EXHIBIT 4.1
BEAR STEARNS ASSET BACKED SECURITIES
I LLC,
Depositor,
EMC MORTGAGE CORPORATION,
Seller and Master
Servicer,
and
LASALLE BANK NATIONAL
ASSOCIATION,
Trustee
____________________
POOLING AND SERVICING
AGREEMENT
Dated as of October 1,
2005
________________________________________
SACO I TRUST 2005-WM3
MORTGAGE-BACKED CERTIFICATES, SERIES
2005-WM3
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
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Section 1.01
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Defined Terms
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Section 1.02
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Allocation of Certain Interest
Shortfalls
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ARTICLE II CONVEYANCE OF TRUST
FUND REPRESENTATIONS AND WARRANTIES
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Section 2.01
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Conveyance of Trust Fund
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Section 2.02
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Acceptance of the Mortgage Loans
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Section 2.03
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Representations, Warranties and Covenants of the
Master Servicer and
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EMC as Seller
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Section 2.04
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Representations and Warranties of the
Depositor
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Section 2.05
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Delivery of Opinion of Counsel in Connection
with Substitutions and
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Repurchases
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Section 2.06
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Countersignature and Delivery of
Certificates
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ARTICLE III ADMINISTRATION AND
SERVICING OF THE MORTGAGE LOANS
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Section 3.01
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The Master Servicer to act as Master
Servicer
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Section 3.02
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Due-on-Sale Clauses; Assumption
Agreements
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Section 3.03
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Subservicers
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Section 3.04
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Documents, Records and Funds in Possession of
the Master Servicer To
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Be Held for Trustee
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Section 3.05
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Maintenance of Hazard Insurance
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Section 3.06
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Presentment of Claims and Collection of
Proceeds
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Section 3.07
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Maintenance of the Primary Mortgage Insurance
Policies
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Section 3.08
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Fidelity Bond, Errors and Omissions
Insurance
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Section 3.09
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Realization Upon Defaulted Mortgage Loans;
Determination of Excess
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Liquidation Proceeds and Realized
Losses; Repurchases of Certain
Mortgage Loans
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Section 3.10
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Servicing Compensation
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Section 3.11
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REO Property
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Section 3.12
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Liquidation Reports
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Section 3.13
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Annual Certificate as to Compliance
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Section 3.14
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Annual Independent Certified Public
Accountants’ Servicing Report
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Section 3.15
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Books and Records
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Section 3.16
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Reports Filed with Securities and Exchange
Commission
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Section 3.18
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Optional Purchase of Certain Mortgage
Loans
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Section 3.19
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Obligations of the Master Servicer in Respect of
Mortgage Rates and
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Scheduled Payments
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Section 3.20
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Reserve Fund
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Section 3.21
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Advancing Facility
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ARTICLE IV
ACCOUNTS
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Section 4.01
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Collection of Mortgage Loan Payments; Protected
Account
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Section 4.02
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Permitted Withdrawals From the Protected
Account
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Section 4.03
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Collection of Taxes; Assessments and Similar
Items; Escrow Accounts
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Section 4.04
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Distribution Account
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Section 4.05
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Permitted Withdrawals and Transfers from the
Distribution Account
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Section 4.06
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Class P Certificate Account
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ARTICLE V DISTRIBUTIONS
AND ADVANCES
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Section 5.02
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Compensating Interest Payments
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Section 5.03
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REMIC Distributions
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Section 5.04
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Distributions
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Section 5.05
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Allocation of Realized Losses
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Section 5.06
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Monthly Statements to
Certificateholders
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Section 5.07
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REMIC Designations and REMIC
Distributions
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ARTICLE VI THE
CERTIFICATES
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Section 6.01
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The Certificates
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Section 6.02
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Certificate Register; Registration of Transfer
and Exchange of
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Certificates
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Section 6.03
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Mutilated, Destroyed, Lost or Stolen
Certificates
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Section 6.04
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Persons Deemed Owners
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Section 6.05
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Access to List of Certificateholders’
Names and Addresses
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Section 6.06
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Book-Entry Certificates
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Section 6.07
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Notices to Depository
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Section 6.08
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Definitive Certificates
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Section 6.09
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Maintenance of Office or Agency
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ARTICLE VII THE
DEPOSITOR AND THE MASTER SERVICER
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Section 7.01
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Liabilities of the Depositor and the Master
Servicer
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Section 7.02
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Merger or Consolidation of the Depositor or the
Master Servicer
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Section 7.03
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Indemnification of the Trustee and the Master
Servicer
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Section 7.04
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Limitations on Liability of the Depositor, the
Master Servicer and Others
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Section 7.05
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Master Servicer Not to Resign
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Section 7.06
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Successor Master Servicer
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Section 7.07
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Sale and Assignment of Master
Servicing
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ARTICLE VIII DEFAULT;
TERMINATION OF MASTER SERVICER
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Section 8.01
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Events of Default
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Section 8.02
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Trustee to Act; Appointment of
Successor
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Section 8.03
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Notification to Certificateholders
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Section 8.04
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Waiver of Defaults
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ARTICLE IX CONCERNING
THE TRUSTEE
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Section 9.01
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Duties of Trustee
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Section 9.02
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Certain Matters Affecting the Trustee
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Section 9.03
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Trustee Not Liable for Certificates or Mortgage
Loans
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Section 9.04
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Trustee May Own Certificates
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Section 9.05
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Trustee’s Fees and Expenses
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Section 9.06
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Eligibility Requirements for Trustee
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Section 9.08
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Resignation and Removal of Trustee
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Section 9.09
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Successor Trustee
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Section 9.10
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Merger or Consolidation of Trustee
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Section 9.11
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Appointment of Co-Trustee or Separate
Trustee
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ARTICLE X
TERMINATION
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Section 10.01
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Termination upon Liquidation or Repurchase of
all Mortgage Loans
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Section 10.02
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Final Distribution on the
Certificates
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Section 10.03
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Additional Termination Requirements
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ARTICLE XI MISCELLANEOUS
PROVISIONS
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Section 11.02
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Recordation of Agreement;
Counterparts
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Section 11.03
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Governing Law
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Section 11.04
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Intention of Parties
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Section 11.06
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Severability of Provisions
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Section 11.08
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Limitation on Rights of
Certificateholders
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Section 11.09
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Inspection and Audit Rights
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Section 11.10
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Certificates Nonassessable and Fully
Paid
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Exhibits
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Exhibit A-1
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Form of Class A
Certificates
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Exhibit A-2
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Form of Class M
Certificates
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Exhibit A-3
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Form of Class B
Certificates
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Exhibit A-4
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Form of Class C
Certificates
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Exhibit A-5
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Form of Class R-1, R-2 and RX
Certificates
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Exhibit A-6
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Form of Class P
Certificates
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Exhibit B
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Mortgage Loan Schedule
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Exhibit C
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Form of Transfer
Affidavit
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Exhibit D
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Form of Transferor
Certificate
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Exhibit E
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Form of Investment Letter (Non-Rule
144A)
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Exhibit F
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Form of Rule 144A and Related
Matters Certificate
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Exhibit G
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Form of Request for
Release
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Exhibit H
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DTC Letter of
Representations
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Exhibit I
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Schedule of Mortgage Loans with Lost
Notes
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Exhibit J
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Form of LaSalle Custodial
Agreement
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Exhibit K
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Form of Back-Up
Certification
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Exhibit L
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Form of Mortgage Loan Purchase
Agreement
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POOLING AND SERVICING AGREEMENT,
dated as of October 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 master servicer (in such capacity, the
“Master Servicer”) and LASALLE BANK NATIONAL
ASSOCIATION, a national banking association, 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 Mortgage Loans from the Seller. On the Closing Date,
the Depositor will sell the 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.
REMIC I
As provided herein, the Trustee will
elect to treat the segregated pool of assets consisting of the
Mortgage Loans and certain other related assets subject to this
Agreement (other than the Reserve Fund) 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 be the sole class of Residual Interests (as
defined herein) 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.
|
|
Uncertificated REMIC I
Pass-Through Rate
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Initial Uncertificated Principal
Balance
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Latest Possible Maturity Date (1)
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AA
|
Variable(2)
|
$ 492,258,769.53
|
September 25, 2035
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A-1
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Variable(2)
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$ 490,000.00
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September 25, 2035
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A-2
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Variable(2)
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$ 1,609,520.00
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September 25, 2035
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A-3
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Variable(2)
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$ 1,059,980.00
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September 25, 2035
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M-1
|
Variable(2)
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$
509,840.00
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September 25, 2035
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M-2
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Variable(2)
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$
143,160.00
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September 25, 2035
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M-3
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Variable(2)
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$
110,500.00
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September 25, 2035
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M-4
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Variable(2)
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$
113,020.00
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September 25, 2035
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M-5
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Variable(2)
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$
95,440.00
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September 25, 2035
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B-1
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Variable(2)
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$
113,020.00
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September 25, 2035
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B-2
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Variable(2)
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$
87,900.00
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September 25, 2035
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B-3
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Variable(2)
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$
77,850.00
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September 25, 2035
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B-4
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Variable(2)
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$
251,150.00
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September 25, 2035
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ZZ
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Variable(2)
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$
5,384,717.34
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September 25, 2035
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P
|
0.00%
|
$
100.00
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September 25, 2035
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___________________
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(1)
|
For purposes of Section
1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution
Date immediately following the maturity date for the Mortgage Loan
with the latest maturity date has been designated as the
“latest possible maturity date” for each REMIC I
Regular Interest.
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(2)
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Calculated in accordance with the
definition of “Uncertificated REMIC I Pass-Through
Rate” herein.
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REMIC II
As provided herein, the Trustee will
elect 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 designation, Pass-Through Rate, Initial Certificate
Principal Balance (or initial Uncertificated Principal Balance, in
the case of the Class C Interest and the Class P Interest) and, for
purposes of satisfying Treasury Regulation Section
1.860G-1(a)(4)(iii), the “latest possible maturity
date” for each class of Certificates and interests that
represents ownership of one or more of the Regular Interests in
REMIC II created hereunder.
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|
|
Initial Certificate or Uncertificated Principal
Balance
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Latest Possible Maturity Date(1)
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A-1
|
Variable(2)
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$ 49,000,000
|
September 25, 2035
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A-2
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Variable(2)
|
$ 160,952,000
|
September 25, 2035
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A-3
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Variable(2)
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$ 105,998,000
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September 25, 2035
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M-1
|
Variable(2)
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$ 50,984,000
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September 25, 2035
|
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M-2
|
Variable(2)
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$
14,316,000
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September 25, 2035
|
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M-3
|
Variable(2)
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$
11,050,000
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September 25, 2035
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M-4
|
Variable(2)
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$
11,302,000
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September 25, 2035
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M-5
|
Variable(2)
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$
9,544,000
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September 25, 2035
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B-1
|
Variable(2)
|
$
11,302,000
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September 25, 2035
|
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B-2
|
Variable(2)
|
$
8,790,000
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September 25, 2035
|
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B-3
|
Variable(2)
|
$
7,785,000
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September 25, 2035
|
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B-4
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Variable(2)
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$
25,115,000
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September 25, 2035
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|
Class C Interest
|
Variable(2)(3)
|
$
36,166,866.87
|
September 25, 2035
|
|
Class P Interest
|
0.00%
|
$
100.00
|
September 25, 2035
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___________________
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(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 Certificate
described above.
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(2)
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Calculated in accordance with the
definition of “Pass-Through Rate” herein.
|
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(3)
|
The Class C Interest will accrue
interest at its variable Pass-Through Rate on the Uncertificated
Notional Amount of the Class C Interest outstanding from time to
time, which shall equal the aggregate Uncertificated Principal
Balance of the REMIC I Regular Interests (other than REMIC I
Regular Interest P). The Class C Interest will not accrue interest
on its Uncertificated Principal Balance.
|
REMIC III
As provided herein, the Trustee
shall elect to treat the segregated pool of assets consisting of
the Class C Interest as a REMIC for federal income tax purposes,
and such segregated pool of assets will be designated as
“REMIC III”. The Class R-3 Interest represents the sole
class of Residual Interests in REMIC III for purposes of the REMIC
Provisions.
The following table sets forth the
Class designation, Pass Through Rate, Initial Certificate Principal
Balance and, for purposes of satisfying Treasury Regulation Section
1.860G-1(a)(4)(iii), the “latest possible maturity
date” for the indicated Class of Certificates that represents
a Regular Interest in REMIC III created hereunder:
|
|
|
Initial Certificate Principal Balance
|
Latest Possible
Maturity Date(1)
|
|
C
|
Variable(2)
|
$ 36,166,866.87
|
September 25, 2035
|
___________________
|
(1)
|
For purposes of Section
1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution
Date immediately following the maturity date for the Mortgage Loan
with the latest maturity date has been designated as the
“latest possible maturity date” for the Class C
Certificates.
|
|
(2)
|
The Class C Certificates will
receive 100% of amounts received in respect of the Class C
Interest.
|
REMIC IV
As provided herein, the Trustee
shall elect to treat the segregated pool of assets consisting of
the Class P Interest as a REMIC for federal income tax purposes,
and such segregated pool of assets will be designated as
“REMIC IV”. The Class R-4 Interest represents the sole
class of Residual Interests in REMIC IV for purposes of the REMIC
Provisions.
The following table sets forth the
Class designation, Pass-Through Rate, Initial Certificate Principal
Balance and, for purposes of satisfying Treasury Regulation Section
1.860G-1(a)(4)(iii), the “latest possible maturity
date” for the indicated Class of Certificates that represents
a Regular Interest in REMIC IV created hereunder:
|
|
|
Initial Certificate Principal Balance
|
Latest Possible
Maturity Date(1)
|
|
P
|
0.00%(2)
|
$ 100.00
|
September 25, 2035
|
_______________
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(1)
|
For purposes of Section
1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution
Date immediately following the maturity date for the Mortgage Loan
with the latest maturity date has been designated as the
“latest possible maturity date” for the Class P
Certificates.
|
|
(2)
|
The Class P Certificates will
receive 100% of amounts received in respect of the Class P
Interest.
|
The Trust Fund shall be named, and
may be referred to as, the “SACO I TRUST 2005-WM3.” The
Certificates issued hereunder may be referred to as
“Mortgage-Backed Certificates, Series 2005-WM3”
(including for purposes of any endorsement or assignment of a
Mortgage Note or Mortgage).
In consideration of the mutual
agreements herein contained, the Depositor, the Master Servicer,
the Seller and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
|
|
Section 1.01
|
Defined Terms
.
|
Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires,
shall have the meanings specified in this Article.
60 Day Plus Delinquency
Percentage : With respect
to any Distribution Date, the arithmetic average for each of the
three successive Distribution Dates ending with the applicable
Distribution Date of the percentage equivalent of a fraction, the
numerator of which is the aggregate Stated Principal Balance of the
Mortgage Loans that are 60 or more days Delinquent in the payment
of principal or interest for the relevant Distribution Date, any
other Mortgage Loans in foreclosure, REO Property and Mortgage
Loans with a related mortgagor subject to bankruptcy procedures,
and the denominator of which is the aggregate Stated Principal
Balance of all of the Mortgage Loans immediately preceding the
relevant Distribution Date.
Accepted Servicing
Practices : With respect
to each Mortgage Loan, those mortgage servicing practices
(including collection procedures) that are in accordance with all
applicable statutes, regulations and prudent mortgage banking
practices for similar mortgage loans.
Account : The Distribution Account, the Reserve Fund,
the Class P Certificate Account and the Protected
Account.
Accrual Period
: With respect to the Certificates
(other than the Class C, Class P and Residual Certificates) and any
Distribution Date, the period from and including the immediately
preceding Distribution Date (or with respect to the first Accrual
Period, the Closing Date) to and including the day prior to such
Distribution Date. With respect to the Class C Certificates and the
Class C Interest and any Distribution Date, the calendar month
immediately preceding such Distribution Date. All calculations of
interest on the Certificates (other than the Class C, Class P and
Residual Certificates) will be made on the basis of the actual
number of days elapsed in the related Accrual Period. All
calculations of interest on the Class C Certificates and the Class
C Interest will be made on the basis of a 360-day year consisting
of twelve 30-day months.
Advance : An advance of delinquent payments of principal
or interest in respect of a Mortgage Loan required to be made by
the Master Servicer as provided in Section 5.01 hereof.
Agreement : This Pooling and Servicing Agreement and any
and all amendments or supplements hereto made in accordance with
the terms herein.
Amount Held for Future
Distribution : As to any
Distribution Date, the aggregate amount held in the Protected
Account at the close of business on the immediately preceding
Determination Date on account of (i) all Scheduled Payments or
portions thereof received in respect of the Mortgage Loans due
after the related Due Period and (ii) Principal Prepayments,
Liquidation Proceeds, Subsequent Recoveries and Insurance Proceeds
received in respect of such Mortgage Loans after the last day of
the related Prepayment Period.
Applied Realized Loss
Amount : With respect to
any Distribution Date and a Class of Class A, Class M and Class B
Certificates, the sum of the Realized Losses with respect to the
Mortgage Loans that have been applied in reduction of the
Certificate Principal Balance of a Class of Certificates pursuant
to Section 5.05 of this Agreement which have not previously been
reimbursed or reduced by any Subsequent Recoveries applied to such
Applied Realized Loss Amount.
Appraised Value
: With respect to any Mortgage Loan
originated in connection with a refinancing, the appraised value of
the Mortgaged Property based upon the appraisal made at the time of
such refinancing or, with respect to any other Mortgage Loan, the
lesser of (x) the appraised value of the Mortgaged Property based
upon the appraisal made by a fee appraiser at the time of the
origination of the related Mortgage Loan, and (y) the sales price
of the Mortgaged Property at the time of such
origination.
Basis Risk Shortfall Carry
Forward Amount : With
respect to any Distribution Date and any Class of Class A, Class M
and Class B Certificates, an amount equal to the sum of (A) the
excess, if any, of (a) the amount of Current Interest that such
Class would have been entitled to receive on such Distribution Date
had the Pass-Though Rate applicable to such Class been calculated
at a per annum rate equal to One-Month LIBOR plus the related
Certificate Margin, over (b) the amount of Current Interest that
such Class received on such Distribution Date if the Pass-Through
Rate is limited to the related Net Rate Cap and (B) the amount in
clause (A) for the previous Distribution Date not previously paid,
together with interest thereon at a rate equal to the related
Pass-Through Rate for such Distribution Date.
Bankruptcy Code
: Title 11 of the United States
Code.
Book-Entry
Certificates : Any of the
Certificates that shall be registered in the name of the Depository
or its nominee, the ownership of which is reflected on the books of
the Depository or on the books of a person maintaining an account
with the Depository (directly, as a “Depository
Participant”, or indirectly, as an indirect participant in
accordance with the rules of the Depository and as described in
Section 6.06). As of the Closing Date, each Class of Regular
Certificates (other than the Class B-4 Certificates and Class C
Certificates) constitutes a Class of Book-Entry
Certificates.
Business Day
: Any day other than (i) a Saturday
or a Sunday, or (ii) a day on which banking institutions in The
City of New York, New York, Chicago, Illinois, Minneapolis,
Minnesota or the city in which the Corporate Trust Office of the
Trustee or the principal office of the Master Servicer is located
are authorized or obligated by law or executive order to be
closed.
Certificate
: Any one of the certificates of any
Class executed and authenticated by the Trustee in substantially
the forms attached hereto as Exhibits A-1 through A-5.
Certificate Margin
: With respect to the Class A-1
Certificates and, for purposes of the definition of
“One-Month LIBOR Pass-Through Rate”, REMIC I Regular
Interest A-1, 0.260% per annum in the case of each Distribution
Date through and including the first possible Optional Termination
Date and 0.520% per annum in the case of each Distribution Date
thereafter.
With respect to the Class A-2
Certificates and, for purposes of the definition of
“One-Month LIBOR Pass-Through Rate”, REMIC I Regular
Interest A-2, 0.110% per annum in the case of each Distribution
Date through and including the first possible Optional Termination
Date and 0.220% per annum in the case of each Distribution Date
thereafter.
With respect to the Class A-3
Certificates and, for purposes of the definition of
“One-Month LIBOR Pass-Through Rate”, REMIC I Regular
Interest A-3, 0.350% per annum in the case of each Distribution
Date through and including the first possible Optional Termination
Date and 0.700% per annum in the case of each Distribution Date
thereafter.
With respect to the Class M-1
Certificates and, for purposes of the definition of
“One-Month LIBOR Pass-Through Rate”, REMIC I Regular
Interest M-1, 0.550% per annum in the case of each Distribution
Date through and including the first possible Optional Termination
Date and 0.825% per annum in the case of each Distribution Date
thereafter.
With respect to the Class M-2
Certificates and, for purposes of the definition of
“One-Month LIBOR Pass-Through Rate”, REMIC I Regular
Interest M-2, 0.580% per annum in the case of each Distribution
Date through and including the first possible Optional Termination
Date and 0.870% per annum in the case of each Distribution Date
thereafter.
With respect to the Class M-3
Certificates and, for purposes of the definition of
“One-Month LIBOR Pass-Through Rate”, REMIC I Regular
Interest M-3, 0.700% per annum in the case of each Distribution
Date through and including the first possible Optional Termination
Date and 1.050% per annum in the case of each Distribution Date
thereafter.
With respect to the Class M-4
Certificates and, for purposes of the definition of
“One-Month LIBOR Pass-Through Rate”, REMIC I Regular
Interest M-4, 0.750% per annum in the case of each Distribution
Date through and including the first possible Optional Termination
Date and 1.125% per annum in the case of each Distribution Date
thereafter.
With respect to the Class M-5
Certificates and, for purposes of the definition of
“One-Month LIBOR Pass-Through Rate”, REMIC I Regular
Interest M-5, 0.800% per annum in the case of each Distribution
Date through and including the first possible Optional Termination
Date and 1.200% per annum in the case of each Distribution Date
thereafter.
With respect to the Class B-1
Certificates and, for purposes of the definition of
“One-Month LIBOR Pass-Through Rate”, REMIC I Regular
Interest B-1, 1.250% per annum in the case of each Distribution
Date through and including the first possible Optional Termination
Date and 1.875% per annum in the case of each Distribution Date
thereafter.
With respect to the Class B-2
Certificates and, for purposes of the definition of
“One-Month LIBOR Pass-Through Rate”, REMIC I Regular
Interest B-2, 1.500% per annum in the case of each Distribution
Date through and including the first possible Optional Termination
Date and 2.250% per annum in the case of each Distribution Date
thereafter.
With respect to the Class B-3
Certificates and, for purposes of the definition of
“One-Month LIBOR Pass-Through Rate”, REMIC I Regular
Interest B-3, 2.100% per annum in the
case of each Distribution Date
through and including the first possible Optional Termination Date
and 3.150% per annum in the case of each Distribution Date
thereafter.
With respect to the Class B-4
Certificates and, for purposes of the definition of
“One-Month LIBOR Pass-Through Rate”, REMIC I Regular
Interest B-4, 4.000% per annum in the case of each Distribution
Date through and including the first possible Optional Termination
Date and 6.000% per annum in the case of each Distribution Date
thereafter.
Certificate Notional
Amount : With respect to
the Class C Certificates and any Distribution Date, an amount equal
to the Stated Principal Balance of the Mortgage Loans as of the
beginning of the related Due Period. The initial Certificate
Notional Amount of the Class C Certificates shall be
$502,304,866.87. For federal income tax purposes, the Certificate
Notional Amount for any Distribution Date shall be an amount equal
to the Uncertificated Notional Amount for the Class C Interest for
such Distribution Date.
Certificate Owner
: With respect to a Book-Entry
Certificate, the Person that is the beneficial owner of such
Book-Entry Certificate.
Certificate Principal
Balance : As to any
Certificate (other than any Class R Certificate) and as of any
Distribution Date, the Initial Certificate Principal Balance of
such Certificate plus, in the case of a Class A, Class M or Class B
Certificate, any Subsequent Recoveries added to the Certificate
Principal Balance of such Certificate pursuant to Section 5.04(b),
less the sum of (i) all amounts distributed with respect to such
Certificate in reduction of the Certificate Principal Balance
thereof on previous Distribution Dates pursuant to Section 5.04,
and (ii) any Applied Realized Loss Amounts allocated to such
Certificate on previous Distribution Dates.
Certificate Register
: The register maintained pursuant
to Section 6.02 hereof.
Certificateholder or
Holder : The person in
whose name a Certificate is registered in the Certificate Register
(initially, Cede & Co., as nominee for the Depository, in the
case of any Book-Entry Certificates).
Class : All Certificates bearing the same Class
designation as set forth in Section 6.01 hereof.
Class A Certificates
: Any of the Class A-1, Class A-2
and Class A-3 Certificates.
Class A Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (x) the
Principal Distribution Amount for such Distribution Date and (y)
the excess, if any, of (i) the aggregate Certificate Principal
Balance of the Class A Certificates immediately prior to such
Distribution Date, over (ii) the lesser of (a) the product of (1)
25.80% and (2) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related
Prepayment Period, and after reduction for Realized Losses incurred
during the related Due Period), and (b) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of
principal received during the
related Prepayment Period, and after reduction for Realized Losses
incurred during the related Due Period ) minus the
Overcollateralization Floor.
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 Basis Risk
Shortfall Carry Forward Amount.
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 Basis Risk
Shortfall Carry Forward Amount.
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 Basis Risk
Shortfall Carry Forward Amount.
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 its
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 Basis Risk
Shortfall Carry Forward Amount.
Class B-1 Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (x) the
remaining Principal Distribution Amount for such Distribution Date
after distribution of the Class A Principal Distribution Amount,
the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution
Amount, the Class M-4 Principal Distribution Amount and the Class
M-5 Principal Distribution Amount and (y) the excess, if any, of
(a) the sum of (1) the aggregate Certificate Principal Balance of
the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such
Distribution Date), (2) the Certificate Principal Balance of the
Class M-1 Certificates (after taking into account the distribution
of the Class M-1 Principal Distribution Amount on such Distribution
Date), (3) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the distribution of the
Class M-2 Principal Distribution Amount on such Distribution Date),
(4) the Certificate Principal Balance of the Class M-3 Certificates
(after taking into account the distribution of the Class M-3
Principal Distribution Amount on such Distribution Date), (5) the
Certificate Principal Balance of the Class M-4 Certificates (after
taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date), (6) the Certificate
Principal Balance of the Class M-5 Certificates (after taking into
account the distribution of the Class M-5
Principal Distribution Amount on
such Distribution Date) and (7) the Certificate Principal Balance
of the Class B-1 Certificates immediately prior to such
Distribution Date, over (b) the lesser of (1) the product of (x)
69.00% and (y) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related
Prepayment Period, and after reduction for Realized Losses incurred
during the related Due Period), and (2) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received
during the related Prepayment Period, and after reduction for
Realized Losses incurred during the related Due Period) minus the
Overcollateralization Floor.
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 its
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 Basis Risk
Shortfall Carry Forward Amount.
Class B-2 Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (x) the
remaining Principal Distribution Amount for such Distribution Date
after distribution of the Class A Principal Distribution Amount,
the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution
Amount, the Class M-4 Principal Distribution Amount, the Class M-5
Principal Distribution Amount and the Class B-1 Principal
Distribution Amount and (y) the excess, if any, of (a) the sum of
(1) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the
Class A Principal Distribution Amount on such Distribution Date),
(2) the Certificate Principal Balance of the Class M-1 Certificates
(after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (3) the
Certificate Principal Balance of the Class M-2 Certificates (after
taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (4) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into
account the distribution of the Class M-3 Principal Distribution
Amount on such Distribution Date), (5) the Certificate Principal
Balance of the Class M-4 Certificates (after taking into account
the distribution of the Class M-4 Principal Distribution Amount on
such Distribution Date), (6) the Certificate Principal Balance of
the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such
Distribution Date) (7) the Certificate Principal Balance of the
Class B-1 Certificates (after taking into account the distribution
of the Class B-1 Principal Distribution Amount on such Distribution
Date) and (8) the Certificate Principal Balance of the Class B-2
Certificates immediately prior to such Distribution Date, over (b)
the lesser of (1) the product of (x) 72.50% and (y) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period, and after
reduction for Realized Losses incurred during the related Due
Period), and (2) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during
the
related Due Period, to the extent
received or advanced, and unscheduled collections of principal
received during the related Prepayment Period, and after reduction
for Realized Losses incurred during the related Due Period) minus
the Overcollateralization Floor.
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 its
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 Basis Risk
Shortfall Carry Forward Amount.
Class B-3 Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (x) the
remaining Principal Distribution Amount for such Distribution Date
after distribution of the Class A Principal Distribution Amount,
the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution
Amount, the Class M-4 Principal Distribution Amount, the Class M-5
Principal Distribution Amount, the Class B-1 Principal Distribution
Amount, and the Class B-2 Principal Distribution Amount and (y) the
excess, if any, of (a) the sum of (1) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into
account the distribution of the Class A Principal Distribution
Amount on such Distribution Date), (2) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account
the distribution of the Class M-1 Principal Distribution Amount on
such Distribution Date), (3) the Certificate Principal Balance of
the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date), (4) the Certificate Principal Balance of the
Class M-3 Certificates (after taking into account the distribution
of the Class M-3 Principal Distribution Amount on such Distribution
Date), (5) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account the distribution of the
Class M-4 Principal Distribution Amount on such Distribution Date),
(6) the Certificate Principal Balance of the Class M-5 Certificates
(after taking into account the distribution of the Class M-5
Principal Distribution Amount on such Distribution Date), (7) the
Certificate Principal Balance of the Class B-1 Certificates (after
taking into account the distribution of the Class B-1 Principal
Distribution Amount on such Distribution Date), (8) the Certificate
Principal Balance of the Class B-2 Certificates (after taking into
account the distribution of the Class B-2 Principal Distribution
Amount on such Distribution Date) and (9) the Certificate Principal
Balance of the Class B-3 Certificates immediately prior to such
Distribution Date, over (b) the lesser of (1) the product of (x)
75.60% and (y) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related
Prepayment Period, and after reduction for Realized Losses incurred
during the related Due Period), and (2) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received
during the related Prepayment Period, and after reduction for
Realized Losses incurred during the related Due Period) minus the
Overcollateralization Floor.
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 its
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 Basis Risk
Shortfall Carry Forward Amount.
Class B-4 Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (x) the
remaining Principal Distribution Amount for such Distribution Date
after distribution of the Class A Principal Distribution Amount,
the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution
Amount, the Class M-4 Principal Distribution Amount, the Class M-5
Principal Distribution Amount, the Class B-1 Principal Distribution
Amount, the Class B-2 Principal Distribution Amount and the Class
B-3 Principal Distribution Amount and (y) the excess, if any, of
(a) the sum of (1) the aggregate Certificate Principal Balance of
the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such
Distribution Date), (2) the Certificate Principal Balance of the
Class M-1 Certificates (after taking into account the distribution
of the Class M-1 Principal Distribution Amount on such Distribution
Date), (3) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the distribution of the
Class M-2 Principal Distribution Amount on such Distribution Date),
(4) the Certificate Principal Balance of the Class M-3 Certificates
(after taking into account the distribution of the Class M-3
Principal Distribution Amount on such Distribution Date), (5) the
Certificate Principal Balance of the Class M-4 Certificates (after
taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date), (6) the Certificate
Principal Balance of the Class M-5 Certificates (after taking into
account the distribution of the Class M-5 Principal Distribution
Amount on such Distribution Date), (7) the Certificate Principal
Balance of the Class B-1 Certificates (after taking into account
the distribution of the Class B-1 Principal Distribution Amount on
such Distribution Date), (8) the Certificate Principal Balance of
the Class B-2 Certificates (after taking into account the
distribution of the Class B-2 Principal Distribution Amount on such
Distribution Date), (9) the Certificate Principal Balance of the
Class B-3 Certificates (after taking into account the distribution
of the Class B-3 Principal Distribution Amount on such Distribution
Date) and (10) the Certificate Principal Balance of the Class B-4
Certificates immediately prior to such Distribution Date, over (b)
the lesser of (1) the product of (x) 85.60% and (y) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period, and after
reduction for Realized Losses incurred during the related Due
Period), and (2) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related
Prepayment Period, and after reduction for Realized Losses incurred
during the related Due Period) minus the Overcollateralization
Floor.
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 III and (ii)
the obligation to pay Basis Risk Shortfall Carry Forward
Amounts.
Class C Distribution
Amount : With respect to
any Distribution Date, the sum of (i) the Current Interest for the
Class C Interest for such Distribution Date, (ii) any
Overcollateralization Release Amount for such Distribution Date and
(iii) without duplication, any Subsequent Recoveries not
distributed to the Class A, Class M and Class B Certificates on
such Distribution Date; provided, however that on any Distribution
Date after the Distribution Date on which the Certificate Principal
Balances of the Class A, Class M and Class B Certificates have been
reduced to zero, the Class C Distribution Amount shall include the
Overcollateralization Amount.
Class C Interest
: An uncertificated interest in the
Trust Fund held by the Trustee on behalf of the Holders of the
Class C Certificates, evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
Class M Certificates
: Any of the Class M-1, Class M-2,
Class M-3, Class M-4 and Class M-5 Certificates.
Class M-1 Certificate
: Any Certificate designated as a
“Class M-1 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its
Percentage Interest of distributions provided for the Class M-1
Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis Risk
Shortfall Carry Forward Amount.
Class M-1 Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (x) the
remaining Principal Distribution Amount for such Distribution Date
after distribution of the Class A Principal Distribution Amount and
(y) the excess, if any, of (a) the sum of (1) the aggregate
Certificate Principal Balance of the Class A Certificates (after
taking into account the distribution of the Class A Principal
Distribution Amount on such Distribution Date) and (2) the
Certificate Principal Balance of the Class M-1 Certificates
immediately prior to such Distribution Date, over (b) the lesser of
(1) the product of (x) 46.10% and (y) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received
during the related Prepayment Period, and after reduction for
Realized Losses incurred during the related Due Period), and (2)
the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period,
to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period, and after
reduction for Realized Losses incurred during the related Due
Period) minus the Overcollateralization Floor.
Class M-2 Certificate
: Any Certificate designated as a
“Class M-2 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its
Percentage Interest of distributions provided for the Class M-2
Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis Risk
Shortfall Carry Forward Amount.
Class M-2 Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (x) the
remaining Principal Distribution Amount for such Distribution Date
after
distribution of the Class A
Principal Distribution Amount and the Class M-1 Principal
Distribution Amount and (y) the excess, if any, of (a) the sum of
(1) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the
Class A Principal Distribution Amount on such Distribution Date),
(2) the Certificate Principal Balance of the Class M-1 Certificates
(after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date) and (3)
the Certificate Principal Balance of the Class M-2 Certificates
immediately prior to such Distribution Date, over (b) the lesser of
(1) the product of (x) 51.80% and (y) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received
during the related Prepayment Period, and after reduction for
Realized Losses incurred during the related Due Period), and (2)
the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period,
to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period, and after
reduction for Realized Losses incurred during the related Due
Period) minus the Overcollateralization Floor.
Class M-3 Certificate
: Any Certificate designated as a
“Class M-3 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its
Percentage Interest of distributions provided for the Class M-3
Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis Risk
Shortfall Carry Forward Amount.
Class M-3 Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (x) the
remaining Principal Distribution Amount for such Distribution Date
after distribution of the Class A Principal Distribution Amount,
the Class M-1 Principal Distribution Amount and the Class M-2
Principal Distribution Amount and (y) the excess, if any, of (a)
the sum of (1) the aggregate Certificate Principal Balance of the
Class A Certificates (after taking into account the distribution of
the Class A Principal Distribution Amount on such Distribution
Date), (2) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date),
(3) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2
Principal Distribution Amount on such Distribution Date) and (4)
the Certificate Principal Balance of the Class M-3 Certificates
immediately prior to such Distribution Date, over (b) the lesser of
(1) the product of (x) 56.20% and (y) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received
during the related Prepayment Period, and after reduction for
Realized Losses incurred during the related Due Period), and (2)
the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period,
to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period, and after
reduction for Realized Losses incurred during the related Due
Period) minus the Overcollateralization Floor.
Class M-4 Certificate
: Any Certificate designated as a
“Class M-4 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its
Percentage Interest of distributions provided for the Class M-4
Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis Risk
Shortfall Carry Forward Amount.
Class M-4 Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (x) the
remaining Principal Distribution Amount for such Distribution Date
after distribution of the Class A Principal Distribution Amount,
the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount and the Class M-3 Principal
Distribution Amount and (y) the excess, if any, of (a) the sum of
(1) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the
Class A Principal Distribution Amount on such Distribution Date),
(2) the Certificate Principal Balance of the Class M-1 Certificates
(after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (3) the
Certificate Principal Balance of the Class M-2 Certificates (after
taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (4) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into
account the distribution of the Class M-3 Principal Distribution
Amount on such Distribution Date) and (5) the Certificate Principal
Balance of the Class M-4 Certificates immediately prior to such
Distribution Date, over (b) the lesser of (1) the product of (x)
60.70% and (y) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related
Prepayment Period, and after reduction for Realized Losses incurred
during the related Due Period), and (2) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received
during the related Prepayment Period, and after reduction for
Realized Losses incurred during the related Due Period) minus the
Overcollateralization Floor.
Class M-5 Certificate
: Any Certificate designated as a
“Class M-5 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its
Percentage Interest of distributions provided for the Class M-5
Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis Risk
Shortfall Carry Forward Amount.
Class M-5 Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (x) the
remaining Principal Distribution Amount for such Distribution Date
after distribution of the Class A Principal Distribution Amount,
the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution
Amount and the Class M-4 Principal Distribution Amount and (y) the
excess, if any, of (a) the sum of (1) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into
account the distribution of the Class A Principal Distribution
Amount on such Distribution Date), (2) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account
the distribution of the Class M-1 Principal Distribution Amount on
such Distribution Date), (3) the Certificate Principal Balance of
the Class M-2 Certificates (after taking into
account the distribution of the
Class M-2 Principal Distribution Amount on such Distribution Date),
(4) the Certificate Principal Balance of the Class M-3 Certificates
(after taking into account the distribution of the Class M-3
Principal Distribution Amount on such Distribution Date), (5) the
Certificate Principal Balance of the Class M-4 Certificates (after
taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date) and (6) the
Certificate Principal Balance of the Class M-5 Certificates
immediately prior to such Distribution Date, over (b) the lesser of
(1) the product of (x) 64.50% and (y) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received
during the related Prepayment Period, and after reduction for
Realized Losses incurred during the related Due Period), and (2)
the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period,
to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period, and after
reduction for Realized Losses incurred during the related Due
Period) minus the Overcollateralization Floor.
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
IV.
Class P Interest
: An uncertificated interest in the
Trust Fund held by the Trustee on behalf of the Holders of the
Class P Certificates, evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
Class P Certificate
Account : The separate
Eligible Account created and maintained by the Trustee pursuant to
Section 4.06 in the name of the Trustee for the benefit of the
Class P Certificateholders.
Class R-1 Certificate
: Any Certificate designated a
“Class R-1 Certificate” on the face thereof, in 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 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.
Class R-3 Interest
: The uncertificated Residual
Interest in REMIC III.
Class R-4 Interest
: The uncertificated Residual
Interest in REMIC IV.
Class RX Certificate
: Any Certificate designated a
“Class RX Certificate” on the face thereof, in the form
set forth in Exhibit A-6 hereto, evidencing the ownership of the
Class R-3 Interest and the Class R-4 Interest and representing the
right to the Percentage Interest of distributions provided for the
Class RX Certificates as set forth herein.
Closing Date
: October 28, 2005.
Code : The Internal Revenue Code of 1986, including
any successor or amendatory provisions.
Compensating Interest
: An amount, not to exceed the
Servicing Fee, to be deposited in the Protected Account by the
Master Servicer to the payment of a Prepayment Interest Shortfall
on a Mortgage Loan subject to this Agreement.
Corporate Trust Office
: The designated office of the
Trustee where at any particular time its corporate trust business
with respect to this Agreement shall be administered, which office
at the date of the execution of this Agreement is located at 135
South LaSalle Street, Suite 1625, Chicago, Illinois, 60603
Attention: Global Securities and Trust Services Group - SACO I
Trust, Series 2005-WM3, 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, ZZ and P), the Certificate with the
corresponding designation.
Cumulative Realized Loss
Percentage : With respect
to the Certificates and any Distribution Date, the percentage
obtained by dividing (x) the aggregate Realized Losses on the
Mortgage Loans incurred since the related Cut-off Date through the
end of the related Due Period by (y) the aggregate Stated Principal
Balance of the Mortgage Loans as of the related Cut-off
Date.
Current Interest
: As of any Distribution Date, with
respect to the Certificates and interests of each class (other than
the Class P Certificates, Class P Interest, the Residual
Certificates and the Residual Interests), (i) the interest accrued
on the Certificate Principal Balance or Uncertificated Notional
Amount, as applicable, during the related Accrual Period at the
applicable Pass-Through Rate, or the interest otherwise payable
thereto, plus any amount previously distributed with respect to
interest for such Certificate or interest that has been recovered
as a voidable preference by a trustee in bankruptcy minus (ii) the
sum of (a) any Prepayment Interest Shortfall for such Distribution
Date, to the extent not covered by Compensating Interest and (b)
any Relief Act Interest Shortfalls during the related Due Period,
provided, however, that for purposes of calculating Current
Interest for any such Class, amounts specified in clause (ii)
hereof for any such Distribution Date shall be allocated first to
the Class C Certificates, Class C Interest and Residual
Certificates in reduction of amounts otherwise distributable to
such Certificates and interest on such Distribution Date and then
any excess shall be allocated to each Class of Class A, Class M and
Class B Certificates pro rata based on the respective
amounts of interest accrued pursuant to clause (i) hereof for each
such Class on such Distribution Date.
Current Specified Enhancement
Percentage : With respect
to any Distribution Date, the percentage obtained by dividing (x)
the sum of (i) the aggregate Certificate Principal Balance of the
Class M Certificates and Class B Certificates and (ii) the
Overcollateralization Amount, in each case prior to the
distribution of the Principal Distribution Amount on such
Distribution Date, by (y) the aggregate Stated Principal Balance of
the Mortgage Loans as of the end of the related Due Period (after
giving effect to scheduled payments of principal due during the
related
Due Period, to the extent received
or advanced, and unscheduled collections of principal received
during the related Prepayment Period, and after reduction for
Realized Losses incurred during the related Due Period).
Custodial Agreement
: The LaSalle Custodial
Agreement.
Custodian : LaSalle Bank National Association or any
successor custodians appointed pursuant to the provisions hereof
and the Custodial Agreement.
Cut-off Date
: The close of business on October
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.
The aggregate Cut-off Date Principal Balance of the Mortgage Loans
is $502,304,866.87.
Debt Service Reduction
: With respect to any Mortgage Loan,
a reduction by a court of competent jurisdiction in a proceeding
under the Bankruptcy Code in the Scheduled Payment for such
Mortgage Loan that became final and non-appealable, except such a
reduction resulting from a Deficient Valuation or any other
reduction that results in a permanent forgiveness of
principal.
Deficient Valuation
: With respect to any Mortgage Loan,
a valuation by a court of competent jurisdiction of the Mortgaged
Property in an amount less than the then outstanding indebtedness
under such Mortgage Loan, or any reduction in the amount of
principal to be paid in connection with any Scheduled Payment that
results in a permanent forgiveness of principal, which valuation or
reduction results from an order of such court that is final and
non-appealable in a proceeding under the Bankruptcy
Code.
Definitive
Certificates : As defined
in Section 6.06.
Deleted Mortgage Loan
: A Mortgage Loan replaced or to be
replaced by a Replacement Mortgage Loan.
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 or Initial Notional Amount of this
Certificate”.
Depositor : Bear Stearns Asset Backed Securities I LLC, a
Delaware limited liability company, or its successor in
interest.
Depository
: The initial Depository shall be
The Depository Trust Company (“DTC”), the nominee of
which is Cede & Co., or any other organization registered as a
“clearing agency” pursuant to Section 17A of the
Securities Exchange Act of 1934, as amended. The Depository shall
initially be the registered Holder of the Book-Entry Certificates.
The Depository shall at all times be a “clearing
corporation” as defined in Section 8-102(a)(5) of the Uniform
Commercial Code of the State of New York.
Depository Agreement
: With respect to the Class of
Book-Entry Certificates, the agreement among the Depositor, the
Trustee and the initial Depository, dated as of the Closing Date,
substantially in the form of Exhibit H.
Depository Participant
: A broker, dealer, bank or other
financial institution or other Person for whom from time to time a
Depository effects book-entry transfers and pledges of securities
deposited with the Depository.
Determination Date
: With respect to any Distribution
Date, the 15th day of the month of such Distribution Date or, if
such 15th day is not a Business Day, the immediately preceding
Business Day.
Distribution Account
: The separate Eligible Account
created and maintained by the Trustee pursuant to Section 4.04 in
the name of the Trustee for the benefit of the Certificateholders
designated “LaSalle Bank National Association, in trust for
registered holders of Bear Stearns Asset Backed Securities I LLC,
Mortgage-Backed Certificates, Series 2005-WM3”. Funds in the
Distribution Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this
Agreement.
Distribution Account Deposit
Date : The second
Business Day prior to each Distribution Date.
Distribution Date
: The 25th day of each calendar
month after the initial issuance of the Certificates, or if such
25th day is not a Business Day, the next succeeding Business Day,
commencing in November 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, as evidenced in writing. Eligible Accounts may
bear interest, and may include, if otherwise qualified under this
definition, accounts maintained with the Trustee.
EMC : EMC Mortgage Corporation, a Delaware
corporation, and its successors and assigns, in its capacity as
seller of the Mortgage Loans to the Depositor.
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 8.01
hereof.
Excess Cashflow
: With respect to any Distribution
Date, an amount, if any, equal to the sum of (a) the Remaining
Excess Spread for such Distribution Date and (b) the
Overcollateralization Release Amount for such Distribution
Date.
Excess Liquidation
Proceeds : To the extent
not required by law to be paid to the related Mortgagor, the
excess, if any, of any Liquidation Proceeds with respect to a
Mortgage Loan over the Stated Principal Balance of such Mortgage
Loan and accrued and unpaid interest at the related Mortgage Rate
through the last day of the month in which the Mortgage Loan has
been liquidated.
Excess Spread
: With respect to any Distribution
Date, the excess, if any, of (i) the Interest Funds for such
Distribution Date over (ii) the sum of the Current Interest on the
Class A, Class M and Class B Certificates and Interest Carry
Forward Amounts on the Class A Certificates (other than Interest
Carry Forward Amounts paid pursuant to Section 5.04(a)(3(A)), in
each case for such Distribution Date.
Exemption : Prohibited Transaction Exemption 90-30, as
amended from time to time.
Extra Principal Distribution
Amount : With respect to
any Distribution Date, the lesser of (i) the excess, if any, of the
Overcollateralization Target Amount for such Distribution Date over
the Overcollateralization Amount for such Distribution Date (after
giving effect to distributions of principal on the Certificates
other than any Extra Principal Distribution Amount) and (ii) the
Excess Spread for such Distribution Date.
Fannie Mae
: Fannie Mae (formerly, Federal
National Mortgage Association), or any successor
thereto.
FDIC : The Federal Deposit Insurance Corporation, or
any successor thereto.
Final Certification
: The certification substantially in
the form of Exhibit Three to the Custodial Agreement.
Final Recovery
Determination : With
respect to any defaulted Mortgage Loan or any REO Property (other
than a Mortgage Loan or REO Property purchased by EMC pursuant to
or as contemplated by Section 2.03(c) or Section 10.01), a
determination made by the Master Servicer that all Insurance
Proceeds, Liquidation Proceeds and other payments or recoveries
which the Master Servicer, in its reasonable good faith judgment,
expects to be finally recoverable in respect thereof have been so
recovered. The Trustee shall maintain records, based solely on
information provided by the Master Servicer, of each Final Recovery
Determination made thereby.
FIRREA : The Financial Institutions Reform, Recovery,
and Enforcement Act of 1989.
Fiscal Quarter
: December 1 to February 29 (or the
last day in such month), March 1 to May 31, June 1 to August 31, or
September 1 to November 30, as applicable.
Fitch : Fitch, Inc. and any successor
thereto.
Freddie Mac
: Federal Home Loan Mortgage
Corporation, or any successor thereto.
Global Certificate
: Any Private Certificate registered
in the name of the Depository or its nominee, beneficial interests
in which are reflected on the books of the Depository or on the
books of a Person maintaining an account with such Depository
(directly or as an indirect participant in accordance with the
rules of such depository).
Indemnified Persons
: The Trustee, the Master Servicer,
the Trust Fund and their officers, directors, agents and employees
and, with respect to the Trustee, any separate co-trustee and its
officers, directors, agents and employees.
Individual Certificate
: Any Private Certificate registered
in the name of the Holder other than the Depository or its
nominee.
Initial Certification
: The certification substantially in
the form of Exhibit One to the Custodial Agreement.
Initial Certificate Principal
Balance : With respect to
any Certificate, the Certificate Principal Balance of such
Certificate or any predecessor Certificate on the Closing
Date.
Institutional Accredited
Investor : Any Person
meeting the requirements of Rule 501(a)(l), (2), (3) or (7) of
Regulation D under the Securities Act or any entity all of the
equity Holders in which come within such paragraphs.
Insurance Proceeds
: Proceeds paid in respect of the
Mortgage Loans pursuant to any Insurance Policy and any other
insurance policy covering a Mortgage Loan, to the extent such
proceeds are payable to the mortgagee under the Mortgage, the
Master Servicer or the trustee under the deed of trust and are not
applied to the restoration of the related Mortgaged Property or
released to the Mortgagor in accordance with the procedures that
the Master Servicer would follow in servicing mortgage loans held
for its own account, in each case other than any amount included in
such Insurance Proceeds in respect of Insured Expenses.
Insured Expenses
: Expenses covered by any insurance
policy with respect to the Mortgage Loans.
Interest Carry Forward
Amount : As of any
Distribution Date and with respect to each Class of Certificates
(other than the Class C, Class P and Residual Certificates), the
sum of (i) the excess of (a) the Current Interest for such Class
with respect to such Distribution Date and any prior Distribution
Dates over (b) the amount actually distributed to such Class of
Certificates with respect to interest on such Distribution Dates
and (ii) interest thereon (to the extent permitted by applicable
law) at the applicable Pass-Through Rate for such Class for the
related Accrual Period including the Accrual Period relating to
such Distribution Date.
Interest Determination
Date : Shall mean the
second LIBOR Business Day preceding the commencement of each
Accrual Period.
Interest Funds
: With respect any Distribution Date
(i) the sum, without duplication, of (a) all scheduled interest
during the related Due Period with respect to the Mortgage Loans
less the Servicing Fee, the Trustee Fee and the LPMI Fee, if any,
(b) all Advances relating to interest with respect to the Mortgage
Loans made on or prior to the related Distribution Account Deposit
Date, (c) all Compensating Interest with respect to the Mortgage
Loans and required to be remitted by the Master Servicer pursuant
to this Agreement with respect to such Distribution Date, (d)
Liquidation Proceeds and Subsequent Recoveries with respect to the
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 EMC pursuant to
Sections 2.02 and 2.03 and by the Master Servicer pursuant to
Section 3.18, in each case to the extent remitted by the Master
Servicer to the Distribution Account pursuant to this Agreement
minus (ii) all amounts relating to interest required to be
reimbursed pursuant to Sections 4.02 and 4.05 or as otherwise set
forth in this Agreement.
Interim Certification
: The certification substantially in
the form of Exhibit Two to the Custodial Agreement.
LaSalle : LaSalle Bank National Association, and any
successor thereto.
LaSalle Custodial
Agreement : The custodial
agreement, dated as of October 28, 2005, among the Depositor, EMC,
as the seller, the Master Servicer, the Trustee and LaSalle, as a
Custodian, in substantially the form of Exhibit J
hereto.
Last Scheduled Distribution
Date : Solely for
purposes of the face of the Certificates as follows: with respect
to the Certificates, the Distribution Date in September
2035.
Latest Possible Maturity
Date : The Distribution
Date in the month following the final scheduled maturity date of
the Mortgage Loan in the Trust Fund having the latest scheduled
maturity date as of the Cut-off Date. For purposes of the Treasury
regulations under Code Sections 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 Master Servicer has made a Final
Recovery Determination with respect thereto.
Liquidation Proceeds
: Amounts, other than Insurance
Proceeds, received in connection with the partial or complete
liquidation of a Mortgage Loan, whether through trustee’s
sale, 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 5.05(b) hereof.
LPMI Fee : The fee payable to the insurer for each
Mortgage Loan subject to an LPMI Policy as set forth in such LPMI
Policy.
LPMI Policy
: A policy of mortgage guaranty
insurance issued by an insurer meeting the requirements of Fannie
Mae and Freddie Mac in which the Master Servicer or the related
subservicer of the related Mortgage Loan is responsible for the
payment of the LPMI Fee thereunder from collections on the related
Mortgage Loan.
Majority Class C
Certificateholder : 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 the REMIC I Regular Interests (other than
REMIC I Regular Interest AA and REMIC I Regular Interest P), with
the rate on each such REMIC I Regular Interest (other than REMIC I
Regular Interest ZZ) subject to a cap equal to the lesser of (i)
the One-Month LIBOR Pass-Through Rate for the Corresponding
Certificate and (ii) the Net Rate Cap for the Corresponding
Certificate for the purpose of this calculation for such
Distribution Date, and with
the rate on REMIC I Regular Interest
ZZ subject to a cap of zero for the purpose of this
calculation.
Master Servicer
: EMC Mortgage Corporation, in its
capacity as master servicer, and its successors and
assigns.
Master Servicer
Certification : A written
certification covering servicing of the Mortgage Loans by the
Master Servicer and signed by an officer of the Master Servicer
that complies with (i) the Sarbanes-Oxley Act of 2002, as amended
from time to time, and (ii) the February 21, 2003 Statement by the
Staff of the Division of Corporation Finance of the Securities and
Exchange Commission Regarding Compliance by Asset Backed Issuers
with Exchange Act Rules 13a-14 and 15d-14, as in effect from time
to time; provided that if, after the Closing Date (a) the Sarbanes
Oxley Act of 2002 is amended, (b) the Statement referred to in
clause (ii) is 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 EMC
following a negotiation in good faith to determine how to comply
with any such new requirements.
Maximum Uncertificated Accrued
Interest Deferral Amount : With respect to any Distribution Date, the
excess of (i) accrued interest at the Uncertificated REMIC I
Pass-Through Rate applicable to REMIC I Regular Interest ZZ for
such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC I Regular Interest ZZ minus the REMIC I
Overcollateralized Amount, in each case for such Distribution Date,
over (ii) the aggregate amount of Uncertificated Accrued Interest
for such Distribution Date on the REMIC I Regular Interests (other
than REMIC I Regular Interests AA, ZZ and P), with the rate on each
such REMIC I Regular Interest subject to a cap equal to the lesser
of (x) the One-Month LIBOR Pass Through Rate for the Corresponding
Certificate and (y) the Net Rate Cap for the Corresponding
Certificate for the purpose of this calculation for such
Distribution Date.
MERS : Mortgage Electronic Registration Systems,
Inc., a corporation organized and existing under the laws of the
State of Delaware, or any successor thereto.
MERS® 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 Statement
: The statement delivered to the
Certificateholders pursuant to Section 5.06.
Moody’s
: Moody’s Investors Service,
Inc., and any successor thereto.
Mortgage : The mortgage, deed of trust or other
instrument creating a first or second lien on or first or second
priority ownership interest in an estate in fee simple in real
property securing a Mortgage Note.
Mortgage File
: The mortgage documents listed in
Section 2.01 hereof pertaining to a particular Mortgage Loan and
any additional documents delivered to the Custodian to be added to
the Mortgage File pursuant to this Agreement and the Custodial
Agreement.
Mortgage Loans
: Such of the Mortgage Loans
transferred and assigned to the Trustee pursuant to the provisions
hereof, as from time to time are held as a part of the Trust Fund
(including any REO Property), the mortgage loans so held being
identified in the Mortgage Loan Schedule, notwithstanding
foreclosure or other acquisition of title of the related Mortgaged
Property.
Mortgage Loan Purchase
Agreement : The Mortgage
Loan Purchase Agreement, dated as of October 28, 2005, between EMC,
as the seller and the Depositor, as purchaser in the form attached
hereto as Exhibit L.
Mortgage Loan Purchase
Price : The price,
calculated as set forth in Section 10.01, to be paid in connection
with the repurchase of the Mortgage Loans pursuant to Section
10.01.
Mortgage Loan Schedule
: The list of Mortgage Loans (as
from time to time amended by EMC 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 Mortgage Loan
Schedule being attached hereto as Exhibit B, with respect to the
Mortgage Loans and as amended from time to time to reflect the
repurchase or substitution of Mortgage Loans pursuant to this
Agreement, the Mortgage Loan Purchase Agreement setting forth the
following information with respect to each Mortgage
Loan:
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(i)
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the Mortgage Loan identifying
number;
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(ii)
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the current gross mortgage
rate;
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(iii)
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the Servicing Fee Rate;
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(iv)
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the master servicing fee rate, if
applicable;
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(v)
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the LPMI Fee, if
applicable;
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(vi)
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the Trustee Fee Rate;
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(vii)
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the current net mortgage
rate;
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(viii)
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the maturity date;
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(ix)
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the original principal
balance;
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(x)
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the current principal
balance;
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(xi)
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the stated original term to
maturity;
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(xii)
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the stated remaining term to
maturity;
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(xiii)
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the property type; and
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(xiv)
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the MIN with respect to each MOM
Loan.
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Such schedule shall also set forth
the aggregate Cut-off Date Principal Balance for all of the
Mortgage Loans.
Mortgage Note
: The original executed note or
other evidence of indebtedness of a Mortgagor under a Mortgage
Loan.
Mortgage Rate
: With respect to each fixed rate
Mortgage Loan, the rate set forth in the related Mortgage Note.
With respect to each Mortgage Loan that becomes an REO Property, as
of any date of determination, the annual rate determined in
accordance with the immediately preceding sentence as of the date
such Mortgage Loan became an REO Property.
Mortgaged Property
: The underlying property securing a
Mortgage Loan.
Mortgagor : The obligors on a Mortgage Note.
Net Mortgage Rate
: As to each Mortgage Loan, and at
any time, the per annum rate equal to the Mortgage Rate less the
sum of (i) the Servicing Fee Rate, (ii) the Trustee Fee Rate and
(iii) the rate at which the LPMI Fee is calculated, if
any.
Net Rate Cap
: With respect to any Distribution
Date and the Class A , Class M and Class B Certificates, a per
annum rate equal to the lesser of (x) 11.00% per annum and (y) 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; provided, however, for federal
income tax purposes, a rate equivalent to the foregoing, expressed
as the lesser of (x) 11.00% per annum and (y) the weighted average
of the Uncertificated REMIC I Pass-Through Rates on the REMIC I
Regular Interests (other than REMIC I Regular Interest P), weighted
on the basis of the Uncertificated Principal Balances of each such
REMIC I Regular Interest immediately prior to such Distribution
Date. The Net Rate Cap for the Class A, Class M and Class B
Certificates will be adjusted to an effective rate reflecting the
accrual of interest on an actual/360 basis.
Non Book-Entry
Certificate : Any
Certificate other than a Book-Entry Certificate.
Nonrecoverable Advance
: Any portion of an Advance
previously made or proposed to be made by the Master Servicer
pursuant to this Agreement, that, in the good faith judgment of the
Master Servicer, will not or, in the case of a proposed advance,
would not, be ultimately recoverable by it from the related
Mortgagor, related Liquidation Proceeds, Insurance Proceeds or
otherwise.
Officer’s
Certificate : A
certificate (i) signed by the Chairman of the Board, the Vice
Chairman of the Board, the President, a Vice President (however
denominated), an Assistant Vice President, the Treasurer, the
Secretary, or one of the assistant treasurers or assistant
secretaries of the Depositor or the Master Servicer (or any other
officer customarily performing functions similar to those performed
by any of the above designated officers and also to whom, with
respect to a particular matter, such matter is referred because of
such officer’s knowledge of and familiarity with a particular
subject) or (ii), if provided for in this Agreement, signed by a
Servicing Officer, as the case may be, and delivered to the
Depositor, the Seller and/or the Trustee, as the case may be, as
required by this Agreement.
One-Month LIBOR
: With respect to any Accrual
Period, the rate determined by the Trustee on the related Interest
Determination Date on the basis of the rate for U.S. dollar
deposits for one month that appears on Telerate Screen Page 3750 as
of 11:00 a.m. (London time) on such Interest Determination Date. If
such rate does not appear on such page (or such other page as may
replace that page on that service, or if such service is no longer
offered, such other service for displaying One-Month LIBOR or
comparable rates as may be reasonably selected by the Trustee),
One-Month LIBOR for the applicable Accrual Period will be the
Reference Bank Rate. If no such quotations can be obtained by the
Trustee and no Reference Bank Rate is available, One-Month LIBOR
will be One-Month LIBOR applicable to the preceding Accrual Period.
The establishment of One-Month LIBOR on each Interest Determination
Date by the Trustee and the Trustee’s calculation of the rate
of interest applicable to the Class A, Class M and Class B
Certificates for the related Accrual Period shall, in the absence
of manifest error, be final and binding.
One-Month LIBOR Pass-Through
Rate : With respect to
the Class A-1 Certificates and, for purposes of the definition of
“Marker Rate” and “Maximum Uncertificated Accrued
Interest Deferral Amount”, REMIC I Regular Interest A-1, a
per annum rate equal to One-Month LIBOR plus the related
Certificate Margin.
With respect to the Class A-2
Certificates and, for purposes of the definition of “Marker
Rate” and “Maximum Uncertificated Accrued Interest
Deferral Amount”, REMIC I Regular Interest A-2, a per annum
rate equal to One-Month LIBOR plus the related Certificate
Margin.
With respect to the Class A-3
Certificates and, for purposes of the definition of “Marker
Rate” and “Maximum Uncertificated Accrued Interest
Deferral Amount”, REMIC I Regular Interest A-3, a per annum
rate equal to One-Month LIBOR plus the related Certificate
Margin.
With respect to the Class M-1
Certificates and, for purposes of the definition of “Marker
Rate” and “Maximum Uncertificated Accrued Interest
Deferral Amount”, REMIC I Regular Interest M-1, a per annum
rate equal to One-Month LIBOR plus the related Certificate
Margin.
With respect to the Class M-2
Certificates and, for purposes of the definition of “Marker
Rate” and “Maximum Uncertificated Accrued Interest
Deferral Amount”, REMIC I Regular Interest M-2, a per annum
rate equal to One-Month LIBOR plus the related Certificate
Margin.
With respect to the Class M-3
Certificates and, for purposes of the definition of “Marker
Rate” and “Maximum Uncertificated Accrued Interest
Deferral Amount”, REMIC I Regular Interest M-3, a per annum
rate equal to One-Month LIBOR plus the related Certificate
Margin.
With respect to the Class M-4
Certificates and, for purposes of the definition of “Marker
Rate” and “Maximum Uncertificated Accrued Interest
Deferral Amount”, REMIC I Regular Interest M-4, a per annum
rate equal to One-Month LIBOR plus the related Certificate
Margin.
With respect to the Class M-5
Certificates and, for purposes of the definition of “Marker
Rate” and “Maximum Uncertificated Accrued Interest
Deferral Amount”, REMIC I Regular Interest M-5, a per annum
rate equal to One-Month LIBOR plus the related Certificate
Margin.
With respect to the Class B-1
Certificates and, for purposes of the definition of “Marker
Rate” and “Maximum Uncertificated Accrued Interest
Deferral Amount”, REMIC I Regular Interest B-1, a per annum
rate equal to One-Month LIBOR plus the related Certificate
Margin.
With respect to the Class B-2
Certificates and, for purposes of the definition of “Marker
Rate” and “Maximum Uncertificated Accrued Interest
Deferral Amount”, REMIC I Regular Interest B-2, a per annum
rate equal to One-Month LIBOR plus the related Certificate
Margin.
With respect to the Class B-3
Certificates and, for purposes of the definition of “Marker
Rate” and “Maximum Uncertificated Accrued Interest
Deferral Amount”, REMIC I Regular Interest B-3, a per annum
rate equal to One-Month LIBOR plus the related Certificate
Margin.
With respect to the Class B-4
Certificates and, for purposes of the definition of “Marker
Rate” and “Maximum Uncertificated Accrued Interest
Deferral Amount”, REMIC I Regular Interest B-4, a per annum
rate equal to One-Month LIBOR plus the related Certificate
Margin.
Opinion of Counsel
: A written opinion of counsel, who
may be counsel for EMC, the Depositor or the Master Servicer,
reasonably acceptable to each addressee of such opinion; provided
that with respect to Section 2.05, 7.05, 7.07 or 11.01, or the
interpretation or application of the REMIC Provisions, such counsel
must (i) in fact be independent of EMC, Depositor and the Master
Servicer, (ii) not have any direct financial interest in EMC, the
Depositor or the Master Servicer or in any affiliate of either, and
(iii) not be connected with EMC, the Depositor or the Master
Servicer as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar
functions.
Optional Termination
: The termination of the Trust Fund
created hereunder as a result of the purchase of all of the
Mortgage Loans and any REO Property pursuant to the last sentence
of Section 10.01 hereof.
Optional Termination
Date : The Distribution
Date on which the Stated Principal Balance of all of the Mortgage
Loans is equal to or less than 20% of the Stated Principal Balance
of all of the Mortgage Loans as of the Cut-off Date.
Original Value
: The value of the property
underlying a Mortgage Loan based, in the case of the purchase of
the underlying Mortgaged Property, on the lower of an appraisal or
the sales price of such property or, in the case of a refinancing,
on an appraisal.
OTS : The Office of Thrift Supervision.
Outstanding
: With respect to the Certificates
as of any date of determination, all Certificates theretofore
executed and authenticated under this Agreement except:
(a) Certificates
theretofore canceled by the Trustee or delivered to the Trustee for
cancellation; and
(b) Certificates
in exchange for which or in lieu of which other Certificates have
been executed and delivered by the Trustee pursuant to this
Agreement.
Outstanding Mortgage
Loan : As of any date of
determination, a Mortgage Loan with a Stated Principal Balance
greater than zero that was not the subject of a Principal
Prepayment in full, and that did not become a Liquidated Loan,
prior to the end of the related Prepayment Period.
Overcollateralization
Amount : With respect to
any Distribution Date, the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received
during the related Prepayment Period, and after reduction for
Realized Losses incurred during the related Due Period) over the
aggregate Certificate Principal Balance of the Certificates (other
than the Class C, Class P and Residual Certificates) on such
Distribution Date (after taking into account the payment of
principal other than any Extra Principal Distribution Amount on
such Certificates).
Overcollateralization
Floor : With respect to
the Certificates, an amount equal to 0.50% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off
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 Overcollateralization Amount for such Distribution Date
(assuming that 100% of the Principal Remittance Amount is applied
as a principal payment on such Distribution Date) over (ii) the
Overcollateralization Target Amount for such Distribution Date
(with the amount pursuant to clause (y) deemed to be $0 if the
Overcollateralization Amount is less than or equal to the
Overcollateralization Target Amount on that Distribution
Date).
Overcollateralization Target
Amount : With respect to
any Distribution Date (a) prior to the Stepdown Date, 7.20% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, (b) on or after the Stepdown Date and if a Trigger
Event is not in effect, the greater of (i) the lesser of (1) 7.20%
of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date and (2) 14.40% of the then current aggregate
Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period, and after
reduction for Realized Losses incurred during the related Due
Period) and (ii) the Overcollateralization Floor or (c) on or after
the Stepdown Date and if a Trigger Event is in effect, the
Overcollateralization Target Amount for the immediately preceding
Distribution Date.
Ownership Interest
: As to any Certificate, any
ownership interest in such Certificate including any interest in
such Certificate as the Holder thereof and any other interest
therein, whether direct or indirect, legal or
beneficial.
Pass-Through Rate
: With respect to the Class A, Class
M and Class B Certificates and any Distribution Date, a rate per
annum equal to the lesser of (i) the related One-Month LIBOR Pass
Through Rate for such Distribution Date and (ii) the Net Rate Cap
for such Distribution Date.
With respect to the Class C Interest
and any Distribution Date, a rate per annum equal to the percentage
equivalent of a fraction, the numerator of which is the sum of the
amount determined for each REMIC I Regular Interest (other than
REMIC I Regular Interest P) equal to (x) the excess of the
Uncertificated REMIC I Pass-Through Rate for such REMIC I Regular
Interest over the Marker Rate, applied to (y) a notional amount
equal to the Uncertificated Principal Balance of such REMIC I
Regular Interest, and the denominator of which is the aggregate
Uncertificated Principal Balance of such REMIC I Regular
Interests.
With respect to the Class C
Certificate, the Class C Certificate shall not have a Pass-Through
Rate, but Current Interest for such Certificate and each
Distribution Date shall be an amount equal to 100% of the amounts
distributable to the Class C Interest for such Distribution
Date.
With respect to the Class P
Certificate and the Class P Interest, 0.00% per annum.
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:
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(i)
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obligations of the United States or
any agency thereof, provided such obligations are backed by the
full faith and credit of the United States;
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(ii)
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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
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Rating Agency, or such lower rating
as will not result in the downgrading or withdrawal of the ratings
then assigned to the Certificates by each Rating Agency, as
evidenced in writing;
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(iii)
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commercial or finance company paper
which is then receiving the highest commercial or finance company
paper rating of each Rating Agency, or such lower rating as will
not result in the downgrading or withdrawal of the ratings then
assigned to the Certificates by each Rating Agency, as evidenced in
writing;
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(iv)
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certificates of deposit, demand or
time deposits, or bankers’ acceptances issued by any
depository institution or trust company incorporated under the laws
of the United States or of any state thereof and subject to
supervision and examination by federal and/or state banking
authorities (including the Trustee in its commercial banking
capacity), provided that the commercial paper and/or long term
unsecured debt obligations of such depository institution or trust
company are then rated one of the two highest long-term and the
highest short-term ratings of each such Rating Agency for such
securities, or such lower ratings as will not result in the
downgrading or withdrawal of the rating then assigned to the
Certificates by any Rating Agency, as evidenced in
writing;
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(v)
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guaranteed reinvestment agreements
issued by any bank, insurance company or other corporation
containing, at the time of the issuance of such agreements, such
terms and conditions as will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by any
such Rating Agency, as evidenced in writing;
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(vi)
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repurchase obligations with respect
to any security described in clauses (i) and (ii) above, in either
case entered into with a depository institution or trust company
(acting as principal) described in clause (v) above;
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(vii)
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securities (other than stripped
bonds, stripped coupons or instruments sold at a purchase price in
excess of 115% of the face amount thereof) bearing interest or sold
at a discount issued by any corporation incorporated under the laws
of the United States or any state thereof which, at the time of
such investment, have one of the two highest short term ratings of
each Rating Agency (except if the Rating Agency is Moody’s,
such rating shall be the highest commercial paper rating of
Moody’s for any such securities), or such lower rating as
will not result in the downgrading or withdrawal of the rating then
assigned to the Certificates by any Rating Agency, as evidenced by
a signed writing delivered by each Rating Agency;
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(viii)
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interests in any money market fund
(including any such fund managed or advised by the Trustee or any
affiliate thereof) which at the date of acquisition of the
interests in such fund and throughout the time such interests are
held in such fund has the highest applicable short term rating by
each Rating Agency or such lower rating as will not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by each Rating Agency, as evidenced in
writing;
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(ix)
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short term investment funds
sponsored by any trust company or banking association incorporated
under the laws of the United States or any state thereof (including
any such fund managed or advised by the Trustee or the Master
Servicer or any affiliate thereof) which on the date of acquisition
has been rated by each Rating Agency in their respective highest
applicable rating category or such lower rating as will not result
in the downgrading or withdrawal of the ratings then assigned to
the Certificates by each Rating Agency, as evidenced in writing;
and
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(x)
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such other investments having a
specified stated maturity and bearing interest or sold at a
discount acceptable to each Rating Agency and as will not result in
the downgrading or withdrawal of the rating then assigned to the
Certificates by any Rating Agency, as evidenced by a signed writing
delivered by each Rating Agency;
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provided, that no such instrument
shall be a Permitted Investment if such instrument (i) evidences
the right to receive interest only payments with respect to the
obligations underlying such instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep discount; provided further
that no such instrument shall be a Permitted Investment (A) if such
instrument evidences principal and interest payments derived from
obligations underlying such instrument and the interest payments
with respect to such instrument provide a yield to maturity of
greater than 120% of the yield to maturity at par of such
underlying obligations, or (B) if it may be redeemed at a price
below the purchase price (the foregoing clause (B) not to apply to
investments in units of money market funds pursuant to clause
(viii) above); provided further that no amount beneficially owned
by any REMIC may be invested in investments (other than money
market funds) treated as equity interests for federal income tax
purposes, unless the Master Servicer shall receive an Opinion of
Counsel, at the expense of the Master Servicer, to the effect that
such investment will not adversely affect the status of any such
REMIC as a REMIC under the Code or result in imposition of a tax on
any such REMIC. Permitted Investments that are subject to
prepayment or call may not be purchased at a price in excess of
par.
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) on 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, REMIC II, REMIC III or REMIC IV to fail to qualify
as a REMIC at any time that any Certificates are Outstanding. The
terms “United States,” “State” and
“International Organization” shall have the meanings
set forth in section 7701 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United
States or of any State or political subdivision thereof for these
purposes if all of its activities are subject to tax and, with the
exception of Freddie Mac, a majority of its board of directors is
not selected by such government unit.
Person : Any individual, corporation, partnership,
joint venture, association, joint-stock company, limited liability
company, trust, unincorporated organization or government, or any
agency or political subdivision thereof.
Prepayment Assumption
: The applicable rate of prepayment
as described in the Prospectus Supplement.
Prepayment Charge
: Any prepayment premium, penalty or
charge payable by a Mortgagor in connection with any Principal
Prepayment on a Mortgage Loan pursuant to the terms of the related
Mortgage Note.
Prepayment Interest
Shortfall : With respect
to any Distribution Date, for each Mortgage Loan that was the
subject of a partial Principal Prepayment, a Principal Prepayment
in full, or that became a Liquidated Loan during the related
Prepayment Period, (other than a Principal Prepayment in full
resulting from the purchase of a Mortgage Loan pursuant to Section
2.02, 2.03, 3.18 or 10.01 hereof), the amount, if any, by which (i)
one month’s interest at the applicable Net Mortgage Rate on
the Stated Principal Balance of such Mortgage Loan immediately
prior to such prepayment (or liquidation) or in the case of a
partial Principal Prepayment on the amount of such prepayment (or
liquidation proceeds) exceeds (ii) the amount of interest paid or
collected in connection with such Principal Prepayment or such
liquidation proceeds less the sum of (a) the Trustee Fee, (b) the
Servicing Fee and (c) the LPMI Fee, if any.
Prepayment Period
: As to any Distribution Date, the
period commencing on the 16th day of the month prior to the month
in which the related Distribution Date occurs and ending on the
15th day of the month in which such Distribution Date
occurs.
Primary Mortgage Insurance
Policy : Any primary
mortgage guaranty insurance policy issued in connection with a
Mortgage Loan which provides compensation to a Mortgage Note Holder
in the event of default by the obligor under such Mortgage Note or
the related security instrument, if any or any replacement policy
therefor through the related Accrual Period for such Class relating
to a Distribution Date.
Principal Distribution
Amount : With respect to
each Distribution Date, an amount equal to (x) the Principal Funds
for such Distribution Date plus (y) any Extra Principal
Distribution Amount for such Distribution Date, less (z) any
Overcollateralization Release Amount.
Principal Funds
: With respect to any Distribution
Date, (i) the sum, without duplication, of (a) all scheduled
principal collected during the related Due Period, (b) all Advances
relating to principal made on or before the Distribution Account
Deposit Date, (c) Principal Prepayments exclusive of prepayment
charges or penalties collected during the related Prepayment
Period, (d) the Stated Principal Balance of each Mortgage Loan that
was repurchased by EMC on its own behalf as Seller pursuant to
Sections 2.02 and 2.03 and by the Master Servicer pursuant to
Section 3.18, (e) the aggregate of all Substitution Adjustment
Amounts for the related Determination Date in connection with the
substitution of Mortgage Loans pursuant to Section 2.03(c), (f) all
Liquidation Proceeds and Subsequent Recoveries collected during the
related Prepayment Period (to the extent such Liquidation Proceeds
and Subsequent Recoveries relate to principal), in each case to the
extent remitted by the Master Servicer to the Distribution Account
pursuant to this Agreement, (g) amounts in respect of principal
paid by the Majority Class C Certificateholder or the Master
Servicer, as applicable, pursuant to Section 10.01 minus (ii) all
amounts required to be reimbursed pursuant to Sections 4.02 and
4.05 or as otherwise set forth in this Agreement.
Principal Prepayment
: Any Mortgagor payment or other
recovery of (or proceeds with respect to) principal on a Mortgage
Loan (including loans purchased or repurchased under Sections 2.02,
2.03, 3.18 and 10.01 hereof) that is received in advance of its
scheduled Due Date and is not accompanied by an amount as to
interest representing scheduled interest due on any date or dates
in any month or months subsequent to the month of prepayment.
Partial Principal Prepayments shall be applied by the Master
Servicer, as appropriate, in accordance with the terms of the
related Mortgage Note.
Principal Remittance
Amount : With respect to
each Distribution Date, the sum of the amounts listed in clauses
(a) through (f) of the definition of Principal Funds.
Private Certificates
: Any of the Class B-4, Class C,
Class P and Residual Certificates.
Prospectus Supplement
: The Prospectus Supplement dated
October 26, 2005 relating to the public offering of the Class A-1,
Class A-2, Class A-3, Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class B-1, Class B-2 and Class B-3
Certificates.
Protected Account
: The separate Eligible Account
established and maintained by the Master Servicer with respect to
the Mortgage Loans and REO Property in accordance with Section 4.01
hereof.
PUD : A Planned Unit Development.
Purchase Price
: With respect to any Mortgage Loan
(x) required to be repurchased by EMC pursuant to Section 2.02 or
2.03 hereof or (y) that EMC has a right to purchase pursuant to
Section 3.18 hereof, an amount equal to the sum of (i) 100% of the
outstanding principal balance of the Mortgage Loan as of the date
of such purchase (or if the related Mortgaged Property was acquired
with respect thereto, 100% of the Outstanding Principal Balance at
the date of the
acquisition), plus (ii) accrued
interest thereon at the applicable Mortgage Rate through the first
day of the month in which the Purchase Price is to be distributed
to Certificateholders, reduced by any portion of the Servicing Fee,
Servicing Advances and Advances payable to the purchaser of the
Mortgage Loan plus (iii) any costs and damages (if any) incurred by
the Trust in connection with any violation of such Mortgage Loan of
any anti-predatory lending laws.
QIB : A Qualified Institutional Buyer as defined in
Rule 144A promulgated under the Securities Act.
Rating Agency
: Each of Moody’s and S&P.
If any such organization or its successor is no longer in
existence, “Rating Agency” shall be a nationally
recognized statistical rating organization, or other comparable
Person, designated by the Depositor, notice of which designation
shall be given to the Trustee. References herein to a given rating
category of a Rating Agency shall mean such rating category without
giving effect to any modifiers.
Realized Loss
: With respect to each Mortgage Loan
as to which a Final Recovery Determination has been made, an amount
(not less than zero) equal to (i) the unpaid principal balance of
such Mortgage Loan as of the commencement of the calendar month in
which the Final Recovery Determination was made, plus (ii) accrued
interest from the Due Date as to which interest was last paid by
the Mortgagor through the end of the calendar month in which such
Final Recovery Determination was made, calculated in the case of
each calendar month during such period (A) at an annual rate equal
to the annual rate at which interest was then accruing on such
Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of such Mortgage Loan as of the close of business
on the Distribution Date during such calendar month, minus (iii)
the proceeds, if any, received in respect of such Mortgage Loan
during the calendar month in which such Final Recovery
Determination was made, net of amounts that are payable therefrom
to the Master Servicer pursuant to this Agreement. In addition, to
the extent the Master Servicer receives Subsequent Recoveries with
respect to any Mortgage Loan, the amount of the Realized Loss with
respect to that Mortgage Loan will be reduced to the extent such
recoveries are distributed to any Class of Certificates or applied
to increase Excess Spread on any Distribution Date.
With respect to any REO Property as
to which a Final Recovery Determination has been made, an amount
(not less than zero) equal to (i) the unpaid principal balance of
the related Mortgage Loan as of the date of acquisition of such REO
Property on behalf of REMIC I, plus (ii) accrued interest from the
Due Date as to which interest was last paid by the Mortgagor in
respect of the related Mortgage Loan through the end of the
calendar month immediately preceding the calendar month in which
such REO Property was acquired, calculated in the case of each
calendar month during such period (A) at an annual rate equal to
the annual rate at which interest was then accruing on the related
Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of the related Mortgage Loan as of the close of
business on the Distribution Date during such calendar month, plus
(iii) REO Imputed Interest for such REO Property for each calendar
month commencing with the calendar month in which such REO Property
was acquired and ending with the calendar month in which such Final
Recovery Determination was made, minus (iv) the aggregate of all
unreimbursed Advances and Servicing Advances.
With respect to each Mortgage Loan
which has become the subject of a Deficient Valuation, the
difference between the principal balance of the Mortgage Loan
outstanding immediately prior to such Deficient Valuation and the
principal balance of the Mortgage Loan as reduced by the Deficient
Valuation.
With respect to each Mortgage Loan
which has become the subject of a Debt Service Reduction, the
portion, if any, of the reduction in each affected Monthly Payment
attributable to a reduction in the Mortgage Rate imposed by a court
of competent jurisdiction. Each such Realized Loss shall be deemed
to have been incurred on the Due Date for each affected Monthly
Payment.
Record Date
: With respect to any Distribution
Date and the Certificates (other than the Class B-4, Class C, Class
P and Residual Certificates), so long as such Classes of
Certificates are Book-Entry Certificates, the Business Day
preceding such Distribution Date, and otherwise, the close of
business on the last Business Day of the month preceding the month
in which such Distribution Date occurs. With respect to the Class
B-4, Class C, Class P and Residual Certificates, so long as such
Classes of Certificates remain non Book-Entry Certificates, the
close of business on the last Business Day of the month preceding
the month in which such Distribution Date occurs.
Reference Banks
: Shall mean leading banks selected
by the Trustee and engaged in transactions in Eurodollar deposits
in the international Eurocurrency market (i) with an established
place of business in London, (ii) which have been designated as
such by the Trustee and (iii) which are not controlling, controlled
by, or under common control with, the Depositor, the Seller or the
Master Servicer.
Reference Bank Rate
: With respect to any Accrual Period
shall mean the arithmetic mean, rounded upwards, if necessary, to
the nearest whole multiple of 0.03125%, of the offered rates for
United States dollar deposits for one month that are quoted by the
Reference Banks as of 11:00 a.m., New York City time, on the
related Interest Determination Date to prime banks in the London
interbank market for a period of one month in an amount
approximately equal to the aggregate Certificate Principal Balance
of the Class A, Class M and Class B Certificates for such Accrual
Period, provided that at least two such Reference Banks provide
such rate. If fewer than two offered rates appear, the Reference
Bank Rate will be the arithmetic mean, rounded upwards, if
necessary, to the nearest whole multiple of 0.03125%, of the rates
quoted by one or more major banks in New York City, selected by the
Trustee, as of 11:00 a.m., New York City time, on such date for
loans in United States dollars to leading European banks for a
period of one month in amounts approximately equal to the aggregate
Certificate Principal Balance of the Class A, Class M and Class B
Certificates for such Accrual Period.
Regular Certificate
: Any Certificate other than a
Residual Certificate.
Regular Interest
: A “regular interest”
in a REMIC within the meaning of Section 860G(a)(1) of the
Code.
Relief Act
: The Servicemembers Civil Relief
Act, as amended, or similar state law.
Relief Act Interest
Shortfall : With respect
to any Distribution Date and any Mortgage Loan, any reduction in
the amount of interest collectible on such Mortgage Loan for the
most recently ended Due Period as a result of the application of
the Relief Act.
Remaining Excess
Spread : With respect to
any Distribution Date, the Excess Spread less any Extra Principal
Distribution Amount, in each case for such Distribution
Date.
REMIC : A “real estate mortgage investment
conduit” within the meaning of section 860D of the
Code.
REMIC I : The segregated pool of assets described in the
Preliminary Statement and Section 5.07(a). Notwithstanding the
foregoing, a REMIC election will not be made with regard to the
Reserve Fund.
REMIC I Regular
Interest : Any of the
separate non-certificated beneficial ownership interests in REMIC I
issued hereunder and designated as a Regular Interest in REMIC I.
Each REMIC I Regular Interest shall accrue interest at the related
Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject
to the terms and conditions hereof, in an aggregate amount equal to
its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto. The designations for the respective
REMIC I Regular Interests are set forth in the Preliminary
Statement hereto. The designations for the respective REMIC I
Regular Interests are set forth in the Preliminary Statement
hereto.
REMIC I Interest Loss Allocation
Amount : With respect to
any Distribution Date, an amount (subject to adjustment based on
the actual number of days elapsed in the respective Accrual Period)
equal to (a) the product of (i) 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 Overcollateralization
Amount : With respect to
any date of determination, (i) 1.00% of the aggregate
Uncertificated Principal Balance of the REMIC I Regular Interests
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 M-1, REMIC I Regular
Interest M-2, REMIC I Regular Interest M-3, REMIC I Regular
Interest M-4, REMIC I Regular Interest M-5, REMIC I Regular
Interest 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 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 M-1, REMIC I Regular Interest M-2, REMIC I Regular
Interest M-3, REMIC I Regular Interest M-4, REMIC I Regular
Interest M-5, REMIC I Regular Interest 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 M-1, REMIC I Regular Interest M-2, REMIC I Regular
Interest M-3, REMIC I Regular Interest M-4, REMIC I Regular
Interest M-5, REMIC I Regular Interest 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 Required
Overcollateralization Amount : 1.00% of the Overcollateralization Target
Amount.
REMIC II : The segregated pool of assets described in the
Preliminary Statement and Section 5.07(a).
REMIC III : The segregated pool of assets consisting of
the Class C Interest conveyed in trust to the Trustee, for the
benefit of the Holders of the Class C Certificates and the Class RX
Certificate (in respect of the Class R-3 Interest), with respect to
which a separate REMIC election is to be made.
REMIC IV : The segregated pool of assets consisting of
the Class P Interest conveyed in trust to the Trustee, for the
benefit of the Holders of the Class P Certificates and the Class RX
Certificate (in respect of the Class R-4 Interest), with respect to
which a separate REMIC election is to be made.
REMIC Opinion
: Shall mean an Opinion of Counsel
to the effect that the proposed action will not cause any of REMIC
I, REMIC II, REMIC III or REMIC IV to fail to qualify as a REMIC at
any time that any Certificates are outstanding.
REMIC Provisions
: Provisions of the federal income
tax law relating to real estate mortgage investment conduits, which
appear at Sections 860A through 860G of the Code, and related
provisions, and proposed, temporary and final regulations and
published rulings, notices and announcements promulgated
thereunder, as the foregoing may be in effect from time to time, as
well as provisions of applicable state laws.
Remittance Date
: Shall mean the Business Day
immediately preceding the Distribution Account Deposit
Date.
REO Imputed Interest
: As to any REO Property, for any
calendar month during which such REO Property was at any time part
of REMIC I, one month’s interest at the applicable Net
Mortgage Rate on the Stated Principal Balance of such REO Property
(or, in the case of the first such calendar month, of the related
Mortgage Loan, if appropriate) as of the close of business on the
Distribution Date in such calendar month.
REO Property
: A Mortgaged Property acquired by
the Master Servicer through foreclosure or deed-in-lieu of
foreclosure in connection with a defaulted Mortgage
Loan.
Replacement Mortgage
Loan : A Mortgage Loan or
Mortgage Loans in the aggregate substituted by EMC for a Deleted
Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release, (i) have a Stated Principal
Balance, after deduction of the principal portion of the Scheduled
Payment due in the month of substitution, not in excess
of,
and not less than 90% of, the Stated
Principal Balance of the Deleted Mortgage Loan; (ii) if the
Replacement Mortgage Loan is a fixed rate Mortgage Loan, have a
fixed Mortgage Rate not less than or more than 1% per annum higher
than the Mortgage Rate of the Deleted Mortgage Loan; (iii) have the
same or higher credit quality characteristics than that of the
Deleted Mortgage Loan; (iv) have a Loan-to-Value Ratio no higher
than that of the Deleted Mortgage Loan; (v) have a remaining term
to maturity no greater than (and not more than one year less than)
that of the Deleted Mortgage Loan; (vi) not permit conversion of
the Mortgage Rate from a fixed rate to a variable rate; (vii) have
the same lien priority as the Deleted Mortgage Loan; (viii)
constitute the same occupancy type as the Deleted Mortgage Loan or
be owner occupied; (ix) comply with each representation and
warranty set forth in Section 7 of the Mortgage Loan Purchase
Agreement and (xiv) the Custodian has delivered its Final
Certification noting no defects or exceptions.
Request for Release
: The Request for Release to be
submitted by EMC or the Master Servicer to the Custodian
substantially in the form of Exhibit G. Each Request for Release
furnished to the Custodian by EMC 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 Master
Servicer.
Required Insurance
Policy : With respect to
any Mortgage Loan, any insurance policy that is required to be
maintained from time to time under this Agreement.
Reserve Fund
: Shall mean the separate trust
account created and maintained by the Trustee pursuant to Section
3.20 hereof.
Reserve Fund Deposit
: With respect to the Reserve Fund,
an amount equal to $5,000, which the Depositor shall deposit into
the Reserve Fund pursuant to Section 3.20 hereof.
Residual Certificates
: The Class R-1, Class R-2 and Class
RX Certificates (representing ownership of the Class R-3 Interest
and the Class R-4 Interest), each evidencing the Residual Interest
or 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., and any successor thereto.
Scheduled Payment
: The scheduled monthly payment on a
Mortgage Loan due on any Due Date allocable to principal and/or
interest on such Mortgage Loan.
Securities Act
: The Securities Act of 1933, as
amended.
Seller : EMC in such capacity under the Mortgage Loan
Purchase Agreement.
Senior Certificates
: Any of the Class A-1, Class A-2
and Class A-3 Certificates.
Servicing Advances
: All customary, reasonable and
necessary “out of pocket” costs and expenses (including
reasonable legal fees) incurred in the performance by the Master
Servicer of its servicing obligations hereunder, including, but not
limited to, the cost of (i) the preservation, restoration and
protection of a Mortgaged Property, (ii) any enforcement or
judicial proceedings, including foreclosures, and including any
expenses incurred in relation to any such proceedings that result
from the Mortgage Loan being registered in the MERS® System,
(iii) the management and liquidation of any REO Property
(including, without limitation, realtor’s commissions) and
(iv) compliance with any obligations under Section 3.07 hereof to
cause insurance to be maintained.
Servicing Fee
: As to each Mortgage Loan and any
Distribution Date, an amount equal to 1/12th of the Servicing Fee
Rate multiplied by the Stated Principal Balance of such Mortgage
Loan as of the Due Date in the month preceding the month in which
such Distribution Date occurs or, in the event of any payment of
interest that accompanies a Principal Prepayment in full during the
related Due Period made by the Mortgagor immediately prior to such
prepayment, interest at the Servicing Fee Rate on the Stated
Principal Balance of such Mortgage Loan for the period covered by
such payment of interest.
Servicing Fee Rate
: 0.500% per annum.
Servicing Officer
: Any officer of the Master Servicer
involved in, or responsible for, the administration and servicing
of the Mortgage Loans whose name and facsimile signature appear on
a list of servicing officers furnished to the Trustee by the Master
Servicer on the Closing Date pursuant to this Agreement, as such
list may from time to time be amended.
Startup Day
: The Startup Day for each REMIC
formed hereunder shall be the Closing Date.
Stated Principal
Balance : With respect to
any Mortgage Loan or related REO Property and any Distribution
Date, the Cut-off Date Principal Balance thereof minus the sum of
(i) the principal portion of the Scheduled Payments due with
respect to such Mortgage Loan during each Due Period ending prior
to such Distribution Date (and irrespective of any delinquency in
their payment), (ii) all Principal Prepayments with respect to such
Mortgage Loan received prior to or during the related Prepayment
Period, and all Liquidation Proceeds to the extent applied by the
Master Servicer as recoveries of principal in accordance with
Section 3.09 with respect to such Mortgage Loan, that were received
by the Master Servicer as of the close of business on the last day
of the Prepayment Period related to such Distribution Date and
(iii) any Realized Losses on such Mortgage Loan incurred during the
related Prepayment Period. The Stated Principal Balance of a
Liquidated Loan equals zero.
Stepdown Date
: The later to occur of (a) the
Distribution Date in November 2008 and (b) the first Distribution
Date on which the Current Specified Enhancement Percentage
(calculated
for this purpose only, prior to
distributions on the Certificates but following distributions on
the Mortgage Loans for the related Due Period and Prepayment
Period) is greater than or equal to 74.20%.
Subordinated
Certificates : The Class
M, Class B, Class C and Residual Certificates.
Subsequent Recoveries
: As of any Distribution Date,
amounts received by the Master Servicer (net of any related
expenses permitted to be reimbursed pursuant to Section 4.02) or
surplus amounts held by the Master Servicer to cover estimated
expenses (including, but not limited to, recoveries in respect of
the representations and warranties made by the Seller pursuant to
the Mortgage Loan Purchase Agreement) specifically related to a
Mortgage Loan that was the subject of a liquidation or final
disposition of any REO Property prior to the related Prepayment
Period that resulted in a Realized Loss.
Subservicing Agreement
: Any agreement entered into between
the Master Servicer and a subservicer with respect to the
subservicing of any Mortgage Loan hereunder by such
subservicer.
Substitution Adjustment
Amount : The meaning
ascribed to such term pursuant to Section 2.03(c).
Successor Master
Servicer : The meaning
ascribed to such term pursuant to Section 8.02.
Tax Matters Person
: The person designated as
“tax matters person” in the manner provided under
Treasury Regulation 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 Trustee, or any successor thereto or assignee thereof, shall
serve as tax administrator hereunder and as agent for the related
Tax Matters Person.
Transfer : Any direct or indirect transfer or sale of any
Ownership Interest in a Certificate.
Transfer Affidavit
: As defined in Section
6.02.
Trigger Event
: With respect to any Distribution
Date, a Trigger Event exists if any of the following tests is not
satisfied: (i) the 60 Day Plus Delinquency Percentage is less than
7.00%, or (ii) (A) for any Distribution Date from and including the
Distribution Date in November 2008 to and including the
Distribution Date in October 2009, the Cumulative Realized Loss
Percentage for such Distribution Date is less than 5.05%, (B) for
any Distribution Date from and including the Distribution Date in
November 2009 to and including the Distribution Date in October
2010, the Cumulative Realized Loss Percentage for such Distribution
Date is less than 7.85%, (C) for any Distribution Date from and
including the Distribution Date in November 2010 to and including
the Distribution Date in October 2011, the Cumulative Realized Loss
Percentage for such Distribution Date is less than 10.05%, and (D)
for any Distribution Date thereafter, the Cumulative Realized Loss
Percentage for such Distribution Date is less than
11.15%.
Trust Fund
: The corpus of the trust created
hereunder consisting of (i) the Mortgage Loans and all interest
accruing and principal due with respect thereto after the Cut-off
Date to the
extent not applied in computing the
Cut-off Date Principal Balance thereof; (ii) the Distribution
Account, the Class P Certificate Account, the Reserve Fund and the
Protected Account and all amounts deposited therein pursuant to the
applicable provisions of this Agreement; (iii) property that
secured a Mortgage Loan and has been acquired by foreclosure, deed
in lieu of foreclosure or otherwise; (iv) the mortgagee’s
rights under the Insurance Policies with respect to the Mortgage
Loans; (v) the rights under the Mortgage Loan Purchase Agreement;
and (vi) all proceeds of the foregoing, including proceeds of
conversion, voluntary or involuntary, of any of the foregoing into
cash or other liquid property.
Trustee : LaSalle Bank National Association, a national
banking association, not in its individual capacity, but solely in
its capacity as trustee for the benefit of the Certificateholders
under this Agreement, and any successor thereto, and any
corporation or national banking association resulting from or
surviving any consolidation or merger to which it or its successors
may be a party and any successor trustee as may from time to time
be serving as successor trustee hereunder.
Trustee Fee
: As to each Mortgage Loan and any
Distribution Date, a per annum fee equal to 0.0115% multiplied by
the Stated Principal Balance of such Mortgage Loan as of Due Date
in the month preceding the month in which such Distribution Date
occurs.
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 related
Uncertificated Principal Balance of such REMIC I Regular Interest.
In each case, Uncertificated Accrued Interest will be reduced by
any Prepayment Interest Shortfalls and Relief Act Interest
Shortfalls (allocated to such REMIC I Regular Interests as set
forth in Section 1.02).
Uncertificated Notional
Amount : With respect to
the Class C Interest and any Distribution Date, an amount equal to
the aggregate Uncertificated Principal Balance of the REMIC I
Regular Interests (other than REMIC I Regular Interest P) for such
Distribution Date.
Uncertificated Principal
Balance : The amount of
REMIC I Regular Interests, Class P Interest or Class C 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
the REMIC I Regular Interests, Class C Interest and Class P
Interest shall be reduced by all distributions of principal made on
such Regular Interests on such Distribution Date pursuant to
Section 5.07 and, if and to the extent necessary and appropriate,
shall be further reduced on such Distribution Date by Realized
Losses as provided in Section 5.05, and the Uncertificated
Principal Balance of REMIC I Regular Interest ZZ shall be increased
by interest deferrals as provided in Section 5.07(b)(1)(i). The
Uncertificated Principal Balance of each REMIC I Regular Interest,
Class C Interest and Class P Interest shall never be less than
zero.
Uncertificated REMIC I
Pass-Through Rate : With
respect to any REMIC I Regular Interest and any Distribution Date,
a per annum rate equal to 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.
Unpaid Realized Loss
Amount : With respect to
the Class A Certificates and as to any distribution date is the
excess of Applied Realized Loss Amounts with respect to such class
over the sum of all distributions in reduction of the Applied
Realized Loss Amounts on all previous distribution dates. Any
amounts distributed to the Class A Certificates in respect of any
Unpaid Realized Loss Amount will not be applied to reduce the
Certificate Principal Balance of such class.
Voting Rights
: The portion of the voting rights
of all the Certificates that is allocated to any Certificate for
purposes of the voting provisions hereunder. Voting Rights shall be
allocated (i) 94.5% to the Class A, Class M and Class B
Certificates, (ii) 3% to the Class C Certificates until paid in
full, (iii) 1.0% to the Class P Certificates, and (iv) 0.50% to
each of the Class R-1, Class R-2 and Class RX 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.
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Section 1.02
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Allocation of Certain Interest
Shortfalls .
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For purposes of calculating the
amount of Current Interest for the Class A Certificates, the Class
M, the Class B and the Class C Certificates and Class C Interest
for any Distribution Date, the aggregate amount of any Prepayment
Interest Shortfalls (to the extent not covered by payments by the
Master Servicer pursuant to Section 5.02) and any Relief Act
Interest Shortfalls incurred in respect of the Mortgage Loans for
any Distribution Date shall be allocated first, to the Class C
Interest based on, and to the extent of, one month’s interest
at the then applicable respective Pass-Through Rate on the
Uncertificated Notional Amount thereof and, thereafter, among the
Class A, Class M and Class B Certificates, in each case on a pro
rata basis based on, and to the extent of, one month’s
interest at the then applicable respective Pass-Through Rates on
the respective Certificate Principal Balances of each such
Certificate.
(a) For
purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC I Regular Interests for any Distribution
Date, the aggregate amount of any Prepayment Interest Shortfalls
(to the extent not covered by payments by the Master Servicer
pursuant to Section 5.02) and any Relief Act Interest Shortfalls
incurred 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 M-1, REMIC I Regular Interest M-2, REMIC I Regular
Interest M-3, REMIC I Regular Interest M-4, REMIC I Regular
Interest M-5, REMIC I Regular Interest 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 ,
based on, and to the extent of, one month’s interest at the
then applicable respective Uncertificated REMIC I Pass-Through
Rates on the respective Uncertificated Principal Balances of each
such REMIC I Regular Interest.
ARTICLE II
CONVEYANCE OF TRUST FUND
REPRESENTATIONS AND
WARRANTIES
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Section 2.01
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Conveyance of Trust
Fund .
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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
sold by it in the Trust Fund.
EMC 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 (i) Trust Fund;
(ii) the Mortgage Loans identified in their respective Mortgage
Loan Schedules, including all interest and principal due with
respect to the Mortgage Loans after the Cut-off Date but excluding
any payments of principal and interest due on or prior to the
Cut-off Date; (iii) such assets as shall from time to time be
credited or are required by the terms of this Agreement to be
credited to the Distribution Account.
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 “LaSalle Bank National
Association, as Trustee for Certificateholders of Bear Stearns
Asset Backed Securities I LLC, Mortgage-Backed Certificates, Series
2005-WM3” or (B) in the case of a loan registered on the MERS
system, in blank, and in each case showing an unbroken chain of
endorsements from the original payee thereof to the Person
endorsing it to the Trustee, (ii) the original Mortgage and, if the
related Mortgage Loan is a MOM Loan, noting the presence of the MIN
and language indicating that such Mortgage Loan is a MOM Loan,
which shall have been recorded (or if the original is not
available, a copy), with evidence of such recording indicated
thereon (or if clause (x) in the proviso below applies, shall be in
recordable form), (iii) unless the Mortgage Loan is a MOM Loan, the
assignment (either an original or a copy, which may be in the form
of a blanket
assignment if permitted in the
jurisdiction in which the Mortgaged Property is located) to the
Trustee of the Mortgage with respect to each Mortgage Loan in the
name of “LaSalle Bank National Association, as Trustee for
Certificateholders of Bear Stearns Asset Backed Securities I LLC,
Mortgage Backed Certificates, Series 2005-WM3,” which shall
have been recorded (or if clause (x) in the proviso below applies,
shall be in recordable form), (iv) an original or a copy of all
intervening assignments of the Mortgage, if any, with evidence of
recording thereon, (v) the original policy of title insurance or
mortgagee’s certificate of title insurance or commitment or
binder for title insurance, if available, or a copy thereof, or, in
the event that such original title insurance policy is unavailable,
a photocopy thereof, or in lieu thereof, a current lien search on
the related Mortgaged Property and (vi) originals or copies of all
available assumption, modification or substitution agreements, if
any; provided, however, that in lieu of the foregoing, the related
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 the
Custodian a certification of a Servicing Officer to such effect and
in such case shall deposit all amounts paid in respect of such
Mortgage Loans, in the Protected Account or in the Distribution
Account on the Closing Date. In the case of the documents referred
to in clause (x) above, the Depositor shall deliver such documents
to the Trustee or the Custodian promptly after they are
received.
EMC 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, EMC need not cause to be
recorded (a) any assignment in any jurisdiction under the laws of
which, as evidenced by an Opinion of Counsel addressed to the
Trustee delivered by EMC to the Trustee and the Rating Agencies,
the recordation of such assignment is not necessary to protect the
Trustee’s interest in the related Mortgage Loan or (b) if
MERS is identified on the Mortgage or on a properly recorded
assignment of the Mortgage as the mortgagee of record solely as
nominee for the related Seller and its successors and assigns. In
the event that any 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, EMC
shall submit or cause to be submitted for recording as specified
above each such previously unrecorded assignment to be submitted
for recording as specified above at the expense of the Trust. In
the event a Mortgage File is released to the Master Servicer as a
result of such Person having completed a Request for Release, the
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, EMC further
agrees that it will cause, at EMC’s own expense, within 30
days after the
Closing Date, the MERS® System
to indicate that such Mortgage Loans have been assigned by EMC 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. EMC further agrees that it
will not, and will not permit the Master Servicer to, and the
Master Servicer agrees that it will not, alter the codes referenced
in this paragraph with respect to any Mortgage Loan during the term
of this Agreement unless and until such Mortgage Loan is
repurchased in accordance with the terms of this Agreement or the
Mortgage Loan Purchase Agreement.
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Section 2.02
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Acceptance of the Mortgage
Loans .
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(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 Mortgage Loans, the Trustee or the
Custodian on its behalf will deliver an Initial Certification, in
the form of Exhibit One to the Custodial Agreement, confirming
whether or not it has received the Mortgage File for each Mortgage
Loan, but without review of such Mortgage File, except to the
extent necessary to confirm whether such Mortgage File contains the
original Mortgage Note or a lost note affidavit and indemnity in
lieu thereof. No later than 90 days after the Closing Date (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 EMC and the Master Servicer and, if reviewed
by the Custodian or the Trustee, an Interim Certifications,
substantially in the form of Exhibit Two to the Custodial
Agreement. 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, 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 attached to the Interim
Certification. EMC shall correct or cure any such defect or, if
prior to the end of the second anniversary of the Closing Date, EMC
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 EMC fails to
correct or cure the defect or deliver such opinion within such
period, EMC 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 EMC 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, EMC shall not be required to purchase such
Mortgage Loan if EMC 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 with respect to any
Substitute Mortgage Loan, within five Business Days after the
receipt by the Trustee or the 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 EMC and the Master
Servicer and, if reviewed by the Custodian or the Trustee, a Final
Certification, substantially in the form of Exhibit Three to the
Custodial Agreement. 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 EMC. EMC shall
correct or cure any such defect or, if prior to the end of the
second anniversary of the Closing Date, EMC 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
EMC 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, EMC 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 EMC 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, EMC shall not be required to purchase such Mortgage
Loan, if EMC delivers such documents promptly upon receipt, but in
no event later than 360 days after the Closing Date.
Notwithstanding anything to the contrary, the Trustee shall have no
responsibility with respect to the custody or review of Mortgage
Files held by the Custodian pursuant to the Custodial Agreement.
The Trustee shall have no liability for the failure of the
Custodian to perform its obligations under the Custodial
Agreement.
(c) In
the event that a Mortgage Loan is purchased by EMC in accordance
with subsections 2.02(a) or (b) above or Section 2.03, EMC shall
remit the applicable Purchase Price to the Master Servicer for
deposit in the Protected Account and shall provide written notice
to the Trustee detailing the components of the Purchase Price,
signed by a Servicing Officer. Upon deposit of the Purchase Price
in the Protected Account and upon receipt of a Request for Release
with respect to such Mortgage Loan, the Trustee or the Custodian
will release to EMC 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
related Seller, as are necessary to vest in the title to and rights
under the Mortgage Loan. Such purchase shall be deemed to have
occurred on the date on which the deposit into the Protected
Account was made. The Trustee shall promptly notify the Rating
Agencies of such repurchase. The obligation of EMC 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) EMC
shall deliver to the Trustee or the Custodian on its behalf, and
the 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 Master Servicer and EMC as Seller
.
(a) The
Master Servicer hereby represents and warrants to the Depositor and
the Trustee as follows, as of the Closing Date:
(i) It
is duly organized and is validly existing and in good standing
under the laws of the State of Delaware and is duly authorized and
qualified to transact any and all business contemplated by this
Agreement to be conducted by it in any state in which a Mortgaged
Property is located or is otherwise not required under applicable
law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the
extent necessary to ensure its ability to enforce each Mortgage
Loan, to service the Mortgage Loans in accordance with the terms of
the Mortgage Loan Purchase Agreement and to perform any of its
other obligations under this Agreement in accordance with the terms
hereof or thereof.
(ii) It
has the full corporate power and authority to service each Mortgage
Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Agreement and has
duly authorized by all necessary corporate action on its part the
execution, delivery and performance of this Agreement; and this
Agreement, assuming the due authorization, execution and delivery
hereof by the other parties hereto or thereto, as applicable,
constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, except that (a) the
enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to
creditors’ rights generally and (b) the
remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
(iii) The
execution and delivery of this Agreement, the servicing of the
Mortgage Loans by it under this Agreement, the consummation of any
other of the transactions contemplated by this Agreement, and the
fulfillment of or compliance with the terms hereof and thereof are
in its ordinary course of business and will not (A) result in a
breach of any term or provision of its charter or by-laws or (B)
conflict with, result in a breach, violation or acceleration of, or
result in a default under, the terms of any other material
agreement or instrument to which it is a party or by which it may
be bound, or (C) constitute a violation of any statute, order or
regulation applicable to it of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
it; and it is not in breach or violation of any material indenture
or other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
it which breach or violation may materially impair its ability to
perform or meet any of its obligations under this
Agreement.
(iv) It
is an approved servicer of conventional mortgage loans for Fannie
Mae or Freddie Mac and is a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to sections 203 and 211 of
the National Housing Act.
(v) No
litigation is pending or, to the best of its knowledge, threatened,
against it that would materially and adversely affect the
execution, delivery or enforceability of this Agreement or its
ability to service the Mortgage Loans or to perform any of its
other obligations under this Agreement in accordance with the terms
hereof.
(vi) No
consent, approval, authorization or order of any court or
governmental agency or body is required for its execution, delivery
and performance of, or compliance with, this Agreement or the
consummation of the transactions contemplated hereby or thereby, or
if any such consent, approval, authorization or order is required,
it has obtained the same.
(b) EMC
(in its capacity as Seller) hereby represents and warrants to the
Depositor and the Trustee as follows, as of the Closing
Date:
(i) EMC
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 EMC in any state
in which a Mortgaged Property is located or is otherwise not
required under applicable law to effect such qualification and, in
any event, is in compliance with the doing business laws of any
such state, to the extent necessary to ensure its ability to
enforce each Mortgage Loan, to sell the Mortgage Loans in
accordance with the terms of the Mortgage Loan Purchase Agreement
and to perform any of its other obligations under this Agreement in
accordance with the terms hereof.
(ii) EMC
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
EMC the execution, delivery and performance of this Agreement,
assuming the due authorization, execution and delivery hereof by
the other parties hereto or thereto, as applicable, constitutes a
legal, valid and binding obligation of EMC, enforceable against EMC
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 EMC, the sale of the
Mortgage Loans by EMC 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 EMC
and will not (A) result in a material breach of any term or
provision of the charter or by-laws of EMC or (B) conflict with,
result in a breach, violation or acceleration of, or result in a
default under, the terms of any other material agreement or
instrument to which EMC is a party or by which it may be bound, or
(C) constitute a violation of any statute, order or regulation
applicable to EMC of any court, regulatory body, administrative
agency or governmental body having jurisdiction over EMC; and EMC
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 EMC’s ability to
perform or meet any of its obligations under this
Agreement.
(iv) EMC
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 EMC’s knowledge,
threatened, against EMC that would materially and adversely affect
the execution, delivery or enforceability of this Agreement or the
ability of EMC to sell the Mortgage Loans or to perform any of its
other obligations under this Agreement in accordance with the terms
hereof or thereof.
(vi) No
consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and performance by EMC of, or compliance by EMC with, this
Agreement or the consummation of the transactions contemplated
hereby, or if any such consent, approval, authorization or order is
required, EMC has obtained the same.
(vii) With
respect to each Mortgage Loan as of the Closing Date (or such other
date as may be specified in Section 7 of the Mortgage Loan Purchase
Agreement), EMC
hereby remakes and restates each of
the representations and warranties set forth in Section 7 of the
Mortgage Loan Purchase Agreement to the Depositor and the Trustee
to the same extent as if fully set forth herein.
(c) Upon
discovery by any of the parties hereto of a breach of a
representation or warranty set forth in the Mortgage Loan Purchase
Agreement with respect to the Mortgage Loans that materially and
adversely affects the interests of the Certificateholders in any
Mortgage Loan, the party discovering such breach shall give prompt
written notice thereof to the other parties. EMC, in its capacity
as Seller hereby covenants, with respect to the representations and
warranties set forth in the Mortgage Loan Purchase Agreement with
respect to the Mortgage Loans, that within 90 days of the discovery
of a breach of any representation or warranty set forth therein
that materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, it shall cure such breach
in all material respects and, if such breach is not so cured, (i)
if such 90 day period expires prior to the second anniversary of
the Closing Date, remove such Mortgage Loan (a “Deleted
Mortgage Loan”) from the Trust Fund and substitute in its
place a Replacement Mortgage Loan, in the manner and subject to the
conditions set forth in this Section; or (ii) repurchase the
affected Mortgage Loan or Mortgage Loans from the Trustee at the
Purchase Price in the manner set forth below; provided that any
such substitution pursuant to (i) above or repurchase pursuant to
(ii) above shall not be effected prior to the delivery to the
Trustee of an Opinion of Counsel if required by Section 2.05 hereof
and any such substitution pursuant to (i) above shall not be
effected prior to the additional delivery to the Trustee of a
Request for Release. The Trustee shall give prompt written notice
to the parties hereto of EMC’s failure to cure such breach as
set forth in the preceding sentence. EMC shall promptly reimburse
the Master Servicer and the Trustee for any expenses reasonably
incurred by the Master Servicer or the Trustee in respect of
enforcing the remedies for such breach. To enable the Master
Servicer to amend the Mortgage Loan Schedule, EMC shall, unless it
cures such breach in a timely fashion pursuant to this Section
2.03, promptly notify the Master Servicer whether it intends either
to repurchase, or to substitute for, the Mortgage Loan affected by
such breach. With respect to the representations and warranties
with respect to the Mortgage Loans that are made to the best of
EMC’s knowledge, if it is discovered by any of the Depositor,
the Master Servicer, EMC, the Trustee or the Custodian that the
substance of such representation and warranty is inaccurate and
such inaccuracy materially and adversely affects the value of the
related Mortgage Loan, notwithstanding EMC’s lack of
knowledge with respect to the substance of such representation or
warranty, EMC in its capacity as 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, EMC in its capacity as Seller (pursuant to
the Mortgage Loan Purchase Agreement) 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 EMC in its capacity as 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 EMC in its capacity as Seller shall be
entitled to retain all amounts received in respect of such Deleted
Mortgage Loan. The Master Servicer shall amend the Mortgage Loan
Schedule for the
benefit of the Certificateholders to
reflect the removal of such Deleted Mortgage Loan and the
substitution of the Replacement Mortgage Loan or Loans and the
Master Servicer shall deliver the amended Mortgage Loan Schedule to
the Trustee and the Custodian. Upon such substitution, the
Replacement Mortgage Loan or Loans shall be subject to the terms of
this Agreement in all respects, and EMC 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 or Section 8 of the Mortgage Loan Purchase
Agreement with respect to such Mortgage Loan. Upon any such
substitution and the deposit into the Protected Account of the
amount required to be deposited therein in connection with such
substitution as described in the following paragraph and receipt by
the Trustee of a Request for Release for such Mortgage Loan, the
Trustee or the Custodian shall release to EMC 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
EMC’s direction such instruments of transfer or assignment as
have been prepared by EMC in each case without recourse,
representation or warranty as shall be necessary to vest in EMC 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 EMC
substitutes one or more Replacement Mortgage Loans for a Deleted
Mortgage Loan, the Master Servicer will determine the amount (if
any) by which the aggregate principal balance of all the
Replacement Mortgage Loans as of the date of substitution is less
than the Stated Principal Balance (after application of the
principal portion of the Scheduled Payment due in the month of
substitution) of such Deleted Mortgage Loan. An amount equal to the
aggregate of such deficiencies, described in the preceding sentence
for any Distribution Date (such amount, the “Substitution
Adjustment Amount”) shall be deposited into the Protected
Account, by EMC 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 EMC in its
capacity as Seller shall have repurchased a Mortgage Loan, the
Purchase Price therefor shall be deposited into the Protected
Account, on the Determination Date for the Distribution Date in the
month following the month during which EMC 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 EMC and the
Trustee shall execute and deliver at such Person’s direction
the related instruments of transfer or assignment prepared by EMC,
in each case without recourse, as shall be necessary to transfer
title from the Trustee for the benefit of the Certificateholders
and transfer the Trustee’s interest to EMC to any Mortgage
Loan purchased pursuant to this Section 2.03. It is understood and
agreed that the obligation under this Agreement of EMC to cure,
repurchase or replace any Mortgage Loan as to which a breach has
occurred and is continuing shall constitute the sole remedies
against EMC in its capacity as Seller respecting such breach
available to the Certificateholders, the Depositor or the
Trustee.
(d) The
representations and warranties set forth in this Section 2.03
hereof shall survive delivery of the respective Mortgage Loans and
Mortgage Files to the Trustee or the Custodian for the benefit of
the Certificateholders.
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Section 2.04
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Representations and Warranties of
the Depositor .
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The Depositor hereby represents and
warrants to the Master Servicer and the Trustee as follows, as of
the date hereof and as of the Closing Date:
(i) The
Depositor is duly organized and is validly existing as a limited
liability company in good standing under the laws of the State of
Delaware and has full power and authority necessary to own or hold
its properties and to conduct its business as now conducted by it
and to enter into and perform its obligations under this
Agreement.
(ii) The
Depositor has the full power and authority to execute, deliver and
perform, and to enter into and consummate the transactions
contemplated by, this Agreement and has duly authorized, by all
necessary corporate action on its part, the execution, delivery and
performance of this Agreement, assuming the due authorization,
execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of the Depositor,
enforceable against the Depositor in accordance with its terms,
subject, as to enforceability, to (i) bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting
creditors’ rights generally and (ii) general principles of
equity, regardless of whether enforcement is sought in a proceeding
in equity or at law.
(iii) The
execution and delivery of this Agreement by the Depositor, the
consummation of the transactions contemplated by this Agreement,
and the fulfillment of or compliance with the terms hereof and
thereof are in the ordinary course of business of the Depositor and
will not (A) result in a material breach of any term or provision
of the certificate of formation or limited liability company
agreement of the Depositor or (B) conflict with, result in a
breach, violation or acceleration of, or result in a default under,
the terms of any other material agreement or instrument to which
the Depositor is a party or by which it may be bound or (C)
constitute a violation of any statute, order or regulation
applicable to the Depositor of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
the Depositor; and the Depositor is not in breach or violation of
any material indenture or other material agreement or instrument,
or in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or violation may materially
impair the Depositor’s ability to perform or meet any of its
obligations under this Agreement.
(iv) No
litigation is pending, or, to the best of the Depositor’s
knowledge, threatened, against the Depositor that would materially
and adversely affect the execution, delivery or enforceability of
this Agreement or the ability of the Depositor to perform its
obligations under this Agreement in accordance with the terms
hereof or thereof.
(v) No
consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and performance by the Depositor of, or compliance by the Depositor
with this Agreement or the consummation of the
transactions contemplated hereby or
thereby, or if any such consent, approval, authorization or order
is required, the Depositor has obtained the same.
The Depositor hereby represents and
warrants to the Trustee as of the Closing Date, following the
transfer of the Mortgage Loans to it by the Seller, the Depositor
had good title to the Mortgage Loans and the related Mortgage Notes
were subject to no offsets, claims, defenses or
counterclaims.
It is understood and agreed that the
representations and warranties set forth in this Section 2.04 shall
survive delivery of the Mortgage Files to the Trustee or the
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 EMC delivers to the Trustee an Opinion
of Counsel, addressed to the Trustee, to the effect that such
repurchase or substitution would not (i) result in the imposition
of the tax on “prohibited transactions” of REMIC I,
REMIC II, REMIC III or REMIC IV or contributions after the Closing
Date, as defined in sections 860F(a)(2) and 860G(d) of the Code,
respectively, or (ii) cause any of REMIC I, REMIC II, REMIC III or
REMIC IV to fail to qualify as a REMIC at any time that any
Certificates are outstanding. Any Mortgage Loan as to which
repurchase or substitution was delayed pursuant to this paragraph
shall be repurchased or the substitution therefor shall occur
(subject to compliance with Sections 2.02 or 2.03) upon the earlier
of (a) the occurrence of a default or imminent default with respect
to such Mortgage Loan and (b) receipt by the Trustee of an Opinion
of Counsel addressed to the Trustee to the effect that such
repurchase or substitution, as applicable, will not result in the
events described in clause (i) or clause (ii) of the preceding
sentence.
(b) Upon
discovery by the Depositor, EMC or the Master Servicer that any
Mortgage Loan does not constitute a “qualified
mortgage” within the meaning of section 860G(a)(3) of the
Code, the party discovering such fact shall promptly (and in any
event within 5 Business Days of discovery) give written notice
thereof to the other parties and the Trustee. In connection
therewith, the Trustee shall require EMC in its capacity as Seller
at EMC’s option, to either (i) substitute, if the conditions
in Section 2.03 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 in accordance with Section
2.03. The Trustee shall reconvey to EMC 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 in accordance with Section
2.03.
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Section 2.06
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Countersignature and Delivery of
Certificates .
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(a) The
Trustee acknowledges the sale, transfer and assignment to it of the
Trust Fund and, concurrently with such transfer and assignment, has
executed, countersigned and delivered, to or upon the order of the
Depositor, the Certificates in authorized denominations evidencing
the entire ownership of the Trust Fund. The Trustee agrees to hold
the Trust Fund and exercise the rights referred to above for the
benefit of all present and future Holders of the Certificates and
to perform the duties set forth in this Agreement in accordance
with its terms.
(b) The
Depositor concurrently with the execution and delivery hereof, does
hereby transfer, assign, set over and otherwise convey in trust to
the Trustee without recourse all the right, title and interest of
the Depositor in and to the REMIC I Regular Interests and the other
assets of REMIC II for the benefit of the Holders of the
Certificates (other than the Class R-1 Certificates and Class RX
Certificates), the Class C Interest and the Class P Interest. 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 Certificates (other
than the Class R-1 Certificates), the Class C Interest and the
Class P Interest.
(c) The
Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and
interest of the Depositor in and to the Class C Interest for the
benefit of the Holders of the Class C Certificates and the Class RX
Certificates (in respect of the Class R-3 Interest). The Trustee
acknowledges receipt of the Class C Interest (which is
uncertificated) and declares that it holds and will hold the same
in trust for the exclusive use and benefit of the Holders of the
Class C Certificates and the Class RX Certificates (in respect of
the Class R-3 Interest).
(d) The
Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and
interest of the Depositor in and to the Class P Interest for the
benefit of the Holders of the Class P Certificates and the Class RX
Certificates (in respect of the Class R-4 Interest). The Trustee
acknowledges receipt of the Class P Interest (which is
uncertificated) and declares that it holds and will hold the same
in trust for the exclusive use and benefit of the Holders of the
Class P Certificates and the Class RX Certificates (in respect of
the Class R-4 Interest).
ARTICLE III
ADMINISTRATION AND SERVICING OF THE
MORTGAGE LOANS
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Section 3.01
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The Master Servicer to act as
Master Servicer .
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The Master Servicer shall service
and administer the Mortgage Loans in accordance with customary and
usual standards of practice of prudent mortgage loan servicers in
the respective states in which the related Mortgaged Properties are
located. In connection with such servicing and administration, the
Master Servicer shall have full power and authority, acting alone
and/or through subservicers as provided in Section 3.03, to do or
cause to be done any and all things that it may deem necessary or
desirable in connection with such servicing and administration,
including but not limited to, the power and authority, subject to
the terms hereof (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers
and other instruments and documents, (ii) to consent to transfers
of any related Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages (but only in the manner provided
herein), (iii) to collect any Insurance Proceeds and other
Liquidation Proceeds or Subsequent Recoveries, and (iv) subject to
Section 3.09, to effectuate foreclosure or other conversion of the
ownership of the Mortgaged Property securing any Mortgage Loan;
provided that the Master Servicer shall take no action that is
inconsistent with or prejudices the interests of the Trust Fund or
the Certificateholders in any Mortgage Loan or the rights and
interests of the Depositor or the Trustee under this
Agreement.
Without limiting the generality of
the foregoing, the Master Servicer, in its own name or in the name
of the Trust, the Depositor or the Trustee, is hereby authorized
and empowered by the Trust, the Depositor and the Trustee, when the
Master Servicer believes it appropriate in its reasonable judgment,
to execute and deliver, on behalf of the Trustee, the Depositor,
the Certificateholders or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or
discharge and all other comparable instruments, with respect to the
Mortgage Loans, and with respect to the Mortgaged Properties held
for the benefit of the Certificateholders. The Master Servicer
shall prepare and deliver to the Depositor and/or the Trustee such
documents requiring execution and delivery by any or all of them as
are necessary or appropriate to enable the Master Servicer to
service and administer the Mortgage Loans. Upon receipt of such
documents, the Depositor and/or the Trustee shall execute such
documents and deliver them to the Master Servicer.
In accordance with the standards of
the first paragraph of this Section 3.01, the Master Servicer shall
advance or cause to be advanced funds as necessary for the purpose
of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first
instance from related collections from the Mortgagors pursuant to
Section 4.03, and further as provided in Section 4.02. All costs
incurred by the Master Servicer, if any, in effecting the timely
payments of taxes and assessments on the Mortgaged Properties and
related insurance premiums shall not, for the purpose of
calculating monthly distributions to the Certificateholders, be
added to the Stated Principal Balance under the Mortgage Loans,
notwithstanding that the terms of such Mortgage Loans so
permit.
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Section 3.02
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Due-on-Sale Clauses; Assumption
Agreements .
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(a) Except
as otherwise provided in this Section 3.02, when any property
subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Master Servicer shall to the extent that it has
knowledge of such conveyance, enforce any due-on-sale clause
contained in any Mortgage Note or Mortgage, to the extent permitted
under applicable law and governmental regulations, but only to the
extent that such enforcement will not adversely affect or
jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Master Servicer is not required
to exercise such rights with respect to a Mortgage Loan if the
Person to whom the related Mortgaged Property has been conveyed or
is proposed to be conveyed satisfies the terms and conditions
contained in the Mortgage Note and Mortgage related thereto and the
consent of the mortgagee under such Mortgage Note or Mortgage is
not otherwise so required under such Mortgage Note or Mortgage as a
condition to such transfer. In the event that the Master Servicer
is prohibited by law from enforcing any such due-on-sale clause, or
if coverage under any Required Insurance Policy would be adversely
affected, or if nonenforcement is otherwise permitted hereunder,
the Master Servicer is authorized, subject to Section 3.02(b), to
take or enter into an assumption and modification agreement from or
with the person to whom such property has been or is about to be
conveyed, pursuant to which such person becomes liable under the
Mortgage Note and, unless prohibited by applicable state law, the
Mortgagor remains liable thereon, provided that the Mortgage Loan
shall continue to be covered (if so covered before the Master
Servicer enters such agreement) by the applicable Required
Insurance Policies. The Master Servicer, subject to Section
3.02(b), is also authorized with the prior approval of the insurers
under any Required Insurance Policies to enter into a substitution
of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is
substituted as Mortgagor and becomes liable under the Mortgage
Note. Notwithstanding the foregoing, the Master Servicer shall not
be deemed to be in default under this Section 3.02(a) by reason of
any transfer or assumption that the Master Servicer reasonably
believes it is restricted by law from preventing.
(b) Subject
to the Master Servicer’s duty to enforce any due-on-sale
clause to the extent set forth in Section 3.02(a), in any case in
which a Mortgaged Property has been conveyed to a Person by a
Mortgagor, and such Person is to enter into an assumption agreement
or modification agreement or supplement to the Mortgage Note or
Mortgage that requires the signature of the Trustee, or if an
instrument of release signed by the Trustee is required releasing
the Mortgagor from liability on the related Mortgage Loan, the
Master Servicer shall prepare and deliver or cause to be prepared
and delivered to the Trustee for signature and shall direct, in
writing, the Trustee to execute the assumption agreement with the
Person to whom the Mortgaged Property is to be conveyed and such
modification agreement or supplement to the Mortgage Note or
Mortgage or other instruments as are reasonable or necessary to
carry out the terms of the Mortgage Note or Mortgage or otherwise
to comply with any applicable laws regarding assumptions or the
transfer of the Mortgaged Property to such Person. In connection
with any such assumption, no material term of the Mortgage Note
(including, but not limited to, the Mortgage Rate, the amount of
the Scheduled Payment and any other term affecting the amount or
timing of payment on the Mortgage Loan) may be changed. In
addition, the substitute Mortgagor and the Mortgaged Property must
be acceptable to the Master Servicer in accordance with its
servicing standards as then in effect. The Master Servicer shall
notify the Trustee that any such substitution or assumption
agreement has been completed by forwarding to the
Trustee
the original of such substitution or
assumption agreement, which in the case of the original shall be
added to the related Mortgage File and shall, for all purposes, be
considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. Any
fee collected by the Master Servicer for entering into an
assumption or substitution of liability agreement will be retained
by the Master Servicer as additional servicing
compensation.
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Section 3.03
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Subservicers
.
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The Master Servicer shall perform
all of its servicing responsibilities hereunder or may cause a
subservicer to perform any such servicing responsibilities on its
behalf, but the use by the Master Servicer of a subservicer shall
not release the Master Servicer from any of its obligations
hereunder and the Master Servicer shall remain responsible
hereunder for all acts and omissions of each subservicer as fully
as if such acts and omissions were those of the Master Servicer.
The Master Servicer shall pay all fees of each subservicer from its
own funds, and a subservicer’s fee shall not exceed the
Servicing Fee payable to the Master Servicer hereunder.
At the cost and expense of the
Master Servicer, without any right of reimbursement from its
Protected Account, the Master Servicer shall be entitled to
terminate the rights and responsibilities of a subservicer and
arrange for any servicing responsibilities to be performed by a
successor subservicer; provided, however, that nothing contained
herein shall be deemed to prevent or prohibit the Master Servicer,
at the Master Servicer’s option, from electing to service the
related Mortgage Loans itself. In the event that the Master
Servicer’s responsibilities and duties under this Agreement
are terminated pursuant to Section 8.01, the Master Servicer shall
at its own cost and expense terminate the rights and
responsibilities of each subservicer effective as of the date of
termination of the Master Servicer. The Master Servicer shall pay
all fees, expenses or penalties necessary in order to terminate the
rights and responsibilities of each subservicer from the Master
Servicer’s own funds without reimbursement from the Trust
Fund.
Notwithstanding the foregoing, the
Master Servicer shall not be relieved of its obligations hereunder
and shall be obligated to the same extent and under the same terms
and conditions as if it alone were servicing and administering the
Mortgage Loans. The Master Servicer shall be entitled to enter into
an agreement with a subservicer for indemnification of the Master
Servicer by the subservicer and nothing contained in this Agreement
shall be deemed to limit or modify such indemnification.
Any subservicing agreement and any
other transactions or services relating to the Mortgage Loans
involving a subservicer shall be deemed to be between such
subservicer and the Master Servicer alone, and the Trustee shall
not have any obligations, duties or liabilities with respect to
such subservicer including any obligation, duty or liability of the
Trustee to pay such subservicer’s fees and expenses. Each
subservicing agreement shall provide that such agreement may be
assumed or terminated without cause or penalty by the Trustee or
other Successor Master Servicer in the event the Master Servicer is
terminated in accordance with this Agreement. For purposes of
remittances to the Trustee pursuant to this Agreement, the Master
Servicer shall be deemed to have received a payment on a Mortgage
Loan when a subservicer has received such payment.
Section
3.04 Documents, Records and Funds
in Possession of the Master Servicer To Be Held for Trustee
.
Notwithstanding any other provisions
of this Agreement, the Master Servicer shall transmit to the
Trustee or the Custodian on behalf of the Trustee as required by
this Agreement all documents and instruments in respect of a
Mortgage Loan coming into the possession of the Master Servicer
from time to time and shall account fully to the Trustee for any
funds received by the Master Servicer or that otherwise are
collected by the Master Servicer as Liquidation Proceeds, Insurance
Proceeds or Subsequent Recoveries in respect of any such Mortgage
Loan. All Mortgage Files and funds collected or held by, or under
the control of, the Master Servicer in respect of any Mortgage
Loans, whether from the collection of principal and interest
payments or from Liquidation Proceeds or Subsequent Recoveries,
including but not limited to, any funds on deposit in the Protected
Account, shall be held by the Master Servicer for and on behalf of
the Trustee and shall be and remain the sole and exclusive property
of the Trustee, subject to the applicable provisions of this
Agreement. The Master Servicer also agrees that it shall not
create, incur or subject any Mortgage File or any funds that are
deposited in the Protected Account or in any Escrow Account, or any
funds that otherwise are or may become due or payable to the
Trustee for the benefit of the Certificateholders, to any claim,
lien, security interest, judgment, levy, writ of attachment or
other encumbrance, or assert by legal action or otherwise any claim
or right of set off against any Mortgage File or any funds
collected on, or in connection with, a Mortgage Loan, except,
however, that the Master Servicer shall be entitled to set off
against and deduct from any such funds any amounts that are
properly due and payable to the Master Servicer under this
Agreement.
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Section 3.05
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Maintenance of Hazard
Insurance .
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The Master Servicer shall cause to
be maintained, for each Mortgage Loan, hazard insurance on
buildings upon, or comprising part of, the Mortgaged Property
against loss by fire, hazards of extended coverage and such other
hazards as are customary in the area where the related Mortgaged
Property is located with an insurer which is licensed to do
business in the state where the related Mortgaged Property is
located. Each such policy of standard hazard insurance shall
contain, or have an accompanying endorsement that contains, a
standard mortgagee clause. The Master Servicer shall also cause
flood insurance to be maintained on property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan, to
the extent described below. Pursuant to Section 4.01, any amounts
collected by the Master Servicer under any such policies (other
than the amounts to be applied to the restoration or repair of the
related Mortgaged Property or property thus acquired or amounts
released to the Mortgagor in accordance with the Master
Servicer’s normal servicing procedures) shall be deposited in
the Protected Account. Any cost incurred by the Master Servicer in
maintaining any such insurance shall not, for the purpose of
calculating monthly distributions to the Certificateholders or
remittances to the Trustee for their benefit, be added to the
principal balance of the Mortgage Loan, notwithstanding that the
terms of the Mortgage Loan so permit. Such costs shall be
recoverable by the Master Servicer out of late payments by the
related Mortgagor or out of Liquidation Proceeds to the extent
permitted by Section 4.02. It is understood and agreed that no
earthquake or other additional insurance is to be required of any
Mortgagor or maintained on property acquired in respect of a
Mortgage other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require
such additional insurance. If the Mortgaged Property is located at
the
time of origination of the Mortgage
Loan in a federally designated special flood hazard area and such
area is participating in the national flood insurance program, the
Master Servicer shall cause flood insurance to be maintained with
respect to such Mortgage Loan. Such flood insurance shall be in an
amount equal to the least of (i) the Stated Principal Balance of
the related Mortgage Loan, (ii) minimum amount required to
compensate for damage or loss on a replacement cost basis or (iii)
the maximum amount of such insurance available for the related
Mortgaged Property under the Flood Disaster Protection Act of 1973,
as amended.
In the event that the Master
Servicer shall obtain and maintain a blanket policy insuring
against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set
forth in the first sentence of this Section 3.05, it being
understood and agreed that such policy may contain a deductible
clause on terms substantially equivalent to those commercially
available and maintained by comparable servicers. If such policy
contains a deductible clause, the Master Servicer shall, in the
event that there shall not have been maintained on the related
Mortgaged Property a policy complying with the first sentence of
this Section 3.05, and there shall have been a loss that would have
been covered by such policy, deposit in the Protected Account the
amount not otherwise payable under the blanket policy because of
such deductible clause. Such deposit shall be from the Master
Servicer’s own funds without reimbursement therefor. In
connection with its activities as administrator and servicer of the
Mortgage Loans, the Master Servicer agrees to present, on behalf of
itself, the Depositor and the Trustee for the benefit of the
Certificateholders claims under any such blanket policy.
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Section 3.06
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Presentment of Claims and
Collection of Proceeds .
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The Master Servicer shall prepare
and present on behalf of the Trustee and the Certificateholders all
claims under the Insurance Policies and take such actions
(including the negotiation, settlement, compromise or enforcement
of the insured’s claim) as shall be necessary to realize
recovery under such Insurance Policies. Any proceeds disbursed to
the Master Servicer in respect of such Insurance Policies shall be
promptly deposited in the Protected Account upon receipt, except
that any amounts realized that are to be applied to the repair or
restoration of the related Mortgaged Property as a condition
precedent to the presentation of claims on the related Mortgage
Loan to the insurer under any applicable Insurance Policy need not
be so deposited (or remitted).
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Section 3.07
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Maintenance of the Primary
Mortgage Insurance Policies .
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(a) The
Master Servicer shall not take any action that would result in
noncoverage under any applicable Primary Mortgage Insurance Policy
of any loss which, but for the actions of the Master Servicer would
have been covered thereunder. The Master Servicer shall use its
best efforts to keep in force and effect (to the extent that the
Mortgage Loan requires the Mortgagor to maintain such insurance),
Primary Mortgage Insurance applicable to each Mortgage Loan. The
Master Servicer shall not cancel or refuse to renew any such
Primary Mortgage Insurance Policy that is in effect at the date of
the initial issuance of the Mortgage Note and is required to be
kept in force hereunder.
(b) The
Master Servicer agrees to present on behalf of the Trustee, the
Certificateholders claims to the insurer under any Primary Mortgage
Insurance Policies and, in
this regard, to take such reasonable
action as shall be necessary to permit recovery under any Primary
Mortgage Insurance Policies respecting defaulted Mortgage Loans.
Pursuant to Section 4.01, any amounts collected by the Master
Servicer under any Primary Mortgage Insurance Policies shall be
deposited in the Protected Account, subject to withdrawal pursuant
to Section 4.02 hereof.
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Section 3.08
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Fidelity Bond, Errors and
Omissions Insurance .
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The Master Servicer shall maintain,
at its own expense, a blanket fidelity bond and an errors and
omissions insurance policy, with broad coverage with responsible
companies on all officers, employees or other persons acting in any
capacity with regard to the Mortgage Loans and who handle funds,
money, documents and papers relating to the Mortgage Loans. The
fidelity bond and errors and omissions insurance shall be in the
form of the Mortgage Banker’s Blanket Bond and shall protect
and insure the Master Servicer against losses, including forgery,
theft, embezzlement, fraud, errors and omissions and negligent acts
of such persons. Such fidelity bond shall also protect and insure
the Master Servicer against losses in connection with the failure
to maintain any insurance policies required pursuant to this
Agreement and the release or satisfaction of a Mortgage Loan which
is not in accordance with Accepted Servicing Practices. No
provision of this Section 3.08 requiring the fidelity bond and
errors and omissions insurance shall diminish or relieve the Master
Servicer from its duties and obligations as set forth in this
Agreement. The minimum coverage under any such bond and insurance
policy shall be at least equal to the corresponding amounts
required by Accepted Servicing Practices. The Master Servicer shall
deliver to the Trustee a certificate from the surety and the
insurer as to the existence of the fidelity bond and errors and
omissions insurance policy and shall obtain a statement from the
surety and the insurer that such fidelity bond or insurance policy
shall in no event be terminated or materially modified without
thirty days prior written notice to the Trustee. The Master
Servicer shall notify the Trustee within five business days of
receipt of notice that such fidelity bond or insurance policy will
be, or has been, materially modified or terminated. The Trustee for
the benefit of the Certificateholders must be named as loss payees
on the fidelity bond and as additional insured on the errors and
omissions policy.
Section
3.09 Realization Upon Defaulted
Mortgage Loans; Determination of Excess Liquidation Proceeds and
Realized Losses; Repurchases of Certain Mortgage Loans
.
(a) The
Master Servicer shall use reasonable efforts to foreclose upon or
otherwise comparably convert the ownership of properties securing
such of the Mortgage Loans as come into and continue in default and
as to which no satisfactory arrangements can be made for collection
of delinquent payments. In connection with such foreclosure or
other conversion, the Master Servicer shall follow such practices
and procedures as it shall deem necessary or advisable and as shall
be normal and usual in its general mortgage servicing activities
and the requirements of the insurer under any Required Insurance
Policy; provided that the Master Servicer shall not be required to
expend its own funds in connection with any foreclosure or towards
the restoration of any property unless it shall determine (i) that
such restoration and/or foreclosure will increase the proceeds of
liquidation of the Mortgage Loan after reimbursement to itself of
such expenses and (ii) that such expenses will be recoverable to it
through Insurance Proceeds, Liquidation Proceeds (respecting which
it shall have priority for purposes of withdrawals from the
Protected Account pursuant to Section 4.02). If the Master
Servicer
reasonably believes that Liquidation
Proceeds with respect to any such Mortgage Loan would not be
increased as a result of such foreclosure or other action, such
Mortgage Loan will be charged-off and will become a Liquidated
Loan. The Master Servicer will give notice of any such charge-off
to the Trustee. The Master Servicer shall be responsible for all
other costs and expenses incurred by it in any such proceedings;
provided that such costs and expenses shall be Servicing Advances
and that it shall be entitled to reimbursement thereof from the
proceeds of liquidation of the related Mortgaged Property, as
contemplated in Section 4.02. If the Master Servicer has knowledge
that a Mortgaged Property that the Master Servicer is contemplating
acquiring in foreclosure or by deed- in-lieu of foreclosure is
located within a one-mile radius of any site with environmental or
hazardous waste risks known to the Master Servicer, the Master
Servicer will, prior to acquiring the Mortgaged Property, consider
such risks and only take action in accordance with its established
environmental review procedures.
With respect to any REO Property,
the deed or certificate of sale shall be taken in the name of the
Trustee for the benefit of the Certificateholders (or the
Trustee’s nominee on behalf of the Certificateholders). The
Trustee’s name shall be placed on the title to such REO
Property solely as the Trustee hereunder and not in its individual
capacity. The Master Servicer shall ensure that the title to such
REO Property references this Agreement and the Trustee’s
capacity hereunder. Pursuant to its efforts to sell such REO
Property, the Master Servicer shall either itself or through an
agent selected by the Master Servicer protect and conserve such REO
Property in the same manner and to such extent as is customary in
the locality where such REO Property is located and may, incident
to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the
Master Servicer deems to be in the best interest of the Master
Servicer and the Certificateholders for the period prior to the
sale of such REO Property. The Master Servicer shall prepare for
and deliver to the Trustee a statement with respect to each REO
Property that has been rented showing the aggregate rental income
received and all expenses incurred in connection with the
management and maintenance of such REO Property at such times as is
necessary to enable the Trustee to comply with the reporting
requirements of the REMIC Provisions. The net monthly rental
income, if any, from such REO Property shall be deposited in the
Protected Account no later than the close of business on each
Determination Date. The Master Servicer shall perform the tax
reporting and withholding related to foreclosures, abandonments and
cancellation of indebtedness income as specified by Sections 1445,
6050J and 6050P of the Code by preparing and filing such tax and
information returns, as may be required.
In the event that the Trust Fund
acquires any Mortgaged Property as aforesaid or otherwise in
connection with a default or imminent default on a Mortgage Loan,
the Master Servicer shall dispose of such Mortgaged Property prior
to three years after its acquisition by the Trust Fund or, at the
expense of the Trust Fund, request more than 60 days prior to the
day on which such three-year period would otherwise expire, an
extension of the three-year grace period unless the Trustee shall
have been supplied with an Opinion of Counsel addressed to the
Trustee (such opinion not to be an expense of the Trustee) to the
effect that the holding by the Trust Fund of such Mortgaged
Property subsequent to such three-year period will not result in
the imposition of taxes on “prohibited transactions” of
REMIC I, REMIC II, REMIC III or REMIC IV as defined in section 860F
of the Code or cause any of REMIC I, REMIC II, REMIC III or REMIC
IV to fail to qualify as a REMIC at any time that any Certificates
are outstanding, in which case the Trust Fund may continue to hold
such Mortgaged Property (subject to any conditions
contained in such Opinion of
Counsel). Notwithstanding any other provision of this Agreement, no
Mortgaged Property acquired by the Trust Fund shall be rented (or
allowed to continue to be rented) or otherwise used for the
production of income by or on behalf of the Trust Fund in such a
manner or pursuant to any terms that would (i) cause such Mortgaged
Property to fail to qualify as “foreclosure property”
within the meaning of section 860G(a)(8) of the Code or (ii)
subject any of REMIC I, REMIC II, REMIC III or REMIC IV to the
imposition of any federal, state or local income taxes on the
income earned from such Mortgaged Property under section 860G(c) of
the Code or otherwise, unless the Master Servicer has agreed to
indemnify and hold harmless the Trust Fund with respect to the
imposition of any such taxes.
The decision of the Master Servicer
to foreclose on a defaulted Mortgage Loan shall be subject to a
determination by the Master Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a
proceeding. The income earned from the management of any Mortgaged
Properties acquired through foreclosure or other judicial
proceeding, net of reimbursement to the Master Servicer for
expenses incurred (including any property or other taxes) in
connection with such management and net of unreimbursed Servicing
Fees, Advances, Servicing Advances and any management fee paid or
to be paid with respect to the management of such Mortgaged
Property, shall be applied to the payment of principal of, and
interest on, the related defaulted Mortgage Loans (with interest
accruing as though such Mortgage Loans were still current) and all
such income shall be deemed, for all purposes in the Agreement, to
be payments on account of principal and interest on the related
Mortgage Notes and shall be deposited into the Protected Account.
To the extent the income received during a Prepayment Period is in
excess of the amount attributable to amortizing principal and
accrued interest at the related Mortgage Rate on the related
Mortgage Loan, such excess shall be considered to be a partial
Principal Prepayment for all purposes hereof.
The Liquidation Proceeds from any
liquidation of a Mortgage Loan, net of any payment to the Master
Servicer as provided above, shall be deposited in the Protected
Account upon receipt and made available on the next succeeding
Determination Date following receipt thereof for distribution on
the related Distribution Date, except that any Excess Liquidation
Proceeds shall be retained by the Master Servicer as additional
servicing compensation.
The proceeds of any Liquidated Loan,
as well as any recovery resulting from a partial collection of
Liquidation Proceeds or any income from an REO Property, will be
applied in the following order of priority: first, to reimburse the
Master Servicer for any related unreimbursed Servicing Advances and
Servicing Fees, pursuant to Section 4.02 or this Section 3.09;
second, to reimburse the Master Servicer for any unreimbursed
Advances, pursuant to Section 4.02 or this Section 3.09; third, to
accrued and unpaid interest (to the extent no Advance has been made
for such amount) on the Mortgage Loan or related REO Property, at
the Net Mortgage Rate to the first day of the month in which such
amounts are required to be distributed; and fourth, as a recovery
of principal of the Mortgage Loan.
(b) On
each Determination Date, the Master Servicer shall determine the
respective aggregate amounts of Excess Liquidation Proceeds and
Realized Losses, if any, for the related Prepayment
Period.
(c) The
Master Servicer has no intent to foreclose on any Mortgage Loan
based on the delinquency characteristics as of the Closing Date;
provided, that the foregoing does not prevent the Master Servicer
from initiating foreclosure proceedings on any date hereafter if
the facts and circumstances of such Mortgage Loans including
delinquency characteristics in the Master Servicer’s
discretion so warrant such action.
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Section 3.10
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Servicing Compensation
.
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As compensation for its activities
hereunder, the Master Servicer shall be entitled to retain or
withdraw from the Protected Account out of each payment of interest
on a Mortgage Loan included in the Trust Fund an amount equal to
the Servicing Fee.
Additional servicing compensation in
the form of any Excess Liquidation Proceeds, assumption fees, late
payment charges, other ancillary income, all income and gain net of
any losses realized from Permitted Investments with respect to
funds in or credited to the Protected Account shall be retained by
the Master Servicer to the extent not required to be deposited in
the Protected Account pursuant to Section 4.02. The Master Servicer
shall be required to pay all expenses incurred by it in connection
with its servicing activities hereunder (including payment of any
premiums for hazard insurance, as required by Section 3.05 and
maintenance of the other forms of insurance coverage required by
Section 3.07) and shall not be entitled to reimbursement therefor
except as specifically provided in Section 4.02.
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Section 3.11
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REO Property
.
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(a) In
the event the Trust Fund acquires ownership of any REO Property in
respect of any related Mortgage Loan, the deed or certificate of
sale shall be issued to the Trustee, or to its nominee, on behalf
of the related Certificateholders. The Master Servicer shall sell
any REO Property as expeditiously as possible and in accordance
with the provisions of this Agreement. Pursuant to its efforts to
sell such REO Property, the Master Servicer shall protect and
conserve such REO Property in the manner and to the extent required
herein, in accordance with the REMIC Provisions.
(b) The
Master Servicer shall deposit all funds collected and received in
connection with the operation of any REO Property into the
Protected Account.
(c) The
Master Servicer, upon the final disposition of any REO Property,
shall be entitled to reimbursement for any related unreimbursed
Advances, unreimbursed Servicing Advances or Servicing Fees from
Liquidation Proceeds received in connection with the final
disposition of such REO Property; provided, that any such
unreimbursed Advances or Servicing Fees as well as any unpaid
Servicing Fees may be reimbursed or paid, as the case may be, prior
to final disposition, out of any net rental income or other net
amounts derived from such REO Property.
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Section 3.12
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Liquidation Reports
.
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Upon the foreclosure of any
Mortgaged Property or the acquisition thereof by the Trust Fund
pursuant to a deed-in-lieu of foreclosure, the Master Servicer
shall submit a liquidation
report to the Trustee containing
such information as shall be mutually acceptable to the Master
Servicer and the Trustee with respect to such Mortgaged
Property.
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Section 3.13
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Annual Certificate as to
Compliance .
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(a) The
Master Servicer will deliver to the Trustee and the Rating Agencies
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 Master Servicer during the preceding calendar year or portion
thereof and of its performance under this Agreement has been made
under such officer’s supervision, and (ii) to the best of
such officer’s knowledge, based on such review, the Master
Servicer has fulfilled all of its obligations under this Agreement
in all material respects throughout such year or portion thereof,
or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and
the nature and status thereof except for such defaults as such
officer in its good faith judgment believe to be
immaterial.
(b) Copies
of such statements shall be provided to any Certificateholder upon
request by the Master Servicer or by the Trustee at the Master
Servicer’s expense if the Master Servicer failed to provide
such copies (unless (i) the Master Servicer shall have failed to
provide the Trustee with such statement or (ii) the Trustee shall
be unaware of the Master Servicer’s failure to provide such
statement).
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Section 3.14
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Annual Independent Certified
Public Accountants’ Servicing Report .
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Not later than March 1, 2006 and not
later than March 1 of each year thereafter, the Master Servicer at
its expense shall cause a firm of independent public accountants
which is a member of the American Institute of Certified Public
Accountants to furnish a statement to the Trustee and the Rating
Agencies to the effect that, with respect to the preceding calendar
year, such firm has examined certain documents and records relating
to the Master Servicer’s servicing of mortgage loans of the
same type as the Mortgage Loans pursuant to servicing agreements
substantially similar to this Agreement, which agreements may
include this Agreement, and that, on the basis of such an
examination, conducted substantially in compliance with the Uniform
Single Attestation Program for Mortgage Bankers, such firm is of
the opinion that the Master Servicer’s servicing has been
conducted in compliance with the agreements examined pursuant to
this Section 3.14, except for (i) such exceptions as such firm
shall believe to be immaterial,(ii) such other exceptions as shall
be set forth in such statement and (iii) such exceptions that the
Uniform Single Attestation Program for Mortgage Bankers requires it
to report. Copies of such statements shall be provided to any
Certificateholder upon request by the Master Servicer or by the
Trustee at the Master Servicer’s expense if the Master
Servicer failed to provide such copies (unless (i) the Master
Servicer shall have failed to provide the Trustee with such
statement or (ii) the Trustee shall be unaware of the Master
Servicer’s failure to provide such statement).
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Section 3.15
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Books and Records
.
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The Master Servicer shall be
responsible for maintaining, and shall maintain, a complete set of
books and records for the Mortgage Loans which shall be
appropriately identified in the
Master Servicer’s computer
system to clearly reflect the ownership of the Mortgage Loans by
the Trust. In particular, the Master Servicer shall maintain in its
possession, available for inspection by the Trustee and shall
deliver to the Trustee upon demand, evidence of compliance with all
federal, state and local laws, rules and regulations. To the extent
that original documents are not required for purposes of
realization of Liquidation Proceeds or Insurance Proceeds,
documents maintained by the Master Servicer may be in the form of
microfilm or microfiche or such other reliable means of recreating
original documents, including, but not limited to, optical imagery
techniques so long as the Master Servicer complies with the
requirements of Accepted Servicing Practices.
The Master Servicer shall maintain
with respect to each Mortgage Loan and shall make available for
inspection by the Trustee the related servicing file during the
time such Mortgage Loan is subject to this Agreement and thereafter
in accordance with applicable law.
