SEPTEMBER 23, 2005
BEAR STEARNS ASSET BACKED SECURITIES I LLC,
Depositor
EMC MORTGAGE CORPORATION,
Seller and Master Servicer
LASALLE BANK NATIONAL ASSOCIATION,
Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of August 1, 2005
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BEAR STEARNS ASSET BACKED SECURITIES TRUST 2005-3
ASSET-BACKED CERTIFICATES, SERIES 2005-3
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TABLE OF CONTENTS
Page
Article I
DEFINITIONS
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Section 1.01.
Defined
Terms...............................................................................2
Article II
CONVEYANCE OF TRUST FUND REPRESENTATIONS AND WARRANTIES
Section 2.01.
Conveyance
of Trust
Fund...................................................................35
Section 2.02.
Acceptance
by Trustee of the Mortgage
Loans................................................38
Section 2.03.
Representations, Warranties and Covenants of the Master Servicer
and the Seller............40
Section 2.04.
Representations and Warranties of the
Depositor............................................51
Section 2.05.
Delivery
of Opinion of Counsel in Connection with Substitutions and
Repurchases............53
Section 2.06.
Authentication and Delivery of
Certificates................................................53
Section 2.07.
Covenants
of the Master
Servicer...........................................................54
Section 2.08.
Lost
Mortgage Notes
Indemnity..............................................................54
Article III
Administration and Master Servicing of Mortgage Loans
Section 3.01.
The Master
Servicer to Service the Mortgage
Loans..........................................55
Section 3.02.
REMIC-Related
Covenants....................................................................56
Section 3.03.
Collection
of Mortgage Loan
Payments.......................................................57
Section 3.04.
Successor
Master Servicer and Subservicing
Agreements......................................57
Section 3.05.
[Reserved].................................................................................58
Section 3.06.
Due-on-Sale Clauses; Assumption
Agreements.................................................58
Section 3.07.
Release of
Mortgage
Files..................................................................59
Section 3.08.
Documents,
Records and Funds in Possession of the Master Servicer To Be Held
for Trustee...60
Section 3.09.
Maintenance of Hazard
Insurance............................................................60
Section 3.10.
Presentment of Claims and Collection of
Proceeds...........................................61
Section 3.11.
Maintenance of the Primary Mortgage Insurance
Policies.....................................62
Section 3.12.
Possession
of Certain Insurance Policies and
Documents.....................................62
Section 3.13.
Realization Upon Defaulted Mortgage
Loans..................................................63
Section 3.14.
Servicing
Compensation.....................................................................65
Section 3.15.
[Reserved].................................................................................66
Section 3.16.
Annual
Officer's Certificate as to
Compliance..............................................66
Section 3.17.
Annual
Independent Accountant's Servicing
Report...........................................66
Section 3.18.
Reports
Filed with Securities and Exchange
Commission......................................66
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Section 3.19.
Collection
of Taxes, Assessments and Similar Items; Escrow
Accounts........................68
Section 3.20.
Access to
Certain Documentation and Information Regarding the Mortgage
Loans...............68
Section 3.21.
Optional
Purchase of Defaulted Mortgage
Loans..............................................68
Section 3.22.
Subservicing...............................................................................69
Section 3.23.
Books and
Records..........................................................................70
Article IV
ACCOUNTS
Section 4.01.
[Reserved].................................................................................71
Section 4.02.
Master
Servicer Collection
Account.........................................................71
Section 4.03.
Permitted
Withdrawals and Transfers from the Master Servicer Collection
Account............72
Section 4.04.
Distribution
Account.......................................................................75
Section 4.05.
Permitted
Withdrawals and Transfers from the Distribution
Account..........................75
Section 4.06.
Yield
Maintenance Account and Yield Maintenance
Agreement..................................76
Section 4.07.
Basis Risk
Reserve
Fund....................................................................78
Section 4.08.
Final
Maturity Reserve
Account.............................................................79
Article V
DISTRIBUTIONS AND ADVANCES
Section 5.01.
Advances...................................................................................82
Section 5.02.
Compensating Interest
Payments.............................................................83
Section 5.03.
REMIC
Distributions........................................................................83
Section 5.04.
Distributions..............................................................................83
Section 5.05.
Allocation
of Realized Losses and Subsequent
Recoveries....................................87
Section 5.06.
[Reserved].................................................................................88
Section 5.07.
Monthly
Statements to
Certificateholders...................................................88
Section 5.08.
REMIC
Designations and
Allocations.........................................................91
Article VI
THE CERTIFICATES
Section 6.01.
The
Certificates...........................................................................94
Section 6.02.
Certificate Register; Registration of Transfer and Exchange of
Certificates................96
Section 6.03.
Mutilated,
Destroyed, Lost or Stolen
Certificates..........................................99
Section 6.04.
Persons
Deemed
Owners......................................................................99
Section 6.05.
Access to
List of Certificateholders' Names and
Addresses.................................100
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Section 6.06.
Book-Entry
Certificates...................................................................100
Section 6.07.
Notices to
Depository.....................................................................101
Section 6.08.
Definitive
Certificates...................................................................101
Section 6.09.
Maintenance of Office or
Agency...........................................................102
Article VII
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER
Section 7.01.
Respective
Liabilities of the Depositor, the Master Servicer and the
Seller...............103
Section 7.02.
Merger or
Consolidation of the Depositor, the Master Servicer or the
Seller...............103
Section 7.03.
Indemnification of the Trustee, the Master Servicer and
Others............................103
Section 7.04.
Limitation
on Liability of the Depositor, the Seller, the Master Servicer and
Others......104
Section 7.05.
Limitation
on Resignation of the Master
Servicer..........................................105
Section 7.06.
Errors and
Omissions Insurance; Fidelity
Bonds............................................105
Article VIII
DEFAULT; TERMINATION OF MASTER SERVICER
Section 8.01.
Events of
Default.........................................................................107
Section 8.02.
Trustee to
Act; Appointment of
Successor..................................................108
Section 8.03.
Notification to
Certificateholders........................................................110
Article IX
CONCERNING THE TRUSTEE
Section 9.01.
Duties of
Trustee.........................................................................111
Section 9.02.
Certain
Matters Affecting the
Trustee.....................................................112
Section 9.03.
Trustee
Not Liable for Certificates or Mortgage
Loans.....................................114
Section 9.04.
Trustee
May Own
Certificates..............................................................115
Section 9.05.
Trustee's
Fees and
Expenses...............................................................115
Section 9.06.
Eligibility Requirements for
Trustee......................................................115
Section 9.07.
Insurance.................................................................................116
Section 9.08.
Resignation and Removal of
Trustee........................................................116
Section 9.09.
Successor
Trustee.........................................................................117
Section 9.10.
Merger or
Consolidation of
Trustee........................................................117
Section 9.11.
Appointment of Co-Trustee or Separate
Trustee.............................................117
Section 9.12.
Tax
Matters...............................................................................119
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Article X
TERMINATION
Section 10.01.
Termination upon
Liquidation or Repurchase of all Mortgage
Loans..........................122
Section 10.02.
Final
Distribution on the
Certificates....................................................122
Section 10.03.
Additional
Termination
Requirements.......................................................124
Article XI
MISCELLANEOUS PROVISIONS
Section 11.01.
Amendment.................................................................................125
Section 11.02.
Recordation of
Agreement;
Counterparts....................................................126
Section 11.03.
Governing
Law.............................................................................126
Section 11.04.
Intention of
Parties......................................................................127
Section 11.05.
Notices...................................................................................127
Section 11.06.
Severability of
Provisions................................................................128
Section 11.07.
Assignment................................................................................129
Section 11.08.
Limitation on
Rights of
Certificateholders................................................129
Section 11.09.
Inspection and
Audit
Rights...............................................................129
Section 11.10.
Certificates
Nonassessable and Fully
Paid.................................................130
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Exhibits
Exhibit A-1.......Form of Class A-1
Certificates
Exhibit A-2.......Form of Class A-2
Certificates
Exhibit A-3.......Form of Class A-3
Certificates
Exhibit A-4.......Form of Class M-1
Certificates
Exhibit A-5.......Form of Class M-2
Certificates
Exhibit A-6.......Form of Class M-3
Certificates
Exhibit A-7.......Form of Class M-4
Certificates
Exhibit A-8.......Form of Class M-5
Certificates
Exhibit A-9.......Form of Class M-6
Certificates
Exhibit A-10......Form of Class M-7
Certificates
Exhibit A-11......Form of Class B-IO
Certificates
Exhibit A-12......Form of Class R-I
Certificates
Exhibit A-13......Form of Class R-II
Certificates
Exhibit B.........Mortgage Loan
Schedule
Exhibit C-1.......Initial Certification of
Trustee
Exhibit C-2.......Interim Certification of
Trustee
Exhibit C-3.......Final Certification of
Trustee
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.........Form of Power of
Attorney
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POOLING AND SERVICING AGREEMENT, dated as of August 1, 2005, among
BEAR
STEARNS ASSET BACKED SECURITIES I LLC, a
Delaware limited liability company, as
depositor (the "Depositor"), EMC MORTGAGE
CORPORATION, a Delaware corporation,
as seller (in such capacity, the "Seller")
and as master servicer (in such
capacity, the "Master Servicer"), and
LASALLE BANK NATIONAL ASSOCIATION, a
national banking association, as trustee
(the "Trustee").
PRELIMINARY STATEMENT
The 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
2005-3." The Certificates issued hereunder
may be referred to as "Asset-Backed
Certificates Series 2005-3" (including for
purposes of any endorsement or assignment
of a Mortgage Note or Mortgage).
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer, the Seller
and the Trustee agree as follows:
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ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms(a) . 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 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 or to the Trustee (in
its capacity, if at all, as Successor
Master Servicer).
Account: The Master Servicer Collection Account, the
Distribution
Account and the Yield Maintenance
Account.
Accrual Period: With respect to the Certificates and any
Distribution
Date, the period from and including the
immediately preceding Distribution Date
(or, in the case of the first Distribution
Date, the Closing Date) to but
excluding such Distribution Date. All
calculations of interest on the
Certificates (including any applicable
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.
Advance: The aggregate of the advances required to be made by
the
Master Servicer with respect to any
Distribution Date pursuant to Section 5.01,
the amount of any such advances being equal
to the aggregate of payments of
interest and (other than with respect to
Simple Interest Loans) principal (net
of the Master Servicing Fees) on the
Mortgage Loans that were due during the
related Due Period and not received as of
the close of business on the related
Determination Date less the aggregate
amount of any such delinquent payments
that the Master Servicer has determined
would constitute a Nonrecoverable
Advance were an advance to be made with
respect thereto. For purposes of this
definition, an REO Property shall continue
to be a Mortgage Loan with an
amortization schedule and periodic
adjustments to the related Mortgage Rate
thereon, if applicable, in accordance with
the related Mortgage Note until it
becomes a Liquidated Loan.
Affiliate: As to any Person, any other Person controlling,
controlled
by or under common control with such
Person. "Control" means the power to direct
the management and policies of a Person,
directly or indirectly, whether through
ownership of voting securities, by contract
or otherwise. "Controlled" and
"Controlling" have meanings correlative to
the foregoing. The Trustee may
conclusively presume that a Person is not
an Affiliate of another Person unless
a Responsible Officer of the Trustee has
actual knowledge to the contrary.
Agreement: This Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in
accordance with the terms herein.
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Allocated Realized Loss Amount: With respect to any Distribution
Date
and each Class of Subordinated
Certificates, the sum of the Realized Losses with
respect to the Mortgage Loans, which have
been applied in reduction of the
Certificate Principal Balance of that Class
of Subordinated Certificates
pursuant to this Agreement, which shall, on
any such Distribution Date with
respect to the Class M-7 Certificates, the
Class M-6 Certificates, the Class M-5
Certificates, the Class M-4 Certificates,
the Class M-3 Certificates, the Class
M-2 Certificates and the Class M-1
Certificates, in that order, 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 on such
Distribution Date (after giving
effect to all distributions of principal
(including as a result of Subsequent
Recoveries on the Mortgage Loans) on the
Certificates on such Distribution Date)
exceeds (ii) the aggregate Stated Principal
Balance of all of the Mortgage Loans
as of the last day of the related Due
Period. Realized Losses will not be
allocated to reduce the Certificate
Principal Balances of the Class A
Certificates.
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 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
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.
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 or in certain
instances, an appraisal procured in
connection with its sale to the
Depositor.
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 Reserve Fund: The reserve fund established and
maintained by
the Trustee pursuant to Section 4.07.
Basis Risk Shortfall: As of any Distribution Date and for any Class
of
Certificates (other than the Class B-IO
Certificates and the Residual
Certificates), the excess of (i) the amount
of the Interest Distribution Amount
for such Distribution Date that such Class
of Certificates would have been
entitled to receive on such Distribution
Date had the applicable Pass-Through
Rate for such Class of Certificates been
calculated based upon One-Month LIBOR
with respect to such
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Distribution Date plus the applicable
Certificate Margin, over (ii) the sum of
interest for such Class of Certificates
calculated at the Interest Rate Cap for
such Distribution Date and any Yield
Maintenance Payments received on such
Distribution Date under the Yield
Maintenance Agreement and relating to such
Class of Certificates.
Basis Risk Carry Forward Amount: As of any Distribution Date and
for
any Class of Certificates (other than the
Class B-IO Certificates and the
Residual Certificates), the sum of: (i) if
on such Distribution Date the
applicable Pass-Through Rate for such Class
of Certificates is based upon the
Interest Rate Cap, then the applicable
Basis Risk Shortfall, and (ii) the Basis
Risk Shortfall for such Class of
Certificates for all previous Distribution
Dates not previously paid (including
interest accrued thereon at the applicable
Pass-Through Rate for the applicable
Accrual Period with respect to each such
prior 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, the State
of Illinois or the State of Texas, or, if
different, the city in which a
Corporate Trust Office of the Trustee or
the principal office of the Master
Servicer is located are authorized or
obligated by law or executive order to be
closed.
Cede: Cede & Co., or its successors in interest.
Certificate: Any one of the certificates of any Class executed
and
authenticated by the Trustee in
substantially the forms attached hereto as
Exhibits A-1 through A-13.
Certificate Margin: Reference to any of the Class A-1 Margin, Class
A-2
Margin, Class A-3 Margin, Class M-1 Margin,
Class M-2 Margin, Class M-3 Margin,
Class M-4 Margin, Class M-5 Margin, Class
M-6 Margin or Class M-7 Margin.
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 and any 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)
with respect to the Subordinated
Certificates, any Allocated Realized Loss
Amounts allocated to such Certificate
on previous Distribution Dates pursuant to
Section 5.05, and increased by any
Subsequent Recoveries allocated to such
Subordinated Certificate on previous
Distribution Dates pursuant to Section
5.05. References herein to the
Certificate Principal Balance of a Class of
Certificates (other than
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the Class B-IO Certificates and the
Residual Certificates) shall mean the
Certificate Principal Balances of all
Certificates in such Class of
Certificates.
Certificate Register: The register maintained pursuant to Section
6.02
hereof.
Certificateholder or Holder: The person in whose name a Certificate
is
registered in the Certificate Register
(initially, Cede & Co., as nominee for
the Depository, in the case of any
Book-Entry Certificates).
Class: All Certificates bearing the same Class designation as set
forth
in Section 6.01 hereof.
Class A Certificates: The Class A-1 Certificates, Class A-2
Certificates and Class A-3
Certificates.
Class A Principal Distribution Amount: For any Distribution Date,
an
amount equal to the excess, if any, of (i)
the aggregate Certificate Principal
Balance of the Class A Certificates
immediately prior to such Distribution Date,
over (ii) the lesser of (a) 60.00% of the
aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of
the related Due Period (after reduction
for Realized Losses incurred during the
related Due Period and prepayments
received during the related Prepayment
Period) and (b) the aggregate Stated
Principal Balance of the Mortgage Loans as
of the last day of the related Due
Period (after reduction for Realized Losses
incurred during the related Due
Period and prepayments received during the
related Prepayment Period) minus the
Overcollateralization Floor.
Class A-1 Certificate: Any Certificate designated as a "Class
A-1
Certificate" on the face thereof, in the
form of Exhibit A-1 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class A-1 Certificates as set forth
herein.
Class A-1 Margin: For any Distribution Date, (i) on or prior to
the
Optional Termination Date, 0.450% per
annum, and (ii) thereafter, 0.900% per
annum.
Class A-1 Pass-Through Rate: For the first Distribution Date,
4.15438%
per annum, and on any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
the Class A-1 Margin for such
Distribution Date and (ii) the Interest
Rate Cap for such Distribution Date.
Class A-2 Certificate: Any Certificate designated as a "Class
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 A-2 Certificates as set forth
herein.
Class A-2 Margin: For any Distribution Date (i) on or prior to
the
Optional Termination Date, 0.270% per annum
and (ii) thereafter, 0.540% per
annum.
Class A-2 Pass-Through Rate: For the first Distribution Date,
3.97438%
per annum, and on any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
the Class A-2 Margin for such
Distribution Date and (ii) the Interest
Rate Cap for such Distribution Date.
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Class A-3 Certificate: Any Certificate designated as a "Class
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 A-3 Certificates as set forth
herein.
Class A-3 Margin: For any Distribution Date (i) on or prior to
the
Optional Termination Date, 0.680% per annum
and (ii) thereafter, 1.360% per
annum.
Class A-3 Pass-Through Rate: For the first Distribution Date,
4.38438%
per annum, and on any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
the Class A-3 Margin for such
Distribution Date and (ii) the Interest
Rate Cap for such Distribution Date.
Class B-IO Certificate: Any Certificate designated as a "Class
B-IO
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 B-IO Certificates herein.
Class B-IO Distribution Amount: With respect to any Distribution
Date,
the amount allocable to the Class B-IO
Certificates as provided in Section
5.08(c), note 3, for such Distribution Date
and all prior Distribution Dates,
less the aggregate of all amounts
distributed or deemed distributed with respect
to the Class B-IO Certificates on prior
Distribution Dates.
Class M-1 Certificate: Any Certificate designated as a "Class
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 M-1 Certificates as set forth
herein.
Class M-1 Margin: For any Distribution Date (i) on or prior to
the
Optional Termination Date, 0.750% per annum
and (ii) thereafter, 1.125% per
annum.
Class M-1 Pass-Through Rate: For the first Distribution Date,
4.45438%
per annum, and for any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
the Class M-1 Margin for such
Distribution Date and (ii) the Interest
Rate Cap for such Distribution Date.
Class M-1 Principal Distribution Amount: For any Distribution Date,
an
amount equal to the excess, if any of (i)
the sum of the aggregate Certificate
Principal Balances of the Class A
Certificates (after taking into account
distributions of the Class A Principal
Distribution Amount for such Distribution
Date) and the Class M-1 Certificates
immediately prior to such Distribution
Date, over (ii) the lesser of (a) 76.30% of
the aggregate Stated Principal
Balance of the Mortgage Loans as of the
last day of the related Due Period
(after reduction for Realized Losses
incurred during the related Due Period and
prepayments received during the related
Prepayment Period) and (b) the aggregate
Stated Principal Balance of the Mortgage
Loans as of the last day of the related
Due Period (after reduction for Realized
Losses incurred during the related Due
Period and prepayments received during the
related Prepayment Period) minus the
Overcollateralization Floor.
Class M-2 Certificate: Any Certificate designated as a "Class
M-2
Certificate" on the face thereof, in the
form of Exhibit A-5 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class M-2 Certificates as set forth
herein.
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Class M-2 Margin: For any Distribution Date (i) on or prior to
the
Optional Termination Date, 1.750% per annum
and (ii) thereafter, 2.625% per
annum.
Class M-2 Pass-Through Rate: For the first Distribution Date,
5.45438%
per annum, and for any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
the Class M-2 Margin for such
Distribution Date and (ii) the Interest
Rate Cap for such Distribution Date.
Class M-2 Principal Distribution Amount: For any Distribution Date,
an
amount equal to the excess, if any of (i)
the sum of the aggregate Certificate
Principal Balances of the Class A
Certificates (after taking into account
distributions of the Class A Principal
Distribution Amount for such Distribution
Date), the Class M-1 Certificates (after
taking into account distributions of
the Class M-1 Principal Distribution Amount
for such Distribution Date) and the
Class M-2 Certificates immediately prior to
such Distribution Date, over (ii)
the lesser of (a) 85.50% of the aggregate
Stated Principal Balance of the
Mortgage Loans as of the last day of the
related Due Period (after reduction for
Realized Losses incurred during the related
Due Period and prepayments received
during the related Prepayment Period) and
(b) the aggregate Stated Principal
Balance of the Mortgage Loans as of the
last day of the related Due Period
(after reduction for Realized Losses
incurred during the related Due Period and
prepayments received during the related
Prepayment Period) minus the
Overcollateralization Floor.
Class M-3 Certificate: Any Certificate designated as a "Class
M-3
Certificate" on the face thereof, in the
form of Exhibit A-6 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class M-3 Certificates as set forth
herein.
Class M-3 Margin: For any Distribution Date (i) on or prior to
the
Optional Termination Date, 2.000% per annum
and (ii) thereafter, 3.000% per
annum.
Class M-3 Pass-Through Rate: For the first Distribution Date,
5.70438%
per annum, and for any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
the Class M-3 Margin for such
Distribution Date and (ii) the Interest
Rate Cap for such Distribution Date.
Class M-3 Principal Distribution Amount: For any Distribution Date,
an
amount equal to the excess, if any of (i)
the sum of the aggregate Certificate
Principal Balances of the Class A
Certificates (after taking into account
distributions of the Class A Principal
Distribution Amount for such Distribution
Date), the Class M-1 Certificates (after
taking into account distributions of
the Class M-1 Principal Distribution Amount
for such Distribution Date), the
Class M-2 Certificates (after taking into
account distributions of the Class M-2
Principal Distribution Amount for such
Distribution Date) and the Class M-3
Certificates immediately prior to such
Distribution Date, over (ii) the lesser
of (a) 87.60% of the aggregate Stated
Principal Balance of the Mortgage Loans as
of the last day of the related Due Period
(after reduction for Realized Losses
incurred during the related Due Period and
prepayments received during the
related Prepayment Period) and (b) the
aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the
related Due Period (after reduction for
Realized Losses incurred during the related
Due Period and prepayments received
during the related Prepayment Period) minus
the Overcollateralization Floor.
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<PAGE>
Class M-4 Certificate: Any Certificate designated as a "Class
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 M-4 Certificates as set forth
herein.
Class M-4 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 M-4 Pass-Through Rate: For the first Distribution Date,
6.20438%
per annum, and for any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
the Class M-4 Margin for such
Distribution Date and (ii) the Interest
Rate Cap for such Distribution Date.
Class M-4 Principal Distribution Amount: For any Distribution Date,
an
amount equal to the excess, if any of (i)
the sum of the aggregate Certificate
Principal Balances of the Class A
Certificates (after taking into account
distributions of the Class A Principal
Distribution Amount for such Distribution
Date), the Class M-1 Certificates (after
taking into account distributions of
the Class M-1 Principal Distribution Amount
for such Distribution Date), the
Class M-2 Certificates (after taking into
account distributions of the Class M-2
Principal Distribution Amount for such
Distribution Date), the Class M-3
Certificates (after taking into account
distributions of the Class M-3 Principal
Distribution Amount for such Distribution
Date) and the Class M-4 Certificates
immediately prior to such Distribution
Date, over (ii) the lesser of (a) 89.50%
of the aggregate Stated Principal Balance
of the Mortgage Loans as of the last
day of the related Due Period (after
reduction for Realized Losses incurred
during the related Due Period and
prepayments received during the related
Prepayment Period) and (b) the aggregate
Stated Principal Balance of the
Mortgage Loans as of the last day of the
related Due Period (after reduction for
Realized Losses incurred during the related
Due Period and prepayments received
during the related Prepayment Period) minus
the Overcollateralization Floor.
Class M-5 Certificate: Any Certificate designated as a "Class
M-5
Certificate" on the face thereof, in the
form of Exhibit A-8 hereto,
representing the right to its Percentage
Interest of distributions provided for
the Class M-5 Certificates as set forth
herein.
Class M-5 Margin: For
any Distribution Date (i) on or prior to the
Optional Termination Date, 3.250% per annum
and (ii) thereafter, 4.875% per
annum.
Class M-5 Pass-Through Rate: For the first Distribution Date,
6.95438%
per annum, and for any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
the Class M-5 Margin for such
Distribution Date and (ii) the Interest
Rate Cap for such Distribution Date.
Class 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 Balances of the Class A
Certificates (after taking into account
distributions of the Class A Principal
Distribution Amount for such Distribution
Date), the Class M-1 Certificates (after
taking into account distributions of
the Class M-1 Principal Distribution Amount
for such Distribution Date), the
Class M-2 Certificates (after taking into
account distributions of the Class M-2
Principal Distribution Amount for such
Distribution Date), the Class M-3
Certificates (after taking into account
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<PAGE>
distributions of the Class M-3 Principal
Distribution Amount for such
Distribution Date), the Class M-4
Certificates (after taking into account
distributions of the Class M-4 Principal
Distribution Amount for such
Distribution Date) and the Class M-5
Certificates immediately prior to such
Distribution Date, over (ii) the lesser of
(a) 91.60% of the aggregate Stated
Principal Balance of the Mortgage Loans as
of the last day of the related Due
Period (after reduction for Realized Losses
incurred during the related Due
Period and prepayments received during the
related Prepayment Period) and (b)
the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day
of the related Due Period (after reduction
for Realized Losses incurred during
the related Due Period and prepayments
received during the related Prepayment
Period) minus the Overcollateralization
Floor.
Class M-6 Certificate: Any Certificate designated as a "Class
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 M-6 Certificates as set forth
herein.
Class M-6 Margin: For any Distribution Date (i) on or prior to
the
Optional Termination Date, 3.250% per annum
and (ii) thereafter, 4.875% per
annum.
Class M-6 Pass-Through Rate: For the first Distribution Date,
6.95438%
per annum, and for any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
the Class M-6 Margin for such
Distribution Date and (ii) the Interest
Rate Cap for such Distribution Date.
Class 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 Balances of the Class A
Certificates (after taking into account
distributions of the Class A Principal
Distribution Amount for such Distribution
Date), the Class M-1 Certificates (after
taking into account distributions of
the Class M-1 Principal Distribution Amount
for such Distribution Date), the
Class M-2 Certificates (after taking into
account distributions of the Class M-2
Principal Distribution Amount for such
Distribution Date), the Class M-3
Certificates (after taking into account
distributions of the Class M-3 Principal
Distribution Amount for such Distribution
Date), the Class M-4 Certificates
(after taking into account distributions of
the Class M-4 Principal Distribution
Amount for such Distribution Date), the
Class M-5 Certificates (after taking
into account distributions of the Class M-5
Principal Distribution Amount for
such Distribution Date) and the Class M-6
Certificates immediately prior to such
Distribution Date, over (ii) the lesser of
(a) 93.40% of the aggregate Stated
Principal Balance of the Mortgage Loans as
of the last day of the related Due
Period (after reduction for Realized Losses
incurred during the related Due
Period and prepayments received during the
related Prepayment Period) and (b)
the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day
of the related Due Period (after reduction
for Realized Losses incurred during
the related Due Period and prepayments
received during the related Prepayment
Period) minus the Overcollateralization
Floor.
Class M-7 Certificate: Any Certificate designated as a "Class
M-7
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 M-7 Certificates as set forth
herein.
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<PAGE>
Class M-7 Margin: For any Distribution Date (i) on or prior to
the
Optional Termination Date, 3.250% per annum
and (ii) thereafter, 4.875% per
annum.
Class M-7 Pass-Through Rate: For the first Distribution Date,
6.95438%
per annum, and for any Distribution Date
thereafter, the lesser of (i) One-Month
LIBOR for the related Accrual Period plus
the Class M-7 Margin for such
Distribution Date and (ii) the Interest
Rate Cap for such Distribution Date.
Class M-7 Principal Distribution Amount: For any Distribution Date,
an
amount equal to the excess, if any of (i)
the sum of the aggregate Certificate
Principal Balances of the Class A
Certificates (after taking into account
distributions of the Class A Principal
Distribution Amount for such Distribution
Date), the Class M-1 Certificates (after
taking into account distributions of
the Class M-1 Principal Distribution Amount
for such Distribution Date), the
Class M-2 Certificates (after taking into
account distributions of the Class M-2
Principal Distribution Amount for such
Distribution Date), the Class M-3
Certificates (after taking into account
distributions of the Class M-3 Principal
Distribution Amount for such Distribution
Date), the Class M-4 Certificates
(after taking into account distributions of
the Class M-4 Principal Distribution
Amount for such Distribution Date), the
Class M-5 Certificates (after taking
into account distributions of the Class M-5
Principal Distribution Amount for
such Distribution Date), the Class M-6
Certificates (after taking into account
distributions of the Class M-6 Principal
Distribution Amount for such
Distribution Date) and the Class M-7
Certificates immediately prior to such
Distribution Date, over (ii) the lesser of
(a) 96.70% of the aggregate Stated
Principal Balance of the Mortgage Loans as
of the last day of the related Due
Period (after reduction for Realized Losses
incurred during the related Due
Period and prepayments received during the
related Prepayment Period) and (b)
the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day
of the related Due Period (after reduction
for Realized Losses incurred during
the related Due Period and prepayments
received during the related Prepayment
Period) minus the Overcollateralization
Floor.
Class R-I Certificate: Any Certificate designated as a "Class
R-I
Certificate" on the face thereof, in
substantially the form set forth in Exhibit
A-10 hereto, and evidencing ownership of
the residual interest in REMIC I and
representing the right to the Percentage
Interest of distributions provided for
the Class R-I Certificate as set forth
herein.
Class R-II Certificate: Any Certificate designated as a "Class
R-II
Certificate" on the face thereof, in
substantially the form set forth in Exhibit
A-11 hereto, and evidencing ownership of
the residual interest in REMIC II and
representing the right to the Percentage
Interest of distributions provided for
the Class R-II Certificate as set forth
herein.
Closing Date:
September 9, 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 at the date of
origination and (y) the outstanding
principal balance at the date of
origination of the Mortgage
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<PAGE>
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 Master Servicing Fee, to be
applied by the Master Servicer to the
payment of the interest portion of a
Prepayment Interest Shortfall on such
Mortgage Loan pursuant to Section 5.02
hereof.
Corporate Trust Office: The Trustee's corporate trust office
for
purpose of presentment and surrender of the
Certificates for the final
distribution thereon and for transfers and
exchanges is located at 135 South
LaSalle Street, Suite 1625, Chicago,
Illinois 60603, Attention: Global
Securities and Trust Services--Bear Stearns
Asset Backed Securities Trust
2005-3, or at such other address as the
Trustee may designate from time to time
in writing to the other parties to this
Agreement.
Custodial Agreement: An agreement, dated as of the Closing Date,
among
the Depositor, the Master Servicer, the
Trustee and the Custodian.
Custodian: LaSalle Bank National Association, or any successor
custodian appointed pursuant to the
provisions hereof and of the Custodial
Agreement.
Cut-off Date: August
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
with respect to such Mortgage Loan
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 is $320,659,792.
Deferred Interest: With respect to any negatively amortizing
Mortgage
Loan, the excess of the amount of interest
due on such negatively amortizing
Mortgage Loan over the interest portion of
the scheduled payment due thereon,
which is permitted under the terms of the
related Mortgage Note to be added to
the principal of the Mortgage Note.
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 shall have occurred and
be
continuing with respect to each
Distribution Date after the Stepdown Date, if
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 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 as of the last day of the related
Due Period, equals or exceeds 39.00% of the
Senior Enhancement Percentage for
such Distribution Date.
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<PAGE>
Delinquent: A Mortgage Loan is "delinquent" if any payment due
thereon
is not made pursuant to the terms of such
Mortgage Loan by the close of business
on the day such payment is scheduled to be
due. A Mortgage Loan is "30 days
delinquent" if such payment has not been
received by the close of business on
the corresponding day of the month
immediately succeeding the month in which
such payment was due, or, if there is no
such corresponding day (e.g., as when a
30-day month follows a 31-day month in
which a payment was due on the 31st day
of such month), then on the last day of
such immediately succeeding month.
Similarly for "60 days delinquent," "90
days delinquent" and so on.
Denomination: With respect to each Certificate (other than the
Residual
Certificates), the amount set forth on the
face thereof as the "Initial
Principal Balance of this Certificate" or
"Initial Principal Balance (Notional)
of this Certificate."
Depositor: Bear Stearns Asset Backed Securities I LLC, a
Delaware
limited liability company, or its successor
in interest.
Depository: The initial Depository shall be DTC, the nominee of
which
is Cede, or any other organization
registered as a "clearing agency" pursuant to
Section 17A of the Securities Exchange Act
of 1934, as amended. The Depository
shall initially be the registered Holder of
the Book-Entry Certificates. The
Depository shall at all times be a
"clearing corporation" as defined in Section
8-102(a)(5) of the Uniform Commercial Code
of the State of New York.
Depository Agreement: With respect to the Class of Book-Entry
Certificates, the agreement between the
Trust and the initial Depository, dated
September 8, 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 the 15th
day
of the month of such Distribution Date or,
if such 15th day is not a Business
Day, the immediately preceding Business
Day.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to
Section 4.04 in the name of the Trustee
for the benefit of the Certificateholders
and designated "LaSalle Bank National
Association, in trust for registered
holders of Bear Stearns Asset Backed
Securities Trust 2005-3, Asset-Backed
Certificates, Series 2005-3, Distribution
Account." 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 coinciding
with,
and after, the initial issuance of the
Certificates, or if such 25th day is not
a Business Day, the next succeeding
Business Day, commencing in September 2005.
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<PAGE>
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
Loan, the last day of the immediately
preceding calendar month, if its Scheduled
Payment is due during such calendar
month.
Due Period: With respect to any Distribution Date and any Mortgage
Loan
(other than a Simple Interest Loan), the
period commencing on the second day of
the calendar month preceding the calendar
month in which such Distribution Date
occurs and ending at the close of business
on the first day of the calendar
month in which such Distribution Date
occurs, and with respect to any Simple
Interest Loan, 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 S&P is not
a Rating Agency) are rated by each
Rating Agency in one of its two highest
long-term and its highest short-term
rating, respectively, (or, if S&P is a
Rating Agency, in its highest long-term
and one of its two highest short-term
ratings, respectively,) at the time any
amounts are held on deposit therein, or
(ii) an account or accounts in a
depository institution or trust company in
which such accounts are insured by
the FDIC (to the limits established by the
FDIC) and the uninsured deposits in
which accounts are otherwise secured such
that, as evidenced by an Opinion of
Counsel delivered to the Trustee and to
each Rating Agency, the
Certificateholders have a claim with
respect to the funds in such account or a
perfected first priority security interest
against any collateral (which shall
be limited to Permitted Investments)
securing such funds that is superior to
claims of any other depositors or creditors
of the depository institution or
trust company in which such account is
maintained, or (iii) a trust account or
accounts maintained with the corporate
trust department of a federal or state
chartered depository institution or trust
company having capital and surplus of
not less than $50,000,000, acting in its
fiduciary capacity or (iv) any other
account acceptable to the Rating Agencies.
Eligible Accounts may bear interest,
and may include, if otherwise qualified
under this definition, accounts
maintained with the Trustee.
EMC: EMC Mortgage
Corporation, a Delaware corporation.
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 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
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<PAGE>
related Mortgage Rate through the last day
of the month in which the Mortgage
Loan has been liquidated.
Excess Spread: With respect to any Distribution Date, the excess,
if
any, of (i) the Interest Funds for such
Distribution Date over (ii) the sum of
the Interest Distribution Amount on the
Offered Certificates and the Class M-7
Certificates, and the Interest Carry
Forward Amount on the Class A Certificates,
in each case for such Distribution
Date.
Excess Yield Maintenance Amount: With respect to any Distribution
Date,
the excess, if any, of (a) the Yield
Maintenance Payments received under the
Yield Maintenance Agreement for such
Distribution Date, over (b) the Interest
Distribution Amount that the Class A-1,
Class A-2, Class A-3, Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class
M-6 and Class M-7 Certificates would
have been entitled to receive on such
Distribution Date had the applicable
Pass-Through Rates on such Classes of
Certificates been calculated at One-Month
LIBOR on such Distribution Date plus the
applicable Certificate Margin, to the
extent that such Interest Distribution
Amount was not otherwise paid from
Interest Funds on such Distribution Date to
such Classes of Certificates.
Extra Principal Distribution Amount: With respect to any
Distribution
Date, the lesser of (i) the
Overcollateralization Deficiency Amount for such
Distribution Date and (ii) the 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.
Final Maturity Reserve Account: The account established and
maintained
by the Trustee pursuant to Section
4.08.
Final Maturity Reserve Amount: For each Distribution Date on and
after
the Distribution Date in December 2026, an
amount equal to the lesser of (x) the
Class B-IO Distribution Amount and the
remaining Excess Yield Maintenance Amount
following distributions under clause fourth
of Section 5.04(a)(iii), and (y) the
lesser of (i) the sum of the aggregate
Certificate Principal Balance of the
Certificates (other than the Class B-IO and
Residual Certificates) after giving
effect to principal distributions on such
Distribution Date, and (ii) the
aggregate principal balance, at the end of
the related Due Period, of each
outstanding Mortgage Loan having a final
maturity occurring subsequent to
September 1, 2035. For each Distribution
Date prior to the Distribution Date in
December 2026, zero.
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.
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<PAGE>
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 related Minimum
Lifetime Mortgage Rate, the related
Maximum Lifetime Mortgage Rate and the
related Periodic Rate Cap, each as
applicable) the related Mortgage Rate until
the next succeeding Interest
Adjustment Date relating to such Mortgage
Loan.
Indemnified Persons: The Trustee, the Master Servicer, the Seller,
the
Custodian and the Depositor 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.
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 not applied to
the restoration or repair of the related
Mortgaged Property or released to the
related Mortgagor in accordance with the
procedures that the Master Servicer
would follow in servicing mortgage loans
held for its own account, in each case
other than any amount included in such
Insurance Proceeds representing the
reimbursement of the Master Servicer's
costs and expenses incurred in connection
with presenting claims under the Insurance
Policies relating to such Mortgaged
Property and exclusive of Subsequent
Recoveries with respect to the related
Mortgage Loan.
Interest 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 Carry Forward Amount: As of any Distribution Date and
with
respect to each Class of Certificates, the
sum of (i) the excess of (a) the
Interest Distribution Amount for such Class
of Certificates with respect to
prior Distribution Dates over (b) the
amount actually distributed to such Class
of Certificates with respect to interest on
such prior Distribution Dates and
(ii) interest on such excess (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.
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<PAGE>
Interest Determination Date: With respect to each Certificate
(other
than the Residual Certificates), for the
first Accrual Period, September 7,
2005, and with respect to any Accrual
Period thereafter, the second LIBOR
Business Day preceding the commencement of
such Accrual Period.
Interest Distribution Amount: As of any Distribution Date, with
respect
to Certificates of each Class of
Certificates (other than the Class B-IO
Certificates and the Residual
Certificates), the interest accrued at the
applicable Pass-Through Rate (including for
such purpose any application of the
related Interest Rate Cap) for the
applicable Accrual Period on the Certificate
Principal Balance of such Class of
Certificates immediately prior to such
Distribution Date, 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, and reduced by
any Prepayment Interest Shortfall (to
the extent not covered by Compensating
Interest) and any shortfalls resulting
from the application of the Relief Act or
similar state laws, in each case to
the extent allocated to such Certificate as
set forth herein. Interest shall not
accrue on the Class B-IO Certificates or on
the Residual Certificates.
Interest Funds: For any Distribution Date (i) the sum, without
duplication, of (a) all interest received
and relating to the related
Distribution Date with respect to the
Mortgage Loans, less the related servicing
fee, if applicable, the Master Servicing
Fee and the Trustee Fee, (b) all
Advances relating to interest with respect
to the Mortgage Loans made on or
prior to the related Master Servicer
Advance Date, (c) all Compensating Interest
with respect to the Mortgage Loans and
required to be remitted pursuant to this
Agreement with respect to such Distribution
Date, (d) all Insurance Proceeds and
Liquidation Proceeds (other than Excess
Liquidation Proceeds) with respect to
the Mortgage Loans collected during the
related Due Period (to the extent such
Insurance Proceeds and Liquidation Proceeds
relate to interest on the Mortgage
Loans plus the interest portion of all
Subsequent Recoveries with respect to the
Mortgage Loans received during the related
Due Period, (e) the interest portion
of prepayments on the Mortgage Loans
collected during the related Prepayment
Period, (f) all amounts relating to
interest with respect to each Mortgage Loan
repurchased by the Seller or the Master
Servicer pursuant to Sections 2.02, 2.03
and 3.21 and (g) all amounts in respect of
interest paid by the Master Servicer
pursuant to Section 10.01, in each case to
the extent remitted by the Master
Servicer to the Master Servicer Collection
Account pursuant to this Agreement
minus (ii) all amounts relating to interest
on the Mortgage Loans that are used
to reimburse the Trustee and the Master
Servicer for amounts due to such Persons
hereunder, to the extent that such amounts
have not been retained by or
otherwise paid to such Person, as set forth
in Section 4.03 and Section 4.05.
Interest Rate Cap: For any Distribution Date and the
Certificates
(other than the Class B-IO Certificates and
the Residual Certificates), the
weighted average of the Net Mortgage Rates
of the Mortgage Loans as of the first
day of the related Due Period, in each
case, 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: The "Latest Possible Maturity Date"
for
the Certificates is the Distribution Date
occurring in September 2035, which is
the Distribution Date occurring in the
month following the final scheduled
maturity date of the Mortgage Loan in the
Trust Fund having the latest scheduled
maturity date as of the Cut-off Date. For
purposes of the Treasury
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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 date
occurring 4 years after the latest of the
foregoing Latest Possible Maturity
Dates.
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 has certified (in accordance
with Section 3.13) 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, Master Servicing Fees
and Servicing Advances and all expenses of
liquidation relating to the related
Mortgage Loan, including property
protection expenses and foreclosure and sale
costs, including court and reasonable
attorneys fees.
Master Servicer: EMC 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 Servicer Certification: A written certification covering
servicing of the Mortgage Loans 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 superseded 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 and the
Depositor following a negotiation in good
faith to determine how to comply with
any such new requirements.
Master Servicer Collection Account: The separate Eligible
Account
created and initially maintained by the
Master Servicer pursuant to Section 4.02
with a depository institution in the
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name of the Trustee for the benefit of the
Certificateholders and designated
"LaSalle Bank National Association, in
trust for registered holders of Bear
Stearns Asset Backed Securities Trust
2005-3, Asset-Backed Certificates, Series
2005-3, Master Servicer Collection
Account." 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.
Master Servicing Fee: As to each Mortgage Loan and any
Distribution
Date, an amount equal to 1/12th of the
Master Servicing Fee Rate multiplied by
the Stated Principal Balance of such
Mortgage Loan as of the 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 related Mortgagor immediately prior to
such prepayment, interest at the
Master Servicing Fee Rate on the Stated
Principal Balance of such Mortgage Loan
for the period covered by such payment of
interest.
Master Servicing Fee Rate: The Master Servicer will receive a
monthly
master servicing fee on each Distribution
Date equal to 0.50% per annum of the
aggregate principal balance of the Mortgage
Loans as of the beginning of the
calendar month immediately preceding such
Distribution Date.
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 the related 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 the related 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 5.07.
Mortgage: The mortgage, deed of trust or other instrument creating
a
first lien on or first priority ownership
interest, or creating a second or more
junior lien on or second or more junior
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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 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)(vii) hereof,
shall continue to be a Mortgage Loan
hereunder until the Purchase Price with
respect thereto has been paid to the
Trust Fund.
Mortgage Loan Purchase Price: The price, calculated as set forth
in
Section 10.01, to be paid in connection
with the repurchase of the Mortgage
Loans pursuant to Section 10.01.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time
to
time amended by the Master Servicer to
reflect the deletion of Deleted Mortgage
Loans and the addition of Replacement
Mortgage Loans pursuant to the provisions
of this Agreement) transferred to the
Trustee as part of the Trust Fund and from
time to time subject to this Agreement. The
initial Mortgage Loan Schedule is
attached hereto as Exhibit B and sets forth
the following information with
respect to each Mortgage Loan:
(i) the loan number;
(ii) the Mortgage Rate in effect as of the Cut-off Date;
(iii) the Master Servicing Fee Rate;
(iv) the Net Mortgage Rate in effect as of the Cut-off Date;
(v) the stated maturity date;
(vi) the stated original principal balance;
(vii) the original term;
(viii) the remaining term;
(ix) the Scheduled Payment;
(x) the property type;
(xi) if it is a second or more junior lien on the related
Mortgaged Property;
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<PAGE>
(xii) if applicable, that such Mortgage Loan is a Balloon
Loan;
(xiii) whether interest accrues at a fixed rate, and
otherwise, the applicable Index (with respect to adjustable
rate
Mortgage Loans);
(xiv) the Gross Margin, if applicable;
(xv) the intervals between Interest Adjustment Dates, if
applicable;
(xvi) the next succeeding Interest Adjustment Date, if
applicable;
(xvii) the Periodic Rate Cap, if applicable;
(xviii) the Minimum Lifetime Mortgage Rate, if applicable;
(xix) the Maximum Lifetime Mortgage Rate, if applicable;
(xx) the Combined Loan-to-Value Ratio as of the Cut-off Date;
(xxi) [Reserved];
(xxii) the Cut-off Date Principal Balance;
(xxiii) if applicable, that such Mortgage Loan is a Simple
Interest Loan;
(xxiv) if applicable, that such Mortgage Loan provides for
negative amortization; and
(xxv) 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
(xxiv) above for all of the Mortgage
Loans.
Mortgage Note: The original executed note or other evidence of
indebtedness of a Mortgagor under the
related Mortgage Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage
Note
from time to time.
Mortgaged Property: The underlying property securing a Mortgage
Loan.
Mortgagor: The obligor
on a Mortgage Note.
Net Monthly Excess Cashflow: With respect to any Distribution Date,
is
the excess of (x) the Interest Funds and
Principal Funds for such Distribution
Date over (y) the sum of the Interest
Distribution Amounts and Principal
Distribution Amounts for the Certificates
for such Distribution Date and the
Interest Carry Forward Amounts for the
Class A Certificates for such
Distribution Date.
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<PAGE>
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 Master Servicing Fee
Rate and the Trustee Fee Rate.
Nonrecoverable Advance: Any portion of an Advance or a
Servicing
Advance previously made or proposed to be
made by the Master Servicer or the
Trustee, as applicable, that, in the good
faith judgment of the Master Servicer
or the Trustee, as applicable, 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 Class A-1 Certificates, Class A-2
Certificates, Class A-3 Certificates, Class
M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class
M-4 Certificates, Class M-5
Certificates and the Class M-6
Certificates.
Officer's Certificate: A certificate (i) signed by the Chairman of
the
Board, the Vice Chairman of the Board, the
President, a Vice President (however
denominated), an Assistant Vice President,
the Treasurer, the Secretary, or one
of the assistant treasurers or assistant
secretaries of the Depositor or the
Master Servicer (or any other officer
customarily performing functions similar
to those performed by any of the above
designated officers and also to whom,
with respect to a particular matter, such
matter is referred because of such
officer's knowledge of and familiarity with
a particular subject) or (ii), if
provided for in this Agreement, signed by a
Servicing Officer and delivered to
the Depositor, the Seller and/or the
Trustee, as the case may be, as required by
this Agreement.
One-Month LIBOR: With respect to any Accrual Period, the rate
determined by the Trustee on the related
Interest Determination Date on the
basis of the rate for U.S. dollar deposits
for one month that appears on
Telerate Screen Page 3750 as of 11:00 a.m.
(London time) on such Interest
Determination Date; provided that the
parties hereto acknowledge that One-Month
LIBOR for the first Accrual Period shall
equal 3.520% 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 Trustee), One-Month LIBOR for the
applicable Accrual Period will be the
Reference Bank Rate. If no such quotations
can be obtained by the Trustee and no
Reference Bank Rate is available, then
One-Month LIBOR for such Accrual Period
will be One-Month LIBOR applicable to the
preceding Accrual Period. The
establishment of One-Month LIBOR on each
Interest Determination Date by the
Trustee, and the Trustee's calculation of
the rate of interest applicable to the
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 the Opinions of Counsel
referenced in Section 7.05 and Section
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.
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Optional Termination: The termination of the Trust Fund created
hereunder as a result of the purchase of
all of the Mortgage Loans and any REO
Property pursuant to the last sentence of
Section 10.01 hereof.
Optional Termination Date: The Distribution Date on which the
Stated
Principal Balance of all of the Mortgage
Loans, and the Appraised Value of all
REO Properties, at the time of repurchase
is equal to or less than 10% of the
aggregate Cut-off Date Principal Balance of
all of the Mortgage Loans.
Original Value: The value of the property underlying a Mortgage
Loan
based on an appraisal.
Originator: Any of the entities which either originated or acquired
a
Mortgage Loan and transferred such Mortgage
Loan to the Seller.
OTS: The Office of
Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore
executed and authenticated under
this Agreement except:
(a)
Certificates theretofore canceled by the Trustee or delivered
to the Trustee for cancellation; and
(b)
Certificates in exchange for which or in lieu of which other
Certificates have been executed and
delivered by the Trustee pursuant to this
Agreement.
Outstanding Mortgage Loan: As of any date of determination, a
Mortgage
Loan with a Stated Principal Balance
greater than zero that was not the subject
of a Principal Prepayment in full, and that
did not become a Liquidated Loan,
prior to the end of the related Prepayment
Period.
Overcollateralization Deficiency Amount: With respect to the
first
Distribution Date, $0. With respect to any
subsequent Distribution Date, is the
amount by which the Overcollateralization
Target Amount for such Distribution
Date exceeds the Overcollateralized Amount
for such Distribution Date (after
giving effect to distributions of principal
on the Certificates (including as a
result of Subsequent Recoveries on the
Mortgage Loans), other than distributions
of any Extra Principal Distribution Amount,
on such Distribution Date).
Overcollateralization Floor: For any date of determination, 0.50%
of
the aggregate Cut-off Date Principal
Balance of the Mortgage Loans.
Overcollateralization Release Amount: With respect to the first
Distribution Date, $0. With respect to any
subsequent Distribution Date, the
lesser of (i) the Principal Funds for such
Distribution Date and (ii) the
excess, if any, of the Overcollateralized
Amount for such Distribution Date
(assuming 100% of the Principal Funds for
such Distribution Date is applied as a
principal payment on the related
Certificates on such Distribution Date) over
the Overcollateralization Target Amount for
such Distribution Date.
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<PAGE>
Overcollateralization Target Amount: With respect to the first
Distribution Date, $0. With respect to the
Mortgage Loans and any subsequent
Distribution Date (i) prior to the Stepdown
Date, an amount equal to 1.650% of
the aggregate Cut-off Date Principal
Balance of the Mortgage Loans and (ii) on
and after the Stepdown Date, provided a
Trigger Event is not in effect, the
greater of (a) an amount equal to 3.300% of
the aggregate Stated Principal
Balance of the Mortgage Loans as of the
last day of the related Due Period and
(b) the Overcollateralization Floor or
(iii) on and after the Stepdown Date and
if a Trigger Event is in effect, the
Overcollateralization Target Amount for the
immediately preceding Distribution
Date.
Overcollateralized Amount: With respect to the first Distribution
Date,
$0. With respect to any subsequent
Distribution Date, the excess, if any, of (i)
the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day
of the related Due Period (after reduction
for Realized Losses incurred during
the related Due Period and prepayments
received during the related Prepayment
Period), over (ii) the sum of the
Certificate Principal Balance of the Offered
Certificates and the Class M-7 Certificates
on such Distribution Date (after
taking into account the payment of
principal (including as a result of
Subsequent Recoveries on the Mortgage
Loans), other than any Extra Principal
Distribution Amount, on such Certificates
on such Distribution Date).
Ownership Interest: As to any Certificate, any ownership interest
in
such Certificate including any interest in
such Certificate as the Holder
thereof and any other interest therein,
whether direct or indirect, legal or
beneficial.
Pass-Through Rate: With respect to 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
Interest Rate Cap. The Class B-IO
Certificates and the Residual Certificates do
not accrue interest and do not have a
Pass-Through Rate.
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 the related Mortgage Rate on
each related 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;
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<PAGE>
(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;
(v)
certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or
trust
company incorporated under the laws of the United States or of
any
state thereof and subject to supervision and examination by
federal
and/or state banking authorities, provided that the commercial
paper
and/or long term unsecured debt obligations of such depository
institution or trust company (or in the case of the principal
depository institution in a holding company system, the
commercial
paper or long-term unsecured debt obligations of such holding
company,
but only if S&P 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;
(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;
(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 S&P is a Rating Agency, such rating shall be the
highest
commercial paper rating of S&P for any such securities), or
such lower
rating as will not result in the downgrading or withdrawal of
the
rating then assigned to the Certificates by any Rating Agency,
as
evidenced by a signed writing delivered by each Rating Agency;
(x) interests in any money market fund (including any such
fund managed or advised by the Trustee, the Master Servicer or
any
affiliate thereof) which at the date of acquisition of the
interests in
such fund and throughout the time such interests are held in such
fund
has the highest applicable long term rating by each Rating
Agency
rating such
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<PAGE>
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;
(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 or any affiliate
thereof) which on the date of acquisition has been rated by each
Rating
Agency in their respective highest applicable rating category or
such
lower rating as will not result in the downgrading or withdrawal of
the
ratings then assigned to the Certificates by each Rating Agency;
and
(xii) such other investments having a specified stated
maturity and bearing interest or sold at a discount acceptable to
each
Rating Agency as will not result in the downgrading or withdrawal
of
the rating then assigned to the Certificates by any Rating Agency,
as
evidenced by a signed writing delivered by each Rating Agency;
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 (as
defined below) 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
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United States federal income tax purposes
regardless of its connection with the
conduct of a trade or business within the
United States, or a trust if a court
within the United States is able to
exercise primary supervision over the
administration of the trust and one or more
United States persons have authority
to control all substantial decisions of the
trust or and (vi) any other Person
so designated by the Trustee based upon an
Opinion of Counsel (which shall not
be an expense of the Trustee) that states
that the Transfer of an Ownership
Interest in a Residual Certificate to such
Person may cause the Trust Fund to
fail to qualify as a REMIC at any time that
any Certificates are Outstanding.
The terms "United States," "State" and
"International Organization" shall have
the meanings set forth in section 7701 of
the Code or successor provisions. A
corporation will not be treated as an
instrumentality of the United States or of
any State or political subdivision thereof
for these purposes if all of its
activities are subject to tax and, with the
exception of the Federal Home Loan
Mortgage Corporation, a majority of its
board of directors is not selected by
such government unit.
Person: Any individual, corporation, partnership, joint
venture,
association, joint-stock company, limited
liability company, trust,
unincorporated organization or government,
or any agency or political
subdivision thereof.
Prepayment Assumption: The applicable rate of prepayment, as
described
in the Prospectus Supplement relating to
each Class of Offered Certificates.
Prepayment Charge: Any prepayment premium or charge payable by
a
Mortgagor in connection with any Principal
Prepayment on the related 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 (other than a
Principal Prepayment in full
resulting from the purchase of a Mortgage
Loan pursuant to Section 2.02, Section
2.03, Section 3.21 or Section 10.01 hereof)
or that became a Liquidated Loan
during the related Prepayment Period, 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, in the case of a
liquidation, the amount of such
Liquidation Proceeds, exceeds (ii) the
amount of interest paid or collected in
connection with such Principal
Prepayment.
Prepayment Period: As to any Distribution Date other than the
First
Distribution Date, 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. As to the first
Distribution Date, the period from the
Cut-off Date through the close of business
on September 15, 2005.
Primary Mortgage Insurance Policy: Any primary mortgage
guaranty
insurance policy issued in connection with
a Mortgage Loan which provides
compensation to the related Mortgage Note
holder in the event of default by the
obligor under such Mortgage Note or the
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related security instrument, if any, or any replacement policy
therefor
through the related Accrual Period for such Class relating to a
Distribution Date.
Principal Distribution Amount: With respect to each Distribution
Date,
an amount equal to (x) the Principal Funds
for such Distribution Date plus (y)
any Extra Principal Distribution Amount for
such Distribution Date minus (z) any
Overcollateralization Release Amount for
such Distribution Date.
Principal Funds: With respect to any Distribution Date, (i) the
sum,
without duplication, of (a) all scheduled
principal (or with respect to any
Simple Interest Loans, actual principal)
collected during the related Due Period
on the Mortgage Loans, (b) all Advances
relating to principal made on or before
the Master Servicer Advance Date relating
to such Distribution 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
pursuant to Sections 2.02, 2.03 or 3.21
with respect to the related Distribution
Date, (e) the aggregate of all
Substitution Adjustment Amounts for the
related Determination Date delivered by
the Master Servicer in connection with the
substitution of Mortgage Loans
pursuant to Section 2.03(c), (f) amounts in
respect of principal paid by the
Master Servicer pursuant to Section 10.01
and (g) all Liquidation Proceeds
(other than Excess Liquidation Proceeds)
and Insurance Proceeds on the Mortgage
Loans collected during the related Due
Period (to the extent such Liquidation
Proceeds and Insurance Proceeds relate to
principal on the Mortgage Loans plus
the principal portion of all Subsequent
Recoveries on the Mortgage Loans
received during the related Due Period, in
each case to the extent remitted by
the Master Servicer to the Master Servicer
Collection Account pursuant to this
Agreement, minus (ii) all amounts relating
to principal or not allocable to
either principal or interest on the
Mortgage Loans that are used to reimburse
the Trustee and the Master Servicer for
amounts due to such Persons hereunder,
to the extent that such amounts have not
been retained by or otherwise paid to
such Person, as set forth in 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 pursuant to
Sections 2.02, 2.03, 3.20 and 10.01 hereof)
that is received in advance of its
scheduled Due Date and is not accompanied by
an amount as to interest representing
scheduled interest due on such Mortgage
Loan on any date or dates in any month or
months subsequent to the month of
prepayment, and all amounts constituting
lost principal with respect to a
Mortgage Loan that is treated as a
Principal Prepayment pursuant to Section
2.08. Partial Principal Prepayments shall
be applied by the Master Servicer in
accordance with the terms of the related
Mortgage Note.
Prospectus Supplement: The Prospectus Supplement, dated September
7,
2005, relating to the public offering of
the Offered Certificates.
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 Section 2.03 hereof or (y)
that the Master Servicer has a right
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to purchase pursuant to Section 3.21
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
from the date through which interest was
last paid on such Mortgage Loan by the
related Mortgagor to the first day of the
month in which such Purchase Price is
to be distributed to Certificateholders
plus (iii) in the case of a repurchase
of such Mortgage Loan resulting from breach
of a representation or warranty
contained in Section 2.03(b)(vii)(G),
Section 2.03(b)(vii)(S) or Section
2.03(b)(vii)(X), any costs or damages
incurred by the Trust and the Trustee in
connection with the violation by such
Mortgage Loans of any predatory lending or
abusive lending law, reduced by (iv) any
portion of the Master Servicing Fee,
Servicing Advances and Advances payable to
the purchaser of such 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, as
reported by the Master Servicer to the
Trustee, equal to (i) the Stated Principal
Balance of such Liquidated Loan as of
the date of such liquidation, minus (ii)
the net 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 such
Liquidated Loan.
Realized Loss Event: A Realized Loss Event will be deemed to
have
occurred if as of the last day of the
related Due Period, for the Distribution
Dates in the months indicated below, the
aggregate amount of Realized Losses on
the Mortgage Loans from the Cut-off Date
through such last day of the related
Due Period (reduced by the aggregate amount
of Subsequent Recoveries on the
Mortgage Loans from the Cut-off Date
through the last day of the related Due
Period), as a percentage of the aggregate
Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date,
exceeds the following:
(i) 36 months through 47 months following the Closing Date,
3.25%;
(ii) 48 months through 59 months following the Closing Date,
4.50%;
(iii) 60 months through 71 months following the Closing Date,
5.25%; and
(iv) 72 months following the Closing Date, and each month
thereafter, 5.75%.
Record Date: With respect to the Class B-IO Certificates and
the
Residual 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 any
Distribution Date and the Certificates (other
than the Class B-IO Certificates and the
Residual Certificates), so long as such
Certificates are Book-Entry Certificates,
the Business Day preceding such
Distribution Date,
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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 the
Certificates (other than the Class B-IO
Certificates and the Residual 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
Trustee, 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 Trustee 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 any Distribution Date,
the
Excess Spread for such Distribution Date
less any Extra Principal Distribution
Amount for such Distribution Date.
REMIC: A "real estate mortgage investment conduit" within the
meaning
of section 860D of the Code.
REMIC I: The
segregated pool of assets described in Section 5.08(a).
REMIC I Certificates: The REMIC I Regular Interests and the Class
R-I
Certificate.
REMIC I Regular Interests: As defined in Section 5.08(b).
REMIC II:
The segregated pool of
assets described in Section 5.08(a).
REMIC II Certificates: The REMIC II Regular Interests and the
Class
R-II Certificate.
REMIC II Regular Interests: As defined in Section 5.08(c).
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REMIC Opinion: An Opinion of Counsel, to the effect that the
proposed
action described therein would not, under
the REMIC Provisions, (i) cause any of
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 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 on such Mortgage Loan
in the month of substitution, not in
excess of, and not less than 90% of, the
Stated Principal Balance of the related
Deleted Mortgage Loan; (ii) have a Mortgage
Rate not less than or more than 1%
per annum higher than the Mortgage Rate of
the related Deleted Mortgage Loan;
(iii) have the same or higher credit
quality characteristics than that of the
related Deleted Mortgage Loan; (iv) have a
Combined Loan-to-Value Ratio no
higher than that of the related Deleted
Mortgage Loan (and which satisfies the
requirements of Section 1.860G-2(a)(2) of
the REMIC Provisions); (v) have a
remaining term to maturity no greater than
(and not more than one year less
than) that of the related Deleted Mortgage
Loan; (vi) not permit conversion of
the related Mortgage Rate from a fixed rate
to a variable rate; (vii) provide
for a Prepayment Charge on terms
substantially similar to those of the
Prepayment Charge, if any, of the related
Deleted Mortgage Loan; (viii) have the
same lien priority as the related Deleted
Mortgage Loan; (ix) constitute the
same occupancy type as the related Deleted
Mortgage Loan or be owner occupied;
(x) be current in payment of principal and
interest as of the date of
substitution; (xi) have payment terms that
do not vary in any material respect
from the payment terms of the related
Deleted Mortgage Loan; (xii) if the
related 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 related Deleted Mortgage Loan, have
the same Index and interval between
Interest Adjustment Dates as that of, and a
Minimum Lifetime Mortgage Rate no
lower than that of, such Deleted Mortgage
Loan; and (xiii) 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 or the Master Servicer to the
Trustee substantially in the form of
Exhibit H. Each Request for Release
furnished to the Trustee by the Seller or
the Master Servicer shall be in duplicate
and shall be executed by a Servicing
Officer (or, if furnished electronically to
the Trustee, shall be deemed to have
been sent and executed by an officer or by
a Servicing Officer) of the Seller 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.
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Residual Certificates: The Class R-I Certificates and Class
R-II
Certificates.
Responsible Officer: With respect to the Trustee, any Vice
President,
any Assistant Vice President, the
Secretary, any Assistant Secretary or any
Trust Officer with specific responsibility
for the 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.
Seller: EMC, in its capacity as seller of the Mortgage Loans to
the
Depositor.
Senior Enhancement Percentage: As to each Distribution Date,
the
percentage equivalent of a fraction, the
numerator of which is the sum of (i)
the aggregate Certificate Principal Balance
of the Subordinated Certificates and
(ii) the Overcollateralized Amount (in each
case after taking into account the
distribution of the related Principal
Distribution Amount, on such Distribution
Date) and the denominator of which is the
aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of
the related Due Period.
Servicing Advances: All customary, reasonable and necessary "out
of
pocket" costs and expenses (including
reasonable legal fees) incurred in the
performance by the Master Servicer of its
servicing obligations hereunder,
including, but not limited to, the cost of
(i) the preservation, restoration and
protection of a Mortgaged Property, (ii)
any enforcement or judicial
proceedings, including foreclosures, with
respect to a Mortgage Loan, 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 Section
3.09 hereof to cause insurance to be
maintained.
Servicing Officer: Any officer of the Master Servicer involved in,
or
responsible for, the administration and
servicing of the Mortgage Loans, whose
name and facsimile signature appear on a
list of servicing officers furnished to
the Trustee by the Master Servicer on the
Closing Date pursuant to this
Agreement, as such list may from time to
time be amended.
Simple Interest
Loan: A Mortgage Loan that provides for daily accrual
of interest and is identified as such on
the Mortgage Loan Schedule.
Startup Day: The startup day, within the meaning of Section
860G(a)(9)
of the Code, for each REMIC formed
hereunder shall be the Closing Date.
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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) from the
related Mortgagor with respect to such
Mortgage Loan during each Due Period ending
prior to such Distribution Date
(and, other than with respect to any Simple
Interest Loans, irrespective of any
delinquency in their payment), (ii) all
Principal Prepayments with respect to
such Mortgage Loan received prior to or
during the related Prepayment Period,
and all Liquidation Proceeds to the extent
applied by the Master Servicer as
recoveries of principal in accordance with
Section 3.13 with respect to such
Mortgage Loan, that were received by the
Master Servicer as of the close of
business on or prior to 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 Due Period, plus (y)
with respect to each negatively
amortizing Mortgage Loan, any Deferred
Interest added to the principal of such
Mortgage Loan through the last day of the
related Due Period. The Stated
Principal Balance of a Liquidated Loan
equals zero.
Stepdown Date: The later to occur of (a) the Distribution Date
occurring in September 2008 and (b) the
first Distribution Date on which the
aggregate Certificate Principal Balance of
the Subordinated Certificates plus
the Overcollateralized Amount for such
Distribution Date divided by the sum of
the Stated Principal Balance of the
Mortgage Loans as of the last day of the
related Due Period (after reduction for
Realized Losses incurred during the
related Due Period and Principal
Prepayments received during the related
Prepayment Period) is greater than or equal
to 39.00%.
Subsequent
Recovery: The recovery by the Master Servicer 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 to one or
more Classes of Certificates.
Subservicer: The meaning ascribed to such term pursuant to
Section
3.22(a).
Subservicing Agreement: The meaning ascribed to such term pursuant
to
Section 3.22(a).
Subordinated Certificates: The Class M-1 Certificates, Class
M-2
Certificates, Class M-3 Certificates, Class
M-4 Certificates, Class M-5
Certificates, Class M-6 Certificates and
Class M-7 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.
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 Trustee, or
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<PAGE>
any successor thereto or assignee thereof,
shall serve as tax administrator
hereunder and as agent for the related Tax
Matters Person.
Transfer Affidavit: As defined in Section 6.02(c). Transfer: Any
direct
or indirect transfer or sale of any
Ownership Interest in a Certificate.
Trigger Event: With respect to any Distribution Date on or after
the
Stepdown Date, a Trigger Event exists if
either a Delinquency Event or a
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) rights under the Yield
Maintenance Agreement, the Yield Maintenance
Account, the Basis Risk Reserve Fund and
the Final Maturity Reserve Account; and
(vi) all proceeds of the foregoing,
including proceeds of conversion, voluntary
or involuntary, of any of the foregoing
into cash or other liquid property.
Trustee: LaSalle Bank National Association, a national banking
association, not in its individual
capacity, but solely in its capacity as
trustee for the benefit of the
Certificateholders under this Agreement, and any
successor thereto, and any corporation or
national banking association resulting
from or surviving any consolidation or
merger to which it or its successors may
be a party, and any successor trustee as
may from time to time be serving as
successor trustee hereunder.
Trustee Fee: As to any Distribution Date, an amount equal to
the
product of 1/12th of the Trustee Fee Rate
and the aggregate Stated Principal
Balance of the Mortgage Loans as of the
first day of the related Due Period.
Trustee Fee Rate:
0.01% per annum.
Unpaid Allocated Realized Loss Amount: As of any Distribution Date,
and
each Class of Subordinated Certificates,
the excess of (i) the Allocated
Realized Loss Amount with respect to such
Class of Subordinated Certificates
over (ii) the sum of all Subsequent
Recoveries allocated to such Class of
Subordinated Certificates, in each case, on
all previous Distribution Dates. Any
amounts distributed to a Class of
Subordinated Certificates in respect of any
Unpaid Allocated Realized Loss Amount on
such Class of Certificates will not be
applied to reduce the Certificate Principal
Balance of such Class of
Certificates.
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 Certificates and the
Residual Certificates),
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<PAGE>
(ii) 3% to the Class B-IO Certificates and
(iv) 1% to each Class of Residual
Certificates, with the allocation among the
Certificates (other than the Class
B-IO Certificates and the Residual
Certificates) to be in proportion to the
Certificate Principal Balance of each Class
relative to the Certificate
Principal Balance of all other such
Classes. Voting Rights will be allocated
among the Certificates of each such Class
in accordance with their respective
Percentage Interests.
Yield Maintenance Account: The separate Eligible Account created
and
maintained by the Trustee pursuant to
Section 4.06 in the name of the Trustee
for the benefit of the Class A-1
Certificateholders, Class A-2
Certificateholders, Class A-3
Certificateholders, the Class M-1
Certificateholders, the Class M-2
Certificateholders, the Class M-3
Certificateholders, the Class M-4
Certificateholders, the Class M-5
Certificateholders, the Class M-6
Certificateholders and the Class M-7
Certificateholders and designated "LaSalle
Bank National Association, in trust
for registered holders of Bear Stearns
Asset Backed Securities Trust 2005-3,
Asset-Backed Certificates, Series 2005-3,
Yield Maintenance Account." The Yield
Maintenance Account shall not constitute an
asset of any REMIC hereunder.
Yield Maintenance Agreement: The Confirmation (which is also a
Schedule
to the ISDA Form Master Agreement referred
to below), Ref. No. FXNEC 7373, dated
September 2005, between the Yield
Maintenance Provider and the Trust and the
1992 ISDA Master Agreement (Multicurrency -
Cross Border) form (the "ISDA Form
Master Agreement") deemed entered into
pursuant to such confirmation.
Yield Maintenance Payment: As defined in the Prospectus
Supplement.
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(a) . 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 Trustee for
the benefit of the Certificateholders the
following documents or instruments
with respect to each Mortgage Loan so
assigned:
(i) the original Mortgage Note, including any riders thereto,
endorsed without recourse in the following form: (A) "Pay to the
order
of LaSalle Bank National Association, as Trustee for
certificateholders
of Bear Stearns Asset Backed Securities Trust 2005-3,
Asset-Backed
Certificates, Series 2005-3, without recourse", or (B) in the case
of a
loan registered on the MERS(R) System, in blank, and in each case
with
all intervening endorsements, to the extent available, and showing
an
unbroken chain of endorsements from the related Originator to
the
Seller, or, if the original Mortgage Note is unavailable to the
Depositor, a photocopy thereof, if available, together with a lost
note
affidavit,
(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 related Mortgaged Property is located) to the Trustee of
the
Mortgage, in recordable form, with respect to each Mortgage Loan in
the
name of "LaSalle Bank National Association, as Trustee for
certificateholders of Bear Stearns Asset Backed Securities
Trust
2005-3, Asset-Backed Certificates, Series 2005-3", in recordable
form
or in blank,
(iv) an original or a copy of all intervening assignments of
the related Mortgage, if any, to the extent available to the
Seller,
with evidence of recording thereon,
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<PAGE>
(v) the original lender's policy of title insurance or a
duplicate lender's policy of title insurance or, in the event
such
original title policy has not been received from the related
insurer,
such original or duplicate original lender's policy of title
insurance
shall be delivered within one year of the Closing Date, or, in
the
event that such original title insurance policy is unavailable,
a
photocopy thereof, or in lieu thereof, a current lien search on
the
related Mortgaged Property, and
(vi) originals or copies of all available assumption,
modification or substitution agreements, if any;
provided, however, that 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 such recordation is not required by the
Rating Agencies; (b) if MERS is
identified on the related Mortgage or on a
properly recorded assignment of the
related Mortgage as the mortgagee of record
solely as nominee for the Seller and
its successors and assigns; or (c) an
Opinion of Counsel has been provided to
the Trustee (with a copy to the Custodian)
which states that recordation of such
assignment is not required to protect the
interests of the Certificateholders in
the related Mortgage Loans;
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 Master 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, all amounts paid in respect of such
Mortgage Loans into the Master Servicer
Collection Account or the Distribution
Account on or before the Distribution
Account Deposit Date relating to the first
Distribution Date, or (ii) deliver to the
Trustee 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 Trustee
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
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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. In the event a
Mortgage File is released to the Master
Servicer as a result of the Master
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 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 Trustee with access to such
Mortgage Loans. The Seller further
agrees that it will not, 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 (W) a "High-Cost Home Loan" as
defined in the New Jersey Home Ownership
Security Act of 2002 (the "New Jersey
Act"), (X) a "High-Cost Home Loan" as
defined in the New Mexico Home Loan
Protection Act (the "New Mexico Act"), (Y)
a "High Cost Home Mortgage Loan" as
defined in the Massachusetts Predatory Home
Loan Practices Act effective
November 7, 2004 (the "Massachusetts Act")
or (Z) a "High-Cost Home Loan" as
defined by the Indiana High Cost Home Loan
Law effective Jan 1, 2005 (the
"Indiana Act"), it is agreed and understood
by the parties hereto that it is not
intended that any mortgage loan be
purchased hereunder that is (1) a "High-Cost
Home Loan" as defined in the New Jersey
Act, (2) a "High-Cost Home Loan" as
defined in the New Mexico Act, (3) a "High
Cost Home Mortgage Loan" as defined
in the Massachusetts Act or (4) a
"High-Cost Home Loan" as defined in the
Indiana Act.
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Section 2.02 Acceptance
by Trustee of the Mortgage Loans.
(a) The Trustee acknowledges receipt, subject to its further
review and the exceptions the Trustee notes
pursuant to the procedures described
below, of the documents (or certified
copies thereof) delivered to the Trustee
or the Custodian pursuant to Section 2.01
and declares that it holds and will
continue to hold those documents, and any
amendments, replacements or
supplements thereto, and all other assets
of the Trust Fund delivered to the
Trustee, in trust for the use and benefit
of all present and future Holders of
the Certificates. On the Closing Date, the
Trustee, or the Custodian acting on
its behalf, will deliver to the Seller, the
Trustee and the Master Servicer an
initial certification, in the form annexed
as Exhibit C-1 hereto, confirming
whether or not it has received the Mortgage
File for each Mortgage Loan (other
than any Mortgage Loan for which a lost
note affidavit has been delivered), 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
Trustee agrees, for the benefit of the
Certificateholders, to review, or to have
the Custodian review on its behalf, each
Mortgage File delivered to it or the
Custodian and to execute and deliver, or
cause to be executed and delivered by
the Custodian, to the Seller, the Trustee
and to the Master Servicer an interim
certification substantially in the form
annexed as Exhibit C-2 hereto. In
conducting such review, the Trustee, or the
Custodian as its agent, will
ascertain whether all required documents
have been executed and received and
whether those documents relate, determined
on the basis of the related Mortgagor
name, original principal balance and loan
number, to the Mortgage Loans
identified in Exhibit B to this Agreement,
as supplemented (provided, however,
that with respect to those documents
described in 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 Trustee, or the Custodian as
its agent, may conclusively rely on the
purported due execution and genuineness of
any such document and on the
purported genuineness of any signature
thereon. If the Trustee, or the Custodian
as its agent, finds any document
constituting part of the Mortgage File not to
have been executed or received, or to be
unrelated to the Mortgage Loans
identified in Exhibit B or to appear to be
defective on its face, the Trustee
shall include such information in the
exception report attached to such interim
certification. The Seller shall, within 90
days from the date of such exception
report, correct or cure any such omission
or defect or, if prior to the end of
the second anniversary of the Closing Date,
the Seller may substitute for the
related Mortgage Loan a Replacement
Mortgage Loan, which substitution shall be
accomplished in the manner and subject to
the conditions set forth in Section
2.03 or shall deliver to the Trustee an
Opinion of Counsel, addressed to the
Trustee, at the Seller's expense, to the
effect that such omission or defect
does not materially or adversely affect the
interests of Certificateholders in
such Mortgage Loan. If the Seller fails to
correct or cure such omission or
defect or deliver such Opinion of Counsel
within such period, the Seller will,
subject to Section 2.03, within 90 days
from the notification of the Trustee
purchase such Mortgage Loan at the Purchase
Price; provided, however, that if
such omission or defect relates solely to
the inability of the Seller to deliver
the related Mortgage, the 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.
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(b) No later than 180 days after the Closing Date, the Trustee
will review, for the benefit of the
Certificateholders, or will have the
Custodian on its behalf review, the
Mortgage Files and will execute and deliver
or cause to be executed and delivered to
the Seller, the Trustee and the Master
Servicer, a final certification
substantially in the form annexed as Exhibit C-3
hereto. In conducting such review, the
Trustee, or the Custodian as its agent,
will ascertain whether each document
required to be recorded has been returned
from the recording office with evidence of
recording thereon and the Trustee 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
Trustee, or the Custodian as its agent,
finds any document with respect to a
Mortgage Loan has not been received, or to
be unrelated, determined on the basis
of the related Mortgagor name, original
principal balance and loan number, to
the Mortgage Loans identified in Exhibit B
or to appear defective on its face,
the Trustee, or the Custodian acting on its
behalf, shall note such defect in
the exception report attached to such final
certification and shall promptly
notify the Seller. The Seller shall, within
90 days from the date of such
exception report, correct or cure any such
omission or defect or, if prior to
the end of the second anniversary of the
Closing Date, the Seller may substitute
for the related Mortgage Loan a Replacement
Mortgage Loan, which substitution
shall be accomplished in the manner and
subject to the conditions set forth in
Section 2.03, or shall deliver to the
Trustee an Opinion of Counsel, addressed
to the Trustee, at the Seller's expense, to
the effect that such omission or
defect does not materially or adversely
affect the interests of
Certificateholders in such Mortgage Loan.
If the Seller is unable within such
period to correct or cure such omission or
defect, or to substitute the related
Mortgage Loan with a Replacement Mortgage
Loan or to deliver such Opinion of
Counsel, the Seller shall, subject to
Section 2.03, within 90 days from the
notification of the Trustee, purchase such
Mortgage Loan at the Purchase Price;
provided, however, that if such defect
relates solely to the inability of the
Seller to deliver the related Mortgage, the
assignment thereof to the Trustee or
intervening assignments thereof with
evidence of recording thereon, because such
documents have not been returned by the
applicable jurisdiction, the Seller
shall not be required to purchase such
Mortgage Loan, if the Seller delivers
such documents promptly upon receipt, but
in no event later than 360 days after
the Closing Date.
Notwithstanding anything to the contrary herein, the parties
hereto
acknowledge that:
(i) all obligations of LaSalle Bank National Association, as
the Trustee with respect to the custody and review of the
Mortgage
Files shall be performed by and be the responsibility of LaSalle
Bank
National Association, as the Custodian pursuant to the
Custodial
Agreement;
(ii) LaSalle Bank National Association, as the Trustee shall
have no responsibility with respect to the custody or review of
Mortgage Files held by LaSalle Bank National Association, as
the
Custodian pursuant to the Custodial Agreement;
(iii) LaSalle Bank National Association, as the Trustee shall
have no liability for the failure of LaSalle Bank National
Association,
as the Custodian to perform the obligations of the Custodian under
the
Custodial Agreement; and
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(iv) LaSalle Bank National Association, as the Custodian shall
be liable for the failure of LaSalle Bank National Association, as
the
Custodian
to perform the obligations of the Custodian under the
Custodial Agreement, to the extent provided in the Custodial
Agreement.
(c) In the event that a Mortgage Loan is purchased by the
Seller in accordance with subsections 2.02(a) or (b) above or
Section
2.03, the Seller shall remit the applicable Purchase Price to
the
Trustee for deposit in the Distribution Account and shall
provide
written notice to the Trustee detailing the components of the
Purchase
Price, signed by a Servicing Officer. Upon deposit of the
Purchase
Price in the Distribution Account and receipt of a Request for
Release,
the Trustee, or the Custodian acting on its behalf, shall release
to
the Seller the related Mortgage File and 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 related Mortgage Loan.
Such
purchase shall be deemed to have occurred on the date on which
the
deposit into the Distribution Account was made. The Trustee
shall
promptly notify the Rating Agencies of such repurchase in
accordance
with Section 11.05. The obligation of the Seller to cure,
repurchase or
substitute for any Mortgage Loan as to which an omission or defect
in a
constituent document exists shall be the sole remedy respecting
such
omission or defect available to the Certificateholders or to
the
Trustee on their behalf.
(d) The Seller shall deliver to the Trustee, or the Custodian
acting on its behalf, and the Trustee agrees to accept, the
Mortgage
Note and other documents constituting the Mortgage File with
respect to
any Replacement Mortgage Loan, which the Trustee, or the Custodian
as
its agent, 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 such
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 as its agent, 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 and the Seller.
(a) The Master
Servicer hereby represents and warrants to the
Depositor and the Trustee as follows, as of
the Closing Date:
(i) It is duly organized and is validly existing and in good
standing under the laws of the State of Delaware, and is duly
authorized and qualified to transact any and all business
contemplated
by this Agreement to be conducted by it in any state in which a
Mortgaged Property is located or is otherwise not required
under
applicable law to effect such qualification and, in any event, is
in
compliance with the "doing business" laws of any such state, to
the
extent necessary to ensure its ability to enforce each Mortgage
Loan,
to service the Mortgage Loans in accordance with the terms of
this
Agreement and
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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 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 the
Master Servicer, the servicing of the Mortgage Loans by the
Master
Servicer 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 Master Servicer 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 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.
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(b) The Seller hereby represents and warrants to the Depositor
and the Trustee as follows, as of the
Closing Date:
(i) The Seller is duly organized as a Delaware corporation and
is validly existing and in good standing under the laws of the
State of
Delaware and is duly authorized and qualified to transact any and
all
business contemplated by this Agreement to be conducted by the
Seller
in any
state in which a Mortgaged Property is located or is otherwise
not required under applicable law to effect such qualification and,
in
any event, is in compliance with the "doing business" laws of any
such
state, to the extent necessary to ensure its ability to enforce
each
Mortgage Loan, to sell the Mortgage Loans in accordance with the
terms
of this Agreement and to perform any of its other obligations
under
this Agreement in accordance with the terms hereof.
(ii) The Seller has the full corporate power and authority to
sell each Mortgage Loan, and to execute, deliver and perform, and
to
enter into and consummate the transactions contemplated by,
this
Agreement
and has duly authorized by all necessary corporate action on
the part of the Seller the execution, delivery and performance of
this
Agreement; and this Agreement, assuming the due authorization,
execution and delivery hereof by the other parties hereto,
constitutes
a legal, valid and binding obligation of the Seller,
enforceable
against the Seller in accordance with its terms, except that (a)
the
enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to
creditors'
rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject
to
equitable defenses and
to the discretion of the court before which any
proceeding therefor may be brought.
(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.
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<PAGE>
(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), (S) and (X) below, 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 related Mortgaged Property subject to
the related Mortgage, directly or indirectly, for the payment
of any amount required under any Mortgage Loan.
(C) Except with respect to taxes, insurance and other
amounts previously advanced by the Master 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 related Mortgage Note and the
related 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 related 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 related
Mortgage File.
(E) The related Mortgage Note and the related
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 such Mortgage
43
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Note and such Mortgage, or the exercise of any right
thereunder, render the related 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
related 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 such Mortgaged Property is
located, and such insurer is licensed to do business in the
state where such Mortgaged Property is located. All such
insurance policies contain a standard mortgagee clause naming
the related 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 such
Mortgage Loan, the related 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 and 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 related Mortgage
obligates the related Mortgagor thereunder to maintain all
such insurance at such Mortgagor's cost and expense and, on
such Mortgagor's failure to do so, authorizes the holder of
the related Mortgage to maintain such insurance at such
Mortgagor's cost and expense and to obtain reimbursement
therefor from such Mortgagor.
(G) As to 10.42% of the Mortgage Loans by Cut-off
Date Principal Balance, that are classified and/or defined as
"high cost" loans at the time of origination, none of such
Mortgage Loans violated at such time 12 CFR Part 226.31, 12
CFR Part 226.32 or 12 CFR Part 226.34 of Regulation Z, the
regulation implementing the Truth-in-Lending Act, which
implements the Home Ownership and Equity Protection Act of
1994, as amended ("TILA"), or any state or local
anti-predatory law (including Mortgage Loans governed by the
Georgia Fair Lending Act, if such Mortgage Loan was originated
on or after October 1, 2002 through March 6, 2003). As to
10.42% of the Mortgage Loans by Cut-off Date Principal
Balance, none of such Mortgage Loans is a loan that is (1)
subject to 12 CFR Part 226.31, 12 CFR Part 226.32 or 12 CFR
Part 226.34 of Regulation Z, the regulation implementing TILA,
(2) classified and/or defined as a "high cost" loan under any
other state, federal or local law including, but not limited
to,
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the States of Georgia, North Carolina and New York or (3)
subject to the Georgia Fair Lending Act, if such Mortgage Loan
was originated on or after October 1, 2002 through March 6,
2003. 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 related Mortgage has not been satisfied,
canceled, subordinated, or rescinded, in whole or in part, and
the related Mortgaged Property has not been released from the
lien of the related Mortgage, in whole or in part, nor has any
instrument been executed that would effect any such release,
cancellation, subordination or rescission.
(I) The related Mortgage is a valid, existing and
enforceable first or second lien on the related Mortgaged
Property, including all improvements on such 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 related
Originator of such Mortgage Loan and which do not adversely
affect the Appraised Value of the related Mortgaged Property
and (3) in the case of a Mortgage that is a second priority
lien, the first lien on the related 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 related Mortgage. The Seller
has full right to sell and assign the related Mortgage to the
Depositor.
(J) The related 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 related Mortgage Note and the
related Mortgage had the legal capacity to enter into the
Mortgage Loan transaction and to execute and deliver such
Mortgage Note and such Mortgage, and such Mortgage Note and
such Mortgage have been duly and properly executed by such
parties.
(L) The proceeds of such 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 such Mortgage Loan and the
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recording of the related Mortgage were paid, and the related
Mortgagor is not entitled to any refund of any amounts paid or
due under the related Mortgage Note or such 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 Loans and
the related servicing rights; the related Originator or the
Seller or the Master Servicer was the custodian of the related
escrow account, if applicable; such 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 such Mortgage Loan and the related servicing rights to
the Depositor free and clear of any encumbrance, equity, lien,
pledge, charge, claim or security interest, and had full right
and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign such
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
related 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 related 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) Such 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 related 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 more junior priority lien of the related Mortgage in
the original principal amount of such Mortgage Loan and
against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of
the related Mortgage Note and/or related Mortgage providing
for adjustment in the related Mortgage Rate and monthly
payment. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against
encroachments by or upon the related 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 related
Mortgage or the related Mortgage Note and there was no event
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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 with
respect to such Mortgage Loan, and the Seller has not waived
any default, breach, violation or event of acceleration with
respect to such Mortgage Loan.
(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 such Mortgaged
Property, and no improvements on adjoining properties encroach
upon such Mortgaged Property.
(S) No Mortgage Loan is a "High-Cost Home Loan" as
defined in the New Jersey Act, a "High-Cost Home Loan" as
defined in the Indiana Act, a "High-Cost Home Loan" as defined
in the New Mexico Act or a "High Cost Home Mortgage Loan" as
defined in the Massachusetts Act.
(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 the related 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 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 related Mortgaged Property is free of
material damage and waste and there is no proceeding pending
for the total or partial condemnation thereof.
(V) The related Mortgage contains customary and
enforceable provisions to render the rights and remedies of
the holder thereof adequate for the realization against the
related 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 related Mortgagor
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which would interfere with the right to sell the related
Mortgaged Property at a trustee's sale or the right to
foreclose the related Mortgage. The related Mortgagor has not
notified the Seller, and the Seller has no knowledge, of any
relief requested or allowed to the related Mortgagor under the
Relief Act.
(W) The related Mortgage Note is not, and has not
been, secured by any collateral except the lien of the
applicable Mortgage.
(X) 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(c) Revised,
Appendix E.
(Y) In the event the related 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 related 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 related Mortgagor.
(Z) No Mortgage Loan contains a permanent or
temporary "buydown" provision. Such Mortgage Loan is not a
graduated payment mortgage loan and does not have a shared
appreciation or other contingent interest feature.
(AA) The related Mortgagor has received all
disclosure materials required by applicable law with respect
to the making of such Mortgage Loan. The Seller has maintained
or caused to be maintained all such statements in the related
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 related
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 such
Mortgaged Property and, with respect to the use and occupancy
of 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
related Mortgaged Property is located.
(EE) Any future advances made to the related
Mortgagor prior to the Cut-off Date have been consolidated
with the outstanding principal amount secured by the related
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 of such Mortgage Loan
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is expressly insured as having first or second 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 such Mortgage Loan.
(FF) With respect to each Mortgage Loan that bears
interest at an adjustable rate, on each related Interest
Adjustment Date, the related 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) The related 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 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 related Mortgaged Property, and is legally classified as
real estate.
(HH) [Reserved].
(II) None of the Mortgage Loans contains a provision
allowing the related Mortgagor to convert the related Mortgage
Note from a fixed rate mortgage loan to an adjustable rate
mortgage loan. Except with respect to 1.48% of the Mortgage
Loans (by Cut-off Date Principal Balance), all of which are
Simple Interest Loans, the principal and interest due on each
Mortgage Loan is calculated pursuant to the standard
amortization method (30/360 day interest accrual).
(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) Except with respect to 0.61% of the Mortgage
Loans (by Cut-off Date Principal Balance), none of the
Mortgage Loans provided for negative amortization.
(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
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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 Trustee or the Custodian that
the substance of such representation
and warranty is inaccurate and such
inaccuracy materially and adversely affects
the value of the related Mortgage Loan,
notwithstanding 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, or the
Custodian acting on its behalf, for the
benefit of the Certificateholders such
documents and agreements as are required
by Section 2.01. No substitution will be
made in any calendar month after the
Determination Date for such month.
Scheduled Payments due with respect to
Replacement Mortgage Loans in the Due
Period related to the Distribution Date on
which such proceeds are to be distributed
shall not be part of the Trust Fund
and will be retained by 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. 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
