BEAR STEARNS ASSET BACKED SECURITIES
I LLC,
Depositor,
EMC MORTGAGE CORPORATION,
Seller and Company,
LASALLE BANK NATIONAL
ASSOCIATION,
Master Servicer and Securities
Administrator,
and
CITIBANK, N.A.
Trustee
POOLING AND SERVICING
AGREEMENT
Dated as of October 1,
2005
SACO I TRUST 2005-8
MORTGAGE-BACKED CERTIFICATES, SERIES
2005-8
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
|
Section 1.01
|
Defined Terms.
|
|
Section 1.02
|
Allocation of Certain Interest
Shortfalls.
|
ARTICLE II
CONVEYANCE OF TRUST FUND
REPRESENTATIONS AND WARRANTIES
|
Section 2.01
|
Conveyance of Trust Fund.
|
|
Section 2.02
|
Acceptance of the Mortgage Loans.
|
|
Section 2.03
|
Representations, Warranties and Covenants of the
Company, the Master Servicer, and EMC as a Seller.
|
|
Section 2.04
|
Representations and Warranties of the
Depositor.
|
|
Section 2.05
|
Delivery of Opinion of Counsel in Connection
with Substitutions and Repurchases.
|
|
Section 2.06
|
Countersignature and Delivery of
Certificates.
|
|
Section 2.07
|
Conveyance of the Subsequent Mortgage
Loans.
|
ARTICLE III
ADMINISTRATION AND SERVICING OF EMC
MORTGAGE LOANS BY THE COMPANY
|
Section 3.01
|
The Company.
|
|
Section 3.02
|
Due-on-Sale Clauses; Assumption
Agreements.
|
|
Section 3.03
|
Subservicers.
|
|
Section 3.04
|
Documents, Records and Funds in Possession of
the Company to Be Held for Trustee.
|
|
Section 3.05
|
Optional Purchase of Certain Mortgage
Loans.
|
|
Section 3.06
|
Release of Mortgage Files
|
|
Section 3.07
|
Maintenance of Hazard Insurance.
|
|
Section 3.08
|
Presentment of Claims and Collection of
Proceeds.
|
|
Section 3.09
|
Maintenance of the Primary Mortgage Insurance
Policies.
|
|
Section 3.10
|
Custodians to Retain Possession of Certain
Insurance Policies and Documents.
|
|
Section 3.11
|
Fidelity Bond, Errors and Omissions
Insurance.
|
|
Section 3.12
|
Realization Upon Defaulted Mortgage Loans;
Determination of Excess Liquidation Proceeds and Realized Losses;
Repurchases of Certain Mortgage Loans.
|
|
Section 3.13
|
Servicing Compensation.
|
|
Section 3.14
|
REO Property.
|
|
Section 3.15
|
Liquidation Reports.
|
|
Section 3.16
|
Annual Statement as to Compliance; Annual
Certification.
|
|
Section 3.17
|
Annual Independent Certified Public
Accountants’ Servicing Report.
|
|
Section 3.18
|
Books and Records.
|
ARTICLE IV
MASTER SERVICING OF MORTGAGE LOANS
BY MASTER SERVICER
|
Section 4.01
|
Master Servicer.
|
|
Section 4.02
|
Monitoring of Company and Servicer
|
|
Section 4.03
|
Fidelity Bond.
|
|
Section 4.04
|
Power to Act; Procedures.
|
|
Section 4.05
|
Due-on-Sale Clauses; Assumption
Agreements.
|
|
Section 4.06
|
Documents, Records and Funds in Possession of
Master Servicer, Company and Servicer To Be Held for
Trustee.
|
|
Section 4.07
|
Presentment of Claims and Collection of
Proceeds.
|
|
Section 4.08
|
Realization Upon Defaulted Mortgage
Loans.
|
|
Section 4.09
|
Compensation of the Master Servicer.
|
|
Section 4.10
|
REO Property.
|
|
Section 4.11
|
Annual Officer’s Certificate as to
Compliance.
|
|
Section 4.14
|
Reserve Fund.
|
|
Section 4.15
|
Reports Filed with Securities and Exchange
Commission
|
ARTICLE V
ACCOUNTS
|
Section 5.01
|
Collection of Mortgage Loan Payments; Protected
Account.
|
|
Section 5.02
|
Permitted Withdrawals From the Protected
Account.
|
|
Section 5.03
|
Reports to Master Servicer.
|
|
Section 5.04
|
Collection of Taxes; Assessments and Similar
Items; Escrow Accounts.
|
|
Section 5.05
|
Protected Accounts
|
|
Section 5.06
|
Master Servicer Collection Account
|
|
Section 5.07
|
Permitted Withdrawals and Transfers from the
Master Servicer Collection Account
|
|
Section 5.08
|
Distribution Account.
|
|
Section 5.09
|
Permitted Withdrawals and Transfers from the
Distribution Account.
|
|
Section 5.10
|
Pre-Funding Account.
|
|
Section 5.11
|
Interest Coverage Account.
|
ARTICLE VI
DISTRIBUTIONS AND
ADVANCES
|
Section 6.02
|
Compensating Interest Payments.
|
|
Section 6.03
|
REMIC Distributions.
|
|
Section 6.04
|
Distributions.
|
|
Section 6.05
|
Allocation of Realized Losses.
|
|
Section 6.06
|
Monthly Statements to
Certificateholders.
|
|
Section 6.07
|
REMIC Designations and REMIC
Distributions.
|
ARTICLE VII
THE CERTIFICATES
|
Section 7.01
|
The Certificates.
|
|
Section 7.02
|
Certificate Register; Registration of Transfer
and Exchange of Certificates.
|
|
Section 7.03
|
Mutilated, Destroyed, Lost or Stolen
Certificates.
|
|
Section 7.04
|
Persons Deemed Owners.
|
|
Section 7.05
|
Access to List of Certificateholders’
Names and Addresses.
|
|
Section 7.06
|
Book-Entry Certificates.
|
|
Section 7.07
|
Notices to Depository.
|
|
Section 7.08
|
Definitive Certificates.
|
|
Section 7.09
|
Maintenance of Office or Agency.
|
ARTICLE VIII
THE DEPOSITOR, COMPANY AND THE
MASTER SERVICER
|
Section 8.01
|
Liabilities of the Depositor, the Company and
the Master Servicer.
|
|
Section 8.02
|
Merger or Consolidation of the Depositor or the
Master Servicer.
|
|
Section 8.03
|
Indemnification of the Trustee, the Master
Servicer and the Securities Administrator.
|
|
Section 8.04
|
Limitations on Liability of the Depositor, the
Company, the Master Servicer and Others
|
|
Section 8.05
|
Master Servicer and Company Not to
Resign.
|
|
Section 8.06
|
Successor Master Servicer
|
|
Section 8.07
|
Sale and Assignment of Master
Servicing
|
ARTICLE IX
DEFAULT; TERMINATION OF MASTER
SERVICER; TERMINATION OF COMPANY
|
Section 9.01
|
Events of Default.
|
|
Section 9.02
|
Trustee to Act; Appointment of
Successor.
|
|
Section 9.03
|
Notification to Certificateholders.
|
|
Section 9.04
|
Waiver of Defaults.
|
|
Section 9.05
|
Company Default.
|
|
Section 9.06
|
Waiver of Company Defaults.
|
ARTICLE X
CONCERNING THE TRUSTEE AND THE
SECURITIES ADMINISTRATOR
|
Section 10.01
|
Duties of Trustee and the Securities
Administrator.
|
|
Section 10.02
|
Certain Matters Affecting the Trustee and the
Securities Administrator.
|
|
Section 10.03
|
Trustee and Securities Administrator Not Liable
for Certificates or Mortgage Loans.
|
|
Section 10.04
|
Trustee and Securities Administrator May Own
Certificates.
|
|
Section 10.05
|
Trustee’s and Securities
Administrator’s Fees and Expenses.
|
|
Section 10.06
|
Eligibility Requirements for Trustee and
Securities Administrator.
|
|
Section 10.08
|
Resignation and Removal of Trustee and
Securities Administrator.
|
|
Section 10.09
|
Successor Trustee or Securities
Administrator.
|
|
Section 10.10
|
Merger or Consolidation of Trustee or Securities
Administrator.
|
|
Section 10.11
|
Appointment of Co-Trustee or Separate
Trustee.
|
|
Section 10.12
|
Tax Matters.
|
|
Section 10.13
|
REMIC-Related Covenants.
|
ARTICLE XI
TERMINATION
|
Section 11.01
|
Termination upon Liquidation or Repurchase of
all Mortgage Loans.
|
|
Section 11.02
|
Final Distribution on the
Certificates.
|
|
Section 11.03
|
Additional Termination Requirements.
|
ARTICLE XII
MISCELLANEOUS PROVISIONS
|
Section 12.02
|
Recordation of Agreement;
Counterparts.
|
|
Section 12.03
|
Governing Law.
|
|
Section 12.04
|
Intention of Parties.
|
|
Section 12.06
|
Severability of Provisions.
|
|
Section 12.07
|
Assignment.
|
|
Section 12.08
|
Limitation on Rights of
Certificateholders.
|
|
Section 12.09
|
Inspection and Audit Rights
|
|
Section 12.10
|
Certificates Nonassessable and Fully
Paid.
|
Exhibits
|
Exhibit A-1
|
Form of Class A
Certificates
|
|
Exhibit A-2
|
Form of Class M
Certificates
|
|
Exhibit A-3
|
Form of Class B
Certificates
|
|
Exhibit A-4
|
Form of Class C
Certificates
|
|
Exhibit A-5
|
Form of Class R
Certificates
|
|
Exhibit B
|
Mortgage Loan Schedule
|
|
Exhibit C
|
Form of Transfer
Affidavit
|
|
Exhibit D
|
Form of Transferor
Certificate
|
|
Exhibit E
|
Form of Investment Letter (Non-Rule
144A)
|
|
Exhibit F
|
Form of Rule 144A and Related
Matters Certificate
|
|
Exhibit G
|
Form of Request for
Release
|
|
Exhibit H
|
DTC Letter of
Representations
|
|
Exhibit I
|
Schedule of Mortgage Loans with Lost
Notes
|
|
Exhibit J
|
Form of LaSalle Custodial
Agreement
|
|
Exhibit K
|
Form of Wells Fargo Custodial
Agreement
|
|
Exhibit L
|
Form of Company
Certification
|
|
Exhibit M
|
Form of Mortgage Loan Purchase
Agreement
|
|
Exhibit N
|
Form of Subsequent Mortgage Loan
Purchase Agreement
|
|
Exhibit O
|
Form of Subsequent Transfer
Instrument
|
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, a
“Seller”) and as company (in such capacity, the
“Company”), LASALLE BANK NATIONAL ASSOCIATION, a
national banking association, as master servicer (in such capacity,
the “Master Servicer”) and as securities administrator
(in such capacity, the “Securities Administrator”) and
CITIBANK, N.A., a national banking association, not in its
individual capacity, but solely as trustee (the
“Trustee”).
PRELIMINARY STATEMENT
The Depositor is the owner of the
Trust Fund that is hereby conveyed to the Trustee in return for the
Certificates. On or prior to the Closing Date, the Depositor
acquired the Initial Mortgage Loans from the Seller. On the Closing
Date, the Depositor will sell the Initial Mortgage Loans and
certain other property to the Trust Fund and receive in
consideration therefor Certificates evidencing the entire
beneficial ownership interest in the Trust Fund. On or prior to any
Subsequent Transfer Date, the Depositor acquired the Subsequent
Mortgage Loans, which will be sold to the Trust on the related
Subsequent Transfer Date.
REMIC I
As provided herein, the Securities
Administrator, on behalf of 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, the Pre-Funding Account and the Interest Coverage
Account) 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
|
Initial
Uncertificated
Principal Balance
|
Latest Possible
Maturity Date
(1)
|
|
AA
|
Variable (2)
|
$
|
483,100,671.78
|
November 25, 2035
|
|
A-1
|
Variable (2)
|
$
|
1,725,360.00
|
November 25, 2035
|
|
A-2
|
Variable (2)
|
$
|
1,013,910.00
|
November 25, 2035
|
|
A-3
|
Variable (2)
|
$
|
711,450.00
|
November 25, 2035
|
|
M-1
|
Variable (2)
|
$
|
517,610.00
|
November 25, 2035
|
|
M-2
|
Variable (2)
|
$
|
108,450.00
|
November 25, 2035
|
|
M-3
|
Variable (2)
|
$
|
147,890.00
|
November 25, 2035
|
|
M-4
|
Variable (2)
|
$
|
98,590.00
|
November 25, 2035
|
|
M-5
|
Variable (2)
|
$
|
83,800.00
|
November 25, 2035
|
|
B-1
|
Variable (2)
|
$
|
120,780.00
|
November 25, 2035
|
|
B-2
|
Variable (2)
|
$
|
78,870.00
|
November 25, 2035
|
|
B-3
|
Variable (2)
|
$
|
78,870.00
|
November 25, 2035
|
|
B-4
|
Variable (2)
|
$
|
216,900.00
|
November 25, 2035
|
|
ZZ
|
Variable (2)
|
$
|
4,956,717.38
|
November 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 each REMIC I
Regular Interest.
|
|
(2)
|
Calculated in accordance with the
definition of “Uncertificated REMIC I Pass-Through
Rate” herein.
|
REMIC II
As provided herein, the Securities
Administrator on behalf of 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, for purposes of satisfying
Treasury Regulation Section 1.860G-1(a)(4)(iii), the “latest
possible maturity date” for each class of Certificates or
interests that represents ownership of one or more of the Regular
Interests in REMIC II created hereunder:
|
|
|
Initial
Certificate
or Uncertificated
Principal Balance
|
Latest Possible
Maturity Date
(1)
|
|
A-1
|
Variable (2)
|
$
|
172,536,000.00
|
November 25, 2035
|
|
A-2
|
Variable (2)
|
$
|
101,391,000.00
|
November 25, 2035
|
|
A-3
|
Variable (2)
|
$
|
71,145,000.00
|
November 25, 2035
|
|
M-1
|
Variable (2)
|
$
|
51,761,000.00
|
November 25, 2035
|
|
M-2
|
Variable (2)
|
$
|
10,845,000.00
|
November 25, 2035
|
|
M-3
|
Variable (2)
|
$
|
14,789,000.00
|
November 25, 2035
|
|
M-4
|
Variable (2)
|
$
|
9,859,000.00
|
November 25, 2035
|
|
M-5
|
Variable (2)
|
$
|
8,380,000.00
|
November 25, 2035
|
|
B-1
|
Variable (2)
|
$
|
12,078,000.00
|
November 25, 2035
|
|
B-2
|
Variable (2)
|
$
|
7,887,000.00
|
November 25, 2035
|
|
B-3
|
Variable (2)
|
$
|
7,887,000.00
|
November 25, 2035
|
|
B-4
|
Variable (2)
|
$
|
21,690,000.16
|
November 25, 2035
|
|
C Interest
|
Variable (2)
|
$
|
2,711,869.16(3)
|
November 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 each Class of
Certificates.
|
|
(2)
|
Calculated in accordance with the
definition of “Pass-Through Rate” herein.
|
|
(3)
|
The Class C Interest will not accrue
interest on its Uncertificated Principal Balance, but will accrue
interest on its Uncertificated Notional Amount as described
herein.
|
REMIC III
As provided herein, the Securities
Administrator on behalf of the Trustee will 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-X
Certificates represent 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)
|
$ 2,711,869.16
|
November 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.
|
The Trust Fund shall be named, and
may be referred to as, the “SACO I Trust 2005-8.” The
Certificates issued hereunder may be referred to as
“Mortgage-Backed Certificates, Series 2005-8”
(including for purposes of any endorsement or assignment of a
Mortgage Note or Mortgage).
In consideration of the mutual
agreements herein contained, the Depositor, the Master Servicer,
the Securities Administrator, the Seller, the Company and the
Trustee agree as follows:
ARTICLE I
DEFINITIONS
|
|
Section 1.01
|
Defined Terms.
|
Whenever used in this Agreement, the
following words and phrases, unless otherwise expressly provided or
unless the context otherwise requires, shall have the meanings
specified in this Article.
Accepted Master Servicing
Practices : With respect
to any Mortgage Loan those customary mortgage master servicing
practices of prudent mortgage master servicing institutions that
master service mortgage loans, of the same type and quality as such
Mortgage Loan in the jurisdiction where the related Mortgaged
Property is located, to the extent applicable to the Master
Servicer (except in its capacity as successor to the Company or the
Servicer).
Accepted Servicing
Practices : With respect
to each EMC Mortgage Loan, those customary mortgage servicing
practices (including collection procedures) that are in accordance
with all applicable statutes, regulations and prudent mortgage
banking practices for mortgage loans of the same type and quality
as such Mortgage Loan in the jurisdiction where the related
Mortgaged Property is located.
Account : The Distribution Account, the Master Servicer
Collection Account, the Reserve Fund, the Pre-Funding Account, the
Interest Coverage Account and the Protected Account.
Accrual Period
: With respect to the Certificates
(other than the Class C Certificates and the Residual Certificates)
and any Distribution Date, the period from and including the
immediately preceding Distribution Date (or with respect to the
first Accrual Period, the Closing Date) to and including the day
prior to such Distribution Date. With respect to the Class C
Certificates and 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 Certificates and the Residual Certificates) will be made on the
basis of the actual number of days elapsed in the related Accrual
Period. All calculations of interest on the Class C Certificates
and 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 Company as provided in Section 6.01(a) hereof or by the Master
Servicer as provided in Section 6.01(b) hereof.
Agreement : This Pooling and Servicing Agreement and any
and all amendments or supplements hereto made in accordance with
the terms herein.
Amount Held for Future
Distribution : As to any
Distribution Date, and the EMC Mortgage Loans, the aggregate amount
held in the Company’s Protected Account at the close of
business on the immediately preceding Determination Date on account
of (i) all Scheduled Payments or portions thereof received in
respect of the EMC 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. As to any Distribution Date and the Mortgage
Loans serviced by the Servicer, the aggregate amount held in the
Servicer’s Protected Account at the close of business on the
immediately preceding Business Day on account of (i) all principal
payments or portions thereof received in respect of such Mortgage
Loans and (ii) Principal Prepayments, Liquidation Proceeds,
Subsequent Recoveries and Insurance Proceeds received in respect of
such Mortgage Loans.
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 6.05 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.
Assignment Agreement
: Shall mean the First Horizon
Assignment Agreement.
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 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 7.06). 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 Securities
Administrator or the principal
office of the Company or the Master Servicer is located are
authorized or obligated by law or executive order to be
closed.
Certificate
: Any one of the certificates of any
Class executed and authenticated by the Securities Administrator in
substantially the forms attached hereto as Exhibits A-1 through
A-5.
Certificate Margin
: With respect to the Class A-1
Certificates and, for purposes of the definition of
“Pass-Through Rate”, REMIC I Regular Interest A-1,
0.280% per annum in the case of each Distribution Date through and
including the first possible Optional Termination Date and 0.560%
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
“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
“Pass-Through Rate”, REMIC I Regular Interest A-3,
0.380% per annum in the case of each Distribution Date through and
including the first possible Optional Termination Date and 0.760%
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
“Pass-Through Rate”, REMIC I Regular Interest M-1,
0.480% per annum in the case of each Distribution Date through and
including the first possible Optional Termination Date and 0.720%
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
“Pass-Through Rate”, REMIC I Regular Interest M-2,
0.510% per annum in the case of each Distribution Date through and
including the first possible Optional Termination Date and 0.765%
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
“Pass-Through Rate”, REMIC I Regular Interest M-3,
0.640% per annum in the case of each Distribution Date through and
including the first possible Optional Termination Date and 0.960%
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
“Pass-Through Rate”, REMIC I Regular Interest M-4,
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-5
Certificates and, for purposes of the definition of
“Pass-Through Rate”, REMIC I Regular Interest M-5,
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 B-1
Certificates and, for purposes of the definition of
“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
“Pass-Through Rate”, REMIC I Regular Interest B-2,
1.350% per annum in the case of each Distribution Date through and
including the first possible Optional Termination Date and 2.025%
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
“Pass-Through Rate”, REMIC I Regular Interest B-3,
1.800% per annum in the case of each Distribution Date through and
including the first possible Optional Termination Date and 2.700%
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
“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
$492,959,869.16. For federal income tax purposes, the Certificate
Notional Amount for the Class C Certificates and 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 6.04(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 6.04,
and (ii) any Applied Realized Loss Amounts allocated to such
Certificate on previous Distribution Dates.
Certificate Register
: The register maintained pursuant
to Section 7.02 hereof.
Certificateholder or
Holder : The Person in
whose name a Certificate is registered in the Certificate Register
(initially, Cede & Co., as nominee for the Depository, in the
case of any Book-Entry Certificates).
Class : All Certificates bearing the same Class
designation as set forth in Section 7.01 hereof.
Class A Certificates
: Any of the Class A-1, Class A-2
and Class A-3 Certificates.
Class A-1 Certificate
: Any Certificate designated as a
“Class A-1 Certificate” on the face thereof, in the
form of Exhibit A-1 hereto, representing the right to the
Percentage Interest of distributions provided for the Class A-1
Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive any Basis Risk
Shortfall Carry Forward Amounts with respect to such Class from the
Reserve Fund.
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 any Basis Risk
Shortfall Carry Forward Amounts with respect to such Class from the
Reserve Fund.
Class A-1 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 any Basis Risk
Shortfall Carry Forward Amounts with respect to such Class from the
Reserve Fund.
Class A Principal Distribution
Amount : For any
Distribution Date an amount equal to, the lesser of (I) the
Principal Distribution Amount for such Distribution Date and (II)
an amount equal to the excess (if any) of (A) the Certificate
Principal Balance of the Class A Certificates immediately prior to
such Distribution Date over (B) the lesser of (x) the product of
(1) 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
Prepayment Period) and (2) approximately 31.70% and (y) (1) 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
Prepayment Period), less (2) the Overcollateralization
Floor.
Class B Certificates
: Any of the Class B-1, Class B-2,
Class B-3 or 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 Amounts with respect to such Class from the
Reserve Fund.
Class B-1 Principal Distribution
Amount : For any
Distribution Date an amount equal to, the lesser of (I) the
Principal Distribution Amount remaining 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 on such
Distribution Date and (II) an amount
equal to the excess (if any) of (A) the sum of (1) the Certificate
Principal Balances of the Class A, Class M-1, Class M-2, Class M-3,
Class M-4 and Class M-5 Certificates (after taking into account the
payment 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 for that Distribution Date) and (2) the
Certificate Principal Balance of the Class B-1 Certificates
immediately for that Distribution Date) over (B) the lesser of (x)
the product of (1) 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 Prepayment Period, multiplied by (2)
approximately 75.40% and (y) (1) 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 Prepayment Period), less (2)
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 Amounts with respect to such Class from the
Reserve Fund.
Class B-2 Principal Distribution
Amount : For any
Distribution Date an amount equal to, the lesser of (I) the
Principal Distribution Amount remaining 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 on such
Distribution Date and (2) the Certificate Principal Balance of the
Class B-3 Certificates immediately for that Distribution Date) and
(2) the Certificate Principal Balance of the Class B-2 Certificates
immediately prior to such Distribution Date over (B) the lesser of
(x) the product of (1) 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 Prepayment Period, multiplied by (2)
approximately 78.60% and (y) (1) 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 Prepayment Period), less (2) 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 Amounts with respect to such Class from the
Reserve Fund.
Class B-3 Principal Distribution
Amount : For any
Distribution Date an amount equal to, the lesser of (I) the
Principal Distribution Amount remaining 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 on such Distribution Date and
(II) an amount equal to the excess (if any) of (A) the sum of (1)
the Certificate Principal Balances of the Class A, Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class B-1 and Class B-2
Certificates (after taking into account the payment 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, Class B-1
Principal Distribution Amount and the Class B-2 Principal
Distribution Amount for that for that Distribution Date) and (2)
the Certificate Principal Balance of the Class B-3 Certificates
immediately prior to such Distribution Date over (B) the lesser of
(x) the product of (1) 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 Prepayment Period, multiplied by (2)
approximately 81.80% and (y) (1) 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 Prepayment Period), less (2) 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 Amounts with respect to such Class from the
Reserve Fund.
Class B-4 Principal Distribution
Amount : For any
Distribution Date an amount equal to, the lesser of (I) the
Principal Distribution Amount remaining 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 on such Distribution Date and (II) an amount
equal to the excess (if any) of (A) the sum of (1) the Certificate
Principal Balances of the Class A, 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 (after taking into account the payment 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 for that Distribution Date) and (2)
the Certificate Principal Balance of the Class B-4 Certificates
immediately prior to such Distribution Date over (B) the lesser of
(x) the product of (1) 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 Prepayment Period, multiplied by (2)
approximately 90.60% and (y) (1) 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 Prepayment Period), less (2) 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 the 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 Amounts with respect to such Class from the
Reserve Fund.
Class M-1 Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (I) the
remaining Principal Distribution Amount for such Distribution Date
after distribution of the Class A Principal Distribution Amount and
(II) an amount equal to the excess, (if any), of (A) the sum of (1)
the 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 (x) the product of (1) 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 Prepayment Period, multiplied by (2)
approximately 52.70% and (y) (1) 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 Prepayment Period), less (2) 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 Amounts with respect to such Class from the
Reserve Fund.
Class M-2 Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (I) 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 (II) an amount
equal to the excess, (if any), of (A) the sum of (1) the
Certificate Principal Balances of the Class A Certificates and
Class M-1 Certificates (after taking into account the distribution
of the Class A Principal Distribution Amount and the Class M-1
Principal Distribution Amount on such Distribution Date) and (2)
the Certificate Principal Balance of the Class M-2 Certificates
immediately prior to such Distribution Date, over (B) the lesser of
(x) the product of (1) 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 Prepayment Period, multiplied by (2)
approximately 57.10% and (y) (1) 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 Prepayment Period), less (2) 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 Amounts with respect to such Class from the
Reserve Fund.
Class M-3 Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (I) 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 (II) an
amount equal to the excess, (if any), of (A) the sum of (1) the
Certificate Principal Balances of the Class A, Class M-1 and Class
M-2 Certificates (after taking into account the distribution of the
Class A Principal Distribution Amount, the Class M-1 Principal
Distribution Amount and the Class M-2 Principal Distribution Amount
on such Distribution Date) and (2) the Certificate Principal
Balance of the Class M-3 Certificates immediately prior to such
Distribution Date, over (B) the lesser of (x) the product of (1)
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
Prepayment Period, multiplied by (2) approximately 63.10% and (y)
(1) 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
Prepayment Period), less (2) 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 Amounts with respect to such Class from the
Reserve Fund.
Class M-4 Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (I) 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 (II) an amount equal to the excess, (if
any), of (A) the sum of (1) the Certificate Principal Balances of
the Class A, Class M-1, Class M-2 and Class M-3 Certificates (after
taking into account the 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 on such Distribution Date) and (2)
the Certificate Principal Balance of the Class M-4 Certificates
immediately prior to such Distribution Date, over (B) the lesser of
(x) the product of (1) 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 Prepayment Period, multiplied by (2)
approximately 67.10% and (y) (1) 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 Prepayment Period), less (2) 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 Amounts with respect to such Class from the
Reserve Fund.
Class M-5 Principal Distribution
Amount : For any
Distribution Date, an amount equal to the lesser of (I) 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 (II) an
amount equal to the excess, (if any), of (A) the sum of (1) the
Certificate Principal Balances of the Class A, Class M-1, Class
M-2, Class M-3 and Class M-4 Certificates (after taking into
account the 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 on such
Distribution Date) and (2) the Certificate Principal Balance of the
Class M-5 Certificates immediately prior to such Distribution Date,
over (B) the lesser of (x) the product of (1) 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 Prepayment Period,
multiplied by (2) approximately 70.50% and (y) (1) 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
Prepayment Period), less (2) the Overcollateralization
Floor.
Class R Certificate:
Any of the Class R-1, Class R-2 and
Class R-X Certificates.
Class R-1 Certificate
: Any Certificate designated a
“Class R-1 Certificate” on the face thereof, in
substantially the form set forth in Exhibit A-5 hereto, evidencing
the Residual Interest in REMIC I and representing the right to the
Percentage Interest of distributions provided for the Class R-1
Certificates as set forth herein.
Class R-2 Certificate
: Any Certificate designated a
“Class R-2 Certificate” on the face thereof, in
substantially the form set forth in Exhibit A-5 hereto, evidencing
the Residual Interest in REMIC II and representing the right to the
Percentage Interest of distributions provided for the Class R-2
Certificates as set forth herein.
Class R-X Certificate
: Any Certificate designated a
“Class R-X Certificate” on the face thereof, in
substantially the form set forth in Exhibit A-5 hereto, evidencing
the Residual Interest in REMIC III and representing the right to
the Percentage Interest of distributions provided for the Class R-X
Certificates as set forth herein.
Closing Date
: October 28, 2005.
Code : The Internal Revenue Code of 1986, including
any successor or amendatory provisions.
Combined Loan-to-Value
Ratio : With respect to
any Mortgage Loan and as of any date of determination, the fraction
(expressed as a percentage) the numerator of which is the sum of
(i) original principal balance of the related Mortgage Loan at such
date of determination and (ii) the unpaid principal balance of the
related first lien Mortgage Loan as of the date of origination of
that Mortgage Loan and the denominator of which is the applicable
Appraised Value of the related Mortgaged Property at
origination.
Company : EMC.
Compensating Interest
: With respect to any Distribution
Date, (i) in the case of EMC, an amount, not to exceed the
Servicing Fee, to be deposited in the Protected Account by the
Company with respect to the payment of a Prepayment Interest
Shortfall on an EMC Mortgage Loan subject to this Agreement and
(ii) in the case of the Master Servicer, an amount not to exceed
that portion of the Master Servicing Fee payable to the Master
Servicer. If the Company fails to make such payment, the Master
Servicer shall be obligated to do so to the extent provided in
Section 6.02(b) hereof.
Corporate Trust Office
: (i) With respect to the Trustee,
the designated corporate trust office of the Trustee, currently
located at Citibank, N.A., 388 Greenwich Street, 14th Floor, New
York, New York 10013, and (ii) with respect to the Securities
Administrator, the designated office of the Securities
Administrator currently located at 135 South LaSalle Street, Suite
1625, Chicago, Illinois 60603 Attention: Global Securities and
Trust Services Group — SACO 2005-8 or at such other address
as the Trustee or Securities Administrator, as applicable, may
designate from time to time by notice to the Certificateholders,
the Depositor, the Trustee, the Master Servicer, the Securities
Administrator and EMC or at the principal corporate trust office of
any successor Trustee.
Corresponding
Certificate : With
respect to each REMIC I Regular Interest (other than REMIC I
Regular Interests AA and ZZ), the Certificate with the
corresponding designation.
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 Residual Certificates), (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 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 Agreements
: Any of the LaSalle Custodial
Agreement or Wells Fargo Custodial Agreement, as
applicable.
Custodians
: (i) Wells Fargo Bank, National
Association, or any successor custodian appointed pursuant to the
provisions hereof and the Wells Fargo Custodial Agreement and (ii)
LaSalle Bank National Association, or any successor custodian
appointed pursuant to the provisions hereof and the LaSalle
Custodial Agreement.
Cut-off Date
: The close of business on 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 $492,959,869.16, which shall be deemed to include the Pre-Funded
Amount.
Debt Service Reduction
: With respect to any Mortgage Loan,
a reduction by a court of competent jurisdiction in a proceeding
under the Bankruptcy Code in the Scheduled Payment for such
Mortgage Loan that became final and non-appealable, except such a
reduction resulting from a Deficient Valuation or any other
reduction that results in a permanent forgiveness of
principal.
Deficient Valuation
: With respect to any Mortgage Loan,
a valuation by a court of competent jurisdiction of the Mortgaged
Property in an amount less than the then outstanding indebtedness
under such Mortgage Loan, or any reduction in the amount of
principal to be paid in connection with any Scheduled Payment that
results in a permanent forgiveness of principal, which valuation or
reduction results from an order of such court that is final and
non-appealable in a proceeding under the Bankruptcy
Code.
Definitive
Certificates : As defined
in Section 7.06.
Deleted Mortgage Loan
: A Mortgage Loan replaced or to be
replaced by a Replacement Mortgage Loan.
Delinquent
: A Mortgage Loan is
“delinquent” if any payment due thereon is not made
pursuant to the terms of such Mortgage Loan by the close of
business on the day such payment is scheduled to be due. A Mortgage
Loan is “30 days delinquent” if such payment has not
been received by the close of business on the corresponding day of
the month immediately succeeding the month in which such payment
was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on
the 31st day of such month), then on the last day of such
immediately succeeding month. Similarly for “60 days
delinquent,” “90 days delinquent” and so
on.
Denomination
: With respect to each Certificate,
the amount set forth on the face thereof as the “Initial
Principal Balance 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
Securities Administrator 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.
Designated Depository
Institution : A
depository institution (commercial bank, federal savings bank,
mutual savings bank or savings and loan association) or trust
company (which may include the Trustee, the Securities
Administrator and the Master Servicer), the deposits of which are
fully insured by the FDIC to the extent provided by law.
Determination Date
: With respect to any Distribution
Date, the 15 th day of the month of such Distribution
Date or, if such 15 th day is not a Business Day, the
immediately preceding Business Day.
Distribution Account
: The segregated trust account or
accounts created and maintained by the Securities Administrator
pursuant to Section 5.08 in the name of the Trustee for the benefit
of the Certificateholders, which shall be entitled “LaSalle
Bank National Association, as Securities Administrator, on behalf
of Citibank, N.A., as Trustee, in trust for the registered holders
of Bear Stearns Asset Backed Securities I LLC, SACO I Trust 2005-8,
Mortgage-Backed Certificates, Series 2005-8.” The
Distribution Account must be an Eligible Account.
Distribution Account Deposit
Date : Two Business Days
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 and the EMC Mortgage Loans, 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. With
respect to any Distribution Date and the Mortgage Loans serviced by
the related Servicer, the period from the first day of the calendar
month preceding the calendar month in which such Distribution Date
occurs through close of business on the last day of such
month.
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 the Securities Administrator 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 each Rating Agency, as evidenced in
writing. Eligible Accounts may bear interest, and may include, if
otherwise qualified under this definition, accounts maintained with
the Trustee and the Securities Administrator.
EMC : EMC Mortgage Corporation, a Delaware
corporation, and its successors and assigns, in its capacity as a
seller of the Mortgage Loans to the Depositor.
EMC Mortgage Loans
: The Mortgage Loans serviced by the
Company pursuant to the terms of this Agreement and identified as
such on the Mortgage Loan Schedule for which EMC is the applicable
Seller.
ERISA : The Employee Retirement Income Security Act of
1974, as amended.
ERISA Restricted
Certificates : Any of the
Class C Certificates and Residual Certificates.
Event of Default
: As defined in Section 9.01
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 6.04(a)(3)(A)), in
each case for such Distribution Date.
Exemption : Prohibited Transaction Exemption 90-30, as
amended from time to time.
Extraordinary Trust Fund
Expenses : Any amounts
reimbursable to the Trustee, or any director, officer, employee or
agent of the Trustee, from the Trust Fund, and any amounts
reimbursable, (other than Advances and Servicing Advances), to the
Depositor, the Securities Administrator, the Master Servicer, any
Custodian, or any director, officer, employee or agent thereof, and
any other amounts payable or reimbursable from the Trust Fund as
Extraordinary Trust Fund Expenses pursuant to the terms of the
Pooling and Servicing Agreement and/or the Custodial Agreements,
including Extraordinary Trust Fund Expenses that are not reimbursed
in any calendar year as a result of the Extraordinary Trust Fund
Expenses Cap. Extraordinary Trust Fund Expenses for any calendar
year, to the extent they may exceed the Extraordinary Trust Fund
Expenses Cap, shall be paid pro rata from the amounts available
therefore.
Extraordinary Trust Fund Expenses
Cap : $250,000 for each
calendar year; provided, however, that such cap will not apply to
any costs and expenses (i) of the Trustee incurred in connection
with the termination of the Securities Administrator or the Master
Servicer, the transfer of master servicing to a successor Master
Servicer and any costs incurred with the replacement of either
Custodian or (ii) of the Master Servicer incurred in connection
with the termination of the Company or the Servicer and the
transfer of servicing to a successor servicer.
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 by a Custodian
substantially in the form of Exhibit Three to the related Custodial
Agreement.
Final Recovery
Determination : With
respect to any defaulted Mortgage Loan or any REO Property (other
than a Mortgage Loan or REO Property purchased by EMC (on its own
behalf as a seller and on behalf of Master Funding) pursuant to or
as contemplated by Section 2.04(d) or Section 11.01), a
determination made by the Company pursuant to this Agreement or the
Servicer pursuant to the First Horizon Servicing Agreement that all
Insurance Proceeds, Liquidation Proceeds and other payments or
recoveries which the Company or such Servicer, in its reasonable
good faith judgment, expects to be finally recoverable in respect
thereof have been so recovered. The Master Servicer shall maintain
records, based solely on information provided by the Company and
the Servicer, of each Final Recovery Determination made
thereby.
First Horizon
: First Horizon Home Loan
Corporation and any successor thereto.
First Horizon Assignment
Agreement : The
Assignment, Assumption and Recognition Agreement, dated as of
October 28, 2005, among EMC, the Trustee, and First Tennessee
evidencing the assignment of the First Horizon Servicing Agreement
to the Trust.
First Horizon Loans
: Those Mortgage Loans subject to
this Agreement which were purchased by EMC from First Horizon
pursuant to the First Horizon Servicing Agreement.
First Horizon Servicing
Agreement : the Purchase,
Warranties and Servicing Agreement, dated as of September 1, 2003,
as amended on May 14, 2004, and that certain term sheet dated as of
June 30, 2005, among EMC Mortgage Corporation, First Tennessee and
First Horizon Home Loan Corporation.
First Tennessee
: First Tennessee Mortgage Services,
Inc.
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 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 Company, the Trust Fund and the Securities Administrator and
their respective 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 Certificate registered in the
name of a Holder other than the Depository or its
nominee.
Initial Certification
: The certification by a Custodian
substantially in the form of Exhibit One to the related Custodial
Agreement.
Initial Certificate Principal
Balance : With respect to
any Certificate, the Certificate Principal Balance of such
Certificate or any predecessor Certificate on the Closing
Date.
Initial Mortgage Loan
: A Mortgage Loan transferred and
assigned to the Trustee on the Closing Date pursuant to Section
2.01 and held as a part of the Trust, as identified in the Mortgage
Loan Schedule.
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 Policy
: With respect to any Mortgage Loan
included in the Trust Fund, any insurance policy or LPMI Policy,
including all riders and endorsements thereto in effect with
respect to such Mortgage Loan, including any replacement policy or
policies for any Insurance Policies.
Insurance Proceeds
: Proceeds paid in respect of the
Mortgage Loans pursuant to any Insurance Policy and any other
insurance policy covering a Mortgage Loan, to the extent such
proceeds are payable to the mortgagee under the Mortgage, the
Company, the Servicer or the trustee under the deed of trust and
are not applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the
procedures that the Company or the 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 Certificates and the Residual
Certificates), the sum of (i) the excess of (a) the Current
Interest for such Class with respect to such Distribution Date and
any prior Distribution Dates over (b) the amount actually
distributed to such Class of Certificates with respect to interest
on such Distribution Dates and (ii) interest thereon (to the extent
permitted by applicable law) at the applicable Pass-Through Rate
for such Class for the related Accrual Period including the Accrual
Period relating to such Distribution Date.
Interest Coverage
Account : Shall mean the
account or sub-account established and maintained pursuant to
Section 5.11 and which shall be an Eligible Account or sub-account
of an Eligible Account.
Interest Coverage Distribution
Amount : With respect to
each Distribution Date, an amount equal to (x) the weighted average
of the Net Mortgage Rates on the then outstanding Mortgage Loans,
weighted based on the Stated Principal Balances of such Mortgage
Loans as of the related Due Date prior to giving effect to any
reduction in the Stated Principal Balances of such Mortgage Loans
on such Due Date, multiplied by (y) the sum of (A) the Remaining
Pre-Funded Amount outstanding at the end of the related Due Period
and (B) the aggregate Stated
Principal Balance of the Subsequent
Mortgage Loans that do not have a Subsequent Cut-off Date prior to
the end of the related Due Period, transferred to the Trust during
the related Due Period.
Interest Determination
Date : Shall mean the
second LIBOR Business Day preceding the commencement of each
Accrual Period.
Interest Funds
: With respect to 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 related servicing 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), and (e) all amounts relating to interest with
respect to each Mortgage Loan repurchased by EMC (on its own behalf
as a Seller and on behalf of Master Funding) pursuant to Sections
2.02 and 2.03 and by the Master Servicer pursuant to Section 3.05,
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 6.02, 5.02 and 5.09 or as otherwise set forth in this
Agreement.
Interim Certification
: The certification by a Custodian
substantially in the form of Exhibit Two to the related Custodial
Agreement.
LaSalle : LaSalle Bank National Association, and any
successor thereto.
LaSalle Custodial
Agreement : The Custodial
Agreement, dated as of October 28, 2005, among the Depositor, EMC,
as a seller, Master Funding, as a seller, the Master Servicer, the
Trustee and LaSalle Bank National Association as Custodian relating
to the Mortgage Loans identified in such Custodial
Agreement.
Last Scheduled Distribution
Date : Solely for
purposes of the face of the Certificates as follows: with respect
to the Certificates, the Distribution Date in November
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 Sections 860A through 860G of the Code, the
latest possible maturity date of each Regular Interest issued by
REMIC I, REMIC II and REMIC III shall be the Latest Possible
Maturity Date.
LIBOR Business Day
: Shall mean a day on which banks
are open for dealing in foreign currency and exchange in London and
New York City.
Liquidated Loan
: With respect to any Distribution
Date, a defaulted Mortgage Loan that has been liquidated through
deed-in-lieu of foreclosure, foreclosure sale, trustee’s sale
or other realization as provided by applicable law governing the
real property subject to the related
Mortgage and any security agreements
and as to which the Company or the 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.
Loss Allocation
Limitation : The meaning
specified in Section 6.05(b) hereof.
LPMI Fee : Shall mean the fee payable to the insurer for
each Mortgage Loan subject to an LPMI Policy as set forth in such
LPMI Policy.
LPMI Policy
: A policy of mortgage guaranty
insurance issued by an insurer meeting the requirements of Fannie
Mae and Freddie Mac in which the Company or the 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
Interest and any Distribution Date, a per annum rate equal to two
(2) times the weighted average of the Uncertificated REMIC I
Pass-Through Rates for the REMIC I Regular Interests (other than
REMIC I Regular Interest AA), with the rate on each such REMIC I
Regular Interest (other than REMIC I Regular Interest ZZ) subject
to a cap equal to the Pass-Through Rate for the Corresponding
Certificate 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 for
such Distribution Date; provided, however, that for this purpose,
the Pass-Through Rate with respect to each REMIC I Regular Interest
other than REMIC I Regular Interests AA and ZZ shall be multiplied
by a fraction, the numerator of which is the actual number of days
in the Accrual Period for the Corresponding Certificate and the
denominator of which is 30.
Master Funding
: Master Funding LLC, a Delaware
limited liability company, and its successors and assigns, in its
capacity as the seller of the Master Funding Mortgage Loans to the
Depositor.
Master Funding Mortgage
Loans : The Mortgage
Loans identified as such on the Mortgage Loan Schedule for which
Master Funding is the applicable Seller.
Master Servicer
: LaSalle Bank National Association,
in its capacity as master servicer, and its successors and assigns
or any successor master servicer appointed as herein
provided.
Master Servicer
Certification : A written
certification signed by a Master Servicing Officer 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.
Master Servicer Collection
Account : The trust
accounts or accounts created and maintained pursuant to Section
5.06 hereof, which shall be entitled “LaSalle Bank National
Association, as master servicer, on behalf of Citibank, N.A., as
Trustee f/b/o holders of Bear Stearns Asset Backed Securities I
LLC, Mortgage-Backed Certificates, Series 2005-8 - Master Servicer
Collection Account”. The Master Servicer Collection Account
may be a sub-account of the Distribution Account.
Master Servicing
Compensation : For any
Distribution Date, the Master Servicing Fee for such Distribution
Date.
Master Servicing Fee
: As to each Mortgage Loan and any
Distribution Date, an amount equal to 1/12th of the Master
Servicing Fee Rate multiplied by the Stated Principal Balance of
such Mortgage Loan as of the first day of the month of the related
Distribution Date.
Master Servicing Fee
Rate : 0.0200% per
annum.
Master Servicing
Officer : Any officer of
the Master Servicer responsible for the master servicing of the
Mortgage Loans.
Maximum Mortgage Rate
: With respect to each Adjustable
Rate Mortgage Loan, the percentage set forth in the related
Mortgage Note as the maximum Mortgage Rate thereunder.
Maximum Uncertificated Accrued
Interest Deferral Amount : With respect to any Distribution Date, the
excess of (i) accrued interest at the Uncertificated REMIC I
Pass-Through Rate applicable to REMIC I Regular Interest ZZ for
such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC I Regular Interest ZZ minus the REMIC I
Overcollateralized Amount, in each case for such Distribution Date,
over (ii) the aggregate amount of Uncertificated Accrued Interest
for such Distribution Date on the REMIC I Regular Interests (other
than REMIC I Regular Interests AA and ZZ), with the rate on each
such REMIC I Regular Interest subject to a cap equal to the
Pass-Through Rate
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.
Minimum Mortgage Rate
: With respect to each Adjustable
Rate Mortgage Loan, the percentage set forth in the related
Mortgage Note as the minimum Mortgage Rate thereunder.
MOM Loan : With respect to any Mortgage Loan, MERS acting
as the mortgagee of such Mortgage Loan, solely as nominee for the
originator of such Mortgage Loan and its successors and assigns, at
the origination thereof.
Monthly Statement
: The statement prepared and
delivered by the Securities Administrator pursuant to Section
6.06.
Moody’s
: Moody’s Investors Service,
Inc., and any successor thereto.
Mortgage : The mortgage, deed of trust or other
instrument creating a second lien on or second priority ownership
interest in an estate in fee simple in real property securing a
Mortgage Note.
Mortgage File
: The mortgage documents listed in
Section 2.01 hereof pertaining to a particular Mortgage Loan and
any additional documents delivered to the related Custodian to be
added to the Mortgage File pursuant to this Agreement and the
related Custodial Agreement.
Mortgage Loan Purchase
Agreement : The Mortgage
Loan Purchase Agreement, dated as of October 28, 2005, among EMC,
as a seller, Master Funding, as a 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 11.01, to be paid in connection
with the repurchase of the Mortgage Loans pursuant to Section
11.01.
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 Schedule
: The list of Mortgage Loans (as
from time to time amended by the Company or the Master Servicer to
reflect the deletion of Deleted Mortgage Loans and the addition of
Replacement Mortgage Loans pursuant to the provisions of this
Agreement)
transferred to the Trustee as part
of the Trust Fund and from time to time subject to this Agreement,
the initial Mortgage Loan Schedule being attached hereto as Exhibit
B, with respect to the Initial Mortgage Loans and the schedule
attached as Exhibit 1 to the related Subsequent Transfer Instrument
with respect to the related Subsequent Mortgage Loans, and as
amended from time to time to reflect the repurchase or substitution
of Initial Mortgage Loans or the addition of Subsequent Mortgage
Loans pursuant to this Agreement, the Mortgage Loan Purchase
Agreement or the Subsequent Mortgage Loan Purchase Agreement, as
the case may be, 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 mortgage
rate;
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(iii)
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the Master Servicing Fee and
Servicing Fee;
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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 lender paid primary mortgage
insurance fee, if any;
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(vi)
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the current net mortgage
rate;
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(vii)
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the stated maturity date;
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(viii)
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the original principal
balance;
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(ix)
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the current principal
balance;
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(x)
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the stated original term to
maturity;
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(xi)
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the stated remaining term to
maturity;
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(xii)
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the property type;
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(xiii)
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the MIN with respect to each MOM
Loan;
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(xiv) with
respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage
Rate;
(xv) with
respect to each Adjustable Rate Mortgage Loan, the Maximum Mortgage
Rate;
(xvi) with
respect to each Adjustable Rate Mortgage Loan, the Gross
Margin;
(xvii) with respect
to each Adjustable Rate Mortgage Loan, the next Adjustment
Date;
(xix) a code
indicating whether the Mortgage Loan is an EMC Mortgage Corporation
Loan or a Master Funding Mortgage Loan; and
(xx) such
other information as the Master Servicer reasonably deems necessary
to be included on the Mortgage Loan Schedule for the master
servicing of the Mortgage Loans.
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 Mortgage
Loan, the rate set forth in the related Mortgage Note. With respect
to each Subsequent Mortgage Loan, the annual rate at which interest
accrues on such Subsequent Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note. With
respect to each Mortgage Loan and Subsequent 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 related Mortgage Rate
less the sum of (i) the Servicing Fee Rate, (ii) the Master
Servicing Fee Rate and (iii) the rate at which the LPMI Fee is
calculated, if any.
Net Rate Cap
: With respect to any Distribution
Date and any Class of Certificates (other than the Class C
Certificates and Class R Certificates), the lesser of (i) 11.00%
per annum and (ii) a per annum rate equal to the weighted average
of the Net Mortgage Rates on the then outstanding Mortgage Loans,
weighted based on their Stated Principal Balances 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. The Net
Rate Cap for such Classes of Certificates, will be calculated based
on a 360-day year and the actual number of days elapsed in the
related Accrual Period. For federal income tax purposes, however,
the rate determined pursuant to the immediately preceding clause
(ii) shall be the equivalent of the foregoing, expressed as the
weighted average of (adjusted for the actual number of days elapsed
in the related Accrual Period) the Uncertificated REMIC I
Pass-Through Rates on the REMIC I Regular Interests, weighted on
the basis of the Uncertificated Principal Balances of each such
REMIC I Regular Interest.
Non-Book-Entry
Certificate : Any
Certificate other than a Book-Entry Certificate.
Nonrecoverable Advance
: Any portion of an Advance
previously made or proposed to be made by the Company or the Master
Servicer pursuant to this Agreement that, in the good faith
judgment of the Company or 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.
Offered Certificates
: Any 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.
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, the Seller 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 Sellers, the Securities Administrator, the
Master Servicer and/or the Trustee, as the case may be, as required
by this Agreement.
One-Month LIBOR
: With respect to any Accrual
Period, the rate determined by the Securities Administrator on the
related Interest Determination Date on the basis of the rate for
U.S. dollar deposits for one month that appears on Telerate Screen
Page 3750 as of 11:00 a.m. (London time) on such Interest
Determination Date; provided that the parties hereto acknowledge
that One-Month LIBOR for the first Accrual Period shall equal
4.070% per annum. If such rate does not appear on such page (or
such other page as may replace that page on that service, or if
such service is no longer offered, such other service for
displaying One-Month LIBOR or comparable rates as may be reasonably
selected by the Securities Administrator), One-Month LIBOR for the
applicable Accrual Period will be the Reference Bank Rate. If no
such quotations can be obtained by the Securities Administrator and
no Reference Bank Rate is available, One-Month LIBOR will be
One-Month LIBOR applicable to the preceding Accrual Period. The
establishment of One-Month LIBOR on each Interest Determination
Date by the Securities Administrator and the Securities
Administrator’s calculation of the rate of interest
applicable to the Class A, Class M and Class B Certificates for the
related Accrual Period shall, in the absence of manifest error, be
final and binding.
Opinion of Counsel
: A written opinion of counsel, who
may be counsel for EMC, the Depositor, the Company or the Master
Servicer, reasonably acceptable to each addressee of such opinion;
provided that with respect to Section 2.05, 8.05, 8.07 or 12.01, or
the interpretation or application of the REMIC Provisions, such
counsel must (i) in fact be independent of EMC, Depositor, the
Company and the Master Servicer, (ii) not have any direct financial
interest in EMC, the Depositor, the Company or the Master Servicer
or in any affiliate of either, and (iii) not be connected with EMC,
the Depositor, the Company or the Master Servicer as an officer,
employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
Optional Termination
: The termination of the Trust Fund
created hereunder as a result of the purchase of all of the
Mortgage Loans and any REO Property pursuant to the last sentence
of Section 11.01 hereof.
Optional Termination
Date : The Distribution
Date on which the Stated Principal Balance of all of the Mortgage
Loans, together with the Remaining Pre-Funded Amount, is equal to
or less than 20% of the Stated Principal Balance of all of the
Mortgage Loans as of the Cut-off Date, plus the amount in the
Pre-Funding Account as of the Closing 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.
Outstanding
: With respect to the Certificates
as of any date of determination, all Certificates theretofore
executed and authenticated under this Agreement except:
(a) Certificates
theretofore canceled by the Securities Administrator or delivered
to the Securities Administrator for cancellation; and
(b) Certificates
in exchange for which or in lieu of which other Certificates have
been executed and delivered by the Securities Administrator
pursuant to this Agreement.
Outstanding Mortgage
Loan : As of any date of
determination, a Mortgage Loan with a Stated Principal Balance
greater than zero that was not the subject of a Principal
Prepayment in full, and that did not become a Liquidated Loan,
prior to the end of the related Prepayment Period.
Overcollateralization
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 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, 4.70% 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) 4.70%
of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date and (2) 9.40% 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, for purposes of the definition of
“Marker Rate” and “Maximum Uncertificated Accrued
Interest Deferral Amount”, each REMIC I Regular Interest
(other than REMIC I Regular Interests AA and ZZ), and any
Distribution Date, a rate per annum equal to the lesser of (i)
One-Month LIBOR plus the related Certificate Margin 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 (x) the sum of
the amount determined for each REMIC I Regular Interest equal to
the product of (a) the excess, if any, of the Uncertificated REMIC
I Pass-Through Rate for such REMIC I Regular Interest over the
Marker Rate and (b) a notional amount equal to the Uncertificated
Principal Balance of such REMIC I Regular Interest, and the
denominator of which is (y) the aggregate Uncertificated Principal
Balance of such REMIC I Regular Interests.
Percentage Interest
: With respect to any Certificate of
a specified Class, the Percentage Interest set forth on the face
thereof or the percentage obtained by dividing the Denomination of
such Certificate by the aggregate of the Denominations of all
Certificates of such Class.
Permitted Investments
: At any time, any one or more of
the following obligations and securities:
(i) obligations
of the United States or any agency thereof, provided such
obligations are backed by the full faith and credit of the United
States;
(ii) general
obligations of or obligations guaranteed by any state of the United
States or the District of Columbia receiving the highest long-term
debt rating of each Rating Agency, or such lower rating as will not
result in the downgrading or withdrawal of the ratings then
assigned to the Certificates by each Rating Agency, as evidenced in
writing;
(iii) commercial
or finance company paper which is then receiving the highest
commercial or finance company paper rating of each Rating Agency,
or such lower rating as will not result in the downgrading or
withdrawal of the ratings then assigned to the Certificates by each
Rating Agency, as evidenced in writing;
(iv) certificates
of deposit, demand or time deposits, or bankers’ acceptances
issued by any depository institution or trust company incorporated
under the laws of the United States or of any state thereof and
subject to supervision and examination by federal and/or state
banking authorities (including the Trustee, the Master Servicer and
the Securities Administrator 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 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 each
Rating Agency, as evidenced in writing;
(v) guaranteed
reinvestment agreements issued by any bank, insurance company or
other corporation containing, at the time of the issuance of such
agreements, such terms and conditions as will not result in the
downgrading or withdrawal of the rating then assigned to the
Certificates by each Rating Agency, as evidenced in
writing;
(vi) repurchase
obligations with respect to any security described in clauses (i)
and (ii) above, in either case entered into with a depository
institution or trust company (acting as principal) described in
clause (v) above;
(vii) securities
(other than stripped bonds, stripped coupons or instruments sold at
a purchase price in excess of 115% of the face amount thereof)
bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States or any state
thereof which, at the time of such investment, have one of the two
highest short term ratings of each Rating Agency (except if the
Rating Agency is Moody’s, such rating shall be the highest
commercial paper rating of Moody’s for any such securities),
or such lower rating as will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by any
Rating Agency, as evidenced by a signed writing delivered by each
Rating Agency;
(viii) interests
in any money market fund (including any such fund managed or
advised by the Master Servicer and the Securities Administrator 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 rating such fund or such lower rating as will
not result in the downgrading or withdrawal of the ratings then
assigned to the Certificates by each Rating Agency, as evidenced in
writing;
(ix) short
term investment funds sponsored by any trust company or banking
association incorporated under the laws of the United States or any
state thereof (including any such fund managed or advised by the
Trustee or the Master Servicer or the Securities Administrator or
any affiliate thereof) which on the date of acquisition has been
rated by each Rating Agency in their highest applicable rating
category or such lower rating as will not result in the downgrading
or withdrawal of the ratings then assigned to the Certificates by
each Rating Agency, as evidenced in writing; and
(x) such
other investments having a specified stated maturity and bearing
interest or sold at a discount acceptable to each Rating Agency and
will not result in the downgrading or withdrawal of the rating then
assigned to the Certificates by each Rating Agency, as evidenced by
a signed writing delivered by each Rating Agency;
provided, that no such instrument
shall be a Permitted Investment if such instrument (i) evidences
the right to receive interest only payments with respect to the
obligations underlying such instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep discount;
provided
further that no such instrument
shall be a Permitted Investment (A) if such instrument evidences
principal and interest payments derived from obligations underlying
such instrument and the interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the
yield to maturity at par of such underlying obligations, or (B) if
it may be redeemed at a price below the purchase price (the
foregoing clause (B) not to apply to investments in units of money
market funds pursuant to clause (viii) above); provided further
that no amount beneficially owned by any REMIC may be invested in
investments (other than money market funds) treated as equity
interests for federal income tax purposes, unless the Securities
Administrator shall receive an Opinion of Counsel, at the expense
of the Securities Administrator, 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 the imposition of a tax on any such
REMIC. Permitted Investments that are subject to prepayment or call
may not be purchased at a price in excess of par.
Permitted Transferee
: Any person (x) other than (i) the
United States, any State or political subdivision thereof, any
possession of the United States or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International
Organization or any agency or instrumentality of either of the
foregoing, (iii) an organization (except certain farmers’
cooperatives described in section 521 of the Code) that is exempt
from tax imposed by Chapter 1 of the Code (including the tax
imposed by section 511 of the Code on unrelated business taxable
income) on any excess inclusions (as defined in section 860E(c)(1)
of the Code) with respect to any Residual Certificate, (iv) rural
electric and telephone cooperatives described in section
1381(a)(2)(C) of the Code or (v) an electing large partnership
within the meaning of Section 775(a) of the Code, (y) that is a
citizen or resident of the United States, a corporation,
partnership (other than a partnership that has any direct or
indirect foreign partners) or other entity (treated as a
corporation or a partnership for federal income tax purposes),
created or organized in or under the laws of the United States, any
State thereof or the District of Columbia, an estate whose income
from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of
its connection with the conduct of a trade or business within the
United States, or a trust if a court within the United States is
able to exercise primary supervision over the administration of the
trust and one or more United States persons have authority to
control all substantial decisions of the trust or if it has a valid
election in effect under applicable U.S. Treasury regulations to be
treated as a United States person and (z) other than any other
Person so designated by the Securities Administrator based upon an
Opinion of Counsel addressed to the Securities Administrator and
the Trustee (which shall not be an expense of the Trustee or the
Securities Administrator) that states that the Transfer of an
Ownership Interest in a Residual Certificate to such Person may
cause REMIC I, REMIC II or REMIC III 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.
Pre-Funded Amount
: The amount deposited by the
Securities Administrator on behalf of the Trustee, upon the
Securities Administrator’s receipt of such amount from the
Depositor, in the Pre-Funding Account on the Closing Date for the
Subsequent Mortgage Loans, which amount is approximately
$2,303,337.
Pre-Funding Account
: As defined in Section
5.10(a).
Pre-Funding Period
: The period from the Closing Date
until the earliest of (i) the date on which the amount on deposit
in the Pre-Funding Account (exclusive of investment income) is
reduced to zero and (ii) January 17, 2006.
Prepayment Assumption
: A prepayment rate for the Mortgage
Loans of 35% CPR.
Prepayment Charge
: Any prepayment premium, penalty or
charge payable by a Mortgagor in connection with any Principal
Prepayment on a Mortgage Loan pursuant to the terms of the related
Mortgage Note.
Prepayment Interest
Excess : With respect to
any Distribution Date, for each EMC Mortgage Loan that was the
subject of a Principal Prepayment in full or in part during the
portion of the related Prepayment Period occurring between the
first day of the calendar month in which such Distribution Date
occurs and the Determination Date of the calendar month in which
such Distribution Date occurs, an amount equal to interest (to the
extent received) at the applicable Net Mortgage Rate on the amount
of such Principal Prepayment for the number of days commencing on
the first day of the calendar month in which such Distribution Date
occurs and ending on the last date through which interest is
collected from the related Mortgagor.
Prepayment Interest
Shortfall : With respect
to any Distribution Date and any EMC Mortgage Loan, 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, 3.05 or 11.01
hereof), the amount, if any, by which (i) one month’s
interest at the applicable Net Mortgage Rate on the Stated
Principal Balance of such Mortgage Loan immediately prior to such
Principal 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 Master Servicing 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
any Distribution Date, an amount equal to (x) the sum of (1) the
Principal Remittance Amount for such Distribution Date and (2) any
Extra Principal Distribution Amount for such Distribution Date
minus (y) the amount of any Overcollateralization Release Amount
for such Distribution Date.
Principal Funds
: With respect to any Distribution
Date, (i) the sum, without duplication, of (a) all scheduled
principal collected during the related Due Period, (b) all Advances
relating to principal made on or 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 a Seller and on behalf
of Master Funding) pursuant to Sections 2.02 and 2.03, (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(d), (f) all Liquidation Proceeds and
Subsequent Recoveries collected during the related Prepayment
Period (to the extent such Liquidation Proceeds and Subsequent
Recoveries relate to principal), in each case to the extent
remitted by the Master Servicer to the Distribution Account
pursuant to this Agreement and (g) amounts in respect of principal
paid by the Majority Class C Certificateholder or the Master
Servicer, as applicable, pursuant to Section 11.01, minus (ii) all
amounts required to be reimbursed pursuant to Sections 5.02 and
5.09 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, 3.05 and 11.01 hereof) that is received in advance of its
scheduled Due Date and is not accompanied by an amount as to
interest representing scheduled interest due on any date or dates
in any month or months subsequent to the month of prepayment.
Partial Principal Prepayments shall be applied by the Company or
the 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 (g) of the definition of Principal Funds.
Private Certificates
: Any of the Class B-4, Class C and
Residual Certificates.
Prospectus Supplement
: The Prospectus Supplement dated
October 27, 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
: Each account established with
respect to receipts on the Mortgage Loans and REO Property in
accordance with Section 5.01 hereof or by the Servicer in
accordance with the First Horizon Servicing Agreement. Each
Protected Account shall be an Eligible Account.
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 3.05 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 and
(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 S&P, Moody’s and
Fitch. 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 and Securities Administrator.
References herein to a given rating category of each 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 Company pursuant to this Agreement or the Servicer pursuant
to the First Horizon Servicing Agreement. In addition, to the
extent the Company, the Servicer or 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 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
and Residual 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 Securities Administrator and engaged in transactions in
Eurodollar deposits in the international Eurocurrency market (i)
with an established place of business in London, (ii) which have
been designated as such by the Securities Administrator and (iii)
which are not controlling, controlled by, or under common control
with, the Depositor, the Sellers 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
Securities Administrator, as of 11:00 a.m., New York City time, on
such date for loans in United States dollars to leading European
banks for a period of one month in amounts approximately equal to
the aggregate Certificate Principal Balance of the Class 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.
Remaining Pre-Funded
Amount : An amount equal
to the Pre-Funded Amount minus the amount equal to 100% of the
aggregate Stated Principal Balance of the Subsequent Mortgage Loans
transferred to the Trust Fund during the Pre-Funding
Period.
REMIC : A “real estate mortgage investment
conduit” within the meaning of section 860D of the
Code.
REMIC I : The segregated pool of assets described in the
Preliminary Statement and Section 5.07(a).
REMIC I Interest Loss Allocation
Amount : With respect to
any Distribution Date, an amount (subject to adjustment based on
the actual number of days elapsed in the respective Accrual Period)
equal to (a) the product of (i) 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, 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 Regular Interest
A-1 : One of the separate
non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a Regular Interest in REMIC I.
REMIC
I Regular Interest A-1 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set forth in the Preliminary Statement
hereto.
REMIC I Regular Interest
A-2 : One of the separate
non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a Regular Interest in REMIC I. REMIC I
Regular Interest A-2 shall accrue interest at the related
Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject
to the terms and conditions hereof, in an aggregate amount equal to
its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC I Regular Interest
A-3 : One of the separate
non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a Regular Interest in REMIC I. REMIC I
Regular Interest A-3 shall accrue interest at the related
Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject
to the terms and conditions hereof, in an aggregate amount equal to
its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC I Regular Interest
AA : One of the separate
non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a Regular Interest in REMIC I. REMIC I
Regular Interest AA shall accrue interest at the related
Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject
to the terms and conditions hereof, in an aggregate amount equal to
its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC I Regular Interest
B-1 : One of the separate
non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a Regular Interest in REMIC I. REMIC I
Regular Interest B-1 shall accrue interest at the related
Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject
to the terms and conditions hereof, in an aggregate amount equal to
its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC I Regular Interest
B-2 : One of the separate
non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a Regular Interest in REMIC I. REMIC I
Regular Interest B-2 shall accrue interest at the related
Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject
to the terms and conditions hereof, in an aggregate amount equal to
its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC I Regular Interest
B-3 : One of the separate
non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a Regular Interest in REMIC I. REMIC I
Regular Interest B-3 shall accrue interest at the related
Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject
to the terms and conditions hereof, in an aggregate amount equal to
its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC I Regular Interest
B-4 : One of the separate
non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a Regular Interest in REMIC I. REMIC I
Regular Interest B-4 shall accrue interest at the related
Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject
to the terms and conditions hereof, in an aggregate amount equal to
its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC I Regular Interest
M-1 : One of the separate
non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a Regular Interest in REMIC I. REMIC I
Regular Interest M-1 shall accrue interest at the related
Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject
to the terms and conditions hereof, in an aggregate amount equal to
its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC I Regular Interest
M-2 : One of the separate
non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a Regular Interest in REMIC I. REMIC I
Regular Interest M-2 shall accrue interest at the related
Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject
to the terms and conditions hereof, in an aggregate amount equal to
its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC I Regular Interest
M-3 : One of the separate
non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a Regular Interest in REMIC I. REMIC I
Regular Interest M-3 shall accrue interest at the related
Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject
to the terms and conditions hereof, in an aggregate amount equal to
its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC I Regular Interest
M-4 : One of the separate
non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a Regular Interest in REMIC I. REMIC I
Regular Interest M-4 shall accrue interest at the related
Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject
to the terms and conditions hereof, in an aggregate amount equal to
its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC I Regular Interest
M-5 : One of the separate
non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a Regular Interest in REMIC I. REMIC I
Regular Interest M-5 shall accrue interest at the related
Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject
to the terms and conditions hereof, in an aggregate amount equal to
its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC I Regular Interest
ZZ : One of the separate
non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a Regular Interest in REMIC I. REMIC I
Regular Interest ZZ shall accrue interest at the related
Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject
to the
terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set forth in the Preliminary Statement
hereto.
REMIC 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 described in the
Preliminary Statement and Section 5.07(a).
REMIC Opinion
: Shall mean an Opinion of Counsel
to the effect that the proposed action will not cause any of REMIC
I, REMIC II or REMIC III 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 (i) with respect to the
Company, the Distribution Account Deposit Date and (ii) with
respect to the Servicer, each Business Day as specified in the
First Horizon Servicing Agreement.
Remittance Report:
Shall mean a report to the
Securities Administrator in an electronic format (or by such other
means as the Master Servicer and the Securities Administrator may
agree from time to time) containing such data and information, as
agreed to by the Master Servicer and the Securities Administrator
such as to permit the Securities Administrator to prepare the
Monthly Statement to Certificateholders.
REO Imputed Interest
: As to any REO Property, for any
calendar month during which such REO Property was at any time part
of REMIC I, one month’s interest at the applicable Net
Mortgage Rate on the Stated Principal Balance of such REO Property
(or, in the case of the first such calendar month, of the related
Mortgage Loan, if appropriate) as of the close of business on the
Distribution Date in such calendar month.
REO Property
: A Mortgaged Property acquired by
the Company or the Servicer on behalf of the Trust Fund 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) 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 Combined 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; (x) the related Custodian has delivered a
Final Certification noting no defects or exceptions.
Repurchase Price
: With respect to each Mortgage
Loan, a price equal to (i) the outstanding principal balance of
such Mortgage Loan, plus (ii) interest on such outstanding
principal balance at the Mortgage Rate (net of the Servicing Fee
Rate) from the last date through which interest has been paid to
the end of the month of repurchase, less (iii) amounts advanced by
the Company, the Servicer or the Master Servicer in respect of such
repurchased Mortgage Loan which are being held in the Master
Servicer Collection Account for remittance to the Securities
Administrator plus (iv) any costs and damages (if any) incurred by
the Trust in connection with any violation of such Mortgage Loan of
any anti-predatory lending laws.
Request for Release
: The Request for Release to be
submitted by the Sellers, the Company, the Servicer or the Master
Servicer to the respective Custodian substantially in the form of
Exhibit G hereto or other form attached as an exhibit to the
related Custodial Agreement. Each Request for Release furnished to
the respective Custodian by the Sellers, the Company, the Servicer
or the Master Servicer shall be in duplicate and shall be executed
by an officer of such Person or a Servicing Officer (or, if
furnished electronically to the respective Custodian, shall be
deemed to have been sent and executed by an officer of such Person
or a Servicing Officer) of the Sellers, the Company, the Servicer
or the Master Servicer, as applicable.
Required Insurance
Policy : With respect to
any Mortgage Loan, any insurance policy that is required to be
maintained from time to time under this Agreement or the First
Horizon Servicing Agreement.
Reserve Fund
: Shall mean the separate trust
account created and maintained by the Securities Administrator
pursuant to Section 4.14 hereof.
Reserve Fund Deposit
: With respect to the Reserve Fund,
an amount equal to $5,000, which the Depositor shall initially
deposit into the Reserve Fund pursuant to Section 4.14
hereof.
Residual Certificates
: The Class R-1, Class R-2 and Class
R-X Certificates, each evidencing the Residual Interest 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 and
the Securities Administrator, any Vice President, any Assistant
Vice President, the Secretary, any Assistant Secretary, or any
Trust Officer in its respective Corporate Trust Office 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 or the
Securities Administrator as specified by the Trustee or the
Securities Administrator, respectively, 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.
Securities
Administrator : LaSalle
Bank National Association, in its capacity as securities
administrator hereunder, and its successors and assigns.
Seller : EMC or Master Funding, in each case in such
capacity under the Mortgage Loan Purchase Agreement.
Senior Certificates
: Any of the Class A
Certificates.
Servicer : Shall mean First Tennessee.
Servicing Advances
: All customary, reasonable and
necessary “out of pocket” costs and expenses (including
reasonable legal fees) incurred in the performance by the Company
or the Servicer of its servicing obligations hereunder or under the
First Horizon Servicing Agreement, including, but not limited to,
the cost of (i) the preservation, restoration and protection of a
Mortgaged Property, (ii) any enforcement or judicial proceedings,
including foreclosures, and including any expenses incurred in
relation to any such proceedings that result from the Mortgage Loan
being registered in the MERS® System, (iii) the management and
liquidation of any REO Property (including, without limitation,
realtor’s commissions) and (iv) compliance with any
obligations under Section 3.07 hereof to cause insurance to be
maintained.
Servicing Fee
: As to each EMC Mortgage Loan and
any Distribution Date, an amount equal to 1/12 th of the
Servicing Fee Rate multiplied by the Stated Principal Balance of
such EMC Mortgage Loan payable solely from interest collections as
of the Due Date in the month preceding the month in which such
Distribution Date occurs. As to each Mortgage Loan serviced by the
Servicer and any Distribution Date, an amount equal to 1/12
th of the unpaid principal balance of each such mortgage
loan payable solely from interest collections, as of the Due Date
in the month preceding the month in which such Distribution Date
occurs.
Servicing Fee Rate
: 0.5000% per annum with respect to
the EMC Mortgage Loans and with respect to the Mortgage Loans
serviced by the Servicer.
Servicing Officer
: Any officer of the Company or the
Servicer involved in, or responsible for, the administration and
servicing of the Mortgage Loans (i) in the case of the Company,
whose name and facsimile signature appear on a list of servicing
officers furnished to the Master Servicer by the Company on the
Closing Date pursuant to this Agreement, as such list may
from
time to time be amended and (ii) in
the case of the Servicer, as to which evidence reasonably
acceptable to the Master Servicer, as applicable, of due
authorization, by such party has been furnished from time to time
to the Master Servicer.
Sixty-Day Plus Delinquency
Percentage : With respect
to any Distribution Date, is 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,
including Mortgage Loans in foreclosure, REO and Mortgage Loans
with a related Mortgagor subject to bankruptcy proceedings, and the
denominator of which is the aggregate Stated Principal Balance of
all of the Mortgage Loans immediately preceding the relevant
Distribution Date.
Startup Day
: The Startup Day for each REMIC
formed hereunder shall be the Closing Date.
Stated Principal
Balance : With respect to
any Mortgage Loan or related REO Property and any Distribution
Date, the Cut-off Date Principal Balance thereof minus the sum of
(i) the principal portion of the Scheduled Payments due with
respect to such Mortgage Loan during each Due Period ending prior
to such Distribution Date (and irrespective of any delinquency in
their payment), (ii) all Principal Prepayments with respect to such
Mortgage Loan received prior to or during the related Prepayment
Period, and all Liquidation Proceeds to the extent applied by the
Company or the Servicer as recoveries of principal in accordance
with Section 3.12 or the First Horizon Servicing Agreement with
respect to such Mortgage Loan, that were received by the Company or
the 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 the applicable Prepayment Period) is
greater than or equal to 68.30%.
Subordinated
Certificates : The Class
M, Class B, Class C and Residual Certificates.
Subsequent Cut-off
Date : Shall mean with
respect to those Subsequent Mortgage Loans sold to the Trust Fund
pursuant to a Subsequent Transfer Instrument, the later of (i) the
first day of the month in which the related Subsequent Transfer
Date occurs or (ii) the date of origination of such Mortgage
Loan.
Subsequent Mortgage Loan Purchase
Agreement : The agreement
dated as of the Subsequent Transfer Date, between EMC, as seller,
and Bear Stearns Asset Backed Securities I LLC, as purchaser, and
all amendments thereof and supplements thereto, regarding the
transfer of the Subsequent Mortgage Loans by EMC to Bear Stearns
Asset Backed Securities I LLC, a form of which is attached as
Exhibit N.
Subsequent Mortgage
Loans : Shall mean the
Mortgage Loans which will be acquired by the Trust during the
Pre-Funding Period with amounts on deposit in the Pre-Funding
Account.
Subsequent Transfer
Date : Shall mean with
respect to each subsequent transfer instrument, the date on which
the Subsequent Mortgage Loans are sold to the Trust.
Subsequent Transfer
Instrument : Each
Subsequent Transfer Instrument, dated as of a Subsequent Transfer
Date, executed by the Depositor at the written direction of the
Depositor and substantially in the form of Exhibit O, by which
Subsequent Mortgage Loans are transferred to the Trust
Fund.
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, Company and the
Servicer to cover estimated expenses (including, but not limited
to, recoveries in respect of the representations and warranties
made by EMC 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 Company and a subservicer with respect to the subservicing of
any Mortgage Loan hereunder by such subservicer.
Substitution Adjustment
Amount : The meaning
ascribed to such term pursuant to Section 2.03(d).
Successor Master
Servicer : The meaning
ascribed to such term pursuant to Section 8.06.
Tax Matters Person
: The person designated as
“tax matters person” in the manner provided under
Treasury Regulation Sections 1.860F-4(d) and 301.6231(a)(7)-1T. The
holder of the greatest Percentage Interest in a Class of Residual
Certificates shall be the Tax Matters Person for the related REMIC.
The Securities Administrator, or any successor thereto or assignee
thereof, shall serve as tax administrator hereunder and as agent
for the related Tax Matters Person.
Transfer : Any direct or indirect transfer or sale of any
Ownership Interest in a Certificate.
Transfer Affidavit
: As defined in Section
7.02(c)(ii).
Trigger Event
: With respect to any Distribution
Date, a “Trigger Event” shall have occurred if any of
the following tests is not satisfied: (i) the Sixty-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
10.50%.
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
Reserve Fund, the Master Servicer Collection Account maintained by
the Master Servicer and the Protected Accounts maintained by the
Company and the Servicer and all amounts deposited therein pursuant
to the applicable provisions of this Agreement and the First
Horizon Servicing 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
First Horizon Servicing Agreement and the Assignment Agreement;
(vi) the rights under the Mortgage Loan Purchase Agreement; and
(vii) all proceeds of the foregoing, including proceeds of
conversion, voluntary or involuntary, of any of the foregoing into
cash or other liquid property.
Trustee : Citibank, N.A., 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.
Uncertificated Accrued
Interest : With respect
to each REMIC I Regular Interest on each Distribution Date, an
amount equal to one month’s interest at the related
Uncertificated REMIC I Pass-Through Rate on the Uncertificated
Principal Balance of such REMIC I Regular Interest. In each case,
Uncertificated Accrued Interest will be reduced by any 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 for such Distribution Date.
Uncertificated Principal
Balance : With respect to
each REMIC I Regular Interest and Class C Interest, the principal
amount of such REMIC I Regular 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 and Class C Interest shall equal the amount set forth in
the Preliminary Statement hereto as its initial Uncertificated
Principal Balance. On each Distribution Date, the Uncertificated
Principal Balance of each REMIC I Regular Interest and Class C
Interest shall be reduced by all distributions of principal made on
such REMIC I Regular Interest on such Distribution Date pursuant to
Section 6.07 and, if and to the extent necessary and appropriate,
shall be further reduced on such Distribution Date by Realized
Losses as provided in Section 6.05, and the Uncertificated
Principal Balance of REMIC I Regular Interest ZZ shall be increased
by interest deferrals as provided in Section 6.07(b)(i). The
Uncertificated Principal Balance of each REMIC I Regular Interest
and Class C 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 of the Mortgage Loans as of the first day of the related Due
Period, weighted on the basis of the Stated Principal Balances of
such Mortgage Loans as of the first day of the related Due
Period.
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% to the Class A, Class M and Class B Certificates,
(ii) 3% to the Class C Certificates until paid in full, and (iii)
1% to each Class of Residual Certificates, with the allocation
among the Certificates (other than the Class C Certificates and the
Residual Certificates) to be in proportion to the Certificate
Principal Balance of each Class relative to the Certificate
Principal Balance of all other such Classes. Voting Rights will be
allocated among the Certificates of each such Class in accordance
with their respective Percentage Interests.
Wells Fargo
: Wells Fargo Bank, National
Association, and any successor thereto.
Wells Fargo Custodial
Agreement : The Custodial
Agreement, dated as of October 28, 2005, among the Depositor, EMC,
as a seller, Master Funding, as a seller, the Master Servicer, the
Trustee and Wells Fargo Bank, National Association as Custodian
relating to the Mortgage Loans identified in such Custodial
Agreement.
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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, Class M, Class B, 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 Company or the Master
Servicer pursuant to Section 6.02) 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 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.
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 Company or the Master Servicer) and any Relief Act
Interest Shortfalls incurred in respect of the Mortgage Loans for
any Distribution Date shall be allocated first, to Uncertificated
Accrued Interest payable to REMIC I Regular
Interest AA and REMIC I Regular
Interest ZZ up to an aggregate amount equal to the REMIC I Interest
Loss Allocation Amount, 98% and 2%, respectively, and thereafter
among REMIC I Regular Interest AA, REMIC I Regular Interest A-1,
REMIC I Regular Interest A-2, REMIC I Regular Interest A-3, REMIC I
Regular Interest 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 Uncertificated REMIC I Pass-Through Rates on the
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, each Seller sold, transferred, assigned, set
over and otherwise conveyed to the Depositor, without recourse, all
the right, title and interest of such 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 Trust
Fund.
The Depositor, EMC, the Master
Servicer, the Securities Administrator and the Trustee agree that
it is not intended that any mortgage loan be included in the Trust
that is either (i) a “High-Cost Home Loan” as defined
in the New Jersey Home Ownership Security Act effective November
27, 2003, (ii) a “High-Cost Home Loan” as defined in
the New Mexico Home Loan Protection Act effective January 1, 2004,
(iii) a “High Cost Home Mortgage Loan” as defined in
the Massachusetts Predatory Home Loan Practices Act effective
November 7, 2004, (iv) a “High-Cost Home Loan” as
defined in the Indiana Home Loan Practices Act, effective as of
January 1, 2005, (v) a “High-Cost Home Loan” as defined
in the Illinois High Risk Home Loan Act effective January 1, 2004
or (vi) a “High-Cost Home Loan” as defined in the
Kentucky High Cost Home Loan Act effective June 24,
2003.
In connection with such sale, the
Depositor has delivered to, and deposited with, the Trustee or the
related Custodian, as its agent, the following documents or
instruments with respect to each Mortgage Loan so assigned: (i) the
original Mortgage Note, including any riders thereto, endorsed
without recourse in blank or to order of “Citibank, N.A., as
Trustee for certificateholders of Bear Stearns Asset Backed
Securities I LLC, Mortgage-Backed Certificates, Series 2005-8 under
the Pooling and Servicing Agreement dated as of October 1, 2005 for
SACO I Trust 2005-8 Mortgage-Backed Certificates, Series
2005-8,” and showing an unbroken chain of endorsements from
the original payee thereof to the Person endorsing it to the
Trustee, (ii) the original Mortgage and, if the related Mortgage
Loan is a MOM Loan, noting the presence of the MIN and language
indicating that such Mortgage Loan is a MOM Loan, which shall have
been recorded (or if the original is not available, a copy), with
evidence of such recording indicated thereon (or if clause (x) in
the proviso below applies, shall be in recordable form), (iii)
unless the Mortgage Loan is a MOM Loan, the assignment (either an
original or a copy, which may be in the form of a blanket
assignment if permitted in the jurisdiction in which the Mortgaged
Property is located) to the Trustee of the Mortgage with respect to
each Mortgage Loan in the name of “Citibank, N.A., as Trustee
for certificateholders of Bear Stearns Asset Backed Securities I
LLC,
Mortgage-Backed Certificates, Series
2005-8,” 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 such Seller or
the title company issuing the commitment for title insurance, on
the face of such copy, substantially as follows: “Certified
to be a true and correct copy of the original, which has been
transmitted for recording” and (y) in lieu of the Mortgage
Notes relating to the Mortgage Loans identified in the list set
forth in Exhibit I, the Depositor may deliver a lost note affidavit
and indemnity and a copy of the original note, if available; and
provided, further, however, that in the case of Mortgage Loans
which have been prepaid in full after the Cut-off Date and prior to
the Closing Date, the Depositor, in lieu of delivering the above
documents, may deliver to the Trustee and the related Custodian a
certification of a Servicing Officer to such effect and in such
case shall deposit all amounts paid in respect of such Mortgage
Loans, in the Master Servicer Collection Account or in the
Distribution Account on the Closing Date. In the case of the
documents referred to in clause (x) above, the Depositor shall
deliver such documents to the Trustee or the related Custodian
promptly after they are received. EMC (on its own behalf as a
Seller and on behalf of Master Funding) 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 (on its own behalf as a
Seller and on behalf of Master Funding) to the Trustee, the
Custodians and each Rating Agency, 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 either Seller,
the Depositor or the Master Servicer or the Securities
Administrator gives written notice to the Trustee that a court has
recharacterized the sale of the Mortgage Loans as a financing, EMC
(on its own behalf as a Seller and on behalf of Master Funding)
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 Company or the
Servicer as a result of such Person having completed a Request for
Release, the related Custodian shall, if not so completed, complete
the assignment of the related Mortgage in the manner specified in
clause (iii) above.
In connection with the assignment of
any Mortgage Loan registered on the MERS® System, EMC (on its
own behalf as a Seller and on behalf of Master Funding) 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 (on its own behalf as a Seller and on
behalf of Master Funding) 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 (on
its own behalf as a Seller and on behalf of Master Funding) further
agrees that it will not, and will not permit the Company or the
Master Servicer to, and the Master Servicer agrees that it will
not, alter the codes referenced in this paragraph with respect to
any Mortgage Loan during the term of this Agreement unless and
until such Mortgage Loan is repurchased in accordance with the
terms of this Agreement or the Mortgage Loan Purchase
Agreement.
All original documents relating to
the Mortgage Loans that are not delivered to the Trustee or the
related Custodian on its behalf are and shall be held by or on
behalf of the Sellers or the Depositor, as the case may be, in
trust for the benefit of the Trustee on behalf of the
Certificateholders. In the event that any such original document is
required pursuant to the terms of this Section to be a part of a
Mortgage File, such document shall be delivered promptly to the
Trustee or the related Custodian on its behalf. Any such original
document delivered to or held by the Depositor that is not required
pursuant to the terms of this Section to be a part of a Mortgage
File, shall be delivered promptly to the Custodian on the
Trustee’s behalf.
Whenever it is provided for in this
Agreement that any document, evidence or information relating to a
Mortgage Loan to be included in a Mortgage File be delivered or
supplied to the Trustee, such delivery or supply shall be made to
the appropriate Custodian pursuant to the related Custodial
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 related
Custodian, the Trustee acknowledges receipt of, subject to the
further review and exceptions reported by the related Custodian
pursuant to the procedures described below, the documents (or
certified copies thereof) delivered to the Trustee or the related
Custodian on its behalf pursuant to Section 2.01 and declares that
it holds and will continue to hold directly or through a custodian
those documents and any amendments, replacements or supplements
thereto and all other assets of the Trust Fund delivered to it in
trust for the use and benefit of all present and future Holders of
the Certificates. On the Closing Date, the Trustee or the related
Custodian on its behalf will deliver one or more Initial
Certifications, each in the form of Exhibit One to the related
Custodial Agreement, confirming whether or not it has received the
Mortgage File for each Mortgage Loan, but without review of such
Mortgage File, except to the extent necessary to confirm whether
such Mortgage File contains the original Mortgage Note or a lost
note affidavit and indemnity in lieu thereof. No later than 90 days
after the Closing Date, Trustee or the related Custodian on its
behalf shall, for the benefit of the Certificateholders, review
each Mortgage File delivered to it and execute and deliver to EMC
(on its own behalf as a Seller and on behalf of Master Funding) and
the Master Servicer and, if reviewed by the related Custodian, to
the Trustee, one or more Interim Certifications, each substantially
in the form of Exhibit Two to the related Custodial Agreement. In
conducting such review, the Trustee or the related Custodian
on
its behalf will ascertain whether
all required documents have been executed and received and whether
those documents relate, determined on the basis of the Mortgagor
name, original principal balance and loan number, to the Mortgage
Loans identified in Exhibit B to this Agreement, as supplemented
(provided, however, that with respect to those documents described
in subclauses (iv) and (vi) of Section 2.01, such obligations shall
extend only to documents actually delivered pursuant to such
subclauses). In performing any such review, the Trustee and the
related Custodian may conclusively rely on the purported due
execution and genuineness of any such document and on the purported
genuineness of any signature thereon. If the Trustee or the related
Custodian on its behalf finds any document constituting part of the
Mortgage File not to have been executed or received, or to be
unrelated to the Mortgage Loans identified in Exhibit B or to
appear to be defective on its face, the Trustee or the related
Custodian on its behalf shall include such information in the
exception report attached to the Interim Certification. EMC (on its
own behalf as a Seller and on behalf of Master Funding) shall
correct or cure any such defect or, if prior to the end of the
second anniversary of the Closing Date, EMC (on its own behalf as a
Seller and on behalf of Master Funding) 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 (on its own behalf as a Seller and on behalf of Master Funding)
fails to correct or cure the defect or deliver such opinion within
such period, EMC (on its own behalf as a Seller and on behalf of
Master Funding) 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 (on its own behalf as a Seller and
on behalf of Master Funding) 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 (on its own behalf as a Seller and on
behalf of Master Funding) 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, the Trustee or the
related Custodian on its behalf will review, for the benefit of the
Certificateholders, the Mortgage Files and will execute and deliver
or cause to be executed and delivered to EMC (on its own behalf as
a Seller and on behalf of Master Funding) and the Master Servicer
and, if reviewed by the related Custodian, to the Trustee, one or
more Final Certifications, each substantially in the form of
Exhibit Three to the related Custodial Agreement. In conducting
such review, the Trustee or the related Custodian on its behalf
will ascertain whether each document required to be recorded has
been returned from the recording office with evidence of recording
thereon and the Trustee or the related Custodian on its behalf has
received either an original or a copy thereof, as required in
Section 2.01 (provided, however, that with respect to those
documents described in subclauses (iv) and (vi) of Section 2.01,
such obligations shall extend only to documents actually delivered
pursuant to such subclauses). If the Trustee or the related
Custodian on its behalf finds any document with respect to a
Mortgage Loan has not been received, or to be unrelated, determined
on the basis of the Mortgagor name, original principal balance and
loan number, to the Mortgage Loans identified in Exhibit B or to
appear defective on its face, the Trustee or the related Custodian
on its behalf shall note such defect in the exception report
attached to the Final
Certification and shall promptly
notify EMC (on its own behalf as a Seller and on behalf of Master
Funding). EMC (on its own behalf as a Seller and on behalf of
Master Funding) shall correct or cure any such defect or, if prior
to the end of the second anniversary of the Closing Date, EMC (on
its own behalf as a Seller and on behalf of Master Funding) 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 and the Securities Administrator an Opinion
of Counsel addressed to the Trustee and the Securities
Administrator 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 (on its own behalf as a Seller and
on behalf of Master Funding) 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 (on its own behalf as a Seller and on behalf of Master Funding)
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 (on its own behalf as a Seller and
on behalf of Master Funding) 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 (on its own behalf as
a Seller and on behalf of Master Funding) 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, all of which shall be performed by the
related Custodian pursuant to the related Custodial Agreement, and
the Trustee is hereby authorized and directed to enter into each
such Custodial Agreement. Performance by the Custodians of their
obligations under the respective Custodial Agreement shall satisfy
all responsibilities for custody and review of Mortgage Files
hereunder. The Trustee shall have no liability for the failure of
the Custodians to perform their respective obligations under the
related Custodial Agreement.
(c) In
the event that a Mortgage Loan is repurchased by EMC (on its own
behalf as a Seller and on behalf of Master Funding) in accordance
with subsections 2.02(a) or (b) above or Section 2.03, EMC (on its
own behalf as a Seller and on behalf of Master Funding) shall remit
the applicable Purchase Price to the Master Servicer for deposit in
the Master Servicer Collection Account and shall provide written
notice to the Securities Administrator and the Trustee detailing
the components of the Purchase Price, signed by a Servicing
Officer. Upon deposit of the Purchase Price in the Master Servicer
Collection Account and upon receipt of a Request for Release with
respect to such Mortgage Loan, the related Custodian will release
to EMC (on its own behalf as a Seller and on behalf of Master
Funding) 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 EMC (on its own behalf as a
Seller and on behalf of Master Funding) title to and rights under
the Mortgage Loan. Such purchase shall be deemed to have occurred
on the date on which the deposit into the Master Servicer
Collection Account was made. The Securities Administrator shall
promptly use its best efforts to notify each Rating Agency of such
repurchase in accordance with Section 12.05. The obligation of EMC
(on its own behalf as a Seller and on behalf of Master Funding) 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
(on its own behalf as a Seller and on behalf of Master Funding)
shall deliver to the Trustee or the related Custodian on its
behalf, and Trustee agrees to accept the Mortgage Note and other
documents constituting the Mortgage File with respect to any
Replacement Mortgage Loan, which the Trustee or the related
Custodian will review as provided in subsections 2.02(a) and
2.02(b), provided, that the Closing Date referred to therein shall
instead be the date of delivery of the Mortgage File with respect
to each Replacement Mortgage Loan.
Section
2.03 Representations, Warranties
and Covenants of the Company, the Master Servicer, and EMC as a
Seller.
(a) The
Company hereby represents and warrants to the Master Servicer, the
Depositor, the Securities Administrator and the Trustee as follows,
as of the Closing Date:
(i) It
is duly organized and is validly existing and in good standing
under the laws of the State of Delaware and is duly authorized and
qualified to transact any and all business contemplated by this
Agreement to be conducted by it in any state in which a Mortgaged
Property related to an EMC Mortgage Loan is located or is otherwise
not required under applicable law to effect such qualification and,
in any event, is in compliance with the doing business laws of any
such state, to the extent necessary to ensure its ability to
enforce each EMC Mortgage Loan, to service the EMC Mortgage Loans
in accordance with the terms of the Mortgage Loan Purchase
Agreement and this 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 and 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 (a) the
execution, delivery or enforceability of this Agreement (b) its
ability to service the EMC Mortgage Loans, (c) to perform any of
its other obligations under this Agreement in accordance with the
terms hereof, (d) its business operations, financial conditions, or
properties or assets owned by it, or (e) its ability to carry on
its business as now conducted.
(vi) No
consent, approval, authorization or order of any court or
governmental agency or body is required for its execution, delivery
and performance of, or compliance with, this Agreement or the
consummation of the transactions contemplated hereby or thereby, or
if any such consent, approval, authorization or order is required,
it has obtained the same.
(vii) The
servicing practices used by the Company in respect of each Mortgage
Loan have been, and will continue to be, compliant in all material
respects with applicable laws and regulations.
(b) LaSalle
Bank National Association, in its capacity as Master Servicer and
Securities Administrator hereby represents and warrants to the
Seller, the Depositor and the Trustee as follows, as of the Closing
Date:
(i) It
is a national banking association duly formed, validly existing and
in good standing under the laws of the United States of America and
is duly authorized and qualified to transact any and all business
contemplated by this Agreement to be conducted by the Master
Servicer and the Securities Administrator and, is in compliance
with the doing business laws of any state, to the extent necessary
to ensure its ability to perform any of its other obligations under
this Agreement in accordance with the terms hereof;
(ii) It
has the full corporate power and authority to execute, deliver and
perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all
necessary corporate action on its part the execution, delivery and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery hereof by the other parties
hereto, constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, except that
(a) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws
relating to creditors’ rights generally and (b) the remedy of
specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be
brought.
(iii) The
execution and delivery of this Agreement by it, the consummation of
any other of the transactions contemplated by this Agreement, and
the fulfillment of or compliance with the terms hereof are in its
ordinary course of business and will not (A) result in a material
breach of any term or provision of its charter or by-laws or (B)
materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms
of any other material agreement or instrument to which it is a
party or by which it may be bound, or (C) constitute a material
violation of any statute, order or regulation applicable to it of
any court, regulatory body, administrative agency or governmental
body having jurisdiction over it; and it is not in breach or
violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of
any court, regulatory body, administrative agency or governmental
body having jurisdiction over it which breach or violation may
materially impair its ability to perform or meet any of its
obligations under this Agreement.
(iv) No
litigation is pending or, to the best of its knowledge, threatened,
against it that would materially and adversely affect the
execution, delivery or enforceability of this Agreement or its
ability to perform any of its other obligations under this
Agreement in accordance with the terms hereof.
(v) No
consent, approval, authorization or order of any court or
governmental agency or body is required for its execution, delivery
and performance of, or compliance with, this Agreement or the
consummation of the transactions contemplated hereby, or if any
such consent, approval, authorization or order is required, it has
obtained the same.
(c) EMC
(in its capacity as a 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
and 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.
(d) 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 a 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 applicable
Custodian 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 Securities
Administrator or the Trustee that the substance of such
representation and warranty is inaccurate and such inaccuracy
materially and adversely affects the value of the related Mortgage
Loan, notwithstanding EMC’s lack of knowledge with respect to
the substance of such representation or warranty, EMC (in its
capacity as a 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 a Seller) shall
deliver to the Trustee or the related Custodian on its behalf for
the benefit of the Certificateholders such documents and agreements
as are required by Section 2.01. No substitution will be made in
any calendar month after the Determination Date for such month.
Scheduled Payments due with 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 a 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 a
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 Securities Administrator, the Trustee and the related
Custodian. Upon such substitution, the Replacement Mortgage Loan or
Loans shall be subject to the terms of this Agreement in all
respects, and 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 Master Servicer Collection Account of the amount required to be
deposited therein in connection with such substitution as described
in the following paragraph and receipt by the related Custodian of
a Request for Release for such Mortgage Loan, the related 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 Master
Servicer Collection 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 a Seller) shall have repurchased a Mortgage Loan, the
Purchase Price therefor shall be deposited into the Master Servicer
Collection Account maintained by the Master Servicer, on the
Determination Date for the Distribution Date in the month following
the month during which 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 related
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, representation or warranty, as shall be necessary
to transfer title from the Trustee for the benefit of the
Certificateholders and transfer the Trustee’s interest to EMC
(on its own behalf as a Seller and on behalf of Master Funding) 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 a Seller) respecting such
breach available to the Certificateholders, the Depositor or the
Trustee.
(e) The
representations and warranties set forth in this Section 2.03
hereof shall survive delivery of the respective Mortgage Loans and
Mortgage Files to the Trustee or the related Custodian for the
benefit of the Certificateholders.
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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, the Securities Administrator and
the Trustee as follows, as of the date hereof and as of the Closing
Date:
(i) The
Depositor is duly organized and is validly existing as 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; and this Agreement, assuming the due
authorization, execution and delivery hereof by the other parties
hereto, constitutes a legal, valid and binding obligation of the
Depositor, enforceable against the Depositor in accordance with its
terms, subject, as to enforceability, to (i) bankruptcy,
insolvency, reorganization, moratorium and other similar laws
affecting creditors’ rights generally and (ii) general
principles of equity, regardless of whether enforcement is sought
in a proceeding in equity or at law.
(iii) The
execution and delivery of this Agreement by the Depositor, the
consummation of the transactions contemplated by this Agreement,
and the fulfillment of or compliance with the terms hereof 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) materially conflict with, result
in a material breach, violation or acceleration of, or result in a
material default under, the terms of any other material agreement
or instrument to which the Depositor is a party or by which it may
be bound or (C) constitute a material violation of any statute,
order or regulation applicable to the Depositor of any court,
regulatory body,
administrative agency or
governmental body having jurisdiction over the Depositor; and the
Depositor is not in breach or violation of any material indenture
or other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
it which breach or violation may materially impair the
Depositor’s ability to perform or meet any of its obligations
under this Agreement.
(iv) No
litigation is pending, or, to the best of the Depositor’s
knowledge, threatened, against the Depositor that would materially
and adversely affect the execution, delivery or enforceability of
this Agreement or the ability of the Depositor to perform its
obligations under this Agreement in accordance with the terms
hereof 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 Sellers, the Depositor
had good title to the Mortgage Loans and the related Mortgage Notes
were subject to no offsets, claims, defenses or
counterclaims.
It is understood and agreed that the
representations and warranties set forth in this Section 2.04 shall
survive delivery of the Mortgage Files to the Trustee or the
related Custodian for the benefit of the Certificateholders. Upon
discovery by the Depositor or the Trustee of a breach of such
representations and warranties, the party discovering such breach
shall give prompt written notice to the others, to each Rating
Agency.
Section
2.05 Delivery of Opinion of
Counsel in Connection with Substitutions and Repurchases.
(a) Notwithstanding
any contrary provision of this Agreement, with respect to any
Mortgage Loan that is not in default or as to which default is not
imminent, no repurchase or substitution pursuant to Sections 2.02
or 2.03 shall be made unless EMC delivers to the Trustee and the
Securities Administrator an Opinion of Counsel, addressed to the
Trustee and the Securities Administrator, to the effect that such
repurchase or substitution would not (i) result in the imposition
of the tax on “prohibited transactions” of REMIC I,
REMIC II or REMIC III 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 or REMIC III
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 and the Securities
Administrator 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 and the Securities
Administrator. In connection therewith, EMC (in its capacity as a
Seller and on behalf of Master Funding) shall 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 (in
its capacity as a Seller and on behalf of Master Funding) the
Mortgage Loan to be released pursuant hereto (and the related
Custodian shall deliver the related Mortgage File) in the same
manner, and on the same terms and conditions, as it would a
Mortgage Loan repurchased for breach of a representation or
warranty in accordance with Section 2.03.
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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, the
Securities Administrator has executed, countersigned and delivered,
to or upon the order of the Depositor, the Certificates in
authorized denominations evidencing the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise
the rights referred to above for the benefit of all present and
future Holders of the Certificates and to perform the duties set
forth in this Agreement in accordance with its terms.
(b) The
Depositor concurrently with the execution and delivery hereof, does
hereby transfer, assign, set over and otherwise convey in trust to
the Trustee without recourse all the right, title and interest of
the Depositor in and to the REMIC I Regular Interests and the other
assets of REMIC II for the benefit of the Holders of the Regular
Certificates (other than the Class C Certificates), the Class C
Interest and the Class R-2 Certificates. The Trustee acknowledges
receipt of the REMIC I Regular Interests (which are uncertificated)
and the other assets of REMIC II and declares that it holds and
will hold the same in trust for the exclusive use and benefit of
the Holders of the Regular Certificates (other than the Class C
Certificates), the Class C Interest and the Class R-2
Certificates.
(c) The
Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and
interest of the Depositor in and to the Class C Interest for the
benefit of the Holders of the Class C Certificates and the Class
R-X Certificates. 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 R-X
Certificates.
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Section 2.07
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Conveyance of the Subsequent
Mortgage Loans.
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(a) In
consideration of the Securities Administrator's delivery on the
Subsequent Transfer Date to or upon the written order of the
Depositor of all or a portion of the balance of funds in the
Pre-Funding Account, the Depositor shall, on such Subsequent
Transfer Date, sell, transfer, assign, set over and convey without
recourse to the Trust Fund (subject to the other terms and
provisions of this Agreement) all its right, title and interest in
and to (i) the Subsequent Mortgage Loans identified on the Mortgage
Loan Schedule attached to the related Subsequent Transfer
Instrument delivered by the Seller on such Subsequent Transfer
Date, (ii) all interest accruing thereon on and after the
Subsequent Cut-off Date and all collections in respect of interest
and principal due after the Subsequent Cut-off Date and (iii) all
items with respect to such Subsequent Mortgage Loans to be
delivered pursuant to Section 2.01 and the other items in the
related Mortgage Files; provided, however, that the Seller reserves
and retains all right, title and interest in and to principal
received and interest accruing on such Subsequent Mortgage Loans
prior to the related Subsequent Cut-off Date. The transfer to the
Trustee for deposit by the Depositor of the Subsequent Mortgage
Loans identified on the Mortgage Loan Schedule shall (i) be
absolute and is intended by the Depositor, the Seller, the Master
Servicer, the Securities Administrator, the Trustee and the
Certificateholders to constitute and to be treated as a sale of the
Subsequent Mortgage Loans by the Depositor to the Trust. The
related Mortgage File for each Subsequent Mortgage Loan shall be
delivered to the Trustee or the Custodian, as its agent, at least
three Business Days prior to the related Subsequent Transfer
Date.
The purchase price paid by the
Securities Administrator on behalf of the Trustee from amounts
released from the Pre-Funding Account shall be 100% of the
aggregate Stated Principal Balance of the Subsequent Mortgage Loans
so transferred (as identified on the Mortgage Loan Schedule
provided by the Depositor). This Agreement shall constitute a fixed
price purchase contract in accordance with Section
860G(a)(3)(A)(ii) of the Code.
(b) The
Depositor shall transfer to the Trustee for deposit in the Trust
Fund, the Subsequent Mortgage Loans, and the other property and
rights related thereto as described in paragraph (a) above, and the
Securities Administrator on behalf of the Trustee shall release
funds from the Pre-Funding Account only upon the satisfaction of
each of the following conditions on or prior to the related
Subsequent Transfer Date:
(i) the
Depositor shall have delivered to the Trustee a duly executed
Subsequent Transfer Instrument, which shall include a Mortgage Loan
Schedule listing the Subsequent Mortgage Loans, and the Seller
shall cause to be delivered a computer file containing such
Mortgage Loan Schedule to the Trustee, the Securities Administrator
and the Master Servicer at least three Business Days prior to the
related Subsequent Transfer Date;
(ii) the
Depositor shall have furnished to the Master Servicer, no later
than three Business Days prior to the related Subsequent Transfer
Date, (x) if the servicer or servicers of such Subsequent Mortgage
Loans are existing Servicers, then a written acknowledgement of
each such Servicer that it is servicing such Subsequent Mortgage
Loans pursuant to the First Horizon Servicing Agreement, or (y) if
the servicer or servicers are not existing Servicers, then a
servicing agreement and assignment
agreements with respect to such
servicer or servicers in form and substance reasonably satisfactory
to the Master Servicer;
(iii) as
of each Subsequent Transfer Date, as evidenced by delivery of the
Subsequent Transfer Instrument, substantially in the form of
Exhibit O, the Depositor shall not be bankrupt or insolvent nor
shall it have been rendered bankrupt or insolvent by such transfer
nor shall it be aware of any pending bankruptcy or insolvency with
respect to it:
(iv) such
sale and transfer shall not result in a material adverse tax
consequences to the Trust or the Certificateholders.
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(v)
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the Pre-Funding Period shall not
have terminated;
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(vi) the
Depositor shall not have selected the Subsequent Mortgage Loans in
a manner that it believed to be adverse to the interests of the
Ccrtificateholders; and
(vii) the
Depositor shall have delivered to the Trustee a Subsequent Transfer
Instrument confirming the satisfaction of the conditions precedent
specified in this Section 2.07 and, pursuant to the Subsequent
Transfer Instrument, assigned to the Trustee without recourse for
the benefit of the Certificateholders all the right, title and
interest of the Depositor, in, to and under the Subsequent Mortgage
Loan Purchase Agreement, to the extent of the Subsequent Mortgage
Loans.
(c) Any
conveyance of Subsequent Mortgage Loans on a Subsequent Transfer
Date is subject to certain conditions including, but not limited to
the following:
(i) Each
such Subsequent Mortgage Loan must satisfy the representations and
warranties specified in the related Subsequent Transfer Instrument
and this Agreement;
(ii) The
Depositor will not select such Subsequent Mortgage Loans in a
manner that it believes to be adverse to the interests of the
Certificateholders;
(iii) the
Trustee, the Securities Administrator and the Rating Agencies are
provided with an Opinion of Counsel or Opinions of Counsel, at the
expense of the Depositor, stating that each REMIC in the Trust Fund
is and shall continue to qualify as a REMIC following the transfer
of the Subsequent Mortgage Loans, to be delivered as provided
pursuant to this Section 2.07;
(iv) the
Rating Agencies and the Trustee are provided with an Opinion of
Counsel or Opinions of Counsel, at the expense of the Depositor,
confirming that the transfer of the Subsequent Mortgage Loans
conveyed on such Subsequent Transfer Date is a true sale, to be
delivered as provided pursuant to this Section 2.07; and
(v) the
execution and delivery of such Subsequent Transfer Agreement or
conveyance of the related Subsequent Mortgage Loans does not result
in a reduction or withdrawal of any ratings assigned to the
Certificates by the Rating Agencies.
(d) The
Securities Administrator shall be entitled to rely upon the
confirmation made by the Depositor pursuant to the related
Subsequent Transfer Instrument and the Opinions of Counsel
delivered pursuant to clause (c)(iii) and (iv) above in determining
that the condition precedents are met for the release of funds from
the Pre-Funding Account.
ARTICLE III
ADMINISTRATION AND SERVICING OF EMC
MORTGAGE LOANS BY THE COMPANY
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Section 3.01
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The Company.
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The Company shall service and
administer the EMC Mortgage Loans in accordance with this Agreement
and with customary and usual standards of practice of prudent
mortgage loan servicers in the respective states in which the
related Mortgaged Properties are located. In connection with such
servicing and administration, the Company shall have full power and
authority, acting alone and/or through subservicers as provided in
Section 3.03, to do or cause to be done any and all things that it
may deem necessary or desirable and consistent with the terms of
this Agreement and customary servicing practices 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 3.12, to effectuate foreclosure or
other conversion of the ownership of the Mortgaged Property
securing any EMC Mortgage Loan; provided that the Company shall
take no action that is inconsistent with or prejudices the
interests of the Trust Fund or the Certificateholders or this
Agreement in any EMC Mortgage Loan or the rights and interests of
the Depositor, the Master Servicer or the Trustee under this
Agreement.
Without limiting the generality of
the foregoing, the Company, in its own name or in the name of the
Trust, the Depositor or the Trustee, is hereby authorized and
empowered by the Trust, the Depositor and the Trustee, when the
Company believes it appropriate in its reasonable judgment, to
execute and deliver, on behalf of the Trustee, the Depositor, the
Certificateholders or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or
discharge and all other comparable instruments, with respect to the
EMC Mortgage Loans, and with respect to the related Mortgaged
Properties held for the benefit of the Certificateholders. The
Company shall prepare and deliver to the Depositor and/or the
Trustee such documents requiring execution and delivery by any or
all of them as are necessary or appropriate to enable the Company
to service and administer the EMC Mortgage Loans. Upon receipt of
such documents, the Depositor and/or the Trustee shall execute such
documents and deliver them to the Company.
With respect to EMC Mortgage Loans
affected by a hurricane or other natural disaster, if the Mortgaged
Property is located in public and individual assistance counties as
designated by the Federal Emergency Management Agency (as set forth
on its website at www.fema.gov), EMC may, at its sole option, cease
collection activities, charging of late fees and credit reporting
activities for all Mortgagors in such counties for a period of
time, and if reasonably prudent, may extent such period as long as
necessary. In addition, EMC may suspend all foreclosure and
bankruptcy activity relating to such EMC Mortgage Loans for a
period of time, and if reasonably prudent, may extent such period
as long as necessary.
In accordance with the standards of
the first paragraph of this Section 3.01, the Company shall advance
or cause to be advanced funds as necessary for the purpose of
effecting the payment of taxes and assessments on the Mortgaged
Properties relating to the EMC Mortgage Loans, which advances shall
be reimbursable in the first instance from related collections from
the Mortgagors pursuant to Section 5.04, and further as provided in
Section 5.02. All costs incurred by the Company, if any, in
effecting the timely payments of taxes and assessments on the
Mortgaged Properties relating to the EMC Mortgage Loans and related
insurance premiums shall not, for the purpose of calculating
monthly distributions to the Certificateholders, be added to the
Stated Principal Balance under the related EMC Mortgage Loans,
notwithstanding that the terms of such Mortgage Loans so
permit.
If the Mortgage relating to a
Mortgage Loan had a lien senior to the Mortgage Loan on the related
Mortgaged Property as of the Cut-off Date, then the Company may
consent to the refinancing of the prior senior lien, provided that
the following requirements are met:
(i) the
resulting Combined Loan-to-Value Ratio of such Mortgage Loan is no
higher than the Combined Loan-to-Value Ratio prior to such
refinancing; and
(ii) the
interest rate, or, in the case of an adjustable rate existing
senior lien, the maximum interest rate, for the loan evidencing the
refinanced senior lien is no more than 2.0% higher than the
interest rate or the maximum interest rate, as the case may be, on
the loan evidencing the existing senior lien immediately prior to
the date of such refinancing; and
(iii) the
loan evidencing the refinanced senior lien is not subject to
negative amortization.
The Trustee shall furnish the
Company and the Servicer with any powers of attorney and other
documents in form as provided to it necessary or appropriate to
enable the Company and the Servicer to service and administer the
related Mortgage Loans and REO Property, to execute and deliver
instruments of satisfaction or cancellation, or of partial or full
release or discharge, and to foreclose upon or otherwise liquidate
Mortgaged Property, and to appeal, prosecute or defend in any court
action relating to the Mortgage Loans or the Mortgaged Property, in
accordance with the First Horizon Servicing Agreement and this
Agreement.
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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 Company shall to the extent that it has knowledge of
such conveyance, enforce any due-on-sale clause contained in any
Mortgage Note or Mortgage, to the extent permitted under applicable
law and governmental regulations, but only to the extent that such
enforcement will not adversely affect or jeopardize coverage under
any Required Insurance Policy. Notwithstanding the foregoing, the
Company is not required to exercise such rights with respect to an
EMC Mortgage Loan if the Person to whom the related Mortgaged
Property has been conveyed or is proposed to be conveyed satisfies
the terms and conditions contained in the Mortgage Note and
Mortgage related thereto and the
consent of the mortgagee under such
Mortgage Note or Mortgage is not otherwise so required under such
Mortgage Note or Mortgage as a condition to such transfer. In the
event that the Company is prohibited by law from enforcing any such
due-on-sale clause, or if coverage under any Required Insurance
Policy would be adversely affected, or if nonenforcement is
otherwise permitted hereunder, the Company is authorized, subject
to Section 3.02(b), to take or enter into an assumption and
modification agreement from or with the person to whom such
property has been or is about to be conveyed, pursuant to which
such person becomes liable under the Mortgage Note and, unless
prohibited by applicable state law, the Mortgagor remains liable
thereon, provided that the Mortgage Loan shall continue to be
covered (if so covered before the Company enters such agreement) by
the applicable Required Insurance Policies. The Company, subject to
Section 3.02(b), is also authorized with the prior approval of the
insurers under any Required Insurance Policies to enter into a
substitution of liability agreement with such Person, pursuant to
which the original Mortgagor is released from liability and such
Person is substituted as Mortgagor and becomes liable under the
Mortgage Note. Notwithstanding the foregoing, the Company shall not
be deemed to be in default under this Section 3.02(a) by reason of
any transfer or assumption that the Company reasonably believes it
is restricted by law from preventing.
(b) Subject
to the Company’s duty to enforce any due-on-sale clause to
the extent set forth in Section 3.02(a), in an
