EXECUTION COPY
BEAR STEARNS ASSET BACKED SECURITIES I LLC,
Depositor
EMC MORTGAGE CORPORATION,
Seller and Servicer
WELLS FARGO BANK, N.A.,
Master Servicer and Securities Administrator
and
JPMORGAN CHASE BANK, N.A.
Trustee
______________________________________
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 2005
______________________________________
BEAR STEARNS ASSET BACKED SECURITIES TRUST 2005-SD1
ASSET-BACKED CERTIFICATES, SERIES 2005-SD1
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TABLE OF CONTENTS
Page
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ARTICLE I.
DEFINITIONS
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Section 1.01. Defined
Terms.......................................................................................1
ARTICLE II.
CONVEYANCE OF TRUST FUND REPRESENTATIONS AND WARRANTIES
Section 2.01. Conveyance of
Trust
Fund.......................................................................35
Section 2.02. Acceptance of
the Mortgage
Loans...............................................................37
Section 2.03. Representations,
Warranties and Covenants of the Master Servicer, the EMC Servicer
and
the
Seller.....................................................................................39
Section 2.03(A) Assignment of Interests in
the Servicing
Agreements............................................48
Section 2.04. Representations
and Warranties of the
Depositor................................................48
Section 2.05. Delivery of
Opinion of Counsel in Connection with Substitutions and
Repurchases................50
Section 2.06. Authentication
and Delivery of
Certificates....................................................50
Section 2.07. Covenants of the
Master Servicer and the EMC
Servicer..........................................50
Section 2.08. Lost Mortgage
Notes
Indemnity..................................................................51
ARTICLE III.
ADMINISTRATION AND MASTER SERVICING OF MORTGAGE LOANS
Section 3.01. The Master
Servicer............................................................................52
Section 3.02. REMIC-Related
Covenants........................................................................52
Section 3.03. Monitoring of
Servicers........................................................................52
Section 3.04. Successor Master
Servicer and Subservicing
Agreements..........................................54
Section 3.05. Power to Act;
Procedures.......................................................................54
Section 3.06. Due-on-Sale
Clauses; Assumption
Agreements.....................................................55
Section 3.07. Release of
Mortgage
Files......................................................................55
Section 3.08. Documents,
Records and Funds in Possession of the Master Servicer To Be Held
for Trustee.......56
Section 3.09. Maintenance of
Hazard
Insurance................................................................56
Section 3.10. Presentment of
Claims and Collection of
Proceeds...............................................57
Section 3.11. Maintenance of
the Primary Mortgage Insurance
Policies.........................................57
Section 3.12. Custodian to
Retain Possession of Certain Insurance Policies and
Documents.....................57
Section 3.13. Realization Upon
Defaulted Mortgage
Loans......................................................58
Section 3.14. Compensation for
the Servicers and the Master
Servicer.........................................58
Section 3.15. REO
Property...................................................................................58
Section 3.16. Annual Officer's
Certificate as to
Compliance..................................................58
Section 3.17. Annual
Independent Accountant's Servicing
Report...............................................59
Section 3.18. Reports Filed
with Securities and Exchange
Commission..........................................59
Section 3.19. The EMC
Servicer...............................................................................60
Section 3.20. Optional
Purchase of Defaulted Mortgage
Loans..................................................60
ARTICLE IV.
ACCOUNTS
Section 4.01. Protected
Accounts.............................................................................61
Section 4.02. Master Servicer
Collection
Account.............................................................61
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Section 4.03. Permitted
Withdrawals and Transfers from the Master Servicer Collection
Account................63
Section 4.04. Distribution
Account...........................................................................63
Section 4.05. Permitted
Withdrawals and Transfers from the Distribution
Account..............................64
Section 4.06. Yield
Maintenance Account and Yield Maintenance
Agreements.....................................65
ARTICLE V.
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 5.01.
Advances.......................................................................................67
Section 5.02. Compensating
Interest
Payments.................................................................67
Section 5.03. REMIC
Distributions............................................................................68
Section 5.04.
Distributions..................................................................................68
Section 5.04A. Allocation of Realized
Losses..................................................................74
Section 5.05. Monthly
Statements to
Certificateholders.......................................................75
Section 5.06. REMIC
Designations and
Allocations.............................................................78
Section 5.07. Supplemental
Interest Reserve Fund; WAC
Excess.................................................79
ARTICLE VI.
THE CERTIFICATES
Section 6.01. The
Certificates...............................................................................81
Section 6.02. Certificate
Register; Registration of Transfer and Exchange of
Certificates....................83
Section 6.03. Mutilated,
Destroyed, Lost or Stolen
Certificates..............................................86
Section 6.04. Persons Deemed
Owners..........................................................................86
Section 6.05. Access to List
of Certificateholders' Names and
Addresses......................................86
Section 6.06. Book-Entry
Certificates........................................................................87
Section 6.07. Notices to
Depository..........................................................................87
Section 6.08. Definitive
Certificates........................................................................88
Section 6.09. Maintenance of
Office or
Agency................................................................88
ARTICLE VII.
THE DEPOSITOR, THE MASTER SERVICER, THE EMC SERVICER AND THE
SELLER
Section 7.01. Respective
Liabilities of the Depositor, the Master Servicer, the EMC Servicer
and the
Seller.........................................................................................89
Section 7.02. Merger or
Consolidation of the Depositor, the Master Servicer, the EMC
Servicer or the
Seller.........................................................................................89
Section 7.03. Indemnification
of the Trustee, the Master Servicer, the Securities Administrator
and
Others.........................................................................................89
Section 7.04. Limitation on
Liability of the Depositor, the Seller, the Master Servicer and
Others...........90
Section 7.05. Limitation on
Resignation of Master Servicer and the EMC Master
Servicer.......................91
Section 7.06. Errors and
Omissions Insurance; Fidelity
Bonds.................................................91
ARTICLE VIII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 8.01. Events of
Default..............................................................................92
Section 8.02. Trustee to Act;
Appointment of
Successor.......................................................93
Section 8.03. Notification to
Certificateholders.............................................................95
ARTICLE IX.
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 9.01. Duties of
Trustee and Securities
Administrator................................................96
Section 9.02. Certain Matters
Affecting the Trustee and the Securities
Administrator........................97
Section 9.03. Trustee and
Securities Administrator Not Liable for Certificates or Mortgage
Loans............99
Section 9.04. Trustee and
Securities Administrator May Own
Certificates.....................................99
Section 9.05. Trustee's and
Securities Administrator's Fees and
Expenses....................................100
Section 9.06. Eligibility
Requirements for Trustee and Securities
Administrator.............................100
Section 9.07.
Insurance.....................................................................................101
Section 9.08. Resignation and
Removal of Trustee and Securities
Administrator...............................101
Section 9.09. Successor
Trustee or Securities
Administrator.................................................102
Section 9.10. Merger or
Consolidation of Trustee or Securities
Administrator................................102
Section 9.11. Appointment of
Co-Trustee or Separate
Trustee.................................................102
Section 9.12. Tax
Matters...................................................................................104
ARTICLE X.
TERMINATION
Section 10.01. Termination upon
Liquidation or Repurchase of all Mortgage
Loans..............................107
Section 10.02. Final Distribution on
the
Certificates........................................................107
Section 10.03. Additional Termination
Requirements...........................................................108
ARTICLE XI.
MISCELLANEOUS PROVISIONS
Section 11.01.
Amendment.....................................................................................110
Section 11.02. Recordation of
Agreement;
Counterparts........................................................111
Section 11.03. Governing
Law.................................................................................111
Section 11.04. Intention of
Parties..........................................................................111
Section 11.05.
Notices.......................................................................................112
Section 11.06. Severability of
Provisions....................................................................113
Section 11.07.
Assignment....................................................................................113
Section 11.08. Limitation on Rights
of
Certificateholders....................................................113
Section 11.09. Inspection and Audit
Rights...................................................................114
Section 11.10. Certificates
Nonassessable and Fully
Paid.....................................................114
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Schedules
Schedule I
List of Servicing Agreements
Schedule II
List of Assignment, Assumptions and Recognition Agreements
Exhibits
Exhibit A-1
Form of Class I-A-1
Exhibit A-2
Form of Class I-A-2
Exhibit A-3
Form of Class I-A-3
Exhibit A-4
Form of Class I-M-1
Exhibit A-5
Form of Class I-M-2
Exhibit A-6
Form of Class I-M-3
Exhibit A-7
Form of
Class I-M-4
Exhibit A-8
Form of Class I-M-5
Exhibit A-9
Form of Class I-M-6
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Exhibit A-10
Form of Class I-B
Exhibit A-11
Form of Class II-A
Exhibit A-12
Form of Class II-M-1
Exhibit A-13
Form of Class II-M-2
Exhibit A-14
Form of Class II-M-3
Exhibit A-15
Form of Class II-B
Exhibit A-16
Form of Class I-B-IO Certificates
Exhibit A-17
Form of Class II-B-IO Certificates
Exhibit A-18
Form of Class R Certificates
Exhibit B
Mortgage Loan Schedule
Exhibit B-I:
Schedule of Group I Mortgage Loans
Exhibit B-II:
Schedule of Group II Mortgage Loans
Exhibit C
Reserved
Exhibit D
Form of Transfer Affidavit
Exhibit E
Form of Transferor Certificate
Exhibit F
Form of Investment Letter (Non-Rule 144A)
Exhibit G
Form of Rule 144A Investment Letter
Exhibit H
Form of Request for Release
Exhibit I
DTC Letter of Representations
Exhibit J
Schedule of Mortgage Loans with Lost Notes
Exhibit K
EMC Mortgage Loan Servicing
iv
<PAGE>
POOLING AND
SERVICING AGREEMENT, dated as of January 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 servicer (in such capacity,
the "EMC Servicer"), WELLS FARGO BANK,
N.A., a national banking association, as
master servicer (in such capacity, the
"Master Servicer") and as securities
administrator (in such capacity, the
"Securities Administrator") and JPMORGAN
CHASE BANK, N.A., a New York banking
corporation, as trustee (the "Trustee").
PRELIMINARY STATEMENT
The parties to
this Agreement hereby create a common law trust pursuant to
the laws of the State of New York. The
Depositor is the owner of the Trust Fund
that is hereby conveyed to the Trustee in
return for the Certificates. As
provided herein, the Trustee shall make two
separate real estate mortgage
investment conduit (each a "REMIC")
elections with respect to the Trust Fund for
Federal income tax purposes.
The Trust Fund
shall be named, and may be referred to as, the "Bear Stearns
Asset Backed Securities Trust 2005-SD1."
The Certificates issued hereunder may
be referred to as "Asset-Backed
Certificates Series 2005-SD1" (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 EMC Servicer
and the Trustee agree as follows:
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ARTICLE I.
DEFINITIONS
Section 1.01.
Defined Terms.
In addition to
those terms defined in Section 1.02, whenever used in this
Agreement, the following words and phrases,
unless the context otherwise
requires, shall have the following
meanings:
Accepted 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
Master Servicer (except in its capacity
as successor to a Servicer) or to the
Trustee (in its capacity, if at all, as
Successor Master Servicer).
Account: The
Master Servicer Collection Account, each Protected Account,
the Distribution Account and the Yield
Maintenance Account.
Accrual Period:
With respect to the Adjustable Rate Certificates and any
Distribution Date, the period from and
including the preceding Distribution Date
(or, in the case of the first Distribution
Date, from the Closing Date) to and
including the day prior to the current
Distribution Date. All calculations of
interest on the Adjustable Rate
Certificates (including the Interest Rate Cap)
will be made on the basis of the actual
number of days elapsed in the related
Accrual Period and in a 360-day year.
Adjustable Rate
Certificates: All of the certificates other than the Class
B-IO Certificates and the Residual
Certificates.
Advance: An
advance of delinquent payments of principal (other than in
respect of delinquent payments of principal
on any Simple Interest Loans) or
interest in respect of a Mortgage Loan
required to be made by the applicable
Servicer pursuant to the related Servicing
Agreement, or by the Master Servicer
pursuant to Section 5.01.
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 Master
Servicer Collection Account at the close of
business on the immediately preceding
Determination Date on account of (i) all
Scheduled Payments or portions thereof
received in respect of the Mortgage Loans
due after the related Due Period and (ii)
Principal Prepayments, Liquidation
Proceeds, Insurance Proceeds and Subsequent
Recoveries received in respect of
such Mortgage Loans after the last day of
the related Prepayment Period.
Applicable
Written Notice: For purposes of Section 8.01, written notice
(i)
in the case of the Master Servicer, to the
Master Servicer by the Trustee or the
Depositor, or to the Trustee and the Master
Servicer by the Holders of
Certificates evidencing not less than 25%
of the Voting Rights evidenced by the
Certificates and (b) in the case of the EMC
Servicer, to the EMC Servicer by the
Master Servicer
Applied Realized
Loss Amount: With respect to any Distribution Date and
each Class of Subordinated Certificates of
a Group, the sum of the Realized
Losses with respect to the Mortgage Loans
of the related Group, which are to be
applied in reduction of the Certificate
Principal Balance of that
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Class of Certificates pursuant to, and in
the order of priority set forth
in Section 5.04A of this Agreement, which
shall on any such Distribution Date,
so long as their respective Certificate
Principal Balances have not been reduced
to zero, equal the amount, if any, by
which, (i) the aggregate Certificate
Principal Balance of all of the
Certificates of the related Group (after all
distributions of principal on such
Distribution Date) exceeds (ii) the aggregate
Stated Principal Balance of all of the
related Mortgage Loans as of the last day
of the related Due Period.
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 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.
Assumption
Agreement: Any Assignment, Assumption and Recognition Agreement
or comparable document transferring or
acknowledging the transfer of a Servicing
Agreement to the Trust listed on Schedule
II hereto.
Balloon Loan: A
Mortgage Loan, identified as such on the Mortgage Loan
Schedule, where the related Mortgage Note
provides for lowered payments of
principal over the life of such Mortgage
Loan and a larger payment of principal
than is usual at its stated maturity.
Bankruptcy Code:
Title 11 of the United States Code.
Basis Risk
Shortfall: As of any Distribution Date and for any Class of
Adjustable Rate Certificates, the excess of
(i) the amount of Current Interest
that such Class would have been entitled to
receive on such Distribution Date
had the applicable Pass-Through Rate been
calculated based upon the lesser of
11.5% and One-Month LIBOR plus the
applicable Certificate Margin for the related
Accrual Period; over (ii) the sum of
interest for such Class calculated at the
applicable Interest Rate Cap for such
Distribution Date and any amount paid to
such Class under the applicable Yield
Maintenance Agreement expressed as a per
annum rate.
Basis Risk Shortfall
Carry Forward Amount: As of any Distribution Date and
for any Class of Adjustable Rate
Certificates, the sum of: (i) if on such
Distribution Date the applicable
Pass-Through Rate for such Class is based upon
the applicable Interest Rate Cap, the
applicable Basis Risk Shortfall; and (ii)
the Basis Risk Shortfall for all previous
Distribution Dates not previously paid
(including interest accrued thereon at the
applicable Pass-Through Rate for the
Accrual Period with respect to each such
prior Distribution Date), together with
interest thereon at a rate equal to the
applicable Pass-Through Rate for such
Distribution Date.
Book-Entry
Certificates: Any of the Certificates that shall be registered
in the name of the Depository or its
nominee, the ownership of which is
reflected on the books of the Depository or
on the books of a person maintaining
an account with the Depository (directly,
as a "Depository Participant", or
indirectly, as an indirect participant in
accordance with the rules of the
Depository and as described in Section
6.06). As of the Closing Date, each Class
of Regular Certificates (other than the
Class B-IO 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, or the States
of Maryland, Minnesota or Texas, or, if
different, the city in which the
Corporate Trust Office of the Trustee or
the principal office of the Securities
Administrator, the Master Servicer or of a
Servicer is located are authorized or
obligated by law or executive order to be
closed.
2
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Cede: Cede &
Co., or its successors in interest.
Ceiling Rate:
For the Group I Senior Yield Maintenance Agreement, 11.00%
and, for the Group I Subordinate Yield
Maintenance Agreement, 10.00%.
Certificate: Any
one of the certificates of any Class executed and
authenticated by the Trustee in
substantially the forms attached hereto as
Exhibits A-1 through A-17.
Certificate
Group: Either of the Group I Certificates or the Group II
Certificates.
Certificate
Margin: Reference to any of the Class I-A-1 Margin, the Class
I-A-2 Margin, the Class I-A-3 Margin, the
Class I-M-1 Margin, the Class I-M-2
Margin, the Class I-M-3 Margin, the Class
I-M-4 Margin, the Class I-M-5 Margin,
the Class I-M-6 Margin, the Class I-B
Margin, the Class II-A Margin, the Class
II-M-1 Margin, the Class II-M-2 Margin, the
Class II-M-3 Margin, or the Class
II-B Margin.
Certificate
Notional Balance: As to the Class B-IO Certificates and any
Distribution Date, the aggregate Stated
Principal Balance of the Mortgage Loans
as of the last day of the related Due
Period.
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
B-IO Certificate or Residual Certificate)
and as of any Distribution Date, the
Initial Certificate Principal Balance of
such Certificate, reduced by the sum of
(i) all amounts distributed with respect to
such Certificate in reduction of the
Certificate Principal Balance thereof on
previous Distribution Dates pursuant to
Section 5.04, and (ii) in the case of any
Subordinated Certificate, any Applied
Realized Loss Amounts allocated to such
Certificate on previous Distribution
Dates, and increased by (iii) in the case
of each such Class of Subordinated
Certificates, any Subsequent Recoveries
allocated to such Class on previous
Distribution Dates pursuant to Section
5.04A. References herein to the
Certificate Principal Balance of a Class of
Certificates shall mean the
Certificate Principal Balances of all
Certificates in such Class.
Certificate
Register: The register maintained pursuant to Section 6.02
hereof.
Certificateholder or Holder: The person in whose name a Certificate
is
registered in the Certificate Register
(initially, Cede & Co., as nominee for
the Depository, in the case of any
Book-Entry Certificates).
Class: All
Certificates bearing the same Class designation as set forth in
Section 6.01 hereof.
Class I-A-1
Certificate: Any Certificate designated as a "Class I-A-1
Certificate" on the face thereof, in the
form of Exhibit A-1 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class I-A-1 Certificates as set forth
herein.
Class I-A-1
Margin: For any Distribution Date (i) on or prior to the
Optional Termination Date, 0.15% per annum
and (ii) thereafter, 0.30% per annum.
3
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Class I-A-1
Pass-Through Rate: For the first Distribution Date, 2.74% per
annum, and on any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
the Class I-A-1 Margin for such
Distribution Date and (ii) the applicable
Interest Rate Cap for such
Distribution Date.
Class I-A-2
Certificate: Any Certificate designated as a "Class I-A-2
Certificate" on the face thereof, in the
form of Exhibit A-2 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class I-A-2 Certificates as set forth
herein.
Class I-A-2
Margin: For any Distribution Date (i) on or prior to the
Optional Termination Date, 0.30% per annum
and (ii) thereafter, 0.60% per annum.
Class I-A-2
Pass-Through Rate: For the first Distribution Date, 2.89% per
annum, and on any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
the Class I-A-2 Margin for such
Distribution Date and (ii) the applicable
Interest Rate Cap for such
Distribution Date.
Class I-A-3
Certificate: Any Certificate designated as a "Class I-A-3
Certificate" on the face thereof, in the
form of Exhibit A-3 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class I-A-3 Certificates as set forth
herein.
Class I-A-3
Margin: For any Distribution Date (i) on or prior to the
Optional Termination Date, 0.40% per annum
and (ii) thereafter, 0.80% per annum.
Class I-A-3
Pass-Through Rate: For the first Distribution Date, 2.99% per
annum, and on any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
the Class I-A-3 Margin for such
Distribution Date and (ii) the applicable
Interest Rate Cap for such
Distribution Date.
Class I-B
Certificate: Any Certificate designated as a "Class I-B
Certificate" on the face thereof, in the
form of Exhibit A-10 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class I-B Certificates as set forth
herein.
Class I-B
Margin: For any Distribution Date (i) on or prior to the
Optional
Termination Date, 3.00% per annum and (ii)
thereafter, 4.50% per annum.
Class I-B
Pass-Through Rate: For the first Distribution Date, 5.59% per
annum, and on any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
the Class I-B Margin for such
Distribution Date and (ii) the applicable
Interest Rate Cap for such
Distribution Date.
Class I-B-IO
Certificate: Any Certificate designated as a "Class I-B-IO
Certificate" on the face thereof, in the
form of Exhibit A-16 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class I-B-IO Certificates herein.
Class I-B-IO
Distribution Amount: With respect to any Distribution Date,
the amount allocable to the Class I-B-IO
Certificates as provided in Section
5.06(b), note 3, for such Distribution Date
and all prior Distribution Dates,
less the aggregate of all amounts
distributed (or deemed distributed in
accordance with Section 5.06(e)) with
respect to the Class I-B-IO Certificates
on prior Distribution Dates.
4
<PAGE>
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-4 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class I-M-1 Certificates as set forth
herein.
Class I-M-1
Margin: For any Distribution Date (i) on or prior to the
Optional Termination Date, 0.50% per annum
and (ii) thereafter, 0.75% per annum.
Class I-M-1
Pass-Through Rate: For the first Distribution Date, 3.09% per
annum, and on any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
the Class I-M-1 Margin for such
Distribution Date and (ii) the applicable
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-5 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class I-M-2 Certificates as set forth
herein.
Class I-M-2
Margin: For any Distribution Date (i) on or prior to the
Optional Termination Date, 0.80% per annum
and (ii) thereafter, 1.20% per annum.
Class I-M-2
Pass-Through Rate: For the first Distribution Date, 3.39% per
annum, and on any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
the Class I-M-2 Margin for such
Distribution Date and (ii) the applicable
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-6 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class I-M-3 Certificates as set forth
herein.
Class I-M-3
Margin: For any Distribution Date (i) on or prior to the
Optional Termination Date, 0.82% per annum
and (ii) thereafter, 1.23% per annum.
Class I-M-3
Pass-Through Rate: For the first Distribution Date, 3.41% per
annum, and on any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
the Class I-M-3 Margin for such
Distribution Date and (ii) the applicable
Interest Rate Cap for such
Distribution Date.
Class I-M-4
Certificate: Any Certificate designated as a "Class I-M-4
Certificate" on the face thereof, in the
form of Exhibit A-7 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class I-M-4 Certificates as set forth
herein.
Class I-M-4
Margin: For any Distribution Date (i) on or prior to the
Optional Termination Date, 1.35% per annum
and (ii) thereafter, 2.025% per
annum.
Class I-M-4
Pass-Through Rate: For the first Distribution Date, 3.94% per
annum, and on any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
the Class I-M-4 Margin for such
Distribution Date and (ii) the applicable
Interest Rate Cap for such
Distribution Date.
Class I-M-4
Principal Distribution Amount: For any Distribution Date, an
amount equal to the excess, if any, of the
sum of (i) the aggregate Certificate
Principal Balance of the related Class A
Certificates (after taking into account
distributions of the related Class A
Principal Distribution Amount
5
<PAGE>
for that Distribution Date), the
Certificate Principal Balance of the
related Class M-1 Certificates (after
taking into account distributions of the
related Class M-1 Principal Distribution
Amount for that Distribution Date), the
Certificate Principal Balance of the
related Class M-2 Certificates (after
taking into account distributions of the
related Class M-2 Principal
Distribution Amount for that Distribution
Date), the Certificate Principal
Balance of the related Class M-3
Certificates (after taking into account
distributions of the related Class M-3
Principal Distribution Amount for that
Distribution Date) and the Certificate
Principal Balance of the Class I-M-4
Certificates immediately prior to that
Distribution Date, over (ii) the lesser
of (a) 90.70% of the aggregate Stated
Principal Balance of the Group I Mortgage
Loans as of the last day of the related Due
Period (after reduction for Realized
Losses incurred during the related
Prepayment Period) and (b) the aggregate
Stated Principal Balance of the Group I
Mortgage Loans as of the last day of the
related Due Period (after reduction for
Realized Losses incurred during the
related Prepayment Period) minus the
related Overcollateralization Floor.
Class I-M-5
Certificate: Any Certificate designated as a "Class I-M-5
Certificate" on the face thereof, in the
form of Exhibit A-8 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class I-M-5 Certificates as set forth
herein.
Class I-M-5
Margin: For any Distribution Date (i) on or prior to the
Optional Termination Date, 1.47% per annum
and (ii) thereafter, 2.205% per
annum.
Class I-M-5
Pass-Through Rate: For the first Distribution Date, 4.06% per
annum, and on any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
the Class I-M-5 Margin for such
Distribution Date and (ii) the applicable
Interest Rate Cap for such
Distribution Date.
Class I-M-5
Principal Distribution Amount: For any Distribution Date, an
amount equal to the excess, if any, of (i)
the sum of the aggregate Certificate
Principal Balance of the related Class A
Certificates (after taking into account
distributions of the related Class A
Principal Distribution Amount for that
Distribution Date), the Certificate
Principal Balance of the related Class M-1
Certificates (after taking into account
distributions of the related Class M-1
Principal Distribution Amount for that
Distribution Date), the Certificate
Principal Balance of the related Class M-2
Certificates (after taking into
account distributions of the related Class
M-2 Principal Distribution Amount for
that Distribution Date), the Certificate
Principal Balance of the related Class
M-3 Certificates (after taking into account
distributions of the related Class
M-3 Principal Distribution Amount for that
Distribution Date), the Certificate
Principal Balance of the Class I-M-4
Certificates (after taking into account
distributions of the Class I-M-4 Principal
Distribution Amount for that
Distribution Date) and the Certificate
Principal Balance of the Class I-M-5
Certificates immediately prior to that
Distribution Date, over (ii) the lesser
of (a) 92.70% of the aggregate Stated
Principal Balance of the Group I Mortgage
Loans as of the last day of the related Due
Period (after reduction for Realized
Losses incurred during the related
Prepayment Period) and (b) the aggregate
Stated Principal Balance of the Group I
Mortgage Loans as of the last day of the
related Due Period (after reduction for
Realized Losses incurred during the
related Prepayment Period) minus the
related Overcollateralization Floor.
Class I-M-6
Certificate: Any Certificate designated as a "Class I-M-6
Certificate" on the face thereof, in the
form of Exhibit A-9 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class I-M-6 Certificates as set forth
herein.
Class I-M-6 Margin:
For any Distribution Date (i) on or prior to the
Optional Termination Date, 2.45% per annum
and (ii) thereafter, 3.675% per
annum.
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<PAGE>
Class I-M-6
Pass-Through Rate: For the first Distribution Date, 5.04% per
annum, and on any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
the Class I-M-6 Margin for such
Distribution Date and (ii) the applicable
Interest Rate Cap for such
Distribution Date.
Class I-M-6
Principal Distribution Amount: For any Distribution Date, an
amount equal to the excess, if any, of (i)
the sum of the aggregate Certificate
Principal Balance of the related Class A
Certificates (after taking into account
distributions of the related Class A
Principal Distribution Amount for that
Distribution Date), the Certificate
Principal Balance of the related Class M-1
Certificates (after taking into account
distributions of the related Class M-1
Principal Distribution Amount for that
Distribution Date), the Certificate
Principal Balance of the related Class M-2
Certificates (after taking into
account distributions of the related Class
M-2 Principal Distribution Amount for
that Distribution Date), the Certificate
Principal Balance of the related Class
M-3 Certificates (after taking into account
distributions of the related Class
M-3 Principal Distribution Amount for that
Distribution Date), the Certificate
Principal Balance of the Class I-M-4
Certificates (after taking into account
distributions of the Class I-M-4 Principal
Distribution Amount for that
Distribution Date), the Certificate
Principal Balance of the Class I-M-5
Certificates (after taking into account
distributions of the Class I-M-5
Principal Distribution Amount for that
Distribution Date) and the Certificate
Principal Balance of the Class I-M-6
Certificates immediately prior to that
Distribution Date, over (ii) the lesser of
(a) 94.70% of the aggregate Stated
Principal Balance of the Group I Mortgage
Loans as of the last day of the
related Due Period (after reduction for
Realized Losses incurred during the
related Prepayment Period) and (b) the
aggregate Stated Principal Balance of the
Group I Mortgage Loans as of the last day
of the related Due Period (after
reduction for Realized Losses incurred
during the related Prepayment Period)
minus the related Overcollateralization
Floor.
Class II-A
Certificate: Any Certificate designated as a "Class II-A-1
Certificate" on the face thereof, in the
form of Exhibit A-11 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class II-A-1 Certificates as set forth
herein.
Class II-A
Margin: For any Distribution Date (i) on or prior to the
Optional Termination Date, 0.29% per annum
and (ii) thereafter, 0.58% per annum.
Class II-A
Pass-Through Rate: For the first Distribution Date, 2.88% per
annum, and on any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
the Class II-A-1 Margin for such
Distribution Date and (ii) the applicable
Interest Rate Cap for such
Distribution Date.
Class II-A Yield
Maintenance Agreement: The Confirmation, Ref. No.
FXBS05SD11, dated the Closing Date, by and
between the Yield Maintenance
Provider and the Trust, relating to the
Class II-A Certificates.
Class II-B
Certificate: Any Certificate designated as a "Class II-B
Certificate" on the face thereof, in the
form of Exhibit A-15 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class II-B Certificates as set forth
herein.
Class II-B
Margin: For any Distribution Date (i) on or prior to the
Optional Termination Date, 2.50% per annum
and (ii) thereafter, 3.75% per annum.
Class II-B
Pass-Through Rate: For the first Distribution Date, 5.09% per
annum, and on any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period
plus
7
<PAGE>
the Class II-B Margin for such Distribution
Date and (ii) the applicable
Interest Rate Cap for such Distribution
Date.
Class II-B-IO
Certificate: Any Certificate designated as a "Class II-B-IO
Certificate" on the face thereof, in the
form of Exhibit A-17 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class II-B-IO Certificates herein.
Class II-B-IO
Distribution Amount: With respect to any Distribution Date,
the amount allocable to the Class II-B-IO
Certificates as provided in Section
5.06(b), note 3, for such Distribution Date
and all prior Distribution Dates,
less the aggregate of all amounts
distributed (or deemed distributed in
accordance with Section 5.06(e)) with
respect to the Class II-B-IO Certificates
on prior Distribution Dates.
Class II-B Yield
Maintenance Agreement: The Confirmation, Ref.
No.FXBS05SD15 , dated the Closing Date, by
and between the Yield Maintenance
Provider and the Trust, relating to the
Class II-B 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-12 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class II-M-1 Certificates as set forth
herein.
Class II-M-1
Margin: For any Distribution Date (i) on or prior to the
Optional Termination Date, 0.55% per annum
and (ii) thereafter, 0.825% per
annum.
Class II-M-1
Pass-Through Rate: For the first Distribution Date, 3.14% per
annum, and on any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
the Class II-M-1 Margin for such
Distribution Date and (ii) the applicable
Interest Rate Cap for such
Distribution Date.
Class II-M-1
Yield Maintenance Agreement: The Confirmation, Ref. No.
FXBS05SD12, dated the Closing Date, by and
between the Yield Maintenance
Provider and the Trust, relating to the
Class II-M-1 Certificates.
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-13 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class II-M-2 Certificates as set forth
herein.
Class II-M-2
Margin: For any Distribution Date (i) on or prior to the
Optional Termination Date, 0.80% per annum
and (ii) thereafter, 1.20% per annum.
Class II-M-2
Pass-Through Rate: For the first Distribution Date, 3.39% per
annum, and on any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
the Class II-M-2 Margin for such
Distribution Date and (ii) the applicable
Interest Rate Cap for such
Distribution Date.
Class II-M-2
Yield Maintenance Agreement: The Confirmation, Ref. No.
FXBS05SD13, dated the Closing Date, by and
between the Yield Maintenance
Provider and the Trust, relating to the
Class II-M-2 Certificates.
8
<PAGE>
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-14 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class II-M-3 Certificates as set forth
herein.
Class II-M-3
Margin: For any Distribution Date (i) on or prior to the
Optional Termination Date, 1.45% per annum
and (ii) thereafter, 2.175% per
annum.
Class II-M-3
Pass-Through Rate: For the first Distribution Date, 4.04% per
annum, and on any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
the Class II-M-3 Margin for such
Distribution Date and (ii) the applicable
Interest Rate Cap for such
Distribution Date.
Class II-M-3
Yield Maintenance Agreement: The Confirmation, Ref.
No.FXBS05SD14 , dated the Closing Date, by
and between the Yield Maintenance
Provider and the Trust, relating to the
Class II-M-3 Certificates.
Class A
Certificates: The Class I-A-1 Certificates, the Class I-A-2,
the
Class I-A-3 and the Class II-A
Certificates.
Class A
Principal Distribution Amount: For a Group and any Distribution
Date and each Group, an amount equal to the
excess, if any, of (i) the aggregate
Certificate Principal Balance of the
related Class A Certificates immediately
prior to that Distribution Date, over (ii)
the lesser of (a) 76.70%, in the case
of Group I and 63.40%, in the case of Group
II, of the aggregate Stated
Principal Balance of the Mortgage Loans in
the related Group as of the last day
of the related Due Period (after reduction
for Realized Losses incurred during
the related Prepayment Period) and (b) the
aggregate Stated Principal Balance of
the Mortgage Loans in the related Group as
of the last day of the related Due
Period (after reduction for Realized Losses
incurred during the related
Prepayment Period) minus the related
Overcollateralization Floor
Class B
Principal Distribution Amount: For a Group and any Distribution
Date and each Group, an amount equal to the
excess, if any, of (i) the sum of
the aggregate Certificate Principal Balance
of the related Class A Certificates
(after taking into account distributions of
the related Class A Principal
Distribution Amount for that Distribution
Date), the Certificate Principal
Balance of the related Class M-1
Certificates (after taking into account
distributions of the related Class M-1
Principal Distribution Amount for that
Distribution Date), the Certificate
Principal Balance of the related Class M-2
Certificates (after taking into account
distributions of the Class M-2 Principal
Distribution Amount for that Distribution
Date), the Certificate Principal
Balance of the related Class M-3
Certificates (after taking into account
distributions of the related Class M-3
Principal Distribution Amount for that
Distribution Date), with respect to Group
I, the Certificate Principal Balance
of the Class I-M-4 Certificates (after
taking into account distributions of the
Class I-M-4 Principal Distribution Amount
for that Distribution Date), with
respect to Group I, the Certificate
Principal Balance of the Class I-M-5
Certificates (after taking into account
distributions of the Class I-M-5
Principal Distribution Amount for that
Distribution Date), with respect to Group
I, the Certificate Principal Balance of the
Class I-M-6 Certificates (after
taking into account distributions of the
Class I-M-6 Principal Distribution
Amount for that Distribution Date), and the
Certificate Principal Balance of the
related Class B Certificates immediately
prior to that Distribution Date
over(ii) the lesser of (a) 96.70%, in the
case of Group I and 90.90%, in the
case of Group II, of the aggregate Stated
Principal Balance of the Mortgage
Loans of the related Group as of the last
day of the related Due Period (after
reduction for Realized Losses incurred
during the related Prepayment Period) and
(b) the aggregate Stated Principal Balance
of the Mortgage Loans of the related
Group as of the last day of the related Due
Period (after reduction for Realized
Losses incurred during the related
Prepayment Period) minus the related
Overcollateralization Floor.
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<PAGE>
Class B-IO
Certificates: Collective reference to the Class I-B-IO
Certificates and the Class II-B-IO
Certificates.
Class M-1
Principal Distribution Amount: For a Group and any Distribution
Date, an amount equal to the excess, if
any, of (i) the sum of the aggregate
Certificate Principal Balance of the
related Class A Certificates (after taking
into account distributions of the related
Class A Principal Distribution Amount
for that Distribution Date) and the
Certificate Principal Balance of the related
Class M-1 Certificates immediately prior to
that Distribution Date, over (ii)
the lesser of (a) 83.40%, in the case of
Group I and 73.80%, in the case of
Group II, of the aggregate Stated Principal
Balance of the Mortgage Loans of the
related Group as of the last day of the
related Due Period (after reduction for
Realized Losses incurred during the related
Prepayment Period) and (b) the
aggregate Stated Principal Balance of the
Mortgage Loans of the related Group as
of the last day of the related Due Period
(after reduction for Realized Losses
incurred during the related Prepayment
Period) minus the related
Overcollateralization Floor.
Class M-2
Principal Distribution Amount: For a Group and any Distribution
Date, an amount equal to the excess, if
any, of (i) the sum of the aggregate
Certificate Principal Balance of the
related Class A Certificates (after taking
into account distributions of the related
Class A Principal Distribution Amount
for that Distribution Date), the
Certificate Principal Balance of the related
Class M-1 Certificates (after taking into
account distributions of the related
Class M-1 Principal Distribution Amount for
that Distribution Date) and the
Certificate Principal Balance of the
related Class M-2 Certificates immediately
prior to that Distribution Date, over (ii)
the lesser of (a) 86.70%, in the case
of Group I and 80.60%, in the case of Group
II, of the aggregate Stated
Principal Balance of the Mortgage Loans of
the related Group as of the last day
of the related Due Period (after reduction
for Realized Losses incurred during
the related Prepayment Period) and (b) the
aggregate Stated Principal Balance of
the Mortgage Loans of the related Group as
of the last day of the related Due
Period (after reduction for Realized Losses
incurred during the related
Prepayment Period) minus the related
Overcollateralization Floor.
Class M-3
Principal Distribution Amount: For a Group and any Distribution
Date, an amount equal to the excess, if
any, of (i) the sum of the aggregate
Certificate Principal Balance of the
related Class A Certificates (after taking
into account distributions of the related
Class A Principal Distribution Amount
for that Distribution Date), the
Certificate Principal Balance of the related
Class M-1 Certificates (after taking into
account distributions of the related
Class M-1 Principal Distribution Amount for
that Distribution Date), the
Certificate Principal Balance of the
related Class M-2 Certificates (after
taking into account distributions of the
related Class M-2 Principal
Distribution Amount for that Distribution
Date) and the Certificate Principal
Balance of the related Class M-3
Certificates immediately prior to that
Distribution Date over (ii) the lesser of
(a) 88.70%, in the case of Group I and
86.30%, in the case of Group II, of the
aggregate Stated Principal Balance of
the Mortgage Loans of the related Group as
of the last day of the related Due
Period (after reduction for Realized Losses
incurred during the related
Prepayment Period) and (b) the aggregate
Stated Principal Balance of the
Mortgage Loans of the related Group as of
the last day of the related Due Period
(after reduction for Realized Losses
incurred during the related Prepayment
Period) minus the related
Overcollateralization Floor.
Class R
Certificate: Any Certificate designated as a "Class R
Certificate"
on the face thereof, in substantially the
form set forth in Exhibit A-18 hereto,
and evidencing ownership of each of the
residual interest in REMIC I and REMIC
II and representing the right to the
Percentage Interest of distributions
provided for the Class R Certificate as set
forth herein.
Closing Date:
February 8, 2005.
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<PAGE>
Code: The
Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Combined
Loan-to-Value Ratio: The fraction, expressed as a percentage,
the
numerator of which is the sum of (x) the
original principal balance of the
related Mortgage Loan and (y) the
outstanding principal balance at the date of
origination of the Mortgage Loan of any
senior mortgage loan, and the
denominator of which is the Appraised Value
of the related Mortgaged Property.
Compensating
Interest: With respect to any Mortgage Loan and any
Distribution Date, an amount, not to exceed
the related Servicing Fee, to be
applied by the EMC Servicer pursuant to
Section 2.02 of Exhibit K or by any
other Servicer pursuant to the related
Servicing Agreement to the payment of a
Prepayment Interest Shortfall on such
Mortgage Loan or by the Master Servicer
pursuant to Section 5.02 hereof.
Corporate Trust
Office: The designated office of the Trustee where at any
particular time its corporate trust
business with respect to this Agreement
shall be administered, which office at the
date of the execution of this
Agreement is located, (i) for Certificate
transfer purposes, at 2001 Bryan
Street, Floor 8, Dallas, Texas 75201,
Attention: Institutional Trust Services
Transfer Department--BSABS Series 2005-SD1
and (ii) for all other purposes, at 4
New York Plaza, 6th Floor, New York, New
York 10004 Attention: Institutional
Trust Services/Global Debt--BSABS Series
2005-SD1, or at such other address as
the Trustee may designate from time to
time.
Current
Interest: As of any Distribution Date, with respect to each
Class
of Certificates (other than the Class B-IO
Certificates and Residual
Certificates), (i) the interest accrued on
the Certificate Principal Balance,
during the related Accrual Period at the
applicable Pass-Through Rate plus any
amount previously distributed with respect
to interest for such Certificate that
has been recovered as a voidable preference
by a trustee in bankruptcy, minus,
to the extent allocated to such Class, (ii)
the sum of (a) any Prepayment
Interest Shortfall for such Distribution
Date, to the extent not covered by
Compensating Interest, and (b) any
shortfalls resulting from application of the
Relief Act or similar state laws during the
related Due Period, provided,
however, that for purposes of calculating
Current Interest for any such Class,
amounts specified in clause (ii) hereof for
any such Distribution Date and
either Group shall be allocated first to
the related Class B-IO Certificates and
the Residual Certificates in reduction of
amounts otherwise distributable to
such Certificates from each Group on such
Distribution Date and then any excess
shall be allocated to each Class of
Certificates of the related Group pro rata
based on the respective amounts of interest
accrued pursuant to clause (i)
hereof for each such Class on such
Distribution Date.
Custodial
Agreement: The Custodial Agreement, dated as of January 1,
2005,
among the Trustee, the Depositor, the
Master Servicer and the Custodian, as
amended or supplemented from time to
time.
Custodian: Wells
Fargo Bank, N.A., as custodian and agent for the Trustee
with respect to the Mortgage Loans.
Cut-off Date:
The close of business on January 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,
except with respect to any Simple Interest
Loans, scheduled payments of
principal due on or before the Cut-off
Date, whether or not received but without
giving effect to any installments of
principal received in respect of Due Dates
after the Cut-off Date. The aggregate
11
<PAGE>
Cut-Off Date Principal Balance of the
Mortgage Loans in Group I and Group
II is $227,691,541 and $113,983,732,
respectively.
Definitive
Certificates: As defined in Section 6.06.
Deleted Mortgage
Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
Delinquency
Event: A Delinquency Event with respect to a Group shall have
occurred and be continuing if at any time,
(x) the three-month rolling average
of the percent equivalent of a fraction,
the numerator of which is the aggregate
Stated Principal Balance of the Mortgage
Loans of the related Group that are 61
days or more Delinquent or are in
bankruptcy or foreclosure or are REO
Properties, and the denominator of which is
the aggregate Stated Principal
Balance of all of the Mortgage Loans of the
related Group as of the last day of
the related Due Period equals or exceeds
(y) 50%, in the case of Group I and
40%, in the case of Group II of the
aggregate Certificate Principal Balance of
the related Subordinated Certificates plus
such Group's Overcollateralization
Amount (in each case after taking into
account distribution of the related
Principal Distribution Amount on such
Distribution Date) as a percentage of the
sum of the Stated Principal Balances of the
Mortgage Loans of the related Group
as of the last day of the related Due
Period.
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 the Certificates, the amount set forth on the
face thereof as, in the case of an Offered
Certificate, the "Initial Principal
Balance of this Certificate," and, in the
case of a Class B-IO Certificate, as
the "Initial Principal Balance (Notional)
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 DTC, the nominee of which is
Cede, 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
February 7, 2005, substantially in the form
of Exhibit I.
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 and (i) the EMC
Servicer, the 15th day of the month of such
Distribution Date or, if such 15th
day is not a Business Day, the
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<PAGE>
immediately preceding Business Day or (ii)
each other Servicer, the date
specified in the related Servicing
Agreement.
Distribution
Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 4.04 in
the name of the Trustee for the
benefit of the Certificateholders and
designated "JPMorgan Chase Bank N.A., in
trust for registered holders of Bear
Stearns Asset Backed Securities Trust
2005-SD1, Asset-Backed Certificates, Series
2005-SD1". Funds in the Distribution
Account shall be held in trust for the
Certificateholders for the uses and
purposes set forth in this Agreement.
Distribution
Account Deposit Date: As to any Distribution Date, on or
before 1:00 p.m. Central 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
February 2005.
DTC: The
Depository Trust Company, or its successors in interest.
Due Date: As to
any Mortgage Loan (other than a Simple Interest Loan), the
date in each month on which the related
Scheduled Payment is due, as set forth
in the related Mortgage Note, and with
respect to any Simple Interest Loans, the
last day of the immediately preceding
Prepayment Period, if its Scheduled
Payment is due during such Prepayment
Period.
Due Period: With
respect to any Distribution Date and any Mortgage Loan
(other than any Simple Interest Mortgage
Loan), 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, and
with respect to any Simple Interest
Mortgage Loans, the related Prepayment
Period.
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, but only if 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, respectively (or, if S&P is a
Rating Agency, in its highest long-term
and one of its two highest short-term
ratings, 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.
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EMC Mortgage
Loans: The Mortgage Loans listed on the Mortgage Loan Schedule
as being serviced by the EMC Servicer.
EMC Servicer:
EMC, in its capacity as servicer hereunder, and its
successors and assigns.
ERISA: The
Employee Retirement Income Security Act of 1974, as amended.
ERISA Restricted
Certificate: Each Class of Certificates other than the
Class A Certificates.
Event of Default: As
defined in Section 8.01 hereof.
Excess Cashflow:
With respect to a Group and any Distribution Date, an
amount, if any, equal to the sum of (a) the
related Excess Overcollateralization
Amount and (b) the related Remaining Excess
Spread, in each case for such Group
and Distribution Date.
Excess
Liquidation Proceeds: To the extent not required by law to be
paid
to the related Mortgagor, the excess, if
any, of any Liquidation Proceeds with
respect to a Mortgage Loan over the Stated
Principal Balance of such Mortgage
Loan and accrued and unpaid interest at the
related Mortgage Rate through the
last day of the month in which the Mortgage
Loan has been liquidated.
Excess
Overcollateralization Amount: With respect to a Group and any
Distribution Date, the lesser of (i)
Principal Funds of the related Group and
(ii) the excess, if any, of the related
Overcollateralization Amount over the
related Specified Overcollateralization
Amount, in each case for such Group and
Distribution Date.
Excess Spread:
With respect to a Group and any Distribution Date, the
excess, if any, of (i) Interest Funds of
the related Group for such Distribution
Date over (ii) the sum of Current Interest
on the Certificates of the related
Group and Interest Carry Forward Amounts on
the related Class A Certificates, in
each case for such Group and Distribution
Date.
Excess Yield
Maintenance Amount: With respect to each Group and the first
Distribution Date, $0. With respect to a
Group and any subsequent Distribution
Date, the excess, if any, of (a) the sum of
the Yield Maintenance Payments for
such Distribution Date and the related
Group over (b) the sum of the Yield
Maintenance Agreement Amounts for the
Adjustable Rate Certificates for such
Distribution Date.
Extra Principal
Distribution Amount: With respect to a Group and any
Distribution Date, the lesser of (i) the
excess, if any, of the related
Specified Overcollateralization Amount for
such Distribution Date over the
related Overcollateralization Amount for
such Distribution Date and (ii) the
related Excess Spread for such Distribution
Date.
Fannie Mae:
Fannie Mae (also known as Federal National Mortgage
Association), or any successor thereto.
FDIC: The
Federal Deposit Insurance Corporation, or any successor
thereto.
FIRREA: The
Financial Institutions Reform, Recovery, and Enforcement Act of
1989.
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<PAGE>
Fiscal Quarter:
December 1 through the last day of February, March 1
through May 31, June 1 through August 31,
or September 1 through November 30, as
applicable.
Fitch: Fitch
Ratings.
Freddie Mac:
Freddie Mac (also known as Federal Home Loan Mortgage
Corporation), or any successor thereto.
Gross Margin:
With respect to each Mortgage Loan that bears an adjustable
rate of interest, the fixed percentage set
forth in the related Mortgage Note
and indicated on the Mortgage Loan Schedule
which percentage is added to the
related Index on each Interest Adjustment
Date to determine (subject to
rounding, the Minimum Lifetime Mortgage
Rate, the Maximum Lifetime Mortgage Rate
and the Periodic Rate Cap, each as
applicable) the Mortgage Rate until the next
succeeding Interest Adjustment Date.
Group: Either a
Loan Group or a Certificate Group, as the context requires.
Group I: Either
of the Group I Certificates or Loan Group I, as the context
requires.
Group I
Certificates: The Class I-A-1 Certificates, the Class I-A-2
Certificates, the Class I-A-3 Certificates,
Class I-M-1 Certificates, Class
I-M-2 Certificates, Class I-M-3
Certificates, Class I-M-4 Certificates, Class
I-M-5 Certificates, Class I-M-6
Certificates and Class I-B Certificates.
Group I Senior
Certificates: The Class I-A-1 Certificates, the Class I-A-2
Certificates and the Class I-A-3
Certificates.
Group I Senior
Certificates Yield Maintenance Agreement: The Confirmation,
Ref. No. FXNEC6726 , dated the Closing
Date, by and between the Yield
Maintenance Provider and the Trust,
relating to the Class A-1 Certificates.
Group I
Subordinate Certificates: The Class I-M-1 Certificates, the
Class
I-M-2 Certificates, the Class I-M-3
Certificates, the Class I-M-4 Certificates,
the Class I-M-5 Certificates, the Class
I-M-6 Certificates and the Class I-B
Certificates.
Group I
Subordinate Certificates Yield Maintenance Agreement: The
Confirmation, Ref. No. FXNEC6725, dated the
Closing Date, by and between the
Yield Maintenance Provider and the Trust,
relating to the Group I Subordinate
Certificates.
Group II: Either
of the Group II Certificates or Loan Group II, as the
context requires.
Group II
Certificates: The Class II-A Certificates, the Class II-M-1
Certificates, the Class II-M-2
Certificates, the Class II-M-3 Certificates and
the Class II-B Certificates.
Group II Senior
Certificates: The Class II-A Certificates.
Group II
Subordinate Certificates: The Class II-M-1 Certificates, the
Class
II-M-2 Certificates, the Class II-M-3
Certificatesand the Class II-B
Certificates.
Indemnified
Persons: The Trustee, the Master Servicer, the Seller, the
Depositor, the Custodian 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.
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<PAGE>
Index: With
respect to each Mortgage Loan that bears an adjustable rate of
interest, the index set forth in the
related Mortgage Note and indicated on the
Mortgage Loan Schedule, by reference to
which the related Mortgage Rate will be
adjusted from time to time.
Initial
Certificate Principal Balance: With respect to any Certificate,
the
Certificate Principal Balance of such
Certificate or any predecessor Certificate
on the Closing Date.
Initial
Overcollateralization Amount: $541, in the case of Group I and
$4,103,414, in the case of Group II.
Insurance
Policy: With respect to any Mortgage Loan included in the Trust
Fund, any insurance policy, including all
riders and endorsements thereto in
effect with respect to such Mortgage Loan,
including any replacement policy or
policies for any such insurance
policies.
Insurance
Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant
to any Insurance Policy, to the extent such
proceeds are payable to the
mortgagee under the Mortgage, the related
Servicer, the Master Servicer or the
trustee under the deed of trust and are not
applied to the restoration of the
related Mortgaged Property or released to
the Mortgagor in accordance with the
procedures that such Servicer or the Master
Servicer would follow in servicing
mortgage loans held for its own account, in
each case other than any amount
included in such Insurance Proceeds in
respect of Insured Expenses and exclusive
of Subsequent Recoveries.
Insured
Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the
Mortgage Loans.
Interest Carry
Forward Amount: As of any Distribution Date and with respect
to each Class of Certificates (other than
the Class B-IO Certificates and the
Residual Certificates), the sum of (i) the
excess of (a) the Current Interest
for such Class with respect to prior
Distribution Dates over (b) the amount
actually distributed to such Class with
respect to interest on such prior
Distribution Dates and (ii) interest
thereon (to the extent permitted by
applicable law) at the applicable
Pass-Through Rate for such Class for the
related Accrual Period including the
Accrual Period relating to such
Distribution Date.
Interest
Determination Date: With respect to each Adjustable Rate
Certificate, for the first Accrual Period
February 4, 2005, and with respect to
any Accrual Period thereafter, the second
LIBOR Business Day preceding the
commencement of such Accrual Period.
Interest Funds:
For a Group and any Distribution Date (i) the sum, without
duplication, of the following amounts, in
each case with respect to the related
Group: (a) all interest received during the
related Due Period with respect to
the related Mortgage Loans less the related
Servicing Fee and Master Servicing
Fee referred to in clause (ii) of the
definition thereof, (b) all Advances
relating to interest with respect to the
related Mortgage Loans made on or prior
to the related Master Servicer Advance
Date, (c) all Compensating Interest with
respect to the related Mortgage Loans and
required to be remitted pursuant to
the related Servicing Agreement or this
Agreement with respect to such
Distribution Date, (d) Liquidation Proceeds
with respect to the related Mortgage
Loans collected during the related
Prepayment Period (to the extent such
Liquidation Proceeds relate to interest),
(e) all amounts relating to interest
with respect to each related Mortgage Loan
repurchased by the Seller pursuant to
Sections 2.02, 2.03 and 3.20 and (f) all
amounts in respect of interest paid by
EMC pursuant to Section 10.01, in each case
to the extent remitted by the Master
Servicer or Servicer to the Master Servicer
Collection Account pursuant to this
Agreement or the related Servicing
Agreement, minus (ii) all amounts relating to
such Group's (or, if not allocable to a
Group, such Group's pro rata share of
such amounts) interest reimbursed pursuant
to Sections 4.03 and 4.05.
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<PAGE>
Interest Rate
Adjustment Date: With respect to each Mortgage Loan that
bears an adjustable rate of interest, the
date set forth in the related Mortgage
Note and indicated on the Mortgage Loan
Schedule, on which the related Mortgage
Rate is subject to adjustment.
Interest Rate
Cap: For any Distribution Date and the Adjustable Rate
Certificates in each respective Group, the
weighted average of the Net Mortgage
Rates of the Mortgage Loans of the related
Group as of the close of business on
the first day of the month immediately
preceding the month in which such
Distribution Date occurs, adjusted to
reflect the accrual of interest based on
the actual number of days elapsed in the
related Accrual Period divided by 360.
Latest Possible
Maturity Date: For the Class I-A-1 Certificates, the
Distribution Date in April 2022 and, for
the Class I-A-2 Certificates, the
Distribution Date in July 2027 which, in
each case, is the Distribution Date on
which the Certificate Principal Balance for
the related Class would be reduced
to zero assuming that no prepayments are
received on the related Mortgage Loans,
scheduled monthly payments of principal and
interest are timely received on the
related Mortgage Loans, no Excess Spread is
applied to pay principal on the
Certificates and the Depositor does not
exercise its related Optional
Termination on the related Optional
Termination Date. The "Latest Possible
Maturity Date" for the Group I
Certificates, other than the Class I-A-1 and
Class I-A-2 Certificates, and the Class
I-BIO Certificates is the Distribution
Date in August 2043 and, for all of the
Group II Certificates, the Class II-B-IO
Certificates and the Class R Certificates,
is the Distribution Date in January
2045, which in each case is the
Distribution Date in the month following the
latest maturing mortgage loan in the
related group. For purposes of the Treasury
Regulations under Code section 860A through
860G, the latest possible maturity
date of each regular interest issued by
REMIC I and REMIC II shall be the
related Latest Possible Maturity Date.
LIBOR Business
Day: Any day on which banks in the London, England and New
York City, U.S.A. are open and conducting
transactions in foreign currency and
exchange.
Liquidated Loan:
With respect to any Distribution Date, a defaulted
Mortgage Loan that has been liquidated
through deed-in-lieu of foreclosure,
foreclosure sale, trustee's sale or other
realization as provided by applicable
law governing the real property subject to
the related Mortgage and any security
agreements and as to which the Master
Servicer or a Servicer has certified (in
accordance with Section 3.07) in the
related Prepayment Period that it has
received all amounts it expects to receive
in connection with such liquidation.
Liquidation
Proceeds: Amounts, other than Insurance Proceeds and Subsequent
Recoveries, 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:
Either Loan Group I or Loan Group II, as the context requires.
Loan Group II:
The pool of Mortgage Loans identified in the related
Schedule of Mortgage Loans as having been
assigned to Group I in Schedule B-I
hereto.
Loan
Group II: The pool of Mortgage Loans identified in the related
Schedule of Mortgage Loans as having been
assigned to Group II in Schedule B-II
hereto.
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<PAGE>
Master Servicer:
Wells Fargo Bank, N.A., a national banking association, in
its capacity as master servicer hereunder,
and its successors and assigns.
Master Servicer
Advance Date: As to any Distribution Date, on or before
1:00 p.m. Central time on the Business Day
immediately preceding such
Distribution Date.
Master Servicing
Fee: For any Distribution Date, the sum of (i) all income
and gain, net of losses, realized from any
investment of funds in the
Distribution Account and the Master
Servicer Collection Account since the prior
Distribution Date and (ii) with respect to
each Mortgage Loan, an amount equal
to 1/12th of the Master Servicing Fee Rate
multiplied by the Stated Principal
Balance of such Mortgage Loan as of the
close of business on the first day of
the month immediately preceding the month
in which such Distribution Date
occurs.
Master Servicing
Fee Rate: 0.01% per annum.
Master Servicer
Certification: A written certification covering servicing
of the Mortgage Loans by all Servicers and
signed by an officer of the Master
Servicer that complies with (i) the
Sarbanes-Oxley Act of 2002, as amended from
time to time, and (ii) the February 21,
2003 Statement by the Staff of the
Division of Corporation Finance of the
Securities and Exchange Commission
Regarding Compliance by Asset-Backed
Issuers with Exchange Act Rules 13a-14 and
15d-14, as in effect from time to time;
provided that if, after the Closing Date
(a) the Sarbanes-Oxley Act of 2002 is
amended, (b) the Statement referred to in
clause (ii) is modified or superceded by
any subsequent statement, rule or
regulation of the Securities and Exchange
Commission or any statement of a
division thereof, or (c) any future
releases, rules and regulations are
published by the Securities and Exchange
Commission from time to time pursuant
to the Sarbanes-Oxley Act of 2002, which in
any such case affects the form or
substance of the required certification and
results in the required
certification being, in the reasonable
judgment of the Master Servicer,
materially more onerous than the form of
the required certification as of the
Closing Date, the Master Servicer
Certification shall be as agreed to by the
Master Servicer, the Depositor and the
Seller following a negotiation in good
faith to determine how to comply with any
such new requirements.
Master Servicer
Collection Account: The separate Eligible Account created
and initially maintained by the Master
Servicer pursuant to Section 4.02 with a
depository institution in the name of the
Trustee for the benefit of the
Certificateholders and designated "JPMorgan
Chase Bank, in trust for registered
holders of Bear Stearns Asset Backed
Securities Trust 2005-SD1, Asset-Backed
Certificates, Series 2005-SD1." Funds in
the Master Servicer Collection Account
shall be held in trust for the
Certificateholders for the uses and purposes set
forth in this Agreement.
Maximum Lifetime
Mortgage Rate: As to each Mortgage Loan that bears an
adjustable rate of interest, the rate, if
any, set forth in the related Mortgage
Note and indicated on the Mortgage Loan
Schedule, that is the maximum level to
which a Mortgage Rate can adjust in
accordance with its terms, regardless of the
change in the applicable Index.
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.
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<PAGE>
Minimum Lifetime
Mortgage Rate: As to each Mortgage Loan that bears an
adjustable rate of interest, the rate, if
any, set forth in the related Mortgage
Note and indicated on the Mortgage Loan
Schedule, that is the minimum level to
which a Mortgage Rate can adjust in
accordance with its terms, regardless of the
change in the applicable Index.
MOM Loan: Any
Mortgage Loan as to which, at origination thereof, MERS acts
as the mortgagee, solely as nominee for the
originator of such Mortgage Loan and
its successors and assigns.
Monthly
Statement: The statement delivered to the Certificateholders
pursuant to Section 5.05.
Moody's: Moody's
Investors Service, Inc.
Mortgage: The
mortgage, deed of trust or other instrument creating a first
lien on or first priority ownership
interest, or creating a second lien on or
second priority ownership interest, as
applicable, in an estate in fee simple in
real property securing a Mortgage Note.
Mortgage File:
The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan
and any additional documents delivered
to the Custodian on behalf of 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 Price: The price, calculated as set forth in Section
10.01, to be paid in connection with the
repurchase of the Mortgage Loans
pursuant to Section 10.01.
Mortgage Loan
Schedule: The list of Mortgage Loans (as from time to time
amended by the 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 is
attached hereto as Exhibit B and sets forth
the following information with
respect to each Mortgage Loan:
(i) the
loan number;
(ii)
the Servicer and/or Master Servicer thereof;
(iii)
the
Mortgage Rate in effect as of the Cut-off Date;
(iv)
the Master Servicing Fee Rate;
(v) the
related Servicing Fee Rate;
(vi)
the Net Mortgage Rate in effect as of the Cut-off Date;
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<PAGE>
(vii)
the
stated maturity date;
(viii)
the
original principal balance;
(ix)
the stated original term;
(x) the
next payment date;
(xi)
the monthly payment;
(xii)
the
remaining term;
(xiii)
the
property type;
(xiv)
if
it is a first or second lien on the related Mortgaged
Property;
(xv)
if applicable, that such Mortgage Loan is a Balloon Loan;
(xvi)
whether interest accrues at a fixed rate, and otherwise, the
applicable Index (with respect to adjustable rate Mortgage
Loans);
(xvii)
the Gross
Margin, if applicable;
(xviii)
the intervals
between Interest Adjustment Dates, if applicable;
(xix)
the next succeeding
Interest Adjustment Date, if applicable;
(xx)
the Periodic Rate Cap, if applicable;
(xxi)
the
Minimum Lifetime Mortgage Rate, if applicable;
(xxii)
the
Maximum Lifetime Mortgage Rate, if applicable;
(xxiii)
the Combined
Loan-to-Value Ratio as of the Cut-off Date;
(xxiv)
[Reserved];
(xxv)
the
Cut-off Date Principal Balance;
(xxvi)
if
applicable, that such Mortgage Loan is a Simple Interest Loan;
(xxvii)
if applicable,
that such Mortgage Loan provides for negative
amortization; and
(xxviii)
the MIN with respect
to each Mortgage Loan registered on the
MERS(R) System.
Such schedule shall also set forth the
total of the amounts described under
(xxv) above for all of the Mortgage
Loans.
Mortgage Note:
The original executed note or other evidence of indebtedness
of a Mortgagor under a Mortgage Loan.
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<PAGE>
Mortgage Rate:
The annual rate of interest borne by a Mortgage Note.
Mortgaged
Property: The underlying property securing a Mortgage Loan.
Mortgagor: The
obligor on a Mortgage Note.
Net Mortgage
Rate: As to each Mortgage Loan, and at any time, the per annum
rate equal to the Mortgage Rate less the
sum of the related Servicing Fee Rate
and the Master Servicing Fee Rate.
Non-Book-Entry
Certificate: Any Certificate other than a Book-Entry
Certificate.
Nonrecoverable
Advance: Any portion of an Advance previously made or
proposed to be made by the Master Servicer
that, in the good faith judgment of
the Master Servicer, will not or, in the
case of a proposed advance, would not,
be ultimately recoverable by it from the
related Mortgagor, related Liquidation
Proceeds or otherwise.
Offered
Certificates: The Adjustable Rate Certificates.
Officer's
Certificate: A certificate (i) signed by the Chairman of the
Board, the Vice Chairman of the Board, the
President, a Vice President (however
denominated), an Assistant Vice President,
the Treasurer, the Secretary, or one
of the assistant treasurers or assistant
secretaries of the Depositor, the EMC
Servicer 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 2.59% 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
Determination Date by the Securities
Administrator and the Securities
Administrator's calculation of the rate of
interest applicable to the Certificates
bearing interest based on One-Month
LIBOR shall, in the absence of manifest
error, be conclusive and binding.
Opinion of
Counsel: A written opinion of counsel, who may be counsel for
the Depositor or the Master Servicer,
reasonably acceptable to each addressee of
such opinion; provided that with respect to
Section 7.05 or 11.01, or the
interpretation or application of the REMIC
Provisions, such counsel must (i) in
fact be independent of the Depositor and
the Master Servicer, (ii) not have any
direct financial interest in the Depositor
or the Master Servicer or in any
affiliate of either, and (iii) not be
connected with the Depositor or the Master
Servicer as an officer, employee, promoter,
underwriter, trustee, partner,
director or person performing similar
functions. For purposes of the EMC
Servicer's
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<PAGE>
obligations pursuant to Exhibit K, a
written opinion of counsel, who
may be counsel to the EMC Servicer,
reasonably acceptable to each addressee of
such opinion.
Optional
Termination: The termination of either Loan Group I or Loan
Group
II as a result of the purchase of all of
the Mortgage Loans of the related Group
and any related REO Property pursuant to
the last sentence of Section 10.01
hereof.
Optional
Termination Date: The Distribution Date on which the Stated
Principal Balance of all of the Mortgage
Loans in the related Loan Group is
equal to or less than 10% , in the case of
Group I and 20%, in the case of Group
II, of the aggregate Cut-off Date Principal
Balance of all of the Mortgage Loans
in the related Group.
Original Value:
The value of the property underlying a Mortgage Loan based
on an appraisal.
Originator: Any
of the entities which either originated or acquired a
Mortgage Loan and transferred such Mortgage
Loan to the Seller.
OTS: The Office
of Thrift Supervision.
Outstanding:
With respect to the Certificates as of any date of
determination, all Certificates theretofore
executed and authenticated under
this Agreement except:
(a) Certificates
theretofore canceled by the Trustee or delivered to the
Trustee for cancellation; and
(b) Certificates
in exchange for which or in lieu of which other
Certificates have been executed and
delivered by the Trustee pursuant to this
Agreement.
Outstanding
Mortgage Loan: As of any date of determination, a Mortgage Loan
with a Stated Principal Balance greater
than zero that was not the subject of a
Principal Prepayment in full, and that did
not become a Liquidated Loan, prior
to the end of the related Prepayment
Period.
Overcollateralization Amount: With respect to a Group and any
Distribution
Date, the excess, if any, of (i) the
aggregate Stated Principal Balance of the
Mortgage Loans of a Group as of the last
day of the related Due Period, over
(ii) the sum of the Certificate Principal
Balances of the Certificates of a
related Group (after taking into account
the payment of principal other than any
related Extra Principal Distribution Amount
on such Certificates) on such
Distribution Date.
Overcollateralization Floor: For a Group and any date of
determination,
0.50% of the aggregate Cut-off Date
Principal Balance of the Mortgage Loans of
the related Group.
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 B-IO Certificates and the
Residual Certificates, the applicable
interest rate for each such Class as set
forth in Section 6.01, subject to the
related Interest Rate Cap.
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<PAGE>
Percentage
Interest: With respect to any Certificate of a specified Class,
the Percentage Interest set forth on the
face thereof or the percentage obtained
by dividing the Denomination of such
Certificate by the aggregate of the
Denominations of all Certificates of such
Class.
Periodic Rate
Cap: As to each Mortgage Loan that bears an adjustable rate
of interest, the rate, if any, set forth in
the related Mortgage Note and
indicated on the Mortgage Loan Schedule,
that is the maximum adjustment that can
be made to a Mortgage Rate on each Interest
Adjustment Date in accordance with
its terms, regardless of the change in the
applicable Index.
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
short-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 (but only if S&P is not a Rating
Agency);
(iii) [Reserved];
(iv) commercial or finance company paper which is then receiving
the
highest
short-term 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 (but only if S&P is not
a Rating
Agency);
(v) 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,
provided that the commercial paper and/or long term unsecured
debt obligations
of such depository institution or trust company (or in the
case of the
principal depository institution in a holding company system,
the commercial
paper or long-term unsecured debt obligations of such
holding company,
but only if Moody's is not a Rating Agency) 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, if S&P is a Rating Agency,
the
highest
long-term and one of the two highest short-term ratings of 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 (but only
if S&P is not a Rating Agency);
(vi) 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;
(vii) 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 (but only if S&P is not a Rating Agency);
(viii) repurchase obligations with respect to any security
described
in clauses (i)
and (ii) above, in either case entered into with a
depository
institution or trust company (acting as principal) described in
clause (v)
above;
23
<PAGE>
(ix) 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 (provided that, for so long as Moody's
is a Rating
Agency, such rating shall be the highest commercial paper
rating of
Moody's for any such securities) (but only if S&P is not a
Rating
Agency), 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
(but only if
S&P is not a Rating Agency);
(x) interests in any money market fund (including any such fund
managed or
advised by the Trustee, the Master Servicer, the Securities
Administrator or
any affiliate thereof) which at the date of acquisition of
the interests in
such fund and throughout the time such interests are held
in such fund has
the highest applicable long term rating by each Rating
Agency rating
such fund (and, so long as S&P is a Rating Agency, the long
term ratings
must be either AAAm or AAAm-G) 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 (but only if S&P is not a Rating
Agency);
(xi) short term investment funds sponsored by any trust company
or
national banking
association incorporated under the laws of the United
States or any
state thereof (including any such fund managed or advised by
the Trustee, the
Master Servicer, the Securities Administrator or any
affiliate
thereof) which on the date of acquisition has been rated by
each
Rating Agency in
their respective highest applicable rating 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 (but only if S&P is
not a Rating
Agency); and
(xii) 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 (but only if S&P is not a
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 (vii)
above); provided further that no
amount beneficially owned by any REMIC
(including, without limitation, any
amounts collected by the Master Servicer
but not yet deposited in the Master
Servicer Collection Account) 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 other than (i) the United States, any
State or political subdivision thereof, 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
24
<PAGE>
organization (except certain farmers'
cooperatives described in section 521
of the Code) that is exempt from tax
imposed by Chapter 1 of the Code (including
the tax imposed by section 511 of the Code
on unrelated business taxable income)
on any excess inclusions (as defined in
section 860E(c)(1) of the Code) with
respect to any Residual Certificate, (iv)
rural electric and telephone
cooperatives described in section
1381(a)(2)(C) of the Code, (v) a Person that
is not a citizen or resident of the United
States, a corporation, partnership
(other than a partnership that has any
direct or indirect foreign partners) or
other entity (treated as a corporation or a
partnership for federal income tax
purposes), created or organized in or under
the laws of the United States, any
state thereof or the District of Columbia,
an estate whose income from sources
without the United States is includible in
gross income for United States
federal income tax purposes regardless of
its connection with the conduct of a
trade or business within the United States,
or a trust if a court within the
United States is able to exercise primary
supervision over the administration of
the trust and one or more United States
persons have authority to control all
substantial decisions of the trust or and
(vi) any other Person so designated by
the Trustee based upon an Opinion of
Counsel (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 the Trust Fund 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
the Federal Home Loan Mortgage
Corporation, a majority of its board of
directors is not selected by such
government unit.
Person: Any
individual, corporation, partnership, joint venture,
association, joint-stock company, limited
liability company, trust,
unincorporated organization or government,
or any agency or political
subdivision thereof.
Prepayment
Assumption: The applicable rate of prepayment, as described in
the Prospectus Supplement 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 Shortfall: With respect to any Distribution Date, for
each Mortgage Loan that was the subject of
a partial Principal Prepayment, a
Principal Prepayment in full, or that
became a Liquidated Loan during the
related Prepayment Period, (other than a
Principal Prepayment in full resulting
from the purchase of a Mortgage Loan
pursuant to Section 2.02, 2.03, 3.20 or
10.01 hereof), the amount, if any, by which
(i) one month's interest at the
applicable Net Mortgage Rate on the Stated
Principal Balance of such Mortgage
Loan immediately prior to such prepayment
(or liquidation) or in the case of a
partial Principal Prepayment on the amount
of such prepayment (or Liquidation
Proceeds) exceeds (ii) the amount of
interest paid or collected in connection
with such Principal Prepayment or such
Liquidation Proceeds.
Prepayment
Period: As to any Distribution Date and (i) the Mortgage Loans
serviced by each Servicer, other than the
EMC Servicer, the prepayment period
specified in the related Servicing
Agreement and (ii) the Mortgage Loans
serviced by the EMC Servicer, the calendar
month immediately preceding the month
in which such Distribution Date occurs.
Primary Mortgage
Insurance Policy: Any primary mortgage guaranty insurance
policy issued in connection with a Mortgage
Loan which provides compensation to
a Mortgage Note holder in the event of
default by the obligor under such
Mortgage Note or the related security
instrument, if any or
25
<PAGE>
any replacement policy therefor through the
related Accrual Period for such
Class relating to a Distribution Date.
Principal
Distribution Amount: With respect to a Group and any each
Distribution Date, an amount equal to (x)
the related Principal Funds for such
Distribution Date plus (y) any related
Extra Principal Distribution Amount for
such Distribution Date minus (z) any
related Excess Overcollateralization Amount
for such Distribution Date.
Principal Funds:
With respect to a Group and any Distribution Date, (i) the
sum, without duplication, of the following
amounts, in each case with respect to
a related Group (a) all scheduled principal
(or with respect to any Simple
Interest Loans, actual principal) collected
during the related Due Period, (b)
all Advances (except with respect to any
Simple Interest Loans) relating to
principal made on or before the Master
Servicer Advance Date, (c) Principal
Prepayments exclusive of Prepayment Charges
collected during the related
Prepayment Period, (d) the Stated Principal
Balance of each Mortgage Loan that
was repurchased by the Seller or a Servicer
pursuant to Sections 2.02, 2.03 or
3.20, (e) the aggregate of all Substitution
Adjustment Amounts for the related
Determination Date in connection with the
substitution of Mortgage Loans
pursuant to Section 2.03(c), (f) amounts in
respect of principal paid by the EMC
Servicer pursuant to Section 10.01 and (g)
all Liquidation Proceeds collected
during the related Prepayment Period (to
the extent such Liquidation Proceeds
relate to principal), in each case to the
extent remitted by the Master Servicer
or the applicable Servicer to the Master
Servicer Collection Account pursuant to
this Agreement or the related Servicing
Agreement and all Subsequent Recoveries
received during the related Prepayment
Period and minus (ii) all amounts
relating to such Group's (or if not
allocable to a Group, such Group's pro rata
share of such amounts) principal or not
allocable to either interest or
principal reimbursed pursuant to Sections
4.03 and 4.05.
Principal
Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a
Mortgage Loan (including loans
purchased or repurchased under Sections
2.02, 2.03, 3.20 and 10.01 hereof) that
is received in advance of its scheduled Due
Date and is not accompanied by an
amount as to interest representing
scheduled interest due on any date or dates
in any month or months subsequent to the
month of prepayment. Partial Principal
Prepayments shall be applied by the Master
Servicer or the applicable Servicer,
as appropriate, in accordance with the
terms of the related Mortgage Note.
Projected
Principal Balances: For any Yield Maintenance Agreement and
Distribution Date, the related Notional
Amount for such Distribution Date set
forth on Schedule I of the related Yield
Maintenance Agreement.
Prospectus
Supplement: The Prospectus Supplement dated February 7, 2005
relating to the public offering of the
Offered Certificates.
Protected
Account: An account established and maintained by each Servicer
with respect to receipts on the Mortgage
Loans and REO Property serviced by such
Servicer in accordance with the related
Servicing Agreement or Exhibit K hereto.
Protected Party:
As defined in Section 7.04 hereof.
PUD: A Planned
Unit Development.
Purchase Price:
With respect to any Mortgage Loan (x) required to be
repurchased by the Seller pursuant to
Section 2.02 or 2.03 hereof or (y) that
the Seller has a right to purchase pursuant
to Section 3.20 hereof, an amount
equal to the sum of (i) 100% of the
outstanding principal balance of the
26
<PAGE>
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 plus (iii) in the case
of a repurchase of such Mortgage Loan
resulting from breach of the
representation or warranty contained in
Section 2.03(b)(vii)(G) or
2.03(b)(vii)(LL), any costs or damages
incurred by the Trust in connection with
the violation by such Mortgage Loan of any
predatory or abusive lending law,
reduced by (iv) any portion of the
Servicing Fee, Servicing Advances and
Advances payable to the purchaser of the
Mortgage Loan.
Rating Agency:
Each of Moody's, S&P and Fitch. If any such organization or
its successor is no longer in existence,
"Rating Agency" shall be a nationally
recognized statistical rating organization,
or other comparable Person,
designated by the Depositor, notice of
which designation shall be given to the
Trustee. 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 Liquidated Loan, an amount (not less
than zero or more than the Stated Principal
Balance of the Mortgage Loan) as of
the date of such liquidation, equal to (i)
the Stated Principal Balance of such
Liquidated Loan as of the date of such
liquidation, minus (ii) the Liquidation
Proceeds, if any, received in connection
with such liquidation during the month
in which such liquidation occurs, to the
extent applied as recoveries of
principal of the Liquidated Loan.
Realized Loss
Event: A Realized Loss Event with respect to a Group will be
deemed to have occurred if the aggregate of
Realized Losses (reduced by the
aggregate amount of Subsequent Recoveries)
from the Closing Date through the
last day of the related Due Period with
respect to the Mortgage Loans of such
Group, as a percentage of the aggregate
Stated Principal Balance of the related
Mortgage Loans as of the Cut-off Date,
exceed for Distribution Dates occurring:
<TABLE>
<CAPTION>
DISTRIBUTION DATE
LOSS PERCENTAGE
<S>
<C>
2.00%, in the case of Group I and
February 2008 through January 2009................. 3.00%, in the case of Group
II
2.50%, in the case of Group I and
February 2009 through January 2010................. 4.50%, in the case of Group
II
3.00%, in the case of Group I and
February 2010 through January 2011................. 5.75%, in the case of Group
II
3.25%, in the case of Group I and
February 2011 and each month thereafter............ 6.00%, in the case of Group
II
</TABLE>
Record Date:
With respect to each Class of Certificates (except the
Adjustable Rate Certificates) and (a) the
first Distribution Date, the Closing
Date, and (b) with respect to any other
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
the Adjustable Rate Certificates and
any Distribution Date, 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 Bank
Rate: With respect to any Accrual Period, the arithmetic
mean (rounded upwards, if necessary, to the
nearest whole multiple of 0.03125%)
of the offered rates for United States
27
<PAGE>
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 amounts
approximately equal to the aggregate
Certificate Principal Balance of all
Adjustable Rate Certificates on such
Interest Determination Date, 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
U.S. dollars to leading European banks for
a period of one month in amounts
approximately equal to the aggregate
Certificate Principal Balance of the
Certificates which bear an adjustable rate
of interest on such Interest
Determination Date.
Reference Banks:
Barclays Bank PLC, Citibank, N.A. and Deutsche Bank AG,
provided that if any of the foregoing banks
are not suitable to serve as a
Reference Bank, then any leading banks
selected by the Securities Administrator
which are engaged in transactions in
Eurodollar deposits in the international
Eurocurrency market (i) with an established
place of business in London,
England, (ii) not controlling, under the
control of or under common control with
the Depositor, the Seller, the Master
Servicer or any affiliate thereof and
(iii) which have been designated as such by
the Trustee.
Regular
Certificate: Any Certificate other than a Residual Certificate.
Relief Act: The
Servicemembers Civil Relief Act.
Remaining Excess
Spread: With respect to a Group and any Distribution Date,
the related Excess Spread less any related
Extra Principal Distribution Amount,
in each case for such Distribution
Date.
REMIC: A "real
estate mortgage investment conduit" within the meaning of
section 860D of the Code.
REMIC I: The
segregated pool of assets described in Section 5.06(a).
REMIC I
Certificates: The REMIC I Regular Interests and the Class R-1
Certificate.
REMIC I Regular
Interests: As defined in Section 5.06(b).
REMIC II: The
segregated pool of assets consisting of the REMIC I regular
interests and constituting a REMIC
hereunder.
REMIC II
Certificates: The REMIC II Regular Interests and the Class R-2
Certificate.
REMIC II Regular
Interests: As defined in Section 5.06(c).
REMIC Opinion:
An Opinion of Counsel, to the effect that the proposed
action described therein would not, under
the REMIC Provisions, (i) cause either
REMIC I or REMIC II to fail to qualify as a
REMIC while any regular interest in
any such REMIC is outstanding, (ii) result
in a tax on prohibited transactions
or (iii) constitute a taxable contribution
after the Startup Day.
REMIC
Provisions: Provisions of the federal income tax law relating to
real
estate mortgage investment conduits, which
appear at sections 860A through 860G
of Subchapter M of Chapter 1 of the Code,
and related provisions, and proposed,
temporary and final regulations and
published
28
<PAGE>
rulings, notices and announcements
promulgated thereunder, as the foregoing
may be in effect from time to time as well
as provisions of applicable state
laws.
Remittance
Report: As defined in Section 5.04(c).
REO Property: A
Mortgaged Property acquired by a Servicer or the Master
Servicer through foreclosure or
deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Replacement
Mortgage Loan: A Mortgage Loan or Mortgage Loans in the
aggregate substituted by 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 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) if the
Deleted Mortgage Loan is an EMC Mortgage
Loan, be an EMC Mortgage Loan; (v) have
a Combined Loan-to-Value Ratio no higher
than that of the Deleted Mortgage Loan;
(vi) have a remaining term to maturity no
greater than (and not more than one
year less than) that of the Deleted
Mortgage Loan; (vii) not permit conversion
of the Mortgage Rate from a fixed rate to a
variable rate; (viii) provide for a
Prepayment Charge on terms substantially
similar to those of the Prepayment
Charge, if any, of the Deleted Mortgage
Loan; (ix) have the same lien priority
as the Deleted Mortgage Loan; (x)
constitute the same occupancy type as the
Deleted Mortgage Loan or be owner occupied;
(xi) be current in payment of
principal and interest as of the date of
substitution; (xii) have payment terms
that do not vary in any material respect
from the payment terms of the Mortgage
Loan for which it is to be substituted;
(xiii) if the Deleted Mortgage Loan
bears an adjustable rate of interest, have
a Gross Margin, Periodic Rate Cap and
Maximum Lifetime Mortgage Rate no less than
those of the Deleted Mortgage Loan,
have the same Index and interval between
Interest Adjustment Dates, and a
Minimum Lifetime Mortgage Rate no lower
than that of such Deleted Mortgage Loan;
and (xiv) comply with each representation
and warranty set forth in Section 2.03
hereof.
Request for
Release: The Request for Release to be submitted by the Seller,
a Servicer or the Master Servicer to the
Trustee and/or the Custodian, as
appropriate, substantially in the form of
Exhibit H. Each Request for Release
furnished to the Trustee and/or the
Custodian by the Seller, a Servicer or the
Master Servicer shall be in duplicate and
shall be executed by a Servicing
Officer (or, if furnished electronically to
the Trustee and/or Custodian, shall
be deemed to have been sent and executed by
a Servicing Officer) of the Seller,
the Servicer or the Master Servicer, as
applicable.
Required
Insurance Policy: With respect to any Mortgage Loan, any
insurance
policy that is required to be maintained
from time to time under this Agreement
or the related Servicing Agreement.
Residual
Certificates: The Class R-1 Certificates and Class R-2
Certificates.
Responsible
Officer: With respect to the Trustee, any Vice President, any
Assistant Vice President, the Secretary,
any Assistant Secretary, any Trust
Officer with specific responsibility for
the transaction contemplated hereby or
other officers of the Trustee specified by
the Trustee, as to whom, with respect
to a particular matter, such matter is
referred because of such officer's
knowledge of and familiarity with the
particular subject.
S&P:
Standard & Poor's, a division of The McGraw-Hill Companies,
Inc.
29
<PAGE>
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, N.A., in its capacity as
securities administrator hereunder, and its
successors and assigns.
Securities
Administrator Fee: As to any Distribution Date, a fee payable
to
the Securities Administrator by the Master
Servicer out of its own funds in such
capacity as they may separately agree.
Seller: EMC, in
its capacity as seller of the Mortgage Loans to the
Depositor.
Servicer: Each
of the EMC Servicer and WFB.
Servicers: The
EMC Servicer and WFB.
Servicer
Remittance Date: With respect to each Mortgage Loan, (i) in the
case of the EMC Servicer, the 23rd day of
each calendar month, or if such 23rd
day is not a Business Day, the next
succeeding Business Day (or, if such next
succeeding Business Day would be the
Distribution Date, the immediately
preceding Business Day), commencing in
February 2005 and (ii) in the case of any
other Servicer, the date set forth in the
related Servicing Agreement, when the
related Servicer is required to remit funds
in the related Protected Account to
the Master Servicer.
Servicing
Agreement: Any servicing agreement listed on Schedule I hereto,
and, in the case of the EMC Servicer, the
obligations of the EMC Servicer set
forth in this Agreement, including Exhibit
K hereto, as amended, including by
the related Assumption Agreement, if
applicable.
Servicing Advances: All customary,
reasonable and necessary "out of pocket"
costs and expenses (including reasonable
legal fees) incurred in the performance
by a Servicer of its servicing obligations
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 a 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 a
Servicing Agreement or Section 3.09
hereof to cause insurance to be
maintained.
Servicing Fee:
As to each Mortgage Loan and any Distribution Date, an
amount equal to 1/12th of the Servicing Fee
Rate multiplied by the Stated
Principal Balance of such Mortgage Loan as
of the close of business on the first
day of the month immediately preceding the
month in which such Distribution Date
occurs or, in the event of any payment of
interest that accompanies a Principal
Prepayment in full during the related Due
Period made by the Mortgagor
immediately prior to such prepayment,
interest at the Servicing Fee Rate on the
Stated Principal Balance of such Mortgage
Loan for the period covered by such
payment of interest.
Servicing Fee
Rate: With respect to each Mortgage Loan, the per annum rate
set forth in the Mortgage Loan Schedule
under the heading "Servicing Fee."
Servicing
Officer: Any officer of a Servicer or the Master Servicer
involved in, or responsible for, the
administration and servicing or master
servicing of the Mortgage Loans (i) in the
case
30
<PAGE>
of the EMC Servicer, whose name and
facsimile signature appear on a list of
servicing officers furnished to the Trustee
by the EMC Servicer 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 Master Servicer
or any other Servicer, as to which
evidence reasonably acceptable to the
Custodian or the Trustee, as applicable,
of due authorization, by such party has
been furnished from time to time to the
Custodian or the Trustee, as
applicable.
Simple Interest
Loan: A Mortgage Loan that provides for daily accrual of
interest and is identified as such on the
Mortgage Loan Schedule. None of the
Mortgage Loans are Simple Interest
Loans.
Specified
Overcollateralization Amount: With respect to the Mortgage
Loans
of either Group and the first Distribution
Date, $0. With respect to the
Mortgage Loans of a Group and any
subsequent Distribution Date (i) prior to the
related Stepdown Date, 1.65%, in the case
of Group I and 4.55%, in the case of
Group II, of the aggregate Cut-off Date
Principal Balance of the related
Mortgage Loans and (ii) on and after the
related Stepdown Date provided a
Trigger Event for such Group is not in
effect, the greater of (a) 3.30%, in the
case of Group I and 9.10%, in the case of
Group II, of the Stated Principal
Balance of the related Mortgage Loans as of
the last day of the related Due
Period and (b) such Group's
Overcollateralization Floor or (iii) on and after
the related Stepdown Date and if a Trigger
Event for such Group is in effect,
the Specified Overcollateralization Amount
for the immediately preceding
Distribution Date.
Startup Day: The
startup day, within the meaning of Section 860G(a)(9), 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 (or,
with respect to any Simple Interest Loans,
the principal portion of payments
actually received) with respect to such
Mortgage Loan during each related Due
Period ending prior to such Distribution
Date (and other than with respect to
any Simple Interest Loans 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 related Servicer or
the Master Servicer as recoveries of
principal in accordance with Section 3.13
with respect to such Mortgage Loan,
that were received by the related Servicer
or the Master Servicer as of the
close of business on the last day of the
Prepayment Period related to such
Distribution Date, and (iii) any Realized
Losses on such Mortgage Loan incurred
during the related Prepayment Period. The
Stated Principal Balance of a
Liquidated Loan equals zero.
Stepdown Date:
With respect to a Group, the earlier to occur of (i) the
Distribution Date on which the aggregate
Certificate Principal Balance of the
Class A Certificates of such Group has been
reduced to zero and (ii) the later
to occur of (a) the Distribution Date in
February 2008 and (b) the first
Distribution Date on which the aggregate
Certificate Principal Balance of the
Subordinated Certificates of such Group
plus the Overcollateralization Amount
for such Group and Distribution Date
divided by the Stated Principal Balance of
the related Mortgage Loans as of the last
day of the related Due Period is
greater than or equal to 23.30%, in the
case of Group I and 36.60%, in the case
of Group II.
Strike Price:
For any Yield Maintenance Agreement and Distribution Date,
the related "Cap Rate" set forth for such
Distribution Date in the applicable
Yield Maintenance Agreement.
Subordinated
Certificates: The Group I Subordinate Certificates and the
Group II Subordinate Certificates.
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Subsequent
Recovery: The recovery of any amount (including the release of
surplus funds held to cover expenses) in
respect of a Liquidated Loan after a
Realized Loss has been allocated with
respect thereto to one or more Classes of
Subordinated Certificates.
Substitution
Adjustment Amount: The meaning ascribed to such term pursuant
to Section 2.03(c).
Successor Master
Servicer: The meaning ascribed to such term pursuant to
Section 8.01.
Supplemental
Interest Reserve Fund: The fund maintained as described in
Section 5.07.
Tax Matters
Person: The person designated as "tax matters person" in the
manner provided under Treasury regulation
ss. 1.860F-4(d) and temporary Treasury
regulation ss. 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.
Termination
Costs: The costs and expenses related to the termination of any
Servicer, the appointment of a successor
servicer or the transfer and assumption
of servicing with respect to the related
Servicing Agreement, including, without
limitation, the items set forth in Section
3.03(c).
Transfer
Affidavit: As defined in Section 6.02(c).
Transfer: Any
direct or indirect transfer or sale of any Ownership Interest
in a Certificate.
Trigger Event:
With respect to a Group and any Distribution Date on or
after the related Stepdown Date, a Trigger
Event for such Group exists if either
a related Delinquency Event or a related
Realized Loss Event shall have occurred
and be continuing.
Trust Fund: The corpus of the
trust created hereunder consisting of (i) the
Mortgage Loans and all interest accruing
and principal due (or in the case of
any Simple Interest Loan, received) with
respect thereto after the Cut-off Date
to the extent not applied in computing the
Cut-off Date Principal Balance
thereof; (ii) the Master Servicer
Collection Account and the Distribution
Account and all amounts deposited therein
pursuant to the applicable provisions
of this Agreement; (iii) property that
secured a Mortgage Loan and has been
acquired by foreclosure, deed in lieu of
foreclosure or otherwise; (iv) the
mortgagee's rights under the Insurance
Policies with respect to the Mortgage
Loans; (v) the Servicing Agreements and
Assumption Agreements; (vi) rights under
the Yield Maintenance Agreements and the
Yield Maintenance Account and (vii) all
proceeds of the foregoing, including
proceeds of conversion, voluntary or
involuntary, of any of the foregoing into
cash or other liquid property.
Trustee:
JPMorgan Chase Bank, N.A., a national banking association, not
in
its individual capacity, but solely in its
capacity as trustee for the benefit
of the Certificateholders under this
Agreement, and any successor thereto, and
any corporation or national banking
association resulting from or surviving any
consolidation or merger to which it or its
successors may be a party and any
successor trustee as may from time to time
be serving as successor trustee
hereunder.
Trustee Fee: As
to any Distribution Date, a fee payable to the Trustee by
the Master Servicer out of its own funds in
such amount as they may separately
agree.
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Unpaid Applied
Realized Loss Amount: As of any Distribution Date, and each
Class of Subordinated Certificates, the
excess of (i) the Applied Realized Loss
Amount for such Class over (ii) the sum of
all distributions on such Class in
reduction of the Applied Realized Loss
Amount and any Subsequent Recoveries
allocated to such Class, in each case, on
all previous Distribution Dates.
Voting Rights:
The portion of the voting rights of all the Certificates
that is allocated to any Certificate for
purposes of the voting provisions
hereunder. Voting Rights shall be allocated
(i) 95% to the Certificates (other
than the Class B-IO and Residual
Certificates), (ii) 1 1/2% to the Class I-B-IO
Certificates, (iii) 1 1/2% to the Class
II-B-IO Certificates and (iv) 2% to the
Residual Certificates, with the allocation
among the Adjustable Rate
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 Class of
Adjustable Rate Certificates, and among the
Class B-IO Certificates and Residual
Certificates, in accordance with their
respective Percentage Interests.
WAC Excess: With
respect to any Distribution Date and for any Class of
Adjustable Rate Certificates, the sum of
(A) the excess of (1) the amount of
interest that such Class of Adjustable Rate
Certificates would otherwise be
entitled to receive on the Distribution
Date had the Pass-Through Rate for such
Class been calculated at the Pass-Through
Rate for such Class and Distribution
Date without regard to the applicable
Interest Rate Cap, over (2) the amount of
interest payable on such Class at the
respective Pass-Through Rate for such
Class for the Distribution Date and (B) the
excess described in clause (A) for
such Class for all previous Distribution
Dates (including any interest accrued
on that amount at the related Pass-Through
Rate without regard to the applicable
Interest Rate Cap) not previously paid to
such Class.
WFB: Wells Fargo
Bank, N.A., in its capacity as a Servicer of Mortgage
Loans and its successors and assigns in
such capacity.
Yield
Maintenance Account: The separate Eligible Account created and
maintained by the Trustee pursuant to
Section 4.06 in the name of the Trustee
primarily for the benefit of the Adjustable
Rate Certificateholders and
designated "JPMorgan Chase Bank, in trust
for registered holders of Bear Stearns
Asset Backed Securities Trust 2005-SD1,
Asset-Backed Certificates, Series
2005-SD1." The Yield Maintenance Account
shall not constitute an asset of any
REMIC hereunder.
Yield
Maintenance Agreements: The Group I Senior Certificates Yield
Maintenance Agreement, the Group I
Subordinate Certificates Yield Maintenance
Agreement, the Class II-A Yield Maintenance
Agreement, the Class II-M-1 Yield
Maintenance Agreement, the Class II-M-2
Yield Maintenance Agreement, the Class
II-M-3 Yield Maintenance Agreement and the
Class II-B Yield Maintenance
Agreement.
Yield
Maintenance Agreement Amount: In the case of the Group I
Certificates, with respect to any
Distribution Date through the Distribution
Date in October 2012, if One-Month LIBOR is
greater than the applicable Strike
Price, an amount equal to the result of
multiplying (A) the actual number of
days in the applicable Accrual Period
divided by 360 by (B) the product of (a)
the rate equal to the excess of (x) the
lesser of One-Month LIBOR and the
applicable Ceiling Rate over (y) the
applicable Strike Price and (b) an amount
equal to the lesser of the aggregate
Certificate Principal Balance of the
applicable Classes of Certificates and the
Projected Principal Balance for such
Classes for that Distribution Date.
In the case of
the Group II Certificates, with respect to any Distribution
Date through the Distribution Date in
February 2010, if One-Month LIBOR is
greater than the applicable Strike Price,
an amount equal to the result of
multiplying (A) the actual number of days
in the applicable Accrual Period
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divided by 360 by (B) the product of (a)
the rate equal to the excess of (x)
One-Month LIBOR over (y) the applicable
Strike Price and (b) an amount equal to
the lesser of the aggregate Certificate
Principal Balance of the applicable
Class of Certificates and the Projected
Principal Balance for such Class for
that Distribution Date.
Yield
Maintenance Payment: With respect to either Yield Maintenance
Agreement and any Distribution Date, the
amount, if any distributed to the
Trustee by the Yield Maintenance Provider
pursuant to such Yield Maintenance
Agreement with respect to such Distribution
Date.
Yield
Maintenance Provider: Bear Stearns Financial Products Inc. or
any
successor in interest.
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ARTICLE II.
CONVEYANCE OF TRUST FUND
REPRESENTATIONS AND WARRANTIES
Section 2.01.
Conveyance of Trust Fund.
The Seller
hereby sells, transfers, assigns, sets over and otherwise
conveys 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 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 any such transfer and assignment, the Depositor has
delivered to or caused to be delivered to,
and deposited with, the Custodian 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 "JPMorgan Chase Bank, as Trustee for
certificateholders of Bear Stearns Asset Backed Securities Trust
2005-SD1,
Asset Backed
Certificates, Series 2005-SD1, without recourse", or (B) in
the case of a
Mortgage Loan registered on the MERS(R) 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 registered on the MERS(R)
System,
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, in recordable form,
with respect to
each Mortgage Loan in the name of "JPMorgan Chase Bank, as
Trustee for
certificateholders of Bear Stearns Asset Backed Securities
Trust 2005-SD1, Asset
Backed Certificates, Series 2005-SD1" or in blank,
(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
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(vi) originals or copies of all available assumption, modification
or
substitution agreements, if
any;
provided,
however, that the assignment of the Mortgage to the Trustee
will
not be required to be submitted for
recording with respect to any Mortgage Loan:
(a) if the Trustee and the Custodian shall
have received an Opinion of Counsel
addressed to the Trustee stating that in
such counsel's opinion, the recordation
of the assignment to the Trustee of the
Mortgage securing a particular Mortgage
Note is not necessary to transfer to the
assignee thereof all the benefits and
security provided by the Mortgage as
against the related assignor or any
creditor of such assignor, and the Mortgage
will continue to secure the Mortgage
Note to the same extent as if the Mortgage
Note and Mortgage had not been
assigned and delivered, (b) such
recordation is not required by the Rating
Agencies or (c) if MERS is identified on
the Mortgage or on a properly recorded
assignment of the Mortgage as the mortgagee
of record solely as nominee for the
Seller and its successors and assigns;
and provided,
further, however, that in lieu of the foregoing, the
Depositor may deliver, or cause to be
delivered, the following documents, under
the circumstances set forth below: (x) if
any Mortgage, assignment thereof to
the Trustee or intervening assignments
thereof have been delivered or are being
delivered to recording offices for
recording and have not been returned in time
to permit their delivery as specified
above, the Depositor may deliver, or cause
to be delivered, a true copy thereof with a
certification by the applicable
Servicer 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 J, the Depositor may
deliver, or cause to be delivered, a lost
note affidavit (or a blanket lost note
affidavit covering some or all of the
Mortgage Loans in Exhibit J) 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 cause the Seller to,
and the Seller shall, (i) deposit or cause
to be deposited on the Closing Date
all amounts paid in respect of such
Mortgage Loans (to the extent required to be
remitted by the related Servicers pursuant
to their Servicing Agreements) into
the Master Servicer Collection Account or
the Distribution Account or (ii)
deliver to the Custodian on the Closing
Date a certification of an authorized
officer of the Seller stating that the
Seller will deposit or cause to be
deposited all such amounts on or before the
Distribution Account Deposit Date
relating to the first Distribution Date, in
which case the Seller shall so
deposit or cause to be deposited such
amounts into the Master Servicer
Collection Account or the Distribution
Account on or before such Distribution
Account Deposit Date.
In the case of
the documents referred to in clause (x) above, the Depositor
shall deliver, or cause to be delivered,
such documents to the 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. In the event that
the Seller, the Depositor or the Master
Servicer gives written notice to the
Trustee (a) that recording of the
assignment of the Mortgage to the Trustee is
required to protect the right, title and
interest of the Trustee on behalf of
the Certificateholders in and to any
Mortgage Loan, (b) a court recharacterizes
the sale of the Mortgage Loans as a
financing, or (c) as a result of any change
in or amendment to the laws of a State in
which recording was not effected or
any applicable political subdivision
thereof, or any change in official position
regarding application or interpretation of
such laws, including a holding by a
court of competent jurisdiction, such
recording is so required, the Seller shall
submit or cause to be submitted for
recording as specified above or, should the
Seller fail to perform such obligations,
the Trustee shall cause each such
previously unrecorded assignment to be
submitted for recording as specified
above at the expense of the Trust pursuant
to Section 9.05. In the event a
Mortgage File is released to the Master
Servicer or a Servicer as a result of
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the Master Servicer's or a Servicer's
having completed a Request for Release,
the Trustee shall, if not so completed,
complete, or cause the Custodian to
complete, the assignment of the related
Mortgage in the manner specified in
clause (iii) above.
In connection
with the assignment of any Mortgage Loans 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, (b) the code in the field "Pool
Field" which identifies the series of
the Certificates issued in connection with
such Mortgage Loans and (c) a code
that provides the Custodian with access to
such Mortgage Loans. The Seller
further agrees that it will not, and will
not permit 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.
Since the
mortgage loans permitted to be purchased pursuant to this
Agreement are limited to (i) the Mortgage
Loans purchased hereunder on the
Closing Date and (ii) any Replacement
Mortgage Loans purchased hereafter
pursuant to the provisions of this
Agreement, and the Seller has made the
representations and warranties contained
herein with respect to all such
Mortgage Loans, including, a representation
and warranty contained in Section
2.03(b)(vii)(S) of this Agreement, that, as
of the Closing Date or date of
substitution, as applicable, no Mortgage
Loan is a "High-Cost Home Loan" as
defined in the New Jersey Home Ownership
Security Act of 2002 (the "New Jersey
Act"), a "High-Cost Home Loan" as defined
in the New Mexico Home Loan Protection
Act (the "New Mexico Act"), a "High Cost
Home Mortgage Loan" under the
Massachusetts Predatory Home Loan Practices
Act of 2004 (the "Massachusetts
Act") or a "High-Cost Home Loan" under the
Indiana High Cost Home Loan Law of
2005 (the "Indiana Act"), it is agreed and
understood by the Depositor, the
Seller and the Trustee that it is not
intended that any mortgage loan be
purchased hereunder that is a "High-Cost
Home Loan" as defined in the New Jersey
Act, a "High-Cost Home Loan" as defined in
the New Mexico Act, a "High Cost Home
Mortgage Loan" as defined in the
Massachusetts Act or a "High-Cost Home Loan" as
defined in the Indiana Act.
Section 2.02.
Acceptance of the Mortgage Loans.
(a) The Trustee
acknowledges receipt based on receipt by the Custodian of,
subject to the further review and the
exceptions the Custodian notes pursuant to
the procedures described below, the
documents (or certified copies thereof)
delivered to the Custodian pursuant to
Section 2.01 and declares that it holds
and will continue to hold directly or
through the Custodian those documents and
any amendments, replacements or supplements
thereto and all other assets of the
Trust Fund delivered to the Custodian on
its behalf in trust for the use and
benefit of all present and future Holders
of the Certificates. On the Closing
Date, the Custodian will deliver an initial
certification in the form annexed as
Exhibit One to the Custodial Agreement
confirming whether or not it has received
the Mortgage File for each Mortgage Loan,
but without review of such Mortgage
File, except to the extent necessary to
confirm whether such Mortgage File
contains the original Mortgage Note or a
lost note affidavit in lieu thereof. No
later than 90 days after the Closing Date,
the Custodian agrees pursuant to the
Custodial Agreement, for the benefit of the
Certificateholders, to review each
Mortgage File delivered to it and to
execute and deliver, or cause to be
executed and delivered, to the Seller and
to the Trustee an interim
certification substantially in the form
annexed as Exhibit Two to the Custodial
Agreement. In conducting such review, the
Custodian on behalf of the Trustee
will ascertain whether all required
documents have been executed and received
and whether those documents relate,
determined on the basis of the Mortgagor
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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 clauses (iv) and (vi) of the
fourth paragraph of Section 2.01, such
obligations shall extend only to
documents actually delivered pursuant to
such clauses). In performing any such
review, the Custodian on behalf of the
Trustee and in accordance with the
Custodial Agreement 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 Custodian 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 Custodian shall include such
information in the exception report attached to
such interim certification. The Seller
shall correct or cure any such defect or,
if prior to the end of the second
anniversary of the Closing Date, the Seller
may substitute for the related Mortgage
Loan a Replacement Mortgage Loan, which
substitution shall be accomplished in the
manner and subject to the conditions
set forth in Section 2.03 or shall deliver
to the Trustee and the Custodian an
Opinion of Counsel, addressed to the
Trustee and the Custodian, at the Seller's
expense, to the effect that such defect
does not materially or adversely affect
the interests of Certificateholders in such
Mortgage Loan within 90 days from
the date of notice from the Custodian 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 Custodian 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 Custodian on behalf
of the Trustee and in accordance with the
Custodial Agreement 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 to the Trustee,
a final certification substantially in the
form annexed as Exhibit Three to the
Custodial Agreement. In conducting such
review, the Custodian will ascertain
whether each document required to be
recorded has been returned from the
recording office with evidence of recording
thereon and the Custodian 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 clauses
(iv) and (vi) of the fourth paragraph of
Section 2.01, such obligations shall
extend only to documents actually delivered
pursuant to such clauses). If the
Custodian 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 Custodian 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 and the Custodian an
Opinion of Counsel, addressed to the
Trustee and the Custodian, at the Seller's
expense, to the effect that such defect
does not materially or adversely affect
the interests of Certificateholders in such
Mortgage Loan within 90 days from
the date of notice from the Custodian 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 Custodian, 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
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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 Trustee for deposit in the
Distribution 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
Distribution Account and receipt of a
Request for Release, the Trustee will
release or notify the Custodian which,
upon receipt of such notice from the
Trustee, shall 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 Distribution Account was made
or if the Custodian is then acting, the
date on which notice of the deposit of
the Purchase Price into the Distribution
Account was received by the Custodian
from the Trustee. 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 remedy respecting such defect
available to the Certificateholders or to
the Trustee on their behalf.
(d) The Seller
shall deliver to the Trustee or upon its direction to the
Custodian, and the Trustee agrees to accept
or to cause the Custodian to accept,
the Mortgage Note and other documents
constituting the Mortgage File with
respect to any Replacement Mortgage Loan,
which the Custodian will review as
provided in subsections 2.02(a) and
2.02(b), provided, that the Closing Date
referred to therein shall instead be the
date of delivery of the Mortgage File
with respect to each Replacement Mortgage
Loan.
(e) Until all
amounts distributable in respect of the Certificates have
been distributed in full and the Master
Servicer has otherwise fulfilled its
respective obligations under this
Agreement, the Trustee, or the Custodian
acting on its behalf, shall retain
possession and custody of each Mortgage File
in accordance with and subject to the terms
and conditions of this Agreement.
Section 2.03.
Representations, Warranties and Covenants of the Master
Servicer, the EMC Servicer and the Seller.
(a) The Master
Servicer and the EMC Servicer each hereby represents and
warrants to the Depositor, the Securities
Administrator and the Trustee (and in
the case of the EMC Servicer, to the Master
Servicer) as follows, as of the
Closing Date:
(i) It is duly organized and is validly existing and in good
standing
(a) in the case
of the EMC Servicer, under the laws of the State of
Delaware and (b)
in the case of the Master Servicer, as a national banking
association
organized under the laws of the United States, and is duly
authorized and
qualified to transact any and all business contemplated by
this Agreement
to be conducted by it in any state in which a Mortgaged
Property is
located or is otherwise not required under applicable law to
effect such
qualification and, in any event, is in compliance with the
doing business
laws of any such state, to the extent necessary to ensure
its ability to
enforce each Mortgage Loan, to service the Mortgage Loans in
accordance with
the terms of 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
Mortgage Loan,
and to execute, deliver and perform, and to enter into and
consummate the
transactions contemplated
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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
Mortgage Loans by it under this Agreement, the
consummation of
any other of the transactions contemplated by this
Agreement, and
the fulfillment of or compliance with the terms hereof are
in its ordinary
course of business and will not (A) result in a material
breach of any
term or provision of its charter or by-laws or (B) materially
conflict with,
result in a material breach, violation or acceleration of,
or result in a
material default under, the terms of any other material
agreement or
instrument to which it is a party or by which it may be bound,
or (C)
constitute a material violation of any statute, order or
regulation
applicable to it
of any court, regulatory body, administrative agency or
governmental
body having jurisdiction over it; and it is not in breach or
violation of any
material indenture or other material agreement or
instrument, or
in violation of any statute, order or regulation of any
court,
regulatory body, administrative agency or governmental body
having
jurisdiction
over it which breach or violation may materially impair its
ability to
perform or meet any of its obligations under this Agreement.
(iv) It or one or more of its affiliates is an approved servicer
of
conventional
mortgage loans for Fannie Mae or Freddie Mac and is a
mortgagee
approved by the Secretary of Housing and Urban Development
pursuant to
sections 203 and 211 of the National Housing Act.
(v) No litigation is pending or, to the best of its knowledge,
threatened,
against it that would materially and adversely affect the
execution,
delivery or enforceability of this Agreement or its ability to
service the
Mortgage Loans or to perform any of its other obligations under
this Agreement
in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court
or
governmental
agency or body is required for its execution, delivery and
performance of,
or compliance with, this Agreement or the consummation of
the transactions
contemplated hereby, or if any such consent, approval,
authorization or
order is required, it has obtained the same.
(b) 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
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contemplated by
this Agreement and has duly authorized by all
necessary
corporate action on the part of the Seller the execution,
delivery and
performance of this Agreement; and this Agreement, assuming
the due
authorization, execution and delivery hereof by the other
parties
hereto,
constitutes a legal, valid and binding obligation of the
Seller,
enforceable
against the Seller in accordance with its terms, except that
(a) the
enforceability hereof may be limited by bankruptcy, insolvency,
moratorium,
receivership and other similar laws relating to creditors'
rights generally
and (b) the remedy of specific performance and injunctive
and other forms
of equitable relief may be subject to equitable defenses
and to the
discretion of the court before which any proceeding therefor
may
be brought.
(iii) The execution and delivery of this Agreement by the Seller,
the
sale of the
Mortgage Loans by the Seller under 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 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) With respect to each Mortgage Loan as of the Cut-off Date
(unless
otherwise expressly provided) or, with respect to clauses (G)
or
(U), as of the
Closing Date:
(A) The information set forth in the Mortgage Loan Schedule on
the
Closing Date is complete, true and
correct.
(B) No Mortgage Loan is delinquent 61 or more days; and the Seller
has
not advanced funds, or induced,
solicited or knowingly received any advance
of funds from a party other than
the owner of the Mortgaged Property
subject to the Mortgage, directly
or indirectly, for the payment of any
amount required under any Mortgage
Loan.
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(C) Except with
respect to taxes, insurance and other amounts previously
advanced by a Servicer with respect to any
Mortgage Loan, to the best of
Seller's knowledge, there are no delinquent
taxes, water charges, sewer rents,
assessments, insurance premiums, leasehold
payments, including assessments
payable in future installments, or other
outstanding charges affecting the
related Mortgaged Property.
(D) The terms of
the Mortgage Note and the Mortgage have not been impaired,
waived, altered or modified in any respect,
except by written instruments which
in the case of the Mortgage Loans are in
the Mortgage File and have been or will
be recorded, if necessary to protect the
interests of the Trustee, and which
have been or will be delivered to the
Trustee, all in accordance with this
Agreement. The substance of any such
waiver, alteration or modification has been
approved by the title insurer, to the
extent required by the related policy. No
Mortgagor has been released, in whole or in
part, except in connection with an
assumption agreement approved by the title
insurer, to the extent required by
the policy, and which assumption agreement
in the case of the Mortgage Loans is
part of the Mortgage File.
(E) The Mortgage
Note and the Mortgage are not subject to any right of
rescission, set-off, counterclaim or
defense, including the defense of usury,
nor will the operation of any of the terms
of the Mortgage Note and the
Mortgage, or the exercise of any right
thereunder, render the Mortgage
unenforceable, in whole or in part, or
subject to any right of rescission,
set-off, counterclaim or defense, including
the defense of usury and no such
right of rescission, set-off, counterclaim
or defense has been asserted with
respect thereto.
(F) All
buildings upon, or comprising part of, the Mortgaged Property
are
insured by an insurer acceptable to Fannie
Mae and Freddie Mac against loss by
fire, hazards of extended coverage and such
other hazards as are customary in
the area where the Mortgaged Property is
located, and such insurer is licensed
to do business in the state where the
Mortgaged Property is located. All such
insurance policies contain a standard
mortgagee clause naming the Originator,
its successors and assigns as mortgagee and
Seller has received no notice that
all premiums thereon have not been paid. If
upon origination of the Mortgage
Loan, the Mortgaged Property was, or was
subsequently deemed to be, in an area
identified in the Federal Register by the
Federal Emergency Management Agency as
having special flood hazards (and such
flood insurance has been made available),
which require under applicable law that a
flood insurance policy meeting the
requirements of the current guidelines of
the Federal Insurance Administration
(or any successor thereto) be obtained,
such flood insurance policy is in effect
which policy is with a generally acceptable
carrier in an amount representing
coverage not less than the least of (A) the
Stated Principal Balance of the
related Mortgage Loan (together with, in
the case of a Mortgage Loan that is not
a first priority lien, the outstanding
principal balance of all related liens
that are prior to the applicable lien of
such Mortgage Loan), (B) the minimum
amount required to compensate for damage or
loss on a replacement cost basis, or
(C) the maximum amount of insurance that is
available under the Flood Disaster
Protection Act of 1973. The Mortgage
obligates the Mortgagor thereunder to
maintain all such insurance at Mortgagor's
cost and expense and, on the
Mortgagor's failure to do so, authorizes
the holder of the Mortgage to maintain
such insurance at Mortgagor's cost and
expense and to obtain reimbursement
therefor from the Mortgagor.
(G) None of the
Mortgage Loans are (a) Mortgage Loans subject to 12 CFR
Part 226.31, 12 CFR Part 226.32 or 226.34
of Regulation Z, the regulation
implementing TILA, which implements the
Home Ownership and Equity Protection Act
of 1994, as amended, (b) classified and/or
defined, as a "high cost",
"threshold", "predatory" or "covered" loan
(or a similarly classified loan using
different terminology under a law imposing
additional legal liability for
mortgage loans having high interest rates,
points and/or fees) under any other
applicable state, federal or local law
including, but not limited to, the States
of New York, North Carolina, Arkansas,
Kentucky, New Mexico, Illinois and
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Oklahoma, (c) Mortgage Loans governed by
the Georgia Fair Lending Act, if such
Mortgage Loan was originated on or after
October 1, 2002 through May 6, 2003 or
(d) Mortgage Loans subject to the New
Jersey Home Ownership Security Act of 2002
(the "New Jersey Act"), unless such
Mortgage Loan is a (1) "Home Loan" as
defined in the New Jersey Act that is a
first lien Mortgage Loan, which is not a
"High Cost Home Loan" as defined in the New
Jersey Act or (2) "Covered Home
Loan" as defined in the New Jersey Act that
is a first lien purchase money
Mortgage Loan, which is not a High Cost
Home Loan under the New Jersey Act. In
addition to and notwithstanding anything to
the contrary herein, no Mortgage
Loan for which the Mortgaged Property is
located in New Jersey is a Home Loan as
defined in the Act that was made, arranged,
or assigned by a person selling
either a manufactured home or home
improvements to the Mortgaged Property or was
made by an originator to whom the Mortgagor
was referred by any such seller.
Each Mortgage Loan at the time it was made
otherwise complied in all material
respects with any and all requirements of
any federal, state or local law
including, but not limited to, all
predatory lending laws, usury, truth in
lending, real estate settlement procedures
(including the Real Estate Settlement
Procedures Act of 1974, as amended,
consumer credit protection, equal credit
opportunity or disclosure laws applicable
to such Mortgage Loan.
(H) The Mortgage
has not been satisfied, canceled, subordinated, or
rescinded, in whole or in part, and the
Mortgaged Property has not been released
from the lien of the Mortgage, in whole or
in part, nor has any instrument been
executed that would effect any such
release, cancellation, subordination or
rescission.
(I) The Mortgage
is a valid, existing and enforceable first lien on the
Mortgaged Property, including all
improvements on the Mortgaged Property, if
any, subject only to (1) the lien of
current real property taxes and assessments
not yet due and payable, (2) covenants,
conditions and restrictions, rights of
way, easements and other matters of the
public record as of the date of
recording being acceptable to mortgage
lending institutions generally and
specifically referred to in the lender's
title insurance policy delivered to the
Originator of the Mortgage Loan and which
do not adversely affect the Appraised
Value of the Mortgaged Property, (3) if
applicable, in the case of a Mortgage
that is a second priority lien, the first
lien on the Mortgaged Property
identified in the related Mortgage File,
and (4) other matters to which like
properties are commonly subject which do
not materially interfere with the
benefits of the security intended to be
provided by the Mortgage. The Seller has
full right to sell and assign the Mortgage
to the Depositor. None of the
Mortgages related to the Mortgage Loans is
a second lien.
(J) The Mortgage
Note and the related Mortgage are genuine and each is the
legal, valid and binding obligation of the
maker thereof, enforceable in
accordance with its terms, except as the
enforceability thereof may be limited
by bankruptcy, insolvency or reorganization
or general principles of equity.
(K) All parties
to the Mortgage Note and the Mortgage had the legal
capacity to enter into the Mortgage Loan
transaction and to execute and deliver
the Mortgage Note and the Mortgage, and the
Mortgage Note and the Mortgage have
been duly and properly executed by such
parties.
(L) The proceeds
of the Mortgage Loan have been fully disbursed and there
is no requirement for future advances
thereunder and any and all requirements as
to completion of any on-site or off-site
improvement and as to disbursements of
any escrow funds therefor have been
complied with. All costs, fees and expenses
incurred in making or closing the Mortgage
Loan and the recording of the
Mortgage were paid, and the Mortgagor is
not entitled to any refund of any
amounts paid or due under the Mortgage Note
or Mortgage.
(M) Immediately
prior to the conveyance of the Mortgage Loans by the Seller
to the Depositor hereunder, the Seller was
the sole owner and holder of the
Mortgage Loan and either serviced
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the Mortgage Loan itself or the Mortgage
Loan was being serviced pursuant
to a Servicing Agreement with the Servicer
indicated on the Mortgage Loan
Schedule; the related Originator or the
Seller or the applicable Servicer was
the custodian of the related escrow
account, if applicable; the Mortgage Loan
had neither been assigned nor pledged, and
the Seller had good and marketable
title thereto, and had full right to
transfer and sell the Mortgage Loan and the
related servicing rights to the Depositor
free and clear of any encumbrance,
equity, lien, pledge, charge, claim or
security interest subject to the
applicable Servicing Agreement, if any, and
had full right and authority subject
to no interest or participation of, or
agreement with, any other party, to sell
and assign the Mortgage Loan and the
related servicing rights to the Depositor
pursuant to the terms of this
Agreement.
(N) All parties
which have had any interest in the Mortgage, whether as
mortgagee, assignee, pledgee or otherwise,
are (or, during the period in which
they held and disposed of such interest,
were) (1) in compliance with any and
all applicable licensing requirements of
the laws of the state wherein the
Mortgaged Property is located, and (2)
organized under the laws of such state,
qualified to do business in such state, a
federal savings and loan association
or national bank having principal offices
in such state or not deemed to be
doing business in such state under
applicable law.
(0) The Mortgage
Loan is covered by an ALTA lender's title insurance policy
or equivalent form acceptable to the
Department of Housing and Urban
Development, or any successor thereto, and
qualified to do business in the
jurisdiction where the Mortgaged Property
is located, insuring (subject to the
exceptions contained in clause (I) above)
the Seller (as assignee), its
successors and assigns as to the first or,
if applicable, more junior priority
lien of the Mortgage in the original
principal amount of the Mortgage Loan and
against any loss by reason of the
invalidity or unenforceability of the lien
resulting from the provisions of the
Mortgage Note and/or Mortgage providing for
adjustment in the Mortgage Rate and monthly
payment. Additionally, such lender's
title insurance policy affirmatively
insures ingress and egress, and against
encroachments by or upon the Mortgaged
Property or any interest therein. With
respect to each Mortgage Loan, the Seller
(as assignee) is the sole insured of
such lender's title insurance policy, and
such lender's title insurance policy
is in full force and effect. No claims have
been made under such lender's title
insurance policy, and no prior holder of
the related Mortgage, including the
Seller in the case of a Mortgage Loan, has
done, by act or omission, anything
which would impair the coverage of such
lender's title insurance policy.
(P) Except as
provided in clause (B), immediately prior to the Cut-off
Date, there was no default, breach,
violation or event of acceleration existing
under the Mortgage or the Mortgage Note and
there was no event which, with the
passage of time or with notice and the
expiration of any grace or cure period,
would constitute a default, breach,
violation or event of acceleration, and the
Seller has not waived any default, breach,
violation or event of acceleration.
(Q) There are no
mechanics' or similar liens or claims which have been
filed for work, labor or material (and no
rights are outstanding that under law
could give rise to such lien) affecting the
related Mortgaged Property which are
or may be liens prior to or equal with, the
lien of the related Mortgage.
(R) All
improvements which were considered in any appraisal which was
used
in determining the Appraised Value of the
related Mortgaged Property lay wholly
within the boundaries and building
restriction lines of the Mortgaged Property,
and no improvements on adjoining properties
encroach upon the Mortgaged
Property.
(S) No Mortgage
Loan is a "High Cost Home Loan" as defined in the New
Jersey Home Ownership Security Act of 2002,
a "High Cost Home Loan" as defined
in the New Mexico Home Loan Protection Act,
a "High Cost Home Mortgage Loan" as
defined in the Massachusetts Predatory
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Home Loan Practices Act of 2004 or a
"High-Cost Home Loan" as defined in
the Indiana High Cost Home Loan Law of
2005.
(T) The
origination, servicing and collection practices with respect to
each Mortgage Note and Mortgage including,
the establishment, maintenance and
servicing of the escrow accounts and escrow
payments, if any, since origination,
have been conducted in all respects in
accordance with the terms of Mortgage
Note and in compliance with all applicable
laws and regulations and, unless
otherwise required by law or Fannie
Mae/Freddie Mac standard, in accordance with
the proper, prudent and customary practices
in the mortgage origination and
servicing business. With respect to the
escrow accounts and escrow payments, if
any, and a Mortgage Loan all such payments
are in the possession or under the
control of the Seller (including pursuant
to a Servicing Agreement) and there
exists no deficiencies in connection
therewith for which customary arrangements
for repayment thereof have not been made.
All Mortgage Rate adjustments have
been made in strict compliance with state
and federal law and the terms of the
related Mortgage Note. Any interest
required to be paid pursuant to state and
local law has been properly paid and
credited.
(U) The
Mortgaged Property is free of material damage and waste and
there
is no proceeding pending for the total or
partial condemnation thereof.
(V) The Mortgage
contains customary and enforceable provisions to render
the rights and remedies of the holder
thereof adequate for the realization
against the Mortgaged Property of the
benefits of the security intended to be
provided thereby, including, (1) in the
case of a Mortgage designated as a deed
of trust, by trustee's sale, and (2)
otherwise by judicial foreclosure. There is
no other exemption available to the
Mortgagor which would interfere with the
right to sell the Mortgaged Property at a
trustee's sale or the right to
foreclose the Mortgage. The Mortgagor has
not notified the Seller and the Seller
has no knowledge of any relief requested or
allowed to the Mortgagor under the
Relief Act.
(W) The Mortgage
Note is not and has not been secured by any collateral
except the lien of the applicable
Mortgage.
(X)
[Reserved].
(Y) In the event
the Mortgage constitutes a deed of trust, a trustee, duly
qualified under applicable law to serve as
such, has been properly designated
and currently so serves and is named in the
Mortgage, and no fees or expenses
are or will become payable by the
Certificateholders to the trustee under the
deed of trust, except in connection with a
trustee's sale after default by the
Mortgagor.
(Z) No Mortgage
Loan contains a permanent or temporary "buydown" provision.
The Mortgage Loan is not a graduated
payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or
other contingent interest feature.
(AA) The
Mortgagor has received all disclosure materials required by
applicable law with respect to the making
of the Mortgage Loan. The Seller has
maintained or caused to be maintained all
such statements in the Mortgage File.
(BB) No Mortgage
Loan was made in connection with the construction or
rehabilitation of a Mortgaged Property.
(CC) To the best
of Seller's knowledge, the Mortgaged Property is lawfully
occupied under applicable law and all
inspections, licenses and certificates
required to be made or issued with respect
to all occupied portions of the
Mortgaged Property and, with respect to the
use and occupancy of
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the same, including but not limited to
certificates of occupancy, have been
made or obtained from the appropriate
authorities.
(DD) The
assignment of Mortgage with respect to a Mortgage Loan (other
than
a Mortgage Loan registered on the MERS(R)
system) is in recordable form and is
acceptable for recording under the laws of
the jurisdiction in which the
Mortgaged Property is located.
(EE) Any future
advances made to the Mortgagor prior to the Cut-off Date
have been consolidated with the outstanding
principal amount secured by the
Mortgage, and the secured principal amount,
as consolidated, bears a single
interest rate and single repayment term.
The lien of the Mortgage securing the
consolidated principal amount is expressly
insured as having first priority, by
a title insurance policy, an endorsement to
the policy insuring the mortgagee's
consolidated interest or by other title
evidence acceptable to Fannie Mae and
Freddie Mac. The consolidated principal
amount does not exceed the original
principal amount of the Mortgage Loan.
(FF) With
respect to any Mortgage Loan that bears, or will upon
conversion
from a fixed rate bear, interest at an
adjustable rate, on each Interest
Adjustment Date, the Mortgage Rate has been
adjusted to equal the respective
Index plus the respective Gross Margin
(subject to standard rounding
conventions), subject to the Periodic Rate
Cap, the Maximum Lifetime Mortgage
Rate and the Minimum Lifetime Mortgage
Rate, if any, as set forth in the related
Mortgage Note.
(GG) Without
exception in either Group, the Mortgaged Property consists of
a single parcel of real property with or
without a detached single family
residence erected thereon, or an individual
condominium unit, or a cooperative,
or a 2-4 family dwelling, or an individual
unit in a planned unit development as
defined by Fannie Mae or a manufactured
dwelling which conforms with Fannie Mae
and Freddie Mac requirements regarding such
dwellings, or a townhouse, each
structure of which is permanently affixed
to the Mortgaged Property, and is
legally classified as real estate.
(HH)
[Reserved].
(II) 85.83% of
the Group II Mortgage Loans (by Cut-off Date Principal
Balance) are Hybrid Mortgage Loans in their
fixed rate period. None of the
Mortgage Loans contain a provision allowing
the Mortgagor to convert an
adjustable rate Mortgage Loan to a fixed
rate Mortgage Loan. The principal and
interest due on each Mortgage Loan is
calculated pursuant to the standard
amortization method (30/360 day interest
accrual). 0.03% and 0% of the Mortgage
Loans (by cut-off Date Principal Balance)
in Group I and Group II, respectively,
are Simple Interest Loans.
(JJ) Each
Mortgage Loan at the time of origination was underwritten in
general in accordance with guidelines not
inconsistent with the guidelines set
forth in the Prospectus Supplement and
generally accepted prime or sub-prime
credit underwriting guidelines.
(KK) No error,
omission, misrepresentation, fraud or similar occurrence
with respect to a Mortgage Loan has taken
place on the part of the Seller or the
related Originator.
(LL) None of the
Mortgage Loans is a "High Cost Loan" or "Covered Loan" as
defined in the current Standard &
Poor's LEVELS(R) Glossary which is now Version
5.6 Revised, Appendix E.
(MM) No more
than 0% and 11.15% of the Mortgage Loans, by Cut-off Date
Principal Balance, in Group I and Group II,
respectively, provided for negative
amortization.
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(c) Upon
discovery by any of the parties hereto of a breach of a
representation or warranty set forth in
Section 2.03(b)(vii) 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 2.03(b)(vii), that within 90
days of the discovery of a breach of any
representation or warranty set forth
therein that materially and adversely
affects the interests of the
Certificateholders in any Mortgage Loan, it
shall cure such breach in all
material respects and, if such breach is
not so cured, (i) if such 90-day period
expires prior to the second anniversary of
the Closing Date, remove such
Mortgage Loan (a "Deleted Mortgage Loan")
from the Trust Fund and substitute in
its place a Replacement Mortgage Loan, in
the manner and subject to the
conditions set forth in this Section; or
(ii) repurchase the affected Mortgage
Loan or Mortgage Loans from the Trustee at
the Purchase Price in the manner set
forth below; provided that any such
substitution pursuant to (i) above or
repurchase pursuant to (ii) above shall not
be effected prior to the delivery to
the Trustee of an Opinion of Counsel if
required by Section 2.05 hereof and any
such substitution pursuant to (i) above
shall not be effected prior to the
additional delivery to the Trustee of a
Request for Release. The Seller shall
promptly reimburse the Master Servicer and
the Trustee for any expenses
reasonably incurred by the Master Servicer
or the Trustee in respect of
enforcing the remedies for such breach. To
enable the Master Servicer to amend
the Mortgage Loan Schedule, the Seller
shall, unless it cures such breach in a
timely fashion pursuant to this Section
2.03, promptly notify the Master
Servicer whether it intends either to
repurchase, or to substitute for, the
Mortgage Loan affected by such breach. With
respect to the representations and
warranties in Section 2.03(b)(vii) 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, except with respect
to any Simple Interest Loans,
distributions to Certificateholders will
include the Scheduled Payment due on
any Deleted Mortgage Loan for the related
Due Period (and with respect to any
Simple Interest Loans, payments of
principal actually received during such Due
Period) and thereafter the Seller shall be
entitled to retain all amounts
received in respect of such Deleted
Mortgage Loan. The Master Servicer shall
amend the Mortgage Loan Schedule for the
benefit of the Certificateholders to
reflect the removal of such Deleted
Mortgage Loan and the substitution of the
Replacement Mortgage Loan or Loans and the
Master Servicer shall deliver the
amended Mortgage Loan Schedule to the
Trustee and the 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
2.03(b)(vii) with respect to such Mortgage
Loan. Upon any such substitution and
the deposit to the Master Servicer
Collection Account, of the amount required to
be deposited therein in connection with
such substitution as described in the
following paragraph, the Trustee shall
release to the Seller the Mortgage File
relating to such Deleted Mortgage Loan and
held for the benefit of the
Certificateholders and 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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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, except the actual payment
received with respect to any Simple
Interest Loans) 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
in the Master Servicer Collection
Account pursuant to Section 3.08 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 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 remedy against the Seller respecting
such breach available to
Certificateholders, the Depositor or the
Trustee.
(d) The representations and warranties
set forth in Section 2.03 hereof
shall survive delivery of the respective
Mortgage Files to the Trustee for the
benefit of the Certificateholders.
Section 2.03(A)
Assignment of Interests in the Servicing Agreements.
To the extent not provided for in the related Assumption
Agreements, the Seller hereby assigns to
the Depositor who concurrently with the
execution and delivery of this Agreement
assigns to the Trustee, on behalf of
the Certificateholders, all of their
respective right, title and interest in the
Servicing Agreements and, if applicable,
the Assumption Agreements, including
but not limited to the Seller's rights
pursuant to the Servicing Agreements
(noting that the Seller has retained the
right in the event of breach of the
representations, warranties and covenants,
if any, with respect to the Mortgage
Loans of WFB under the related Servicing
Agreement to enforce the provisions
thereof and to seek all or any available
remedies); provided that the Seller
shall retain the right to terminate WFB
without cause as set forth in Section
11.02 of the related Servicing
Agreement.
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
a
limited
liability company in good standing under the laws of the State
of
Delaware and has
full power and authority necessary to own or hold its
properties and
to conduct its business as now conducted by it and to enter
into and perform
its obligations under this Agreement.
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(ii) The Depositor has the full power and authority to execute,
deliver and
perform, and to enter into and consummate the transactions
contemplated by,
this Agreement and has duly authorized, by all necessary
action on its
part, the execution, delivery and performance of this
Agreement; and
this Agreement, assuming the due authorization, execution
and delivery
hereof by the other parties hereto, constitutes a legal, valid
and binding
obligation of the Depositor, enforceable against the Depositor
in accordance
with its terms, subject, as to enforceability, to (i)
bankruptcy,
insolvency, reorganization, moratorium and other similar laws
affecting creditors'
rights generally and (ii) general principles of
equity,
regardless of whether enforcement is sought in a proceeding in
equity or at
law.
(iii) The execution and delivery of this Agreement by the
Depositor,
the consummation of the
transactions contemplated by this Agreement, and
the fulfillment
of or compliance with the terms hereof are in the ordinary
course of
business of the Depositor and will not (A) result in a material
breach of any
term or provision of the certificate of formation or limited
liability
company agreement of the Depositor or (B) materially conflict
with, result in
a material breach, violation or acceleration of, or result
in a material
default under, the terms of any other material agreement or
instrument to
which the Depositor is a party or by which it may be bound or
(C) constitute a
material violation of any statute, order or regulation
applicable to
the Depositor of any court, regulatory body, administrative
agency or
governmental body having jurisdiction over the Depositor; and
the
Depositor is not
in breach or violation of any material indenture or other
material
agreement or instrument, or in violation of any statute, order
or
regulation of
any court, regulatory body, administrative agency or
governmental
body having jurisdiction over it which breach or violation may
materially
impair the Depositor's ability to perform or meet any of its
obligations
under this Agreement.
(iv) No litigation is pending, or, to the best of the
Depositor's
knowledge,
threatened, against the Depositor that would materially and
adversely affect
the execution, delivery or enforceability of this
Agreement or the
ability of the Depositor to perform its obligations under
this Agreement
in accordance with the terms hereof.
(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 free and clear of all liens,
claims and encumbrances, 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 Custodian on behalf
of the Trustee to the Trustee. 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.
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Section 2.05.
Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases.
(a)
Notwithstanding any contrary provision of this Agreement, with
respect
to any Mortgage Loan that is not in default
or as to which default is not
imminent, no repurchase or substitution
pursuant to Sections 2.02 or 2.03 shall
be made unless the Seller delivers to the
Trustee, with a copy to the Custodian,
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 or
REMIC II or contributions after the
Closing Date, as defined in sections
860F(a)(2) and 860G(d) of the Code,
respectively or (ii) cause either REMIC I
or REMIC II to fail to qualify as a
REMIC at any time that any Certificates are
outstanding. Any Mortgage Loan as to
which repurchase or substitution was
delayed pursuant to this paragraph shall be
repurchased or the substitution therefor
shall occur (subject to compliance with
Sections 2.02 or 2.03) upon the earlier of
(a) the occurrence of a default or
imminent default with respect to such
Mortgage Loan and (b) receipt by the
Trustee, with a copy to the Custodian, of
an Opinion of Counsel addressed to the
Trustee to the effect that such repurchase
or substitution, as applicable, will
not result in the events described in
clause (i) or clause (ii) of the preceding
sentence.
(b) Upon
discovery by the Depositor, the Seller, the Master Servicer,
the
Custodian or the Trustee 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. 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 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.
Authentication and Delivery of Certificates.
The Trustee
acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer
and assignment, has executed,
authenticated 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, to the end
that the interests of the Holders of the
Certificates may be adequately and
effectively protected.
Section 2.07.
Covenants of the Master Servicer and the EMC Servicer.
The Master
Servicer covenants to the Depositor, the Securities
Administrator and the Trustee, and the EMC
Servicer covenants to the Master
Servicer, as follows:
(a) it shall comply in the performance of its obligations under
this
Agreement;
(b) no written information, certificate of an officer,
statement
furnished in
writing (other than annual compliance certificates and annual
accountants'
reports of the Servicers delivered by the Master Servicer
pursuant to
Section 3.18) or written report prepared by the Master Servicer
or the EMC
Servicer, as applicable, pursuant to this Agreement and
delivered, the
case of the Master Servicer, to the Securities
Administrator,
the Depositor, any affiliate of the
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Depositor or the
Trustee or, in the case of the EMC Servicer, to the
Master Servicer,
will contain any untrue statement of a material fact or
omit to state a
material fact necessary to make the information,
certificate,
statement or report not misleading; and
(c) it shall (in the case of the Master Servicer, only in its
capacity
as successor
servicer pursuant to a Servicing Agreement) accurately and
fully provide
information regarding payment performance of the Mortgagors
to the
nationally recognized credit repositories, to the extent such
reporting
remains customary and prudent in the servicing of mortgage
loans
similar to the
Mortgage Loans. Nothing in this Section shall derogate from
the obligation
of the Master Servicer or the EMC Servicer to observe any
applicable law
prohibiting disclosure of information regarding the
Mortgagors and
the failure of the Master Servicer or the EMC Servicer to
provide access
as provided in this Section as a result of such obligation
shall not
constitute a breach of this Section.
Section 2.08.
Lost Mortgage Notes Indemnity
With respect to
each Mortgage Loan for which the Seller has delivered a
lost note affidavit in lieu of an original
Mortgage Note, the Seller does hereby
agree to defend, indemnify, and hold
harmless the Trust Fund and the Trustee,
from and against any and all losses or
damages, together with all reasonable
costs, charges and expenses (whether or not
a lawsuit is filed), incurred as a
result of (i) the inability to enforce the
related Mortgage Note according to
its terms, (ii) any claim, demand, suit,
cause of action or proceeding by a
third party arising out of a Servicer's,
the Master Servicer's or the Trustee's
inability to enforce the related Mortgage
Note according to its terms due to the
lack of an original Mortgage Note, or (iii)
the inability to receive any related
Insurance Proceeds, Liquidation Proceeds or
other amounts due to the lack of an
original Mortgage Note. Upon demand from a
Servicer, the Master Servicer or the
Trustee, the Seller shall deposit all
amounts constituting lost principal with
respect to such Mortgage Loan into the
Master Servicer Collection Account to be
treated as a Principal Prepayment, and
reimburse such Servicer, the Master
Servicer or the Trustee, as applicable, for
all costs and expenses incurred in
connection with such lost Mortgage
Note.
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ARTICLE III.
ADMINISTRATION AND MASTER SERVICING OF MORTGAGE LOANS
Section 3.01.
The Master Servicer.
The Master
Servicer shall supervise, monitor and oversee the obligation of
the Servicers to service and administer
their respective Mortgage Loans in
accordance with the terms of the applicable
Servicing Agreement and shall have
full power and authority to do any and all
things which it may deem necessary or
desirable in connection with such master
servicing and administration. In
performing its obligations hereunder, the
Master Servicer shall act in a manner
consistent with Accepted Master Servicing
Practices. Furthermore, the Master
Servicer shall oversee and consult with
each such Servicer as necessary from
time-to-time to carry out the Master
Servicer's obligations hereunder, shall
receive and review all reports, information
and other data provided to the
Master Servicer by each such Servicer and
shall cause each such Servicer to
perform and observe the covenants,
obligations and conditions to be performed or
observed by such Servicer under the
applicable Servicing Agreement. The Master
Servicer shall independently and separately
monitor each such Servicer's
servicing activities with respect to each
related Mortgage Loan, reconcile the
results of such monitoring with such
information provided in the previous
sentence on a monthly basis and coordinate
corrective adjustments to such
Servicers' and the Master Servicer's
records, and based on such reconciled and
corrected information, prepare the
statements specified in Section 5.04(c) and
any other information and statements
required hereunder. The Master Servicer
shall reconcile the results of its Mortgage
Loan monitoring with the actual
remittances of each such Servicer to its
Protected Account pursuant to the
applicable Servicing Agreement.
Section 3.02.
REMIC-Related Covenants.
For as long as
each REMIC shall exist, the Trustee shall act in accordance
herewith to assure continuing treatment of
such REMIC as a REMIC, and the
Trustee shall comply with any directions of
the Seller, the Depositor, any
Servicer or the Master Servicer to assure
such continuing treatment. In
particular, the Trustee shall not (a) sell
or permit the sale of all or any
portion of the Mortgage Loans or of any
investment of deposits in an Account
unless such sale is as a result of a
repurchase of the Mortgage Loans pursuant
to this Agreement or the Trustee has
received a REMIC Opinion, addressed to the
Trustee and prepared at the expense of the
Trust Fund; and (b) other than with
respect to a substitution pursuant to a
Servicing Agreement or Section 2.04 of
this Agreement, as applicable, accept any
contribution to any REMIC after the
Startup Day without receipt of a REMIC
Opinion addressed to the Trustee.
Section 3.03.
Monitoring of Servicers.
(a) The Master
Servicer shall be responsible for reporting to the
Securities Administrator, the Depositor and
the Seller the compliance by each
Servicer with its duties under the related
Servicing Agreement. In the review of
each such Servicer's activities, the Master
Servicer may rely upon an officer's
certificate of such Servicer with regard to
such Servicer's compliance with the
terms of its Servicing Agreement. In the
event that the Master Servicer, in its
judgment, determines that any such Servicer
should be terminated in accordance
with its Servicing Agreement, or that a
notice should be sent pursuant to such
Servicing Agreement with respect to the
occurrence of an event that, unless
cured, would constitute grounds for such
termination, the Master Servicer shall
notify the Seller, the Depositor, the EMC
Servicer and the Trustee thereof and
the Master Servicer shall issue such notice
or take such other action as it
deems appropriate.
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(b) Subject to
the preceding paragraph, the Master Servicer, on behalf of
the Trustee and the Certificateholders,
shall enforce the obligations of each
Servicer under the related Servicing
Agreement, and, in the event that any such
Servicer fails to perform its obligations
in accordance with the related
Servicing Agreement, then either the EMC
Servicer (if such defaulting Servicer
is WFB) or the Master Servicer (if such
defaulting Servicer is any Servicer
other than WFB), shall terminate the rights
and obligations of the defaulting
Servicer thereunder and act as successor
servicer of the related Mortgage Loans
or cause the Trustee to enter into a new
Servicing Agreement with a successor
servicer selected by either the EMC
Servicer (if the defaulting Servicer is WFB)
or by the Master Servicer (if the
defaulting Servicer is any Servicer other than
WFB) (which new Servicing Agreement shall,
in any case, have terms generally in
accordance with the terms of the terminated
Servicing Agreement); provided,
however, it is understood and acknowledged
by the parties hereto that there will
be a period of transition (not to exceed 90
days) before the actual servicing
functions can be fully transferred to such
successor servicer. Such enforcement,
including, without limitation, the legal
prosecution of claims, termination of
Servicing Agreements and the pursuit of
other appropriate remedies, shall be in
such form and carried out to such an extent
and at such time as the Master
Servicer, in its good faith business
judgment, would require were it the owner
of the related Mortgage Loans. Except as
contemplated by subsection (c) below,
the Master Servicer shall pay the costs of
such enforcement at its own expense,
provided that the Master Servicer shall not
be required to prosecute or defend
any legal action except to the extent that
the Master Servicer shall have
received reasonable indemnity for its costs
and expenses in pursuing such
action. Without limiting the generality of
the foregoing, WFB shall reimburse
the EMC Servicer for all Termination Costs
associated with a termination of WFB
as Servicer. To the extent that any
Termination Costs with respect to WFB are
not fully and timely reimbursed by WFB, the
EMC Servicer shall be entitled to
reimbursement of such Termination Costs
from its Protected Account.
(c) The EMC
Servicer shall reimburse the Master Servicer for the costs and
expenses of the Master Servicer related to
the termination of the EMC Servicer,
appointment of a successor servicer or the
transfer and assumption of servicing
by the Master Servicer with respect to the
related Servicing Agreement,
including, without limitation, (i) all
legal costs and expenses and all due
diligence costs and expenses associated
with an evaluation of the potential
termination of the EMC Servicer as a result
of an event of default by such
Servicer and (ii) all costs and expenses
associated with the complete transfer
of servicing, including all servicing files
and all servicing data and the
completion, correction or manipulation of
such servicing data as may be required
by the successor servicer to correct any
errors or insufficiencies in the
servicing data or otherwise to enable the
successor servicer to service the
Mortgage Loans in accordance with the
related Servicing Agreement. To the extent
that any Termination Costs with respect to
the EMC Servicer or any other
terminated servicer pursuant to the related
Servicing Agreement are not fully
and timely reimbursed by the EMC Servicer
or such other terminated Servicer, as
applicable, the Master Servicer shall be
entitled to reimbursement of such
Termination Costs from the Master Servicer
Collection Account.
(d) The Master
Servicer shall require each Servicer to comply with the
remittance requirements and other
obligations set forth in the related Servicing
Agreement, including any related Assumption
Agreement. The Master Servicer shall
enforce the obligation of each Servicer
pursuant to the related Servicing
Agreement to provide it with the annual
officer's certificate of compliance and
annual independent accountants' servicing
reports, as well as back-up
certifications to each Master Servicer
Certification pursuant to Section 3.18.
(e) If the
Master Servicer or the EMC Servicer assumes the servicing with
respect to any of the Mortgage Loans, it
will not assume liability for the
representations and warranties of any
Servicer that it replaces.
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Section 3.04.
Successor Master Servicer and Subservicing Agreements.
In the event
that, pursuant to Section 8.01 hereof, the Trustee or any
other Person shall become Successor Master
Servicer, such Successor Master
Servicer may, at its option, succeed to any
rights and obligations of the
predecessor Master Servicer under any
subservicing agreement in accordance with
the terms thereof; provided that such
Successor Master Servicer shall not incur
any liability or have any obligations in
its capacity as servicer under a
subservicing agreement arising prior to the
date of such succession unless it
expressly elects to succeed to the rights
and obligations of the predecessor
Master Servicer thereunder; and the
predecessor Master Servicer shall not
thereby be relieved of any liability or
obligations under the subservicing
agreement arising prior to the date of such
succession.
Such predecessor
Master Servicer shall, upon request of the Trustee, but at
the expense of such predecessor Master
Servicer, deliver to the assuming party
all documents and records relating to each
subservicing agreement and the
Mortgage Loans then being serviced
thereunder and an accounting of amounts
collected held by it and otherwise use its
best efforts to effect the orderly
and efficient transfer of the subservicing
agreement to the assuming party.
Section 3.05.
Power to Act; Procedures.
The Master
Servicer shall master service the Mortgage Loans and shall have
full power and authority, subject to the
REMIC Provisions and the provisions of
Article X hereof, to do any and all things
that it may deem necessary or
desirable in connection with the master
servicing and administration of such
Mortgage Loans, including but not limited
to the power and authority (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 Mortgaged
Property and assumptions of the Mortgage
Notes and related Mortgages, (iii) to
collect any Insurance Proceeds and
Liquidation Proceeds and (iv) to effectuate
foreclosure or other conversion of
the ownership of the Mortgaged Property
securing any Mortgage Loan, in each
case, in accordance with the provisions of
the related Servicing Agreement,
including any related Assumption Agreement.
The Trustee shall furnish the Master
Servicer, upon written request from a
Servicing Officer, with any powers of
attorney empowering it or any Servicer to
execute and deliver instruments of
satisfaction or cancellation, or of partial
or full release or discharge, and to
foreclose upon or otherwise liquidate
Mortgaged Property, and to appeal,
prosecute or defend in any court action
relating to the Mortgage Loans or the
Mortgaged Property, in accordance with the
applicable Servicing Agreement and
this Agreement, and the Trustee shall
execute and deliver such other documents,
as the Master Servicer may request, to
enable it to master service and
administer the Mortgage Loans and carry out
its duties hereunder, in each case
in accordance with Accepted Master
Servicing Practices (and the Trustee shall
have no liability for the use or misuse of
any such powers of attorney by the
Master Servicer or any Servicer). If the
Master Servicer or the Trustee has been
advised that it is likely that the laws of
the state in which action is to be
taken prohibit such action if taken in the
name of the Trustee or that the
Trustee would be adversely affected under
the "doing business" or tax laws of
such state if such action is taken in its
name, the Master Servicer shall join
with the Trustee in the appointment of a
co-trustee pursuant to Section 9.11
hereof. In the performance of its duties
hereunder, the Master Servicer shall be
an independent contractor and shall not,
except in those instances where it is
taking action in the name of the Trustee,
be deemed to be the agent of the
Trustee.
The Trustee and
the Securities Administrator shall each execute and deliver
to related Servicer and the Master Servicer
any court pleadings, requests for
trustee's sale or other documents necessary
or desirable to (i) the foreclosure
or trustee's sale with respect to a
Mortgaged Property; (ii) any legal action
brought to obtain judgment against any
Mortgagor on the Mortgage Note or related
Mortgage; (iii) obtain a deficiency
judgment against the Mortgagor; or (iv)
enforce any other rights or remedies
provided by the Mortgage Note or related
Mortgage or otherwise available at law or
equity.
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Section 3.06.
Due-on-Sale Clauses; Assumption Agreements.
To the extent
provided in the applicable Servicing Agreement, for any
Mortgage Loans that contain enforceable
due-on-sale clauses, the Master Servicer
shall cause the related Servicer to enforce
such clauses in accordance with the
applicable Servicing Agreement. If
applicable law prohibits the enforcement of a
due-on-sale clause or such clause is
otherwise not enforced in accordance with
such applicable Servicing Agreement, and,
as a consequence, a Mortgage Loan is
assumed, the original Mortgagor may be
released from liability in accordance
with the applicable Servicing
Agreement.
Section 3.07.
Release of Mortgage Files.
(a) Upon
becoming aware of the payment in full of any Mortgage Loan, or
the
receipt by the Master Servicer or any
Servicer of a notification that payment in
full has been escrowed in a manner
customary for such purposes for payment to
Certificateholders on the next Distribution
Date, such Servicer will, or if it
does not, the Master Servicer may, if
required under the applicable Servicing
Agreement, promptly furnish to the
Custodian on behalf of the Trustee two copies
of a certification substantially in the
form of Exhibit H hereto signed by a
Servicing Officer or in a mutually
agreeable electronic format which will, in
lieu of a signature on its face, originate
from a Servicing Officer (which
certification shall include a statement to
the effect that all amounts received
in connection with such payment that are
required to be deposited in the
Protected Account maintained by the Master
Servicer (as successor servicer) or
the applicable Servicer pursuant to its
Servicing Agreement have been or will be
so deposited or escrowed) and shall request
that the Custodian on behalf of the
Trustee deliver to the Master Servicer or
the applicable Servicer, as
appropriate, the related Mortgage File.
Upon receipt of such certification and
request, the Custodian on behalf of the
Trustee shall promptly release the
related Mortgage File to the Master
Servicer or the applicable Servicer, as
appropriate, and neither the Custodian nor
the Trustee shall have any further
responsibility with regard to such Mortgage
File. Upon any such payment in full,
the Master Servicer and each Servicer is
authorized, to give, as agent for the
Trustee, as the mortgagee under the
Mortgage that secured the Mortgage Loan, an
instrument of satisfaction (or assignment
of mortgage without recourse)
regarding the Mortgaged Property subject to
the Mortgage, which instrument of
satisfaction or assignment, as the case may
be, shall be delivered to the Person
or Persons entitled thereto against receipt
therefor of such payment, it being
understood and agreed that no expenses
incurred in connection with such
instrument of satisfaction or assignment,
as the case may be, shall be
chargeable to the Protected Account.
(b) From time to
time and as appropriate for the servicing or foreclosure
of any Mortgage Loan and in accordance with
the applicable Servicing Agreement,
the Trustee shall execute such documents as
shall be prepared and furnished to
the Trustee by a Servicer or the Master
Servicer (in form reasonably acceptable
to the Trustee) and as are necessary to the
prosecution of any such proceedings.
The Custodian on behalf of the Trustee
shall, upon the request of a Servicer or
the Master Servicer, and delivery to the
Custodian on behalf of the Trustee, of
two copies of a request for release signed
by a Servicing Officer substantially
in the form of Exhibit H (or in a mutually
agreeable electronic format which
will, in lieu of a signature on its face,
originate from a Servicing Officer),
release the related Mortgage File held in
its possession or control to the
Servicer or the Master Servicer, as
applicable. Such trust receipt shall
obligate the Servicer or the Master
Servicer to return the Mortgage File to the
Custodian on behalf of the Trustee, when
the need therefor by the Servicer or
the Master Servicer no longer exists unless
the Mortgage Loan shall be
liquidated, in which case, upon receipt of
a certificate of a Servicing Officer
similar to that hereinabove specified, the
Mortgage File shall be released by
the Custodian on behalf of the Trustee, to
the Servicer or the Master Servicer.
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Section 3.08.
Documents, Records and Funds in Possession of the Master
Servicer To Be Held for Trustee.
(a) The Master
Servicer and each Servicer (to the extent required by the
related Servicing Agreement) shall transmit
to the Trustee or Custodian such
documents and instruments coming into the
possession of the Master Servicer or
such Servicer from time to time as are
required by the terms hereof, or in the
case of the Servicers, in accordance with
the applicable Servicing Agreement, to
be delivered to the Trustee or the
Custodian. Any funds received by the Master
Servicer or a Servicer in respect of any
Mortgage Loan or which otherwise are
collected by the Master Servicer or a
Servicer as Liquidation Proceeds or
Insurance Proceeds in respect of any
Mortgage Loan shall be held for the benefit
of the Trustee and the Certificateholders
subject to, in the case of the Master
Servicer, the Master Servicer's right to
retain or withdraw from the Master
Servicer Collection Account the Master
Servicing Fee and other amounts provided
in this Agreement and to the right of each
Servicer to retain its Servicing Fee
and other amounts as provided in the
applicable Servicing Agreement. The Master
Servicer shall, and, to the extent provided
in the applicable Servicing
Agreement, shall cause each Servicer to,
provide access to information and
documentation regarding the Mortgage Loans
to the Trustee, the Securities
Administrator and their respective agents
and accountants at any time upon
reasonable request and during normal
business hours, and to Certificateholders
that are savings and loan associations,
banks or insurance companies, the Office
of Thrift Supervision, the FDIC and the
supervisory agents and examiners of such
Office and Corporation or examiners of any
other federal or state banking or
insurance regulatory authority if so
required by applicable regulations of the
Office of Thrift Supervision or other
regulatory authority, such access to be
afforded without charge but only upon
reasonable request in writing and during
normal business hours at the offices of the
Master Servicer designated by it. In
fulfilling such a request the Master
Servicer shall not be responsible for
determining the sufficiency of such
information.
(b) All Mortgage
Files and funds collected or held by, or under the control
of, the Master Servicer in respect of any
Mortgage Loans, whether from the
collection of principal and interest
payments or from Liquidation Proceeds or
Insurance Proceeds, shall be held by the
Master Servicer for and on behalf of
the Trustee and the Certificateholders and
shall be and remain the sole and
exclusive property of the Trustee;
provided, however, that the Master Servicer
and each Servicer shall be entitled to
setoff against, and deduct from, any such
funds any amounts that are properly due and
payable to the Master Servicer or
such Servicer under this Agreement or the
applicable Servicing Agreement.
Section 3.09.
Maintenance of Hazard Insurance.
(a) For each
Mortgage Loan, the Master Servicer shall enforce any
obligation of a Servicer under the related
Servicing Agreement to maintain or
cause to be maintained hazard insurance in
accordance with the provisions of the
related Servicing Agreement.
(b) Pursuant to
Section 4.01, any amounts collected by the Master Servicer,
or by any Servicer, under any Insurance
Policies (other than amounts to be
applied to the restoration or repair of the
property subject to the related
Mortgage or released to the Mortgagor in
accordance with the applicable
Servicing Agreement) shall be deposited
into the Master Servicer Collection
Account, subject to withdrawal pursuant to
Section 4.03. Any cost incurred by
the Master Servicer or any such Servicer in
maintaining any such insurance if
the Mortgagor defaults in its obligation to
do so shall be added to the amount
owing under the Mortgage Loan where the
terms of the Mortgage Loan so permit;
provided, however, that the addition of any
such cost shall not be taken into
account for purposes of calculating the
distributions to be made to
Certificateholders and shall be recoverable
by the Master Servicer or such
Servicer pursuant to Section 4.03.
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Section 3.10.
Presentment of Claims and Collection of Proceeds.
The Master
Servicer shall (to the extent provided in the applicable
Servicing Agreement) cause the related
Servicer to prepare and present on behalf
of the Trustee and the Certificateholders
all claims under the Insurance
Policies and take such actions (including
the negotiation, settlement,
compromise or enforcement of the insured's
claim) as shall be necessary to
realize recovery under such Insurance
Policies. Any proceeds disbursed to the
Master Servicer (or disbursed to a Servicer
and remitted to the Master Servicer)
in respect of such Insurance Policies shall
be promptly deposited in the Master
Servicer Collection Account upon receipt,
except that any amounts realized that
are to be applied to the repair or
restoration of the related Mortgaged Property
as a condition precedent to the
presentation of claims on the related Mortgage
Loan to the insurer under any applicable
Insurance Policy need not be so
deposited (or remitted).
Section 3.11.
Maintenance of the Primary Mortgage Insurance Policies.
(a) The Master
Servicer shall not take, or permit any Servicer, to the
extent such action is prohibited under the
applicable Servicing Agreement, to
take, any action that would result in
noncoverage under any applicable Primary
Mortgage Insurance Policy of any loss
which, but for the actions of the Master
Servicer or such Servicer, would have been
covered thereunder. The Master
Servicer shall use its best efforts to
cause each such Servicer (to the extent
required under the related Servicing
Agreement) to keep in force and effect (to
the extent that the Mortgage Loan requires
the Mortgagor to maintain such
insurance), Primary Mortgage Insurance
applicable to each Mortgage Loan in
accordance with the provisions of the
related Servicing Agreement. The Master
Servicer shall not, and shall not permit
any Servicer, to the extent required
under the related Servicing Agreement, to
cancel or refuse to renew any such
Primary Mortgage Insurance Policy that is
in effect at the date of the initial
issuance of the Mortgage Note and is
required to be kept in force hereunder
except in accordance with the provisions of
the related Servicing Agreement.
(b) The Master
Servicer agrees to present, or to cause each Servicer to the
extent required under the related Servicing
Agreement to present, on behalf of
the Trustee and the Certificateholders,
claims to the insurer under any Primary
Mortgage Insurance Policies and, in this
regard, to take such reasonable action
as shall be necessary to permit recovery
under any Primary Mortgage Insurance
Policies respecting defaulted Mortgage
Loans. Pursuant to Section 4.01, any
amounts collected by the Master Servicer or
any such Servicer under any Primary
Mortgage Insurance Policies shall be
deposited in the Master Servicer Collection
Account, subject to withdrawal pursuant to
Section 4.03.
Section 3.12.
Custodian to Retain Possession of Certain Insurance Policies
and Documents.
The Custodian
shall, on behalf of the Trustee, retain possession and
custody of the originals (to the extent
available) of any Primary Mortgage
Insurance Policies, or certificate of
insurance if applicable, and any
certificates of renewal as to the foregoing
as may be issued from time to time.
Until all amounts distributable in respect
of the Certificates have been
distributed in full and the Master Servicer
otherwise has fulfilled its
obligations under this Agreement, the
Custodian, on behalf of the Trustee, shall
also retain possession and custody of each
Mortgage File in accordance with and
subject to the terms and conditions of this
Agreement and the Custodial
Agreement. The Master Servicer shall
promptly deliver or cause to be delivered
to the Custodian, on behalf of the Trustee,
upon the execution or receipt
thereof the originals of any Primary
Mortgage Insurance Policies, any
certificates of renewal, and such other
documents or instruments that constitute
portions of the Mortgage File that come
into the possession of the Master
Servicer from time to time.
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Section 3.13.
Realization Upon Defaulted Mortgage Loans.
The Master
Servicer shall cause each Servicer to the extent required under
the related Servicing Agreement, to
foreclose upon, repossess or otherwise
comparably convert the ownership of
Mortgaged Properties securing such of the
Mortgage Loans as come into and continue in
default and as to which no
satisfactory arrangements can be made for
collection of delinquent payments, all
in accordance with the terms of the
applicable Servicing Agreement, including
any related Assumption Agreement.
Section 3.14.
Compensation for the Servicers and the Master Servicer.
Servicing
compensation in the form of any prepayment charges and
penalties,
assumption fees, tax service fees, fees for
statement of account payoff or late
payment charges collected by any Servicer
shall be retained by such Servicer and
shall not be deposited in the Master
Servicer Collection Account. In accordance
with Sections 4.02(b) and 4.03, the Master
Servicer shall be entitled to pay
itself the Master Servicing Fee in respect
of remittances from Servicers prior
to deposit in the Master Servicer
Collection Account or to withdraw such portion
of the Master Servicing Fee from the Master
Servicer Collection Account. The
Master Servicer shall be required to pay
all expenses incurred by it in
connection with its activities hereunder
and shall not be entitled to
reimbursement therefor except as
specifically provided in this Agreement.
Pursuant to Article IV, all income and gain
realized from any investment of
funds in the Distribution Account and the
Master Servicer Collection Account
shall be for the benefit of the Master
Servicer.
Section 3.15.
REO Property.
(a) In the event
the Trust Fund acquires ownership of any REO Property in
respect of any related Mortgage Loan, the
deed or certificate of sale shall be
issued to the Trustee, or to its nominee,
on behalf of the related
Certificateholders. The Master Servicer
shall, to the extent provided in the
applicable Servicing Agreement, cause the
applicable Servicer to sell any REO
Property as expeditiously as possible and
in accordance with the provisions of
this Agreement and the related Servicing
Agreement. Pursuant to its efforts to
sell such REO Property, the Master Servicer
shall cause such applicable Servicer
to protect and conserve such REO Property
in the manner and to the extent
required by the applicable Servicing
Agreement, subject to the REMIC Provisions.
(b) The Master
Servicer shall, to the extent required by the related
Servicing Agreement, cause the applicable
Servicer to deposit all funds
collected and received in connection with
the operation of any REO Property into
the related Protected Account.
(c) The Master
Servicer and such applicable Servicer, upon the final
disposition of any REO Property, shall be
entitled to reimbursement for any
related unreimbursed Advances, unreimbursed
Servicing Advances or Servicing Fees
from Liquidation Proceeds received in
connection with the final disposition of
such REO Property; provided, that any such
unreimbursed Advances or Servicing
Fees as well as any unpaid Servicing Fees
may be reimbursed or paid, as the case
may be, prior to final disposition, out of
any net rental income or other net
amounts derived from such REO Property.
Section 3.16.
Annual Officer's Certificate as to Compliance.
(a) The Master
Servicer shall deliver to the Depositor, the Trustee and the
Rating Agencies by March 1, 2006, and by
March 1 of each year thereafter, in
each case for the immediately preceding
calendar year, an Officer's Certificate,
certifying that with respect to the period
ending on such calendar year end: (i)
such Servicing Officer has reviewed the
activities of the Master Servicer during
the preceding calendar year or portion
thereof and its performance under this
Agreement, (ii) to the best of
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such Servicing Officer's knowledge, based
on such review, the Master
Servicer has performed and fulfilled its
duties, responsibilities and
obligations under this Agreement in all
material respects throughout such year,
or, if there has been a default in the
fulfillment of any such duties,
responsibilities or obligations, specifying
each such default known to such
Servicing Officer and the nature and status
thereof and (iii) nothing has come
to the attention of such Servicing Officer
to lead such Servicing Officer to
believe that any Servicer has failed to
perform any of its duties,
responsibilities and obligations under its
Servicing Agreement in all material
respects throughout such year, or, if there
has been a material default in the
performance or fulfillment of any such
duties, responsibilities or obligations,
specifying each such default known to such
Servicing Officer and the nature and
status thereof.
(b) Copies of
such statements shall be provided by the Trustee to any
Certificateholder upon request at the
Master Servicer's expense, provided that
such statement shall have been delivered to
the Trustee.
Section 3.17.
Annual Independent Accountant's Servicing Report.
If the Master
Servicer has, during the course of any calendar year,
directly serviced any of the Mortgage
Loans, the Master Servicer, at its
expense, shall cause a nationally
recognized firm of independent certified
public accountants to furnish a statement
to the Trustee, the Rating Agencies
and the Seller by March 1, 2006, and by
March 1 of each year thereafter, in each
case for the immediately preceding calendar
year, to the effect that, with
respect to the most recently ended calendar
year, such firm has examined certain
records and documents relating to the
Master Servicer's performance of its
servicing obligations under this Agreement
and pooling and servicing and trust
agreements in material respects similar to
this Agreement and to each other and
that, on the basis of such examination
conducted substantially in compliance
with the audit program for mortgages
serviced for Freddie Mac or the Uniform
Single Attestation Program for Mortgage
Bankers, such firm is of the opinion
that the Master Servicer's activities have
been conducted in compliance with
this Agreement, or that such examination
has disclosed no material items of
noncompliance except for (i) such
exceptions as such firm believes to be
immaterial, (ii) such other exceptions as
are set forth in such statement and
(iii) such exceptions that the Uniform
Single Attestation Program for Mortgage
Bankers or the Audit Program for Mortgages
Serviced by Freddie Mac requires it
to report. Copies of such statements shall
be provided to any Certificateholder,
upon request, by the Master Servicer, or by
the Trustee at the expense of the
Master Servicer if the Master Servicer
shall fail to provide such copies. If any
such report discloses exceptions that are
material, the Master Servicer shall
advise the Trustee whether such exceptions
have been or are susceptible of cure,
and will take prompt action to do so.
Section 3.18.
Reports Filed with Securities and Exchange Commission.
Within 15 days
after each Distribution Date, the Securities Administrator
shall, in accordance with industry
standards, file with the Commission via the
Electronic Data Gathering and Retrieval
System ("EDGAR"), a Form 8-K with a copy
of the statement to the Trustee. Prior to
January 30 in each year, the
Securities Administrator shall, in
accordance with industry standards and only
if instructed by the Depositor, file a Form
15 Suspension Notice with respect to
the Trust Fund, if applicable. Prior to (i)
March 15, 2006 and (ii) unless and
until a Form 15 Suspension Notice shall
have been filed, prior to March 15 of
each year thereafter, the Master Servicer
shall provide the Securities
Administrator with a Master Servicer
Certification, together with a copy of the
annual independent accountant's servicing
report and annual statement of
compliance of each Servicer, in each case,
required to be delivered pursuant to
its Servicing Agreement, and, if
applicable, the annual independent accountant's
servicing report and annual statement of
compliance to be delivered by the
Master Servicer pursuant to Sections 3.16
and 3.17. Prior to (i) March 31, 2006
and (ii) unless and until a Form 15
Suspension Notice shall have been filed, the
90th day of each year thereafter, the
Securities Administrator
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shall prepare and file a Form 10-K, in
substance conforming to industry
standards, with respect to the Trust. Such
Form 10-K shall include the Master
Servicer Certification and other
documentation provided by the Master Servicer
pursuant to the second preceding sentence.
The Depositor hereby grants to the
Securities Administrator a limited power of
attorney to execute and file each
such document on behalf of the Depositor.
Such power of attorney shall continue
until either the earlier of (i) receipt by
the Securities Administrator from the
Depositor of written termination of such
power of attorney and (ii) the
termination of the Trust Fund. The
Depositor agrees to promptly furnish to the
Securities Administrator, from time to time
upon request, such further
information, reports and financial
statements within its control related to this
Agreement, the Mortgage Loans as the
Securities Administrator reasonably deems
appropriate to prepare and file all
necessary reports with the Commission. The
Securities Administrator shall have no
responsibility to file any items other
than those specified in this Section 3.18;
provided, however, the Securities
Administrator will cooperate with the
Depositor in connection with any
additional filings with respect to the
Trust Fund as the Depositor deems
necessary under the Securities Exchange Act
of 1934, as amended (the "Exchange
Act"). Copies of all reports filed by the
Securities Administrator under the
Exchange Act shall be sent to: the
Depositor c/o Bear, Stearns & Co. Inc., Attn:
Managing Director-Analysis and Control, One
Metrotech Center North, Brooklyn,
New York 11202-3859. Fees and expenses
incurred by the Securities Administrator
in connection with this Section 3.18 shall
not be reimbursable from the Trust
Fund.
Section 3.19.
The EMC Servicer.
The EMC Servicer
shall service the EMC Mortgage Loans pursuant to and in
accordance with the terms and provisions of
Exhibit K hereto.
Section 3.20.
Optional Purchase of Defaulted Mortgage Loans.
Beginning on the
first Business Day of the Fiscal Quarter immediately
following the date on which a Mortgage Loan
has become at least 91 days
delinquent, the EMC Servicer, in its sole
discretion, shall have the right to
elect (by written notice sent to the
Trustee, with a copy to the Master Servicer
and the applicable Servicer) to purchase
for its own account from the Trust Fund
any such Mortgage Loan at a price equal to
the Purchase Price. The Purchase
Price for any Mortgage Loan purchased
hereunder shall be deposited in the Master
Servicer Collection Account, and the
Trustee, upon receipt of a Request for
Release from the EMC Servicer, shall
release or cause the Custodian to release
to the EMC Servicer, the related Mortgage
File and shall execute and deliver
such instruments of transfer or assignment
prepared by the EMC Servicer, in each
case without recourse, representation or
warranty as shall be necessary to vest
in the EMC Servicer any Mortgage Loan
released pursuant hereto and the EMC
Servicer shall succeed to all the Trust's
right, title and interest in and to
such Mortgage Loan and all security and
documents related thereto. Such
assignment shall be an assignment outright
and not for security. The EMC
Servicer shall thereupon own such Mortgage
Loan, and all security and documents,
free of any further obligation to the
Trustee or the Certificateholders with
respect thereto. Notwithstanding the
foregoing, any such optional right of
repurchase by the EMC Servicer hereunder
with respect to a delinquent Mortgage
Loan shall, if unexercised, terminate on
the earlier of (i) the date on which
such delinquency has been cured or (ii) the
last Business Day of such Fiscal
Quarter immediately following the date on
which such Mortgage Loan became 91
days delinquent, provided however, that
such optional right of repurchase shall
be reinstated if (a) in the case of clause
(i), the related Mortgage Loan shall
thereafter again have become 91 or more
days delinquent and (b) in the case of
clause (ii), such delinquency shall have
been subsequently cured and the related
Mortgage Loan shall thereafter again become
91 or more days delinquent in any
subsequent Fiscal Quarter. In either event,
the purchase option shall again
become exercisable on the first day of the
Fiscal Quarter immediately following
the date on which the related Mortgage Loan
again becomes at least 91 days
delinquent.
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ARTICLE IV.
ACCOUNTS
Section 4.01.
Protected Accounts.
(a) The Master
Servicer shall enforce the obligation of each Servicer to
establish and maintain a Protected Account
in accordance with the applicable
Servicing Agreement, with records to be
kept with respect thereto on a Mortgage
Loan by Mortgage Loan basis, into which
Protected Accounts shall be deposited
daily (or as of such other time specified
in the related Servicing Agreement)
all collections of principal and interest
on any Mortgage Loan and with respect
to any REO Property received by a Servicer,
including Principal Prepayments,
Insurance Proceeds, Liquidation Proceeds,
and advances made from the Servicer's
own funds (less Servicing Fees as permitted
by such applicable Servicing
Agreement in the case of any such Servicer)
and all other amounts to be
deposited in the Protected Account pursuant
to the related Servicing Agreement.
(b)
[Reserved].
(c) Subject to
this Article IV, on or before each Servicer Remittance Date,
the Master Servicer shall (if acting as
successor servicer to a Servicer), or
shall cause the related Servicer to
withdraw or shall cause to be withdrawn from
the Protected Accounts and immediately
deposit or cause to be deposited into the
Master Servicer Collection Account, amounts
representing the following
collections and payments (other than with
respect to principal of or interest on
the Mortgage Loans due on or before the
Cut-off Date) with respect to each
Mortgage Loan serviced by it:
(i) Scheduled Payments on the Mortgage Loans received or any
related
portion thereof
advanced by the related Servicers pursuant to the Servicing
Agreements which
were due on or before the related Due Date, net of the
amount thereof
comprising the Servicing Fees;
(ii) full Principal Prepayments, any Liquidation Proceeds received
by
the Servicers
with respect to such Mortgage Loans in the related Prepayment
Period, with
interest to the date of prepayment or liquidation, net of the
amount thereof comprising the
Servicing Fees and any Subsequent Recoveries;
(iii) partial Principal Prepayments received by the Servicers for
such
Mortgage Loans
in the related Prepayment Period; and
(iv) any amount to be used as an Advance and any payments of
Compensating
Interest.
Section 4.02.
Master Servicer Collection Account.
(a) The Master
Servicer shall establish and maintain in the name of the
Trustee, for the benefit of the
Certificateholders, the Master Servicer
Collection Account as a segregated trust
account or accounts. The Master
Servicer will deposit in the Master
Servicer Collection Account as identified by
the Master Servicer and as received by the
Master Servicer, the following:
(i) Any amounts withdrawn from a Protected Account and remitted to
the
Master Servicer
Collection Account pursuant to Section 4.01(c);
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(ii) Any Advances and any payments of Compensating Interest which
were
not deposited in
a Protected Account;
(iii Any Insurance Proceeds, Liquidation Proceeds or Subsequent
Recoveries
received by or on behalf of the Master Servicer or which were
not deposited in
a Protected Account;
(iv)
The Purchase Price with respect to any Mortgage Loans purchased
by the Seller
pursuant to Sections 2.02, 2.03 or 3.20;
(v) Any amounts required to be deposited with respect to losses
on
investments of
deposits in the Master Servicer Collection Account; and
(vi) Any other amounts received by or on behalf of the Master
Servicer
or the Trustee
and required to be deposited in the Master Servicer
Collection
Account pursuant to this Agreement.
(b) All amounts
deposited to the Master Servicer Collection Account shall
be held by the Master Servicer in the name
of the Trustee in trust for the
benefit of the Certificateholders in
accordance with the terms and provisions of
this Agreement. The requirements for
crediting the Master Servicer Collection
Account or the Distribution Account shall
be exclusive, it being understood and
agreed that, without limiting the
generality of the foregoing, payments in the
nature of (i) prepayment or late payment
charges or assumption, tax service,
statement account or payoff, substitution,
satisfaction, release and other like
fees and charges and (ii) the items
enumerated in Subsections 4.05(a)(i), (ii),
(iii), (iv), (vi), (vii), (ix) and (xi)
need not be credited by the Master
Servicer or the related Servicer to the
Master Servicer Collection Account. In
the event that the Master Servicer shall
deposit or cause to be deposited to the
Distribution Account any amount not
required to be credited thereto, the
Trustee, upon receipt of a written request
therefor signed by a Servicing
Officer of the Master Servicer, shall
promptly transfer such amount to the
Master Servicer, any provision herein to
the contrary notwithstanding.
(c) The amount
at any time credited to the Master Servicer Collection
Account may be invested, in the name of the
Trustee, or its nominee, for the
benefit of the Certificateholders, in
Permitted Investments as directed by the
Master Servicer. In the absence of such
direction, amounts will remain
uninvested. All Permitted Investments shall
mature or be subject to redemption
or withdrawal on or before, and shall be
held until, the next succeeding
Distribution Account Deposit Date. Any and
all investment earnings from the
Master Servicer Collection Account shall be
paid to the Master Servicer. The
risk of loss of moneys required to be
distributed to the Certificateholders
resulting from such investments shall be
borne by and be the risk of the Master
Servicer. The Master Servicer shall deposit
the amount of any such loss in the
Master Servicer Collection Account within
two Business Days of receipt of
notification of such loss but not later
than the second Business Day prior to
the Distribution Date on which the moneys
so invested are required to be
distributed to the Certificateholders.
(d) On or before
each Distribution Account Deposit Date, the Master
Servicer shall deposit in the Distribution
Account (or separately remit to the
Trustee for deposit in the Distribution
Account) any Advances or payments of
Compensating Interest required to be made
by the Master Servicer with respect to
the Mortgage Loans.
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Section 4.03.
Permitted Withdrawals and Transfers from the Master Servicer
Collection Account.
(a) The Master
Servicer will, from time to time in its discretion or on
demand of the Securities Administrator,
make or cause to be made such
withdrawals or transfers from the Master
Servicer Collection Account as the
Master Servicer has designated for such
transfer or withdrawal pursuant to the
Servicing Agreements. The Master Servicer
may make withdrawals in payment of any
Master Servicing Fee not previously
reimbursed or withheld from funds in the
Master Servicer Collection Account or the
Distribution Account, and may clear
and terminate the Master Servicer
Collection Account pursuant to Section 10.01
and remove amounts from time to time
deposited in error.
(b) On an
ongoing basis, Master Servicer shall withdraw from the Master
Servicer Collection Account any expenses
recoverable by the Trustee, the Master
Servicer, the EMC Servicer, the Custodian,
the Seller or the Securities
Administrator pursuant to Sections 3.03,
7.01, 7.03, 7.04 and 9.05.
(c) No later
than 1:00 p.m. New York time on each Distribution Account
Deposit Date, the Master Servicer will
transfer all amounts on deposit in the
Master Servicer Collection Account to the
Distribution Account.
Section 4.04.
Distribution Account.
(a) The Trustee
shall establish and maintain in the name of the Trustee,
for the benefit of the Certificateholders,
the Distribution Account as a
segregated trust account or accounts.
(b) All amounts
deposited to the Distribution Account shall be held by the
Trustee in the name of the Trustee in trust
for the benefit of the
Certificateholders in accordance with the
terms and provisions of this
Agreement.
(c) The
Distribution Account shall constitute an Eligible Account of
the
Trust Fund segregated on the books of the
Trustee and held by the Trustee in a
financial institution located in the State
of the Corporate Trustee Office or in
the State of New York, and the Distribution
Account and the funds deposited
therein shall not be subject to, and shall
be protected from, all claims, liens,
and encumbrances of any creditors or
depositors of the Trustee or the Master
Servicer (whether made directly, or
indirectly through a liquidator or receiver
of the Trustee or the Master Servicer). The
amount at any time credited to the
Distribution Account shall be (i) fully
insured by the FDIC to the maximum
coverage provided thereby or (ii) invested
in the name of the Trustee in such
Permitted Investments, or deposited in
demand deposits with such depository
institutions, as directed in writing by the
Master Servicer. In the absence of
such direction, amounts will remain
uninvested. All Permitted Investments shall
mature or be subject to redemption or
withdrawal on or before, and shall be held
until, the next succeeding Distribution
Date if the obligor for such Permitted
Investment is the Trustee or, if such
obligor is any other Person, the Business
Day preceding such Distribution Date. All
investment earnings on amounts on
deposit in the Distribution Account shall
be for the account of the Master
Servicer. The Master Servicer shall be
permitted to withdraw or receive
distribution of any and all investment
earnings from the Distribution Account on
each Distribution Date. If there is any
loss on a Permitted Investment or demand
deposit, the Master Servicer shall deposit
the amount of the loss in the
Distribution Account. With respect to the
Distribution Account and the funds
deposited therein, the Master Servicer
shall take such action as may be
necessary to ensure that the
Certificateholders shall be entitled to the
priorities afforded to such a trust account
(in addition to a claim against the
estate of the Trustee) as provided by 12
U.S.C. ss. 92a(e), and applicable
regulations pursuant thereto, if
applicable, or any applicable comparable state
statute applicable to state chartered
banking corporations.
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Section 4.05.
Permitted Withdrawals and Transfers from the Distribution
Account.
(a) The Trustee
will, from time to time on demand of the Master Servicer or
the Securities Administrator, make or cause
to be made such withdrawals or
transfers from the Distribution Account as
the Master Servicer has designated
for such transfer or withdrawal pursuant to
the Servicing Agreements or as the
Securities Administrator has instructed
hereunder for the following purposes
(limited in the case of amounts due the
Master Servicer to those not withdrawn
from the Master Servicer Collection Account
in accordance with the terms of this
Agreement, and in the case of amounts due
the EMC Servicer or any other Servicer
to those not withdrawn from its Protected
Account in accordance with the related
Servicing Agreement):
(i) to reimburse the Master Servicer or any Servicer for any
Advance,
the right of the
Master Servicer or a Servicer to reimbursement pursuant to
this subclause
(i) being limited to amounts received on a particular
Mortgage Loan
(including, for this purpose, the Purchase Price therefor,
Insurance
Proceeds and Liquidation Proceeds) which represent late
payments
or recoveries of
the principal of or interest on such Mortgage Loan
respecting which
such Advance or advance was made;
(ii) to reimburse the Master Servicer or any Servicer from
Insurance
Proceeds or
Liquidation Proceeds relating to a particular Mortgage Loan for
amounts expended
by the Master Servicer or such Servicer in good faith in
connection with
the restoration of the related Mortgaged Property which was
damaged not
covered by any Insurance Policy, including any hazard insurance
or in connection
with the liquidation of such Mortgage Loan;
(iii) to reimburse the Master Servicer or any Servicer from
Insurance
Proceeds
relating to a particular Mortgage Loan for insured expenses
incurred with
respect to such Mortgage Loan and to reimburse the Master
Servicer or such
Servicer from Liquidation Proceeds from a particular
Mortgage Loan
for liquidation expenses incurred with respect to such
Mortgage Loan;
provided that the Master Servicer shall not be entitled to
reimbursement
for liquidation expenses with respect to a Mortgage Loan to
the extent that
(i) any amounts with respect to such Mortgage Loan were
paid as Excess
Liquidation Proceeds pursuant to clause (xi) of this
Subsection (a)
to the Master Servicer; and (ii) such liquidation expenses
were not
included in the computation of such Excess Liquidation
Proceeds;
(iv) to pay the Master Servicer or any Servicer, as appropriate,
from
Liquidation
Proceeds or Insurance Proceeds received in connection with the
liquidation of
any Mortgage Loan, the amount which it or such Servicer
would have been
entitled to receive under subclause (xi) of this Subsection
4.03(a) as
servicing compensation on account of each defaulted scheduled
payment on such
Mortgage Loan if paid in a timely manner by the related
Mortgagor;
(v) to pay the Master Servicer or any Servicer from the Purchase
Price
for any Mortgage
Loan, the amount which it or such Servicer would have been
entitled to
receive under subclause (xi) of this subsection (a) as
servicing
compensation;
(vi) to reimburse the Master Servicer or any Servicer for
unreimbursed
Servicing
Advances made pursuant to the applicable Servicing Agreement,
the
right to
reimbursement pursuant to this subclause being limited to
amounts
received on the
related Mortgage Loan (including, for this purpose, the
Purchase Price
therefor, Insurance Proceeds and Liquidation Proceeds) which
represent late
recoveries of the payments for which such Servicing Advances
were made;
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(vii) to reimburse the Master Servicer or any Servicer for any
unreimbursed
Advance or any Servicing Advance, from collections with
respect to a
related Group, after a Realized Loss has been allocated with
respect to the
related Mortgage Loan, if the Advance or Servicing Advance
has not been
reimbursed pursuant to clause (i) or (vi);
(viii) to pay any Master Servicing Fee;
(ix) from collections with respect to a related Group, to
reimburse
the Master
Servicer for expenses, costs and liabilities incurred by and
reimbursable to
it, with respect to the related Group or otherwise
allocable to
such Group, pursuant to Sections 3.03, 7.04 and 11.02, as
applicable;
(x) to pay to the Master Servicer, as additional compensation,
any
Excess
Liquidation Proceeds with respect to a Mortgage Loan to the
extent
not retained by
the related Servicer and to pay to the EMC Servicer, as
additional
servicing compensation, any Excess Liquidation Proceeds with
respect to an
EMC Mortgage Loan;
(xi) from collections with respect to a related Group, to reimburse
or
pay any Servicer
or the Master Servicer any such amounts as are due
thereto, with
respect to the related Group or otherwise allocable to such
Group, under the
applicable Servicing Agreement and have not been retained
by or paid to
the Servicer, to the extent provided in the related Servicing
Agreement;
(xii) from collections with respect to a related Group, to
reimburse
the Trustee, the
Securities Administrator or the Custodian for expenses,
costs and
liabilities incurred by or reimbursable to it, with respect to
the related
Group or otherwise allocable to such Group, pursuant to this
Agreement;
(xiii) to remove amounts deposited in error; and
(xiv) to clear and terminate the Distribution Account pursuant
to
Section
10.01.
(b) The Master
Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for
the purpose of accounting for any
reimbursement from the Distribution Account
pursuant to subclauses (i) through
(xii), inclusive, or with respect to any
such amounts which would have been
covered by such subclauses had the amounts
not been retained by the Master
Servicer without being deposited in the
Distribution Account under Section
4.02(b).
(c) On each
Distribution Date, based solely on the applicable Remittance
Report, the Trustee shall distribute
Interest Funds and Principal Funds in the
Distribution Account to the Holders of the
Certificates in accordance with
Section 5.04(a).
Section 4.06.
Yield Maintenance Account and Yield Maintenance Agreements.
The Trustee is
hereby directed to execute each Yield Maintenance Agreement
on behalf of the Trust Fund. Amounts
payable by the Trust Fund on the Closing
Date pursuant to each Yield Maintenance
Agreement shall be paid by the Seller.
The Trustee in its individual capacity
shall have no responsibility for any of
the undertakings, agreements or
representations with respect to any Yield
Maintenance Agreement, including, without
limitation, for making any payments
thereunder.
The Trustee
shall establish and maintain in the name of the Trustee, for
the benefit of the Adjustable Rate
Certificateholders, the Yield Maintenance
Account as a segregated trust account.
The
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Yield Maintenance Account shall not
constitute an asset of any REMIC
hereunder. For federal income tax purposes,
the Class B-IO Certificateholders
shall be treated as the owners of the Yield
Maintenance Account. Any Yield
Maintenance Payments received by the
Trustee shall be deposited by the Trustee
into the Yield Maintenance Account. On the
Distribution Date immediately
succeeding its receipt thereof, the Trustee
shall distribute from each such
Yield Maintenance Payment, to the related
Class of Adjustable Rate Certificates,
the Yield Maintenance Agreement Amount owed
to such Class for such Distribution
Date.
On each
Distribution Date following application of any Yield
Maintenance
Payments as described in the immediately
preceding paragraph, any Excess Yield
Maintenance Amount will be distributed by
the Trustee on such Distribution Date
in the manner set forth in Section 5.04(a)
in accordance with the Remittance
Report for such Distribution Date.
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ARTICLE V.
DISTRIBUTIONS AND ADVANCES
BY THE MASTER SERVICER
Section 5.01.
Advances.
Except with
respect to any Simple Interest Loans, for which no Advances of
principal are required to be made, if the
Scheduled Payment on a Mortgage Loan,
that was due on a related Due Date and is
delinquent other than as a result of
application of the Relief Act or similar
state laws and for which the related
Servicer was required to make an Advance
pursuant to the related Servicing
Agreement exceeds the amount deposited in
the Master Servicer Collection Account
for use as an Advance with respect to such
Mortgage Loan, the Master Servicer
will make an Advance in an amount equal to
such deficiency for deposit into the
Master Servicer Collection Account or the
Distribution Account, as applicable.
Each such Advance shall be remitted to the
Master Servicer Collection Account or
the Distribution Account, as appropriate,
no later than 1:00 p.m. Central time
on the Master Servicer Advance Date in
immediately available funds. The Master
Servicer shall be obligated to make any
such Advance only to the extent that
such advance would not be a Nonrecoverable
Advance. If the Master Servicer shall
have determined that it has made a
Nonrecoverable Advance or that a proposed
Advance or a lesser portion of such Advance
would constitute a Nonrecoverable
Advance, the Master Servicer shall deliver
(i) to the Trustee for the benefit of
the Certificateholders funds constituting
the remaining por
