BEAR STEARNS ASSET BACKED SECURITIES
I LLC,
Depositor
EMC MORTGAGE CORPORATION,
Seller and Company
WELLS FARGO BANK, NATIONAL
ASSOCIATION,
Master Servicer and Securities
Administrator
and
U.S. BANK NATIONAL
ASSOCIATION,
Trustee
POOLING AND SERVICING
AGREEMENT
Dated as of September 1, 2005
BEAR STEARNS ASSET BACKED SECURITIES
I TRUST 2005-AC7
ASSET-BACKED CERTIFICATES, SERIES
2005-AC7
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
|
Section 1.01
|
Defined Terms.
|
|
Section 1.02
|
Allocation of Certain Interest
Shortfalls.
|
ARTICLE II
CONVEYANCE OF TRUST FUND
REPRESENTATIONS AND WARRANTIES
|
Section 2.01
|
Conveyance of Trust Fund.
|
|
Section 2.02
|
Acceptance of the Mortgage Loans.
|
|
Section 2.03
|
Representations, Warranties and Covenants of the
Company, the Master Servicer and the Seller.
|
|
Section 2.04
|
Representations and Warranties of the
Depositor.
|
|
Section 2.05
|
Delivery of Opinion of Counsel in Connection
with Substitutions and Repurchases.
|
|
Section 2.06
|
Countersignature and Delivery of
Certificates.
|
|
Section 2.07
|
Conveyance of the Subsequent Mortgage
Loans.
|
ARTICLE III
ADMINISTRATION AND SERVICING OF EMC
MORTGAGE LOANS BY COMPANY
|
Section 3.01
|
The Company.
|
|
Section 3.02
|
Due-on-Sale Clauses; Assumption
Agreements.
|
|
Section 3.03
|
Subservicers.
|
|
Section 3.04
|
Documents, Records and Funds in Possession of
Company To Be Held for Trustee.
|
|
Section 3.05
|
Maintenance of Hazard Insurance.
|
|
Section 3.06
|
Presentment of Claims and Collection of
Proceeds.
|
|
Section 3.07
|
Maintenance of the Primary Mortgage Insurance
Policies.
|
|
Section 3.08
|
Fidelity Bond, Errors and Omissions
Insurance.
|
|
Section 3.09
|
Realization Upon Defaulted Mortgage Loans;
Determination of Excess Liquidation Proceeds and Realized Losses;
Repurchases of Certain Mortgage Loans.
|
|
Section 3.10
|
Servicing Compensation.
|
|
Section 3.11
|
REO Property.
|
|
Section 3.12
|
Liquidation Reports.
|
|
Section 3.13
|
Annual Statement as to Compliance; Annual
Certification.
|
|
Section 3.14
|
Annual Independent Certified Public
Accountants’ Servicing Report.
|
|
Section 3.15
|
Books and Records.
|
ARTICLE IV
ADMINISTRATION AND MASTER SERVICING
OF MORTGAGE LOANS BY MASTER SERVICER
|
Section 4.01
|
Master Servicer
|
|
Section 4.02
|
REMIC-Related Covenants
|
|
Section 4.03
|
Monitoring of Company and Servicer
|
|
Section 4.04
|
Fidelity Bond.
|
|
Section 4.05
|
Power to Act; Procedures
|
|
Section 4.06
|
Due-on-Sale Clauses; Assumption
Agreements
|
|
Section 4.07
|
Release of Mortgage Files
|
|
Section 4.08
|
Documents, Records and Funds in Possession of
Master Servicer, Company and Servicer To Be Held for
Trustee.
|
|
Section 4.09
|
Standard Hazard Insurance and Flood Insurance
Policies.
|
|
Section 4.10
|
Presentment of Claims and Collection of
Proceeds.
|
|
Section 4.11
|
Maintenance of the Primary Mortgage Insurance
Policies.
|
|
Section 4.12
|
Trustee to Retain Possession of Certain
Insurance Policies and Documents.
|
|
Section 4.13
|
Realization Upon Defaulted Mortgage
Loans.
|
|
Section 4.14
|
Compensation for the Master Servicer.
|
|
Section 4.15
|
REO Property.
|
|
Section 4.16
|
Annual Officer’s Certificate as to
Compliance.
|
|
Section 4.17
|
Annual Independent Accountant’s Servicing
Report
|
|
Section 4.18
|
Reports Filed with Securities and Exchange
Commission
|
|
Section 4.19
|
UCC
|
|
Section 4.20
|
Optional Purchase of Certain Mortgage
Loans.
|
ARTICLE V
ACCOUNTS
|
Section 5.01
|
Collection of Mortgage Loan Payments; Protected
Account.
|
|
Section 5.02
|
Permitted Withdrawals From the Protected
Account.
|
|
Section 5.03
|
Reports to Master Servicer.
|
|
Section 5.04
|
Collection of Taxes; Assessments and Similar
Items; Escrow Accounts.
|
|
Section 5.05
|
Servicer Protected Accounts
|
|
Section 5.06
|
Master Servicer Collection Account
|
|
Section 5.07
|
Permitted Withdrawals and Transfers from the
Master Servicer Collection Account
|
|
Section 5.08
|
Distribution Account.
|
|
Section 5.09
|
Permitted Withdrawals and Transfers from the
Distribution Account.
|
|
Section 5.10
|
Pre-Funding Accounts.
|
|
Section 5.11
|
Interest Coverage Account.
|
ARTICLE VI
DISTRIBUTIONS AND
ADVANCES
|
Section 6.02
|
Compensating Interest Payments.
|
|
Section 6.03
|
REMIC Distributions.
|
|
Section 6.04
|
Distributions.
|
|
Section 6.05
|
Allocation of Realized Losses.
|
|
Section 6.06
|
Monthly Statements to
Certificateholders.
|
|
Section 6.07
|
REMIC Designations and REMIC I
Distributions.
|
|
Section 6.08
|
Net WAC Reserve Fund.
|
|
Section 6.09
|
Class P Certificate Account
|
ARTICLE VII
THE CERTIFICATES
|
Section 7.01
|
The Certificates.
|
|
Section 7.02
|
Certificate Register; Registration of Transfer
and Exchange of Certificates.
|
|
Section 7.03
|
Mutilated, Destroyed, Lost or Stolen
Certificates.
|
|
Section 7.04
|
Persons Deemed Owners.
|
|
Section 7.05
|
Access to List of Certificateholders’
Names and Addresses.
|
|
Section 7.06
|
Book-Entry Certificates.
|
|
Section 7.07
|
Notices to Depository.
|
|
Section 7.08
|
Definitive Certificates.
|
|
Section 7.09
|
Maintenance of Office or Agency.
|
ARTICLE VIII
THE COMPANY AND THE MASTER
SERVICER
|
Section 8.01
|
Liabilities of the Depositor, the Company and
the Master Servicer
|
|
Section 8.02
|
Merger or Consolidation of the Depositor, the
Company or the Master Servicer.
|
|
Section 8.03
|
Indemnification of the Trustee, the Master
Servicer and the Securities Administrator.
|
|
Section 8.04
|
Limitations on Liability of the Depositor, the
Company, the Master Servicer and Others
|
|
Section 8.05
|
Master Servicer and Company Not to
Resign
|
|
Section 8.06
|
Successor Master Servicer
|
|
Section 8.07
|
Sale and Assignment of Master
Servicing
|
ARTICLE IX
DEFAULT; TERMINATION OF MASTER
SERVICER; TERMINATION OF COMPANY
|
Section 9.01
|
Events of Default.
|
|
Section 9.02
|
Trustee to Act; Appointment of
Successor.
|
|
Section 9.03
|
Notification to Certificateholders.
|
|
Section 9.04
|
Waiver of Defaults.
|
|
Section 9.05
|
Company Default.
|
|
Section 9.06
|
Waiver of Company Defaults.
|
ARTICLE X
CONCERNING THE TRUSTEE AND THE
SECURITIES ADMINISTRATOR
|
Section 10.01
|
Duties of Trustee and Securities
Administrator.
|
|
Section 10.02
|
Certain Matters Affecting the Trustee and the
Securities Administrator.
|
|
Section 10.03
|
Trustee and Securities Administrator Not Liable
for Certificates or Mortgage Loans.
|
|
Section 10.04
|
Trustee and Securities Administrator May Own
Certificates.
|
|
Section 10.05
|
Trustee’s and Securities
Administrator’s Fees and Expenses.
|
|
Section 10.06
|
Eligibility Requirements for Trustee and
Securities Administrator.
|
|
Section 10.07
|
Insurance.
|
|
Section 10.08
|
Resignation and Removal of Trustee and
Securities Administrator.
|
|
Section 10.09
|
Successor Trustee or Securities
Administrator.
|
|
Section 10.10
|
Merger or Consolidation of Trustee or Securities
Administrator.
|
|
Section 10.11
|
Appointment of Co-Trustee or Separate
Trustee.
|
|
Section 10.12
|
Tax Matters.
|
ARTICLE XI
TERMINATION
|
Section 11.01
|
Termination upon Liquidation or Repurchase of
all Mortgage Loans.
|
|
Section 11.02
|
Final Distribution on the
Certificates.
|
|
Section 11.03
|
Additional Termination Requirements.
|
ARTICLE XII
MISCELLANEOUS PROVISIONS
|
Section 12.01
|
Amendment.
|
|
Section 12.02
|
Recordation of Agreement;
Counterparts.
|
|
Section 12.03
|
Governing Law.
|
|
Section 12.04
|
Intention of Parties.
|
|
Section 12.05
|
Notices.
|
|
Section 12.06
|
Severability of Provisions.
|
|
Section 12.07
|
Assignment.
|
|
Section 12.08
|
Limitation on Rights of
Certificateholders.
|
|
Section 12.09
|
Inspection and Audit Rights
|
|
Section 12.10
|
Certificates Nonassessable and Fully
Paid.
|
Exhibits
|
Exhibit A-1
|
Form of Class A-[1][2][3][4]
Certificates
|
|
Exhibit A-2
|
Form of Class M-[1][2][3]
Certificates
|
|
Exhibit A-3
|
Form of Class B-[1][2][3][4]
Certificates
|
|
Exhibit A-4
|
Form of Class C Certificates
|
|
Exhibit A-5
|
Form of Class P Certificates
|
|
Exhibit A-6
|
Form of Class R-[1][2] 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 Investment Letter
|
|
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 Company Certification
|
|
Exhibit L
|
Form of Mortgage Loan Purchase
Agreement
|
|
Exhibit M
|
Form of Subsequent Mortgage Loan Purchase
Agreement
|
|
Exhibit N
|
Form of Subsequent Transfer
Instrument
|
POOLING AND SERVICING AGREEMENT,
dated as of September 1, 2005, 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 company (in such capacity, the
“Company”), WELLS FARGO BANK, NATIONAL ASSOCIATION, a
national banking association, as master servicer (in such capacity,
the “Master Servicer”) and as securities administrator
(in such capacity, the “Securities Administrator”) and
U.S. 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. On or prior to the Closing Date, the Depositor
acquired the Initial Mortgage Loans from the Seller. On the Closing
Date, the Depositor will sell the Initial Mortgage Loans and
certain other property to the Trust Fund and receive in
consideration therefor Certificates evidencing the entire
beneficial ownership interest in the Trust Fund. On or prior to any
Subsequent Transfer Date, the Depositor acquired the Subsequent
Mortgage Loans, which will be sold to the Trust on the related
Subsequent Transfer Date.
REMIC I
As provided herein, the Trustee will
make an election to treat the segregated pool of assets consisting
of the Mortgage Loans and certain other related assets subject to
this Agreement (other than the Net WAC Reserve Fund) as a REMIC (as
defined herein) for federal income tax purposes, and such
segregated pool of assets will be designated as “REMIC
I.” The Class R-1 Certificates will represent 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 designation, the Uncertificated REMIC I Pass-Through
Rate, the initial Uncertificated Principal Balance and, 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.
< p style=' margin-bottom:0pt;
margin-top:0pt; text-indent:0.5in;text-align:justify;'>
|
|
|
Initial Uncertificated Principal
Balance
|
|
Uncertificated REMIC I
Pass-Through Rate
|
|
Latest Possible Maturity Date
(1)
|
|
AA
|
|
$
|
322,442,564.39
|
|
Variable(2)
|
|
October 25, 2035
|
|
A-1
|
|
$
|
550,000.00
|
|
Variable(2)
|
|
October 25, 2035
|
|
A-2
|
|
$
|
250,000.00
|
|
Variable(2)
|
|
October 25, 2035
|
|
A-3
|
|
$
|
750,000.00
|
|
Variable(2)
|
|
October 25, 2035
|
|
A-4
|
|
$
|
1,022,960.00
|
|
Variable(2)
|
|
October 25, 2035
|
|
M-1
|
|
$
|
187,550.00
|
|
Variable(2)
|
|
October 25, 2035
|
|
M-2
|
|
$
|
171,090.00
|
|
Variable(2)
|
|
October 25, 2035
|
|
M-3
|
|
$
|
65,800.00
|
|
Variable(2)
|
|
October 25, 2035
|
|
B-1
|
|
$
|
65,800.00
|
|
Variable(2)
|
|
October 25, 2035
|
|
B-2
|
|
$
|
69,090.00
|
|
Variable(2)
|
|
October 25, 2035
|
|
B-3
|
|
$
|
59,220.00
|
|
Variable(2)
|
|
October 25, 2035
|
|
B-4
|
|
$
|
75,680.00
|
|
Variable(2)
|
|
October 25, 2035
|
|
ZZ
|
|
$
|
3,313,270.50
|
|
Variable(2)
|
|
October 25, 2035
|
|
P
|
|
$
|
100.00
|
|
0.00%
|
|
October 25, 2035
|
___________________
|
(1)
|
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 of the REMIC I Regular
Interests.
|
|
(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 and Initial
Certificate Principal Balance for each Class of Certificates that
represents one or more of the Regular Interests in REMIC II created
hereunder.
|
|
|
Initial Certificate
Principal Balance
|
|
|
|
Assumed Final Maturity Date
(1)
|
|
Class A-1
|
|
$
|
55,000,000.00
|
|
Class A-1 Pass-Through
Rate
|
|
October 25, 2035
|
|
Class A-2
|
|
$
|
25,000,000.00
|
|
Class A-2 Pass-Through
Rate
|
|
October 25, 2035
|
|
Class A-3
|
|
$
|
75,000,000.00
|
|
Class A-3 Pass-Through
Rate
|
|
October 25, 2035
|
|
Class A-4
|
|
$
|
102,296,000.00
|
|
Class A-4 Pass-Through
Rate
|
|
October 25, 2035
|
|
Class M-1
|
|
$
|
18,755,000.00
|
|
Class M-1 Pass-Through
Rate
|
|
October 25, 2035
|
|
Class M-2
|
|
$
|
17,109,000.00
|
|
Class M-2 Pass-Through
Rate
|
|
October 25, 2035
|
|
Class M-3
|
|
$
|
6,580,000.00
|
|
Class M-3 Pass-Through
Rate
|
|
October 25, 2035
|
|
Class B-1
|
|
$
|
6,580,000.00
|
|
Class B-1 Pass Through
Rate
|
|
October 25, 2035
|
|
Class B-2
|
|
$
|
6,909,000.00
|
|
Class B-2 Pass-Through
Rate
|
|
October 25, 2035
|
|
Class B-3
|
|
$
|
5,922,000.00
|
|
Class B-3 Pass Through
Rate
|
|
October 25, 2035
|
|
Class B-4
|
|
$
|
7,568,000.00
|
|
Class B-4 Pass Through
Rate
|
|
October 25, 2035
|
|
Class C
|
|
$
|
2,304,024.89
|
(3)
|
(2)
|
|
October 25, 2035
|
|
Class P
|
|
$
|
100.00
|
(4)
|
N/A (4)
|
|
October 25, 2035
|
___________________
|
(1)
|
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 Class of Certificates that represents
one or more of the Regular Interests in REMIC II.
|
|
(2)
|
Calculated in accordance with the definition of
“Pass-Through Rate” herein.
|
|
(3)
|
The Class C Certificates will not accrue interest
on its Certificate Principal Balance, but will accrue interest on
its Certificate Notional Amount as described herein.
|
|
(4)
|
The Class P Certificates are not
entitled to distributions in respect of interest.
|
The Trust Fund shall be named, and
may be referred to as, the “Bear Stearns Asset Backed
Securities I Trust 2005-AC7.” The Certificates issued
hereunder may be referred to as “Asset-Backed Certificates
Series 2005-AC7” (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 Securities Administrator, the Seller, the Company and the
Trustee agree as follows:
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 Master Servicing
Practices : With respect
to any Mortgage Loan, those customary mortgage servicing practices
of prudent mortgage servicing institutions that master service
mortgage loans of the same type and quality as such Mortgage Loan
in the jurisdiction where the related Mortgaged Property is
located, to the extent applicable to the Trustee or the Master
Servicer (except in its capacity as successor to the Company or the
related Servicer).
Accepted Servicing
Practices : With respect
to each EMC 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.
Accounts : The Distribution Account, the Master Servicer
Collection Account, the Pre-Funding Account, the Class P
Certificate Account, the Interest Coverage Account, the Net WAC
Reserve Fund and any Protected Account.
Additional Master Servicing
Compensation : The
meaning specified in Section 4.14.
Advance : An advance of delinquent payments of principal
or interest in respect of a Mortgage Loan required to be made by
the Company as provided in Section 6.01(a) hereof, by the related
Servicer in accordance with the related Servicing Agreement or by
the Master Servicer as provided in Section 6.01(b)
hereof.
Agreement : This Pooling and Servicing Agreement and any
and all amendments or supplements hereto made in accordance with
the terms herein.
Amount Held for Future
Distribution : As to any
Distribution Date, the aggregate amount held in the Company’s
or the related Sevicer’s 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 and Insurance
Proceeds received in respect of such Mortgage Loans after the last
day of the related Prepayment Period.
Applied Realized Loss
Amount : With respect to
any Distribution Date and a Class of Subordinate 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 that Class of Certificates pursuant to Section 6.05 of this
Agreement, which have not previously been reimbursed.
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.
Assignment Agreement
: Shall mean any of the GMAC
Assignment Agreement, GreenPoint Assignment Agreement, Harbourside
Assignment Agreement or the PHH Assignment Agreement.
Available Funds
: The sum of Interest Funds and
Principal Funds with respect to the Mortgage Loans.
Bankruptcy Code
: Title 11 of the United States
Code.
Bishop’s Gate
: Bishop’s Gate Residential
Mortgage Trust, and any successor thereto.
Basic Principal Distribution
Amount : Shall mean, with
respect to any Distribution Date, the lesser of (a) the excess of
(i) the Available Funds for such Distribution Date over (ii) the
aggregate Monthly Interest Distributable Amount for the
Certificates (other than the Class P, Class C and Class R
Certificates) for such Distribution Date and (b) the excess of (i)
the Principal Remittance Amount for such Distribution Date over
(ii) the Overcollateralization Release Amount, if any, for such
Distribution Date.
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 7.06). As of the Closing Date, each Class of Offered
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, Minneapolis, Minnesota, Columbia,
Maryland or the city in which the Corporate Trust Office of the
Trustee or the principal office of the Company or the Master
Servicer is located are authorized or obligated by law or executive
order to be closed.
Certificate
: Any one of the certificates of any
Class executed and authenticated by the Securities Administrator in
substantially the forms attached hereto as Exhibits A-1 through
A-6.
Certificate Notional
Amount : As to the Class
C Certificates and any Distribution Date, an amount equal to the
aggregate Stated Principal Balance of the Mortgage Loans. The
initial Certificate Notional Amount of the Class C
Certificates shall be $2,304,024.89. For federal income tax
purposes, however, the Class C Certificates will have a Certificate
Notional Amount equal to the aggregate Uncertificated Principal
Balance of the REMIC I Regular Interests (other than REMIC I
Regular Interest P).
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 R Certificate) and as of any
Distribution Date, the Initial Certificate Principal Balance of
such Certificate plus any Subsequent Recoveries added to the
Certificate Principal Balance of such Certificate pursuant to
Section 6.05 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 6.04 and (ii) any Applied Realized Loss Amounts
allocated to such Certificate on previous Distribution
Dates.
Certificate Register
: The register maintained pursuant
to Section 7.02 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 7.01 hereof.
Class A Certificates
: Any of Class A-1, Class A-2,
Class A-3 and Class A-4 Certificates.
Class A-1 Certificate
: Any Certificate designated as a
“Class 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 A-1
Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive the Net WAC Rate
Carryover Amount.
Class A-1 Pass-Through
Rate : Shall mean on any
Distribution Date, One-Month LIBOR plus 0.300% per annum, with a
maximum rate of 8.000% per annum and a minimum rate of 0.300% per
annum, subject to the applicable Interest Rate Cap.
Class A-2 Certificate
: Any Certificate designated as a
“Class 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 A-2
Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive the Net WAC Rate
Carryover Amount.
Class A-2 Pass-Through
Rate : Shall mean (i) on
any Distribution Date which occurs on or prior to the Optional
Termination Date, 16.94% per annum minus the product of 2.2 and
One-Month LIBOR, with a maximum rate of 16.94% per annum and a
minimum rate of 0.00% per annum and (ii) for each Distribution Date
thereafter, 16.94% per annum, subject to an increase equal to
0.500% per annum multiplied by a fraction equal to (1) the
aggregate Certificate Principal Balance of the Class A-1
Certificates and Class A-2 Certificates over (2) the Certificate
Principal Balance of the Class A-2 Certificates, minus the product
of 2.2 and One-Month LIBOR, in each case subject to the applicable
Interest Rate Cap.
Class A-3 Certificate
: Any Certificate designated as a
“Class 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
A-3 Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive the Net WAC Rate
Carryover Amount.
Class A-3 Pass-Through
Rate : Shall mean (i) on
any Distribution Date which occurs on or prior to the Optional
Termination Date, a fixed rate equal to 5.500% per annum and (ii)
for each Distribution Date thereafter, a fixed rate equal to 6.000%
per annum, in each case subject to a cap equal to the related
Interest Rate Cap for such Distribution Date.
Class A-4 Certificate
: Any Certificate designated as a
“Class A-4 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 A-4
Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive the Net WAC Rate
Carryover Amount.
Class A-4 Pass-Through
Rate : Shall mean (i) on
any Distribution Date which occurs on or prior to the Optional
Termination Date, a fixed rate equal to 5.500% per annum and (ii)
for each Distribution Date thereafter, a fixed rate equal to 6.000%
per annum, in each case subject to a cap equal to the related
Interest Rate Cap for such Distribution Date.
Class B Certificates
: Any of the Class B-1, Class B-2,
Class B-3 and Class B-4 Certificates.
Class B-1 Certificate
: Any Certificate designated as a
“Class B-1 Certificate” on the face thereof, in the
form of Exhibit A-3 hereto, representing the right to the
Percentage Interest of distributions provided for the Class B-1
Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive the Net WAC Rate
Carryover Amount.
Class B-1 Pass-Through
Rate : Shall mean (i) on
any Distribution Date which occurs on or prior to the Optional
Termination Date, One-Month LIBOR plus 1.200% per annum and (ii)
for each Distribution Date thereafter, One-Month LIBOR plus 1.800%
per annum, in each case subject to a cap equal to the related
Interest Rate Cap for such Distribution Date.
Class B-2 Certificate
: Any Certificate designated as a
“Class B-2 Certificate” on the face thereof, in the
form of Exhibit A-3 hereto, representing the right to the
Percentage Interest of distributions provided for the Class B-2
Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive the Net WAC Rate
Carryover Amount.
Class B-2 Pass-Through
Rate : Shall mean (i) on
any Distribution Date which occurs on or prior to the Optional
Termination Date, One-Month LIBOR plus 1.350% per annum and (ii)
for each Distribution Date thereafter, One-Month LIBOR plus 2.025%
per annum, in each case subject to a cap equal to the related
Interest Rate Cap for such Distribution Date.
Class B-3 Certificate
: Any Certificate designated as a
“Class B-3 Certificate” on the face thereof, in the
form of Exhibit A-3 hereto, representing the right to the
Percentage Interest of distributions provided for the Class B-3
Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive the Net WAC Rate
Carryover Amount.
Class B-3 Pass-Through
Rate : Shall mean (i) on
any Distribution Date which occurs on or prior to the Optional
Termination Date, One-Month LIBOR plus 1.750% per annum and
(ii)
for each Distribution Date
thereafter, One-Month LIBOR plus 2.625% per annum, in each case
subject to a cap equal to the related Interest Rate Cap for such
Distribution Date.
Class B-4 Certificate
: Any Certificate designated as a
“Class B-4 Certificate” on the face thereof, in the
form of Exhibit A-3 hereto, representing the right to the
Percentage Interest of distributions provided for the Class B-4
Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive the Net WAC Rate
Carryover Amount.
Class B-4 Pass-Through
Rate : Shall mean (i) on
any Distribution Date which occurs on or prior to the Optional
Termination Date, One-Month LIBOR plus 3.000% per annum and (ii)
for each Distribution Date thereafter, One-Month LIBOR plus 4.500%
per annum, in each case subject to a cap equal to the related
Interest Rate Cap for such Distribution Date.
Class C Certificate
: Any Certificate designated as a
“Class C 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 C Certificates
herein and evidencing (i) a Regular Interest in REMIC II and (ii)
the obligation to pay the Net WAC Rate Carryover Amount.
Class C Distribution
Amount : With respect to
any Distribution Date, the sum of (i) the Monthly Interest
Distributable Amount for the Class C Certificates 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 and after the Distribution Date on which the
Certificate Principal Balances of the Offered Certificates and
Class B-4 Certificates have been reduced to zero, the Class C
Distribution Amount shall include the Overcollateralized
Amount.
Class M Certificates
: Any of the Class M-1, Class M-2
and Class M-3 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 the
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 Net WAC Rate
Carryover Amount.
Class M-1 Pass-Through
Rate : Shall mean (i) on
any Distribution Date which occurs on or prior to the Optional
Termination Date, One-Month LIBOR plus 0.500% per annum and (ii)
for each Distribution Date thereafter, One-Month LIBOR plus 0.750%
per annum, in each case subject to a cap equal to the related
Interest Rate Cap for such Distribution Date.
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 the
Percentage Interest of 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 Net WAC Rate
Carryover Amount.
Class M-2 Pass-Through
Rate : Shall mean (i) on
any Distribution Date which occurs on or prior to the Optional
Termination Date, One-Month LIBOR plus 0.650% per annum and (ii)
for each Distribution Date thereafter, One-Month LIBOR plus 0.975%
per annum, in each case subject to a cap equal to the related
Interest Rate Cap for such Distribution Date.
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 the
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 Net WAC Rate
Carryover Amount.
Class M-3 Pass-Through
Rate : Shall mean (i) on
any Distribution Date which occurs on or prior to the Optional
Termination Date, One-Month LIBOR plus 0.730% per annum and (ii)
for each Distribution Date thereafter, One-Month LIBOR plus 1.095%
per annum, in each case subject to a cap equal to the related
Interest Rate Cap for such Distribution Date.
Class P Certificate
: Any Certificate designated as a
“Class P Certificate” on the face thereof, in the form
of Exhibit A-5 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
II.
Class P Certificate
Account : The account
established and maintained by the Securities Administrator pursuant
to Section 6.10 hereof.
Class R Certificates
: Any of the Class R-1 Certificates
or Class R-2 Certificates.
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-6 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-6 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.
Closing Date
: September 30, 2005.
Code : The Internal Revenue Code of 1986, including
any successor or amendatory provisions.
Company : EMC.
Compensating Interest
: An amount, not to exceed the
Servicing Fee, to be deposited in the Master Servicer Collection
Account by the Company or the related Servicer to the payment of a
Prepayment Interest Shortfall on a Mortgage Loan subject to this
Agreement; provided that in the event the Company or the related
Servicer fails to make such payment, the Master Servicer shall be
obligated to do so to the extent provided in Section 6.02(c)
hereof.
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 US
Bank Corporate Trust Services, One Federal Street, 3rd Floor,
Boston, Massachusetts 02110, Attention: Corporate Trust
Services/BSABS I 2005-AC7, or at
such other address as the Trustee may designate from time to
time.
Corresponding
Certificate : With
respect to each REMIC I Regular Interest (other than REMIC I
Regular Interests AA and ZZ), the Certificate with the
corresponding designation.
Cross-Over Date
: The first Distribution Date on
which the aggregate Certificate Principal Balance of the
Subordinate Certificates has been reduced to zero (giving effect to
all distributions on such Distribution Date).
Custodial Agreement
: An agreement, dated as of
September 30, 2005, among the Depositor, the Seller, the Trustee
and the Custodian in substantially the form of Exhibit J
hereto.
Custodian : Wells Fargo Bank, National Association, or any
successor custodian appointed pursuant to the provisions hereof and
the Custodial Agreement.
Cut-off Date
: The close of business on September
1, 2005.
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.
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 7.06.
Deleted Mortgage Loan
: A Mortgage Loan replaced or to be
replaced by a Replacement Mortgage Loan.
Delinquent
: A Mortgage Loan is
“delinquent” if any payment due thereon is not made
pursuant to the terms of such Mortgage Loan by the close of
business on the day such payment is scheduled to be due. A Mortgage
Loan is “30 days delinquent” if such payment has not
been received by the close of business on the corresponding day of
the month immediately succeeding the month in which such payment
was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on
the 31st day of
such month), then on the last day of
such immediately succeeding month. Similarly for “60 days
delinquent,” “90 days delinquent” and so
on.
Denomination
: With respect to each Certificate,
the amount set forth on the face thereof as the “Initial
Principal Balance of this Certificate”.
Depositor : 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 Securities Administrator pursuant to
Section 5.08 in the name of the Trustee for the benefit of the
Certificateholders and designated “U.S. Bank National
Association, in trust for registered Holders of Bear Stearns Asset
Backed Securities I LLC, Asset-Backed Certificates, Series
2005-AC7” shall be held in trust for the Certificateholders
for the uses and purposes set forth in this Agreement.
Distribution Account Deposit
Date : As to any
Distribution Date, on or before 3:00 p.m. Eastern time on the
Business Day immediately preceding such 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 October 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
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. 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.
EMC Mortgage Loans
: Those Mortgage Loans serviced by
the Company pursuant to the terms of this Agreement.
ERISA : The Employee Retirement Income Security Act of
1974, as amended.
ERISA Restricted
Certificates : Any of the
Class C, Class P and Residual Certificates.
Event of Default
: As defined in Section 9.01
hereof.
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 is the excess, if any, of the Interest Funds for such
Distribution Date over the Monthly Interest Distributable Amounts
payable to the Offered Certificates on 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 (a) on or prior to the earlier of (1) the 20%
Clean-Up Call Date and (2) the Distribution Date in September 2015,
the lesser of (x) the Excess Spread for such Distribution Date and
(y) the Overcollateralization Increase Amount for such Distribution
Date; and (b) thereafter, the Excess Spread for such Distribution
Date; provided that, the Excess Spread in clause (b) will be
used
first to pay the
Overcollateralization Increase Amount, any Unpaid Interest
Shortfalls and any Net WAC Rate Carryover Amounts on 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 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 or the
Class C Certificateholder pursuant to or as contemplated by Section
2.03(c) or Section 11.01), a determination made by the Company
pursuant to this Agreement or the applicable Servicer pursuant to
the related Servicing Agreement that all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which the
Company or such Servicer, in its reasonable good faith judgment,
expects to be finally recoverable in respect thereof have been so
recovered. The Master Servicer shall maintain records, based solely
on information provided by each Servicer, of each Final Recovery
Determination made thereby.
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 to November 30, as applicable.
Freddie Mac
: Freddie Mac (formerly The Federal
Home Loan Mortgage Corporation), or any successor
thereto.
GMAC : GMAC Mortgage Corporation, and any successor
thereto.
GMAC Assignment
Agreement : The
Assignment, Assumption and Recognition Agreement, dated as of
September 30, 2005, by and among the Seller, GMAC and the Trustee
evidencing the assignment of the GMAC Servicing Agreement to the
Trust.
GMAC Loans
: Those Mortgage Loans subject to
this Agreement which were purchased by the Seller from GMAC
pursuant to the GMAC Purchase Agreement and serviced in accordance
with the GMAC Servicing Agreement.
GMAC Purchase
Agreement : The Mortgage
Loan Purchase Agreement, dated as of May 1, 2001, as amended by
Amendment No. 1, dated as of December 1, 2002, between the Seller
and GMAC.
GMAC Servicing
Agreement : The Servicing
Agreement, dated as of May 1, 2001, between the Seller and GMAC, as
amended by Amendment No. 1, dated as of October 1, 2001 and
Amendment No. 2, dated as of July 31, 2002, as modified by the GMAC
Assignment Agreement.
GreenPoint
: GreenPoint Mortgage Funding, Inc.,
and any successor thereto.
GreenPoint Assignment
Agreement : The
Assignment, Assumption and Recognition Agreement, dated as of
September 30, 2005, by and among the Seller, GreenPoint and the
Trustee evidencing the assignment of the GreenPoint Servicing
Agreement to the Trust.
GreenPoint Loans
: Those Mortgage Loans subject to
this Agreement which were purchased by the Seller from GreenPoint
pursuant to the GreenPoint Servicing Agreement.
GreenPoint Servicing
Agreement : The Purchase,
Warranties and Servicing Agreement, dated as of September 1, 2003,
between Seller and GreenPoint, as modified by the GreenPoint
Assignment Agreement.
Harbourside
: Savannah Bank, NA dba Harbourside
Mortgage Corporation, and any successor thereto.
Harbourside Assignment
Agreement : The
Assignment, Assumption and Recognition Agreement, dated as of
September 30, 2005, by and among the Seller, Harbourside and the
Trustee evidencing the assignment of the Harbourside Servicing
Agreement to the Trust.
Harbourside Loans
: Those Mortgage Loans subject to
this Agreement which were purchased by the Seller from Harbourside
pursuant to the Harbourside Servicing Agreement.
Harbourside Servicing
Agreement : The Purchase,
Warranties and Servicing Agreement, dated as of April 1, 2005,
between Seller and Harbourside, as modified by the Harbourside
Assignment Agreement.
Indemnified Persons
: The Trustee, the Master Servicer,
the Company, the Trust Fund and the Securities Administrator and
their officers, directors, agents and employees and, with respect
to the Trustee, any separate co-trustee and its officers,
directors, agents and employees.
Initial Certificate Principal
Balance : With respect to
any Certificate, the Certificate Principal Balance of such
Certificate or any predecessor Certificate on the Closing
Date.
Initial Interest Coverage
Deposit : The amount to
be deposited by the Depostor in the Interest Coverage Account on
the Closing Date, which amount is $10,946.
Insurance Policy
: With respect to any Mortgage Loan
included in the Trust Fund, any insurance policy or LPMI Policy,
including all riders and endorsements thereto in effect with
respect to such Mortgage Loan, including any replacement policy or
policies for any Insurance Policies.
Insurance Proceeds
: Proceeds paid in respect of the
Mortgage Loans pursuant to any Insurance Policy or any other
insurance policy covering a Mortgage Loan, to the extent such
proceeds are payable to the mortgagee under the Mortgage, the
Company, the related 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 Company or the related Servicer would
follow in servicing mortgage loans held for its own account, in
each case other than any amount included in such Insurance Proceeds
in respect of Insured Expenses.
Insured Expenses
: Expenses covered by an Insurance
Policy or any other insurance policy with respect to the Mortgage
Loans.
Interest Accrual
Period : With respect to
the Class A-3, Class A-4 and Class C Certificates and any
Distribution Date, the calendar month immediately preceding such
Distribution Date.
With respect to the Class A-1, Class
A-2, Class M and Class B Certificates and any Distribution Date,
the period from and including the 25th day of the calendar month
preceding the calendar month in which the Distribution Date occurs
(or, with respect to the first Interest Accrual Period for the
Class M Certificates and Class B Certificates, the Closing Date) to
and including the 24th day of the calendar month in which such
Distribution Date occurs. All calculations of interest on the Class
A Certificates and Class C Certificates will be made on the basis
of a 360-day year consisting of twelve 30-day months. All
calculations of interest on the Class M Certificates and Class B
Certificates will be made on the basis of the actual number of days
elapsed in the related Interest Accrual Period.
Interest Coverage
Account : The account or
sub-account established and maintained pursuant to Section 4.22 and
which shall be an Eligible Account or a sub-account of an Eligible
Account.
Interest Coverage Distribution
Amount : With respect to
each Distribution Date, an amount equal to (x) the weighted average
of the Net Mortgage Rates on the then Outstanding Mortgage Loans,
weighted based on the Stated Principal Balances of such Mortgage
Loans as of the related Due Date prior to giving effect to any
reduction in the Stated Principal Balances of such Mortgage Loans
on such Due Date, multiplied by (y) the sum of (A) the Remaining
Pre-Funded Amount outstanding at the end of therelated Due Period
and (B) the aggregate Stated Principal Balance of the Subsequent
Mortgage Loans that do not have a Subsequent Cut-off Date prior to
the end of the related Due Period, transferred to the Trust during
the related Due Period.
Interest Determination
Date : Shall mean the
second LIBOR Business Day preceding the commencement of each
Interest Accrual Period.
Interest Funds
: For 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 Master Servicing 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 required to be remitted by the Company
or the Master Servicer pursuant to this Agreement or the related
Servicer pursuant to the related Servicing 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),
(e) all amounts relating to interest with respect to each Mortgage
Loan repurchased by the Seller pursuant to Sections 2.02 and 2.03
and by EMC
pursuant to Section 4.20, (f) all
amounts in respect of interest paid by the Master Servicer pursuant
to Section 11.01, in each case to the extent remitted by the
Company or the related Servicer, as applicable, to the Distribution
Account pursuant to this Agreement or the related Servicing
Agreement and (g) any proceeds from the Interest Coverage Account,
minus (ii) all amounts relating to interest required to be
reimbursed pursuant to Sections 5.02, 5.05, 5.07 and 5.09 or as
otherwise set forth in this Agreement.
Interest Rate Cap
: With respect to the Class A-1
Certificates and Class A-2 Certificates, will be calculated based
on an assumed certificate with a Certificate Principal Balance
equal to the aggregate Certificate Principal Balance of the Class
A-1 Certificates and Class A-2 Certificates and a fixed
pass-through rate of 5.50% per annum and a rate increase of 0.50%
per annum after the optional termination date. If the weighted
average of the Net Mortgage Rates on the Mortgage Loans is less
than 5.50% per annum (or, after the Optional Termination Date,
6.00% per annum), the amount of the shortfall which would occur
with respect to the assumed certificate will be allocated among the
Class A-1 Certificates and Class A-2 Certificates in proportion to
their current entitlements to interest calculated without regard to
this cap. Specifically, the Interest Rate Cap with respect to the
Class A-1 Certificates shall mean (i) on any Distribution Date
which occurs on or prior to the Optional Termination Date, the
product of (x) the weighted average of the Net Mortgage Rates on
the Mortgage Loans for such Distribution Date and (y)
73.09090909090910% and (ii) for each Distribution Date thereafter,
the product of (x) the weighted average of the Net Mortgage Rates
on the Mortgage Loans for such Distribution Date and (y)
67.00000000000000%, and the Interest Rate Cap with respect to the
Class A-2 Certificates shall mean (i) on any Distribution Date
which occurs on or prior to the Optional Termination Date, the
product of (x) the weighted average of the Net Mortgage Rates on
the Mortgage Loans for such Distribution Date and (y)
159.20000000000000% and (ii) for each Distribution Date thereafter,
the product of (x) the weighted average of the Net Mortgage Rates
on the Mortgage Loans for such Distribution Date and (y)
172.60000000000000%.
With respect to the Class A-3
Certificates and Class A-4 Certificates and on any Distribution
Date, the weighted average of the Net Mortgage Rates of the
Mortgage Loans for such Distribution Date.
With respect to the Class M
Certificates and Class B Certificates and any Distribution Date,
the lesser of (i) 9.00% per annum and (ii) the weighted average of
the Net Mortgage Rates of the Mortgage Loans for such Distribution
Date.
For federal income tax purposes, the
weighted average of the Net Mortgage Rates of the Mortgage Loans
shall equal, with respect to each of the Class A, Class M and Class
B Certificates, the weighted average of the Uncertificated REMIC I
Pass-Through Rate on the REMIC I Regular Interest for which such
Certificate is the Corresponding Certificate.
Interest Shortfall
: With respect to any Distribution
Date, means the aggregate shortfall, if any, in collections of
interest (adjusted to the related Net Mortgage Rates) on Mortgage
Loans resulting from (a) Principal Prepayments in full received
during the related Prepayment Period, (b) the partial Principal
Prepayments received during the related Prepayment Period to the
extent applied prior to the Due Date in the month of the
Distribution Date and (c) interest payments on certain of the
Mortgage Loans being limited pursuant to the provisions of the
Relief Act or similar state laws.
Last Scheduled Distribution
Date : October 25,
2035.
Latest Possible Maturity
Date : The Distribution
Date 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 and REMIC II 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 Company or the related 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, 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.
Loss Allocation
Limitation : The meaning
specified in Section 6.05(c) hereof.
LPMI Fee : Shall mean 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 Company or the related Servicer of
the related Mortgage Loan is responsible for the payment of the
LPMI Fee thereunder from collections on the related Mortgage
Loan.
Majority Class C
Certificateholder : Shall
mean the Holder of a 50.01% or greater Percentage Interest in the
Class C Certificates.
Marker Rate
: With respect to the Class C
Certificate 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 REMIC I Regular Interest A-1, REMIC I
Regular Interest A-2, REMIC I Regular Interest A-3, REMIC I Regular
Interest A-4, REMIC I Regular Interest M-1, REMIC I Regular
Interest M-2, REMIC I Regular Interest M-3, REMIC I Regular
Interest B-1, REMIC I Regular Interest B-2, REMIC I Regular
Interest B-3, REMIC I Regular Interest B-4 and REMIC
I Regular Interest ZZ, with the rate
on each such REMIC I Regular Interest (other than REMIC I Regular
Interest ZZ) subject to a cap equal to the Pass-Through Rate for
the Corresponding Certificate and with the rate on REMIC I Regular
Interest ZZ subject to a cap of zero for the purpose of this
calculation; provided, however, that for this purpose, the
calculation of the Uncertificated REMIC I Pass-Through Rate and the
related cap with respect to REMIC I Regular Interest M-1, REMIC I
Regular Interest M-2, REMIC I Regular Interest M-3, REMIC I Regular
Interest B-1, REMIC I Regular Interest B-2, REMIC I Regular
Interest B-3 and REMIC I Regular Interest B-4 shall be multiplied
by a fraction, the numerator of which is the actual number of days
in the Interest Accrual Period and the denominator of which is
30.
Master Servicer
: Wells Fargo Bank, National
Association, 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
Company and all Servicers 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 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.
Master Servicer Collection
Account : The trust
accounts or accounts created and maintained pursuant to Section
5.06 hereof, which shall be entitled “U.S. Bank National
Association, as Trustee f/b/o Holders of Bear Stearns Asset Backed
Securities I LLC, Asset Backed Certificates, Series 2005-AC7 -
Master Servicer Collection Account”.
Master Servicing
Compensation : For any
Distribution Date, the sum of the Master Servicing Fee and the
Additional Master Servicing Compensation for such Distribution
Date.
Master Servicing Fee
: As to each Mortgage Loan and any
Distribution Date, an amount equal to 1/12th of the Master
Servicing Fee Rate multiplied by the Stated Principal Balance of
such Mortgage Loan as of the last day of the related Due
Period.
Master Servicing Fee
Rate : 0.012% per
annum.
MERS : Mortgage Electronic Registration Systems,
Inc., a corporation organized and existing under the laws of the
State of Delaware, or any successor thereto.
MERS® 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®
System.
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 Interest Distributable
Amount : With respect to
the Certificates (other than the Class P Certificates and Class R
Certificates) for any Distribution Date, means an amount equal to
the interest accrued during the related Interest Accrual Period at
the applicable Pass-Through Rate on the Certificate Principal
Balance (or Certificate Notional Amount) of such Certificate
immediately prior to such Distribution Date less such
Certificate’s share of any Unpaid Interest Shortfall and the
interest portion of any Realized Losses on the Mortgage Loans
allocated to such Certificate pursuant to Section 1.02. The Monthly
Interest Distributable Amount with respect to the Class A
Certificates and Class C Certificates is calculated on the basis of
a 360-day year consisting of twelve 30-day months. The Monthly
Interest Distributable Amount with respect to the Subordinate
Certificates is calculated on the basis of a 360-day year and the
actual number of days elapsed during the related Interest Accrual
Period. No Monthly Interest Distributable Amount will be payable
with respect to any Class of Certificates after the Distribution
Date on which the outstanding Certificate Principal Balance (or
Certificate Notional Amount) of such Certificate has been reduced
to zero.
Monthly Statement
: The statement delivered to the
Certificateholders pursuant to Section 6.06.
Moody’s
: Moody’s Investors Service,
Inc.
Mortgage : The mortgage, deed of trust or other
instrument creating a first lien on or first 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 Trustee to be added to
the Mortgage File pursuant to this 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. Any mortgage loan that was intended by the parties hereto
to be transferred to the Trust Fund as indicated by such Mortgage
Loan Schedule which is in fact not so transferred for any reason
including, without limitation, a breach of the representation
contained in Section 2.03(b)(v) hereof, shall continue to be a
Mortgage Loan hereunder until the Purchase Price with respect
thereto has been paid to the Trust Fund.
Mortgage Loan Purchase
Agreement : Shall mean
the Mortgage Loan Purchase Agreement, dated as of September 30,
2005, between the Seller, as seller and the Depositor, as
purchaser.
Mortgage Loan Purchase
Price : The price,
calculated as set forth in Section 11.01, to be paid in connection
with the repurchase of the Mortgage Loans pursuant to Section
11.01.
Mortgage Loan Schedule
: The list of Mortgage Loans (as
from time to time amended by the Company 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 loan number;
|
|
(ii)
|
the Mortgage Rate in effect as of
the Cut-off Date;
|
|
(iii)
|
the Servicer (or the Company, if it
services the Mortgage Loan), the Servicing Fee Rate and the Master
Servicing Fee Rate;
|
|
(iv)
|
the LPMI Fee, if
applicable;
|
|
(v)
|
the Net Mortgage Rate in effect as
of the Cut-off Date;
|
|
(vi)
|
the maturity date;
|
|
(vii)
|
the original principal
balance;
|
|
(viii)
|
the Cut-off Date Principal
Balance;
|
|
(ix)
|
the original term;
|
|
(x)
|
the remaining term;
|
|
(xi)
|
the property type; and
|
|
(xii)
|
the MIN with respect to each
Mortgage Loan.
|
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
: The annual rate of interest borne
by a Mortgage Note.
Mortgaged Property
: The underlying property securing a
Mortgage Loan.
Mortgagor : The obligors on a Mortgage Note.
Net Interest
Shortfalls : Shall mean
Interest Shortfalls net of payments by the Company, the Servicer or
the Master Servicer in respect of Compensating Interest.
Net Monthly Excess
Cashflow : With respect
to any Distribution Date, the sum of (a) any Overcollateralization
Release Amount for such Distribution Date and (b) the Remaining
Excess Spread for such Distribution Date.
Net Mortgage Rate
: As to each Mortgage Loan, and at
any time, the per annum rate equal to the related Mortgage Rate
less the sum of (i) the Servicing Fee Rate, (ii) the Master
Servicing Fee Rate and (iii) the rate at which the LPMI Fee is
calculated, if any.
Net WAC Rate Carryover
Amount : With respect to
each Class of Offered Certificates and any Distribution Date, an
amount equal to the sum of (i) the excess, if any, of (x) the
amount of interest such Class would have been entitled to receive
on such Distribution Date if the Pass-Through Rate applicable to
such Class would not have been reduced by the applicable Interest
Rate Cap on such Distribution Date over (y) the amount of interest
paid to such Class on such Distribution Date plus (ii) the related
Net WAC Rate Carryover Amount for the previous Distribution Date
for such Class not previously distributed together with interest
thereon at a rate equal to the Pass-Through Rate for such Class for
the most recently ended Interest Accrual Period.
Net WAC Reserve Fund
: Shall mean the separate trust
account created and maintained by the Securities Administrator
pursuant to Section 6.08 hereof.
Net WAC Reserve Fund
Deposit : With respect to
the Net WAC Reserve Fund, an amount equal to $5,000, which the
Depositor shall deposit initially into the Net WAC Reserve Fund
pursuant to Section 6.08 hereof.
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 Company or the Master
Servicer pursuant to this Agreement or the related Servicer
pursuant to the related Servicing Agreement, that, in the good
faith judgment of the Company, the Master Servicer or the related
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.
Offered Certificates
: Any of the Class A-1, Class A-2,
Class A-3, Class A-4, Class M-1, Class M-2, Class M-3, Class B-1,
Class B-2 and Class B-3 Certificates.
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, the Securities Administrator, the Master
Servicer and/or the Trustee, as the case may be, as required by
this Agreement.
One-Month LIBOR
: With respect to any Interest
Accrual Period and the LIBOR Certificates, the rate determined by
the Securities Administrator 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. 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 Securities
Administrator), One-Month LIBOR for the applicable Interest Accrual
Period will be the Reference Bank Rate. If no such quotations can
be obtained by the Securities Administrator and no Reference Bank
Rate is available, One-Month LIBOR shall be One-Month LIBOR
applicable to the preceding Interest Accrual Period. The
establishment of One-Month LIBOR on each Interest Determination
Date by the Securities Administrator and the Securities
Administrator’s calculation of the rate of interest
applicable to the LIBOR Certificates for the related Interest
Accrual Period shall, in the absence of manifest error, be final
and binding. One-Month LIBOR for the Class A-1 Certificates and
Class A-2 Certificates and the first Interest Accrual Period will
be approximately 3.720% per annum. One-Month LIBOR for the other
LIBOR Certificates and any Interest Accrual Period shall be
calculated as described above.
Opinion of Counsel
: A written opinion of counsel, who
may be counsel for the Seller, the Depositor, the Company or the
Master Servicer, reasonably acceptable to each addressee of such
opinion; provided that with respect to Section 2.05, 8.05, 8.07 or
12.01, or the interpretation or application of the REMIC
Provisions, such counsel must (i) in fact be independent of the
Seller, Depositor, the Company and the Master Servicer, (ii) not
have any direct financial interest in the Seller, Depositor, the
Company or the Master Servicer or in any affiliate of either, and
(iii) not be connected with the Seller, Depositor, the Company 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 11.01 hereof.
Optional Termination
Date : The first
Distribution Date on which the Trust Fund may be terminated at the
option of the Majority Class C Certificateholder as described under
Section 11.01.
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.
Originator
: With respect to each Mortgage
Loan, shall mean the originator set forth in the Mortgage Loan
Schedule for such Mortgage Loan.
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 Securities Administrator or delivered
to the Securities Administrator for cancellation; and
(b) Certificates
in exchange for which or in lieu of which other Certificates have
been executed and delivered by the Securities Administrator
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 Increase
Amount : As of any
Distribution Date, the lesser of (a) the excess, if any, of (i) the
Overcollateralization Target Amount over (ii) the
Overcollateralized Amount on such Distribution Date (after taking
into account payments to the Offered Certificates of the Basic
Principal Distribution Amount on such Distribution Date) and (b)
the Excess Spread for such Distribution Date.
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 Overcollateralized 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
Overcollateralized Amount is less than or equal to the
Overcollateralization Target Amount on that Distribution
Date).
Overcollateralization Target
Amount : With respect to
any Distribution Date, $2,304,024.89.
Overcollateralized
Amount : With respect to
any Distribution Date, is the excess, if any, of (a) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period over (b) the aggregate Certificate
Principal Balance of the Offered Certificates on such Distribution
Date (after taking into account the payment of principal other than
any Extra Principal Distribution Amount on such
Certificates).
Ownership Interest
: As to any Certificate, any
ownership interest in such Certificate including any interest in
such Certificate as the Holder thereof and any other interest
therein, whether direct or indirect, legal or
beneficial.
Pass-Through Rate
: With respect to each Class of
Certificates (other than the Class C Certificates), the Class A-1
Pass-Through Rate, Class A-2 Pass-Through Rate, Class A-3
Pass-Through Rate, Class A-4 Pass-Through Rate, Class M-1
Pass-Through Rate, Class M-2 Pass-Through Rate, Class M-3
Pass-Through Rate, Class B-1 Pass-Through Rate, Class B-2
Pass-Through Rate, Class B-3 Pass-Through Rate or Class B-4
Pass-Through Rate, as applicable.
With respect to the Class C
Certificates, a per annum rate equal to the percentage equivalent
of a fraction, the numerator of which is (x) the sum of the amounts
calculated pursuant to clauses (A) through (M) below, and the
denominator of which is (y) the aggregate Uncertificated Principal
Balance of the REMIC I Regular Interests (other than
REMIC I Regular Interest P). For
purposes of calculating the Pass-Through Rate for the Class C
Certificates, the numerator is equal to the sum of the following
components:
(A)
the Uncertificated REMIC I
Pass-Through Rate for REMIC I Regular Interest AA minus the Marker
Rate, applied to an amount equal to the Uncertificated Principal
Balance of REMIC I Regular Interest AA;
(B)
the Uncertificated REMIC I
Pass-Through Rate for REMIC I Regular Interest A-1 minus the Marker
Rate, applied to an amount equal to the Uncertificated Principal
Balance of REMIC I Regular Interest A-1;
(C) the
Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest A-2 minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC I Regular Interest
A-2;
(D) the
Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest A-3 minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC I Regular Interest
A-3;
(E) the
Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest A-4 minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC I Regular Interest
A-4;
(F) the
Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest M-1 minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC I Regular Interest
M-1;
(G) the
Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest M-2 minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC I Regular Interest
M-2;
(H) the
Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest M-3 minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC I Regular Interest
M-3;
(I) the
Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest B-1 minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC I Regular Interest
B-1;
(J) the
Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest B-2 minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC I Regular Interest
B-2;
(K) the
Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest B-3 minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC I Regular Interest
B-3;
(L) the
Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest B-4 minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC I Regular Interest
B-4; and
(M) the
Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest ZZ minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC I Regular Interest
ZZ.
Paying Agent
: Wells Fargo Bank, National
Association, in its capacity as paying agent, and its successors
and assigns.
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.
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;
(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;
(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;
(v) demand
or time deposits or certificates of deposit issued by any bank or
trust company or savings institution to the extent that such
deposits are fully insured by the FDIC;
(vi) guaranteed
reinvestment agreements issued by any bank, insurance company or
other corporation 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;
(vii) repurchase
obligations with respect to any security described in clauses (i)
and (ii) above, in either case entered into with a depository
institution or trust company (acting as principal) described in
clause (iv) above;
(viii) securities
(other than stripped bonds, stripped coupons or instruments sold at
a purchase price in excess of 115% of the face amount thereof)
bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States or any state
thereof which, at the time of such investment, have one of the two
highest long term ratings of each Rating Agency (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;
(ix) interests
in any money market fund (including any such fund managed or
advised by the Trustee or Master Servicer 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 long 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;
(x) 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 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; and
(xi) such
other investments having a specified stated maturity and bearing
interest or sold at a discount acceptable to each Rating Agency 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 (vi)
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.
Permitted Transferee
: Any Person (x) 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 or (v) an electing large partnership
within the meaning of Section 775(a) of the Code, (y) that is 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 trust or if it has a valid
election in effect under applicable U.S. Treasury regulations to be
treated as a United States person and (z) other than 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 or REMIC
II 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.
PHH : PHH Mortgage Corporation, and any successor
thereto.
PHH Assignment
Agreement : The
Assignment, Assumption and Recognition Agreement, dated as of
September 30, 2005, by and among the Seller, PHH, Bishop’s
Gate and the Trustee evidencing the assignment of the PHH Servicing
Agreement to the Trust.
PHH Loans : Those Mortgage Loans subject to this Agreement
which were purchased by the Seller from PHH and Bishop’s Gate
pursuant to the PHH Servicing Agreement.
PHH Servicing
Agreement : The Purchase,
Warranties and Servicing Agreement, dated as of October 23, 2001,
by and among the Seller, PHH, as successor to Cendant Mortgage
Corporation, and Bishop’s Gate, as modified by the PHH
Assignment Agreement.
Pre-Funded Amount
: The amount deposited by the
Depositor in the Pre-Funding Account on the Closing Date for the
Subsequent Mortgage Loans, which amount is, with respect to the
Mortgage Loans, $828,247.
Pre-Funding Account
: The account or sub-account
established and maintained pursuant to Section 5.10(a) and which
shall be an Eligible Account or a sub-account of an Eligible
Account.
Pre-Funding Period
: The period from the Closing Date
until the earliest of (i) the date on which the amount on deposit
in the Pre-Funding Account (exclusive of investment income) is
reduced to zero or (ii) December 17, 2005.
Prepayment Assumption
: The applicable rate of prepayment,
as described in the Prospectus Supplement relating to each Class of
Offered Certificates.
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
Excess : With respect to
any Distribution Date, for each EMC Mortgage Loan that was the
subject of a Principal Prepayment in full or in part during the
portion of the related Prepayment Period occurring between the
first day of the calendar month in which such Distribution Date
occurs and the Determination Date of the calendar month in which
such Distribution Date occurs, an amount equal to interest (to the
extent received) at the applicable Net Mortgage Rate on the amount
of such Principal Prepayment for the number of days commencing on
the first day of the calendar month in which such Distribution Date
occurs and ending on the last date through which interest is
collected from the related Mortgagor.
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, 4.20 or 11.01 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 of interest paid or
collected in connection with such Principal Prepayment or such
liquidation proceeds less the sum of (a) the related Servicing Fee,
(b) the Master Servicing Fee and (c) the LPMI Fee, if
any.
Prepayment Period
: As to any Distribution Date and
(i) each EMC Mortgage Loan, the period commencing on the 16
th day of the month prior to the month in which the
related Distribution Date occurs and ending on the 15 th
day of the month in which such Distribution
Date occurs and (ii) any other
Mortgage Loan, the period set forth in the related Servicing
Agreement.
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 Interest Accrual Period for such Class
relating to a Distribution Date.
Principal Distribution
Amount : With respect to
each Distribution Date, the sum of (a) the Basic Principal
Distribution Amount for such Distribution Date and (b) any Extra
Principal Distribution Amount for such Distribution
Date.
Principal Funds
: With respect to 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 prior to 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 that
was repurchased by the Seller pursuant to Sections 2.02 or 2.03 or
by EMC pursuant to Section 4.20, (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), (e) all Liquidation Proceeds and Subsequent
Recoveries collected during the related Prepayment Period (to the
extent such Liquidation Proceeds and Subsequent Recoveries relate
to principal) and remitted by the Company or the related Servicer
to the Distribution Account pursuant to this Agreement or the
related Servicing Agreement, (f) amounts in respect of principal
paid by the Majority Class C Certificateholder pursuant to Section
11.01 and (g) any Remaining Pre-Funded Amount withdrawn from the
Pre-Funding Accountat the end of the Pre-Funding Period pursuant to
Section 5.10(c) minus (ii) all amounts required to be reimbursed
pursuant to Sections 5.02, 5.05, 5.07 and 5.09 or as otherwise set
forth in this Agreement.
Principal Remittance
Amount : With respect to
each Distribution Date, the sum of the amounts listed in clauses
(a) through (e) of the definition of Principal Funds.
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, 4.20 and 11.01 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 Company or
the related Servicer, as appropriate, in accordance with the terms
of the related Mortgage Note.
Private Certificates
: Any of the Class B-4, Class P,
Class C and Residual Certificates.
Prospectus Supplement
: The Prospectus Supplement dated
September 28, 2005 relating to the public offering of the Offered
Certificates.
Protected Account
: Each account established and
maintained by the Company with respect to receipts on the Mortgage
Loans and REO Property in accordance with Section 5.01 hereof or by
the related Servicer in accordance with the related Servicing
Agreement.
PUD : A Planned Unit Development.
Purchase Price
: With respect to any Mortgage Loan
required to be repurchased by the Seller pursuant to Section 2.02
or 2.03 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 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 and (iii) any costs and damages (if any)
incurred by the Trust in connection with any violation of such
Mortgage Loan of any predatory lending laws.
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 (v) 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 Company
pursuant to this Agreement or the applicable Servicer pursuant to
the related Servicing 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 Subordinate Certificates or applied to
increase Excess Spread on any Distribution Date.
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.
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 Subsequent
Recoveries are applied to reduce the Certificate Principal Balance
of any Class of Certificates on any Distribution Date.
Record Date
: With respect to the Class A-3,
Class A-4, Class C, Class P and Class R Certificates and any
Distribution Date, the close of business on the last Business Day
of the month preceding the month in which such Distribution Date
occurs. With respect to any Distribution Date and the Class A-1,
Class A-2, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2,
Class B-3 and Class B-4 Certificates, so long as such 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.
Reference Banks
: Shall mean leading banks selected
by the Securities Administrator 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 Securities Administrator 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 Interest
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 aggregate Certificate Principal Balance
of the Class M-1, Class M-2, Class M-3, Class B-1, Class B-2, Class
B-3 and Class B-4 Certificates for such Interest 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 Securities
Administrator, 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 M-1, Class M-2, Class M-3, Class
B-1, Class B-2, Class B-3 and Class B-4 Certificates for such
Interest 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 any similar state law.
Remaining Excess
Spread : With respect to
any Distribution Date is the Excess Spread less the any Extra
Principal Distribution Amount, in each case for such Distribution
Date.
Remaining Pre-Funded
Amount : An amount equal
to the Pre-Funding Amount minus the amount equal to 100% of the
aggregate Scheduled Principal Balance of the Subsequent Mortgage
Loans transferred to the Trust Fund during the Pre-Funding
Period.
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 6.07(a).
REMIC I Interest Loss Allocation
Amount : With respect to
any Distribution Date, an amount equal to the product of (i) 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 Interests
: The REMIC I Regular Interests and
the Class R-1 Certificates.
REMIC I Overcollateralization
Amount : With respect to
any date of determination, (i) 1% of the aggregate Uncertificated
Principal Balance of the REMIC I Regular Interests (other than
REMIC I Regular Interest P) minus (ii) the aggregate Uncertificated
Principal Balance of REMIC I Regular Interest A-1, REMIC I Regular
Interest A-2, REMIC I Regular Interest A-3, REMIC I Regular
Interest A-4, REMIC I Regular Interest M-1, REMIC I Regular
Interest M-2, REMIC I Regular Interest M-3, REMIC I Regular
Interest B-1, REMIC I Regular Interest B-2, REMIC I Regular
Interest B-3 and REMIC I Regular Interest B-4, in each case as of
such date of determination.
REMIC I Overcollateralization
Target Amount : 1% of the
Overcollateralization Target Amount.
REMIC I Principal Loss Allocation
Amount : With respect to
any Distribution Date, an amount equal to the product of (i) 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 (2) times the aggregate Uncertificated
Principal Balance of REMIC I Regular Interest A-1, REMIC I Regular
Interest A-2, REMIC I Regular Interest A-3, REMIC I Regular
Interest A-4, REMIC I Regular Interest M-1, REMIC I Regular
Interest M-2, REMIC I Regular Interest M-3,
REMIC I Regular Interest B-1, REMIC
I Regular Interest B-2, REMIC I Regular Interest B-3 and REMIC I
Regular Interest B-4, and the denominator of which is the aggregate
Uncertificated Principal Balance of REMIC I Regular Interest A-1,
REMIC I Regular Interest A-2, REMIC I Regular Interest A-3, REMIC I
Regular Interest A-4, REMIC I Regular Interest M-1, REMIC I Regular
Interest M-2, REMIC I Regular Interest M-3, REMIC I Regular
Interest B-1, REMIC I Regular Interest B-2, REMIC I Regular
Interest B-3, REMIC I Regular Interest B-4 and REMIC I Regular
Interest ZZ.
REMIC I Regular Interest ZZ
Maximum 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
Overcollateralization Amount, in each case for such Distribution
Date, over (ii) the Uncertificated Accrued Interest on REMIC I
Regular Interest A-1, REMIC I Regular Interest A-2, REMIC I Regular
Interest A-3, REMIC I Regular Interest A-4, REMIC I Regular
Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular
Interest M-3, REMIC I Regular Interest B-1, REMIC I Regular
Interest B-2, REMIC I Regular Interest B-3 and REMIC I Regular
Interest B-4 for such Distribution Date, with the rate on each such
REMIC I Regular Interest subject to a cap equal to the Pass-Through
Rate for the Corresponding Certificate.
REMIC I Regular
Interests : REMIC I
Regular Interest AA, REMIC I Regular Interest A-1, REMIC I Regular
Interest A-2, REMIC I Regular Interest A-3, REMIC I Regular
Interest A-4, REMIC I Regular Interest M-1, REMIC I Regular
Interest M-2, REMIC I Regular Interest M-3, REMIC I Regular
Interest B-1, REMIC I Regular Interest B-2, REMIC I Regular
Interest B-3, REMIC I Regular Interest B-4, REMIC I Regular
Interest ZZ and REMIC I Regular Interest P.
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
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 A 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
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 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
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 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
A-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 A-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
B-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 B-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
B-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 B-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
B-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 B-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
B-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 B-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-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.
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 will not accrue interest 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 terms and conditions hereof, in an aggregate amount equal to
its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC II : The segregated pool of assets described in the
Preliminary Statement consisting of the REMIC I Regular
Interests.
REMIC II Certificates
: The Regular Certificates and the
Class R-2 Certificates.
REMIC Opinion
: Shall mean an Opinion of Counsel
to the effect that the proposed action will not have an adverse
affect on any REMIC created hereunder.
REMIC Provisions
: Provisions of the federal income
tax law relating to real estate mortgage investment conduits, which
appear at Sections 860A through 860G 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 (i) with respect to the
Company, the Business Day immediately preceding the Distribution
Account Deposit Date and (ii) with respect to the related Servicer,
the date specified in the related Servicing Agreement.
Remittance Report
: As defined in Section
6.04(d).
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 Company or the related Servicer through foreclosure or
deed-in-lieu of foreclosure in connection with a defaulted Mortgage
Loan.
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) 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; and (ix)
comply with each representation and warranty set forth in Section
2.03 hereof.
Repurchase Price
: With respect to each Mortgage
Loan, a price equal to (i) the outstanding principal balance of
such Mortgage Loan, plus (ii) interest on such outstanding
principal balance at the Mortgage Rate (net of the Servicing Fee
Rate) from the last date through which interest has been paid to
the end of the month of repurchase, less (iii) amounts advanced by
the Company or the related Servicer in respect of such repurchased
Mortgage Loan which are being held in the Master Servicer
Collection Account for remittance to the Trustee (or the Securities
Administrator on its behalf) plus (iv) 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.
Request for Release
: The Request for Release to be
submitted by the Seller, the Company, the related Servicer or the
Master Servicer to the Custodian substantially in the form of
Exhibit G. Each Request for Release furnished to the Custodian by
the Seller, the Company, the related Servicer 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 Custodian, shall be deemed to have been sent
and executed by an officer of such Person or a Servicing Officer)
of the Company or the related Servicer, as applicable.
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 or the related
Servicing Agreement.
Residual Certificates
: Any of the Class R-1 Certificates
and Class R-2 Certificates, each evidencing the sole class of
Residual Interests 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.
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.
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.
Securities
Administrator : Wells
Fargo Bank, National Association, in its capacity as securities
administrator hereunder, and its successors and assigns.
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 A-1, Class A-2,
Class A-3 and Class A-4 Certificates.
Servicer : Shall mean any of GMAC, GreenPoint,
Harbourside or PHH.
Servicing Advances
: All customary, reasonable and
necessary “out of pocket” costs and expenses (including
reasonable legal fees) incurred in the performance by the Company
or the related Servicer of its servicing obligations hereunder or
under the related Servicing Agreement, 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® 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 Agreement
: Shall mean either the GMAC
Servicing Agreement, GreenPoint Servicing Agreement, Harbourside
Servicing Agreement or PHH Servicing Agreement.
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.
Servicing Fee Rate
: 0.250% per annum.
Servicing Modification
: With respect to any Mortgage Loan
that is in default or, in the reasonable judgment of the Company or
the related Servicer, as to which default is reasonably
foreseeable, any modification which
is effected by the Company or the related Servicer in accordance
with the terms of this Agreement or the related Servicing 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.
Servicing Officer
: Any officer of the Company or the
related Servicer involved in, or responsible for, the
administration and servicing of the Mortgage Loans (i) in the case
of the Company, whose name and facsimile signature appear on a list
of servicing officers furnished to the Trustee by the Company on
the Closing Date pursuant to this Agreement, as such list may from
time to time be amended and (ii) in the case of the related
Servicer, as to which evidence reasonably acceptable to the
Trustee, as applicable, of due authorization, by such party has
been furnished from time to time to the Trustee.
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
Company or the related Servicer as recoveries of principal in
accordance with Section 3.09 or the related Servicing Agreement
with respect to such Mortgage Loan, that were received by the
Company or the related 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.
Subordinate
Certificates : Any of the
Class M-1, Class M-2, Class M-3, Class B-1, Class B-2, Class B-3
and Class B-4 Certificates.
Subsequent Cut-off
Date : With respect to
the Subsequent Mortgage Loans sold to the Trust pursuant to a
Subsequent Transfer Instrument, the later of (i) the first day of
the month in which the related Subsequent Transfer Date occurs or
(ii) the date of origination of such Mortgage Loan.
Subsequent Mortgage
Loans : The Mortgage
Loans which will be acquired by the Trust during the Pre-Funding
Period with amounts on deposit in the Pre-Funding Account, which
Mortgage Loans will be held as part of the Trust Fund.
Subsequent Mortgage Loan Purchase
Agreement : The agreement
dated as of the Subsequent Transfer Date, between EMC, as seller,
and Bear Stearns Asset Backed Securities I LLC, as purchaser, and
all amendments thereof and supplements thereto, regarding the
transfer of the Subsequent Mortgage Loans by EMC to Bear Stearns
Asset Backed Securities I LLC, a form of which is attached as
Exhibit M.
Subsequent Recoveries
: As of any Distribution Date,
amounts received by the Master Servicer during the related Due
Period 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 Liquidated Mortgage Loan or disposition of an REO
Property prior to the related Prepayment Period that resulted in a
Realized Loss, after the liquidation or disposition of such
Mortgage Loan.
Subsequent Transfer
Date : With respect to
each Subsequent Transfer Instrument, the date on which the related
Subsequent Mortgage Loans are sold to the Trust.
Subsequent Transfer
Instrument : Each
Subsequent Transfer Instrument, dated as of a Subsequent Transfer
Date, executed by the Depositor at the written direction of the
Seller and substantially in the form attached hereto as Exhibit N,
by which Subsequent Mortgage Loans are transferred to the Trust
Fund.
Subservicing Agreement
: Any agreement entered into between
the Company 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 9.01.
Tax Matters Person
: The person designated as
“tax matters person” in the manner provided under
Treasury Regulation Sections 1.860F-4(d) and 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 Securities Administrator, or any successor thereto or assignee
thereof, shall serve as tax administrator hereunder and as agent
for the related Tax Matters Person.
Transfer Affidavit
: As defined in Section
7.02(c).
Transfer : Any direct or indirect transfer or sale of any
Ownership Interest in a Certificate.
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 Class P Certificate Account,
the Net WAC Reserve Fund, the Distribution Account, the Master
Servicer Collection Account maintained by the Master Servicer and
the Protected Accounts maintained by the Company and the Servicers
and all amounts deposited therein pursuant to the applicable
provisions of this Agreement and the Servicing Agreements; (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 Servicing Agreements and the
Assignment 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.
The Net WAC Reserve Fund shall
constitute an asset of the Trust Fund but will not be included in
REMIC I or REMIC II.
Trustee : U.S. 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.
20% Clean-up Call Date
: Shall mean the first Distribution
Date upon which the aggregate Stated Principal Balance of the
Mortgage Loans as of the end of the related Due Period is less than
or equal to 20% of the aggregate Cut-off Date Principal Balance of
the Mortgage Loans.
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 related
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 Unpaid
Interest Shortfalls and interest portion of Realized Losses
(allocated to such REMIC I Regular Interests as set forth in
Sections 1.02 and 6.05).
Uncertificated Principal
Balance : With respect to
each REMIC I Regular Interest, the principal amount of such REMIC I
Regular Interest 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 each 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 6.07 and, if
and to the extent necessary and appropriate, shall be further
reduced on such Distribution Date by Realized Losses as provided in
Section 6.05, and the Uncertificated Principal Balance of REMIC I
Regular Interest ZZ shall be increased by interest deferrals as
provided in Section 6.07(b)(i). The Uncertificated Principal
Balance of each REMIC I Regular Interest shall never be less than
zero.
Uncertificated REMIC I
Pass-Through Rate : With
respect to any REMIC I Regular Interest other than REMIC I Regular
Interest P and any Distribution Date, a per annum rate equal to the
weighted average of the Net Mortgage Rates of the Mortgage Loans as
of the first day of the related Due Period, weighted on the basis
of the Stated Principal Balances thereof as of the first day of the
related Due Period. With respect to REMIC I Regular Interest P and
any Distribution Date, 0.00%.
Unpaid Interest
Shortfalls : Shall mean
Interest Shortfalls net of payments by the Company, the related
Servicer or the Master Servicer in respect of Compensating
Interest.
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) 95.00% to the Certificates (other than the Class C,
Class P and the Residual Certificates), (ii) 1% to the Class P
Certificates, (iii) 3% to the Class C Certificates and (iv) 0.50%
to each Class of Residual Certificates, with the allocation among
the Certificates other than the Class C, 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.
|
Section 1.02
|
Allocation of Certain Interest
Shortfalls.
|
For purposes of calculating the
amount of the Monthly Interest Distributable Amount for the Class
A-1, Class A-2, Class A-3, Class A-4, Class M-1, Class M-2, Class
M-3, Class B-1, Class B-2, Class B-3, Class B-4 and Class C
Certificates for any Distribution Date, (1) the aggregate amount of
any Unpaid Interest Shortfalls in respect of the Mortgage Loans for
any Distribution Date shall be allocated first, in reduction of
amounts otherwise distributable to the Class C Certificates and
Class R Certificates, and thereafter, among the Offered
Certificates in proportion to the amount of the Monthly Interest
Distributable Amount that would have been allocated to such
Certificates in the absence of such Unpaid Interest Shortfalls, and
(2) the interest portion of Realized Losses for the Mortgage Loans
will be allocated first, to the Class C Certificates, based on, and
to the extent of, one month’s interest at the then applicable
Pass-Through Rate on the Certificate Notional Amount thereof,
second to the Class B-4 Certificates, third to the Class B-3
Certificates, fourth to the Class B-2 Certificates, fifth to the
Class B-1 Certificates, sixth to the Class M-3 Certificates,
seventh to the Class M-2 Certificates, eighth to the Class M-1
Certificates, and following the Cross-Over Date, ninth to the
Senior Certificates in each case, based on, and to the extent of,
one month’s interest at the then applicable respective
Pass-Through Rates on the respective Certificate Principal Balances
of each such Certificate.
For purposes of calculating the
amount of Uncertificated Accrued Interest for the REMIC I Regular
Interests (other than REMIC I Regular Interest P) for any
Distribution Date, the aggregate amount of any Unpaid Interest
Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, to Uncertificated
Accrued Interest payable to REMIC I Regular Interest AA and REMIC I
Regular Interest ZZ up to an aggregate amount equal to the REMIC I
Interest Loss Allocation Amount, 98% and 2%, respectively, and
thereafter among REMIC I Regular Interest AA, REMIC I Regular
Interest A-1, REMIC I Regular Interest A-2, REMIC I Regular
Interest A-3, REMIC I Regular Interest A-4, REMIC I Regular
Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular
Interest M-3, REMIC I Regular Interest B-1, REMIC I Regular
Interest B-2, REMIC I Regular Interest B-3, REMIC I Regular
Interest B-4 and REMIC I Regular Interest ZZ, pro rata in
proportion to the amount of the Uncertificated Accrued Interest
that would have been allocated to such REMIC I Regular Interests in
the absence of such Unpaid Interest Shortfalls.
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
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 (A) to the order of “U.S. Bank National Association,
as Trustee for certificateholders of Bear Stearns Asset Backed
Securities I LLC, Asset Backed Certificates, Series
2005-AC7,” or (B) in the case of a loan registered on the
MERS system, in blank, and in each case showing to the extent
available to the Seller 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 “U.S. Bank National
Association, as Trustee for certificateholders of Bear Stearns
Asset Backed Securities I LLC, Asset Backed Certificates, Series
2005-AC7,” 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, to the extent available to the Seller, 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 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 its 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 Master Servicer
Collection 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 its
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 any assignment (a) 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 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 or, should the Seller fail to perform such
obligations, the Master Servicer shall cause 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 Company or the Servicer as a result of such Person
having completed a Request for Release, the 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® System, the Seller
further agrees that it will cause, at the Seller’s own
expense, within 30 days after the Closing Date, the MERS®
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
Company, any Servicer or 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.
The Depositor shall not be required
to deliver intervening assignments or Mortgage Note endorsements
between the related Underlying Seller and the Seller, between the
Seller and the Depositor, and between the Depositor and the
Trustee; and provided, further, however, that in the
case of Initial Mortgage Loans which
have been prepaid in full after the Cut-off Date and prior to the
Closing Date, and in the case of Subsequent Mortgage Loans which
have been prepaid in full after the related Subsequent Cut-off Date
and prior to the related Subsequent Transfer Date, the Depositor,
in lieu of delivering the above documents, may deliver to the
Trustee or the Custodian, as its agent, a certification to such
effect and shall deposit all amounts paid in respect of such
Mortgage Loans in the Master Servicer Collection Account on the
Closing Date.
|
Section 2.02
|
Acceptance of the Mortgage Loans.
|
(a) Based
on the Initial Certification received by it from the Custodian, the
Trustee acknowledges receipt of, subject to the further review and
exceptions reported by the Custodian pursuant to the procedures
described below, the documents (or certified copies thereof)
delivered to the Trustee or the 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, with respect to the Initial Mortgage Loans, or the Subequent
Transfer Date, with respect to the Subsequent Mortgage Loans, the
Trustee or the Custodian on its behalf will deliver an Initial
Certification 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 (or within 90 days of the Subsequent
Transfer Date, with respect to the Subsequent Mortgage Loans, or
with respect to any Substitute Mortgage Loan, within five Business
Days after the receipt by the Trustee or Custodian thereof), the
Trustee or the 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, if reviewed by the
Custodian, the Trustee, an Interim Certification. In conducting
such review, the Trustee or the 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, or the Subsequent Mortgage Loans identified on Exhibit 1
to the related Subsequent Transfer Instrument, 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
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 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 Custodian on its behalf shall
include such information in the exception report. 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.
(b) No
later than 180 days after the Closing Date, (or within 180 days of
the Subsequent Transfer Date, with respect to the Subsequent
Mortgage loans, or with respect to any Substitute Mortgage Loan,
within five Business Days after the receipt by the Trustee or
Custodian thereof), the Trustee or the 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, if reviewed by the Custodian, the
Trustee, a Final Certification. In conducting such review, the
Trustee or the 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 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 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
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.
(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 Master Servicer Collection 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 Master Servicer
Collection Account
and upon receipt of a Request for
Release with respect to such Mortgage Loan, the Trustee or the
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 Master Servicer Collection Account 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 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 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 Company, the
Master Servicer and the Seller.
(a) The
Company hereby represents and warrants to the Master Servicer, the
Depositor, the Securities Administrator 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 related to an EMC Mortgage Loan is located or is otherwise
not required under applicable law to effect such qualification and,
in any event, is in compliance with the doing business laws of any
such state, to the extent necessary to ensure its ability to
enforce each EMC Mortgage Loan, to service the EMC Mortgage Loans
in accordance with the terms of this Agreement and to perform any
of its other obligations under this Agreement in accordance with
the terms hereof.
(ii) It
has the full corporate power and authority to service each EMC
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, constitutes its legal,
valid and binding obligation, enforceable against it in accordance
with its terms, except that (a) the enforceability hereof may be
limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors’ rights generally
and (b) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and
to the discretion of the court before which any proceeding therefor
may be brought.
(iii) The
execution and delivery of this Agreement by it, the servicing of
the EMC 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 are in its ordinary course of business and will not (A)
result in a material breach of any term or provision of its charter
or by-laws or (B) materially conflict with, result in a material
breach, violation or acceleration of, or result in a material
default under, the terms of any other material agreement or
instrument to which it is a party or by which it may be bound, or
(C) constitute a material violation of any statute, order or
regulation applicable to it of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
it; and it is not in breach or violation of any material indenture
or other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
it which breach or violation may materially impair its ability to
perform or meet any of its obligations under this
Agreement.
(iv) 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 EMC 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 if any
such consent, approval, authorization or order is required, it has
obtained the same.
(b) Wells
Fargo Bank, National Association, in its capacity as Master
Servicer and Securities Administrator hereby represents and
warrants to the Seller, the Depositor and the Trustee as follows,
as of the Closing Date:
(i) It
is a national banking association duly formed, validly existing and
in good standing under the laws of the United States of America and
is duly authorized and qualified to transact any and all business
contemplated by this Agreement to be conducted by the Master
Servicer and the Securities Administrator 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
this Agreement and to perform any of its other obligations under
this Agreement in accordance with the terms hereof;
(ii) It
has the full corporate power and authority to execute, deliver and
perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all
necessary corporate action on its part the execution, delivery and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery hereof by the other parties
hereto,
constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its
terms, except that (a) the enforceability hereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors’ rights generally and (b) the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(iii) The
execution and delivery of this Agreement by it, the consummation of
any other of the transactions contemplated by this Agreement, and
the fulfillment of or compliance with the terms hereof are in its
ordinary course of business and will not (A) result in a material
breach of any term or provision of its charter or by-laws or (B)
materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms
of any other material agreement or instrument to which it is a
party or by which it may be bound, or (C) constitute a material
violation of any statute, order or regulation applicable to it of
any court, regulatory body, administrative agency or governmental
body having jurisdiction over it; and it is not in breach or
violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of
any court, regulatory body, administrative agency or governmental
body having jurisdiction over it which breach or violation may
materially impair its ability to perform or meet any of its
obligations under this Agreement.
(iv) No
litigation is pending or, to the best of its knowledge, threatened,
against it that would materially and adversely affect the
execution, delivery or enforceability of this Agreement or its
ability to perform any of its other obligations under this
Agreement in accordance with the terms hereof.
(v) No
consent, approval, authorization or order of any court or
governmental agency or body is required for its execution, delivery
and performance of, or compliance with, this Agreement or the
consummation of the transactions contemplated hereby, or if any
such consent, approval, authorization or order is required, it has
obtained the same.
(c) The
Seller hereby represents and warrants to the Depositor, the
Securities Administrator, the Master Servicer 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 this Agreement and to perform
any of its other obligations under this Agreement in accordance
with the terms hereof.
(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;
and this Agreement, assuming the due authorization, execution and
delivery hereof by the other parties hereto, constitutes a legal,
valid and binding obligation of the 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) materially conflict with, result in a material
breach, violation or acceleration of, or result in a material
default under, the terms of any other material agreement or
instrument to which the Seller is a party or by which it may be
bound, or (C) constitute a material violation of any statute, order
or regulation applicable to the 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.
(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.
(vii) As
of the Closing Date, the representations and warranties concerning
the Mortgage Loans set forth in Section 7 of the Mortgage Loan
Purchase Agreement are true and correct in all material
respects.
(d) Upon
discovery by any of the parties hereto of a breach of a
representation or warranty set forth in Section 7 of the Mortgage
Loan Purchase Agreement 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. The Seller hereby covenants with respect to the
representations and warranties set forth in Section 7 of the
Mortgage Loan Purchase Agreement, 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 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 Securities Administrator 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 Securities Administrator whether it intends
either to repurchase, or to substitute for, the Mortgage Loan
affected by such breach. With respect to the representations and
warranties in Section 7 of the Mortgage Loan Purchase Agreement
that are made to the best of the Seller’s knowledge, if it is
discovered by any of the Depositor, the Master Servicer, the
Seller, the Securities Administrator or the Trustee that the
substance of such representation and warranty is inaccurate and
such inaccuracy materially and adversely affects the value of the
related Mortgage Loan, 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 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 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 Securities
Administrator 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 Securities Administrator shall
deliver the amended Mortgage Loan Schedule to the Trustee and the
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 Master Servicer
Collection 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 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 Master
Servicer Collection 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 Master Servicer Collection Account maintained
by the Master Servicer, 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 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, representation or warranty 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 has occurred and is continuing shall
constitute the sole remedies against the Seller respecting such
breach available to Certificateholders, the Depositor or the
Trustee.
(e) The
representations and warranties set forth in Section 2.03 hereof
shall survive delivery of the respective Mortgage Loans and
Mortgage Files to the Trustee or the 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, the Securities Administrator 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 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 action on its part, the execution, delivery and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery hereof by the other parties
hereto, constitutes 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 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
organizational documents of the Depositor or (B) materially
conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms
of any other material agreement or instrument to which the
Depositor is a party or by which it may be bound or (C) constitute
a material violation of any statute, order or regulation applicable
to the Depositor of any court, regulatory body, administrative
agency or governmental body having jurisdiction over the Depositor;
and the Depositor is not in breach or violation of any material
indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or violation may materially
impair the Depositor’s ability to perform or meet any of its
obligations under this Agreement.
(iv) No
litigation is pending, or, to the best of the Depositor’s
knowledge, threatened, against the Depositor that would materially
and adversely affect the execution, delivery or enforceability of
this Agreement or the ability of the Depositor to perform its
obligations under this Agreement in accordance with the terms
hereof.
(v) No
consent, approval, authorization or order of any court or
governmental agency or body is required for 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 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 the immediately
preceding paragraph shall survive delivery of the Mortgage Files to
the Trustee or the 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 and 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 and
Securities Administrator an Opinion of Counsel, addressed to the
Trustee and Securities Administrator, to the effect that such
repurchase or substitution would not (i) result in the imposition
of the tax on “prohibited transactions” of REMIC I or
REMIC II 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 or REMIC II 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, the Custodian 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, or the Custodian on its
behalf, shall require the Seller, at the Seller’s option, to
either (i) substitute, if the conditions in Section 2.03(c) with
respect to substitutions are satisfied, a Replacement Mortgage Loan
for the affected Mortgage Loan, or (ii) repurchase the affected
Mortgage Loan within 90 days of such discovery in the same manner
as it would a Mortgage Loan for a breach of representation or
warranty contained in Section 2.03. The Trustee, or the Custodian
on its behalf, shall reconvey to the Seller the Mortgage Loan to be
released pursuant hereto (and the 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 contained in 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, the
Securities Administrator 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 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 Certificates.
|
Section 2.07
|
Conveyance of the Subsequent
Mortgage Loans.
|
(a) Subject
to the conditions set forth in paragraph (b) below, in
consideration of the Securities Administrator’s delivery, on
behalf of the Trustee, on the Subsequent Transfer Dates to or upon
the written order of the Depositor of all or a portion of the
balance of funds in the Pre-Funding Account, the Depositor shall,
on such Subsequent Transfer Date, sell, transfer, assign, set over
and convey without recourse to the Trust Fund (subject to the other
terms and provisions of this Agreement) all its right, title and
interest in and to (i) the Subsequent Mortgage Loans identified on
the Mortgage Loan Schedule attached to the related Subsequent
Transfer Instrument delivered by the Seller on such Subsequent
Transfer Date, (ii) all interest accruing thereon on and after the
Subsequent Cut-off Date and all collections in respect of interest
and principal due after the Subsequent Cut-off Date and (iii) all
items with respect to such Subsequent Mortgage Loans to be
delivered pursuant to Section 2.01 and the other items in the
related Mortgage Files; provided, however, that the Seller reserves
and retains all right, title and interest in and to principal
received and interest accruing on such Subsequent Mortgage Loans
prior to the related Subsequent Cut-off Date. The transfer to the
Securities Administrator for deposit in the Trust Fund by the
Depositor of the Subsequent Mortgage Loans identified on the
Mortgage Loan Schedule shall be absolute and is intended by the
Depositor, the Seller, the Master Servicer, the Securities
Administrator, the Trustee and the Certificateholders to constitute
and to be treated as a sale of the Subsequent Mortgage Loans by the
Depositor to the Trust. The related Mortgage File for each
Subsequent Mortgage Loan shall be delivered to the Trustee or the
Custodian, on behalf of the Trustee, at least three Business Days
prior to the related Subsequent Transfer Date.
The purchase price paid by the
Trustee from amounts released from the Pre-Funding Account shall be
100% of the aggregate Scheduled Principal Balance of the Subsequent
Mortgage Loans so transferred (as identified on the Mortgage Loan
Schedule provided by the Depositor). This Agreement shall
constitute a fixed price purchase contract in accordance with
Section 860G(a)(3)(A)(ii) of the Code.
(b) The
Depositor shall transfer to the Trustee for deposit in the Trust
Fund, the Subsequent Mortgage Loans, and the other property and
rights related thereto as described in paragraph (a) above, and the
Securities Administrator, on behalf of the Trustee, shall release
funds from the Pre-Funding Account only upon the satisfaction of
each of the following conditions on or prior to the related
Subsequent Transfer Date:
(i) the
Depositor shall have delivered to the Trustee, with a copy to the
Securities Administrator, a duly executed Subsequent Transfer
Instrument, which shall include a Mortgage Loan Schedule listing
the Subsequent Mortgage Loans, and the Seller shall cause to be
delivered a computer file containing such Mortgage Loan Schedule to
the
Trustee, the Securities
Administrator and the Master Servicer at least three Business Days
prior to the related Subsequent Transfer Date;
(ii) the
Depositor shall have furnished to the Master Servicer, no later
than three Business Days prior to the related Subsequent Transfer
Date, (x) if the servicer or servicers of such Subsequent Mortgage
Loans are existing Servicers, then a written acknowledgement of
each such Servicer that it is servicing such Subsequent Mortgage
Loans pursuant to the related Servicing Agreement, or (y) if the
servicer or servicers are not existing Servicers, then a Servicing
Agreement and Assignment Agreements with respect to such servicer
or servicers in form and substance reasonably satisfactory to the
Master Servicer;
(iii) as
of each Subsequent Transfer Date, as evidenced by delivery of the
Subsequent Transfer Instrument, substantially in the form of
Exhibit N, the Depositor shall not be insolvent nor shall it have
been rendered insolvent by such transfer nor shall it be aware of
any pending insolvency with respect to it:
(iv) such
sale and transfer shall not result in a material adverse tax
consequence to the Trust or the Certificateholders;
|
(v)
|
the Pre-Funding Period shall not
have terminated;
|
(vi) the
Depositor shall not have selected the Subsequent Mortgage Loans in
a manner that it believed to be adverse to the interests of the
Ccrtificateholders; and
(vii) the
Depositor shall have delivered to the Trustee and the Securities
Administrator a Subsequent Transfer Instrument confirming the
satisfaction of the conditions precedent specified in this Section
2.07 and, pursuant to the Subsequent Transfer Instrument, assigned
to the Trustee without recourse for the benefit of the
Certificateholders all the right, title and interest of the
Depositor, in, to and under the Subsequent Mortgage Loan Purchase
Agreement, to the extent of the Subsequent Mortgage
Loans.
(c) Any
conveyance of Subsequent Mortgage Loans on a Subsequent Transfer
Date is subject to certain conditions including, but not limited to
the following:
(i) Each
such Subsequent Mortgage Loan must satisfy the representations and
warranties specified in the related Subsequent Transfer Instrument
and this Agreement;
(ii) The
Depositor will not select such Subsequent Mortgage Loans in a
manner that it believes to be adverse to the interests of the
Certificateholders;
(iii) the
Trustee and the Rating Agencies are provided with an Opinion of
Counsel or Opinions of Counsel, at the expense of the Depositor,
stating that each REMIC in the Trust Fund is and shall continue to
qualify as a REMIC following the transfer of the Subsequent
Mortgage Loans, to be delivered as provided pursuant to this
Section 2.07;
(iv) the
Rating Agencies and the Trustee are provided with an Opinion of
Counsel or Opinions of Counsel, at the expense of the Depositor,
confirming that the transfer of the Subsequent Mortgage Loans
conveyed on such Subsequent Transfer Date is a true sale, to be
delivered as provided pursuant to this Section 2.07;
(d) The
Trustee shall be entitled to rely upon the confirmation made by the
Depositor pursuant to the related Subsequent Transfer Instrument
and the Opinions of Counsel delivered pursuant to clauses (c)(iii)
and (iv) above in determining that the condition precedents are met
for the release of funds from the Pre-Funding Account.
ARTICLE III
ADMINISTRATION AND SERVICING OF
EMC MORTGAGE LOANS BY COMPANY
|
Section 3.01
|
The Company.
|
The Company shall service and
administer the EMC 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
Company 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, and (iv) subject to Section 3.09, to
effectuate foreclosure or other conversion of the ownership of the
Mortgaged Property securing any EMC Mortgage Loan; provided that
the Company shall take no action that is inconsistent with or
prejudices the interests of the Trust Fund or the
Certificateholders in any EMC Mortgage Loan or the rights and
interests of the Depositor and the Trustee under this
Agreement.
Without limiting the generality of
the foregoing, the Company, 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
Company 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
EMC Mortgage Loans, and with respect to the related Mortgaged
Properties held for the benefit of the Certificateholders. The
Company 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 Company
to service and administer the EMC Mortgage Loans. Upon receipt of
such documents, the Depositor and/or the Trustee shall execute such
documents and deliver them to the Company.
In accordance with the standards of
the first paragraph of this Section 3.01, the Company 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 relating to the EMC Mortgage Loans, which advances shall
be reimbursable in the first instance from related collections from
the Mortgagors pursuant to Section 5.04, and further as provided in
Section 5.02. All costs incurred by the Company, if any, in
effecting the timely payments of taxes and assessments on the
Mortgaged Properties relating to the EMC Mortgage Loans 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 EMC Mortgage Loans,
notwithstanding that the terms of such Mortgage Loans so
permit.
|
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 Company 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
Company is not required to exercise such rights with respect to an
EMC 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 Company 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 Company 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 Company enters such agreement) by
the applicable Required Insurance Policies. The Company, 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 Company shall not
be deemed to be in default under this Section 3.02(a) by reason of
any transfer or assumption that the Company reasonably believes it
is restricted by law from preventing.
(b) Subject
to the Company’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 EMC Mortgage Loan, the
Company 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 EMC Mortgage Loan) may be changed. In
addition, the substitute Mortgagor and the Mortgaged Property must
be acceptable to the Company in accordance with its servicing
standards as then in effect. The Company shall notify the Trustee
that 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 Company for entering into an
assumption or substitution of liability agreement will be retained
by the Company as additional servicing compensation.
|
Section 3.03
|
Subservicers.
|
The Company 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 Company of a subservicer shall not release the Company
from any of its obligations hereunder and the Company shall remain
responsible hereunder for all acts and omissions of each
subservicer as fully as if such acts and omissions were those of
the Company. The Company 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 Company hereunder.
At the cost and expense of the
Company, without any right of reimbursement from its Protected
Account, the Company 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 Company, at the Company’s option,
from electing to service the related EMC Mortgage Loans itself. In
the event that the Company’s responsibilities and duties
under this Agreement are terminated pursuant to Section 9.03, the
Company shall at its own cost and expense terminate the rights and
responsibilities of each subservicer effective as of the date of
termination of the Company. The Company shall pay all fees,
expenses or penalties necessary in order to terminate the rights
and responsibilities of each subservicer from the Company’s
own funds without reimbursement from the Trust Fund.
Notwithstanding the foregoing, the
Company 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 EMC
Mortgage Loans. The Company shall be entitled to enter into an
agreement with a subservicer for indemnification of the Company 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 EMC Mortgage Loans
involving a subservicer shall be deemed to be between such
subservicer and the Company alone, and neither the Master Servicer
nor the Trustee shall have any obligations, duties or liabilities
with respect to such subservicer including any obligation, duty or
liability of either the Master Servicer or the Trustee to pay such
subservicer’s fees and expenses. For purposes of remittances
to the Master Servicer pursuant to this Agreement, the Company
shall be deemed to have received a payment on an EMC Mortgage Loan
when a subservicer has received such payment.
Section 3.04
Documents, Records and Funds in Possession of Company To Be Held
for Trustee.
Notwithstanding any other provisions
of this Agreement, the Company shall transmit to the Trustee as
required by this Agreement all documents and instruments in respect
of an EMC Mortgage Loan coming into the possession of the Company
from time to time and shall account fully to the Trustee for any
funds received by the Company or that otherwise are collected by
the Company as Liquidation Proceeds or Insurance Proceeds in
respect of any such Mortgage Loan. All Mortgage Files and funds
collected or held by, or under the control of, the Company in
respect of any EMC Mortgage Loans, whether from the collection of
principal and interest payments or from Liquidation Proceeds,
including but not limited to, any funds on deposit in the Protected
Account maintained by the Company, shall be held by the Company 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 Company also agrees that it shall
not create, incur or subject any Mortgage File or any funds that
are deposited in the Protected Account maintained by the Company or
the Master Servicer Collection 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, an EMC Mortgage Loan, except,
however, that the Company shall be entitled to set off against and
deduct from any such funds any amounts that are properly due and
payable to the Company under this Agreement.
|
Section 3.05
|
Maintenance of Hazard Insurance.
|
The Company shall cause to be
maintained, for each EMC 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 Company shall also cause flood
insurance to be maintained on property acquired upon foreclosure or
deed in lieu of foreclosure of any EMC Mortgage Loan, to the extent
described below. Pursuant to Section 5.01, any amounts collected by
the Company 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 Company’s normal servicing
procedures) shall be deposited in the Protected Account maintained
by the Company. Any cost incurred by the Company in maintaining any
such insurance shall not, for the purpose of calculating monthly
distributions to the Certificateholders or remittances to the
Trustee (or Securities Administrator on its behalf) for their
benefit, be added to the principal balance of the Mortgage Loan,
notwithstanding that the terms of the EMC Mortgage Loan so permit.
Such costs shall be recoverable by the Company out of late payments
by the related Mortgagor or out of Liquidation Proceeds to the
extent permitted by Section 5.02. 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 related
EMC Mortgage Loan in a federally
designated special flood hazard area and such area is participating
in the national flood insurance program, the Company shall cause
flood insurance to be maintained with respect to such EMC Mortgage
Loan. Such flood insurance shall be in an amount equal to the least
of (i) the Stated Principal Balance of the related EMC 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 Company shall
obtain and maintain a blanket policy insuring against hazard losses
on all of the EMC 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 Company 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 maintained by the Company the amount not
otherwise payable under the blanket policy because of such
deductible clause. Such deposit shall be from the Company’s
own funds without reimbursement therefor. In connection with its
activities as administrator and servicer of the EMC Mortgage Loans,
the Company 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 Company shall prepare and
present on behalf of the Trustee and the Certificateholders all
claims under the Insurance Policies relating to the EMC Mortgage
Loans 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 Company in respect of such Insurance
Policies shall be promptly deposited in the Protected Account
maintained by the Company 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 EMC 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
Company 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 Company would have been covered
thereunder. The Company shall use its best efforts to keep in force
and effect (to the extent that the EMC Mortgage Loan requires the
Mortgagor to maintain such insurance), Primary Mortgage Insurance
applicable to each EMC Mortgage Loan. The Company shall not cancel
or refuse to renew any such Primary Mortgage Insurance Policy that
is in effect at the date of the initial issuance of the related
Mortgage Note and is required to be kept in force
hereunder.
(b) The
Company agrees to present on behalf of the Trustee and the
Certificateholders, claims to the insurer under any Primary
Mortgage Insurance Policies relating
to the EMC Mortgage Loans and, in
this regard, to take such reasonable action as shall be necessary
to permit recovery under any Primary Mortgage Insurance Policies
respecting defaulted EMC Mortgage Loans. Pursuant to Section 5.01,
any amounts collected by the Company under any Primary Mortgage
Insurance Policies shall be deposited in the Protected Account
maintained by the Company, subject to withdrawal pursuant to
Section 5.02 hereof.
|
Section 3.08
|
Fidelity Bond, Errors and
Omissions Insurance.
|
The Company 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 EMC Mortgage Loans and who handle funds, money,
documents and papers relating to the EMC 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 Company 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
Company against losses in connection with the failure to maintain
any insurance policies required pursuant to this Agreement and the
release or satisfaction of an EMC 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 Company 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 Company shall deliver to the Master Servicer 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 Master
Servicer and the Trustee. The Company shall notify the Master
Servicer and 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
Company shall use reasonable efforts to foreclose upon or otherwise
comparably convert the ownership of properties securing such of the
EMC 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 Company 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 Company 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
EMC Mortgage Loan after reimbursement to itself of such expenses
and (ii) that such expenses will be recoverable to it through
Insurance Proceeds or Liquidation Proceeds (respecting which it
shall have priority for purposes of withdrawals from the Protected
Account maintained by the Company pursuant to Section 5.02). If the
Company
reasonably believes that Liquidation
Proceeds with respect to any such EMC Mortgage Loan would not be
increased as a result of such foreclosure or other action, such EMC
Mortgage Loan will be charged-off and will become a Liquidated
Loan. The Company will give notice of any such charge-off to the
Trustee and the Securities Administrator. The Company 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 5.02. If the Company has
knowledge that a Mortgaged Property that the Company 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 Company, the
Company will, prior to acquiring the related Mortgaged Property,
consider such risks and only take action in accordance with its
established environmental review procedures.
With respect to any REO Property
relating to an EMC Mortgage Loan, 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 Company 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 Company shall either itself or through an
agent selected by the Company 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
Company deems to be in the best interest of the Company and the
Certificateholders for the period prior to the sale of such REO
Property. The Company shall prepare for and deliver to the Trustee
and the Securities Administrator a statement with respect to each
such 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 maintained by the Company no later than the close
of business on each Determination Date. The Company 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 an EMC Mortgage
Loan, the Company 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 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 or REMIC II as defined in Section 860F of the Code or cause
either REMIC I or REMIC II 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 or REMIC II 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 Company has agreed to indemnify and hold harmless the
Trust Fund with respect to the imposition of any such
taxes.
The decision of the Company to
foreclose on a defaulted EMC Mortgage Loan shall be subject to a
determination by the Company 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 Company 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 EMC
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 maintained by the Company. 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 EMC
Mortgage Loan, such excess shall be considered to be a partial
Principal Prepayment for all purposes hereof.
The Liquidation Proceeds from any
liquidation of an EMC Mortgage Loan, net of any payment to the
Company as provided above, shall be deposited in the Protected
Account maintained by the Company 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 Company 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
Company for any related unreimbursed Servicing Advances and
Servicing Fees, pursuant to Section 5.02 or this Section 3.09;
second, to reimburse the Company for any unreimbursed Advances,
pursuant to Section 5.02 or this Section 3.09; third, to accrued
and unpaid interest (to the extent no Advance has been made for
such amount) on the EMC Mortgage Loan or related REO Property, at
the Net Mortgage Rate to the first day of the month in which such
amounts are required to be distributed; and fourth, as a recovery
of principal of the EMC Mortgage Loan.
(b) On
each Determination Date, the Company shall determine the respective
aggregate amounts of Excess Liquidation Proceeds and Realized
Losses, if any, for the related Prepayment Period.
(c) The
Company has no intent to foreclose on any EMC Mortgage Loan based
on the delinquency characteristics as of the Closing Date;
provided, that the foregoing does not prevent the Company from
initiating foreclosure proceedings on any date hereafter if the
facts
and circumstances of such EMC
Mortgage Loans including delinquency characteristics in the
Company’s discretion so warrant such action.
|
Section 3.10
|
Servicing Compensation.
|
As compensation for its activities
hereunder, the Company shall be entitled to retain or withdraw from
its Protected Account out of each payment of interest on an EMC
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 Prepayment Interest Excess on any EMC Mortgage
Loan, all income and gain net of any losses realized from Permitted
Investments with respect to funds in or credited to the Protected
Account maintained by the Company shall be retained by the Company
to the extent not required to be deposited in the Protected Account
maintained by the Company pursuant to Section 5.02. The Company
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 5.02.
EMC will be entitled to retain any
Prepayment Interest Excess pursuant to Section 5.07(e).
|
Section 3.11
|
REO Property.
|
(a) In
the event the Trust Fund acquires ownership of any REO Property in
respect of any related EMC 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 Company shall sell
any such 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 Company shall protect and
conserve such REO Property in the manner and to the extent required
herein, in accordance with the REMIC Provisions.
(b) The
Company shall deposit all funds collected and received in
connection with the operation of any REO Property in respect of any
EMC Mortgage Loan into the Protected Account maintained by the
Company.
(c) The
Company, upon the final disposition of any REO Property in respect
of any EMC Mortgage Loan, 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
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 relating to an EMC Mortgage Loan or the
acquisition thereof by the Trust Fund pursuant to a deed-in-lieu of
foreclosure, the Company shall submit a liquidation report to the
Master Servicer containing such information as shall be mutually
acceptable to the Company and the Master Servicer with respect to
such Mortgaged Property.
|
Section 3.13
|
Annual Statement as to
Compliance; Annual Certification.
|
(a) The
Company will deliver to the Master Servicer not later than March 1,
2006 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 Company during
the preceding calendar year and of performance under this Agreement
has been made under such officers’ supervision, and (ii) to
the best of such officers’ knowledge, based on such review,
the Company has fulfilled all of its obligations under this
Agreement throughout such year, or, if there has been a default in
the fulfillment of any such obligation, specifying each such
default known to such officers and the nature and status thereof
except for such defaults as such officer in its good faith judgment
believe to be immaterial.
(b) (i) The
Company will deliver to the Master Servicer, on or before March 1
of each year beginning March 1, 2006 (or, if any such day is not a
Business Day, the immediately preceding Business Day), or on any
alternative date specified by the Master Servicer upon thirty (30)
days written request, a certification containing the information
set forth in Exhibit K. Such certification shall be signed by the
senior officer in charge of servicing of the Company. In addition,
the Company shall provide such other information with respect to
the EMC Mortgage Loans and the servicing and administration thereof
within the control of the Company which shall be required to enable
the Master Servicer to comply with the reporting requirements of
the Securities and Exchange Act of 1934, as amended.
(ii) The
Company shall indemnify and hold harmless the Master Servicer and
its officers, directors, agents and affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable legal
fees and related costs, judgments and other costs and expenses
arising out of or based upon a breach by the Company or any of its
officers, directors, agents or affiliates of its obligations under
this Section 3.13(b) or the Company’s negligence, bad faith
or willful misconduct in connection therewith. If the
indemnification provided for herein is unavailable or insufficient
to hold harmless the Master Servicer, then the Company agrees that
it shall contribute to the amount paid or payable by the Master
Servicer as a result of the losses, claims, damages or liabilities
of the Master Servicer in such proportion as is appropriate to
reflect the relative fault of the Master Servicer on the one hand
and the Company on the other in connection with a breach of the
Company’s obligations under this Section 3.13(b).
|
Section 3.14
|
Annual Independent Certified
Public Accountants’ Servicing Report.
|
The Company 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
not later than March 1, 2006 and not later than March 1 of each
year thereafter a statement, in a form
acceptable for filing with the
Commission on an Exhibit to Form 10-K, to the Master Servicer to
the effect that, with respect to the preceding calendar year such
firm has examined certain documents and records relating to the
Company’s servicing of mortgage loans of the same type as the
EMC 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
Company’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.
|
Section 3.15
|
Books and Records.
|
The Company shall be responsible for
maintaining, and shall maintain, a complete set of books and
records for the EMC Mortgage Loans which shall be appropriately
identified in the Company’s computer system to clearly
reflect the ownership of the EMC Mortgage Loans by the Trust. In
particular, the Company shall maintain in its possession, available
for inspection by the Master Servicer and the Trustee and shall
deliver to Master Servicer and 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 Company 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 Company complies with the requirements of
Accepted Servicing Practices.
The Company shall maintain with
respect to each EMC Mortgage Loan and shall make available for
inspection by the Master Servicer and the Trustee the related
servicing file during the time such EMC Mortgage Loan is subject to
this Agreement and thereafter in accordance with applicable
law.
ARTICLE IV
ADMINISTRATION AND MASTER
SERVICING OF MORTGAGE LOANS BY MASTER SERVICER
Section 4.01
Master Servicer . The Master Servicer shall, beginning on
the Closing Date, supervise, monitor and oversee the obligation of
the Company and the related Servicer to service and administer
their respective Mortgage Loans in accordance with the terms of
this Agreement and the related Servicing Agreement and shall have
full power and authority to do any and all things which it may deem
necessary or desirable in connection with such master servicing and
administration. In performing its obligations hereunder, the Master
Servicer shall act in a manner consistent with Accepted Master
Servicing Practices. Furthermore, the Master Servicer shall oversee
and consult with the Company and the related Servicer as necessary
from time-to-time to carry out the Master Servicer’s
obligations hereunder, shall receive, review and evaluate all
reports, information and other data provided to the Master Servicer
by the Company and the related Servicer and shall cause the Company
and related Servicer to perform and observe the covenants,
obligations and conditions to be performed or observed by such
Person under this Agreement and the related Servicing Agreement.
The Master Servicer shall independently and separately monitor the
Company and the related Servicer’s servicing activities with
respect to each related Mortgage Loan, reconcile the results of
such monitoring with such information provided in the previous
sentence on a monthly basis and coordinate corrective adjustments
to the Company’s, the related Servicer’s and Master
Servicer’s records, and based on such reconciled and
corrected information, the Master Servicer shall provide such
information to the Securities Administrator as shall be necessary
in order for it to prepare the statements specified in Section 6.06
and any other information and statements required hereunder. The
Master Servicer shall reconcile the results of its Mortgage Loan
monitoring with the actual remittances of the Company and each
Servicer pursuant to this Agreement and the related Servicing
Agreement.
The Trustee shall furnish the
Company, the Servicers and the Master Servicer with any powers of
attorney and other documents in form as provided to it necessary or
appropriate to enable the Company, the Servicer and the Master
Servicer to service and administer the related Mortgage Loans and
REO Property.
The Trustee or the Custodian on its
behalf and the Securities Administrator shall provide access to the
records and documentation in possession of the Trustee or the
Custodian on its behalf or the Securities Administrator regarding
the related Mortgage Loans and REO Property and the servicing
thereof to the Certificateholders, the FDIC, and the supervisory
agents and examiners of the FDIC, such access being afforded only
upon reasonable prior written request and during normal business
hours at the office of the Trustee, the Custodian or the Securities
Administrator; provided, however, that, unless otherwise required
by law, neither the Trustee, the Custodian nor the Securities
Administrator shall be required to provide access to such records
and documentation if the provision thereof would violate the legal
right to privacy of any Mortgagor. The Trustee, the Custodian and
the Securities Administrator shall allow representatives of the
above entities to photocopy any of the records and documentation
and shall provide equipment for that purpose at a charge that
covers the Trustee’s, the Custodian’s or the Securities
Administrator’s actual costs.
The Trustee shall execute and
deliver to the Company or the related Servicer and the Master
Servicer any court pleadings, requests for trustee’s sale or
other documents necessary or desirable to (i) the foreclosure or
trustee’s sale with respect to a Mortgaged Property; (ii) any
legal action brought to obtain judgment against any Mortgagor on
the Mortgage Note or Security Instrument; (iii) obtain a deficiency
judgment against the Mortgagor; or (iv) enforce any other rights or
remedies provided by the Mortgage Note or Security Instrument or
otherwise available at law or equity.
Section 4.02
REMIC-Related Covenants . For as long as each REMIC shall
exist, the Trustee and the Securities Administrator shall act in
accordance herewith to assure continuing treatment of such REMIC as
a REMIC, and the Trustee and the Securities Administrator shall
comply with any directions of the Seller, the Company, the
Servicers or the Master Servicer to assure such continuing
treatment. In particular, the Trustee shall not (a) sell or permit
the sale of all or any portion of the Mortgage Loans or of any
investment of deposits in an Account unless such sale is as a
result of a repurchase of the Mortgage Loans pursuant to this
Agreement or the Trustee has received a REMIC Opinion addressed to
the Trustee prepared at the expense of the Trust Fund; and (b)
other than with respect to a substitution pursuant to the Mortgage
Loan Purchase Agreement or Section 2.03 of this Agreement, as
applicable, accept any contribution to any REMIC after the Startup
Day without receipt of a REMIC Opinion.
Section 4.03
Monitoring of Company and Servicer. (a) The Master Servicer
shall be responsible for reporting to the Trustee and the Seller
the compliance by the Company and the related Servicer with its
duties under this Agreement and the related Servicing Agreement. In
the review of the Company’s and the related Servicer’s
activities, the Master Servicer may rely upon an Officer’s
Certificate of the Company and the related Servicer with regard to
such Person’s compliance with the terms of this Agreement or
the related Servicing Agreement. In the event that the Master
Servicer, in its judgment, determines that the Company or the
related Servicer should be terminated in accordance with this
Agreement or the related Servicing Agreement, or that a notice
should be sent pursuant to this Agreement or the related Servicing
Agreement with respect to the occurrence of an event that, unless
cured, would constitute grounds for such termination, the Master
Servicer shall notify the Seller and the Trustee thereof and the
Master Servicer shall issue such notice or take such other action
as it deems appropriate.
(b) The
Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of the Company
under this Agreement and the related Servicer under the related
Servicing Agreement, and shall, in the event that the Company or
the related Servicer fails to perform its obligations in accordance
with this Agreement or the related Servicing Agreement, subject to
the preceding paragraph, terminate the rights and obligations of
such Person thereunder and act as servicer of the related Mortgage
Loans or to cause the Trustee to enter into a new Servicing
Agreement with a successor Servicer selected by the Master
Servicer; provided, however, it is understood and acknowledged by
the parties hereto that there will be a period of transition (not
to exceed 90 days) before the actual servicing functions can be
fully transferred to such successor Servicer. Such enforcement,
including, without limitation, the legal prosecution of claims,
termination of the related Servicing Agreement and the pursuit of
other appropriate remedies, shall be in such form and carried out
to such an extent and at such time as the Master Servicer, in its
good faith business judgment, would require were it the owner of
the related Mortgage Loans. The Master Servicer shall pay the costs
of such enforcement at its own expense, subject to its right of
reimbursement pursuant to the provisions of this
Agreement
or the related Servicing Agreement,
provided that the Master Servicer shall not be required to
prosecute or defend any legal action except to the extent that the
Master Servicer shall have received reasonable indemnity for its
costs and expenses in pursuing such action.
