BEAR STEARNS ASSET BACKED SECURITIES I LLC,
Depositor
EMC MORTGAGE CORPORATION,
Seller and Company
WELLS FARGO BANK, NATIONAL ASSOCIATION,
Master Servicer and Securities Administrator
and
U.S. BANK NATIONAL ASSOCIATION,
Trustee
--------------------
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2005
----------------------------------------
BEAR STEARNS ASSET BACKED SECURITIES I TRUST 2005-AC2
ASSET-BACKED CERTIFICATES, SERIES 2005-AC2
<PAGE>
TABLE OF CONTENTS
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PAGE
ARTICLE I
DEFINITIONS
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Section 1.01 Defined
Terms.....................................................................4
Section 1.02 Allocation
of Certain Interest
Shortfalls........................................46
ARTICLE II
CONVEYANCE OF TRUST
FUND REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance
of Trust
Fund.........................................................49
Section 2.02 Acceptance
of the Mortgage
Loans.................................................51
Section 2.03
Representations, Warranties and Covenants of the Company, the
Master
Servicer and the
Seller..........................................................53
Section 2.04
Representations and Warranties of the
Depositor..................................58
Section 2.05 Delivery
of Opinion of Counsel in Connection
with Substitutions and
Repurchases...............................................59
Section 2.06
Countersignature and Delivery of
Certificates....................................60
ARTICLE III
ADMINISTRATION AND SERVICING OF EMC MORTGAGE LOANS BY COMPANY
Section 3.01 The
Company......................................................................61
Section 3.02
Due-on-Sale Clauses; Assumption
Agreements.......................................62
Section 3.03
Subservicers.....................................................................63
Section 3.04 Documents, Records and
Funds in Possession of Company To Be Held for Trustee.....63
Section 3.05
Maintenance of Hazard
Insurance..................................................64
Section 3.06
Presentment of Claims and Collection of
Proceeds.................................65
Section 3.07
Maintenance of the Primary Mortgage Insurance
Policies...........................65
Section 3.08 Fidelity
Bond, Errors and Omissions
Insurance....................................65
Section 3.09 Realization Upon Defaulted
Mortgage Loans; Determination of Excess Liquidation
Proceeds and Realized Losses; Repurchases of Certain Mortgage
Loans..............66
Section 3.10 Servicing
Compensation...........................................................69
Section 3.11 REO
Property.....................................................................69
Section 3.12
Liquidation
Reports..............................................................70
Section 3.13 Annual
Statement as to Compliance; Annual
Certification..........................70
Section 3.14 Annual
Independent Certified Public Accountants' Servicing
Report................70
Section 3.15 Books and
Records................................................................71
</TABLE>
i
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<TABLE>
<CAPTION>
ARTICLE IV
ADMINISTRATION AND MASTER SERVICING OF MORTGAGE LOANS BY MASTER
SERVICER
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Section 4.01 Master
Servicer..................................................................72
Section 4.02
REMIC-Related
Covenants..........................................................73
Section 4.03 Monitoring
of Company and
Servicer...............................................73
Section 4.04 Fidelity
Bond....................................................................74
Section 4.05 Power to
Act;
Procedures.........................................................74
Section 4.06
Due-on-Sale Clauses; Assumption
Agreements.......................................75
Section 4.07 Release of
Mortgage
Files........................................................75
Section 4.08 Documents,
Records and Funds in Possession of Master Servicer,
Company and Servicer To Be Held for
Trustee......................................76
Section 4.09 Standard
Hazard Insurance and Flood Insurance
Policies...........................77
Section 4.10
Presentment of Claims and Collection of
Proceeds.................................78
Section 4.11
Maintenance of the Primary Mortgage Insurance
Policies...........................78
Section 4.12 Trustee to
Retain Possession of Certain Insurance Policies and
Documents.........79
Section 4.13
Realization Upon Defaulted Mortgage
Loans........................................79
Section 4.14
Compensation for the Master
Servicer.............................................79
Section 4.15 REO
Property.....................................................................79
Section 4.16 Annual
Officer's Certificate as to
Compliance....................................80
Section 4.17 Annual
Independent Accountant's Servicing
Report.................................81
Section 4.18 Reports
Filed with Securities and Exchange
Commission............................81
Section 4.19
UCC..............................................................................82
Section 4.20 Optional
Purchase of Certain Mortgage
Loans......................................82
ARTICLE V
ACCOUNTS
Section 5.01 Collection
of Mortgage Loan Payments; Protected
Account..........................84
Section 5.02 Permitted
Withdrawals From the Protected
Account.................................86
Section 5.03 Reports to
Master
Servicer.......................................................87
Section 5.04 Collection
of Taxes; Assessments and Similar Items; Escrow
Accounts..............88
Section 5.05 Servicer
Protected
Accounts......................................................89
Section 5.06 Master
Servicer Collection
Account...............................................90
Section 5.07 Permitted
Withdrawals and Transfers from the Master Servicer
Collection
Account...............................................................91
Section 5.08
Distribution
Account.............................................................92
Section 5.09 Permitted
Withdrawals and Transfers from the Distribution
Account................93
ARTICLE VI
DISTRIBUTIONS AND ADVANCES
Section 6.01
Advances.........................................................................95
</TABLE>
ii
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<TABLE>
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Section 6.02
Compensating Interest
Payments...................................................96
Section 6.03 REMIC
Distributions..............................................................96
Section 6.04
Distributions....................................................................96
Section 6.05 Allocation
of Realized
Losses...................................................102
Section 6.06 Monthly
Statements to
Certificateholders........................................105
Section 6.07 REMIC
Designations and REMIC I
Distributions....................................108
Section 6.08 Net WAC
Reserve
Fund............................................................111
Section 6.09 Class P
Certificate
Accounts....................................................112
ARTICLE VII
THE CERTIFICATES
Section 7.01 The
Certificates................................................................113
Section 7.02
Certificate Register; Registration of Transfer and
Exchange of
Certificates........................................................114
Section 7.03 Mutilated,
Destroyed, Lost or Stolen
Certificates...............................118
Section 7.04 Persons
Deemed
Owners...........................................................118
Section 7.05 Access to
List of Certificateholders' Names and
Addresses.......................118
Section 7.06 Book-Entry
Certificates.........................................................118
Section 7.07 Notices to
Depository...........................................................119
Section 7.08 Definitive
Certificates.........................................................120
Section 7.09
Maintenance of Office or
Agency.................................................120
ARTICLE VIII
THE COMPANY AND THE MASTER SERVICER
Section 8.01
Liabilities of the Depositor, the Company and the Master
Servicer...............121
Section 8.02 Merger or
Consolidation of the Depositor, the Company or
the Master
Servicer.............................................................121
Section 8.03
Indemnification of the Trustee, the Master Servicer and
the Securities
Administrator....................................................121
Section 8.04
Limitations on Liability of the Depositor, the Company,
the Master Servicer and
Others..................................................122
Section 8.05 Master
Servicer and Company Not to
Resign.......................................123
Section 8.06 Successor
Master
Servicer.......................................................124
Section 8.07 Sale and
Assignment of Master
Servicing.........................................124
ARTICLE IX
DEFAULT; TERMINATION OF MASTER SERVICER; TERMINATION OF COMPANY
Section 9.01 Events of
Default...............................................................126
Section 9.02 Trustee to
Act; Appointment of
Successor........................................127
Section 9.03
Notification to
Certificateholders..............................................129
Section 9.04 Waiver of
Defaults..............................................................129
Section 9.05 Company
Default.................................................................129
Section 9.06 Waiver of
Company
Defaults......................................................131
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iii
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ARTICLE X
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
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Section 10.01 Duties of
Trustee and Securities
Administrator..................................132
Section 10.02 Certain Matters
Affecting the Trustee and the Securities
Administrator..........134
Section 10.03 Trustee and
Securities Administrator Not Liable for
Certificates or Mortgage
Loans..................................................136
Section 10.04 Trustee and Securities
Administrator May Own Certificates.......................136
Section 10.05 Trustee's and
Securities Administrator's Fees and
Expenses......................136
Section 10.06 Eligibility
Requirements for Trustee and Securities
Administrator...............137
Section 10.07
Insurance.......................................................................137
Section 10.08 Resignation and
Removal of Trustee and Securities
Administrator.................137
Section 10.09 Successor Trustee or Securities
Administrator...................................138
Section 10.10 Merger or
Consolidation of Trustee or Securities
Administrator..................139
Section 10.11 Appointment of
Co-Trustee or Separate
Trustee...................................139
Section 10.12 Tax
Matters.....................................................................140
ARTICLE XI
TERMINATION
Section 11.01 Termination upon
Liquidation or Repurchase of all Mortgage
Loans................144
Section 11.02 Final
Distribution on the Group I Certificates and Group II
Certificates........145
Section 11.03 Additional
Termination
Requirements.............................................146
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01
Amendment.......................................................................148
Section 12.02 Recordation of
Agreement;
Counterparts..........................................149
Section 12.03 Governing
Law...................................................................149
Section 12.04 Intention of
Parties............................................................149
Section 12.05
Notices.........................................................................150
Section 12.06 Severability of
Provisions......................................................151
Section 12.07
Assignment......................................................................151
Section 12.08 Limitation on
Rights of
Certificateholders......................................151
Section 12.09 Inspection and
Audit
Rights.....................................................152
Section 12.10 Certificates
Nonassessable and Fully
Paid.......................................152
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<PAGE>
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 P Certificates
Exhibit A-6 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 Investment Letter
Exhibit G
Form of Request for Release
Exhibit H
DTC Letter of Representations
Exhibit I
Schedule of Mortgage Loans with Lost Notes
Exhibit J
Form of Custodial Agreement
Exhibit K
Form of Company Certification
Exhibit L
Form of Mortgage Loan Purchase Agreement
v
<PAGE>
POOLING AND SERVICING AGREEMENT, dated as of March 1, 2005, among
BEAR
STEARNS ASSET BACKED SECURITIES I LLC, a
Delaware limited liability company, as
depositor (the "Depositor"), EMC MORTGAGE
CORPORATION, a Delaware corporation,
as seller (in such capacity, the "Seller")
and as company (in such capacity, the
"Company"), WELLS FARGO BANK, NATIONAL
ASSOCIATION, a national banking
association, as master servicer (in such
capacity, the "Master Servicer") and as
securities administrator (in such capacity,
the "Securities Administrator") and
U.S. BANK NATIONAL ASSOCIATION, a national
banking association, not in its
individual capacity, but solely as trustee
(the "Trustee").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby
conveyed to
the Trustee in return for the
Certificates.
REMIC I
As
provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of
Loan Group I and certain other related
assets subject to this Agreement 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 I-R-1 Certificates
will represent the sole class of
Residual Interests in REMIC I for purposes
of the REMIC Provisions (as defined
herein) under federal income tax law. 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.
<TABLE>
<CAPTION>
Initial Uncertificated Uncertificated
REMIC I
Latest Possible Maturity
Designation
Principal Balance
Pass-Through Rate
Date(1)
------------------------------ ---------------------------
------------------------- ---------------------------
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AA
$
359,778,845.76
Variable (2)
April 25, 2035
I-A
$
2,903,920.00
Variable (2)
April 25, 2035
I-M-1
$
198,250.00
Variable (2)
April 25, 2035
I-M-2
$
209,260.00
Variable (2)
April 25, 2035
I-M-3
$
71,590.00
Variable (2)
April 25, 2035
I-B-1
$
86,270.00
Variable (2)
April 25, 2035
I-B-2
$
56,900.00
Variable (2)
April 25, 2035
I-B-3
$
111,980.00
Variable (2)
April 25, 2035
ZZ
$
3,704,255.42
Variable (2)
April 25, 2035
I-P
$
100.00
0.00%
April 25, 2035
</TABLE>
----------
(1) For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the
month following the maturity date for
the Mortgage Loan with the latest maturity
date has been designated as the
"latest possible maturity date" for each of
the REMIC I Regular Interests.
(2) Calculated
in accordance with the definition of "Uncertificated REMIC I
Pass-Through Rate" herein.
- 1 -
<PAGE>
REMIC II
As provided herein, the Trustee will make an election to treat
the
segregated pool of assets consisting of
Loan Group II and certain other related
assets subject to this Agreement as a REMIC
for federal income tax purposes, and
such segregated pool of assets will be
designated as "REMIC II." The Class II-R
Certificates will represent the sole class
of Residual Interests in REMIC II for
purposes of the REMIC Provisions under
federal income tax law. The following
table irrevocably sets forth the
designation, the Uncertificated REMIC II
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 II Regular Interests (as
defined herein). None of the REMIC II
Regular Interests will be certificated.
<TABLE>
<CAPTION>
Initial Uncertificated Uncertificated
REMIC II
Latest Possible Maturity
Designation
Principal Balance
Pass-Through Rate
Date(1)
------------------------------ ---------------------------
------------------------- --------------------------
<S>
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<C>
<C>
AA
$
191,043,932.86
Variable (2)
April 25, 2035
II-A-1
$
1,380,000.00
Variable (2)
April 25, 2035
II-A-2
$
130,800.00
Variable (2)
April 25, 2035
II-M-1
$
140,360.00
Variable (2)
April 25, 2035
II-M-2
$
107,220.00
Variable (2)
April 25, 2035
II-M-3
$
38,010.00
Variable (2)
April 25, 2035
II-B-1
$
45,810.00
Variable (2)
April 25, 2035
II-B-2
$
38,990.00
Variable (2)
April 25, 2035
II-B-3
$
52,640.00
Variable (2)
April 25, 2035
ZZ
$
1,965,025.77
Variable (2)
April 25, 2035
II-P
$
100.00
0.00%
April 25, 2035
</TABLE>
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(1) For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the
month following the maturity date for
the Mortgage Loan with the latest maturity
date has been designated as the
"latest possible maturity date" for each of
the REMIC II Regular Interests.
(2) Calculated
in accordance with the definition of "Uncertificated REMIC
II Pass-Through Rate" herein.
REMIC III
As provided herein, the Trustee will make an election to treat
the
segregated pool of assets consisting of the
REMIC I Regular Interests and REMIC
II Regular Interests as a REMIC for federal
income tax purposes, and such
segregated pool of assets will be
designated as "REMIC III". The Class I-R-2
Certificates will represent the sole class
of Residual Interests in REMIC III
for purposes of the REMIC Provisions.
The
following table irrevocably 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 each Class of
Certificates that represents one or more of the
Regular Interests in REMIC III created
hereunder.
- 2 -
<PAGE>
<TABLE>
<CAPTION>
Initial Uncertificated
Latest Possible Maturity
Class Designation
Principal Balance
Pass-Through Rate
Date(1)
---------------------- --------------------------
-------------------------------- ---------------------------
<S>
<C>
<C>
<C>
Class I-A
$ 290,392,000.00
Class I-A Pass-Through Rate
April 25, 2035
Class I-M-1 $
19,825,000.00
Class I-M-1 Pass-Through Rate
April 25, 2035
Class I-M-2 $
20,926,000.00
Class I-M-2 Pass-Through Rate
April 25, 2035
Class I-M-3 $
7,159,000.00
Class I-M-3 Pass-Through Rate
April 25, 2035
Class I-B-1 $
8,627,000.00
Class I-B-1 Pass Through Rate
April 25, 2035
Class I-B-2 $
5,690,000.00
Class I-B-2 Pass-Through Rate
April 25, 2035
Class I-B-3 $
11,198,000.00
Class I-B-3 Pass Through Rate
April 25, 2035
Class I-C
$
3,304,271.18(3)
(2)
April 25, 2035
Class I-P
$
100.00(4)
N/A(4)
April 25, 2035
Class II-A-1 $
138,000,000.00
Class II-A-1 Pass-Through Rate
April 25, 2035
Class II-A-2 $
13,080,000.00
Class II-A-2 Pass-Through Rate
April 25, 2035
Class II-M-1 $
14,036,000.00
Class II-M-1 Pass-Through Rate
April 25, 2035
Class II-M-2 $
10,722,000.00
Class II-M-2 Pass-Through Rate
April 25, 2035
Class II-M-3 $
3,801,000.00
Class II-M-3 Pass-Through Rate
April 25, 2035
Class II-B-1 $
4,581,000.00
Class II-B-1 Pass Through Rate
April 25, 2035
Class II-B-2 $
3,899,000.00
Class II-B-2 Pass-Through Rate
April 25, 2035
Class II-B-3 $
5,264,000.00
Class II-B-3 Pass Through Rate
April 25, 2035
Class II-C
$
1,559,788.63(3)
(2)
April 25, 2035
Class II-P
$
100.00(4)
N/A(4)
April 25, 2035
</TABLE>
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(1) For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the
maturity
date for the Mortgage Loan with the latest maturity date has
been
designated as the "latest possible maturity date" for each Class
of
Certificates that represents one or more of the "regular interests"
in
REMIC III.
(2) Calculated
in accordance with the definition of "Pass-Through Rate"
herein.
(3) The Class
I-C Certificates and Class II-C Certificates will not accrue
interest on their respective Certificate Principal Balances, but
will
accrue interest on their respective Certificate Notional Amounts
as
described herein.
(4) The Class
I-P Certificates and Class II-P Certificates are not entitled
to distributions in respect of interest.
The Trust Fund shall be named, and may be referred to as, the
"Bear
Stearns Asset Backed Securities I Trust
2005-AC2." The Certificates issued
hereunder may be referred to as
"Asset-Backed Certificates Series 2005-AC2"
(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:
- 3
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<PAGE>
Article I
DEFINITIONS
Section 1.01 DEFINED TERMS.
In addition to those terms defined in Section 1.02, whenever used
in
this Agreement, the following words and
phrases, unless the context otherwise
requires, shall have the following
meanings:
ACCEPTED MASTER SERVICING PRACTICES: With respect to any Mortgage
Loan
those customary mortgage servicing
practices of prudent mortgage servicing
institutions that master service mortgage
loans of the same type and quality as
such Mortgage Loan in the jurisdiction
where the related Mortgaged Property is
located, to the extent applicable to the
Trustee or the Master Servicer (except
in its capacity as successor to the Company
or the related Servicer).
ACCEPTED SERVICING PRACTICES: With respect to each EMC Mortgage
Loan,
those mortgage servicing practices
(including collection procedures) that are in
accordance with all applicable statutes,
regulations and prudent mortgage
banking practices for similar mortgage
loans.
ACCOUNT: The Distribution Account, the Master Servicer
Collection
Account, the Net WAC Reserve Fund and any
Protected Account.
ACCRUAL PERIOD: With respect to the Class I-A, Class II-A-1 and
Class C
Certificates and any Distribution Date, the
calendar month immediately preceding
such Distribution Date. With respect to the
Class II-A-2, Class M and Class B
Certificates and any Distribution Date, the
period from and including the 25th
day of the calendar month preceding the
calendar month in which the Distribution
Date occurs (or, with respect to the first
Accrual Period for the Class II-A-2,
Class M and Class B Certificates, the
Closing Date) to and including the 24th
day of the calendar month in which such
Distribution Date occurs. All
calculations of interest on the Class I-A,
Class II-A-1 and Class C Certificates
will be made on the basis of a 360-day year
consisting of twelve 30-day months.
All calculations of interest on the Class
II-A-2, Class M and Class B
Certificates will be made on the basis of
the actual number of days elapsed in
the related Accrual Period.
ADDITIONAL MASTER SERVICING COMPENSATION: The meaning specified
in
Section 4.14.
ADVANCE: An advance of delinquent payments of principal or interest
in
respect of a Mortgage Loan required to be
made by the Company as provided in
Section 6.01(a) hereof, by the related
Servicer in accordance with the related
Servicing Agreement or by the Master
Servicer as provided in Section 6.01(b)
hereof.
AGREEMENT: This Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in
accordance with the terms herein.
AMOUNT HELD FOR FUTURE DISTRIBUTION: As to any Distribution Date,
the
aggregate amount held in the Company's or
the related Sevicer's Protected
Account at the close of business on the
immediately preceding Determination Date
on account of (i) all Scheduled Payments or
portions
- 4 -
<PAGE>
thereof received in respect of the Mortgage
Loans due after the related Due
Period and (ii) Principal Prepayments,
Liquidation Proceeds and Insurance
Proceeds received in respect of such
Mortgage Loans after the last day of the
related Prepayment Period.
APPLIED REALIZED LOSS AMOUNT: With respect to any Distribution Date
and
a Class of Subordinate Certificates the sum
of the Realized Losses with respect
to the related Mortgage Loans which have
been applied in reduction of the
Certificate Principal Balance of that Class
of Certificates pursuant to Section
6.05 of this Agreement, which have not
previously been reimbursed.
APPRAISED VALUE: With respect to any Mortgage Loan originated
in
connection with a refinancing, the
appraised value of the Mortgaged Property
based upon the appraisal made at the time
of such refinancing or, with respect
to any other Mortgage Loan, the lesser of
(x) the appraised value of the
Mortgaged Property based upon the appraisal
made by a fee appraiser at the time
of the origination of the related Mortgage
Loan, and (y) the sales price of the
Mortgaged Property at the time of such
origination.
ASSIGNMENT AGREEMENT: Shall mean any of the Southtrust
Assignment
Agreement, the PHH Assignment Agreement,
Greenpoint Assignment Agreement, or the
HSBC Assignment Agreement.
BANKRUPTCY CODE: Title 11 of the United States Code.
BISHOP'S GATE: Bishop's Gate Residential Mortgage Trust, and
any
successor thereto.
BOOK-ENTRY
CERTIFICATES: Any of the Certificates that shall be
registered in the name of the Depository or
its nominee, the ownership of which
is reflected on the books of the Depository
or on the books of a person
maintaining an account with the Depository
(directly, as a "Depository
Participant", or indirectly, as an indirect
participant in accordance with the
rules of the Depository and as described in
Section 7.06). As of the Closing
Date, each Class of Offered Certificates
constitutes a Class of Book-Entry
Certificates.
BUSINESS DAY: Any day other than (i) a Saturday or a Sunday, or
(ii) a
day on which banking institutions in The
City of New York, New York,
Minneapolis, Minnesota, Columbia, Maryland
or the city in which the Corporate
Trust Office of the Trustee or the
principal office of the Company or the Master
Servicer is located are authorized or
obligated by law or executive order to be
closed.
CERTIFICATE: Any one of the certificates of any Class executed
and
authenticated by the Securities
Administrator in substantially the forms
attached hereto as Exhibits A-1 through
A-6.
CERTIFICATE NOTIONAL AMOUNT: As to the Class I-C Certificates and
any
Distribution Date, an amount equal to the
aggregate Stated Principal Balance of
Loan Group I. The initial Certificate
Notional Amount of the Class I-C
Certificates shall be $367,121,271.18. As
to the Class II-C Certificates and any
Distribution Date, an amount equal to the
aggregate Stated Principal Balance of
Loan Group II. The initial Certificate
Notional Amount of the Class II-C
Certificates shall be $194,942,788.63. For
federal income tax purposes, however,
the Class I-C Certificates will have a
Certificate Notional Amount equal to the
aggregate Uncertificated
- 5 -
<PAGE>
Principal Balance of the REMIC I Regular
Interests (other than REMIC I Regular
Interest I-P), and the Class II-C
Certificates will have a Certificate Notional
Amount equal to the aggregate
Uncertificated Principal Balance of the REMIC II
Regular Interests (other than REMIC II
Regular Interest II-P).
CERTIFICATE OWNER: With respect to a Book-Entry Certificate, the
Person
that is the beneficial owner of such
Book-Entry Certificate.
CERTIFICATE PRINCIPAL BALANCE: As to any Certificate (other than
any
Class I-C, Class II-C or Class R
Certificate) and as of any Distribution Date,
the Initial Certificate Principal Balance
of such Certificate plus any
Subsequent Recoveries added to the
Certificate Principal Balance of such
Certificate pursuant to Section 6.05 less
the sum of (i) all amounts distributed
with respect to such Certificate in
reduction of the Certificate Principal
Balance thereof on previous Distribution
Dates pursuant to Section 6.04 and (ii)
any Applied Realized Loss Amounts allocated
to such Certificate on previous
Distribution Dates.
CERTIFICATE REGISTER: The register maintained pursuant to Section
7.02
hereof.
CERTIFICATEHOLDER OR HOLDER: The person in whose name a Certificate
is
registered in the Certificate Register
(initially, Cede & Co., as nominee for
the Depository, in the case of any
Book-Entry Certificates).
CLASS: All Certificates bearing the same Class designation as set
forth
in Section 7.01 hereof.
CLASS A CERTIFICATE: Any of the Class I-A, Class II-A-1 and
Class
II-A-2 Certificates.
CLASS B CERTIFICATES: Any of the Class I-B-1, Class I-B-2, Class
I-B-3,
Class II-B-1 Class II-B-2 and Class II-B-3
Certificates.
CLASS C CERTIFICATE: Any of the Class I-C Certificates and Class
II-C
Certificates.
CLASS M CERTIFICATE: Any of the Class I-M-1, Class I-M-2, Class
I-M-3,
Class II-M-1 Class II-M-2 and Class II-M-3
Certificates.
CLASS P CERTIFICATE: Any of the Class I-P Certificates and Class
II-P
Certificates.
CLASS P CERTIFICATE ACCOUNT: Each account established and
maintained by
the Securities Administrator pursuant to
Section 6.09 hereof.
CLASS R CERTIFICATE: Any of the Class I-R-1, Class I-R-2 and Class
II-R
Certificates.
CLASS I-A CERTIFICATE: Any Certificate designated as a "Class
I-A
Certificate" on the face thereof, in the
form of Exhibit A-1 hereto,
representing the right to the Percentage
Interest of distributions provided for
the Class I-A Certificates as set forth
herein and evidencing a Regular Interest
in REMIC III.
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<PAGE>
CLASS I-A PASS-THROUGH RATE: Shall mean (i) on any Distribution
Date
which occurs on or prior to the Group I
Optional Termination Date, 5.250% per
annum, subject to a cap equal to the
related Inerest Rate Cap for such
Distribution Date and (ii) for each
Distribution Date thereafter, 5.750% per
annum, subject to a cap equal to the
related Interest Rate Cap for such
Distribution Date.
CLASS I-B CERTIFICATES: Any of the Class I-B-1, Class I-B-2 and
Class
I-B-3 Certificates.
CLASS I-B-1 CERTIFICATE: Any Certificate designated as a "Class
I-B-1
Certificate" on the face thereof, in the
form of Exhibit A-3 hereto,
representing the right to the Percentage
Interest of distributions provided for
the Class I-B-1 Certificates as set forth
herein and evidencing a Regular
Interest in REMIC III.
CLASS I-B-1 PASS-THROUGH RATE: Shall mean (i) on any Distribution
Date
which occurs on or prior to the Group I
Optional Termination Date, the lesser of
(a) 9.00% per annum and (b) One-Month LIBOR
plus 1.300% per annum and (ii) for
each Distribution Date thereafter, the
lesser of (a) 9.00% per annum and (b)
One-Month LIBOR plus 1.950% per annum, in
each case subject to a cap equal to
the related Interest Rate Cap for such
Distribution Date.
CLASS I-B-2 CERTIFICATE: Any Certificate designated as a "Class
I-B-2
Certificate" on the face thereof, in the
form of Exhibit A-3 hereto,
representing the right to the Percentage
Interest of distributions provided for
the Class I-B-2 Certificates as set forth
herein and evidencing a Regular
Interest in REMIC III.
CLASS I-B-2 PASS-THROUGH RATE: Shall mean (i) on any Distribution
Date
which occurs on or prior to the Group I
Optional Termination Date, the lesser of
(a) 9.00% per annum and (b) One-Month LIBOR
plus 1.400% per annum and (ii) for
each Distribution Date thereafter, the
lesser of (a) 9.00% per annum and (b)
One-Month LIBOR plus 2.100% per annum, in
each case subject to a cap equal to
the related Interest Rate Cap for such
Distribution Date.
CLASS I-B-3 CERTIFICATE: Any Certificate designated as a "Class
I-B-3
Certificate" on the face thereof, in the
form of Exhibit A-3 hereto,
representing the right to the Percentage
Interest of distributions provided for
the Class I-B-3 Certificates as set forth
herein and evidencing a Regular
Interest in REMIC III.
CLASS I-B-3 PASS-THROUGH RATE: Shall mean (i) on any Distribution
Date
which occurs on or prior to the Group I
Optional Termination Date, the lesser of
(a) 9.00% per annum and (b) One-Month LIBOR
plus 1.850% per annum and (ii) for
each Distribution Date thereafter, the
lesser of (a) 9.00% per annum and (b)
One-Month LIBOR plus 2.775% per annum, in
each case subject to a cap equal to
the related Interest Rate Cap for such
Distribution Date.
CLASS I-C CERTIFICATE: Any Certificate designated as a "Class
I-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 I-C Certificates herein and
evidencing a Regular Interest in REMIC
III.
CLASS I-C DISTRIBUTION AMOUNT: With respect to any Distribution
Date,
the sum of (i) the related Monthly Interest
Distributable Amount for the Class
I-C Certificates for such Distribution
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<PAGE>
Date, (ii) any Group I
Overcollateralization Release Amount for such
Distribution Date and (iii) without
duplication, any Subsequent Recoveries for
Loan Group I not distributed to the Class
I-A, Class I-M and Class I-B
Certificates on such Distribution Date;
provided, however, that on and after the
Distribution Date on which the Certificate
Principal Balance of the Group I
Offered Certificates has been reduced to
zero, the Class I-C Distribution Amount
shall include the Group I
Overcollateralized Amount.
CLASS I-M CERTIFICATES: Any of the Class I-M-1, Class I-M-2 and
Class
I-M-3 Certificates.
CLASS I-M-1 CERTIFICATE: Any Certificate designated as a "Class
I-M-1
Certificate" on the face thereof, in the
form of Exhibit A-2 hereto,
representing the right to the Percentage
Interest of distributions provided for
the Class I-M-1 Certificates as set forth
herein and evidencing a Regular
Interest in REMIC III.
CLASS I-M-1 PASS-THROUGH RATE: Shall mean (i) on any Distribution
Date
which occurs on or prior to the Group I
Optional Termination Date, the lesser of
(a) 9.00% per annum and (b) One-Month LIBOR
plus 0.450% per annum and (ii) for
each Distribution Date thereafter, the
lesser of (a) 9.00% per annum and (b)
One-Month LIBOR plus 0.675% per annum, in
each case subject to a cap equal to
the related Interest Rate Cap for such
Distribution Date.
CLASS I-M-2 CERTIFICATE: Any Certificate designated as a "Class
I-M-2
Certificate" on the face thereof, in the
form of Exhibit A-2 hereto,
representing the right to the Percentage
Interest of distributions provided for
the Class I-M-2 Certificates as set forth
herein and evidencing a Regular
Interest in REMIC III.
CLASS I-M-2 PASS-THROUGH RATE: Shall mean (i) on any Distribution
Date
which occurs on or prior to the Group I
Optional Termination Date, the lesser of
(a) 9.00% per annum and (b) One-Month LIBOR
plus 0.650% per annum and (ii) for
each Distribution Date thereafter, the
lesser of (a) 9.00% per annum and (b)
One-Month LIBOR plus 0.975% per annum, in
each case subject to a cap equal to
the related Interest Rate Cap for such
Distribution Date.
CLASS I-M-3 CERTIFICATE: Any Certificate designated as a "Class
I-M-3
Certificate" on the face thereof, in the
form of Exhibit A-2 hereto,
representing the right to the Percentage
Interest of distributions provided for
the Class I-M-3 Certificates as set forth
herein and evidencing a Regular
Interest in REMIC III.
CLASS I-M-3 PASS-THROUGH RATE: Shall mean (i) on any Distribution
Date
which occurs on or prior to the Group I
Optional Termination Date, the lesser of
(a) 9.00% per annum and (b) One-Month LIBOR
plus 0.680% per annum and (ii) for
each Distribution Date thereafter, the
lesser of (a) 9.00% per annum and (b)
One-Month LIBOR plus 1.020% per annum, in
each case subject to a cap equal to
the related Interest Rate Cap for such
Distribution Date.
CLASS I-P CERTIFICATE: Any Certificate designated as a "Class
I-P
Certificate" on the face thereof, in the
form of Exhibit A-5 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class I-P Certificates as set forth
herein and evidencing a Regular Interest
in REMIC III.
CLASS I-R CERTIFICATES: Any of the Class I-R-1 Certificates
or Class I-R-2 Certificates.
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<PAGE>
CLASS I-R-1 CERTIFICATE: Any Certificate designated as a "Class
I-R-1
Certificate" on the face thereof, in the
form set forth in Exhibit A-6 hereto,
evidencing the Residual Interest in REMIC I
and representing the right to the
Percentage Interest of distributions
provided for the Class I-R-1 Certificates
as set forth herein.
CLASS I-R-2 CERTIFICATE: Any Certificate designated a "Class
I-R-2
Certificate" on the face thereof, in the
form set forth in Exhibit A-6 hereto,
evidencing the Residual Interest in REMIC
III and representing the right to the
Percentage Interest of distributions
provided for the Class I-R-2 Certificates
as set forth herein.
CLASS II-A CERTIFICATE: Any of the Class II-A-1 Certificates and
Class
II-A-2 Certificates.
CLASS II-A-1 CERTIFICATE: Any Certificate designated as a "Class
II-A-1
Certificate" on the face thereof, in the
form of Exhibit A-1 hereto,
representing the right to the Percentage
Interest of distributions provided for
the Class II-A-1 Certificates as set forth
herein and evidencing a Regular
Interest in REMIC III.
CLASS II-A-1 PASS-THROUGH RATE: Shall mean (i) on any Distribution
Date
which occurs on or prior to the Group II
Optional Termination Date, 5.250% per
annum, subject to a cap equal to the
related Interest Rate Cap for such
Distribution Date and (ii) for each
Distribution Date thereafter, 5.750% per
annum, subject to a cap equal to the
related Interest Rate Cap for such
Distribution Date.
CLASS II-A-2 CERTIFICATE: Any Certificate designated as a "Class
II-A-2
Certificate" on the face thereof, in the
form of Exhibit A-1 hereto,
representing the right to the Percentage
Interest of distributions provided for
the Class II-A-2 Certificates as set forth
herein and evidencing a Regular
Interest in REMIC III.
CLASS II-A-2 PASS-THROUGH RATE: Shall mean (i) on any Distribution
Date
which occurs on or prior to the Group II
Optional Termination Date, the lesser
of (a) 8.00% per annum and (b) One-Month
LIBOR plus 0.350% per annum and (ii)
for each Distribution Date thereafter, the
lesser of (a) 8.00% per annum and (b)
One-Month LIBOR plus 0.525% per annum, in
each case subject to a cap equal to
the related Interest Rate Cap for such
Distribution Date.
CLASS II-B CERTIFICATE: Any of the Class II-B-1, Class II-B-2 and
Class
II-B-3 Certificates.
CLASS II-B-1 CERTIFICATE: Any Certificate designated as a "Class
II-B-1
Certificate" on the face thereof, in the
form of Exhibit A-3 hereto,
representing the right to the Percentage
Interest of distributions provided for
the Class II-B-1 Certificates as set forth
herein and evidencing a Regular
Interest in REMIC III.
CLASS II-B-1 PASS-THROUGH RATE: Shall mean (i) on any Distribution
Date
which occurs on or prior to the Group II
Optional Termination Date, the lesser
of (a) 9.00% per annum and (b) One-Month
LIBOR plus 1.200% per annum and (ii)
for each Distribution Date thereafter, the
lesser of (a) 9.00% per annum and (b)
One-Month LIBOR plus 1.800% per annum, in
each case subject to a cap equal to
the related Interest Rate Cap for such
Distribution Date.
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<PAGE>
CLASS II-B-2 CERTIFICATE: Any Certificate designated as a "Class
II-B-2
Certificate" on the face thereof, in the
form of Exhibit A-3 hereto,
representing the right to the Percentage
Interest of distributions provided for
the Class II-B-2 Certificates as set forth
herein and evidencing a Regular
Interest in REMIC III.
CLASS II-B-2 PASS-THROUGH RATE: Shall mean (i) on any Distribution
Date
which occurs on or prior to the Group II
Optional Termination Date, the lesser
of (a) 9.00% per annum and (b) One-Month
LIBOR plus 1.300% per annum and (ii)
for each Distribution Date thereafter, the
lesser of (a) 9.00% per annum and (b)
One-Month LIBOR plus 1.950% per annum, in
each case subject to a cap equal to
the related Interest Rate Cap for such
Distribution Date.
CLASS II-B-3 CERTIFICATE: Any Certificate designated as a "Class
II-B-3
Certificate" on the face thereof, in the
form of Exhibit A-3 hereto,
representing the right to the Percentage
Interest of distributions provided for
the Class II-B-3 Certificates as set forth
herein and evidencing a Regular
Interest in REMIC III.
CLASS II-B-3 PASS-THROUGH RATE: Shall mean (i) on any Distribution
Date
which occurs on or prior to the Group II
Optional Termination Date, the lesser
of (a) 9.00% per annum and (b) One-Month
LIBOR plus 1.850% per annum and (ii)
for each Distribution Date thereafter, the
lesser of (a) 9.00% per annum and (b)
One-Month LIBOR plus 2.775% per annum, in
each case subject to a cap equal to
the related Interest Rate Cap for such
Distribution Date.
CLASS II-C CERTIFICATE: Any Certificate designated as a "Class
II-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 II-C Certificates herein and
evidencing a Regular Interest in REMIC
III.
CLASS II-C DISTRIBUTION AMOUNT: With respect to any Distribution
Date,
the sum of (i) the related Monthly Interest
Distributable Amount for the Class
II-C Certificates for such Distribution
Date, (ii) any Group II
Overcollateralization Release Amount for
such Distribution Date and (iii)
without duplication, any Subsequent
Recoveries for Loan Group II not distributed
to the Class II-A, Class II-M and Class
II-B Certificates on such Distribution
Date; provided, however, that on and after
the Distribution Date on which the
Certificate Principal Balance of the Group
II Offered Certificates has been
reduced to zero, the Class II-C
Distribution Amount shall include the Group II
Overcollateralized Amount.
CLASS II-M CERTIFICATES: Any of the Class II-M-1, Class II-M-2
and
Class II-M-3 Certificates.
CLASS II-M-1 CERTIFICATE: Any Certificate designated as a "Class
II-M-1
Certificate" on the face thereof, in the
form of Exhibit A-2 hereto,
representing the right to the Percentage
Interest of distributions provided for
the Class II-M-1 Certificates as set forth
herein and evidencing a Regular
Interest in REMIC III.
CLASS II-M-1 PASS-THROUGH RATE: Shall mean (i) on any Distribution
Date
which occurs on or prior to the Group II
Optional Termination Date, the lesser
of (a) 9.00% per annum and (b) One-Month
LIBOR plus 0.460% per annum and (ii)
for each Distribution Date thereafter,
the
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<PAGE>
lesser of (a) 9.00% per annum and (b)
One-Month LIBOR plus 0.690% per annum, in
each case subject to a cap equal to the
related Interest Rate Cap for such
Distribution Date.
CLASS II-M-2 CERTIFICATE: Any Certificate designated as a "Class
II-M-2
Certificate" on the face thereof, in the
form of Exhibit A-2 hereto,
representing the right to the Percentage
Interest of distributions provided for
the Class II-M-2 Certificates as set forth
herein and evidencing a Regular
Interest in REMIC III.
CLASS
II-M-2 PASS-THROUGH RATE: Shall mean (i) on any Distribution
Date
which occurs on or prior to the Group II
Optional Termination Date, the lesser
of (a) 9.00% per annum and (b) One-Month
LIBOR plus 0.650% per annum and (ii)
for each Distribution Date thereafter, the
lesser of (a) 9.00% per annum and (b)
One-Month LIBOR plus 0.975% per annum, in
each case subject to a cap equal to
the related Interest Rate Cap for such
Distribution Date.
CLASS II-M-3 CERTIFICATE: Any Certificate designated as a "Class
II-M-3
Certificate" on the face thereof, in the
form of Exhibit A-2 hereto,
representing the right to the Percentage
Interest of distributions provided for
the Class II-M-3 Certificates as set forth
herein and evidencing a Regular
Interest in REMIC III.
CLASS II-M-3 PASS-THROUGH RATE: Shall mean (i) on any Distribution
Date
which occurs on or prior to the Group II
Optional Termination Date, the lesser
of (a) 9.00% per annum and (b) One-Month
LIBOR plus 0.680% per annum and (ii)
for each Distribution Date thereafter, the
lesser of (a) 9.00% per annum and (b)
One-Month LIBOR plus 1.020% per annum, in
each case subject to a cap equal to
the related Interest Rate Cap for such
Distribution Date.
CLASS II-P CERTIFICATE: Any Certificate designated as a "Class
II-P
Certificate" on the face thereof, in the
form of Exhibit A-5 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class II-P Certificates as set forth
herein and evidencing a Regular
Interest in REMIC III.
CLASS II-R CERTIFICATE: Any Certificate designated a "Class
II-R
Certificate" on the face thereof, in
substantially the form set forth in Exhibit
A-6 hereto, evidencing the Residual
Interest in REMIC II and representing the
right to the Percentage Interest of
distributions provided for the Class II-R
Certificates as set forth herein.
CLOSING DATE: March 31, 2005.
CODE: The Internal Revenue Code of 1986, including any successor
or
amendatory provisions.
COMPANY: EMC.
COMPENSATING INTEREST: An amount, not to exceed the Servicing Fee,
to
be deposited in the Master Servicer
Collection Account by the Company or the
related Servicer to the payment of a
Prepayment Interest Shortfall on a Mortgage
Loan subject to this Agreement; provided
that in the event the Company or the
related Servicer fails to make such
payment, the Master Servicer shall be
obligated to do so to the extent provided
in Section 6.02(c) hereof.
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<PAGE>
CORPORATE TRUST OFFICE: The designated office of the Trustee where
at
any particular time its corporate trust
business with respect to this Agreement
shall be administered, which office at the
date of the execution of this
Agreement is located at US Bank Corporate
Trust Services, One Federal Street,
3rd Floor, Boston, Massachusetts 02110,
Attention: Corporate Trust
Services/BSABS I 2005-AC2, or at such other
address as the Trustee may designate
from time to time.
CORRESPONDING CERTIFICATE: With respect to each REMIC I Regular
Interest (other than REMIC I Regular
Interests AA and ZZ) or each REMIC II
Regular Interest (other than REMIC II
Regular Interests AA and ZZ), as
applicable, the Certificate with the
corresponding designation.
CROSS-OVER DATE: The first Distribution Date on which the
aggregate
Certificate Principal Balance of the
related Subordinate Certificates has been
reduced to zero (giving effect to all
related distributions on such Distribution
Date).
CUSTODIAL AGREEMENT: An agreement, dated as of March 31, 2005,
among
the Depositor, the Seller, the Trustee and
the Custodian in substantially the
form of Exhibit J hereto.
CUSTODIAN: Wells Fargo Bank, National Association, or any
successor
custodian appointed pursuant to the
provisions hereof and the Custodial
Agreement.
CUT-OFF DATE: The close of business on March 1, 2005.
CUT-OFF DATE PRINCIPAL BALANCE: As to any Mortgage Loan, the
unpaid
principal balance thereof as of the close
of business on the Cut-off Date after
application of all Principal Prepayments
received prior to the Cut-off Date and
scheduled payments of principal due on or
before the Cut-off Date, whether or
not received, but without giving effect to
any installments of principal
received in respect of Due Dates after the
Cut-off Date.
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a
reduction
by a court of competent jurisdiction in a
proceeding under the Bankruptcy Code
in the Scheduled Payment for such Mortgage
Loan that became final and
non-appealable, except such a reduction
resulting from a Deficient Valuation or
any other reduction that results in a
permanent forgiveness of principal.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation
by
a court of competent jurisdiction of the
Mortgaged Property in an amount less
than the then outstanding indebtedness
under such Mortgage Loan, or any
reduction in the amount of principal to be
paid in connection with any Scheduled
Payment that results in a permanent
forgiveness of principal, which valuation or
reduction results from an order of such
court that is final and non-appealable
in a proceeding under the Bankruptcy
Code.
DEFINITIVE CERTIFICATES: As defined in Section 7.06.
DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be replaced
by a
Replacement Mortgage Loan.
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<PAGE>
DELINQUENT: A Mortgage Loan is "delinquent" if any payment due
thereon
is not made pursuant to the terms of such
Mortgage Loan by the close of business
on the day such payment is scheduled to be
due. A Mortgage Loan is "30 days
delinquent" if such payment has not been
received by the close of business on
the corresponding day of the month
immediately succeeding the month in which
such payment was due, or, if there is no
such corresponding day (e.g., as when a
30-day month follows a 31-day month in
which a payment was due on the 31st day
of such month), then on the last day of
such immediately succeeding month.
Similarly for "60 days delinquent," "90
days delinquent" and so on.
DENOMINATION: With respect to each Certificate, the amount set
forth on
the face thereof as the "Initial Principal
Balance or initial notional amount of
this Certificate".
DEPOSITOR: Bear Stearns Asset Backed Securities I LLC, a
Delaware
limited liability company, or its successor
in interest.
DEPOSITORY: The initial Depository shall be The Depository
Trust
Company ("DTC"), the nominee of which is
Cede & Co., or any other organization
registered as a "clearing agency" pursuant
to Section 17A of the Securities
Exchange Act of 1934, as amended. The
Depository shall initially be the
registered Holder of the Book-Entry
Certificates. The Depository shall at all
times be a "clearing corporation" as
defined in Section 8-102(a)(5) of the
Uniform Commercial Code of the State of New
York.
DEPOSITORY AGREEMENT: With respect to the Class of Book-Entry
Certificates, the agreement among the
Depositor, the Trustee and the initial
Depository, dated as of the Closing Date,
substantially in the form of Exhibit
H.
DEPOSITORY PARTICIPANT: A broker, dealer, bank or other
financial
institution or other Person for whom from
time to time a Depository effects
book-entry transfers and pledges of
securities deposited with the Depository.
DETERMINATION DATE: With respect to any Distribution Date, the 15th
day
of the month of such Distribution Date or,
if such 15th day is not a Business
Day, the immediately preceding Business
Day.
DISTRIBUTION ACCOUNT: The separate Eligible Account created and
maintained by the Securities Administrator
pursuant to Section 5.08 in the name
of the Trustee for the benefit of the
Certificateholders and designated "U.S.
Bank National Association, in trust for
registered Holders of Bear Stearns Asset
Backed Securities I LLC, Asset-Backed
Certificates, Series 2005-AC2" shall be
held in trust for the Certificateholders
for the uses and purposes set forth in
this Agreement.
DISTRIBUTION ACCOUNT DEPOSIT DATE: As to any Distribution Date, on
or
before 3:00 p.m. Eastern time on the
Business Day immediately preceding such
Distribution Date.
DISTRIBUTION DATE: The 25th day of each calendar month after
the
initial issuance of the Certificates, or if
such 25th day is not a Business Day,
the next succeeding Business Day,
commencing in April 2005.
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<PAGE>
DUE DATE: As to any Mortgage Loan, the date in each month on which
the
related Scheduled Payment is due, as set
forth in the related Mortgage Note.
DUE PERIOD: With respect to any Distribution Date, the period from
the
second day of the calendar month preceding
the calendar month in which such
Distribution Date occurs through close of
business on the first day of the
calendar month in which such Distribution
Date occurs.
ELIGIBLE ACCOUNT: Any of (i) an account or accounts maintained with
a
federal or state chartered depository
institution or trust company, the
long-term unsecured debt obligations and
short-term unsecured debt obligations
of which (or, in the case of a depository
institution or trust company that is
the principal subsidiary of a holding
company, the debt obligations of such
holding company, so long as Moody's is not
a Rating Agency) are rated by each
Rating Agency in one of its two highest
long-term and its highest short-term
rating categories respectively, at the time
any amounts are held on deposit
therein, or (ii) an account or accounts in
a depository institution or trust
company in which such accounts are insured
by the FDIC (to the limits
established by the FDIC) and the uninsured
deposits in which accounts are
otherwise secured such that, as evidenced
by an Opinion of Counsel delivered to
the Trustee and to each Rating Agency, the
Certificateholders have a claim with
respect to the funds in such account or a
perfected first priority security
interest against any collateral (which
shall be limited to Permitted
Investments) securing such funds that is
superior to claims of any other
depositors or creditors of the depository
institution or trust company in which
such account is maintained, or (iii) a
trust account or accounts maintained with
the corporate trust department of a federal
or state chartered depository
institution or trust company having capital
and surplus of not less than
$50,000,000, acting in its fiduciary
capacity or (iv) any other account
acceptable to the Rating Agencies. Eligible
Accounts may bear interest, and may
include, if otherwise qualified under this
definition, accounts maintained with
the Trustee.
EMC: EMC Mortgage Corporation, a Delaware corporation.
EMC MORTGAGE LOANS: Those Mortgage Loans serviced by the
Company
pursuant to the terms of this
Agreement.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA RESTRICTED CERTIFICATES: Any of the Class C, Class P and
Residual
Certificates.
EVENT OF
DEFAULT: As defined in Section 9.01 hereof.
EXCESS LIQUIDATION PROCEEDS: To the extent not required by law to
be
paid to the related Mortgagor, the excess,
if any, of any Liquidation Proceeds
with respect to a Mortgage Loan over the
Stated Principal Balance of such
Mortgage Loan and accrued and unpaid
interest at the related Mortgage Rate
through the last day of the month in which
the Mortgage Loan has been
liquidated.
EXCESS SPREAD: With respect to any Distribution Date and each
Loan
Group, the excess, if any, of (i) the
Interest Funds for such Loan Group for
such Distribution Date over (ii) the
related Monthly Interest Distributable
Amounts payable to the related group of
Offered Certificates on such
Distribution Date.
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<PAGE>
EXEMPTION: Prohibited Transaction Exemption 90-30, as amended from
time
to time.
FANNIE MAE: Fannie Mae (formerly, Federal National Mortgage
Association), or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor
thereto.
FINAL RECOVERY DETERMINATION: With respect to any defaulted
Mortgage
Loan or any REO Property (other than a
Mortgage Loan or REO Property purchased
by the Seller or the Class C
Certificateholder pursuant to or as contemplated by
Section 2.03(c) or Section 11.01), a
determination made by the Company pursuant
to this Agreement or the applicable
Servicer pursuant to the related Servicing
Agreement that all Insurance Proceeds,
Liquidation Proceeds and other payments
or recoveries which the Company or such
Servicer, in its reasonable good faith
judgment, expects to be finally recoverable
in respect thereof have been so
recovered. The Master Servicer shall
maintain records, based solely on
information provided by each Servicer, of
each Final Recovery Determination made
thereby.
FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement
Act of 1989.
FISCAL QUARTER: December 1 to February 29 (or the last day in
such
month), March 1 to May 31, June 1 to August
31, or September to November 30, as
applicable.
FREDDIE MAC: Freddie Mac (formerly The Federal Home Loan
Mortgage
Corporation), or any successor thereto.
GREENPOINT: GreenPoint Mortgage Funding, Inc., and any
successor
thereto.
GREENPOINT ASSIGNMENT AGREEMENT: The Assignment, Assumption and
Recognition Agreement, dated as of March
31, 2005, by and among the Seller,
GreenPoint and the Trustee evidencing the
assignment of the GreenPoint Servicing
Agreement to the Trust.
GREENPOINT LOANS: Those Mortgage Loans subject to this Agreement
which
were purchased by the Seller from
GreenPoint pursuant to the GreenPoint
Servicing Agreement.
GREENPOINT SERVICING AGREEMENT: The Purchase, Warranties and
Servicing
Agreement, dated as of September 1, 2003,
by and between the Seller and
GreenPoint, as modified by the GreenPoint
Assignment Agreement.
GROUP I 20% CLEAN-UP CALL DATE: With respect to Loan Group I, the
first
Distribution Date upon which the aggregate
Stated Principal Balance of Loan
Group I as of the end of the related Due
Period is less than or equal to 20% of
the aggregate Cut-off Date Principal
Balance of the Mortgage Loans in Loan Group
I.
GROUP I AVAILABLE FUNDS: The sum of Interest Funds and Principal
Funds
with respect to the Mortgage Loans in Loan
Group I.
GROUP I BASIC PRINCIPAL DISTRIBUTION AMOUNT: Shall mean, with
respect
to any Distribution Date, the lesser of (a)
the excess of (i) the Group I
Available Funds for such
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<PAGE>
Distribution Date over (ii) the aggregate
Monthly Interest Distributable Amount
for the Group I Certificates (other than
the Class I-P, Class I-C, Class I-R-1
and Class I-R-2 Certificates) for such
Distribution Date and (b) the excess of
(i) the related Principal Remittance Amount
for such Distribution Date over (ii)
the Group I Overcollateralization Release
Amount, if any, for such Distribution
Date.
GROUP I CERTIFICATES: Any of the Class I-A, Class I-M or Class
I-B
Certificates.
GROUP I EXTRA PRINCIPAL DISTRIBUTION AMOUNT: With respect to
any
Distribution Date and Loan Group I (a) on
or prior to the earlier of (1) the
Group I 20% Clean-Up Call Date and (2) the
Distribution Date in March 2015, the
lesser of (x) the Excess Spread for Loan
Group I for such Distribution Date and
(y) the Group I Overcollateralization
Increase Amount for such Distribution
Date; and (b) thereafter, the Excess Spread
for Loan Group I for such
Distribution Date.
GROUP I OFFERED CERTIFICATE: Any of the Class I-A, Class I-M-1,
Class
I-M-2, Class I-M-3, Class I-B-1, Class
I-B-2 and Class I-B-3 Certificates.
GROUP I OPTIONAL TERMINATION: The termination of the Group I
Sub-Trust
created hereunder as a result of the
purchase of all of the assets related to
Loan Group I and any related REO Property
pursuant to the last sentence of
Section 11.01 hereof.
GROUP I OPTIONAL TERMINATION DATE: The first Distribution Date on
which
the Group I Sub-Trust may be terminated at
the option of the Majority Class I-C
Certificateholder as described under
Section 11.01.
GROUP I OVERCOLLATERALIZATION INCREASE AMOUNT: As of any
Distribution
Date, the lesser of (a) the excess, if any,
of (i) the Group I
Overcollateralization Target Amount over
(ii) the Group I Overcollateralized
Amount on such Distribution Date (after
taking into account payments to the
Group I Offered Certificates of the Group I
Basic Principal Distribution Amount
on such Distribution Date) and (b) the
related Excess Spread for such
Distribution Date.
GROUP I OVERCOLLATERALIZATION RELEASE AMOUNT: With respect to
any
Distribution Date, the lesser of (x) the
related Principal Remittance Amount for
such Distribution Date and (y) the excess,
if any, of (i) the Group I
Overcollateralized Amount for such
Distribution Date (assuming that 100% of the
related Principal Remittance Amount is
applied as a principal payment on such
Distribution Date) over (ii) the Group I
Overcollateralization Target Amount for
such Distribution Date (with the amount
pursuant to clause (y) deemed to be $0
if the Group I Overcollateralized Amount is
less than or equal to the Group I
Overcollateralization Target Amount on that
Distribution Date).
GROUP I OVERCOLLATERALIZATION TARGET AMOUNT: With respect to
any
Distribution Date, $3,304,091.18.
GROUP I OVERCOLLATERALIZED AMOUNT: With respect to any
Distribution
Date, is the excess, if any, of (a) the
aggregate Stated Principal Balance of
Loan Group I as of the last day of the
related Due Period over (b) the aggregate
Certificate Principal Balance of the Group
I Offered
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<PAGE>
Certificates on such Distribution Date
(after taking into account the payment of
principal other than any Group I Extra
Principal Distribution Amount on such
Certificates).
GROUP I SENIOR CERTIFICATES: The Class I-A Certificates.
GROUP I SUBORDINATE CERTIFICATES: Any of the Class I-M-1, Class
I-M-2,
Class I-M-3, Class I-B-1, Class I-B-2 and
Class I-B-3 Certificates.
GROUP I SUB-TRUST: The portion of the Trust Fund allocated to
Loan
Group I.
GROUP II 20% CLEAN-UP CALL DATE: Shall mean the first Distribution
Date
upon which the aggregate Stated Principal
Balance of Loan Group II as of the end
of the related Due Period is less than or
equal to 20% of the aggregate Cut-off
Date Principal Balance of Loan Group
II.
GROUP II AVAILABLE FUNDS: The sum of Interest Funds and Principal
Funds
with respect to the Mortgage Loans in Loan
Group II.
GROUP II BASIC PRINCIPAL DISTRIBUTION AMOUNT: Shall mean, with
respect
to any Distribution Date, the lesser of (a)
the excess of (i) the Group II
Available Funds for such Distribution Date
over (ii) the aggregate Monthly
Interest Distributable Amount for the Group
II Certificates (other than the
Class II-P, Class II-C and Class II-R
Certificates) for such Distribution Date
and (b) the excess of (i) the related
Principal Remittance Amount for such
Distribution Date over (ii) the Group II
Overcollateralization Release Amount,
if any, for such Distribution Date.
GROUP II CERTIFICATES: Any of the Class II-A, Class II-M or Class
II-B
Certificates.
GROUP II EXTRA PRINCIPAL DISTRIBUTION AMOUNT: With respect to
any
Distribution Date and Loan Group II (a) on
or prior to the earlier of (1) the
Group II 20% Clean-Up Call Date and (2) the
Distribution Date in March 2015, the
lesser of (x) the Excess Spread for Loan
Group II for such Distribution Date and
(y) the Group II Overcollateralization
Increase Amount for such Distribution
Date; and (b) thereafter, the Excess Spread
for Loan Group II for such
Distribution Date.
GROUP II OFFERED CERTIFICATES: Any of the Class II-A-1, Class
II-A-2,
Class II-M-1, Class II-M-2, Class II-M-3,
Class II-B-1, Class II-B-2 and Class
II-B-3 Certificates.
GROUP II OPTIONAL TERMINATION: The termination of the Group II
Sub-Trust created hereunder as a result of
the purchase of all Loan Group II and
any related REO Property pursuant to the
last sentence of Section 11.01 hereof.
GROUP II OPTIONAL TERMINATION DATE: The first Distribution Date
on
which the Group II Sub-Trust may be
terminated at the option of the Majority
Class II-C Certificateholder as described
under Section 11.01.
GROUP II OVERCOLLATERALIZED AMOUNT: With respect to any
Distribution
Date, is the excess, if any, of (a) the
aggregate Stated Principal Balance of
Loan Group II as of the last day of the
related Due Period over (b) the
aggregate Certificate Principal Balance of
the Group II Offered
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<PAGE>
Certificates on such Distribution Date
(after taking into account the payment of
principal other than any Group II Extra
Principal Distribution Amount on such
Certificates).
GROUP II OVERCOLLATERALIZATION INCREASE AMOUNT: As of any
Distribution
Date, the lesser of (a) the excess, if any,
of (i) the Group II
Overcollateralization Target Amount over
(ii) the Group II Overcollateralized
Amount on such Distribution Date (after
taking into account payments to the
Group II Offered Certificates of the Group
II Basic Principal Distribution
Amount on such Distribution Date) and (b)
the related Excess Spread for such
Distribution Date.
GROUP II OVERCOLLATERALIZATION RELEASE AMOUNT: With respect to
any
Distribution Date, the lesser of (x) the
related Principal Remittance Amount for
such Distribution Date and (y) the excess,
if any, of (i) the Group II
Overcollateralized Amount for such
Distribution Date (assuming that 100% of the
related Principal Remittance Amount is
applied as a principal payment on such
Distribution Date) over (ii) the Group II
Overcollateralization Target Amount
for such Distribution Date (with the amount
pursuant to clause (y) deemed to be
$0 if the Group I Overcollateralized Amount
is less than or equal to the Group
II Overcollateralization Target Amount on
that Distribution Date).
GROUP II OVERCOLLATERALIZATION TARGET AMOUNT: With respect to
any
Distribution Date, $1,559,542.63.
GROUP II SENIOR CERTIFICATES: The Class II-A-1 Certificates and
Class
II-A-2 Certificates.
GROUP II SUBORDINATE CERTIFICATES: Any of the Class II-M-1,
Class
II-M-2, Class II-M-3, Class II-B-1, Class
II-B-2 and Class II-B-3 Certificates.
GROUP II SUB-TRUST: The portion of the Trust Fund allocated to
Loan
Group II.
HSBC: HSBC Mortgage Corporation (USA), and any successor
thereto.
HSBC ASSIGNMENT AGREEMENT: The Assignment, Assumption and
Recognition
Agreement, dated as of March 31, 2005, by
and among the Seller, HSBC and the
Trustee evidencing the assignment of the
HSBC Servicing Agreement to the Trust.
HSBC LOANS: Those Mortgage Loans subject to this Agreement which
were
purchased by the Seller from HSBC pursuant
to the HSBC Servicing Agreement.
HSBC SERVICING AGREEMENT: The Purchase, Warranties and
Servicing
Agreement, dated as of May 1, 2002, by and
between the Seller and HSBC, as
modified by the HSBC Assignment
Agreement.
INDEMNIFIED PERSONS: The Trustee, the Master Servicer, the Company,
the
Trust Fund and the Securities Administrator
and their officers, directors,
agents and employees and, with respect to
the Trustee, any separate co-trustee
and its officers, directors, agents and
employees.
INITIAL CERTIFICATE PRINCIPAL BALANCE: With respect to any
Certificate,
the Certificate Principal Balance of such
Certificate or any predecessor
Certificate on the Closing Date.
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<PAGE>
INSURANCE POLICY: With respect to any Mortgage Loan included in
the
Trust Fund, any insurance policy or LPMI
Policy, including all riders and
endorsements thereto in effect with respect
to such Mortgage Loan, including any
replacement policy or policies for any
Insurance Policies.
INSURANCE PROCEEDS: Proceeds paid in respect of the Mortgage
Loans
pursuant to any Insurance Policy or any
other insurance policy covering a
Mortgage Loan, to the extent such proceeds
are payable to the mortgagee under
the Mortgage, the Company, the related
Servicer or the trustee under the deed of
trust and are not applied to the
restoration of the related Mortgaged Property
or released to the Mortgagor in accordance
with the procedures that the Company
or the related Servicer would follow in
servicing mortgage loans held for its
own account, in each case other than any
amount included in such Insurance
Proceeds in respect of Insured
Expenses.
INSURED EXPENSES: Expenses covered by an Insurance Policy or any
other
insurance policy with respect to the
Mortgage Loans.
INTEREST DETERMINATION DATE: Shall mean the second LIBOR Business
Day
preceding the commencement of each Accrual
Period.
INTEREST FUNDS: For any Distribution Date and each Loan Group, (i)
the
sum, without duplication, of (a) all
scheduled interest during the related Due
Period with respect to the related Mortgage
Loans less the Servicing Fee and the
LPMI Fee, if any, (b) all Advances relating
to interest with respect to the
related Mortgage Loans made on or prior to
the related Distribution Account
Deposit Date, (c) all Compensating Interest
with respect to the related Mortgage
Loans required to be remitted by the
Company or the Master Servicer pursuant to
this Agreement or the related Servicer
pursuant to the related Servicing
Agreement with respect to such Distribution
Date, (d) Liquidation Proceeds and
Subsequent Recoveries with respect to the
related Mortgage Loans collected
during the related Prepayment Period (to
the extent such Liquidation Proceeds
and Subsequent Recoveries relate to
interest), (e) all amounts relating to
interest with respect to each Mortgage Loan
in the related Loan Group
repurchased by the Seller pursuant to
Sections 2.02 and 2.03 and by EMC pursuant
to Section 4.20 and (f) all amounts in
respect of interest in respect of the
related Loan Group paid by the Master
Servicer pursuant to Section 11.01, in
each case to the extent remitted by the
Company or the related Servicer, as
applicable, to the Distribution Account
pursuant to this Agreement or the
related Servicing Agreement minus (ii) all
amounts relating to interest in
respect of the related Loan Group required
to be reimbursed pursuant to Sections
5.02, 5.05, 5.07 and 5.09 or as otherwise
set forth in this Agreement.
INTEREST RATE CAP: With respect to the Class I-A Certificates and
on
any Distribution Date, the weighted average
of the Net Mortgage Rates of Loan
Group I for such Distribution Date;
provided, however, that for federal income
tax purposes the Interest Rate Cap for such
Certificates shall be the equivalent
of the foreogoing, expressed as the
weighted average of the Uncertificated REMIC
I Pass-Through Rates on the REMIC I Regular
Interests (other than REMIC I
Regular Interest I-P).
With respect to the Class I-M Certificates and Class I-B
Certificates
and any Distribution Date, the weighted
average of the Net Mortgage Rates of
Loan Group I for such Distribution Date,
adjusted for the actual number of days
elapsed in the related Accrual Period;
provided,
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<PAGE>
however, that for federal income tax
purposes the Interest Rate Cap for such
Certificates shall be the equivalent of the
foreogoing, expressed as the
weighted average of the Uncertificated
REMIC I Pass-Through Rates on the REMIC I
Regular Interests (other than REMIC I
Regular Interest I-P), adjusted for the
actual number of days elapsed in the
related Accrual Period.
With respect to the Class II-A-1 Certificates and on any
Distribution
Date, the weighted average of the Net
Mortgage Rates of Loan Group II for such
Distribution Date; provided, however, that
for federal income tax purposes the
Interest Rate Cap for such Certificates
shall be the equivalent of the
foreogoing, expressed as the weighted
average of the Uncertificated REMIC II
Pass-Through Rates on the REMIC II Regular
Interests (other than REMIC II
Regular Interest II-P).
With respect to the Class II-A-2, Class II-M and Class II-B
Certificates and any Distribution Date, the
weighted average of the Net Mortgage
Rates of Loan Group II for such
Distribution Date, adjusted for the actual
number of days elapsed in the related
Accrual Period; provided, however, that
for federal income tax purposes the
Interest Rate Cap for such Certificates
shall be the equivalent of the foreogoing,
expressed as the weighted average of
the Uncertificated REMIC II Pass-Through
Rates on the REMIC II Regular Interests
(other than REMIC II Regular Interest
II-P), adjusted for the actual number of
days elapsed in the related Accrual
Period.
INTEREST SHORTFALL: With respect to any Distribution Date, means
the
aggregate shortfall, if any, in collections
of interest (adjusted to the related
Net Mortgage Rates) on the related Mortgage
Loans resulting from (a) Principal
Prepayments with respect to the related
Loan Group in full received during the
related Prepayment Period, (b) the partial
Principal Prepayments with respect to
the related Loan Group received during the
related Prepayment Period to the
extent applied prior to the Due Date in the
month of the Distribution Date and
(c) interest payments on the related Loan
Group being limited pursuant to the
provisions of the Relief Act or similar
state laws.
LAST SCHEDULED DISTRIBUTION DATE: April 25, 2035.
LATEST POSSIBLE MATURITY DATE: The Distribution Date following
the
final scheduled maturity date of the
Mortgage Loan in the Trust Fund having the
latest scheduled maturity date as of the
Cut-off Date. For purposes of the
Treasury regulations under 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 related Servicer has made a Final
Recovery Determination with respect
thereto.
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<PAGE>
LIQUIDATION PROCEEDS: Amounts, other than Insurance Proceeds,
received
in connection with the partial or complete
liquidation of a Mortgage Loan,
whether through trustee's sale, foreclosure
sale or otherwise, or in connection
with any condemnation or partial release of
a Mortgaged Property and any other
proceeds received with respect to an REO
Property, less the sum of related
unreimbursed Advances, Servicing Fees and
Servicing Advances and all expenses of
liquidation, including property protection
expenses and foreclosure and sale
costs, including court and reasonable
attorneys fees.
LOAN GROUP: Any of Loan Group I or Loan Group II.
LOAN GROUP I: The Mortgage Loans included as part of Loan Group I
on
the Mortgage Loan Schedule.
LOAN GROUP II: The Mortgage Loans included as as part of Loan Group
II
on the Mortgage Loan Schedule.
LOAN-TO-VALUE RATIO: The fraction, expressed as a percentage,
the
numerator of which is the original
principal balance of the related Mortgage
Loan and the denominator of which is the
Appraised Value of the related
Mortgaged Property.
LOSS ALLOCATION LIMITATION: The meaning specified in Section
6.05(c)
hereof.
LPMI FEE: Shall mean the fee payable to the insurer for each
Mortgage
Loan subject to an LPMI Policy as set forth
in such LPMI Policy.
LPMI POLICY: A policy of mortgage guaranty insurance issued by
an
insurer meeting the requirements of Fannie
Mae and Freddie Mac in which the
Company or the related Servicer of the
related Mortgage Loan is responsible for
the payment of the LPMI Fee thereunder from
collections on the related Mortgage
Loan.
MAJORITY CLASS I-C CERTIFICATEHOLDER: Shall mean the Holder of a
50.01%
or greater Percentage Interest in the Class
I-C Certificates.
MAJORITY CLASS II-C CERTIFICATEHOLDER: Shall mean the Holder of
a
50.01% or greater Percentage Interest in
the Class II-C Certificates.
MASTER SERVICER: Wells Fargo Bank, National Association, in its
capacity as master servicer, and its
successors and assigns.
MASTER SERVICER CERTIFICATION: A written certification covering
servicing of the Mortgage Loans by the
Company and all Servicers and signed by
an officer of the Master Servicer that
complies with (i) the Sarbanes-Oxley Act
of 2002, as amended from time to time, and
(ii) the February 21, 2003 Statement
by the Staff of the Division of Corporation
Finance of the Securities and
Exchange Commission Regarding Compliance by
Asset-Backed Issuers with Exchange
Act Rules 13a-14 and 15d-14, as in effect
from time to time; provided that if,
after the Closing Date (a) the
Sarbanes-Oxley Act of 2002 is amended, (b) the
Statement referred to in clause (ii) is
modified or superceded by any subsequent
statement, rule or regulation of the
Securities and Exchange Commission or any
statement of a division thereof, or (c) any
future
- 21 -
<PAGE>
releases, rules and regulations are
published by the Securities and Exchange
Commission from time to time pursuant to
the Sarbanes-Oxley Act of 2002, which
in any such case affects the form or
substance of the required certification and
results in the required certification
being, in the reasonable judgment of the
Master Servicer, materially more onerous
than the form of the required
certification as of the Closing Date, the
Master Servicer Certification shall be
as agreed to by the Master Servicer, the
Depositor and the Seller following a
negotiation in good faith to determine how
to comply with any such new
requirements.
MASTER SERVICER COLLECTION ACCOUNT: The trust accounts or
accounts
created and maintained pursuant to Section
5.06 hereof, which shall be entitled
"U.S. Bank National Association, as Trustee
f/b/o Holders of Bear Stearns Asset
Backed Securities I LLC, Asset Backed
Certificates, Series 2005-AC2 - Master
Servicer Collection Account".
MASTER SERVICING COMPENSATION: The meaning specified in Section
4.14.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation
organized and existing under the laws of
the State of Delaware, or any successor
thereto.
MERS(R) SYSTEM: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans
registered
with MERS on the MERS(R) System.
MOM LOAN: With respect to any Mortgage Loan, MERS acting as the
mortgagee of such Mortgage Loan, solely as
nominee for the originator of such
Mortgage Loan and its successors and
assigns, at the origination thereof.
MONTHLY INTEREST DISTRIBUTABLE AMOUNT: With respect to the
related
Certificates (other than the Class P
Certificates and Class R Certificates) for
any Distribution Date, means an amount
equal to the interest accrued during the
related Accrual Period at the applicable
Pass-Through Rate on the Certificate
Principal Balance (or Certificate Notional
Amount) of such Certificate
immediately prior to such Distribution Date
less such Certificate's share of any
Unpaid Interest Shortfall and the interest
portion of any Realized Losses on the
related Mortgage Loans allocated to such
Certificate pursuant to Section 1.02.
The Monthly Interest Distributable Amount
with respect to the Class I-A, Class
II-A-1 and Class C Certificates is
calculated on the basis of a 360-day year
consisting of twelve 30-day months. The
Monthly Interest Distributable Amount
with respect to the Class II-A-2
Certificates and Subordinate Certificates is
calculated on the basis of a 360-day year
and the actual number of days elapsed
during the related Accrual Period. No
Monthly Interest Distributable Amount will
be payable with respect to any Class of
Certificates after the Distribution Date
on which the outstanding Certificate
Principal Balance (or Certificate Notional
Amount) of such Certificate has been
reduced to zero.
MONTHLY STATEMENT: The statement delivered to the
Certificateholders
pursuant to Section 6.06.
MOODY'S: Moody's Investors Service, Inc.
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<PAGE>
MORTGAGE: The mortgage, deed of trust or other instrument creating
a
first lien on or first priority ownership
interest in an estate in fee simple in
real property securing a Mortgage Note.
MORTGAGE FILE: The mortgage documents listed in Section 2.01
hereof
pertaining to a particular Mortgage Loan
and any additional documents delivered
to the Trustee to be added to the Mortgage
File pursuant to this Agreement.
MORTGAGE LOANS: Such of the Mortgage Loans transferred and assigned
to
the Trustee pursuant to the provisions
hereof, as from time to time are held as
a part of the Trust Fund (including any REO
Property), the mortgage loans so
held being identified in the Mortgage Loan
Schedule, notwithstanding foreclosure
or other acquisition of title of the
related Mortgaged Property. Any mortgage
loan that was intended by the parties
hereto to be transferred to the Trust Fund
as indicated by such Mortgage Loan Schedule
which is in fact not so transferred
for any reason including, without
limitation, a breach of the representation
contained in Section 2.03(b)(v) hereof,
shall continue to be a Mortgage Loan
hereunder until the Purchase Price with
respect thereto has been paid to the
Trust Fund.
MORTGAGE LOAN PURCHASE AGREEMENT: Shall mean the Mortgage Loan
Purchase
Agreement, dated as of March 31, 2005,
between the Seller, as seller and the
Depositor, as purchaser.
MORTGAGE LOAN PURCHASE PRICE: The price, calculated as set forth
in
Section 11.01, to be paid in connection
with the repurchase of the Mortgage
Loans pursuant to Section 11.01.
MORTGAGE LOAN SCHEDULE: The list of Mortgage Loans (as from time
to
time amended by the Company or the Master
Servicer to reflect the deletion of
Deleted Mortgage Loans and the addition of
Replacement Mortgage Loans pursuant
to the provisions of this Agreement)
transferred to the Trustee as part of the
Trust Fund and from time to time subject to
this Agreement, the initial Mortgage
Loan Schedule being attached hereto as
Exhibit B, setting forth the following
information with respect to each Mortgage
Loan:
(i) the loan
number;
(ii)
the loan group;
(iii) the
Mortgage Rate in effect as of the Cut-off Date;
(iv)
the Servicer (or the Company, if it services the Mortgage
Loan), the Servicing Fee Rate;
(v) the LPMI
Fee, if applicable;
(vi)
the Net Mortgage Rate in effect as of the Cut-off Date;
(vii) the
maturity date;
(viii) the
original principal balance;
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<PAGE>
(ix)
the Cut-off Date Principal Balance;
(x) the
original term;
(xi)
the remaining term;
(xii) the property type; and
(xiii) the MIN
with respect to each Mortgage Loan.
Such schedule shall also set forth the
aggregate Cut-off Date Principal Balance
for all of the Mortgage Loans in each Loan
Group.
MORTGAGE NOTE: The original executed note or other evidence of
indebtedness of a Mortgagor under a
Mortgage Loan.
MORTGAGE RATE: The annual rate of interest borne by a Mortgage
Note.
MORTGAGED PROPERTY: The underlying property securing a Mortgage
Loan.
MORTGAGOR: The obligors on a Mortgage Note.
NET MONTHLY EXCESS CASHFLOW: With respect to any Distribution Date
and
each Loan Group, the sum of (a) any Group I
Overcollateralization Release Amount
or Group II Overcollateralization Release
Amount, as applicable, for such
Distribution Date and (b) the Remaining
Excess Spread for such Loan Group for
such Distribution Date.
NET MORTGAGE RATE: As to each Mortgage Loan, and at any time, the
per
annum rate equal to the related Mortgage
Rate less the sum of (i) the Servicing
Fee Rate and (ii) the rate at which the
LPMI Fee is calculated, if any.
NET WAC RATE CARRYOVER AMOUNT: With respect to each Class of
Offered
Certificates and any Distribution Date, an
amount equal to the sum of (i) the
excess, if any, of (x) the amount of
interest such Class would have been
entitled to receive on such Distribution
Date if the Pass-Through Rate
applicable to such Class would not have
been reduced by the related Interest
Rate Cap on such Distribution Date (not to
exceed 8.00% per annum, in the case
of the Class II-A-2 Certificates, and 9.00%
per annum, in the case of the Class
M Certificates and Class B Certificates)
over (y) the amount of interest paid on
such Distribution Date if the Pass-Through
Rate is limited by the related
Interest Rate Cap plus (ii) the related Net
WAC Rate Carryover Amount for the
previous Distribution Date not previously
distributed together with interest
thereon at a rate equal to the Pass-Through
Rate for such Class for the most
recently ended Accrual Period.
NET WAC RESERVE FUND: Shall mean the separate trust account created
and
maintained by the Securities Administrator
pursuant to Section 6.08 hereof.
NON-BOOK-ENTRY CERTIFICATE: Any Certificate other than a
Book-Entry
Certificate.
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<PAGE>
NONRECOVERABLE ADVANCE: Any portion of an Advance previously made
or
proposed to be made by the Company or the
Master Servicer pursuant to this
Agreement or the related Servicer pursuant
to the related Servicing Agreement,
that, in the good faith judgment of the
Company, the Master Servicer or the
related Servicer, will not or, in the case
of a proposed advance, would not, be
ultimately recoverable by it from the
related Mortgagor, related Liquidation
Proceeds, Insurance Proceeds or
otherwise.
OFFERED CERTIFICATES: Any of the Class I-A, Class I-M-1, Class
I-M-2,
Class I-M-3, Class I-B-1, Class I-B-2,
Class I-B-3, Class II-A-1, Class II-A-2,
Class II-M-1, Class II-M-2, Class II-M-3,
Class II-B-1, Class II-B-2, Class
II-B-3 Certificates.
OFFICER'S CERTIFICATE: A certificate (i) signed by the Chairman of
the
Board, the Vice Chairman of the Board, the
President, a Vice President (however
denominated), an Assistant Vice President,
the Treasurer, the Secretary, or one
of the assistant treasurers or assistant
secretaries of the Depositor or the
Master Servicer (or any other officer
customarily performing functions similar
to those performed by any of the above
designated officers and also to whom,
with respect to a particular matter, such
matter is referred because of such
officer's knowledge of and familiarity with
a particular subject) or (ii), if
provided for in this Agreement, signed by a
Servicing Officer, as the case may
be, and delivered to the Depositor, the
Seller, the Securities Administrator,
the Master Servicer and/or the Trustee, as
the case may be, as required by this
Agreement.
ONE-MONTH LIBOR: With respect to any 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 2.850% 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
II-A-2, 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 the Seller, the Depositor, the Company
or the Master Servicer, reasonably
acceptable to each addressee of such
opinion; provided that with respect to
Section 2.05, 8.05, 8.07 or 12.01, or the
interpretation or application of the
REMIC Provisions, such counsel must (i) in
fact be independent of the Seller,
Depositor, the Company and the Master
Servicer, (ii) not have any direct
financial interest in the Seller,
Depositor, the Company or the Master Servicer
or in any affiliate of either, and (iii)
not be connected with the Seller,
Depositor, the Company or the Master
Servicer as an officer, employee, promoter,
underwriter, trustee, partner, director or
person performing similar functions.
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<PAGE>
ORIGINAL VALUE: The value of the property underlying a Mortgage
Loan
based, in the case of the purchase of the
underlying Mortgaged Property, on the
lower of an appraisal or the sales price of
such property or, in the case of a
refinancing, on an appraisal.
ORIGINATOR: With respect to each Mortgage Loan, shall mean the
originator set forth in the Mortgage Loan
Schedule for such Mortgage Loan.
OTS: The Office of Thrift Supervision.
OUTSTANDING: With respect to the Certificates as of any date of
determination, all Certificates theretofore
executed and authenticated under
this Agreement except:
(a)
Certificates theretofore canceled by the Securities
Administrator or delivered to the
Securities Administrator for cancellation; and
(b)
Certificates in exchange for which or in lieu of
which other Certificates have been executed
and delivered by the Securities
Administrator pursuant to this
Agreement.
OUTSTANDING MORTGAGE LOAN: As of any date of determination, a
Mortgage
Loan with a Stated Principal Balance
greater than zero that was not the subject
of a Principal Prepayment in full, and that
did not become a Liquidated Loan,
prior to the end of the related Prepayment
Period.
OWNERSHIP INTEREST: As to any Certificate, any ownership interest
in
such Certificate including any interest in
such Certificate as the Holder
thereof and any other interest therein,
whether direct or indirect, legal or
beneficial.
PASS-THROUGH RATE: With respect to each Class of Certificates
(other
than the Class I-C Certificates and Class
II-C Certificates), the Class I-A
Pass-Through Rate, Class I-M-1 Pass-Through
Rate, Class I-M-2 Pass-Through Rate,
Class I-M-3 Pass-Through Rate, Class I-B-1
Pass-Through Rate, Class I-B-2
Pass-Through Rate, Class I-B-3, Class
II-A-1 Pass-Through Rate, Class II-A-2
Pass-Through Rate, Class II-M-1
Pass-Through Rate, Class II-M-2 Pass-Through
Rate, Class II-M-3 Pass-Through Rate, Class
II-B-1 Pass-Through Rate, Class
II-B-2 Pass-Through Rate or Class II-B-3
Pass-Through Rate, as applicable.
With respect to the Class I-C Certificates, a per annum rate equal
to
the percentage equivalent of a fraction,
the numerator of which is (x) the sum
of the amounts calculated pursuant to
clauses (A) through (I) below, and the
denominator of which is (y) the aggregate
Uncertificated Principal Balance of
the REMIC I Regular Interests (other than
REMIC I Regular Interest I-P). For
purposes of calculating the Pass-Through
Rate for the Class I-C Certificates,
the numerator of the fraction described
above is equal to the sum of the
following components:
(A) the
Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest AA minus the REMIC I Marker Rate, applied
to
an amount equal to the Uncertificated Principal Balance of REMIC
I
Regular Interest AA;
- 26 -
<PAGE>
(B) the
Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest I-A minus the REMIC I Marker Rate, applied
to
an amount equal to the Uncertificated Principal Balance of REMIC
I
Regular Interest
I-A;
(C) the
Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest I-M-1 minus the REMIC I Marker Rate,
applied
to an amount equal to the Uncertificated Principal Balance of REMIC
I
Regular Interest I-M-1;
(D) the
Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest I-M-2 minus the REMIC I Marker Rate,
applied
to an amount equal to the Uncertificated Principal Balance of REMIC
I
Regular Interest I-M-2;
(E) the
Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest I-M-3 minus the REMIC I Marker Rate,
applied
to an amount equal to the Uncertificated Principal Balance of REMIC
I
Regular Interest I-M-3;
(F) the
Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest I-B-1 minus the REMIC I Marker Rate,
applied
to an amount equal to the Uncertificated Principal Balance of REMIC
I
Regular Interest I-B-1;
(G) the
Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest I-B-2 minus the REMIC I Marker Rate,
applied
to an amount equal to the Uncertificated Principal Balance of REMIC
I
Regular Interest I-B-2;
(H) the
Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest I-B-3 minus the REMIC I Marker Rate,
applied
to an amount equal to the Uncertificated Principal Balance of REMIC
I
Regular Interest I-B-3; and
(I) the
Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest ZZ minus the REMIC I Marker Rate, applied
to
an amount equal to the Uncertificated Principal Balance of REMIC
I
Regular Interest ZZ.
With respect to the Class II-C Certificates, a per annum rate equal
to
the percentage equivalent of a fraction,
the numerator of which is (x) the sum
of the amounts calculated pursuant to
clauses (A) through (J) below, and the
denominator of which is (y) the aggregate
Uncertificated Principal Balance of
the REMIC II Regular Interests (other than
REMIC II Regular Interest II-P). For
purposes of calculating the Pass-Through
Rate for the Class II-C Certificates,
the numerator of the fraction described
above is equal to the sum of the
following components:
(A) the
Uncertificated REMIC II Pass-Through Rate for
REMIC II Regular Interest AA minus the REMIC II Marker Rate,
applied to
an amount equal to the Uncertificated Principal Balance of REMIC
II
Regular Interest AA;
(B) the
Uncertificated REMIC II Pass-Through Rate for
REMIC II Regular Interest II-A-1 minus the REMIC II Marker
Rate,
applied to an amount equal to the Uncertificated Principal Balance
of
REMIC II Regular Interest II-A-1;
- 27 -
<PAGE>
(C) the
Uncertificated REMIC II Pass-Through Rate for
REMIC II Regular Interest II-A-2 minus the REMIC II Marker
Rate,
applied to an amount equal to the Uncertificated Principal Balance
of
REMIC II Regular Interest II-A-2;
(D) the
Uncertificated REMIC II Pass-Through Rate for
REMIC II Regular Interest II-M-1 minus the REMIC II Marker
Rate,
applied to an amount equal to the Uncertificated Principal Balance
of
REMIC II Regular Interest II-M-1;
(E) the
Uncertificated REMIC II Pass-Through Rate for
REMIC II Regular Interest II-M-2 minus the REMIC II Marker
Rate,
applied to an amount equal to the Uncertificated Principal Balance
of
REMIC II Regular Interest II-M-2;
(F) the
Uncertificated REMIC II Pass-Through Rate for
REMIC II Regular Interest II-M-3 minus the REMIC II Marker
Rate,
applied to an amount equal to the Uncertificated Principal Balance
of
REMIC II Regular Interest II-M-3;
(G) the
Uncertificated REMIC II Pass-Through Rate for
REMIC II Regular Interest II-B-1 minus the REMIC II Marker
Rate,
applied to an amount equal to the Uncertificated Principal Balance
of
REMIC II Regular Interest II-B-1;
(H) the
Uncertificated REMIC II Pass-Through Rate for
REMIC II Regular Interest II-B-2 minus the REMIC II Marker
Rate,
applied to an amount equal to the Uncertificated Principal Balance
of
REMIC II Regular Interest II-B-2;
(I) the
Uncertificated REMIC II Pass-Through Rate for
REMIC II Regular Interest II-B-3 minus the REMIC II Marker
Rate,
applied to
an amount equal to the Uncertificated Principal Balance of
REMIC II Regular Interest II-B-3; and
(J) the
Uncertificated REMIC II Pass-Through Rate for
REMIC II Regular Interest ZZ minus the REMIC II Marker Rate,
applied to
an amount equal to the Uncertificated Principal Balance of REMIC
II
Regular Interest ZZ.
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
the 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;
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<PAGE>
(iii)
commercial or finance company paper which is then
receiving the highest commercial or finance company paper rating
of
each Rating Agency, or such lower rating as will not result in
the
downgrading or withdrawal of the ratings then assigned to the
Certificates by each Rating Agency;
(iv)
certificates of
deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or
trust
company incorporated under the laws of the United States or of
any
state thereof and subject to supervision and examination by
federal
and/or state banking authorities (including the Trustee in its
commercial banking capacity), provided that the commercial paper
and/or
long term unsecured debt obligations of such depository institution
or
trust company are then rated one of the two highest long-term and
the
highest short-term ratings of each such Rating Agency for such
securities, or such lower ratings as will not result in the
downgrading
or withdrawal of the rating then assigned to the Certificates by
any
Rating Agency;
(v) demand or
time deposits or certificates of deposit
issued by any bank or trust company or savings institution to
the
extent that such deposits are fully insured by the FDIC;
(vi)
guaranteed reinvestment agreements issued by any
bank, insurance company or other corporation containing, at the
time of
the issuance of such agreements, such terms and conditions as will
not
result in the downgrading or withdrawal of the rating then assigned
to
the Certificates by any such Rating Agency;
(vii)
repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered
into
with a depository institution or trust company (acting as
principal)
described in clause (iv) above;
(viii)
securities (other than stripped bonds, stripped
coupons or instruments sold at a purchase price in excess of 115%
of
the face amount thereof) bearing interest or sold at a discount
issued
by any corporation incorporated under the laws of the United States
or
any state thereof which, at the time of such investment, have one
of
the two highest long term ratings of each Rating Agency (except if
the
Rating Agency is Moody's, such rating shall be the highest
commercial
paper rating of Moody's for any such securities), or such lower
rating
as will not result in the downgrading or withdrawal of the rating
then
assigned to the Certificates by any Rating Agency, as evidenced by
a
signed writing delivered by each Rating Agency;
(ix)
interests in any money market fund (including any
such fund managed or advised by the Trustee or Master Servicer or
any
affiliate thereof) which at the date of acquisition of the
interests in
such fund and throughout the time such interests are held in such
fund
has the highest applicable long term rating by each Rating Agency
or
such lower rating as will not result in the downgrading or
withdrawal
of the ratings then assigned to the Certificates by each Rating
Agency;
(x) short term
investment funds sponsored by any trust
company or banking association incorporated under the laws of
the
United States or any state thereof
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<PAGE>
(including any such fund managed or advised by the Trustee or
any
affiliate thereof) which on the date of acquisition has been rated
by
each Rating Agency in their respective highest applicable
rating
category or such lower rating as will not result in the downgrading
or
withdrawal of the ratings then assigned to the Certificates by
each
Rating Agency; and
(xi)
such other investments having a specified stated
maturity and bearing interest or sold at a discount acceptable to
each
Rating Agency as will not result in the downgrading or withdrawal
of
the rating then assigned to the Certificates by any Rating Agency,
as
evidenced by a signed writing delivered by each Rating Agency;
provided, that no such instrument shall be
a Permitted Investment if such
instrument (i) evidences the right to
receive interest only payments with
respect to the obligations underlying such
instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep
discount; provided further that no such
instrument shall be a Permitted Investment
(A) if such instrument evidences
principal and interest payments derived
from obligations underlying such
instrument and the interest payments with
respect to such instrument provide a
yield to maturity of greater than 120% of
the yield to maturity at par of such
underlying obligations, or (B) if it may be
redeemed at a price below the
purchase price (the foregoing clause (B)
not to apply to investments in units of
money market funds pursuant to clause (vi)
above); provided further that no
amount beneficially owned by any REMIC may
be invested in investments (other
than money market funds) treated as equity
interests for federal income tax
purposes, unless the Master Servicer shall
receive an Opinion of Counsel, at the
expense of the Master Servicer, to the
effect that such investment will not
adversely affect the status of any such
REMIC as a REMIC under the Code or
result in imposition of a tax on any such
REMIC. Permitted Investments that are
subject to prepayment or call may not be
purchased at a price in excess of par.
PERMITTED TRANSFEREE: Any Person (x) other than (i) the United
States,
any State or political subdivision thereof,
any possession of the United States
or any agency or instrumentality of any of
the foregoing, (ii) a foreign
government, International Organization or
any agency or instrumentality of
either of the foregoing, (iii) an
organization (except certain farmers'
cooperatives described in section 521 of
the Code) that is exempt from tax
imposed by Chapter 1 of the Code (including
the tax imposed by section 511 of
the Code on unrelated business taxable
income) on any excess inclusions (as
defined in section 860E(c)(1) of the Code)
with respect to any Residual
Certificate, (iv) rural electric and
telephone cooperatives described in section
1381(a)(2)(C) of the Code or (v) an
electing large partnership within the
meaning of Section 775(a) of the Code, (y)
that is a citizen or resident of the
United States, a corporation, partnership
(other than a partnership that has any
direct or indirect foreign partners) or
other entity (treated as a corporation
or a partnership for federal income tax
purposes), created or organized in or
under the laws of the United States, any
State thereof or the District of
Columbia, an estate whose income from
sources without the United States is
includible in gross income for United
States federal income tax purposes
regardless of its connection with the
conduct of a trade or business within the
United States, or a trust if a court within
the United States is able to
exercise primary supervision over the
administration of the trust and one or
more United States persons have authority
to control all substantial decisions
of the trust or if it has a valid election
in effect under applicable U.S.
Treasury regulations to be treated as a
United States person and (z) other than
any other Person so designated by the
Trustee based upon an Opinion of Counsel
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<PAGE>
addressed to the Trustee (which shall not
be an expense of the Trustee) that
states that the Transfer of an Ownership
Interest in a Residual Certificate to
such Person may cause REMIC I, REMIC II 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.
PHH: PHH Mortgage Corporation, and any successor thereto.
PHH ASSIGNMENT AGREEMENT: The Assignment, Assumption and
Recognition
Agreement, dated as of March 31, 2005, by
and among the Seller, PHH, Bishop's
Gate and the Trustee evidencing the
assignment of the PHH Servicing Agreement to
the Trust.
PHH LOANS: Those Mortgage Loans subject to this Agreement which
were
purchased by the Seller from PHH and
Bishop's Gate pursuant to the PHH Servicing
Agreement.
PHH SERVICING AGREEMENT: The Purchase, Warranties and Servicing
Agreement, dated as of October 23, 2001, by
and among the Seller, PHH, as
successor to Cendant Mortgage Corporation,
and Bishop's Gate, as modified by the
PHH Assignment Agreement.
PREPAYMENT ASSUMPTION: The applicable rate of prepayment, as
described
in the Prospectus Supplement relating to
each Class of Offered Certificates.
PREPAYMENT CHARGE: Any prepayment premium, penalty or charge
payable by
a Mortgagor in connection with any
Principal Prepayment on a Mortgage Loan
pursuant to the terms of the related
Mortgage Note.
PREPAYMENT INTEREST EXCESS: With respect to any Distribution Date,
for
each EMC Mortgage Loan that was the subject
of a Principal Prepayment in full or
in part during the portion of the related
Prepayment Period occurring between
the first day of the calendar month in
which such Distribution Date occurs and
the Determination Date of the calendar
month in which such Distribution Date
occurs, an amount equal to interest (to the
extent received) at the applicable
Net Mortgage Rate on the amount of such
Principal Prepayment for the number of
days commencing on the first day of the
calendar month in which such
Distribution Date occurs and ending on the
last date through which interest is
collected from the related Mortgagor.
PREPAYMENT INTEREST SHORTFALL: With respect to any Distribution
Date,
for each Mortgage Loan that was the subject
of a partial Principal Prepayment, a
Principal Prepayment in full, or that
became a Liquidated Loan during the
related Prepayment Period, (other than a
Principal Prepayment in full resulting
from the purchase of a Mortgage Loan
pursuant to Section 2.02, 2.03, 4.20 or
11.01 hereof), the amount, if any, by which
(i) one month's interest at the
applicable Net Mortgage Rate on the Stated
Principal Balance of such Mortgage
Loan
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<PAGE>
immediately prior to such prepayment (or
liquidation) or in the case of a
partial Principal Prepayment on the amount
of such prepayment (or liquidation
proceeds) exceeds (ii) the amount of
interest paid or collected in connection
with such Principal Prepayment or such
liquidation proceeds less the sum of (a)
the related Servicing Fee and (b) the LPMI
Fee, if any.
PREPAYMENT PERIOD: As to any Distribution Date and (i) each EMC
Mortgage Loan, 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 and (ii) any other Mortgage
Loan, the period set forth in the related
Servicing Agreement.
PRIMARY MORTGAGE INSURANCE POLICY: Any primary mortgage
guaranty
insurance policy issued in connection with
a Mortgage Loan which provides
compensation to a Mortgage Note holder in
the event of default by the obligor
under such Mortgage Note or the related
security instrument, if any or any
replacement policy therefor through the
related Accrual Period for such Class
relating to a Distribution Date.
PRINCIPAL DISTRIBUTION AMOUNT: With respect to each Loan Group and
any
Distribution Date, the sum of (a) the Group
I Basic Principal Distribution
Amount or Group II Basic Principal
Distribution Amount, as applicable, for such
Loan Group for such Distribution Date and
(b) any Group I Extra Principal
Distribution Amount or Group II Extra
Principal Distribution Amount, as
applicable, for such Distribution Date.
PRINCIPAL FUNDS: With respect to any Distribution Date and each
Loan
Group, (i) the sum, without duplication, of
(a) all scheduled principal
collected on the related Mortgage Loans
during the related Due Period, (b) all
Advances relating to principal made with
respect to the Mortgage Loans in the
related Loan Group on or prior to the
Distribution Account Deposit Date, (c)
Principal Prepayments with respect to the
Mortgage Loans in the related Loan
Group exclusive of Prepayment Charges or
penalties collected during the related
Prepayment Period, (d) the Stated Principal
Balance of each Mortgage Loan in the
related Loan Group that was repurchased by
the Seller pursuant to Sections 2.02
or 2.03 or by EMC pursuant to Section 4.20,
(e) the aggregate of all
Substitution Adjustment Amounts with
respect to the related Mortgage Loans for
the related Determination Date in
connection with the substitution of related
Mortgage Loans pursuant to Section 2.03(c),
(e) all Liquidation Proceeds and
Subsequent Recoveries with respect to the
Mortgage Loans in the related Loan
Group collected during the related
Prepayment Period (to the extent such
Liquidation Proceeds and Subsequent
Recoveries relate to principal) and remitted
by the Company or the related Servicer to
the Distribution Account pursuant to
this Agreement or the related Servicing
Agreement and (f) amounts in respect of
principal paid by the Majority Class I-C
Certificateholder or by the Majority
Class II-C Certificateholder, as
applicable, pursuant to Section 11.01 minus
(ii) all related amounts required to be
reimbursed pursuant to Sections 5.02,
5.05, 5.07 and 5.09 or as otherwise set
forth in this Agreement.
PRINCIPAL REMITTANCE AMOUNT: With respect to each Distribution Date
and
each Loan Group, the sum of the amounts
listed in clauses (a) through (e) of the
definition of Principal Funds for the
related Loan Group.
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<PAGE>
PRINCIPAL PREPAYMENT: Any Mortgagor payment or other recovery of
(or
proceeds with respect to) principal on a
Mortgage Loan (including loans
purchased or repurchased under Sections
2.02, 2.03, 4.20 and 11.01 hereof) that
is received in advance of its scheduled Due
Date and is not accompanied by an
amount as to interest representing
scheduled interest due on any date or dates
in any month or months subsequent to the
month of prepayment. Partial Principal
Prepayments shall be applied by the Company
or the related Servicer, as
appropriate, in accordance with the terms
of the related Mortgage Note.
PRIVATE CERTIFICATES: Any of the Class C, Class P and Residual
Certificates.
PROSPECTUS SUPPLEMENT: The Prospectus Supplement dated March 29,
2005
relating to the public offering of the
Offered Certificates.
PROTECTED ACCOUNT: Each account established and maintained by
the
Company with respect to receipts on the
Mortgage Loans and REO Property in
accordance with Section 5.01 hereof or by
the related Servicer in accordance
with the related Servicing Agreement.
PUD: A Planned Unit Development.
PURCHASE PRICE: With respect to any Mortgage Loan required to
be
repurchased by the Seller pursuant to
Section 2.02 or 2.03 hereof, an amount
equal to the sum of (i) 100% of the
outstanding principal balance of the
Mortgage Loan as of the date of such
purchase plus (ii) accrued interest thereon
at the applicable Mortgage Rate through the
first day of the month in which the
Purchase Price is to be distributed to
Certificateholders, reduced by any
portion of the Servicing Fee, Servicing
Advances and Advances payable to the
purchaser of the Mortgage Loan plus and
(iii) any costs and damages (if any)
incurred by the Trust in connection with
any violation of such Mortgage Loan of
any predatory lending laws.
RATING AGENCY: Each of Moody's and S&P. If any such
organization or its
successor is no longer in existence,
"Rating Agency" shall be a nationally
recognized statistical rating organization,
or other comparable Person,
designated by the Depositor, notice of
which designation shall be given to the
Trustee. References herein to a given
rating category of a Rating Agency shall
mean such rating category without giving
effect to any modifiers.
REALIZED LOSS: With respect to each Mortgage Loan as to which a
Final
Recovery Determination has been made, an
amount (not less than zero) equal to
(i) the unpaid principal balance of such
Mortgage Loan as of the commencement of
the calendar month in which the Final
Recovery Determination was made, plus (ii)
accrued interest from the Due Date as to
which interest was last paid by the
Mortgagor through the end of the calendar
month in which such Final Recovery
Determination was made, calculated in the
case of each calendar month during
such period (A) at an annual rate equal to
the annual rate at which interest was
then accruing on such Mortgage Loan and (B)
on a principal amount equal to the
Stated Principal Balance of such Mortgage
Loan as of the close of business on
the Distribution Date during such calendar
month, minus (v) the proceeds, if
any, received in respect of such Mortgage
Loan during the calendar month in
which such Final Recovery Determination was
made, net of amounts that are
payable therefrom to the Company pursuant
to this Agreement or the applicable
Servicer pursuant to the related Servicing
Agreement. In addition, to the extent
the Master
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<PAGE>
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 related
Subordinate Certificates or applied to
increase Excess Spread on the related
Loan Group 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 the Class I-A, Class II-A-1, Class
I-C,
Class II-C, Class I-P, Class II-P and Class
R Certificates and any Distribution
Date, the close of business on the last
Business Day of the month preceding the
month in which such Distribution Date
occurs. With respect to any Distribution
Date and the Class II-A-2, Class M and
Class B Certificates, so long as such
Certificates are Book-Entry Certificates,
the Business Day preceding such
Distribution Date, and otherwise, the close
of business on the last Business Day
of the month preceding the month in which
such Distribution Date occurs.
REFERENCE BANKS: Shall mean leading banks selected by the
Securities
Administrator and engaged in transactions
in Eurodollar deposits in the
international Eurocurrency market (i) with
an established place of business in
London, (ii) which have been designated as
such by the Securities Administrator
and (iii) which are not controlling,
controlled by, or under common control
with, the Depositor, the Seller or the
Master Servicer.
REFERENCE BANK RATE: With respect to any Accrual Period shall mean
the
arithmetic mean, rounded upwards, if
necessary, to the nearest whole multiple of
0.03125%, of the offered
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<PAGE>
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 II-A-2,
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
II-A-2, 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
any
similar state law.
REMAINING EXCESS SPREAD: With respect to each Loan Group and
any
Distribution Date, (i) the Excess Spread
for such Loan Group, less (ii) the
Group I Extra Principal Distribution Amount
or Group II Extra Principal
Distribution Amount, as applicable, in each
case for such Distribution Date.
REMIC: A "real estate mortgage investment conduit" within the
meaning
of section 860D of the Code.
REMIC I: The segregated pool of assets described in Section
6.07(a).
REMIC I INTERESTS: The REMIC I Regular Interests and the Class
I-R-1
Certificates.
REMIC I INTEREST LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a)
the product of (i) the aggregate
Stated Principal Balance of Loan Group I
and related REO Properties then
outstanding and (ii) the Uncertificated
REMIC I Pass-Through Rate for REMIC I
Regular Interest AA minus the REMIC I
Marker Rate, divided by (b) 12.
REMIC I MARKER RATE: With respect to the Class I-C Certificates and
any
Distribution Date, a per annum rate equal
to two (2) times the weighted average
of the Uncertificated REMIC I Pass-Through
Rates for REMIC I Regular Interest
I-A, REMIC I Regular Interest I-M-1, REMIC
I Regular Interest I-M-2, REMIC I
Regular Interest I-M-3, REMIC I Regular
Interest I-B-1, REMIC I Regular Interest
I-B-2, REMIC I Regular Interest I-B-3 and
REMIC I Regular Interest ZZ, with the
rate on each such REMIC I Regular Interest
(other than REMIC I Regular Interest
ZZ) subject to a cap equal to the
Pass-Through Rate for the Corresponding
Certificate and with the rate on REMIC I
Regular Interest ZZ subject to a cap of
zero for the purpose of this calculation;
provided, however, that for this
purpose, the calculation of the
Uncertificated REMIC I Pass-Through Rate and the
related cap with respect to REMIC I Regular
Interest I-M-1, REMIC I Regular
Interest I-M-2, REMIC I Regular Interest
I-M-3, REMIC I Regular Interest I-B-1,
REMIC I Regular Interest I-B-2 and REMIC I
Regular Interest I-B-3 shall be
multiplied
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<PAGE>
by a fraction, the numerator of which is
the actual number of days in the
Accrual Period and the denominator of which
is 30.
REMIC I OVERCOLLATERALIZATION AMOUNT: With respect to any date
of
determination, (i) 1% of the aggregate
Uncertificated Principal Balance of the
REMIC I Regular Interests (other than REMIC
I Regular Interest I-P) minus (ii)
the aggregate Uncertificated Principal
Balance of REMIC I Regular Interest I-A,
REMIC I Regular Interest I-M-1, REMIC I
Regular Interest I-M-2, REMIC I Regular
Interest I-M-3, REMIC I Regular Interest
I-B-1, REMIC I Regular Interest I-B-2
and REMIC I Regular Interest I-B-3, in each
case as of such date of
determination.
REMIC I OVERCOLLATERALIZATION TARGET AMOUNT: 1% of the Group I
Overcollateralization Target Amount.
REMIC I PRINCIPAL LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a)
the product of (i) the aggregate
Stated Principal Balance of Loan Group I
and related 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 I-A,
REMIC I Regular Interest I-M-1, REMIC I
Regular Interest I-M-2, REMIC I Regular
Interest I-M-3, REMIC I Regular Interest
I-B-1, REMIC I Regular Interest I-B-2
and REMIC I Regular Interest I-B-3 and the
denominator of which is the aggregate
Uncertificated Principal Balance of REMIC I
Regular Interest I-A, REMIC I
Regular Interest I-M-1, REMIC I Regular
Interest I-M-2, REMIC I Regular Interest
I-M-3, REMIC I Regular Interest I-B-1,
REMIC I Regular Interest I-B-2, REMIC I
Regular Interest I-B-3 and REMIC I Regular
Interest ZZ.
REMIC I REGULAR INTEREST ZZ MAXIMUM INTEREST DEFERRAL AMOUNT:
With
respect to any Distribution Date, the
excess of (i) accrued interest at the
Uncertificated REMIC I Pass-Through Rate
applicable to REMIC I Regular Interest
ZZ for such Distribution Date on a balance
equal to the Uncertificated Principal
Balance of REMIC I Regular Interest ZZ
minus the REMIC I Overcollateralization
Amount, in each case for such Distribution
Date, over (ii) the Uncertificated
Accrued Interest on REMIC I Regular
Interest I-A, REMIC I Regular Interest
I-M-1, REMIC I Regular Interest I-M-2,
REMIC I Regular Interest I-M-3, REMIC I
Regular Interest I-B-1, REMIC I Regular
Interest I-B-2 and REMIC I Regular
Interest I-B-3 for such Distribution Date,
with the rate on each such REMIC I
Regular Interest subject to a cap equal to
the Pass-Through Rate for the
Corresponding Certificate.
REMIC I REGULAR INTERESTS: REMIC I Regular Interest AA, REMIC I
Regular
Interest I-A, REMIC I Regular Interest
I-M-1, REMIC I Regular Interest I-M-2,
REMIC I Regular Interest I-M-3, REMIC I
Regular Interest I-B-1, REMIC I Regular
Interest I-B-2, REMIC I Regular Interest
I-B-3, REMIC I Regular Interest ZZ and
REMIC I Regular Interest I-P.
REMIC I REGULAR INTEREST AA: One of the separate
non-certificated
beneficial ownership interests in REMIC I
issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I
Regular Interest AA shall accrue interest
at the related Uncertificated REMIC I
Pass-Through Rate in effect from time to
time, and shall be entitled to
distributions of principal, subject to the terms
and conditions hereof, in an aggregate
amount equal to its initial
Uncertificated Principal Balance as set
forth in the Preliminary Statement
hereto.
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<PAGE>
REMIC I REGULAR INTEREST I-A: One of the separate
non-certificated
beneficial ownership interests in REMIC I
issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I
Regular Interest I-A shall accrue interest
at the related Uncertificated REMIC I
Pass-Through Rate in effect from time to
time, and shall be entitled to
distributions of principal, subject to the terms
and conditions hereof, in an aggregate
amount equal to its initial
Uncertificated Principal Balance as set
forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST I-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 I-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 I-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 I-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 I-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 I-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 I-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 I-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 I-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 I-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 I-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 I-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,
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<PAGE>
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Principal Balance as
set forth in the Preliminary
Statement hereto.
REMIC I REGULAR INTEREST I-P: One of the separate
non-certificated
beneficial ownership interests in REMIC I
issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I
Regular Interest I-P will not accrue
interest and shall be entitled to
distributions of principal, subject to the
terms and conditions hereof, in an
aggregate amount equal to its initial
Uncertificated Principal Balance as set
forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST ZZ: One of the separate
non-certificated
beneficial ownership interests in REMIC I
issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I
Regular Interest ZZ shall accrue interest
at the related Uncertificated REMIC I
Pass-Through Rate in effect from time to
time, and shall be entitled to
distributions of principal, subject to the terms
and conditions hereof, in an aggregate
amount equal to its initial
Uncertificated Principal Balance as set
forth in the Preliminary Statement
hereto.
REMIC II: The segregated pool of assets described in Section
6.07(a).
REMIC II INTEREST LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a)
the product of (i) the aggregate
Stated Principal Balance of Loan Group II
and related REO Properties then
outstanding and (ii) the Uncertificated
REMIC II Pass-Through Rate for REMIC II
Regular Interest AA minus the REMIC II
Marker Rate, divided by (b) 12.
REMIC II MARKER RATE: With respect to the Class II-C Certificates
and
any Distribution Date, a per annum rate
equal to two (2) times the weighted
average of the Uncertificated REMIC II
Pass-Through Rates for REMIC II Regular
Interest II-A-1, REMIC II Regular Interest
II-A-2, REMIC II Regular Interest
II-M-1, REMIC II Regular Interest II-M-2,
REMIC II Regular Interest II-M-3,
REMIC II Regular Interest II-B-1, REMIC II
Regular Interest II-B-2, REMIC II
Regular Interest II-B-3 and REMIC II
Regular Interest ZZ, with the rate on each
such REMIC II Regular Interest (other than
REMIC II Regular Interest ZZ) subject
to a cap equal to the Pass-Through Rate for
the Corresponding Certificate and
with the rate on REMIC II Regular Interest
ZZ subject to a cap of zero for the
purpose of this calculation; provided,
however, that for this purpose, the
calculation of the Uncertificated REMIC II
Pass-Through Rate and the related cap
with respect to REMIC II Regular Interest
II-A-2, REMIC II Regular Interest
II-M-1, REMIC II Regular Interest II-M-2,
REMIC II Regular Interest II-M-3,
REMIC II Regular Interest II-B-1, REMIC II
Regular Interest II-B-2 and REMIC II
Regular Interest II-B-3 shall be multiplied
by a fraction, the numerator of
which is the actual number of days in the
Accrual Period and the denominator of
which is 30.
REMIC II OVERCOLLATERALIZATION AMOUNT: With respect to any date
of
determination, (i) 1% of the aggregate
Uncertificated Principal Balance of the
REMIC II Regular Interests (other than
REMIC II Regular Interest II-P) minus
(ii) the aggregate Uncertificated Principal
Balance of REMIC II Regular Interest
II-A-1, REMIC II Regular Interest II-A-2,
REMIC II Regular Interest II-M-1,
REMIC II Regular Interest II-M-2, REMIC II
Regular Interest II-M-3, REMIC II
Regular Interest II-B-1, REMIC II Regular
Interest II-B-2 and REMIC II Regular
Interest II-B-3, in each case as of such
date of determination.
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<PAGE>
REMIC II OVERCOLLATERALIZATION TARGET AMOUNT: 1% of the Group
II
Overcollateralization Target Amount.
REMIC II
PRINCIPAL LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a)
the product of (i) the aggregate
Stated Principal Balance of Loan Group II
and related 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 II Regular Interest
II-A-1, REMIC II Regular Interest II-A-2,
REMIC II Regular Interest II-M-1,
REMIC II Regular Interest II-M-2, REMIC II
Regular Interest II-M-3, REMIC II
Regular Interest II-B-1, REMIC II Regular
Interest II-B-2 and REMIC II Regular
Interest II-B-3 and the denominator of
which is the aggregate Uncertificated
Principal Balance of REMIC II Regular
Interest II-A-1, REMIC II Regular Interest
II-A-2, REMIC II Regular Interest II-M-1,
REMIC II Regular Interest II-M-2,
REMIC II Regular Interest II-M-3, REMIC II
Regular Interest II-B-1, REMIC II
Regular Interest II-B-2 and REMIC II
Regular Interest II-B-3 and REMIC II
Regular Interest ZZ.
REMIC II REGULAR INTEREST ZZ MAXIMUM INTEREST DEFERRAL AMOUNT:
With
respect to any Distribution Date, the
excess of (i) accrued interest at the
Uncertificated REMIC II Pass-Through Rate
applicable to REMIC II Regular
Interest ZZ for such Distribution Date on a
balance equal to the Uncertificated
Principal Balance of REMIC II Regular
Interest ZZ minus the REMIC II
Overcollateralization Amount, in each case
for such Distribution Date, over (ii)
the Uncertificated Accrued Interest on
REMIC II Regular Interest II-A-1, REMIC
II Regular Interest II-A-2, REMIC II
Regular Interest II-M-1, REMIC II Regular
Interest II-M-2, REMIC II Regular Interest
II-M-3, REMIC II Regular Interest
II-B-1, REMIC II Regular Interest II-B-2
and REMIC II Regular Interest II-B-3
for such Distribution Date, with the rate
on each such REMIC II Regular Interest
subject to a cap equal to the Pass-Through
Rate for the Corresponding
Certificate.
REMIC II REGULAR INTERESTS: REMIC II Regular Interest AA, REMIC
II
Regular Interest II-A-1, REMIC II Regular
Interest II-A-2, REMIC II Regular
Interest II-M-1, REMIC II Regular Interest
II-M-2, REMIC II Regular Interest
II-M-3, REMIC II Regular Interest II-B-1,
REMIC II Regular Interest II-B-2 and
REMIC II Regular Interest II-B-3, REMIC II
Regular Interest ZZ and REMIC II
Regular Interest II-P.
REMIC II REGULAR INTEREST AA: One of the separate
non-certificated
beneficial ownership interests in REMIC II
issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II
Regular Interest AA shall accrue interest
at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to
time, and shall be entitled to
distributions of principal, subject to the terms
and conditions hereof, in an aggregate
amount equal to its initial
Uncertificated Principal Balance as set
forth in the Preliminary Statement
hereto.
REMIC II REGULAR INTEREST II-A-1: One of the separate
non-certificated
beneficial ownership interests in REMIC II
issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II
Regular Interest II-A-1 shall accrue
interest at the related Uncertificated
REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to
distributions of principal, subject to
the terms and conditions hereof, in an
aggregate amount equal to its initial
Uncertificated Principal Balance as set
forth in the Preliminary Statement
hereto.
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<PAGE>
REMIC II REGULAR INTEREST II-A-2: One of the separate
non-certificated
beneficial ownership interests in REMIC II
issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II
Regular Interest II-A-2 shall accrue
interest at the related Uncertificated
REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to
distributions of principal, subject to
the terms and conditions hereof, in an
aggregate amount equal to its initial
Uncertificated Principal Balance as set
forth in the Preliminary Statement
hereto.
REMIC II REGULAR INTEREST II-B-1: One of the separate
non-certificated
beneficial ownership interests in REMIC II
issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II
Regular Interest II-B-1 shall accrue
interest at the related Uncertificated
REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to
distributions of principal, subject to
the terms and conditions hereof, in an
aggregate amount equal to its initial
Uncertificated Principal Balance as set
forth in the Preliminary Statement
hereto.
REMIC II REGULAR INTEREST II-B-2: One of the separate
non-certificated
beneficial ownership interests in REMIC II
issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II
Regular Interest II-B-2 shall accrue
interest at the related Uncertificated
REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to
distributions of principal, subject to
the terms and conditions hereof, in an
aggregate amount equal to its initial
Uncertificated Principal Balance as set
forth in the Preliminary Statement
hereto.
REMIC II REGULAR INTEREST II-B-3: One of the separate
non-certificated
beneficial ownership interests in REMIC II
issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II
Regular Interest II-B-3 shall accrue
interest at the related Uncertificated
REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to
distributions of principal, subject to
the terms and conditions hereof, in an
aggregate amount equal to its initial
Uncertificated Principal Balance as set
forth in the Preliminary Statement
hereto.
REMIC II REGULAR INTEREST II-M-1: One of the separate
non-certificated
beneficial ownership interests in REMIC II
issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II
Regular Interest II-M-1 shall accrue
interest at the related Uncertificated
REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to
distributions of principal, subject to
the terms and conditions hereof, in an
aggregate amount equal to its initial
Uncertificated Principal Balance as set
forth in the Preliminary Statement
hereto.
REMIC II REGULAR INTEREST II-M-2: One of the separate
non-certificated
beneficial ownership interests in REMIC II
issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II
Regular Interest II-M-2 shall accrue
interest at the related Uncertificated
REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to
distributions of principal, subject to
the terms and conditions hereof, in an
aggregate amount equal to its initial
Uncertificated Principal Balance as set
forth in the Preliminary Statement
hereto.
REMIC II REGULAR INTEREST II-M-3: One of the separate
non-certificated
beneficial ownership interests in REMIC II
issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II
Regular Interest II-M-3 shall accrue
interest at the related Uncertificated
REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to
distributions of
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<PAGE>
principal, subject to the terms and
conditions hereof, in an aggregate amount
equal to its initial Uncertificated
Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC II REGULAR INTEREST II-P: One of the separate
non-certificated
beneficial ownership interests in REMIC II
issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II
Regular Interest II-P will not accrue
interest and shall be entitled to
distributions of principal, subject to the
terms and conditions hereof, in an
aggregate amount equal to its initial
Uncertificated Principal Balance as set
forth in the Preliminary Statement
hereto.
REMIC II REGULAR
INTEREST ZZ: One of the separate non-certificated
beneficial ownership interests in REMIC II
issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II
Regular Interest ZZ shall accrue interest
at the related Uncertificated REMIC II
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 III: The segregated pool of assets described in the
Preliminary
Statement hereto consisting of the REMIC I
Regular Interests and the REMIC II
Regular Interests.
REMIC III CERTIFICATES: The Regular Certificates and the Class
II-R
Certificates.
REMIC OPINION: Shall mean an Opinion of Counsel to the effect that
the
proposed action will not have an adverse
affect on any REMIC created hereunder.
REMIC PROVISIONS: Provisions of the federal income tax law relating
to
real estate mortgage investment conduits,
which appear at Sections 860A through
860G of the Code, and related provisions,
and proposed, temporary and final
regulations and published rulings, notices
and announcements promulgated
thereunder, as the foregoing may be in
effect from time to time, as well as
provisions of applicable state laws.
REMIC REGULAR INTEREST: A REMIC I Regular Interest, REMIC II
Regular
Interest or Regular Certificate.
REMITTANCE DATE: Shall mean (i) with respect to the Company,
the
Business Day immediately preceding the
Distribution Account Deposit Date and
(ii) with respect to the related Servicer,
the date specified in the related
Servicing Agreement.
REMITTANCE REPORT: As defined in Section 6.04(e).
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 or REMIC II, one
month's interest at the applicable Net
Mortgage Rate on the Stated Principal
Balance of such REO Property (or, in the
case of the first such calendar month,
of the related Mortgage Loan, if
appropriate) as of the close of business on the
Distribution Date in such calendar
month.
REO PROPERTY: A Mortgaged Property acquired by the Company or
the
related Servicer through foreclosure or
deed-in-lieu of foreclosure in
connection with a defaulted Mortgage
Loan.
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<PAGE>
REPLACEMENT MORTGAGE LOAN: A Mortgage Loan or Mortgage Loans in
the
aggregate substituted by the Seller for a
Deleted Mortgage Loan, which must, on
the date of such substitution, as confirmed
in a Request for Release, (i) have a
Stated Principal Balance, after deduction
of the principal portion of the
Scheduled Payment due in the month of
substitution, not in excess of, and not
less than 90% of, the Stated Principal
Balance of the Deleted Mortgage Loan;
(ii) have a fixed Mortgage Rate not less
than or more than 1% per annum higher
than the Mortgage Rate of the Deleted
Mortgage Loan; (iii) have the same or
higher credit quality characteristics than
that of the Deleted Mortgage Loan;
(iv) have a Loan-to-Value Ratio no higher
than that of the Deleted Mortgage
Loan; (v) have a remaining term to maturity
no greater than (and not more than
one year less than) that of the Deleted
Mortgage Loan; (vi) not permit
conversion of the Mortgage Rate from a
fixed rate to a variable rate; (vii) have
the same lien priority as the Deleted
Mortgage Loan; (viii) constitute the same
occupancy type as the Deleted Mortgage Loan
or be owner occupied; and (ix)
comply with each representation and
warranty set forth in Section 2.03 hereof.
REPURCHASE PRICE: With respect to each Mortgage Loan, a price equal
to
(i) the outstanding principal balance of
such Mortgage Loan, plus (ii) interest
on such outstanding principal balance at
the Mortgage Rate (net of the Servicing
Fee Rate) from the last date through which
interest has been paid to the end of
the month of repurchase, less (iii) amounts
advanced by the Company or the
related Servicer in respect of such
repurchased Mortgage Loan which are being
held in the Master Servicer Collection
Account for remittance to the Trustee
plus (iv) any costs and damages (if any)
incurred by the Trust in connection
with any violation of such Mortgage Loan of
any anti-predatory lending laws.
REQUEST FOR RELEASE: The Request for Release to be submitted by
the
Seller, the Company, the related Servicer
or the Master Servicer to the
Custodian substantially in the form of
Exhibit G. Each Request for Release
furnished to the Custodian by the Seller,
the Company, the related Servicer or
the Master Servicer shall be in duplicate
and shall be executed by an officer of
such Person or a Servicing Officer (or, if
furnished electronically to the
Custodian, shall be deemed to have been
sent and executed by an officer of such
Person or a Servicing Officer) of the
Company or the related Servicer, as
applicable.
REQUIRED INSURANCE POLICY: With respect to any Mortgage Loan,
any
insurance policy that is required to be
maintained from time to time under this
Agreement or the related Servicing
Agreement.
RESIDUAL CERTIFICATES: Any of the Class I-R-1, Class I-R-2 and
Class
II-R Certificates, each evidencing the sole
class of "residual interests"
(within the meaning of Section 860G(a)(2)
of the Code) in the related REMIC.
RESIDUAL INTEREST: The sole class of "residual interests" in a
REMIC
within the meaning of Section 860G(a)(2) of
the Code.
RESPONSIBLE OFFICER: With respect to the Trustee, any Vice
President,
any Assistant Vice President, the
Secretary, any Assistant Secretary, or any
Trust Officer with specific responsibility
for the transactions contemplated
hereby, any other officer customarily
performing functions similar to those
performed by any of the above designated
officers or other officers of the
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Trustee specified by the Trustee, as to
whom, with respect to a particular
matter, such matter is referred because of
such officer's knowledge of and
familiarity with the particular
subject.
S&P: Standard & Poor's, a division of The McGraw-Hill
Companies, Inc.
SCHEDULED PAYMENT: The scheduled monthly payment on a Mortgage Loan
due
on any Due Date allocable to principal
and/or interest on such Mortgage Loan.
SECURITIES ACT: The Securities Act of 1933, as amended.
SECURITIES ADMINISTRATOR: Wells Fargo Bank, National Association,
in
its capacity as securities administrator
hereunder, and its successors and
assigns.
SELLER: EMC Mortgage Corporation, a Delaware corporation, and
its
successors and assigns, in its capacity as
seller of the Mortgage Loans to the
Depositor.
SENIOR CERTIFICATES: Any of the Class I-A, Class II-A-1 and
Class
II-A-2 Certificates.
SERVICER: Any of GreenPoint, Cendant, HSBC or SouthTrust.
SERVICING ADVANCES: All customary, reasonable and necessary "out
of
pocket" costs and expenses (including
reasonable legal fees) incurred in the
performance by the Company or the related
Servicer of its servicing obligations
hereunder or under the related Servicing
Agreement, including, but not limited
to, the cost of (i) the preservation,
restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial
proceedings, including foreclosures,
and including any expenses incurred in
relation to any such proceedings that
result from the Mortgage Loan being
registered in the MERS(R) System, (iii) the
management and liquidation of any REO
Property (including, without limitation,
realtor's commissions) and (iv) compliance
with any obligations under Section
3.07 hereof to cause insurance to be
maintained.
SERVICING AGREEMENT: Any of the GreenPoint Servicing Agreement,
PHH
Servicing Agreement, HSBC Servicing
Agreement or SouthTrust Servicing Agreement.
SERVICING FEE: As to each Mortgage Loan and any Distribution Date,
an
amount equal to 1/12th of the Servicing Fee
Rate multiplied by the Stated
Principal Balance of such Mortgage Loan as
of the last day of the related Due
Period.
SERVICING FEE RATE: 0.250% per annum.
SERVICING MODIFICATION: With respect to any Mortgage Loan that is
in
default or, in the reasonable judgment of
the Company or the related Servicer,
as to which default is reasonably
foreseeable, any modification which is
effected by the Company or the related
Servicer in accordance with the terms of
this Agreement or the related Servicing
Agreement which results in any change in
the outstanding Stated Principal Balance,
any change in the Mortgage Rate or any
extension of the term of such Mortgage
Loan.
SERVICING OFFICER: Any officer of the Company or the related
Servicer
involved in, or responsible for, the
administration and servicing of the
Mortgage Loans (i) in the case of the
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Company, whose name and facsimile signature
appear on a list of servicing
officers furnished to the Trustee by the
Company on the Closing Date pursuant to
this Agreement, as such list may from time
to time be amended and (ii) in the
case of the related Servicer, as to which
evidence reasonably acceptable to the
Trustee, as applicable, of due
authorization, by such party has been furnished
from time to time to the Trustee.
SOUTHTRUST: SouthTrust Mortgage Corporation, and any successor
thereto.
SOUTHTRUST ASSIGNMENT AGREEMENT: The Assignment, Assumption and
Recognition Agreement, dated as of January
31, 2005, by and among the Seller,
SouthTrust and the Trustee evidencing the
assignment of the SouthTrust Servicing
Agreement to the Trust.
SOUTHTRUST LOANS: Those Mortgage Loans subject to this Agreement
which
were purchased by the Seller from
SouthTrust pursuant to the SouthTrust
Servicing Agreement.
SOUTHTRUST SERVICING AGREEMENT: The Purchase, Warranties and
Servicing
Agreement, dated as of November 1, 2002, by
and between the Seller and
SouthTrust, as modified by the SouthTrust
Assignment Agreement.
STARTUP DAY: The Startup Day for each REMIC formed hereunder shall
be
the Closing Date.
STATED PRINCIPAL BALANCE: With respect to any Mortgage Loan or
related
REO Property and any Distribution Date, the
Cut-off Date Principal Balance
thereof minus the sum of (i) the principal
portion of the Scheduled Payments due
with respect to such Mortgage Loan during
each Due Period ending prior to such
Distribution Date (and irrespective of any
delinquency in their payment), (ii)
all Principal Prepayments with respect to
such Mortgage Loan received prior to
or during the related Prepayment Period,
and all Liquidation Proceeds to the
extent applied by the Company or the
related Servicer as recoveries of principal
in accordance with Section 3.09 or the
related Servicing Agreement with respect
to such Mortgage Loan, that were received
by the Company or the related Servicer
as of the close of business on the last day
of the Prepayment Period related to
such Distribution Date and (iii) any
Realized Losses on such Mortgage Loan
incurred during the related Prepayment
Period. The Stated Principal Balance of a
Liquidated Loan equals zero.
SUBORDINATE CERTIFICATES: Any of the Class I-M-1, Class I-M-2,
Class
I-M-3, Class I-B-1, Class I-B-2, Class
I-B-3, Class II-M-1, Class II-M-2, Class
II-M-3, Class II-B-1, Class II-B-2 and
Class II-B-3 Certificates.
SUBSEQUENT RECOVERIES: As of any Distribution Date, amounts
received by
the Master Servicer during the related Due
Period or surplus amounts held by the
Master Servicer to cover estimated expenses
(including, but not limited to,
recoveries in respect of the
representations and warranties made by the Seller
pursuant to the Mortgage Loan Purchase
Agreement) specifically related to a
Liquidated Mortgage Loan or disposition of
an REO Property prior to the related
Prepayment Period that resulted in a
Realized Loss, after the liquidation or
disposition of such Mortgage Loan.
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<PAGE>
SUBSERVICING AGREEMENT: Any agreement entered into between the
Company
and a subservicer with respect to the
subservicing of any Mortgage Loan
hereunder by such subservicer.
SUBSTITUTION ADJUSTMENT AMOUNT: The meaning ascribed to such
term
pursuant to Section 2.03(c).
SUB-TRUST: Each of Loan Group I and Loan Group II.
SUCCESSOR MASTER SERVICER: The meaning ascribed to such term
pursuant
to Section 9.01.
TAX MATTERS PERSON: The person designated as "tax matters person"
in
the manner provided under Treasury
Regulation Sections 1.860F-4(d) and
301.6231(a)(7)-1T. The Holder of the
greatest Percentage Interest in a Class of
Residual Certificates shall be the Tax
Matters Person for the related REMIC. The
Securities Administrator or any successor
thereto or assignee thereof shall
serve as tax administrator hereunder and as
agent for the related Tax Matters
Person.
TRANSFER AFFIDAVIT: As defined in Section 7.02(c).
TRANSFER: Any direct or indirect transfer or sale of any
Ownership
Interest in a Certificate.
TRUST FUND: The corpus of the trust created hereunder consisting of
(i)
the Mortgage Loans and all interest
accruing and principal due with respect
thereto after the Cut-off Date to the
extent not applied in computing the
Cut-off Date Principal Balance thereof;
(ii) the Class P Certificate Accounts,
the Net WAC Reserve Fund, the Distribution
Account, the Master Servicer
Collection Account maintained by the Master
Servicer and the Protected Accounts
maintained by the Company and the Servicers
and all amounts deposited therein
pursuant to the applicable provisions of
this Agreement and the Servicing
Agreements; (iii) property that secured a
Mortgage Loan and has been acquired by
foreclosure, deed in lieu of foreclosure or
otherwise; (iv) the mortgagee's
rights under the Insurance Policies with
respect to the Mortgage Loans; (v) the
Servicing Agreements and the Assignment
Agreements; (vi) the rights under the
Mortgage Loan Purchase Agreement, and (vii)
all proceeds of the foregoing,
including proceeds of conversion, voluntary
or involuntary, of any of the
foregoing into cash or other liquid
property. The Net WAC Reserve Fund shall
constitute an asset of the Trust Fund but
will not be included in REMIC I, REMIC
II or REMIC III.
TRUSTEE: U.S. Bank National Association, a national banking
association, not in its individual
capacity, but solely in its capacity as
trustee for the benefit of the
Certificateholders under this Agreement, and any
successor thereto, and any corporation or
national banking association resulting
from or surviving any consolidation or
merger to which it or its successors may
be a party and any successor trustee as may
from time to time be serving as
successor trustee hereunder.
UNCERTIFICATED ACCRUED INTEREST: With respect to each REMIC I
Regular
Interest or REMIC II Regular Interest, as
applicable, on each Distribution Date,
an amount equal to one month's interest at
the related Uncertificated REMIC I
Pass-Through Rate or Uncertificated REMIC
II Pass-Through Rate, as applicable,
on the Uncertificated Principal Balance of
such
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<PAGE>
REMIC Regular Interest. In each case,
Uncertificated Accrued Interest will be
reduced by any Unpaid Interest Shortfalls
in respect of Loan Group I or Loan
Group II, as applicable (allocated to such
REMIC Regular Interests as set forth
in Section 1.02).
UNCERTIFICATED PRINCIPAL BALANCE: With respect to each REMIC I
Regular
Interest or REMIC II Regular Interest, as
applicable, the principal amount of
such REMIC Regular Interest outstanding as
of any date of determination. As of
the Closing Date, the Uncertificated
Principal Balance of each REMIC I Regular
Interest or REMIC II Regular Interest, as
applicable, 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 or
REMIC II Regular Interest, as
applicable, shall be reduced by all
distributions of principal made on such
REMIC 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 6.07. The
Uncertificated Principal Balance of each
REMIC I Regular Interest or REMIC II
Regular Interest, as applicable, shall
never be less than zero.
UNCERTIFICATED REMIC I PASS-THROUGH RATE: With respect to any REMIC
I
Regular Interest other than REMIC I Regular
Interest I-P, and any Distribution
Date, a per annum rate equal to the
weighted average of the Net Mortgage Rates
of Loan Group I as of the first day of the
related Due Period, weighted on the
basis of the Stated Principal Balances of
Loan Group I as of the first day of
the related Due Period. With respect to
REMIC I Regular Interest I-P and any
Distribution Date, 0.00%.
UNCERTIFICATED REMIC II PASS-THROUGH RATE: With respect to any
REMIC II
Regular Interest other than REMIC II
Regular Interest II-P and any Distribution
Date, a per annum rate equal to the
weighted average of the Net Mortgage Rates
of Loan Group II as of the first day of the
related Due Period, weighted on the
basis of the Stated Principal Balances of
Loan Group II as of the first day of
the related Due Period. With respect to
REMIC II Regular Interest II-P and any
Distribution Date, 0.00%.
UNPAID INTEREST SHORTFALLS: Shall mean Interest Shortfalls with
respect
to each Loan Group, net of payments by the
Company, the related Servicer or the
Master Servicer in respect of Compensating
Interest for the related Loan Group.
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) 90.50% to the Certificates
(other than the Class P, Class C and
Residual Certificates), (ii) 1% to each of
the Class I-P Certificates and Class II-P
Certificates, (iii) 3% to each of the
Class I-C Certificates and Class II-C
Certificates and (iv) 0.50% to each Class
of Residual Certificates, with the
allocation among the Certificates other than
the Class P, Class C and Residual
Certificates to be in proportion to the
Certificate Principal Balance of each Class
relative to the Certificate
Principal Balance of all other such
Classes. Voting Rights will be allocated
among the Certificates of each such Class
in accordance with their respective
Percentage Interests.
Section 1.02 ALLOCATION OF CERTAIN INTEREST SHORTFALLS. For
purposes of
calculating the amount of the Monthly
Interest Distributable Amount for the
Class I-A, Class I-M-1, Class I-M-
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2, Class I-M-3, Class I-B-1, Class I-B-2,
Class I-B-3 and Class I-C Certificates
for any Distribution Date, (1) the
aggregate amount of any Unpaid Interest
Shortfalls in respect of Loan Group I for
any Distribution Date shall be
allocated first, in reduction of amounts
otherwise distributable to the Class
I-C Certificates, Class I-R-1 and Class
I-R-2 Certificates, and thereafter,
among the Group I Offered Certificates in
proportion to the amount of the
Monthly Interest Distributable Amount that
would have been allocated to such
Certificates in the absence of such Unpaid
Interest Shortfalls, and (2) the
interest portion of Realized Losses for
Loan Group I will be allocated first, to
the Class I-C Certificates based on, and to
the extent of, one month's interest
at the then applicable Pass-Through Rate on
the Certificate Notional Amount
thereof, second to the Class I-B-3
Certificates, third to the Class I-B-2
Certificates, fourth to the Class I-B-1
Certificates, fifth to the Class I-M-3
Certificates, sixth to the Class I-M-2
Certificates, seventh to the Class I-M-1
Certificates, and following the Cross-Over
Date, to the Group I Senior
Certificates, on a pro rata basis, in each
case, based on, and to the extent of,
one month's interest at the then applicable
respective Pass-Through Rates on the
respective Certificate Principal Balances
of each such Certificate.
For purposes of calculating the amount of Uncertificated
Accrued
Interest for the REMIC I Regular Interests
(other than REMIC I Regular Interest
I-P), for any Distribution Date, the
aggregate amount of any Unpaid Interest
Shortfalls incurred in respect of Loan
Group I 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 I-A, REMIC I Regular Interest
I-M-1, REMIC I Regular Interest I-M-2,
REMIC I Regular Interest I-M-3, REMIC I
Regular Interest I-B-1, REMIC I Regular
Interest I-B-2, REMIC I Regular Interest
I-B-3 and REMIC I Regular Interest ZZ, pro
rata, in each case based on, and to
the extent of, one month's interest at the
then applicable respective
Uncertificated REMIC I Pass-Through Rates
on the respective Uncertificated
Principal Balances of each such REMIC I
Regular Interest.
For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the Class II-A-1,
Class II-A-2, Class II-M-1, Class
II-M-2, Class II-M-3, Class II-B-1, Class
II-B-2, Class II-B-3 and Class II-C
Certificates for any Distribution Date, (1)
the aggregate amount of any Unpaid
Interest Shortfalls in respect of Loan
Group II for any Distribution Date shall
be allocated first, in reduction of amounts
otherwise distributable to the Class
II-C Certificates, Class II-R Certificates,
and thereafter, among the Group II
Offered Certificates in proportion to the
amount of the Monthly Interest
Distributable Amount that would have been
allocated to such Certificates in the
absence of such Unpaid Interest Shortfalls,
and (2) the interest portion of
Realized Losses for Loan Group II will be
allocated first, to the Class II-C
Certificates based on, and to the extent
of, one month's interest at the then
applicable Pass-Through Rate on the
Certificate Notional Amount thereof, second
to the Class II-B-3 Certificates, third to
the Class II-B-2 Certificates, fourth
to the Class II-B-1 Certificates, fifth to
the Class II-M-3 Certificates, sixth
to the Class II-M-2 Certificates, seventh
to the Class II-M-1 Certificates, and
following the Cross-Over Date, to the Group
II Senior Certificates, on a pro
rata basis.
For purposes of calculating the amount of Uncertificated
Accrued
Interest for the REMIC II Regular Interests
(other than REMIC II Regular
Interest II-P) for any Distribution Date,
the aggregate amount of any Unpaid
Interest Shortfalls incurred in respect of
Loan Group II for any
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Distribution Date shall be allocated first,
to Uncertificated Accrued Interest
payable to REMIC II Regular Interest AA and
REMIC II Regular Interest ZZ up to
an aggregate amount equal to the REMIC II
Interest Loss Allocation Amount, 98%
and 2%, respectively, and thereafter among
REMIC II Regular Interest II-A-1,
REMIC II Regular Interest II-A-2, REMIC II
Regular Interest II-M-1, REMIC II
Regular Interest II-M-2, REMIC II Regular
Interest II-M-3, REMIC II Regular
Interest II-B-1, REMIC II Regular Interest
II-B-2, REMIC II Regular Interest
II-B-3 and REMIC II Regular Interest ZZ,
pro rata, in each case based on, and to
the extent of, one month's interest at the
then applicable respective
Uncertificated REMIC II Pass-Through Rates
on the respective Uncertificated
Principal Balances of each such REMIC II
Regular Interest.
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Article II
CONVEYANCE OF TRUST FUND
REPRESENTATIONS AND WARRANTIES
Section 2.01 CONVEYANCE OF TRUST FUND. Pursuant to the Mortgage
Loan
Purchase Agreement, the Seller sold,
transferred, assigned, set over and
otherwise conveyed to the Depositor,
without recourse, all the right, title and
interest of the Seller in and to the assets
in the Trust Fund.
The Seller has entered into this Agreement in consideration for
the
purchase of the Mortgage Loans by the
Depositor pursuant to the Mortgage Loan
Purchase Agreement and has agreed to take
the actions specified herein.
The Depositor, concurrently with the execution and delivery
hereof,
hereby sells, transfers, assigns, sets over
and otherwise conveys to the Trustee
for the use and benefit of the
Certificateholders, without recourse, all the
right, title and interest of the Depositor
in and to the Trust Fund.
In connection with such sale, the Depositor has delivered to,
and
deposited with, the Trustee or the
Custodian, as its agent, the following
documents or instruments with respect to
each Mortgage Loan so assigned: (i) the
original Mortgage Note, including any
riders thereto, endorsed without recourse
(A) to the order of "U.S. Bank National
Association, as Trustee for
certificateholders of Bear Stearns Asset
Backed Securities I LLC, Asset Backed
Certificates, Series 2005-AC2," or (B) in
the case of a loan registered on the
MERS system, in blank, and in each case
showing to the extent available to the
Seller an unbroken chain of endorsements
from the original payee thereof to the
Person endorsing it to the Trustee, (ii)
the original Mortgage and, if the
related Mortgage Loan is a MOM Loan, noting
the presence of the MIN and language
indicating that such Mortgage Loan is a MOM
Loan, which shall have been recorded
(or if the original is not available, a
copy), with evidence of such recording
indicated thereon (or if clause (x) in the
proviso below applies, shall be in
recordable form), (iii) unless the Mortgage
Loan is a MOM Loan, the assignment
(either an original or a copy, which may be
in the form of a blanket assignment
if permitted in the jurisdiction in which
the Mortgaged Property is located) to
the Trustee of the Mortgage with respect to
each Mortgage Loan in the name of
"U.S. Bank National Association, as Trustee
for certificateholders of Bear
Stearns Asset Backed Securities I LLC,
Asset Backed Certificates, Series
2005-AC2," which shall have been recorded
(or if clause (x) in the proviso below
applies, shall be in recordable form) (iv)
an original or a copy of all
intervening assignments of the Mortgage, if
any, to the extent available to the
Seller, with evidence of recording thereon,
(v) the original policy of title
insurance or mortgagee's certificate of
title insurance or commitment or binder
for title insurance, if available, or a
copy thereof, or, in the event that such
original title insurance policy is
unavailable, a photocopy thereof, or in lieu
thereof, a current lien search on the
related Mortgaged Property and (vi)
originals or copies of all available
assumption, modification or substitution
agreements, if any; provided, however, that
in lieu of the foregoing, the Seller
may deliver the following documents, under
the circumstances set forth below:
(x) if any Mortgage, assignment thereof to
the Trustee or intervening
assignments thereof have been delivered or
are being delivered to recording
offices for recording and have not been
returned in time to permit their
delivery as specified above, the Depositor
may
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<PAGE>
deliver a true copy thereof with a
certification by the Seller or the title
company issuing the commitment for title
insurance, on the face of such copy,
substantially as follows: "Certified to be
a true and correct copy of the
original, which has been transmitted for
recording"; and (y) in lieu of the
Mortgage Notes relating to the Mortgage
Loans identified in the list set forth
in Exhibit I, the Depositor may deliver a
lost note affidavit and indemnity and
a copy of the original note, if available;
and provided, further, however, that
in the case of Mortgage Loans which have
been prepaid in full after the Cut-off
Date and prior to the Closing Date, the
Depositor, in lieu of delivering the
above documents, may deliver to the Trustee
and its Custodian a certification of
a Servicing Officer to such effect and in
such case shall deposit all amounts
paid in respect of such Mortgage Loans, in
the Master Servicer Collection
Account or in the Distribution Account on
the Closing Date. In the case of the
documents referred to in clause (x) above,
the Depositor shall deliver such
documents to the Trustee or its Custodian
promptly after they are received. The
Seller shall cause, at its expense, the
Mortgage and intervening assignments, if
any, and to the extent required in
accordance with the foregoing, the assignment
of the Mortgage to the Trustee to be
submitted for recording promptly after the
Closing Date provided that the Seller need
not cause to be recorded any
assignment (a) in any jurisdiction under
the laws of which, as evidenced by an
Opinion of Counsel addressed to the Trustee
delivered by the Seller to the
Trustee and the Rating Agencies, the
recordation of such assignment is not
necessary to protect the Trustee's interest
in the related Mortgage Loan or (b)
if MERS is identified on the Mortgage or on
a properly recorded assignment of
the Mortgage as mortgagee of record solely
as nominee for Seller and its
successors and assigns. In the event that
the Seller, the Depositor or the
Master Servicer gives written notice to the
Trustee that a court has
recharacterized the sale of the Mortgage
Loans as a financing, the Seller shall
submit or cause to be submitted for
recording as specified above or, should the
Seller fail to perform such obligations,
the Master Servicer shall cause each
such previously unrecorded assignment to be
submitted for recording as specified
above at the expense of the Trust. In the
event a Mortgage File is released to
the Company or the Servicer as a result of
such Person having completed a
Request for Release, the Custodian shall,
if not so completed, complete the
assignment of the related Mortgage in the
manner specified in clause (iii)
above.
In connection with the assignment of any Mortgage Loan registered
on
the MERS(R) System, the Seller further
agrees that it will cause, at the
Seller's own expense, within 30 days after
the Closing Date, the MERS(R) System
to indicate that such Mortgage Loans have
been assigned by the Seller to the
Depositor and by the Depositor to the
Trustee in accordance with this Agreement
for the benefit of the Certificateholders
by including (or deleting, in the case
of Mortgage Loans which are repurchased in
accordance with this Agreement) in
such computer files (a) the code in the
field which identifies the specific
Trustee and (b) the code in the field "Pool
Field" which identifies the series
of the Certificates issued in connection
with such Mortgage Loans. The Seller
further agrees that it will not, and will
not permit the Company, any Servicer
or the Master Servicer to, and the Master
Servicer agrees that it will not,
alter the codes referenced in this
paragraph with respect to any Mortgage Loan
during the term of this Agreement unless
and until such Mortgage Loan is
repurchased in accordance with the terms of
this Agreement or the Mortgage Loan
Purchase Agreement.
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<PAGE>
Section 2.02 ACCEPTANCE OF THE MORTGAGE LOANS.
(a) Based on
the Initial Certification received by it
from the Custodian, the Trustee
acknowledges receipt of, subject to the further
review and exceptions reported by the
Custodian pursuant to the procedures
described below, the documents (or
certified copies thereof) delivered to the
Trustee or the Custodian on its behalf
pursuant to Section 2.01 and declares
that it holds and will continue to hold
directly or through a custodian those
documents and any amendments, replacements
or supplements thereto and all other
assets of the Trust Fund delivered to it in
trust for the use and benefit of all
present and future Holders of the
Certificates. On the Closing Date, the Trustee
or the Custodian on its behalf will deliver
an Initial Certification confirming
whether or not it has received the Mortgage
File for each Mortgage Loan, but
without review of such Mortgage File,
except to the extent necessary to confirm
whether such Mortgage File contains the
original Mortgage Note or a lost note
affidavit and indemnity in lieu thereof. No
later than 90 days after the Closing
Date, the Trustee or the Custodian on its
behalf shall, for the benefit of the
Certificateholders, review each Mortgage
File delivered to it and execute and
deliver to the Seller and, if reviewed by
the Custodian, the Trustee, an Interim
Certification. In conducting such review,
the Trustee or the Custodian on its
behalf will ascertain whether all required
documents have been executed and
received and whether those documents
relate, determined on the basis of the
Mortgagor name, original principal balance
and loan number, to the Mortgage
Loans identified in Exhibit B to this
Agreement, as supplemented (provided,
however, that with respect to those
documents described in subclauses (iv) and
(vi) of Section 2.01, such obligations
shall extend only to documents actually
delivered pursuant to such subclauses). In
performing any such review, the
Trustee and the Custodian may conclusively
rely on the purported due execution
and genuineness of any such document and on
the purported genuineness of any
signature thereon. If the Trustee or the
Custodian on its behalf finds any
document constituting part of the Mortgage
File not to have been executed or
received, or to be unrelated to the
Mortgage Loans identified in Exhibit B or to
appear to be defective on its face, the
Trustee or the Custodian on its behalf
shall include such information in the
exception report. The Seller shall correct
or cure any such defect or, if prior to the
end of the second anniversary of the
Closing Date, the Seller may substitute for
the related Mortgage Loan a
Replacement Mortgage Loan, which
substitution shall be accomplished in the
manner and subject to the conditions set
forth in Section 2.03 or shall deliver
to the Trustee an Opinion of Counsel
addressed to the Trustee to the effect that
such defect does not materially or
adversely affect the interests of the
Certificateholders in such Mortgage Loan
within 60 days from the date of notice
from the Trustee of the defect and if the
Seller fails to correct or cure the
defect or deliver such opinion within such
period, the Seller will, subject to
Section 2.03, within 90 days from the
notification of the Trustee purchase such
Mortgage Loan at the Purchase Price;
provided, however, that if such defect
relates solely to the inability of the
Seller to deliver the Mortgage,
assignment thereof to the Trustee, or
intervening assignments thereof with
evidence of recording thereon because such
documents have been submitted for
recording and have not been returned by the
applicable jurisdiction, the Seller
shall not be required to purchase such
Mortgage Loan if the Seller delivers such
documents promptly upon receipt, but in no
event later than 360 days after the
Closing Date.
(b) No later
than 180 days after the Closing Date, the
Trustee or the Custodian on its behalf will
review, for the benefit of the
Certificateholders, the Mortgage Files and
will execute and deliver or cause to
be executed and delivered to the Seller
and, if reviewed by the
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<PAGE>
Custodian, the Trustee, a Final
Certification. In conducting such review, the
Trustee or the Custodian on its behalf will
ascertain whether each document
required to be recorded has been returned
from the recording office with
evidence of recording thereon and the
Trustee or the Custodian on its behalf has
received either an original or a copy
thereof, as required in Section 2.01
(provided, however, that with respect to
those documents described in subclauses
(iv) and (vi) of Section 2.01, such
obligations shall extend only to documents
actually delivered pursuant to such
subclauses). If the Trustee or the Custodian
on its behalf finds any document with
respect to a Mortgage Loan has not been
received, or to be unrelated, determined on
the basis of the Mortgagor name,
original principal balance and loan number,
to the Mortgage Loans identified in
Exhibit B or to appear defective on its
face, the Trustee or the Custodian on
its behalf shall note such defect in the
exception report attached to the Final
Certification and shall promptly notify the
Seller. The Seller shall correct or
cure any such defect or, if prior to the
end of the second anniversary of the
Closing Date, the Seller may substitute for
the related Mortgage Loan a
Replacement Mortgage Loan, which
substitution shall be accomplished in the
manner and subject to the conditions set
forth in Section 2.03 or shall deliver
to the Trustee an Opinion of Counsel
addressed to the Trustee to the effect that
such defect does not materially or
adversely affect the interests of
Certificateholders in such Mortgage Loan
within 60 days from the date of notice
from the Trustee of the defect and if the
Seller is unable within such period to
correct or cure such defect, or to
substitute the related Mortgage Loan with a
Replacement Mortgage Loan or to deliver
such opinion, the Seller shall, subject
to Section 2.03, within 90 days from the
notification of the Trustee, purchase
such Mortgage Loan at the Purchase Price;
provided, however, that if such defect
relates solely to the inability of the
Seller to deliver the Mortgage,
assignment thereof to the Trustee or
intervening assignments thereof with
evidence of recording thereon, because such
documents have not been returned by
the applicable jurisdiction, the Seller
shall not be required to purchase such
Mortgage Loan, if the Seller delivers such
documents promptly upon receipt, but
in no event later than 360 days after the
Closing Date.
(c) In the
event that a Mortgage Loan is purchased by the
Seller in accordance with subsections
2.02(a) or (b) above or Section 2.03, the
Seller shall remit the applicable Purchase
Price to the Master Servicer for
deposit in the Master Servicer Collection
Account and shall provide written
notice to the Trustee detailing the
components of the Purchase Price, signed by
a Servicing Officer. Upon deposit of the
Purchase Price in the Master Servicer
Collection Account and upon receipt of a
Request for Release with respect to
such Mortgage Loan, the Trustee or the
Custodian will release to the Seller the
related Mortgage File and the Trustee shall
execute and deliver all instruments
of transfer or assignment, without
recourse, representation or warranty
furnished to it by the Seller, as are
necessary to vest in the Seller title to
and rights under the Mortgage Loan. Such
purchase shall be deemed to have
occurred on the date on which the deposit
into the Master Servicer Collection
Account was made. The Trustee shall
promptly notify the Rating Agencies of such
repurchase. The obligation of the Seller to
cure, repurchase or substitute for
any Mortgage Loan as to which a defect in a
constituent document exists shall be
the sole remedies respecting such defect
available to the Certificateholders or
to the Trustee on their behalf.
(d) The Seller
shall deliver to the Trustee or the
Custodian on its behalf, and Trustee agrees
to accept the Mortgage Note and
other documents constituting the Mortgage
File with respect to any Replacement
Mortgage Loan, which the Trustee or the
Custodian will review as provided in
subsections 2.02(a) and 2.02(b), provided,
that the Closing Date referred to
therein
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<PAGE>
shall instead be the date of delivery of
the Mortgage File with respect to each
Replacement Mortgage Loan.
Section 2.03 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
COMPANY,
THE MASTER SERVICER AND THE SELLER.
(a) The
Company hereby represents and warrants to the
Master Servicer, the Depositor, the
Securities Administrator and the Trustee as
follows, as of the Closing Date:
(i) It is duly
organized and is validly existing and in
good standing under the laws of the State of Delaware and is
duly
authorized and qualified to transact any and all business
contemplated
by this Agreement to be conducted by it in any state in which a
Mortgaged Property related to an EMC Mortgage Loan is located or
is
otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the
doing
business laws of any such state, to the extent necessary to ensure
its
ability to enforce each EMC Mortgage Loan, to service the EMC
Mortgage
Loans in accordance with the terms of this Agreement and to perform
any
of its other obligations under this Agreement in accordance with
the
terms hereof.
(ii)
It has the full corporate power and authority to
service each EMC Mortgage Loan, and to execute, deliver and
perform,
and to enter into and consummate the transactions contemplated by
this
Agreement and has duly authorized by all necessary corporate action
on
its part the execution, delivery and performance of this Agreement;
and
this Agreement, assuming the due authorization, execution and
delivery
hereof by the other parties hereto, constitutes its legal, valid
and
binding obligation, enforceable against it in accordance with
its
terms, except that (a) the enforceability hereof may be limited
by
bankruptcy, insolvency, moratorium, receivership and other similar
laws
relating to creditors' rights generally and (b) the remedy of
specific
performance and injunctive and other forms of equitable relief may
be
subject to equitable defenses and to the discretion of the court
before
which any proceeding therefor may be brought.
(iii) The
execution and delivery of this Agreement by it,
the servicing of the EMC Mortgage Loans by it under this Agreement,
the
consummation of any other of the transactions contemplated by
this
Agreement, and the fulfillment of or compliance with the terms
hereof
are in its ordinary course of business and will not (A) result in
a
material breach of any term or provision of its charter or by-laws
or
(B) materially conflict with, result in a material breach,
violation or
acceleration of, or result in a material default under, the terms
of
any other material agreement or instrument to which it is a party
or by
which it may be bound, or (C) constitute a material violation of
any
statute, order or regulation applicable to it of any court,
regulatory
body, administrative agency or governmental body having
jurisdiction
over it; and it is not in breach or violation of any material
indenture
or other material agreement or instrument, or in violation of
any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
it
which breach or violation may materially impair its ability to
perform
or meet any of its obligations under this Agreement.
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<PAGE>
(iv)
It is an approved servicer of conventional mortgage
loans for Fannie Mae or Freddie Mac and is a mortgagee approved by
the
Secretary of Housing and Urban Development pursuant to sections 203
and
211 of the National Housing Act.
(v) No
litigation is pending or, to the best of its
knowledge, threatened, against it that would materially and
adversely
affect the execution, delivery or enforceability of this Agreement
or
its ability to service the EMC Mortgage Loans or to perform any of
its
other obligations under this Agreement in accordance with the
terms
hereof.
(vi)
No consent, approval, authorization or order of any
court or governmental agency or body is required for its
execution,
delivery and performance of, or compliance with, this Agreement or
the
consummation of the transactions contemplated hereby, or if any
such
consent, approval, authorization or order is required, it has
obtained
the same.
(b) Wells
Fargo Bank, National Association, in its
capacity as Master Servicer and Securities
Administrator hereby represents and
warrants to the Seller, the Depositor and
the Trustee as follows, as of the
Closing Date:
(i) It is a
national banking association duly formed,
validly existing and in good standing under the laws of the
United
States of America and is duly authorized and qualified to transact
any
and all business contemplated by this Agreement to be conducted by
the
Master Servicer and the Securities Administrator in any state in
which
a Mortgaged Property is located or is otherwise not required
under
applicable law to effect such qualification and, in any event, is
in
compliance with the doing business laws of any such state, to
the
extent necessary to ensure its ability to enforce each Mortgage
Loan,
to service the Mortgage Loans in accordance with the terms of
this
Agreement and to perform any of its other obligations under
this
Agreement in accordance with the terms hereof;
(ii)
It has the full corporate power and authority to
execute, deliver and perform, and to enter into and consummate
the
transactions contemplated by this Agreement and has duly authorized
by
all necessary corporate action on its part the execution, delivery
and
performance of this Agreement; and this Agreement, assuming the
due
authorization, execution and delivery hereof by the other
parties
hereto, constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, except that
(a)
the enforceability hereof may be limited by bankruptcy,
insolvency,
moratorium, receivership and other similar laws relating to
creditors'
rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject
to
equitable defenses and to the discretion of the court before which
any
proceeding therefor may be brought.
(iii) The
execution and delivery of this Agreement by it,
the consummation of any other of the transactions contemplated by
this
Agreement, and the fulfillment of or compliance with the terms
hereof
are in its ordinary course of business and will not (A) result in
a
material breach of any term or provision of its charter or by-laws
or
(B) materially conflict with, result in a material breach,
violation or
acceleration of, or result
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<PAGE>
in a material default under, the terms of any other material
agreement
or instrument to which it is a party or by which it may be bound,
or
(C) constitute a material violation of any statute, order or
regulation
applicable to it of any court, regulatory body, administrative
agency
or governmental body having jurisdiction over it; and it is not
in
breach or violation of any material indenture or other material
agreement or instrument, or in violation of any statute, order
or
regulation of any court, regulatory body, administrative agency
or
governmental body having jurisdiction over it which breach or
violation
may materially impair its ability to perform or meet any of its
obligations under this Agreement.
(iv)
No litigation is pending or, to the best of its
knowledge, threatened, against it that would materially and
adversely
affect the execution, delivery or enforceability of this Agreement
or
its ability to perform any of its other obligations under this
Agreement in accordance with the terms hereof.
(v) No
consent, approval, authorization or order of any
court or governmental agency or body is required for its
execution,
delivery and performance of, or compliance with, this Agreement or
the
consummation of the transactions contemplated hereby, or if any
such
consent, approval, authorization or order is required, it has
obtained
the same.
(c) The Seller
hereby represents and warrants to the
Depositor, the Securities Administrator,
the Master Servicer and the Trustee as
follows, as of the Closing Date:
(i) The Seller
is duly organized as a Delaware
corporation and is validly existing and in good standing under the
laws
of the State of Delaware and is duly authorized and qualified
to
transact any and all business contemplated by this Agreement to
be
conducted by the Seller in any state in which a Mortgaged Property
is
located or is otherwise not required under applicable law to
effect
such qualification and, in any event, is in compliance with the
doing
business laws of any such state, to the extent necessary to ensure
its
ability to enforce each Mortgage Loan, to sell the Mortgage Loans
in
accordance with the terms of this Agreement and to perform any of
its
other obligations under this Agreement in accordance with the
terms
hereof.
(ii)
The Seller has the full corporate power and authority
to sell each Mortgage Loan, and to execute, deliver and perform,
and to
enter into and consummate the transactions contemplated by this
Agreement and has duly authorized by all necessary corporate action
on
the part of the Seller the execution, delivery and performance of
this
Agreement; and this Agreement, assuming the due authorization,
execution and delivery hereof by the other parties hereto,
constitutes
a legal, valid and binding obligation of the Seller,
enforceable
against the Seller in accordance with its terms, except that (a)
the
enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to
creditors'
rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject
to
equitable defenses and to the discretion of the court before which
any
proceeding therefor may be brought.
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<PAGE>
(iii) The
execution and delivery of this Agreement by the
Seller, the sale of the Mortgage Loans by the Seller under the
Mortgage
Loan Purchase Agreement, the consummation of any other of the
transactions contemplated by this Agreement, and the fulfillment of
or
compliance with the terms hereof and thereof are in the ordinary
course
of business of the Seller and will not (A) result in a material
breach
of any term or provision of the charter or by-laws of the Seller or
(B)
materially conflict with, result in a material breach, violation
or
acceleration of, or result in a material default under, the terms
of
any other material agreement or instrument to which the Seller is
a
party or by which it may be bound, or (C) constitute a material
violation of any statute, order or regulation applicable to the
Seller
of any court, regulatory body, administrative agency or
governmental
body having jurisdiction over the Seller; and the Seller is not
in
breach or violation of any material indenture or other material
agreement or instrument, or in violation of any statute, order
or
regulation of any court, regulatory body, administrative agency
or
governmental body having jurisdiction over it which breach or
violation
may materially impair the Seller's ability to perform or meet any
of
its obligations under this Agreement.
(iv)
The Seller is an approved seller of conventional
mortgage loans for Fannie Mae or Freddie Mac and is a mortgagee
approved by the Secretary of Housing and Urban Development pursuant
to
sections 203 and 211 of the National Housing Act.
(v) No
litigation is pending or, to the best of the
Seller's knowledge, threatened, against the Seller that would
materially and adversely affect the execution, delivery or
enforceability
of this Agreement or the ability of the Seller to sell
the Mortgage Loans or to perform any of its other obligations
under
this Agreement in accordance with the terms hereof.
(vi)
No consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution,
delivery and performance by the Seller of, or compliance by the
Seller
with, this Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval,
authorization or
order is required, the Seller has obtained the same.
(vii) As
of the Closing Date, the representations and
warranties concerning the Mortgage Loans set forth in Section 7 of
the
Mortgage Loan Purchase Agreement are true and correct in all
material
respects.
(d) Upon
discovery by any of the parties hereto of a
breach of a representation or warranty set
forth in Section 7 of the Mortgage
Loan Purchase Agreement that materially and
adversely affects the interests of
the Certificateholders in any Mortgage
Loan, the party discovering such breach
shall give prompt written notice thereof to
the other parties. The Seller hereby
covenants with respect to the
representations and warranties set forth in
Section 7 of the Mortgage Loan Purchase
Agreement, that within 90 days of the
discovery of a breach of any representation
or warranty set forth therein that
materially and adversely affects the
interests of the Certificateholders in any
Mortgage Loan, it shall cure such breach in
all material respects and, if such
breach is not so cured, (i) if such 90-day
period expires prior to the second
anniversary of the Closing Date, remove
such Mortgage Loan (a "Deleted Mortgage
Loan") from
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<PAGE>
the Trust Fund and substitute in its place
a Replacement Mortgage Loan, in the
manner and subject to the conditions set
forth in this Section; or (ii)
repurchase the affected Mortgage Loan or
Mortgage Loans from the Trustee at the
Purchase Price in the manner set forth
below; provided that any such
substitution pursuant to (i) above or
repurchase pursuant to (ii) above shall
not be effected prior to the delivery to
the Trustee of an Opinion of Counsel if
required by Section 2.05 hereof and any
such substitution pursuant to (i) above
shall not be effected prior to the
additional delivery to the Trustee of a
Request for Release. The Seller shall
promptly reimburse the Master Servicer and
the Trustee for any expenses reasonably
incurred by the Master Servicer or the
Trustee in respect of enforcing the
remedies for such breach. To enable the
Securities Administrator to amend the
Mortgage Loan Schedule, the Seller shall,
unless it cures such breach in a timely
fashion pursuant to this Section 2.03,
promptly notify the Securities
Administrator whether it intends either to
repurchase, or to substitute for, the
Mortgage Loan affected by such breach.
With respect to the representations and
warranties in Section 7 of the Mortgage
Loan Purchase Agreement that are made to
the best of the Seller's knowledge, if
it is discovered by any of the Depositor,
the Master Servicer, the Seller, the
Securities Administrator or the Trustee
that the substance of such
representation and warranty is inaccurate
and such inaccuracy materially and
adversely affects the value of the related
Mortgage Loan, notwithstanding the
Seller's lack of knowledge with respect to
the substance of such representation
or warranty, the Seller shall nevertheless
be required to cure, substitute for
or repurchase the affected Mortgage Loan in
accordance with the foregoing.
With respect to any Replacement Mortgage Loan or Loans, the
Seller
shall deliver to the Trustee for the
benefit of the Certificateholders such
documents and agreements as are required by
Section 2.01. No substitution will
be made in any calendar month after the
Determination Date for such month.
Scheduled Payments due with respect to
Replacement Mortgage Loans in the Due
Period related to the Distribution Date on
which such proceeds are to be
distributed shall not be part of the Trust
Fund and will be retained by the
Seller. For the month of substitution,
distributions to Certificateholders will
include the Scheduled Payment due on any
Deleted Mortgage Loan for the related
Due Period and thereafter the Seller shall
be entitled to retain all amounts
received in respect of such Deleted
Mortgage Loan. The Securities Administrator
shall amend the Mortgage Loan Schedule for
the benefit of the Certificateholders
to reflect the removal of such Deleted
Mortgage Loan and the substitution of the
Replacement Mortgage Loan or Loans and the
Securities Administrator shall
deliver the amended Mortgage Loan Schedule
to the Trustee and the Custodian.
Upon such substitution, the Replacement
Mortgage Loan or Loans shall be subject
to the terms of this Agreement in all
respects, and the Seller shall be deemed
to have made with respect to such
Replacement Mortgage Loan or Loans, as of the
date of substitution, the representations
and warranties set forth in Section 7
of the Mortgage Loan Purchase Agreement
with respect to such Mortgage Loan. Upon
any such substitution and the deposit into
the Master Servicer Collection
Account of the amount required to be
deposited therein in connection with such
substitution as described in the following
paragraph and receipt by the Trustee
of a Request for Release for such Mortgage
Loan, the Trustee or the Custodian
shall release to the Seller the Mortgage
File relating to such Deleted Mortgage
Loan and held for the benefit of the
Certificateholders and the Trustee shall
execute and deliver at the Seller's
direction such instruments of transfer or
assignment as have been prepared by the
Seller, in each case without recourse,
representation or warranty as shall be
necessary to vest in the Seller, or its
respective designee, title to the Trustee's
interest in any Deleted Mortgage
Loan substituted for pursuant to this
Section 2.03.
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<PAGE>
For any month in which the Seller substitutes one or more
Replacement
Mortgage Loans for a Deleted Mortgage Loan,
the Master Servicer will determine
the amount (if any) by which the aggregate
principal balance of all the
Replacement Mortgage Loans as of the date
of substitution is less than the
Stated Principal Balance (after application
of the principal portion of the
Scheduled Payment due in the month of
substitution) of such Deleted Mortgage
Loan. An amount equal to the aggregate of
such deficiencies, described in the
preceding sentence for any Distribution
Date (such amount, the "Substitution
Adjustment Amount") shall be deposited into
the Master Servicer Collection
Account, by the Seller delivering such
Replacement Mortgage Loan on the
Determination Date for the Distribution
Date relating to the Prepayment Period
during which the related Mortgage Loan
became required to be purchased or
replaced hereunder.
In
the event that the Seller shall have repurchased a Mortgage
Loan,
the Purchase Price therefor shall be
deposited into the Master Servicer
Collection Account maintained by the Master
Servicer, on the Determination Date
for the Distribution Date in the month
following the month during which the
Seller became obligated to repurchase or
replace such Mortgage Loan and upon
such deposit of the Purchase Price, the
delivery of an Opinion of Counsel if
required by Section 2.05 and the receipt of
a Request for Release, the Trustee
or the Custodian shall release the related
Mortgage File held for the benefit of
the Certificateholders to the Seller, and
the Trustee shall execute and deliver
at such Person's direction the related
instruments of transfer or assignment
prepared by the Seller, in each case
without recourse, representation or
warranty as shall be necessary to transfer
title from the Trustee for the
benefit of the Certificateholders and
transfer the Trustee's interest to the
Seller to any Mortgage Loan purchased
pursuant to this Section 2.03. It is
understood and agreed that the obligation
under this Agreement of the Seller to
cure, repurchase or replace any Mortgage
Loan as to which a breach has occurred
and is continuing shall constitute the sole
remedies against the Seller
respecting such breach available to
Certificateholders, the Depositor or the
Trustee.
(e) The
representations and warranties set forth in
Section 2.03 hereof shall survive delivery
of the respective Mortgage Loans and
Mortgage Files to the Trustee or the
Custodian for the benefit of the
Certificateholders.
Section 2.04 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
The
Depositor hereby represents and warrants to
the Master Servicer, the Securities
Administrator and the Trustee as follows,
as of the date hereof and as of the
Closing Date:
(i) The
Depositor is duly organized and is validly
existing as limited liability company in good standing under the
laws
of the State of Delaware and has full power and authority necessary
to
own or hold its properties and to conduct its business as now
conducted
by it and to enter into and perform its obligations under this
Agreement.
(ii)
The Depositor has the full power and authority to
execute, deliver and perform, and to enter into and consummate
the
transactions contemplated by, this Agreement and has duly
authorized,
by all necessary action on its part, the execution, delivery
and
performance of this Agreement; and this Agreement, assuming the
due
authorization, execution and delivery hereof by the other
parties
hereto, constitutes a legal, valid and binding obligation of
the
Depositor, enforceable against the Depositor in accordance with
its
terms, subject, as to enforceability, to (i) bankruptcy,
insolvency,
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reorganization, moratorium and other similar laws affecting
creditors'
rights generally and (ii) general principles of equity, regardless
of
whether enforcement is sought in a proceeding in equity or at
law.
(iii) The
execution and delivery of this Agreement by the
Depositor, the consummation of the transactions contemplated by
this
Agreement, and the fulfillment of or compliance with the terms
hereof
are in the ordinary course of business of the Depositor and will
not
(A) result in a material breach of any term or provision of the
organizational documents of the Depositor or (B) materially
conflict
with, result in a material breach, violation or acceleration of,
or
result in a material default under, the terms of any other
material
agreement or instrument to which the Depositor is a party or by
which
it may be bound or (C) constitute a material violation of any
statute,
order or regulation applicable to the Depositor of any court,
regulatory body, administrative agency or governmental body
having
jurisdiction over the Depositor; and the Depositor is not in breach
or
violation of any material indenture or other material agreement
or
instrument, or in violation of any statute, order or regulation of
any
court, regulatory body, administrative agency or governmental
body
having jurisdiction over it which breach or violation may
materially
impair the Depositor's ability to perform or meet any of its
obligations under this Agreement.
(iv)
No litigation is pending, or, to the best of the
Depositor's knowledge, threatened, against the Depositor that
would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Depositor
to
perform its obligations under this Agreement in accordance with
the
terms hereof.
(v) No
consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution,
delivery and performance by the Depositor of, or compliance by
the
Depositor with, this Agreement or the consummation of the
transactions
contemplated hereby, or if any such consent, approval,
authorization or
order is required, the Depositor has obtained the same.
The Depositor hereby represents and warrants to the Trustee as of
the
Closing Date, following the transfer of the
Mortgage Loans to it by the Seller,
the Depositor had good title to the
Mortgage Loans and the related Mortgage
Notes were subject to no offsets, claims,
defenses or counterclaims.
It is understood and agreed that the representations and warranties
set
forth in the immediately preceding
paragraph shall survive delivery of the
Mortgage Files to the Trustee or the
Custodian for the benefit of the
Certificateholders. Upon discovery by the
Depositor or the Trustee of a breach
of such representations and warranties, the
party discovering such breach shall
give prompt written notice to the others
and to each Rating Agency.
Section 2.05 DELIVERY OF OPINION OF COUNSEL IN CONNECTION WITH
SUBSTITUTIONS AND REPURCHASES.
(a)
Notwithstanding any contrary provision of this
Agreement, with respect to any Mortgage
Loan that is not in default or as to
which default is not imminent, no
repurchase or
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substitution pursuant to Sections 2.02 or
2.03 shall be made unless the Seller
delivers to the Trustee an Opinion of
Counsel, addressed to the Trustee, to the
effect that such repurchase or substitution
would not (i) result in the
imposition of the tax on "prohibited
transactions" of REMIC I, REMIC II 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 to the effect that
such repurchase or substitution, as
applicable, will not result in the events
described in clause (i) or clause (ii)
of the preceding sentence.
(b) Upon
discovery by the Depositor, the Seller or the
Master Servicer that any Mortgage Loan does
not constitute a "qualified
mortgage" within the meaning of Section
860G(a)(3) of the Code, the party
discovering such fact shall promptly (and
in any event within 5 Business Days of
discovery) give written notice thereof to
the other parties and the Trustee. In
connection therewith, the Trustee shall
require the Seller, at the Seller's
option, to either (i) substitute, if the
conditions in Section 2.03(c) with
respect to substitutions are satisfied, a
Replacement Mortgage Loan for the
affected Mortgage Loan, or (ii) repurchase
the affected Mortgage Loan within 90
days of such discovery in the same manner
as it would a Mortgage Loan for a
breach of representation or warranty
contained in Section 2.03. The Trustee
shall reconvey to the Seller the Mortgage
Loan to be released pursuant hereto
(and the Custodian shall deliver the
related Mortgage File) in the same manner,
and on the same terms and conditions, as it
would a Mortgage Loan repurchased
for breach of a representation or warranty
contained in Section 2.03.
Section 2.06
COUNTERSIGNATURE AND DELIVERY OF CERTIFICATES.
(a) The
Trustee acknowledges the sale, transfer and
assignment to it of the Trust Fund and,
concurrently with such transfer and
assignment, the Securities Administrator
has executed, countersigned and
delivered, to or upon the order of the
Depositor, the Certificates in authorized
denominations evidencing the entire
ownership of the Trust Fund. The Trustee
agrees to hold the Trust Fund and exercise
the rights referred to above for the
benefit of all present and future Holders
of the Certificates and to perform the
duties set forth in this Agreement in
accordance with its terms.
(b) The
Depositor, concurrently with the execution and
delivery hereof, does hereby transfer,
assign, set over and otherwise convey in
trust to the Trustee without recourse all
the right, title and interest of the
Depositor in and to the REMIC I Regular
Interests, REMIC II Regular Interests
and the other assets of REMIC III for the
benefit of the Holders of the REMIC
III Certificates. The Trustee acknowledges
receipt of the REMIC I Regular
Interests, REMIC II Regular Interests (all
of which are uncertificated) and the
other assets of REMIC III and declares that
it holds and will hold the same in
trust for the exclusive use and benefit of
the Holders of the REMIC III
Certificates.
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Article III
ADMINISTRATION AND SERVICING OF EMC MORTGAGE LOANS BY COMPANY
Section 3.01 THE COMPANY. The Company shall service and administer
the
EMC Mortgage Loans in accordance with
customary and usual standards of practice
of prudent mortgage loan servicers in the
respective states in which the related
Mortgaged Properties are located. In
connection with such servicing and
administration, the Company shall have full
power and authority, acting alone
and/or through subservicers as provided in
Section 3.03, to do or cause to be
done any and all things that it may deem
necessary or desirable in connection
with such servicing and administration,
including but not limited to, the power
and authority, subject to the terms hereof
(i) to execute and deliver, on behalf
of the Certificateholders and the Trustee,
customary consents or waivers and
other instruments and documents, (ii) to
consent to transfers of any related
Mortgaged Property and assumptions of the
Mortgage Notes and related Mortgages
(but only in the manner provided herein),
(iii) to collect any Insurance
Proceeds and other Liquidation Proceeds,
and (iv) subject to Section 3.09, to
effectuate foreclosure or other conversion
of the ownership of the Mortgaged
Property securing any EMC Mortgage Loan;
provided that the Company shall take no
action that is inconsistent with or
prejudices the interests of the Trust Fund
or the Certificateholders in any EMC
Mortgage Loan or the rights and interests
of the Depositor and the Trustee under this
Agreement.
Without limiting the generality of the foregoing, the Company, in
its
own name or in the name of the Trust, the
Depositor or the Trustee, is hereby
authorized and empowered by the Trust, the
Depositor and the Trustee, when the
Company believes it appropriate in its
reasonable judgment, to execute and
deliver, on behalf of the Trustee, the
Depositor, the Certificateholders or any
of them, any and all instruments of
satisfaction or cancellation, or of partial
or full release or discharge and all other
comparable instruments, with respect
to the EMC Mortgage Loans, and with respect
to the related Mortgaged Properties
held for the benefit of the
Certificateholders. The Company shall prepare and
deliver to the Depositor and/or the Trustee
such documents requiring execution
and delivery by any or all of them as are
necessary or appropriate to enable the
Company to service and administer the EMC
Mortgage Loans. Upon receipt of such
documents, the Depositor and/or the Trustee
shall execute such documents and
deliver them to the Company.
In accordance with the standards of the first paragraph of this
Section
3.01, the Company shall advance or cause to
be advanced funds as necessary for
the purpose of effecting the payment of
taxes and assessments on the Mortgaged
Properties relating to the EMC Mortgage
Loans, which advances shall be
reimbursable in the first instance from
related collections from the Mortgagors
pursuant to Section 5.04, and further as
provided in Section 5.02. All costs
incurred by the Company, if any, in
effecting the timely payments of taxes and
assessments on the Mortgaged Properties
relating to the EMC Mortgage Loans and
related insurance premiums shall not, for
the purpose of calculating monthly
distributions to the Certificateholders, be
added to the Stated Principal
Balance under the related EMC Mortgage
Loans, notwithstanding that the terms of
such Mortgage Loans so permit.
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Section 3.02 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS.
(a) Except as
otherwise provided in this Section 3.02,
when any property subject to a Mortgage has
been or is about to be conveyed by
the Mortgagor, the Company shall to the
extent that it has knowledge of such
conveyance, enforce any due-on-sale clause
contained in any Mortgage Note or
Mortgage, to the extent permitted under
applicable law and governmental
regulations, but only to the extent that
such enforcement will not adversely
affect or jeopardize coverage under any
Required Insurance Policy.
Notwithstanding the foregoing, the Company
is not required to exercise such
rights with respect to an EMC Mortgage Loan
if the Person to whom the related
Mortgaged Property has been conveyed or is
proposed to be conveyed satisfies the
terms and conditions contained in the
Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such
Mortgage Note or Mortgage is not
otherwise so required under such Mortgage
Note or Mortgage as a condition to
such transfer. In the event that the
Company is prohibited by law from enforcing
any such due-on-sale clause, or if coverage
under any Required Insurance Policy
would be adversely affected, or if
nonenforcement is otherwise permitted
hereunder, the Company is authorized,
subject to Section 3.02(b), to take or
enter into an assumption and modification
agreement from or with the person to
whom such property has been or is about to
be conveyed, pursuant to which such
person becomes liable under the Mortgage
Note and, unless prohibited by
applicable state law, the Mortgagor remains
liable thereon, provided that the
Mortgage Loan shall continue to be covered
(if so covered before the Company
enters such agreement) by the applicable
Required Insurance Policies. The
Company, subject to Section 3.02(b), is
also authorized with the prior approval
of the insurers under any Required
Insurance Policies to enter into a
substitution of liability agreement with
such Person, pursuant to which the
original Mortgagor is released from
liability and such Person is substituted as
Mortgagor and becomes liable under the
Mortgage Note. Notwithstanding the
foregoing, the Company shall not be deemed
to be in default under this Section
3.02(a) by reason of any transfer or
assumption that the Company reasonably
believes it is restricted by law from
preventing.
(b) Subject to
the Company's duty to enforce any
due-on-sale clause to the extent set forth
in Section 3.02(a), in any case in
which a Mortgaged Property has been
conveyed to a Person by a Mortgagor, and
such Person is to enter into an assumption
agreement or modification agreement
or supplement to the Mortgage Note or
Mortgage that requires the signature of
the Trustee, or if an instrument of release
signed by the Trustee is required
releasing the Mortgagor from liability on
the related EMC Mortgage Loan, the
Company shall prepare and deliver or cause
to be prepared and delivered to the
Trustee for signature and shall direct, in
writing, the Trustee to execute the
assumption agreement with the Person to
whom the Mortgaged Property is to be
conveyed and such modification agreement or
supplement to the Mortgage Note or
Mortgage or other instruments as are
reasonable or necessary to carry out the
terms of the Mortgage Note or Mortgage or
otherwise to comply with any
applicable laws regarding assumptions or
the transfer of the Mortgaged Property
to such Person. In connection with any such
assumption, no material term of the
Mortgage Note (including, but not limited
to, the Mortgage Rate, the amount of
the Scheduled Payment and any other term
affecting the amount or timing of
payment on the EMC Mortgage Loan) may be
changed. In addition, the substitute
Mortgagor and the Mortgaged Property must
be acceptable to the Company in
accordance with its servicing standards as
then in effect. The Company shall
notify the Trustee that any such
substitution or assumption agreement has been
completed by forwarding to the
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Trustee the original of such substitution
or assumption agreement, which in the
case of the original shall be added to the
related Mortgage File and shall, for
all purposes, be considered a part of such
Mortgage File to the same extent as
all other documents and instruments
constituting a part thereof. Any fee
collected by the Company for entering into
an assumption or substitution of
liability agreement will be retained by the
Company as additional servicing
compensation.
Section 3.03 SUBSERVICERS. The Company shall perform all of its
servicing responsibilities hereunder or may
cause a subservicer to perform any
such servicing responsibilities on its
behalf, but the use by the Company of a
subservicer shall not release the Company
from any of its obligations hereunder
and the Company shall remain responsible
hereunder for all acts and omissions of
each subservicer as fully as if such acts
and omissions were those of the
Company. The Company shall pay all fees of
each subservicer from its own funds,
and a subservicer's fee shall not exceed
the Servicing Fee payable to the
Company hereunder.
At the cost and expense of the Company, without any right of
reimbursement from its Protected Account,
the Company shall be entitled to
terminate the rights and responsibilities
of a subservicer and arrange for any
servicing responsibilities to be performed
by a successor subservicer; provided,
however, that nothing contained herein
shall be deemed to prevent or prohibit
the Company, at the Company's option, from
electing to service the related EMC
Mortgage Loans itself. In the event that
the Company's responsibilities and
duties under this Agreement are terminated
pursuant to Section 9.03, the Company
shall at its own cost and expense terminate
the rights and responsibilities of
each subservicer effective as of the date
of termination of the Company. The
Company shall pay all fees, expenses or
penalties necessary in order to
terminate the rights and responsibilities
of each subservicer from the Company's
own funds without reimbursement from the
Trust Fund.
Notwithstanding the foregoing, the Company shall not be relieved of
its
obligations hereunder and shall be
obligated to the same extent and under the
same terms and conditions as if it alone
were servicing and administering the
EMC Mortgage Loans. The Company shall be
entitled to enter into an agreement
with a subservicer for indemnification of
the Company by the subservicer and
nothing contained in this Agreement shall
be deemed to limit or modify such
indemnification.
Any subservicing agreement and any other transactions or
services
relating to the EMC Mortgage Loans
involving a subservicer shall be deemed to be
between such subservicer and the Company
alone, and neither the Master Servicer
nor the Trustee shall have any obligations,
duties or liabilities with respect
to such subservicer including any
obligation, duty or liability of either the
Master Servicer or the Trustee to pay such
subservicer's fees and expenses. For
purposes of remittances to the Master
Servicer pursuant to this Agreement, the
Company shall be deemed to have received a
payment on an EMC Mortgage Loan when
a subservicer has received such
payment.
Section 3.04 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF COMPANY
TO
BE HELD FOR TRUSTEE. Notwithstanding any
other provisions of this Agreement, the
Company shall transmit to the Trustee as
required by this Agreement all
documents and instruments in respect of an
EMC Mortgage Loan coming into the
possession of the Company from time to time
and shall account
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fully to the Trustee for any funds received
by the Company or that otherwise are
collected by the Company as Liquidation
Proceeds or Insurance Proceeds in
respect of any such Mortgage Loan. All
Mortgage Files and funds collected or
held by, or under the control of, the
Company in respect of any EMC Mortgage
Loans, whether from the collection of
principal and interest payments or from
Liquidation Proceeds, including but not
limited to, any funds on deposit in the
Protected Account maintained by the
Company, shall be held by the Company for
and on behalf of the Trustee and shall be
and remain the sole and exclusive
property of the Trustee, subject to the
applicable provisions of this Agreement.
The Company also agrees that it shall not
create, incur or subject any Mortgage
File or any funds that are deposited in the
Protected Account maintained by the
Company or the Master Servicer Collection
Account or in any Escrow Account, or
any funds that otherwise are or may become
due or payable to the Trustee for the
benefit of the Certificateholders, to any
claim, lien, security interest,
judgment, levy, writ of attachment or other
encumbrance, or assert by legal
action or otherwise any claim or right of
set off against any Mortgage File or
any funds collected on, or in connection
with, an EMC Mortgage Loan, except,
however, that the Company shall be entitled
to set off against and deduct from
any such funds any amounts that are
properly due and payable to the Company
under this Agreement.
Section 3.05 MAINTENANCE OF HAZARD INSURANCE. The Company shall
cause
to be maintained, for each EMC Mortgage
Loan, hazard insurance on buildings
upon, or comprising part of, the Mortgaged
Property against loss by fire,
hazards of extended coverage and such other
hazards as are customary in the area
where the related Mortgaged Property is
located with an insurer which is
licensed to do business in the state where
the related Mortgaged Property is
located. Each such policy of standard
hazard insurance shall contain, or have an
accompanying endorsement that contains, a
standard mortgagee clause. The Company
shall also cause flood insurance to be
maintained on property acquired upon
foreclosure or deed in lieu of foreclosure
of any EMC Mortgage Loan, to the
extent described below. Pursuant to Section
5.01, any amounts collected by the
Company under any such policies (other than
the amounts to be applied to the
restoration or repair of the related
Mortgaged Property or property thus
acquired or amounts released to the
Mortgagor in accordance with the Company's
normal servicing procedures) shall be
deposited in the Protected Account
maintained by the Company. Any cost
incurred by the Company in maintaining any
such insurance shall not, for the purpose
of calculating monthly distributions
to the Certificateholders or remittances to
the Trustee for their benefit, be
added to the principal balance of the
Mortgage Loan, notwithstanding that the
terms of the EMC Mortgage Loan so permit.
Such costs shall be recoverable by the
Company out of late payments by the related
Mortgagor or out of Liquidation
Proceeds to the extent permitted by Section
5.02. It is understood and agreed
that no earthquake or other additional
insurance is to be required of any
Mortgagor or maintained on property
acquired in respect of a Mortgage other than
pursuant to such applicable laws and
regulations as shall at any time be in
force and as shall require such additional
insurance. If the Mortgaged Property
is located at the time of origination of
the related EMC Mortgage Loan in a
federally designated special flood hazard
area and such area is participating in
the national flood insurance program, the
Company shall cause flood insurance to
be maintained with respect to such EMC
Mortgage Loan. Such flood insurance shall
be in an amount equal to the least of (i)
the Stated Principal Balance of the
related EMC Mortgage Loan, (ii) minimum
amount required to compensate for damage
or loss on a replacement cost basis or
(iii) the maximum amount of such
insurance available for the related
Mortgaged Property under the Flood Disaster
Protection Act of 1973, as amended.
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In the event that the Company shall obtain and maintain a
blanket
policy insuring against hazard losses on
all of the EMC Mortgage Loans, it shall
conclusively be deemed to have satisfied
its obligations as set forth in the
first sentence of this Section 3.05, it
being understood and agreed that such
policy may contain a deductible clause on
terms substantially equivalent to
those commercially available and maintained
by comparable servicers. If such
policy contains a deductible clause, the
Company shall, in the event that there
shall not have been maintained on the
related Mortgaged Property a policy
complying with the first sentence of this
Section 3.05, and there shall have
been a loss that would have been covered by
such policy, deposit in the
Protected Account maintained by the Company
the amount not otherwise payable
under the blanket policy because of such
deductible clause. Such deposit shall
be from the Company's own funds without
reimbursement therefor. In connection
with its activities as administrator and
servicer of the EMC Mortgage Loans, the
Company agrees to present, on behalf of
itself, the Depositor and the Trustee
for the benefit of the Certificateholders,
claims under any such blanket policy.
Section 3.06 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS.
The
Company shall prepare and present on behalf
of the Trustee and the
Certificateholders all claims under the
Insurance Policies relating to the EMC
Mortgage Loans and take such actions
(including the negotiation, settlement,
compromise or enforcement of the insured's
claim) as shall be necessary to
realize recovery under such Insurance
Policies. Any proceeds disbursed to the
Company in respect of such Insurance
Policies shall be promptly deposited in the
Protected Account maintained by the Company
upon receipt, except that any
amounts realized that are to be applied to
the repair or restoration of the
related Mortgaged Property as a condition
precedent to the presentation of
claims on the related EMC Mortgage Loan to
the insurer under any applicable
Insurance Policy need not be so deposited
(or remitted).
Section 3.07 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE
POLICIES.
(a) The
Company shall not take any action that would
result in noncoverage under any applicable
Primary Mortgage Insurance Policy of
any loss which, but for the actions of the
Company would have been covered
thereunder. The Company shall use its best
efforts to keep in force and effect
(to the extent that the EMC Mortgage Loan
requires the Mortgagor to maintain
such insurance), Primary Mortgage Insurance
applicable to each EMC Mortgage
Loan. The Company shall not cancel or
refuse to renew any such Primary Mortgage
Insurance Policy that is in effect at the
date of the initial issuance of the
related Mortgage Note and is required to be
kept in force hereunder.
(b) The
Company agrees to present on behalf of the
Trustee and the Certificateholders, claims
to the insurer under any Primary
Mortgage Insurance Policies relating to the
EMC Mortgage Loans and, in this
regard, to take such reasonable action as
shall be necessary to permit recovery
under any Primary Mortgage Insurance
Policies respecting defaulted EMC Mortgage
Loans. Pursuant to Section 5.01, any
amounts collected by the Company under any
Primary Mortgage Insurance Policies shall
be deposited in the Protected Account
maintained by the Company, subject to
withdrawal pursuant t
