest) collected during the related Prepayment Period, (5) all
proceeds of
any purchase pursuant to Section 2.02 or 2.03 during the related
Prepayment
Period or pursuant to Section 9.01 not later than the related
Determination Date
(to the extent that such proceeds relate to interest) less the
Servicing Fee and
the Trustee Fee and (6) all Prepayment Charges received with
respect to the
Mortgage Loans during the related Prepayment Period less (A) all
Non-Recoverable
Advances relating to interest and (B) other amounts reimbursable to
the Servicer
and the Trustee pursuant to this Agreement.
Issuing Entity: Ownit Mortgage Loan Trust, Series 2006-3.
LaSalle: LaSalle Bank National Association.
Latest Possible Maturity Date: The latest maturity date for any
Mortgage
Loan in the Trust Fund plus one year.
LIBOR Business Day: Any day on which banks in the City of London,
England
and New York City, U.S.A. are open and conducting transactions in
foreign
currency and exchange.
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LIBOR Certificates: The Class A, Class M and Class B-4
Certificates.
Liquidated Loan: With respect to any Distribution Date, a
defaulted
Mortgage Loan that either (a) pursuant to Section 3.12 has been
realized upon or
liquidated through deed-in-lieu of foreclosure, foreclosure sale,
trustee's sale
or other realization as provided by applicable law governing the
real property
subject to the related Mortgage and any security agreements and as
to which the
Servicer has certified (in accordance with Section 3.12) in the
related
Prepayment Period that it has received all amounts it expects to
receive in
connection with such liquidation or (b) as to which is not a first
lien Mortgage
Loan and is delinquent 180 days or longer, the Servicer has
certified in a
certificate of an officer of the Servicer delivered to the
Depositor and the
Trustee that it does not believe that there is a reasonable
likelihood that any
further net proceeds will be received or recovered with respect to
such Mortgage
Loan.
Liquidation Proceeds: Amounts, including Condemnation Proceeds,
Insurance
Proceeds, received in connection with the partial or complete
liquidation of a
Mortgage Loan, whether through trustee's sale, foreclosure sale,
sale by the
Servicer pursuant to this Agreement or otherwise or amounts
received in
connection with any condemnation or partial release of a Mortgaged
Property and
any other proceeds received in connection with the final sale of a
related REO
Property, less the sum of related unreimbursed Advances, Servicing
Fees,
Servicing Advances and any other expenses related to such Mortgage
Loan.
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 lesser
of (X) the Appraised Value of the related Mortgaged Property (or
applicable
dwelling unit, in the case of a Co-op Loan) and (Y) the sales price
of the
related Mortgaged Property (or applicable dwelling unit, in the
case of a Co-op
Loan) at the time of origination.
Losses: Any losses, claims, damages, liabilities or expenses
collectively.
Lower Tier REMIC: As described in the Preliminary Statement and
Section
2.07.
Lower Tier REMIC Interests: Each of the Class LTA-1 Interest, the
Class
LTA-2A Interest, the Class LTA-2B Interest, the Class LTA-2C
Interest, the Class
LTA-2D Interest, the Class LTM-1 Interest, the Class LTM-2
Interest, the Class
LTM-3 Interest, the Class LTM-4 Interest, the Class LTM-5 Interest,
the Class
LTM-6 Interest, the Class LTB-1 Interest, the Class LTB-2 Interest,
the Class
LTB-3 Interest, the Class LTB-4 Interest, the Class LTIX Interest,
the Class
LTIIX Interest, the Class LTII1A Interest, the Class LTII1B
Interest, the Class
LTII2A Interest, the Class LTII2B Interest, the Class LT-IO
Interest and the
Class LTR Interest.
Lower Tier REMIC I Marker Interests: Each of the classes of Lower
Tier
REMIC Regular Interests other than the Class LTIX Interest, the
Class LTIIX
Interest, the Class LTII1A Interest, the Class LTII1B Interest, the
Class LTII2A
Interest, the Class LTII2B Interest and the Class LT-IO
Interest.
Lower Tier REMIC II Marker Interests: Each of the Class LTII1A
Interest,
the Class LTII1B Interest, the Class LTII2A Interest and the Class
LTII2B
Interest.
Lower Tier REMIC Regular Interests: Each of the Lower Tier REMIC
Interests
other than the Class LTR Interest.
Lower Tier REMIC Subordinated Balance Ratio: The ratio of (i) the
principal
balance of the Class LTII1A Interest to (ii) the principal balance
of the Class
LTII2A Interest that is equal to the ratio of
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(i) the excess of (A) the aggregate Stated Principal Balance of
Group One over
(B) the current Certificate Principal Balance of the Class A-1 and
Class R
Certificates to (ii) the excess of (A) the aggregate Stated
Principal Balance of
Group Two over (B) the current Certificate Principal Balance of the
Class A-2
Certificates.
Maximum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan,
the maximum rate of interest set forth as such in the related
Mortgage Note and
with respect to each Fixed Rate Mortgage Loan, the rate of interest
set forth in
the related Mortgage Note.
Maximum Rate Cap: Any of the Class A-1 Maximum Rate Cap, the Class
A-2
Maximum Rate Cap or the Weighted Average Maximum Rate Cap.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation
organized and existing under the laws of the State of Delaware, or
any successor
thereto.
MERS
Loan: Any Mortgage Loan registered with MERS on the MERS
System.
MERS
System: The system of recording transfers of mortgage
electronically
maintained by MERS.
MIN:
The loan number for any MERS Loan.
Minimum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan,
the minimum rate of interest set forth as such in the related
Mortgage Note.
Minimum Required Overcollateralization Amount: An amount equal to
the
product of (x) 0.50% and (y) the Stated Principal Balance of the
Mortgage Loans
as of the Cut-off Date.
MOM
Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely
as nominee for the originator of such Mortgage Loan and its
successors and
assigns.
Monthly Statement: The statement delivered to the
Certificateholders
pursuant to Section 4.05.
Moody's: Moody's Investors Service, Inc. or any successor in
interest.
Mortgage: With respect to a Mortgage Loan that is not a Co-op Loan,
the
mortgage, deed of trust or other instrument with all riders
attached thereto
creating a first or second lien or a first or second priority
ownership interest
in an estate in fee simple in real property securing a Mortgage
Note. With
respect to a Co-op Loan, the security agreement with all riders
attached thereto
creating a security interest in the stock allocated to a dwelling
unit in a
residential cooperative housing corporation and pledged to secure
such Co-op
Loan and the related Co-op Lease.
Mortgage File: The mortgage documents listed in Section 2.01
hereof
pertaining to a particular Mortgage Loan and any additional
documents delivered
to the Trustee to be added to the Mortgage File pursuant to this
Agreement.
Mortgage Group: Either of Group One or Group Two.
Mortgage Loans: Such of the mortgage loans transferred and assigned
to the
Trustee pursuant to the provisions hereof as from time to time are
held as a
part of the Trust Fund (including any REO Properties the mortgage
loans so held
being identified in the Mortgage Loan Schedule, notwithstanding
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<PAGE>
foreclosure or other acquisition of title of the related Mortgaged
Property. Any
mortgage loan that was intended by the parties hereto to be
transferred to the
Trust Fund as indicated by such Mortgage Loan Schedule which is in
fact not so
transferred for any reason shall continue to be a Mortgage Loan
hereunder until
the Purchase Price with respect thereto has been paid to the Trust
Fund.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to
time
amended by the Trustee to reflect the deletion of Deleted Mortgage
Loans and the
addition of Replacement Mortgage Loans pursuant to the provisions
of this
Agreement transferred to the Trustee as part of the Trust Fund and
from time to
time subject to this Agreement, attached hereto as Exhibits B-1,
B-2 and B-3,
setting forth the following information with respect to each
Mortgage Loan:
(i) the loan number;
(ii) borrower name and address;
(iii) the unpaid principal balance of the Mortgage Loans;
(iv) the Initial Mortgage Rate;
(v) the original maturity date and the months remaining before
maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the first payment due date of the Mortgage Loan;
(ix) the Loan-to-Value Ratio at origination with respect to a
Mortgage
Loan;
(x) a code indicating whether the residential dwelling at the time
of
origination was represented to be owner-occupied;
(xi) a code indicating the property type;
(xii) with respect to each Adjustable Rate Mortgage Loan;
(A) the frequency of
each Adjustment Date;
(B) the next
Adjustment Date;
(C) the Maximum
Mortgage Rate;
(D) the Minimum
Mortgage Rate;
(E) the Mortgage Rate
as of the Cut-off Date;
(F) the related
Periodic Rate Cap;
(G) the Gross
Margin;
(H) the lifetime rate
cap;
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(xiii) location of the related Mortgaged Property (or
Underlying
Mortgaged Property, in the case of a Co-op Loan);
(xiv) a code indicating whether a Prepayment Charge is applicable
and,
if
so, the term of such Prepayment Charge;
(xv) the Credit Score and date obtained; and
(xvi) the MIN.
Mortgage Note: The original executed note or other evidence of
indebtedness
evidencing the indebtedness of a Mortgagor under a Mortgage Loan
and all
amendments, modifications and attachments thereto with all riders
attached
thereto.
Mortgage Pool: The aggregate of the Mortgage Loans identified in
the
Mortgage Loan Schedule.
Mortgaged Property: The underlying property securing a Mortgage
Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note
from
time to time.
Mortgagor: The obligor on a Mortgage Note.
Net
Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum
rate equal to the then current Mortgage Rate less (1) the Servicing
Fee Rate and
(2) the Trustee Fee Rate.
Net
Rate: The per annum rate set forth in footnote 8 to the description
of
the Lower Tier REMIC in the Preliminary Statement hereto (such rate
being based
on the weighted average of the interest rates on the SWAP REMIC
Regular
Interests as adjusted and as set forth in such footnote).
Net
Swap Payment: With respect to any Distribution Date, any net
payment
(other than a Swap Termination Payment or Defaulted Swap
Termination Payment)
made by the Supplemental Interest Trust to the Swap Counterparty on
the related
Fixed Rate Payer Payment Date (as defined in the Swap Agreement) or
made by the
Swap Counterparty to the Supplemental Interest Trust on the related
Floating
Rate Payer Payment Date (as defined in the Swap Agreement). In each
case, the
Net Swap Payment shall not be less than zero.
Net
WAC: With respect to any Distribution Date and for any Mortgage
Group,
the weighted average Net Mortgage Rate for the Mortgage Loans in
such Mortgage
Group calculated based on the respective Net Mortgage Rates and the
Stated
Principal Balances of such Mortgage Loans as of the preceding
Distribution Date
(or, in the case of the first Distribution Date, as of the Cut-off
Date).
NIM
Notes: The notes to be issued pursuant to the Indenture.
NIMs
Insurer: Any of the one or more insurers, if any, that is
guaranteeing
certain payments under any NIM Notes; provided, that upon the
payment in full of
the NIM Notes, all rights of the NIMs Insurer hereunder shall
terminate.
NIMs
Insurer Default: As defined in Section 10.12.
Non-Recoverable Advance: Any portion of an Advance previously made
or
proposed to be made by the Servicer that, in the good faith
judgment of the
Servicer, will not or, in the case of a current
47
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delinquency, would not, be ultimately recoverable by the Servicer
from the
related Mortgagor, related Liquidation Proceeds or otherwise with
respect to the
related Mortgage Loan.
Non-Recoverable Servicing Advance: Any portion of a Servicing
Advance
previously made or proposed to be made by the Servicer that, in the
good faith
judgment of the Servicer, will not or, in the case of a current
Servicing
Advance, would not, be ultimately recoverable by the Servicer from
the related
Mortgagor, related Liquidation Proceeds or otherwise with respect
to the related
Mortgage Loan.
Non-Supported Interest Shortfall: As defined in Section 4.02.
Officer's Certificate: A certificate (1) signed by the Chairman of
the
Board, the Vice Chairman of the Board, the President, a vice
president (however
denominated), an Assistant Vice President, the Treasurer, the
Secretary, or one
of the assistant treasurers or assistant secretaries of the
Depositor, the
Servicer or the Trustee (or any other officer customarily
performing functions
similar to those performed by any of the above designated officers
and also to
whom, with respect to a particular matter, such matter is referred
because of
such officer's knowledge of and familiarity with a particular
subject) or (2),
if provided for in this Agreement, signed by a Servicing Officer,
as the case
may be, and delivered to the Depositor, the Servicer or the
Trustee, as the case
may be, as required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period, the rate
determined by
the Trustee on the related Interest Determination Date on the basis
of (a) the
offered rates for one-month United States dollar deposits, as such
rates appear
on Telerate page 3750, as of 11:00 a.m. (London time) on such
Interest
Determination Date or (b) if such rate does not appear on Telerate
Page 3750 as
of 11:00 a.m. (London time), the offered rates of the Reference
Banks for
one-month United States dollar deposits, as such rates appear on
the Reuters
Screen LIBO Page, as of 11:00 a.m. (London time) on such Interest
Determination
Date. If One-Month LIBOR is determined pursuant to clause (b)
above, on each
Interest Determination Date, One-Month LIBOR for the related
Accrual Period will
be established by the Trustee as follows:
(i) If on such Interest Determination Date two or more Reference
Banks
provide such offered quotations, One-Month LIBOR for the related
Accrual
Period shall be the arithmetic mean of such offered quotations
(rounded
upwards if necessary to the nearest whole multiple of
0.03125%).
(ii) If on such Interest Determination Date fewer than two
Reference
Banks provide such offered quotations, One-Month LIBOR for the
related
Accrual Period shall be the higher of (i) One-Month LIBOR as
determined on
the
previous Interest Determination Date and (ii) the Reserve
Interest
Rate.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for
the Depositor, the Servicer or the Trustee, reasonably acceptable
to each
addressee of such opinion; provided, however, that with respect to
Section 6.04
or 10.01, or the interpretation or application of the REMIC
Provisions, such
counsel must (1) in fact be independent of the Depositor, the
Servicer or the
Trustee, (2) not have any direct financial interest in the
Depositor, the
Servicer or the Trustee or in any affiliate of any such party and
(3) not be
connected with the Depositor, the Servicer or the Trustee as an
officer,
employee, promoter, underwriter, trustee, partner, director or
person performing
similar functions.
Optional Termination: The termination of the Trust Fund hereunder
pursuant
to clause (b) of Section 9.01 hereof.
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Optional Termination Amount: The amount received by the Trustee
in
connection with any purchase of all of the Mortgage Loans and REO
Properties
pursuant to Section 9.01(b).
Optional Termination Price: On any date after the Initial
Optional
Termination Date an amount equal to the sum of (i) the then
aggregate
outstanding Stated Principal Balance of the Mortgage Loans (or, if
such Mortgage
Loan is an REO Property, the fair market value of such REO
Property) plus
accrued interest thereon at the applicable Mortgage Rate through
the Due Date in
the month in which the Optional Termination Price is to be
distributed to the
Certificateholders; (ii) any unreimbursed out-of-pocket costs and
expenses owed
to the Trustee or the Servicer, any unpaid or unreimbursed
Servicing Fees,
Trustee Fees and all unreimbursed Advances and Servicing Advances,
in each case
incurred by such party in the performance of its obligations; (iii)
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 (iv) any Swap Termination
Payment, other
than a Defaulted Swap Termination Payment, owed to the Swap
Counterparty.
OTS:
The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and
authenticated under
this Agreement except: (1) Certificates theretofore canceled by the
Trustee or
delivered to the Trustee for cancellation; and (2) Certificates in
exchange for
which or in lieu of which other Certificates have been executed by
the Trustee
and delivered by the Trustee pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage
Loan
with a Stated Principal Balance greater than zero that was not the
subject of a
Principal Prepayment in full, and that did not become a Liquidated
Loan, prior
to the end of the related Due Period.
Overcollateralization Amount: As of any date of determination, the
excess
of (1) the sum of (x) the Stated Principal Balance of the Mortgage
Loans over
(2) the Certificate Principal Balance of the Certificates (other
than the Class
P Certificates and the Class C Certificates).
Ownership Interest: As to any Certificate, any ownership 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.
Ownit: Ownit Mortgage Solutions Inc., a California corporation, or
its
successor in interest.
Pass-Through Rate: With respect to any Class of Certificates,
the
corresponding Pass-Through Rate for such Class of Certificates.
Percentage Interest: With respect to:
(i) any Class, the percentage interest in the undivided
beneficial
ownership interest evidenced by such Class which shall be equal to
the
Certificate Principal Balance of such Class divided by the
aggregate
Certificate Principal Balance of all Classes; and
(ii) any Certificate, the Percentage Interest evidenced thereby of
the
related Class shall equal the percentage obtained by dividing
the
Denomination of such Certificate by the aggregate of the
Denominations of
all
Certificates of such Class; except that in the case of any Class
P
Certificates, the Percentage Interest with respect to such
Certificate
shown on the face of such Certificate.
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Periodic Rate Cap: As to each Adjustable Rate Mortgage Loan and the
related
Mortgage Note, the provision therein that limits permissible
increases and
decreases in the Mortgage Rate on any Adjustment Date.
Permitted Activities: The primary activities of the Trust Fund
created
pursuant to this Agreement, which shall be:
(i) holding Mortgage Loans transferred from the Depositor and
other
assets of the Trust Fund, including the Cap Contracts and the
Supplemental
Interest Trust subtrust, which in turn holds the Swap Agreement,
and any
credit enhancement and passive derivative financial instruments
that
pertain to beneficial interests issued or sold to parties other
than the
Depositor, its Affiliates, or its agents;
(ii) issuing Certificates and other interests in the assets of
the
Trust Fund;
(iii) through the appropriate subtrust, as applicable,
receiving
collections on the Mortgage Loans and the Swap Agreement and
making
payments on such Certificates and interests in accordance with the
terms of
this
Agreement; and
(iv) engaging in other activities that are necessary or incidental
to
accomplish these limited purposes, which activities cannot be
contrary to
the
status of the Trust Fund as a qualified special purpose entity
under
existing accounting literature.
Permitted Investments: At any time, any one or more of the
following
obligations and securities:
(i) obligations of the United States or any agency thereof,
provided
such
obligations are backed by the full faith and credit of the
United
States;
(ii) general obligations of or obligations guaranteed by any state
of
the
United States or the District of Columbia receiving the highest
long-term debt rating of each Rating Agency rating the
Certificates;
(iii) commercial or finance company paper, other than commercial
or
finance company paper issued by the Depositor, the Trustee or any
of its
Affiliates, which is then receiving the highest commercial or
finance
company paper rating of each such Rating Agency;
(iv) certificates of deposit, demand or time deposits, or
bankers'
acceptances (other than banker's acceptances issued by the Trustee
or any
of
its Affiliates) issued by any depository institution or trust
company
incorporated under the laws of the United States or of any state
thereof
and
subject to supervision and examination by federal and/or state
banking
authorities, provided that the commercial paper and/or long term
unsecured
debt
obligations of such depository institution or trust company are
then
rated one of the two highest long-term and the highest short-term
ratings
of
each such Rating Agency for such securities;
(v) demand
or time deposits or certificates of deposit issued by any
bank
or trust company or savings institution to the extent that such
deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance
company or other corporation rated in the two highest long-term or
the
highest short-term ratings of each Rating Agency containing, at the
time of
the
issuance of such agreements, such terms and
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<PAGE>
conditions as will not result in the downgrading or withdrawal of
the
rating then assigned to the Certificates by any such Rating Agency
as
evidenced by a letter from each Rating Agency;
(vii) repurchase obligations with respect to any security described
in
clauses (i) and (ii) above, in either case entered into with a
depository
institution or trust company (acting as principal) described in
clause (v)
above;
(viii) securities (other than stripped bonds, stripped coupons
or
instruments sold at a purchase price in excess of 115% of the face
amount
thereof) bearing interest or sold at a discount issued by any
corporation,
other than the Trustee or any of its Affiliates, incorporated under
the
laws
of the United States or any state thereof which, at the time of
such
investment, have one of the two highest long term ratings of each
Rating
Agency;
(ix) interests in any money market fund (including those managed
or
advised the Trustee or its respective affiliates) which at the date
of
acquisition of the interests in such fund and throughout the time
such
interests are held in such fund has the highest applicable long
term rating
by
each Rating Agency rating such fund; and
(x) short term investment funds sponsored by any trust company
or
national banking association incorporated under the laws of the
United
States or any state thereof, other than the Trustee or any of
its
Affiliates, which on the date of acquisition has been rated by each
such
Rating Agency in their respective highest applicable rating
category;
provided, that no such instrument shall be a Permitted Investment
if such
instrument (i) evidences the right to receive interest only
payments with
respect to the obligations underlying such instrument, (ii) is
purchased at a
premium or above par or (iii) is purchased at a deep discount;
provided,
further, that no such instrument shall be a Permitted Investment
(A) if such
instrument evidences principal and interest payments derived from
obligations
underlying such instrument and the interest payments with respect
to such
instrument provide a yield to maturity of greater than 120% of the
yield to
maturity at par of such underlying obligations, or (B) if it may be
redeemed at
a price below the purchase price (the foregoing clause (B) not to
apply to
investments in units of money market funds pursuant to clause (ix)
above); and
provided, further, (I) that no amount beneficially owned by any
REMIC
(including, without limitation, any amounts collected by the
Servicer but not
yet deposited in the Collection Account) may be invested in
investments (other
than money market funds) treated as equity interests for Federal
income tax
purposes, unless the Servicer shall receive an Opinion of Counsel,
at the
expense of the party requesting that such investment be made, to
the effect that
such investment will not adversely affect the status of the any
REMIC provided
for herein as a REMIC under the Code or result in imposition of a
tax on the
Trust Fund or any REMIC provided for herein and (II) each such
investment must
be a "permitted investment" within the meaning of Section
860G(a)(5) of the
Code. Permitted Investments that are subject to prepayment or call
may not be
purchased at a price in excess of par. The Trustee may trade with
itself or an
affiliate when purchasing or selling Permitted Investments.
Permitted Transferee: Any Person other than (i) the United States,
any
State or political subdivision thereof, or any agency or
instrumentality of any
of the foregoing, (ii) a foreign government, International
Organization or any
agency or instrumentality of either of the foregoing, (iii) an
organization
(except certain farmers' cooperatives described in Section 521 of
the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the
tax imposed
by Section 511 of the Code on unrelated business taxable income) on
any excess
inclusions (as defined in Section 860E(c)(1) of the Code) with
respect to the
Class R Certificate, (iv) rural electric and telephone cooperatives
described in
Section 1381(a)(2)(C) of the Code, and (v) a Person that is not a
citizen or
resident of the United States, a corporation or partnership (or
other entity
treated as a corporation or partnership for United States
federal
51
<PAGE>
income tax purposes) created or organized in or under the laws of
the United
States or any State thereof or the District of Columbia or an
estate whose
income from sources without the United States is includable in
gross income for
United States federal income tax purposes regardless of its
connection with the
conduct of a trade or business within the United States, or a trust
if a court
within the United States is able to exercise primary supervision
over the
administration of the trust and one or more United States persons
have authority
to control all substantial decisions of the trust, unless, in the
case of this
clause (v), such Person has furnished the transferor and the
Trustee with a duly
completed Internal Revenue Service Form W-8ECI or applicable
successor form. The
terms "United States," "State" and "International Organization"
shall have the
meanings set forth in Section 7701 of the Code. A corporation will
not be
treated as an instrumentality of the United States or of any State
thereof for
these purposes if all of its activities are subject to tax and,
with the
exception of the Federal Home Loan Mortgage Corporation, a majority
of its board
of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, limited
liability
company, joint venture, association, joint-stock company, trust,
unincorporated
organization or government, or any agency or political subdivision
thereof.
Pool
Stated Principal Balance: As to any Distribution Date, the
aggregate
of the Stated Principal Balances, as of such Distribution Date, of
the Mortgage
Loans that were Outstanding Mortgage Loans as of such date.
Preference Claim: The meaning set forth in Section 4.04(j)
hereof.
Prepayment Assumption: A rate or rates of prepayment, as described
in the
Prospectus Supplement in the definition of "Modeling Assumptions,"
relating to
the Certificates.
Prepayment Charges: Any prepayment fees, premiums or charges to be
paid by
the Mortgagor on a Mortgage Loan pursuant to the terms of the
related Mortgage
Note or Mortgage, as applicable, as identified on the Mortgage Loan
Schedule.
Prepayment Interest Excess: With respect to any Servicer Remittance
Date,
for each Mortgage Loan that was the subject of a Principal
Prepayment in full
during the portion of the related Prepayment Period occurring
between the first
day of the calendar month in which such Servicer Remittance Date
occurs and the
last day of the related Prepayment Period, an amount equal to
interest (to the
extent received) at the applicable Net Mortgage Rate on the amount
of such
Principal Prepayment for the number of days commencing on the first
day of the
calendar month in which such Servicer Remittance Date occurs and
ending on the
date on which such Principal Prepayment is so applied.
Prepayment Interest Shortfall: With respect to any Distribution
Date, for
each Mortgage Loan that was the subject of a Principal Prepayment
in full (other
than a Principal Prepayment in full resulting from the purchase of
a Mortgage
Loan pursuant to Section 2.02, 2.03 or 9.01 hereof), the amount, if
any, by
which (i) one month's interest at the applicable Net Mortgage Rate
on the Stated
Principal Balance of such Mortgage Loan as of the preceding
Distribution Date or
in the case of a partial Principal Prepayment, on the amount of
such prepayment,
exceeds (ii) the amount of interest paid or collected in connection
with such
Principal Prepayment.
Prepayment Period: As to any Distribution Date, the period
commencing on
the 16th day of the calendar month preceding the calendar month in
which such
Distribution Date occurs, and ending on the 15th day of the
calendar month in
which such Distribution Date occurs.
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<PAGE>
Principal Distribution Amount: With respect to each Distribution
Date, the
sum of (i) the Principal Funds for such Distribution Date and (ii)
any Extra
Principal Distribution Amount for such Distribution Date.
Principal Funds: With respect to the Mortgage Loans and any
Distribution
Date, the sum, without duplication, of (1) all scheduled principal
due during
the related Due Period and received before the related Servicer
Remittance Date
or advanced on or before the related Servicer Remittance Date, (2)
Principal
Prepayments collected in the related Prepayment Period, (3) the
Stated Principal
Balance of each Mortgage Loan that was purchased by the Depositor
or the
Servicer during the related Prepayment Period or, in the case of a
purchase
pursuant to Section 9.01, on any Business Day prior to such
Distribution Date,
(4) the amount, if any, by which the aggregate unpaid principal
balance of any
Replacement Mortgage Loan is less than the aggregate unpaid
principal of the
related Deleted Mortgage Loans delivered by the Sponsor in
connection with a
substitution of a Mortgage Loan pursuant to Section 2.03(c), (5)
all Liquidation
Proceeds collected during the related Prepayment Period (to the
extent such
Liquidation Proceeds related to principal), (6) all Subsequent
Recoveries
received during the related Due Period, and (7) all other
collections and
recoveries in respect of principal during the related Prepayment
Period less (A)
all Non-Recoverable Advances relating to principal with respect to
the Mortgage
Loans and (B) other amounts reimbursable to the Servicer and the
Trustee
pursuant to this Agreement and allocable to principal.
Principal Prepayment: Any Mortgagor payment or other recovery of
(or
proceeds with respect to) principal on a Mortgage Loan (including
Mortgage Loans
purchased or repurchased under Sections 2.02, 2.03, 3.12 and 9.01
hereof) that
is received or recovered in advance of its scheduled Due Date and
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.
Partial Principal Prepayments shall be applied by the Servicer in
accordance
with the terms of the related Mortgage Note.
Privately Offered Certificates: The Class B Certificates.
Prospectus Supplement: The Prospectus Supplement dated April 11,
2006
relating to the public offering of the Class A and Class M
Certificates.
PUD:
A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan required to
be
repurchased by the Sponsor or the Transferor pursuant to Section
2.02 or 2.03
hereof or purchased by the Servicer pursuant to Section 3.12(c)
hereof, an
amount equal to the sum of (i) 100% of the unpaid principal balance
of the
Mortgage Loan as of the date of such purchase together with any
unreimbursed
Servicing Advances, (ii) accrued interest on such unpaid principal
balance at
the applicable Mortgage Rate from (a) the date through which
interest was last
paid by the Mortgagor to (b) the Due Date in the month in which the
Purchase
Price is to be distributed to Certificateholders and (iii) any
unreimbursed
costs, penalties and/or damages incurred by the Trust Fund (or the
Trustee on
behalf of the Trust Fund) in connection with any violation relating
to such
Mortgage Loan of any predatory or abusive lending law. With respect
to any REO
Property purchased by the Servicer pursuant to Section 3.12(c)
hereof, an amount
equal to the fair market value of such REO Property, as determined
in good faith
by the Servicer
Rating Agency: Either of S&P or Moody's. If any such
organization or its
successor is no longer in existence, "Rating Agency" shall be a
nationally
recognized statistical rating organization, or other comparable
Person,
designated by the Depositor, notice of which designation shall be
given to the
Trustee. References herein to a given rating category of a Rating
Agency shall
mean such rating category without giving effect to any
modifiers.
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Rating Agency Condition: As defined in the Swap Agreement.
Realized Loss: With respect to (1) a Liquidated Loan, the amount,
if any,
by which the Stated Principal Balance and accrued interest thereon
at the Net
Mortgage Rate exceeds the amount actually recovered by the Servicer
with respect
thereto (net of reimbursement of Advances and Servicing Advances)
at the time
such Mortgage Loan became a Liquidated Loan or (2) a Mortgage Loan
which is not
a Liquidated Loan, any amount of principal that the Mortgagor is no
longer
legally required to pay (except for the extinguishment of debt that
results from
the exercise of remedies due to default by the Mortgagor).
Record Date: With respect to any Distribution Date, the close of
business
on the last Business Day of the month preceding the month in which
the
applicable Distribution Date occurs (or, in the case of the first
Distribution
Date, the Closing Date).
Reference Banks: Barclays Bank PLC, JPMorgan Chase Bank, N.A.,
Citibank,
N.A., Wells Fargo Bank, N.A. and NatWest, N.A.; provided that if
any of the
foregoing banks are not suitable to serve as a Reference Bank, then
any leading
banks selected by the Trustee which are engaged in transactions in
Eurodollar
deposits in the international Eurocurrency market (i) with an
established place
of business in London, England, (ii) whose quotations appear on the
Reuters
Screen LIBO Page on the relevant Interest Determination Date and
(iii) which
have been designated as such by the Trustee.
Regular Certificate: Any one of the Class A, Class M and Class
B
Certificates.
Regulation AB: Subpart 229.1100 - 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 Securities and Exchange Commission in the adopting release
(Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed Reg. 1,506,
1.531 (Jan.
7, 2005) or by the staff of the Securities and Exchange Commission,
or as may be
provided by the Securities and Exchange Commission or its staff
from time to
time.
Regulation S: Regulation S promulgated under the Securities Act or
any
successor provision thereto, in each case as the same may be
amended from time
to time; and all references to any rule, section or subsection of,
or definition
or term contained in, Regulation S means such rule, section,
subsection,
definition or term, as the case may be, or any successor thereto,
in each case
as the same may be amended from time to time.
Regulation S Book-Entry Certificates: Certificates sold in
offshore
transactions in reliance on Regulation S in the form of one or more
permanent
global Certificates in definitive, fully registered form without
interest
coupons, which shall be deposited on behalf of the subscribers for
such
Certificates represented thereby with the Trustee, as custodian for
DTC and
registered in the name of a nominee of DTC.
Related Certificates: For each interest in the Upper Tier REMIC,
the Class
of Certificates listed on the same row in the table entitled "Upper
Tier REMIC"
in the Preliminary Statement.
Relevant Servicing Criteria: The Servicing Criteria applicable to
the
various parties, as set forth on Exhibit Q attached hereto. For
clarification
purposes, multiple parties can have responsibility for the same
Relevant
Servicing Criteria. With respect to a Subcontractor engaged by the
Trustee or
the Servicer, the term "Relevant Servicing Criteria" may refer to
one or more
discrete functions specified in the Relevant Servicing Criteria
applicable to
the Servicer or the Trustee.
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Relief Act: The Servicemembers Civil Relief Act or any similar
state or
local law.
Relief Act Shortfall: With respect to any Distribution Date and
any
Mortgage Loan, any reduction in the amount of interest or principal
collectible
on such Mortgage Loan for the most recently ended calendar month as
a result of
the application of the Relief Act.
REMIC: A "real estate mortgage investment conduit" within the
meaning of
section 860D of the Code. References herein to "the REMICs" or "a
REMIC" shall
mean any of (or, as the context requires, all of) the SWAP REMIC,
the Lower Tier
REMIC and the Upper Tier REMIC.
REMIC Pass-Through Rate: In the case of a Class of the Class A,
Class M and
Class B Certificates, the Upper Tier REMIC Net WAC Cap for the
Corresponding
REMIC Regular Interest.
REMIC Provisions: 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 proposed,
temporary and final regulations and published rulings, notices and
announcements
promulgated thereunder, as the foregoing may be in effect from time
to time as
well as provisions of applicable state laws.
REMIC Regular Interests: Each of the interests in the Upper Tier
REMIC as
set forth in the Preliminary Statement other than the Residual
Interest.
REMIC SWAP Rate: For each Distribution Date (and the related
Accrual
Period), a per annum rate equal to the Fixed Rate under the Swap
Agreement for
such Distribution Date, as set forth in the Prospectus
Supplement.
Remittance Report: As defined in Section 4.04(j) hereof.
REO
Property: A Mortgaged Property acquired by the Servicer, on behalf
of
the Trustee for the benefit of the Certificateholders, through
foreclosure or
deed-in-lieu of foreclosure in connection with a defaulted Mortgage
Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by the
Depositor for
a Deleted Mortgage Loan, which must, on the date of such
substitution, as
confirmed in a Request for Release, substantially in the form of
Exhibit I (1)
have a Stated Principal Balance, after deduction of the principal
portion of the
Scheduled Payment due in the month of substitution, not in excess
of, and not
less than 90% of the Stated Principal Balance of the Deleted
Mortgage Loan; (2)
with respect to any Fixed Rate Mortgage Loan, have a Mortgage Rate
not less than
or no more than 1% per annum higher than the Mortgage Rate of the
Deleted
Mortgage Loan and, with respect to any Adjustable Rate Mortgage
Loan: (A) have a
Maximum Mortgage Rate no more than 1% per annum higher or lower
than the Maximum
Mortgage Rate of the Deleted Mortgage Loan; (B) have a Minimum
Mortgage Rate no
more than 1% per annum higher or lower than the Minimum Mortgage
Rate of the
Deleted Mortgage Loan; (C) have the same index and Periodic Rate
Cap as that of
the Deleted Mortgage Loan and a Gross Margin not more than 1% per
annum higher
or lower than that of the Deleted Mortgage Loan; (D) not permit
conversion of
the related Mortgage Rate to a fixed Mortgage Rate and (F)
currently be accruing
interest at a rate not more than 1% per annum higher or lower than
that of the
Deleted Mortgage Loan; (3) have a similar or higher FICO score or
credit grade
than that of the Deleted Mortgage Loan; (4) have a Loan-to-Value
Ratio no higher
than that of the Deleted Mortgage Loan; (5) have a remaining term
to maturity no
greater than (and not more than one year less than) that of the
Deleted Mortgage
Loan; (6) provide for a Prepayment Charge on terms substantially
similar to
those of the Prepayment Charge, if any, of the Deleted Mortgage
Loan; (7) have
the same lien priority as the Deleted Mortgage Loan; (8) constitute
the
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<PAGE>
same occupancy type as the Deleted Mortgage Loan; and (9) comply
with each
representation and warranty set forth in Section 2.03 hereof.
Reportable Event: Has the meaning set forth in Section 3.27.
Request for Release: The Request for Release of Documents submitted
by the
Servicer to the Trustee or the Custodian, substantially in the form
of Exhibit I
hereto.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance
policy that is required to be maintained from time to time under
this Agreement.
Required Percentage: As of any Distribution Date following the
Stepdown
Date, the quotient of (1) the excess of (A) the Stated Principal
Balances of the
Mortgage Loans as of such Distribution Date, over (B) the
Certificate Principal
Balance of the most senior Class of Certificates outstanding as of
such
Distribution Date, prior to giving effect to distributions to be
made on such
Distribution Date and (2) the Stated Principal Balance of the
Mortgage Loans as
of such Distribution Date.
Reserve Interest Rate: With respect to any Interest Determination
Date, the
rate per annum that the Trustee determines to be (1) the arithmetic
mean
(rounded upwards if necessary to the nearest whole multiple of
0.03125%) of the
one-month United States dollar lending rates which New York City
banks selected
by the Trustee are quoting on the relevant Interest Determination
Date to the
principal London offices of leading banks in the London interbank
market or (2)
in the event that the Trustee can determine no such arithmetic
mean, the lowest
one-month United States dollar lending rate which New York City
banks selected
by the Trustee are quoting on such Interest Determination Date to
leading
European banks.
Residual Interest: An interest in the Upper Tier REMIC that is
entitled to
all distributions of principal and interest on the Class R
Certificate other
than distributions in respect of the Class SWR Interest and Class
LTR Interest
and distributions on the Class R Certificate in respect of Excess
Interest.
Responsible Officer: When used with respect to the Trustee or the
Servicer,
any officer of the Trustee or the Servicer with direct
responsibility for the
administration of this Agreement and any other officer to whom,
with respect to
a particular matter, such matter is referred because of such
officer's knowledge
of and familiarity with the particular subject.
Reuters Screen LIBO Page: The display designated as page "LIBO" on
the
Reuters Monitor Money Rates Service (or such other page as may
replace such LIBO
page on that service for the purpose of displaying London interbank
offered
rates of major banks.
S&P: Standard & Poor's, a division of The McGraw-Hill
Companies, Inc., or
any successor in interest.
Sale
Agreement: The Mortgage Loan Sale and Assignment Agreement dated as
of
March 1, 2006 between the Depositor and the Sponsor.
Sarbanes-Oxley Act: means the Sarbanes-Oxley Act of 2002 and the
rules and
regulations of the Securities and Exchange Commission promulgated
thereunder
(including any interpretations thereof by the Securities and
Exchange
Commission's staff).
Sarbanes-Oxley Certification: Has the meaning set forth in Section
3.27(k).
56
<PAGE>
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due on
any Due Date allocable to principal and/or interest on such
Mortgage Loan.
Section 302 Requirements: Any rules or regulations promulgated
pursuant to
the Sarbanes-Oxley Act of 2002 (as such may be amended from time to
time).
Securities Act: The Securities Act of 1933, as amended.
Servicer: Litton Loan Servicing LP, a Delaware limited partnership,
or its
successor in interest.
Servicer Advance Date: As to any Distribution Date, the related
Servicer
Remittance Date.
Servicer Remittance Date: With respect to any Distribution Date,
the 20th
day (or if the 20th day is not a Business Day, the next succeeding
Business Day)
of the month in which such Distribution Date occurs.
Servicer Trigger Event: As defined in Section 7.02 hereof.
Servicer's Assignee: As defined in Section 10.14(a).
Servicing Advances: All customary, reasonable and necessary "out of
pocket"
costs and expenses incurred in the performance of the Servicer's
servicing
obligations hereunder, including, but not limited to, the cost of
(1) the
preservation, inspection, restoration and protection of a Mortgaged
Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan),
including without
limitation advances in respect of real estate taxes and
assessments, (2) any
collection, enforcement or judicial proceedings, including without
limitation
foreclosures, collections and liquidations, (3) the conservation,
management,
sale and liquidation of any REO Property, (4) executing and
recording
instruments of satisfaction, deeds of reconveyance or Assignments
of Mortgage to
the extent not otherwise recovered from the related Mortgages or
payable under
this Agreement, (5) correcting errors of prior servicers; costs and
expenses
charged to the Servicer by the Trustee; tax tracking; title
research; flood
certifications; lender paid mortgage insurance, (6) obtaining or
correcting any
legal documentation required to be included in the Mortgage Files
and reasonably
necessary for the Servicer to perform its obligations under this
Agreement and
(7) compliance with the obligations under Sections 3.01 and 3.10;
provided that
such amounts are required to be advanced only to the extent such
advances
constitute "unanticipated expenses" within the meaning of Treasury
Regulation
Section 1.860G-1(b)(3)(ii).
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 each Mortgage Loan and any Distribution Date,
an
amount equal to the product of (x) one-twelfth of the Servicing Fee
Rate and (y)
the Stated Principal Balance of such Mortgage Loan as of the
preceding
Distribution Date or, in the event of any payment of interest that
accompanies a
Principal Prepayment in full made by the Mortgagor, interest at the
Servicing
Fee Rate on the Stated Principal Balance of such Mortgage Loan as
of the
preceding Distribution Date for the period covered by such payment
of interest.
Servicing Fee Rate: 0.50% for each Mortgage Loan.
Servicing Officer: Any officer of the Servicer involved in, or
responsible
for, the administration and servicing of the Mortgage Loans whose
name appears
on a list of servicing officers furnished to the
57
<PAGE>
Trustee by the Servicer on the Closing Date pursuant to this
Agreement, as such
list may from time to time be amended.
Servicing Rights Pledgee: One or more lenders, selected by the
Servicer, to
which the Servicer may pledge and assign all of its right, title
and interest
in, to and under this Agreement (other than rights with respect to
Advances and
Servicing Advances herein), including JPMorgan Chase Bank, N.A., as
the
representative of certain lenders.
Servicing Transfer Costs: In the event that the Servicer does not
reimburse
the Trustee under this Agreement, all costs associated with the
transfer of
servicing from the predecessor Servicer, including, without
limitation, any
costs or expenses associated with the termination of the
predecessor servicer,
the appointment of a successor servicer, the complete transfer of
all servicing
data and the manipulation, completion or correction of such
servicing data as
may be required by the Trustee or any successor servicer to correct
any errors
or insufficiencies in the servicing data or otherwise to enable the
Trustee or
successor servicer to service the Mortgage Loans properly and
effectively.
SFAS
140: Statement of Financial Accounting Standard No. 140,
Accounting
for Transfers and Servicing of Financial Assets and Extinguishments
of
Liabilities dated September 2000, published by the Financial
Accounting
Standards Board of the Financial Accounting Foundation.
Significance Estimate: With respect to any Distribution Date, and
in
accordance with Item 1115 of Regulation AB, shall be an amount
determined based
on the reasonable good-faith estimate by the Depositor or its
affiliate of the
aggregate maximum probable exposure of the outstanding Certificates
to the Swap
Agreement.
Significance Percentage: With respect to any Distribution Date, and
in
accordance with Item 1115 of Regulation AB, shall be a percentage
equal to the
Significance Estimate divided by the aggregate outstanding
Certificate Principal
Balance of the Certificates, prior to the distribution of the
Principal
Distribution Amount on such Distribution Date.
Sponsor: Merrill Lynch Mortgage Lending, Inc., a Delaware
corporation, or
its successor in interest.
Startup Day: As defined in Section 2.07 hereof.
Stated Principal Balance: With respect to any Mortgage Loan or
related REO
Property (1) as of the Cut-off Date, the Cut-off Date Principal
Balance thereof,
and (2) as of any Distribution Date, such Cut-off Date Principal
Balance minus
the sum of (A) the principal portion of the Scheduled Payments (x)
due with
respect to such Mortgage Loan during each Due Period ending prior
to such
Distribution Date and (y) that were received by the Servicer as of
the close of
business on the Determination Date related to such Distribution
Date or with
respect to which Advances were made on the Servicer Advance Date
prior to such
Distribution Date and (B) all Principal Prepayments with respect to
such
Mortgage Loan received on or prior to the last day of the related
Prepayment
Period, and all Liquidation Proceeds to the extent applied by the
Servicer as
recoveries of principal in accordance with Section 3.12 with
respect to such
Mortgage Loan, that were received by the Servicer as of the close
of business on
the last day of the related Due Period. Notwithstanding the
foregoing, the
Stated Principal Balance of a Liquidated Loan shall be deemed to be
zero.
Stepdown Date: The earlier of: (A) the first Distribution Date on
which the
aggregate Certificate Principal Balance of the Class A-1
Certificates and Class
A-2 Certificates has been reduced to zero; and (B) the later to
occur of (1) the
Distribution Date in April 2009 or (2) the first Distribution Date
on which
58
<PAGE>
(A) the Class A Certificate Principal Balance (reduced by the
Principal Funds
with respect to such Distribution Date) is less than or equal to
(B) 54.90% of
the aggregate Stated Principal Balances of the Mortgage Loans as of
such
Distribution Date.
Stepdown Required Loss Percentage: For any Distribution Date,
the
applicable percentage for such Distribution Date set forth in the
following
table:
<TABLE>
<CAPTION>
DISTRIBUTION DATE OCCURRING IN STEPDOWN REQUIRED LOSS
PERCENTAGE
------------------------------
---------------------------------
<S>
<C>
April 2008 - March 2009
1.40% with respect to April 2008, plus an
additional 1/12th of 1.35% for each month
thereafter
April 2009 - March 2010
2.75% with respect to April 2090, plus an
additional 1/12th of 0.75% for each month
thereafter
April 2010 - March 2011
3.50% with respect to April 2010, plus an
additional 1/12th of 0.75% for each month
thereafter
April 2011 - March 2012
4.25% with respect to April 2011, plus an
additional 1/12th of 0.25% for each month
thereafter
April 2012 and thereafter
4.50%
</TABLE>
Stepdown Trigger Event: With respect to the Certificates on or
after the
Stepdown Date, a Distribution Date on which (1) the quotient of (A)
the
aggregate Stated Principal Balance of all Mortgage Loans that are
60 or more
days Delinquent measured on a rolling three month basis (including,
for the
purposes of this calculation, Mortgage Loans in foreclosure and REO
Properties
and Mortgage Loans with respect to which the applicable Mortgagor
is in
bankruptcy) and (B) the Stated Principal Balance of the Mortgage
Loans as of the
preceding Servicer Remittance Date, equals or exceeds the product
of (i) 35.45%
and (ii) the Required Percentage or (2) the quotient (expressed as
a percentage)
of (A) the aggregate Realized Losses incurred from the Cut-off Date
through the
last day of the calendar month preceding such Distribution Date and
(B) the
aggregate principal balance of the Mortgage Loans as of the Cut-off
Date exceeds
the Stepdown Required Loss Percentage.
Subcontractor: Any vendor, subcontractor or other Person that is
not
responsible for the overall servicing (as "servicing" is commonly
understood by
participants in the mortgage-backed securities market) 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 Subservicer.
Subordinate Certificates: Each Class of the Class M and Class B
Certificates.
Subsequent Recovery: Any amount received on a Mortgage Loan (net of
amounts
reimbursed to the Servicer related to such Mortgage Loan)
subsequent to such
Mortgage Loan being determined to be a Liquidated Mortgage
Loan.
Subservicer: Any Person that services Mortgage Loans on behalf of
the
Servicer or any Subservicer and is responsible for the performance
(whether
directly or through Subservicers or Subcontractors) of the material
servicing
functions required to be performed by the Servicer under this
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<PAGE>
Agreement, with respect to some or all of the Mortgage Loans, that
are
identified in Item 1122(d) of Regulation AB and meets any of the
criteria of
Item 1108(a)(2)(i), (ii) or (iii).
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant
to Section 2.03(c).
Supplemental Interest Trust: The separate trust, established
pursuant to
Section 4.04(l) of this Agreement and held by the Trustee for the
benefit of the
holders of the Certificates as a segregated subtrust of the Trust
Fund, in which
the Swap Agreement will be held, out of which any Swap Termination
Payments or
Net Swap Payments owed to the Swap Counterparty will be paid,
certain
distributions to Certificateholders will be made, and into which
any Swap
Termination Payments or Net Swap Payments received from the Swap
Counterparty
will be deposited as set forth in Section 4.04 hereof.
Swap
Account: The separate Eligible Account created and maintained by
the
Trustee pursuant to Section 4.04(l)(i) in the name of the Trustee
for the
benefit of the Trust Fund and designated "LaSalle Bank National
Association, as
trustee, in trust for registered holders of Ownit Mortgage Loan
Trust, Mortgage
Loan Asset-Backed Certificates, Series 2006-3." Funds in the Swap
Account shall
be held in trust for the Trust Fund for the uses and purposes set
forth in this
Agreement.
Swap
Agreement: The confirmation to the master agreement, dated as of
March
31, 2006, between the Swap Counterparty and the trustee of the
Supplemental
Interest Trust for the benefit of the Issuing Entity or any other
cap agreement
or swap agreement (including any related schedules) held by the
Supplemental
Interest Trust pursuant to Section 4.04(l) hereof.
Swap
Counterparty: The Bank of New York or any successor counterparty
who
meets the requirements set forth in the Swap Agreement.
Swap
LIBOR: With respect to any Distribution Date (and the related
Accrual
Period) the product of (i) the Floating Rate Option (as defined in
the Swap
Agreement for the related Swap Payment Date), (ii) two and (iii)
the quotient of
(a) the actual number of days in the Accrual Period for the Lower
Tier REMIC
Interests divided by (b) 30.
Swap
Payment Date: For so long as the Swap Agreement is in effect or
amounts remain unpaid thereunder, the second Business Day preceding
each
Distribution Date.
SWAP
REMIC: As described in the Preliminary Statement and Section
2.07.
SWAP
REMIC Interests: Each of the interests in the SWAP REMIC as set
forth
in the Preliminary Statement.
SWAP
REMIC Regular Interests: Each of the SWAP REMIC Interests other
than
the Class SWR Interest.
Swap
Termination Payment: Any payment payable by the Supplemental
Interest
Trust or the Swap Counterparty upon termination of the Swap
Agreement as a
result of termination of the Swap Agreement.
Tax
Matters Person: The Person designated as "tax matters person" in
the
manner provided under Treasury regulation Section 1.860F-4(d) and
Treasury
regulation Section 301.6231(a)(7)-1.
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<PAGE>
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest
in a Certificate.
Transfer Agreement: The Master Mortgage Loan Purchase and Interim
Servicing
Agreement dated as of April 1, 2005, between Merrill Lynch Mortgage
Capital
Inc., as purchaser and Ownit, as seller and interim servicer, as
amended, and as
supplemented by the Bring Down Letter.
Transferor: Ownit.
Transferor Affirmation Notice: A notice from Fitch to the Depositor
or the
Sponsor that the ratings of the Certificates will not be negatively
impacted by
the removal of the Sponsor's obligation to honor the
Transferor's
representations and warranties, a copy of which notice shall be
provided by
either the Sponsor or the Depositor to the Trustee.
Trust Fund: The corpus of the trust (the "Ownit Mortgage Loan
Trust, Series
2006-3") created hereunder consisting of (i) the Mortgage Loans and
all interest
and principal received on or with respect thereto on and after the
Cut-off Date
to the extent not applied in computing the Cut-off Date Principal
Balance
thereof, exclusive of interest not required to be deposited in the
Collection
Account; (ii) the Collection Account, the Certificate Account and
all amounts
deposited therein pursuant to the applicable provisions of this
Agreement; (iii)
property that secured a Mortgage Loan and has been acquired by
foreclosure, deed
in lieu of foreclosure or otherwise; (iv) the mortgagee's rights
under the
Insurance Policies with respect to the Mortgage Loans; (v) all
proceeds of the
conversion, voluntary or involuntary, of any of the foregoing into
cash or other
liquid property; (vi) the Cap Contracts and Cap Contract Account
and (vii) the
Supplemental Interest Trust, which in turn holds the Swap
Agreement.
Trustee: LaSalle Bank National Association, a national banking
association,
not in its individual capacity, but solely in its capacity as
trustee for the
benefit of the Certificateholders under this Agreement, and any
successor
thereto, and any corporation or national banking association
resulting from or
surviving any consolidation or merger to which it or its successors
may be a
party and any successor trustee as may from time to time be serving
as successor
trustee hereunder.
Trustee Fee: A fee paid monthly to the Trustee from interest
collected with
respect to each Mortgage Loan equal to the product of (a)
one-twelfth of the
Trustee Fee Rate and (b) the Stated Principal Balance of such
Mortgage Loan. The
Trustee is also entitled to a portion of investment income earned
on amounts on
deposit in the Certificate Account as set forth in Section 3.05(g)
hereof.
Trustee Fee Rate: 0.0060% for each Mortgage Loan.
Uncertificated Class C Interest: An uncertificated REMIC Regular
Interest
having the characteristics described in the Preliminary
Statement.
Underlying Mortgaged Property: With respect to each Co-op Loan,
the
underlying real property owned by the related residential
cooperative housing
corporation.
Unpaid Realized Loss Amount: The Class M-1 Unpaid Realized Loss
Amount,
Class M-2 Unpaid Realized Loss Amount, Class M-3 Unpaid Realized
Loss Amount,
Class M-4 Unpaid Realized Loss Amount, Class M-5 Unpaid Realized
Loss Amount,
Class M-6 Unpaid Realized Loss Amount, Class B-1 Unpaid Realized
Loss Amount,
Class B-2 Unpaid Realized Loss Amount, Class B-3 Unpaid Realized
Loss Amount,
Class B-4 Unpaid Realized Loss Amount and Class C Unpaid Realized
Loss Amount,
collectively.
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<PAGE>
Upper Collar: Any of the Class A-1 Upper Collar, the Class A-2
Upper Collar
or the Floating Rate Subordinate Certificate Upper Collar.
Upper Tier REMIC: As described in the Preliminary Statement and
Section
2.07.
Upper Tier REMIC Net WAC Cap: In the case of the Class UTA-1
Interest and
the Residual Interest, a per annum rate equal to the weighted
average of the
interest rate of the Class LTII1B Interest for such Distribution
Date. In the
case of the Class UTA-2A, Class UTA-2B, Class UTA-2C and Class
UTA-2D Interests,
a per annum rate equal to the weighted average of the interest rate
for the
Class LTII2B Interest for such Distribution Date. In the case of
the Class
UTM-1, Class UTM-2, Class UTM-3, Class UTM-4, Class UTM-5, Class
UTM-6, Class
UTB-1, Class UTB-2, Class UTB-3 and Class UTB-4 Interests, a per
annum rate
equal to the weighted average (adjusted, in the case of the Class
UTB-1, Class
UTB-2 and Class UTB-3 Interests, to reflect accruals on the basis
of a 360 day
year consisting of twelve 30 day months) of the interest rates of
Class LTII1B
and Class LTII2B Interests for such Distribution weighted,
respectively, on the
basis of the uncertificated principal balances of the Class LTII1A
and the Class
LTII2A Interests.
Voting Rights: The portion of the voting rights of all the
Certificates
that is allocated to any of the Certificates for purposes of the
voting
provisions hereunder. Voting Rights allocated to each Class of
Certificates
shall be allocated as follows: (1) 98% to the Class A, Class M and
Class B
Certificates, with the allocation among such Certificates to be in
proportion to
the Certificate Principal Balance of each Class relative to the
Certificate
Principal Balance of all other Classes and (2) each Class of the
Class C and
Class P will be allocated 1% of the Voting Rights. Voting Rights
will be
allocated among the Certificates of each such Class in accordance
with their
respective Percentage Interests.
Weighted Average Available Funds Cap: With respect to a
Distribution Date,
the per annum rate equal to the weighted average of the Class A-1
Available
Funds Cap and the Class A-2 Available Funds Cap (weighted in
proportion to the
results of subtracting from the aggregate stated principal balance
of each
mortgage group, the current certificate principal balance of the
class A-1 and
class R certificates, in the case of group one, or the class A-2
certificates,
in the case of group two) and, only with respect to the Class B-1,
Class B-2 and
Class B-3 Certificates, multiplied by the actual number of days in
the accrual
period divided by 30.
Weighted Average Maximum Rate Cap: With respect to a Distribution
Date, the
per annum rate equal to the weighted average (weighted in
proportion to the
results of subtracting from the aggregate Stated Principal Balance
of each
Mortgage Group, the current Certificate Principal Balance of the
Class A-1 and
Class R Certificates, in the case of Group One, or the Class A-2
Certificates,
in the case of Group Two) of the Class A-1 Maximum Rate Cap and the
Class A-2
Maximum Rate Cap, and, only with respect to the Class B-1, Class
B-2 and Class
B-3 Certificates, multiplied by the actual number of days in the
accrual period
divided by 30.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage Loans.
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<PAGE>
The
Depositor, concurrently with the execution and delivery hereof,
does
hereby sell, transfer, assign, set over and convey to the Trustee
without
recourse all the right, title and interest of the Depositor in and
to the assets
of the Trust Fund. Such assignment includes all interest and
principal received
on or with respect to the Mortgage Loans, on or after the Cut-off
Date (other
than Scheduled Payments due on the Mortgage Loans on or before the
Cut-off
Date).
It
is agreed and understood by the Depositor, the Servicer and the
Trustee
that it is not intended that any Mortgage Loan be included in the
Trust that is,
without limitation, a "High-Cost Home 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; or (iii) a "High-Cost Home Loan" as defined in
the
Massachusetts Predatory Home Loan Practices Act effective November
7, 2004; (iv)
a "High-Cost Home Loan" as defined by the Indiana High Cost Home
Loan Law
effective January 1, 2005 or (v) a "High-Cost Home Loan" as defined
by the
Illinois High-Risk Home Loan Act effective January 1, 2004.
(i)
In connection with such assignment, the Depositor does hereby
deliver
to, and deposit with, the Trustee or the Custodian, the following
documents or
instruments with respect to each Mortgage Loan so assigned that is
not a Co-op
Loan:
(A) The original Mortgage Note endorsed in blank or, "Pay to the
order
of
LaSalle Bank National Association, as trustee, without
recourse"
together with all riders thereto. The Mortgage Note shall include
all
intervening endorsements showing a complete chain of the title from
the
originator to [____________________] or "Pay to the order of
LaSalle Bank
National Association, as trustee, without recourse";
(B) Except as provided below and for each Mortgage Loan that is not
a
MERS
Loan, the original recorded Mortgage with all riders thereto,
with
evidence of recording thereon, or, if the original Mortgage has not
yet
been
returned from the recording office, a copy of the original
Mortgage
certified by the Transferor to be true copy of the original of the
Mortgage
that
has been delivered for recording in the appropriate recording
office
of
the jurisdiction in which the Mortgaged Property is located and in
the
case
of each MERS Loan, the original Mortgage, noting the presence of
the
MIN
of the Loan and either language indicating that the Mortgage Loan
is a
MOM
Loan or if the Mortgage Loan was not a MOM Loan at origination,
the
original Mortgage and the assignment thereof to MERS, with evidence
of
recording indicated thereon, or a copy of the Mortgage certified by
the
public recording office in which such Mortgage has been
recorded;
(C) In the case of each Mortgage Loan that is not a MERS Loan,
the
original Assignment of each Mortgage endorsed either in blank or,
to
"LaSalle Bank National Association, as trustee;"
(D) The original policy of title insurance (or a preliminary
title
report, commitment or binder if the original title insurance policy
has not
been
received from the title insurance company);
(E) Originals of any intervening assignments of the Mortgage,
with
evidence of recording thereon or, if the original intervening
assignment
has
not yet been returned from the recording office, a copy of such
assignment certified to be a true copy of the original of the
assignment
which has been sent for recording in the appropriate jurisdiction
in which
the
Mortgaged Property is located; and
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(F) Originals of all assumption and modification agreements, if
any.
(ii)
In connection with such assignment, the Depositor does hereby
deliver
to, and deposit with, the Trustee or the Custodian the following
documents or
instruments with respect to each Mortgage Loan so assigned that is
a Co-op Loan:
(A) (i) The original Mortgage Note (or a lost note affidavit
(including a copy of the original Mortgage Note)) or (ii)
original
consolidation, extension and modification agreement (or a lost
note
affidavit (including a
copy of the original consolidation, extension and
modification agreement)), in either case endorsed either in blank
or, "Pay
to
the order of LaSalle Bank National Association, as trustee,
without
recourse;"
(B) The original
Mortgage entered into by the Mortgagor with respect
to
such Co-Op Loan;
(C) The original Assignment of Mortgage endorsed either in blank or
to
"LaSalle Bank National Association, as trustee;"
(D) Original assignments of Mortgage showing a complete chain
of
assignment from the originator of the related Co-Op Loan to the
last
endorsee on the Mortgage Note;
(E) Original Form UCC-1 (or copy thereof) and any continuation
statements with evidence of filing thereon entered into by the
Mortgagor
with
respect to such Co-Op Loan (or a recorded copy thereof);
(F) Form UCC-3 (or copy thereof) by the Transferor or its agent
assigning the security interest covered by such Form UCC-1 to
"LaSalle Bank
National Association, as trustee," together with all Forms UCC-3
(or copies
thereof) showing a complete chain of assignment from the originator
of the
related Co-op Loan to the Transferor, with evidence of recording
thereon;
(G) Original stock certificate representing the stock allocated to
the
related dwelling unit in the related residential cooperative
housing
corporation and pledged by the related Mortgagor to the originator
of such
Co-op Loan with a stock power in blank attached;
(H) Original proprietary lease;
(I) Original assignment of proprietary lease or a copy thereof, to
the
Trustee or in blank, and all intervening assignments thereof;
(J) Original recognition agreement or a copy thereof of the
interests
of
the mortgagee with respect to the Co-op Loan by the residential
cooperative housing corporation, the stock of which was pledged by
the
related Mortgagor to the originator of such Co-op Loan; and
(K) Originals of any assumption, consolidation or modification
agreements relating to any of the items specified in (A) through
(F) above
with
respect to such Co-op Loan.
If
in connection with any Mortgage Loan that is not a Co-op Loan,
the
Depositor cannot deliver the Mortgage, Assignments of Mortgage or
assumption,
consolidation or modification, as the case may be, with evidence of
recording
thereon, if applicable, concurrently with the execution and
delivery of this
Agreement solely because of a delay caused by the public recording
office where
such Mortgage,
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Assignments of Mortgage or assumption, consolidation or
modification, as the
case may be, has been delivered for recordation, the Depositor
shall deliver or
cause to be delivered to the Trustee or the Custodian written
notice stating
that such Mortgage or assumption, consolidation or modification, as
the case may
be, has been delivered to the appropriate public recording office
for
recordation. Thereafter, the Depositor shall deliver or cause to be
delivered to
the Trustee or the Custodian such Mortgage, Assignments of Mortgage
or
assumption, consolidation or modification, as the case may be, with
evidence of
recording indicated thereon, if applicable, upon receipt thereof
from the public
recording office. To the extent any required endorsement is not
contained on a
Mortgage Note or an Assignment of Mortgage, the Depositor shall
make or cause
such endorsement to be made.
With
respect to any Mortgage Loan that is not a Co-op Loan, none of
the
Depositor, the Servicer or the Trustee shall be obligated to cause
to be
recorded the Assignment of Mortgage referred to in this Section
2.01. With
respect to any Co-op Loan, none of the Depositor, the Servicer or
the Trustee
shall be obligated to cause to be filed the Form UCC-3 referred to
in this
Section 2.01. In the event that any Assignment of Mortgage referred
to in this
Section 2.01 is not recorded or is improperly recorded, the
Servicer and the
Trustee shall have no liability for any failure to receive or act
on notices
related to such Assignment of Mortgage.
The
ownership of each Mortgage Note, the Mortgage and the contents of
the
related Mortgage File is vested in the Trustee on behalf of the
Certificateholders. None of the Depositor, the Servicer or the
Trustee shall
take any action inconsistent with such ownership and shall not
claim any
ownership interest therein. The Depositor, the Servicer and the
Trustee shall
respond to any third party inquiries with respect to ownership of
the Mortgage
Loans by stating that such ownership is held by the Trustee on
behalf of the
Certificateholders. Mortgage documents relating to the Mortgage
Loans not
delivered to the Trustee or the Custodian are and shall be held in
trust by the
Servicer, for the benefit of the Trustee as the owner thereof, and
the
Servicer's possession of the contents of each Mortgage File so
retained is for
the sole purpose of servicing the related Mortgage Loan, and such
retention and
possession by the Servicer is in a custodial capacity only. The
Depositor agrees
to take no action inconsistent with the Trustee's ownership of the
Mortgage
Loans, to indicate promptly to all inquiring parties that the
Mortgage Loans
have been sold and to claim no ownership interest in the Mortgage
Loans.
It
is the intention of this Agreement that the conveyance of the
Depositor's right, title and interest in and to the Trust Fund
pursuant to this
Agreement shall constitute a purchase and sale and not a loan. If a
conveyance
of Mortgage Loans from the Sponsor to the Depositor is
characterized as a pledge
and not a sale, then the Depositor shall be deemed to have
transferred to the
Trustee all of the Depositor's right, title and interest in, to and
under the
obligations of the Sponsor deemed to be secured by said pledge; and
it is the
intention of this Agreement that the Depositor shall also be deemed
to have
granted to the Trustee a first priority security interest in all of
the
Depositor's right, title, and interest in, to and under the
obligations of the
Sponsor to the Depositor deemed to be secured by said pledge and
that the
Trustee shall be deemed to be an independent custodian for purposes
of
perfection of the security interest granted to the Depositor. If
the conveyance
of the Mortgage Loans from the Depositor to the Trustee is
characterized as a
pledge, it is the intention of this Agreement that this Agreement
shall
constitute a security agreement under applicable law, and that the
Depositor
shall be deemed to have granted to the Trustee a first priority
security
interest in all of the Depositor's right, title and interest in, to
and under
the Mortgage Loans, all payments of principal of or interest on
such Mortgage
Loans, all other rights relating to and payments made in respect of
the Trust
Fund, and all proceeds of any thereof. If the trust created by this
Agreement
terminates prior to the satisfaction of the claims of any Person in
any
Certificates, the security interest created hereby shall continue
in full force
and effect and the Trustee shall be deemed to be the collateral
agent for the
benefit of such Person.
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<PAGE>
In
addition to the conveyance made in the first paragraph of this
Section
2.01, the Depositor does hereby convey, assign and set over to the
Trustee for
the benefit of the Certificateholders its rights and interests
under the Sale
Agreement, including the Depositor's right, title and interest in
the
representations and warranties contained in the Sale Agreement, the
rights in
the Transfer Agreement described therein and the benefit of the
repurchase
obligations and the obligation of the Sponsor contained in the Sale
Agreement to
take, at the request of the Depositor or the Trustee, all action on
its part
which is reasonably necessary to ensure the enforceability of a
Mortgage Loan.
The Trustee hereby accepts such assignment, and shall be entitled
to exercise
all rights of the Depositor under the Sale Agreement as if, for
such purpose, it
were the Depositor. The foregoing sale, transfer, assignment,
set-over, deposit
and conveyance does not and is not intended to result in creation
or assumption
by the Trustee of any obligation of the Depositor, the Sponsor, or
any other
Person in connection with the Mortgage Loans or any other agreement
or
instrument relating thereto except as specifically set forth
herein.
SECTION 2.02. Acceptance by the Trustee of the Mortgage Loans.
Except as set forth in the exception report delivered
contemporaneously
herewith (the "Exception Report"), the Trustee acknowledges receipt
of the
Mortgage Note for each Mortgage Loan and delivery of a Mortgage
File (but does
not acknowledge receipt of all documents required to be included in
such
Mortgage File) with respect to each Mortgage Loan and declares that
it (or the
Custodian) holds and will hold such documents and any other
documents
constituting a part of the Mortgage` Files delivered to it in trust
for the use
and benefit of all present and future Certificateholders. The
Depositor will
cause the Sponsor to repurchase any Mortgage Loan to which a
material exception
was taken in the Exception Report unless such exception is cured to
the
satisfaction of the Trustee within 45 Business Days of the Closing
Date.
The
Trustee acknowledges receipt of the three Cap Contracts (forms of
which
are attached hereto as Exhibits N-1, N-2 and N-3), the Transfer
Agreement, the
Bring Down Letter and the Sale Agreement.
The Trustee acknowledges
receipt of the Swap Agreement (a form of which is
attached hereto as Exhibit S) that will be held in the Supplemental
Interest
Trust and is hereby instructed to enter into the Swap Agreement,
not in its
individual capacity, but solely as Trustee for the Supplemental
Interest Trust.
The
Trustee agrees, for the benefit of Certificateholders and the
NIMs
Insurer, to review or cause its Custodian to review each Mortgage
File delivered
to it within 60 days after the Closing Date to ascertain and to
certify, within
70 days of the Closing Date, to the NIMs Insurer, the Depositor and
the Servicer
that all documents required by Section 2.01 (provided that with
respect to the
items listed in Sections 2.01(i)(F) and 2.01(ii)(E)-(K), to the
extent
identified on the Mortgage Loan Schedule) have been executed and
received, and
that such documents relate to the Mortgage Loans identified in
Exhibit B that
have been conveyed to it. It is herein acknowledged that, in
conducting such
review, the Trustee shall not be under any duty or obligation to
inspect, review
or examine any such documents, instruments, certificates or other
papers to
determine that they are genuine, enforceable or appropriate for the
represented
purpose, that they have actually been recorded or that they are
other than what
they purport to be on their face. If the Trustee or the Custodian
finds any
document or documents constituting a part of a Mortgage File to be
missing or
defective (that is, mutilated, damaged, defaced or unexecuted) in
any material
respect, the Trustee or the Custodian shall promptly (and in any
event within no
more than five Business Days) after such finding so notify the NIMs
Insurer, the
Servicer, the Sponsor and the Depositor. In addition, the Trustee
or the
Custodian shall also notify the NIMs Insurer, the Servicer, the
Sponsor and the
Depositor if the original Mortgage with evidence of recording
thereon with
respect to a Mortgage Loan is not received within 70 days of the
Closing Date;
if it has not been received because of a delay caused by the public
recording
office where such Mortgage has been delivered for recordation, the
Depositor
shall deliver or cause to be delivered to the Trustee written
notice stating
that such Mortgage
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<PAGE>
has been delivered to the appropriate public recording office for
recordation
and thereafter the Depositor shall deliver or cause to be delivered
such
Mortgage with evidence of recording thereon upon receipt thereof
from the public
recording office. The Trustee shall request that the Sponsor
correct or cure
such omission, defect or other irregularity, or substitute a
Mortgage Loan
pursuant to the provisions of Section 2.03, within 90 days from the
date the
Sponsor was notified of such omission or defect and, if the Sponsor
does not
correct or cure such omission or defect within such period, that
the Sponsor
purchase such Mortgage Loan from the Trust Fund within 90 days from
the date the
Trustee notified the Sponsor of such omission, defect or other
irregularity at
the Purchase Price of such Mortgage Loan.
The
Purchase Price for any Mortgage Loan purchased pursuant to this
Section
2.02 shall be paid to the Servicer and deposited by the Servicer in
the
Certificate Account or Collection Account, as appropriate, promptly
upon
receipt, and, upon receipt by the Trustee of written notification
of such
deposit signed by a Servicing Officer, the Trustee, upon receipt of
a Request
for Release, shall promptly release to the Sponsor the related
Mortgage File and
the Trustee shall execute and deliver such instruments of transfer
or
assignment, without recourse, as shall be requested by the Sponsor
and necessary
to vest in the Sponsor or its designee, as the case may be, any
Mortgage Loan
released pursuant hereto, and the Trustee shall have no further
responsibility
with regard to such Mortgage Loan. It is understood and agreed that
the
obligation of the Sponsor to purchase, cure or substitute any
Mortgage Loan as
to which a material defect in or omission of a constituent document
exists shall
constitute the sole remedy respecting such defect or omission
available to the
Trustee on behalf of Certificateholders and the NIMs Insurer. The
preceding
sentence shall not, however, limit any remedies available to
the
Certificateholders, the NIMs Insurer, the Depositor or the Trustee
pursuant to
the Sale Agreement, the Transfer Agreement and the Bring Down
Letter.
The
Trustee shall be under no duty or obligation to inspect, review
and
examine such documents, instruments, certificates or other papers
to determine
that they are genuine, enforceable, recordable, duly authorized,
sufficient,
legal, valid or appropriate to the represented purpose, or that
they have
actually been recorded, or that they are other than what they
purport to be on
their face. The Servicer and the Trustee shall keep confidential
the name of
each Mortgagor except as required by this Agreement and the
Servicer and the
Trustee shall not solicit any such Mortgagor for the purpose of
refinancing the
related Mortgage Loan; notwithstanding anything herein to the
contrary, the
foregoing shall not be construed to prohibit (i) disclosure of any
and all
information that is or becomes publicly known, or information
obtained by the
Trustee or the Servicer from sources other than the other parties
hereto, (ii)
disclosure of any and all information (A) if required by any
applicable law,
rule or regulation, (B) to any government agency or regulatory body
having or
claiming authority to regulate or oversee any aspects of the
Trustee's business
or that of its affiliates, (C) pursuant to any subpoena, civil
investigation
demand or similar demand or request of any court, regulatory
authority,
arbitrator or arbitration to which Trustee or any affiliate or an
officer,
director, employer or shareholder thereof is a party or (D) to any
affiliate,
independent or internal auditor, agent, employee or attorney of the
Trustee or
the Servicer having a need to know the same, provided that the
Trustee or the
Servicer, as applicable, advises such recipient of the confidential
nature of
the information being disclosed, or (iii) any other disclosure
authorized by the
Depositor. It is understood and agreed that all rights and benefits
relating to
the solicitation of any Mortgagors and the attendant rights, title
and interest
in and to the list of Mortgagors and data relating to the Mortgages
shall be
retained by the Servicer.
Within 70 days of the Closing Date, the Trustee or the Custodian
shall
deliver to the NIMs Insurer, the Depositor and the Servicer, the
Trustee's
Certification, substantially in the form of Exhibit D attached
hereto,
evidencing the completeness of the Mortgage Files, with any
exceptions noted
thereto.
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SECTION 2.03. Representations, Warranties and Covenants of the
Depositor.
(a) The Depositor hereby represents and warrants to the Servicer,
the
NIMs Insurer and the Trustee as follows, as of the date hereof:
(i) The Depositor is duly organized and is validly existing as
a
corporation in good standing under the laws of the State of
Delaware and
has
full power and authority (corporate and other) necessary to own or
hold
its
properties and to conduct its business as now conducted by it and
to
enter into and perform its obligations under this Agreement and the
Sale
Agreement.
(ii) The Depositor 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 the Sale Agreement
and has
duly
authorized, by all necessary corporate action on its part, the
execution, delivery and performance of this Agreement and the
Sale
Agreement; and this
Agreement and the Sale Agreement, assuming the due
authorization, execution and delivery hereof by the other parties
hereto,
constitutes a legal, valid and binding obligation of the
Depositor,
enforceable against the Depositor in accordance with its terms,
subject, as
to
enforceability, to (i) bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights
generally and
(ii)
general principles of equity, regardless of whether enforcement
is
sought in a proceeding in equity or at law.
(iii) The execution and delivery of this Agreement and the Sale
Agreement by the Depositor, the consummation of the
transactions
contemplated by this Agreement and the Sale Agreement, and the
fulfillment
of
or compliance with the terms hereof are in the ordinary course
of
business of the Depositor and will not (A) result in a material
breach of
any
term or provision of the charter or by-laws of the Depositor or
(B)
materially conflict with, result in a violation or acceleration of,
or
result in a material default under, the terms of any other
material
agreement or instrument to which the Depositor is a party or by
which it
may
be bound or (C) constitute a material violation of any statute,
order
or
regulation applicable to the Depositor of any court, regulatory
body,
administrative agency or governmental body having jurisdiction over
the
Depositor; and the Depositor 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 the Depositor's ability to perform
or meet
any
of its obligations under this Agreement.
(iv) No litigation is pending, or, to the best of the
Depositor's
knowledge, threatened, against the Depositor that would materially
and
adversely affect the execution, delivery or enforceability of
this
Agreement and the Sale Agreement or the ability of the Depositor to
perform
its
obligations under this Agreement and the Sale 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 the execution, delivery
and
performance by the Depositor of, or compliance by the Depositor
with, this
Agreement and the Sale Agreement or the consummation of the
transactions
contemplated hereby, or if any such consent, approval,
authorization or
order is required, the Depositor has obtained the same. The
Depositor
hereby represents and warrants to the Trustee with respect to each
Mortgage
Loan
as of the Closing Date and following the transfer of the
Mortgage
Loans to it by the Sponsor, the Depositor had good title to the
Mortgage
Loans and the Mortgage Notes were subject to no offsets, claims,
liens,
mortgage, pledge, charge, security interest, defenses or
counterclaims.
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(b) The representations and warranties of the Transferor with
respect
to the Mortgage Loans contained in the Transfer Agreement were made
as of the
date of the Transfer Agreement and brought forward to the Closing
Date pursuant
to the Bring Down Letter. The representations and warranties of the
Transferor
with respect to the Mortgage Loans contained in the Bring Down
Letter were made
as of the Closing Date. The representations and warranties of the
Sponsor with
respect to the Mortgage Loans contained in the Sale Agreement were
made as of
the Closing Date.
To the extent that any
fact, condition or event with respect to a Mortgage
Loan constitutes a breach of a representation or warranty of the
Transferor
under the Transfer Agreement (whether or not such fact, condition
or event would
also constitute a breach of a representation or warranty of the
Sponsor under
the Sale Agreement), the only rights or remedies of the Trustee,
the NIMs
Insurer or of any Certificateholder shall be first, the Trustee's
right to
enforce the obligations of the Transferor under such applicable
representation
or warranty made by it and, second, only if the Transferor is
unable or
unwilling to fulfill its obligations to cure or repurchase such
Mortgage Loan,
the Trustee shall exercise its right to enforce any rights it may
have against
the Sponsor under the Sale Agreement with respect to such
representation or
warranty; provided, that in the event the Trustee shall have
received a copy of
any Transferor Affirmation Notice, the Trustee shall only be
entitled to enforce
any rights it has against the Transferor under the Transfer
Agreement and shall
not have any rights against the Sponsor under the Sale Agreement
with respect to
such representation or warranty. To the extent that any fact,
condition or event
with respect to a Mortgage Loan constitutes a breach of a
representation or
warranty made by the Sponsor in the Sale Agreement that does not
also constitute
a breach of a representation or warranty of the Transferor under
the Transfer
Agreement, the Trustee shall enforce any rights it may have against
the Sponsor
under the Sale Agreement. In furtherance of the above, the Sponsor
expressly
acknowledges that prior to the issuance of a Transferor Affirmation
Notice, it
shall be obligated and liable to the Trustee, the NIMs Insurer and
the
Certificateholders for any breach of a representation or warranty
made under the
Transfer Agreement, but only after the Transferor evidences that it
is unwilling
or unable to fulfill its contractual obligations under the Transfer
Agreement.
The Trustee acknowledges that the Depositor shall have no
obligation or
liability with respect to any breach of any representation or
warranty with
respect to the Mortgage Loans (except as set forth in Section
2.03(a)(v)) under
any circumstances.
In
addition to the representations and warranties of the Transferor in
the
Transfer Agreement that were brought forward to the Closing Date
pursuant to the
Bring Down Letter, with respect to each Mortgage Loan, the
Transferor made
certain additional covenants regarding such Mortgage Loan, as set
forth in the
Transfer Agreement. With respect to any breach of such additional
covenants that
materially and adversely affects the interests of the
Certificateholders in such
Mortgage Loan, the Sponsor shall (1) use reasonable efforts to
enforce such
covenant against the Transferor and (2) if the Sponsor successfully
enforces any
obligation of the Transferor to repurchase such Mortgage Loan, the
Sponsor shall
repurchase such Mortgage Loan in accordance with this Section 2.03.
If the
Sponsor does not successfully enforce the obligation, if any, of
the Transferor
to repurchase a Mortgage Loan with respect to any breach of any
such additional
covenants, the Sponsor shall have no obligation or right to
repurchase or cure
such Mortgage Loan.
(c) Upon discovery by any of the Depositor, the Servicer, the
NIMs
Insurer or the Trustee of a breach of any of such representations
and warranties
that adversely and materially affects the value of the related
Mortgage Loan,
Prepayment Charges or the interests of the Certificateholders, the
party
discovering such breach shall give prompt written notice to the
other parties.
Within 90 days of the discovery of such breach of any
representation or
warranty, the Transferor or the Sponsor, as applicable, shall
either (a) cure
such breach in all material respects, (b) repurchase such Mortgage
Loan or any
property acquired in respect thereof from the Trustee at the
Purchase Price or
(c) within the two
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<PAGE>
year period following the Closing Date, substitute a Replacement
Mortgage Loan
for the affected Mortgage Loan. In the event of discovery of a
breach of any
representation and warranty of the Transferor or the Sponsor, the
Trustee shall
enforce its rights under the Transfer Agreement or the Sale
Agreement for the
benefit of Certificateholders and the NIMs Insurer. If a breach of
the
representations and warranties set forth in the Transfer Agreement
exists solely
due to the unenforceability of a Prepayment Charge, the Trustee
shall notify the
NIMs Insurer thereof and not seek to enforce the repurchase remedy
provided for
herein unless directed in writing to do so by the NIMs Insurer. In
the event of
a breach of the representations and warranties with respect to the
Mortgage
Loans set forth in the Transfer Agreement, the Trustee shall, at
the request of
the NIMs Insurer, enforce the right of the Trust Fund and the NIMs
Insurer to be
indemnified for such breach of representation and warranty. In the
event that
such breach relates solely to the unenforceability of a Prepayment
Charge,
amounts received in respect of such indemnity up to the amount of
such
Prepayment Charge shall be distributed pursuant to Section
4.04(b)(i). As
provided in the Sale Agreement, if the Transferor substitutes for a
Mortgage
Loan for which there is a breach of any representations and
warranties in the
Transfer Agreement which adversely and materially affects the value
of such
Mortgage Loan and such substitute mortgage loan is not a
Replacement Mortgage
Loan, under the terms of the Sale Agreement, the Sponsor will, in
exchange for
such substitute Mortgage Loan, (i) provide the applicable Purchase
Price for the
affected Mortgage Loan or (ii) within two years of the Closing
Date, substitute
such affected Mortgage Loan with a Replacement Mortgage Loan. Any
such
substitution shall not be effected prior to the additional delivery
to the
Trustee of a Request for Release substantially in the form of
Exhibit I and
shall not be effected unless it is within two years of the Startup
Day. As
provided in the Sale Agreement, the Sponsor indemnifies and holds
the Trust
Fund, the Trustee, the Custodian, the Depositor, the NIMs Insurer,
the Servicer
and each Certificateholder harmless against any and all taxes,
claims, losses,
penalties, fines, forfeitures, reasonable legal fees and related
costs,
judgments, and any other costs, fees and expenses that the Trust
Fund, the
Trustee, the Custodian, the Depositor, the NIMs Insurer, the
Servicer and any
Certificateholder may sustain in connection with any actions of the
Sponsor
relating to a repurchase of a Mortgage Loan other than in
compliance with the
terms of this Section 2.03 and the Sale Agreement, to the extent
that any such
action causes (i) any federal or state tax to be imposed on the
Trust Fund or
any REMIC provided for herein, including without limitation, any
federal tax
imposed on "prohibited transactions" under Section 860F(a)(1) of
the Code or on
"contributions after the startup day" under Section 860G(d)(1) of
the Code, or
(ii) any REMIC created hereunder to fail to qualify as a REMIC at
any time that
any Certificate is outstanding. In furtherance of the foregoing, if
the Sponsor
is not a member of MERS and repurchases a Mortgage Loan which is
registered on
the MERS System, the Sponsor, at its own expense and without any
right of
reimbursement, shall cause MERS to execute and deliver an
assignment of the
Mortgage in recordable form to transfer the Mortgage from MERS to
the Sponsor
and shall cause such Mortgage to be removed from registration on
the MERS System
in accordance with MERS' rules and regulations.
With
respect to any Mortgage Loan repurchased by the Depositor pursuant
to
this Agreement, by the Sponsor pursuant to the Sale Agreement or by
the
Transferor pursuant to the Transfer Agreement, the principal
portion of the
funds received by the Servicer in respect of such repurchase of a
Mortgage Loan
will be considered a Principal Prepayment and shall be deposited by
the Servicer
in the Collection Account pursuant to Section 3.05 and the Servicer
shall notify
the Trustee of its receipt of the same. The Trustee, upon receipt
of notice from
the Servicer of its receipt of the full amount of the Purchase
Price for a
Deleted Mortgage Loan, or upon receipt of the Mortgage File for a
Replacement
Mortgage Loan substituted for a Deleted Mortgage Loan, shall
release or cause to
be released and reassign to the Depositor, the Sponsor or the
Transferor, as
applicable, the related Mortgage File for the Deleted Mortgage Loan
and shall
execute and deliver such instruments of transfer or assignment, in
each case
without recourse, representation or warranty, as shall be necessary
to vest in
such party or its designee or assignee title to any Deleted
Mortgage Loan
released pursuant hereto, free and clear of all security interests,
liens and
other encumbrances created by this Agreement, which instruments
shall be
prepared
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by the Depositor or the Sponsor, and the Trustee shall not have any
further
responsibility with respect to the Mortgage File relating to such
Deleted
Mortgage Loan.
With
respect to each Replacement Mortgage Loan to be delivered to
the
Trustee or the Custodian pursuant to the terms of this Article II
in exchange
for a Deleted Mortgage Loan: (i) the Depositor, the Transferor or
the Sponsor,
as applicable, must deliver to the Trustee or the Custodian the
Mortgage File
for the Replacement Mortgage Loan containing the documents set
forth in Section
2.01 along with a written certification certifying as to the
delivery of such
Mortgage File and containing the granting language set forth in
Section 2.01;
and (ii) the Depositor will be deemed to have made, with respect to
such
Replacement Mortgage Loan, each of the representations and
warranties made by it
with respect to the related Deleted Mortgage Loan. The Trustee or
the Custodian
shall review the Mortgage File with respect to each Replacement
Mortgage Loan
and certify to the NIMs Insurer and the Depositor that all
documents required by
Section 2.01 have been executed and received.
For
any month in which the Sponsor substitutes one or more
Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the Sponsor
will
determine the amount (if any) by which the aggregate principal
balance of all
such Replacement Mortgage Loans as of the date of substitution and
the aggregate
Prepayment Charges with respect to such Replacement Mortgage Loans
is less than
the aggregate Stated Principal Balance (after application of the
principal
portion of the Scheduled Payment due in the month of substitution)
and aggregate
Prepayment Charges of all such Deleted Mortgage Loans. An amount
equal to the
aggregate of the deficiencies described in the preceding sentence
(such amount,
the "Substitution Adjustment Amount") plus an amount equal to any
unreimbursed
costs, penalties and/or damages incurred by the Trust Fund in
connection with
any violation relating to such Deleted Mortgage Loan of any
predatory or abusive
lending law shall be remitted by the Sponsor to the Servicer for
deposit into
the Collection Account on the Determination Date for the
Distribution Date
relating to the Prepayment Period during which the related Mortgage
Loan became
required to be purchased or replaced hereunder.
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 Replacement
Mortgage Loan for a
Deleted Mortgage Loan shall be made unless the Trustee and the NIMs
Insurer
shall each 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.
The
Sponsor shall cause the Mortgage Loan Schedule to be amended in
accordance with the terms of this Agreement.
The
Sponsor shall give or cause to be given written notice to the
Certificateholders and the NIMs Insurer that such substitution has
taken place,
shall amend the Mortgage Loan Schedule to reflect the removal of
such Deleted
Mortgage Loan from the terms of this Agreement and the substitution
of the
Replacement Mortgage Loan or Replacement Mortgage Loans and shall
deliver a copy
of such amended Mortgage Loan Schedule to the NIMs Insurer, the
Servicer, and
the Trustee. Upon such substitution by the Sponsor, such
Replacement Mortgage
Loan or Replacement Mortgage Loans shall constitute part of the
Mortgage Pool
and shall be subject in all respects to the terms of this Agreement
and the Sale
Agreement, including all applicable representations and warranties
thereof
included in the Sale Agreement as of the date of substitution.
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(d) It is understood and agreed that the representations,
warranties
and indemnification (i) set forth in this Section 2.03, (ii) of the
Sponsor and
the Depositor set forth in the Sale Agreement and assigned to the
Trustee by the
Depositor hereunder and (iii) of the Transferor, assigned by the
Sponsor to the
Depositor pursuant to the Sale Agreement and assigned to the
Trustee by the
Depositor hereunder shall each survive delivery of the Mortgage
Files and the
Assignment of Mortgage of each Mortgage Loan to the Trustee and
shall continue
throughout the term of this Agreement.
(e) The Depositor shall deliver a copy of the Mortgage Loan
Schedule
to the Servicer on the Closing Date.
(f) The Depositor shall notify the Servicer and the Trustee when
any
NIM Notes are issued and when such NIM Notes are no longer
outstanding.
SECTION 2.04. Representations and Warranties of the Servicer
(a) The Servicer hereby represents and warrants to the Depositor
and
the Trustee as follows, as of the date hereof:
(i) The Servicer is duly organized and is validly existing as a
limited partnership in good standing under the laws of the State of
Delaware and
is duly authorized and qualified to transact any and all business
contemplated
by this Agreement to be conducted by the Servicer in any state in
which a
Mortgaged Property (or Underlying Mortgaged Property, in the case
of a Co-op
Loan) is located or is otherwise not required under applicable law
to effect
such qualification and, in any event, is in compliance with the
doing business
laws of any such state, to the extent necessary to ensure its
ability to enforce
each Mortgage Loan, to 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) The Servicer has the corporate power and authority to
service each Mortgage Loan, and 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 the part of the
Servicer 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 a legal, valid and binding obligation
of the
Servicer, enforceable against the Servicer 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
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 the
Servicer, the servicing of the Mortgage Loans under this Agreement,
the
consummation of any other of the transactions contemplated by this
Agreement,
and the fulfillment of or compliance with the terms hereof are in
the ordinary
course of business of the Servicer and will not (A) result in a
material breach
of any term or provision of the charter or by-laws of the Servicer
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 the Servicer is a party or by
which it may be
bound, or (C) constitute a material violation of any statute, order
or
regulation applicable to the Servicer of any court, regulatory
body,
administrative agency or governmental body having jurisdiction over
the
Servicer; and the Servicer 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
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governmental body having jurisdiction over it which breach or
violation may
materially impair the Servicer's ability to perform or meet any of
its
obligations under this Agreement.
(iv) The Servicer is an approved servicer of mortgage loans for
Fannie Mae and is an approved servicer of mortgage loans for
Freddie Mac.
(v) No litigation is pending or, to the best of the Servicer's
knowledge, threatened, against the Servicer that would materially
and adversely
affect the execution, delivery or enforceability of this Agreement
or the
ability of the Servicer to service the Mortgage Loans or to perform
any of its
other obligations under this Agreement in accordance with the terms
hereof.
(vi) No consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution, delivery
and
performance by the Servicer of, or compliance by the Servicer with,
this
Agreement or the consummation of the transactions contemplated
hereby, or if any
such consent, approval, authorization or order is required, the
Servicer has
obtained the same.
(vii) The Servicer has fully furnished and will fully furnish
(for the period it serviced the Mortgage Loans), in accordance with
the Fair
Credit Reporting Act and its implementing regulations, accurate and
complete
information (e.g., favorable and unfavorable) on its borrower
credit files to
Equifax, Experian and Trans Union Credit Information Company on a
monthly basis.
(viii) Notwithstanding any state or federal law to the
contrary,
the Servicer shall not impose or collect a Prepayment Charge in any
instance
when the mortgage debt is accelerated as the result of the
Mortgagor's default
in making the Mortgage Loan payments.
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans that
are not
"Qualified Mortgages."
Upon
discovery by the Depositor, the Servicer or the Trustee that
any
Mortgage Loan does not constitute a "qualified mortgage" within the
meaning of
section 860G(a)(3) of the Code, the party discovering such fact
shall promptly
(and in any event within 5 Business Days of discovery) give written
notice
thereof to the other parties. In connection therewith, the
Depositor shall, at
the Depositor's option, either (i) substitute, if the conditions in
Section
2.03(c) with respect to substitutions are satisfied, a Replacement
Mortgage Loan
for the affected Mortgage Loan, or (ii) repurchase the affected
Mortgage Loan
within 90 days of such discovery in the same manner as it would a
Mortgage Loan
for a breach of representation or warranty contained in Section
2.03. The
Trustee, upon the written request of the Depositor, shall reconvey
to the
Depositor the Mortgage Loan to be released pursuant hereto in the
same manner,
and on the same terms and conditions, as it would a Mortgage Loan
repurchased
for breach of a representation or warranty contained in Section
2.03.
SECTION 2.06. Authentication and Delivery of Certificates.
The
Trustee acknowledges the transfer and assignment to it of the
Trust
Fund and, concurrently with such transfer and assignment, the
Trustee has caused
to be authenticated and delivered to or upon the order of the
Depositor, in
exchange for the Mortgage Loans, Certificates duly authenticated by
the
Authenticating Agent in authorized denominations evidencing
ownership of the
entire Trust Fund. The Trustee agrees to hold the Trust Fund and
exercise the
rights referred to above for the benefit of all present and future
Holders of
the Certificates and to perform its duties set forth in this
Agreement in
accordance with the provisions hereof.
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<PAGE>
SECTION 2.07. REMIC Elections.
(a) The Depositor hereby instructs and authorizes the Trustee to
make
an appropriate election to treat each of the Upper Tier REMIC, the
Lower Tier
REMIC and the SWAP REMIC as a REMIC. The Trustee shall sign the
returns
providing for such elections and such other tax or information
returns that are
required to be signed by the Trustee under applicable law. This
Agreement shall
be construed so as to carry out the intention of the parties that
each of the
Upper Tier REMIC, the Lower Tier REMIC and the SWAP REMIC be
treated as a REMIC
at all times prior to the date on which the Trust Fund is
terminated.
(b) The Preliminary Statement sets forth the designations and
"latest
possible maturity date" for federal income tax purposes of all
interests created
hereby. The "Startup Day" for purposes of the REMIC Provisions
shall be the
Closing Date. Each REMIC's fiscal year shall be the calendar
year.
The SWAP REMIC shall consist of all of the assets of the Trust
Fund,
other than (i) amounts distributable to the Class P Certificates
pursuant to
Section 4.04(b)(i) hereof, (ii) the interests issued by the SWAP
REMIC and the
interests issued by the Lower Tier REMIC, (iii) the grantor trusts
described in
Section 2.07 hereof, (iv) each Cap Contract and the Cap Contract
Account and (v)
the Swap Agreement and the Supplemental Interest Trust. The SWAP
REMIC shall
issue the SWAP REMIC Regular Interests, which shall be designated
as regular
interests of such REMIC, and shall issue the Class SWR Interest,
which shall be
designated as the sole class of residual interest in the SWAP
REMIC. Each of the
SWAP REMIC Regular Interests shall have the characteristics set
forth in the
Preliminary Statement and this Section 2.07.
The Lower Tier REMIC shall consist of the SWAP REMIC Regular
Interests. The Lower Tier REMIC shall issue the Lower Tier REMIC
Regular
Interests, which shall be designated as regular interests of such
REMIC and
shall issue the Class LTR Interest, which shall be designated as
the sole class
of residual interest in the Lower Tier REMIC. Each of the Lower
Tier REMIC
Regular Interests shall have the characteristics set forth in its
definition and
the Preliminary Statement.
The assets of the Upper Tier REMIC shall be the Lower Tier
REMIC
Regular Interests. The REMIC Regular Interests shall be designated
as the
regular interests in the Upper Tier REMIC and the Residual Interest
shall be
designated as the sole class of residual interest in the Upper Tier
REMIC. For
federal income tax purposes, the pass-through rate on each REMIC
Regular
Interest (other than the Uncertificated Class C Interest and the
Class UT-IO
Interest) and on the sole class of residual interest in the Upper
Tier REMIC
shall be subject to a cap equal to the Upper Tier REMIC Net WAC
Cap.
The beneficial ownership of the Class SWR Interest, Class LTR
Interest
and the Residual Interest shall be represented by the Class R
Certificate. The
Class SWR Interest and Class LTR Interest shall not have a
principal balance or
bear interest.
(c) The "tax matters person" with respect to each REMIC for
purposes
of the REMIC Provisions shall be the beneficial owner of the Class
R
Certificate; provided, however, that the Holder of the Class R
Certificate, by
its acceptance thereof, irrevocably appoints the Trustee as its
agent and
attorney-in-fact to act as "tax matters person" with respect to
each such REMIC
for purposes of the REMIC Provisions. If there is more than one
beneficial owner
of the Class R Certificate, the "tax matters person" shall be the
Person with
the greatest percentage interest in the Class R Certificate and, if
there is
more than one such Person, shall be determined under Treasury
regulation Section
1.860F-4(d) and Treasury regulation Section 301.6231(a)(7)-1.
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(d)
(i) It is intended that the rights of each Class of the Class
A,
Class M and Class B Certificates to receive payments in respect of
Excess
Interest shall be treated as a right in interest rate cap contracts
written by
the Class C Certificateholders in favor of the holders of each
Class of the
Class A, Class M and Class B Certificates and such shall be
accounted for as
property held separate and apart from the regular interests in the
Upper Tier
REMIC held by the holders of the Class A (other than the Class R
Certificate),
Class M and Class B Certificates, and the residual interest in the
Upper Tier
REMIC held by the holder of the Class R Certificate. For
information reporting
requirements, the rights of the Class A, Class M and Class B
Certificates to
receive payments in respect of Excess Interest shall be assumed to
have zero or
a de minimis value. This provision is intended to satisfy the
requirements of
Treasury Regulations Section 1.860G-2(i) for the treatment of
property rights
coupled with REMIC interests to be separately respected and shall
be interpreted
consistently with such regulation. On each Distribution Date, to
the extent that
any of the Class A, Class M and Class B Certificates receive
payments in respect
of Excess Interest, such amounts, to the extent not derived from
payments on the
Cap Contracts or the Swap Agreement, will be treated as distributed
by the Upper
Tier REMIC to the Class C Certificates pro rata in payment of the
amounts
specified in Section 4.04(g) and then paid to the relevant Class of
Certificates
pursuant to the related interest rate cap agreement.
(ii) It is intended that the beneficial owners of the
Certificates
(other than the Class P and Class C Certificates) shall be treated
as having
entered into a notional principal contract with respect to the
beneficial owners
of the Class C Certificates. Pursuant to each such notional
principal contract,
all beneficial owners of each Class of Certificates (other than the
Class P and
Class C Certificates) shall be treated as having agreed to pay, on
each
Distribution Date, to the beneficial owners of the Class C
Certificates an
aggregate amount equal to the excess, if any, of (i) the amount
payable on such
Distribution Date on the Corresponding REMIC Regular Interest of
such Class of
Certificates over (ii) the amount payable on such Class of
Certificates on such
Distribution Date (such excess, a "Class Payment Shortfall"). A
Class Payment
Shortfall shall be allocated to each Class of Certificates to the
extent that
interest accrued on such Class for the related Accrual Period at
the
Pass-Through Rate for a Class, computed by substituting "Upper Tier
REMIC Net
WAC Cap" for the Available Funds Cap set forth in the definition
thereof,
exceeds the amount of interest accrued on such Certificate at the
Pass-Through
Rate (without such substitution) for the related Accrual Period,
and a Class
Payment Shortfall payable from principal collections shall be
allocated to the
most subordinate Class of Certificates with an outstanding
principal balance to
the extent of such balance.
(e) The parties intend that the portion of the Trust Fund
consisting
of the Uncertificated Class C Interest, the uncertificated Class
UT-IO Interest,
the rights to receive payments deemed made by the Class A, Class M
and Class B
Certificates in respect of notional principal contracts described
in Section
2.07(d)(ii), the Supplemental Interest Trust which holds the Swap
Agreement, the
Cap Contracts, the Cap Contract Account and the obligation of the
holders of the
Class C Certificates to pay amounts in respect of Excess Interest
to the holders
of the Class A, Class M and Class B Certificates shall be treated
as a "grantor
trust" under the Code, for the benefit of the holders of the Class
C
Certificates, and the provisions hereof shall be interpreted
consistently with
this intention. In furtherance of such intention, the Trustee shall
(i) furnish
or cause to be furnished to the holders of the Class C Certificates
information
regarding their allocable share, if any, of the income with respect
to such
grantor trust, (ii) file or cause to be filed with the Internal
Revenue Service
Form 1041 (together with any necessary attachments) and such other
forms as may
be applicable and (iii) comply with such information reporting
obligations with
respect to payments from such grantor trust to the holders of Class
A, Class M,
Class B and Class C Certificates as may be applicable under the
Code.
(f) The parties intend that the portion of the Trust Fund
consisting
of the right to receive amounts distributable to the Class P
Certificates
pursuant to Section 4.04(b)(i) hereof shall be treated as a
"grantor trust"
under the Code, for the benefit of the holders of the Class P
Certificates, and
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the provisions hereof shall be interpreted consistently with this
intention. In
furtherance of such intention, the Trustee shall (i) furnish or
cause to be
furnished to the holders of the Class P Certificates information
regarding their
allocable share of the income with respect to such grantor trust
and (ii) file
or cause to be filed with the Internal Revenue Service Form 1041
(together with
any necessary attachments) and such other forms as may be
applicable.
(g) The parties intend
that amounts paid to the Swap Counterparty
under the Swap Agreement shall be deemed for federal income tax
purposes to be
paid by the Class C Certificates first, out of funds deemed
received in respect
of the Class UT-IO Interest, second, out of funds deemed received
in respect of
the Uncertificated Class C Interest and third, out of funds deemed
received in
respect of notional principal contracts described in Section
2.07(d)(ii), and
the provisions hereof shall be interpreted consistently with this
intention. On
each Distribution Date, to the extent that amounts paid to the Swap
Counterparty
are deemed paid out of funds received in respect of the
Uncertificated Class C
Interest, such amounts will be treated as distributed by the Upper
Tier REMIC to
the Class C Certificates pro rata in payment of the amounts
specified in Section
4.04(g) and then paid to the Swap Counterparty pursuant to the Swap
Agreement.
The Supplemental Interest Trust shall be an "outside reserve fund"
for
federal income tax purposes and not an asset of any REMIC.
Furthermore, the
Holders of the Class C Certificates shall be the beneficial owners
of the
Supplemental Interest Trust for all federal income tax purposes,
and shall be
taxable on all income earned thereon.
(h) All payments of principal and interest at the Net Mortgage Rate
on
each of the Mortgage Loans (other than amounts distributable to the
Class P
Certificates pursuant to Section 4.04(b)(i) hereof) received by the
SWAP REMIC
with respect to the Mortgage Loans shall be paid to the SWAP REMIC
Regular
Interests until the principal balance of all such interests have
been reduced to
zero and any losses allocated to such interests have been
reimbursed. Any
available funds remaining in the SWAP REMIC on a Distribution Date
after
distributions to the SWAP REMIC Regular Interests shall be
distributed to the
Class R Certificates on account of the Class SWR Interest. On each
Distribution
Date, the Trustee shall distribute the aggregate Interest Funds
(net of expenses
and payments to the Class P Certificates) with respect to each of
the SWAP REMIC
Regular Interests based on the interest rates for each such SWAP
REMIC Regular
Interest. On each Distribution Date, the Trustee shall distribute
the aggregate
Principal Funds with respect to the Group One Mortgage Loans first
to the Class
1-SW1 Interest until its principal balance is reduced to zero and
then
sequentially to each of the other SWAP REMIC Regular Interests
beginning with
designation "1" in ascending order of their numerical class
designation, in
equal amounts to each such class in such numerical designation,
until the
principal balance of each such class is reduced to zero. All losses
with respect
to the Group One Mortgage Loans shall be allocated among the SWAP
REMIC Regular
Interests beginning with the designation "1" in the same manner
that principal
distributions are allocated. On each Distribution Date, the Trustee
shall
distribute the aggregate Principal Funds with respect to the Group
Two Mortgage
Loans first to the Class 2-SW2 Interest until its principal balance
is reduced
to zero and then sequentially to each of the other SWAP REMIC
Regular Interests
beginning with designation "2" in ascending order of their
numerical class
designation, in equal amounts to each such class in such numerical
designation,
until the principal balance of each such class is reduced to zero.
All losses
with respect to the Group Two Mortgage Loans shall be allocated
among the SWAP
REMIC Regular Interests beginning with the designation "2" in the
same manner
that principal distributions are allocated. Subsequent Recoveries
with respect
to the Group One and Group Two Mortgage Loans shall be allocated in
the reverse
fashion from the manner in which losses are allocated.
All payments received by the Lower Tier REMIC with respect to the
SWAP
REMIC Regular Interests shall be paid to the Lower Tier REMIC
Regul
