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 April 1, 2005
______________________________________
BEAR STEARNS ASSET BACKED SECURITIES TRUST 2005-SD2
ASSET-BACKED CERTIFICATES, SERIES 2005-SD2
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TABLE OF CONTENTS
Page
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..............49
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
Secton 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.................................................59
Section 3.17. Annual
Independent Accountant's Servicing
Report..............................................59
Section 3.18. Reports
Filed with Securities and Exchange
Commission.........................................60
Section 3.19. The EMC
Servicer..............................................................................60
Section 3.20. Optional
Purchase of Defaulted Mortgage
Loans.................................................60
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ARTICLE IV.
ACCOUNTS
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Section 4.01. Protected
Accounts............................................................................62
Section 4.02. Master
Servicer Collection
Account............................................................62
Section 4.03. Permitted
Withdrawals and Transfers from the Master Servicer Collection
Account...............63
Section 4.04.
Distribution
Account..........................................................................64
Section 4.05. Permitted
Withdrawals and Transfers from the Distribution
Account.............................65
Section 4.06. Yield
Maintenance Account and Yield Maintenance
Agreements....................................66
ARTICLE V.
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 5.01.
Advances......................................................................................68
Section 5.02. Compensating Interest
Payments................................................................68
Section 5.03. REMIC
Distributions...........................................................................69
Section 5.04.
Distributions.................................................................................69
Section 5.05. Monthly
Statements to
Certificateholders......................................................76
Section 5.06. REMIC
Designations and
Allocations............................................................79
Section 5.07.
Supplemental Interest Reserve Fund; WAC
Excess................................................81
ARTICLE VI.
THE CERTIFICATES
Section 6.01. The
Certificates..............................................................................82
Section 6.02.
Certificate Register; Registration of Transfer and Exchange of
Certificates...................84
Section 6.03. Mutilated,
Destroyed, Lost or Stolen
Certificates.............................................87
Section 6.04. Persons
Deemed
Owners.........................................................................87
Section 6.05. Access to
List of Certificateholders' Names and
Addresses.....................................88
Section 6.06. Book-Entry
Certificates.......................................................................88
Section 6.07. Notices to
Depository.........................................................................89
Section 6.08. Definitive
Certificates.......................................................................89
Section 6.09.
Maintenance of Office or
Agency...............................................................89
Section 6.10.
Appointment of Paying Agent and Certificate
Registrar.........................................90
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........................................................................................91
Section 7.02. Merger or
Consolidation of the Depositor, the Master Servicer, the EMC
Servicer or the
Seller........................................................................................91
Section 7.03.
Indemnification of the Trustee, the Master Servicer, the Securities
Administrator and
Others........................................................................................91
Section 7.04. Limitation
on Liability of the Depositor, the Seller, the Master Servicer, the
Securities
Administrator and
Others......................................................................92
Section 7.05. Limitation
on Resignation of Master Servicer and the EMC Master
Servicer......................93
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Section 7.06. Errors and
Omissions Insurance; Fidelity
Bonds................................................93
ARTICLE VIII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 8.01. Events of
Default.............................................................................94
Section 8.02. Trustee to
Act; Appointment of
Successor......................................................95
Section 8.03.
Notification to
Certificateholders............................................................97
ARTICLE IX.
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 9.01. Duties of
Trustee and Securities
Administrator................................................98
Section 9.02. Certain Matters Affecting the
Trustee and the Securities
Administrator........................99
Section 9.03. Trustee
and Securities Administrator Not Liable for Certificates or
Mortgage Loans...........101
Section 9.04. Trustee
and Securities Administrator May Own
Certificates....................................101
Section 9.05. Trustee's
and Securities Administrator's Fees and
Expenses...................................102
Section 9.06.
Eligibility Requirements for Trustee, Securities Administrator and
Paying Agent..............102
Section 9.07.
Insurance....................................................................................103
Section 9.08.
Resignation and Removal of Trustee and Securities
Administrator..............................103
Section 9.09. Successor
Trustee , Securities Administrator or Successor Paying
Agent.......................104
Section 9.10. Merger or
Consolidation of Trustee, Securities Administrator or Paying
Agent.................104
Section 9.11.
Appointment of Co-Trustee or Separate
Trustee................................................105
Section 9.12. Tax
Matters..................................................................................106
ARTICLE X.
TERMINATION
Section 10.01. Termination upon
Liquidation or Repurchase of the Mortgage
Loans.............................109
Section 10.02. Final
Distribution on the
Certificates.......................................................109
Section 10.03. Additional
Termination
Requirements..........................................................110
ARTICLE XI.
MISCELLANEOUS PROVISIONS
Section 11.01.
Amendment....................................................................................112
Section 11.02. Recordation of
Agreement;
Counterparts.......................................................113
Section 11.03. Governing
Law................................................................................113
Section 11.04. Intention of
Parties.........................................................................113
Section 11.05.
Notices......................................................................................114
Section 11.06. Severability of
Provisions...................................................................115
Section 11.07.
Assignment...................................................................................115
Section 11.08. Limitation on
Rights of
Certificateholders...................................................115
Section 11.09. Inspection and
Audit
Rights..................................................................116
Section 11.10. Certificates
Nonassessable and Fully
Paid....................................................116
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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
Exhibit A-10
Form of Class I-B
Exhibit A-11
Form of Class II-A-1
Exhibit A-12
Form of Class II-A-2
Exhibit A-13
Form of Class II-M-1
Exhibit A-14
Form of Class II-M-2
Exhibit A-15
Form of Class II-M-3
Exhibit A-16
Form of Class II-B
Exhibit A-17
Form of Class I-B-IO Certificates
Exhibit A-18
Form of Class II-B-IO Certificates
Exhibit A-19
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
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POOLING AND SERVICING AGREEMENT, dated as of April 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-SD2." The Certificates issued
hereunder may be referred to as
"Asset-Backed Certificates Series 2005-SD2"
(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
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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
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.
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
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Securities Administrator, the Master
Servicer or of a Servicer is located are
authorized or obligated by law or executive
order to be closed.
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 Certificate Registrar
in substantially the forms attached
hereto as Exhibits A-1 through A-19.
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-1 Margin,
the Class II-A-2 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.
Certificate Registrar: The Securities Administrator or any
successor
certificate registrar appointed
hereunder.
Certificate Registrar Office: The office of the Certificate
Registrar
located at Sixth Street and Marquette
Avenue, Minneapolis, Minnesota 55479,
Attention: BSABS 2005-SD2.
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.
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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, 0.200% per annum
and (ii) thereafter, 0.200% per
annum.
Class I-A-1 Pass-Through Rate: For the first Distribution Date,
3.290 %
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, 0.470% per annum
and (ii) thereafter, 0.940% per
annum.
Class I-A-2 Pass-Through Rate: For the first Distribution Date,
3.560%
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, 0.400% per annum
and (ii) thereafter, 0.800% per
annum.
Class I-A-3 Pass-Through Rate: For the first Distribution Date,
3.490%
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, 2.900% per annum
and (ii) thereafter, 4.350% per
annum.
Class I-B Pass-Through Rate: For the first Distribution Date,
5.990%
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-17 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class I-B-IO Certificates herein.
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<PAGE>
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.
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, 0.650% per annum
and (ii) thereafter, 0.975% per
annum.
Class I-M-1 Pass-Through Rate: For the first Distribution Date,
3.740%
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, 1.000% per annum
and (ii) thereafter, 1.500% per
annum.
Class I-M-2 Pass-Through Rate: For the first Distribution Date,
4.090%
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, 1.150% per annum
and (ii) thereafter, 1.725% per
annum.
Class I-M-3 Pass-Through Rate: For the first Distribution Date,
4.240%
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, 1.500% per annum
and (ii) thereafter, 2.250% per
annum.
Class I-M-4 Pass-Through Rate: For the first Distribution Date,
4.590%
per annum, and on any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period
5
<PAGE>
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
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) 89.80% 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, 2.900% per annum
and (ii) thereafter, 4.350% per
annum.
Class I-M-5 Pass-Through Rate: For the first Distribution Date,
5.990%
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) 91.80% 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.
6
<PAGE>
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, 2.900% per annum
and (ii) thereafter, 4.350% per
annum.
Class I-M-6 Pass-Through Rate: For the first Distribution Date,
5.990%
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) 92.80% 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-1 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-1 Margin: For any Distribution Date (i) on or prior to
the
Optional Termination Date, 0.330% per annum
and (ii) thereafter, 0.660% per
annum.
Class II-A Pass-Through Rate: For the first Distribution Date,
3.420%
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-2 Certificate: Any Certificate designated as a "Class
II-A-2
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-A-2 Certificates as set forth
herein.
Class II-A-2 Margin: For any Distribution Date (i) on or prior to
the
Optional Termination Date, 0.480% per annum
and (ii) thereafter, 0.960% per
annum.
7
<PAGE>
Class II-A-2 Pass-Through Rate: For the first Distribution Date,
3.570%
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-2 Margin for such
Distribution Date and (ii) the applicable
Interest Rate Cap for such
Distribution Date.
Class II-B Certificate: Any Certificate designated as a "Class
II-B
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 II-B Certificates as set forth
herein.
Class II-B Margin: For any Distribution Date (i) on or prior to
the
Optional Termination Date, 2.500% per annum
and (ii) thereafter, 3.750% per
annum.
Class II-B Pass-Through Rate: For the first Distribution Date,
5.590%
per annum, and on any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
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-18 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.
FXBSD5SO25, 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-13 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, 0.650% per annum
and (ii) thereafter, 0.975% per
annum.
Class II-M-1 Pass-Through Rate: For the first Distribution Date,
3.740%
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.
FXBS05SD22, 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-14 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class II-M-2 Certificates as set forth
herein.
8
<PAGE>
Class II-M-2 Margin: For any Distribution Date (i) on or prior to
the
Optional Termination Date, 1.000% per annum
and (ii) thereafter, 1.500% per
annum.
Class II-M-2 Pass-Through Rate: For the first Distribution Date,
4.090%
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.
FXBS05SD23, dated the Closing Date, by and
between the Yield Maintenance
Provider and the Trust, relating to the
Class II-M-2 Certificates.
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-15 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, 2.500% per annum
and (ii) thereafter, 3.750% per
annum.
Class II-M-3 Pass-Through Rate: For the first Distribution Date,
5.590%
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.
FXBS05SD24, 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, the Class II-A-1 and the
Class II-A-2 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) 71.90%, in the case
of Group I and 69.10%, 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
9
<PAGE>
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) 95.80%, in the case
of Group I and 95.00%, 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 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) 82.30%, in the case of Group I
and 81.40%, 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) 85.80%, in the case of Group
I and 87.70%, 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) 87.80%, in the case of Group
I and 93.80%, in the
10
<PAGE>
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
(c) 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-19 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: May 13, 2005.
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 at 4 New York Plaza,
6th Floor, New York, New York 10004
Attention: Institutional Trust
Services/Global Debt--BSABS Series 2005-SD2, or
at such other address as the Trustee may
designate from time to time. With
respect to the Certificate Registrar and
the presentment of Certificates for
registration of transfer, exchange or final
payment, Wells Fargo Bank, N.A.,
Sixth Street and Marquette Avenue,
Minneapolis, Minnesota 55479, Attention:
Corporate Trust, BSABS 2005-SD2, and for
all other purposes, P.O. Box 98,
Columbia, Maryland 21046 (or for overnight
deliveries, 9062 Old Annapolis Road,
Columbia, Maryland 21045), Attention:
Corporate Trust, BSABS 2005-SD2
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
11
<PAGE>
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 April
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 April 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
Cut-Off Date Principal Balance of the
Mortgage Loans in Group I and Group II is
$195,604,252.00 and $187,458,778.43,
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.
12
<PAGE>
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 May 12, 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
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 Paying
Agent for the benefit of the
Certificateholders and designated "Wells Fargo Bank
N.A., in trust for registered holders of
Bear Stearns Asset Backed Securities
Trust 2005-SD2, Asset-Backed Certificates,
Series 2005-SD2". 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 May 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 calendar month
immediately preceding the month in which such
Distribution Date occurs.
Eligible Account: Any of (i) an account or accounts maintained with
a
federal or state chartered depository
institution or trust company, the
long-term unsecured debt obligations and
short-term unsecured debt obligations
of which (or, in the case of a depository
institution or trust company that is
the principal subsidiary of a holding
company, the debt obligations of such
holding company, 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
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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.
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,
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of (a) the sum of the Yield Maintenance
Payments for the Adjustable Rate
Certificates of the related Group for such
Distribution Date over (b) the sum of
the Yield Maintenance Agreement Amounts for
the Adjustable Rate Certificates of
the related Group 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.
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. FXNEC7018, dated the
Closing Date, by and between the
Yield Maintenance Provider and the Trust,
relating to the Class I-A-1, the Class
I-A-2 and the Class I-A-3 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.
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<PAGE>
Group I Subordinate Certificates Yield Maintenance Agreement:
The
Confirmation, Ref. No. FXNEC7019, 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-1 Certificates, the Class
II-A-2
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-1 Certificates and
the
Class II-A-2 Certificates.
Group II Senior Certificates Yield Maintenance Agreement: The
Confirmation, Ref. No. FXBS05SD21, dated
the Closing Date, by and between the
Yield Maintenance Provider and the Trust,
relating to the Class II-A-1 and the
Class II-A-2 Certificates.
Group II Subordinate 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.
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.
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: $1,467,252.00, in the case
of
Group I and $2,904,778.43, 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
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(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
May 10, 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.
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 Group I Certificates and
the
Class I-BIO Certificates, the Distribution
Date in March 2035 and, for the Group
II Certificates, the Class II-B-IO
Certificates and the Class R Certificates,
the Distribution Date in December 2044,
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
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<PAGE>
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.
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: 0.0125% 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.
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<PAGE>
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-SD2, Asset-Backed
Certificates, Series 2005-SD2." 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.
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: Not applicable.
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.
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<PAGE>
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;
(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;
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<PAGE>
(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.
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
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<PAGE>
Interest Determination Date; provided that
the parties hereto acknowledge that
One-Month LIBOR for the first Accrual
Period shall equal 3.090% 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 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.
22
<PAGE>
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.
Paying Agent: The Securities Administrator and any successor
paying
agent appointed hereunder.
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
23
<PAGE>
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;
(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
24
<PAGE>
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 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.
25
<PAGE>
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: With respect to any Distribution Date and
the
Mortgage Loans serviced by EMC, the period
from the sixteenth day of the
calendar month preceding the calendar month
in which such Distribution Date
occurs through the close of business on the
fifteenth day of the calendar month
in which such Distribution Date occurs in.
With respect to any Distribution Date
and all other Mortgage Loans, the period
that is provided in the related
Servicing Agreement.
Primary Mortgage Insurance Policy: Any primary mortgage
guaranty
insurance policy issued in connection with
a Mortgage Loan which provides
compensation to a Mortgage Note holder in
the event of default by the obligor
under such Mortgage Note or the related
security instrument, if any or any
replacement policy therefor through the
related Accrual Period for such Class
relating to a Distribution Date.
Principal Distribution Amount: With respect to 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
26
<PAGE>
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 May
[__________], 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
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 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:
27
<PAGE>
DISTRIBUTION DATE
LOSS PERCENTAGE
-----------------
---------------
May 2008 through April
2009
2.25%, in the case of Group I and
2.75%, in the case of Group II
May 2009 through April
2010
2.75%, in the case of Group I and
3.50%, in the case of Group II
May 2010 through April
2011
3.25%, in the case of Group I and
4.25%, in the case of Group II
May 2011 and each
month thereafter
3.50%, in the case of Group I and
4.50%, in the case of Group II
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
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.
28
<PAGE>
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 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
29
<PAGE>
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.
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 May
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.
30
<PAGE>
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 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, 2.10%, in the case
of Group I and 2.50%, 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) 4.20%, in the
case of Group I and 5.00%, 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
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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 means (A.) in the case of
Group
I, the later to occur of (i) the
Distribution Date in May 2008 and (ii) 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 sum of the Stated
Principal Balances of the related Mortgage
Loans as of the last day of the
related Due Period is greater than or equal
to 28.10%; and (B.) in the case of
Group II, the earlier to occur of (x) the
Distribution Date on which the
aggregate Certificate Principal Balance of
the Class A Certificates of such
Group has been reduced to zero and (y) the
later to occur of (i) the
Distribution Date in May 2008 and (ii) 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 sum of the Stated Principal
Balances of the related Mortgage
Loans as of the last day of the related Due
Period is greater than or equal to
30.90%.
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.
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).
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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.
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 Offered 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 Offered 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.
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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-SD2,
Asset-Backed Certificates, Series
2005-SD2." 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 Group II Senior Certificates
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 a Class of Group
I
Certificates, with respect to any
Distribution Date through the Distribution
Date in February 2013, 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 such Class
and the Projected Principal Balance for
such Class for that Distribution Date.
In the case of a Class of Group II Certificates, with respect to
any
Distribution Date through the Distribution
Date in March 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
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 such Class and the
Projected Principal Balance for such Class
for that Distribution Date.
Yield Maintenance Payment: With respect to any Yield
Maintenance
Agreement and any Distribution Date, the
amount, if any, distributed to the
Trustee by the Yield Maintenance Provider
pursuant to each such Yield
Maintenance Agreement for the related Class
or Classes of Adjustable Rate
Certificates and 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-SD2, Asset Backed Certificates, Series 2005-SD2,
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-SD2, Asset
Backed
Certificates, Series 2005-SD2" 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 Paying Agent for deposit
in the Distribution Account and shall
provide written notice to the Paying Agent
and 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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<PAGE>
(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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<PAGE>
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.
(O) 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)
90.63% 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). None of the Mortgage Loans
(by cut-off Date Principal Balance) in
either Group 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 7.32% 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.
Section 2.05. Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases.
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(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, the Certificate
Registrar 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 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
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(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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Secton 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
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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.
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
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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 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.
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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, 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 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
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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.
