<PAGE>
Exhibit 4.1
MERRILL LYNCH MORTGAGE INVESTORS, INC.,
Depositor
WELLS FARGO BANK, N.A.
Master Servicer and Securities Administrator
and
HSBC BANK USA, NATIONAL ASSOCIATION,
Trustee
POOLING AND SERVICING AGREEMENT
comprised of,
the Stack I Pooling and Servicing Terms
and the Stack II Pooling and Servicing Terms
Dated as of September 1, 2006
----------
Mortgage Pass-Through Certificates, MLMI Series 2006-AF1
<PAGE>
MERRILL LYNCH MORTGAGE INVESTORS, INC.,
Depositor
WELLS FARGO BANK, N.A.
Master Servicer and Securities Administrator
and
HSBC BANK USA, NATIONAL ASSOCIATION,
Trustee
STACK I POOLING AND SERVICING TERMS,
constituting,
along with the Stack II Pooling and Servicing Terms, the
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2006
----------
Mortgage Pass-Through Certificates, MLMI Series 2006-AF1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S>
<C>
ARTICLE I
DEFINITIONS....................................................
7
Section 1.02
Accounting............................................ 51
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES..................................................
52
Section 2.01
Conveyance
of Mortgage Loans to Trustee............... 52
Section 2.02
Acceptance
of Mortgage Loans by Trustee............... 55
Section 2.03
Assignment
of Interest in the Mortgage Loan
Purchase Agreement.................................... 58
Section 2.04
Substitution of Mortgage Loans........................ 59
Section 2.05
Issuance
of Certificates.............................. 61
Section 2.06
Representations and Warranties Concerning
the Depositor......................................... 61
Section 2.07
Representations and Warranties Concerning the
Master Servicer and Securities Administrator.......... 62
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS............... 64
Section 3.01
Master
Servicer....................................... 64
Section 3.02
REMIC-Related Covenants............................... 65
Section 3.03
Monitoring
of Servicers............................... 65
Section 3.04
Fidelity
Bond......................................... 66
Section 3.05
Power to
Act; Procedures.............................. 66
Section 3.06
Due-on-Sale Clauses; Assumption Agreements............ 67
Section 3.07
Release of
Mortgage Files............................. 67
Section 3.08
Documents,
Records and Funds in Possession of Master
Servicer To Be Held for Trustee....................... 68
Section 3.09
Standard
Hazard Insurance and Flood Insurance
Policies.............................................. 69
Section 3.10
Presentment of Claims and Collection of Proceeds...... 69
Section 3.11
Maintenance of the Primary
Mortgage Insurance
Policies.............................................. 70
Section 3.12
Trustee to
Retain Possession of Certain Insurance
Policies and Documents................................ 70
Section 3.13
Realization Upon Defaulted Mortgage Loans............. 71
Section 3.14
Compensation for the Master Servicer.................. 71
Section 3.15
REO
Property.......................................... 71
Section 3.16
Annual
Statement as to Compliance..................... 72
Section 3.17
Reports on
Assessment of Compliance and Attestation... 73
Section 3.18
Periodic
Filings...................................... 75
Section 3.19
Compliance
with Regulation AB......................... 82
ARTICLE IV
ACCOUNTS......................................................
83
Section 4.01
Protected
Accounts.................................... 83
Section 4.02
Master
Servicer Collection Account.................... 84
</TABLE>
<PAGE>
<TABLE>
<S>
<C>
Section 4.03
Permitted
Withdrawals and Transfers from the Master
Servicer Collection Account........................... 85
Section 4.04
Distribution Account.................................. 86
Section 4.05
Permitted
Withdrawals and Transfers from the
Distribution Account.................................. 86
Section 4.06
[Reserved]............................................ 88
ARTICLE V
CERTIFICATES...................................................
90
Section 5.01
The
Certificates...................................... 90
Section 5.02
Certificate Register; Registration of Transfer and
Exchange of Certificates.............................. 90
Section 5.03
Mutilated,
Destroyed, Lost or Stolen Certificates..... 94
Section 5.04
Persons
Deemed Owners................................. 95
Section 5.05
Access to
List of Certificateholders' Names and
Addresses............................................. 95
Section 5.06
Book-Entry
Certificates............................... 95
Section 5.07
Notices to
Depository................................. 96
Section 5.08
Definitive
Certificates............................... 96
Section 5.09
Maintenance of Office or Agency....................... 97
ARTICLE VI PAYMENTS TO
CERTIFICATEHOLDERS................................ 98
Section 6.01
Distributions on the Certificates..................... 98
Section 6.02
Allocation
of Losses.................................. 103
Section 6.03
Payments.............................................. 104
Section 6.04
Statements
to Certificateholders...................... 104
Section 6.05
Monthly
Advances...................................... 107
Section 6.06
Compensating Interest Payments........................ 107
ARTICLE VII THE MASTER SERVICER AND THE
DEPOSITOR........................ 108
Section 7.01
Liabilities of the Master Servicer.................... 108
Section 7.02
Merger or
Consolidation of the Master Servicer........ 108
Section 7.03
Indemnification from the Master Servicer
and the Depositor..................................... 108
Section 7.04
Limitations on Liability of the Master
Servicer and Others................................... 109
Section 7.05
Master
Servicer Not to Resign......................... 110
Section 7.06
Successor
Master Servicer............................. 110
Section 7.07
Sale and
Assignment of Master Servicing............... 110
ARTICLE VIII
DEFAULT.....................................................
112
Section 8.01
Events of
Default..................................... 112
Section 8.02
Trustee to
Act; Appointment of Successor.............. 113
Section 8.03
Notification to Certificateholders.................... 114
Section 8.04
Waiver of
Defaults.................................... 114
Section 8.05
List of
Certificateholders............................ 115
ARTICLE IX CONCERNING THE TRUSTEE AND THE SECURITIES
ADMINISTRATOR....... 116
</TABLE>
iii
<PAGE>
<TABLE>
<S>
<C>
Section 9.01
Duties of
Trustee..................................... 116
Section 9.02
Certain
Matters Affecting the Trustee and the
Securities Administrator.............................. 118
Section 9.03
Trustee
and Securities Administrator Not Liable for
Certificates or Mortgage Loans........................ 120
Section 9.04
Trustee
and Securities Administrator May Own
Certificates.......................................... 120
Section 9.05
Trustee's
and Securities Administrator's Fees and
Expenses.............................................. 120
Section 9.06
Eligibility Requirements for Trustee and Securities
Administrator......................................... 121
Section 9.07
Insurance............................................. 122
Section 9.08
Resignation and Removal of the Trustee and Securities
Administrator......................................... 122
Section 9.09
Successor
Trustee and Successor Securities
Administrator......................................... 123
Section 9.10
Merger or
Consolidation of Trustee or Securities
Administrator......................................... 123
Section 9.11
Appointment of Co-Trustee or Separate Trustee......... 124
Section 9.12
Federal
Information Returns and Reports to
Certificateholders; REMIC Administration.............. 125
ARTICLE X
TERMINATION....................................................
130
Section 10.01
Termination upon
Liquidation or Repurchase of all
Mortgage Loans........................................ 130
Section 10.02
Final
Distribution on the Certificates................ 131
Section 10.03
Additional
Termination Requirements................... 132
ARTICLE XI MISCELLANEOUS
PROVISIONS...................................... 134
Section 11.01
Intent of
Parties..................................... 134
Section 11.02
Amendment............................................. 134
Section 11.03
Recordation of
Agreement.............................. 136
Section 11.04
Limitation on
Rights of Certificateholders............ 136
Section 11.05
Acts of
Certificateholders............................ 136
Section 11.06
Governing
Law......................................... 138
Section 11.07
Notices............................................... 138
Section 11.08
Severability of
Provisions............................ 139
Section 11.09
Successors and
Assigns................................ 139
Section 11.10
Article and
Section Headings.......................... 139
Section 11.11
Counterparts.......................................... 139
Section 11.12
Notice to Rating
Agencies............................. 139
ARTICLE XII REMIC
ADMINISTRATION.........................................
140
Section 12.01
REMIC
Administration.................................. 140
Section 12.02
Prohibited
Transactions and Activities................ 140
Section 12.03
Indemnification
with Respect to Prohibited
Transactions or Loss of REMIC Status.................. 140
Section 12.04
REO
Property.......................................... 141
</TABLE>
iv
<PAGE>
EXHIBITS
Exhibit A-1
- Form of Class A and Class M Certificates
Exhibit A-2
- Form of Class B Certificates
Exhibit A-3
- Form of Class A-R Certificate
Exhibit A-4
- Form of Class P Certificate
Exhibit B
- Mortgage Loan Schedule
Exhibit C
- [Reserved]
Exhibit D
- Request for Release of Documents
Exhibit E-1
- Form of Transferee's Letter and Affidavit
Exhibit E-2
- Form of Transferor Certificate
Exhibit F-1
- Form of Transferor Representation Letter
Exhibit F-2 - Form of Investor
Representation Letter
Exhibit F-3
- Form of Rule 144A Letter
Exhibit G
- Form of Custodial Agreement
Exhibit H
- [Reserved]
Exhibit I-1 to I-6 - Assignment Agreements
Exhibit J
- Mortgage Loan Purchase Agreement
Exhibit K
- Servicing Criteria To Be Addressed in Assessment
of Compliance
Exhibit L
- Form of Sarbanes-Oxley Certification
Exhibit M
- Form of Back-up Sarbanes-Oxley Certification
Exhibit N
-
[Reserved]
Exhibit O
- Additional Disclosure Notification
Exhibit P
- Form of Item 1123 Certification of Servicer
Exhibit Q-1
- Additional Form 10-D Disclosure
Exhibit Q-2
- Additional Form 10-K Disclosure
Exhibit Q-3
- Form 8-K Disclosure Information
v
<PAGE>
STACK I POOLING AND SERVICING TERMS
These Stack I Pooling and Servicing Terms are dated as of September
1, 2006
(the "Agreement," and, together with the Stack II Pooling and
Servicing Terms
(the "Stack II Agreement") dated as of September 1, 2006, the
"Pooling and
Servicing Agreement"), among MERRILL LYNCH MORTGAGE INVESTORS,
INC., as
depositor (the "Depositor"), WELLS FARGO BANK, N.A., as master
servicer (in such
capacity, the "Master Servicer") and as securities administrator
(in such
capacity, the "Securities Administrator") and HSBC BANK USA,
NATIONAL
ASSOCIATION, as trustee (the "Trustee").
PRELIMINARY STATEMENT
The
Depositor has acquired the Mortgage Loans from the Seller and at
the
Closing Date is the owner of the Mortgage Loans and the other
related property
being conveyed by the Depositor to the Trustee hereunder on behalf
of the
Issuing Entity for inclusion in the Trust Fund. On the Closing
Date, the
Depositor will acquire the Certificates from the Securities
Administrator as
consideration for the Depositor's transfer to the Issuing Entity of
the Mortgage
Loans and the other related property constituting that portion of
the Trust Fund
relating to the Certificates. The Depositor has duly authorized the
execution
and delivery of this Agreement to provide for the conveyance to the
Issuing
Entity of the Mortgage Loans and the other related property
constituting that
portion of the Trust Fund relating to the Certificates. All
covenants and
agreements made by the Seller in the Mortgage Loan Purchase
Agreement and in
this Agreement and all covenants and agreements made by the
Depositor, the
Trustee, the Securities Administrator and the Master Servicer
herein with
respect to the Mortgage Loans and the other related property
constituting the
portion of the Trust Fund relating to the Certificates are for the
benefit of
the Holders from time to time of the Certificates. The Depositor,
the Trustee,
the Securities Administrator and the Master Servicer are entering
into this
Agreement, and the Trustee on behalf of the Issuing Entity is
accepting the
Trust Fund created hereby, for good and valuable consideration, the
receipt and
sufficiency of which are hereby acknowledged.
In
conjunction herewith, the Depositor has acquired the Stack II
Mortgage
Loans from the Seller and at the Closing Date is the owner of the
Stack II
Mortgage Loans and the other related property being conveyed by the
Depositor to
the Trustee under the Stack II Agreement on behalf of the Issuing
Entity for
inclusion in the Trust Fund. On the Closing Date, the Depositor
will acquire the
Stack II Certificates from the Securities Administrator as
consideration for the
Depositor's transfer to the Issuing Entity of the Stack II Mortgage
Loans and
the other related property constituting that portion of the Trust
Fund relating
to the Stack II Certificates. The Depositor has duly authorized the
execution
and delivery of the Stack II Agreement to provide for the
conveyance to the
Issuing Entity of the Stack II Mortgage Loans and the other related
property
constituting that portion of the Trust Fund relating to the Stack
II
Certificates. The terms and conditions relating to the issuance of
the Stack II
Certificates are set forth in the Stack II Agreement.
As
provided herein, the Securities Administrator shall elect that
that
portion of the Trust Fund relating to Mortgage Group One, Mortgage
Group Two and
Mortgage Group Three be treated for federal income tax purposes as
comprising
two real estate mortgage investment conduits (each a "REMIC" or, in
the
alternative, "REMIC 1" and the "Upper Tier REMIC," respectively) in
a tiered
structure. The Certificates created under this Agreement, other
than the
<PAGE>
Class A-R Certificate and the Class P Certificate, shall represent
ownership of
regular interests in the Upper Tier REMIC. The Class A-R
Certificate represents
the sole class of residual interest in each of REMIC 1, the Upper
Tier REMIC and
any REMIC created under the Stack II Agreement.
The
Upper Tier REMIC shall hold as its assets the several classes
of
uncertificated REMIC 1 Regular Interests. REMIC 1 shall hold as its
assets the
property of the Trust Fund relating to Mortgage Group One, Mortgage
Group Two
and Mortgage Group Three other than (i) the REMIC 1 Interests and
(ii) the
amounts payable to the Class P Certificates.
Each
Upper Tier REMIC Regular Interest is hereby designated as a
regular
interest in the Upper Tier REMIC for purposes of the REMIC
Provisions. Each
REMIC 1 Regular Interest is hereby designated as a regular interest
in REMIC 1
for purposes of the REMIC Provisions.
The
Class LT1-R Interest is hereby designated as the sole class of
residual
interest in REMIC 1 for purposes of the REMIC Provisions. The Class
UT-R
Interest is hereby designated as the sole class of residual
interest in the
Upper Tier REMIC for purposes of the REMIC Provisions. The Class
A-R Certificate
shall represent the Class LT1-R Interest, the Class UT-R Interest
and the
residual interest in any REMIC created under the Stack II
Agreement.
THE REMIC 1 INTERESTS
The following table sets forth (or describes) the class
designation, interest
rate, initial principal balance, and related group of Mortgage
Loans for each
class of REMIC 1 Interests:
<TABLE>
<CAPTION>
Principal
Interest Related
Mortgage groups
Class Designation
Balance Rate
or Mortgage Group
--------------------- --------- -------- -----------------------
<S>
<C>
<C>
<C>
LT11A
(2)
(9)
Mortgage Group One
LT11B
(3) (10)
Mortgage Group One
LT12A
(4)
(9)
Mortgage Group Two
LT12B
(5) (11)
Mortgage Group Two
LT13A
(6)
(9)
Mortgage Group Three
LT13B
(7) (12)
Mortgage Group Three
LT1Z
(8)
(9)
Mortgage Group One,
Mortgage Group Two and
Mortgage Group Three
LT1PO Component One
(13)
0.00%
Mortgage
Group One
LT1PO Component Two
(14)
0.00%
Mortgage Group Two
LT1PO Component Three (15)
0.00%
Mortgage Group Three
LT1IO Component One
(16)
6.25%
Mortgage Group One
LT1IO Component Two
(17)
6.25%
Mortgage Group Two
LT1IO Component Three (18)
6.25%
Mortgage Group Three
LT1-R
(1)
(1)
N/A
</TABLE>
----------
(1) The Class LT1-R
Interest represents the sole class of residual interest in
REMIC 1 and has neither a principal amount nor an interest rate.
The Class
LT1-R Interest shall be represented by the Class A-R
Certificate.
(2) The initial
principal balance of the Class LT11A Interest shall equal 1% of
the
excess of (x) the initial Group One Non-PO Allocated Amount over
(y)
the
initial principal balances of the Class AF-1 Certificates.
(3) The initial
principal balance of the Class LT11B Interest shall equal 1% of
the
initial Group One Non-PO Allocated
-2-
<PAGE>
Amount.
(4) The initial
principal balance of the Class LT12A Interest shall equal 1% of
the
excess of (x) the initial Group Two Non-PO Allocated Amount over
(y)
the
initial principal balances of the Class AF-2 Certificates.
(5) The initial
principal balance of the Class LT12B Interest shall equal 1% of
the
initial Group Two Non-PO Allocated Amount.
(6) The initial
principal balance of the Class LT13A Interest shall equal 1% of
the excess of (x) the
initial Group Three Non-PO Allocated Amount over (y)
the
initial principal balances of the Class AF-3 Certificates.
(7) The initial
principal balance of the Class LT13B Interest shall equal 1% of
the
initial Group Three Non-PO Allocated Amount.
(8) The initial
principal balance of the Class LT1Z Interest shall equal the
excess of (x) the sum of the initial Group One Non-PO Allocated
Amount, the
initial Group Two Non-PO Allocated Amount and the initial Group
Three
Non-PO Allocated Amount over (y) the sum of the initial principal
amounts
of
each of the REMIC 1 Regular Interests with a designation ending in
"A"
or
"B".
(9) The Class LT11A
Interest, the Class LT12A Interest, the Class LT13A
Interest and the Class LT1Z Interest shall have an interest rate
for each
Distribution Date (and the related Accrual Period) equal to the
weighted
average of the Group One Remittance Rate, the Group Two Remittance
Rate and
the
Group Three Remittance Rate (weighted based on the Group One
Non-PO
Allocated Amount, the Group Two Non-PO Allocated Amount and the
Group Three
Non-PO Allocated Amount, respectively, at the beginning of the
related Due
Period).
(10) The Class LT11B Interest shall have an interest rate for any
Distribution
Date
(and the related Accrual Period) equal to the Group One
Remittance
Rate.
(11) The Class LT12B Interest shall have an interest rate for any
Distribution
Date
(and the related Accrual Period) equal to the Group Two
Remittance
Rate.
(12) The Class LT13B Interest shall have an interest rate for any
Distribution
Date
(and the related Accrual Period) equal to the Group Three
Remittance
Rate.
(13) The initial principal balance of the Class LT1PO Component One
Interest
shall equal the initial principal amount of Class PO Component
One.
(14) The initial principal balance of the Class LT1PO Component Two
Interest
shall equal the initial principal amount of Class PO Component
Two.
(15) The initial principal balance of the Class LT1PO Component
Three Interest
shall equal the initial principal amount of Class PO Component
Three.
(16) The Class LT1IO Component One Interest is an interest-only
interest, has no
principal balance, is not entitled to payments of principal and
will bear
interest on its notional amount. The notional amount of the Class
LT1IO
Component One Interest shall equal the Class IO Component One
Notional
Amount.
(17) The Class LT1IO Component Two Interest is an interest-only
interest, has no
principal balance, is not entitled to payments of principal and
will bear
interest on its notional amount. The notional amount of the Class
LT1IO
Component Two Interest shall equal the Class IO Component Two
Notional
Amount.
(18) The Class LT1IO Component Three Interest is an interest-only
interest, has
no
principal balance, is not entitled to payments of principal and
will
bear
interest on its notional amount. The notional amount of the
Class
LT1IO Component Three Interest shall equal the Class IO Component
Three
Notional Amount.
On
each Distribution Date, the Securities Administrator shall first
pay or
charge as an expense of REMIC 1 all expenses of the Issuing Entity
relating to
Mortgage Group One, Mortgage Group Two and Mortgage Group Three for
such
Distribution Date.
-3-
<PAGE>
Interest shall be payable to, and shortfalls and losses are
allocable to,
the Class LT1IO Component One Interest as such amounts are payable
or allocable
to Class IO Component One. Interest shall be payable to, and
shortfalls and
losses are allocable to, the Class LT1IO Component Two Interest as
such amounts
are payable or allocable to Class IO Component Two. Interest shall
be payable
to, and shortfalls and losses are allocable to, the Class LT1IO
Component Three
Interest as such amounts are payable or allocable to Class IO
Component Three.
Principal shall be payable to, and shortfalls, losses, prepayments
and
increases in principal amount related to Subsequent Recoveries are
allocable to,
the Class LT1PO Component One Interest as such amounts are payable
or allocable
to Class PO Component One. Principal shall be payable to, and
shortfalls,
losses, prepayments and increases in principal amount related to
Subsequent
Recoveries are allocable to, the Class LT1PO Component Two Interest
as such
amounts are payable or allocable to Class PO Component Two.
Principal shall be
payable to, and shortfalls, losses, prepayments and increases in
principal
amount related to Subsequent Recoveries are allocable to, the Class
LT1PO
Component Three Interest as such amounts are payable or allocable
to Class PO
Component Three.
After the allocations and distributions are made pursuant to the
two
immediately preceding paragraphs, principal distributions shall be
deemed to be
made and Realized Losses shall be deemed allocated to the REMIC 1
Interests
first, so as to keep the uncertificated principal balance of each
REMIC 1
Interest ending with the designation "A" equal to 1% of the excess
of (x) the
Group One Non-PO Allocated Amount (in the case of the Class LT11A
Interest), the
Group Two Non-PO Allocated Amount (in the case of the Class LT12A
Interest) or
the Group Three Non-PO Allocated Amount (in the case of the Class
LT13A
Interest) over (y) the aggregate class principal amounts of the
Class AF-1
Certificates (in the case of the Class LT11A Interest), the Class
AF-2
Certificates (in the case of the Class LT12A Interest) or the Class
AF-3
Certificates (in the case of the Class LT13A Interest) (except that
if 1% of any
such excess is greater than the principal amount of the
corresponding REMIC 1
Interest ending with the designation "A", the least amount of
principal and
Realized Losses shall be distributed and allocated to such REMIC 1
Interests
such that the REMIC 1 Subordinate Balance Ratio is maintained);
second, to each
REMIC 1 Interest ending with the designation "B" so as to keep
the
uncertificated principal balance of each such REMIC 1 Interest
equal to 1% of
the Group One Non-PO Allocated Amount (in the case of the Class
LT11B Interest),
Group Two Non-PO Allocated Amount (in the case of the Class LT12B
Interest) or
Group Three Non-PO Allocated Amount (in the case of the Class LT13B
Interest)
and finally, all remaining principal amounts and Realized Losses
shall be
distributed and allocated in respect of the Class LT1Z
Interest.
If
on any Distribution Date the Class Certificate Balance of any Class
of
Certificates (other than the Class PO Certificates) is increased
due to
Subsequent Recoveries pursuant to the definition of "Class
Certificate Balance",
then there shall be an equivalent aggregate increase in the
principal amounts of
the REMIC 1 Regular Interests, with such increase allocated (before
the making
of distributions and the allocation of losses on the REMIC 1
Regular Interests
on such Distribution Date) among the REMIC 1 Regular Interests as
follows: (i)
first, to each REMIC 1 Interest ending with the designation "B" so
as to keep
the uncertificated principal balance of each such REMIC 1 Interest
equal to 1%
of the Group One Non-PO Allocated Amount (in the case of the Class
LT11B
Interest), Group Two Non-PO Allocated Amount (in the case of
the
-4-
<PAGE>
Class LT12B Interest) or Group Three Non-PO Allocated Amount (in
the case of the
Class LT13B Interest), (ii) second, to each REMIC 1 Regular
Interest ending with
the designation "A", so that the uncertificated principal balance
of each REMIC
1 Regular Interest ending with the designation "A" is as close as
possible to
(but does not exceed) 1% of the excess of (x) the Group One Non-PO
Allocated
Amount (in the case of the Class LT11A Interest), the Group Two
Non-PO Allocated
Amount (in the case of the Class LT12A Interest) or the Group Three
Non-PO
Allocated Amount (in the case of the Class LT13A Interest) over (y)
the
aggregate Class Certificate Balances of the Class AF-1 Certificates
(in the case
of the Class LT11A Interest), the Class AF-2 Certificates (in the
case of the
Class LT12A Interest) or the Class AF-3 Certificates (in the case
of the Class
LT13A Interest); provided, however, that (a) the REMIC 1
Subordinate Balance
Ratio is maintained and (b) amounts allocated to any REMIC 1
Regular Interest
pursuant to this clause (ii) shall not exceed the amount of any
previous
realized losses allocated to such REMIC 1 Regular Interest not
previously offset
by distributions or increases in the principal amount of such REMIC
1 Regular
Interest and (iii) finally, all remaining amounts to the Class LT1Z
Interest.
All
computations with respect to the REMIC 1 Interests shall be
computed to
eight decimal places.
THE CERTIFICATES
The
following table sets forth (or describes) the Class
designation,
Certificate Rate, initial Class Certificate Balance or initial
notional amount,
and minimum denomination for each Class of Certificates comprising
interests in
the Trust Fund created hereunder.
<TABLE>
<CAPTION>
Initial Class
Certificate Balance
Class
Certificate or
Initial Notional Minimum
Denominations
Designation Rate
Amount
or Percentage Interest
-----------
-----------
------------------- ----------------------
<S>
<C>
<C>
<C>
Class AF-1
5.75%
$102,615,000
$25,000.00
Class AF-2A (1)
$ 68,555,000
$25,000.00
Class AF-2B (1)
$ 60,939,000
$25,000.00
Class AF-2C (1)
$ 7,616,000
$25,000.00
Class AF-3A (1)
$ 88,739,000
$25,000.00
Class AF-3B (1)
$ 11,200,000
$25,000.00
Class IO
(1)
(2)
$25,000.00
Class PO
(3)
$ 5,728,823
Class MF-1
(4)
$ 7,513,000
$25,000.00
Class MF-2
(4)
$ 4,397,000
$25,000.00
Class MF-3
(4)
$ 2,748,000
$25,000.00
Class BF-1
(4)
$ 2,748,000
$25,000.00
Class BF-2
(4)
$ 2,015,000
$25,000.00
Class BF-3
(4)
$ 1,651,245
$25,000.00
Class P
N/A
N/A (5)
100%
</TABLE>
(1) The Certificate
Rate with respect to any Distribution Date (and the related
Accrual Period) will be 6.25%.
(2) The class IO
certificates are interest-only certificates. The class IO
certificates will accrue interest on their class notional
amount.
(3) The class PO
certificates are principal-only certificates and are not
entitled to payments of interest.
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<PAGE>
(4) The Certificate
Rate with respect to any Distribution Date (and the related
Accrual Period) will equal the fraction, expressed as a percentage,
the
numerator of which will equal the sum of (A) the product of (x) the
Group
One Remittance Rate and (y)
the Group One Subordinated Amount, (B) the
product of (x) the Group Two Remittance Rate and (y) the Group
Two
Subordinated Amount and (C) the product of (x) the Group Three
Remittance
Rate
and (y) the Group Three Subordinated Amount and the denominator
of
which will equal the sum of the Group One Subordinated Amount, the
Group
Two
Subordinated Amount and the Group Three Subordinated Amount.
(5) The Class P
Certificates will be entitled to receive Prepayment Penalties
on
the Prepayment Penalty Mortgage Loans.
The
Class IO Certificates consist of three components. With respect to
the
first Distribution Date, the notional amount of the Class IO
Component One will
be $9,843,605, the notional amount of the Class IO Component Two
will be
$8,948,750 and the notional amount of the Class IO Component Three
will be
$3,752,473.
The
Class PO Certificates consist of three components, referred to
herein
as the "Class PO Component One," "Class PO Component Two," and
"Class PO
Component Three."
As
of the Cut-off Date, the Mortgage Loans had an aggregate Stated
Principal Balance of $366,465,068.31.
In
consideration of the mutual agreements herein contained, the
Depositor,
the Trustee, Securities Administrator and the Master Servicer
hereby agree as
follows:
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ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless
otherwise expressly provided or unless the context otherwise
requires, shall
have the meanings specified in this Article.
Accepted Master Servicing Practices: With respect to any Mortgage
Loan, as
applicable, either (x) those customary mortgage master servicing
practices of
prudent mortgage servicing institutions that master service
mortgage loans of
the same type and quality as such Mortgage Loan in the jurisdiction
where the
related Mortgaged Property is located, to the extent applicable to
the Trustee
or the Master Servicer (except in its capacity as successor to a
Servicer), or
(y) as provided in the applicable Servicing Agreement, to the
extent applicable
to any Servicer, but in no event below the standard set forth in
clause (x).
Account: The Master Servicer Collection Account, Distribution
Account and
any Protected Account as the context may require.
Accountant's Attestation: As defined in Section 3.17.
Accrual Period: With respect to any Distribution Date, the calendar
month
immediately preceding the month in which the related Distribution
Date occurs.
Interest shall accrue on all Classes of Certificates and REMIC 1
Regular
Interests on the basis of a 360-day year consisting of twelve
30-day months.
Accrued Certificate Interest: With respect to each Class of
Certificates,
an amount equal to the interest accrued during the related Accrual
Period on the
Class Certificate Balance thereof at the then-applicable
Certificate Rate.
Accrued Certificate Interest on any Class of Certificates will be
reduced by the
amount of (i) Prepayment Interest Shortfalls (to the extent not
offset by the
related Servicer or Master Servicer with a payment of Compensating
Interest as
provided in Section 6.06), (ii) the interest portion of Realized
Losses
allocated to such Class of Certificates pursuant to Section 6.02
and (iii) any
other interest shortfalls not covered by the subordination provided
by the Class
M Certificates and Class B Certificates, including shortfalls as a
result of the
Relief Act or similar legislation or regulations, with all such
reductions
allocated among all of the Certificates in proportion to their
respective
amounts of Accrued Certificate Interest payable on such
Distribution Date which
would have resulted absent such reductions.
Additional Disclosure Notification: As defined in Section
3.18(b).
Additional Form 10-D Disclosure: As defined in Section 3.18(e).
Additional Form 10-K Disclosure: As defined in Section 3.18(h).
Adverse REMIC Event: As defined in Section 9.12(g).
Affiliate: As to any Person, any other Person controlling,
controlled by or
under common control with such Person. "Control" means the power to
direct the
management and policies of a Person, directly or indirectly,
whether through
ownership of voting securities, by contract or otherwise.
"Controlled" and
"Controlling" have meanings correlative to the foregoing. The
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<PAGE>
Master Servicer may conclusively presume that a Person is not an
Affiliate of
another Person unless a Responsible Officer of the Master Servicer
has actual
knowledge to the contrary.
Aggregate Subordinated Percentage: The meaning set forth in
Section
6.01(I)(b)(viii)(A) hereof.
Agreement: This Stack I Pooling and Servicing Agreement, including
the
exhibits hereto, and all amendments hereof and supplements
hereto.
Applicable Credit Rating: For any long-term deposit or security, a
credit
rating of AAA in the case of S&P or Aaa in the case of Moody's.
For any
short-term deposit or security, a rating of A-l+ in the case of
S&P or P-1 in
the case of Moody's.
Appraised Value: For any Mortgaged Property related to a Mortgage
Loan, the
amount set forth as the appraised value of such Mortgaged Property
in an
appraisal made for the mortgage originator in connection with its
origination of
the related Mortgage Loan.
Assessment of Compliance: As defined in Section 3.17.
Assignment: An assignment of the Mortgage, notice of transfer or
equivalent
instrument, in recordable form, sufficient under the laws of the
jurisdiction
wherein the related Mortgaged Property is located to reflect of
record the sale
of the Mortgage Loan to the Trustee for the benefit of
Certificateholders, which
assignment, notice of transfer or equivalent instrument may be in
the form of
one or more blanket assignments covering Mortgages secured by
Mortgaged
Properties located in the same county, if permitted by law and
accompanied by an
Opinion of Counsel to that effect.
Assignment Agreements: The CitiMortgage Assignment Agreement, the
IndyMac
Assignment Agreement, and the PHH Assignment Agreement, which are
attached
hereto as Exhibits I-1, I-2, and I-4, respectively.
Auction: The one-time auction conducted by the Securities
Administrator, as
described in Section 10.01(b) hereof.
Available Distribution Amount: As to each Mortgage Group or, as the
context
requires, all Mortgage Groups, on any Distribution Date, an amount
equal to the
amount on deposit in the Master Servicer Collection Account with
respect to such
Mortgage Group as of the close of business two Business Days
immediately
preceding the related Distribution Date (but prior to making any
deposits into
the Certificate Account on such date) except:
(a)
amounts received on particular Mortgage Loans in such Mortgage
Group as
late payments or other recoveries of principal or interest
(including any
Subsequent Recoveries, Liquidation Proceeds, Insurance Proceeds and
condemnation
awards) and respecting which the Servicer previously made an
unreimbursed
Advance of such amounts;
(b)
reimbursement for Nonrecoverable Advances and other amounts
permitted
to be withdrawn by the Servicer pursuant to Section 5.09 from, or
not required
to be deposited in, the Master Servicer Collection Account
attributable, in each
case, to Mortgage Loans in such Mortgage Group;
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<PAGE>
(c)
amounts representing the Servicing Fee attributable in each case to
the
Mortgage Loans in such Mortgage Group with respect to such
Distribution Date;
(d)
amounts representing all or part of a Monthly Payment with respect
to a
Mortgage Loan in such Mortgage Group due (i) after the related Due
Period or
(ii) on or prior to the Cut-off Date;
(e)
all Repurchase Proceeds, Principal Prepayments, Liquidation
Proceeds,
Insurance Proceeds, Subsequent Recoveries and condemnation awards
with respect
to Mortgage Loans in such Mortgage Group received after the related
Principal
Prepayment Period, and all related payments of interest
representing interest
for any period of time after the last day of the related Due Period
for such
Mortgage Loans; and
(f)
all income from eligible investments held in the Master
Servicer
Collection Account for the account of the Servicer.
Back-Up Certification: As defined in Section 3.18(k).
Bankruptcy Code: The United States Bankruptcy Code, as amended as
codified
in 11 U.S.C. Sections 101-1330.
Book-Entry Certificates: Any of the Certificates that shall be
registered
in the name of the Depository or its nominee, the ownership of
which is
reflected on the books of the Depository or on the books of a
Person maintaining
an account with the Depository (directly, as a "Depository
Participant", or
indirectly, as an indirect participant in accordance with the rules
of the
Depository and as described in Section 5.02 hereof). On the Closing
Date, the
Certificates (other than the Class A-R Certificate and the Private
Certificates)
shall be Book-Entry Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or
(ii) a day
on which the New York Stock Exchange or Federal Reserve is closed
or on which
banking institutions in the jurisdiction in which the Trustee, the
Master
Servicer, any Servicer or the Securities Administrator are
authorized or
obligated by law or executive order to be closed.
Carry-Over Subordinated Principal Amount: As of any Distribution
Date, with
respect to any Class of Subordinate Certificates, an amount, if
any, equal to
the amount of principal distributable to such Class on any prior
Distribution
Date that has not been so distributed.
Certificate: Any mortgage pass-through certificate issued pursuant
to this
Agreement, evidencing a beneficial ownership interest in that
portion of the
Trust Fund related to the Mortgage Loans, signed and countersigned
by the
Securities Administrator. For the avoidance of doubt, as defined
below, the term
"Stack II Certificate" shall be used to refer to any mortgage
pass-through
certificate issued pursuant to the Stack II Agreement, evidencing a
beneficial
ownership interest in that portion of the Trust Fund related to the
Stack II
Mortgage Loans, signed and countersigned by the Securities
Administrator.
Certificate Group: Each of the Class AF-1 Certificates, the Class
AF-2
Certificates and the Class AF-3 Certificates.
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<PAGE>
Certificate Owner: With respect to each Book-Entry Certificate,
any
beneficial owner thereof.
Certificate Rate: The per annum rate of interest borne by each
Class of
Certificates (other than the Class PO Certificates), which (i) in
the case of
the Class AF-1 will be 5.75%, (ii) which in the case of the Class
AF-2A, Class
AF-2B, Class AF-2C, Class AF-3A, Class AF-3B and Class IO
Certificates will be
6.25% and (iii) with respect to each Class of Subordinate
Certificates, will
equal the fraction, expressed as a percentage, the numerator of
which will equal
the sum of (A) the product of (x) the Group One Remittance Rate and
(y) the
Group One Subordinated Amount, (B) the product of (x) the Group Two
Remittance
Rate and (y) the Group Two Subordinated Amount and (C) the product
of (x) the
Group Three Remittance Rate and (y) the Group Three Subordinated
Amount and the
denominator of which will equal the sum of the Group One
Subordinated Amount,
the Group Two Subordinated Amount and the Group Three Subordinated
Amount.
Certificate Register: The register maintained pursuant to Section
5.02
hereof.
Certificateholder or Holder: The Person in whose name a Regular
Certificate
is registered in the Certificate Register, except that a
Disqualified
Organization or non-U.S. Person shall not be a Holder of the Class
A-R
Certificate for any purpose hereof.
Certification Parties: As defined in Section 3.18(k).
Certifying Person: As defined in Section 3.18(k).
CitiMortgage: CitiMortgage, Inc.
CitiMortgage Assignment Agreement: The Assignment, Assumption
and
Recognition Agreement, dated as of September 1, 2006, among
CitiMortgage, the
Depositor and the Seller pursuant to which the CitiMortgage
Servicing Agreement
and the rights of the Seller thereunder (other than the rights to
enforce the
representations and warranties with respect to the CitiMortgage
Loans) were
assigned to the Depositor for the benefit of the
Certificateholders.
CitiMortgage Loans: The Mortgage Loans serviced by CitiMortgage
pursuant to
the CitiMortgage Servicing Agreement.
CitiMortgage Servicing Agreement: The Mortgage Servicing Purchase
and Sale
Agreement dated as of September 1, 2006, between CitiMortgage as
seller and MLML
as purchaser, as at any time in effect.
Class: Collectively, Certificates which have the same priority of
payment
and bear the same class designation and the form of which is
identical except
for variation in the Percentage Interest evidenced thereby.
Class A Certificate: Any of the Class AF-1, Class AF-2A, Class
AF-2B, Class
AF-2C, Class AF-3A, Class AF-3B, Class IO or Class PO Certificates
as designated
on the face thereof substantially in the form annexed (other than
the Class A-R
Certificate) hereto as Exhibits A-1, executed by the Securities
Administrator
and authenticated and delivered by the Securities Administrator,
representing
the right to distributions as set forth herein and therein.
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<PAGE>
Class A Certificateholder: Any Holder of a Class A Certificate.
Class A-R Certificate: The Class A-R Certificate created and issued
under
the Stack II Agreement.
Class AF-1 Certificate: Any one of the Class AF-1 Certificates,
executed by
the Securities Administrator and authenticated and delivered by the
Securities
Administrator, senior in right of payment to the Class M and Class
B
Certificates, substantially in the form of the Class A Certificate
set forth in
Exhibit A-1 hereto.
Class AF-1 Interest Accrual Amount: With respect to any
Distribution Date,
one month's interest at the Certificate Rate on the Class
Certificate Balance of
the Class AF-1 Certificates minus (i) any Compensating Interest
Shortfall
allocated to the Class AF-1 Certificates on such Distribution Date
pursuant to
Section 6.07(a), (ii) any Realized Loss Interest Shortfall
allocated to the
Class AF-1 Certificates on such Distribution Date pursuant to
Section 6.07(b),
and (iii) any interest shortfall resulting from the Relief Act
allocated to the
Class AF-1 Certificates on such Distribution Date pursuant to
Section 6.07(c).
Class AF-1 Shortfall: With respect to any Distribution Date, the
amount
equal to the excess, if any, of the Class AF-1 Interest Accrual
Amount over the
amount actually distributed to the Class AF-1 Certificateholders on
such
Distribution Date pursuant to Section 6.01(I)(b)(i)(A).
Class AF-2 Certificate: The Class AF-2A, Class AF-2B and Class
AF-2C
Certificates, referred to collectively.
Class AF-2A Certificate: Any one of the Class AF-2A Certificates,
executed
by the Securities Administrator and authenticated and delivered by
the
Securities Administrator, senior in right of payment to the Class M
and Class B
Certificates, substantially in the form of the Class A Certificate
set forth in
Exhibit A-1 hereto.
Class AF-2A Interest Accrual Amount: With respect to any
Distribution Date,
one month's interest at the Certificate Rate on the Class
Certificate Balance of
the Class AF-2A Certificates minus (i) any Compensating Interest
Shortfall
allocated to the Class AF-2A Certificates on such Distribution Date
pursuant to
Section 6.07(a), (ii) any Realized Loss Interest Shortfall
allocated to the
Class AF-2A Certificates on such Distribution Date pursuant to
Section 6.07(b),
and (iii) any interest shortfall resulting from the Relief Act
allocated to the
Class AF-2A Certificates on such Distribution Date pursuant to
Section 6.07(c).
Class AF-2A Shortfall: With respect to any Distribution Date, the
amount
equal to the excess, if any, of the Class AF-2A Interest Accrual
Amount over the
amount actually distributed to the Class AF-2A Certificateholders
on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(B).
Class AF-2B Certificate: Any one of the Class AF-2B Certificates,
executed
by the Securities Administrator and authenticated and delivered by
the
Securities Administrator, senior in right of payment to the Class M
and Class B
Certificates, substantially in the form of the Class A Certificate
set forth in
Exhibit A-1 hereto.
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Class AF-2B Interest Accrual Amount: With respect to any
Distribution Date,
one month's interest at the Certificate Rate on the Class
Certificate Balance of
the Class AF-2B Certificates minus (i) any Compensating Interest
Shortfall
allocated to the Class AF-2B Certificates on such Distribution Date
pursuant to
Section 6.07(a), (ii) any Realized Loss Interest Shortfall
allocated to the
Class AF-2B Certificates on such Distribution Date pursuant to
Section 6.07(b),
and (iii) any interest shortfall resulting from the Relief Act
allocated to the
Class AF-2B Certificates on such Distribution Date pursuant to
Section 6.07(c).
Class AF-2B Shortfall: With respect to any Distribution Date, the
amount
equal to the excess, if any, of the Class AF-2B Interest Accrual
Amount over the
amount actually distributed to the Class AF-2B Certificateholders
on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(C).
Class AF-2C Certificate: Any one of the Class AF-2C Certificates,
executed
by the Securities Administrator and authenticated and delivered by
the
Securities Administrator, senior in right of payment to the Class M
and Class B
Certificates, substantially in the form of the Class A Certificate
set forth in
Exhibit A-1 hereto.
Class AF-2C Interest Accrual Amount: With respect to any
Distribution Date,
one month's interest at the Certificate Rate on the Class
Certificate Balance of
the Class AF-2C Certificates minus (i) any Compensating Interest
Shortfall
allocated to the Class AF-2C Certificates on such Distribution Date
pursuant to
Section 6.07(a), (ii) any Realized Loss Interest Shortfall
allocated to the
Class AF-2C Certificates on such Distribution Date pursuant to
Section 6.07(b),
and (iii) any interest shortfall resulting from the Relief Act
allocated to the
Class AF-2C Certificates on such Distribution Date pursuant to
Section 6.07(c).
Class AF-2C Shortfall: With respect to any Distribution Date, the
amount
equal to the excess, if any, of the Class AF-2C Interest Accrual
Amount over the
amount actually distributed to the Class AF-2C Certificateholders
on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(D).
Class AF-3 Certificate: The Class AF-3A and Class AF-3B
Certificates,
referred to collectively.
Class AF-3A Certificate: Any one of the Class AF-3A Certificates,
executed
by the Securities Administrator and authenticated and delivered by
the
Securities Administrator, substantially in the form of the Class A
Certificate
set forth in Exhibit A-1 hereto.
Class AF-3A Interest Accrual Amount: With respect to any
Distribution Date,
one month's interest at the Certificate Rate on the Class
Certificate Balance of
the Class AF-3A Certificates minus (i) any Compensating Interest
Shortfall
allocated to the Class AF-3A Certificates on such Distribution Date
pursuant to
Section 6.07(a), (ii) any Realized Loss Interest Shortfall
allocated to the
Class AF-3A Certificates on such Distribution Date pursuant to
Section 6.07(b),
and (iii) any interest shortfall resulting from the Relief Act
allocated to the
Class AF-3A Certificates on such Distribution Date pursuant to
Section 6.07(c).
Class AF-3A Shortfall: With respect to any Distribution Date, the
amount
equal to the excess, if any, of the Class AF-3A Interest Accrual
Amount over the
amount actually distributed
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to the Class AF-3A Certificateholders on such Distribution Date
pursuant to
Section 6.01(I)(b)(i)(E).
Class AF-3B Certificate: Any one of the Class AF-3B Certificates,
executed
by the Securities Administrator and authenticated and delivered by
the
Securities Administrator, senior in right of payment to the Class M
and Class B
Certificates, substantially in the form of the Class A Certificate
set forth in
Exhibit A-1 hereto.
Class AF-3B Interest Accrual Amount: With respect to any
Distribution Date,
one month's interest at the Certificate Rate on the Class
Certificate Balance of
the Class AF-3B Certificates minus (i) any Compensating Interest
Shortfall
allocated to the Class AF-3B Certificates on such Distribution Date
pursuant to
Section 6.07(a), (ii) any Realized Loss Interest Shortfall
allocated to the
Class AF-3B Certificates on such Distribution Date pursuant to
Section 6.07(b),
and (iii) any interest shortfall resulting from the Relief Act
allocated to the
Class AF-3B Certificates on such Distribution Date pursuant to
Section 6.07(c).
Class AF-3B Shortfall: With respect to any Distribution Date, the
amount
equal to the excess, if any, of the Class AF-3B Interest Accrual
Amount over the
amount actually distributed to the Class AF-3B Certificateholders
on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(F).
Class B Certificate: Any one of the Class BF-1, Class BF-2 or Class
BF-3
Certificates as designated on the face thereof substantially in the
form annexed
hereto as Exhibit A-2, executed by the Securities Administrator
and
authenticated and delivered by the Securities Administrator,
representing the
right to distributions as set forth herein and therein.
Class B Certificateholder: Any Holder of a Class B Certificate.
Class B Percentage: As of any Distribution Date, the difference
between
100% and the sum of (i) the Class A Percentage and (ii) the Class M
Percentage
for such Distribution Date.
Class BF-1 Certificate: Any one of the Class BF-1 Certificates
executed by
the Securities Administrator and authenticated and delivered by the
Securities
Administrator, subordinated in right of payment to the Class A and
Class M
Certificates, substantially in the form of the Class B Certificate
set forth in
Exhibit A-2 hereto.
Class BF-1 Interest Accrual Amount: With respect to any
Distribution Date,
one month's interest at the Certificate Rate on the Class
Certificate Balance of
the Class BF-1 Certificates minus (i) any Compensating Interest
Shortfall
allocated to the Class BF-1 Certificates on such Distribution Date
pursuant to
Section 6.07(a), (ii) any Realized Loss Interest Shortfall
allocated to the
Class BF-1 Certificates on such Distribution Date pursuant to
Section 6.07(b)
and (iii) any interest shortfall resulting from the Relief Act
allocated to the
Class BF-1 Certificates on such Distribution Date pursuant to
Section 6.07(c).
Class BF-1 Shortfall: With respect to any Distribution Date, the
amount
equal to the excess, if any, of the Class BF-1 Interest Accrual
Amount over the
amount actually distributed to the Class BF-1 Certificates on such
Distribution
Date pursuant to Section 6.01(I)(d)(i) (A) and (B).
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Class BF-2 Certificate: Any one of the Class BF-2 Certificates
executed by
the Securities Administrator and authenticated and delivered by the
Securities
Administrator, subordinated in right of payment to the Class A,
Class M and
Class BF-1 Certificates, substantially in the form of the Class B
Certificate
set forth in Exhibit A-2 hereto.
Class BF-2 Interest Accrual Amount: With respect to any
Distribution Date,
one month's interest at the Certificate Rate on the Class
Certificate Balance of
the Class BF-2 Certificates minus (i) any Compensating Interest
Shortfall
allocated to the Class BF-2 Certificates on such Distribution Date
pursuant to
Section 6.07(a), (ii) any Realized Loss Interest Shortfall
allocated to the
Class BF-2 Certificates on such Distribution Date pursuant to
Section 6.07(b)
and (iii) any interest shortfall resulting from the Relief Act
allocated to the
Class BF-2 Certificates on such Distribution Date pursuant to
Section 6.07(c).
Class BF-2 Shortfall: With respect to any Distribution Date, the
amount
equal to the excess, if any, of the Class BF-2 Interest Accrual
Amount over the
amount actually distributed to the Class BF-2 Certificates on such
Distribution
Date pursuant to Section 6.01(I)(d)(ii) (A) and (B).
Class BF-3 Certificate: Any one of the Class BF-3 Certificates
executed by
the Securities Administrator and authenticated and delivered by the
Securities
Administrator, subordinated in right of payment to the Class A,
Class M, Class
BF-1 and Class BF-2 Certificates, substantially in the form of the
Class B
Certificate set forth in Exhibit A-2 hereto.
Class BF-3 Interest Accrual Amount: With respect to any
Distribution Date,
one month's interest at the Certificate Rate on the Class
Certificate Balance of
the Class BF-3 Certificates minus (i) any Compensating Interest
Shortfall
allocated to the Class BF-3 Certificates on such Distribution Date
pursuant to
Section 6.07(a), (ii) any Realized Loss Interest Shortfall
allocated to the
Class BF-3 Certificates on such Distribution Date pursuant to
Section 6.07(b)
and (iii) any interest shortfall resulting from the Relief Act
allocated to the
Class BF-3 Certificates on such Distribution Date pursuant to
Section 6.07(c).
Class BF-3 Shortfall: With respect to any Distribution Date, the
amount
equal to the excess, if any, of the Class BF-3 Interest Accrual
Amount over the
amount actually distributed to the Class BF-3 Certificates on such
Distribution
Date pursuant to Section 6.01(I)(d)(iii) (A) and (B).
Class Certificate Balance: With respect to any Certificate (other
than the
Class IO Certificates) as of any date of determination, the Class
Certificate
Balance of such Certificate on the Distribution Date immediately
prior to such
date of determination, plus any Subsequent Recoveries added to the
Class
Certificate Balance of such Certificate pursuant to Section 6.01,
and reduced by
the aggregate of (a) all distributions of principal made thereon on
such
immediately prior Distribution Date and (b) without duplication of
amounts
described in clause (a) above, reductions in the Class Certificate
Balance
thereof in connection with allocations thereto of Realized Losses
on the
Mortgage Loans and Extraordinary Trust Fund Expenses on such
immediately prior
Distribution Date (or, in the case of any date of determination up
to and
including the initial Distribution Date, the initial Class
Certificate Balance
of such Certificate, as stated on the face thereof); provided,
however, that the
Class Certificate Balance of each Subordinate Certificate of the
Class of
Subordinate Certificates outstanding with the highest
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<PAGE>
numerical designation at any given time shall be calculated to
equal the
Percentage Interest evidenced by such Certificate multiplied by the
excess, if
any, of (A) the then aggregate Stated Principal Balance of the
Mortgage Loans
over (B) the then aggregate Class Certificate Balance of all other
Classes of
Certificates then outstanding.
Class IO Certificate: Any one of the Class IO Certificates,
executed by the
Securities Administrator and authenticated and delivered by the
Securities
Administrator, senior in right of payment to the Class M and Class
B
Certificates, substantially in the form of the Class A Certificate
set forth in
Exhibit A-1 hereto.
Class IO Component One: The portion of the Class IO Certificate
so
designated under the heading "The Certificates" in the Preliminary
Statement
hereto.
Class IO Component One Interest Accrual Amount: With respect to
any
Distribution Date, one month's interest at the Class IO Certificate
Rate on the
Class IO Component One Notional Amount minus (i) any Compensating
Interest
Shortfall allocated to Class IO Component One on such Distribution
Date pursuant
to Section 6.07(a), (ii) any Realized Loss Interest Shortfall
allocated to Class
IO Component One on such Distribution Date pursuant to Section
6.07(b) and (iii)
any interest shortfall resulting from the Servicemembers Civil
Relief Act
allocated to the Class IO Component One on such Distribution Date
pursuant to
Section 6.07(c).
Class IO Component One Notional Amount: With respect to any
Distribution
Date, an amount equal to the product of the aggregate Stated
Principal Balance
of the Non-Discount Mortgage Loans in Mortgage Group One and a
fraction the
numerator of which is the Group One Stripped Interest Rate and the
denominator
of which is 6.25%. The Class IO Component One Notional Amount for
the first
Distribution Date will be $9,843,605.
Class IO Component One Shortfall: With respect to any Distribution
Date the
amount equal to the excess, if any, of the Class IO Component One
Interest
Accrual Amount over the amount actually distributed to the Class
IO
Certificateholders on such Distribution Date pursuant to
Section
6.01(I)(b)(i)(G)(1).
Class IO Component Two: The portion of the Class IO Certificate
so
designated under the heading "The Certificates" in the Preliminary
Statement
hereto.
Class IO Component Two Interest Accrual Amount: With respect to
any
Distribution Date, one month's interest at the Class IO Certificate
Rate on the
Class IO Component Two Notional Amount minus (i) any Compensating
Interest
Shortfall allocated to Class IO Component Two on such Distribution
Date pursuant
to Section 6.07(a), (ii) any Realized Loss Interest Shortfall
allocated to Class
IO Component Two on such Distribution Date pursuant to Section
6.07(b) and (iii)
any interest shortfall resulting from the Servicemembers Civil
Relief Act
allocated to the Class IO Component Two on such Distribution Date
pursuant to
Section 6.07(c).
Class IO Component Two Notional Amount: With respect to any
Distribution
Date, an amount equal to the product of the aggregate Stated
Principal Balance
of the Non-Discount Mortgage Loans in Mortgage Group Two and a
fraction the
numerator of which is the Group
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<PAGE>
Two Stripped Interest Rate and the denominator of which is 6.25%.
The Class IO
Component Two Notional Amount for the first Distribution Date will
be
$8,948,750.
Class IO Component Two Shortfall: With respect to any Distribution
Date the
amount equal to the excess, if any, of the Class IO Component Two
Interest
Accrual Amount over the amount actually distributed to the Class
IO
Certificateholders on such Distribution Date pursuant to
Section
6.01(I)(b)(i)(G)(2).
Class IO Component Three: The portion of the Class IO Certificate
so
designated under the heading "The Certificates" in the Preliminary
Statement
hereto.
Class IO Component Three Interest Accrual Amount: With respect to
any
Distribution Date, one month's interest at the Class IO Certificate
Rate on the
Class IO Component Three Notional Amount minus (i) any Compensating
Interest
Shortfall allocated to Class IO Component Three on such
Distribution Date
pursuant to Section 6.07(a), (ii) any Realized Loss Interest
Shortfall allocated
to Class IO Component Three on such Distribution Date pursuant to
Section
6.07(b) and (iii) any interest shortfall resulting from the
Servicemembers Civil
Relief Act allocated to the Class IO Component Three on such
Distribution Date
pursuant to Section 6.07(c).
Class IO Component Three Notional Amount: With respect to any
Distribution
Date, an amount equal to the product of the aggregate Stated
Principal Balance
of the Non-Discount Mortgage Loans in Mortgage Group Three and a
fraction the
numerator of which is the Group Three Stripped Interest Rate and
the denominator
of which is 6.25%. The Class IO Component Three Notional Amount for
the first
Distribution Date will be $3,752,473.
Class IO Component Three Shortfall: With respect to any
Distribution Date
the amount equal to the excess, if any, of the Class IO Component
Three Interest
Accrual Amount over the amount actually distributed to the Class
IO
Certificateholders on such Distribution Date pursuant to
Section
6.01(I)(b)(i)(G)(3).
Class IO Interest Accrual Amount: The sum of the Class IO Component
One
Interest Accrual Amount, the Class IO Component Two Interest
Accrual Amount and
the Class IO Component Three Interest Accrual Amount.
Class IO Notional Amount: With respect to any Distribution Date, an
amount
equal to the sum of the Class IO Component One Notional Amount,
Class IO
Component Two Notional Amount and the Class IO Component Three
Notional Amount.
The Class IO Notional Amount for the first Distribution Date will
be
$22,544,828.
Class IO Shortfall: The sum of the Class IO Component One
Shortfall, the
Class IO Component Two Shortfall and the Class IO Component Three
Shortfall.
Class M Certificate: Any one of the Class MF-1, Class MF-2 or Class
MF-3
Certificates as designated on the face thereof substantially in the
form annexed
hereto as Exhibit A-1, executed by the Securities Administrator
and
authenticated and delivered by the Securities Administrator,
representing the
right to distributions as set forth herein and therein.
Class M Certificateholder: Any Holder of a Class M Certificate.
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<PAGE>
Class M Interest Accrual Amount: With respect to any Distribution
Date, one
(1) month's interest at the Certificate Rate on the Class
Certificate Balance of
the Class M Certificates minus (i) any Compensating Interest
Shortfall allocated
to the Class M Certificates on such Distribution Date pursuant to
Section
6.07(a), (ii) any Realized Loss Interest Shortfall allocated to the
Class M
Certificates on such Distribution Date pursuant to Section 6.05(b)
and (iii) any
interest shortfall resulting from the Relief Act allocated to the
Class M
Certificates on such Distribution Date pursuant to Section
6.07(c)].
Class M Percentage: The Class MF-1 Percentage, Class MF-2
Percentage or
Class MF-3 Percentage.
Class M Principal Balance: As of any Distribution Date, (a) the
Class M
Principal Balance for the immediately preceding Distribution Date
less (b)
amounts distributed to the Class M Certificateholders on such
preceding
Distribution Date allocable to principal (including the principal
portion of
Advances of the Servicer made pursuant to Section 6.06 and Realized
Losses
allocated to the Class M Certificates pursuant to Section 6.02);
provided that
the Class M Principal Balance on the first Distribution Date shall
be the
Original Class M Principal Balance, and provided further that if
the aggregate
Class Certificate Balance of the Class B Certificates has been
reduced to zero,
as of any Distribution Date, the Class M Principal Balance will
equal the excess
of the Mortgage Pool Principal Balance (together with the portion
of any Monthly
Payment due but not paid with respect to which an Advance has not
been made)
over the Class A Principal Balance.
Class MF-1 Percentage: With respect to any Distribution Date, the
lesser of
100% and a fraction, expressed as a percentage, the numerator of
which is the
aggregate Class Certificate Balance of the Class MF-1 Certificates
immediately
prior to such date and the denominator of which is the aggregate
Stated
Principal Balance of all of the Mortgage Loans (or related REO
Properties)
immediately prior to such Distribution Date.
Class MF-2 Percentage: With respect to any Distribution Date, the
lesser of
100% and a fraction, expressed as a percentage, the numerator of
which is the
aggregate Class Certificate Balance of the Class MF-2 Certificates
immediately
prior to such date and the denominator of which is the aggregate
Stated
Principal Balance of all of the Mortgage Loans (or related REO
Properties)
immediately prior to such Distribution Date.
Class MF-3 Percentage: With respect to any Distribution Date, the
lesser of
100% and a fraction, expressed as a percentage, the numerator of
which is the
aggregate Class Certificate Balance of the Class MF-3 Certificates
immediately
prior to such date and the denominator of which is the aggregate
Stated
Principal Balance of all of the Mortgage Loans (or related REO
Properties)
immediately prior to such Distribution Date.
Class P Certificate: Any one of the Class P Certificates as
designated on
the face thereof substantially in the forum of annexed hereto as
Exhibit A-4,
executed by the Securities Administrator and authenticated and
delivered by the
Securities Administrator representing the right to distributions of
Prepayment
Penalties received on the Prepayment Penalty Mortgage Loans as set
forth herein
and pursuant to the Stack II Agreement.
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<PAGE>
Class PO Amount: With respect to any Distribution Date, the
applicable PO
Percentage of (i) all principal received on or in respect of each
Discount
Mortgage Loan (exclusive of any amounts in respect of any Monthly
Payment)
during the related Principal Prepayment Period and (ii) all
principal received
as part of a Monthly Payment on or in respect of a Discount
Mortgage Loan during
the related Due Period.
Class PO Certificate: Any one of the Class PO Certificates,
executed by the
Securities Administrator and authenticated and delivered by the
Securities
Administrator, senior in right of payment to the Class M and Class
B
Certificates, substantially in the form of the Class A Certificate
set forth in
Exhibit A-1 hereto.
Class PO Component One: The portion of the Class PO Certificates
so
designated under the heading "The Certificates" in the Preliminary
Statement
hereto.
Class PO Component Two: The portion of the Class PO Certificates
so
designated under the heading "The Certificates" in the Preliminary
Statement
hereto.
Class PO Component Three: The portion of the Class PO Certificates
so
designated under the heading "The Certificates" in the Preliminary
Statement
hereto.
Class PO Shortfall Amount: With respect to any Distribution Date
prior to
and including the Credit Support Depletion Date, to the extent of
amounts
available to pay the Subordinated Optimal Principal Amount (without
regard to
clause (b)(2) of the definition of such term), an amount equal to
the sum of (i)
the applicable PO Percentage of the principal portion of any
Realized Loss with
respect to a Discount Mortgage Loan and (ii) the sum of amounts, if
any, by
which the amounts specified in clause (i) with respect to each
prior
Distribution Date exceeded the amount actually distributed in
respect thereof on
such prior Distribution Date and not subsequently distributed to
the Class PO
Certificateholders.
Class Subordination Percentage: With respect to any Distribution
Date and
each Class of Subordinate Certificates, the fraction (expressed as
a percentage)
the numerator of which is the Class Certificate Balance of such
Class of
Subordinate Certificates immediately prior to such Distribution
Date and the
denominator of which is the aggregate of the Class Certificate
Balances of all
Classes of Certificates immediately prior to such Distribution
Date.
Class UT-R Interest: The sole class of residual interest in the
Upper Tier
REMIC for purposes of the REMIC Provisions. The Class UT-R Interest
shall have
neither a principal amount nor an interest rate. The Class UT-R
Interest shall
be represented by the Class A-R Certificate.
Closing Date: September 29, 2006.
Code: The Internal Revenue Code of 1986, as amended.
Commission: The Securities and Exchange Commission.
Compensating Interest Shortfall: As defined in Section 6.07(a).
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Cooperative: A corporation that has been formed for the purpose
of
cooperative apartment ownership.
Cooperative Assets: Shares issued by Cooperatives, the related
Cooperative
Lease and any other collateral securing the Cooperative Loans.
Cooperative Lease: With respect to a Cooperative Loan, the
proprietary
lease or occupancy agreement with respect to the cooperative
apartment occupied
by the Mortgagor and relating to the related Cooperative Assets,
which lease or
agreement confers an exclusive right to the holder of such
Cooperative Assets to
occupy such apartment.
Cooperative Loan: The indebtedness of a Mortgagor evidenced by a
Mortgage
Note which is secured by Cooperative Assets and which is being sold
to the
Depositor pursuant to this Agreement, the Mortgage Loans so sold
being
identified in the Mortgage Loan Schedule.
Cooperative Stock: With respect to a Cooperative Loan, the
single
outstanding class of stock, partnership interest or other ownership
instrument
in the related Cooperative.
Corporate Trust Office: With respect to the Trustee, the
principal
corporate trust office of the Trustee at which at any particular
time its
corporate trust business in connection with this Agreement shall
be
administered, which office at the date of the execution of this
instrument is
located at HSBC Bank USA, National Association, 452 Fifth Avenue,
New York, New
York 10018, Attention: Issuer Services - Merrill Lynch Mortgage
Investors, Inc.,
MLMI Series 2006-AF1, or at such other address as the Trustee may
designate from
time to time by notice to the Certificateholders, the Depositor and
the Master
Servicer and with respect to the Securities Administrator, for
Certificate
transfer purposes, Wells Fargo Center, Sixth Street and Marquette
Avenue,
Minneapolis, Minnesota 55479, Attn: Client Service Manager - MLMI
2006-AF1, and
for all other purposes, 9062 Old Annapolis Road, Columbia,
Maryland, 21045,
Attn: Corporate Trust Services - MLMI 2006-AF1.
Corresponding Class or Classes of Certificates: With respect to
each REMIC
2 Regular Interest, the Class or Classes of Certificates appearing
opposite such
REMIC 2 Regular Interest as described in the Preliminary Statement
hereto.
Credit Support: With respect to each Class of Subordinate
Certificates
(other than the Class BF-3 Certificates), the level of credit
support supporting
such Class, expressed as a percentage of the aggregate outstanding
Class
Certificate Balance of all Classes of Certificates (other than the
Class PO
Certificates). With respect to each Distribution Date, Credit
Support for each
such Class will equal in each case the percentage, rounded to two
decimal
places, obtained by dividing the aggregate outstanding Class
Certificate Balance
immediately prior to such Distribution Date of all Classes of
Subordinate
Certificates having higher numerical Class designations than such
Class by the
aggregate outstanding Class Certificate Balance of all Classes of
Certificates
(other than the Class PO Certificates) immediately prior to such
Distribution
Date. For purposes of this defined term, the Class B Certificates
shall be
considered as having higher numerical Class designations than the
Class M
Certificates.
Credit Support Depletion Date: The first Distribution Date on which
the
aggregate Class Certificate Balance of the Subordinate Certificates
is reduced
to zero.
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<PAGE>
Curtailment: Any Principal Prepayment made by a Mortgagor which is
not a
Principal Prepayment in Full.
Custodial Agreement: An agreement, dated as of the Closing Date
among the
Depositor, the Master Servicer, the Securities Administrator, the
Trustee and
the Custodian in substantially the form of Exhibit G hereto.
Custodian: Wells Fargo Bank, N.A., including any successors in
interest, or
any successor custodian appointed pursuant to the provisions hereof
and of the
Custodial Agreement.
Cut-off Date: September 1, 2006.
Debt
Service Reduction: Any reduction of the Monthly Payments which
a
Mortgagor is obligated to pay with respect to a Mortgage Loan as a
result of any
proceeding under the Bankruptcy Code or any other similar state law
or other
proceeding.
Defective Mortgage Loan: A Mortgage Loan replaced or to be replaced
by one
or more Substitute Mortgage Loans.
Deficient Valuation: With respect to any Mortgage Loan, a valuation
of the
related Mortgaged Property by a court of competent jurisdiction in
an amount
less than the then outstanding principal balance of the Mortgage
Loan, which
valuation results from a proceeding initiated under the Bankruptcy
Code.
Definitive Certificates: As defined in Section 5.06.
Depositor: Merrill Lynch Mortgage Investors, Inc., a Delaware
corporation,
or any successor in interest.
Depository: The Depository Trust Company, the nominee of which is
Cede &
Co., or any successor thereto.
Depository Participant: A broker, dealer, bank or other
financial
institution or other Person for whom from time to time the
Depository effects
book-entry transfers and pledges of securities deposited with the
Depository.
Designated Depository Institution: A depository institution
(commercial
bank, federal savings bank, mutual savings bank or savings and loan
association)
or trust company (which may include the Trustee), the deposits of
which are
fully insured by the FDIC to the extent provided by law.
Determination Date: With respect to each Mortgage Loan, the
Determination
Date as defined in the related Servicing Agreement.
Discount Mortgage Loan: A Mortgage Loan having a Net Mortgage Rate
less
than the Remittance Rate.
Disqualified Organization: A "disqualified organization" as defined
in
Section 860 E(e)(5) of the Code.
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<PAGE>
Distribution Account: The trust account or accounts created and
maintained
pursuant to Section 4.04, which shall be denominated "Wells Fargo
Bank, National
Association, as Securities Administrator for HSBC Bank USA,
National
Association, as Trustee f/b/o holders of Merrill Lynch Mortgage
Investors, Inc.,
Mortgage Pass-Through Certificates, MLMI Series 2006-AF1 -
Distribution Account
(Stack I)." The Distribution Account shall be an Eligible
Account.
Distribution Account Deposit Date: The Business Day prior to
each
Distribution Date.
Distribution Date: The 25th day of any month, beginning in October
2006,
or, if such 25th day is not a Business Day, the Business Day
immediately
following.
Due
Date: With respect to each Mortgage Loan, the date in each month
on
which its Monthly Payment is due if such due date is the first day
of a month
and otherwise is deemed to be the first day of the following month
or such other
date specified in the related Servicing Agreement.
Due
Period: With respect to any Distribution Date and each Mortgage
Loan,
the period commencing on the second day of the month preceding the
month in
which the Distribution Date occurs and ending at the close of
business on the
first day of the month in which the Distribution Date occurs.
Eligible Account: Any of (i) a segregated account maintained with a
federal
or state chartered depository institution (A) the short-term
obligations of
which are rated A-1 or better by S&P and P-1 by Moody's at the
time of any
deposit therein or (B) insured by the FDIC (to the limits
established by such
Corporation), the uninsured deposits (as evidenced in writing by
the Rating
Agencies that use of any such account as the Distribution Account
will not have
an adverse effect on the then-current ratings assigned to the
Classes of
Certificates then rated by the Rating Agencies) in which account
are otherwise
secured such that, as evidenced by an Opinion of Counsel (obtained
by the Person
requesting that the account be held pursuant to this clause (i))
delivered to
the Securities Administrator prior to the establishment of such
account, the
Certificateholders will have a claim with respect to the funds in
such account
and a perfected first priority security interest against any
collateral (which
shall be limited to Permitted Investments, each of which shall
mature not later
than the Business Day immediately preceding the Distribution Date
next following
the date of investment in such collateral or the Distribution Date
if such
Permitted Investment is an obligation of the institution that
maintains the
Distribution Account) securing such funds that is superior to
claims of any
other depositors or general creditors of the depository institution
with which
such account is maintained, (ii) a segregated trust account or
accounts
maintained with a federal or state chartered depository institution
or trust
company with trust powers acting in its fiduciary capacity or (iii)
a segregated
account or accounts of a depository institution acceptable to the
Rating
Agencies (as evidenced in writing by the Rating Agencies that use
of any such
account as the Distribution Account will not have an adverse effect
on the
then-current ratings assigned to the Classes of the Certificates
then rated by
the Rating Agencies). Eligible Accounts may bear interest.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
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ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that would satisfy the
requirements of
Prohibited Transaction Exemption 90-29, Exemption Application No.
D-8012, 55
Fed. Reg. 21459 (1990), as amended, granted to the Underwriter by
the United
States Department of Labor (or any other applicable underwriter's
exemption
granted by the United States Department of Labor), except, in
relevant part, for
the requirement that the certificates have received a rating at the
time of
acquisition that is in one of the three (or four, in the case of a
"designated
transaction") highest generic rating categories by at least one of
the Rating
Agencies.
ERISA Restricted Certificates: Any of the Class BF-1, Class BF-2,
Class
BF-3 or Class P Certificates, and any other Certificate, as long as
the
acquisition and holding of such Certificate is not covered by and
exempt under
an underwriter's exemption.
Event of Default: An event of default described in Section
8.01.
Excess Liquidation Proceeds: To the extent that such amount is not
required
by law to be paid to the related Mortgagor, the amount, if any, by
which
Liquidation Proceeds with respect to a Liquidated Mortgage Loan
exceed the sum
of (i) the Outstanding Principal Balance of such Mortgage Loan and
accrued but
unpaid interest at the related Mortgage Interest Rate through the
last day of
the month in which the related Liquidation Date occurs, plus (ii)
related
Liquidation Expenses.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Extraordinary Loss: Any Realized Loss or portion thereof caused by
or
resulting from:
(i) nuclear or chemical reaction or nuclear radiation or
radioactive
or
chemical contamination, all whether controlled or uncontrolled
and
whether such loss be direct or indirect, proximate or remote;
(ii) hostile or warlike action in time of peace or war,
including
action in hindering, combating or defending against an actual,
impending or
expected attack by any government or sovereign power, de jure or de
facto,
or
by any authority maintaining or using military, naval or air
forces, or
by
military, naval or air forces, or by an agent of any such
government,
power, authority or forces;
(iii) any weapon of war employing atomic fission or radioactive
forces
whether in time of peace or war, and
(iv) insurrection, rebellion, revolution, civil war, usurped power
or
action taken by governmental authority in hindering, combating or
defending
against such an occurrence, seizure or destruction under quarantine
or
customs regulations, confiscation by order of any government or
public
authority, or risks of contraband or illegal transactions or
trade.
Extraordinary Trust Fund Expenses: Any amounts reimbursable to the
Master
Servicer or the Depositor pursuant to this Agreement, including but
not limited
to Sections 4.03, 4.05 and 7.04, any amounts reimbursable to the
Trustee and the
Securities Administrator from the Trust
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Fund pursuant to this Agreement, including but not limited to
Section 9.05, and
any other costs, expenses, liabilities and losses borne by the
Trust Fund
(exclusive of any cost, expense, liability or loss that is specific
to a
particular Mortgage Loan or REO Property and is taken into account
in
calculating a Realized Loss in respect thereof) for which the Trust
Fund has not
and, in the reasonable good faith judgment of the Securities
Administrator,
shall not, obtain reimbursement or indemnification from any other
Person.
Fannie Mae: Federal National Mortgage Association or any successor
thereto.
FDIC: Federal Deposit Insurance Corporation or any successor
thereto.
Final Certification: The certification substantially in the form of
Exhibit
Two to the Custodial Agreement.
Fitch: Fitch Ratings or its successor in interest.
Form
8-K Disclosure Information: As defined in Section 3.18(a).
Freddie Mac: Freddie Mac, formerly the Federal Home Loan
Mortgage
Corporation, or any successor thereto.
Global Certificate: Any Private Certificate registered in the name
of the
Depository or its nominee, beneficial interests in which are
reflected on the
books of the Depository or on the books of a Person maintaining an
account with
such Depository (directly or as an indirect participant in
accordance with the
rules of such depository).
Group One Class PO Amount: With respect to any Distribution Date,
the
applicable PO Percentage of (i) all principal received on or in
respect of each
Discount Mortgage Loan in Mortgage Group One (exclusive of any
amounts in
respect of any Monthly Payment) during the related Principal
Prepayment Period
and (ii) all principal received as part of a Monthly Payment on or
in respect of
a Discount Mortgage Loan in Mortgage Group One during the related
Due Period.
Group One Mortgage Loans: The Mortgage Loans in Mortgage Group
One.
Group One Mortgage
Pool Principal Balance: As of any date of determination,
the aggregate of the Principal Balances of each Outstanding
Mortgage Loan in
Mortgage Group One on such date of determination less the principal
portion of
any Monthly Payment due but not paid with respect to which an
Advance has not
been made.
Group One Non-PO Allocated Amount: At the time of any
determination, the
amount derived by (i) multiplying the outstanding Principal Balance
of each
Mortgage Loan in Mortgage Group One on such date of determination
by the Non-PO
Percentage with respect to such Mortgage Loan and (ii) summing the
results.
Group One Remittance Rate: 5.75% per annum.
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Group One Stripped Interest Rate: The excess of the weighted
average Net
Mortgage Rate of the Group One Mortgage Loans that are Non-Discount
Mortgage
Loans over the Group One Remittance Rate.
Group One Subordinated Amount: For any Distribution Date, the
excess of the
Group One Non-PO Allocated Amount immediately following the
preceding
Distribution Date (or as of the Cut-off Date if there is no
preceding
Distribution Date) over the aggregate outstanding Principal Balance
of the Class
AF-1 Certificates (prior to giving effect to distributions to be
made on such
Distribution Date and allocation of losses to be made on such
Distribution
Date).
Group Two Class PO Amount: With respect to any Distribution Date,
the
applicable PO Percentage of (i) all principal received on or in
respect of each
Discount Mortgage Loan in Mortgage Group Two (exclusive of any
amounts in
respect of any Monthly Payment) during the related Principal
Prepayment Period
and (ii) all principal received as part of a Monthly Payment on or
in respect of
a Discount Mortgage Loan in Mortgage Group Two during the related
Due Period.
Group Two Mortgage Loans: The Mortgage Loans in Mortgage Group
Two.
Group Two Mortgage Pool Principal Balance: As of any date of
determination,
the aggregate of the Principal Balances of each Outstanding
Mortgage Loan in
Mortgage Group Two on such date of determination less the principal
portion of
any Monthly Payment due but not paid with respect to which an
Advance has not
been made.
Group Two Non-PO Allocated Amount: At the time of any
determination, the
amount derived by (i) multiplying the outstanding Principal Balance
of each
Mortgage Loan in Mortgage Group Two on such date of determination
by the Non-PO
Percentage with respect to such Mortgage Loan and (ii) summing the
results.
Group Two Remittance Rate: 6.25% per annum.
Group Two Stripped Interest Rate: The excess of the weighted
average Net
Mortgage Rate of the Group Two Mortgage Loans that are Non-Discount
Mortgage
Loans over the Group Two Remittance Rate.
Group Two Subordinated Amount: For any Distribution Date, the
excess of the
Group Two Non-PO Allocated Amount immediately following the
preceding
Distribution Date (or as of the Cut-off Date, if there is no
preceding
Distribution Date) over the aggregate outstanding Principal Balance
of the Class
AF-2A, Class AF-2B and Class AF-2C Certificates (prior to giving
effect to
distributions to be made on such Distribution Date and allocation
of losses to
be made on such Distribution Date).
Group Three Class PO Amount: With respect to any Distribution Date,
the
applicable PO Percentage of (i) all principal received on or in
respect of each
Discount Mortgage Loan in Mortgage Group Three (exclusive of any
amounts in
respect of any Monthly Payment) during the related Principal
Prepayment Period
and (ii) all principal received as part of a Monthly Payment on or
in respect of
a Discount Mortgage Loan in Mortgage Group Three during the related
Due Period.
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<PAGE>
Group Three Mortgage Loans: The Mortgage Loans in Mortgage Group
Three.
Group Three Mortgage Pool Principal Balance: As of any date of
determination, the aggregate of the Principal Balances of each
Outstanding
Mortgage Loan in Mortgage Group Three on such date of determination
less the
principal portion of any Monthly Payment due but not paid with
respect to which
an Advance has not been made.
Group Three Non-PO Allocated Amount: At the time of any
determination, the
amount derived by (i) multiplying the outstanding Principal Balance
of each
Mortgage Loan in Mortgage Group Three on such date of determination
by the
Non-PO Percentage with respect to such Mortgage Loan and (ii)
summing the
results.
Group Three Remittance Rate: 6.25% per annum.
Group Three Stripped Interest Rate: The excess of the weighted
average Net
Mortgage Rate of the Group Three Mortgage Loans that are
Non-Discount Mortgage
Loans over the Group Three Remittance Rate.
Group Three Subordinated Amount: For any Distribution Date, the
excess of
the Group Three Non-PO Allocated Amount immediately following the
preceding
Distribution Date (or as of the Cut-off Date, if there is no
preceding
Distribution Date) over the aggregate outstanding Principal Balance
of the Class
AF-3A and Class AF-3B Certificates (prior to giving effect to
distributions to
be made on such Distribution Date and allocation of losses to be
made on such
Distribution Date).
Highest Priority: As of any date of determination, the Class of
Subordinate
Certificates then outstanding with the earliest priority for
payments pursuant
to Section 6.01, in the following order: Class MF-1, Class MF-2,
Class MF-3,
Class BF-1, Class BF-2 and Class BF-3 Certificates.
Indemnified Persons: The Trustee, the Master Servicer, the
Depositor and
the Securities Administrator and their officers, directors, agents
and employees
and, with respect to the Trustee, any separate co-trustee and its
officers,
directors, agents and employees.
Independent: When used with respect to any specified Person, any
such
Person who (a) is in fact independent of the Depositor, the Master
Servicer and
their respective Affiliates, (b) does not have any direct financial
interest in
or any material indirect financial interest in the Depositor or the
Master
Servicer or any Affiliate thereof, and (c) is not connected with
the Depositor
or the Master Servicer or any Affiliate thereof as an officer,
employee,
promoter, underwriter, trustee, partner, director or Person
performing similar
functions; provided, however, that a Person shall not fail to be
Independent of
the Depositor or the Master Servicer or any Affiliate thereof
merely because
such Person is the beneficial owner of 1% or less of any class of
securities
issued by the Depositor or the Master Servicer or any Affiliate
thereof, as the
case may be.
Index: The index, if any, specified in a Mortgage Note by reference
to
which the related Mortgage Interest Rate will be adjusted from time
to time.
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<PAGE>
Individual Certificate: Any Private Certificate registered in the
name of
the Holder other than the Depository or its nominee.
IndyMac: IndyMac Bank, F.S.B. or any successor thereto.
IndyMac Assignment Agreement: The Assignment, Assumption and
Recognition
Agreement, dated as of September 1, 2006, among IndyMac, the
Depositor and the
Seller pursuant to which the IndyMac Servicing Agreement and the
rights of the
Seller thereunder (other than the rights to enforce the
representations and
warranties with respect to the IndyMac Loans) were assigned to the
Depositor for
the benefit of the Certificateholders.
IndyMac Loans: The Mortgage Loans serviced by IndyMac pursuant to
the
IndyMac Servicing Agreement.
IndyMac Servicing Agreement: The Master Seller's Warranties and
Servicing
Agreement dated as of May 1, 2006, between IndyMac Bank, F.S.B. as
seller and
MLML as purchaser, as at any time in effect.
Initial Certification: The certification substantially in the form
of
Exhibit One to the Custodial Agreement.
Initial Class Certificate Balance: With respect to any Regular
Certificate,
the amount designated "Initial Class Certificate Balance" on the
face thereof.
Initial Optional Termination Date: The first Distribution Date
following
the date on which the aggregate Stated Principal Balance of the
Mortgage Loans
is less than 10% of the aggregate Stated Principal Balance of the
Mortgage Loans
as of the Cut-off Date.
Initial Subordinated Class Percentage: With respect to each Class
of
Subordinate Certificates, an amount which is equal to the initial
aggregate
Class Certificate Balance of such Class of Subordinate Certificates
divided by
the aggregate Stated Principal Balance of all the Mortgage Loans as
of the
Cut-off Date as follows:
<TABLE>
<S>
<C>
Class MF-1: 2.05% Class BF-1: 0.75%
Class MF-2: 1.20% Class BF-2: 0.55%
Class MF-3: 0.75% Class BF-3: 0.45%
</TABLE>
Insurance Policy: With respect to any Mortgage Loan, any standard
hazard
insurance policy, flood insurance policy or title insurance
policy.
Insurance Proceeds: Amounts paid by the insurer under any Insurance
Policy
covering any Mortgage Loan or Mortgaged Property other than amounts
required to
be paid over to the Mortgagor pursuant to law or the related
Mortgage Note or
Security Instrument and other than amounts used to repair or
restore the
Mortgaged Property or to reimburse insured expenses.
Interest Adjustment Date: With respect to a Mortgage Loan, the
date, if
any, specified in the related Mortgage Note on which the Mortgage
Interest Rate
is subject to adjustment.
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<PAGE>
Investor Representation Letter: As defined in Section 5.02(b).
Issuing Entity: Merrill Lynch Mortgage Investors Trust, Series
2006-AF1.
Late
Collections: With respect to any Mortgage Loan, all amounts
received
during any Due Period, whether as late payments of Monthly Payments
or as
Liquidation Proceeds, condemnation proceeds, Insurance Proceeds, or
with respect
to a disposition of a Mortgaged Property (or stock allocated to a
dwelling unit,
in the case of a Co-op Loan) which has been acquired by foreclosure
or deed in
lieu of foreclosure or otherwise, which represent late payments or
collections
of Monthly Payments due but delinquent for a previous Due Period
and not
previously recovered.
Latest Possible Maturity Date: With respect to the Certificates,
the
Distribution Date in August 2036.
Liquidated Mortgage Loan: Any defaulted Mortgage Loan (including
any REO
Property) as to which the related Servicer has determined that all
amounts it
expects to recover from or on account of such Mortgage Loan have
been recovered.
Liquidation Date: With respect to any Liquidated Mortgage Loan, the
date on
which the related Servicer has certified that such Mortgage Loan
has become a
Liquidated Mortgage Loan.
Liquidation Expenses: With respect to a Mortgage Loan in
liquidation,
unreimbursed expenses paid or incurred by or for the account of the
Master
Servicer or the related Servicer in connection with the liquidation
of such
Mortgage Loan and the related Mortgaged Property, such expenses
including (a)
property protection expenses, (b) property sales expenses, (c)
foreclosure and
sale costs, including court costs and reasonable attorneys' fees,
and (d)
similar expenses reasonably paid or incurred in connection with
liquidation.
Liquidation Proceeds: With respect to any Mortgage Loan, cash
received in
connection with the liquidation of a defaulted Mortgage Loan,
whether through
trustee's sale, foreclosure sale or otherwise, and amounts received
through
Insurance Proceeds and condemnation proceeds.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the
fraction,
expressed as a percentage, the numerator of which is the original
principal
balance of the related Mortgage Loan and the denominator of which
is the
Original Value of the related Mortgaged Property.
Lower Priority: As of any date of determination and with respect to
any
Class of Subordinate Certificates, any other Class of Subordinate
Certificates
then outstanding with a later priority for payments pursuant to
Section 6.01.
Lower Tier Regular Interests: Any of the REMIC 1 Regular Interests
or the
REMIC 2 Regular Interests.
Lower Tier REMIC Interests: Any of the REMIC 1 Interests or the
REMIC 2
Interests.
Lowest Priority: As of any date of determination, the Class of
Subordinate
Certificates then outstanding with the latest priority for payments
pursuant to
Section 6.01, in the following
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<PAGE>
order: Class BF-3, Class BF-2, Class BF-1, Class MF-3, Class MF-2
and Class MF-1
Certificates.
Lost
Notes: The original Mortgage Notes that have been lost, as
indicated
on the Mortgage Loan Schedule.
Majority Certificateholders: The Holders of Certificates evidencing
at
least 51% of the Voting Rights.
Master Servicer: Wells Fargo Bank, N.A. including any successors
in
interest who meet the qualifications of the Servicing Agreements
and this
Agreement, and any successor master servicer appointed
hereunder.
Master Servicer Collection Account: The trust account or accounts
created
and maintained pursuant to Section 4.02, which shall be denominated
"Wells Fargo
Bank, National Association as Master Servicer for HSBC Bank USA,
National
Association, as Trustee f/b/o holders of Merrill Lynch Mortgage
Investors, Inc.,
Mortgage Pass-Through Certificates, MLMI Series 2006-AF1 - Master
Servicer
Collection Account (Stack I)." The Master Servicer Collection
Account shall be
an Eligible Account.
Master Servicing Compensation: The meaning specified in Section
3.14.
Maximum Lifetime Mortgage Rate: The maximum level to which a
Mortgage
Interest Rate can adjust in accordance with its terms, regardless
of changes in
the applicable Index.
Minimum Lifetime Mortgage Rate: The minimum level to which a
Mortgage
Interest Rate can adjust in accordance with its terms, regardless
of changes in
the applicable Index.
MLBUSA: Merrill Lynch Bank, USA.
MLML: Merrill Lynch Mortgage Lending, Inc., a Delaware corporation,
or any
successor in interest.
Monthly Advance: An advance of principal or interest required to be
made by
the applicable Servicer pursuant to the related Servicing Agreement
or the
Master Servicer pursuant to Section 6.05.
Monthly Payment: With respect to any Mortgage Loan, the scheduled
monthly
payment of principal and interest on such Mortgage Loan which is
payable by the
related Mortgagor from time to time under the related Mortgage
Note, determined:
(a) after giving effect to (i) any Deficient Valuation and/or Debt
Service
Reduction with respect to such Mortgage Loan and (ii) any reduction
in the
amount of interest collectible from the related Mortgagor pursuant
to the Relief
Act; (b) without giving effect to any extension granted or agreed
to by the
related Servicer pursuant to related Servicing Agreement; and (c)
on the
assumption that all other amounts, if any, due under such Mortgage
Loan are paid
when due.
Monthly Principal: The principal portion of any Monthly
Payment.
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<PAGE>
Monthly Statement: The statement distributed to Certificateholders
pursuant
to Section 6.04.
Moody's: Moody's Investors Service, Inc. or its successor in
interest.
Mortgage: The mortgage, deed of trust or other instrument creating
a first
lien on, or first priority security interest in, a Mortgaged
Property securing a
Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01(b)
pertaining
to a particular Mortgage Loan and any additional documents required
to be added
to the Mortgage File pursuant to this Agreement.
Mortgage Group: Pertaining to Mortgage Group One, Mortgage Group
Two or
Mortgage Group Three, as the case may be.
Mortgage Group One: The Mortgage Loans in the Trust Fund that
are
designated in the Mortgage Loan Schedule attached hereto as Exhibit
B as
comprising Mortgage Group One.
Mortgage Group One Subordinated Percentage: As of any Distribution
Date,
the difference between 100% and the Non-PO Class AF-1
Percentage.
Mortgage Group One Subordinated Prepayment Percentage: As of
any
Distribution Date, the difference between 100% and the Non-PO Class
AF-1
Prepayment Percentage.
Mortgage Group Two: The Mortgage Loans in the Trust Fund that
are
designated in the Mortgage Loan Schedule attached hereto as Exhibit
B as
comprising Mortgage Group Two.
Mortgage Group Two Subordinated Percentage: As of any Distribution
Date,
the difference between 100% and the Non-PO Class AF-2
Percentage.
Mortgage Group Two Subordinated Prepayment Percentage: As of
any
Distribution Date, the difference between 100% and the Non-PO Class
AF-2
Prepayment Percentage.
Mortgage Group Three: The Mortgage Loans in the Trust Fund that
are
designated in the Mortgage Loan Schedule attached hereto as Exhibit
B as
comprising Mortgage Group Three.
Mortgage Group Three
Subordinated Percentage: As of any Distribution Date,
the difference between 100% and the Non-PO Class AF-3
Percentage.
Mortgage Group Three Subordinated Prepayment Percentage: As of
any
Distribution Date, the difference between 100% and the Non-PO Class
AF-3
Prepayment Percentage.
Mortgage Interest Rate: The annual rate at which interest accrues
from time
to time on any Mortgage Loan pursuant to the related Mortgage Note,
which rate
is equal to the "Mortgage Interest Rate" set forth with respect
thereto on the
Mortgage Loan Schedule.
Mortgage Loan: A mortgage loan transferred and assigned to the
Trustee
pursuant to Section 2.01 or Section 2.04 and held as a part of the
Trust Fund,
as identified in the Mortgage Loan Schedule, including a mortgage
loan the
property securing which has become an REO
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<PAGE>
Property. For the avoidance of doubt, as defined below, the term
"Stack II
Mortgage Loan" shall be used within this Agreement to refer to a
mortgage loan
transferred and assigned to the Trustee pursuant to Section 2.01 or
Section 2.04
of the Stack II Agreement and held as a part of the Trust Fund, as
identified in
the Stack II Mortgage Loan Schedule, including a mortgage loan the
property
securing which has become an REO Property.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase
Agreement
dated as of September 29, 2006, between the Seller and the
Depositor, as
purchaser, and all amendments thereof and supplements thereto,
attached hereto
as Exhibit J.
Mortgage Loan Schedule: The schedule, attached hereto as Exhibit B
with
respect to the Mortgage Loans and as amended from time to time to
reflect the
repurchase or substitution of Mortgage Loans pursuant to this
Agreement.
Mortgage Note: The originally executed note or other evidence of
the
indebtedness of a Mortgagor under the related Mortgage Loan.
Mortgage Pool: The pool of Mortgage Loans, identified on Exhibit B
from
time to time, and any REO Properties acquired in respect
thereof.
Mortgaged Property: Land and improvements securing the indebtedness
of a
Mortgagor under the related Mortgage Loan or, in the case of REO
Property, such
REO Property.
Mortgagor: The obligor on a Mortgage Note.
Net
Liquidation Proceeds: As to any Liquidated Mortgage Loan,
Liquidation
Proceeds net of (i) Liquidation Expenses which are payable
therefrom by the
related Servicer or the Master Servicer in accordance with the
related Servicing
Agreement or this Agreement and (ii) unreimbursed advances by the
related
Servicer or the Master Servicer and Monthly Advances.
Net
Mortgage Rate: With respect to each Mortgage Loan, the Mortgage
Interest Rate in effect from time to time less the Servicing Fee
Rate (expressed
as a per annum rate).
Non-Discount Mortgage Loan: A Mortgage Loan having a Net Mortgage
Rate
greater than the Remittance Rate.
Non-PO Class AF-1 Optimal Principal Amount: With respect to any
Distribution Date, the lesser of (a) the Non-PO Class AF-1
Principal Balance and
(b) the sum of:
(i)
the Non-PO Class AF-1 Percentage of the applicable Non-PO
Percentage of
the principal portion of all Monthly Payments, whether or not
received, which
were due during the related Due Period on Group One Mortgage Loans
which were
outstanding during such Due Period;
(ii)
the Non-PO Class AF-1 Prepayment Percentage of the applicable
Non-PO
Percentage of all Principal Prepayments made on any Group One
Mortgage Loan
during the related Principal Prepayment Period;
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<PAGE>
(iii) with respect to each Mortgage Loan not described in (iv)
below, the
Non-PO Class AF-1 Percentage of the applicable Non-PO Percentage of
the
principal portion of all Insurance Proceeds, condemnation awards
and any other
cash proceeds from a source other than the applicable Mortgagor, to
the extent
required to be deposited in the Master Servicer Collection Account
and (v),
which were received during the related Principal Prepayment Period
with respect
to a Group One Mortgage Loan, net of related unreimbursed Servicing
Advances and
net of any portion thereof which, as to any such Mortgage Loan,
constitutes Late
Collections that have been the subject of an Advance on any prior
Distribution
Date;
(iv)
with respect to each Group One Mortgage Loan which has become a
Liquidated Mortgage Loan during the related Principal Prepayment
Period, the
lesser of (A) the Non-PO Class AF-1 Percentage of the applicable
Non-PO
Percentage of an amount equal to the Principal Balance of such
Liquidated
Mortgage Loan as of the Due Date immediately preceding the date on
which it
became a Liquidated Mortgage Loan and (B) the Non-PO Class AF-1
Prepayment
Percentage of the applicable Non-PO Percentage of the Net
Liquidation Proceeds
with respect to such liquidated Mortgage Loan (net of any
unreimbursed
Advances);
(v)
with respect to each Group One Mortgage Loan repurchased during
the
related Principal Prepayment Period, an amount equal to the Non-PO
Class AF-1
Prepayment Percentage of the applicable Non-PO Percentage of the
principal
portion of the Purchase Price (net of amounts with respect to which
a
distribution of principal has previously been made to the Non-PO
Class AF-1
Certificateholders);
(vi)
on or after the Credit Support Depletion Date, the excess of
the
Non-PO Class AF-1 Principal Balance (calculated after giving effect
to
reductions thereof on such Distribution Date with respect to the
amounts
described in (i) - (v) above) over the Group One Non-PO Allocated
Amount, as of
the preceding Distribution Date; and
(vii) Subsequent Recoveries.
Non-PO Class AF-2 Optimal Principal Amount: With respect to any
Distribution Date, the lesser of (a) the Non-PO Class AF-2
Principal Balance and
(b) the sum of:
(i)
the Non-PO Class AF-2 Percentage of the applicable Non-PO
Percentage of
the principal portion of all Monthly Payments, whether or not
received, which
were due during the related Due Period on Group Two Mortgage Loans
which were
outstanding during such Due Period;
(ii)
the Non-PO Class AF-2 Prepayment Percentage of the applicable
Non-PO
Percentage of all Principal Prepayments made on any Group Two
Mortgage Loan
during the related Principal Prepayment Period;
(iii) with respect to each Mortgage Loan not described in (iv)
below, the
Non-PO Class AF-2 Percentage of the applicable Non-PO Percentage of
the
principal portion of all Insurance Proceeds, condemnation awards
and any other
cash proceeds from a source other than the applicable Mortgagor, to
the extent
required to be deposited in the Master Servicer Collection Account,
which were
received during the related Principal Prepayment Period with
respect to a Group
Two Mortgage Loan, net of related unreimbursed Servicing Advances
and net of any
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<PAGE>
portion thereof which, as to any such Mortgage Loan, constitutes
Late
Collections that have been the subject of an Advance on any prior
Distribution
Date;
(iv)
with respect to each Group Two Mortgage Loan which has become a
Liquidated Mortgage Loan during the related Principal Prepayment
Period, the
lesser of (A) the Non-PO Class AF-2 Percentage of the applicable
Non-PO
Percentage of an amount equal to the Principal Balance of such
Liquidated
Mortgage Loan as of the Due Date immediately preceding the date on
which it
became a Liquidated Mortgage Loan and (B) the Non-PO Class AF-2
Prepayment
Percentage of the applicable Non-PO Percentage of the Net
Liquidation Proceeds
with respect to such liquidated Mortgage Loan (net of any
unreimbursed
Advances);
(v)
with respect to each Group Two Mortgage Loan repurchased during
the
related Principal Prepayment Period, an amount equal to the Non-PO
Class AF-2
Prepayment Percentage of the applicable Non-PO Percentage of the
principal
portion of the Purchase Price (net of amounts with respect to which
a
distribution of principal has previously been made to the Non-PO
Class AF-2
Certificateholders);
(vi)
on or after the Credit Support Depletion Date, the excess of
the
Non-PO Class AF-2 Principal Balance (calculated after giving effect
to
reductions thereof on such Distribution Date with respect to the
amounts
described in (i) - (v) above) over the Group Two Non-PO Allocated
Amount, as of
the preceding Distribution Date; and
(vii) Subsequent Recoveries.
Non-PO Class AF-3 Optimal Principal Amount: With respect to any
Distribution Date, the lesser of (a) the Non-PO Class AF-3
Principal Balance and
(b) the sum of:
(i)
the Non-PO Class AF-3 Percentage of the applicable Non-PO
Percentage of
the principal portion of all Monthly Payments, whether or not
received, which
were due during the related Due Period on Group Three Mortgage
Loans which were
outstanding during such Due Period;
(ii)
the Non-PO Class AF-3 Prepayment Percentage of the applicable
Non-PO
Percentage of all Principal Prepayments made on any Group Three
Mortgage Loan
during the related Principal Prepayment Period;
(iii) with respect to each Mortgage Loan not described in (iv)
below, the
Non-PO Class AF-3 Percentage of the applicable Non-PO Percentage of
the
principal portion of all Insurance Proceeds, condemnation awards
and any other
cash proceeds from a source other than the applicable Mortgagor, to
the extent
required to be deposited in the Master Servicer Collection Account,
which were
received during the related Principal Prepayment Period with
respect to a Group
Three Mortgage Loan, net of related unreimbursed Servicing Advances
and net of
any portion thereof which, as to any such Mortgage Loan,
constitutes Late
Collections that have been the subject of an Advance on any prior
Distribution
Date;
(iv)
with respect to each Group Three Mortgage Loan which has become
a
Liquidated Mortgage Loan during the related Principal Prepayment
Period, the
lesser of (A) the Non-PO Class AF-3 Percentage of the applicable
Non-PO
Percentage of an amount equal to the Principal
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<PAGE>
Balance of such Liquidated Mortgage Loan as of the Due Date
immediately
preceding the date on which it became a Liquidated Mortgage Loan
and (B) the
Non-PO Class AF-3 Prepayment Percentage of the applicable Non-PO
Percentage of
the Net Liquidation Proceeds with respect to such liquidated
Mortgage Loan (net
of any unreimbursed Advances);
(v)
with respect to each Group Three Mortgage Loan repurchased during
the
related Principal Prepayment Period, an amount equal to the Non-PO
Class AF-3
Prepayment Percentage of the applicable Non-PO Percentage of the
principal
portion of the Purchase Price (net of amounts with respect to which
a
distribution of principal has previously been made to the Non-PO
Class AF-3
Certificateholders);
(vi)
on or after the Credit Support Depletion Date, the excess of
the
Non-PO Class AF-3 Principal Balance (calculated after giving effect
to
reductions thereof on such Distribution Date with respect to the
amounts
described in (i) - (v) above) over the Group Three Non-PO Allocated
Amount, as
of the preceding Distribution Date; and
(vii) Subsequent Recoveries.
Non-PO Class AF-1 Percentage: As of any Distribution Date, a
fraction,
expressed as a percentage (which shall never exceed 100%), the
numerator of
which is the Non-PO Class AF-1 Principal Balance and the
denominator of which is
the Group One Non-PO Allocated Amount as of the immediately
preceding Due Date.
Non-PO Class AF-2 Percentage: As of any Distribution Date, a
fraction,
expressed as a percentage (which shall never exceed 100%), the
numerator of
which is the Non-PO Class AF-2 Principal Balance and the
denominator of which is
the Group Two Non-PO Allocated Amount of the immediately preceding
Due Date.
Non-PO Class AF-3 Percentage: As of any Distribution Date, a
fraction,
expressed as a percentage (which shall never exceed 100%), the
numerator of
which is the Non-PO Class AF-3 Principal Balance and the
denominator of which is
the Group Three Non-PO Allocated Amount of the immediately
preceding Due Date.
Non-PO Class AF-1 Prepayment Percentage: As of any Distribution
Date up to
and including the Distribution Date in September 2011, 100%; as of
any
Distribution Date in the first year thereafter, the Non-PO Class
AF-1 Percentage
plus 70% of the Mortgage Group One Subordinated Percentage for such
Distribution
Date; as of any Distribution Date in the second year thereafter,
the Non-PO
Class AF-1 Percentage plus 60% of the Mortgage Group One
Subordinated Percentage
for such Distribution Date; as of any Distribution Date in the
third year
thereafter, the Non-PO Class AF-1 Percentage plus 40% of the
Mortgage Group One
Subordinated Percentage for such Distribution Date; as of any
Distribution Date
in the fourth year thereafter, the Non-PO Class AF-1 Percentage
plus 20% of the
Mortgage Group One Subordinated Percentage for such Distribution
Date; and as of
any Distribution Date after the fourth year thereafter, the Non-PO
Class AF-1
Percentage; provided that, if the Non-PO Class AF-1 Percentage as
of any such
Distribution Date is greater than the Non-PO Class AF-1 Percentage
on the first
Distribution Date, the Non-PO Class AF-1 Prepayment Percentage
shall be 100%;
and provided further, however, that whenever the Non-PO Class AF-1
Percentage
equals 0%, the Non-PO Class AF-1 Prepayment Percentage shall equal
0%; and
provided further
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<PAGE>
that no reduction of the Non-PO Class AF-1 Prepayment Percentage
below the level
in effect for the most recent period shall occur with respect to
any
Distribution Date unless, as of the last day of the month preceding
such
Distribution Date, (i) the aggregate outstanding Principal Balance
of Mortgage
Loans with respect to any Mortgage Group, each taken individually,
delinquent 60
days or more (including for this purpose any Mortgage Loans in
foreclosure and
Mortgage Loans with respect to which the related Mortgaged Property
has been
acquired by the Trust Fund) does not exceed 50% of the Mortgage
Group One
Subordinated Percentage of the Mortgage Pool Principal Balance with
respect to
Mortgage Group One as of such date and (ii) cumulative Realized
Losses with
respect to any Mortgage Group, each taken individually, do not
exceed (a) 30% of
the related Subordinated Percentage of the Mortgage Pool Principal
Balance with
respect to the related Mortgage Group as of the date of issuance of
the
Certificates (the related Original Subordinated Principal Balance)
if such
Distribution Date occurs between and including October 2011 and
September 2012,
(b) 35% of the related Original Subordinated Principal Balance if
such
Distribution Date occurs between and including October 2012 and
September 2013,
(c) 40% of the related Original Subordinated Principal Balance if
such
Distribution Date occurs between and including October 2013 and
September 2014,
(d) 45% of the related Original Subordinated Principal Balance if
such
Distribution Date occurs between and including October 2014 and
September 2015,
and (e) 50% of the related Original Subordinated Principal Balance
if such
Distribution Date occurs during or after October 2015.
Non-PO Class AF-2 Prepayment Percentage: As of any Distribution
Date up to
and including the Distribution Date in September 2011, 100%; as of
any
Distribution Date in the first year thereafter, the Non-PO Class
AF-2 Percentage
plus 70% of the Mortgage Group Two Subordinated Percentage for such
Distribution
Date; as of any Distribution Date in the second year thereafter,
the applicable
Non-PO Class AF-2 Percentage plus 60% of the Mortgage Group Two
Subordinated
Percentage for such Distribution Date; as of any Distribution Date
in the third
year thereafter, the Non-PO Class AF-2 Percentage plus 40% of the
Mortgage Group
Two Subordinated Percentage for such Distribution Date; as of any
Distribution
Date in the fourth year thereafter, the applicable Non-PO Class
AF-2 Percentage
plus 20% of the Mortgage Group Two Subordinated Percentage for such
Distribution
Date; and as of any Distribution Date after the fourth year
thereafter, the
Non-PO Class AF-2 Percentage; provided that, if the Non-PO Class
AF-2 Percentage
on the first Distribution Date is greater than the Non-PO Class
AF-2A
Percentage, the Non-PO Class AF-2 Prepayment Percentage shall be
100%; and
provided further, however, that whenever the Non-PO Class AF-2
Percentage equals
0%, the Non-PO Class AF-2 Prepayment Percentage shall equal 0%; and
provided
further that no reduction of the Non-PO Class AF-2 Prepayment
Percentage below
the level in effect for the most recent period shall occur with
respect to any
Distribution Date unless, as of the last day of the month preceding
such
Distribution Date, (i) the aggregate outstanding Principal Balance
of Mortgage
Loans with respect to any Mortgage Group, each taken individually,
delinquent 60
days or more (including for this purpose any Mortgage Loans in
foreclosure and
Mortgage Loans with respect to which the related Mortgaged Property
has been
acquired by the Trust Fund) does not exceed 50% of the Mortgage
Group Two
Subordinated Percentage of the Mortgage Pool Principal Balance with
respect to
Mortgage Group Two as of such date and (ii) cumulative Realized
Losses with
respect to any Mortgage Group, each taken individually, do not
exceed (a) 30% of
the related Subordinated Percentage of the Mortgage Pool Principal
Balance with
respect to the related Mortgage Group as of the date of issuance of
the
Certificates (the related Original Subordinated Principal Balance)
if such
Distribution Date occurs between and including October 2011 and
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<PAGE>
September 2012, (b) 35% of the related Original Subordinated
Principal Balance
if such Distribution Date occurs between and including October 2012
and
September 2013, (c) 40% of the related Original Subordinated
Principal Balance
if such Distribution Date occurs between and including October 2013
and
September 2014, (d) 45% of the related Original Subordinated
Principal Balance
if such Distribution Date occurs between and including October 2014
and
September 2015, and (e) 50% of the related Original Subordinated
Principal
Balance if such Distribution Date occurs during or after October
2015.
Non-PO Class AF-3 Prepayment Percentage: As of any Distribution
Date up to
and including the Distribution Date in September 2011, 100%; as of
any
Distribution Date in the first year thereafter, the Non-PO Class
AF-3 Percentage
plus 70% of the Mortgage Group Three Subordinated Percentage for
such
Distribution Date; as of any Distribution Date in the second year
thereafter,
the applicable Non-PO Class AF-3 Percentage plus 60% of the
Mortgage Group Three
Subordinated Percentage for such Distribution Date; as of any
Distribution Date
in the third year thereafter, the Non-PO Class AF-3 Percentage plus
40% of the
Mortgage Group Three Subordinated Percentage for such Distribution
Date; as of
any Distribution Date in the fourth year thereafter, the applicable
Non-PO Class
AF-3 Percentage plus 20% of the Mortgage Group Three Subordinated
Percentage for
such Distribution Date; and as of any Distribution Date after the
fourth year
thereafter, the Non-PO Class AF-3 Percentage; provided that, if the
Non-PO Class
AF-3 Percentage on the first Distribution Date is greater than the
Non-PO Class
AF-3 Percentage, the Non-PO Class AF-3 Prepayment Percentage shall
be 100%; and
provided further, however, that whenever the Non-PO Class AF-3
Percentage equals
0%, the Non-PO Class AF-3 Prepayment Percentage shall equal 0%; and
provided
further that no reduction of the Non-PO Class AF-3 Prepayment
Percentage below
the level in effect for the most recent period shall occur with
respect to any
Distribution Date unless, as of the last day of the month preceding
such
Distribution Date, (i) the aggregate outstanding Principal Balance
of Mortgage
Loans with respect to any Mortgage Group, each taken individually,
delinquent 60
days or more (including for this purpose any Mortgage Loans in
foreclosure and
Mortgage Loans with respect to which the related Mortgaged Property
has been
acquired by the Trust Fund) does not exceed 50% of the Mortgage
Group Three
Subordinated Percentage of the Mortgage Pool Principal Balance with
respect to
Mortgage Group Three as of such date and (ii) cumulative Realized
Losses with
respect to any Mortgage Group, each taken individually, do not
exceed (a) 30% of
the related Subordinated Percentage of the Mortgage Pool Principal
Balance with
respect to the related Mortgage Group as of the date of issuance of
the
Certificates (the related Original Subordinated Principal Balance)
if such
Distribution Date occurs between and including October 2011 and
September 2012,
(b) 35% of the related Original Subordinated Principal Balance if
such
Distribution Date occurs between and including October 2012 and
September 2013,
(c) 40% of the related Original Subordinated Principal Balance if
such
Distribution Date occurs between and including October 2013 and
September 2014,
(d) 45% of the related Original Subordinated Principal Balance if
such
Distribution Date occurs between and including October 2014 and
September 2015,
and (e) 50% of the related Original Subordinated Principal Balance
if such
Distribution Date occurs during or after October 2015.
Non-PO Class AF-1 Principal Balance: As of any Distribution Date,
(a) the
Non-PO Class AF-1 Principal Balance for the immediately preceding
Distribution
Date less (b) amounts distributed (or deemed distributed) to the
Class AF-1
Certificateholders on such preceding Distribution Date allocable to
principal
(including the principal portion of Advances of the
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Servicer made pursuant to Section 6.06 and Realized Losses
allocated to the
Class AF-1 Certificates pursuant to Section 6.02); provided that
the Non-PO
Class AF-1 Principal Balance on the first Distribution Date shall
be the
Original Non-PO Class AF-1 Principal Balance.
Non-PO Class AF-2 Principal Balance: As of any Distribution Date,
(a) the
Non-PO Class AF-2 Principal Balance for the immediately preceding
Distribution
Date less (b) amounts distributed (or deemed distributed) to the
Class AF-2
Certificateholders on such preceding Distribution Date allocable to
principal
(including the principal portion of Advances of the Servicer made
pursuant to
Section 6.06 and Realized Losses allocated to the Class AF-2
Certificates
pursuant to Section 6.02); provided that the Non-PO Class AF-2
Principal Balance
on the first Distribution Date shall be the Original Non-PO Class
AF-2 Principal
Balance.
Non-PO Class AF-3 Principal Balance: As of any Distribution Date,
(a) the
Non-PO Class AF-3 Principal Balance for the immediately preceding
Distribution
Date less (b) amounts distributed (or deemed distributed) to the
Class AF-3
Certificateholders on such preceding Distribution Date allocable to
principal
(including the principal portion of Advances of the Servicer made
pursuant to
Section 6.06 and Realized Losses allocated to the Class AF-3
Certificates
pursuant to Section 6.02); provided that the Non-PO Class AF-3
Principal Balance
on the first Distribution Date shall be the Original Non-PO Class
AF-3 Principal
Balance.
Non-PO Class AF-1 Principal Payment Rules: With respect to any
Distribution
Date, distributions to the Class AF-1 Certificateholders pursuant
to Section
6.01(I)(b)(ii)(A) shall be made to the Class AF-1 Certificates,
until the Class
Certificate Balance of such class has been reduced to zero.
Non-PO Class AF-2 Principal Payment Rules:
(I)
With respect to any Distribution Date up to and including the
Credit
Support Depletion Date, distributions to the Class AF-2
Certificateholders
pursuant to Section 6.01(I)(b)(ii)(B) shall be made in the
following amounts and
priority:
pro
rata, as follows:
(a)
to the Class AF-2A Certificates, based upon their outstanding
principal
balance, until the Class Certificate Balance of such Class has been
reduced to
zero; and
(b)
to the aggregate of the Class AF-2B Certificates and Class
AF-2C
Certificates, based upon their aggregate outstanding principal
balance, as
follows:
(i)
first, to the Class AF-2B Certificates, until the Class
Certificate
Balance of such Class has been reduced to zero; and
(ii)
to the Class AF-2C Certificates, until the Class Certificate
Balance
of such Class has been reduced to zero.
(II)
With respect to any Distribution Date after the Credit Support
Depletion Date, distributions pursuant to Section 6.01(I)(b)(ii)(B)
shall be
made pro rata among the outstanding Classes of Class AF-2
Certificates in
relation to the respective Class Certificate Balances of such
outstanding
Classes, and not in accordance with the priority of payments among
such Classes
set forth in clause (I) above.
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Non-PO Class AF-3 Principal Payment Rules:
(I)
With respect to any Distribution Date up to and including the
Credit
Support Depletion Date, distributions to the Class AF-3
Certificateholders
pursuant to Section 6.01(I)(b)(ii)(C) shall be made in the
following amounts and
priority:
first, to the Class AF-3A Certificates, until the Class Certificate
Balance
of such class has been reduced to zero; and
second, to the Class AF-3B Certificates, until the Class
Certificate
Balance of such class has been reduced to zero.
(II)
With respect to any Distribution Date after the Credit Support
Depletion Date, distributions pursuant to Section 6.01(I)(b)(ii)(B)
shall be
made pro rata among the outstanding Classes of Class AF-3
Certificates in
relation to the respective Class Certificate Balances of such
outstanding
Classes, and not in accordance with the priority of payments among
such Classes
set forth in clause (I) above.
Non-PO Percentage: With respect to each Mortgage Loan, the
fraction,
expressed as a percentage (but not greater than 100%), the
numerator of which
equals the applicable Net Mortgage Rate and the denominator of
which equals the
applicable Remittance Rate.
Non-PO Principal Balance: In the case of a Non-Discount Mortgage
Loan, the
Stated Principal Balance of such Mortgage Loan and, in the case of
a Discount
Mortgage Loan, the product of (i) the Stated Principal Balance of
such Mortgage
Loan and (ii) the Non-PO Percentage for such Mortgage Loan.
Nonrecoverable Advance: With respect to any Mortgage Loan any
advance or
Monthly Advance (i) which was previously made or is proposed to be
made by the
applicable Servicer, or the Master Servicer as successor Servicer,
or the
Trustee as successor Master Servicer and (ii) which, in the good
faith judgment
of the applicable Servicer, the Master Servicer or the Trustee,
will not or, in
the case of a proposed advance or Monthly Advance, would not, be
ultimately
recoverable by the applicable Servicer, the Master Servicer or the
Trustee (as
successor Master Servicer) from Liquidation Proceeds, Insurance
Proceeds or
future payments on the Mortgage Loan for which such advance or
Monthly Advance
was made.
Offered Certificate: Any Senior Certificate or Offered
Subordinate
Certificate issued hereunder, along with the Class AV-1A, Class
AV-1B, Class
AV-2A, Class AV-2B, Class MV-1, Class MV-2 or Class MV-3
Certificates defined
and issued pursuant to the terms and conditions of the Stack II
Agreement.
Offered Subordinate Certificates: The Class MF-l, Class MF-2 and
Class MF-3
Certificates.
Officer's Certificate: A certificate signed by the Chairman of the
Board,
the Vice Chairman of the Board, the President or a Vice President
or Assistant
Vice President or other authorized officer of the Master Servicer
or the
Depositor, as applicable, and delivered to the Trustee, as required
by this
Agreement.
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Opinion of Counsel: A written opinion of counsel who is or are
acceptable
to the Trustee and who, unless required to be Independent (an
"Opinion of
Independent Counsel"), may be internal counsel for the Master
Servicer or the
Depositor.
Optional Termination: The termination hereunder of that portion of
the
Trust Fund related to the Certificates pursuant to Section 10.01(a)
hereof.
Optional Termination Amount: The amount received by the
Securities
Administrator in connection with any purchase of all of the
Mortgage Loans and
REO Properties pursuant to Section 10.01(b) hereof.
Optional Termination Price: On any date after the Initial
Optional
Termination Date, an amount equal to the sum of (A) the aggregate
Stated
Principal Balance of each Mortgage Loan (other than any Mortgage
Loan that has
become an REO Property) as of the Distribution Date on which the
proceeds of the
Optional Termination are distributed to the Certificateholders,
plus accrued
interest thereon at the applicable Mortgage Interest Rate as of the
Due Date
preceding the Distribution Date on which the proceeds of the
Optional
Termination are distributed to Certificateholders and the fair
market value of
any REO Property, plus accrued interest thereon as of the
Distribution Date on
which the proceeds of the Optional Termination are distributed
to
Certificateholders, (B) any unreimbursed out-of-pocket costs and
expenses owed
to the Master Servicer, the Trustee or the Securities Administrator
(including
any amounts incurred by the Securities Administrator in connection
with
conducting the Auction), a Servicer or the Master Servicer and any
unpaid or
unreimbursed Servicing Fees, Monthly Advances and Servicing
Advances, (C) any
unreimbursed costs, penalties and/or damages incurred by the Trust
Fund in
connection with any violation relating to any of the Mortgage Loans
of any
predatory or abusive lending law and (D) in the event an Auction
has been
conducted, all reasonable fees and expenses incurred by the
Securities
Administrator to conduct the Auction.
Original Class IO Notional Amount: The Class Certificate Balance of
the
Class IO Certificates on the Closing Date, as set forth opposite
such Class in
the Preliminary Statement.
Original Credit Support: With respect to any Class of
Subordinate
Certificates (other than the Class B-3 Certificates), the level of
Credit
Support indicated below:
<TABLE>
<S>
<C>
Class A:
5.75%
Class M-1: 3.70%
Class M-2: 2.50%
Class M-3: 1.75%
Class B-1: 1.00%
Class B-2: 0.45%
</TABLE>
Original Subordinated Principal Balance: The sum of the aggregate
Class
Certificate Balances of each Class of Subordinate Certificates as
of the Closing
Date.
Original Value: The lesser of (i) the Appraised Value or (ii) the
sales
price of a Mortgaged Property at the time of origination of a
Mortgage Loan,
except in instances where either clauses (i) or (ii) is
unavailable, the other
may be used to determine the Original Value, or
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if both clauses (i) and (ii) are unavailable, Original Value may be
determined
from other sources reasonably acceptable to the Depositor.
Outstanding Mortgage Loan: With respect to any Due Date, a Mortgage
Loan
which, prior to such Due Date, was not the subject of a Principal
Prepayment in
Full, did not become a Liquidated Mortgage Loan and was not
purchased or
replaced.
Outstanding Principal Balance: As of the time of any determination,
the
principal balance of a Mortgage Loan remaining to be paid by the
Mortgagor, or,
in the case of an REO Property, the principal balance of the
related Mortgage
Loan remaining to be paid by the Mortgagor at the time such
property was
acquired by the Trust Fund less any Net Liquidation Proceeds with
respect
thereto to the extent applied to principal.
Ownership Interest: As to any Certificate, any ownership or
security
interest in such Certificate, including any interest in such
Certificate as the
Holder thereof and any other interest therein, whether direct or
indirect, legal
or beneficial, as owner or as pledgee.
Paying Agent: The Securities Administrator or any successor Paying
Agent
appointed by the Securities Administrator.
Percentage Interest: With respect to any Certificate (other than
the Class
P Certificates), a fraction, expressed as a percentage, the
numerator of which
is the Initial Class Certificate Balance (or Class IO Notional
Amount in the
case of the Class IO Certificates) represented by such Certificate
and the
denominator of which is the Initial Class Certificate Balance (or
Class IO
Notional Amount in the case of the Class IO Certificates) of the
related Class.
With respect to the Class P Certificates, the Percentage Interest
evidenced
thereby shall be as specified on the face thereof, or otherwise, be
equal to
100%.
Permitted Investments: Any one or more of the following obligations
or
securities held in the name of the Trustee for the benefit of
the
Certificateholders (provided that such obligation or security must
be a
"permitted investment" within the meaning of such term as provided
for in
Section 860G(a)(5) of the Code):
(i) direct obligations of, and obligations the timely payment of
which
are
fully guaranteed by the United States of America or any agency
or
instrumentality of the United States of America the obligations of
which
are
backed by the full faith and credit of the United States of
America;
(ii) (a) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust
company
incorporated under the laws of the United States of America or any
state
thereof (including the Trustee or the Master Servicer or its
Affiliates
acting in its commercial banking capacity) and subject to
supervision and
examination by federal and/or state banking authorities, provided
that the
commercial paper and/or the short-term debt rating and/or the
long-term
unsecured debt obligations of such depository institution or trust
company
at
the time of such investment or contractual commitment providing for
such
investment have the Applicable Credit Rating or better from each
Rating
Agency and (b) any other demand or time deposit or certificate of
deposit
that
is fully insured by the Federal Deposit Insurance Corporation;
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<PAGE>
(iii) repurchase obligations with respect to (a) any security
described in clause (i) above or (b) any other security issued
or
guaranteed by an agency or instrumentality of the United States of
America,
the
obligations of which are backed by the full faith and credit of
the
United States of America, in either case entered into with a
depository
institution or trust company (acting as principal) described in
clause
(ii)(a) above where the Trustee holds the security therefor;
(iv) securities bearing interest or sold at a discount issued by
any
corporation (including the Trustee or the Master Servicer or
its
Affiliates) incorporated under the laws of the United States of
America or
any
state thereof that have the Applicable Credit Rating or better
from
each
Rating Agency at the time of such investment or contractual
commitment
providing for such investment; provided, however, that securities
issued by
any
particular corporation will not be Permitted Investments to the
extent
that
investments therein will cause the then outstanding principal
amount
of
securities issued by such corporation and held as part of the
Issuing
Entity to exceed 10% of the aggregate Outstanding Principal
Balances of all
the
Mortgage Loans and Permitted Investments held as part of the
Issuing
Entity;
(v) commercial paper (including both non-interest-bearing
discount
obligations and interest-bearing obligations payable on demand or
on a
specified date not more than one year after the date of issuance
thereof)
having the Applicable Credit Rating or better from each Rating
Agency at
the
time of such investment;
(vi) a Reinvestment Agreement issued by any bank, insurance company
or
other corporation or entity;
(vii) any other demand, money market or time deposit,
obligation,
security or investment as may be acceptable to either Rating Agency
as
evidenced in writing by each Rating Agency to the Trustee or
Master
Servicer;
(viii) any money market or common trust fund having the
Applicable
Credit Rating or better from each Rating Agency (if such fund is
rated by
each
Rating Agency), including any such fund for which the Trustee
or
Master Servicer or any affiliate of the Trustee or Master Servicer
acts as
a
manager or an advisor; provided, however, that no instrument or
security
shall be a Permitted Investment if such instrument or security
evidences a
right to receive only interest payments with respect to the
obligations
underlying such instrument or if such security provides for payment
of both
principal and interest with a yield to maturity in excess of 120%
of the
yield to maturity at par or if such instrument or security is
purchased at
a
price greater than par; and
(ix) units of a taxable money-market portfolio having the
highest
rating assigned by each Rating Agency (except if S&P is a
Rating Agency,
"AAAm" or "AAAM-G" by S&P) and restricted to obligations issued
or
guaranteed by the United States of America or entities whose
obligations
are
backed by the full faith and credit of the United States of America
and
repurchase agreements collateralized by such obligations.
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<PAGE>
Permitted Transferee: Any Person other than a Disqualified
Organization or
an "electing large partnership" (as defined by Section 775 of the
Code).
Person: Any individual, corporation, partnership, joint
venture,
association, limited liability company, joint-stock company,
trust,
unincorporated organization or government or any agency or
political subdivision
thereof.
Principal Prepayment Period: With respect to any Distribution Date,
the
period beginning on the first day of the month preceding the month
in which such
Distribution Date occurs and ending on the last day of such
month.
PHH:
PHH Mortgage Corporation, or any successor thereto.
PHH
Assignment Agreement: The Assignment, Assumption and
Recognition
Agreement, dated as of September 1, 2006, among PHH Mortgage
Corporation, the
Depositor and the Seller pursuant to which the PHH Servicing
Agreement and the
rights of the Seller thereunder (other than the rights to enforce
the
representations and warranties with respect to the PHH Mortgage
Loans) were
assigned to the Depositor for the benefit of the
Certificateholders.
PHH
Mortgage Loans: The Mortgage Loans serviced by PHH pursuant to the
PHH
Servicing Agreement.
PHH
Servicing Agreement: The Mortgage Loan Flow Purchase, Sale and
Servicing Agreement dated as of March 27, 2001 between Merrill
Lynch Mortgage
Capital Inc., Bishop's Gate Residential Mortgage Trust (formerly
known as
Cendant Residential Mortgage Trust) and Cendant Mortgage
Corporation (as amended
and in effect at any time).
Physical Certificate: The Residual Certificate.
Pooling and Servicing Agreement: The Pooling and Servicing
Agreement
relating to the Mortgage Pass-Through Certificates, MLMI Series
2006-AF1,
jointly comprised of the Stack II Agreement and this Agreement.
Prepayment Assumption: A rate or rates of prepayment, as described
in the
Prospectus Supplement related to the Offered Certificates.
Prepayment Interest Shortfall: As to any Distribution Date and any
Mortgage
Loan (other than a Mortgage Loan relating to an REO Property) that
was the
subject of (a) a Principal Prepayment in Full during the related
Prepayment
Period, an amount equal to the excess of one month's interest at
the Net
Mortgage Rate on the Stated Principal Balance of such Mortgage
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<PAGE>
Loan over the amount of interest (adjusted to the Net Mortgage
Rate) paid by the
Mortgagor for such Prepayment Period to the date of such Principal
Prepayment in
Full or (b) a Curtailment during the prior calendar month, an
amount equal to
one month's interest at the Net Mortgage Rate on the amount of such
Curtailment.
The obligations of the Master Servicer in respect of any Prepayment
Interest
Shortfall are set forth in Section 6.06.
Prepayment Penalty: With respect to any Prepayment Period, any
prepayment
premium, charge or penalty payable by a Mortgagor in connection
with any
Principal Prepayment on the Prepayment Penalty Mortgage Loans.
Prepayment Penalty Mortgage Loans: Any of the Mortgage Loans that
are
subject to existing prepayment premiums.
Prepayment Period: With respect to any Mortgage Loan and any
Distribution
Date, the calendar month preceding the month in which such
Distribution Date
occurs.
Primary Mortgage Insurance Policy: Any primary mortgage guaranty
insurance
policy issued in connection with a Mortgage Loan which provides
compensation to
a Mortgage Note holder in the event of default by the obligor under
such
Mortgage Note or the related Security Instrument, if any or any
replacement
policy therefor through the related Accrual Period for such Class
relating to a
Distribution Date.
Principal Balance: At the time of any determination, the principal
balance
of a Mortgage Loan remaining to be paid at the close of business on
the Cut-off
Date (after deduction of all principal payments due on or before
the Cut-off
Date whether or not paid) (or, in the case of a substitute Mortgage
Loan
included in the Trust Fund pursuant to the Mortgage Loan Purchase
Agreement or
Section 2.04, the close of business as of the date of substitution)
reduced by
all amounts previously distributed to Certificateholders that are
allocable to
payments of principal on such Mortgage Loan (including the
principal portion of
Advances of the Servicer made pursuant to Section 6.06).
Principal Prepayment: Any Principal Prepayment in full or
Curtailment or
other recovery of principal on a Mortgage Loan which is received in
advance of
its scheduled Due Date to the extent that it is not accompanied by
an amount as
to interest representing scheduled interest due on any date or
dates in any
month or months subsequent to the month of prepayment, including
Insurance
Proceeds and Repurchase Proceeds, but excluding the principal
portion of Net
Liquidation Proceeds.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor
of the entire unpaid principal balance of the Mortgage Loan.
Private Certificates: Any of the Class BF-1, Class BF-2, Class BF-3
and
Class P Certificates.
Prospectus Supplement: The Prospectus Supplement dated September
28, 2006,
relating to the public offering of the Offered Certificates.
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<PAGE>
Protected Account: An account established and maintained for the
benefit of
Certificateholders by each Servicer with respect to the related
Mortgage Loans
and with respect to REO Property pursuant to the respective
Servicing Agreement.
The Protected Account shall be an Eligible Account.
Purchase Price: With respect to any Mortgage Loan or REO Property
to be
purchased pursuant to or as contemplated by Section 2.03 or 10.01,
and as
confirmed by an Officers' Certificate from the Master Servicer to
the Trustee,
an amount equal to the sum of (i) 100% of the Stated Principal
Balance thereof
as of the date of purchase (or such other price as provided in
Section 10.01),
(ii) accrued interest on such Stated Principal Balance at the
applicable
Mortgage Interest Rate in effect from time to time from the Due
Date as to which
interest was last covered by a payment by the Mortgagor or an
advance by the
related Servicer or Master Servicer, which payment or advance had
as of the date
of purchase been distributed to Certificateholders, through the end
of the
calendar month in which the purchase is to be effected less any
unreimbursed
Monthly Advances and any unpaid Servicing Fees payable to the
purchaser of the
Mortgage Loan and (iii) any costs and damages incurred by the
Issuing Entity in
connection with any violation by such Mortgage Loan or REO Property
of any
predatory or abusive-lending law.
Qualified Insurer: Any insurance company duly qualified as such
under the
laws of the state or states in which the related Mortgaged Property
or Mortgaged
Properties is or are located, duly authorized and licensed in such
state or
states to transact the type of insurance business in which it is
engaged and
approved as an insurer by the Master Servicer, so long as the
claims paying
ability of which is acceptable to the Rating Agencies for
pass-through
certificates having the same rating as the Certificates rated by
the Rating
Agencies as of the Closing Date.
Rating Agencies: Moody's and S&P.
Realized Loss: With respect to a Liquidated Mortgage Loan, the
amount by
which the remaining unpaid principal balance of the Mortgage Loan
exceeds the
amount of Liquidation Proceeds applied to the principal balance of
the related
Mortgage Loan. To the extent the Master Servicer receives
Subsequent Recoveries
with respect to any Mortgage Loan, the amount of the Realized Loss
with respect
to that Mortgage Loan will be reduced to the extent such recoveries
are applied
to reduce the Class Certificate Balance of any Class of
Certificates on any
Distribution Date.
Record Date: With respect to each Distribution Date and each class
of
Offered Certificates, the close of business on the last Business
Day of the
month immediately preceding the month in which the related
Distribution Date
occurs.
Reference Banks: Those banks (i) with an established place of
business in
London, England, (ii) not controlling, under the control of or
under common
control with the Depositor or the Securities Administrator, (iii)
that have been
designated as such by the Securities Administrator and (iv) that
are engaged in
transactions in the London interbank market.
Refinanced Mortgage Loan: Any Mortgage Loan the proceeds of which
were not
used to purchase the related Mortgaged Property.
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<PAGE>
Regular Certificates: Any of the Class AF-1, Class AF-2A, Class
AF-2B,
Class AF-2C, Class AF-3A, Class AF-3B, Class IO, Class PO, Class
MF-1, Class
MF-2, Class MF-3, Class BF-1, Class BF-2 or Class BF-3
Certificates.
Regulation AB: Subpart 22.1100 - Asset Backed Securities
(Regulation AB),
17 C.F.R. Sections 229.1100-229.1123, as such may be amended from
time to time,
and subject to such clarification and interpretation as have been
provided by
the Commission in the adopting release (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 Commission, or as may be provided by the Commission or its
staff from time
to time.
Reinvestment Agreements: One or more reinvestment agreements,
acceptable to
each of the Rating Agencies, from a bank, insurance company or
other corporation
or entity (including the Trustee).
Relevant Servicing Criteria: The Servicing Criteria applicable to
the
various parties, as set forth on Exhibit K hereto. For
clarification purposes,
multiple parties can have responsibility for the same Relevant
Servicing
Criteria. With respect to a Servicing Function Participant engaged
by the Master
Servicer, the Securities Administrator, the Trustee, the Custodian
or a
Servicer, the term "Relevant Servicing Criteria" may refer to one
or more
discrete functions specified in the Relevant Servicing Criteria
applicable to
such parties.
Relief Act: The Servicemembers Civil Relief Act, as amended.
Relief Act Mortgage Loan: Any Mortgage Loan as to which the Monthly
Payment
thereof has been reduced due to the application of the Relief
Act.
REMIC: Each pool of assets in the Trust Fund designated as a REMIC
as
described in the Preliminary Statement.
REMIC Interests: Any regular or residual interest in any of REMIC
1, REMIC
2 or the Upper Tier REMIC, as described in the Preliminary
Statement.
REMIC Opinion: An Opinion of Counsel to the effect that a
contemplated
action will neither adversely affect the status as a REMIC of any
REMIC created
hereunder nor subject any such REMIC to any tax under the REMIC
Provisions.
REMIC Provisions: The provisions of the federal income tax law
relating to
real estate mortgage investment conduits, which appear at Sections
860A through
860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and
regulations, including proposed regulations and rulings, and
administrative
pronouncements promulgated thereunder, as the foregoing may be in
effect from
time to time.
REMIC 1: As described in the Preliminary Statement.
REMIC 1 Interest: Each class of interest in REMIC 1 as described in
the
Preliminary Statement.
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REMIC 1 Regular Interest: Each of the REMIC 1 Interests other than
the
Class LT1-R Interest.
REMIC 1 Subordinate Balance Ratio: The ratio among the
uncertificated
principal balances of each of the REMIC 1 Interests ending with the
designation
"A" that is equal to the ratio among, with respect to each such
REMIC 1
Interest, the excess of (x) the aggregate Non-PO Percentage of the
Principal
Balance of each of the Mortgage Loans in the related Mortgage Group
over (y) the
aggregate Class Certificate Balance of the Certificates in the
Certificate Group
related to such Mortgage Group.
REMIC 2: Not applicable.
REMIC 2 Interest: Not applicable.
REMIC 2 Regular Interest: Not applicable.
Remittance Rate: With respect to each of Mortgage Group One,
Mortgage Group
Two and Mortgage Group Three, the Mortgage Group One Remittance
Rate, the
Mortgage Group Two Remittance Rate and the Mortgage Group Three
Remittance Rate,
respectively.
REO
Property: A Mortgaged Property acquired by the Servicer or
Master
Servicer on behalf of the Trust Fund through foreclosure or
deed-in-lieu of
foreclosure, as described in Section 3.15 in connection with a
defaulted
Mortgage Loan.
Reportable Event: As defined in Section 3.18(a).
Reporting Servicer: As defined in Section 3.18(h).
Repurchase Proceeds: The repurchase price in connection with any
repurchase
of a Mortgage Loan by the Seller and any cash deposit in connection
with the
substitution of a Mortgage Loan.
Request for Release: A request for release in the form attached
hereto as
Exhibit D.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance
policy which is required to be maintained from time to time under
this Agreement
with respect to such Mortgage Loan.
Residual Certificate: The Class A-R Certificate.
Residual Interest: Not applicable.
Responsible Officer: Any officer assigned to the Corporate Trust
Office (or
any successor thereto), including any Vice President, Assistant
Vice President,
Trust Officer, any Assistant Secretary, any trust officer or any
other officer
of the Trustee or Securities Administrator customarily performing
functions
similar to those performed by any of the above designated officers
and having
direct responsibility for the administration of this Agreement, and
any other
officer of the Trustee or Securities Administrator to whom a matter
arising
hereunder may be referred because of such officers familiarity with
the subject
matter thereof.
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Rule
144A Letter: The certificate to be furnished by each purchaser of
a
Private Certificate (which is also a Physical Certificate) which is
a Qualified
Institutional Buyer as defined under Rule 144A promulgated under
the Securities
Act, substantially in the form set forth as Exhibit F-3 hereto.
Sarbanes-Oxley Act: The Sarbanes-Oxley Act of 2002 and the rules
and
regulations of the Commission promulgated thereunder (including
any
interpretations thereof by the Commission's staff).
Sarbanes-Oxley Certification: A written certification signed by an
officer
of the Master Servicer that complies with (i) the Sarbanes-Oxley
Act, and (ii)
Exchange Act Rules 13a-14(d) and 15d-14(d), as in effect from time
to time;
provided that if, after the Closing Date (a) the Sarbanes-Oxley Act
is amended,
(b) the Rules referred to in clause (ii) are modified or superseded
by any
subsequent statement, rule or regulation of the Commission or any
statement of a
division thereof, or (c) any future releases, rules and regulations
are
published by the Commission from time to time pursuant to the
Sarbanes-Oxley
Act, which in any such case affects the form or substance of the
required
certification and results in the required certification being, in
the reasonable
judgment of the Master Servicer, materially more onerous that then
form of the
required certification as of the Closing Date, the Sarbanes-Oxley
Certification
shall be as agreed to by the Master Servicer and the Depositor
following a
negotiation in good faith to determine how to comply with any such
new
requirements.
S&P: Standard and Poor's, a division of The McGraw-Hill
Companies, Inc. or
its successor in interest.
Scheduled Payment: With respect to any Mortgage Loan and any month,
the
scheduled payment or payments of principal and interest due during
such month on
such Mortgage Loan which either is payable by a Mortgagor in such
month under
the related Mortgage Note or, in the case of REO Property, would
otherwise have
been payable under the related Mortgage Note.
Scheduled Principal: The principal portion of any Scheduled
Payment.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Wells Fargo Bank, N.A., or any successor
in
interest, or any successor securities administrator appointed as
herein
provided.
Security Agreement: With respect to a Cooperative Loan, the
agreement
creating a security interest in favor of the originator in the
related
Cooperative Stock.
Security Instrument: A written instrument creating a valid first
lien on a
Mortgaged Property securing a Mortgage Note, which may be any
applicable form of
mortgage, deed of trust, deed to secure debt or security deed,
including any
riders or addenda thereto.
Seller: Merrill Lynch Mortgage Lending, Inc., a Delaware
corporation, or
any successor in interest.
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Senior Certificates: The Class AF-1 Certificates, Class AF-2A
Certificates,
Class AF-2B Certificates, Class AF-2C Certificates, Class AF-3A
Certificates,
Class AF-3B Certificates, Class IO Certificates and Class PO
Certificates.
Servicer: With respect to each Mortgage Loan, CitiMortgage, IndyMac
or PHH
as applicable and as specified on the Mortgage Loan Schedule.
Servicer Remittance Date: With respect to each Mortgage Loan, the
date set
forth in the related Servicing Agreement.
Servicing Advances: With respect to any Mortgage Loan, all
customary,
reasonable and necessary "out-of-pocket" costs and expenses
incurred by the
Servicer in the performance of its servicing obligations,
including, but not
limited to, the cost of (i) preservation, restoration, protection
and repair of
a Mortgaged Property or Cooperative Unit, as applicable, (ii) any
enforcement or
judicial proceedings with respect to a Mortgage Loan, including
foreclosure
actions and (iii) the management and liquidation of REO
Property.
Servicing Agreements: The CitiMortgage Servicing Agreement,
IndyMac
Servicing Agreement and PHH Servicing Agreement.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing Fee: As to any Mortgage Loan and Distribution Date, an
amount
equal to the product of (i) the Stated Principal Balance of such
Mortgage Loan
as of the Due Date in the preceding calendar month and (ii) the
applicable
Servicing Fee Rate. Such fee shall be payable monthly, computed on
the basis of
the same principal amount and period respectively which any related
interest
payment on a Mortgage Loan is computed.
Servicing Fee Rate: As to any Mortgage Loan, a per annum rate as
set forth
in the Mortgage Loan Schedule.
Servicing Function Participant: Any Sub-Servicer, Subcontractor or
any
other Person, engaged by a Servicer, the Custodian, the Master
Servicer, the
Paying Agent, the Securities Administrator and the Trustee.
Servicing Officer: Any officer of the Master Servicer involved in,
or
responsible for, the administration and servicing of the Mortgage
Loans whose
names and specimen signatures appear on a list of servicing
officers furnished
to the Trustee by the Master Servicer, as such list may be amended
from time to
time.
Stack II Agreement: The Stack II Pooling and Servicing Terms dated
as of
September 1, 2006.
Stack II Certificate: Any mortgage pass-through certificate issued
pursuant
to the Stack II Agreement, evidencing a beneficial ownership
interest in that
portion of the Trust Fund related to the Stack II Mortgage Loans
set forth on
the Stack II Mortgage Loan Schedule, signed and countersigned by
the Securities
Administrator.
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Stack II Mortgage Loan: A mortgage loan transferred and assigned to
the
Trustee pursuant to Section 2.01 or Section 2.04 of the Stack II
Agreement and
held as a part of the Trust Fund, as identified in the Stack II
Mortgage Loan
Schedule, including a mortgage loan the property securing which has
become an
REO Property.
Stack II Mortgage Loan Schedule: The schedule, attached to the
Stack II
Agreement as Exhibit B with respect to the Stack II Mortgage Loans
and as
amended from time to time to reflect the repurchase or substitution
of Stack II
Mortgage Loans pursuant to the Stack II Agreement.
Startup Day: The Closing Date.
Stated Principal Balance: With respect to any Mortgage Loan and Due
Date,
the unpaid principal balance of such Mortgage Loan as of such Due
Date, as
specified in the amortization schedule at the time relating thereto
(before any
adjustment to such amortization schedule by reason of any
moratorium or similar
waiver or grace period), after giving effect to any previous
partial prepayments
and Liquidation Proceeds received and to the payment of principal
due on such
Due date and irrespective of any delinquency in payment by the
related
Mortgagor.
Subcontractor: Any vendor, subcontractor or other Person that is
not
responsible for the overall servicing of Mortgage Loans but
performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with
respect to
Mortgage Loans under the direction or authority of any Servicer (or
a
Sub-Servicer of any Servicer), the Master Servicer, the Trustee,
the Custodian
or the Securities Administrator.
Subordinate Certificates: The Class MF-1, Class MF-2, Class MF-3,
Class
BF-1, Class BF-2 and Class BF-3 Certificates.
Subordinated Optimal Principal Amount: Generally as of any
Distribution
Date, an amount, not in excess of the aggregate outstanding
principal balance of
the Subordinate Certificates, equal to (1) the sum of (a) an amount
equal to the
applicable Subordinated Percentage of the applicable Non-PO
Percentage of the
principal portion of all Scheduled Payments whether or not
received, which were
due on the related Due Date on outstanding Mortgage Loans as of
such Due Date;
(b) an amount equal to the applicable Subordinated Prepayment
Percentage of the
applicable Non-PO Percentage of all principal prepayments received
during the
related principal Prepayment Period; (c) with respect to each
Mortgage Loan not
described in (d) below, an amount equal to the applicable
Subordinated
Percentage of the applicable Non-PO Percentage of the sum of the
principal
portion of all insurance proceeds, condemnation awards and any
other cash
proceeds from a source other than the Mortgagor, to the extent
required to be
deposited in the Master Servicer Collection Account, which were
received during
the related principal Prepayment Period, net of related
unreimbursed servicing
Advances and net of any portion thereof which, as to any Mortgage
Loan,
constitutes a late collection with respect to which an Advance has
previously
been made; (d) with respect to each Mortgage Loan which has become
a Liquidated
Mortgage Loan during the related principal Prepayment Period, an
amount equal to
the portion (if any) of the net liquidation proceeds with respect
to such
Liquidated Mortgage Loan (net of any unreimbursed Advances) that
was not
included in the Class PO Certificate Distribution Amount or the
Non-PO Senior
Optimal Principal Amount with respect to such Distribution Date;
(e) Subsequent
Recoveries; and (f) with respect to each Mortgage Loan repurchased
during the
related principal Prepayment Period, an amount equal to the
applicable
Subordinated Prepayment Percentage of the applicable Non-PO
Percentage of the
principal portion of the purchase price thereof (net of amounts
with respect to
which a distribution has previously been made to the
Subordinate
Certificateholders), minus (2) the Class PO Shortfall Amount with
respect to
such Distribution Date.
Subordinated Percentage: The Mortgage Group One Subordinated
Percentage,
the Mortgage Group Two Subordinated Percentage or the Mortgage
Group Three
Subordinated Percentage, as the case may be.
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Subordinated Prepayment Percentage: The Mortgage Group One
Subordinated
Prepayment Percentage, the Mortgage group Two Subordinated
Prepayment Percentage
or the Mortgage Group Three Prepayment Percentage, as the case may
be.
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Subsequent Recoveries: Any amount recovered by a Servicer or the
Master
Servicer (net of reimbursable expenses) with respect to a
Liquidated Mortgage
Loan with respect to which a Realized Loss was incurred after the
liquidation or
disposition of such Mortgage Loan.
Sub-Servicer: Any Person that services Mortgage Loans on behalf of
a
Servicer, and is responsible for the performance (whether directly
or through
sub-servicers or Subcontractors) of servicing functions required to
be performed
under this Agreement, any related Servicing Agreement or any
sub-servicing
agreement that are identified in Item 1122(d) of Regulation AB.
Substitute Mortgage Loan: With respect to any Mortgage Loan, which
is
tendered to the Trustee pursuant to the related Servicing
Agreement, the
Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement,
as
applicable, in each case, (i) which has an Outstanding Principal
Balance not
greater nor materially less than the Mortgage Loan for which it is
to be
substituted; (ii) which has a Mortgage Interest Rate and Net Rate
not less than,
and not materially greater than, such Mortgage Loan; (iii) which
has a maturity
date not materially earlier or later than such Mortgage Loan and
not later than
the latest maturity date of any Mortgage Loan; (iv) which is of the
same
property type and occupancy type as such Mortgage Loan; (v) which
has a
Loan-to-Value Ratio not greater than the Loan-to-Value Ratio of
such Mortgage
Loan; (vi) which is current in payment of principal and interest as
of the date
of substitution; and (vii) as to which the payment terms do not
vary in any
material respect from the payment terms of the Mortgage Loan for
which it is to
be substituted.
Tax
Matters Person: The Securities Administrator or any successor
thereto
or assignee thereof shall serve as tax administrator hereunder and
as agent for
the Tax Matters Person. The Holder of the Residual Certificates
shall be the Tax
Matters Person for the related REMIC, as more particularly set
forth in Section
9.12 hereof.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest
in a certificate.
Transferor Representation Letter: As defined in Section
5.02(b).
Trustee: HSBC Bank USA, National Association, or its successor in
interest,
or any successor trustee appointed as herein provided.
Trust Fund: The corpus of the Issuing Entity created pursuant to
Article II
of this Agreement and Article II of the Stack II Agreement.
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Undercollateralized Senior Certificates: As defined in Section
6.01(I).
Underlying Seller: With respect to each Mortgage Loan, IndyMac,
Ameriquest
Mortgage Company, Quicken Loans, Inc., The New York Mortgage
Corporation and
Weichert, as indicated on the Mortgage Loan Schedule.
Uninsured Cause: Any cause of damage to a Mortgaged Property or
related REO
Property such that the complete restoration of such Mortgaged
Property or
related REO Property is not fully reimbursable by the hazard
insurance policies
required to be maintained pursuant the related Servicing Agreement,
without
regard to whether or not such policy is maintained.
United States Person: A citizen or resident of the United States,
a
corporation or partnership (including an entity treated as a
corporation or
partnership for federal income tax purposes) created or organized
in, or under
the laws of, the United States or any state thereof or the District
of Columbia
(except, in the case of a partnership, to the extent provided in
regulations),
provided that, for purposes solely of the Class A-R Certificate, no
partnership
or other entity treated as a partnership for United States federal
income tax
purposes shall be treated as a United States Person unless all
persons that own
an interest in such partnership either directly or through any
entity that is
not a corporation for United States federal income tax purposes are
United
States Persons, or an estate whose income is subject to United
States federal
income tax regardless of its source, or a trust if a court within
the United
States is able to exercise primary supervision over the
administration of the
trust and one or more such United States Persons have the authority
to control
all substantial decisions of the trust. To the extent prescribed in
regulations
by the Secretary of the Treasury, which have not yet been issued, a
trust which
was in existence on August 20, 1996 (other than a trust treated as
owned by the
grantor under subpart E of part I of subchapter J of chapter 1 of
the Code), and
which was treated as a United States person on August 20, 1996 may
elect to
continue to be treated as a United States person notwithstanding
the previous
sentence.
Upper Tier REMIC: As described in the Preliminary Statement.
Upper Tier REMIC Regular Interest: Each of (i) each class of the
Class AF-1
Certificates, Class AF-2 Certificates, Class AF-3 Certificates,
Class M
Certificates and Class B Certificates and (ii) Class IO Component
One, Class IO
Component Two, Class IO Component Three, Class PO Component One,
Class PO
Component Two and Class PO Component Three.
Voting Rights: The portion of the voting rights of all of the
Certificates
which is allocated to any Certificate. The Voting Rights allocated
among Holders
of such Certificates outstanding shall be the fraction, expressed
as a
percentage, the numerator of which is the aggregate Class
Certificate Balance of
all the Certificates of such Class then outstanding and the
denominator of which
is the aggregate Class Certificate Balance of all the Certificates
then
outstanding. 100.00% of all Voting Rights will be allocated among
all holders of
the Certificates in proportion to their then outstanding Class
Certificate
Balances; provided, however, that any Certificate registered in the
name of the
Master Servicer, the Depositor or the Securities
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Administrator or any of their respective affiliates shall not be
included in the
calculation of Voting Rights. The Class P Certificates shall have
no voting
rights.
Wells Fargo: Wells Fargo Bank, N.A., or any successor thereto.
Section 1.02 Accounting.
Unless otherwise specified herein, for the purpose of any
definition or
calculation, whenever amounts are required to be netted, subtracted
or added or
any distributions are taken into account such definition or
calculation and any
related definitions or calculations shall be determined without
duplication of
such functions.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans to Trustee.
(a)
The Depositor concurrently with the execution and delivery of
this
Agreement, sells, transfers and assigns to the Issuing Entity
without recourse
all its right, title and interest in and to (i) the Mortgage Loans
identified in
the Mortgage Loan Schedule, including all interest and principal
due with
respect to the Mortgage Loans after the Cut-off Date, but excluding
any payments
of principal and interest due on or prior to the Cut-off Date; (ii)
such assets
as shall from time to time be credited or are required by the terms
of this
Agreement to be credited to the Master Servicer Collection Account,
(iii) such
assets relating to the Mortgage Loans as from time to time may be
held by the
Servicers in Protected Accounts, the Master Servicer in the Master
Servicer
Collection Account and the Securities Administrator in the
Distribution Account
for the benefit of the Trustee on behalf of the Certificateholders,
(iv) any REO
Property, (v) the Required Insurance Policies and any amounts paid
or payable by
the insurer under any Insurance Policy (to the extent the mortgagee
has a claim
thereto), (vi) the Mortgage Loan Purchase Agreement to the extent
provided in
Subsection 2.03(a), (vii) the rights with respect to the Servicing
Agreements as
assigned to the Depositor on behalf of the Certificateholders by
the Assignment
Agreements and (viii) any proceeds of the foregoing. Although it is
the intent
of the parties to this Agreement that the conveyance of the
Depositor's right,
title and interest in and to the Mortgage Loans and other assets in
the Trust
Fund pursuant to this Agreement shall constitute a purchase and
sale and not a
loan, in the event that such conveyance is deemed to be a loan, it
is the intent
of the parties to this Agreement that the Depositor shall be deemed
to have
granted to the Trustee a first priority perfected security interest
in all of
the Depositor's right, title and interest in, to and under the
Mortgage Loans
and other assets in the Trust Fund, and that this Agreement shall
constitute a
security agreement under applicable law.
(b)
In connection with the above transfer and assignment, the
Depositor
hereby deposits with the Trustee or the Custodian, as its agent,
the following
documents or instruments
(I)
with respect to each Mortgage Loan, other than a Cooperative
Loan:
(i) the original Mortgage Note, endorsed in the following form:
"Pay
to
the order of HSBC Bank USA, National Association, as Trustee for
the
registered holders of
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the
Merrill Lynch Mortgage Investors, Inc., Mortgage Pass-Through
Certificates, Series 2006-AF1, without recourse," with all prior
and
intervening endorsements showing a complete chain of endorsement
from the
originator to the Person so endorsing to the Trustee;
(ii) the original recorded Mortgage or a copy of the Mortgage
certified by the public recording office in which such Mortgage has
been
recorded;
(iii) an original Assignment of the Mortgage executed in the
following
form: "HSBC Bank USA, National Association, as Trustee for the
registered
holders of the Merrill Lynch Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 2006-AF1."
(iv) the original recorded Assignment or Assignments of the
Mortgage
showing a complete chain of assignment from the originator to the
Person
assigning the Mortgage to the Trustee as contemplated by the
immediately
preceding clause (iii), if applicable and only to the extent
available to
the
Depositor with evidence of recording thereon;
(v) the originals of all assumption, modification, consolidation
or
extension agreements, with evidence of recording thereon, if
any;
(vi) the original of any guarantee executed in connection with
the
Mortgage Note;
(vii) the original mortgagee title insurance policy;
(viii) the original of any security agreement, chattel mortgage
or
equivalent document executed in connection with the Mortgage;
and
(ix) the original power of attorney, if applicable.
and (II) with respect to each Mortgage Loan that is a Cooperative
Loan:
(x) the original Mortgage Note, endorsed in the following form:
"Pay
to
the order of HSBC Bank USA, National Association, as Trustee for
the
registered holders of the Merrill Lynch Mortgage Investors, Inc.,
Mortgage
Pass-Through Certificates, Series 2006-AF1, without recourse," with
all
prior and intervening endorsements showing a complete chain of
endorsement
from
the originator to the Person so endorsing to the Trustee;
(xi) the original duly executed assignment of Security Agreement
to
the
Trustee;
(xii) the acknowledgment copy of the original executed Form UCC-1
(or
certified copy thereof) with respect to the Security Agreement, and
any
required continuation statements;
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(xiii) the acknowledgment copy of the original executed Form
UCC-3
with
respect to the Security Agreement, indicating the Trustee as
the
assignee of the secured party;
(xiv) the stock certificate representing the Cooperative Assets
allocated to the cooperative unit, with a stock power in blank
attached;
(xv) the original collateral assignment of the proprietary lease
by
Mortgagor to the originator;
(xvi) a copy of the recognition agreement;
(xvii) if applicable and to the extent available, the original
intervening assignments, including warehousing assignments, if
any,
showing, to the extent available, an unbroken chain of the related
Mortgage
Loan
to the Trustee, together with a copy of the related Form UCC-3
with
evidence of filing thereon; and
(xviii) the originals of each assumption, modification or
substitution
agreement, if any, relating to the Mortgage Loan;
provided, however, that in lieu of the foregoing, the Depositor may
deliver the
following documents, under the circumstances set forth below: (w)
the Depositor
may deliver a Mortgage Note pursuant to (a)(i) and (b)(i) endorsed
in blank,
provided that the endorsement is completed within 60 days of the
Closing Date;
(x) in lieu of the original Mortgage, assignments to the Trustee or
its
Custodian, as applicable, or intervening assignments thereof which
have been
delivered, are being delivered or will, upon receipt of recording
information
relating to the Mortgage required to be included thereon, be
delivered to
recording offices for recording and have not been returned to the
Depositor in
time to permit their delivery as specified above, the Depositor may
deliver a
true copy thereof with a certification by the Depositor on the face
of such
copy, substantially as follows: "Certified to be a true and correct
copy of the
original, which has been transmitted for recording"; and (y) in
lieu of the
Mortgage, assignment to the Trustee or intervening assignments
thereof, if the
applicable jurisdiction retains the originals of such documents (as
evidenced by
a certification from the Depositor or the Master Servicer, to such
effect) the
Depositor may deliver photocopies of such documents containing an
original
certification by the judicial or other governmental authority of
the
jurisdiction where such documents were recorded; and provided,
further, however,
that in the case of Mortgage Loans which have been prepaid in full
after the
Cut-off Date and prior to the Closing Date, the Depositor, in lieu
of delivering
the above documents, may deliver to the Trustee or its Custodian,
as applicable,
a certification to such effect and shall deposit all amounts paid
in respect of
such Mortgage Loans in the Distribution Account on the Closing
Date. The
Depositor shall deliver such original documents (including any
original
documents as to which certified copies had previously been
delivered) to the
Trustee or its Custodian, as applicable, promptly after they are
received. As of
the date hereof, recordation of the assignment of the Mortgage
Loans to the
Trustee or the Custodian, as applicable, is not required in any
state by either
Rating Agency to obtain the initial rating on the Certificates
(upon which
statement the Master Servicer, the Trustee and the Custodian may
each
conclusively rely).
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If
any original Mortgage Note referred to in Section 2.01(b)(I)(i)
or
2.01(b)(II)(i) above cannot be located, the obligations of the
Depositor to
deliver such documents shall be deemed to be satisfied upon
delivery to the
Trustee or its Custodian, as applicable, of a photocopy of such
Mortgage Note,
if available, with a lost note affidavit. If any of the original
Mortgage Notes
for which a lost note affidavit was delivered to the Trustee or its
Custodian,
as applicable, is subsequently located, such original Mortgage Note
shall be
delivered to the Trustee or its Custodian, as applicable, within
three Business
Days.
(c)
The parties hereto agree that it is not intended that any mortgage
loan
be included in the Trust Fund that is, without limitation, a "High
Cost Loan" as
defined by the Home Ownership and Equity Protection Act of 1994 or
any other
applicable anti-predatory lending laws, including but not limited
to (i) a
"High-Cost Home Loan" as defined in the New Jersey Home Ownership
Act effective
November 27, 2003, (ii) a "High-Cost Home Loan" as defined in the
New Mexico
Home Loan Protection Act effective January 1, 2004, (iii) a "High
Cost Home
Mortgage Loan" as defined in the Massachusetts Predatory Home Loan
Practices Act
effective November 7, 2004 or (iv) a "High-Cost Home Loan" as
defined by the
Indiana High Cost Home Loan Law effective January 1, 2005.
(d)
Notwithstanding anything to the contrary contained herein, the
parties
hereto acknowledge that the functions of the Trustee with respect
to the
custody, acceptance, inspection and release of Mortgage Files,
including but not
limited to certain insurance policies and documents contemplated by
Section 3.12
of this Agreement, and preparation and delivery of the
certifications shall be
performed by the Custodian(s) pursuant to the terms and conditions
of the
Custodial Agreement(s).
Section 2.02 Acceptance of Mortgage Loans by Trustee.
(a)
The Trustee acknowledges the sale, transfer and assignment of the
Trust
Fund to it by the Depositor and its receipt thereof, subject to
further review
and the exceptions which may be noted pursuant to the procedures
described
below, and declares that it, or the Custodian on its behalf, holds
the documents
(or certified copies thereof) delivered to it pursuant to Section
2.01, and
declares that it will continue to hold those documents and any
amendments,
replacements or supplements thereto and all other assets of the
Trust Fund
delivered to it as Trustee in trust for the use and benefit of all
present and
future Holders of the Certificates. On or before the Closing Date
(or, with
respect to any Substitute Mortgage Loan, within five Business Days
after the
receipt by the Trustee or Custodian thereof), the Trustee agrees,
for the
benefit of the Certificateholders, to review or cause to be
reviewed by the
Custodian on its behalf (under the Custodial Agreement), each
Mortgage File
delivered to it and to execute and deliver, or cause to be executed
and
delivered, to the Depositor on the Closing Date an Initial
Certification. In
conducting such review, the Trustee or Custodian will certify as to
each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan
paid in full or any Mortgage Loan specifically identified in the
exception
report annexed thereto as not being covered by such certification),
(i) all
documents constituting part of such Mortgage File (other than such
documents
described in Section 2.01(b)(I)(iii)) required to be delivered to
it pursuant to
this Agreement are in its possession, provided that with respect to
the
documents described in Section 2.01(b)(I)(v), (vi), (viii) and (ix)
and
2.01(b)(II)(viii) and (ix) to the extent the Trustee or the
Custodian on its
behalf has actual knowledge that such documents exist, (ii) such
documents have
been reviewed by it and are not torn, mutilated, defaced or
otherwise altered
(except if
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initialed by the obligor) and appear to relate on their face to
such Mortgage
Loan, (iii) based on its examination and only as to the foregoing,
the
information set forth in the Mortgage Loan Schedule corresponding
to the loan
number for the Mortgage Loan, the Mortgagor's name, including the
street address
but excluding the zip code, the Mortgage Interest Rate and the
original
principal balance of the Mortgage Loan accurately reflects
information set forth
in the Mortgage File and (iv) with respect to Mortgage Loans with a
Mortgage
Interest Rate subject to adjustment, the gross margin, the lifetime
cap and the
periodic cap for such Mortgage Loan. In performing any such review,
the Trustee,
or the Custodian, as its agent, may conclusively rely on the
purported due
execution and genuineness of any such document and on the purported
genuineness
of any signature thereon. Notwithstanding anything to the contrary
in this
Agreement, it is herein acknowledged that, in conducting such
review, the
Trustee or the Custodian on its behalf is under no duty or
obligation to
inspect, review or examine any such documents, instruments,
certificates or
other papers to determine whether they are genuine, enforceable, or
appropriate
for the represented purpose or whether they have actually been
recorded or that
they are other than what they purport to be on their face, or to
determine
whether any Person executing any documents is authorized to do so
or whether any
signature is genuine.
If
the Trustee or the Custodian, as its agent, finds any document
constituting part of the Mortgage File not to have been executed or
received, or
to be unrelated to the Mortgage Loans identified in Exhibit B or to
appear to be
defective on its face, the Trustee or the Custodian, as its agent,
shall
promptly notify the Seller. In accordance with the Mortgage Loan
Purchase
Agreement, the Seller shall correct or cure any such defect within
ninety (90)
days from the date of notice from the Trustee or the Custodian, as
its agent, of
the defect and if the Seller fails to correct or cure the defect
within such
period, and such defect materially and adversely affects the
interests of the
Certificateholders in the related Mortgage Loan, the Trustee, shall
enforce the
Seller's obligation pursuant to the Mortgage Loan Purchase
Agreement, within 90
days from the Trustee's or the Custodian's notification, to
purchase such
Mortgage Loan at the Purchase Price; provided that, if such defect
would cause
the Mortgage Loan to be other than a "qualified mortgage" as
defined in Section
860G(a)(3) of the Code, any such cure or repurchase must occur
within 90 days
from the date such breach was discovered; provided, however, that
if such defect
relates solely to the inability of the Seller to deliver the
original Security
Instrument or intervening assignments thereof, or a certified copy
because the
originals of such documents, or a certified copy have not been
returned by the
applicable jurisdiction, the Seller shall not be required to
purchase such
Mortgage Loan if the Seller delivers such original documents or
certified copy
promptly upon receipt, but in no event later than 360 days after
the Closing
Date. The foregoing repurchase obligation shall not apply in the
event that the
Seller cannot deliver such original or copy of any document
submitted for
recording to the appropriate recording office in the applicable
jurisdiction
because such document has not been returned by such office;
provided that the
Seller shall instead deliver a recording receipt of such recording
office or, if
such receipt is not available, a certificate confirming that such
documents have
been accepted for recording, and delivery to the Trustee or the
Custodian, as
its agent, shall be effected by the Seller within thirty days of
its receipt of
the original recorded document.
(b)
No later than 180 days after the Closing Date, the Trustee or
the
Custodian, as its agent, will review, for the benefit of the
Certificateholders,
the Mortgage Files delivered to it and will execute and deliver or
cause to be
executed and delivered to the Depositor a Final Certification. In
conducting
such review, the Trustee or the Custodian, as its agent, will
certify
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as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any
Mortgage Loan paid in full or any Mortgage Loan specifically
identified in the
exception report annexed thereto as not being covered by such
certification),
that (i) all documents constituting part of such Mortgage File
(other than such
documents described in Section 2.01(b)(I)(v) and (ix)) required to
be delivered
to it pursuant to this Agreement are in its possession, provided
that with
respect to the documents described in Section 2.01(b)(I)(v), (vi),
(viii) and
(ix) and 2.01(b)(II)(viii) and (ix) to the extent the Trustee or
the Custodian
on its behalf has actual knowledge that such documents exist, (ii)
such
documents have been reviewed by it and are not torn, mutilated,
defaced or
otherwise altered (except if initialed by the obligor) and appear
regular on
their face and relate to such Mortgage Loan, (iii) based on its
examination and
only as to the foregoing, the information set forth in the Mortgage
Loan
Schedule corresponding to the loan number for the Mortgage Loan,
the Mortgagor's
name, including the street address but excluding the zip code, the
Mortgage
Interest Rate and the original principal balance of the Mortgage
Loan accurately
reflects information set forth in the Mortgage File. In performing
any such
review, the Trustee, or the Custodian, as its agent, may
conclusively rely on
the purported due execution and genuineness of any such document
and on the
purported genuineness of any signature thereon. Notwithstanding
anything to the
contrary in this Agreement, it is herein acknowledged that, in
conducting such
review, the Trustee or the Custodian on its behalf is under no duty
or
obligation (i) to inspect, review or examine any such documents,
instruments,
certificates or other papers to determine whether they are genuine,
enforceable,
or appropriate for the represented purpose or whether they have
actually been
recorded or that they are other than what they purport to be on
their face, or
to determine whether any Person executing any documents is
authorized to do so
or whether any signature is genuine. If the Trustee or the
Custodian, as its
agent, finds any document constituting part of the Mortgage File
not to have
been executed or received, or to be unrelated to the Mortgage Loans
identified
in Exhibit B or to appear to be defective on its face, the Trustee
or the
Custodian, as its agent, shall promptly notify the Seller. In
accordance with
the Mortgage Loan Purchase Agreement, the Seller shall correct or
cure any such
defect within 90 days from the date of notice from the Trustee of
the defect and
if the Seller is unable to cure such defect within such period, and
if such
defect materially and adversely affects the interests of the
Certificateholders
in the related Mortgage Loan, the Trustee shall enforce the
Seller's obligation
under the Mortgage Loan Purchase Agreement to purchase such
Mortgage Loan at the
Purchase Price, provided, however, that if such defect relates
solely to the
inability of the Seller to deliver the original Security Instrument
or
intervening assignments thereof, or a certified copy, because the
originals of
such documents, or a certified copy, have not been returned by the
applicable
jurisdiction, the Seller shall not be required to purchase such
Mortgage Loan,
if the Seller delivers such original documents or certified copy
promptly upon
receipt, but in no event later than 360 days after the Closing
Date.
(c)
In the event that a Mortgage Loan is purchased by the Seller in
accordance with Subsections 2.02(a) or (b) above, the Seller shall
remit to the
Master Servicer the Purchase Price for deposit in the Master
Servicer Collection
Account and the Seller shall provide to the Trustee written
notification
detailing the components of the Purchase Price. Upon deposit of the
Purchase
Price in the Master Servicer Collection Account, the Depositor
shall give
written notice thereof to the Trustee and the Custodian and the
Trustee or the
Custodian, as its agent (upon receipt of a Request for Release in
the form of
Exhibit D attached hereto with respect to such Mortgage Loan),
shall release to
the Seller the related Mortgage File and the Trustee shall execute
and deliver
all instruments of transfer or assignment, without recourse,
furnished to it by
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the Seller as are necessary to vest in the Seller title to and
rights under the
Mortgage Loan. Such purchase shall be deemed to have occurred on
the date on
which the Purchase Price in available funds is received by the
Trustee. The
Depositor or Master Servicer shall amend the Mortgage Loan
Schedule, to reflect
such repurchase and shall promptly notify the Rating Agencies and
the Master
Servicer of such amendment. The obligation of the Seller to
repurchase any
Mortgage Loan as to which such a defect in a constituent document
exists shall
be the sole remedy respecting such defect available to the
Certificateholders or
to the Trustee on their behalf.
Section 2.03 Assignment of Interest in the Mortgage Loan
Purchase
Agreement.
(a)
The Depositor hereby assigns to the Trustee, on behalf of the
Certificateholders, all of its right, title and interest in the
Mortgage Loan
Purchase Agreement, including but not limited to Depositor's rights
pursuant to
the Servicing Agreements (noting that the Seller has retained the
right in the
event of breach of the representations, warranties and covenants,
if any, with
respect to the related Mortgage Loans of the related Servicer under
the related
Servicing Agreement to enforce the provisions thereof and to seek
all or any
available remedies). The obligations of the Seller to substitute or
repurchase,
as applicable, a Mortgage Loan shall be the Trustee's and the
Certificateholders' sole remedy for any breach thereof. At the
request of the
Trustee, the Depositor shall take such actions as may be necessary
to enforce
the above right, title and interest on behalf of the Trustee and
the
Certificateholders or shall execute such further documents as the
Trustee may
reasonably require in order to enable the Trustee to carry out such
enforcement.
With respect to the representations and warranties described in the
Mortgage
Loan Purchase Agreement that are made to the best of the Seller's
knowledge, if
it is discovered by any of the Depositor, the Seller, the Master
Servicer, the
Securities Administrator or the Trustee that the substance of
such
representation and warranty is inaccurate and such inaccuracy
materially and
adversely affects the value of the related Mortgage Loan, then
notwithstanding
the Seller's lack of knowledge with respect to the substance of
such
representation and warranty, such inaccuracy shall be deemed a
breach of the
applicable representation or warranty.
(b)
If the Depositor, the Master Servicer, Securities Administrator or
the
Trustee discovers a breach of any of the representations and
warranties set
forth in the Mortgage Loan Purchase Agreement, which breach
materially and
adversely affects the value of the interests of Certificateholders
or the
Trustee in the related Mortgage Loan, the party discovering the
breach shall
give prompt written notice of the breach to the other parties. The
Seller,
within 90 days of its discovery or receipt of notice that such
breach has
occurred (whichever occurs earlier), shall cure the breach in all
material
respects or, subject to the Mortgage Loan Purchase Agreement or
Section 2.04 of
this Agreement, as applicable, shall purchase the Mortgage Loan or
any property
acquired with respect thereto from the Trustee; provided, however,
that if there
is a breach of any representation set forth in the Mortgage Loan
Purchase
Agreement or Section 2.04 of this Agreement, as applicable, and the
Mortgage
Loan or the related property acquired with respect thereto has been
sold, then
the Seller shall pay, in lieu of the Purchase Price, any excess of
the Purchase
Price over the Net Liquidation Proceeds received upon such sale.
(If the Net
Liquidation Proceeds exceed the Purchase Price, any excess shall be
paid to the
Seller to the extent not required by law to be paid to the
borrower.) Any such
purchase by the Seller shall be made by providing an amount equal
to the
Purchase Price to the Master Servicer for deposit in the Master
Servicer
Collection Account and written notification detailing the
components of such
Purchase Price. The Depositor shall notify the Trustee in writing
of the deposit
of the Purchase
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Price and submit to the Trustee or the Custodian, as its agent, a
Request for
Release, and the Trustee shall release, or the Trustee shall cause
the Custodian
to release, to the Seller the related Mortgage File and the Trustee
shall
execute and deliver all instruments of transfer or assignment
furnished to it by
the Seller, without recourse, as are necessary to vest in the
Seller title to
and rights under the Mortgage Loan or any property acquired with
respect
thereto. Such purchase shall be deemed to have occurred on the date
on which the
Purchase Price in available funds is received by the Master
Servicer. The
Depositor or the Master Servicer shall amend the Mortgage Loan
Schedule to
reflect such repurchase and shall promptly notify the Master
Servicer and the
Rating Agencies of such amendment. Enforcement of the obligation of
the Seller
to purchase (or substitute a Substitute Mortgage Loan for) any
Mortgage Loan or
any property acquired with respect thereto (or pay the Purchase
Price as set
forth in the above proviso) as to which a breach has occurred and
is continuing
shall constitute the sole remedy respecting such breach available
to the
Certificateholders or the Trustee on their behalf.
Section 2.04 Substitution of Mortgage Loans. Notwithstanding
anything to
the contrary in this Agreement, in lieu of purchasing a Mortgage
Loan pursuant
to the Mortgage Loan Purchase Agreement or Sections 2.02 or 2.03 of
this
Agreement, the Seller may, no later than the date by which such
purchase by the
Seller would otherwise be required, tender to the Trustee a
Substitute Mortgage
Loan accompanied by a certificate of an authorized officer of the
Seller that
such Substitute Mortgage Loan conforms to the requirements set
forth in the
definition of "Substitute Mortgage Loan" in the Mortgage Loan
Purchase Agreement
or this Agreement, as applicable; provided, however, that
substitution pursuant
to the Mortgage Loan Purchase Agreement or Section 2.04 of this
Agreement, as
applicable, in lieu of purchase shall not be permitted after the
termination of
the two-year period beginning on the Startup Day; provided,
further, that if the
breach would cause the Mortgage Loan to be other than a "qualified
mortgage" as
defined in Section 860G(a)(3) of the Code, any such cure or
substitution must
occur within 90 days from the date the breach was discovered. The
Trustee or the
Custodian, as its agent, shall examine the Mortgage File for any
Substitute
Mortgage Loan in the manner set forth in Section 2.02(a) and the
Trustee or the
Custodian, as its agent, shall notify the Seller, in writing,
within five
Business Days after receipt, whether or not the documents relating
to the
Substitute Mortgage Loan satisfy the requirements of the fourth
sentence of
Subsection 2.02(a). Within two Business Days after such
notification, the Seller
shall provide to the Securities Administrator for deposit in the
Distribution
Account the amount, if any, by which the Outstanding Principal
Balance as of the
next preceding Due Date of the Mortgage Loan for which substitution
is being
made, after giving effect to Scheduled Principal due on such date,
exceeds the
Outstanding Principal Balance as of such date of the Substitute
Mortgage Loan,
after giving effect to Scheduled Principal due on such date, which
amount shall
be treated for the purposes of this Agreement as if it were the
payment by the
Seller of the Purchase Price for the purchase of a Mortgage Loan by
the Seller.
After such notification to the Seller and, if any such excess
exists, upon
written notification of the receipt of such deposit, the Trustee
shall accept
such Substitute Mortgage Loan which shall thereafter be deemed to
be a Mortgage
Loan hereunder. In the event of such a substitution, accrued
interest on the
Substitute Mortgage Loan for the month in which the substitution
occurs and any
Principal Prepayments made thereon during such month shall be the
property of
the Issuing Entity and accrued interest for such month on the
Mortgage Loan for
which the substitution is made and any Principal Prepayments made
thereon during
such month shall be the property of the Seller. The Scheduled
Principal on a
Substitute Mortgage Loan due on the Due Date in the month of
substitution shall
be the property
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of the Seller and the Scheduled Principal on the Mortgage Loan for
which the
substitution is made due on such Due Date shall be the property of
the Issuing
Entity. Upon acceptance of the Substitute Mortgage Loan (and
delivery to the
Trustee or Custodian of a Request for Release for such Mortgage
Loan), the
Trustee shall release to the Seller the related Mortgage File
related to any
Mortgage Loan released pursuant to the Mortgage Loan Purchase
Agreement or
Section 2.04 of this Agreement, as applicable, and shall execute
and deliver all
instruments of transfer or assignment, without recourse, in form as
provided to
it as are necessary to vest in the Seller title to and rights under
any Mortgage
Loan released pursuant to the Mortgage Loan Purchase Agreement or
Section 2.04
of this Agreement, as applicable. The Seller shall deliver the
documents related
to the Substitute Mortgage Loan in accordance with the provisions
of the
Mortgage Loan Purchase Agreement or Subsections 2.01(b) and 2.02(b)
of this
Agreement, as applicable, with the date of acceptance of the
Substitute Mortgage
Loan deemed to be the Closing Date for purposes of the time periods
set forth in
those Subsections. The representations and warranties set forth in
the Mortgage
Loan Purchase Agreement shall be deemed to have been made by the
Seller with
respect to each Substitute Mortgage Loan as of the date of
acceptance of such
Mortgage Loan by the Trustee. The Master Servicer shall amend the
Mortgage Loan
Schedule to reflect such substitution and shall provide a copy of
such amended
Mortgage Loan Schedule to the Trustee and the Rating Agencies.
Notwithstanding any other provision of this Agreement, the right
to
substitute Mortgage Loans pursuant to this Article II shall be
subject to the
additional limitations that no substitution of a Mortgage Loan
shall be made
unless the Securities Administrator and the Trustee shall have
received an
Opinion of Counsel (at the expense of the party seeking to make
the
substitution) that, under current law, such substitution will not
(A) affect
adversely the status of any REMIC established hereunder as a REMIC,
or of the
related "regular interests" as "regular interests" in any such
REMIC, or (B)
cause any such REMIC to engage in a "prohibited transaction" or
prohibited
contribution pursuant to the REMIC provisions.
Section 2.05 Issuance of Certificates. The Trustee acknowledges
the
assignment to it on behalf of the Issuing Entity of the Mortgage
Loans and the
other assets comprising the Trust Fund and, concurrently therewith,
the
Securities Administrator has signed, and countersigned and
delivered to the
Depositor, in exchange therefor, Certificates in such authorized
denominations
representing such Percentage Interests as the Depositor has
requested. The
Trustee agrees that it will hold the Mortgage Loans and such other
assets as may
from time to time be delivered to it segregated on the books of the
Trustee in
trust for the benefit of the Certificateholders.
Section 2.06 Representations and Warranties Concerning the
Depositor. The
Depositor hereby represents and warrants to the Trustee, the Master
Servicer and
the Securities Administrator as follows:
(i) the Depositor (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware and
(b)
is qualified and in good standing as a foreign corporation to
do
business in each jurisdiction where such qualification is
necessary, except
where the failure so to qualify would not reasonably be expected to
have a
material adverse effect on the Depositor's business as presently
conducted
or
on the Depositor's ability to enter into this Agreement and to
consummate the transactions contemplated hereby;
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<PAGE>
(ii) the Depositor has full corporate power to own its property,
to
carry on its business as presently conducted and to enter into and
perform
its
obligations under this Agreement;
(iii) the execution and delivery by the Depositor of this
Agreement
have
been duly authorized by all necessary corporate action on the part
of
the
Depositor; and neither the execution and delivery of this
Agreement,
nor
the consummation of the transactions herein contemplated, nor
compliance with the provisions hereof, will conflict with or result
in a
breach of, or constitute a default under, any of the provisions of
any law,
governmental rule, regulation, judgment, decree or order binding on
the
Depositor or its properties or the articles of incorporation or
by-laws of
the
Depositor, except those conflicts, breaches or defaults which would
not
reasonably be expected to have a material adverse effect on the
Depositor's
ability to enter into this Agreement and to consummate the
transactions
contemplated hereby;
(iv) the execution, delivery and performance by the Depositor of
this
Agreement and the consummation of the transactions contemplated
hereby do
not
require the consent or approval of, the giving of notice to,
the
registration with, or the taking of any other action in respect of,
any
state, federal or other governmental authority or agency, except
those
consents, approvals, notices, registrations or other actions as
have
already been obtained, given or made;
(v) this Agreement has been duly executed and delivered by the
Depositor and, assuming due authorization, execution and delivery
by the
other parties hereto, constitutes a valid and binding obligation of
the
Depositor enforceable against it in accordance with its terms
(subject to
applicable bankruptcy and insolvency laws and other similar laws
affecting
the
enforcement of the rights of creditors generally);
(vi) there are no actions, suits or proceedings pending or, to
the
knowledge of the Depositor, threatened against the Depositor,
before or by
any
court, administrative agency, arbitrator or governmental body (i)
with
respect to any of the transactions contemplated by this Agreement
or (ii)
with
respect to any other matter which in the judgment of the
Depositor
will
be determined adversely to the Depositor and will if determined
adversely to the Depositor materially and adversely affect the
Depositor's
ability to enter into this Agreement or perform its obligations
under this
Agreement; and the Depositor is not in default with respect to any
order of
any
court, administrative agency, arbitrator or governmental body so as
to
materially and adversely affect the transactions contemplated by
this
Agreement; and
(vii) immediately prior to the transfer and assignment to the
Trustee,
each
Mortgage Note and each Mortgage were not subject to an assignment
or
pledge, and the Depositor had good and marketable title to and was
the sole
owner thereof and had full right to transfer and sell such Mortgage
Loan to
the
Trustee free and clear of any encumbrance, equity, lien,
pledge,
charge, claim or security interest.
Section 2.07 Representations and Warranties Concerning the Master
Servicer
and Securities Administrator. Wells Fargo Bank, N.A., in its
capacity as Master
Servicer and
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Securities Administrator hereby represents and warrants to the
Seller, the
Depositor and the Trustee as follows, as of the Closing Date:
(i) It is a national banking association duly formed, validly
existing
and
in good standing under the laws of the United States of America and
is
duly
authorized and qualified to transact any and all business
contemplated
by
this Agreement to be conducted by the Master Servicer and the
Securities
Administrator, to the extent necessary to ensure its ability to
master
service the Mortgage Loans in accordance with the terms of this
Agreement
and
to perform any of its other obligations under this Agreement in
accordance with the terms hereof;
(ii) It has the full corporate power and authority to execute,
deliver
and
perform, and to enter into and consummate the transactions
contemplated
by
this Agreement and has duly authorized by all necessary corporate
action
on
its part the execution, delivery and performance of this Agreement;
and
this
Agreement, assuming the due authorization, execution and
delivery
hereof by the other parties hereto, constitutes its legal, valid
and
binding obligation, enforceable against it in accordance with its
terms,
except that (a) the enforceability hereof may be limited by
bankruptcy,
insolvency, moratorium, receivership and other similar laws
relating to
creditors' rights generally and (b) the remedy of specific
performance and
injunctive and other forms of equitable relief may be subject to
equitable
defenses and to the discretion of the court before which any
proceeding
therefor may be brought.
(iii) The execution and delivery of this Agreement by it, the
consummation of any
other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms
hereof are
in
its ordinary course of business and will not (A) result in a
material
breach of any term or provision of its charter or by-laws or (B)
materially
conflict with, result in a material breach, violation or
acceleration of,
or
result in a material default under, the terms of any other
material
agreement or instrument to which it is a party or by which it may
be bound,
or
(C) constitute a material violation of any statute, order or
regulation
applicable to it of any court, regulatory body, administrative
agency or
governmental body having jurisdiction over it; and it is not in
breach or
violation of any material indenture or other material agreement
or
instrument, or in violation of any statute, order or regulation of
any
court, regulatory body, administrative agency or governmental body
having
jurisdiction over it which breach or violation may materially
impair its
ability to perform or meet any of its obligations under this
Agreement.
(iv) No litigation is pending or, to the best of its knowledge,
threatened, against it that would materially and adversely affect
the
execution, delivery or enforceability of this Agreement or its
ability to
perform any of its other obligations under this Agreement in
accordance
with
the terms hereof.
(v) No consent, approval, authorization or order of any court
or
governmental agency or body is required for its execution, delivery
and
performance of, or compliance with, this Agreement or the
consummation of
the
transactions contemplated hereby, or if any such consent,
approval,
authorization or order is required, it has obtained the same.
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ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master Servicer. The Master Servicer shall supervise,
monitor
and oversee the obligation of the Servicers to service and
administer their
respective Mortgage Loans in accordance with the terms of the
applicable
Servicing Agreement and shall have full power and authority to do
any and all
things which it may deem necessary or desirable in connection with
such master
servicing and administration. In performing its obligations
hereunder, the
Master Servicer shall act in a manner consistent with Accepted
Master Servicing
Practices. Furthermore, the Master Servicer shall oversee and
consult with each
Servicer as necessary from time-to-time to carry out the Master
Servicer's
obligations hereunder, shall receive, review and evaluate all
reports,
information and other data provided to the Master Servicer by each
Servicer and
shall cause each Servicer to perform and observe the covenants,
obligations and
conditions to be performed or observed by such Servicer under the
applicable
Servicing Agreement. The Master Servicer shall independently and
separately
monitor each Servicer's servicing activities with respect to each
related
Mortgage Loan, reconcile the results of such monitoring with such
information
provided in the previous sentence on a monthly basis and coordinate
corrective
adjustments to the Servicers' and Master Servicer's records, and
based on such
reconciled and corrected information, the Master Servicer shall
provide such
information to the Securities Administrator as shall be necessary
in order for
it to prepare the statements specified in Section 6.04, and prepare
any other
information and statements required to be forwarded by the Master
Servicer
hereunder. The Master Servicer shall reconcile the results of its
monitoring
with the actual remittances of the Servicers to the Master Servicer
Collection
Account pursuant to the applicable Servicing Agreements.
If
the Master Servicer and the Securities Administrator are the
same
entity, then at any time the Master Servicer is terminated as
Master Servicer,
the Securities Administrator shall likewise be removed as
securities
administrator.
The
Trustee shall furnish the Servicers and the Master Servicer with
any
limited powers of attorney and other documents in form acceptable
to it
necessary or appropriate to enable the Servicers and the Master
Servicer to
service and administer the related Mortgage Loans and REO Property.
The Trustee
shall have no liability with respect to the use of any such limited
power of
attorney.
The
Trustee or the Custodian shall provide access to the records
and
documentation in possession of the Trustee or the Custodian
regarding the
related Mortgage Loans and REO Property and the servicing thereof
to the
Certificateholders, the FDIC, and the supervisory agents and
examiners of the
FDIC, such access being afforded only upon reasonable prior written
request and
during normal business hours at the office of the Trustee or the
Custodian;
provided, however, that, unless otherwise required by law, the
Trustee or the
Custodian shall not be required to provide access to such records
and
documentation if the provision thereof would violate the legal
right to privacy
of any Mortgagor. The Trustee or the Custodian shall allow
representatives of
the above entities to photocopy any of the records and
documentation and shall
provide equipment for that purpose at a charge that covers the
Trustee's or the
Custodian's actual costs.
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The
Trustee shall execute and deliver to the related Servicer and
the
Master Servicer upon request any court pleadings, requests for
trustee's sale or
other documents necessary or desirable to (i) the foreclosure or
trustee's sale
with respect to a Mortgaged Property; (ii) any legal action brought
to obtain
judgment against any Mortgagor on the Mortgage Note or Security
Instrument;
(iii) obtain a deficiency judgment against the Mortgagor; or (iv)
enforce any
other rights or remedies provided by the Mortgage Note or Security
Instrument or
otherwise available at law or equity.
Section 3.02 REMIC-Related Covenants. For as long as each REMIC
shall
exist, the Trustee and the Securities Administrator shall act in
accordance
herewith to assure continuing treatment of such REMIC as a REMIC,
and the
Trustee and the Securities Administrator shall comply with any
directions of the
Depositor, the related Servicer or the Master Servicer to assure
such continuing
treatment. In particular, the Trustee shall not (a) sell or permit
the sale of
all or any portion of the Mortgage Loans or of any investment of
deposits in an
Account unless such sale is as a result of a repurchase of the
Mortgage Loans
pursuant to this Agreement or the Trustee has received a REMIC
Opinion prepared
at the expense of the Issuing Entity; and (b) other than with
respect to a
substitution pursuant to the Mortgage Loan Purchase Agreement or
Section 2.04 of
this Agreement, as applicable, accept any contribution to any REMIC
after the
Startup Day without receipt of a REMIC Opinion.
Section 3.03 Monitoring of Servicers.
(a)
The Master Servicer shall be responsible for reporting to the
Trustee
and the Depositor the compliance by each Servicer with its duties
under the
related Servicing Agreement. In the review of each Servicer's
activities, the
Master Servicer may rely upon an officer's certificate of the
Servicer with
regard to such Servicer's compliance with the terms of its
Servicing Agreement.
In the event that the Master Servicer, in its judgment, determines
that a
Servicer should be terminated in accordance with its Servicing
Agreement, or
that a notice should be sent pursuant to such Servicing Agreement
with respect
to the occurrence of an event that, unless cured, would constitute
grounds for
such termination, the Master Servicer shall notify the Depositor
and the Trustee
thereof and the Master Servicer shall issue such notice or take
such other
action as it deems appropriate.
(b)
The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer
under the
related Servicing Agreement, and shall, in the event that a
Servicer fails to
perform its obligations in accordance with the related Servicing
Agreement,
subject to the preceding paragraph, terminate the rights and
obligations of such
Servicer thereunder and act as servicer of the related Mortgage
Loans or, if the
Master Servicer is unwilling or unable to act as a Servicer, the
Master Servicer
shall cause the Trustee to enter in to a new Servicing Agreement
with a
successor Servicer selected by the Master Servicer that is eligible
in
accordance with the criteria specified in this Agreement; provided,
however, it
is understood and acknowledged by the parties hereto that there
will be a period
of transition (not to exceed 90 days) before the actual servicing
functions can
be fully transferred to such successor servicer. In either event,
such
enforcement, including, without limitation, the legal prosecution
of claims,
termination of the Servicing Agreements and the pursuit of other
appropriate
remedies, shall be in such form and carried out to such an extent
and at such
time as the Master Servicer, in its good faith business judgment,
would require
were it the owner of the related Mortgage Loans. The Master
Servicer shall pay
the costs of such enforcement at its own
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expense subject to Section 3.03(c), provided that the Master
Servicer shall not
be required to prosecute or defend any legal action except to the
extent that
the Master Servicer shall have received reasonable indemnity for
its costs and
expenses in pursuing such action.
(c)
To the extent that the costs and expenses of the Master
Servicer
related to any termination of a Servicer, appointment of a
successor Servicer or
the transfer and assumption of servicing by the Master Servicer
with respect to
any Servicing Agreement (including, without limitation, (i) all
legal costs and
expenses and all due diligence costs and expenses associated with
an evaluation
of the potential termination of a Servicer as a result of an event
of default by
such Servicer and (ii) all costs and expenses associated with the
complete
transfer of servicing, including all servicing files and all
servicing data and
the completion, correction or manipulation of such servicing data
as may be
required by the successor servicer to correct any errors or
insufficiencies in
the servicing data or otherwise to enable the successor service to
service the
Mortgage Loans in accordance with the related Servicing Agreement)
are not fully
and timely reimbursed by the terminated Servicer, the Master
Servicer shall be
entitled to reimbursement of such costs and expenses from the
Master Servicer
Collection Account pursuant to Section 4.03(b).
(d)
The Master Servicer shall require each Servicer to comply with
the
remittance requirements and other obligations set forth in the
related Servicing
Agreement.
(e)
If the Master Servicer acts as Servicer, it will not assume
liability
for the representations and warranties of such Servicer, if any,
that it
replaces.
Section 3.04 Fidelity Bond. The Master Servicer, at its expense,
shall
maintain in effect a blanket fidelity bond and an errors and
omissions insurance
policy, affording coverage with respect to all directors, officers,
employees
and other Persons acting on such Master Servicer's behalf, and
covering errors
and omissions in the performance of the Master Servicer's
obligations hereunder.
The errors and omissions insurance policy and the fidelity bond
shall be in such
form and amount generally acceptable for entities serving as master
servicers or
trustees.
Section 3.05 Power to Act; Procedures. The Master Servicer shall
master
service the Mortgage Loans and shall have full power and authority,
subject to
the REMIC Provisions and the provisions of Article X hereof, to do
any and all
things that it may deem necessary or desirable in connection with
the master
servicing and administration of the Mortgage Loans, including but
not limited to
the power and authority (i) to execute and deliver, on behalf of
the
Certificateholders and the Trustee, customary consents or waivers
and other
instruments and documents, (ii) to consent to transfers of any
Mortgaged
Property and assumptions of the Mortgage Notes and related
Mortgages, (iii) to
collect any Insurance Proceeds and Liquidation Proceeds, and (iv)
to effectuate
foreclosure or other conversion of the ownership of the Mortgaged
Property
securing any Mortgage Loan, in each case, in accordance with the
provisions of
this Agreement and the related Servicing Agreement, as applicable;
provided,
however, that the Master Servicer shall not (and, consistent with
its
responsibilities under Section 3.03, shall not permit any Servicer
to) knowingly
or intentionally take any action, or fail to take (or fail to cause
to be taken)
any action reasonably within its control and the scope of duties
more
specifically set forth herein, that, under the REMIC Provisions, if
taken or not
taken, as the case may be, would cause any REMIC created hereunder
to fail to
qualify as a REMIC or result in the imposition of a tax upon the
Issuing Entity
(including but not limited to the tax on
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prohibited transactions as defined in Section 860F(a)(2) of the
Code and the tax
on contributions to a REMIC set forth in Section 860G(d) of the
Code) unless the
Master Servicer has received an Opinion of Counsel (but not at the
expense of
the Master Servicer) to the effect that the contemplated action
will not would
cause any REMIC created hereunder to fail to qualify as a REMIC or
result in the
imposition of a tax upon any REMIC created hereunder. The Trustee
shall furnish
the Master Servicer, upon written request from a Servicing Officer,
with any
limited powers of attorney (in form acceptable to the Trustee)
empowering the
Master Servicer or any Servicer to execute and deliver instruments
of
satisfaction or cancellation, or of partial or full release or
discharge, and to
foreclose upon or otherwise liquidate Mortgaged Property, and to
appeal,
prosecute or defend in any court action relating to the Mortgage
Loans or the
Mortgaged Property, in accordance with the applicable Servicing
Agreement and
this Agreement, and the Trustee shall execute and deliver such
other documents,
as the Master Servicer may request, to enable the Master Servicer
to master
service and administer the Mortgage Loans and carry out its duties
hereunder, in
each case in accordance with Accepted Master Servicing Practices
(and the
Trustee shall have no liability for misuse of any such powers of
attorney by the
Master Servicer or any Servicer). If the Master Servicer or the
Trustee has been
advised that it is likely that the laws of the state in which
action is to be
taken prohibit such action if taken in the name of the Trustee or
that the
Trustee would be adversely affected under the "doing business" or
tax laws of
such state if such action is taken in its name, the Master Servicer
shall join
with the Trustee in the appointment of a co-trustee pursuant to
Section 9.11
hereof. In the performance of its duties hereunder, the Master
Servicer shall be
an independent contractor and shall not, except in those instances
where it is
taking action in the name of the Trustee, be deemed to be the agent
of the
Trustee.
Section 3.06 Due-on-Sale Clauses; Assumption Agreements. To the
extent
provided in the applicable Servicing Agreement, to the extent
Mortgage Loans
contain enforceable due-on-sale clauses, the Master Servicer shall
cause the
Servicers to enforce such clauses in accordance with the applicable
Servicing
Agreement. If applicable law prohibits the enforcement of a
due-on-sale clause
or such clause is otherwise not enforced in accordance with the
applicable
Servicing Agreement, and, as a consequence, a Mortgage Loan is
assumed, the
original Mortgagor may be released from liability in accordance
with the
applicable Servicing Agreement.
Section 3.07 Release of Mortgage Files.
(a)
Upon becoming aware of the payment in full of any Mortgage Loan, or
the
receipt by any Servicer of a notification that payment in full has
been escrowed
in a manner customary for such purposes for payment to
Certificateholders on the
next Distribution Date, the Servicers or the Master Servicer will,
if required
under the applicable Servicing Agreement, promptly furnish to the
Custodian, on
behalf of the Trustee, two copies of a certification substantially
in the form
of Exhibit D hereto signed by a Servicing Officer or in a mutually
agreeable
electronic format which will, in lieu of a signature on its face,
originate from
a Servicing Officer (which certification shall include a statement
to the effect
that all amounts received in connection with such payment that are
required to
be deposited in the Protected Account maintained by the applicable
Servicer
pursuant to its Servicing Agreement have been or will be so
deposited) and shall
request that the Custodian, on behalf of the Trustee, deliver to
the applicable
Servicer the related Mortgage File. Upon receipt of such
certification and
request, the Custodian, on behalf of
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the Trustee, shall no later than five Business Days (or, to the
extent that the
applicable Servicer notifies the Seller that a document is not in
the Servicer's
possession as part of the servicing file which is needed for
purposes of the
Servicer complying with any applicable law, within such shorter
period as may be
necessary to enable the Servicer to comply with such law), release
the related
Mortgage File to the applicable Servicer and the Trustee and
Custodian shall
have no further responsibility with regard to such Mortgage File.
Upon any such
payment in full, each Servicer is authorized, to give, as agent for
the Trustee,
as the mortgagee under the Mortgage that secured the Mortgage Loan,
an
instrument of satisfaction (or assignment of mortgage without
recourse)
regarding the Mortgaged Property subject to the Mortgage, which
instrument of
satisfaction or assignment, as the case may be, shall be delivered
to the Person
or Persons entitled thereto against receipt therefor of such
payment, it being
understood and agreed that no expenses incurred in connection with
such
instrument of satisfaction or assignment, as the case may be, shall
be
chargeable to the Protected Account.
(b)
From time to time and as appropriate for the servicing or
foreclosure
of any Mortgage Loan and in accordance with the applicable
Servicing Agreement,
the Trustee shall execute such documents as requested and as shall
be prepared
and furnished to the Trustee by a Servicer or the Master Servicer
and as are
necessary to the prosecution of any such proceedings. In connection
with the
foregoing, the Custodian, on behalf of the Trustee, shall, upon the
request of a
Servicer or the Master Servicer, and delivery to the Custodian, on
behalf of the
Trustee, of two copies of a Request for Release signed by a
Servicing Officer
substantially in the form of Exhibit D (or in a mutually agreeable
electronic
format which will, in lieu of a signature on its face, originate
from a
Servicing Officer), release the related Mortgage File held in its
possession or
control to the related Servicer or the Master Servicer, as
applicable. Such
trust receipt shall obligate the related Servicer or the Master
Servicer to
return the Mortgage File to the Custodian on behalf of the Trustee,
when the
need therefor by the Servicer or the Master Servicer no longer
exists unless the
Mortgage Loan shall be liquidated, in which case, upon receipt of a
certificate
of a Servicing Officer similar to that hereinabove specified, the
Mortgage File
shall be released by the Custodian, on behalf of the Trustee, to
the related
Servicer or the Master Servicer.
Section 3.08 Documents, Records and Funds in Possession of Master
Servicer
To Be Held for Trustee.
(a)
The Master Servicer shall transmit and each Servicer (to the
extent
required by the related Servicing Agreement) shall transmit to the
Trustee or
Custodian such documents and instruments coming into the possession
of the
Master Servicer or such Servicer from time to time as are required
by the terms
hereof, or in the case of the Servicers, the applicable Servicing
Agreement, to
be delivered to the Trustee or Custodian. Any funds received by the
Master
Servicer or by a Servicer in respect of any Mortgage Loan or which
otherwise are
collected by the Master Servicer or by a Servicer as Liquidation
Proceeds or
Insurance Proceeds in respect of any Mortgage Loan shall be held
for the benefit
of the Trustee and the Certificateholders subject to the Master
Servicer's right
to retain or withdraw from the Master Servicer Collection Account
the Master
Servicing Compensation and other amounts provided in this
Agreement, and to the
right of each Servicer to retain its Servicing Fee and other
amounts as provided
in the applicable Servicing Agreement. The Master Servicer shall,
and (to the
extent provided in the applicable Servicing Agreement) shall cause
each Servicer
to, provide access to information and documentation regarding the
Mortgage Loans
to the Trustee, its agents and accountants at any
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time upon reasonable request and during normal business hours, and
to
Certificateholders that are savings and loan associations, banks or
insurance
companies, the Office of Thrift Supervision, the FDIC and the
supervisory agents
and examiners of such Office and Corporation or examiners of any
other federal
or state banking or insurance regulatory authority if so required
by applicable
regulations of the Office of Thrift Supervision or other regulatory
authority,
such access to be afforded without charge but only upon reasonable
request in
writing and during normal business hours at the offices of the
Master Servicer
designated by it. In fulfilling such a request, the Master Servicer
shall not be
responsible for determining the sufficiency of such
information.
(b)
All Mortgage Files and funds collected or held by, or under the
control
of, the Master Servicer, in respect of any Mortgage Loans, whether
from the
collection of principal and interest payments or from Liquidation
Proceeds or
Insurance Proceeds, shall be held by the Master Servicer for and on
behalf of
the Trustee and the Certificateholders and shall be and remain the
sole and
exclusive property of the Trustee; provided, however, that the
Master Servicer
and each Servicer shall be entitled to setoff against, and deduct
from, any such
funds any amounts that are properly due and payable to the Master
Servicer or
such Servicer under this Agreement or the applicable Servicing
Agreement.
Section 3.09 Standard Hazard Insurance and Flood Insurance
Policies.
(a)
For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Servicers under the related Servicing Agreements
to maintain
or cause to be maintained standard fire and casualty insurance and,
where
applicable, flood insurance, all in accordance with the provisions
of the
related Servicing Agreements. It is understood and agreed that such
insurance
shall be with insurers meeting the eligibility requirements set
forth in the
applicable Servicing Agreement and that no earthquake or other
additional
insurance is to be required of any Mortgagor or to be maintained on
property
acquired in respect of a defaulted loan, other than pursuant to
such applicable
laws and regulations as shall at any time be in force and as shall
require such
additional insurance.
(b)
Pursuant to Sections 4.01 and 4.02, any amounts collected by
the
Servicers or the Master Servicer, under any insurance policies
(other than
amounts to be applied to the restoration or repair of the property
subject to
the related Mortgage or released to the Mortgagor in accordance
with the
applicable Servicing Agreement) shall be deposited into the Master
Servicer
Collection Account, subject to withdrawal pursuant to Sections 4.02
and 4.03 in
accordance with the terms and conditions of the related Servicing
Agreement. Any
cost incurred by the Master Servicer or any Servicer in maintaining
any such
insurance if the Mortgagor defaults in its obligation to do so
shall be added to
the amount owing under the Mortgage Loan where the terms of the
Mortgage Loan so
permit; provided, however, that the addition of any such cost shall
not be taken
into account for purposes of calculating the distributions to be
made to
Certificateholders and shall be recoverable by the Master Servicer
or such
Servicer pursuant to Sections 4.02 and 4.03.
Section 3.10 Presentment of Claims and Collection of Proceeds. The
Master
Servicer shall (to the extent provided in the applicable Servicing
Agreement)
cause the related Servicer to, prepare and present on behalf of the
Trustee and
the Certificateholders all claims under the Insurance Policies and
take such
actions (including the negotiation, settlement, compromise or
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enforcement of the insured's claim) as shall be necessary to
realize recovery
under such policies. Any proceeds disbursed to the Master Servicer
(or disbursed
to a Servicer and remitted to the Master Servicer) in respect of
such policies,
bonds or contracts shall be promptly deposited in the Master
Servicer Collection
Account upon receipt, except that any amounts realized that are to
be applied to
the repair or restoration of the related Mortgaged Property as a
condition
precedent to the presentation of claims on the related Mortgage
Loan to the
insurer under any applicable Insurance Policy need not be so
deposited (or
remitted).
Section 3.11 Maintenance of the Primary Mortgage Insurance
Policies.
(a)
The Master Servicer shall not take, or permit any Servicer (to
the
extent such action is prohibited under the applicable Servicing
Agreement) to
take, any action that would result in noncoverage under any
applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of
such Master
Servicer or Servicer, would have been covered thereunder. The
Master Servicer
shall use its best reasonable efforts to cause each Servicer (to
the extent
required under the related Servicing Agreement) to keep in force
and effect (to
the extent that the Mortgage Loan requires the Mortgagor to
maintain such
insurance), primary mortgage insurance applicable to each Mortgage
Loan in
accordance with the provisions of this Agreement and the related
Servicing
Agreement, as applicable. The Master Servicer shall not, and shall
not permit
any Servicer (to the extent required under the related Servicing
Agreement) to,
cancel or refuse to renew any such Primary Mortgage Insurance
Policy that is in
effect at the date of the initial issuance of the Mortgage Note and
is required
to be kept in force hereunder except in accordance with the
provisions of this
Agreement and the related Servicing Agreement, as applicable.
(b)
The Master Servicer agrees to present, or to cause each Servicer
(to
the extent required under the related Servicing Agreement) to
present, on behalf
of the Trustee and the Certificateholders, claims to the insurer
under any
Primary Mortgage Insurance Policies and, in this regard, to take
such reasonable
action as shall be necessary to permit recovery under any Primary
Mortgage
Insurance Policies respecting defaulted Mortgage Loans. Pursuant to
Section 4.01
and 4.02, any amounts collected by the Master Servicer or any
Servicer under any
Primary Mortgage Insurance Policies shall be deposited in the
Master Servicer
Collection Account, subject to withdrawal pursuant to Section
4.03.
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Section 3.12 Trustee to Retain Possession of Certain Insurance
Policies and
Documents. The Trustee or the Custodian shall retain possession and
custody of
the originals (to the extent available) of any Primary Mortgage
Insurance
Policies, or certificate of insurance if applicable, and any
certificates of
renewal as to the foregoing as may be issued from time to time as
contemplated
by this Agreement. Until all amounts distributable in respect of
the
Certificates have been distributed in full and the Master Servicer
otherwise has
fulfilled its obligations under this Agreement, the Trustee or its
Custodian
shall also retain possession and custody of each Mortgage File in
accordance
with and subject to the terms and conditions of this Agreement. The
Master
Servicer shall promptly deliver or cause to be delivered to the
Trustee or the
Custodian upon the execution or receipt thereof the originals of
any Primary
Mortgage Insurance Policies, any certificates of renewal, and such
other
documents or instruments that constitute portions of the Mortgage
File that come
into the possession of the Master Servicer from time to time.
Section 3.13 Realization Upon Defaulted Mortgage Loans. The Master
Servicer
shall cause each Servicer (to the extent required under the related
Servicing
Agreement) to foreclose upon, repossess or otherwise comparably
convert the
ownership of Mortgaged Properties securing such of the Mortgage
Loans as come
into and continue in default and as to which no satisfactory
arrangements can be
made for collection of delinquent payments, all in accordance with
the terms and
conditions of the applicable Servicing Agreement.
Section 3.14 Compensation for the Master Servicer. The Master
Servicer will
be entitled to all income and gain realized from any investment of
funds in the
Master Servicer Collection Account, pursuant to Article IV, for the
performance
of its activities hereunder. Servicing compensation in the form of
assumption
fees, if any, late payment charges, as collected, if any, or
otherwise (but not
including any prepayment premium or penalty) shall be retained by
the applicable
Servicer and shall not be deposited in the Protected Account. The
Master
Servicer shall be required to pay all expenses incurred by it in
connection with
its activities hereunder and shall not be entitled to reimbursement
therefor
except as provided in this Agreement.
Section 3.15 REO Property.
(a)
In the event the Issuing Entity acquires ownership of any REO
Property
in respect of any related Mortgage Loan, the deed or certificate of
sale shall
be issued to the Trustee, or to its nominee, on behalf of the
related
Certificateholders. The Master Servicer shall, to the extent
provided in the
applicable Servicing Agreement, cause the applicable Servicer to
sell, any REO
Property as expeditiously as possible and in accordance with the
provisions of
this Agreement and the related Servicing Agreement, as applicable.
Pursuant to
its efforts to sell such REO Property, the Master Servicer shall
cause the
applicable Servicer to protect and conserve, such REO Property in
the manner and
to the extent required by the applicable Servicing Agreement, in
accordance with
the REMIC Provisions and in a manner that does not result in a tax
on "net
income from foreclosure property" or cause such REO Property to
fail to qualify
as "foreclosure property" within the meaning of Section 860G(a)(8)
of the Code.
(b)
The Master Servicer shall, to the extent required by the
related
Servicing Agreement, cause the applicable Servicer to deposit all
funds
collected and received in connection with the operation of any REO
Property in
the Protected Account.
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(c)
The Master Servicer and the applicable Servicer, upon the final
disposition of any REO Property, shall be entitled to reimbursement
for any
related unreimbursed Monthly Advances and other unreimbursed
advances as well as
any unpaid Servicing Fees from Liquidation Proceeds received in
connection with
the final disposition of such REO Property; provided, that any such
unreimbursed
Monthly Advances as well as any unpaid Servicing Fees may be
reimbursed or paid,
as the case may be, prior to final disposition, out of any net
rental income or
other net amounts derived from such REO Property.
(d)
To the extent provided in the related Servicing Agreement, the
Liquidation Proceeds from the final disposition of the REO
Property, net of any
payment to the Master Servicer and the applicable Servicer as
provided above
shall be deposited in the Protected Account on or prior to the
Determination
Date in the month following receipt thereof and be remitted by wire
transfer in
immediately available funds to the Master Servicer for deposit into
the related
Master Servicer Collection Account on the next succeeding Servicer
Remittance
Date.
Section 3.16 Annual Statement as to Compliance.
Not
later than March 1 of each calendar year (other than the calendar
year
during which the Closing Date occurs), each Servicer shall deliver
(or otherwise
make available) and each Servicer shall cause any Servicing
Function Participant
engaged by it to deliver to the Master Servicer, the Securities
Administrator
and the Depositor, an Officer's Certificate in the form attached
hereto as
Exhibit P stating, as to each signatory thereof, that (i) a review
of the
activities of such signatory during the preceding calendar year, or
portion
thereof, and of the performance of such signatory under the related
Servicing
Agreement or such other applicable agreement in the case of a
Servicing Function
Participant has been made under such officer's supervision, and
(ii) to the best
of such officer's knowledge, based on such review, such signatory
has fulfilled
all its obligations under this Agreement, the related Servicing
Agreement or
such other applicable agreement in all material respects throughout
such year or
a portion thereof, or, if there has been a failure to fulfill any
such
obligation in any material respect, specifying each such failure
known to such
officer and the nature and status thereof.
The
Master Servicer and the Securities Administrator shall deliver
(or
otherwise make available) (and the Trustee, the Master Servicer and
Securities
Administrator shall cause any Servicing Function Participant
engaged by it to
deliver) to the Depositor and the Securities Administrator on or
before March 1
(with a ten-calendar day cure period) of each year, commencing in
March 2007, an
Officer's Certificate stating, as to the signer thereof, that (A) a
review of
such party's activities during the preceding calendar year or
portion thereof
and of such party's performance under this Agreement, or such other
applicable
agreement in the case of a Servicing Function Participant, has been
made under
such officer's supervision and (B) to the best of such officer's
knowledge,
based on such review, such party has fulfilled all its obligations
under this
Agreement, or such other applicable agreement in the case of a
Servicing
Function Participant, in all material respects throughout such year
or portion
thereof, or, if there has been a failure to fulfill any such
obligation in any
material respect, specifying each such failure known to such
officer and the
nature and status thereof.
The
Master Servicer shall include all annual statements of
compliance
received by it from each Servicer with its own annual statement of
compliance to
be submitted to the Securities
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Administrator pursuant to this Section. For the avoidance of doubt,
the Master
Servicer and the Securities Administrator may satisfy the
requirements of this
Section 3.16 and Section 3.16 of the Stack II Agreement by each
delivering a
single annual statement of compliance containing all of the
information required
pursuant to this Section 3.16 and Section 3.16 of the Stack II
Agreement.
In
the event the Master Servicer, the Securities Administrator or
any
Servicing Function Participant engaged by any such party or the
Trustee is
terminated, assigns its rights and obligations under or resigns
pursuant to the
terms of this Agreement, or such other applicable agreement in the
case of a
Servicing Function Participant, as the case may be, such party
shall provide, an
annual statement of compliance pursuant to this Section 3.16 or to
such
applicable agreement, as the case may be, notwithstanding any such
termination,
assignment or resignation.
Section 3.17 Reports on Assessment of Compliance and
Attestation.
(a)
Not later than March 1 of each calendar year (other than the
calendar
year during which the Closing Date occurs) each Servicer at its own
expense,
shall furnish, and shall cause any Servicing Function Participant
engaged by it
to furnish (unless in the case of a Subcontractor, such Servicer
has notified
the Depositor and the Master Servicer in writing that such
compliance statement
is not required for the Subcontractor) to the Master Servicer, the
Securities
Administrator and the Depositor an officer's assessment of its
compliance with
the Relevant Servicing Criteria during the preceding calendar year
as required
by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of
Regulation AB
(the "Assessment of Compliance"), which assessment shall contain
(A) a statement
by such party of its responsibility for assessing compliance with
the Relevant
Servicing Criteria, (B) a statement that such party used the
Relevant Servicing
Criteria to assess compliance with the Relevant Servicing Criteria,
(C) such
party's assessment of compliance with the Relevant Servicing
Criteria as of and
for the fiscal year covered by the Form 10-K required to be filed
pursuant to
Section 3.18, including, if there has been any material instance
of
noncompliance with the Relevant Servicing Criteria, a discussion of
each such
failure and the nature and status thereof, which assessment shall
be based on
the activities it performs with respect to asset-backed securities
transactions
taken as a whole involving such party that are backed by the same
asset type as
the Mortgage Loans, and (D) a statement that a registered public
accounting firm
has issued an attestation report on such party's assessment of
compliance with
the Relevant Servicing Criteria as of and for such period.
By
March 1 (with a ten-calendar day cure period) of each year,
commencing
in March 2007, the Master Servicer, the Securities Administrator
and the
Custodian each at its own expense, shall furnish or otherwise make
available,
and each such party and the Trustee shall cause any Servicing
Function
Participant engaged by it to furnish, each at its own expense, to
the Securities
Administrator and the Depositor, a report on an assessment of
compliance with
the Relevant Servicing Criteria that contains (A) a statement by
such party of
its responsibility for assessing compliance with the Relevant
Servicing
Criteria, (B) a statement that such party used the Relevant
Servicing Criteria
to assess compliance with the Relevant Servicing Criteria, (C) such
party's
assessment of compliance with the Relevant Servicing Criteria as of
and for the
fiscal year covered by the Form 10-K required to be filed pursuant
to Sections
3.18(h), (i), (j) and (k), including, if there has been any
material instance of
noncompliance with the Relevant Servicing Criteria, a discussion of
each such
failure and the nature and status thereof, and (D) a
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statement that a registered public accounting firm has issued an
attestation
report on such party's assessment of compliance with the Relevant
Servicing
Criteria as of and for such period.
No
later than the end of each fiscal year for the Issuing Entity for
which
a 10-K is required to be filed, the Master Servicer, the Custodian
and the
Trustee shall each forward to the Securities Administrator and the
Depositor the
name of each Servicing Function Participant engaged by it and what
Relevant
Servicing Criteria will be addressed in the report on assessment of
compliance
prepared by such Servicing Function Participant (provided, however,
that the
Master Servicer need not provide such information to the
Securities
Administrator so long as the Master Servicer and the Securities
Administrator
are the same Person). When the Master Servicer, and the Securities
Administrator
(or any Servicing Function Participant engaged by them or the
Trustee) submit
their assessments to the Securities Administrator, such parties
will also at
such time include the assessment and attestation pursuant to this
Section 3.17
of each Servicing Function Participant engaged by it.
Promptly after receipt of each report on assessment of compliance,
(i) the
Depositor shall review each such report and, if applicable, consult
with such
Servicer, the Master Servicer, the Securities Administrator and any
Servicing
Function Participant engaged by any such party as to the nature of
any material
instance of noncompliance with the Relevant Servicing Criteria by
such Servicer
by each such party, and (ii) the Securities Administrator shall
confirm that the
assessments individually address the Relevant Servicing Criteria
for each party
as set forth on Exhibit K or any similar exhibit set forth in each
Servicing
Agreement in respect of each Servicer and notify the Depositor of
any
exceptions.
The
Master Servicer shall include all annual reports on assessment
of
compliance received by it from the Servicers with its own
assessment of
compliance to be submitted to the Securities Administrator pursuant
to this
Section. For the avoidance of doubt, the Master Servicer and the
Securities
Administrator may satisfy the requirements of this Section 3.17 and
Section 3.17
of the Stack II Agreement relating to reports on assessment of
compliance by
each delivering a single annual report on assessment of compliance
containing
all of the information required pursuant to this Section 3.17 and
Section 3.17
of the Stack II Agreement.
In
the event the Master Servicer, the Securities Administrator or
any
Servicing Function Participant engaged by any such party or the
Trustee is
terminated, assigns its rights and obligations under or resigns
pursuant to the
terms of this Agreement, or any other applicable agreement, as the
case may be,
such party shall provide, an assessment of compliance pursuant to
this Section
3.17, coupled with an attestation as required in this Section 3.17,
or such
applicable agreement notwithstanding any such termination,
assignment or
resignation.
(b)
Not later than March 1 of each calendar year (other than the
calendar
year during which the Closing Date occurs) each Servicer at its own
expense,
shall cause, and shall cause any Servicing Function Participant
engaged by it to
cause (unless in the case of a Subcontractor, such Servicer has
notified the
Depositor and the Master Servicer in writing that such report is
not required
for the Subcontractor) a nationally or regionally recognized firm
of independent
registered public accountants (who may also render other services
to such
Servicer, the Master Servicer or any affiliate thereof) which is a
member of the
American Institute of Certified Public Accountants to furnish a
report (the
"Accountant's Attestation") to the Master Servicer, the Securities
Administrator
and the Depositor to the effect that (i) it has obtained a
representation
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regarding certain matters from the management of such party, which
includes an
assertion that such party has complied with the Relevant Servicing
Criteria, and
(ii) on the basis of an examination conducted by such firm in
accordance with
standards for attestation engagements issued or adopted by the
Public Company
Accounting Oversight Board, it is expressing an opinion as to
whether such
party's compliance with the Relevant Servicing Criteria was fairly
stated in all
material respects, or it cannot express an overall opinion
regarding such
party's assessment of compliance with the Relevant Servicing
Criteria. In the
event that an overall opinion cannot be expressed, such registered
public
accounting firm shall state in such report why it was unable to
express such an
opinion. Such report must be available for general use and not
contain
restricted use language. Such Accountant's Attestation shall be in
accordance
with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the
Securities Act and
the Exchange Act.
By
March 1 (with a ten-calendar day cure period) of each year,
commencing
in March 2007, the Master Servicer, the Securities Administrator
and the
Custodian, each at its own expense, shall cause, and each such
party and the
Trustee shall cause any Servicing Function Participant engaged by
it to cause,
each at its own expense, a registered public accounting firm (which
may also
render other services to the Master Servicer, the Trustee, the
Securities
Administrator, or such other Servicing Function Participants, as
the case may
be) and that is a member of the American Institute of Certified
Public
Accountants to furnish an attestation report to the Securities
Administrator and
the Depositor, to the effect that (i) it has obtained a
representation regarding
certain matters from the management of such party, which includes
an assertion
that such party has complied with the Relevant Servicing Criteria,
and (ii) on
the basis of an examination conducted by such firm in accordance
with standards
for attestation engagements issued or adopted by the Public Company
Accounting
Oversight Board, it is expressing an opinion as to whether such
party's
compliance with the Relevant Servicing Criteria was fairly stated
in all
material respects, or it cannot express an overall opinion
regarding such
party's assessment of compliance with the Relevant Servicing
Criteria. In the
event that an overall opinion cannot be expressed, such registered
public
accounting firm shall state in such report why it was unable to
express such an
opinion. Such report must be available for general use and not
contain
restricted use language.
(c)
Promptly after receipt of each assessment of compliance and
attestation
report, the Securities Administrator shall confirm that each
assessment
submitted pursuant to Section 3.17(a) is coupled with an
attestation meeting the
requirements of Section 3.17(b) and notify the Depositor of any
exceptions.
The
Master Servicer shall include each such attestation furnished to it
by
the Servicers with its own attestation to be submitted to the
Securities
Administrator pursuant to this Section. For the avoidance of doubt,
the Master
Servicer and the Securities Administrator may satisfy the
requirements of this
Section 3.17 and Section 3.17 of the Stack II Agreement relating to
attestations
by each delivering a single attestation containing all of the
information
required pursuant to this Section 3.17 and Section 3.17 of the
Stack II
Agreement.
In
the event the Master Servicer, the Securities Administrator,
the
Custodian, any Servicer or any Servicing Function Participant
engaged by any
such party, is terminated, assigns its rights and duties under, or
resigns
pursuant to the terms of, this Agreement, or any applicable
Custodial Agreement,
Servicing Agreement or sub-servicing agreement, as the case may be,
such party
shall cause a registered public accounting firm to provide an
attestation
pursuant to this
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Section 3.17, or such other applicable agreement, notwithstanding
any such
termination, assignment or resignation.
Section 3.18 Periodic Filings.
(a)
Within four (4) Business Days after the occurrence of an event
requiring disclosure on Form 8-K (each such event, a "Reportable
Event"), and if
requested by the Depositor, the Securities Administrator shall
prepare and file
on behalf of the Issuing Entity a Form 8-K, as required by the
Exchange Act,
provided that the Depositor shall file the initial Form 8-K in
connection with
the issuance of the Certificates. Any disclosure or information
related to a
Reportable Event or that is otherwise required to be included on
Form 8-K (other
than the initial Form 8-K) ("Form 8-K Disclosure Information")
shall be reported
by the parties set forth on Exhibit Q-3 to the Depositor and the
Securities
Administrator and directed and approved by the Depositor, and the
Securities
Administrator will have no duty or liability for any failure
hereunder to
determine or prepare any Form 8-K Disclosure Information or any
Form 8-K except
as set forth in the next paragraph.
(b)
For so long as the Issuing Entity is subject to the reporting
requirements of the Exchange Act, following the occurrence of a
Reportable Event
(A) each party listed on Exhibit Q-3 hereto shall use commercially
reasonable
best efforts to provide immediate notice to the Master Servicer,
the Securities
Administrator and the Depositor, by fax and by phone or by e-mail
and by phone,
(B) each such party shall be required to provide to the Securities
Administrator
and the Depositor, to the extent known, in EDGAR-compatible format
or in such
other format as agreed upon by the Securities Administrator and
such party, the
form and substance of any Form 8-K Disclosure Information if
applicable,
together with the form set forth on Exhibit O (the "Additional
Disclosure
Notification") by the close of business New York City time on the
2nd Business
Day following the occurrence of such Reportable Event and (C) the
Depositor,
shall approve, as to form and substance, or disapprove, as the case
may be, the
inclusion of the Form 8-K Disclosure Information on Form 8-K. The
Securities
Administrator has no duty under this Agreement to monitor or
enforce the
performance by the parties listed on Exhibit Q-3 of their duties
under this
paragraph or proactively solicit or procure from such parties any
Form 8-K
Disclosure Information. The Depositor will be responsible for any
reasonable
fees and expenses assessed or incurred by the Securities
Administrator in
connection with including any Form 8-K Disclosure Information on
Form 8-K
pursuant to this paragraph.
(c)
After preparing the Form 8-K, the Securities Administrator shall,
upon
request, forward electronically a copy of the Form 8-K to the
Depositor.
Promptly, but no later than the close of business on the third
Business Day
after the Reportable Event, the Depositor shall notify the
Securities
Administrator in writing (which may be furnished electronically) of
any changes
to or approval of such Form 8-K. In the absence of receipt of any
written
changes or approval, or if the Depositor does not request a copy of
a Form 8-K,
the Securities Administrator shall be entitled to assume that such
Form 8-K is
in final form and the Securities Administrator may proceed with the
process for
execution and filing of the Form 8-K. A duly authorized
representative of the
Master Servicer shall sign each Form 8-K. If a Form 8-K cannot be
filed on time
or if a previously filed Form 8-K needs to be amended, the
Securities
Administrator will follow the procedures set forth in Section
3.18(n).
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(d)
Promptly (but no later than one Business Day) after filing with
the
Commission, the Securities Administrator will make available on its
internet
website a final executed copy of each Form 8-K prepared and filed
by the
Securities Administrator. The parties to this Agreement acknowledge
that the
performance by the Master Servicer and the Securities Administrator
of its
duties under this Section 3.18 related to the timely preparation,
execution and
filing of Form 8-K is contingent upon the other parties hereto
strictly
observing all applicable deadlines in the performance of their
duties under this
Section 3.18. The Depositor acknowledges that the performance by
the Master
Servicer and the Securities Administrator of its duties under this
Section 3.18
related to the timely preparation, execution and filing of Form 8-K
is also
contingent upon the Servicers, the Custodian and any Servicing
Function
Participant strictly observing deadlines no later than those set
forth in this
paragraph that are applicable to the parties to this Agreement in
the delivery
to the Securities Administrator of any necessary Form 8-K
Disclosure Information
pursuant to the related Servicing Agreements, the Custodial
Agreement or any
other applicable agreement. Neither the Master Servicer nor the
Securities
Administrator shall have any liability for any loss, expense,
damage or claim
arising out of or with respect to any failure to properly prepare,
execute
and/or timely file such Form 8-K, where such failure results from
the Securities
Administrator's inability or failure to obtain or receive, on a
timely basis,
any information from any other party hereto or any Servicer,
Custodian or
Servicing Function Participant needed to prepare, arrange for
execution or file
such Form 8-K.
(e)
Within fifteen (15) days after each Distribution Date (subject
to
permitted extensions under the Exchange Act), the Securities
Administrator
shall, on behalf of the Issuing Entity and in accordance with
industry
standards, prepare and file with the Commission via the Electronic
Data
Gathering and Retrieval System (EDGAR), a Form 10-D with a copy of
the Monthly
Statement for such Distribution Date as an exhibit thereto. Any
disclosure in
addition to the Monthly Statement that is required to be included
on Form 10-D
("Additional Form 10-D Disclosure") shall be reported by the
parties set forth
on Exhibit Q-1 to the Depositor and the Securities Administrator
and directed
and approved by the Depositor pursuant to the following paragraph,
and the
Securities Administrator will have no duty or liability for any
failure
hereunder to determine or prepare any Additional Form 10-D
Disclosure except as
set forth in the next paragraph.
(f)
As set forth in Exhibit Q-1 hereto, for so long as the Issuing
Entity
is subject to the reporting requirements of the Exchange Act,
within five (5)
calendar days after the related Distribution Date (i) each party
listed on
Exhibit Q-1 hereto shall be required to provide to the Depositor
and the
Securities Administrator, to the extent known, in EDGAR-compatible
format or in
such other format as agreed upon by the Securities Administrator
and such party,
the form and substance of any Additional Form 10-D Disclosure if
applicable
together with an Additional Disclosure Notification, and (ii) the
Depositor will
approve, as to form and substance, or disapprove, as the case may
be, the
inclusion of the Additional Form 10-D Disclosure on Form 10-D. The
Securities
Administrator has no duty under this Agreement to monitor or
enforce the
performance by the parties listed on Exhibit Q-1 of their duties
under this
paragraph or proactively solicit or procure from such parties any
Additional
Form 10-D Disclosure Information. The Depositor will be responsible
for any
reasonable fees and expenses incurred by the Securities
Administrator in
connection with including any Additional Form 10-D Disclosure on
Form 10-D
pursuant to this paragraph.
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(g)
After preparing the Form 10-D, the Securities Administrator shall,
upon
request, forward electronically a copy of the Form 10-D to the
Depositor
(provided that such Form 10-D includes any Additional Form 10-D
Disclosure).
Within two Business Days after receipt of such copy, but no later
than the 12th
calendar day after the Distribution Date, the Depositor shall
notify the
Securities Administrator in writing (which may be furnished
electronically) of
any changes to or approval of such Form 10-D. In the absence of
receipt of any
written changes or approval, or if the Depositor does not request a
copy of a
Form 10-D, the Securities Administrator shall be entitled to assume
that such
Form 10-D is in final form and the Securities Administrator may
proceed with the
process for execution and filing of the Form 10-D. A duly
authorized
representative of the Master Servicer shall sign each Form 10-D. If
a Form 10-D
cannot be filed on time or if a previously filed Form 10-D needs to
be amended,
the Securities Administrator will follow the procedures set forth
in Section
3.18(n). Promptly (but not later than one Business Day) after
filing with the
Commission, the Securities Administrator will make available on its
internet
website a final executed copy of each Form 10-D prepared and filed
by the
Securities Administrator. Form 10-D requires the registrant to
indicate (by
checking "yes" or "no") that it "(1) has filed all reports required
to be filed
by Section 13 or 15(d) of the Exchange Act during the preceding 12
months (or
for such shorter period that the registrant was required to file
such reports),
and (2) has been subject to such filing requirements for the past
90 days." The
Depositor hereby represents to the Securities Administrator that
the Depositor
has filed all such required reports during the preceding 12 months
and that it
has been subject to such filing requirement for the past 90 days.
The Depositor
shall notify the Securities Administrator in writing, no later than
the fifth
calendar day after the related Distribution Date with respect to
the filing of a
report on Form 10-D, if the answer to the questions should be "no."
The
Securities Administrator shall be entitled to rely on such
representations in
preparing, executing and/or filing any such Form 10-D. The parties
to this
Agreement acknowledge that the performance by the Master Servicer
and the
Securities Administrator of its respective duties under this
Section 3.18
related to the timely preparation, execution and filing of Form
10-D is
contingent upon the other parties hereto strictly observing all
applicable
deadlines in the performance of their duties under this Section
3.18. The
Depositor acknowledges that the performance by the Master Servicer
and the
Securities Administrator of its duties under this Section 3.18
related to the
timely preparation, execution and filing of Form 10-D is also
contingent upon
the Servicers, the Custodian and any Servicing Function Participant
strictly
observing deadlines no later than those set forth in this paragraph
that are
applicable to the parties to this Agreement in the delivery to the
Securities
Administrator of any necessary Additional Form 10-D Disclosure
pursuant to the
related Servicing Agreements, the Custodial Agreement or any other
applicable
agreement. Neither the Master Servicer nor the Securities
Administrator will
have any liability for any loss, expense, damage or claim arising
out of or with
respect to any failure to properly prepare, execute and/or timely
file such Form
10-D resulting from the Securities Administrator's inability or
failure to
obtain or receive any information needed to prepare, arrange for
execution or
file such Form 10-D on a timely basis.
(h)
On or prior to the 90th calendar day after the end of the fiscal
year
for the Issuing Entity or such earlier date as may be required by
the Exchange
Act (the "10-K Filing Deadline") (it being understood that the
fiscal year for
the Issuing Entity ends on December 31st of each year) commencing
in March 2007,
the Securities Administrator shall, on behalf of the Issuing Entity
and in
accordance with industry standards, prepare and file with the
Commission via
EDGAR a Form 10-K with respect to the Issuing Entity. Such Form
10-K shall
include the
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following items, in each case, as applicable, to the extent they
have been
delivered to the Securities Administrator within the applicable
time frames set
forth in this Agreement, the related Servicing Agreements and
Custodial
Agreement: (i) an annual compliance statement for the Master
Servicer, each
Servicer, the Securities Administrator and any Servicing Function
Participant
engaged by any such party or the Trustee (together with the
Custodian, each a
"Reporting Servicer"), as described in Section 3.16 of this
Agreement, the
related Servicing Agreement and the Custodial Agreement; provided,
however, that
the Securities Administrator, at its discretion, may omit from the
Form 10-K any
annual compliance statement that is not required to be filed with
such Form 10-K
pursuant to Regulation AB; (ii)(A) the annual reports on assessment
of
compliance with Servicing Criteria for each Reporting Servicer
(unless the
Depositor has determined that such compliance statement is not
required by
Regulation AB), as described in Section 3.17 of this Agreement, the
related
Servicing Agreement and the Custodial Agreement, and (B) if any
Reporting
Servicer's report on assessment of compliance with Servicing
Criteria described
in Section 3.17 identifies any material instance of noncompliance,
disclosure
identifying such instance of noncompliance, or if any Reporting
Servicer's
report on assessment of compliance with Servicing Criteria
described in Section
3.17 of this Agreement is not included as an exhibit to such Form
10-K,
disclosure that such report is not included and an explanation why
such report
is not included; provided, however, that the Securities
Administrator, at its
discretion, may omit from the Form 10-K any assessment of
compliance or
attestation report described in clause (iii) below that is not
required to be
filed with such Form 10-K pursuant to Regulation AB; (iii)(A) the
registered
public accounting firm attestation report for each Reporting
Servicer, as
described in Section 3.17 of this Agreement, the related Servicing
Agreement and
the Custodial Agreement, and (B) if any registered public
accounting firm
attestation report described under Section 3.17 of this Agreement
identifies any
material instance of noncompliance, disclosure identifying such
instance of
noncompliance, or if any such registered public accounting firm
attestation
report is not included as an exhibit to such Form 10-K, disclosure
that such
report is not included and an explanation why such report is not
included, and
(iv) a Sarbanes-Oxley Certification in the form attached hereto as
Exhibit L,
executed by the senior officer in charge of securitizations of the
Master
Servicer. Any disclosure or information in addition to (i) through
(iv) above
that is required to be included on Form 10-K ("Additional Form 10-K
Disclosure")
shall be reported by the parties as set forth in Exhibit Q-2 to the
Depositor
and the Securities Administrator and directed and approved by the
Depositor
pursuant to the following paragraph and the Securities
Administrator will have
no duty or liability for any failure hereunder to determine or
prepare any
Additional Form 10-K Disclosure except or set forth in the next
paragraph.
(i)
As set forth in Exhibit Q-2 hereto, no later than March 1 (with a
ten
calendar day cure period) of each year that the Issuing Entity is
subject to the
Exchange Act reporting requirements, commencing in March 2007, (i)
the parties
listed on Exhibit Q-2 hereto shall be required to provide to the
Depositor and
the Securities Administrator, to the extent known, in
EDGAR-compatible format or
in such other format as agreed upon by the Securities Administrator
and such
party, the form and substance of any Additional Form 10-K
Disclosure, if
applicable together with an Additional Disclosure Notification, and
(ii) the
Depositor will approve, as to form and substance, or disapprove, as
the case may
be, the inclusion of the Additional Form 10-K Disclosure and shall
forward such
Additional Form 10-K Disclosure. The Securities Administrator has
no duty under
this Agreement to monitor or enforce the performance by the parties
listed on
Exhibit Q-2 of their duties under this paragraph or
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proactively solicit or procure from such parties any Additional
Form 10-K
Disclosure Information. The Depositor will be responsible for any
reasonable
fees and expenses incurred by the Securities Administrator in
connection with
including any Additional Form 10-K Disclosure on Form 10-K pursuant
to this
paragraph.
(j)
After preparing the Form 10-K, the Securities Administrator shall,
upon
request, forward electronically a copy of the Form 10-K to the
Depositor. Within
three Business Days after receipt of such copy, but no later than
March 25th,
the Depositor shall notify the Securities Administrator in writing
(which may be
furnished electronically) of any changes to or approval of such
Form 10-K. In
the absence of receipt of any written changes or approval, or if
the Depositor
does not request a copy of a Form 10-K, the Securities
Administrator shall be
entitled to assume that such Form 10-K is in final form and the
Securities
Administrator may proceed with the process for execution and filing
of the Form
10-K. A senior officer of the Master Servicer in charge of the
master servicing
function shall sign the Form 10-K. If a Form 10-K cannot be filed
on time or if
a previously filed Form 10-K needs to be amended, the Securities
Administrator
will follow the procedures set forth in Section 3.18(n). Promptly
(but no later
than one Business Day) after filing with the Commission, the
Securities
Administrator will make available on its internet website a final
executed copy
of each Form 10-K prepared and filed by the Securities
Administrator. Form 10-K
requires the registrant to indicate (by checking "yes" or "no")
that it "(1) has
filed all reports required to be filed by Section 13 or 15(d) of
the Exchange
Act during the preceding 12 months (or for such shorter period that
the
registrant was required to file such reports), and (2) has been
subject to such
filing requirements for the past 90 days." The Depositor hereby
represents to
the Securities Administrator that the Depositor has filed all such
required
reports during the preceding 12 months and that it has been subject
to such
filing requirement for the past 90 days. The Depositor shall notify
the
Securities Administrator in writing, no later than the 15th
calendar day of
March in any year in which the Trust is subject to the reporting
requirements of
the Exchange Act, if the answer to the questions should be "no."
The Securities
Administrator shall be entitled to rely on such representations in
preparing,
executing and/or filing any such Form 10-D. The parties to this
Agreement
acknowledge that the performance by the Master Servicer and the
Securities
Administrator of its duties under this Section 3.18 related to the
timely
preparation, execution and filing of Form 10-K is contingent upon
such parties
(and any Servicing Function Participant) strictly observing all
applicable
deadlines in the performance of their duties under this Section
3.18, Section
3.16 and Section 3.17. The Depositor acknowledges that the
performance by the
Master Servicer and the Securities Administrator of its duties
under this
Section 3.18 related to the timely preparation, execution and
filing of Form
10-K is also contingent upon the Servicers, the Custodian and any
Servicing
Function Participant strictly observing deadlines no later than
those set forth
in this paragraph that are applicable to the parties to this
Agreement in the
delivery to the Securities Administrator of any necessary
Additional Form 10-K
Disclosure, any annual statement of compliance and any assessment
of compliance
and attestation pursuant to the related Servicing Agreement, the
Custodial
Agreement or any other applicable agreement. Neither the Master
Servicer nor the
Securities Administrator shall have any liability for any loss,
expense, damage
or claim arising out of or with respect to any failure to properly
prepare,
execute and/or timely file such Form 10-K resulting from the
Securities
Administrator's inability or failure to obtain or receive any
information from
any other party hereto or any Servicer, Custodian or Servicing
Function
Participant needed to prepare, execute or file such Form 10-K.
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(k)
Each Form 10-K shall include a Sarbanes-Oxley Certification,
which
shall be in the form attached hereto as Exhibit L. Each Servicer
shall sign and
provide, and each of the Servicers, the Master Servicer and the
Securities
Administrator shall cause any Servicing Function Participant
engaged by it to
sign and provide, to the person who signs the Sarbanes-Oxley
Certification (the
"Certifying Person") by March 1 (with a ten day cure period) of
each year in
which the Issuing Entity is subject to the reporting requirements
of the
Exchange Act and otherwise within a reasonable period of time upon
request, a
certification (a "Back-Up Certification") (in the form attached
hereto as
Exhibit M) upon which the Certifying Person, the entity for which
the Certifying
Person acts as an officer and such entity's officers, directors and
affiliates
(collectively, with the Certifying Person, the "Certification
Parties") can
reasonably rely. The senior officer of the Master Servicer in
charge of the
master servicing function shall serve as the Certifying Person on
behalf of the
Issuing Entity. Such officer of the Certifying Person can be
contacted by e-mail
at cts.sec.notifications@wellsfargo.com or by facsimile at
410-715-2380. In the
event any such party or Servicing Function Participant engaged by
any such party
is terminated or resigns pursuant to the terms of this Agreement,
or any other
applicable agreement, as the case may be, such party shall provide
a Back-Up
Certification to the Master Servicer pursuant to this Section 3.18
with respect
to the period of time it was subject to this Agreement or any other
applicable
agreement, as the case may be. Notwithstanding the foregoing, (i)
the Master
Servicer and the Securities Administrator shall not be required to
deliver a
Back-Up Certification to each other if both are the same Person and
the Master
Servicer is the Certifying Person and (ii) the Master Servicer
shall not be
obligated to sign the Sarbanes-Oxley Certification in the event
that it does not
receive any Back-Up Certification required to be furnished to it
pursuant to
this section or any Servicing Agreement or Custodial Agreement.
(l)
The Securities Administrator shall have no responsibility to file
any
items with the Commission other than those specified in this
section and the
Master Servicer shall execute any and all Form 10-Ds, 8-Ks and
10-Ks required
hereunder.
(m)
On or prior to January 30 of the first year in which the
Securities
Administrator is able to do so under applicable law, the
Securities
Administrator shall prepare and file a Form 15 Suspension
Notification relating
to the automatic suspension of reporting in respect of the Issuing
Entity under
the Exchange Act.
(n)
In the event that the Securities Administrator is unable to timely
file
with the Commission all or any required portion of any Form 8-K,
10-D or 10-K
required to be filed by this Agreement because required disclosure
information
was either not delivered to it or delivered to it after the
delivery deadlines
set forth in this Agreement or for any other reason, the
Securities
Administrator will promptly notify electronically the Depositor of
such
inability to make a timely filing with the Commission. In the case
of Form 10-D
and 10-K, the parties to this Agreement will cooperate to prepare
and file a
Form 12b-25 and a 10-D/A and 10K/A, as applicable, pursuant to Rule
12b-25 of
the Exchange Act. In the case of Form 8-K, the Securities
Administrator will,
upon receipt of all required Form 8-K Disclosure Information and
upon the
approval and direction of the Depositor, include such disclosure
information on
the next succeeding Form 10-D to be filed for the Issuing Entity.
In the event
that any previously filed Form 8-K, 10-D or 10-K needs to be
amended, in
connection with any Additional Form 10-D Disclosure (other than, in
the case of
Form 10-D, for the purpose of restating any Monthly Statement),
Additional Form
10-K Disclosure or Form 8-K Disclosure Information, the
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Securities Administrator will electronically notify the Depositor
and such other
parties to the transaction as are affected by such amendment, and
such parties
will cooperate to prepare any necessary 8-K/A, 10-D/A or 10-K/A.
Any Form 15,
Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K shall be
signed by duly
authorized representative or a senior officer in charge of master
servicing, as
applicable, of the Master Servicer. The parties to this Agreement
acknowledge
that the performance by the Master Servicer of its duties under
this Section
3.18 related to the timely preparation, execution and filing of
Form 15, a Form
12b-25 or any amendment to Form 8-K, 10-D or 10-K is contingent
upon each such
party performing its duties under this Section. Neither the Master
Servicer nor
the Securities Administrator shall have any liability for any loss,
expense,
damage or claim arising out of or with respect to any failure to
properly
prepare, execute and/or timely file any such Form 15, Form 12b-25
or any
amendments to Forms 8-K, 10-D or 10-K, where such failure results
from the
Securities Administrator's inability or failure to receive, on a
timely basis,
any information from any other party hereto or any Servicer, any
Custodian or
any Servicing Function Participant needed to prepare, arrange for
execution or
file such Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D
or 10-K.
(o)
The Depositor and the Securities Administrator agree to use their
good
faith efforts to cooperate in complying with the requirements of
this Section
3.18.
(p)
Each of the parties agrees to provide to the Securities
Administrator
such additional information related to such party as the
Securities
Administrator may reasonably request, including evidence of the
authorization of
the person signing any certificate or statement, financial
information and
reports, and such other information related to such party or its
performance
hereunder.
(q)
Any notice or notification required to be delivered by the
Securities
Administrator or Master Servicer to the Depositor pursuant to this
Section 3.18,
may be delivered via facsimile to (212) 449-2700, via email to
paul_park@ml.com
or telephonically by calling Paul Park at (212) 449-6380.
(r)
For the avoidance of doubt, any filings or deliverables required
under
this Section 3.18 and Section 3.18 of the Stack II Agreement, may
be prepared,
delivered and filed in a consolidated manner. The Master Servicer,
the
Securities Administrator and the Depositor may satisfy the
requirements of this
Section 3.18 and Section 3.18 of the Stack II Agreement with a
single set of
filings and deliverables addressing the requirements of both this
Section 3.18
and Section 3.18 of the Stack II Agreement.
Section 3.19 Compliance with Regulation AB. Each of the parties
hereto
acknowledges and agrees that the purpose of Sections 3.16, 3.17 and
3.18 is to
facilitate compliance by the Depositor with the provisions of
Regulation AB, as
such may be amended or clarified from time to time. Therefore, each
of the
parties agrees that the parties' obligations hereunder will be
supplemented and
modified as necessary to be consistent with any such amendments,
interpretive
advice or guidance, convention or consensus among active
participants in the
asset-backed securities markets, advice of counsel, or otherwise in
respect of
the requirements of Regulation AB and the parties shall comply with
requests
made by the Depositor for delivery of additional or different
information as the
Depositor may determine in good faith is necessary to comply with
the provisions
of Regulation AB. Any such supplementation or modification shall be
made in
accordance with Section 11.02 without the consent of the
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Certificateholders, and may result in a change in the reports filed
by the
Securities Administrator on behalf of the Issuing Entity under the
Exchange Act.
ARTICLE IV
ACCOUNTS
Section 4.01 Protected Accounts.
(a)
The Master Servicer shall enforce the obligation of each Servicer
to
establish and maintain a Protected Account in accordance with the
applicable
Servicing Agreement, with records to be kept with respect thereto
on a Mortgage
Loan by Mortgage Loan basis, into which accounts shall be deposited
within two
Business Days (or as of such other time specified in the related
Servicing
Agreement) of receipt all collections of principal and interest on
any Mortgage
Loan and with respect to any REO Property received by a Servicer,
including
Principal Prepayments, Insurance Proceeds, Liquidation Proceeds,
Subsequent
Recoveries and advances made from the Servicer's own funds (less
servicing
compensation as permitted by the applicable Servicing Agreement in
the case of
the Servicer) and all other amounts to be deposited in the
Protected Account.
The Servicer is hereby authorized to make withdrawals from and
deposits to the
related Protected Account for purposes required or permitted by
this Agreement.
To the extent provided in the related Servicing Agreement, the
Protected Account
shall be held in a Designated Depository Institution and segregated
on the books
of such institution in the name of the Trustee for the benefit
of
Certificateholders.
(b)
To the extent provided in the related Servicing Agreement, amounts
on
deposit in a Protected Account may be invested in Permitted
Investments in the
name of the Trustee for the benefit of Certificateholders and,
except as
provided in the preceding paragraph, not commingled with any other
funds, such
Permitted Investments to mature, or to be subject to redemption or
withdrawal,
no later than the date on which such funds are required to be
withdrawn for
deposit in the Master Servicer Collection Account, and shall be
held until
required for such deposit. The income earned from Permitted
Investments made
pursuant to this Section 4.01 shall be paid to the related Servicer
under the
applicable Servicing Agreement, and the risk of loss of moneys
required to be
distributed to the Certificateholders resulting from such
investments shall be
borne by and be the risk of the related Servicer, as set forth in
the applicable
Servicing Agreement. The related Servicer (to the extent provided
in the related
Servicing Agreement) shall deposit the amount of any such loss in
the Protected
Account within two Business Days of receipt of notification of such
loss but not
later than the second Business Day prior to the Distribution Date
on which the
moneys so invested are required to be distributed to the
Certificateholders.
(c)
To the extent provided in the related Servicing Agreement and
subject
to this Article IV, on or before each Servicer Remittance Date, the
related
Servicer shall withdraw or shall cause to be withdrawn from the
Protected
Accounts and shall immediately deposit or cause to be deposited in
the Master
Servicer Collection Account amounts representing the following
collections and
payments (other than with respect to principal of or interest on
the Mortgage
Loans due on or before the Cut-off Date) with respect to each
Mortgage Group:
(i) Monthly Payments on the Mortgage Loans received or any
related
portion thereof advanced by such Servicer pursuant to the related
Servicing
Agreement which
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were
due on or before the related Due Date, net of the amount
thereof
comprising the Servicing Fees;
(ii) Principal Prepayments in Full and any Liquidation Proceeds
received by such Servicer with respect to such Mortgage Loans in
the
related Prepayment Period, with interest to the date of prepayment
or
liquidation, net of the amount thereof comprising the Servicing
Fees;
(iii) Curtailments received by such Servicer for such Mortgage
Loans
in
the related Prepayment Period; and
(iv) Any amount to be used as a Monthly Advance.
(d)
Withdrawals by the Master Servicer may be made from an Account only
to
make remittances as provided in Section 4.01(c), 4.02 and 4.03; to
reimburse the
Master Servicer or a Servicer for Monthly Advances which have been
recovered by
subsequent collection from the related Mortgagor; to remove amounts
deposited in
error; to remove fees, charges or other such amounts deposited on a
temporary
basis; or to clear and terminate the account at the termination of
this
Agreement in accordance with Section 10.01. As provided in Sections
4.01(c) and
4.02(b) certain amounts otherwise due to the Servicers may be
retained by them
as set forth in the related Servicing Agreements and need not be
deposited in
the Master Servicer Collection Account.
Section 4.02 Master Servicer Collection Account.
(a)
The Master Servicer shall establish and maintain in the name of
the
Trustee, for the benefit of the Certificateholders, the Master
Servicer
Collection Account as a segregated trust account or accounts. The
Master
Servicer Collection Account may be a sub-account of the
Distribution Account.
The Master Servicer will deposit in the Master Servicer Collection
Account as
identified by the Master Servicer and as received by the Master
Servicer, the
following amounts:
(i) Any amounts withdrawn from a Protected Account or other
permitted
account;
(ii) Any Monthly Advance and any Compensating Interest
Payments;
(iii) Any Insurance Proceeds, Liquidation Proceeds or
Subsequent
Recoveries received by or on behalf of the Master Servicer or which
were
not
deposited in a Protected Account or other permitted account;
(iv) The repurchase price with respect to any Mortgage Loans
repurchased and all proceeds of any Mortgage Loans or property
acquired in
connection with the optional termination of the trust;
(v) Any amounts required to be deposited with respect to losses
on
investments of deposits in an Account; and
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(vi) Any other amounts received by or on behalf of the Master
Servicer
and
required to be deposited in the Master Servicer Collection
Account
pursuant to this Agreement.
(b)
All amounts deposited to the Master Servicer Collection Account
shall
be held by the Master Servicer in the name of the Trustee in trust
for the
benefit of the Certificateholders in accordance with the terms and
provisions of
this Agreement. The requirements for crediting the Master Servicer
Collection
Account or the Distribution Account shall be exclusive, it being
understood and
agreed that, without limiting the generality of the foregoing,
payments in the
nature of (i) prepayment or late payment charges or assumption, tax
service,
statement account or payoff, substitution, satisfaction, release
and other like
fees and charges and (ii) the items enumerated in Subsections
4.05(a)(i), (ii),
(iii), (iv), (vi), (vii), (viii), (ix), (xi) and (xii) with respect
to the
Securities Administrator, need not be credited by the Master
Servicer or the
related Servicer to the Distribution Account or the Master Servicer
Collection
Account, as applicable. In the event that the Master Servicer shall
deposit or
cause to be deposited to the Distribution Account any amount not
required to be
credited thereto, the Securities Administrator, upon receipt of a
written
request therefor signed by a Servicing Officer of the Master
Servicer, shall
promptly transfer such amount to the Master Servicer from the
Distribution
Account, any provision herein to the contrary notwithstanding.
(c)
The amount at any time credited to the Master Servicer
Collection
Account shall be invested, in the name of the Trustee, or its
nominee, for the
benefit of the Certificateholders, in Permitted Investments as
directed by
Master Servicer. All Permitted Investments shall mature or be
subject to
redemption or withdrawal on or before, and shall be held until, the
next
succeeding Distribution Account Deposit Date. Any and all
investment earnings on
amounts on deposit in the Master Servicer Collection Account from
time to time
shall be for the account of the Master Servicer. The Master
Servicer from time
to time shall be permitted to withdraw or receive distribution of
any and all
investment earnings from the Master Servicer Collection Account.
The risk of
loss of moneys required to be distributed to the Certificateholders
resulting
from such investments shall be borne by and be the risk of the
Master Servicer.
The Master Servicer shall deposit the amount of any such loss in
the Master
Servicer Collection Account within two Business Days of receipt of
notification
of such loss but not later than the second Business Day prior to
the
Distribution Date on which the moneys so invested are required to
be distributed
to the Certificateholders.
(d)
For the avoidance of doubt, it is agreed that the Master Servicer
shall
establish and maintain in the name of the Trustee, for the benefit
of the
holders of the Stack II Certificates, a separate segregated trust
account or
accounts pursuant to Section 4.02 of the Stack II Agreement.
Section 4.03 Permitted Withdrawals and Transfers from the Master
Servicer
Collection Account.
(a)
The Master Servicer will, from time to time on demand of the
Master
Servicer, the Trustee or the Securities Administrator, make or
cause to be made
such withdrawals or transfers from the Master Servicer Collection
Account as the
Master Servicer has designated for such transfer or withdrawal
pursuant to the
Servicing Agreements. The Master Servicer may clear
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and terminate the Master Servicer Collection Account pursuant to
Section 10.01
and remove amounts from time to time deposited in error.
(b)
On an ongoing basis, the Master Servicer shall withdraw from the
Master
Servicer Collection Account (i) any expenses recoverable by the
Trustee, the
Master Servicer or the Securities Administrator pursuant to this
Agreement,
including but not limited to Sections 2.01(b), 3.03, 7.04 and 9.05
and (ii) any
amounts payable to the Master Servicer as set forth in Section
3.14.
(c)
In addition, on or before each Distribution Account Deposit Date,
the
Master Servicer shall deposit in the Distribution Account (or remit
to the
Securities Administrator for deposit therein) any Monthly Advances
required to
be made by the Master Servicer with respect to the Mortgage
Loans.
(d)
No later than 3:00 p.m. New York time on each Distribution
Account
Deposit Date, the Master Servicer will transfer the Available
Distribution
Amount on deposit in the Master Servicer Collection Account with
respect to the
related Distribution Date to the Securities Administrator for
deposit in the
Distribution Account.
Section 4.04 Distribution Account.
(a)
The Securities Administrator shall establish and maintain in the
name
of the Trustee, for the benefit of the Certificateholders, the
Distribution
Account as a segregated trust account or accounts.
(b)
All amounts deposited to the Distribution Account shall be held by
the
Securities Administrator in the name of the Trustee in trust for
the benefit of
the Certificateholders in accordance with the terms and provisions
of this
Agreement.
(c)
The Distribution Account shall constitute a trust account of the
Trust
Fund segregated on the books of the Securities Administrator and
held by the
Securities Administrator in trust in its Corporate Trust Office,
and the
Distribution Account and the funds deposited therein shall not be
subject to,
and shall be protected to the maximum extent permitted by
applicable law from,
all claims, liens, and encumbrances of any creditors or depositors
of the
Securities Administrator, the Trustee or the Master Servicer
(whether made
directly, or indirectly through a liquidator or receiver of the
Securities
Administrator, the Trustee or the Master Servicer). The
Distribution Account
shall be an Eligible Account. The amount at any time credited to
the
Distribution Account shall be (i) fully insured by the FDIC to the
maximum
coverage provided thereby or (ii) invested in the name of the
Trustee, in such
Permitted Investments selected by the Master Servicer or deposited
in demand
deposits with such depository institutions as selected by the
Master Servicer,
provided that time deposits of such depository institutions would
be a Permitted
Investment. All Permitted Investments shall mature or be subject to
redemption
or withdrawal on or before, and shall be held until, the next
succeeding
Distribution Date if the obligor for such Permitted Investment is
the Master
Servicer or, if such obligor is any other Person, the Business Day
preceding
such Distribution Date. All investment earnings on amounts on
deposit in the
Distribution Account or benefit from funds uninvested therein from
time to time
shall be for the account of the Securities Administrator. The
Securities
Administrator shall be permitted to withdraw or receive
distribution of any and
all
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investment earnings from the Distribution Account on each
Distribution Date. If
there is any loss on a Permitted Investment or demand deposit, the
Securities
Administrator shall deposit such amount in the Distribution
Account. With
respect to the Distribution Account and the funds deposited
therein, the
Securities Administrator shall take such action as may be necessary
to ensure
that the Certificateholders shall be entitled to the priorities
afforded to such
a trust account (in addition to a claim against the estate of the
Trust) as
provided by 12 U.S.C. Section 92a(e), and applicable regulations
pursuant
thereto, if applicable, or any applicable comparable state statute
applicable to
state chartered banking corporations.
(d)
For the avoidance of doubt, the Securities Administrator shall
establish and maintain in the name of the Trustee, for the benefit
of the
holders of the Stack II Certificates, a separate segregated trust
account or
accounts pursuant to Section 4.04 of the Stack II Agreement.
Section 4.05 Permitted Withdrawals and Transfers from the
Distribution
Account.
(a)
The Securities Administrator will, from time to time on demand of
the
Master Servicer, make or cause to be made such withdrawals or
transfers from the
Distribution Account as the Master Servicer has designated for such
transfer or
withdrawal pursuant to the Servicing Agreements for the following
purposes
(limited in the case of amounts due the Master Servicer to those
not withdrawn
from the Master Servicer Collection Account in accordance with the
terms of this
Agreement):
(i) to reimburse the Master Servicer or any Servicer for any
Monthly
Advance of its own funds or any advance of such Servicer's own
funds, the
right of the Master Servicer or a Servicer to reimbursement
pursuant to
this
subclause (i) being limited to amounts received on a particular
Mortgage Loan (including, for this purpose, the Purchase Price
therefor,
Insurance Proceeds and Liquidation Proceeds) which represent late
payments
or
recoveries of the principal of or interest on such Mortgage
Loan
respecting which such Monthly Advance or advance was made;
(ii) to reimburse the Master Servicer or any Servicer from
Insurance
Proceeds or
Liquidation Proceeds relating to a particular Mortgage Loan for
amounts expended by the Master Servicer or such Servicer in good
faith as a
Servicing Advance in connection with the restoration of the
related
Mortgaged Property which was damaged by an Uninsured Cause or in
connection
with
the liquidation of such Mortgage Loan;
(iii) to reimburse the Master Servicer or any Servicer from
Insurance
Proceeds relating to a particular Mortgage Loan for insured
expenses
incurred with respect to such Mortgage Loan and to reimburse the
Master
Servicer or such Servicer from Liquidation Proceeds from a
particular
Mortgage Loan for Liquidation Expenses incurred with respect to
such
Mortgage Loan; provided that the Master Servicer shall not be
entitled to
reimbursement for Liquidation Expenses with respect to a Mortgage
Loan to
the
extent that (i) any amounts with respect to such Mortgage Loan
were
paid
as Excess Liquidation Proceeds pursuant to clause (xi) of this
Subsection 4.03 (a) to the Master Servicer; and (ii) such
Liquidation
Expenses were not included in the computation of such Excess
Liquidation
Proceeds;
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(iv)
to pay the Master Servicer or any Servicer, as appropriate,
from
Liquidation Proceeds or Insurance Proceeds received in connection
with the
liquidation of any Mortgage Loan, the amount which it or such
Servicer
would have been entitled to receive under subclause (ix) of this
Subsection
4.03(a) as servicing compensation on account of each defaulted
scheduled
payment on such Mortgage Loan if paid in a timely manner by the
related
Mortgagor;
(v) to pay the Master Servicer or any Servicer from the Purchase
Price
for
any Mortgage Loan, the amount which it or such Servicer would have
been
entitled to receive under subclause (ix) of this Subsection 4.03
(a) as
servicing compensation;
(vi) to reimburse the Master Servicer or any Servicer for advances
of
funds pursuant to Sections, and the right to reimbursement pursuant
to this
subclause being limited to amounts received on the related Mortgage
Loan
(including, for this purpose, the Purchase Price therefor,
Insurance
Proceeds and Liquidation Proceeds) which represent late recoveries
of the
payments for which such advances were made;
(vii) to reimburse the Master Servicer or any Servicer for any
Monthly
Advance or advance, after a Realized Loss has been allocated with
respect
to
the related Mortgage Loan if the Monthly Advance or advance has not
been
reimbursed pursuant to clauses (i) and (vi);
(viii) to pay the Master Servicer as set forth in Section 3.14;
(ix) to reimburse the Master Servicer for expenses, costs and
liabilities incurred by and reimbursable to it pursuant to this
Agreement,
including but not limited to Sections 3.03, 7.04(c) and (d);
(x) to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds to the extent not
retained by
the
related Servicer;
(xi) to reimburse or pay any Servicer any such amounts as are
due
thereto under the applicable Servicing Agreement and have not been
retained
by
or paid to the Servicer, to the extent provided in the related
Servicing
Agreement;
(xii) to reimburse the Trustee or the Securities Administrator
for
expenses, costs and liabilities incurred by or reimbursable to it
pursuant
to
this Agreement;
(xiii) to remove amounts deposited in error; and
(xiv) to clear and terminate the Distribution Account pursuant
to
Section 9.01.
(b)
The Master Servicer shall keep and maintain separate accounting, on
a
Mortgage Loan by Mortgage Loan basis, for the purpose of accounting
for any
reimbursement from the Distribution Account pursuant to subclauses
(i) through
(vi), inclusive, and (viii) or with respect to any such amounts
which would have
been covered by such subclauses had the amounts not been retained
by the Master
Servicer without being deposited in the Distribution Account under
Section
4.02(b).
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(c)
On each Distribution Date, the Securities Administrator shall
distribute the Available Distribution Amount for each Mortgage
Group to the
Holders of the Certificates in accordance with Section 6.01.
ARTICLE V
CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be executed
by manual
or facsimile signature on behalf of the Securities Administrator by
an
authorized officer. Certificates bearing the manual or facsimile
signatures of
individuals who were, at the time when such signatures were
affixed, authorized
to sign on behalf of the Securities Administrator shall bind the
Issuing Entity,
notwithstanding that such individuals or any of them have ceased to
be so
authorized prior to the authentication and delivery of such
Certificates or did
not hold such offices at the date of such authentication and
delivery. No
Certificate shall be entitled to any benefit under this Agreement,
or be valid
for any purpose, unless there appears on such Certificate a
certificate of
authentication substantially in the form set forth as attached
hereto executed
by the Securities Administrator by manual signature, and such
certificate of
authentication upon any Certificate shall be conclusive evidence,
and the only
evidence, that such Certificate has been duly authenticated and
delivered
hereunder. All Certificates shall be dated the date of their
authentication. On
the Closing Date, the Securities Administrator shall authenticate
the
Certificates to be issued at the written direction of the
Depositor, or any
Affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of
Certificates.
(a)
The Securities Administrator shall maintain, or cause to be
maintained
in accordance with the provisions of Section 5.09 hereof, a
Certificate Register
for the Trust Fund in which, subject to the provisions of
subsections (b) and
(c) below and to such reasonable regulations as it may prescribe,
the Securities
Administrator shall provide for the registration of Certificates
and of
Transfers and exchanges of Certificates as herein provided. Upon
surrender for
registration of Transfer of any Certificate, the Securities
Administrator shall
authenticate and deliver, in the name of the designated transferee
or
transferees, one or more new Certificates of the same Class and of
like
aggregate Percentage Interest.
At
the option of a Certificateholder, Certificates may be exchanged
for
other Certificates of the same Class in authorized denominations
and evidencing
the same aggregate Percentage Interest upon surrender of the
Certificates to be
exchanged at the office or agency of the Securities Administrator.
Whenever any
Certificates are so surrendered for exchange, the Securities
Administrator shall
execute, authenticate and deliver the Certificates that the
Certificateholder
making the exchange is entitled to receive. Every Certificate
presented or
surrendered for registration of Transfer or exchange shall be
accompanied by a
written instrument of Transfer in form satisfactory to the
Securities
Administrator duly executed by the holder thereof or his attorney
duly
authorized in writing.
No
service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment
of a sum
sufficient to cover any tax or governmental charge that may be
imposed in
connection with any Transfer or exchange of Certificates may be
required. All
Certificates surrendered for registration of Transfer or exchange
shall be
canceled
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and subsequently destroyed by the Securities Administrator in
accordance with
such Securities Administrator's customary procedures.
(b)
No Transfer of a Class B, Class P or Class A-R Certificate shall
be
made unless such Transfer is made pursuant to an effective
registration
statement under the Securities Act and any applicable state
securities laws or
is exempt from the registration requirements under the Securities
Act and such
state securities laws. In the event that a Transfer is to be made
in reliance
upon an exemption from the Securities Act and such laws, in order
to assure
compliance with the Securities Act and such laws, the
Certificateholder desiring
to effect such Transfer and such Certificateholder's prospective
transferee
shall (except with respect to the initial transfer of a Class B,
Class P or
Class A-R Certificate by Merrill Lynch & Co.) each certify to
each Securities
Administrator in writing the facts surrounding the Transfer in
substantially the
form set forth in Exhibit F-1 (the "Transferor Representation
Letter") and (i)
deliver a letter in substantially the form of either Exhibit F-2
(the "Investor
Representation Letter") or Exhibit F-3 (the "Rule 144A Letter") or
(ii) there
shall be delivered to the Securities Administrator an Opinion of
Counsel that
such Transfer may be made pursuant to an exemption from the
Securities Act,
which Opinion of Counsel shall not be an expense of the Depositor
or the
Securities Administrator. The Depositor shall provide to any Holder
of a Class
B, Class P or Class A-R Certificate and any prospective transferee
designated by
any such Holder, information regarding the related Certificates and
the Mortgage
Loans and such other information as shall be necessary to satisfy
the condition
to eligibility set forth in Rule 144A(d)(4) for Transfer of any
such Certificate
without registration thereof under the Securities Act pursuant to
the
registration exemption provided by Rule 144A. The Securities
Administrator shall
cooperate with the Depositor in providing the Rule 144A information
referenced
in the preceding sentence, including providing to the Depositor
such information
in the possession of the Securities Administrator regarding the
Certificates,
the Mortgage Loans and other matters regarding the Trust Fund as
the Depositor
shall reasonably request to meet its obligation under the preceding
sentence.
Each Holder of a Class B, Class P or Class A-R Certificate desiring
to effect
such Transfer shall, and does hereby agree to, indemnify the
Depositor and the
Securities Administrator against any liability that may result if
the Transfer
is not so exempt or is not made in accordance with such federal and
state laws.
No
transfer of an ERISA Restricted Certificate or a Class A-R
Certificate
will be registered unless the Securities Administrator has received
(A) a
representation to the effect that such transferee is not an
employee benefit
plan subject to Title I of ERISA, a plan subject to Section 4975 of
the Code or
a plan subject to any state, local, federal, non-U.S. or other law
substantively
similar to the foregoing provisions of ERISA or the Code ("Similar
Law")
(collectively, a "Plan"), and is not directly or indirectly
acquiring such
Certificate for, on behalf of, or with any assets of any such Plan,
or (B)
solely in the case of an ERISA Restricted Certificate (I) if the
Certificate has
been the subject of an ERISA-Qualifying Underwriting, a
representation to the
effect that such transferee is an insurance company that is
acquiring the
Certificate with assets contained in an "insurance company general
account," as
defined in Section V(e) of Prohibited Transaction Class Exemption
("PTCE")
95-60, and the acquisition and holding of the Certificate are
covered and exempt
under Sections I and III of PTCE 95-60, or (II) solely in the case
of a
Definitive Certificate, an Opinion of Counsel satisfactory to the
Securities
Administrator, and upon which the Securities Administrator shall be
entitled to
rely, to the effect that the acquisition and holding of such
Certificate will
not constitute or result in a
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nonexempt prohibited transaction under Title I of ERISA or Section
4975 of the
Code, or a violation of Similar Law, and will not subject the
Securities
Administrator, the Master Servicer, the Trustee or the Depositor to
any
obligation in addition to those expressly undertaken in this
Agreement, which
Opinion of Counsel shall not be an expense of the Securities
Administrator, the
Master Servicer, the Trustee or the Depositor.
Except in the case of a Definitive Certificate, the representations
set
forth in the immediately preceding paragraph of this Subsection
5.02(b), other
than clause (B)(II) in the immediately preceding paragraph, shall
be deemed to
have been made to the Securities Administrator by the transferee's
acceptance of
an ERISA Restricted Certificate or a Class A-R Certificate (or the
acceptance by
a Certificate Owner of the beneficial interest in any Class of
ERISA Restricted
Certificates or a Class A-R Certificate).
Notwithstanding any other provision herein to the contrary, any
purported
transfer of an ERISA Restricted Certificate or a Class A-R
Certificate to or on
behalf of a Plan without the delivery to the Securities
Administrator of a
representation or an Opinion of Counsel satisfactory to the
Securities
Administrator as described above shall be void and of no effect.
The Securities
Administrator shall not be under any liability to any Person for
any
registration or transfer of any ERISA Restricted Certificate or
Class A-R
Certificate that is in fact not permitted by this Section 5.02(b),
nor shall the
Trustee or the Securities Administrator be under any liability for
making any
payments due on such Certificate to the Holder thereof or taking
any other
action with respect to such Holder under the provisions of this
Agreement so
long as the transfer was registered by the Securities Administrator
in
accordance with the foregoing requirements. The Trustee or the
Securities
Administrator shall be entitled, but not obligated, to recover from
any Holder
of any ERISA Restricted Certificate or Class A-R Certificate that
was in fact a
Plan and that held such Certificate in violation of this Section
5.02(b) all
payments made on such ERISA Restricted Certificate or a Class A-R
Certificate at
and after the time it commenced such holding. Any such payments so
recovered
shall be paid and delivered to the last preceding Holder of such
Certificate
that is not a Plan.
(c)
Each Person who has or who acquires any Ownership Interest in a
Class
A-R Certificate shall be deemed by the acceptance or acquisition of
such
Ownership Interest to have agreed to be bound by the following
provisions, and
the rights of each Person acquiring any Ownership Interest in a
Class A-R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Class
A-R
Certificate shall be a Permitted Transferee and shall promptly
notify
the
Securities Administrator of any change or impending change in
its
status as a Permitted Transferee.
(ii) No Ownership Interest in a Class A-R Certificate may be
purchased, transferred or sold, directly or indirectly, except
in
accordance with the provisions hereof. No Ownership Interest in a
Class A-R
Certificate may be registered on the Closing Date or thereafter
transferred, and the Securities Administrator shall not register
the
Transfer of any Class A-R Certificate unless, in addition to
the
certificates required to be delivered to the Securities
Administrator under
subparagraph (b) above, the Securities Administrator shall have
been
furnished with an affidavit (a "Transferee's Letter") of the
initial owner
or
the proposed transferee in the form attached hereto as Exhibit E-1
and
an
affidavit (a "Transferor Certificate") of the proposed transferor
in the
form
attached
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hereto as Exhibit E-2. In the absence of a contrary instruction
from the
transferor of a Class A-R Certificate, declaration (11) in Appendix
A of
the
Transferee's Letter may be left blank. If the transferor requests
by
written notice to the Securities Administrator prior to the date of
the
proposed transfer that one of the two other forms of declaration
(11) in
Appendix A of the Transferee's Letter be used, then the
requirements of
this
Section 5.02(c)(ii) shall not have been satisfied unless the
Transferee's Letter includes such other form of declaration.
(iii) Each Person holding or acquiring any Ownership Interest in
a
Class A-R Certificate
shall agree (A) to obtain a Transferee's Letter from
any
other Person to whom such Person attempts to Transfer its
Ownership
Interest in a Class A-R Certificate, (B) to obtain a Transferee's
Letter
from
any Person for whom such Person is acting as nominee, trustee or
agent
in
connection with any Transfer of a Class A-R Certificate and (C) not
to
Transfer its Ownership Interest in a Class A-R Certificate or to
cause the
Transfer of an Ownership Interest in a Class A-R Certificate to any
other
Person if it has actual knowledge that such Person is not a
Permitted
Transferee. Further, no transfer, sale or other disposition of
any
Ownership Interest in a Class A-R Certificate may be made to a
person who
is
not a U.S. Person (within the meaning of Section 7701 of the
Code)
unless such person furnishes the transferor and the Securities
Administrator with a duly completed and effective Internal Revenue
Service
Form
W-8ECI (or any successor thereto) and the Securities
Administrator
consents to such transfer, sale or other disposition in
writing.
(iv) Any attempted or purported Transfer of any Ownership Interest
in
a
Class A-R Certificate in violation of the provisions of this
Section
5.02(c) shall be absolutely null and void and shall vest no rights
in the
purported Transferee. If any purported transferee shall become a
Holder of
a
Class A-R Certificate in violation of the provisions of this
Section
5.02(c), then the last preceding Permitted Transferee shall be
restored to
all
rights as Holder thereof retroactive to the date of registration
of
Transfer of such Class A-R Certificate. The Securities
Administrator shall
be
under no liability to any Person for any registration of Transfer
of a
Class A-R Certificate that is in fact not permitted by Section
5.02(b) and
this
Section 5.02(c) or for making any payments due on such Certificate
to
the
Holder thereof or taking any other action with respect to such
Holder
under the provisions of this Agreement so long as the Transfer
was
registered after receipt of the related Transferee's Letter. The
Securities
Administrator shall be entitled but not obligated to recover from
any
Holder of a Class A-R Certificate that was in fact not a
Permitted
Transferee at the time it became a Holder or, at such subsequent
time as it
became other than a Permitted Transferee, all payments made on such
Class
A-R
Certificate at and after either such time. Any such payments so
recovered by the Securities Administrator shall be paid and
delivered by
the
Securities Administrator to the last preceding Permitted Transferee
of
such
Certificate.
(v) At the
option of the Holder of the Class A-R Certificate, the
Class LT1-R Interest, the Class UT-R Interest and the residual
interest in
any
REMIC created under the Stack II Agreement may be severed and
represented by separate certificates; provided, however, that such
separate
certification may not occur until the Securities Administrator
receives a
REMIC Opinion to the effect that separate certification in the
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form
and manner proposed would not result in the imposition of federal
tax
upon
the Issuing Entity or any of the REMICs provided for in the
Pooling
and
Servicing Agreement or cause any of the REMICs provided for in
the
Pooling and Servicing Agreement to fail to qualify as a REMIC; and
provided
further, that the provisions of Sections 5.02(b) and (c) will apply
to each
such
separate certificate as if the separate certificate were a Class
A-R
Certificate. If, as evidenced by a REMIC Opinion, it is necessary
to
preserve the REMIC status of any of the REMICs provided for in the
Pooling
and
Servicing Agreement, the Class LT1-R Interest, the Class UT-R
Interest
and
the residual interest in any REMIC created under the Stack II
Agreement
shall be severed and represented by separate Certificates.
The
restrictions on Transfers of a Class A-R Certificate set forth in
this
Section 5.02(c) shall cease to apply (and the applicable portions
of the legend
on a Class A-R Certificate may be deleted) with respect to
Transfers occurring
after delivery to the Securities Administrator of an Opinion of
Counsel, which
Opinion of Counsel shall not be an expense of the Securities
Administrator or
the Depositor, to the effect that the elimination of such
restrictions will not
cause any of the REMICs provided for herein to fail to qualify as a
REMIC at any
time that the Certificates are outstanding or result in the
imposition of any
tax on the Issuing Entity, any REMIC provided for herein, a
Certificateholder or
another Person. Each Person holding or acquiring any Ownership
Interest in a
Class A-R Certificate hereby consents to any amendment of this
Agreement that,
based on an Opinion of Counsel furnished to the Securities
Administrator, is
reasonably necessary (a) to ensure that the record ownership of, or
any
beneficial interest in, a Class A-R Certificate is not transferred,
directly or
indirectly, to a Person that is not a Permitted Transferee and (b)
to provide
for a means to compel the Transfer of a Class A-R Certificate that
is held by a
Person that is not a Permitted Transferee to a Holder that is a
Permitted
Transferee.
(d)
The transferor of the Class A-R Certificate shall notify the
Securities
Administrator in writing upon the transfer of the Class A-R
Certificate.
(e)
The preparation and delivery of all certificates, opinions and
other
writings referred to above in this Section 5.02 shall not be an
expense of the
Issuing Entity, the Depositor or the Securities Administrator.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any
mutilated Certificate is surrendered to the Securities
Administrator or the
Securities Administrator receives evidence to its satisfaction of
the
destruction, loss or theft of any Certificate and of the ownership
thereof and
(b) there is delivered to the Securities Administrator such
security or
indemnity as may be required by them to save each of them harmless,
then, in the
absence of notice to the Securities Administrator that such
Certificate has been
acquired by a bona fide purchaser, the Securities Administrator
shall execute,
authenticate and deliver, in exchange for or in lieu of any such
mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor
and Percentage Interest. In connection with the issuance of any new
Certificate
under this Section 5.03, the Securities Administrator may require
the payment of
a sum sufficient to cover any tax or other governmental charge that
may be
imposed in relation thereto and any other expenses (including the
fees and
expenses of the Securities Administrator) connected therewith. Any
replacement
Certificate issued pursuant to this Section 5.03 shall constitute
complete and
indefeasible evidence of ownership in the Trust Fund, as if
originally issued,
whether or not the
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lost, stolen or destroyed Certificate shall be found at any time.
All
Certificates surrendered to the Securities Administrator under the
terms of this
Section 5.03 shall be canceled and destroyed by the Securities
Administrator in
accordance with its standard procedures without liability on its
part.
Section 5.04 Persons Deemed Owners. The Securities Administrator
and any
agent of the Securities Administrator may treat the Person in whose
name any
Certificate is registered as the owner of such Certificate for the
purpose of
receiving distributions as provided in this Agreement and for all
other purposes
whatsoever, and neither the Securities Administrator, nor any agent
of the
Securities Administrator shall be affected by any notice to the
contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses. If
three or more Certificateholders (a) request such information in
writing from
the Securities Administrator, (b) state that such
Certificateholders desire to
communicate with other Certificateholders with respect to their
rights under
this Agreement or under the Certificates, and (c) provide a copy of
the
communication that such Certificateholders propose to transmit or
if the
Depositor shall request such information in writing from the
Securities
Administrator, then the Securities Administrator shall, within ten
Business Days
after the receipt of such request, provide the Depositor or
such
Certificateholders at such recipients' expense the most recent list
of the
Certificateholders of the Trust Fund held by the Securities
Administrator, if
any. The Depositor and every Certificateholder, by receiving and
holding a
Certificate, agree that the Securities Administrator shall not be
held
accountable by reason of the disclosure of any such information as
to the list
of the Certificateholders hereunder, regardless of the source from
which such
information was derived.
Section 5.06 Book-Entry
Certificates. The Regular Certificates, upon
original issuance, shall be issued in the form of one or more
typewritten
Certificates representing the Book-Entry Certificates, to be
delivered to the
Depository by or on behalf of the Depositor. The Book-Entry
Certificates shall
initially be registered on the Certificate Register in the name of
the
Depository or its nominee, and no Certificate Owner of a Book-Entry
Certificate
will receive a definitive certificate representing such Certificate
Owner's
interest in such Certificates, except as provided in Section 5.08.
Unless and
until definitive, fully registered Certificates ("Definitive
Certificates") have
been issued to the Certificate Owners of the Book-Entry
Certificates pursuant to
Section 5.08:
(a)
the provisions of this Section shall be in full force and
effect;
(b)
the Depositor and the Securities Administrator may deal with
the
Depository and the Depository Participants for all purposes
(including the
making of distributions) as the authorized representative of the
respective
Certificate Owners of the Book-Entry Certificates;
(c)
registration of the Book-Entry Certificates may not be transferred
by
the Securities Administrator except to another Depository;
(d) the rights of the
respective Certificate Owners of the Book-Entry
Certificates shall be exercised only through the Depository and the
Depository
Participants and shall be limited to those established by law and
agreements
between the Owners of the Book-Entry Certificates and the
Depository and/or the
Depository Participants. Pursuant to the Depository Agreement,
unless
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and until Definitive Certificates are issued pursuant to Section
5.08, the
Depository will make book-entry transfers among the Depository
Participants and
receive and transmit distributions of principal and interest on the
related
Certificates to such Depository Participants;
(e)
the Depository may collect its usual and customary fees, charges
and
expenses from its Depository Participants;
(f)
the Securities Administrator may rely and shall be fully protected
in
relying upon information furnished by the Depository with respect
to its
Depository Participants; and
(g)
to the extent that the provisions of this Section conflict with
any
other provisions of this Agreement, the provisions of this Section
shall
control.
For
purposes of any provision of this Agreement requiring or
permitting
actions with the consent of, or at the direction of,
Certificateholders
evidencing a specified percentage of the aggregate unpaid principal
amount of
any Class of Certificates, such direction or consent may be given
by Certificate
Owners (acting through the Depository and the Depository
Participants) owning
Book-Entry Certificates evidencing the requisite percentage of
principal amount
of such Class of Certificates.
Section 5.07 Notices to Depository. Whenever any notice or
other
communication is required to be given to Certificateholders of the
Class with
respect to which Book-Entry Certificates have been issued, unless
and until
Definitive Certificates shall have been issued to the related
Certificate
Owners, the Securities Administrator shall give all such notices
and
communications to the Depository.
Section 5.08 Definitive Certificates. If, after Book-Entry
Certificates
have been issued with respect to any Certificates, (a) the
Depository or the
Depositor advises the Securities Administrator that the Depository
is no longer
willing, qualified or able to discharge properly its
responsibilities under the
Depository Agreement with respect to such Certificates and the
Securities
Administrator or the Depositor is unable to locate a qualified
successor, (b)
the Depositor notifies the Securities Administrator and the
Depository of its
intent to terminate the book-entry system through the Depository
and, upon
receipt of notice of such intent from the Depository, the
Certificate Owners of
the Book-Entry Certificates agree to initiate such termination or
(c) after the
occurrence and continuation of an Event of Default, Certificate
Owners of such
Book-Entry Certificates having not less than 51% of the Voting
Rights evidenced
by any Class of Book-Entry Certificates advise the Securities
Administrator and
the Depository in writing through the Depository Participants that
the
continuation of a book-entry system with respect to Certificates of
such Class
through the Depository (or its successor) is no longer in the best
interests of
the Certificate Owners of such Class, then the Securities
Administrator shall
notify all Certificate Owners of such Book-Entry Certificates,
through the
Depository, of the occurrence of any such event and of the
availability of
Definitive Certificates to Certificate Owners of such Class
requesting the same.
The Depositor shall provide the Securities Administrator with an
adequate
inventory of certificates to facilitate the issuance and transfer
of Definitive
Certificates. Upon surrender to the Securities Administrator of any
such
Certificates by the Depository, accompanied by registration
instructions from
the Depository for registration, the Securities Administrator shall
authenticate
and deliver such Definitive Certificates. Neither the Depositor nor
the
Securities Administrator shall be liable for any delay
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in delivery of such instructions and each may conclusively rely on,
and shall be
protected in relying on, such instructions. Upon the issuance of
such Definitive
Certificates, all references herein to obligations imposed upon or
to be
performed by the Depository shall be deemed to be imposed upon and
performed by
the Securities Administrator, to the extent applicable with respect
to such
Definitive Certificates and the Securities Administrator shall
recognize the
Holders of such Definitive Certificates as Certificateholders
hereunder.
Section 5.09 Maintenance of Office or Agency. The Securities
Administrator
will maintain or cause to be maintained at its expense an office or
offices or
agency or agencies where Certificates may be surrendered for
registration of
transfer or exchange. The Securities Administrator initially
designates its
offices at Sixth Street and Marquette Avenue, Minneapolis,
Minnesota 55479,
Attention: Corporate Trust Services - Merrill Lynch Mortgage
Investors Trust,
Series 2006-AF1 as offices for such purposes. The Securities
Administrator will
give prompt written notice to the Certificateholders of any change
in such
location of any such office or agency. For the avoidance of doubt,
the
Securities Administrator may satisfy the requirements of both this
Section 5.09
and Section 5.09 of the Stack II Agreement by maintaining a single
office or
agency.
ARTICLE VI
PAYMENTS TO CERTIFICATEHOLDERS
Section 6.01 Distributions. Interest and principal on the
Certificates will
be distributed by the Securities Administrator monthly on each
Distribution
Date, commencing in October 2006, as instructed by the Master
Servicer, in an
aggregate amount equal to the sum of the Available Distribution
Amount for such
Distribution Date.
(I) Prior to the Credit Support Depletion Date, the Available
Distribution
Amount shall be applied as follows:
(a) On each Distribution Date, the Securities Administrator
shall
apply an amount equal to the Available Distribution Amount in the
following
order of priority:
(i) Concurrently (A) solely from the Available Distribution
Amount with respect to Mortgage Group One, to the Class AF-1
Certificateholders (other than the Class PO Certificates), all
amounts
distributable pursuant to (I)(b)(i)(A), (B) solely from the
Available
Distribution Amount with respect to Mortgage Group Two, to the
Class
AF-2 Certificateholders (other than the Class PO Certificates),
all
amounts distributable pursuant to (I)(b)(i)(B) through (D) below,
and
(C) solely from the Available Distribution Amount with respect
to
Mortgage Group Three, to the Class AF-3 Certificateholders (other
than
the Class PO Certificates), all amounts distributable pursuant
to
(I)(b)(i)(E) through (F) below;
(ii) the balance, if any, of the Available Distribution Amount
shall be distributed first, (A) concurrently, solely from the
Available Distribution Amount with respect to Mortgage Group One
to
the Class AF-1 Certificateholders in the amounts distributable
pursuant to (I)(b)(ii)(A) below, up to the Non-PO Class AF-1
Optimal
Principal Amount and (I)(b)(iii) below, up to the amounts
payable
thereunder and to Class PO Component One, the Group One Class
PO
Amount pursuant to (I)(b)(ii)(A)
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below, (B) concurrently, solely from the Available Distribution
Amount
with respect to Mortgage Group Two to the Class AF-2
Certificateholders in the amounts distributable pursuant to
(I)(b)(ii)(B) below, up to the Non-PO Class AF-2 Optimal
Principal
Amount and (I)(b)(iv) below, up to the amounts payable thereunder
and
to the Class PO Component Two Certificates, the Group Two Class
PO
Amount pursuant to (I)(b)(ii)(B) below, and (C) concurrently,
solely
from the Available Distribution Amount with respect to Mortgage
Group
Three to the Class AF-3 Certificateholders in the amounts
distributable pursuant to (I)(b)(ii)(C) below, up to the Non-PO
Class
AF-3 Optimal Principal Amount and (I)(b)(v) below, up to the
amounts
payable thereunder and to the Class PO Component Three
Certificates,
the Group Three Class PO Amount pursuant to (I)(b)(ii)(C) below,
and
second, to the Class PO Component One, the portion of the Class
PO
Shortfall Amount relating to the Group One Mortgage Loans, to
the
Class PO Component Two, the portion of the Class PO Shortfall
Amount
relating to the Group Two Mortgage Loans and to the Class PO
Component
Three, the portion of the Class PO Shortfall Amount relating to
the
Group Three Mortgage Loans, in accordance with paragraph
(I)(b)(v)
below;
(iii) subject to subsection (b) below, to the Class M
Certificateholders, the balance, if any, of the Available
Distribution
Amount after making the distributions provided for in paragraphs
(i)
and (ii) above, in accordance with, and up to the amount
calculated
pursuant to, Section 6.01(I)(c) below;
(iv) subject to subsection (b) below, to the Class B
Certificateholders, the balance, if any, of the Available
Distribution
Amount after making the distributions provided for in paragraphs
(i)
through (iii) above, in accordance with, and up to the amounts
calculated pursuant to, Section 6.01(I)(d) below; and
(v) to the Class A-R Certificateholders the balance, if any, of
the Available Distribution Amount remaining after the
distributions
provided for in paragraphs (i) through (iv) above.
(b) Amounts payable to the Class A
