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EXHIBIT 99.2
AGENCY AGREEMENT
This AGENCY AGREEMENT
, dated as of November 1, 2006 (this "Agency
Agreement"), is entered into by and between HSBC Bank USA, National
Association ("HSBC"), a national banking association, as trustee
under the Pooling and Servicing Agreement (as defined below) and
Wells Fargo Bank, N.A. ("Wells Fargo"), a national banking
association, as agent.
RECITALS
WHEREAS , HSBC is the successor
trustee under the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of July 1, 2006, among Bear Stearns
Asset Backed Securities I LLC (the "Depositor"), EMC Mortgage
Corporation (the "Master Servicer") and Wells Fargo (the
"Predecessor Trustee") for the Bear Stearns Mortgage Funding Trust
2006-AC1, Asset-Backed Certificates, Series 2006-AC1;
WHEREAS , HSBC is the successor
trustee under the Custodial Agreement, dated as of July 31, 2006
(the "Custodial Agreement"; together with the Pooling and Servicing
Agreement, the "Agreements"), by and among the Predecessor Trustee,
the Depositor, EMC Mortgage Corporation, as seller, the Master
Servicer and Wells Fargo Bank, National Association, as
custodian;
WHEREAS , HSBC desires to
appoint Wells Fargo as its agent for the purpose of executing
certain trusts and powers and performing certain duties of HSBC
under the Agreements; and
WHEREAS , Wells Fargo desires to
accept appointment as HSBC’s agent for the purposes of
executing certain trusts and powers and performing certain duties
of HSBC under the Agreements on the terms and conditions set forth
herein;
NOW, THEREFORE , HSBC and Wells
Fargo hereby agree as follows:
1. (a)
HSBC hereby appoints Wells Fargo as its agent
pursuant to Section 10.02 of the Pooling and Servicing Agreement
for the purpose of executing certain trusts and powers of HSBC
under the Agreements. Wells Fargo hereby accepts such appointment
as if Wells Fargo had been appointed as trustee of the Trust Fund
by the provisions of the Pooling and Servicing
Agreement.
(b) Wells Fargo has
been provided with and has reviewed the Agreements and hereby
agrees to perform, on behalf of HSBC, all of the non-fiduciary
duties of HSBC (defined as those duties that would typically not be
performed by a nominal trustee in an asset-backed securities
transaction) under the Agreements (including, but not limited to
the Trustee’s reporting responsibilities under Article III of
the Pooling and Servicing Agreement and the Trustee’s
responsibility for paying the custodian’s fee pursuant to
Section 3.3 of the Custodial Agreement) except as otherwise
provided in this Agency Agreement. Notwithstanding the foregoing,
HSBC shall not delegate to Wells Fargo its duty to accept all of
the right, title and interest of the Depositor in and to the Trust
Fund. Moreover, nothing in this Agency Agreement shall be construed
to confer a fiduciary obligation on Wells Fargo or to eliminate
HSBC’s own fiduciary obligations. Wells Fargo shall advise
HSBC when action by HSBC is necessary to comply with HSBC’s
duties under the Agreements. Wells Fargo shall act as paying agent
and certificate registrar under the Pooling and Servicing
Agreement.
(c) HSBC shall
forward to Wells Fargo a copy of all written notices received by
HSBC that are addressed to HSBC promptly upon receipt.
(d) Wells Fargo
shall carry out in timely fashion, and in accordance with the
provisions of the Agreements, all of the non-fiduciary duties HSBC
is required to perform under the Agreements on behalf of HSBC
pursuant to the terms of this Agency Agreement.
(e) Wells Fargo
hereby agrees that it will not take any action that is not related
to the administration of the Trust to (i) impair the validity or
effectiveness of the Agreements or release any Person from any
covenant or obligation under the Agreements, except as expressly
permitted thereby or (ii) creating any lien, charge, security
interest or similar encumbrance (other than as permitted under the
provisions of the Pooling and Servicing Agreement) on any portion
of the Trust Fund.
(f) Wells Fargo
hereby accepts its appointment as (i) Certificate Registrar with
respect to all the Certificates pursuant to Section 7.02 of the
Pooling and Servicing Agreement, (ii) Paying Agent pursuant to
Section 5.09 of the Pooling and Servicing Agreement, (iii)
Authenticating Agent pursuant to Section 7.01 of the Pooling and
Servicing Agreement and (iv) calculating agent for the purposes of
performing any calculations required of the Trustee pursuant to
Article VI of the Pooling and Servicing Agreement. Wells Fargo
shall advise HSBC when action is necessary to comply with
HSBC’s remaining duties under the Agreements. Wells Fargo
shall prepare for execution by HSBC, or shall cause the preparation
by other appropriate persons of, all such documents, reports,
filings, tax returns, instruments, certificates and opinions that
it shall be the duty of HSBC to prepare, file or deliver pursuant
to the Pooling and Servicing Agreement and shall, subject to this
Agency Agreement, take all appropriate non-fiduciary action that is
the duty of HSBC to take pursuant to the Agreements, as
required.
(g) HSBC hereby
unconditionally appoints and constitutes Wells Fargo its true and
lawful attorney-in-fact, irrevocably, with full power, coupled with
an interest (in the name of HSBC or otherwise) and Wells Fargo is
hereby authorized and empowered to ask, require, demand, receive,
endorse, execute and deliver on behalf of HSBC all instruments and
to take all other actions in connection with Wells Fargo’s
obligations under this Agency Agreement. If reasonably required by
Wells Fargo, HSBC shall furnish Wells Fargo with any additional
powers of attorney and other documents necessary or appropriate to
enable Wells Fargo to carry out its administrative duties under
this Agency Agreement.
(h) Notwithstanding
any term or provision in this Agency Agreement to the contrary, the
rights and obligations of HSBC as trustee under the Agreements
shall not be diminished by the fact that HSBC may employ the
services of Wells Fargo to accomplish certain of the duties of HSBC
under this Agency Agreement.
(i) HSBC agrees to
cooperate and assist Wells Fargo with respect to matters that in
the reasonable judgment of Wells Fargo are non-ministerial;
provided that any action taken by Wells Fargo with respect to such
non-ministerial matters shall, in the good faith judgment of Wells
Fargo, be in the best interests of the holders of the Certificates
and HSBC.
(j) Wells Fargo
agrees to provide the Depositor with a backup certification in the
form of Exhibit A hereto if HSBC is required to provide its own
backup certification to the Depositor for the Depositor to use in
issuing the certification required under Section 302(a) of the
Sarbanes-Oxley Act of 2002.
2. Wells Fargo shall
not be required to execute or perform any power or duty under the
Agreements or to exercise any right under the Agreements if Wells
Fargo is legally prohibited from doing so. All such powers, duties
and rights are hereby deemed not to have been delegated by HSBC or
accepted by Wells Fargo.
3. HSBC hereby
agrees that any compensation payable to it under the Pooling and
Servicing Agreement shall be paid to Wells Fargo. HSBC shall be
compensated for its services performed and expenses incurred as
Trustee by Wells Fargo pursuant to a fee schedule previously
executed by HSBC and Wells Fargo with respect to the Pooling and
Servicing Agreement and attached hereto as Exhibit B.
4. Wells Fargo shall
be subject to the same standard of care and have the same
liabilities, rights and immunities as HSBC under the Pooling and
Servicing Agreement prior to the occurrence of an Event of Default.
Wel
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