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BEAR STEARNS ASSET BACKED SECURITIES I LLC,
Depositor,
EMC MORTGAGE CORPORATION,
Seller and Master Servicer,
and
LASALLE BANK NATIONAL ASSOCIATION,
Trustee
____________________
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 2004
________________________________________
BEAR STEARNS ASSET BACKED SECURITIES I TRUST 2004-HE11
ASSET-BACKED CERTIFICATES, SERIES 2004-HE11
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TABLE OF CONTENTS
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Page
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ARTICLE I
DEFINITIONS
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Section 1.01 Defined
Terms...............................................................................5
Section 1.02 Allocation of Certain Interest
Shortfalls..................................................48
ARTICLE II
CONVEYANCE OF TRUST FUND REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Trust
Fund...................................................................50
Section 2.02 Acceptance of the Mortgage
Loans...........................................................52
Section 2.03 Representations, Warranties and Covenants of the
Master Servicer and the Seller............54
Section 2.04 Representations and Warranties of the
Depositor............................................59
Section 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases............60
Section 2.06 Countersignature and Delivery of
Certificates..............................................61
ARTICLE III
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 3.01 The Master Servicer to act as Master
Servicer..............................................62
Section 3.02 Due-on-Sale Clauses; Assumption
Agreements.................................................63
Section 3.03
Subservicers...............................................................................64
Section 3.04 Documents, Records and Funds in Possession of the
Master Servicer To Be Held for
Trustee....................................................................................65
Section 3.05 Maintenance of Hazard
Insurance............................................................65
Section 3.06 Presentment of Claims and Collection of
Proceeds...........................................66
Section 3.07 Maintenance of the Primary Mortgage Insurance
Policies.....................................66
Section 3.08 Fidelity Bond, Errors and Omissions
Insurance..............................................67
Section 3.09 Realization Upon Defaulted Mortgage Loans;
Determination of Excess Liquidation
Proceeds and Realized Losses; Repurchases of Certain Mortgage
Loans........................67
Section 3.10 Servicing
Compensation.....................................................................70
Section 3.11 REO
Property...............................................................................70
Section 3.12 Liquidation
Reports........................................................................71
Section 3.13 Annual Certificate as to
Compliance........................................................71
Section 3.14 Annual Independent Certified Public Accountants'
Servicing Report..........................71
Section 3.15 Books and
Records..........................................................................72
Section 3.16 Reports Filed with Securities and Exchange
Commission......................................72
Section 3.17
UCC........................................................................................74
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Section 3.18 Optional Purchase of Certain Mortgage
Loans................................................74
Section 3.19 Obligations of the Master Servicer in Respect of
Mortgage Rates and Scheduled
Payments...................................................................................75
Section 3.20 Reserve
Fund...............................................................................75
Section 3.21 Advancing
Facility.........................................................................76
ARTICLE IV
ACCOUNTS
Section 4.01 Collection of Mortgage Loan Payments; Protected
Account....................................78
Section 4.02 Permitted Withdrawals From the Protected
Account...........................................80
Section 4.03 Collection of Taxes; Assessments and Similar Items;
Escrow Accounts........................81
Section 4.04 Distribution
Account.......................................................................82
Section 4.05 Permitted Withdrawals and Transfers from the
Distribution Account..........................83
Section 4.06 Class P Certificate
Account................................................................83
ARTICLE V
DISTRIBUTIONS AND ADVANCES
Section 5.01
Advances...................................................................................84
Section 5.02 Compensating Interest
Payments.............................................................85
Section 5.03 REMIC
Distributions........................................................................85
Section 5.04
Distributions..............................................................................85
Section 5.05 Allocation of Realized
Losses..............................................................90
Section 5.06 Monthly Statements to
Certificateholders...................................................92
Section 5.07 REMIC Designations and REMIC
Distributions.................................................95
ARTICLE VI
THE CERTIFICATES
Section 6.01 The
Certificates...........................................................................98
Section 6.02 Certificate Register; Registration of Transfer and
Exchange of Certificates................99
Section 6.03 Mutilated, Destroyed, Lost or Stolen
Certificates.........................................103
Section 6.04 Persons Deemed
Owners.....................................................................103
Section 6.05 Access to List of Certificateholders' Names and
Addresses.................................103
Section 6.06 Book-Entry
Certificates...................................................................103
Section 6.07 Notices to
Depository.....................................................................104
Section 6.08 Definitive
Certificates...................................................................105
Section 6.09 Maintenance of Office or
Agency...........................................................105
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ARTICLE VII
THE DEPOSITOR AND THE MASTER SERVICER
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Section 7.01 Liabilities of the Depositor and the Master
Servicer......................................106
Section 7.02 Merger or Consolidation of the Depositor or the
Master Servicer...........................106
Section 7.03 Indemnification of the Trustee and the Master
Servicer....................................106
Section 7.04 Limitations on Liability of the Depositor, the
Master Servicer and Others.................107
Section 7.05 Master Servicer Not to
Resign.............................................................108
Section 7.06 Successor Master
Servicer.................................................................108
Section 7.07 Sale and Assignment of Master
Servicing...................................................108
ARTICLE VIII
DEFAULT; TERMINATION OF MASTER SERVICER
Section 8.01 Events of
Default.........................................................................110
Section 8.02 Trustee to Act; Appointment of
Successor..................................................112
Section 8.03 Notification to
Certificateholders........................................................113
Section 8.04 Waiver of
Defaults........................................................................113
ARTICLE IX
CONCERNING THE TRUSTEE
Section 9.01 Duties of
Trustee.........................................................................114
Section 9.02 Certain Matters Affecting the
Trustee.....................................................115
Section 9.03 Trustee Not Liable for Certificates or Mortgage
Loans.....................................117
Section 9.04 Trustee May Own
Certificates..............................................................118
Section 9.05 Trustee's Fees and
Expenses...............................................................118
Section 9.06 Eligibility Requirements for
Trustee......................................................118
Section 9.07
Insurance.................................................................................119
Section 9.08 Resignation and Removal of
Trustee........................................................119
Section 9.09 Successor
Trustee.........................................................................120
Section 9.10 Merger or Consolidation of
Trustee........................................................120
Section 9.11 Appointment of Co-Trustee or Separate
Trustee.............................................120
Section 9.12 Tax
Matters...............................................................................122
ARTICLE X
TERMINATION
Section 10.01 Termination upon Liquidation or Repurchase of all
Mortgage Loans..........................125
Section 10.02 Final Distribution on the
Certificates....................................................125
Section 10.03 Additional Termination
Requirements.......................................................127
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ARTICLE XI
MISCELLANEOUS PROVISIONS
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Section 11.01
Amendment.................................................................................128
Section 11.02 Recordation of Agreement;
Counterparts....................................................129
Section 11.03 Governing
Law.............................................................................129
Section 11.04 Intention of
Parties......................................................................130
Section 11.05
Notices...................................................................................130
Section 11.06 Severability of
Provisions................................................................131
Section 11.07
Assignment................................................................................131
Section 11.08 Limitation on Rights of
Certificateholders................................................131
Section 11.09 Inspection and Audit
Rights...............................................................132
Section 11.10 Certificates Nonassessable and Fully
Paid.................................................132
EXHIBITS
Exhibit A-1 Form of Class A Certificates
Exhibit A-2 Form of Class M Certificates
Exhibit A-3 Form of Class P Certificates
Exhibit A-4 Form of Class CE Certificates
Exhibit A-5 Form of Class R Certificates
Exhibit B Mortgage Loan Schedule
Exhibit C Form of Transfer Affidavit
Exhibit D Form of Transferor Certificate
Exhibit E Form of Investment Letter (Non-Rule 144A)
Exhibit F Form of Rule 144A and Related Matters Certificate
Exhibit G Form of Request for Release
Exhibit H DTC Letter of Representations
Exhibit I Schedule of Mortgage Loans with Lost Notes
Exhibit J Form of Custodial Agreement
Exhibit K Form of Back-Up Certification
Exhibit L Form of Mortgage Loan Purchase Agreement
Exhibit M Notional Amount Schedule and Cap Rate Schedule
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POOLING AND SERVICING AGREEMENT, dated as of December 1, 2004,
among
BEAR STEARNS ASSET BACKED SECURITIES I LLC, a Delaware limited
liability
company, as depositor (the "Depositor"), EMC MORTGAGE
CORPORATION, a Delaware
corporation, as seller (in such capacity, the "Seller") and as
master servicer
(in such capacity, the "Master Servicer") and LASALLE BANK
NATIONAL ASSOCIATION,
a national banking association, not in its individual capacity,
but solely as
trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby
conveyed to
the Trustee in return for the Certificates.
REMIC I
-------
As provided herein, the Trustee will elect to treat the
segregated pool
of assets consisting of the Mortgage Loans and certain other
related assets
subject to this Agreement (other than the Reserve Fund and the
Yield Maintenance
Agreements) as a REMIC for federal income tax purposes, and such
segregated pool
of assets will be designated as "REMIC I". The Class R-1
Certificates will be
the sole class of "residual interests" in REMIC I for purposes
of the REMIC
Provisions (as defined herein). The following table irrevocably
sets forth the
Class designation, the Uncertificated REMIC I Pass-Through Rate,
the initial
Uncertificated Principal Balance and, solely for purposes of
satisfying Treasury
Regulation Section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for
each of the REMIC I Regular Interests (as defined herein). None
of the REMIC I
Regular Interests will be certificated.
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UNCERTIFICATED REMIC I INITIAL UNCERTIFICATED LATEST POSSIBLE
MATURITY
DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE DATE (1)
----------- ----------------- ----------------- --------
<S> <C> <C> <C>
AA Variable(2) $ 802,173,847.96 December 25, 2034
I-A-1 Variable(2) $ 1,693,200.00 December 25, 2034
I-A-2 Variable(2) $ 766,055.00 December 25, 2034
I-A-3 Variable(2) $ 213,610.00 December 25, 2034
II-A-1 Variable(2) $ 2,972,700.00 December 25, 2034
II-A-2 Variable(2) $ 743,175.00 December 25, 2034
M-1 Variable(2) $ 589,350.00 December 25, 2034
M-2 Variable(2) $ 311,045.00 December 25, 2034
M-3 Variable(2) $ 257,845.00 December 25, 2034
M-4 Variable(2) $ 98,230.00 December 25, 2034
M-5 Variable(2) $ 106,410.00 December 25, 2034
M-6 Variable(2) $ 85,945.00 December 25, 2034
M-7 Variable(2) $ 118,690.00 December 25, 2034
ZZ Variable(2) $ 8,414,639.86 December 25, 2034
P 0.00% $ 100.00 December 25, 2034
1A Variable(2) $ 15,033.84 December 25, 2034
1B Variable(2) $ 68,491.14 December 25, 2034
2A Variable(2) $ 20,900.31 December 25, 2034
2B Variable(2) $ 95,217.81 December 25, 2034
XX Variable(2) $ 818,345,099.72 December 25, 2034
</TABLE>
___________________________
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury
regulations, the Distribution Date immediately following the
maturity
date for the Mortgage Loan with the latest maturity date has
been
designated as the "latest possible maturity date" for each REMIC
I
Regular Interest.
(2) Calculated in accordance with the definition of
"Uncertificated REMIC I
Pass-Through Rate" herein.
REMIC II
--------
As provided herein, the Trustee will make an election to treat
the
segregated pool of assets consisting of the REMIC I Regular
Interests as a REMIC
for federal income tax purposes, and such segregated pool of
assets will be
designated as "REMIC II". The Class R-2 Certificates will
represent the sole
class of "residual interests" in REMIC II for purposes of the
REMIC Provisions.
The following table irrevocably sets forth the Class
designation,
Pass-Through Rate, Initial Certificate Principal Balance and,
solely for
purposes of satisfying Treasury Regulation Section
1.860G-1(a)(4)(iii), the
"latest possible maturity date" for each Class of Certificates
that represents
one or more of the "regular interests" in REMIC II created
hereunder.
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INITIAL CERTIFICATE LATEST POSSIBLE MATURITY
DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE DATE(1)
----------- ----------------- ----------------- -------
<S> <C> <C> <C>
I-A-1 Variable(2) $ 338,640,000.00 December 25, 2034
I-A-2 Variable(2) $ 153,211,000.00 December 25, 2034
I-A-3 Variable(2) $ 42,722,000.00 December 25, 2034
II-A-1 Variable(2) $ 594,540,000.00 December 25, 2034
II-A-2 Variable(2) $ 148,635,000.00 December 25, 2034
M-1 Variable(2) $ 117,870,000.00 December 25, 2034
M-2 Variable(2) $ 62,209,000.00 December 25, 2034
M-3 Variable(2) $ 51,569,000.00 December 25, 2034
M-4 Variable(2) $ 19,646,000.00 December 25, 2034
M-5 Variable(2) $ 21,282,000.00 December 25, 2034
M-6 Variable(2) $ 17,189,000.00 December 25, 2034
M-7 Variable(2) $ 23,738,000.00 December 25, 2034
Class CE Interest Variable(2)(3) $ 45,838,485.64 December 25,
2034
Class P Interest 0.00%(4) $ 100.00 December 25, 2034
</TABLE>
___________________________
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury
regulations, the Distribution Date in the month following the
maturity
date for the Mortgage Loan with the latest maturity date has
been
designated as the "latest possible maturity date" for each REMIC
II
Regular Interest.
(2) Calculated in accordance with the definition of
"Pass-Through Rate"
herein.
(3) The Class CE Interest will accrue interest at its variable
Pass-Through
Rate on the Uncertificated Notional Amount of the Class CE
Interest
outstanding from time to time which shall equal the
Uncertificated
Principal Balance of the REMIC I Regular Interests (other than
REMIC I
Regular Interest P). The Class CE Interest will not accrue
interest on
its Certificate Principal Balance.
(4) The Class P Interest is not entitled to distributions in
respect of
interest.
REMIC III
---------
As provided herein, the Trustee shall make an election to treat
the
segregated pool of assets consisting of the Class CE Interest as
a REMIC for
federal income tax purposes, and such segregated pool of assets
will be
designated as "REMIC III." The Class R-3 Interest represents the
sole class of
"residual interests" in REMIC III for purposes of the REMIC
Provisions.
The following table sets forth the Class designation,
Pass-Through
Rate, Initial Certificate Principal Balance and, solely for
purposes of
satisfying Treasury Regulation Section 1.860G-1(a)(4)(iii), the
"latest possible
maturity date" for the indicated Class of Certificates that
represents a
"regular interest" in REMIC III created hereunder:
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INITIAL AGGREGATE CERTIFICATE LATEST POSSIBLE
CLASS DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE MATURITY
DATE(1)
----------------- ----------------- -----------------
----------------
<S> <C> <C> <C>
Class CE Certificates Variable(2) $45,838,485.64 December 25,
2034
</TABLE>
___________________________
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury
regulations, the Distribution Date immediately following the
maturity
date for the Mortgage Loan with the latest maturity date has
been
designated as the "latest possible maturity date" for the Class
CE
Certificates.
(2) The Class CE Certificates will receive 100% of amounts
received in
respect of the Class CE Interest.
REMIC IV
--------
As provided herein, the Trustee shall make an election to treat
the
segregated pool of assets consisting of the Class P Interest as
a REMIC for
federal income tax purposes, and such segregated pool of assets
will be
designated as "REMIC IV." The Class R-4 Interest represents the
sole class of
"residual interests" in REMIC IV for purposes of the REMIC
Provisions.
The following table sets forth the Class designation,
Pass-Through
Rate, Initial Certificate Principal Balance and, solely for
purposes of
satisfying Treasury Regulation Section 1.860G-1(a)(4)(iii), the
"latest possible
maturity date" for the indicated Class of Certificates that
represents a
"regular interest" in REMIC IV created hereunder:
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INITIAL AGGREGATE
CERTIFICATE PRINCIPAL LATEST POSSIBLE
CLASS DESIGNATION PASS-THROUGH RATE BALANCE MATURITY DATE(1)
----------------- ----------------- ------- ----------------
<S> <C> <C> <C>
Class P Certificates 0.00%(2) $100.00 December 25, 2034
</TABLE>
___________________________
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury
regulations, the Distribution Date immediately following the
maturity
date for the Mortgage Loan with the latest maturity date has
been
designated as the "latest possible maturity date" for the Class
P
Certificates.
(2) The Class P Certificates will receive 100% of amounts
received in
respect of the Class P Interest.
The Trust Fund shall be named, and may be referred to as, the
"Bear
Stearns Asset Backed Securities I Trust 2004-HE11." The
Certificates issued
hereunder may be referred to as "Asset-Backed Certificates,
Series 2004-HE11"
(including for purposes of any endorsement or assignment of a
Mortgage Note or
Mortgage).
In consideration of the mutual agreements herein contained,
the
Depositor, the Master Servicer, the Seller and the Trustee agree
as follows:
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ARTICLE I
DEFINITIONS
Section 1.01 DEFINED TERMS.
In addition to those terms defined in Section 1.02, whenever
used in
this Agreement, the following words and phrases, unless the
context otherwise
requires, shall have the following meanings:
ACCEPTED SERVICING PRACTICES: With respect to each Mortgage
Loan, those
mortgage servicing practices (including collection procedures)
that are in
accordance with all applicable statutes, regulations and prudent
mortgage
banking practices for similar mortgage loans.
ACCOUNT: The Distribution Account, the Reserve Account, the
Class P
Certificate Account and the Protected Account.
ACCRUAL PERIOD: With respect to the Certificates (other than the
Class
CE, Class P and the Residual Certificates) and any Distribution
Date, the period
from and including the immediately preceding Distribution Date
(or with respect
to the first Accrual Period, the Closing Date) to and including
the day prior to
such Distribution Date. With respect to the Class CE
Certificates and any
Distribution Date, the calendar month immediately preceding such
Distribution
Date. All calculations of interest on the Certificates (other
than the Class CE,
Class P and the Residual Certificates) will be made on the basis
of the actual
number of days elapsed in the related Accrual Period. All
calculations of
interest on the Class CE Certificates will be made on the basis
of a 360-day
year consisting of twelve 30-day months.
ADVANCE: An advance of delinquent payments of principal or
interest in
respect of a Mortgage Loan required to be made by the Master
Servicer as
provided in Section 5.01 hereof.
AGREEMENT: This Pooling and Servicing Agreement and any and
all
amendments or supplements hereto made in accordance with the
terms herein.
ADJUSTABLE RATE MORTGAGE LOAN: Each of the Mortgage Loans
identified in
the Mortgage Loan Schedule as having a Mortgage Rate that is
subject to
adjustment.
ADJUSTMENT DATE: With respect to each Adjustable Rate Mortgage
Loan,
the first day of the month in which the Mortgage Rate of an
Adjustable Rate
Mortgage Loan changes pursuant to the related Mortgage Note. The
first
Adjustment Date following the Cut-off Date as to each Adjustable
Rate Mortgage
Loan is set forth in the Mortgage Loan Schedule.
AMOUNT HELD FOR FUTURE DISTRIBUTION: As to any Distribution
Date, the
aggregate amount held in the Protected Account at the close of
business on the
immediately preceding Determination Date on account of (i) all
Scheduled
Payments or portions thereof received in respect of the Mortgage
Loans due after
the related Due Period and (ii) Principal Prepayments,
Liquidation Proceeds,
Subsequent Recoveries and Insurance Proceeds received in respect
of such
Mortgage Loans after the last day of the related Prepayment
Period.
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APPLIED REALIZED LOSS AMOUNT: With respect to any Distribution
Date and
a Class of Class A Certificates and Class M Certificates, the
sum of the
Realized Losses with respect to the Mortgage Loans which have
been applied in
reduction of the Certificate Principal Balance of a Class of
Certificates
pursuant to Section 5.05 of this Agreement which have not
previously been
reimbursed or reduced by any Subsequent Recoveries applied to
such Applied
Realized Loss Amount.
APPRAISED VALUE: With respect to any Mortgage Loan originated
in
connection with a refinancing, the appraised value of the
Mortgaged Property
based upon the appraisal made at the time of such refinancing
or, with respect
to any other Mortgage Loan, the lesser of (x) the appraised
value of the
Mortgaged Property based upon the appraisal made by a fee
appraiser at the time
of the origination of the related Mortgage Loan, and (y) the
sales price of the
Mortgaged Property at the time of such origination.
BASIS RISK SHORTFALL CARRY FORWARD AMOUNT: With respect to
any
Distribution Date and any Class of Class A Certificates and
Class M Certificates
and any Distribution Date for which the Pass-Through Rate for
such Certificates
is equal to the related Net Rate Cap, an amount equal to the sum
of (A) the
excess, if any, of (a) the amount of Current Interest that such
Class would have
been entitled to receive on such Distribution Date had the
Pass-Though Rate
applicable to such Class been calculated at a per annum rate
equal to One-Month
LIBOR plus the related Certificate Margin, over (b) the amount
of Current
Interest that such Class received on such Distribution Date at a
per annum rate
equal to the related Net Rate Cap and (B) the amount in clause
(A) for all
previous Distribution Dates not previously paid, together with
interest thereon
at a rate equal to the related Pass-Through Rate for such
Distribution Date.
BANKRUPTCY CODE: Title 11 of the United States Code.
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 6.06). As of
the Closing
Date, each Class of Regular Certificates (other than the Class
M-7, Class CE and
Class P Certificates) constitutes a Class of Book-Entry
Certificates.
BUSINESS DAY: Any day other than (i) a Saturday or a Sunday, or
(ii) a
day on which banking institutions in The City of New York, New
York, Chicago,
Illinois, Minneapolis, Minnesota or the city in which the
Corporate Trust Office
of the Trustee or the principal office of the Master Servicer is
located are
authorized or obligated by law or executive order to be
closed.
CAP RATE: With respect to each Yield Maintenance Agreement, the
rates
set forth therefor in Exhibit M.
CERTIFICATE: Any one of the certificates of any Class executed
and
authenticated by the Trustee in substantially the forms attached
hereto as
Exhibits A-1 through A-5.
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CERTIFICATE MARGIN: With respect to the Class I-A-1 Certificates
and,
for purposes of the definition of "One-Month LIBOR Pass-Through
Rate", REMIC I
Regular Interest I-A-1, 0.150%.
With respect to the Class I-A-2 Certificates and, for purposes
of the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I
Regular Interest
I-A-2, 0.300% in the case of each Distribution Date through and
including the
first possible Optional Termination Date and 0.600% in the case
of each
Distribution Date thereafter.
With respect to the Class I-A-3 Certificates and, for purposes
of the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I
Regular Interest
I-A-3, 0.450% in the case of each Distribution Date through and
including the
first possible Optional Termination Date and 0.900% in the case
of each
Distribution Date thereafter.
With respect to the Class II-A-1 Certificates and, for purposes
of the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I
Regular Interest
II-A-1, 0.350% in the case of each Distribution Date through and
including the
first possible Optional Termination Date and 0.700% in the case
of each
Distribution Date thereafter.
With respect to the Class II-A-2 Certificates and, for purposes
of the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I
Regular Interest
II-A-2, 0.390% in the case of each Distribution Date through and
including the
first possible Optional Termination Date and 0.780% in the case
of each
Distribution Date thereafter.
With respect to the Class M-1 Certificates and, for purposes of
the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I
Regular Interest M-1,
0.590% in the case of each Distribution Date through and
including the first
possible Optional Termination Date and 0.885% in the case of
each Distribution
Date thereafter.
With respect to the Class M-2 Certificates and, for purposes of
the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I
Regular Interest M-2,
1.050% in the case of each Distribution Date through and
including the first
possible Optional Termination Date and 1.575% in the case of
each Distribution
Date thereafter.
With respect to the Class M-3 Certificates and, for purposes of
the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I
Regular Interest M-3,
1.250% in the case of each Distribution Date through and
including the first
possible Optional Termination Date and 1.875% in the case of
each Distribution
Date thereafter.
With respect to the Class M-4 Certificates and, for purposes of
the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I
Regular Interest M-4,
1.700% in the case of each Distribution Date through and
including the first
possible Optional Termination Date and 2.550% in the case of
each Distribution
Date thereafter.
With respect to the Class M-5 Certificates and, for purposes of
the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I
Regular Interest M-5,
1.800% in the case of each
7
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Distribution Date through and including the first possible
Optional Termination
Date and 2.700% in the case of each Distribution Date
thereafter.
With respect to the Class M-6 Certificates and, for purposes of
the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I
Regular Interest M-6,
2.950% in the case of each Distribution Date through and
including the first
possible Optional Termination Date and 4.425% in the case of
each Distribution
Date thereafter.
With respect to the Class M-7 Certificates and, for purposes of
the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I
Regular Interest M-7,
4.000% in the case of each Distribution Date through and
including the first
possible Optional Termination Date and 6.000% in the case of
each Distribution
Date thereafter.
CERTIFICATE NOTIONAL AMOUNT: With respect to the Class CE
Certificates
and any Distribution Date, an amount equal to the Stated
Principal Balance of
the Mortgage Loans at the beginning of the related Due Period.
The initial
Certificate Notional Amount of the Class CE Certificates shall
be
$1,637,089,485.64. For federal income tax purposes, the
Certificate Notional
Amount for any Distribution Date shall be an amount equal to the
Uncertificated
Principal Balance of the REMIC I Regular Interests (other than
REMIC I Regular
Interest P) for such Distribution Date.
CERTIFICATE OWNER: With respect to a Book-Entry Certificate, the
Person
that is the beneficial owner of such Book-Entry Certificate.
CERTIFICATE PRINCIPAL BALANCE: As to any Certificate (other than
any
Class CE Certificate or Class R Certificate) and as of any
Distribution Date,
the Initial Certificate Principal Balance of such Certificate
plus, in the case
of a Class A Certificate and Class M Certificate, any Subsequent
Recoveries
added to the Certificate Principal Balance of such Certificate
pursuant to
Section 5.04(b), less the sum of (i) all amounts distributed
with respect to
such Certificate in reduction of the Certificate Principal
Balance thereof on
previous Distribution Dates pursuant to Section 5.04, and (ii)
any Applied
Realized Loss Amounts allocated to such Certificate on previous
Distribution
Dates.
CERTIFICATE REGISTER: The register maintained pursuant to
Section 6.02
hereof.
CERTIFICATEHOLDER OR HOLDER: The person in whose name a
Certificate is
registered in the Certificate Register (initially, Cede &
Co., as nominee for
the Depository, in the case of any Book-Entry Certificates).
CLASS: All Certificates bearing the same Class designation as
set forth
in Section 6.01 hereof.
CLASS A CERTIFICATES: Any of the Class I-A-1, Class I-A-2, Class
I-A-3,
Class II-A-1 and Class II-A-2 Certificates.
CLASS A PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution
Date, an
amount equal to the lesser of (x) the Principal Distribution
Amount for such
Distribution Date and (y) the excess,
8
<PAGE>
if any, of (i) the aggregate Certificate Principal Balance of
the Class A
Certificates immediately prior to such Distribution Date, over
(ii) the lesser
of (a) the product of (1) 56.10% and (2) the aggregate Stated
Principal Balance
of the Mortgage Loans as of the last day of the related Due
Period, and (b) the
aggregate Stated Principal Balance of the Mortgage Loans as of
the last day of
the related Due Period minus $8,185,447.
CLASS I-A CERTIFICATES: Any of the Class I-A-1, Class I-A-2 and
Class
I-A-3 Certificates.
CLASS I-A-1 CERTIFICATE: Any Certificate designated as a "Class
I-A-1
Certificate" on the face thereof, in the form of Exhibit A-1
hereto,
representing the right to the Percentage Interest of
distributions provided for
the Class I-A-1 Certificates as set forth herein and evidencing
(i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis
Risk Shortfall
Carry Forward Amount from the Reserve Fund.
CLASS I-A-2 CERTIFICATE: Any Certificate designated as a "Class
I-A-2
Certificate" on the face thereof, in the form of Exhibit A-1
hereto,
representing the right to the Percentage Interest of
distributions provided for
the Class I-A-2 Certificates as set forth herein and evidencing
(i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis
Risk Shortfall
Carry Forward Amount from the Reserve Fund.
CLASS I-A-3 CERTIFICATE: Any Certificate designated as a "Class
I-A-3
Certificate" on the face thereof, in the form of Exhibit A-1
hereto,
representing the right to the Percentage Interest of
distributions provided for
the Class I-A-3 Certificates as set forth herein and evidencing
(i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis
Risk Shortfall
Carry Forward Amount from the Reserve Fund.
CLASS I-A PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution
Date,
with respect to the Class I-A Certificates and any Distribution
Date, is the
product of the Class A Principal Distribution Amount and a
fraction, the
numerator of which is the Principal Funds for Loan Group I for
such Distribution
Date and the denominator of which is the Principal Funds for
both Loan Groups
for such Distribution Date.
CLASS II-A CERTIFICATES: Any of the Class II-A-1 Certificates
and Class
II-A-2 Certificates.
CLASS II-A-1 CERTIFICATE: Any Certificate designated as a "Class
II-A-1
Certificate" on the face thereof, in the form of Exhibit A-1
hereto,
representing the right to the Percentage Interest of
distributions provided for
the Class II-A-1 Certificates as set forth herein and evidencing
(i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis
Risk Shortfall
Carry Forward Amount from the Reserve Fund.
CLASS II-A-2 CERTIFICATE: Any Certificate designated as a "Class
II-A-2
Certificate" on the face thereof, in the form of Exhibit A-1
hereto,
representing the right to the Percentage Interest of
distributions provided for
the Class II-A-2 Certificates as set forth herein and evidencing
(i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis
Risk Shortfall
Carry Forward Amount from the Reserve Fund.
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<PAGE>
CLASS II-A PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution
Date,
with respect to the Class II-A Certificates and any Distribution
Date, is the
product of the Class A Principal Distribution Amount and a
fraction, the
numerator of which is the Principal Funds for Loan Group II for
such
Distribution Date and the denominator of which is the Principal
Funds for both
Loan Groups for such Distribution Date.
CLASS CE CERTIFICATE: Any Certificate designated as a "Class
CE
Certificate" on the face thereof, in the form of Exhibit A-4
hereto,
representing the right to its Percentage Interest of
distributions provided for
the Class CE Certificates herein and evidencing a Regular
Interest in REMIC III.
CLASS CE DISTRIBUTION AMOUNT: With respect to any Distribution
Date,
the sum of (i) the Current Interest for the Class CE Interest
for such
Distribution Date, (ii) any Overcollateralization Release Amount
for such
Distribution Date and (iii) without duplication, any Subsequent
Recoveries not
distributed to the Class A Certificates and Class M Certificates
on such
Distribution Date; provided, however that on any Distribution
Date after the
Distribution Date on which the Certificate Principal Balances of
the Class A
Certificates and Class M Certificates have been reduced to zero,
the Class CE
Distribution Amount shall include the Overcollateralization
Amount.
CLASS CE INTEREST: An uncertificated interest in the Trust Fund
held by
the Trustee on behalf of the Holders of the Class CE
Certificates, evidencing a
Regular Interest in REMIC II for purposes of the REMIC
Provisions.
CLASS M CERTIFICATES: Any of the Class M-1, Class M-2, Class
M-3, Class
M-4, Class M-5, Class M-6 and Class M-7 Certificates.
CLASS M-1 CERTIFICATE: Any Certificate designated as a "Class
M-1
Certificate" on the face thereof, in the form of Exhibit A-2
hereto,
representing the right to its Percentage Interest of
distributions provided for
the Class M-1 Certificates as set forth herein and evidencing
(i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis
Risk Shortfall
Carry Forward Amount from the Reserve Fund.
CLASS M-1 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution
Date, an
amount equal to the lesser of (x) the remaining Principal
Distribution Amount
for such Distribution Date after distribution of the Class A
Principal
Distribution Amount and (y) the excess, if any, of (a) the sum
of (1) the
aggregate Certificate Principal Balance of the Class A
Certificates (after
taking into account the distribution of the Class A Principal
Distribution
Amount on such Distribution Date and (2) the Certificate
Principal Balance of
the Class M-1 Certificates immediately prior to such
Distribution Date, over (b)
the lesser of (1) the product of (x) 70.50% and (y) the
aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of
the related Due
Period, and (2) the aggregate Stated Principal Balance of the
Mortgage Loans as
of the last day of the related Due Period minus $8,185,447.
CLASS M-2 CERTIFICATE: Any Certificate designated as a "Class
M-2
Certificate" on the face thereof, in the form of Exhibit A-2
hereto,
representing the right to its Percentage Interest of
10
<PAGE>
distributions provided for the Class M-2 Certificates as set
forth herein and
evidencing (i) a Regular Interest in REMIC II and (ii) the right
to receive the
Basis Risk Shortfall Carry Forward Amount from the Reserve
Fund.
CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution
Date, an
amount equal to the lesser of (x) the remaining Principal
Distribution Amount
for such Distribution Date after distribution of the Class A
Principal
Distribution Amount and the Class M-1 Principal Distribution
Amount and (y) the
excess, if any, of (a) the sum of (1) the aggregate Certificate
Principal
Balance of the Class A Certificates (after taking into account
the distribution
of the Class A Principal Distribution Amount on such
Distribution Date), (2) the
Certificate Principal Balance of the Class M-1 Certificates
(after taking into
account the distribution of the Class M-1 Principal Distribution
Amount on such
Distribution Date) and (3) the Certificate Principal Balance of
the Class M-2
Certificates immediately prior to such Distribution Date, over
(b) the lesser of
(1) the product of (x) 78.10% and (y) the aggregate Stated
Principal Balance of
the Mortgage Loans as of the last day of the related Due Period,
and (2) the
aggregate Stated Principal Balance of the Mortgage Loans as of
the last day of
the related Due Period minus $8,185,447.
CLASS M-3 CERTIFICATE: Any Certificate designated as a "Class
M-3
Certificate" on the face thereof, in the form of Exhibit A-2
hereto,
representing the right to its Percentage Interest of
distributions provided for
the Class M-3 Certificates as set forth herein and evidencing
(i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis
Risk Shortfall
Carry Forward Amount from the Reserve Fund.
CLASS M-3 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution
Date, an
amount equal to the lesser of (x) the remaining Principal
Distribution Amount
for such Distribution Date after distribution of the Class A
Principal
Distribution Amount, the Class M-1 Principal Distribution Amount
and the Class
M-2 Principal Distribution Amount and (y) the excess, if any, of
(a) the sum of
(1) the aggregate Certificate Principal Balance of the Class A
Certificates
(after taking into account the distribution of the Class A
Principal
Distribution Amount on such Distribution Date), (2) the
Certificate Principal
Balance of the Class M-1 Certificates (after taking into account
the
distribution of the Class M-1 Principal Distribution Amount on
such Distribution
Date), (3) the Certificate Principal Balance of the Class M-2
Certificates
(after taking into account the distribution of the Class M-2
Principal
Distribution Amount on such Distribution Date) and (4) the
Certificate Principal
Balance of the Class M-3 Certificates immediately prior to such
Distribution
Date, over (b) the lesser of (1) the product of (x) 84.40% and
(y) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last
day of the related
Due Period, and (2) the aggregate Stated Principal Balance of
the Mortgage Loans
as of the last day of the related Due Period minus
$8,185,447.
CLASS M-4 CERTIFICATE: Any Certificate designated as a "Class
M-4
Certificate" on the face thereof, in the form of Exhibit A-2
hereto,
representing the right to its Percentage Interest of
distributions provided for
the Class M-4 Certificates as set forth herein and evidencing
(i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis
Risk Shortfall
Carry Forward Amount from the Reserve Fund.
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<PAGE>
CLASS M-4 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution
Date, an
amount equal to the lesser of (x) the remaining Principal
Distribution Amount
for such Distribution Date after distribution of the Class A
Principal
Distribution Amount, the Class M-1 Principal Distribution
Amount, the Class M-2
Principal Distribution Amount and the Class M-3 Principal
Distribution Amount
and (y) the excess, if any, of (a) the sum of (1) the aggregate
Certificate
Principal Balance of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount on
such Distribution
Date), (2) the Certificate Principal Balance of the Class M-1
Certificates
(after taking into account the distribution of the Class M-1
Principal
Distribution Amount on such Distribution Date), (3) the
Certificate Principal
Balance of the Class M-2 Certificates (after taking into account
the
distribution of the Class M-2 Principal Distribution Amount on
such Distribution
Date), (4) the Certificate Principal Balance of the Class M-3
Certificates
(after taking into account the distribution of the Class M-3
Principal
Distribution Amount on such Distribution Date) and (5) the
Certificate Principal
Balance of the Class M-4 Certificates immediately prior to such
Distribution
Date, over (b) the lesser of (1) the product of (x) 86.80% and
(y) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last
day of the related
Due Period, and (2) the aggregate Stated Principal Balance of
the Mortgage Loans
as of the last day of the related Due Period minus
$8,185,447.
CLASS M-5 CERTIFICATE: Any Certificate designated as a "Class
M-5
Certificate" on the face thereof, in the form of Exhibit A-2
hereto,
representing the right to its Percentage Interest of
distributions provided for
the Class M-5 Certificates as set forth herein and evidencing
(i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis
Risk Shortfall
Carry Forward Amount from the Reserve Fund.
CLASS M-5 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution
Date, an
amount equal to the lesser of (x) the remaining Principal
Distribution Amount
for such Distribution Date after distribution of the Class A
Principal
Distribution Amount, the Class M-1 Principal Distribution
Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal
Distribution Amount and
the Class M-4 Principal Distribution Amount and (y) the excess,
if any, of (a)
the sum of (1) the aggregate Certificate Principal Balance of
the Class A
Certificates (after taking into account the distribution of the
Class A
Principal Distribution Amount on such Distribution Date), (2)
the Certificate
Principal Balance of the Class M-1 Certificates (after taking
into account the
distribution of the Class M-1 Principal Distribution Amount on
such Distribution
Date), (3) the Certificate Principal Balance of the Class M-2
Certificates
(after taking into account the distribution of the Class M-2
Principal
Distribution Amount on such Distribution Date), (4) the
Certificate Principal
Balance of the Class M-3 Certificates (after taking into account
the
distribution of the Class M-3 Principal Distribution Amount on
such Distribution
Date), (5) the Certificate Principal Balance of the Class M-4
Certificates
(after taking into account the distribution of the Class M-4
Principal
Distribution Amount on such Distribution Date) and (6) the
Certificate Principal
Balance of the Class M-5 Certificates immediately prior to such
Distribution
Date, over (b) the lesser of (1) the product of (x) 89.40% and
(y) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last
day of the related
Due Period, and (2) the aggregate Stated Principal Balance of
the Mortgage Loans
as of the last day of the related Due Period minus
$8,185,447.
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<PAGE>
CLASS M-6 CERTIFICATE: Any Certificate designated as a "Class
M-6
Certificate" on the face thereof, in the form of Exhibit A-2
hereto,
representing the right to its Percentage Interest of
distributions provided for
the Class M-6 Certificates as set forth herein and evidencing
(i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis
Risk Shortfall
Carry Forward Amount from the Reserve Fund.
CLASS M-6 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution
Date, an
amount equal to the lesser of (x) the remaining Principal
Distribution Amount
for such Distribution Date after distribution of the Class A
Principal
Distribution Amount, the Class M-1 Principal Distribution
Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal
Distribution Amount, the
Class M-4 Principal Distribution Amount and the Class M-5
Principal Distribution
Amount and (y) the excess, if any, of (a) the sum of (1) the
aggregate
Certificate Principal Balance of the Class A Certificates (after
taking into
account the distribution of the Class A Principal Distribution
Amount on such
Distribution Date), (2) the Certificate Principal Balance of the
Class M-1
Certificates (after taking into account the distribution of the
Class M-1
Principal Distribution Amount on such Distribution Date), (3)
the Certificate
Principal Balance of the Class M-2 Certificates (after taking
into account the
distribution of the Class M-2 Principal Distribution Amount on
such Distribution
Date), (4) the Certificate Principal Balance of the Class M-3
Certificates
(after taking into account the distribution of the Class M-3
Principal
Distribution Amount on such Distribution Date), (5) the
Certificate Principal
Balance of the Class M-4 Certificates (after taking into account
the
distribution of the Class M-4 Principal Distribution Amount on
such Distribution
Date), (6) the Certificate Principal Balance of the Class M-5
Certificates
(after taking into account the distribution of the Class M-5
Principal
Distribution Amount on such Distribution Date) and (7) the
Certificate Principal
Balance of the Class M-6 Certificates immediately prior to such
Distribution
Date, over (b) the lesser of (1) the product of (x) 91.50% and
(y) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last
day of the related
Due Period, and (2) the aggregate Stated Principal Balance of
the Mortgage Loans
as of the last day of the related Due Period minus
$8,185,447.
CLASS M-7 CERTIFICATE: Any Certificate designated as a "Class
M-7
Certificate" on the face thereof, in the form of Exhibit A-2
hereto,
representing the right to its Percentage Interest of
distributions provided for
the Class M-7 Certificates as set forth herein and evidencing
(i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis
Risk Shortfall
Carry Forward Amount from the Reserve Fund.
CLASS M-7 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution
Date, an
amount equal to the lesser of (x) the remaining Principal
Distribution Amount
for such Distribution Date after distribution of the Class A
Principal
Distribution Amount, the Class M-1 Principal Distribution
Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal
Distribution Amount, the
Class M-4 Principal Distribution Amount, the Class M-5 Principal
Distribution
Amount and the Class M-6 Principal Distribution Amount and (y)
the excess, if
any, of (a) the sum of (1) the aggregate Certificate Principal
Balance of the
Class A Certificates (after taking into account the distribution
of the Class A
Principal Distribution Amount on such Distribution Date), (2)
the Certificate
Principal Balance of the Class M-1 Certificates (after taking
into account the
distribution of the Class M-1 Principal Distribution Amount on
such Distribution
13
<PAGE>
Date), (3) the Certificate Principal Balance of the Class M-2
Certificates
(after taking into account the distribution of the Class M-2
Principal
Distribution Amount on such Distribution Date), (4) the
Certificate Principal
Balance of the Class M-3 Certificates (after taking into account
the
distribution of the Class M-3 Principal Distribution Amount on
such Distribution
Date), (5) the Certificate Principal Balance of the Class M-4
Certificates
(after taking into account the distribution of the Class M-4
Principal
Distribution Amount on such Distribution Date), (6) the
Certificate Principal
Balance of the Class M-5 Certificates (after taking into account
the
distribution of the Class M-5 Principal Distribution Amount on
such Distribution
Date) (7) the Certificate Principal Balance of the Class M-6
Certificates (after
taking into account the distribution of the Class M-6 Principal
Distribution
Amount on such Distribution Date) and (8) the Certificate
Principal Balance of
the Class M-7 Certificates immediately prior to such
Distribution Date, over (b)
the lesser of (1) the product of (x) 94.40% and (y) the
aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of
the related Due
Period, and (2) the aggregate Stated Principal Balance of the
Mortgage Loans as
of the last day of the related Due Period minus $8,185,447.
CLASS P CERTIFICATE: Any Certificate designated as a "Class
P
Certificate" on the face thereof, in the form of Exhibit A-3
hereto,
representing the right to its Percentage Interest of
distributions provided for
the Class P Certificates as set forth herein and evidencing a
Regular Interest
in REMIC IV.
CLASS P INTEREST: An uncertificated interest in the Trust Fund
held by
the Trustee on behalf of the Holders of the Class P
Certificates, evidencing a
Regular Interest in REMIC II for purposes of the REMIC
Provisions.
CLASS P CERTIFICATE ACCOUNT: The separate Eligible Account
created and
maintained by the Trustee pursuant to Section 4.05 in the name
of the Trustee
for the benefit of the Class P Certificateholders.
CLASS R-1 CERTIFICATE: Any Certificate designated a "Class
R-1
Certificate" on the face thereof, in substantially the form set
forth in Exhibit
A-5 hereto, evidencing the Residual Interest in REMIC I and
representing the
right to the Percentage Interest of distributions provided for
the Class R-1
Certificates as set forth herein.
CLASS R-2 CERTIFICATE: Any Certificate designated a "Class
R-2
Certificate" on the face thereof, in substantially the form set
forth in Exhibit
A-5 hereto, evidencing the Residual Interest in REMIC II and
representing the
right to the Percentage Interest of distributions provided for
the Class R-2
Certificates as set forth herein.
CLASS RX CERTIFICATE: Any Certificate designated a "Class RX
Certificate" on the face thereof, in substantially the form set
forth in Exhibit
A-5 hereto, evidencing the ownership of the Class R-3 Interest
and the Class R-4
Interest and representing the right to the Percentage Interest
of distributions
provided for the Class RX Certificates as set forth herein.
CLASS R-3 INTEREST: The uncertificated Residual Interest in
REMIC III.
CLASS R-4 INTEREST: The uncertificated Residual Interest in
REMIC IV.
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<PAGE>
CLOSING DATE: December 29, 2004.
CODE: The Internal Revenue Code of 1986, including any successor
or
amendatory provisions.
COMPENSATING INTEREST: An amount, not to exceed the Servicing
Fee, to
be deposited in the Protected Account by the Master Servicer to
the payment of a
Prepayment Interest Shortfall on a Mortgage Loan subject to this
Agreement.
CORPORATE TRUST OFFICE: The designated office of the Trustee
where at
any particular time its corporate trust business with respect to
this Agreement
shall be administered, which office at the date of the execution
of this
Agreement is located at 135 South LaSalle Street, Suite 1625,
Chicago, Illinois,
Attention: Global Securitization Trust Services Group - Bear
Stearns Asset
Backed Securities I LLC, Series 2004-HE11, or at such other
address as the
Trustee may designate from time to time.
CORRESPONDING CERTIFICATE: With respect to each Uncertificated
REMIC I
Regular Interest (other than REMIC I Regular Interests AA, ZZ,
1A, 1B, 2A, 2B,
XX and P), the Certificate with the corresponding
designation.
CURRENT INTEREST: As of any Distribution Date, with respect to
the
Certificates of each Class (other than the Class P Certificates
and the Residual
Certificates), (i) the interest accrued on the Certificate
Principal Balance or
Certificate Notional Amount or Uncertificated Notional Amount,
as applicable,
during the related Accrual Period at the applicable Pass-Through
Rate plus any
amount previously distributed with respect to interest for such
Certificate that
has been recovered as a voidable preference by a trustee in
bankruptcy minus
(ii) the sum of (a) any Prepayment Interest Shortfall for such
Distribution
Date, to the extent not covered by Compensating Interest and (b)
any Relief Act
Interest Shortfalls during the related Due Period, provided,
however, that for
purposes of calculating Current Interest for any such Class,
amounts specified
in clause (ii) hereof for any such Distribution Date shall be
allocated first to
the Class CE Certificates and Residual Certificates in reduction
of amounts
otherwise distributable to such Certificates on such
Distribution Date and then
any excess shall be allocated to each Class of Class A
Certificates and Class M
Certificates pro rata based on the respective amounts of
interest accrued
pursuant to clause (i) hereof for each such Class on such
Distribution Date.
CURRENT SPECIFIED ENHANCEMENT PERCENTAGE: With respect to
any
Distribution Date, the percentage obtained by dividing (x) the
sum of (i) the
aggregate Certificate Principal Balance of the Class M
Certificates and (ii) the
Overcollateralization Amount, in each case prior to the
distribution of the
Principal Distribution Amount on such Distribution Date, by (y)
the aggregate
Stated Principal Balance of the Mortgage Loans as of the end of
the related Due
Period.
CUSTODIAL AGREEMENT: Any of the LaSalle Custodial Agreement or
Wells
Fargo Custodial Agreement.
CUSTODIANS: (i) Wells Fargo Bank, National Association, or
any
successor custodian appointed pursuant to the provisions hereof
and the Wells
Fargo Custodial Agreement and (ii)
15
<PAGE>
LaSalle Bank National Association, or any successor custodian
appointed pursuant
to the provisions hereof and the LaSalle Custodial
Agreement.
CUT-OFF DATE: The close of business on December 1, 2004.
CUT-OFF DATE PRINCIPAL BALANCE: As to any Mortgage Loan, the
unpaid
principal balance thereof as of the close of business on the
Cut-off Date after
application of all Principal Prepayments received prior to the
Cut-off Date and
scheduled payments of principal due on or before the Cut-off
Date, whether or
not received, but without giving effect to any installments of
principal
received in respect of Due Dates after the Cut-off Date. The
aggregate Cut-off
Date Principal Balance of the Mortgage Loans is
$1,637,089,485.64.
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a
reduction
by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code
in the Scheduled Payment for such Mortgage Loan that became
final and
non-appealable, except such a reduction resulting from a
Deficient Valuation or
any other reduction that results in a permanent forgiveness of
principal.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a
valuation by
a court of competent jurisdiction of the Mortgaged Property in
an amount less
than the then outstanding indebtedness under such Mortgage Loan,
or any
reduction in the amount of principal to be paid in connection
with any Scheduled
Payment that results in a permanent forgiveness of principal,
which valuation or
reduction results from an order of such court that is final and
non-appealable
in a proceeding under the Bankruptcy Code.
DEFINITIVE CERTIFICATES: As defined in Section 6.06.
DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be
replaced by a
Replacement Mortgage Loan.
DELINQUENCY EVENT: A Delinquency Event shall have occurred and
be
continuing if at any time, (x) the percent equivalent of a
fraction, the
numerator of which is the aggregate Stated Principal Balance of
the Mortgage
Loans that are 60 days or more Delinquent (including for this
purpose any such
Mortgage Loans in bankruptcy or foreclosure and Mortgage Loans
with respect to
which the related Mortgaged Property is REO Property), and the
denominator of
which is the aggregate Stated Principal Balance of all of the
Mortgage Loans as
of the last day of the related Due Period exceeds (y) 35% of the
Current
Specified Enhancement Percentage.
DELINQUENT: A Mortgage Loan is "delinquent" if any payment due
thereon
is not made pursuant to the terms of such Mortgage Loan by the
close of business
on the day such payment is scheduled to be due. A Mortgage Loan
is "30 days
delinquent" if such payment has not been received by the close
of business on
the corresponding day of the month immediately succeeding the
month in which
such payment was due, or, if there is no such corresponding day
(e.g., as when a
30-day month follows a 31-day month in which a payment was due
on the 31st day
of such month), then on the last day of such immediately
succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so
on.
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<PAGE>
DENOMINATION: With respect to each Certificate, the amount set
forth on
the face thereof as the "Initial Principal Balance or Initial
Notional Amount of
this Certificate".
DEPOSITOR: Bear Stearns Asset Backed Securities I LLC, a
Delaware
limited liability company, or its successor in interest.
DEPOSITORY: The initial Depository shall be The Depository
Trust
Company ("DTC"), the nominee of which is Cede & Co., or any
other organization
registered as a "clearing agency" pursuant to Section 17A of the
Securities
Exchange Act of 1934, as amended. The Depository shall initially
be the
registered Holder of the Book-Entry Certificates. The Depository
shall at all
times be a "clearing corporation" as defined in Section
8-102(a)(5) of the
Uniform Commercial Code of the State of New York.
DEPOSITORY AGREEMENT: With respect to the Class of
Book-Entry
Certificates, the agreement among the Depositor, the Trustee and
the initial
Depository, dated as of the Closing Date, substantially in the
form of Exhibit
H.
DEPOSITORY PARTICIPANT: A broker, dealer, bank or other
financial
institution or other Person for whom from time to time a
Depository effects
book-entry transfers and pledges of securities deposited with
the Depository.
DETERMINATION DATE: With respect to any Distribution Date, the
15th day
of the month of such Distribution Date or, if such 15th day is
not a Business
Day, the immediately preceding Business Day.
DISTRIBUTION ACCOUNT: The separate Eligible Account created
and
maintained by the Trustee pursuant to Section 4.04 in the name
of the Trustee
for the benefit of the Certificateholders designated "LaSalle
Bank National
Association, in trust for registered holders of Bear Stearns
Asset Backed
Securities I LLC, Asset-Backed Certificates, Series 2004-HE11".
Funds in the
Distribution Account shall be held in trust for the
Certificateholders for the
uses and purposes set forth in this Agreement.
DISTRIBUTION ACCOUNT DEPOSIT DATE: The Business Day prior to
each
Distribution Date.
DISTRIBUTION DATE: The 25th day of each calendar month after
the
initial issuance of the Certificates, or if such 25th day is not
a Business Day,
the next succeeding Business Day, commencing in January
2005.
DUE DATE: As to any Mortgage Loan, the date in each month on
which the
related Scheduled Payment is due, as set forth in the related
Mortgage Note.
DUE PERIOD: With respect to any Distribution Date, the period
from the
second day of the calendar month preceding the calendar month in
which such
Distribution Date occurs through close of business on the first
day of the
calendar month in which such Distribution Date occurs.
ELIGIBLE ACCOUNT: Any of (i) an account or accounts maintained
with a
federal or state chartered depository institution or trust
company, the
long-term unsecured debt obligations and
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short-term unsecured debt obligations of which (or, in the case
of a depository
institution or trust company that is the principal subsidiary of
a holding
company, the debt obligations of such holding company, so long
as Moody's is not
a Rating Agency) are rated by each Rating Agency in one of its
two highest
long-term and its highest short-term rating categories,
respectively, at the
time any amounts are held on deposit therein, or (ii) an account
or accounts in
a depository institution or trust company in which such accounts
are insured by
the FDIC (to the limits established by the FDIC) and the
uninsured deposits in
which accounts are otherwise secured such that, as evidenced by
an Opinion of
Counsel delivered to the Trustee and to each Rating Agency,
the
Certificateholders have a claim with respect to the funds in
such account or a
perfected first priority security interest against any
collateral (which shall
be limited to Permitted Investments) securing such funds that is
superior to
claims of any other depositors or creditors of the depository
institution or
trust company in which such account is maintained, or (iii) a
trust account or
accounts maintained with the corporate trust department of a
federal or state
chartered depository institution or trust company having capital
and surplus of
not less than $50,000,000, acting in its fiduciary capacity or
(iv) any other
account acceptable to the Rating Agencies, as evidenced in
writing. Eligible
Accounts may bear interest, and may include, if otherwise
qualified under this
definition, accounts maintained with the Trustee.
EMC: EMC Mortgage Corporation, a Delaware corporation, and
its
successors and assigns.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA RESTRICTED CERTIFICATES: Any of the Class CE, Class P
and
Residual Certificates.
EVENT OF DEFAULT: As defined in Section 8.01 hereof.
EXCESS CASHFLOW: With respect to any Distribution Date, an
amount, if
any, equal to the sum of (a) the Remaining Excess Spread for
such Distribution
Date and (b) the Overcollateralization Release Amount for such
Distribution
Date.
EXCESS LIQUIDATION PROCEEDS: To the extent not required by law
to be
paid to the related Mortgagor, the excess, if any, of any
Liquidation Proceeds
with respect to a Mortgage Loan over the Stated Principal
Balance of such
Mortgage Loan and accrued and unpaid interest at the related
Mortgage Rate
through the last day of the month in which the Mortgage Loan has
been
liquidated.
EXCESS SPREAD: With respect to any Distribution Date, the
excess, if
any, of (i) the Interest Funds for such Distribution Date over
(ii) the sum of
the Current Interest on the Class A Certificates and Class M
Certificates and
Interest Carry Forward Amounts on the Class A Certificates
(other than Interest
Carry Forward Amounts paid pursuant to Section 5.04(a)(4)(A)),
in each case for
such Distribution Date.
EXEMPTION: Prohibited Transaction Exemption 90-30, as amended
from time
to time.
EXTRA PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution
Date, the lesser of (i) the excess, if any, of the
Overcollateralization Target
Amount for such Distribution Date over
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the Overcollateralization Amount for such Distribution Date
(after giving effect
to distributions of principal on the Certificates other than any
Extra Principal
Distribution Amount) and (ii) the Excess Spread for such
Distribution Date.
FANNIE MAE: Fannie Mae (formerly, Federal National Mortgage
Association), or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor
thereto.
FINAL CERTIFICATION: The certification substantially in the form
of
Exhibit Three to the related Custodial Agreement.
FINAL RECOVERY DETERMINATION: With respect to any defaulted
Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO
Property purchased
by the Seller pursuant to or as contemplated by Section 2.03(c)
or Section
10.01), a determination made by the Master Servicer that all
Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which the
Master Servicer,
in its reasonable good faith judgment, expects to be finally
recoverable in
respect thereof have been so recovered. The Trustee shall
maintain records,
based solely on information provided by the Master Servicer, of
each Final
Recovery Determination made thereby.
FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement
Act of 1989.
FISCAL QUARTER: December 1 to February 29 (or the last day in
such
month), March 1 to May 31, June 1 to August 31, or September 1
to November 30,
as applicable.
FREDDIE MAC: Federal Home Loan Mortgage Corporation, or any
successor
thereto.
GROSS MARGIN: With respect to each Adjustable Rate Mortgage
Loan, the
fixed percentage set forth in the related Mortgage Note that is
added to the
Index on each Adjustment Date in accordance with the terms of
the related
Mortgage Note used to determine the Mortgage Rate for such
Mortgage Loan.
GROUP I LOANS: The Mortgage Loans identified as such on the
Mortgage
Loan Schedule.
GROUP I PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution
Date, the product of the Principal Distribution Amount for such
Distribution
Date and a fraction, the numerator of which is the Principal
Funds for the Loan
Group I for such Distribution Date and the denominator of which
is the Principal
Funds for both Loan Groups for such Distribution Date.
GROUP II LOANS: The Mortgage Loans identified as such on the
Mortgage
Loan Schedule.
GROUP II PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the product of the Principal Distribution
Amount for such
Distribution Date and a fraction, the numerator of which is the
Principal Funds
for the Loan Group II for such Distribution Date and
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<PAGE>
the denominator of which is the Principal Funds for both Loan
Groups for such
Distribution Date.
GROUP II SEQUENTIAL TRIGGER EVENT: With respect to any
Distribution
Date, a trigger event is in effect if, on any Distribution Date
before the 37th
Distribution Date, the aggregate amount of Realized Losses
incurred since the
Cut-off Date through the last day of the related Prepayment
Period divided by
the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off
Date exceeds 3.25% or if, on or after the 37th Distribution
Date, a Trigger
Event is in effect.
INDEMNIFIED PERSONS: The Trustee, the Master Servicer, the Trust
Fund
and their officers, directors, agents and employees and, with
respect to the
Trustee, any separate co-trustee and its officers, directors,
agents and
employees.
INDEX: With respect to each Adjustable Rate Mortgage Loan and
with
respect to each related Adjustment Date, the index as specified
in the related
Mortgage Note.
INITIAL CERTIFICATION: The certification substantially in the
form of
Exhibit One to the related Custodial Agreement.
INITIAL CERTIFICATE PRINCIPAL BALANCE: With respect to any
Certificate,
the Certificate Principal Balance of such Certificate or any
predecessor
Certificate on the Closing Date.
INSTITUTIONAL ACCREDITED INVESTOR: Any Person meeting the
requirements
of Rule 501(a)(l), (2), (3) or (7) of Regulation D under the
Securities Act or
any entity all of the equity holders in which come within such
paragraphs.
INSURANCE PROCEEDS: Proceeds paid in respect of the Mortgage
Loans
pursuant to any Insurance Policy and any other insurance policy
covering a
Mortgage Loan, to the extent such proceeds are payable to the
mortgagee under
the Mortgage, the Master Servicer or the trustee under the deed
of trust and are
not applied to the restoration of the related Mortgaged Property
or released to
the Mortgagor in accordance with the procedures that the Master
Servicer would
follow in servicing mortgage loans held for its own account, in
each case other
than any amount included in such Insurance Proceeds in respect
of Insured
Expenses.
INSURED EXPENSES: Expenses covered by any insurance policy with
respect
to the Mortgage Loans.
INTEREST CARRY FORWARD AMOUNT: As of any Distribution Date and
with
respect to each Class of Certificates (other than the Class CE,
Class P and the
Residual Certificates), the sum of (i) the excess of (a) the
Current Interest
for such Class with respect to such Distribution Date and any
prior Distribution
Dates over (b) the amount actually distributed to such Class of
Certificates
with respect to interest on such Distribution Dates and (ii)
interest thereon
(to the extent permitted by applicable law) at the applicable
Pass-Through Rate
for such Class for the related Accrual Period including the
Accrual Period
relating to such Distribution Date.
INTEREST DETERMINATION DATE: Shall mean the second LIBOR
Business Day
preceding the commencement of each Accrual Period.
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<PAGE>
INTEREST FUNDS: With respect to each Loan Group and any
Distribution
Date (i) the sum, without duplication, of (a) all scheduled
interest during the
related Due Period with respect to the related Mortgage Loans
less the Servicing
Fee, the Trustee Fee and the LPMI Fee, if any, (b) all Advances
relating to
interest with respect to the related Mortgage Loans made on or
prior to the
related Distribution Account Deposit Date, (c) all Compensating
Interest with
respect to the related Mortgage Loans and required to be
remitted by the Master
Servicer pursuant to this Agreement with respect to such
Distribution Date, (d)
Liquidation Proceeds and Subsequent Recoveries with respect to
the related
Mortgage Loans collected during the related Prepayment Period
(to the extent
such Liquidation Proceeds and Subsequent Recoveries relate to
interest), and (e)
all amounts relating to interest with respect to each Mortgage
Loan in such Loan
Group repurchased by the Seller pursuant to Sections 2.02 and
2.03 and by EMC
pursuant to Section 3.18, in each case to the extent remitted by
the Master
Servicer to the Distribution Account pursuant to this Agreement
minus (ii) all
amounts relating to interest required to be reimbursed pursuant
to Sections 4.02
and 4.05 or as otherwise set forth in this Agreement.
INTERIM CERTIFICATION: The certification substantially in the
form of
Exhibit Two to the related Custodial Agreement.
LASALLE: LaSalle Bank National Association, and any successor
thereto.
LASALLE CUSTODIAL AGREEMENT: The Custodial Agreement, dated as
December
29, 2004, among the Depositor, the Seller, the Master Servicer
and LaSalle Bank
National Association as Custodian and as Trustee relating to the
Mortgage Loans
identified in such Custodial Agreement.
LAST SCHEDULED DISTRIBUTION DATE: Solely for purposes of the
face of
the Certificates as follows: with respect to the Certificates,
other than the
Class I-A-1 Certificates and Class I-A-2 Certificates, the
Distribution Date in
December 2034; with respect to the Class I-A-1 Certificates and
Class I-A-2
Certificates, the Distribution Date in February 2027 and April
2033,
respectively.
LATEST POSSIBLE MATURITY DATE: The Distribution Date in the
month
following the final scheduled maturity date of the Mortgage Loan
in the Trust
Fund having the latest scheduled maturity date as of the Cut-off
Date. For
purposes of the Treasury Regulations under Code section 860A
through 860G, the
latest possible maturity date of each regular interest issued by
REMIC I, REMIC
II, REMIC III and REMIC IV shall be the Latest Possible Maturity
Date.
LIBOR BUSINESS DAY: Shall mean a day on which banks are open
for
dealing in foreign currency and exchange in London and New York
City.
LIQUIDATED LOAN: With respect to any Distribution Date, a
defaulted
Mortgage Loan that has been liquidated through deed-in-lieu of
foreclosure,
foreclosure sale, trustee's sale or other realization as
provided by applicable
law governing the real property subject to the related Mortgage
and any security
agreements and as to which the Master Servicer has made a Final
Recovery
Determination with respect thereto.
LIQUIDATION PROCEEDS: Amounts, other than Insurance Proceeds,
received
in connection with the partial or complete liquidation of a
Mortgage Loan,
whether through trustee's sale,
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<PAGE>
foreclosure sale or otherwise, or in connection with any
condemnation or partial
release of a Mortgaged Property and any other proceeds received
with respect to
an REO Property, less the sum of related unreimbursed Advances,
Servicing Fees
and Servicing Advances and all expenses of liquidation,
including property
protection expenses and foreclosure and sale costs, including
court and
reasonable attorneys fees.
LOAN-TO-VALUE RATIO: 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 Appraised Value of the
related
Mortgaged Property.
LOAN GROUP: Any of Loan Group I or Loan Group II.
LOAN GROUP I: The Mortgage Loans included as such on the
Mortgage Loan
Schedule.
LOAN GROUP II: The Mortgage Loans included as such on the
Mortgage Loan
Schedule.
LPMI FEE: The fee payable to the insurer for each Mortgage Loan
subject
to an LPMI Policy as set forth in such LPMI Policy.
LPMI POLICY: A policy of mortgage guaranty insurance issued by
an
insurer meeting the requirements of Fannie Mae and Freddie Mac
in which the
Master Servicer or the related subservicer of the related
Mortgage Loan is
responsible for the payment of the LPMI Fee thereunder from
collections on the
related Mortgage Loan.
MAJORITY CLASS CE CERTIFICATEHOLDER: The Holder of a 50.01% or
greater
Percentage Interest in the Class CE Certificates.
MARKER RATE: With respect to the Class CE Interest and any
Distribution
Date, a per annum rate equal to two (2) times the weighted
average of the
Uncertificated REMIC I Pass-Through Rates for the REMIC I
Regular Interests
(other than REMIC I Regular Interests AA, 1A, 1B, 2A, 2B, XX and
P), with the
rate on each such REMIC I Regular Interest (other than REMIC I
Regular Interest
ZZ) subject to a cap equal to the lesser of (i) the related
One-Month LIBOR
Pass-Through Rate for the Corresponding Certificate and (ii) the
Net Rate Cap
for the Corresponding Certificate for the purpose of this
calculation for such
Distribution Date and with the rate on REMIC I Regular Interest
ZZ subject to a
cap of zero for the purpose of this calculation.
MASTER SERVICER: EMC Mortgage Corporation, in its capacity as
master
servicer, and its successors and assigns.
MASTER SERVICER CERTIFICATION: A written certification
covering
servicing of the Mortgage Loans by the Master Servicer and
signed by an officer
of the Master Servicer that complies with (i) the Sarbanes-Oxley
Act of 2002, as
amended from time to time, and (ii) the February 21, 2003
Statement by the Staff
of the Division of Corporation Finance of the Securities and
Exchange Commission
Regarding Compliance by Asset-Backed Issuers with Exchange Act
Rules 13a-14 and
15d-14, as in effect from time to time; provided that if, after
the Closing Date
(a) the Sarbanes-Oxley Act of 2002 is amended, (b) the Statement
referred to in
clause (ii) is
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<PAGE>
modified or superceded by any subsequent statement, rule or
regulation of the
Securities and Exchange Commission or any statement of a
division thereof, or
(c) any future releases, rules and regulations are published by
the Securities
and Exchange Commission from time to time pursuant to the
Sarbanes-Oxley Act of
2002, 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 than
the form of the
required certification as of the Closing Date, the Master
Servicer Certification
shall be as agreed to by the Master Servicer, the Depositor and
the Seller
following a negotiation in good faith to determine how to comply
with any such
new requirements.
MAXIMUM MORTGAGE RATE: With respect to each Adjustable Rate
Mortgage
Loan, the percentage set forth in the related Mortgage Note as
the maximum
Mortgage Rate thereunder.
MAXIMUM UNCERTIFICATED ACCRUED INTEREST DEFERRAL AMOUNT: With
respect
to any Distribution Date, the excess of (i) accrued interest at
the
Uncertificated REMIC I Pass-Through Rate applicable to REMIC I
Regular Interest
ZZ for such Distribution Date on a balance equal to the
Uncertificated Principal
Balance of REMIC I Regular Interest ZZ minus the REMIC I
Overcollateralized
Amount, in each case for such Distribution Date, over (ii) the
aggregate amount
of Uncertificated Accrued Interest for such Distribution Date on
the REMIC I
Regular Interests (other than REMIC I Regular Interests AA, ZZ,
1A, 1B, 2A, 2B,
XX and P), with the rate on each such REMIC I Regular Interest
subject to a cap
equal to the lesser of (x) the One-Month LIBOR Pass-Through Rate
for the
Corresponding Certificate and (y) the Net Rate Cap for the
Corresponding
Certificate for the purpose of this calculation for such
Distribution Date.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation
organized and existing under the laws of the State of Delaware,
or any successor
thereto.
MERS(R) SYSTEM: The system of recording transfers of
Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans
registered
with MERS on the MERS(R) System.
MINIMUM MORTGAGE RATE: With respect to each Adjustable Rate
Mortgage
Loan, the percentage set forth in the related Mortgage Note as
the minimum
Mortgage Rate thereunder.
MOM LOAN: With respect to any Mortgage Loan, MERS acting as
the
mortgagee of such Mortgage Loan, solely as nominee for the
originator of such
Mortgage Loan and its successors and assigns, at the origination
thereof.
MONTHLY STATEMENT: The statement delivered to the
Certificateholders
pursuant to Section 5.06.
MOODY'S: Moody's Investors Service, Inc., and any successor
thereto.
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MORTGAGE: The mortgage, deed of trust or other instrument
creating a
first or second lien on or first or second priority ownership
interest in an
estate in fee simple in real property securing a Mortgage
Note.
MORTGAGE FILE: The mortgage documents listed in Section 2.01
hereof
pertaining to a particular Mortgage Loan and any additional
documents delivered
to the related Custodian to be added to the Mortgage File
pursuant to this
Agreement and the related Custodial Agreement.
MORTGAGE LOANS: Such of the Mortgage Loans transferred and
assigned to
the Trustee pursuant to the provisions hereof, as from time to
time are held as
a part of the Trust Fund (including any REO Property), the
mortgage loans so
held being identified in the Mortgage Loan Schedule,
notwithstanding foreclosure
or other acquisition of title of the related Mortgaged
Property.
MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase
Agreement,
dated as of December 29, 2004, between the Seller, as seller and
the Depositor,
as purchaser, in the form attached hereto as Exhibit L.
MORTGAGE LOAN PURCHASE PRICE: The price, calculated as set forth
in
Section 10.01, to be paid in connection with the repurchase of
the Mortgage
Loans pursuant to Section 10.01.
MORTGAGE LOAN SCHEDULE: The list of Mortgage Loans (as from time
to
time amended by the Seller or the Master Servicer to reflect the
deletion of
Deleted Mortgage Loans and the addition of Replacement Mortgage
Loans pursuant
to the provisions of this Agreement) transferred to the Trustee
as part of the
Trust Fund and from time to time subject to this Agreement, the
initial Mortgage
Loan Schedule being attached hereto as Exhibit B, setting forth
the following
information with respect to each Mortgage Loan:
(i) the Mortgage Loan identifying number
(ii) the current gross mortgage rate;
(iii) the Servicing Fee Rate;
(iv) the master servicing fee rate, if applicable;
(v) the LPMI Fee, if applicable;
(vi) the Trustee Fee Rate;
(vii) the current net mortgage rate;
(viii) the maturity date;
(ix) the original principal balance;
(x) the current principal balance;
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(xi) the stated original term to maturity ;
(xii) the stated remaining term to maturity;
(xiii) the property type;
(xiv) the MIN with respect to each MOM Loan;
(xv) with respect to each Adjustable Rate Mortgage Loan,
the Minimum Mortgage Rate;
(xvi) with respect to each Adjustable Rate Mortgage Loan,
the Maximum Mortgage Rate;
(xvii) with respect to each Adjustable Rate Mortgage Loan,
the Gross Margin;
(xviii) with respect to each Adjustable Rate Mortgage Loan,
the next Adjustment Date;
(xix) with respect to each Adjustable Rate Mortgage Loan,
the Periodic Rate Cap;
(xx) the Loan Group;
(xxi) a code indicating whether such Mortgage Loan is a
first lien Mortgage Loan or a second lien Mortgage Loan; and
(xxii) the Custodian.
Such schedule shall also set forth the aggregate Cut-off Date
Principal
Balance for all of the Mortgage Loans.
MORTGAGE NOTE: The original executed note or other evidence
of
indebtedness of a Mortgagor under a Mortgage Loan.
MORTGAGE RATE: With respect to each fixed rate Mortgage Loan,
the rate
set forth in the related Mortgage Note. With respect to each
Adjustable Rate
Mortgage Loan, the annual rate at which interest accrues on such
Mortgage Loan
from time to time in accordance with the provisions of the
related Mortgage
Note, which rate (A) as of any date of determination until the
first Adjustment
Date following the Cut-off Date shall be the rate set forth in
the Mortgage Loan
Schedule as the Mortgage Rate in effect immediately following
the Cut-off Date
and (B) as of any date of determination thereafter shall be the
rate as adjusted
on the most recent Adjustment Date, to equal the sum, rounded to
the next
highest or nearest 0.125% (as provided in the Mortgage Note), of
the Index,
determined as set forth in the related Mortgage Note, plus the
related Gross
Margin subject to the limitations set forth in the related
Mortgage Note. With
respect to each Mortgage Loan that becomes an REO Property, as
of any date of
determination,
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<PAGE>
the annual rate determined in accordance with the immediately
preceding sentence
as of the date such Mortgage Loan became an REO Property.
MORTGAGED PROPERTY: The underlying property securing a Mortgage
Loan.
MORTGAGOR: The obligors on a Mortgage Note.
NET MORTGAGE RATE: As to each Mortgage Loan, and at any time,
the per
annum rate equal to the Mortgage Rate less the sum of (i) the
Servicing Fee
Rate, (ii) the Trustee Fee Rate and (iii) the rate at which the
LPMI Fee is
calculated, if any.
NET RATE CAP: With respect to the Class I-A-1, Class I-A-2 and
Class
I-A-3 Certificates and any Distribution Date, a rate per annum
equal to the
product of (x) the weighted average of the Net Mortgage Rates on
the then
outstanding Mortgage Loans in Loan Group I, weighted based on
their Stated
Principal Balances as of the first day of the calendar month
preceding the month
in which the Distribution Date occurs and (y) a fraction, the
numerator of which
is 30 and the denominator of which is the actual number of days
elapsed in the
related Accrual Period. For federal income tax purposes,
however, such rate
shall be the equivalent of the foregoing, expressed as the
weighted average of
(adjusted for the actual number of days elapsed in the related
Accrual Period)
the Uncertificated REMIC I Pass-Through Rate on REMIC I Regular
Interest 1B,
weighted on the basis of the Uncertificated Principal Balance of
such REMIC I
Regular Interest.
With respect to the Class II-A-1 Certificates and Class
II-A-2
Certificates and any Distribution Date, a rate per annum equal
to the product of
(x) the weighted average of the Net Mortgage Rates on the then
outstanding
Mortgage Loans in Loan Group II, weighted based on their Stated
Principal
Balances as of the first day of the calendar month preceding the
month in which
the Distribution Date occurs and (y) a fraction, the numerator
of which is 30
and the denominator of which is the actual number of days
elapsed in the related
Accrual Period. For federal income tax purposes, however, such
rate shall be the
equivalent of the foregoing, expressed as the weighted average
of (adjusted for
the actual number of days elapsed in the related Accrual Period)
the
Uncertificated REMIC I Pass-Through Rate on REMIC I Regular
Interest 2B,
weighted on the basis of the Uncertificated Principal Balance of
such REMIC I
Regular Interest.
With respect to the Class M Certificates and any Distribution
Date, a
rate per annum equal to the product of (x) the weighted average
of the weighted
average of the Net Mortgage Rates on the then outstanding
Mortgage Loans in each
Loan Group, weighted in proportion to the results of subtracting
from the
aggregate Stated Principal Balance of each such Loan Group as of
the first day
of the calendar month preceding the month in which the
Distribution Date, the
aggregate Certificate Principal Balance of the related Class or
Classes of
Senior Certificates and (y) a fraction, the numerator of which
is 30 and the
denominator of which is the actual number of days elapsed in the
related Accrual
Period. For federal income tax purposes, however, such rate
shall be the
equivalent of the foregoing, expressed as the weighted average
(adjusted for the
actual number of days elapsed in the related Accrual Period) of
the
Uncertificated REMIC I Pass-Through Rates on (a) REMIC I Regular
Interest 1A,
subject to a cap and a floor equal to the
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Uncertificated REMIC I Pass-Through Rate on REMIC I Regular
Interest 1B, and (b)
REMIC I Regular Interest 2A, subject to a cap and a floor equal
to the
Uncertificated REMIC I Pass-Through Rate on REMIC I Regular
Interest 2B,
weighted on the basis of the Uncertificated Balance of each such
REMIC I Regular
Interest.
NON-BOOK-ENTRY CERTIFICATE: Any Certificate other than a
Book-Entry
Certificate.
NONRECOVERABLE ADVANCE: Any portion of an Advance previously
made or
proposed to be made by the Master Servicer pursuant to this
Agreement, that, in
the good faith judgment of the Master Servicer, will not or, in
the case of a
proposed advance, would not, be ultimately recoverable by it
from the related
Mortgagor, related Liquidation Proceeds, Insurance Proceeds or
otherwise.
NOTIONAL AMOUNT: With respect to each Distribution Date and the
Yield
Maintenance Agreements relating to the Class I-A, Class II-A and
Class M
Certificates, the lesser of (i) the aggregate Certificate
Principal Balance of
the Class I-A, Class II-A or the Class M Certificates,
respectively, at the
beginning of the related calculation period, and (ii) the
notional amount for
the related calculation period as set forth in the related
schedule set forth in
Exhibit M.
OFFICER'S CERTIFICATE: A certificate (i) signed by the Chairman
of the
Board, the Vice Chairman of the Board, the President, a Vice
President (however
denominated), an Assistant Vice President, the Treasurer, the
Secretary, or one
of the assistant treasurers or assistant secretaries of the
Depositor or the
Master Servicer (or any other officer customarily performing
functions similar
to those performed by any of the above designated officers and
also to whom,
with respect to a particular matter, such matter is referred
because of such
officer's knowledge of and familiarity with a particular
subject) or (ii), if
provided for in this Agreement, signed by a Servicing Officer,
as the case may
be, and delivered to the Depositor, the Seller and/or the
Trustee, as the case
may be, as required by this Agreement.
ONE-MONTH LIBOR: With respect to any Accrual Period, the
rate
determined by the Trustee on the related Interest Determination
Date on the
basis of the rate for U.S. dollar deposits for one month that
appears on
Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such
Interest
Determination Date; provided that the parties hereto acknowledge
that One-Month
LIBOR for the first Accrual Period shall equal 2.41688% per
annum. If such rate
does not appear on such page (or such other page as may replace
that page on
that service, or if such service is no longer offered, such
other service for
displaying One-Month LIBOR or comparable rates as may be
reasonably selected by
the Trustee), One-Month LIBOR for the applicable Accrual Period
will be the
Reference Bank Rate. If no such quotations can be obtained by
the Trustee and no
Reference Bank Rate is available, One-Month LIBOR will be
One-Month LIBOR
applicable to the preceding Accrual Period. The establishment of
One-Month LIBOR
on each Interest Determination Date by the Trustee and the
Trustee's calculation
of the rate of interest applicable to the Class A Certificates
and Class M
Certificates for the related Accrual Period shall, in the
absence of manifest
error, be final and binding.
ONE-MONTH LIBOR PASS-THROUGH RATE: With respect to the Class
I-A-1
Certificates and, for purposes of the definition of "Marker
Rate" and "Maximum
Uncertificated Accrued Interest
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Deferral Amount", REMIC I Regular Interest I-A-1, a per annum
rate equal to
One-Month LIBOR plus the related Certificate Margin.
With respect to the Class I-A-2 Certificates and, for purposes
of the
definition of "Marker Rate" and "Maximum Uncertificated Accrued
Interest
Deferral Amount", REMIC I Regular Interest I-A-2, a per annum
rate equal to
One-Month LIBOR plus the related Certificate Margin.
With respect to the Class I-A-3 Certificates and, for purposes
of the
definition of "Marker Rate" and "Maximum Uncertificated Accrued
Interest
Deferral Amount", REMIC I Regular Interest I-A-3, a per annum
rate equal to
One-Month LIBOR plus the related Certificate Margin.
With respect to the Class II-A-1 Certificates and, for purposes
of the
definition of "Marker Rate" and "Maximum Uncertificated Accrued
Interest
Deferral Amount", REMIC I Regular Interest II-A-1, a per annum
rate equal to
One-Month LIBOR plus the related Certificate Margin.
With respect to the Class II-A-2 Certificates and, for purposes
of the
definition of "Marker Rate" and "Maximum Uncertificated Accrued
Interest
Deferral Amount", REMIC I Regular Interest II-A-2, a per annum
rate equal to
One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-1 Certificates and, for purposes of
the
definition of "Marker Rate" and "Maximum Uncertificated Accrued
Interest
Deferral Amount", REMIC I Regular Interest M-1, a per annum rate
equal to
One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-2 Certificates and, for purposes of
the
definition of "Marker Rate" and "Maximum Uncertificated Accrued
Interest
Deferral Amount", REMIC I Regular Interest M-2, a per annum rate
equal to
One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-3 Certificates and, for purposes of
the
definition of "Marker Rate" and "Maximum Uncertificated Accrued
Interest
Deferral Amount", REMIC I Regular Interest M-3, a per annum rate
equal to
One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-4 Certificates and, for purposes of
the
definition of "Marker Rate" and "Maximum Uncertificated Accrued
Interest
Deferral Amount", REMIC I Regular Interest M-4, a per annum rate
equal to
One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-5 Certificates and, for purposes of
the
definition of "Marker Rate" and "Maximum Uncertificated Accrued
Interest
Deferral Amount", REMIC I Regular Interest M-5, a per annum rate
equal to
One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-6 Certificates and, for purposes of
the
definition of "Marker Rate" and "Maximum Uncertificated Accrued
Interest
Deferral Amount", REMIC I Regular Interest M-6, a per annum rate
equal to
One-Month LIBOR plus the related Certificate Margin.
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<PAGE>
With respect to the Class M-7 Certificates and, for purposes of
the
definition of "Marker Rate" and "Maximum Uncertificated Accrued
Interest
Deferral Amount", REMIC I Regular Interest M-7, a per annum rate
equal to
One-Month LIBOR plus the related Certificate Margin.
OPINION OF COUNSEL: A written opinion of counsel, who may be
counsel
for the Seller, the Depositor or the Master Servicer, reasonably
acceptable to
each addressee of such opinion; provided that with respect to
Section 2.05,
7.05, 7.07 or 11.01, or the interpretation or application of the
REMIC
Provisions, such counsel must (i) in fact be independent of the
Seller,
Depositor and the Master Servicer, (ii) not have any direct
financial interest
in the Seller, the Depositor or the Master Servicer or in any
affiliate of
either, and (iii) not be connected with the Seller, the
Depositor or the Master
Servicer as an officer, employee, promoter, underwriter,
trustee, partner,
director or person performing similar functions.
OPTIONAL TERMINATION: The termination of the Trust Fund
created
hereunder as a result of the purchase of all of the Mortgage
Loans and any REO
Property pursuant to the last sentence of Section 10.01
hereof.
OPTIONAL TERMINATION DATE: The Distribution Date on which the
Stated
Principal Balance of all of the Mortgage Loans is equal to or
less than 10% of
the Stated Principal Balance of all of the Mortgage Loans as of
the Cut-off
Date.
ORIGINAL VALUE: The value of the property underlying a Mortgage
Loan
based, in the case of the purchase of the underlying Mortgaged
Property, on the
lower of an appraisal or the sales price of such property or, in
the case of a
refinancing, on an appraisal.
OTS: The Office of Thrift Supervision.
OUTSTANDING: With respect to the Certificates as of any date
of
determination, all Certificates theretofore executed and
authenticated under
this Agreement except:
(a) Certificates theretofore canceled by the Trustee or
delivered
to the Trustee for cancellation; and
(b) Certificates in exchange for which or in lieu of which
other
Certificates have been executed and delivered by the Trustee
pursuant to this
Agreement.
OUTSTANDING MORTGAGE LOAN: As of any date of determination, a
Mortgage
Loan with a Stated Principal Balance greater than zero that was
not the subject
of a Principal Prepayment in full, and that did not become a
Liquidated Loan,
prior to the end of the related Prepayment Period.
OVERCOLLATERALIZATION AMOUNT: With respect to any Distribution
Date,
the excess, if any, of the aggregate Stated Principal Balances
of the Mortgage
Loans as of the last day of the related Due Period (including
any reduction due
to Realized Losses) over the Certificate Principal Balances of
the Certificates
on such Distribution Date (after taking into account the payment
of principal
other than any Extra Principal Distribution Amount on such
Certificates).
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<PAGE>
OVERCOLLATERALIZATION RELEASE AMOUNT: With respect to any
Distribution
Date, the lesser of (x) the Principal Remittance Amount for such
Distribution
Date and (y) the excess, if any, of (i) the
Overcollateralization Amount for
such Distribution Date (assuming that 100% of the Principal
Remittance Amount is
applied as a principal payment on such Distribution Date) over
(ii) the
Overcollateralization Target Amount for such Distribution Date
(with the amount
pursuant to clause (y) deemed to be $0 if the
Overcollateralization Amount is
less than or equal to the Overcollateralization Target Amount on
that
Distribution Date).
OVERCOLLATERALIZATION TARGET AMOUNT: With respect to any
Distribution
Date (a) prior to the Stepdown Date, 2.80% of the aggregate
Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date, (b) on or
after the
Stepdown Date and if a Trigger Event is not in effect, the
greater of (i) the
lesser of (1) 2.80% of the aggregate Stated Principal Balance of
the Mortgage
Loans as of the Cut-off Date and (2) 5.60% of the then current
aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of
the related Due
Period and (ii) $8,185,447 or (c) on or after the Stepdown Date
and if a Trigger
Event is in effect, the Overcollateralization Target Amount for
the immediately
preceding Distribution Date.
OWNERSHIP INTEREST: As to any Certificate, any ownership
interest in
such Certificate including any interest in such Certificate as
the Holder
thereof and any other interest therein, whether direct or
indirect, legal or
beneficial.
PASS-THROUGH RATE: With respect to the Class A Certificates and
Class M
Certificates and any Distribution Date, a rate per annum equal
to the lesser of
(i) the related One-Month LIBOR Pass-Through Rate for such
Distribution Date and
(ii) the related Net Rate Cap for such Distribution Date. The
initial
Pass-Through Rates for the Class I-A-1, Class I-A-2, Class
I-A-3, Class II-A-1,
Class II-A-2, Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5, Class M-6
and Class M-7 Certificates will be 2.56688%, 2.71688%, 2.86688%,
2.76688%,
2.80688%, 3.00688%, 3.46688%, 3.66688%, 4.11688%, 4.21688%,
5.36688% and
6.41688%, respectively.
With respect to the Class CE Interest and any Distribution Date,
a rate
per annum equal to the percentage equivalent of a fraction, the
numerator of
which is the sum of the amount determined for each REMIC I
Regular Interest
(other than REMIC I Regular Interests 1A, 1B, 2A, 2B, XX and P)
of the excess of
the Uncertificated REMIC I Pass-Through Rate for such REMIC I
Regular Interest
over the Marker Rate, applied to a notional amount equal to the
Uncertificated
Principal Balance of such REMIC I Regular Interest and the
denominator of which
is the aggregate Uncertificated Principal Balances of such REMIC
I Regular
Interests.
With respect to the Class CE Certificates: the Class CE
Certificates
shall not have a Pass-Through Rate, but Current Interest for
such Certificates
and each Distribution Date shall be an amount equal to 100% of
the amounts
distributable to the Class CE Interest for such Distribution
Date.
With respect to the Class P Certificates, 0.00% per annum.
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<PAGE>
PERCENTAGE INTEREST: With respect to any Certificate of a
specified
Class, the Percentage Interest set forth on the face thereof or
the percentage
obtained by dividing the Denomination of such Certificate by the
aggregate of
the Denominations of all Certificates of such Class.
PERIODIC RATE CAP: With respect to each Adjustable Rate Mortgage
Loan
and any Adjustment Date therefor, the fixed percentage set forth
in the related
Mortgage Note, which is the maximum amount by which the Mortgage
Rate for such
Mortgage Loan may increase or decrease (without regard to the
Maximum Mortgage
Rate or the Minimum Mortgage Rate) on such Adjustment Date from
the Mortgage
Rate in effect immediately prior to such Adjustment Date.
PERMITTED INVESTMENTS: At any time, any one or more of the
following
obligations and securities:
(i) obligations of the United States or any agency
thereof, provided such obligations are backed by the full faith
and
credit of the United States;
(ii) general obligations of or obligations guaranteed by
any state of the United States or the District of Columbia
receiving
the highest long-term debt rating of each Rating Agency, or such
lower
rating as will not result in the downgrading or withdrawal of
the
ratings then assigned to the Certificates by each Rating Agency,
as
evidenced in writing;
(iii) commercial or finance company paper which is then
receiving the highest commercial or finance company paper rating
of
each Rating Agency, or such lower rating as will not result in
the
downgrading or withdrawal of the ratings then assigned to
the
Certificates by each Rating Agency, as evidenced in writing;
(iv) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or
trust
company incorporated under the laws of the United States or of
any
state thereof and subject to supervision and examination by
federal
and/or state banking authorities (including the Trustee in
its
commercial banking capacity), provided that the commercial paper
and/or
long term unsecured debt obligations of such depository
institution or
trust company are then rated one of the two highest long-term
and the
highest short-term ratings of each such Rating Agency for
such
securities, or such lower ratings as will not result in the
downgrading
or withdrawal of the rating then assigned to the Certificates by
any
Rating Agency, as evidenced in writing;
(v) guaranteed reinvestment agreements issued by any
bank, insurance company or other corporation containing, at the
time of
the issuance of such agreements, such terms and conditions as
will not
result in the downgrading or withdrawal of the rating then
assigned to
the Certificates by any such Rating Agency, as evidenced in
writing;
(vi) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered
into
with a depository institution or trust company (acting as
principal)
described in clause (v) above;
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(vii) securities (other than stripped bonds, stripped
coupons or instruments sold at a purchase price in excess of
115% of
the face amount thereof) bearing interest or sold at a discount
issued
by any corporation incorporated under the laws of the United
States or
any state thereof which, at the time of such investment, have
one of
the two highest short term ratings of each Rating Agency (except
if the
Rating Agency is Moody's, such rating shall be the highest
commercial
paper rating of Moody's for any such securities), or such lower
rating
as will not result in the downgrading or withdrawal of the
rating then
assigned to the Certificates by any Rating Agency, as evidenced
by a
signed writing delivered by each Rating Agency;
(viii) interests in any money market fund (including any
such fund managed or advised by the Trustee or any affiliate
thereof)
which at the date of acquisition of the interests in such fund
and
throughout the time such interests are held in such fund has
the
highest applicable short term rating by each Rating Agency or
such
lower rating as will not result in the downgrading or withdrawal
of the
ratings then assigned to the Certificates by each Rating Agency,
as
evidenced in writing;
(ix) short term investment funds sponsored by any trust
company or banking association incorporated under the laws of
the
United States or any state thereof (including any such fund
managed or
advised by the Trustee or the Master Servicer or any affiliate
thereof)
which on the date of acquisition has been rated by each Rating
Agency
in their respective highest applicable rating category or such
lower
rating as will not result in the downgrading or withdrawal of
the
ratings then assigned to the Certificates by each Rating Agency,
as
evidenced in writing; and
(x) such other investments having a specified stated
maturity and bearing interest or sold at a discount acceptable
to each
Rating Agency and as will not result in the downgrading or
withdrawal
of the rating then assigned to the Certificates by any Rating
Agency,
as evidenced by a signed writing delivered by each Rating
Agency;
provided, that no such instrument shall be a Permitted
Investment if such
instrument (i) evidences the right to receive interest only
payments with
respect to the obligations underlying such instrument, (ii) is
purchased at a
premium or (iii) is purchased at a deep discount; provided
further that no such
instrument shall be a Permitted Investment (A) if such
instrument evidences
principal and interest payments derived from obligations
underlying such
instrument and the interest payments with respect to such
instrument provide a
yield to maturity of greater than 120% of the yield to maturity
at par of such
underlying obligations, or (B) if it may be redeemed at a price
below the
purchase price (the foregoing clause (B) not to apply to
investments in units of
money market funds pursuant to clause (viii) above); provided
further that no
amount beneficially owned by any REMIC may be invested in
investments (other
than money market funds) treated as equity interests for federal
income tax
purposes, unless the Master Servicer shall receive an Opinion of
Counsel, at the
expense of the Master Servicer, to the effect that such
investment will not
adversely affect the status of any such REMIC as a REMIC under
the Code or
result in imposition of a tax on any such REMIC. Permitted
Investments that are
subject to prepayment or call may not be purchased at a price in
excess of par.
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<PAGE>
PERMITTED TRANSFEREE: Any person other than (i) the United
States, any
State or political subdivision thereof, any possession of the
United States or
any agency or instrumentality of any of the foregoing, (ii) a
foreign
government, International Organization or any agency or
instrumentality of
either of the foregoing, (iii) an organization (except certain
farmers'
cooperatives described in section 521 of the Code) that is
exempt from tax
imposed by Chapter 1 of the Code (including the tax imposed by
section 511 of
the Code on unrelated business taxable income) on any excess
inclusions (as
defined in section 860E(c)(1) of the Code) with respect to any
Residual
Certificate, (iv) rural electric and telephone cooperatives
described in section
1381(a)(2)(C) of the Code, (v) a Person that is not a citizen or
resident of the
United States, a corporation, partnership (other than a
partnership that has any
direct or indirect foreign partners) or other entity (treated as
a corporation
or a partnership for federal income tax purposes), created or
organized in or
under the laws of the United States, any state thereof or the
District of
Columbia, an estate whose income from sources without the United
States is
includible in gross income for United States federal income tax
purposes
regardless of its connection with the conduct of a trade or
business within the
United States, or a trust if a court within the United States is
able to
exercise primary supervision over the administration of the
trust and one or
more United States persons have authority to control all
substantial decisions
of the trustor and (vi) any other Person so designated by the
Trustee based upon
an Opinion of Counsel addressed to the Trustee (which shall not
be an expense of
the Trustee) that states that the Transfer of an Ownership
Interest in a
Residual Certificate to such Person may cause REMIC I, REMIC II,
REMIC III or
REMIC IV to fail to qualify as a REMIC at any time that any
Certificates are
Outstanding. The terms "United States," "State" and
"International Organization"
shall have the meanings set forth in section 7701 of the Code or
successor
provisions. A corporation will not be treated as an
instrumentality of the
United States or of any State or political subdivision thereof
for these
purposes if all of its activities are subject to tax and, with
the exception of
Freddie Mac, a majority of its board of directors is not
selected by such
government unit.
PERSON: Any individual, corporation, partnership, joint
venture,
association, joint- stock company, limited liability company,
trust,
unincorporated organization or government, or any agency or
political
subdivision thereof.
PREPAYMENT ASSUMPTION: The applicable rate of prepayment as
described
in the Prospectus Supplement.
PREPAYMENT CHARGE: Any prepayment premium, penalty or charge
payable by
a Mortgagor in connection with any Principal Prepayment on a
Mortgage Loan
pursuant to the terms of the related Mortgage Note.
PREPAYMENT INTEREST SHORTFALL: With respect to any Distribution
Date,
for each Mortgage Loan that was the subject of a partial
Principal Prepayment, a
Principal Prepayment in full, or that became a Liquidated Loan
during the
related Prepayment Period, (other than a Principal Prepayment in
full resulting
from the purchase of a Mortgage Loan pursuant to Section 2.02,
2.03, 3.18 or
10.01 hereof), the amount, if any, by which (i) one month's
interest at the
applicable Net Mortgage Rate on the Stated Principal Balance of
such Mortgage
Loan immediately prior to such prepayment (or liquidation) or in
the case of a
partial Principal Prepayment on the amount of such prepayment
(or liquidation
proceeds) exceeds (ii) the amount
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of interest paid or collected in connection with such Principal
Prepayment or
such liquidation proceeds less the sum of (a) the Trustee Fee,
(b) the Servicing
Fee and (c) the LPMI Fee, if any.
PREPAYMENT PERIOD: As to any Distribution Date, the period
commencing
on the 16th day of the month prior to the month in which the
related
Distribution Date occurs and ending on the 15th day of 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 DISTRIBUTION AMOUNT: With respect to each Distribution
Date,
an amount equal to (x) the Principal Funds for such Distribution
Date plus (y)
any Extra Principal Distribution Amount for such Distribution
Date, less (z) any
Overcollateralization Release Amount.
PRINCIPAL FUNDS: With respect to each Loan Group and any
Distribution
Date, (i) the sum, without duplication, of (a) all scheduled
principal collected
during the related Due Period, (b) all Advances relating to
principal made on or
before the Distribution Account Deposit Date, (c) Principal
Prepayments
exclusive of prepayment charges or penalties collected during
the related
Prepayment Period, (d) the Stated Principal Balance of each
Mortgage Loan in the
related Loan Group that was repurchased by the Seller pursuant
to Sections 2.02
and 2.03 or by EMC pursuant to Section 3.18, (e) the aggregate
of all
Substitution Adjustment Amounts for the related Determination
Date in connection
with the substitution of Mortgage Loans pursuant to Section
2.03(c), (f) all
Liquidation Proceeds and Subsequent Recoveries collected during
the related
Prepayment Period (to the extent such Liquidation Proceeds and
Subsequent
Recoveries relate to principal), in each case to the extent
remitted by the
Master Servicer to the Distribution Account pursuant to this
Agreement and (g)
amounts in respect of principal paid by the Majority Class CE
Certificateholder
or the Master Servicer, as applicable, pursuant to Section
10.01, minus (ii) all
amounts required to be reimbursed pursuant to Sections 4.02 and
4.05 or as
otherwise set forth in this Agreement.
PRINCIPAL PREPAYMENT: Any Mortgagor payment or other recovery of
(or
proceeds with respect to) principal on a Mortgage Loan
(including loans
purchased or repurchased under Sections 2.02, 2.03, 3.18 and
10.01 hereof) that
is received in advance of its scheduled Due Date and is not
accompanied by an
amount as to interest representing scheduled interest due on any
date or dates
in any month or months subsequent to the month of prepayment.
Partial Principal
Prepayments shall be applied by the Master Servicer, as
appropriate, in
accordance with the terms of the related Mortgage Note.
PRINCIPAL REMITTANCE AMOUNT: With respect to each Distribution
Date,
the sum of the amounts listed in clauses (a) through (f) of the
definition of
Principal Funds.
PRIVATE CERTIFICATES: Any of the Class M-7, Class P, Class CE
and
Residual Certificates.
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PROSPECTUS SUPPLEMENT: The Prospectus Supplement dated December
22,
2004 relating to the public offering of the Class I-A-1, Class
I-A-2, Class
I-A-3, Class II-A-1, Class II-A-2, Class M-1, Class M-2, Class
M-3, Class M-4,
Class M-5 and Class M-6 Certificates.
PROTECTED ACCOUNT: The separate Eligible Account established
and
maintained by the Master Servicer with respect to the Mortgage
Loans and REO
Property in accordance with Section 4.01 hereof.
PUD: A Planned Unit Development.
PURCHASE PRICE: With respect to any Mortgage Loan (x) required
to be
repurchased by the Seller pursuant to Section 2.02 or 2.03
hereof or (y) that
EMC has a right to purchase pursuant to Section 3.18 hereof, an
amount equal to
the sum of (i) 100% of the outstanding principal balance of the
Mortgage Loan as
of the date of such purchase (or if the related Mortgaged
Property was acquired
with respect thereto, 100% of the Outstanding Principal Balance
at the date of
the acquisition), plus (ii) accrued interest thereon at the
applicable Mortgage
Rate through the first day of the month in which the Purchase
Price is to be
distributed to Certificateholders, reduced by any portion of the
Servicing Fee,
Servicing Advances and Advances payable to the purchaser of the
Mortgage Loan
plus (iii) any costs and damages (if any) incurred by the Trust
in connection
with any violation of such Mortgage Loan of any anti-predatory
lending laws.
QIB: A Qualified Institutional Buyer as defined in Rule 144A
promulgated under the Securities Act.
RATING AGENCY: Each of Moody's and S&P. If any such
organization or its
successor is no longer in existence, "Rating Agency" shall be a
nationally
recognized statistical rating organization, or other comparable
Person,
designated by the Depositor, notice of which designation shall
be given to the
Trustee. References herein to a given rating category of a
Rating Agency shall
mean such rating category without giving effect to any
modifiers.
REALIZED LOSS: With respect to each Mortgage Loan as to which a
Final
Recovery Determination has been made, an amount (not less than
zero) equal to
(i) the unpaid principal balance of such Mortgage Loan as of the
commencement of
the calendar month in which the Final Recovery Determination was
made, plus (ii)
accrued interest from the Due Date as to which interest was last
paid by the
Mortgagor through the end of the calendar month in which such
Final Recovery
Determination was made, calculated in the case of each calendar
month during
such period (A) at an annual rate equal to the annual rate at
which interest was
then accruing on such Mortgage Loan and (B) on a principal
amount equal to the
Stated Principal Balance of such Mortgage Loan as of the close
of business on
the Distribution Date during such calendar month, minus (iii)
the proceeds, if
any, received in respect of such Mortgage Loan during the
calendar month in
which such Final Recovery Determination was made, net of amounts
that are
payable therefrom to the Master Servicer pursuant to this
Agreement. In
addition, 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 distributed
to any Class of Certificates or applied to increase Excess
Spread on any
Distribution Date.
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With respect to any REO Property as to which a Final
Recovery
Determination has been made, an amount (not less than zero)
equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the
date of
acquisition of such REO Property on behalf of REMIC I, plus (ii)
accrued
interest from the Due Date as to which interest was last paid by
the Mortgagor
in respect of the related Mortgage Loan through the end of the
calendar month
immediately preceding the calendar month in which such REO
Property was
acquired, calculated in the case of each calendar month during
such period (A)
at an annual rate equal to the annual rate at which interest was
then accruing
on the related Mortgage Loan and (B) on a principal amount equal
to the Stated
Principal Balance of the related Mortgage Loan as of the close
of business on
the Distribution Date during such calendar month, plus (iii) REO
Imputed
Interest for such REO Property for each calendar month
commencing with the
calendar month in which such REO Property was acquired and
ending with the
calendar month in which such Final Recovery Determination was
made, minus (iv)
the aggregate of all unreimbursed Advances and Servicing
Advances.
With respect to each Mortgage Loan which has become the subject
of a
Deficient Valuation, the difference between the principal
balance of the
Mortgage Loan outstanding immediately prior to such Deficient
Valuation and the
principal balance of the Mortgage Loan as reduced by the
Deficient Valuation.
With respect to each Mortgage Loan which has become the subject
of a
Debt Service Reduction, the portion, if any, of the reduction in
each affected
Monthly Payment attributable to a reduction in the Mortgage Rate
imposed by a
court of competent jurisdiction. Each such Realized Loss shall
be deemed to have
been incurred on the Due Date for each affected Monthly
Payment.
RECORD DATE: With respect to any Distribution Date and the
Certificates
(other than the Class M-7, Class CE, Class P and Residual
Certificates), so long
as such Classes of Certificates are Book-Entry Certificates, the
Business Day
preceding such Distribution Date, and otherwise, the close of
business on the
last Business Day of the month preceding the month in which such
Distribution
Date occurs. With respect to the Class M-7, Class CE, Class P
and Residual
Certificates, so long as such Classes of Certificates remain non
Book-Entry
Certificates, the close of business on the last Business Day of
the month
preceding the month in which such Distribution Date occurs.
REFERENCE BANKS: Shall mean leading banks selected by the
Trustee and
engaged in transactions in Eurodollar deposits in the
international Eurocurrency
market (i) with an established place of business in London, (ii)
which have been
designated as such by the Trustee and (iii) which are not
controlling,
controlled by, or under common control with, the Depositor, the
Seller or the
Master Servicer.
REFERENCE BANK RATE: With respect to any Accrual Period shall
mean the
arithmetic mean, rounded upwards, if necessary, to the nearest
whole multiple of
0.03125%, of the offered rates for United States dollar deposits
for one month
that are quoted by the Reference Banks as of 11:00 a.m., New
York City time, on
the related Interest Determination Date to prime banks in the
London interbank
market for a period of one month in an amount approximately
equal to the
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aggregate Certificate Principal Balance of the Class A
Certificates and Class M
Certificates for such Accrual Period, provided that at least two
such Reference
Banks provide such rate. If fewer than two offered rates appear,
the Reference
Bank Rate will be the arithmetic mean, rounded upwards, if
necessary, to the
nearest whole multiple of 0.03125%, of the rates quoted by one
or more major
banks in New York City, selected by the Trustee, as of 11:00
a.m., New York City
time, on such date for loans in United States dollars to leading
European banks
for a period of one month in amounts approximately equal to the
aggregate
Certificate Principal Balance of the Class A Certificates and
Class M
Certificates for such Accrual Period.
REGULAR CERTIFICATE: Any Certificate other than a Residual
Certificate.
REGULAR INTEREST: A "regular interest" in a REMIC within the
meaning of
Section 860G(a)(1) of the Code.
RELIEF ACT: The Servicemembers Civil Relief Act, as amended, or
similar
state law.
RELIEF ACT INTEREST SHORTFALL: With respect to any Distribution
Date
and any Mortgage Loan, any reduction in the amount of interest
collectible on
such Mortgage Loan for the most recently ended Due Period as a
result of the
application of the Relief Act.
REMAINING EXCESS SPREAD: With respect to any Distribution Date,
the
Excess Spread less any Extra Principal Distribution Amount, in
each case for
such Distribution Date.
REMIC: A "real estate mortgage investment conduit" within the
meaning
of section 860D of the Code.
REMIC I: The segregated pool of assets described in Section
5.07(a).
REMIC I INTEREST LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount (subject to adjustment based on the
actual number
of days elapsed in the respective Accrual Period) equal to (a)
the product of
(i) 50% of the aggregate Stated Principal Balance of the
Mortgage Loans and REO
Properties then outstanding and (ii) the Uncertificated REMIC I
Pass-Through
Rate for REMIC I Regular Interest AA minus the Marker Rate,
divided by (b) 12.
REMIC I MARKER ALLOCATION PERCENTAGE: 50% of any amount payable
or loss
attributable from the Mortgage Loans, which shall be allocated
to REMIC I
Regular Interest AA, REMIC I Regular Interest I-A-1, REMIC I
Regular Interest
I-A-2, REMIC I Regular Interest I-A-3, REMIC I Regular Interest
II-A-1, REMIC I
Regular Interest II-A-2, REMIC I Regular Interest M-1, REMIC I
Regular Interest
M-2, REMIC I Regular Interest M-3, REMIC I Regular Interest M-4,
REMIC I Regular
Interest M-5, REMIC I Regular Interest M-6, REMIC I Regular
Interest M-7 and
REMIC I Regular Interest ZZ.
REMIC I OVERCOLLATERALIZATION AMOUNT: With respect to any date
of
determination, (i) 0.50% of the aggregate Uncertificated
Principal Balances of
the REMIC I Regular Interests (other than REMIC I Regular
Interest P) minus (ii)
the aggregate of the Uncertificated Principal Balances of REMIC
I Regular
Interest I-A-1, REMIC I Regular Interest I-A-2, REMIC I Regular
Interest I-A-3,
REMIC I Regular Interest II-A-1, REMIC I Regular Interest
II-A-2, REMIC I
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Regular Interest M-1, REMIC I Regular Interest M-2, REMIC I
Regular Interest
M-3, REMIC I Regular Interest M-4, REMIC I Regular Interest M-5
and REMIC I
Regular Interest M-6 and REMIC I Regular Interest M-7, in each
case as of such
date of determination.
REMIC I PRINCIPAL LOSS ALLOCATION AMOUNT: With respect to
any
Distribution Date, an amount equal to (a) the product of (i) 50%
of the
aggregate Stated Principal Balance of the Mortgage Loans and REO
Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which
is two times the
aggregate of the Uncertificated Principal Balances of REMIC I
Regular Interest
I-A-1, REMIC I Regular Interest I-A-2, REMIC I Regular Interest
I-A-3, REMIC I
Regular Interest II-A-1, REMIC I Regular Interest II-A-2, REMIC
I Regular
Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular
Interest M-3, REMIC
I Regular Interest M-4, REMIC I Regular Interest M-5, REMIC I
Regular Interest
M-6, REMIC I Regular Interest M-7 and the denominator of which
is the aggregate
of the Uncertificated Principal Balances of REMIC I Regular
Interest I-A-1,
REMIC I Regular Interest I-A-2, REMIC I Regular Interest I-A-3,
REMIC I Regular
Interest II-A-1, REMIC I Regular Interest II-A-2, REMIC I
Regular Interest M-1,
REMIC I Regular Interest M-2, REMIC I Regular Interest M-3,
REMIC I Regular
Interest M-4, REMIC I Regular Interest M-5, REMIC I Regular
Interest M-6, REMIC
I Regular Interest M-7 and REMIC I Regular Interest ZZ.
REMIC I REGULAR INTEREST: Any of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
"regular interest" in REMIC I. Each REMIC I Regular Interest
shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate
in effect from
time to time, and shall be entitled to distributions of
principal, subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto. The designations for the respective REMIC I Regular
Interests are set
forth in the Preliminary Statement hereto.
REMIC I REGULAR INTEREST AA: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest AA shall
accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to
time, and shall be entitled to distributions of principal,
subject to the terms
and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST I-A-1: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-A-1
shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate
in effect from
time to time, and shall be entitled to distributions of
principal, subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST I-A-2: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-A-2
shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate
in effect from
time to time, and shall be entitled to distributions of
principal,
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subject to the terms and conditions hereof, in an aggregate
amount equal to its
initial Uncertificated Principal Balance as set forth in the
Preliminary
Statement hereto.
REMIC I REGULAR INTEREST I-A-3: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-A-3
shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate
in effect from
time to time, and shall be entitled to distributions of
principal, subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST II-A-1: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest II-A-1
shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate
in effect from
time to time, and shall be entitled to distributions of
principal, subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST II-A-2: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest II-A-2
shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate
in effect from
time to time, and shall be entitled to distributions of
principal, subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST M-1: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest M-1 shall
accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to
time, and shall be entitled to distributions of principal,
subject to the terms
and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST M-2: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest M-2 shall
accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to
time, and shall be entitled to distributions of principal,
subject to the terms
and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST M-3: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest M-3 shall
accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to
time, and shall be entitled to distributions of principal,
subject to the terms
and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
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<PAGE>
REMIC I REGULAR INTEREST M-4: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest M-4 shall
accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to
time, and shall be entitled to distributions of principal,
subject to the terms
and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST M-5: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest M-5 shall
accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to
time, and shall be entitled to distributions of principal,
subject to the terms
and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST M-6: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest M-6 shall
accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to
time, and shall be entitled to distributions of principal,
subject to the terms
and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST M-7: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest M-7 shall
accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to
time, and shall be entitled to distributions of principal,
subject to the terms
and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST P: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest P shall
accrue interest at
the related Uncertificated REMIC I Pass-Through Rate in effect
from time to
time, and shall be entitled to distributions of principal,
subject to the terms
and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST XX: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest XX shall
accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to
time, and shall be entitled to distributions of principal,
subject to the terms
and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST ZZ: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest ZZ shall
accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to
time, and shall be entitled to distributions of principal,
subject to the
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<PAGE>
terms and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST 1A: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest 1A shall
accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to
time, and shall be entitled to distributions of principal,
subject to the terms
and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST 1B: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest 1B shall
accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to
time, and shall be entitled to distributions of principal,
subject to the terms
and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST 2A: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest 2A shall
accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to
time, and shall be entitled to distributions of principal,
subject to the terms
and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST 2B: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest 2B shall
accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to
time, and shall be entitled to distributions of principal,
subject to the terms
and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I SUB WAC ALLOCATION PERCENTAGE: 50% of any amount payable
or
loss attributable from the Mortgage Loans, which shall be
allocated to REMIC I
Regular Interest 1A, REMIC I Regular Interest 1B, REMIC I
Regular Interest 2A,
REMIC I Regular Interest 2B and REMIC I Regular Interest XX.
REMIC I SUBORDINATED BALANCE RATIO: The ratio among the
Uncertificated
Principal Balances of each REMIC I Regular Interest ending with
the designation
"A", equal to the ratio among, with respect to each such REMIC I
Regular
Interest, the excess of (x) the aggregate Stated Principal
Balance of the
Mortgage Loans in Loan Group I or the Mortgage Loans in Loan
Group II, as
applicable over (y) the current Certificate Principal Balance of
the related
Class A Certificates.
REMIC I REQUIRED OVERCOLLATERALIZATION AMOUNT: 0.50% of the
Overcollateralization Target Amount.
REMIC II: The segregated pool of assets described in Section
5.07(a).
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<PAGE>
REMIC II CERTIFICATE: Any Regular Certificate (other than the
Class CE
Certificates and Class P Certificates).
REMIC II CERTIFICATEHOLDER: The Holder of any REMIC II
Certificate.
REMIC II REGULAR INTEREST: Any Class A Certificate, Class M
Certificate, the Class CE Interest or Class P Interest.
REMIC III: The segregated pool of assets consisting of the Class
CE
Interest conveyed in trust to the Trustee, for the benefit of
the Holders of the
Class CE Certificates and the Class RX Certificate (in respect
of the Class R-3
Interest), with respect to which a separate REMIC election is to
be made.
REMIC III CERTIFICATE: Any Class CE Certificate or Class RX
Certificate
(in respect of the Class R-3 Interest).
REMIC IV: The segregated pool of assets consisting of the Class
P
Interest conveyed in trust to the Trustee, for the benefit of
the Holders of the
Class P Certificates and the Class RX Certificate (in respect of
the Class R-4
Interest), with respect to which a separate REMIC election is to
be made.
REMIC IV CERTIFICATE: Any Class P Certificate or Class RX
Certificate
(in respect of the Class R-4 Interest).
REMIC OPINION: Shall mean an Opinion of Counsel to the effect
that the
proposed action will not cause any of REMIC I, REMIC II, REMIC
III or REMIC IV
to fail to qualify as a REMIC at any time that any Certificates
are outstanding.
REMIC PROVISIONS: Provisions of the federal income tax law
relating to
real estate mortgage investment conduits, which appear at
sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and
proposed, temporary and final regulations and published rulings,
notices and
announcements promulgated thereunder, as the foregoing may be in
effect from
time to time as well as provisions of applicable state laws.
REMITTANCE DATE: Shall mean the Business Day immediately
preceding the
Distribution Account Deposit Date.
REO IMPUTED INTEREST: As to any REO Property, for any calendar
month
during which such REO Property was at any time part of REMIC I,
one month's
interest at the applicable Net Mortgage Rate on the Stated
Principal Balance of
such REO Property (or, in the case of the first such calendar
month, of the
related Mortgage Loan, if appropriate) as of the close of
business on the
Distribution Date in such calendar month.
REO PROPERTY: A Mortgaged Property acquired by the Master
Servicer
through foreclosure or deed-in-lieu of foreclosure in connection
with a
defaulted Mortgage Loan.
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REPLACEMENT MORTGAGE LOAN: A Mortgage Loan or Mortgage Loans in
the
aggregate substituted by the Seller for a Deleted Mortgage Loan,
which must, on
the date of such substitution, as confirmed in a Request for
Release, (i) have a
Stated Principal Balance, after deduction of the principal
portion of the
Scheduled Payment due in the month of substitution, not in
excess of, and not
less than 90% of, the Stated Principal Balance of the Deleted
Mortgage Loan;
(ii) if the Replacement Mortgage Loan is a fixed rate Mortgage
Loan, have a
fixed Mortgage Rate not less than or more than 1% per annum
higher than the
Mortgage Rate of the Deleted Mortgage Loan; (iii) have the same
or higher credit
quality characteristics than that of the Deleted Mortgage Loan;
(iv) have a
Loan-to-Value Ratio no higher than that of the Deleted Mortgage
Loan; (v) have a
remaining term to maturity no greater than (and not more than
one year less
than) that of the Deleted Mortgage Loan; (vi) not permit
conversion of the
Mortgage Rate from a fixed rate to a variable rate; (vii) have
the same lien
priority as the Deleted Mortgage Loan; (viii) constitute the
same occupancy type
as the Deleted Mortgage Loan or be owner occupied; (ix) if the
Replacement
Mortgage Loan is an Adjustable Rate Mortgage Loan, have a
Maximum Mortgage Rate
not less than the Maximum Mortgage Rate on the Deleted Mortgage
Loan, (x) if the
Replacement Mortgage Loan is an Adjustable Rate Mortgage Loan,
have a Minimum
Mortgage Rate not less than the Minimum Mortgage Rate of the
Deleted Mortgage
Loan, (xi) if the Replacement Mortgage Loan is an Adjustable
Rate Mortgage Loan,
have a Gross Margin equal to or greater than the Gross Margin of
the Deleted
Mortgage Loan, (xii) if the Replacement Mortgage Loan is an
Adjustable Rate
Mortgage Loan, have a next Adjustment Date not more than two
months later than
the next Adjustment Date on the Deleted Mortgage Loan, (xiii)
comply with each
representation and warranty set forth in Section 7 of the
Mortgage Loan Purchase
Agreement and (xiv) the related Custodian has delivered a Final
Certification
noting no defects or exceptions.
REQUEST FOR RELEASE: The Request for Release to be submitted by
the
Seller or the Master Servicer to the related Custodian
substantially in the form
of Exhibit G. Each Request for Release furnished to the related
Custodian by the
Seller or the Master Servicer shall be in duplicate and shall be
executed by an
officer of such Person or a Servicing Officer (or, if furnished
electronically
to the related Custodian, shall be deemed to have been sent and
executed by an
officer of such Person or a Servicing Officer) of the Master
Servicer.
REQUIRED INSURANCE POLICY: With respect to any Mortgage Loan,
any
insurance policy that is required to be maintained from time to
time under this
Agreement.
RESERVE FUND: Shall mean the separate trust account created
and
maintained by the Trustee pursuant to Section 3.20 hereof.
RESIDUAL CERTIFICATES: The Class R-1, Class R-2 and Class RX
Certificates (representing ownership of the Class R-3 Interest
and Class R-4
Interest) each evidencing the sole class of "residual interests"
(within the
meaning of Section 860G(a)(2) of the Code) in the related
REMIC.
RESIDUAL INTEREST: The sole class of "residual interests" in a
REMIC
within the meaning of Section 860G(a)(2) of the Code.
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RESPONSIBLE OFFICER: With respect to the Trustee, any Vice
President,
any Assistant Vice President, the Secretary, any Assistant
Secretary, or any
Trust Officer with specific responsibility for the transactions
contemplated
hereby, any other officer customarily performing functions
similar to those
performed by any of the above designated officers or other
officers of the
Trustee specified by the Trustee, as to whom, with respect to a
particular
matter, such matter is referred because of such officer's
knowledge of and
familiarity with the particular subject.
S&P: Standard & Poor's, a division of The McGraw-Hill
Companies, Inc.,
and any successor thereto.
SCHEDULED PAYMENT: The scheduled monthly payment on a Mortgage
Loan due
on any Due Date allocable to principal and/or interest on such
Mortgage Loan.
SECURITIES ACT: The Securities Act of 1933, as amended.
SELLER: EMC Mortgage Corporation, a Delaware corporation, and
its
successors and assigns, in its capacity as seller of the
Mortgage Loans to the
Depositor.
SENIOR CERTIFICATES: Any of the Class I-A-1, Class I-A-2, Class
I-A-3,
Class II-A-1 and Class II-A-2 Certificates.
SERVICING ADVANCES: All customary, reasonable and necessary "out
of
pocket" costs and expenses (including reasonable legal fees)
incurred in the
performance by the Master Servicer of its servicing obligations
hereunder,
including, but not limited to, the cost of (i) the preservation,
restoration and
protection of a Mortgaged Property, (ii) any enforcement or
judicial
proceedings, including foreclosures, and including any expenses
incurred in
relation to any such proceedings that result from the Mortgage
Loan being
registered in the MERS(R) System, (iii) the management and
liquidation of any
REO Property (including, without limitation, realtor's
commissions) and (iv)
compliance with any obligations under Section 3.07 hereof to
cause insurance to
be maintained.
SERVICING FEE: As to each Mortgage Loan and any Distribution
Date, an
amount equal to 1/12th of the Servicing Fee Rate multiplied by
the Stated
Principal Balance of such Mortgage Loan as of the last day of
the related Due
Period or, in the event of any payment of interest that
accompanies a Principal
Prepayment in full during the related Due Period made by the
Mortgagor
immediately prior to such prepayment, interest at the Servicing
Fee Rate on the
Stated Principal Balance of such Mortgage Loan for the period
covered by such
payment of interest.
SERVICING FEE RATE: 0.500% per annum.
SERVICING MODIFICATION: With respect to any Mortgage Loan that
is in
default or, in the reasonable judgment of the Master Servicer,
as to which
default is reasonably foreseeable, any modification which is
effected by the
Master Servicer in accordance with the terms of this Agreement
which results in
any change in the outstanding Stated Principal Balance, any
change in the
Mortgage Rate or any extension of the term of such Mortgage
Loan.
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SERVICING OFFICER: Any officer of the Master Servicer involved
in, or
responsible for, the administration and servicing of the
Mortgage Loans whose
name and facsimile signature appear on a list of servicing
officers furnished to
the Trustee by the Master Servicer on the Closing Date pursuant
to this
Agreement, as such list may from time to time be amended.
STARTUP DAY: The Startup Day for each REMIC formed hereunder
shall be
the Closing Date.
STATED PRINCIPAL BALANCE: With respect to any Mortgage Loan or
related
REO Property and any Distribution Date, the Cut-off Date
Principal Balance
thereof minus the sum of (i) the principal portion of the
Scheduled Payments due
with respect to such Mortgage Loan during each Due Period ending
prior to such
Distribution Date (and irrespective of any delinquency in their
payment), (ii)
all Principal Prepayments with respect to such Mortgage Loan
received prior to
or during the related Prepayment Period, and all Liquidation
Proceeds to the
extent applied by the Master Servicer as recoveries of principal
in accordance
with Section 3.09 with respect to such Mortgage Loan, that were
received by the
Master Servicer as of the close of business on the last day of
the Prepayment
Period related to such Distribution Date and (iii) any Realized
Losses on such
Mortgage Loan incurred during the related Prepayment Period. The
Stated
Principal Balance of a Liquidated Loan equals zero.
STEPDOWN DATE: The later to occur of (a) the Distribution Date
in
January 2008 and (b) the first Distribution Date on which the
Current Specified
Enhancement Percentage (calculated for this purpose only, prior
to distributions
on the Certificates but following distributions on the Mortgage
Loans for the
related Due Period) is greater than or equal to 43.90%.
SUBORDINATED CERTIFICATES: The Class M Certificates, Class
CE
Certificates and Residual Certificates.
SUBSEQUENT RECOVERIES: As of any Distribution Date, amounts
received by
the Master Servicer (net of any related expenses permitted to be
reimbursed
pursuant to Section 4.02) or surplus amounts held by the Master
Servicer to
cover estimated expenses (including, but not limited to,
recoveries in respect
of the representations and warranties made by the Seller
pursuant to the
Mortgage Loan Purchase Agreement) specifically related to a
Mortgage Loan that
was the subject of a liquidation or final disposition of any REO
Property prior
to the related Prepayment Period that resulted in a Realized
Loss.
SUBSERVICING AGREEMENT: Any agreement entered into between the
Master
Servicer and a subservicer with respect to the subservicing of
any Mortgage Loan
hereunder by such subservicer.
SUBSTITUTION ADJUSTMENT AMOUNT: The meaning ascribed to such
term
pursuant to Section 2.03(c).
SUCCESSOR MASTER SERVICER: The meaning ascribed to such term
pursuant
to Section 8.02.
TAX MATTERS PERSON: The person designated as "tax matters
person" in
the manner provided under Treasury regulation ss. 1.860F-4(d)
and temporary
Treasury regulation ss.
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301.6231(a)(7)-1T. The holder of the greatest Percentage
Interest in a Class of
Residual Certificates shall be the Tax Matters Person for the
related REMIC. The
Trustee, or any successor thereto or assignee thereof shall
serve as tax
administrator hereunder and as agent for the related Tax Matters
Person.
TRANSFER: Any direct or indirect transfer or sale of any
Ownership
Interest in a Certificate.
TRANSFER AFFIDAVIT: As defined in Section 6.02(c).
TRIGGER EVENT: With respect to any Distribution Date, a Trigger
Event
exists if (i) a Delinquency Event shall have occurred and be
continuing or (ii)
the aggregate amount of Realized Losses on the Mortgage Loans
since the Cut-off
Date as a percentage of the Cut-off Date Principal Balance
exceeds the
applicable percentages set forth below with respect to such
Distribution Date:
DISTRIBUTION DATE PERCENTAGE
----------------- ----------
January 2008 to December 2008 3.25%
January 2009 to December 2009 5.00%
January 2010 to December 2010 6.50%
January 2011 and thereafter 7.25%
TRUST FUND: The corpus of the trust created hereunder consisting
of (i)
the Mortgage Loans and all interest accruing and principal due
with respect
thereto after the Cut-off Date to the extent not applied in
computing the
Cut-off Date Principal Balance thereof; (ii) the Distribution
Account, the Class
P Certificate Account, the Reserve Fund and the Protected
Account and all
amounts deposited therein pursuant to the applicable provisions
of this
Agreement; (iii) property that secured a Mortgage Loan and has
been acquired by
foreclosure, deed in lieu of foreclosure or otherwise; (iv) the
mortgagee's
rights under the Insurance Policies with respect to the Mortgage
Loans; (v) the
rights under the Yield Maintenance Agreements; (vi) the rights
under the
Mortgage Loan Purchase Agreement; and (vii) all proceeds of the
foregoing,
including proceeds of conversion, voluntary or involuntary, of
any of the
foregoing into cash or other liquid property.
TRUSTEE: LaSalle Bank National Association, a national
banking
association, not in its individual capacity, but solely in its
capacity as
trustee for the benefit of the Certificateholders under this
Agreement, and any
successor thereto, and any corporation or national banking
association resulting
from or surviving any consolidation or merger to which it or its
successors may
be a party and any successor trustee as may from time to time be
serving as
successor trustee hereunder.
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TRUSTEE FEE: As to each Mortgage Loan and any Distribution Date,
a per
annum fee equal to 0.0011% multiplied by the Stated Principal
Balance of such
Mortgage Loan as of the last day of the related Due Period.
UNCERTIFICATED ACCRUED INTEREST: With respect to each REMIC I
Regular
Interest on each Distribution Date, an amount equal to one
month's interest at
the Uncertificated REMIC I Pass-Through Rate on the
Uncertificated Principal
Balance of such REMIC I Regular Interest. In each case,
Uncertificated Accrued
Interest will be reduced by any Prepayment Interest Shortfalls
and Relief Act
Interest Shortfalls (allocated to such REMIC I Regular Interests
as set forth in
Section 5.07).
UNCERTIFICATED NOTIONAL AMOUNT: With respect to the Class CE
Interest
and any Distribution Date, an amount equal to the aggregate
Uncertificated
Principal Balance of the REMIC I Regular Interests (other than
REMIC I Regular
Interest P) for such Distribution Date.
UNCERTIFICATED PRINCIPAL BALANCE: The amount of the REMIC I
Regular
Interests outstanding as of any date of determination. As of the
Closing Date,
the Uncertificated Principal Balance of each REMIC I Regular
Interest shall
equal the amount set forth in the Preliminary Statement hereto
as its initial
uncertificated principal balance. On each Distribution Date, the
Uncertificated
Principal Balance of the REMIC I Regular Interest shall be
reduced by all
distributions of principal made on such REMIC I Regular Interest
on such
Distribution Date pursuant to Section 5.07 and, if and to the
extent necessary
and appropriate, shall be further reduced on such Distribution
Date by Realized
Losses as provided in Section 5.05 and the Uncertificated
Principal Balance of
REMIC I Regular Interest ZZ shall be increased by interest
deferrals as provided
in Section 5.07(b)(1)(i). The Uncertificated Principal Balance
of each REMIC I
Regular Interest shall never be less than zero. With respect to
the Class CE
Interest as of any date of determination, an amount equal to the
excess, if any,
of (A) the then aggregate Uncertificated Principal Balances of
the REMIC I
Regular Interests over (B) the then aggregate Certificate
Principal Balances of
the Class A Certificates, the Class M Certificates and the Class
P Interest then
outstanding.
UNCERTIFICATED REMIC I PASS-THROUGH RATE: With respect to REMIC
I
Regular Interest AA, REMIC I Regular Interest I-A-1, REMIC I
Regular Interest
I-A-2, REMIC I Regular Interest I-A-3, REMIC I Regular Interest
II-A-1, REMIC I
Regular Interest II-A-2, REMIC I Regular Interest M-1, REMIC I
Regular Interest
M-2, REMIC I Regular Interest M-3, REMIC I Regular Interest M-4,
REMIC I Regular
Interest M-5, REMIC I Regular Interest M-6, REMIC I Regular
Interest M-7, REMIC
I Regular Interest ZZ, REMIC I Regular Interest 1A, REMIC I
Regular Interest 2A
and REMIC I Regular Interest XX, the weighted average of the Net
Mortgage Rates
of the Mortgage Loans. With respect to REMIC I Regular Interest
1B, the weighted
average of the Net Mortgage Rates of the Mortgage Loans in Loan
Group I. With
respect to REMIC I Regular Interest 2B, the weighted average of
the Net Mortgage
Rates of the Mortgage Loans in Loan Group II. With respect to
REMIC I Regular
Interest P, 0.00%.
UNPAID REALIZED LOSS AMOUNT: With respect to any Class A
Certificates
and as to any Distribution Date, is the excess of Applied
Realized Loss Amounts
with respect to such Class over the sum of all distributions in
reduction of the
Applied Realized Loss Amounts on all
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previous Distribution Dates. Any amounts distributed to the
Class A Certificates
in respect of any Unpaid Realized Loss Amount shall not be
applied to reduce the
Certificate Principal Balance of such Class.
VOTING RIGHTS: The portion of the voting rights of all the
Certificates
that is allocated to any Certificate for purposes of the voting
provisions
hereunder. Voting Rights shall be allocated (i) 93% to the Class
A Certificates
and Class M Certificates, (ii) 3% to the Class CE Certificates
until paid in
full, and (iii) 1% to each Class of Residual Certificates and
Class P
Certificates, with the allocation among the Certificates (other
than the Class
CE, Class P and Residual Certificates) to be in proportion to
the Certificate
Principal Balance of each Class relative to the Certificate
Principal Balance of
all other such Classes. Voting Rights will be allocated among
the Certificates
of each such Class in accordance with their respective
Percentage Interests.
WELLS FARGO: Wells Fargo Bank, National Association, and any
successor
thereto.
WELLS FARGO CUSTODIAL AGREEMENT: The Custodial Agreement, dated
as
December 29, 2004, among the Depositor, the Seller, the Master
Servicer, the
Trustee and Wells Fargo Bank, National Association as Custodian
relating to the
Mortgage Loans identified in such Custodial Agreement.
YIELD MAINTENANCE AGREEMENT: Any of the three Yield
Maintenance
Agreements, each dated December 29, 2004, between the Trustee
and Bear Stearns
Financial Products Inc.
Section 1.02 ALLOCATION OF CERTAIN INTEREST SHORTFALLS.
For purposes of calculating the amount of Current Interest for
the
Class A Certificates, the Class M Certificates and the Class CE
Certificates for
any Distribution Date, the aggregate amount of any Prepayment
Interest
Shortfalls (to the extent not covered by payments by the Master
Servicer
pursuant to Section 5.02) and any Relief Act Interest Shortfalls
incurred in
respect of the Mortgage Loans for any Distribution Date shall be
allocated
first, to the Class CE Certificates based on, and to the extent
of, one month's
interest at the then applicable respective Pass-Through Rate on
the Certificate
Notional Amount thereof and, thereafter, among the Class A
Certificates and
Class M Certificates, in each case on a pro rata basis based on,
and to the
extent of, one month's interest at the then applicable
respective Pass-Through
Rate on the respective Certificate Principal Balance of each
such Certificate.
For purposes of calculating the amount of Uncertificated
Accrued
Interest for the REMIC I Regular Interests for any Distribution
Date:
(a) The REMIC I Marker Allocation Percentage of the
aggregate
amount of any Prepayment Interest Shortfalls (to the extent not
covered by
payments by the Master Servicer pursuant to Section 5.02) and
the REMIC I Marker
Allocation Percentage of any Relief Act Interest Shortfalls
incurred in respect
of the Mortgage Loans for any Distribution Date shall be
allocated among REMIC I
Regular Interest I-A-1, REMIC I Regular Interest I-A-2, REMIC I
Regular Interest
I-A-3, REMIC I Regular Interest II-A-1, REMIC I Regular Interest
II-A-2, REMIC I
Regular Interest M-1, REMIC I Regular Interest M-2, REMIC I
Regular Interest
M-3, REMIC I Regular Interest M-4, REMIC I Regular Interest M-5,
REMIC I Regular
Interest M-6,
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REMIC I Regular Interest M-7 and REMIC I Regular Interest ZZ,
pro rata, based
on, and to the extent of, one month's interest at the then
applicable respective
Uncertificated REMIC I Pass-Through Rate on the respective
Uncertificated
Principal Balance of each such REMIC I Regular Interest;
(b) The REMIC I Sub WAC Allocation Percentage of the
aggregate
amount of any Prepayment Interest Shortfalls (to the extent not
covered by
payments by the Master Servicer pursuant to Section 5.02) and
the REMIC I Sub
WAC Allocation Percentage of any Relief Act Interest Shortfalls
incurred in
respect of the Mortgage Loans for any Distribution Date shall be
allocated to
Uncertificated Accrued Interest payable to REMIC I Regular
Interest 1A, REMIC I
Regular Interest 1B, REMIC I Regular Interest 2A, REMIC I
Regular Interest 2B
and REMIC I Regular Interest XX, pro rata, based on, and to the
extent of, one
month's interest at the then applicable respective
Uncertificated REMIC I
Pass-Through Rate on the respective Uncertificated Principal
Balance of each
such REMIC I Regular Interest; and
(c) The aggregate amount of any Prepayment Interest Shortfalls
(to
the extent not covered by payments by the Master Servicer
pursuant to Section
5.02) and any Relief Act Interest Shortfalls allocated to the
Class CE
Certificates shall be deemed allocated to the Class CE
Interest.
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ARTICLE II
CONVEYANCE OF TRUST FUND
REPRESENTATIONS AND WARRANTIES
Section 2.01 CONVEYANCE OF TRUST FUND.
Pursuant to the Mortgage Loan Purchase Agreement, the Seller
sold,
transferred, assigned, set over and otherwise conveyed to the
Depositor, without
recourse, all the right, title and interest of the Seller in and
to the assets
in the Trust Fund.
The Seller has entered into this Agreement in consideration for
the
purchase of the Mortgage Loans by the Depositor pursuant to the
Mortgage Loan
Purchase Agreement and has agreed to take the actions specified
herein.
The Depositor, concurrently with the execution and delivery
hereof,
hereby sells, transfers, assigns, sets over and otherwise
conveys to the Trustee
for the use and benefit of the Certificateholders, without
recourse, all the
right, title and interest of the Depositor in and to the Trust
Fund.
In connection with such sale, the Depositor has delivered to,
and
deposited with, the Trustee or the related Custodian, as its
agent, the
following documents or instruments with respect to each Mortgage
Loan so
assigned: (i) the original Mortgage Note, including any riders
thereto, endorsed
without recourse to the order of "LaSalle Bank National
Association, as Trustee
for certificateholders of Bear Stearns Asset Backed Securities I
LLC Asset
Backed Certificates, Series 2004-HE11," and showing an unbroken
chain of
endorsements from the original payee thereof to the Person
endorsing it to the
Trustee, (ii) the original Mortgage and, if the related Mortgage
Loan is a MOM
Loan, noting the presence of the MIN and language indicating
that such Mortgage
Loan is a MOM Loan, which shall have been recorded (or if the
original is not
available, a copy), with evidence of such recording indicated
thereon (or if
clause (x) in the proviso below applies, shall be in recordable
form), (iii)
unless the Mortgage Loan is a MOM Loan, the assignment (either
an original or a
copy, which may be in the form of a blanket assignment if
permitted in the
jurisdiction in which the Mortgaged Property is located) to the
Trustee of the
Mortgage with respect to each Mortgage Loan in the name of
"LaSalle Bank
National Association, as Trustee for certificateholders of Bear
Stearns Asset
Backed Securities I LLC Asset Backed Certificates, Series
2004-HE11," which
shall have been recorded (or if clause (x) in the proviso below
applies, shall
be in recordable form) (iv) an original or a copy of all
intervening assignments
of the Mortgage, if any, with evidence of recording thereon, (v)
the original
policy of title insurance or mortgagee's certificate of title
insurance or
commitment or binder for title insurance, if available, or a
copy thereof, or,
in the event that such original title insurance policy is
unavailable, a
photocopy thereof, or in lieu thereof, a current lien search on
the related
Mortgaged Property and (vi) originals or copies of all available
assumption,
modification or substitution agreements, if any; provided,
however, that in lieu
of the foregoing, the Seller may deliver the following
documents, under the
circumstances set forth below: (x) if any Mortgage, assignment
thereof to the
Trustee or intervening assignments thereof have been
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delivered or are being delivered to recording offices for
recording and have not
been returned in time to permit their delivery as specified
above, the Depositor
may deliver a true copy thereof with a certification by the
Seller or the title
company issuing the commitment for title insurance, 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 Notes relating to the Mortgage Loans identified in the
list set forth
in Exhibit I, the Depositor may deliver a lost note affidavit
and indemnity and
a copy of the original note, if available; 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 and the related
Custodian a
certification of a Servicing Officer to such effect and in such
case shall
deposit all amounts paid in respect of such Mortgage Loans, in
the Protected
Account or in the Distribution Account on the Closing Date. In
the case of the
documents referred to in clause (x) above, the Depositor shall
deliver such
documents to the Trustee or the related Custodian promptly after
they are
received. The Seller shall cause, at its expense, the Mortgage
and intervening
assignments, if any, and to the extent required in accordance
with the
foregoing, the assignment of the Mortgage to the Trustee to be
submitted for
recording promptly after the Closing Date; provided that the
Seller need not
cause to be recorded (a) any assignment in any jurisdiction
under the laws of
which, as evidenced by an Opinion of Counsel addressed to the
Trustee delivered
by the Seller to the Trustee and the Rating Agencies, the
recordation of such
assignment is not necessary to protect the Trustee's interest in
the related
Mortgage Loan or (b) if MERS is identified on the Mortgage or on
a properly
recorded assignment of the Mortgage as the mortgagee of record
solely as nominee
for Seller and its successors and assigns. In the event that the
Seller, the
Depositor or the Master Servicer gives written notice to the
Trustee that a
court has recharacterized the sale of the Mortgage Loans as a
financing, the
Seller shall submit or cause to be submitted for recording as
specified above
each such previously unrecorded assignment to be submitted for
recording as
specified above at the expense of the Trust. In the event a
Mortgage File is
released to the Master Servicer as a result of such Person
having completed a
Request for Release, the related Custodian shall, if not so
completed, complete
the assignment of the related Mortgage in the manner specified
in clause (iii)
above.
In connection with the assignment of any Mortgage Loan
registered on
the MERS(R) System, the Seller further agrees that it will
cause, at the
Seller's own expense, within 30 days after the Closing Date, the
MERS(R) System
to indicate that such Mortgage Loans have been assigned by the
Seller to the
Depositor and by the Depositor to the Trustee in accordance with
this Agreement
for the benefit of the Certificateholders by including (or
deleting, in the case
of Mortgage Loans which are repurchased in accordance with this
Agreement) in
such computer files (a) the code in the field which identifies
the specific
Trustee and (b) the code in the field "Pool Field" which
identifies the series
of the Certificates issued in connection with such Mortgage
Loans. The Seller
further agrees that it will not, and will not permit the Master
Servicer to, and
the Master Servicer agrees that it will not, alter the codes
referenced in this
paragraph with respect to any Mortgage Loan during the term of
this Agreement
unless and until such Mortgage Loan is repurchased in accordance
with the terms
of this Agreement or the Mortgage Loan Purchase Agreement.
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Section 2.02 ACCEPTANCE OF THE MORTGAGE LOANS.
(a) Based on the Initial Certification received by it from
the
related Custodian, the Trustee acknowledges receipt of, subject
to the further
review and exceptions reported by the related Custodian pursuant
to the
procedures described below, the documents (or certified copies
thereof)
delivered to the Trustee or the related Custodian on its behalf
pursuant to
Section 2.01 and declares that it holds and will continue to
hold directly or
through a custodian those documents and any amendments,
replacements or
supplements thereto and all other assets of the Trust Fund
delivered to it in
trust for the use and benefit of all present and future Holders
of the
Certificates. On the Closing Date, the Trustee or the related
Custodian on its
behalf will deliver one or more Initial Certifications, each in
the form of
Exhibit One to the related Custodial Agreement, confirming
whether or not it has
received the Mortgage File for each Mortgage Loan, but without
review of such
Mortgage File, except to the extent necessary to confirm whether
such Mortgage
File contains the original Mortgage Note or a lost note
affidavit and indemnity
in lieu thereof. No later than 90 days after the Closing Date,
the Trustee or
the related Custodian on its behalf shall, for the benefit of
the
Certificateholders, review each Mortgage File delivered to it
and execute and
deliver to the Seller and the Master Servicer and, if reviewed
by the related
Custodian or the Trustee, one or more Interim Certifications,
each substantially
in the form of Exhibit Two to the related Custodial Agreement.
In conducting
such review, the Trustee or the related Custodian on its behalf
will ascertain
whether all required documents have been executed and received
and whether those
documents relate, determined on the basis of the Mortgagor name,
original
principal balance and loan number, to the Mortgage Loans
identified in Exhibit B
to this Agreement, as supplemented (provided, however, that with
respect to
those documents described in subclauses (iv) and (vi) of Section
2.01, such
obligations shall extend only to documents actually delivered
pursuant to such
subclauses). In performing any such review, the Trustee and the
related
Custodian may conclusively rely on the purported due execution
and genuineness
of any such document and on the purported genuineness of any
signature thereon.
If the Trustee or the related Custodian on its behalf 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 related Custodian on
its behalf shall
include such information in the exception report attached to the
Interim
Certification. The Seller shall correct or cure any such defect
or, if prior to
the end of the second anniversary of the Closing Date, the
Seller may substitute
for the related Mortgage Loan a Replacement Mortgage Loan, which
substitution
shall be accomplished in the manner and subject to the
conditions set forth in
Section 2.03 or shall deliver to the Trustee an Opinion of
Counsel addressed to
the Trustee to the effect that such defect does not materially
or adversely
affect the interests of the Certificateholders in such Mortgage
Loan within 60
days from the date of notice from the Trustee of the defect and
if the Seller
fails to correct or cure the defect or deliver such opinion
within such period,
the Seller will, subject to Section 2.03, within 90 days from
the notification
of the Trustee 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 Mortgage, assignment thereof to the Trustee, or
intervening
assignments thereof with evidence of recording thereon because
such documents
have been submitted for recording and have not been returned by
the applicable
jurisdiction, the Seller shall not be required to purchase such
Mortgage Loan if
the Seller delivers such documents promptly upon receipt, but in
no event later
than 360 days after the Closing Date.
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(b) No later than 180 days after the Closing Date, the Trustee
or
the related Custodian on its behalf will review, for the benefit
of the
Certificateholders, the Mortgage Files and will execute and
deliver or cause to
be executed and delivered to the Seller and the Master Servicer
and, if reviewed
by the related Custodian or the Trustee, one or more Final
Certifications, each
substantially in the form of Exhibit Three to the related
Custodial Agreement.
In conducting such review, the Trustee or the related Custodian
on its behalf
will ascertain whether each document required to be recorded has
been returned
from the recording office with evidence of recording thereon and
the Trustee or
the related Custodian on its behalf has received either an
original or a copy
thereof, as required in Section 2.01 (provided, however, that
with respect to
those documents described in subclauses (iv) and (vi) of Section
2.01, such
obligations shall extend only to documents actually delivered
pursuant to such
subclauses). If the Trustee or the related Custodian on its
behalf finds any
document with respect to a Mortgage Loan has not been received,
or to be
unrelated, determined on the basis of the Mortgagor name,
original principal
balance and loan number, to the Mortgage Loans identified in
Exhibit B or to
appear defective on its face, the Trustee or the related
Custodian on its behalf
shall note such defect in the exception report attached to the
Final
Certification and shall promptly notify the Seller. The Seller
shall correct or
cure any such defect or, if prior to the end of the second
anniversary of the
Closing Date, the Seller may substitute for the related Mortgage
Loan a
Replacement Mortgage Loan, which substitution shall be
accomplished in the
manner and subject to the conditions set forth in Section 2.03
or shall deliver
to the Trustee an Opinion of Counsel addressed to the Trustee to
the effect that
such defect does not materially or adversely affect the
interests of
Certificateholders in such Mortgage Loan within 60 days from the
date of notice
from the Trustee of the defect and if the Seller is unable
within such period to
correct or cure such defect, or to substitute the related
Mortgage Loan with a
Replacement Mortgage Loan or to deliver such opinion, the Seller
shall, subject
to Section 2.03, within 90 days from the notification of the
Trustee, 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
Mortgage,
assignment thereof to the Trustee or intervening assignments
thereof with
evidence of recording thereon, because such documents have not
been returned by
the applicable jurisdiction, the Seller shall not be required to
purchase such
Mortgage Loan, if the Seller delivers such documents promptly
upon receipt, but
in no event later than 360 days after the Closing Date.
Notwithstanding anything
to the contrary, the Trustee shall have no responsibility with
respect to the
custody or review of Mortgage Files held by the related
Custodian pursuant to
the related Custodial Agreement. The Trustee shall have no
liability for the
failure of the Custodians to perform their respective
obligations under the
related Custodial Agreement.
(c) In the event that a Mortgage Loan is purchased by the
Seller
in accordance with subsections 2.02(a) or (b) above or Section
2.03, the Seller
shall remit the applicable Purchase Price to the Master Servicer
for deposit in
the Protected Account and shall provide written notice to the
Trustee detailing
the components of the Purchase Price, signed by a Servicing
Officer. Upon
deposit of the Purchase Price in the Protected Account and upon
receipt of a
Request for Release with respect to such Mortgage Loan, the
Trustee or the
related Custodian will release to the Seller the related
Mortgage File and the
Trustee shall execute and deliver all instruments of transfer or
assignment,
without recourse, representation or warranty furnished to it by
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 deposit
into the Protected Account
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was made. The Trustee shall promptly notify the Rating Agencies
of such
repurchase. The obligation of the Seller to cure, repurchase or
substitute for
any Mortgage Loan as to which a defect in a constituent document
exists shall be
the sole remedies respecting such defect available to the
Certificateholders or
to the Trustee on their behalf.
(d) The Seller shall deliver to the Trustee or the related
Custodian on its behalf, and Trustee agrees to accept the
Mortgage Note and
other documents constituting the Mortgage File with respect to
any Replacement
Mortgage Loan, which the Trustee or the related Custodian will
review as
provided in subsections 2.02(a) and 2.02(b), provided, that the
Closing Date
referred to therein shall instead be the date of delivery of the
Mortgage File
with respect to each Replacement Mortgage Loan.
Section 2.03 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
MASTER
SERVICER AND THE SELLER.
(a) The Master Servicer hereby represents and warrants to
the
Depositor and the Trustee as follows, as of the Closing
Date:
(i) It is duly organized and is validly existing and in
good standing under the laws of the State of Delaware and is
duly
authorized and qualified to transact any and all business
contemplated
by this Agreement to be conducted by it in any state in which
a
Mortgaged Property is located or is otherwise not required
under
applicable law to effect such qualification and, in any event,
is in
compliance with the doing business laws of any such state, to
the
extent necessary to ensure its ability to enforce each Mortgage
Loan,
to service the Mortgage Loans in accordance with the terms of
the
Mortgage Loan Purchase Agreement and to perform any of its
other
obligations under this Agreement in accordance with the terms
hereof or
thereof.
(ii) It has the full corporate power and authority to
service each Mortgage Loan, and to execute, deliver and perform,
and to
enter into and consummate the transactions contemplated by
this
Agreement and has duly authorized by all necessary corporate
action on
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 or thereto, as
applicable,
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, the
servicing of the Mortgage Loans by it under this Agreement,
the
consummation of any other of the transactions contemplated by
this
Agreement, and the fulfillment of or compliance with the terms
hereof
and thereof are in its ordinary course of business and will not
(A)
result in a breach of any term or provision of its charter or
by-laws
or (B) conflict with, result in
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a breach, violation or acceleration of, or result in a 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
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) It is an approved servicer of conventional mortgage
loans for Fannie Mae or Freddie Mac and is a mortgagee approved
by the
Secretary of Housing and Urban Development pursuant to sections
203 and
211 of the National Housing Act.
(v) 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 service the Mortgage Loans or to perform any of
its
other obligations under this Agreement in accordance with the
terms
hereof.
(vi) No consent, approval, authorization or order of any
court or governmental agency or body is required for its
execution,
delivery and performance of, or compliance with, this Agreement
or the
consummation of the transactions contemplated hereby or thereby,
or if
any such consent, approval, authorization or order is required,
it has
obtained the same.
(vii) The Master Servicer has and will fully furnish for
each Group II Loan, in accordance with the Fair Credit Reporting
Act
and its implementing regulations, accurate and complete
information
(i.e., favorable and unfavorable) on its borrower credit files
to
Equifax, Experian, and Trans Union Credit Information Company
(three of
the credit repositories), on a monthly basis.
(b) The Seller hereby represents and warrants to the Depositor
and
the Trustee as follows, as of the Closing Date:
(i) The Seller is duly organized as a Delaware
corporation and is validly existing and in good standing under
the laws
of the State of Delaware and is duly authorized and qualified
to
transact any and all business contemplated by this Agreement to
be
conducted by the Seller in any state in which a Mortgaged
Property is
located or is otherwise not required under applicable law to
effect
such qualification and, in any event, is in compliance with the
doing
business laws of any such state, to the extent necessary to
ensure its
ability to enforce each Mortgage Loan, to sell the Mortgage
Loans in
accordance with the terms of the Mortgage Loan Purchase
Agreement and
to perform any of its other obligations under this Agreement
in
accordance with the terms hereof.
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(ii) The Seller has the full corporate power and authority
to sell each Mortgage Loan, and to execute, deliver and perform,
and to
enter into and consummate the transactions contemplated by
this
Agreement and has duly authorized by all necessary corporate
action on
the part of the Seller the execution, delivery and performance
of this
Agreement, assuming the due authorization, execution and
delivery
hereof by the other parties hereto or thereto, as
applicable,
constitutes a legal, valid and binding obligation of the
Seller,
enforceable against the Seller in accordance with its terms,
except
that (a) the enforceability hereof may be limited by
bankruptcy,
insolvency, moratorium, receivership and other similar laws
relating to
creditors' rights generally and (b) the remedy of specific
performance
and injunctive and other forms of equitable relief may be
subject to
equitable defenses and to the discretion of the court before
which any
proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement by the
Seller, the sale of the Mortgage Loans by the Seller under the
Mortgage
Loan Purchase Agreement, the consummation of any other of
the
transactions contemplated by this Agreement, and the fulfillment
of or
compliance with the terms hereof and thereof are in the ordinary
course
of business of the Seller and will not (A) result in a material
breach
of any term or provision of the charter or by-laws of the Seller
or (B)
conflict with, result in a breach, violation or acceleration of,
or
result in a default under, the terms of any other material
agreement or
instrument to which the Seller is a party or by which it may be
bound,
or (C) constitute a violation of any statute, order or
regulation
applicable to the Seller of any court, regulatory body,
administrative
agency or governmental body having jurisdiction over the Seller;
and
the Seller is not in breach or violation of any material
indenture or
other material agreement or instrument, or in violation of any
statute,
order or regulation of any court, regulatory body,
administrative
agency or governmental body having jurisdiction over it which
breach or
violation may materially impair the Seller's ability to perform
or meet
any of its obligations under this Agreement.
(iv) The Seller is an approved seller of conventional
mortgage loans for Fannie Mae or Freddie Mac and is a
mortgagee
approved by the Secretary of Housing and Urban Development
pursuant to
sections 203 and 211 of the National Housing Act.
(v) No litigation is pending or, to the best of the
Seller's knowledge, threatened, against the Seller that
would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Seller to
sell
the Mortgage Loans or to perform any of its other obligations
under
this Agreement in accordance with the terms hereof or
thereof.
(vi) No consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution,
delivery and performance by the Seller of, or compliance by the
Seller
with, this Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval,
authorization or
order is required, the Seller has obtained the same.
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(vii) With respect to each Mortgage Loan as of the Closing
Date (or such other date as may be specified in Section 7 of
the
Mortgage Loan Purchase Agreement), the Seller hereby remakes
and
restates each of the representations and warranties set forth
in
Section 7 of the Mortgage Loan Purchase Agreement to the
Depositor and
the Trustee to the same extent as if fully set forth herein.
(c) Upon discovery by any of the parties hereto of a breach of
a
representation or warranty set forth in the Mortgage Loan
Purchase Agreement
with respect to the Mortgage Loans that materially and adversely
affects the
interests of the Certificateholders in any Mortgage Loan, the
party discovering
such breach shall give prompt written notice thereof to the
other parties. Any
breach of a representation or warranty contained in clauses
(gg), (hh) and (nn)
through (qq) of Section 7 of the Mortgage Loan Purchase
Agreement in respect of
a Group II Loan, shall be deemed to materially adversely affect
the interests of
the related Certificateholders. The Seller hereby covenants with
respect to the
representations and warranties set forth in the Mortgage Loan
Purchase Agreement
with respect to the Mortgage Loans, that within 90 days of the
discovery of a
breach of any representation or warranty set forth therein that
materially and
adversely affects the interests of the Certificateholders in any
Mortgage Loan,
it shall cure such breach in all material respects and, if such
breach is not so
cured, (i) if such 90 day period expires prior to the second
anniversary of the
Closing Date, remove such Mortgage Loan (a "Deleted Mortgage
Loan") from the
Trust Fund and substitute in its place a Replacement Mortgage
Loan, in the
manner and subject to the conditions set forth in this Section;
or (ii)
repurchase the affected Mortgage Loan or Mortgage Loans from the
Trustee at the
Purchase Price in the manner set forth below; provided that any
such
substitution pursuant to (i) above or repurchase pursuant to
(ii) above shall
not be effected prior to the delivery to the Trustee of an
Opinion of Counsel if
required by Section 2.05 hereof and any such substitution
pursuant to (i) above
shall not be effected prior to the additional delivery to the
Trustee of a
Request for Release. The Trustee shall give prompt written
notice to the parties
hereto of the Seller's failure to cure such breach as set forth
in the preceding
sentence. The Seller shall promptly reimburse the Master
Servicer and the
Trustee for any expenses reasonably incurred by the Master
Servicer or the
Trustee in respect of enforcing the remedies for such breach. To
enable the
Master Servicer to amend the Mortgage Loan Schedule, the Seller
shall, unless it
cures such breach in a timely fashion pursuant to this Section
2.03, promptly
notify the Master Servicer whether it intends either to
repurchase, or to
substitute for, the Mortgage Loan affected by such breach. With
respect to the
representations and warranties with respect to the Mortgage
Loans that are made
to the best of the Seller's knowledge, if it is discovered by
any of the
Depositor, the Master Servicer, the Seller, the Trustee or the
related Custodian
that the substance of such representation and warranty is
inaccurate and such
inaccuracy materially and adversely affects the value of the
related Mortgage
Loan, notwithstanding the Seller's lack of knowledge with
respect to the
substance of such representation or warranty, the Seller shall
nevertheless be
required to cure, substitute for or repurchase the affected
Mortgage Loan in
accordance with the foregoing.
With respect to any Replacement Mortgage Loan or Loans, the
Seller
shall deliver to the Trustee or the related Custodian on its
behalf for the
benefit of the Certificateholders such documents and agreements
as are required
by Section 2.01. No substitution will be made in any calendar
month after the
Determination Date for such month. Scheduled Payments due
with
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respect to Replacement Mortgage Loans in the Due Period related
to the
Distribution Date on which such proceeds are to be distributed
shall not be part
of the Trust Fund and will be retained by the Seller. For the
month of
substitution, distributions to Certificateholders will include
the Scheduled
Payment due on any Deleted Mortgage Loan for the related Due
Period and
thereafter the Seller shall be entitled to retain all amounts
received in
respect of such Deleted Mortgage Loan. The Master Servicer shall
amend the
Mortgage Loan Schedule for the benefit of the Certificateholders
to reflect the
removal of such Deleted Mortgage Loan and the substitution of
the Replacement
Mortgage Loan or Loans and the Master Servicer shall deliver the
amended
Mortgage Loan Schedule to the Trustee and the related Custodian.
Upon such
substitution, the Replacement Mortgage Loan or Loans shall be
subject to the
terms of this Agreement in all respects, and the Seller shall be
deemed to have
made with respect to such Replacement Mortgage Loan or Loans, as
of the date of
substitution, the representations and warranties set forth in
Section 7 of the
Mortgage Loan Purchase Agreement with respect to such Mortgage
Loan. Upon any
such substitution and the deposit into the Protected Account of
the amount
required to be deposited therein in connection with such
substitution as
described in the following paragraph and receipt by the Trustee
of a Request for
Release for such Mortgage Loan, the Trustee or the related
Custodian shall
release to the Seller the Mortgage File relating to such Deleted
Mortgage Loan
and held for the benefit of the Certificateholders and the
Trustee shall execute
and deliver at the Seller's direction such instruments of
transfer or assignment
as have been prepared by the Seller, in each case without
recourse,
representation or warranty as shall be necessary to vest in the
Seller, or its
respective designee, title to the Trustee's interest in any
Deleted Mortgage
Loan substituted for pursuant to this Section 2.03.
For any month in which the Seller substitutes one or more
Replacement
Mortgage Loans for a Deleted Mortgage Loan, the Master Servicer
will determine
the amount (if any) by which the aggregate principal balance of
all the
Replacement Mortgage Loans as of the date of substitution is
less than the
Stated Principal Balance (after application of the principal
portion of the
Scheduled Payment due in the month of substitution) of such
Deleted Mortgage
Loan. An amount equal to the aggregate of such deficiencies,
described in the
preceding sentence for any Distribution Date (such amount, the
"Substitution
Adjustment Amount") shall be deposited into the Protected
Account, by the Seller
delivering such Replacement Mortgage Loan on the Determination
Date for the
Distribution Date relating to the Prepayment Period during which
the related
Mortgage Loan became required to be purchased or replaced
hereunder.
In the event that the Seller shall have repurchased a Mortgage
Loan,
the Purchase Price therefor shall be deposited into the
Protected Account, on
the Determination Date for the Distribution Date in the month
following the
month during which the Seller became obligated to repurchase or
replace such
Mortgage Loan and upon such deposit of the Purchase Price, the
delivery of an
Opinion of Counsel if required by Section 2.05 and the receipt
of a Request for
Release, the Trustee or the related Custodian shall release the
related Mortgage
File held for the benefit of the Certificateholders to the
Seller, and the
Trustee shall execute and deliver at such Person's direction the
related
instruments of transfer or assignment prepared by the Seller, in
each case
without recourse, as shall be necessary to transfer title from
the Trustee for
the benefit of the Certificateholders and transfer the Trustee's
interest to the
Seller to any Mortgage Loan purchased pursuant to this Section
2.03. It is
understood and agreed that the obligation under this Agreement
of the Seller to
cure, repurchase or replace any Mortgage Loan as to which a
breach
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has occurred and is continuing shall constitute the sole
remedies against the
Seller respecting such breach available to the
Certificateholders, the Depositor
or the Trustee.
(d) The representations and warranties set forth in this
Section
2.03 hereof shall survive delivery of the respective Mortgage
Loans and Mortgage
Files to the Trustee or the related Custodian for the benefit of
the
Certificateholders.
Section 2.04 REPRESENTATIONS AND WARRANTIES OF THE
DEPOSITOR.
The Depositor hereby represents and warrants to the Master
Servicer and
the Trustee as follows, as of the date hereof and as of the
Closing Date:
(i) The Depositor is duly organized and is validly
existing as a limited liability company in good standing under
the laws
of the State of Delaware and has full power and authority
necessary to
own or hold its properties and to conduct its business as now
conducted
by it and to enter into and perform its obligations under
this
Agreement.
(ii) The Depositor has the full 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, assuming the due
authorization,
execution and delivery hereof by the other parties hereto,
constitutes
a legal, valid and binding obligation of the Depositor,
enforceable
against the Depositor in accordance with its terms, subject, as
to
enforceability, to (i) bankruptcy, insolvency,
reorganization,
moratorium and other similar laws affecting creditors' rights
generally
and (ii) general principles of equity, regardless of whether
enforcement is sought in a proceeding in equity or at law.
(iii) The execution and delivery of this Agreement by the
Depositor, the consummation of the transactions contemplated by
this
Agreement, and the fulfillment of or compliance with the terms
hereof
and thereof are in the ordinary course of business of the
Depositor and
will not (A) result in a material breach of any term or
provision of
the certificate of formation or limited liability company
agreement of
the Depositor or (B) conflict with, result in a breach,
violation or
acceleration of, or result in a default under, the terms of any
other
material agreement or instrument to which the Depositor is a
party or
by which it may be bound or (C) constitute a violation of any
statute,
order or regulation applicable to the Depositor of any
court,
regulatory body, administrative agency or governmental body
having
jurisdiction over the Depositor; and the Depositor is not in
breach or
violation of any material indenture or other material agreement
or
instrument, or in violation of any statute, order or regulation
of any
court, regulatory body, administrative agency or governmental
body
having jurisdiction over it which breach or violation may
materially
impair the Depositor's ability to perform or meet any of its
obligations under this Agreement.
(iv) No litigation is pending, or, to the best of the
Depositor's knowledge, threatened, against the Depositor that
would
materially and adversely affect the
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execution, delivery or enforceability of this Agreement or the
ability
of the Depositor to perform its obligations under this Agreement
in
accordance with the terms hereof or thereof.
(v) No consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution,
delivery and performance by the Depositor of, or compliance by
the
Depositor with this Agreement or the consummation of the
transactions
contemplated hereby or thereby, or if any such consent,
approval,
authorization or order is required, the Depositor has obtained
the
same.
The Depositor hereby represents and warrants to the Trustee as
of the
Closing Date, following the transfer of the Mortgage Loans to it
by the Seller,
the Depositor had good title to the Mortgage Loans and the
related Mortgage
Notes were subject to no offsets, claims, defenses or
counterclaims.
It is understood and agreed that the representations and
warranties set
forth in this Section 2.04 shall survive delivery of the
Mortgage Files to the
Trustee or the related Custodian for the benefit of the
Certificateholders. Upon
discovery by the Depositor or the Trustee of a breach of such
representations
and warranties, the party discovering such breach shall give
prompt written
notice to the others, to each Rating Agency.
Section 2.05 DELIVERY OF OPINION OF COUNSEL IN CONNECTION
WITH
SUBSTITUTIONS AND REPURCHASES.
(a) Notwithstanding any contrary provision of this Agreement,
with
respect to any Mortgage Loan that is not in default or as to
which default is
not imminent, no repurchase or substitution pursuant to Sections
2.02 or 2.03
shall be made unless the Seller delivers to the Trustee an
Opinion of Counsel,
addressed to the Trustee, to the effect that such repurchase or
substitution
would not (i) result in the imposition of the tax on "prohibited
transactions"
of REMIC I, REMIC II, REMIC III or REMIC IV or contributions
after the Closing
Date, as defined in sections 860F(a)(2) and 860G(d) of the Code,
respectively or
(ii) cause any of REMIC I, REMIC II, REMIC III or REMIC IV to
fail to qualify as
a REMIC at any time that any Certificates are outstanding. Any
Mortgage Loan as
to which repurchase or substitution was delayed pursuant to this
paragraph shall
be repurchased or the substitution therefor shall occur (subject
to compliance
with Sections 2.02 or 2.03) upon the earlier of (a) the
occurrence of a default
or imminent default with respect to such Mortgage Loan and (b)
receipt by the
Trustee of an Opinion of Counsel addressed to the Trustee to the
effect that
such repurchase or substitution, as applicable, will not result
in the events
described in clause (i) or clause (ii) of the preceding
sentence.
(b) Upon discovery by the Depositor, the Seller or the
Master
Servicer that any Mortgage Loan does not constitute a "qualified
mortgage"
within the meaning of section 860G(a)(3) of the Code, the party
discovering such
fact shall promptly (and in any event within 5 Business Days of
discovery) give
written notice thereof to the other parties and the Trustee. In
connection
therewith, the Trustee shall require the Seller, at the Seller's
option, to
either (i) substitute, if the conditions in Section 2.03 with
respect to
substitutions are satisfied, a
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Replacement Mortgage Loan for the affected Mortgage Loan, or
(ii) repurchase the
affected Mortgage Loan within 90 days of such discovery in the
same manner as it
would a Mortgage Loan for a breach of representation or warranty
in accordance
with Section 2.03. The Trustee shall reconvey to the Seller the
Mortgage Loan to
be released pursuant hereto (and the related Custodian shall
deliver the related
Mortgage File) in the same manner, and on the same terms and
conditions, as it
would a Mortgage Loan repurchased for breach of a representation
or warranty in
accordance with Section 2.03.
Section 2.06 COUNTERSIGNATURE AND DELIVERY OF CERTIFICATES.
(a) The Trustee acknowledges the sale, transfer and assignment
to
it of the Trust Fund and, concurrently with such transfer and
assignment, has
executed, countersigned and delivered, to or upon the order of
the Depositor,
the Certificates in authorized denominations evidencing the
entire ownership of
the Trust Fund. The Trustee agrees to hold the Trust Fund and
exercise the
rights referred to above for the benefit of all present and
future Holders of
the Certificates and to perform the duties set forth in this
Agreement in
accordance with its terms.
(b) The Depositor concurrently with the execution and
delivery
hereof, does hereby transfer, assign, set over and otherwise
convey in trust to
the Trustee without recourse all the right, title and interest
of the Depositor
in and to the REMIC I Regular Interests, and the other assets of
REMIC II for
the benefit of the holders of the REMIC II Regular Interests and
the Class R-2
Certificates. The Trustee acknowledges receipt of the REMIC I
Regular Interests
(which are uncertificated) and the other assets of REMIC II and
declares that it
holds and will hold the same in trust for the exclusive use and
benefit of the
holders of the REMIC II Regular Interests and the Class R-2
Certificates.
(c) The Depositor, concurrently with the execution and
delivery
hereof, does hereby transfer, assign, set over and otherwise
convey in trust to
the Trustee without recourse all the right, title and interest
of the Depositor
in and to the Class CE Interest for the benefit of the holders
of the REMIC III
Certificates. The Trustee acknowledges receipt of the Class CE
Interest (which
are uncertificated) and declares that it holds and will hold the
same in trust
for the exclusive use and benefit of the holders of the REMIC
III Certificates.
(d) The Depositor, concurrently with the execution and
delivery
hereof, does hereby transfer, assign, set over and otherwise
convey in trust to
the Trustee without recourse all the right, title and interest
of the Depositor
in and to the Class P Interest for the benefit of the holders of
the REMIC IV
Certificates. The Trustee acknowledges receipt of the Class P
Interest (which
are uncertificated) and declares that it holds and will hold the
same in trust
for the exclusive use and benefit of the holders of the REMIC IV
Certificates.
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ARTICLE III
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 3.01 THE MASTER SERVICER TO ACT AS MASTER SERVICER.
The Master Servicer shall service and administer the Mortgage
Loans in
accordance with customary and usual standards of practice of
prudent mortgage
loan servicers in the respective states in which the related
Mortgaged
Properties are located. In connection with such servicing and
administration,
the Master Servicer shall have full power and authority, acting
alone and/or
through subservicers as provided in Section 3.03, to do or cause
to be done any
and all things that it may deem necessary or desirable in
connection with such
servicing and administration, including but not limited to, the
power and
authority, subject to the terms hereof (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
related Mortgaged
Property and assumptions of the Mortgage Notes and related
Mortgages (but only
in the manner provided herein), (iii) to collect any Insurance
Proceeds and
other Liquidation Proceeds or Subsequent Recoveries, and (iv)
subject to Section
3.09, to effectuate foreclosure or other conversion of the
ownership of the
Mortgaged Property securing any Mortgage Loan; provided that the
Master Servicer
shall take no action that is inconsistent with or prejudices the
interests of
the Trust Fund or the Certificateholders in any Mortgage Loan or
the rights and
interests of the Depositor or the Trustee under this
Agreement.
Without limiting the generality of the foregoing, the Master
Servicer,
in its own name or in the name of the Trust, the Depositor or
the Trustee, is
hereby authorized and empowered by the Trust, the Depositor and
the Trustee,
when the Master Servicer believes it appropriate in its
reasonable judgment, to
execute and deliver, on behalf of the Trustee, the Depositor,
the
Certificateholders or any of them, any and all instruments of
satisfaction or
cancellation, or of partial or full release or discharge and all
other
comparable instruments, with respect to the Mortgage Loans, and
with respect to
the Mortgaged Properties held for the benefit of the
Certificateholders. The
Master Servicer shall prepare and deliver to the Depositor
and/or the Trustee
such documents requiring execution and delivery by any or all of
them as are
necessary or appropriate to enable the Master Servicer to
service and administer
the Mortgage Loans. Upon receipt of such documents, the
Depositor and/or the
Trustee shall execute such documents and deliver them to the
Master Servicer.
In accordance with the standards of the first paragraph of this
Section
3.01, the Master Servicer shall advance or cause to be advanced
funds as
necessary for the purpose of effecting the payment of taxes and
assessments on
the Mortgaged Properties, which advances shall be reimbursable
in the first
instance from related collections from the Mortgagors pursuant
to Section 5.03,
and further as provided in Section 5.02. All costs incurred by
the Master
Servicer, if any, in effecting the timely payments of taxes and
assessments on
the Mortgaged Properties and related insurance premiums shall
not, for the
purpose of calculating monthly distributions to the
Certificateholders, be added
to the Stated Principal Balance under the related Mortgage
Loans,
notwithstanding that the terms of such Mortgage Loans so
permit.
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Section 3.02 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS.
(a) Except as otherwise provided in this Section 3.02, when
any
property subject to a Mortgage has been or is about to be
conveyed by the
Mortgagor, the Master Servicer shall to the extent that it has
knowledge of such
conveyance, enforce any due-on-sale clause contained in any
Mortgage Note or
Mortgage, to the extent permitted under applicable law and
governmental
regulations, but only to the extent that such enforcement will
not adversely
affect or jeopardize coverage under any Required Insurance
Policy.
Notwithstanding the foregoing, the Master Servicer is not
required to exercise
such rights with respect to a Mortgage Loan if the Person to
whom the related
Mortgaged Property has been conveyed or is proposed to be
conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage
related thereto
and the consent of the mortgagee under such Mortgage Note or
Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a
condition to
such transfer. In the event that the Master Servicer is
prohibited by law from
enforcing any such due-on-sale clause, or if coverage under any
Required
Insurance Policy would be adversely affected, or if
nonenforcement is otherwise
permitted hereunder, the Master Servicer is authorized, subject
to Section
3.02(b), to take or enter into an assumption and modification
agreement from or
with the person to whom such property has been or is about to be
conveyed,
pursuant to which such person becomes liable under the Mortgage
Note and, unless
prohibited by applicable state law, the Mortgagor remains liable
thereon,
provided that the Mortgage Loan shall continue to be covered (if
so covered
before the Master Servicer enters such agreement) by the
applicable Required
Insurance Policies. The Master Servicer, subject to Section
3.02(b), is also
authorized with the prior approval of the insurers under any
Required Insurance
Policies to enter into a substitution of liability agreement
with such Person,
pursuant to which the original Mortgagor is released from
liability and such
Person is substituted as Mortgagor and becomes liable under the
Mortgage Note.
Notwithstanding the foregoing, the Master Servicer shall not be
deemed to be in
default under this Section 3.02(a) by reason of any transfer or
assumption that
the Master Servicer reasonably believes it is restricted by law
from preventing.
(b) Subject to the Master Servicer's duty to enforce any
due-on-sale clause to the extent set forth in Section 3.02(a),
in any case in
which a Mortgaged Property has been conveyed to a Person by a
Mortgagor, and
such Person is to enter into an assumption agreement or
modification agreement
or supplement to the Mortgage Note or Mortgage that requires the
signature of
the Trustee, or if an instrument of release signed by the
Trustee is required
releasing the Mortgagor from liability on the related Mortgage
Loan, the Master
Servicer shall prepare and deliver or cause to be prepared and
delivered to the
Trustee for signature and shall direct, in writing, the Trustee
to execute the
assumption agreement with the Person to whom the Mortgaged
Property is to be
conveyed and such modification agreement or supplement to the
Mortgage Note or
Mortgage or other instruments as are reasonable or necessary to
carry out the
terms of the Mortgage Note or Mortgage or otherwise to comply
with any
applicable laws regarding assumptions or the transfer of the
Mortgaged Property
to such Person. In connection with any such assumption, no
material term of the
Mortgage Note (including, but not limited to, the Mortgage Rate,
the amount of
the Scheduled Payment and any other term affecting the amount or
timing of
payment on the Mortgage Loan) may be changed. In addition, the
substitute
Mortgagor and the Mortgaged Property must be acceptable to the
Master Servicer
in accordance with its servicing standards as then in effect.
The Master
Servicer shall notify the Trustee that
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any such substitution or assumption agreement has been completed
by forwarding
to the Trustee the original of such substitution or assumption
agreement, which
in the case of the original shall be added to the related
Mortgage File and
shall, for all purposes, be considered a part of such Mortgage
File to the same
extent as all other documents and instruments constituting a
part thereof. Any
fee collected by the Master Servicer for entering into an
assumption or
substitution of liability agreement will be retained by the
Master Servicer as
additional servicing compensation.
Section 3.03 SUBSERVICERS.
The Master Servicer shall perform all of its servicing
responsibilities
hereunder or may cause a subservicer to perform any such
servicing
responsibilities on its behalf, but the use by the Master
Servicer of a
subservicer shall not release the Master Servicer from any of
its obligations
hereunder and the Master Servicer shall remain responsible
hereunder for all
acts and omissions of each subservicer as fully as if such acts
and omissions
were those of the Master Servicer. The Master Servicer shall pay
all fees of
each subservicer from its own funds, and a subservicer's fee
shall not exceed
the Servicing Fee payable to the Master Servicer hereunder.
At the cost and expense of the Master Servicer, without any
right of
reimbursement from its Protected Account, the Master Servicer
shall be entitled
to terminate the rights and responsibilities of a subservicer
and arrange for
any servicing responsibilities to be performed by a successor
subservicer;
provided, however, that nothing contained herein shall be deemed
to prevent or
prohibit the Master Servicer, at the Master Servicer's option,
from electing to
service the related Mortgage Loans itself. In the event that the
Master
Servicer's responsibilities and duties under this Agreement are
terminated
pursuant to Section 8.03, the Master Servicer shall at its own
cost and expense
terminate the rights and responsibilities of each subservicer
effective as of
the date of termination of the Master Servicer. The Master
Servicer shall pay
all fees, expenses or penalties necessary in order to terminate
the rights and
responsibilities of each subservicer from the Master Servicer's
own funds
without reimbursement from the Trust Fund.
Notwithstanding the foregoing, the Master Servicer shall not
be
relieved of its obligations hereunder and shall be obligated to
the same extent
and under the same terms and conditions as if it alone were
servicing and
administering the Mortgage Loans. The Master Servicer shall be
entitled to enter
into an agreement with a subservicer for indemnification of the
Master Servicer
by the subservicer and nothing contained in this Agreement shall
be deemed to
limit or modify such indemnification.
Any subservicing agreement and any other transactions or
services
relating to the Mortgage Loans involving a subservicer shall be
deemed to be
between such subservicer and the Master Servicer alone, and the
Trustee shall
not have any obligations, duties or liabilities with respect to
such subservicer
including any obligation, duty or liability of the Trustee to
pay such
subservicer's fees and expenses. Each subservicing agreement
shall provide that
such agreement may be assumed or terminated without cause or
penalty by the
Trustee or other Successor Master Servicer in the event the
Master Servicer is
terminated in accordance with this Agreement. For purposes of
remittances to the
Trustee pursuant to this Agreement, the Master Servicer shall
be
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deemed to have received a payment on a Mortgage Loan when a
subservicer has
received such payment.
Section 3.04 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF THE
MASTER
SERVICER TO BE HELD FOR TRUSTEE.
Notwithstanding any other provisions of this Agreement, the
Master
Servicer shall transmit to the Trustee or the related Custodian
on behalf of the
Trustee as required by this Agreement all documents and
instruments in respect
of a Mortgage Loan coming into the possession of the Master
Servicer from time
to time and shall account fully to the Trustee for any funds
received by the
Master Servicer or that otherwise are collected by the Master
Servicer as
Liquidation Proceeds, Insurance Proceeds or Subsequent
Recoveries in respect of
any such Mortgage Loan. 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 Subsequent Recoveries, including but not
limited to, any
funds on deposit in the Protected Account, shall be held by the
Master Servicer
for and on behalf of the Trustee and shall be and remain the
sole and exclusive
property of the Trustee, subject to the applicable provisions of
this Agreement.
The Master Servicer also agrees that it shall not create, incur
or subject any
Mortgage File or any funds that are deposited in the Protected
Account or in any
Escrow Account, or any funds that otherwise are or may become
due or payable to
the Trustee for the benefit of the Certificateholders, to any
claim, lien,
security interest, judgment, levy, writ of attachment or other
encumbrance, or
assert by legal action or otherwise any claim or right of set
off against any
Mortgage File or any funds collected on, or in connection with,
a Mortgage Loan,
except, however, that the Master Servicer shall be entitled to
set off against
and deduct from any such funds any amounts that are properly due
and payable to
the Master Servicer under this Agreement.
Section 3.05 MAINTENANCE OF HAZARD INSURANCE.
The Master Servicer shall cause to be maintained, for each
Mortgage
Loan, hazard insurance on buildings upon, or comprising part of,
the Mortgaged
Property against loss by fire, hazards of extended coverage and
such other
hazards as are customary in the area where the related Mortgaged
Property is
located with an insurer which is licensed to do business in the
state where the
related Mortgaged Property is located. Each such policy of
standard hazard
insurance shall contain, or have an accompanying endorsement
that contains, a
standard mortgagee clause. The Master Servicer shall also cause
flood insurance
to be maintained on property acquired upon foreclosure or deed
in lieu of
foreclosure of any Mortgage Loan, to the extent described below.
Pursuant to
Section 4.01, any amounts collected by the Master Servicer under
any such
policies (other than the amounts to be applied to the
restoration or repair of
the related Mortgaged Property or property thus acquired or
amounts released to
the Mortgagor in accordance with the Master Servicer's normal
servicing
procedures) shall be deposited in the Protected Account. Any
cost incurred by
the Master Servicer in maintaining any such insurance shall not,
for the purpose
of calculating monthly distributions to the Certificateholders
or remittances to
the Trustee for their benefit, be added to the principal balance
of the Mortgage
Loan, notwithstanding that the terms of the Mortgage Loan so
permit. Such costs
shall be recoverable by the Master Servicer out of late payments
by the related
Mortgagor or out of Liquidation Proceeds to the extent
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permitted by Section 4.02. It is understood and agreed that no
earthquake or
other additional insurance is to be required of any Mortgagor or
maintained on
property acquired in respect of a Mortgage other than pursuant
to such
applicable laws and regulations as shall at any time be in force
and as shall
require such additional insurance. If the Mortgaged Property is
located at the
time of origination of the Mortgage Loan in a federally
designated special flood
hazard area and such area is participating in the national flood
insurance
program, the Master Servicer shall cause flood insurance to be
maintained with
respect to such Mortgage Loan. Such flood insurance shall be in
an amount equal
to the least of (i) the Stated Principal Balance of the related
Mortgage Loan,
(ii) minimum amount required to compensate for damage or loss on
a replacement
cost basis or (iii) the maximum amount of such insurance
available for the
related Mortgaged Property under the Flood Disaster Protection
Act of 1973, as
amended.
In the event that the Master Servicer shall obtain and maintain
a
blanket policy insuring against hazard losses on all of the
Mortgage Loans, it
shall conclusively be deemed to have satisfied its obligations
as set forth in
the first sentence of this Section 3.05, it being understood and
agreed that
such policy may contain a deductible clause on terms
substantially equivalent to
those commercially available and maintained by comparable
servicers. If such
policy contains a deductible clause, the Master Servicer shall,
in the event
that there shall not have been maintained on the related
Mortgaged Property a
policy complying with the first sentence of this Section 3.05,
and there shall
have been a loss that would have been covered by such policy,
deposit in the
Protected Account the amount not otherwise payable under the
blanket policy
because of such deductible clause. Such deposit shall be from
the Master
Servicer's own funds without reimbursement therefor. In
connection with its
activities as administrator and servicer of the Mortgage Loans,
the Master
Servicer agrees to present, on behalf of itself, the Depositor
and the Trustee
for the benefit of the Certificateholders claims under any such
blanket policy.
Section 3.06 PRESENTMENT OF CLAIMS AND COLLECTION OF
PROCEEDS.
The Master Servicer shall prepare and present on behalf of the
Trustee
and the Certificateholders all claims under the Insurance
Policies and take such
actions (including the negotiation, settlement, compromise or
enforcement of the
insured's claim) as shall be necessary to realize recovery under
such Insurance
Policies. Any proceeds disbursed to the Master Servicer in
respect of such
Insurance Policies shall be promptly deposited in the Protected
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 3.07 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE
POLICIES.
(a) The Master Servicer shall not take any action that would
result in noncoverage under any applicable Primary Mortgage
Insurance Policy of
any loss which, but for the actions of the Master Servicer would
have been
covered thereunder. The Master Servicer shall use its best
efforts 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. The Master Servicer shall not cancel or refuse to renew
any such Primary
Mortgage Insurance Policy
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that is in effect at the date of the initial issuance of the
Mortgage Note and
is required to be kept in force hereunder.
(b) The Master Servicer agrees to present on behalf of the
Trustee, 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,
any amounts
collected by the Master Servicer under any Primary Mortgage
Insurance Policies
shall be deposited in the Protected Account, subject to
withdrawal pursuant to
Section 4.02 hereof.
Section 3.08 FIDELITY BOND, ERRORS AND OMISSIONS INSURANCE.
The Master Servicer shall maintain, at its own expense, a
blanket
fidelity bond and an errors and omissions insurance policy, with
broad coverage
with responsible companies on all officers, employees or other
persons acting in
any capacity with regard to the Mortgage Loans and who handle
funds, money,
documents and papers relating to the Mortgage Loans. The
fidelity bond and
errors and omissions insurance shall be in the form of the
Mortgage Banker's
Blanket Bond and shall protect and insure the Master Servicer
against losses,
including forgery, theft, embezzlement, fraud, errors and
omissions and
negligent acts of such persons. Such fidelity bond shall also
protect and insure
the Master Servicer against losses in connection with the
failure to maintain
any insurance policies required pursuant to this Agreement and
the release or
satisfaction of a Mortgage Loan which is not in accordance with
Accepted
Servicing Practices. No provision of this Section 3.08 requiring
the fidelity
bond and errors and omissions insurance shall diminish or
relieve the Master
Servicer from its duties and obligations as set forth in this
Agreement. The
minimum coverage under any such bond and insurance policy shall
be at least
equal to the corresponding amounts required by Accepted
Servicing Practices. The
Master Servicer shall deliver to the Trustee a certificate from
the surety and
the insurer as to the existence of the fidelity bond and errors
and omissions
insurance policy and shall obtain a statement from the surety
and the insurer
that such fidelity bond or insurance policy shall in no event be
terminated or
materially modified without thirty days prior written notice to
the Trustee. The
Master Servicer shall notify the Trustee within five business
days of receipt of
notice that such fidelity bond or insurance policy will be, or
has been,
materially modified or terminated. The Trustee for the benefit
of the
Certificateholders must be named as loss payees on the fidelity
bond and as
additional insured on the errors and omissions policy.
Section 3.09 REALIZATION UPON DEFAULTED MORTGAGE LOANS;
DETERMINATION
OF EXCESS LIQUIDATION PROCEEDS AND REALIZED LOSSES; REPURCHASES
OF CERTAIN
MORTGAGE LOANS.
(a) The Master Servicer shall use reasonable efforts to
foreclose
upon or otherwise comparably convert the ownership of 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. In
connection with such foreclosure or other conversion, the Master
Servicer shall
follow such practices and procedures as it shall deem necessary
or advisable and
as shall be normal and usual in its general mortgage servicing
activities and
the requirements of the insurer under any Required Insurance
Policy; provided
that the Master
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Servicer shall not be required to expend its own funds in
connection with any
foreclosure or towards the restoration of any property unless it
shall determine
(i) that such restoration and/or foreclosure will increase the
proceeds of
liquidation of the Mortgage Loan after reimbursement to itself
of such expenses
and (ii) that such expenses will be recoverable to it through
Insurance
Proceeds, Liquidation Proceeds (respecting which it shall have
priority for
purposes of withdrawals from the Protected Account pursuant to
Section 4.02). If
the Master Servicer reasonably believes that Liquidation
Proceeds with respect
to any such Mortgage Loan would not be increased as a result of
such foreclosure
or other action, such Mortgage Loan will be charged-off and will
become a
Liquidated Loan. The Master Servicer will give notice of any
such charge-off to
the Trustee. The Master Servicer shall be responsible for all
other costs and
expenses incurred by it in any such proceedings; provided that
such costs and
expenses shall be Servicing Advances and that it shall be
entitled to
reimbursement thereof from the proceeds of liquidation of the
related Mortgaged
Property, as contemplated in Section 4.02. If the Master
Servicer has knowledge
that a Mortgaged Property that the Master Servicer is
contemplating acquiring in
foreclosure or by deed- in-lieu of foreclosure is located within
a one-mile
radius of any site with environmental or hazardous waste risks
known to the
Master Servicer, the Master Servicer will, prior to acquiring
the Mortgaged
Property, consider such risks and only take action in accordance
with its
established environmental review procedures.
With respect to any REO Property, the deed or certificate of
sale shall
be taken in the name of the Trustee for the benefit of the
Certificateholders
(or the Trustee's nominee on behalf of the Certificateholders).
The Trustee's
name shall be placed on the title to such REO Property solely as
the Trustee
hereunder and not in its individual capacity. The Master
Servicer shall ensure
that the title to such REO Property references this Agreement
and the Trustee's
capacity hereunder. Pursuant to its efforts to sell such REO
Property, the
Master Servicer shall either itself or through an agent selected
by the Master
Servicer protect and conserve such REO Property in the same
manner and to such
extent as is customary in the locality where such REO Property
is located and
may, incident to its conservation and protection of the
interests of the
Certificateholders, rent the same, or any part thereof, as the
Master Servicer
deems to be in the best interest of the Master Servicer and
the
Certificateholders for the period prior to the sale of such REO
Property. The
Master Servicer shall prepare for and deliver to the Trustee a
statement with
respect to each REO Property that has been rented showing the
aggregate rental
income received and all expenses incurred in connection with the
management and
maintenance of such REO Property at such times as is necessary
to enable the
Trustee to comply with the reporting requirements of the REMIC
Provisions. The
net monthly rental income, if any, from such REO Property shall
be deposited in
the Protected Account no later than the close of business on
each Determination
Date. The Master Servicer shall perform the tax reporting and
withholding
related to foreclosures, abandonments and cancellation of
indebtedness income as
specified by Sections 1445, 6050J and 6050P of the Code by
preparing and filing
such tax and information returns, as may be required.
In the event that the Trust Fund acquires any Mortgaged Property
as
aforesaid or otherwise in connection with a default or imminent
default on a
Mortgage Loan, the Master Servicer shall dispose of such
Mortgaged Property
prior to three years after its acquisition by the Trust Fund or,
at the expense
of the Trust Fund, request more than 60 days prior to the day on
which such
three-year period would otherwise expire, an extension of the
three-year grace
period
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unless the Trustee shall have been supplied with an Opinion of
Counsel addressed
to the Trustee (such opinion not to be an expense of the
Trustee) to the effect
that the holding by the Trust Fund of such Mortgaged Property
subsequent to such
three-year period will not result in the imposition of taxes on
"prohibited
transactions" of REMIC I, REMIC II, REMIC III or REMIC IV as
defined in section
860F of the Code or cause any of REMIC I, REMIC II, REMIC III or
REMIC IV to
fail to qualify as a REMIC at any time that any Certificates are
outstanding, in
which case the Trust Fund may continue to hold such Mortgaged
Property (subject
to any conditions contained in such Opinion of Counsel).
Notwithstanding any
other provision of this Agreement, no Mortgaged Property
acquired by the Trust
Fund shall be rented (or allowed to continue to be rented) or
otherwise used for
the production of income by or on behalf of the Trust Fund in
such a manner or
pursuant to any terms that would (i) cause such Mortgaged
Property to fail to
qualify as "foreclosure property" within the meaning of section
860G(a)(8) of
the Code or (ii) subject any of REMIC I, REMIC II, REMIC III or
REMIC IV to the
imposition of any federal, state or local income taxes on the
income earned from
such Mortgaged Property under section 860G(c) of the Code or
otherwise, unless
the Master Servicer has agreed to indemnify and hold harmless
the Trust Fund
with respect to the imposition of any such taxes.
The decision of the Master Servicer to foreclose on a
defaulted
Mortgage Loan shall be subject to a determination by the Master
Servicer that
the proceeds of such foreclosure would exceed the costs and
expenses of bringing
such a proceeding. The income earned from the management of any
Mortgaged
Properties acquired through foreclosure or other judicial
proceeding, net of
reimbursement to the Master Servicer for expenses incurred
(including any
property or other taxes) in connection with such management and
net of
unreimbursed Servicing Fees, Advances, Servicing Advances and
any management fee
paid or to be paid with respect to the management of such
Mortgaged Property,
shall be applied to the payment of principal of, and interest
on, the related
defaulted Mortgage Loans (with interest accruing as though such
Mortgage Loans
were still current) and all such income shall be deemed, for all
purposes in the
Agreement, to be payments on account of principal and interest
on the related
Mortgage Notes and shall be deposited into the Protected
Account. To the extent
the income received during a Prepayment Period is in excess of
the amount
attributable to amortizing principal and accrued interest at the
related
Mortgage Rate on the related Mortgage Loan, such excess shall be
considered to
be a partial Principal Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage
Loan, net
of any payment to the Master Servicer as provided above, shall
be deposited in
the Protected Account on the next succeeding Determination Date
following
receipt thereof for distribution on the related Distribution
Date, except that
any Excess Liquidation Proceeds shall be retained by the Master
Servicer as
additional servicing compensation.
The proceeds of any Liquidated Loan, as well as any recovery
resulting
from a partial collection of Liquidation Proceeds or any income
from an REO
Property, will be applied in the following order of priority:
first, to
reimburse the Master Servicer for any related unreimbursed
Servicing Advances
and Servicing Fees, pursuant to Section 4.02 or this Section
3.09; second, to
reimburse the Master Servicer for any unreimbursed Advances,
pursuant to Section
4.02 or this Section 3.09; third, to accrued and unpaid interest
(to the extent
no Advance has been made for such amount) on the Mortgage Loan
or related REO
Property, at the Net Mortgage Rate to the
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first day of the month in which such amounts are required to be
distributed; and
fourth, as a recovery of principal of the Mortgage Loan.
(b) On each Determination Date, the Master Servicer shall
determine the respective aggregate amounts of Excess Liquidation
Proceeds and
Realized Losses, if any, for the related Prepayment Period.
(c) The Master Servicer has no intent to foreclose on any
Mortgage
Loan based on the delinquency characteristics as of the Closing
Date; provided,
that the foregoing does not prevent the Master Servicer from
initiating
foreclosure proceedings on any date hereafter if the facts and
circumstances of
such Mortgage Loans including delinquency characteristics in the
Master
Servicer's discretion so warrant such action.
Section 3.10 SERVICING COMPENSATION.
As compensation for its activities hereunder, the Master
Servicer shall
be entitled to retain or withdraw from the Protected Account out
of each payment
of interest on a Mortgage Loan included in the Trust Fund an
amount equal to the
Servicing Fee.
Additional servicing compensation in the form of any Excess
Liquidation
Proceeds, assumption fees, late payment charges, all income and
gain net of any
losses realized from Permitted Investments with respect to funds
in or credited
to the Protected Account shall be retained by the Master
Servicer to the extent
not required to be deposited in the Protected Account pursuant
to Section 4.02.
The Master Servicer shall be required to pay all expenses
incurred by it in
connection with its servicing activities hereunder (including
payment of any
premiums for hazard insurance, as required by Section 3.05 and
maintenance of
the other forms of insurance coverage required by Section 3.07)
and shall not be
entitled to reimbursement therefor except as specifically
provided in Section
4.02.
Section 3.11 REO PROPERTY.
(a) In the event the Trust Fund acquires ownership of any
REO
Property in respect of any related Mortgage Loan, the deed or
certificate of
sale shall be issued to the Trustee, or to its nominee, on
behalf of the related
Certificateholders. The Master Servicer shall sell any REO
Property as
expeditiously as possible and in accordance with the provisions
of this
Agreement. Pursuant to its efforts to sell such REO Property,
the Master
Servicer shall protect and conserve such REO Property in the
manner and to the
extent required herein, in accordance with the REMIC
Provisions.
(b) The Master Servicer shall deposit all funds collected
and
received in connection with the operation of any REO Property
into the Protected
Account.
(c) The Master Servicer, upon the final disposition of any
REO
Property, shall be entitled to reimbursement for any related
unreimbursed
Advances, unreimbursed Servicing Advances or Servicing Fees from
Liquidation
Proceeds received in connection with the final disposition of
such REO Property;
provided, that any such unreimbursed Advances or Servicing Fees
as well as any
unpaid Servicing Fees may be reimbursed or paid, as the case may
be, prior
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to final disposition, out of any net rental income or other net
amounts derived
from such REO Property.
Section 3.12 LIQUIDATION REPORTS.
Upon the foreclosure of any Mortgaged Property or the
acquisition
thereof by the Trust Fund pursuant to a deed-in-lieu of
foreclosure, the Master
Servicer shall submit a liquidation report to the Trustee
containing such
information as shall be mutually acceptable to the Master
Servicer and the
Trustee with respect to such Mortgaged Property.
Section 3.13 ANNUAL CERTIFICATE AS TO COMPLIANCE.
(a) The Master Servicer will deliver to the Trustee and the
Rating
Agencies not later than March 1, 2005 and not later than March 1
of each year
thereafter, a certificate of a Servicing Officer stating, as to
each signatory
thereof, that (i) a review of the activities of the Master
Servicer during the
preceding calendar year or portion thereof and of its
performance under this
Agreement has been made under such officer's supervision, and
(ii) to the best
of such officer's knowledge, based on such review, the Master
Servicer has
fulfilled all of its obligations under this Agreement in all
material respects
throughout such year or portion thereof, or, if there has been a
default in the
fulfillment of any such obligation, specifying each such default
known to such
officer and the nature and status thereof except for such
defaults as such
officer in its good faith judgment believe to be immaterial.
(b) Copies of such statements shall be provided to any
Certificateholder upon request by the Master Servicer or by the
Trustee at the
Master Servicer's expense if the Master Servicer failed to
provide such copies
(unless (i) the Master Servicer shall have failed to provide the
Trustee with
such statement or (ii) the Trustee shall be unaware of the
Master Servicer's
failure to provide such statement).
Section 3.14 ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS'
SERVICING
REPORT.
Not later than March 1, 2005 and not later than March 1 of each
year
thereafter, the Master Servicer at its expense shall cause a
firm of independent
public accountants which is a member of the American Institute
of Certified
Public Accountants to furnish a statement to the Trustee and the
Rating Agencies
to the effect that, with respect to the preceding calendar year,
such firm has
examined certain documents and records relating to the Master
Servicer's
servicing of mortgage loans of the same type as the Mortgage
Loans pursuant to
servicing agreements substantially similar to this Agreement,
which agreements
may include this Agreement, and that, on the basis of such an
examination,
conducted substantially in compliance with the Uniform Single
Attestation
Program for Mortgage Bankers, such firm is of the opinion that
the Master
Servicer's servicing has been conducted in compliance with the
agreements
examined pursuant to this Section 3.14, except for (i) such
exceptions as such
firm shall believe to be immaterial,(ii) such other exceptions
as shall be set
forth in such statement and (iii) such exceptions that the
Uniform Single
Attestation Program for Mortgage Bankers requires it to report.
Copies of such
statements shall be provided to any Certificateholder upon
request by the Master
Servicer or by the Trustee at the Master Servicer's expense if
the Master
Servicer failed
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to provide such copies (unless (i) the Master Servicer shall
have failed to
provide the Trustee with such statement or (ii) the Trustee
shall be unaware of
the Master Servicer's failure to provide such statement).
Section 3.15 BOOKS AND RECORDS.
The Master Servicer shall be responsible for maintaining, and
shall
maintain, a complete set of books and records for the Mortgage
Loans which shall
be appropriately identified in the Master Servicer's computer
system to clearly
reflect the ownership of the Mortgage Loans by the Trust. In
particular, the
Master Servicer shall maintain in its possession, available for
inspection by
the Trustee and shall deliver to the Trustee upon demand,
evidence of compliance
with all federal, state and local laws, rules and regulations.
To the extent
that original documents are not required for purposes of
realization of
Liquidation Proceeds or Insurance Proceeds, documents maintained
by the Master
Servicer may be in the form of microfilm or microfiche or such
other reliable
means of recreating original documents, including, but not
limited to, optical
imagery techniques so long as the Master Servicer complies with
the requirements
of Accepted Servicing Practices.
The Master Servicer shall maintain with respect to each Mortgage
Loan
and shall make available for inspection by the Trustee the
related servicing
file during the time such Mortgage Loan is subject to this
Agreement and
thereafter in accordance with applicable law.
Section 3.16 REPORTS FILED WITH SECURITIES AND EXCHANGE
COMMISSION.
(a) The Depositor shall prepare or cause to be prepared the
initial current report on Form 8-K. Within 15 days after each
Distribution Date,
the Trustee shall, in accordance with industry standards, file
with the
Commission via the Electronic Data Gathering and Retrieval
System ("EDGAR"), a
Form 8-K with a copy of the monthly statement to be furnished by
the Trustee to
the Certificateholders for such Distribution Date as an exhibit
thereto. Prior
to January 30 in each year commencing in 2005, the Trustee
shall, in accordance
with industry standards, file a Form 15 Suspension Notice with
respect to the
Trust Fund, if applicable. Prior to (i) March 15, 2005 and (ii)
unless and until
a Form 15 Suspension Notice shall have been filed, prior to
March 15 of each
year thereafter, the Master Servicer shall provide the Trustee
with a Master
Servicer Certification, together with a copy of the annual
independent
accountant's servicing report and annual statement of compliance
to be delivered
by the Master Servicer pursuant to Sections 3.13 and 3.14. Prior
to (i) March
31, 2005 and (ii) unless and until a Form 15 Suspension Notice
shall have been
filed, March 31 of each year thereafter, the Trustee shall,
subject to
subsection (d) below, file a Form 10-K, in substance conforming
to industry
standards, with respect to the Trust Fund. Such Form 10-K shall
include the
Master Servicer Certification and other documentation provided
by the Master
Servicer pursuant to the second preceding sentence and the Form
10-K
certification signed by the Depositor. The Depositor hereby
grants to the
Trustee a limited power of attorney to execute and file each
such document on
behalf of the Depositor. Such power of attorney shall continue
until either the
earlier of (i) receipt by the Trustee from the Depositor of
written termination
of such power of attorney and (ii) the termination of the Trust
Fund. The
Depositor agrees to promptly furnish to the Trustee, from time
to time upon
request, such further information, reports and financial
statements within its
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control related to this Agreement, the Mortgage Loans as the
Trustee reasonably
deems appropriate to prepare and file all necessary reports with
the Commission.
The Trustee shall have no responsibility to file any items other
than those
specified in this Section 3.16; provided, however, the Trustee
will cooperate
with the Depositor in connection with any additional filings
with respect to the
Trust Fund as the Depositor deems necessary under the Securities
Exchange Act of
1934, as amended (the "Exchange Act"). Copies of all reports
filed by the
Trustee under the Exchange Act shall be sent to: the Depositor
c/o Bear, Stearns
& Co. Inc., Attn: Managing Director-Analysis and Control,
One Metrotech Center
North, Brooklyn, New York 11202-3859. Fees and expenses incurred
by the Trustee
in connection with this Section 3.16 shall not be reimbursable
from the Trust
Fund.
(b) In connection with the filing of any 10-K hereunder, the
Trustee shall sign a certification (in the form attached hereto
as Exhibit K)
for the Depositor regarding certain aspects of the Form 10-K
certification
signed by the Depositor, provided, however, that the Trustee
shall not be
required to undertake an analysis of any accountant's report
attached as an
exhibit to the Form 10-K.
(c) (i) The Trustee shall indemnify and hold harmless the
Depositor and its officers, directors and affiliates from and
against any
losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal
fees and related costs, judgments and other costs and expenses
arising out of or
based upon a breach of the Trustee's obligations under this
Section 3.16 or the
Trustee's negligence, bad faith or willful misconduct in
connection therewith.
(ii) The Depositor shall indemnify and hold harmless the
Trustee and its officers, directors and affiliates from and
against any
losses, damages, penalties, fines, forfeitures, reasonable
and
necessary legal fees and related costs, judgments and other
costs and
expenses arising out of or based upon a breach of the
obligations of
the Depositor under this Section 3.16 or the Depositor's
negligence,
bad faith or willful misconduct in connection therewith.
(iii) The Master Servicer shall indemnify and hold harmless
the Trustee and the Depositor and their respective officers,
directors
and affiliates from and against any losses, damages, penalties,
fines,
forfeitures, reasonable and necessary legal fees and related
costs,
judgments and other costs and expenses arising out of or based
upon a
breach of the obligations of the Master Servicer under this
Section
3.16 or the Master Servicer's negligence, bad faith or
willful
misconduct in connection therewith.
(iv) If the indemnification provided for herein is
unavailable or insufficient to hold harmless the Depositor or
the
Trustee, as applicable, then the defaulting party, in connection
with a
breach of its respective obligations under this Section 3.16 or
its
respective negligence, bad faith or willful misconduct in
connection
therewith, agrees that it shall contribute to the amount paid
or
payable by the other parties as a result of the losses, claims,
damages
or liabilities of the other party in such proportion as is
appropriate
to reflect the relative fault and the relative benefit of the
Depositor
on the one hand and the Trustee on the other.
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(d) Nothing shall be construed from the foregoing subsections
(a),
(b) and (c) to require the Trustee or any officer, director or
Affiliate thereof
to sign any Form 10-K or any certification contained therein.
Furthermore, the
inability of the Trustee to file a Form 10-K as a result of the
lack of required
information as set forth in Section 3.16(a) or required
signatures on such Form
10-K or any certification contained therein shall not be
regarded as a breach by
the Trustee of any obligation under this Agreement.
(e) Notwithstanding the provisions of Section 11.01, this
Section
3.16 may be amended without the consent of the
Certificateholders.
Section 3.17 UCC.
The Trustee agrees to file continuation statements for any
Uniform
Commercial Code financing statements which the Seller has
informed the Trustee
were filed on the Closing Date in connection with the Trust. The
Seller shall
file any financing statements or amendments thereto required by
any change in
the Uniform Commercial Code.
Section 3.18 OPTIONAL PURCHASE OF CERTAIN MORTGAGE LOANS.
With respect to any Mortgage Loans which as of the first day of
a
Fiscal Quarter is delinquent in payment by 90 days or more or is
an REO
Property, EMC shall have the right to purchase any Mortgage Loan
from the Trust
which becomes 90 days or more delinquent or becomes an REO
Property at a price
equal to the Purchase Price; provided however (i) that such
Mortgage Loan is
still 90 days or more delinquent or is an REO Property as of the
date of such
purchase and (ii) this purchase option, if not theretofore
exercised, shall
terminate on the date prior to the last day of the related
Fiscal Quarter. This
purchase option, if not exercised, shall not be thereafter
reinstated unless the
delinquency is cured and the Mortgage Loan thereafter again
becomes 90 days or
more delinquent or becomes an REO Property, in which case the
option shall again
become exercisable as of the first day of the related Fiscal
Quarter.
In addition, EMC shall, at its option, purchase any Mortgage
Loan from
the Trust if the first Due Date for such Mortgage Loan is
subsequent to the
Cut-off Date and the initial Scheduled Payment is not made
within thirty (30)
days of such Due Date. Such purchase shall be made at a price
equal to the
Purchase Price.
If at any time EMC remits to the Master Servicer a payment for
deposit
in the Protected Account covering the amount of the Purchase
Price for such a
Mortgage Loan, and EMC provides to the Trustee a certification
signed by a
Servicing Officer stating that the amount of such payment has
been deposited in
the Protected Account, then the Trustee shall execute the
assignment of such
Mortgage Loan prepared and delivered to the Trustee, at the
request of EMC,
without recourse, representation or warranty, to EMC which shall
succeed to all
the Trustee's right, title and interest in and to such Mortgage
Loan, and all
security and documents relative thereto. Such assignment shall
be an assignment
outright and not for security. EMC will thereupon own such
Mortgage, and all
such security and documents, free of any further obligation to
the Trustee or
the Certificateholders with respect thereto.
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Section 3.19 OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF
MORTGAGE
RATES AND SCHEDULED PAYMENTS.
In the event that a shortfall in any collection on or liability
with
respect to any Mortgage Loan results from or is attributable to
adjustments to
Mortgage Rates, Scheduled Payments or Stated Principal Balances
that were made
by the Master Servicer in a manner not consistent with the terms
of the related
Mortgage Note and this Agreement, the Master Servicer, upon
discovery or receipt
of notice thereof, immediately shall deliver to the Trustee for
deposit in the
Distribution Account from its own funds the amount of any such
shortfall and
shall indemnify and hold harmless the Trust Fund, the Trustee,
the Depositor and
any successor Master Servicer in respect of any such liability.
Such indemnities
shall survive the termination or discharge of this Agreement.
Notwithstanding
the foregoing, this Section 3.19 shall not limit the ability of
the Master
Servicer to seek recovery of any such amounts from the related
Mortgagor under
the terms of the related Mortgage Note and Mortgage, to the
extent permitted by
applicable law.
Section 3.20 RESERVE FUND.
(a) On or before the Closing Date, the Trustee shall establish
a
Reserve Fund on behalf of the Holders of the Certificates. The
Reserve Fund must
be an Eligible Account. The Reserve Fund shall be entitled
"Reserve Fund,
LaSalle Bank National Association as Trustee for the benefit of
holders of Bear
Stearns Asset Backed Securities I LLC, Asset-Backed
Certificates, Series
2004-HE11". The Trustee shall demand payment of all money
payable by Bear
Stearns Financial Products Inc. (the "Counterparty") under the
Yield Maintenance
Agreements. The Trustee shall deposit in the Reserve Fund all
payments received
from the Counterparty pursuant to the Yield Maintenance
Agreements. On each
Distribution Date the Trustee shall remit amounts received from
the Counterparty
to the Holders of the Class A Certificates, Class M Certificates
and Class CE
Certificates in the manner provided in clause (b) below. In
addition, on each
Distribution Date as to which there is a Basis Risk Shortfall
Carry Forward
Amount payable to any Class of Class A Certificates and/or Class
M Certificates,
the Trustee shall deposit the amounts distributable pursuant to
clauses (C) and
(D) of Section 5.04(a)(4) into the Reserve Fund and the Trustee
has been
directed by the Class CE Certificateholder to distribute such
amounts to the
Holders of the Class A and/or Class M Certificates in the
amounts and priorities
set forth in clauses (C) and (D) of Section 5.04(a)(4). Any
amount paid to the
Holders of Class A Certificates and/or Class M Certificates
pursuant to the
preceding sentence in respect of Basis Risk Shortfall Carry
Forward Amount shall
be treated as distributed to the Class CE Certificateholder in
respect of the
Class CE Certificates and paid by the Class CE Certificateholder
to the Holders
of the Class A Certificates and/or Class M Certificates. Any
payments to the
Holders of the Class A Certificates and/or Class M Certificates
in respect of
Basis Risk Shortfall Carry Forward Amount, whether pursuant to
the second
preceding sentence or pursuant to subsection (b) below, shall
not be payments
with respect to a "regular interest" in a REMIC within the
meaning of Code
Section 860(G)(a)(1).
(b) Amounts received from the Counterparty under the Yield
Maintenance Agreements shall be distributed in the following
manner and order of
priority:
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(i) first, (A) from amounts received under the Yield
Maintenance Agreement related to the Class I-A Certificates, to
the
Class I-A Certificates, pro rata based on the amount of Basis
Risk
Shortfall Carry Forward Amount for such Classes of Certificates
for the
related Distribution Date, (B) from amounts received under the
Yield
Maintenance Agreement related to the Class II-A Certificates, to
the
Class II-A Certificates, pro rata based on the amount of Basis
Risk
Shortfall Carry Forward Amount for such Classes of Certificates
for the
related Distribution Date and (C) from amounts received under
the Yield
Maintenance Agreement related to the Class M Certificates,
sequentially
to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6
and Class M-7 Certificates, in that order, the amount of any
Basis Risk
Shortfall Carry Forward Amount for such Classes of Certificates
for the
related Distribution Date;
(ii) second, from any remaining amounts received under the
non-related Yield Maintenance Agreements, to the Class A
Certificates
and Class M Certificates, as applicable, pro rata, based on
the
aggregate amount of Basis Risk Shortfall Carry Forward Amounts
for the
Class A Certificates and Class M Certificates, as applicable,
for such
Distribution Date to the extent not covered in clause (i) above,
which
amounts shall be paid in the case of the Class I-A, Class II-A
and
Class M Certificates in the order of priority in clauses (i)
first (A),
(B) and (C) above; and
(iii) third, any remaining amounts received under the Yield
Maintenance Agreements, to the Class CE Certificates.
(c) The Reserve Fund is an "outside reserve fund" within the
meaning of Treasury Regulation ss.1.860G-2(h) and shall be an
asset of the Trust
Fund but not an asset of any REMIC. The Trustee on behalf of the
Trust shall be
the nominal owner of the Reserve Fund. The Class CE
Certificateholder shall be
the beneficial owner of the Reserve Fund, subject to the power
of the Trustee to
transfer amounts under Section 5.04. Amounts in the Reserve Fund
shall, at the
direction of the Class CE Certificateholder, be invested in
Permitted
Investments that mature no later than the Business Day prior to
the next
succeeding Distribution Date. All net income and gain from such
investments
shall be distributed to the Class CE Certificateholder, not as a
distribution in
respect of any interest in any REMIC, on such Distribution Date.
All amounts
earned on amounts on deposit in the Reserve Fund shall be
taxable to the Class
CE Certificateholder. Any losses on such investments shall be
deposited in the
Reserve Fund by the Class CE Certificateholder out of its own
funds immediately
as realized.
Section 3.21 ADVANCING FACILITY.
(a) The Master Servicer and/or the Trustee on behalf of the
Trust
Fund, in either case, with the consent of the Master Servicer in
the case of the
Trustee and, in each case, with notice to the Rating Agencies,
is hereby
authorized to enter into a facility (the "Advancing Facility")
with any Person
which provides that such Person (an "Advancing Person") may fund
Advances and/or
Servicing Advances to the Trust Fund under this Agreement,
although no such
facility shall reduce or otherwise affect the Master Servicer's
obligation to
fund such Advances and/or Servicing Advances. If the Master
Servicer enters into
such an Advancing Facility pursuant to this Section 3.21, upon
reasonable
request of the Advancing Person, the Trustee shall execute a
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letter of acknowledgment, confirming its receipt of notice of
the existence of
such Advancing Facility. To the extent that an Advancing Person
funds any
Advance or any Servicing Advance and provides the Trustee with
notice
acknowledged by the Servicer that such Advancing Person is
entitled to
reimbursement, such Advancing Person shall be entitled to
receive reimbursement
pursuant to this Agreement for such amount to the extent
provided in Section
3.21(b). Such notice from the Advancing Person must specify the
amount of the
reimbursement, the Section of this Agreement that permits the
applicable Advance
or Servicing Advance to be reimbursed and the section(s) of the
Advancing
Facility that entitle the Advancing Person to request
reimbursement from the
Trustee, rather than the Master Servicer, and include the Master
Servicer's
acknowledgment thereto or proof of an Event of Default under the
Advancing
Facility. The Trustee shall have no duty or liability with
respect to any
calculation of any reimbursement to be paid to an Advancing
Person and shall be
entitled to rely without independent investigation on the
Advancing Person's
notice provided pursuant to this Section 3.21. An Advancing
Person whose
obligations hereunder are limited to the funding of Advances
and/or Servicing
Advances shall not be required to meet the qualifications of a
Master Servicer
or a subservicer pursuant to Section 8.02 hereof and will not be
deemed to be a
subservicer under this Agreement.
(b) If an Advancing Facility is entered into, then the
Master
Servicer shall not be permitted to reimburse itself therefor
under Section
4.02(a)(ii), Section 4.02(a)(iii) and Section 4.02(a)(v) prior
to the remittance
to the Trust Fund, but instead the Master Servicer shall include
such amounts in
the applicable remittance to the Trustee made pursuant to
Section 4.02. The
Trustee is hereby authorized to pay to the Advancing Person,
reimbursements for
Advances and Servicing Advances from the Distribution Account to
the same extent
the Master Servicer would have been permitted to reimburse
itself for such
Advances and/or Servicing Advances in accordance with Section
4.02(a)(ii),
Section 4.02(a)(iii) or Section 4.02(a)(v), as the case may be,
had the Master
Servicer itself funded such Advance or Servicing Advance. The
Trustee is hereby
authorized to pay directly to the Advancing Person such portion
of the Servicing
Fee as the parties to any advancing facility agree.
(c) All Advances and Servicing Advances made pursuant to the
terms
of this Agreement shall be deemed made and shall be reimbursed
on a "first
in-first out" (FIFO) basis.
(d) Any amendment to this Section 3.21 or to any other
provision
of this Agreement that may be necessary or appropriate to effect
the terms of an
Advancing Facility as described generally in this Section 3.21,
including
amendments to add provisions relating to a successor master
servicer, may be
entered into by the Trustee and the Master Servicer without the
consent of any
Certificateholder, notwithstanding anything to the contrary in
this Agreement.
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ARTICLE IV
ACCOUNTS
Section 4.01 COLLECTION OF MORTGAGE LOAN PAYMENTS; PROTECTED
ACCOUNT.
(a) The Master Servicer shall make reasonable efforts in
accordance with customary and usual standards of practice of
prudent mortgage
lenders in the respective states in which the Mortgaged
Properties are located
to collect all payments called for under the terms and
provisions of the
Mortgage Loans to the extent such procedures shall be consistent
with this
Agreement and the terms and provisions of any related Required
Insurance Policy.
Consistent with the foregoing, the Master Servicer may in its
discretion (i)
waive any late payment charge and (ii) extend the due dates for
payments due on
a Mortgage Note for a period not greater than 125 days. In the
event of any such
arrangement, the Master Servicer shall make Advances on the
related Mortgage
Loan during the scheduled period in accordance with the
amortization schedule of
such Mortgage Loan without modification thereof by reason of
such arrangements,
and shall be entitled to reimbursement therefor in accordance
with Section 5.01.
The Master Servicer shall not be required to institute or join
in litigation
with respect to collection of any payment (whether under a
Mortgage, Mortgage
Note or otherwise or against any public or governmental
authority with respect
to a taking or condemnation) if it reasonably believes that
enforcing the
provision of the Mortgage or other instrument pursuant to which
such payment is
required is prohibited by applicable law. In addition, if (x) a
Mortgage Loan is
in default or default is imminent or (y) the Master Servicer
delivers to the
Trustee a certification addressed to the Trustee, based on the
advice of counsel
or certified public accountants, in either case, that have a
national reputation
with respect to taxation of REMICs, that a modification of such
Mortgage Loan
will not result in the imposition of taxes on or disqualify any
of REMIC I,
REMIC II, REMIC III or REMIC IV, the Master Servicer may, (A)
amend the related
Mortgage Note to reduce the Mortgage Rate applicable thereto,
provided that such
reduced Mortgage Rate shall in no event be lower than 5.00% with
respect to any
Mortgage Loan and (B) amend any Mortgage Note to extend to the
maturity thereof.
The Master Servicer shall not waive (or permit a sub-servicer to
waive)
any Prepayment Charge unless: (i) the enforceability thereof
shall have been
limited by bankruptcy, insolvency, moratorium, receivership and
other similar
laws relating to creditors' rights generally, (ii) the
enforcement thereof is
illegal, or any local, state or federal agency has threatened
legal action if
the prepayment penalty is enforced, (iii) the collectability
thereof shall have
been limited due to acceleration in connection with a
foreclosure or other
involuntary payment or (iv) such waiver is standard and
customary in servicing
similar Mortgage Loans and relates to a default or a reasonably
foreseeable
default and would, in the reasonable judgment of the Master
Servicer, maximize
recovery of total proceeds taking into account the value of such
Prepayment
Charge and the related Mortgage Loan. If a Prepayment Charge is
waived, but does
not meet the standards described above, then the Master Servicer
is required to
pay the amount of such waived Prepayment Charge, for the benefit
of the Class P
Certificates, by remitting such amount to the Trustee by the
Distribution
Account Deposit Date.
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(b) The Master Servicer shall establish and maintain a
Protected
Account (which shall at all times be an Eligible Account) with a
depository
institution in the name of the Master Servicer for the benefit
of the Trustee on
behalf of the Certificateholders and designated "EMC Mortgage
Corporation, as
Master Servicer, for the benefit of LaSalle Bank National
Association, in trust
for registered holders of Bear Stearns Asset Backed Securities I
LLC,
Asset-Backed Certificates Series 2004-HE11". The Master Servicer
shall deposit
or cause to be deposited into the Protected Account on a daily
basis within one
Business Day of receipt, except as otherwise specifically
provided herein, the
following payments and collections remitted by subservicers or
received by it in
respect of the Mortgage Loans subsequent to the Cut-off Date
(other than in
respect of principal and interest due on the Mortgage Loans on
or before the
Cut-off Date) and the following amounts required to be deposited
hereunder:
(i) all payments on account of principal, including
Principal Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage
Loans net of the Servicing Fee permitted under Section 3.10 and
LPMI
Fees, if any;
(iii) all Liquidation Proceeds, Subsequent Recoveries and
Insurance Proceeds, other than proceeds to be applied to the
restoration or repair of the Mortgaged Property or released to
the
Mortgagor in accordance with the Master Servicer's normal
servicing
procedures;
(iv) any amount required to be deposited by the Master
Servicer pursuant to Section 4.01(c) in connection with any
losses on
Permitted Investments;
(v) any amounts required to be deposited by the Master
Servicer pursuant to Section 3.05;
(vi) any Prepayment Charges collected on the Mortgage
Loans; and
(vii) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Master Servicer
into
the Protected Account shall be exclusive, it being understood
and agreed that,
without limiting the generality of the foregoing, payments in
the nature of late
payment charges or assumption fees, if collected, need not be
remitted by the
Master Servicer. In the event that the Master Servicer shall
remit any amount
not required to be remitted and not otherwise subject to
withdrawal pursuant to
Section 4.02, it may at any time withdraw or direct the
institution maintaining
the Protected Account, to withdraw such amount from the
Protected Account, any
provision herein to the contrary notwithstanding. Such
withdrawal or direction
may be accomplished by delivering written notice thereof to the
institution
maintaining the Protected Account, that describes the amounts
deposited in error
in the Protected Account. The Master Servicer shall maintain
adequate records
with respect to all withdrawals made pursuant to this Section.
All funds
deposited in the Protected Account shall be held in trust for
the
Certificateholders until withdrawn in accordance with Section
4.02.
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(c) The institution that maintains the Protected Account
shall
invest the funds in the Protected Account, in the manner
directed by the Master
Servicer, in Permitted Investments which shall mature not later
than the
Remittance Date and shall not be sold or disposed of prior to
its maturity. All
such Permitted Investments shall be made in the name of the
Trustee, for the
benefit of the Certificateholders. All income and gain net of
any losses
realized from any such investment shall be for the benefit of
the Master
Servicer as servicing compensation and shall be remitted to it
monthly as
provided herein. The amount of any losses incurred in the
Protected Account in
respect of any such investments shall be deposited by the Master
Servicer into
the Protected Account, out of the Master Servicer's own
funds.
(d) The Master Servicer shall give at least 30 days advance
notice
to the Trustee, the Seller, each Rating Agency and the Depositor
of any proposed
change of location of the Protected Account prior to any change
thereof.
Section 4.02 PERMITTED WITHDRAWALS FROM THE PROTECTED
ACCOUNT.
(a) The Master Servicer may from time to time make
withdrawals
from the Protected Account for the following purposes:
(i) to pay itself (to the extent not previously paid to
or withheld by the Master Servicer), as servicing compensation
in
accordance with Section 3.10, that portion of any payment of
interest
that equals the Servicing Fee for the period with respect to
which such
interest payment was made, and, as additional servicing
compensation,
those other amounts set forth in Section 3.10;
(ii) to reimburse the Master Servicer for Advances made by
it with respect to the Mortgage Loans, provided, however, that
the
Master Servicer's right of reimbursement pursuant to this
subclause
(ii) shall be limited to amounts received on particular
Mortgage
Loan(s) (including, for this purpose, Liquidation Proceeds,
Insurance
Proceeds and Subsequent Recoveries) that represent late
recoveries of
payments of principal and/or interest on such particular
Mortgage
Loan(s) in respect of which any such Advance was made;
(iii) to reimburse the Master Servicer for any previously
made portion of a Servicing Advance or an Advance made by the
Master
Servicer that, in the good faith judgment of the Master
Servicer, will
not be ultimately recoverable by it from the related Mortgagor,
any
related Liquidation Proceeds, Insurance Proceeds or otherwise
(a
"Nonrecoverable Advance"), to the extent not reimbursed pursuant
to
clause (ii) or clause (v);
(iv) to reimburse the Master Servicer from Insurance
Proceeds for Insured Expenses covered by the related Insurance
Policy;
(v) to pay the Master Servicer any unpaid Servicing Fees
and to reimburse it for any unreimbursed Servicing Advances,
provided,
however, that the Master Servicer's right to reimbursement
for
Servicing Advances pursuant to this subclause (v) with respect
to any
Mortgage Loan shall be limited to amounts received on
particular
Mortgage
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Loan(s) (including, for this purpose, Liquidation Proceeds,
Insurance
Proceeds, Subsequent Recoveries and purchase and repurchase
proceeds)
that represent late recoveries of the payments for which such
Servicing
Advances were made;
(vi) to pay to the Seller, the Depositor or itself, as
applicable, with respect to each Mortgage Loan or property
acquired in
respect thereof that has been purchased pursuant to Section
2.02, 2.03
or 3.18 of this Agreement, all amounts received thereon and not
taken
into account in determining the related Stated Principal Balance
of
such repurchased Mortgage Loan;
(vii) to pay any expenses recoverable by the Master
Servicer pursuant to Section 7.04 of this Agreement;
(viii) to withdraw pursuant to Section 4.01 any amount
deposited in the Protected Account and not required to be
deposited
therein; and
(ix) to clear and terminate the Protected Account upon
termination of this Agreement pursuant to Section 10.01
hereof.
In addition, no later than 1:00 p.m. Eastern time on the
Distribution
Account Deposit Date, the Master Servicer shall withdraw from
the Protected
Account and remit to the Trustee the amount of Interest Funds
for each Loan
Group (without taking into account any reduction in the amount
of Interest Funds
attributable to the application of clause (c) of the definition
thereof
contained in Article I of this Agreement) and Principal Funds
for each Loan
Group collected, to the extent on deposit, and the Trustee shall
deposit such
amount in the Distribution Account. In addition, on or before
the Distribution
Account Deposit Date, the Master Servicer shall remit to the
Trustee for deposit
in the Distribution Account any Advances or any payments of
Compensating
Interest required to be made by the Master Servicer with respect
to the Mortgage
Loans. Furthermore, on each Distribution Account Deposit Date,
the Master
Servicer shall remit to the Trustee all Prepayment Charges
collected by the
Master Servicer with respect to the Mortgage Loans during the
related Prepayment
Period.
The Master Servicer shall keep and maintain separate accounting,
on a
Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any
withdrawal from the Protected Account pursuant to subclauses
(i), (ii), (iv),
(v), (vi) and (vii) above. Prior to making any withdrawal from
the Protected
Account pursuant to subclause (iii), the Master Servicer shall
deliver to the
Trustee an Officer's Certificate of a Servicing Officer
indicating the amount of
any previous Advance or Servicing Advance determined by the
Master Servicer to
be a Nonrecoverable Advance and identifying the related Mortgage
Loan(s), and
their respective portions of such Nonrecoverable Advance.
Section 4.03 COLLECTION OF TAXES; ASSESSMENTS AND SIMILAR ITEMS;
ESCROW
ACCOUNTS.
With respect to each Mortgage Loan, to the extent required by
the
related Mortgage Note, the Master Servicer shall establish and
maintain one or
more accounts (each, an "Escrow Account") and deposit and retain
therein all
collections from the Mortgagors (or advances by the Master
Servicer) for the
payment of taxes, assessments, hazard insurance premiums or
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comparable items for the account of the Mortgagors. Nothing
herein shall require
the Master Servicer to compel a Mortgagor to establish an Escrow
Account in
violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may
be
made only to effect timely payment of taxes, assessments, hazard
insurance
premiums, condominium or PUD association dues, or comparable
items, to reimburse
the Master Servicer out of related collections for any payments
made with
respect to each Mortgage Loan pursuant to Section 3.01 (with
respect to taxes
and assessments and insurance premiums) and Section 3.05 (with
respect to hazard
insurance), to refund to any Mortgagors for any Mortgage Loans
any sums as may
be determined to be overages, to pay interest, if required by
law or the terms
of the related Mortgage or Mortgage Note, to such Mortgagors on
balances in the
Escrow Account or to clear and terminate the Escrow Account at
the termination
of this Agreement in accordance with Section 10.01 thereof. The
Escrow Account
shall not be a part of the Trust Fund.
Section 4.04 DISTRIBUTION ACCOUNT.
(a) The Trustee 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 Trustee 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 an Eligible
Account
of the Trust Fund segregated on the books of the Trustee and
held by the Trustee
and the Distribution Account and the funds deposited therein
shall not be
subject to, and shall be protected from, all claims, liens, and
encumbrances of
any creditors or depositors of the Trustee (whether made
directly, or indirectly
through a liquidator or receiver of the Trustee). The amount at
any time
credited to the Distribution Account may be invested in the name
of the Trustee,
in such Permitted Investments, or deposited in demand deposits
with such
depository institutions, as determined by the Trustee. 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 Trustee 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
Trustee. The Trustee
shall be permitted to withdraw or receive distribution of any
and all investment
earnings from the Distribution Account on each Distribution
Date. If there is
any loss on a Permitted Investment or demand deposit, the
Trustee shall deposit
the amount of the loss in the Distribution Account not later
than t
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