BEAR XXXXXXX ASSET BACKED SECURITIES I LLC,
Depositor
EMC MORTGAGE CORPORATION,
Seller and Company
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
Master Servicer and Securities Administrator
and
U.S. BANK NATIONAL ASSOCIATION,
Trustee
--------------------
POOLING AND SERVICING AGREEMENT
Dated as of April 1, 2004
----------------------------------------
BEAR XXXXXXX ASSET BACKED SECURITIES I TRUST 2004-AC2
ASSET-BACKED CERTIFICATES, SERIES 2004-AC2
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms........................................................................-5-
ARTICLE II
CONVEYANCE OF TRUST FUND
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Trust Fund............................................................-54-
Section 2.02 Acceptance of the Mortgage Loans....................................................-56-
Section 2.03 Representations, Warranties and Covenants of the Company, the
Master Servicer and the Seller......................................................-58-
Section 2.04 Representations and Warranties of the Depositor.....................................-64-
Section 2.05 Delivery of Opinion of Counsel in Connection with Substitutions
and Repurchases.....................................................................-65-
Section 2.06 Countersignature and Delivery of Certificates.......................................-66-
ARTICLE III
ADMINISTRATION AND SERVICING OF EMC MORTGAGE LOANS BY COMPANY
Section 3.01 The Company.........................................................................-67-
Section 3.02 Due-on-Sale Clauses; Assumption Agreements..........................................-68-
Section 3.03 Subservicers........................................................................-69-
Section 3.04 Documents, Records and Funds in Possession of Company To Be
Held for Trustee....................................................................-69-
Section 3.05 Maintenance of Hazard Insurance.....................................................-70-
Section 3.06 Presentment of Claims and Collection of Proceeds....................................-71-
Section 3.07 Maintenance of the Primary Mortgage Insurance Policies..............................-71-
Section 3.08 Fidelity Bond, Errors and Omissions Insurance.......................................-72-
Section 3.09 Realization Upon Defaulted Mortgage Loans; Determination of
Excess Liquidation Proceeds and Realized Losses; Repurchases of
Certain Mortgage Loans..............................................................-72-
Section 3.10 Servicing Compensation..............................................................-75-
Section 3.11 REO Property........................................................................-75-
Section 3.12 Liquidation Reports.................................................................-76-
Section 3.13 Annual Certificate as to Compliance.................................................-76-
i
Section 3.14 Annual Independent Certified Public Accountants' Servicing
Report..............................................................................-76-
Section 3.15 Books and Records...................................................................-77-
ARTICLE IV
ADMINISTRATION AND MASTER SERVICING OF MORTGAGE LOANS BY MASTER
SERVICER
Section 4.01 Master Servicer.....................................................................-78-
Section 4.02 REMIC-Related Covenants.............................................................-79-
Section 4.03 Monitoring of Company and Servicer..................................................-79-
Section 4.04 Fidelity Bond.......................................................................-80-
Section 4.05 Power to Act; Procedures............................................................-80-
Section 4.06 Due-on-Sale Clauses; Assumption Agreements..........................................-81-
Section 4.07 Release of Mortgage Files...........................................................-81-
Section 4.08 Documents, Records and Funds in Possession of Master Servicer,
Company and Servicer To Be Held for Trustee.........................................-82-
Section 4.09 Standard Hazard Insurance and Flood Insurance Policies..............................-83-
Section 4.10 Presentment of Claims and Collection of Proceeds....................................-84-
Section 4.11 Maintenance of the Primary Mortgage Insurance Policies..............................-84-
Section 4.12 Trustee to Retain Possession of Certain Insurance Policies and
Documents...........................................................................-85-
Section 4.13 Realization Upon Defaulted Mortgage Loans...........................................-85-
Section 4.14 Compensation for the Master Servicer................................................-85-
Section 4.15 REO Property........................................................................-85-
Section 4.16 Annual Officer's Certificate as to Compliance.......................................-86-
Section 4.17 Annual Independent Accountant's Servicing Report....................................-87-
Section 4.18 Reports Filed with Securities and Exchange Commission...............................-87-
Section 4.19 EMC.................................................................................-88-
Section 4.20 UCC.................................................................................-88-
Section 4.21 Optional Purchase of Certain Mortgage Loans.........................................-88-
ARTICLE V
ACCOUNTS
Section 5.01 Collection of Mortgage Loan Payments; Protected Account.............................-90-
Section 5.02 Permitted Withdrawals From the Protected Account....................................-92-
Section 5.02A Reports to Master Servicer..........................................................-93-
Section 5.03 Collection of Taxes; Assessments and Similar Items; Escrow
Accounts............................................................................-94-
Section 5.04 Servicer Protected Accounts.........................................................-95-
Section 5.05 Master Servicer Collection Account..................................................-96-
ii
Section 5.06 Permitted Withdrawals and Transfers from the Master Servicer
Collection Account..................................................................-97-
Section 5.07 Distribution Account................................................................-98-
Section 5.08 Permitted Withdrawals and Transfers from the Distribution Account...................-99-
ARTICLE VI
DISTRIBUTIONS AND ADVANCES
Section 6.01 Advances...........................................................................-101-
Section 6.02 Compensating Interest Payments.....................................................-102-
Section 6.03 REMIC Distributions................................................................-102-
Section 6.04 Distributions......................................................................-102-
Section 6.04A Allocation of Realized Losses......................................................-106-
Section 6.05 Monthly Statements to Certificateholders...........................................-109-
Section 6.06 REMIC Designations and REMIC I Allocations........................................-112-
Section 6.07 REMIC II Allocations...............................................................-114-
Section 6.08 Class P Certificate Account.......................................................-114-
ARTICLE VII
THE CERTIFICATES
Section 7.01 The Certificates...................................................................-115-
Section 7.02 Certificate Register; Registration of Transfer and Exchange of
Certificates.......................................................................-119-
Section 7.03 Mutilated, Destroyed, Lost or Stolen Certificates..................................-122-
Section 7.04 Persons Deemed Owners..............................................................-123-
Section 7.05 Access to List of Certificateholders' Names and Addresses..........................-123-
Section 7.06 Transfer Restrictions on Residual Certificates.....................................-123-
Section 7.07 Restrictions on Transferability of Certificates. ..................................-124-
Section 7.08 ERISA Restrictions.................................................................-125-
Section 7.09 Rule 144A Information..............................................................-126-
ARTICLE VIII
THE COMPANY AND THE MASTER SERVICER
Section 8.01 Liabilities of the Depositor, the Company and the Master Servicer..................-127-
Section 8.02 Merger or Consolidation of the Depositor, the Company or the
Master Servicer....................................................................-127-
iii
Section 8.03 Indemnification of the Trustee, the Master Servicer and the
Securities Administrator...........................................................-127-
Section 8.04 Limitations on Liability of the Depositor, the Company, the Master
Servicer and Others................................................................-128-
Section 8.05 Master Servicer and Company Not to Resign..........................................-129-
Section 8.06 Successor Master Servicer..........................................................-130-
Section 8.07 Sale and Assignment of Master Servicing............................................-130-
ARTICLE IX
DEFAULT; TERMINATION OF MASTER SERVICER;
TERMINATION OF COMPANY
Section 9.01 Events of Default..................................................................-132-
Section 9.02 Trustee to Act; Appointment of Successor...........................................-133-
Section 9.03 Notification to Certificateholders.................................................-135-
Section 9.04 Waiver of Defaults.................................................................-135-
Section 9.05 Company Default....................................................................-135-
Section 9.06 Waiver of Company Defaults.........................................................-137-
ARTICLE X
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of Trustee and Securities Administrator.....................................-138-
Section 10.02 Certain Matters Affecting the Trustee and the Securities
Administrator......................................................................-140-
Section 10.03 Trustee and Securities Administrator Not Liable for Certificates or
Mortgage Loans.....................................................................-142-
Section 10.04 Trustee and Securities Administrator May Own Certificates..........................-142-
Section 10.05 Trustee's and Securities Administrator's Fees and Expenses.........................-142-
Section 10.06 Eligibility Requirements for Trustee and Securities Administrator..................-143-
Section 10.07 Insurance..........................................................................-143-
Section 10.08 Resignation and Removal of Trustee and Securities Administrator....................-144-
Section 10.09 Successor Trustee or Securities Administrator......................................-145-
Section 10.10 Merger or Consolidation of Trustee or Securities Administrator.....................-145-
Section 10.11 Appointment of Co-Trustee or Separate Trustee......................................-145-
Section 10.12 Tax Matters........................................................................-147-
iv
ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Repurchase of all Mortgage
Loans..............................................................................-150-
Section 11.02 Final Distribution on the Certificates.............................................-150-
Section 11.03 Additional Termination Requirements................................................-152-
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment..........................................................................-153-
Section 12.02 Recordation of Agreement; Counterparts.............................................-154-
Section 12.03 Governing Law......................................................................-154-
Section 12.04 Intention of Parties...............................................................-155-
Section 12.05 Notices............................................................................-155-
Section 12.06 Severability of Provisions.........................................................-156-
Section 12.07 Assignment.........................................................................-156-
Section 12.08 Limitation on Rights of Certificateholders.........................................-156-
Section 12.09 Inspection and Audit Rights........................................................-157-
Section 12.10 Certificates Nonassessable and Fully Paid..........................................-157-
EXHIBITS
Exhibit A-1 Form of Class A, Class X, Class PO Certificates
Exhibit A-2 Form of Class B Certificates
Exhibit A-3 Form of Class P Certificates
Exhibit A-4 Form of Class R Certificates
Exhibit B Mortgage Loan Schedule
Exhibit C [Reserved]
Exhibit D Form of Transfer Affidavit
Exhibit E Form of Transferor Certificate
Exhibit F Form of Investment Letter (Non-Rule 144A)
Exhibit G Form of Rule 144A and Related Matters Certificate
Exhibit H Form of Request for Release
Exhibit I Depository Agreement
Exhibit J Schedule of Mortgage Loans with Lost Notes
Exhibit K Form of Custodial Agreement
Exhibit L Form of Company Certification
v
POOLING AND SERVICING AGREEMENT, dated as of April 1, 2004, among BEAR
XXXXXXX ASSET BACKED SECURITIES I LLC., a Delaware limited liability company, as
depositor (the "Depositor"), EMC MORTGAGE CORPORATION, a Delaware corporation,
as seller (in such capacity, the "Seller") and as company (in such capacity, the
"Company"), XXXXX FARGO BANK, NATIONAL ASSOCIATION, a national banking
association, as master servicer (in such capacity, the "Master Servicer") and as
securities administrator (in such capacity, the "Securities Administrator") and
U.S. BANK NATIONAL ASSOCIATION, a national banking association, not in its
individual capacity, but solely as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates.
REMIC I
-------
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement as a real estate mortgage investment
conduit (a "REMIC") for federal income tax purposes, and such segregated pool of
assets will be designated as "REMIC I." The Class R-1 Certificates will
represent the sole class of "residual interests" in REMIC I for purposes of the
REMIC Provisions (as defined herein) under federal income tax law and will have
an initial Certificate Principal Balance of $50.00. The following table
irrevocably sets forth the designation, the Uncertificated REMIC I Pass-Through
Rate, the initial Uncertificated Principal Balance, and solely for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for each of the REMIC I Regular Interests. None of the REMIC I
Regular Interests will be certificated.
Initial Uncertificated Uncertificated REMIC I Assumed Final Maturity
Designation Principal Balance Pass-Through Rate Date(1)
----------- ----------------- ----------------- -------
LTI-IA $ 1,246.45 6.00% May 25, 2034
LTI-I-IO N/A(2) Variable(3) May 25, 2034
LTI-I-PO $ 1,920,994.00 0.00%(4) May 25, 2034
LTI-I-ZZZ $ 176,139,269.55 6.00% May 25, 2034
LTI-IIA $ 648.97 5.00% May 25, 2034
LTI-II-IO N/A(5) Variable(3) May 25, 2034
LTI-II-PO $ 256,831.00 0.00%(4) May 25, 2034
LTI-II-ZZZ $ 92,448,013.03 5.00% May 25, 0000
XXX-X $ 100.00 X/X(0) Xxx 00, 0000
XXX-X0 $ 50.00 5.00% May 25, 2034
LTI-R3 $ 50.00 5.00% May 25, 2034
-------------------
-1-
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity
date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each Class of
Certificates that represents one or more of the "regular interests" in
REMIC I.
(2) REMIC I Regular Interest LTI-I-IO will not have an Uncertificated
Principal Balance and is not entitled to receive distributions of
principal. Interest will accrue on an Uncertificated Notional Balance
equal to the aggregate Stated Principal Balance of the Non- Discount
Mortgage Loans in Loan Group I.
(3) Calculated in accordance with the definition of "Uncertificated REMIC I
Pass-Through Rate" herein.
(4) REMIC I Regular Interest LTI-I-PO and REMIC I Regular Interest
LTI-II-PO are principal only certificates and will not be entitled to
distributions of interest.
(5) REMIC I Regular Interest LTI-II-IO will not have an Uncertificated
Principal Balance and is not entitled to distributions of principal.
Interest will accrue on an Uncertificated Notional Balance equal to the
aggregate Stated Principal Balance of the Non- Discount Mortgage Loans
in Loan Group II.
(6) REMIC I Regular Interest LTI-P will not be entitled to distributions of
interest.
REMIC II
--------
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II". The Class R-2 Certificates will represent the sole
class of "residual interests" in REMIC II for purposes of the REMIC Provisions
and will have an initial Certificate Principal Balance of $50.00. The following
table irrevocably sets forth the designation, the Uncertificated REMIC II
Pass-Through Rate, the initial Uncertificated Principal Balance, and solely for
purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" for each of the REMIC II Regular Interests. None
of the REMIC II Regular Interests will be certificated.
Initial Uncertificated Uncertificated REMIC II Assumed Final Maturity
Designation Principal Balance Pass-Through Rate Date(1)
----------- ----------------- ----------------- -------
LTII-I-A1 $ 114,500,000.00 5.25% May 25, 2034
LTII-I-A2 $ 4,537,091.00 5.25% May 25, 2034
LTII-I-A3 $ 44,638,909.00 8.00% May 25, 2034
LTII-I-X N/A(2) Variable(3) May 25, 2034
LTII-I-PO $ 1,920,994.00 0.00%(4) May 25, 2034
LTII-II-A $ 85,959,000.00 5.00% May 25, 2034
LTII-II-X N/A(5) Variable(3) May 25, 2034
LTII-II-PO $ 256,831.00 0.00%(6) May 25, 2034
LTII-B1 $ 7,040,000.00 Xxxxxxxx(0) Xxx 00, 0000
XXXX-X0 $ 3,926,000.00 Xxxxxxxx(0) Xxx 00, 0000
XXXX-X0 $ 2,572,000.00 Xxxxxxxx(0) Xxx 00, 0000
XXXX-X0 $ 2,031,000.00 Xxxxxxxx(0) Xxx 00, 0000
XXXX-X0 $ 812,000.00 Xxxxxxxx(0) Xxx 00, 0000
XXXX-X0 $ 2,573,178.01 Xxxxxxxx(0) Xxx 00, 0000
XXXX-X0 $ 50.00 15.00% May 25, 2034
LTII-P $ 100.00 N/A(7) May 25, 2034
-------------------
-2-
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity date for
the Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each Class of Certificates that represents
one or more of the "regular interests" in REMIC II.
(2) REMIC II Regular Interest LTII-I-X will not have an Uncertificated Principal
Balance and is not entitled to receive distributions of principal. REMIC II
Regular Interest LTII-I-X will be entitled to 100% of the interest distributed
on REMIC I Regular Interest LTI-I-IO.
(3) Calculated in accordance with the definition of "Uncertificated REMIC II
Pass-Through Rate" herein.
(4) REMIC II Regular Interest LTII-I-PO is a principal only certificate and will
not be entitled to distributions of interest.
(5) REMIC II Regular Interest LTII-II-X will not have an Uncertificated
Principal Balance and is not entitled to distributions of principal. REMIC II
Regular Interest LTII-II-X will be entitled to 100% of the interest distributed
on REMIC I Regular Interest LTI-II-IO.
(6) REMIC II Regular Interest LTII-II-PO is a principal only certificate and
will not be entitled to distributions of interest.
(7) REMIC II Regular Interest LTII-P will not be entitled to distributions of
interest.
REMIC III
---------
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the REMIC II Regular Interests as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC III". The Class R-3 Certificates will represent the sole
class of "residual interests" in REMIC III for purposes of the REMIC Provisions
and will have an initial Certificate Principal Balance of $50.00.
The following table irrevocably sets forth the Class designation,
Pass-Through Rate and Initial Certificate Principal Balance for each Class of
Certificates that represents one or more of the "regular interests" in REMIC III
created hereunder.
Initial Certificate Assumed Final Maturity
Class Designation Principal Balance Pass-Through Rate Date(1)
----------------- ----------------- ----------------- -------
Class I-A1 $ 114,500,000.00 Class I-A1 Pass-Through Rate May 25, 2034
Class I-A2 $ 4,537,091.00 Class I-A2 Pass-Through Rate May 25, 2034
Class I-A3 $ 44,638,909.00 Class I-A3 Pass Through Rate May 25, 2034
Class I-A4 N/A(2) Class I-A4 Pass-Through Rate May 25, 2034
Class II-A $ 85,959,000.00 Class II-A Pass Through Rate May 25, 2034
Class I-X N/A(3) Class I-X Pass-Through Rate May 25, 2034
Class II-X N/A(4) Class II-X Pass-Through Rate May 25, 2034
Class I-PO $ 1,920,994.00 N/A(5) May 25, 2034
Class II-PO $ 256,831.00 N/A(6) May 25, 2034
Class B-1 $ 7,040,000.00 Class B Pass-Through Rate May 25, 2034
Class B-2 $ 3,926,000.00 Class B Pass-Through Rate May 25, 2034
Class B-3 $ 2,572,000.00 Class B Pass-Through Rate May 25, 2034
Class B-4 $ 2,031,000.00 Class B Pass-Through Rate May 25, 2034
Class B-5 $ 812,000.00 Class B Pass-Through Rate May 25, 2034
Class B-6 $ 2,573,178.01 Class B Pass-Through Rate May 25, 2034
Class P $ 100.00 N/A(7) May 25, 2034
-------------------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity
date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each Class of
Certificates that represents one or more of the "regular interests" in
REMIC II.
-3-
(2) The Class I-A4 Certificates will accrue interest at the Class I-A4
Pass-Though Rate on the Certificate Notional Balance of the Class I-A4
Certificates calculated in accordance with the definition of
"Certificate Notional Balance" herein. The Class I-A4 Certificates will
not be entitled to distributions in respect of principal.
(3) The Class I-X Certificates will accrue interest at the Class I-X
Pass-Through Rate on the Certificate Notional Balance of the Class I-X
Certificates calculated in accordance with the definition of
"Certificate Notional Balance" herein. The Class I-X Certificates will
not be entitled to distributions in respect of principal.
(4) The Class II-X Certificates will accrue interest at the Class II-X
Pass-Through Rate on the Certificate Notional Balance of the Class II-X
Certificates calculated in accordance with the definition of
"Certificate Notional Balance" herein. The Class II-X Certificates will
not be entitled to distributions in respect of principal.
(5) The Class I-PO Certificates are principal only certificates and are not
entitled to distributions in respect of interest. (6) The Class II-PO
Certificates are principal only certificates and are not entitled to
distributions in respect of interest. (7) The Class P Certificates are
not entitled to distributions in respect of interest.
The Trust Fund shall be named, and may be referred to as, the "Bear
Xxxxxxx Asset Backed Securities Trust I 2004-AC2." The Certificates issued
hereunder may be referred to as "Asset-Backed Certificates Series 2004-AC2"
(including for purposes of any endorsement or assignment of a Mortgage Note or
Mortgage).
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer, the Securities Administrator, the Seller, the
Company and the Trustee agree as follows:
-4-
ARTICLE I
DEFINITIONS
Section 1.01 DEFINED TERMS.
In addition to those terms defined in Section 1.02, whenever used in
this Agreement, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:
ACCEPTED MASTER SERVICING PRACTICES: With respect to any Mortgage Loan,
as applicable, either (a) those customary mortgage servicing practices of
prudent mortgage servicing institutions that master service mortgage loans of
the same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the Trustee
or the Master Servicer (except in its capacity as successor to the Company or
the related Servicer), or (b) as provided in Section 3.01 hereof or as provided
in the related Servicing Agreement, but, in each case, in no event below the
standard set forth in clause (a).
ACCEPTED SERVICING PRACTICES: With respect to each EMC Mortgage Loan,
those mortgage servicing practices (including collection procedures) that are in
accordance with all applicable statutes, regulations and prudent mortgage
banking practices for similar mortgage loans.
ACCOUNT: The Distribution Account, the Master Servicer Collection
Account, the Class P Account and any Protected Account.
ACCRUAL PERIOD: With respect to the Certificates (other than the Class
I-A3, Class I-A4, Class P and Class PO Certificates) and any Distribution Date,
the calendar month immediately preceding the calendar month in which such
Distribution Date occurs. With respect to the Class I-A3 Certificates and Class
I-A4 Certificates and any Distribution Date, the period from and including the
25th day of the calendar month preceding the calendar month in which such
Distribution Date occurs to and including the 24th day of the calendar month in
which such Distribution Date occurs. All calculations of interest on the
Certificates (other than the Class P Certificates and Class PO Certificates)
will be made on the basis of a 360-day year consisting of twelve 30-day months.
ACCRUED CERTIFICATE INTEREST: With respect to the Certificates (other
than the Class P Certificates and the Class PO Certificates) for any
Distribution Date, means an amount equal to the interest accrued during the
related Accrual Period at the applicable Pass-Through Rate on the Certificate
Principal Balance (or Certificate Notional Balance) of such Certificate
immediately prior to such Distribution Date less (i) in the case of a Senior
Certificate (other than the Class P Certificates and the Class PO Certificates),
such Certificate's share of any Net Interest Shortfalls from the related
Mortgage Loans and, after the Cross-Over Date, the interest portion of any
Realized Losses on the related Mortgage Loans allocated to such Certificate
pursuant to Section 6.04A(h), and (ii) in the case of a Subordinated
Certificate, such Certificate's share of any Net Interest Shortfalls and the
interest portion of any Realized Losses on the Mortgage Loans allocated to such
Certificate pursuant to Section 6.04A(h). Accrued Certificate Interest is
calculated on the basis of a 360-day year consisting of twelve 30-day months. No
Accrued Certificate Interest will be payable with
-5-
respect to any Class of Certificates after the Distribution Date on which the
outstanding Certificate Principal Balance of such Certificate has been reduced
to zero.
ADDITIONAL MASTER SERVICING COMPENSATION: The meaning specified in
Section 4.14.
ADVANCE: An advance of delinquent payments of principal or interest in
respect of a Mortgage Loan required to be made by the Company as provided in
Section 6.01(a) hereof, by the related Servicer in accordance with the related
Servicing Agreement or by the Master Servicer as provided in Section 6.01(b)
hereof.
AGREEMENT: This Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in accordance with the terms herein.
ALLOCABLE SHARE: With respect to any Class of Subordinated
Certificates:
(a) as to any Distribution Date and amounts distributable
pursuant to clauses (i) and (iv) of the definitions of Group I
Subordinate Optimal Principal Amount and Group II Subordinate Optimal
Principal Amount, the fraction, expressed as a percentage, the
numerator of which is the Certificate Principal Balance of such Class
and the denominator of which is the aggregate Certificate Principal
Balance of all Classes of the Subordinated Certificates; and
(b) as to any Distribution Date and amounts distributable
pursuant to clauses (ii), (iii) and (v) of the definitions of Group I
Subordinate Optimal Principal Amount and Group II Subordinate Optimal
Principal Amount, and as to each Class of Subordinated Certificates
(other than the Class of Subordinated Certificates having the lowest
numerical designation as to which the Class Prepayment Distribution
Trigger shall not be applicable) for which (x) the related Class
Prepayment Distribution Trigger has been satisfied on such Distribution
Date, the fraction, expressed as a percentage, the numerator of which
is the Certificate Principal Balance of such Class and the denominator
of which is the aggregate Certificate Principal Balance of all such
Classes of Subordinated Certificates and (y) the related Class
Prepayment Distribution Trigger has not been satisfied on such
Distribution Date, 0%; provided that if on a Distribution Date, the
Certificate Principal Balance of any Class of Subordinated Certificates
for which the related Class Prepayment Distribution Trigger was
satisfied on such Distribution Date is reduced to zero, any amounts
distributed pursuant to this clause (b), to the extent of such Class's
remaining Allocable Share, shall be distributed to the remaining
Classes of Subordinated Certificates which satisfy the related Class
Prepayment Distribution Trigger and to the Class of Subordinated
Certificates having the lowest numerical designation in reduction of
their respective Certificate Principal Balances in the order of their
numerical Class designations.
AMOUNT HELD FOR FUTURE DISTRIBUTION: As to any Distribution Date, the
aggregate amount held in the Company's or the related Sevicer's Protected
Account at the close of business on the immediately preceding Determination Date
on account of (i) all Scheduled Payments or portions thereof received in respect
of the Mortgage Loans due after the related Due Period and (ii) Principal
-6-
Prepayments, Liquidation Proceeds and Insurance Proceeds received in respect of
such Mortgage Loans after the last day of the related Prepayment Period.
APPLIED REALIZED LOSS AMOUNT: With respect to any Distribution Date and
(i) a Class of Senior Certificates (other than the Interest Only Certificates
and the Class P Certificates), means the Realized Losses with respect to the
related Mortgage Loans, which have been applied in reduction of the Certificate
Principal Balance of that Class of Senior Certificates pursuant to Section 6.04A
of this Agreement and (ii) a Class of Subordinated Certificates, means the sum
of (x) the Realized Losses with respect to the Mortgage Loans, (y) any Class
I-PO Certificate Deferred Payment Writedown Amount and (z) any Class II-PO
Certificate Deferred Payment Writedown Amount, which have been applied in
reduction of the Certificate Principal Balance of that Class of Subordinated
Certificates pursuant to Section 6.04A of this Agreement.
APPRAISED VALUE: With respect to any Mortgage Loan originated in
connection with a refinancing, the appraised value of the Mortgaged Property
based upon the appraisal made at the time of such refinancing or, with respect
to any other Mortgage Loan, the lesser of (x) the appraised value of the
Mortgaged Property based upon the appraisal made by a fee appraiser at the time
of the origination of the related Mortgage Loan, and (y) the sales price of the
Mortgaged Property at the time of such origination.
ASSIGNMENT AGREEMENT: Shall mean, collectively, the Cendant Assignment
Agreement, the Countrywide Assignment Agreement, the GMAC Assignment Agreement,
the HSBC Assignment Agreement, the National City Assignment Agreement, the Union
Federal Assignment Agreement and the Nexstar Assignment Agreement.
ASSIGNMENT OF PROPRIETARY LEASE: With respect to a Cooperative Loan,
the assignment of the related Cooperative Lease from the Mortgagor to the
originator of the Cooperative Loan.
ASSUMED FINAL DISTRIBUTION DATE: May 25, 2034.
BANKRUPTCY CODE: Title 11 of the United States Code.
XXXXXX'X GATE: Shall mean Xxxxxx'x Gate Residential Mortgage Trust.
BOOK-ENTRY CERTIFICATES: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 7.01). As of the Closing
Date, each Class of Regular Certificates other than the Class B-4, Class B-5,
Class B-6 and Class P Certificates constitutes a Class of Book-Entry
Certificates.
BUSINESS DAY: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which banking institutions in The City of New York, New York,
Minneapolis, Minnesota, Columbia, Maryland or the city in which the Corporate
Trust Office of the Trustee or the principal office of the Company or the Master
Servicer is located are authorized or obligated by law or executive order to be
closed.
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CENDANT: Shall mean Cendant Mortgage Corporation, or its successor in
interest.
CENDANT ASSIGNMENT AGREEMENT: Shall mean the Assignment, Assumption and
Recognition Agreement, dated April 30, 2004, by and among the Seller, Cendant,
Xxxxxx'x Gate and the Trustee acknowledging the assignment of the Cendant
Servicing Agreement and the Cendant Loans to the Trust.
CENDANT LOANS: Those Mortgage Loans subject to this Agreement which
were purchased by the Seller from Cendant and Xxxxxx'x Gate pursuant to the
Cendant Servicing Agreement.
CENDANT SERVICING AGREEMENT: Shall mean the Purchase, Warranties and
Servicing Agreement, dated as of October 23, 2001, by and among Cendant,
Xxxxxx'x Gate and the Seller, as modified by the Cendant Assignment Agreement.
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-4.
CERTIFICATE GROUP: Either the Group I Certificates or the Group II
Certificates, as applicable.
CERTIFICATE NOTIONAL BALANCE: As to any Class I-A4 Certificate and any
Distribution Date, the Certificate Principal Balance of the Class I-A3
Certificates; for federal income tax purposes, however, the equivalent of the
foregoing, expressed as the Uncertificated Principal Balance of REMIC II Regular
Interest LTII-I-A3. As to any Class I-X Certificate and any Distribution Date,
the aggregate Stated Principal Balance of the Non-Discount Mortgage Loans in
Loan Group I. As to any Class II-X Certificate and any Distribution Date, the
aggregate Stated Principal Balance of the Non- Discount Mortgage Loans in Loan
Group II. For federal income tax purposes, however, the Class I-X Certificates
and Class II-X Certificates will not have Certificate Notional Balances, and
Accrued Certificate Interest for any Distribution Date for such Certificates
shall be an amount equal to 100% of the interest distributed on REMIC II Regular
Interest LTII-I-X and REMIC II Regular Interest LTII-II-X, respectively, for
such Distribution Date.
CERTIFICATE OWNER: With respect to a Book-Entry Certificate, the Person
that is the beneficial owner of such Book-Entry Certificate.
CERTIFICATE PRINCIPAL BALANCE: As to any Certificate (other than the
Interest Only Certificates) and as of any Distribution Date, the Initial
Certificate Principal Balance of such Certificate plus any Subsequent Recoveries
added to the Current Principal Amount of such Certificate pursuant to Section
6.04A(i), less the sum of (i) all amounts distributed with respect to such
Certificate in reduction of the Certificate Principal Balance thereof on
previous Distribution Dates pursuant to Section 6.04, and (ii) any Applied
Realized Loss Amounts allocated to such Certificate on previous Distribution
Dates. References herein to the Certificate Principal Balance of a Class of
Certificates or a Certificate Group shall mean the Certificate Principal
Balances of all Certificates in such Class or all Certificates in such
Certificate Group, as the case may be.
CERTIFICATE REGISTER: The register maintained pursuant to Section 7.02
hereof.
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CERTIFICATEHOLDER OR HOLDER: The person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository, in the case of any Book- Entry Certificates).
CLASS: All Certificates bearing the same Class designation as set forth
in Section 7.01 hereof.
CLASS I-A1 CERTIFICATE: Any Certificate designated as a "Class I-A1
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class I-A1 Certificates as set forth herein and evidencing a Regular
Interest in REMIC III.
CLASS I-A1 PASS-THROUGH RATE: On any Distribution Date, 5.250% per
annum.
CLASS I-A2 CERTIFICATE: Any Certificate designated as a "Class I-A2
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class I-A2 Certificates as set forth herein and evidencing a Regular
Interest in REMIC III.
CLASS I-A2 PASS-THROUGH RATE: On any Distribution Date, 5.250% per
annum.
CLASS I-A3 CERTIFICATE: Any Certificate designated as a "Class I-A3
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class I-A3 Certificates as set forth herein and evidencing a Regular
Interest in REMIC III.
CLASS I-A3 PASS-THROUGH RATE: For the first Distribution Date,
approximately 1.590% per annum and for any Distribution Date thereafter,
One-Month LIBOR for the related Accrual Period plus 0.50% per annum, with a
maximum rate of 8.00% per annum and a minimum rate of 0.50% per annum.
CLASS I-A4 CERTIFICATE: Any Certificate designated as a "Class I-A4
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class I-A4 Certificates as set forth herein and evidencing a Regular
Interest in REMIC III.
CLASS I-A4 PASS-THROUGH RATE: For the first Distribution Date,
approximately 6.410% per annum and for any Distribution Date thereafter, 7.50%
per annum minus One-Month LIBOR for the related Accrual Period, with a maximum
rate of 7.50% per annum and a minimum rate of 0.00% per annum.
CLASS II-A CERTIFICATE: Any Certificate designated as a "Class II-A
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 II-A Certificates as set forth herein and evidencing a Regular
Interest in REMIC III.
CLASS II-A PASS-THROUGH RATE: On any Distribution Date, 5.000% per
annum.
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CLASS B PASS-THROUGH RATE: For the first Distribution Date,
approximately 5.658% per annum and for any Distribution Date thereafter, a
variable Pass-Through Rate equal to the weighted average of the Loan Group I
Strip Rate and the Loan Group II Strip Rate, weighted in proportion to the
results of subtracting from the aggregate Stated Principal Balance of the
Mortgage Loans of each Loan Group (other than than any principal balance
attributable to the Class I-PO Certificates or Class II-PO Certificates), the
Certificate Principal Balance of the related Class or Classes of Senior
Certificates (other than the Class I-PO Certificates or Class II-PO
Certificates); provided that, for federal income tax purposes, the equivalent of
the foregoing expressed as the weighted average of REMIC II Regular Interests,
LTII-B1, LTII-B2, LTII-B3, LTII-B4, LTII-B5 and LTII-B6, weighted on the basis
of their respective Uncertificated Principal Balances.
CLASS B-1 CERTIFICATE: Any Certificate designated as a "Class B-1
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class B-1 Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.
CLASS B-2 CERTIFICATE: Any Certificate designated as a "Class B-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 B-2 Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.
CLASS B-3 CERTIFICATE: Any Certificate designated as a "Class B-3
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class B-3 Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.
CLASS B-4 CERTIFICATE: Any Certificate designated as a "Class B-4
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class B-4 Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.
CLASS B-5 CERTIFICATE: Any Certificate designated as a "Class B-5
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class B-5 Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.
CLASS B-6 CERTIFICATE: Any Certificate designated as a "Class B-6
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 B-6 Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.
CLASS I-PO CERTIFICATE: Any Certificate designated as a "Class I-PO
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class I-PO Certificates as set forth herein and evidencing a Regular
Interest in REMIC III.
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CLASS I-PO CERTIFICATE CASH SHORTFALL: As defined in Section
6.04(a)(vi) hereof.
CLASS I-PO CERTIFICATE DEFERRED AMOUNT: With respect to each
Distribution Date through the Cross-Over Date, the aggregate of all amounts
allocable on such Distribution Date to the Class I-PO Certificates in respect of
the principal portion of Realized Losses on the Discount Mortgage Loans in Loan
Group I and any Class I-PO Certificate Cash Shortfall, and all amounts
previously allocated in respect of such losses and such shortfall to the Class
I-PO Certificates and not distributed on prior Distribution Dates. No interest
shall accrue on any Class I-PO Certificate Deferred Amount.
CLASS I-PO CERTIFICATE DEFERRED PAYMENT WRITEDOWN AMOUNT: Means, with
respect to any Distribution Date and the Class I-PO Certificates, the amount
distributed to the Class I-PO Certificates on such Distribution Date pursuant to
priority FOURTH under clause (i) of Section 6.04(a) which amount will be
allocated to the Class B-6 Certificates, Class B-5 Certificates, Class B-4
Certificates, Class B-3 Certificates, Class B-2 Certificates and Class B-1
Certificates, in that order, until the Certificate Principal Balance of each
such class has been reduced to zero.
CLASS I-PO CERTIFICATE PRINCIPAL DISTRIBUTION AMOUNT: With respect to
each Distribution Date and the Class I-PO Certificates, means an amount equal to
the sum of the following (but in no event greater than the aggregate Certificate
Principal Balance of the Class I-PO Certificates immediately prior to such
Distribution Date):
(i) the applicable PO Percentage of the principal portion of
all Scheduled Payments due on the Discount Mortgage Loans in Loan Group
I on the related Due Date, as specified in the amortization schedule at
the time applicable thereto (after adjustment for previous Principal
Prepayments but before any adjustment to such amortization schedule by
reason of any bankruptcy or similar proceeding or any moratorium or
similar waiver or grace period);
(ii) the applicable PO Percentage of the Stated Principal
Balance of each Discount Mortgage Loan in Loan Group I which was the
subject of a Principal Prepayment in full received by the related
Servicer during the applicable Prepayment Period;
(iii) the applicable PO Percentage of all partial Principal
Prepayments received during the applicable Prepayment Period with
respect to any Discount Mortgage Loan in Loan Group I;
(iv) the lesser of (a) the applicable PO Percentage of the sum
of (A) all Net Liquidation Proceeds allocable to principal received in
respect of each Discount Mortgage Loan in Loan Group I which became a
Liquidated Loan during the related Prepayment Period (other than
Discount Mortgage Loans described in the immediately following clause
(B)) and all Subsequent Recoveries received in respect of each Discount
Mortgage Loan in Loan Group I during the related Due Period and (B) the
Stated Principal Balance of each such Discount Mortgage Loan in Loan
Group I purchased by an insurer from the trustee during the related
Prepayment Period pursuant to the related Primary Mortgage Insurance
Policy, if any, or otherwise; and (b) the applicable PO Percentage of
the sum of (A) the Stated Principal Balance of each Discount Mortgage
Loan in Loan Group I which became a
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Liquidated Loan during the related Prepayment Period (other than the
Discount Mortgage Loans in Loan Group I described in the immediately
following clause (B)) and (B) the Stated Principal Balance of each such
Discount Mortgage Loan that was purchased by an insurer from the
Trustee during the related Prepayment Period pursuant to the related
Primary Mortgage Insurance Policy, if any or otherwise; and
(v) the applicable PO Percentage of the sum of (a) the Stated
Principal Balance of each Discount Mortgage Loan in Loan Group I which
was repurchased by the Seller in connection with such Distribution Date
and (b) the excess, if any, of the Stated Principal Balance of each
Discount Mortgage Loan in Loan Group I that has been replaced by the
Seller with a Replacement Mortgage Loan pursuant to this Agreement in
connection with such Distribution Date over the Stated Principal
Balance of each such Replacement Mortgage Loan.
CLASS I-X CERTIFICATE: Any Certificate designated as a "Class I-X
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class I-X Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.
CLASS I-X PASS-THROUGH RATE: For the first Distribution Date,
approximately 0.878% per annum and for any Distribution Date thereafter, the
weighted average of the excess of (a) the Net Mortgage Rate on each Non-Discount
Mortgage Loan in Loan Group I over (b) 6.00% per annum. For federal income tax
purposes, however, the Class I-X Certificates will not have a Class I-X Pass-
Through Rate, and the Accrued Certificate Interest for the Class I-X
Certificates and any Distribution Date will be deemed to be 100% of the amount
distributed on REMIC II Regular Interest LTII-I-X for such Distribution Date.
CLASS II-PO CERTIFICATE: Any Certificate designated as a "Class II-PO
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 II-PO Certificates as set forth herein and evidencing a Regular
Interest in REMIC III.
CLASS II-PO CERTIFICATE CASH SHORTFALL: As defined in Section
6.04(a)(vi) hereof.
CLASS II-PO CERTIFICATE DEFERRED AMOUNT: With respect to each
Distribution Date, the aggregate of all amounts allocable on such Distribution
Date to the Class II-PO Certificates in respect of the principal portion of
Realized Losses on Discount Mortgage Loans in Loan Group II and any Class II-PO
Certificate Cash Shortfall, and all amounts previously allocated in respect of
such losses and such shortfall to the Class II-PO Certificates and not
distributed on prior Distribution Dates. No interest shall accrue on any Class
II-PO Certificate Deferred Amount.
CLASS II-PO CERTIFICATE DEFERRED PAYMENT WRITEDOWN AMOUNT: Means, with
respect to any Distribution Date and the Class II-PO Certificates, the amount
distributed to the Class II-PO Certificates on such Distribution Date pursuant
to priority FIFTH under clause (ii) of Section 6.04(a) which amount will be
allocated to the Class B-6 Certificates, Class B-5 Certificates, Class B-4
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Certificates, Class B-3 Certificates, Class B-2 Certificates and Class B-1
Certificates, in that order, until the Certificate Principal Balance of each
such class has been reduced to zero.
CLASS II-PO CERTIFICATE PRINCIPAL DISTRIBUTION AMOUNT: With respect to
each Distribution Date and the Class II-PO Certificates, means an amount equal
to the sum of the following (but in no event greater than the aggregate
Certificate Principal Balance of the Class II-PO Certificates immediately prior
to such Distribution Date):
(i) the applicable PO Percentage of the principal portion of
all Scheduled Payments due on the Discount Mortgage Loans in Loan Group
II on the related Due Date, as specified in the amortization schedule
at the time applicable thereto (after adjustment for previous Principal
Prepayments but before any adjustment to such amortization schedule by
reason of any bankruptcy or similar proceeding or any moratorium or
similar waiver or grace period);
(ii) the applicable PO Percentage of the Stated Principal
Balance of each Discount Mortgage Loan in Loan Group II which was the
subject of a Principal Prepayment in full received by the related
Servicer during the applicable Prepayment Period;
(iii) the applicable PO Percentage of all partial Principal
Prepayments received during the applicable Prepayment Period with
respect to any Discount Mortgage Loan in Loan Group II;
(iv) the lesser of (a) the applicable PO Percentage of the sum
of (A) all Net Liquidation Proceeds allocable to principal received in
respect of each Discount Mortgage Loan in Loan Group II which became a
Liquidated Loan during the related Prepayment Period (other than
Discount Mortgage Loans described in the immediately following clause
(B)) and all Subsequent Recoveries received in respect of each Discount
Mortgage Loan in Loan Group II during the related Due Period and (B)
the Stated Principal Balance of each such Discount Mortgage Loan in
Loan Group II purchased by an insurer from the Trustee during the
related Prepayment Period pursuant to the related Primary Mortgage
Insurance Policy, if any, or otherwise; and (b) the applicable PO
Percentage of the sum of (A) the Stated Principal Balance of each
Discount Mortgage Loan in Loan Group II which became a Liquidated Loan
during the related Prepayment Period (other than the Discount Mortgage
Loans in Loan Group II described in the immediately following clause
(B)) and (B) the Stated Principal Balance of each such Discount
Mortgage Loan that was purchased by an insurer from the Trustee during
the related Prepayment Period pursuant to the related Primary Mortgage
Insurance Policy, if any or otherwise; and
(v) the applicable PO Percentage of the sum of (a) the Stated
Principal Balance of each Discount Mortgage Loan in Loan Group II which
was repurchased by the Seller in connection with such Distribution Date
and (b) the excess, if any, of the Stated Principal Balance of each
Discount Mortgage Loan in Loan Group II that has been replaced by the
Seller with a Replacement Mortgage Loan pursuant to this Agreement in
connection with such Distribution Date over the Stated Principal
Balance of each such Replacement Mortgage Loan.
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CLASS II-X CERTIFICATE: Any Certificate designated as a "Class II-X
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 II-X Certificates as set forth herein and evidencing a Regular
Interest in REMIC III.
CLASS II-X PASS-THROUGH RATE: For the first Distribution Date,
approximately 0.542% per annum and for any Distribution Date thereafter, the
weighted average of the excess of (a) the Net Mortgage Rate on each Non-Discount
Mortgage Loan in Loan Group II over (b) 5.00% per annum. For federal income tax
purposes, however, the Class II-X Certificates will not have a Class II-X
Pass-Through Rate, and the Accrued Certificate Interest for the Class II-X
Certificates and any Distribution Date will be deemed to be 100% of the amount
distributed on REMIC II Regular Interest LTII-II-X for such Distribution Date.
CLASS P CERTIFICATE: Any Certificate designated as a "Class P
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 P Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.
CLASS P CERTIFICATE ACCOUNT: The account established and maintained by
the Trustee pursuant to Section 6.08 hereof.
CLASS PREPAYMENT DISTRIBUTION TRIGGER: With respect to any Class of
Subordinate Certificates is satisfied for any Distribution Date on which the
fraction (expressed as a percentage), the numerator of which is the aggregate
Certificate Principal Balance of such Class and each Class of Subordinate
Certificates subordinate thereto, if any, and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans as of the related Due
Date, equals or exceeds such percentage calculated as of the Closing Date.
CLASS R PASS-THROUGH RATE: On any Distribution Date, 5.000% per annum.
CLASS R-1 CERTIFICATE: Any Certificate designated a "Class R-1
Certificate" on the face thereof, in substantially the form set forth in Exhibit
A-4 hereto, evidencing the Residual Interest in REMIC I and representing the
right to the Percentage Interest of distributions provided for the Class R-1
Certificates as set forth herein.
CLASS R-2 CERTIFICATE: Any Certificate designated a "Class R-2
Certificate" on the face thereof, in substantially the form set forth in Exhibit
A-4 hereto, evidencing the Residual Interest in REMIC II and representing the
right to the Percentage Interest of distributions provided for the Class R-2
Certificates as set forth herein.
CLASS R-3 CERTIFICATE: Any Certificate designated a "Class R-3
Certificate" on the face thereof, in substantially the form set forth in Exhibit
A-4 hereto, evidencing the Residual Interest in REMIC III and representing the
right to the Percentage Interest of distributions provided for the Class R-3
Certificates as set forth herein.
CLOSING DATE: April 30, 2004.
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CODE: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
COMPANY: EMC.
COMPENSATING INTEREST: An amount, not to exceed the related Servicing
Fee, to be deposited in the Master Servicer Collection Account by the Company or
the related Servicer to the payment of a Prepayment Interest Shortfall on a
Mortgage Loan subject to this Agreement; provided that in the event the Company
or the related Servicer fails to make such payment, the Master Servicer shall be
obligated to do so pursuant to Section 6.02(c) hereof.
COOPERATIVE: A private, cooperative housing corporation which owns or
leases land and all or part of a building or buildings, including apartments,
spaces used for commercial purposes and common areas therein and whose board of
directors authorizes, among other things, the sale of Cooperative Stock.
COOPERATIVE APARTMENT: A dwelling unit in a multi-dwelling building
owned or leased by a Cooperative, which unit the Mortgagor has an exclusive
right to occupy pursuant to the terms of a proprietary lease or occupancy
agreement.
COOPERATIVE LEASE: With respect to a Cooperative Loan, the proprietary
lease or occupancy agreement with respect to the Cooperative Apartment occupied
by the Mortgagor and relating to the related Cooperative Stock, which lease or
agreement confers an exclusive right to the holder of such Cooperative Stock to
occupy such apartment.
COOPERATIVE LOAN: Any of the Mortgage Loans made in respect of a
Cooperative Apartment, evidenced by a Mortgage Note and secured by (i) a
Security Agreement, (ii) the related Cooperative Stock Certificate, (iii) an
assignment of the Cooperative Lease, (iv) financing statements and (v) a stock
power (or other similar instrument), and ancillary thereto, a recognition
agreement between the Cooperative and the originator of the Cooperative Loan,
each of which was transferred and assigned to the Trustee pursuant to Section
2.01 and are from time to time held as part of the Trust Fund.
COOPERATIVE STOCK: With respect to a Cooperative Loan, the single
outstanding class of stock, partnership interest or other ownership instrument
in the related Cooperative.
COOPERATIVE STOCK CERTIFICATE: With respect to a Cooperative Loan, the
stock certificate or other instrument evidencing the related Cooperative Stock.
CORPORATE TRUST OFFICE: The designated office of the Trustee where at
any particular time its corporate trust business with respect to this Agreement
shall be administered, which office at the date of the execution of this
Agreement is located at US Bank Corporate Trust Services, Xxx Xxxxxxx Xxxxxx,
0xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Corporate Trust
Services/BSABS I 2004- AC2, or at such other address as the Trustee may
designate from time to time.
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CORRESPONDING CERTIFICATE: With respect to:
(i) REMIC II Regular Interest LTII-I-A1, the Class I-A1
Certificates,
(ii) REMIC II Regular Interest LTII-I-A2, the Class I-A2
Certificates,
(iii) REMIC II Regular Interest LTII-I-A3, the Class I-A3
Certificates,
(iv) REMIC II Regular Interest LTII-I-PO the Class I-PO
Certificates,
(v) REMIC II Regular Interest LTII-II-A, the Class II-A
Certificates,
(vi) REMIC II Regular Interest LTII-II-PO, the Class II-PO
Certificates,
(vii) REMIC II Regular Interest LTII-B1, the Class B-1
Certificates,
(viii) REMIC II Regular Interest LTII-B2, the Class B-2
Certificates,
(ix) REMIC II Regular Interest LTII-B3, the Class B-3
Certificates,
(x) REMIC II Regular Interest LTII-B4, the Class B-4
Certificates,
(xi) REMIC II Regular Interest LTII-B5, the Class B-5
Certificates,
(xii) REMIC II Regular Interest LTII-B6, the Class B-6
Certificates,
(xiii) REMIC II Regular Interest LTII-R3, the Class R-3
Certificates; and
(xiv) REMIC II Regular Interest LTII-P, the Class P
Certificates.
COUNTRYWIDE ASSIGNMENT AGREEMENT: The Assignment, Assumption and
Recognition Agreement, dated as of April 30, 2004, by and among the Seller, the
Depositor, Countrywide Home Loans, Countrywide Servicing and the Trustee
evidencing the assignment of the Countrywide Servicing Agreement to the Trust.
COUNTRYWIDE HOME LOANS: Countrywide Home Loans, Inc. and any successor
thereto.
COUNTRYWIDE LOANS: Those Mortgage Loans subject to this Agreement which
were purchased by the Seller from Countrywide Home Loans pursuant to the
Countrywide Servicing Agreement.
COUNTRYWIDE SERVICING: Countrywide Home Loans Servicing LP and any
successor thereto.
COUNTRYWIDE SERVICING AGREEMENT: The Seller's Warranties and Servicing
Agreement, dated as of September 1, 2002, as amended on January 1, 2003, between
the Seller and Countrywide Home Loans, as modified by the Countrywide Assignment
Agreement.
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CROSS-OVER DATE: The first Distribution Date on which the aggregate
Certificate Principal Balance of the Subordinated Certificates has been reduced
to zero (giving effect to all distributions on such Distribution Date).
CUSTODIAL AGREEMENT: An agreement dated as of April 30, 2004 among the
Depositor, the Seller, the Trustee and the Custodian in substantially the form
of Exhibit K hereto.
CUSTODIAN: Xxxxx Fargo Bank, National Association, or any successor
custodian appointed pursuant to the provisions hereof and the Custodial
Agreement.
CUT-OFF DATE: The close of business on April 1, 2004.
CUT-OFF DATE PRINCIPAL BALANCE: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the Cut-off Date after
application of all Principal Prepayments received prior to the Cut-off Date and
scheduled payments of principal due on or before the Cut-off Date, whether or
not received, but without giving effect to any installments of principal
received in respect of Due Dates after the Cut-off Date.
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a reduction
by a court of competent jurisdiction in a proceeding under the Bankruptcy Code
in the Scheduled Payment for such Mortgage Loan that became final and
non-appealable, except such a reduction resulting from a Deficient Valuation or
any other reduction that results in a permanent forgiveness of principal.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation by
a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding indebtedness under such Mortgage Loan, or any
reduction in the amount of principal to be paid in connection with any Scheduled
Payment that results in a permanent forgiveness of principal, which valuation or
reduction results from an order of such court that is final and non-appealable
in a proceeding under the Bankruptcy Code.
DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
DELINQUENT: A Mortgage Loan is "delinquent" if any payment due thereon
is not made pursuant to the terms of such Mortgage Loan by the close of business
on the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30- day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on.
DENOMINATION: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Principal Balance of this Certificate."
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DEPOSITOR: Bear Xxxxxxx Asset Backed Securities I LLC, a Delaware
corporation, or its successor in interest.
DEPOSITORY: The initial Depository shall be The Depository Trust
Company ("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(a)(5) of the
Uniform Commercial Code of the State of New York.
DEPOSITORY AGREEMENT: With respect to each Class of Book-Entry
Certificates, the agreement among the Depositor, the Trustee and the initial
Depository, dated as of the Closing Date, substantially in the form of Exhibit
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.
DISCOUNT MORTGAGE LOAN: Shall mean (a) any Mortgage Loan in Loan Group
I with a Net Mortgage Rate less than 6.00% per annum and (b) any Mortgage Loan
in Loan Group II with a Net Mortgage Rate less than 5.00% per annum.
DISTRIBUTION ACCOUNT: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 5.07 in the name of the Trustee
for the benefit of the Certificateholders and designated "U.S. Bank National
Association, in trust for registered holders of Bear Xxxxxxx Asset Backed
Securities I LLC, Asset-Backed Certificates, Series 2004-AC2". 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 3:00 p.m. Eastern time on the Business Day immediately preceding such
Distribution Date.
DISTRIBUTION DATE: The 25th day of each calendar month after the
initial issuance of the Certificates, or if such 25th day is not a Business Day,
the next succeeding Business Day, commencing in May 2004.
DTC CUSTODIAN: U.S. Bank National Association, or its successors in
interest as custodian for the Depository.
DUE DATE: As to any Mortgage Loan, the date in each month on which the
related Scheduled Payment is due, as set forth in the related Mortgage Note.
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DUE PERIOD: With respect to any Distribution Date, the period from the
second day of the calendar month preceding the calendar month in which such
Distribution Date occurs through close of business on the first day of the
calendar month in which such Distribution Date occurs.
ELIGIBLE ACCOUNT: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and short-term unsecured debt obligations
of which (or, in the case of a depository institution or trust company that is
the principal subsidiary of a holding company, the debt obligations of such
holding company, so long as Xxxxx'x is not a Rating Agency) are rated by each
Rating Agency in one of its two highest long-term and its highest short-term
rating categories respectively, at the time any amounts are held on deposit
therein, or (ii) an account or accounts in a depository institution or trust
company in which such accounts are insured by the FDIC (to the limits
established by the FDIC) and the uninsured deposits in which accounts are
otherwise secured such that, as evidenced by an Opinion of Counsel delivered to
the Trustee and to each Rating Agency, the Certificateholders have a claim with
respect to the funds in such account or a perfected first priority security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution or trust company in which
such account is maintained, or (iii) a trust account or accounts maintained with
the corporate trust department of a federal or state chartered depository
institution or trust company having capital and surplus of not less than
$50,000,000, acting in its fiduciary capacity or (iv) any other account
acceptable to the Rating Agencies. Eligible Accounts may bear interest, and may
include, if otherwise qualified under this definition, accounts maintained with
the Trustee.
EMC: EMC Mortgage Corporation, a Delaware corporation.
EMC MORTGAGE LOANS: Shall mean those Mortgage Loans serviced by the
Company pursuant to the terms of this Agreement.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA RESTRICTED CERTIFICATE: Each of the Class P, Class B-4, Class
B-5, Class B-6 and Residual Certificates.
EVENT OF DEFAULT: As defined in Section 9.01 hereof.
EXCESS LIQUIDATION PROCEEDS: To the extent not required by law to be
paid to the related Mortgagor, the excess, if any, of any Liquidation Proceeds
with respect to a Mortgage Loan over the Stated Principal Balance of such
Mortgage Loan and accrued and unpaid interest at the related Mortgage Rate
through the last day of the month in which the Mortgage Loan has been
liquidated.
EXEMPTION: Prohibited Transaction Exemption 90-30, as amended from time
to time.
XXXXXX XXX: Xxxxxx Xxx (formerly, Federal National Mortgage
Association), or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
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FINAL RECOVERY DETERMINATION: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Seller pursuant to or as contemplated by Section 2.03(d) or Section
11.01), a determination made by the Company pursuant to this Agreement or the
applicable Servicer pursuant to the related Servicing Agreement that all
Insurance Proceeds, Liquidation Proceeds and other payments or recoveries which
the Company or such Servicer, in its reasonable good faith judgment, expects to
be finally recoverable in respect thereof have been so recovered. The Master
Servicer shall maintain records, based solely on information provided by each
Servicer, of each Final Recovery Determination made thereby.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989.
XXXXXXX MAC: Federal Home Loan Mortgage Corporation, or any successor
thereto.
GLOBAL CERTIFICATE: Any Private Certificate registered in the name of
the Depository or its nominee, beneficial interests in which are reflected on
the books of the Depository or on the books of a Person maintaining an account
with such Depository (directly or as an indirect participant in accordance with
the rules of such depository).
GMACM: GMACM Mortgage Corporation, and any successor thereto.
GMACM ASSIGNMENT AGREEMENT: The Assignment, Assumption and Recognition
Agreement, dated as of April 30, 2004 by and among and the Seller, GMACM and the
Trustee evidencing the assignment of the GMACM Servicing Agreement to the Trust.
GMACM LOANS: Those Mortgage Loans subject to this Agreement which were
purchased by the Seller from GMACM pursuant to the GMACM Servicing Agreement.
GMACM SERVICING AGREEMENT: Shall mean the Servicing Agreement, dated as
of May 1, 2001, as amended by Amendment No. 1, dated as of October 1, 2001 and
Amendment No. 2, dated as of July 31, 2002, by and among the Seller and GMACM,
as modified by the GMACM Assignment Agreement.
GROUP AVAILABLE FUNDs: Shall mean the Group I Available Funds or the
Group II Available Funds, as applicable.
GROUP I AVAILABLE FUNDS: Shall mean the sum of Interest Funds and
Principal Funds relating to Loan Group I.
GROUP I CERTIFICATES: The Class I-A1, Class I-A2, Class I-A3, Class
I-A4, Class I-X and Class I-PO Certificates.
GROUP I SENIOR OPTIMAL PRINCIPAL AMOUNT: With respect to each
Distribution Date and the Group I Certificates (other than the Interest Only
Certificates and Class I-PO Certificates), means an amount equal to the sum of
the following (but in no event greater than the aggregate Certificate Principal
Balance of the Group I Certificates (other than the Interest Only Certificates
and Class I-PO Certificates) immediately prior to such Distribution Date):
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(i) the applicable Senior Percentage of the applicable Non-PO
Percentage of the principal portion of all Scheduled Payments due on
the Mortgage Loans in Loan Group I on the related Due Date, as
specified in the amortization schedule at the time applicable thereto
(after adjustment for previous Principal Prepayments but before any
adjustment to such amortization schedule by reason of any bankruptcy or
similar proceeding or any moratorium or similar waiver or grace
period);
(ii) the applicable Senior Prepayment Percentage of the
applicable Non-PO Percentage of the Stated Principal Balance of each
Mortgage Loan in the Loan Group I which was the subject of a Principal
Prepayment in full received by the Company or the related Servicer
during the applicable Prepayment Period;
(iii) the applicable Senior Prepayment Percentage of the
applicable Non-PO Percentage of all partial Principal Prepayments
received during the applicable Prepayment Period with respect to any
Mortgage Loan in Loan Group I;
(iv) the lesser of (a) the applicable Senior Prepayment
Percentage of the applicable Non-PO Percentage of the sum of (A) all
Net Liquidation Proceeds allocable to principal received in respect of
each Mortgage Loan in Loan Group I which became a Liquidated Mortgage
Loan during the related Prepayment Period (other than Mortgage Loans
described in the immediately following clause (B)) and all Subsequent
Recoveries received in respect of each Liquidated Mortgage Loan in Loan
Group I during the related Due Period and (B) the Stated Principal
Balance of each such Mortgage Loan in Loan Group I purchased by an
insurer from the Trustee during the related Prepayment Period pursuant
to the related Primary Mortgage Insurance Policy, if any, or otherwise;
and (b) the applicable Senior Percentage of the applicable Non-PO
Percentage of the sum of (A) the Stated Principal Balance of each
Mortgage Loan in Loan Group I which became a Liquidated Mortgage Loan
during the related Prepayment Period (other than the Mortgage Loans
described in the immediately following clause (B)) and (B) the Stated
Principal Balance of each such Mortgage Loan in Loan Group I that was
purchased by an insurer from the Trustee during the related Prepayment
Period pursuant to the related Primary Mortgage Insurance Policy, if
any or otherwise; and
(v) the applicable Senior Prepayment Percentage of the
applicable Non-PO Percentage of the sum of (a) the Stated Principal
Balance of each Mortgage Loan in Loan Group I which was repurchased by
the Seller in connection with such Distribution Date and (b) the
excess, if any, of the Stated Principal Balance of each Mortgage Loan
in Loan Group I that has been replaced by the Seller with a Replacement
Mortgage Loan pursuant to this Agreement in connection with such
Distribution Date over the Stated Principal Balance of each such
Replacement Mortgage Loan.
GROUP I SUBORDINATE OPTIMAL PRINCIPAL AMOUNT: For the Subordinated
Certificates with respect to each Distribution Date means an amount equal to the
sum of the following for Loan Group I (but in no event greater than the
aggregate Certificate Principal Balances of the Subordinated Certificates
immediately prior to such Distribution Date):
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(i) the applicable Subordinate Percentage of the applicable
Non-PO Percentage of the principal portion of all Scheduled Payments
due on each Mortgage Loan in Loan Group I on the related Due Date, as
specified in the amortization schedule at the time applicable thereto
(after adjustment for previous Principal Prepayments but before any
adjustment to such amortization schedule by reason of any bankruptcy or
similar proceeding or any moratorium or similar waiver or grace
period);
(ii) the applicable Subordinate Prepayment Percentage of the
applicable Non-PO Percentage of the Stated Principal Balance of each
Mortgage Loan in Loan Group I which was the subject of a Principal
Prepayment in full received by the Company or the Servicer during the
applicable Prepayment Period;
(iii) the applicable Subordinate Prepayment Percentage of the
applicable Non-PO Percentage of all partial Principal Prepayments
received during the applicable Prepayment Period for each Mortgage Loan
in Loan Group I;
(iv) the excess, if any, of (a) the Net Liquidation Proceeds
allocable to principal received during the related Prepayment Period in
respect of each Liquidated Mortgage Loan in Loan Group I and all
Subsequent Recoveries received in respect of each Liquidated Mortgage
Loan in Loan Group I during the related Due Period over (b) the sum of
the amounts distributable to the related Senior Certificateholders
pursuant to clause (iv) of the definitions of "Group I Senior Optimal
Principal Amount" and "Class I-PO Certificate Principal Distribution
Amount" on such Distribution Date;
(v) the applicable Subordinate Prepayment Percentage of the
applicable Non-PO Percentage of the sum of (a) the Stated Principal
Balance of each Mortgage Loan in Loan Group I which was repurchased by
the Seller in connection with such Distribution Date and (b) the
difference, if any, between the Stated Principal Balance of each
Mortgage Loan in Loan Group I that has been replaced by the Seller with
a Replacement Mortgage Loan pursuant to this Agreement in connection
with such distribution date and the Stated Principal Balance of each
such Replacement Mortgage Loan; and
(vi) on the Distribution Date on which the Certificate
Principal Balances of the related Senior Certificates (other than the
Interest Only Certificates and Class I-PO Certificates) have all been
reduced to zero, 100% of the Group I Senior Optimal Principal Amount.
GROUP II AVAILABLE FUNDS: Shall mean the sum of Interest Funds and
Principal Funds relating to Loan Group II.
GROUP II CERTIFICATES: The Class II-A, Class II-PO, Class II-X, Class
R-1, Class R-2 and Class R-3 Certificates.
GROUP II SENIOR OPTIMAL PRINCIPAL AMOUNT: With respect to each
Distribution Date and the Group II Certificates (other than the Interest Only
Certificates and Class II-PO Certificates), means an amount equal to the sum of
the following (but in no event greater than the aggregate Certificate
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Principal Balance of the Group II Certificates (other than the Interest Only
Certificates and Class II- PO Certificates) immediately prior to such
Distribution Date):
(i) the applicable Senior Percentage of the applicable Non-PO
Percentage of the principal portion of all Scheduled Payments due on
the Mortgage Loans in Loan Group II on the related Due Date, as
specified in the amortization schedule at the time applicable thereto
(after adjustment for previous Principal Prepayments but before any
adjustment to such amortization schedule by reason of any bankruptcy or
similar proceeding or any moratorium or similar waiver or grace
period);
(ii) the applicable Senior Prepayment Percentage of the
applicable Non-PO Percentage of the Stated Principal Balance of each
Mortgage Loan in the Loan Group II which was the subject of a Principal
Prepayment in full received by the Company or the related Servicer
during the applicable Prepayment Period;
(iii) the applicable Senior Prepayment Percentage of the
applicable Non-PO Percentage of all partial Principal Prepayments
received during the applicable Prepayment Period with respect to any
Mortgage Loan in Loan Group II;
(iv) the lesser of (a) the applicable Senior Prepayment
Percentage of the applicable Non-PO Percentage of the sum of (A) all
Net Liquidation Proceeds allocable to principal received in respect of
each Mortgage Loan in Loan Group II which became a Liquidated Mortgage
Loan during the related Prepayment Period (other than Mortgage Loans
described in the immediately following clause (B)) and all Subsequent
Recoveries received in respect of each Liquidated Mortgage Loan in Loan
Group II during the related Due Period and (B) the Stated Principal
Balance of each such Mortgage Loan in Loan Group II purchased by an
insurer from the Trustee during the related Prepayment Period pursuant
to the related Primary Mortgage Insurance Policy, if any, or otherwise;
and (b) the applicable Senior Percentage of the applicable Non-PO
Percentage of the sum of (A) the Stated Principal Balance of each
Mortgage Loan in Loan Group II which became a Liquidated Mortgage Loan
during the related Prepayment Period (other than the Mortgage Loans
described in the immediately following clause (B)) and (B) the Stated
Principal Balance of each such Mortgage Loan in Loan Group II that was
purchased by an insurer from the Trustee during the related Prepayment
Period pursuant to the related Primary Mortgage Insurance Policy, if
any or otherwise; and
(v) the applicable Senior Prepayment Percentage of the
applicable Non-PO Percentage of the sum of (a) the Stated Principal
Balance of each Mortgage Loan in Loan Group II which was repurchased by
the Seller in connection with such Distribution Date and (b) the
excess, if any, of the Stated Principal Balance of each Mortgage Loan
in Loan Group II that has been replaced by the Seller with a
Replacement Mortgage Loan pursuant to this Agreement in connection with
such Distribution Date over the Stated Principal Balance of each such
Replacement Mortgage Loan.
GROUP II SUBORDINATE OPTIMAL PRINCIPAL AMOUNT: For the Subordinated
Certificates with respect to each Distribution Date means an amount equal to the
sum of the following for Loan Group
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II (but in no event greater than the aggregate Certificate Principal Balances of
the Subordinated Certificates immediately prior to such Distribution Date):
(i) the applicable Subordinate Percentage of the applicable
Non-PO Percentage of the principal portion of all Scheduled Payments
due on each Mortgage Loan in Loan Group II on the related Due Date, as
specified in the amortization schedule at the time applicable thereto
(after adjustment for previous Principal Prepayments but before any
adjustment to such amortization schedule by reason of any bankruptcy or
similar proceeding or any moratorium or similar waiver or grace
period);
(ii) the applicable Subordinate Prepayment Percentage of the
applicable Non-PO Percentage of the Stated Principal Balance of each
Mortgage Loan in Loan Group II which was the subject of a Principal
Prepayment in full received by the Company or the Servicer during the
applicable Prepayment Period;
(iii) the applicable Subordinate Prepayment Percentage of the
applicable Non-PO Percentage of all partial Principal Prepayments
received during the applicable Prepayment Period for each Mortgage Loan
in Loan Group II;
(iv) the excess, if any, of (a) the Net Liquidation Proceeds
allocable to principal received during the related Prepayment Period in
respect of each Liquidated Mortgage Loan in Loan Group II and all
Subsequent Recoveries received in respect of each Liquidated Mortgage
Loan in Loan Group II during the related Due Period over (b) the sum of
the amounts distributable to the related Senior Certificateholders
pursuant to clause (iv) of the definitions of "Group II Senior Optimal
Principal Amount" and "Class II-PO Certificate Principal Distribution
Amount" on such Distribution Date;
(v) the applicable Subordinate Prepayment Percentage of the
applicable Non-PO Percentage of the sum of (a) the Stated Principal
Balance of each Mortgage Loan in Loan Group II which was repurchased by
the Seller in connection with such Distribution Date and (b) the
difference, if any, between the Stated Principal Balance of each
Mortgage Loan in Loan Group II that has been replaced by the Seller
with a Replacement Mortgage Loan pursuant to this Agreement in
connection with such distribution date and the Stated Principal Balance
of each such Replacement Mortgage Loan; and
(vi) on the Distribution Date on which the Certificate
Principal Balances of the related Senior Certificates (other than the
Interest Only Certificates and Class II-PO Certificates) have all been
reduced to zero, 100% of the Group II Senior Optimal Principal Amount.
HSBC: HSBC Mortgage Corporation (USA), and any successor thereto.
HSBC ASSIGNMENT AGREEMENT: The Assignment, Assumption and Recognition
Agreement, dated as of April 30, 2004, by and among the Seller, HSBC and the
Trustee evidencing the assignment of the HSBC Servicing Agreement to the Trust.
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HSBC LOANS: Those Mortgage Loans subject to this Agreement which were
purchased by the Seller from HSBC pursuant to the HSBC Servicing Agreement.
HSBC SERVICING AGREEMENT: Shall mean the Purchase, Warranties and
Servicing Agreement, dated as of May 1, 2002, by and between the Seller and
HSBC, as modified by the HSBC Assignment Agreement.
INDEMNIFIED PERSONS: The Trustee, the Master Servicer, the Company, the
Trust Fund and the Securities Administrator and their officers, directors,
agents and employees and, with respect to the Trustee, any separate co-trustee
and its officers, directors, agents and employees.
INDIVIDUAL CERTIFICATE: Any Private Certificate registered in the name
of the Holder other than the Depository or its nominee.
INITIAL CERTIFICATE PRINCIPAL BALANCE: With respect to any Certificate,
the Certificate Principal Balance of such Certificate or any predecessor
Certificate on the Closing Date.
INSTITUTIONAL ACCREDITED INVESTOR: Any Person meeting the requirements
of Rule 501(a)(l), (2), (3) or (7) of Regulation D under the Securities Act or
any entity all of the equity holders in which come within such paragraphs.
INSURANCE POLICY: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy or LPMI Policy, including all riders and
endorsements thereto in effect with respect to such Mortgage Loan, including any
replacement policy or policies for any Insurance Policies.
INSURANCE PROCEEDS: Proceeds paid in respect of the Mortgage Loans
pursuant to any Insurance Policy or any other insurance policy covering a
Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, the Company, the related Servicer or the trustee under the deed of
trust and are not applied to the restoration of the related Mortgaged Property
or released to the Mortgagor in accordance with the procedures that the Company
or the related Servicer would follow in servicing mortgage loans held for its
own account, in each case other than any amount included in such Insurance
Proceeds in respect of Insured Expenses.
INSURED EXPENSES: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
INTEREST DETERMINATION DATE: Shall mean the second LIBOR Business Day
preceding the commencement of each Accrual Period.
INTEREST FUNDS: For any Distribution Date and with respect to each Loan
Group, (i) the sum, without duplication, of (a) all scheduled interest collected
during the related Due Period with respect to the Mortgage Loans in such Loan
Group less the Master Servicing Fee, the Servicing Fee and the LPMI Fee, if any
on each Mortgage Loan in such Loan Group, (b) all Advances relating to interest
with respect to the Mortgage Loans in such Loan Group made on or prior to the
related Distribution Account Deposit Date, (c) all Compensating Interest with
respect to the Mortgage Loans in such Loan Group required to be remitted by the
Company or the Master Servicer pursuant to this
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Agreement or the related Servicer pursuant to the related Servicing Agreement
with respect to such Distribution Date, (d) Liquidation Proceeds with respect to
the Mortgage Loans in such Loan Group collected during the related Prepayment
Period (to the extent such Liquidation Proceeds relate to interest) and (e) all
amounts relating to interest with respect to each Mortgage Loan repurchased by
the Seller pursuant to Sections 2.02 and 2.03 and by EMC pursuant to Sections
4.21 and Section11.01, minus (ii) all amounts relating to interest required to
be reimbursed pursuant to Sections 5.02, 5.04, 5.06 and 5.08 or as otherwise set
forth in this Agreement.
INTEREST ONLY CERTIFICATES: The Class I-A4, Class I-X and Class II-X
Certificates.
INTEREST SHORTFALL: With respect to any Distribution Date, means the
aggregate shortfall, if any, in collections of interest (adjusted to the related
Net Mortgage Rates) on Mortgage Loans resulting from (a) Principal Prepayments
in full received during the related Prepayment Period, (b) the partial Principal
Prepayments received during the related Prepayment Period to the extent applied
prior to the Due Date in the month of the Distribution Date and (c) interest
payments on certain of the Mortgage Loans being limited pursuant to the
provisions of the Relief Act.
INVESTMENT LETTER: The letter to be furnished by each Institutional
Accredited Investor which purchases any of the Private Certificates in
connection with such purchase, substantially in the form set forth as Exhibit F
hereto.
LATEST POSSIBLE MATURITY DATE: The Distribution Date following the
final scheduled maturity date of the Mortgage Loan in the Trust Fund having the
latest scheduled maturity date as of the Cut- off Date. For purposes of the
Treasury Regulations under Code section 860A through 860G, the latest possible
maturity date of each regular interest issued by REMIC I, REMIC II and REMIC III
shall be the Latest Possible Maturity Date.
LIBOR BUSINESS DAY: Shall mean a day on which banks are open for
dealing in foreign currency and exchange in London and New York City.
LIQUIDATED LOAN: With respect to any Distribution Date, a defaulted
Mortgage Loan that has been liquidated through deed-in-lieu of foreclosure,
foreclosure sale, trustee's sale or other realization as provided by applicable
law governing the real property subject to the related Mortgage and any security
agreements and as to which the Company or the related Servicer has made a Final
Recovery Determination with respect thereto.
LIQUIDATION PROCEEDS: Amounts, other than Insurance Proceeds, received
in connection with the partial or complete liquidation of a Mortgage Loan,
whether through trustee's sale, foreclosure sale or otherwise, or in connection
with any condemnation or partial release of a Mortgaged Property and any other
proceeds received with respect to an REO Property, less the sum of related
unreimbursed Advances, Servicing Fees and Servicing Advances and all expenses of
liquidation, including property protection expenses and foreclosure and sale
costs, including court and reasonable attorneys fees and any Subsequent
Recoveries.
LOAN GROUP: Either Loan Group I or Loan Group II, as applicable.
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LOAN GROUP I: The Mortgage Loans identified as such on the Mortgage
Loan Schedule.
LOAN GROUP I STRIP RATE: 6.00% per annum.
LOAN GROUP II: The Mortgage Loans identified as such on the Mortgage
Loan Schedule.
LOAN GROUP II STRIP RATE: 5.00% per annum.
LOAN-TO-VALUE RATIO: The fraction, expressed as a percentage, the
numerator of which is the original principal balance of the related Mortgage
Loan and the denominator of which is the Appraised Value of the related
Mortgaged Property.
LOSS ALLOCATION LIMITATION: The meaning specified in Section 6.04A(c)
hereof.
LPMI FEE: Shall mean the fee payable to the insurer for each Mortgage
Loan subject to an LPMI Policy as set forth in such LPMI Policy.
LPMI POLICY: A policy of mortgage guaranty insurance issued by an
insurer meeting the requirements of Xxxxxx Xxx and Xxxxxxx Mac in which the
Company or the related Servicer of the related Mortgage Loan is responsible for
the payment of the LPMI Fee thereunder from collections on the related Mortgage
Loan.
MASTER SERVICER: Xxxxx Fargo Bank, National Association, in its
capacity as master servicer, and its successors and assigns.
MASTER SERVICER CERTIFICATION: A written certification covering
servicing of the Mortgage Loans by the Company and all Servicers and signed by
an officer of the Master Servicer that complies with (i) the Xxxxxxxx-Xxxxx 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 Xxxxxxxx-Xxxxx Act of 2002 is amended, (b) the
Statement referred to in clause (ii) is modified or superceded by any subsequent
statement, rule or regulation of the Securities and Exchange Commission or any
statement of a division thereof, or (c) any future releases, rules and
regulations are published by the Securities and Exchange Commission from time to
time pursuant to the Xxxxxxxx-Xxxxx Act of 2002, which in any such case affects
the form or substance of the required certification and results in the required
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Master Servicer Certification shall be as agreed to by the
Master Servicer, the Depositor and the Seller following a negotiation in good
faith to determine how to comply with any such new requirements.
MASTER SERVICER COLLECTION ACCOUNT: The trust accounts or accounts
created and maintained pursuant to Section 5.05 hereof, which shall be entitled
"U.S. Bank National Association, as Trustee f/b/o holders of Bear Xxxxxxx Asset
Backed Securities I LLC, Asset Backed Certificates, Series 2004- AC2 - Master
Servicer Collection Account".
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MASTER SERVICING COMPENSATION: For any Distribution Date, the sum of
the Master Servicing Fee and the Additional Master Servicing Compensation for
such Distribution Date.
MASTER SERVICING FEE: As to each Mortgage Loan and any Distribution
Date, an amount equal to 1/12th of the Master Servicing Fee Rate multiplied by
the Stated Principal Balance of such Mortgage Loan as of the last day of the
related Due Period.
MASTER SERVICING FEE RATE: 0.0150% per annum.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS(R) SYSTEM: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS(R) System.
MOM LOAN: With respect to any Mortgage Loan, MERS acting as the
mortgagee of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination thereof.
MONTHLY STATEMENT: The statement delivered to the Certificateholders
pursuant to Section 6.05.
MOODY'S: Xxxxx'x Investors Service, Inc.
MORTGAGE: The mortgage, deed of trust or other instrument creating a
first lien on or first priority ownership interest in an estate in fee simple in
real property securing a Mortgage Note.
MORTGAGE FILE: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee or the Custodian 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 the Mortgage Loan Schedule which is in fact not so transferred
for any reason shall continue to be a Mortgage Loan hereunder until the Purchase
Price with respect thereto has been paid to the Trust Fund.
MORTGAGE LOAN PURCHASE AGREEMENT: Shall mean the Mortgage Loan Purchase
Agreement dated as of April 30, 2004, between the Seller, as seller and the
Depositor, as purchaser.
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MORTGAGE LOAN PURCHASE PRICE: The price, calculated as set forth in
Section 11.01, to be paid in connection with the repurchase of the Mortgage
Loans pursuant to Section 11.01.
MORTGAGE LOAN SCHEDULE: The list of Mortgage Loans (as from time to
time amended by the Company or the Master Servicer to reflect the deletion of
Deleted Mortgage Loans and the addition of Replacement Mortgage Loans pursuant
to the provisions of this Agreement) transferred to the Trustee as part of the
Trust Fund and from time to time subject to this Agreement, the initial Mortgage
Loan Schedule being attached hereto as Exhibit B, setting forth the following
information with respect to each Mortgage Loan and divided into Loan Groups:
(i) the loan number;
(ii) the Mortgage Rate in effect as of the Cut-off Date;
(iii) the Servicer (or the Company, if it services the
Mortgage Loan), the Servicing Fee Rate and the Master
Servicing Fee Rate;
(iv) the Net Mortgage Rate in effect as of the Cut-off
Date;
(v) the maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the original term;
(ix) the remaining term;
(x) the property type;
(xi) the MIN with respect to each Mortgage Loan; and
(xii) the Loan Group.
Such schedule shall also set forth the aggregate Cut-off Date Principal Balance
for all of the Mortgage Loans and such aggregate amount for all Mortgage Loans
for each Loan Group.
MORTGAGE NOTE: The original executed note or other evidence of
indebtedness of a Mortgagor under a Mortgage Loan.
MORTGAGE RATE: The annual rate of interest borne by a Mortgage Note.
MORTGAGED PROPERTY: Land and improvements securing the indebtedness of
a Mortgagor under the related Mortgage Loan or, in the case of REO Property,
such REO Property, or, in the case of a Cooperative Loan, the related
Cooperative Lease and Cooperative Stock.
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MORTGAGOR: The obligors on a Mortgage Note.
NATIONAL CITY: National City Mortgage Company, and any successor
thereto.
NATIONAL CITY ASSIGNMENT AGREEMENT: The Assignment, Assumption and
Recognition Agreement, dated as of April 30, 2004, by and among and the Seller,
National City and the Trustee evidencing the assignment of the National City
Servicing Agreement to the Trust.
NATIONAL CITY LOANS: Those Mortgage Loans subject to this Agreement
which were purchased by the Seller from National City pursuant to the National
City Servicing Agreement.
NATIONAL CITY SERVICING AGREEMENT: Shall mean the Purchase, Warranties
and Servicing Agreement, dated as of October 1, 2001, by and among the Seller
and National City, as modified by the National City Assignment Agreement.
NET INTEREST SHORTFALLS: Shall mean Interest Shortfalls net of payments
by the Company, the Servicers or the Master Servicer in respect of Compensating
Interest.
NET MORTGAGE RATE: As to each Mortgage Loan, and at any time, the per
annum rate equal to the related Mortgage Rate less the sum of (i) the Master
Servicing Fee Rate, (ii) the Servicing Fee Rate and (iii) the rate at which the
LPMI Fee is calculated, if any.
NEXSTAR: Nexstar Financial Corporation, and any successor thereto.
NEXSTAR ASSIGNMENT AGREEMENT: The Assignment, Assumption and
Recognition Agreement, dated as of April 30, 2004, by and among the Seller,
Nexstar and the Trustee evidencing the assignment of the Nexstar Servicing
Agreement to the Trust.
NEXSTAR LOANS: Those Mortgage Loans subject to this Agreement which
were purchased by the Seller from Nexstar pursuant to the Nexstar Servicing
Agreement.
NEXSTAR SERVICING AGREEMENT: Shall mean the Master Sale and Servicing
Agreement, dated as of March 18, 2002, by and between the Seller and Nexstar, as
modified by the Nexstar Assignment Agreement.
NON-BOOK-ENTRY CERTIFICATE: Any Certificate other than a Book-Entry
Certificate.
NON-DISCOUNT MORTGAGE LOANS: Shall mean (a) any Mortgage Loan in Loan
Group I with a Net Mortgage Rate greater than or equal to 6.00% and (b) any
Mortgage Loan in Loan Group II with a Net Mortgage Rate greater than or equal to
5.00% per annum.
NON-PO PERCENTAGE: Shall mean, (a) with respect to Loan Group I and (i)
any related Discount Mortgage Loan, the Net Mortgage Rate thereof divided by
6.00% and (ii) any related Non- Discount Mortgage Loan, 100% and (b) with
respect to Loan Group II and (i) any related Discount Mortgage Loan, the Net
Mortgage Rate thereof divided by 5.00% and (ii) any related Non-Discount
Mortgage Loan, 100%.
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NONRECOVERABLE ADVANCE: Any portion of an Advance previously made or
proposed to be made by the Company or the Master Servicer pursuant to this
Agreement or the related Servicer pursuant to the related Servicing Agreement,
that, in the good faith judgment of the Company, the Master Servicer or the
related Servicer, will not or, in the case of a proposed advance, would not, be
ultimately recoverable by it from the related Mortgagor, related Liquidation
Proceeds, related Insurance Proceeds or otherwise.
OFFERED CERTIFICATES: The Class I-A1, Class I-A2, Class I-A3, Class
I-A4, Class II-A, Class I-X, Class II-X, Class I-PO, Class II-PO, Class B-1,
Class B-2, Class B-3, Class R-1, Class R-2 and Class R-3 Certificates.
OFFERED SUBORDINATED CERTIFICATES: The Class B-1, Class B-2 and Class
B-3 Certificates.
OFFICER'S CERTIFICATE: A certificate (i) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Vice President (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of the Depositor or the
Master Servicer (or any other officer customarily performing functions similar
to those performed by any of the above designated officers and also to whom,
with respect to a particular matter, such matter is referred because of such
officer's knowledge of and familiarity with a particular subject) or (ii), if
provided for in this Agreement, signed by a Servicing Officer, as the case may
be, and delivered to the Depositor, the Seller, the Securities Administrator,
the Master Servicer and/or the Trustee, as the case may be, as required by this
Agreement.
ONE-MONTH LIBOR: With respect to any Accrual Period and the Class I-A3
Certificates and Class I-A4 Certificates, the rate determined by the Securities
Administrator on the related Interest Determination Date on the basis of the
rate for U.S. dollar deposits for one month that appears on Telerate Screen Page
3750 as of 11:00 a.m. (London time) on such Interest Determination Date;
provided that the parties hereto acknowledge that One-Month LIBOR for the first
Accrual Period shall equal 1.090% per annum. If such rate does not appear on
such page (or such other page as may replace that page on that service, or if
such service is no longer offered, such other service for displaying One-Month
LIBOR or comparable rates as may be reasonably selected by the Securities
Administrator), One-Month LIBOR for the applicable Accrual Period will be the
Reference Bank Rate. If no such quotations can be obtained by the Securities
Administrator and no Reference Bank Rate is available, One-Month LIBOR will be
One-Month LIBOR applicable to the preceding Accrual Period. The establishment of
One-Month LIBOR on each Interest Determination Date by the Securities
Administrator and the Securities Administrator's calculation of the rate of
interest applicable to the Class I-A3 Certificates and Class I-A4 Certificates
for the related Accrual Period shall, in the absence of manifest error, be final
and binding.
OPINION OF COUNSEL: A written opinion of counsel, who may be counsel
for the Seller, the Depositor, the Company or the Master Servicer, reasonably
acceptable to each addressee of such opinion; provided that with respect to
Section 2.05, 8.05, 8.07 or 12.01, or the interpretation or application of the
REMIC Provisions, such counsel must (i) in fact be independent of the Seller,
Depositor, the Company and the Master Servicer, (ii) not have any direct
financial interest in the Seller, Depositor, the Company or the Master Servicer
or in any affiliate of either, and (iii) not be
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connected with the Seller, Depositor, the Company or the Master Servicer as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
OPTIONAL TERMINATION: The termination of the Trust Fund created
hereunder as a result of the purchase of all of the Mortgage Loans and any REO
Property pursuant to the last sentence of Section 11.01 hereof.
OPTIONAL TERMINATION DATE: The first Distribution Date on which the
Trust Fund may be terminated at the option of EMC as described in Section 11.01.
ORIGINAL VALUE: The value of the property underlying a Mortgage Loan
based, in the case of the purchase of the underlying Mortgaged Property, on the
lower of an appraisal or the sales price of such property or, in the case of a
refinancing, on an appraisal.
ORIGINATOR: With respect to each Mortgage Loan, shall mean the
originator set forth in the Mortgage Loan Schedule for such Mortgage Loan.
OTS: The Office of Thrift Supervision.
OUTSTANDING: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(a) Certificates theretofore canceled by the 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.
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, the
applicable Pass-Through Rate for each such Class as set forth in the Preliminary
Statement.
PERCENTAGE INTEREST: With respect to any Certificate of a specified
Class, the Percentage Interest set forth on the face thereof or the percentage
obtained by dividing the Denomination of such Certificate by the aggregate of
the Denominations of all Certificates of the such Class.
PERMITTED INVESTMENTS: At any time, any one or more of the following
obligations and securities:
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(i) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and credit of
the United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency, or such lower
rating as will not result in the downgrading or withdrawal of the
ratings then assigned to the Certificates by each Rating Agency;
(iii) [Reserved];
(iv) commercial or finance company paper which is then
receiving the highest commercial or finance company paper rating of
each Rating Agency, or such lower rating as will not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by each Rating Agency;
(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 (including the Trustee in its
commercial banking capacity), provided that the commercial paper and/or
long term unsecured debt obligations of such depository institution or
trust company are then rated one of the two highest long-term and the
highest short-term ratings of each such Rating Agency for such
securities, or such lower ratings as will not result in the downgrading
or withdrawal of the rating then assigned to the Certificates by any
Rating Agency;
(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 (except if the
Rating Agency is Moody's, such rating shall be the highest commercial
paper rating of Moody's for any such securities), or such lower rating
as will not result in the downgrading or withdrawal of the rating then
assigned to the Certificates by any Rating Agency, as evidenced by a
signed writing delivered by each Rating Agency;
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(x) interests in any money market fund (including any such
fund managed or advised by the Trustee or Master Servicer or any
affiliate thereof) which at the date of acquisition of the interests in
such fund and throughout the time such interests are held in such fund
has the highest applicable long term rating by each Rating Agency or
such lower rating as will not result in the downgrading or withdrawal
of the ratings then assigned to the Certificates by each Rating Agency;
(xi) short term investment funds sponsored by any trust
company or banking association incorporated under the laws of the
United States or any state thereof (including any such fund managed or
advised by the Trustee or 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 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, any possession of the United States or
any agency or instrumentality of any of the foregoing, (ii) a foreign
government, International Organization or any agency or instrumentality of
either of the foregoing, (iii) an organization (except certain farmers'
cooperatives described in section 521 of the Code) that is exempt from tax
imposed by Chapter 1 of the Code (including the tax imposed by section 511 of
the Code on unrelated business taxable income) on any excess inclusions (as
defined in section 860E(c)(1) of the Code) with respect to any Residual
Certificate, (iv) rural electric and telephone cooperatives described in section
1381(a)(2)(C) of the Code, (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
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Xxxxxx Xxxxxx, any state thereof or the District of Columbia, an estate whose
income from sources without the United States is includible in gross income for
United States federal income tax purposes regardless of its connection with the
conduct of a trade or business within the United States, or a trust if a court
within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have authority
to control all substantial decisions of the trustor and (vi) any other Person so
designated by the Trustee based upon an Opinion of Counsel addressed to the
Trustee (which shall not be an expense of the Trustee) that states that the
Transfer of an Ownership Interest in a Residual Certificate to such Person may
cause REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC at any time
that any Certificates are Outstanding. The terms "United States," "State" and
"International Organization" shall have the meanings set forth in section 7701
of the Code or successor provisions. A corporation will not be treated as an
instrumentality of the United States or of any State or political subdivision
thereof for these purposes if all of its activities are subject to tax and, with
the exception of Xxxxxxx Mac, a majority of its board of directors is not
selected by such government unit.
PERSON: Any individual, corporation, partnership, joint venture,
association, joint- stock company, limited liability company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
PHYSICAL CERTIFICATES: The Residual Certificates, the Class P
Certificate and the Private Certificates.
PO PERCENTAGE: Shall mean, (a) with respect to any Discount Mortgage
Loan in Loan Group I, a fraction, expressed as a percentage, equal to 6.00%
minus the Net Mortgage Rate thereof divided by 6.00% and (b) with respect to any
Discount Mortgage Loan in Loan Group II, a fraction, expressed as a percentage,
equal to 5.00% minus the Net Mortgage Rate thereof divided by 5.00%.
PREPAYMENT ASSUMPTION: The applicable rate of prepayment, as described
in the Prospectus Supplement relating to each Class of Offered Certificates.
PREPAYMENT CHARGE: Any prepayment premium, penalty or charge payable by
a Mortgagor in connection with any Principal Prepayment on a Mortgage Loan
pursuant to the terms of the related Mortgage Note.
PREPAYMENT INTEREST EXCESS: With respect to any Distribution Date, for
each EMC Mortgage Loan that was the subject of a Principal Prepayment in full or
in part during the portion of the related Prepayment Period occurring between
the first day of the calendar month in which such Distribution Date occurs and
the Determination Date of the calendar month in which such Distribution Date
occurs, an amount equal to interest (to the extent received) at the applicable
Net Mortgage Rate on the amount of such Principal Prepayment for the number of
days commencing on the first day of the calendar month in which such
Distribution Date occurs and ending on the last date through which interest is
collected from the related Mortgagor.
PREPAYMENT INTEREST SHORTFALL: With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a partial Principal Prepayment, a
Principal Prepayment in full, or that became a Liquidated Loan during the
related Prepayment Period, (other than a Principal Prepayment in full
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resulting from the purchase of a Mortgage Loan pursuant to Section 2.02, 2.03,
4.21 or 11.01 hereof), the amount, if any, by which (i) one month's interest at
the applicable Net Mortgage Rate on the Stated Principal Balance of such
Mortgage Loan immediately prior to such prepayment (or liquidation) or in the
case of a partial Principal Prepayment on the amount of such prepayment (or
Liquidation Proceeds) exceeds (ii) the amount of interest paid or collected in
connection with such Principal Prepayment or such Liquidation Proceeds less the
sum of (a) the Master Servicing Fee, (b) the related Servicing Fee and (b) the
LPMI Fee, if any, on such Mortgage Loan.
PREPAYMENT PERIOD: As to any Distribution Date and (i) each EMC
Mortgage Loan, the period commencing on the 16th day of the month prior to the
month in which the related Distribution Date occurs and ending on the 15th day
of the month in which such Distribution Date occurs and (ii) any other Mortgage
Loan, the period set forth in the related Servicing Agreement.
PRIMARY MORTGAGE INSURANCE POLICY: Any primary mortgage guaranty
insurance policy issued in connection with a Mortgage Loan which provides
compensation to a Mortgage Note holder in the event of default by the obligor
under such Mortgage Note or the related security instrument, if any or any
replacement policy therefor through the related Accrual Period for such Class
relating to a Distribution Date.
PRINCIPAL FUNDS: With respect to any Distribution Date and each Loan
Group, (i) the sum, without duplication, of (a) all scheduled principal
collected during the related Due Period with respect to the Mortgage Loans in
such Loan Group, (b) all Advances relating to principal with respect to the
Mortgage Loans in such Loan Group made on or prior to the Distribution Account
Deposit Date, (c) Principal Prepayments exclusive of Prepayment Charges or
penalties collected on the Mortgage Loans in such Loan Group during the related
Prepayment Period, (d) the Stated Principal Balance of each Mortgage Loan in
such Loan Group that was repurchased by the Seller pursuant to Sections 2.02 or
2.03 or by EMC pursuant to Sections 4.21 or 11.01 and (e) the aggregate of all
Substitution Adjustment Amounts for the related Determination Date in connection
with the substitution of a Replacement Mortgage Loan for a Deleted Mortgage Loan
in such Loan Group pursuant to Section 2.03(c) and (e) all Liquidation Proceeds
collected during the related Prepayment Period (to the extent such Liquidation
Proceeds relate to principal) with respect to the Mortgage Loans in such Loan
Group and remitted by the Company or the related Servicer to the Distribution
Account pursuant to this Agreement or the related Servicing Agreement, minus
(ii) all amounts required to be reimbursed pursuant to Sections 5.02, 5.04, 5.06
and 5.08 or as otherwise set forth in this Agreement.
PRINCIPAL PREPAYMENT: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including Mortgage Loans
purchased or repurchased under Sections 2.02, 2.03, 4.21 and 11.01 hereof) that
is received in advance of its scheduled Due Date and is not accompanied by an
amount as to interest representing scheduled interest due on any date or dates
in any month or months subsequent to the month of prepayment. Partial Principal
Prepayments shall be applied by the Company or the related Servicer, as
appropriate, in accordance with the terms of the related Mortgage Note.
PRIVATE CERTIFICATE: Each of the Class P, Class B-4, Class B-5 and
Class B-6 Certificates.
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PROSPECTUS SUPPLEMENT: The Prospectus Supplement dated April 28, 2004,
relating to the public offering of the Offered Certificates.
PROTECTED ACCOUNT: Each account established and maintained by the
Company with respect to receipts on the Mortgage Loans and REO Property in
accordance with Section 4.01 hereof or by a Servicer in accordance with the
related Servicing Agreement.
PUD: A Planned Unit Development.
PURCHASE PRICE: With respect to any Mortgage Loan required to be
repurchased by the Seller pursuant to Section 2.02 or 2.03 hereof, an amount
equal to the sum of (i) 100% of the outstanding principal balance of the
Mortgage Loan as of the date of such purchase plus (ii) accrued interest thereon
at the applicable Mortgage Rate through the first day of the month in which the
Purchase Price is to be distributed to Certificateholders, reduced by any
portion of the Servicing Fee, Servicing Advances and Advances payable to the
purchaser of the Mortgage Loan plus and (iii) any costs and damages (if any)
incurred by the Trust in connection with any violation of such Mortgage Loan of
any predatory lending laws.
QIB: A Qualified Institutional Buyer as defined in Rule 144A
promulgated under the Securities Act.
RATING AGENCY: Each of Xxxxx'x and S&P. If any such organization or its
successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.
REALIZED LOSS: With respect to each Mortgage Loan as to which a Final
Recovery Determination has been made, an amount (not less than zero) equal to
(i) the unpaid principal balance of such Mortgage Loan as of the commencement of
the calendar month in which the Final Recovery Determination was made, plus (ii)
accrued interest from the Due Date as to which interest was last paid by the
Mortgagor through the end of the calendar month in which such Final Recovery
Determination was made, calculated in the case of each calendar month during
such period (A) at an annual rate equal to the annual rate at which interest was
then accruing on such Mortgage Loan and (B) on a principal amount equal to the
Stated Principal Balance of such Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, minus the proceeds, if any,
received in respect of such Mortgage Loan during the calendar month in which
such Final Recovery Determination was made, net of amounts that are payable
therefrom to the Company pursuant to this Agreement or the applicable Servicer
pursuant to the related Servicing Agreement.
With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, calculated in the case of each calendar month
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during such period (A) at an annual rate equal to the annual rate at which
interest was then accruing on the related Mortgage Loan and (B) on a principal
amount equal to the Stated Principal Balance of the related Mortgage Loan as of
the close of business on the Distribution Date during such calendar month, plus
(iii) REO Imputed Interest for such REO Property for each calendar month
commencing with the calendar month in which such REO Property was acquired and
ending with the calendar month in which such Final Recovery Determination was
made, minus (iv) the aggregate of all unreimbursed Advances and Servicing
Advances.
With respect to each Mortgage Loan which has become the subject of a
Deficient Valuation, the difference between the principal balance of the
Mortgage Loan outstanding immediately prior to such Deficient Valuation and the
principal balance of the Mortgage Loan as reduced by the Deficient Valuation.
With respect to each Mortgage Loan which has become the subject of a
Debt Service Reduction, the portion, if any, of the reduction in each affected
Scheduled Payment attributable to a reduction in the Mortgage Rate imposed by a
court of competent jurisdiction. Each such Realized Loss shall be deemed to have
been incurred on the Due Date for each affected Scheduled Payment.
In addition, to the extent the Master Servicer receives Subsequent
Recoveries with respect to any Mortgage Loan, the amount of the Realized Loss
with respect to that Mortgage Loan will be reduced to the extent such Subsequent
Recoveries are applied to reduce the Certificate Principal Balance of any Class
of Certificates on any Distribution Date.
RECORD DATE: With respect to the Certificates (other than the Class
I-A3 Certificates and Class I-A4 Certificates) and any Distribution Date, the
close of business on the last Business Day of the month preceding the month in
which such Distribution Date occurs. With respect to any Distribution Date and
the Class I-A3 Certificates and Class I-A4 Certificates, so long as the Class
I-A3 Certificates and the Class I-A4 Certificates are Book-Entry Certificates,
the Business Day preceding such Distribution Date, and otherwise, the close of
business on the last Business Day of the month preceding the month in which such
Distribution Date occurs.
REFERENCE BANKS: Shall mean leading banks selected by the Securities
Administrator and engaged in transactions in Eurodollar deposits in the
international Eurocurrency market (i) with an established place of business in
London, (ii) which have been designated as such by the Securities Administrator
and (iii) which are not controlling, controlled by, or under common control
with, the Depositor, the Seller or the Master Servicer.
REFERENCE BANK RATE: With respect to any Accrual Period shall mean the
arithmetic mean, rounded upwards, if necessary, to the nearest whole multiple of
0.03125%, of the offered rates for United States dollar deposits for one month
that are quoted by the Reference Banks as of 11:00 a.m., New York City time, on
the related Interest Determination Date to prime banks in the London interbank
market for a period of one month in an amount approximately equal to the
aggregate of the Certificate Principal Balance of the Class I-A3 Certificates
and the Certificate Notional Balance of the Class I-A4 Certificates for such
Accrual Period, provided that at least two such Reference Banks provide such
rate. If fewer than two offered rates appear, the Reference Bank Rate will be
the arithmetic mean, rounded upwards, if necessary, to the nearest whole
multiple of 0.03125%, of
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the rates quoted by one or more major banks in New York City, selected by the
Securities Administrator, as of 11:00 a.m., New York City time, on such date for
loans in United States dollars to leading European banks for a period of one
month in amounts approximately equal to the aggregate of the Certificate
Principal Balance of the Class I-A3 Certificates and the Certificate Notional
Balance of the Class I-A4 Certificates for such Accrual Period.
REGULAR CERTIFICATE: Any Certificate other than a Residual Certificate.
RELIEF ACT: The Servicemembers Civil Relief Act, formerly known as the
Soldiers' and Sailors' Civil Relief Act of 1940, as amended or any similar state
law.
REMIC: A "real estate mortgage investment conduit" within the meaning
of section 860D of the Code.
REMIC I: The segregated pool of assets described in Section 6.06(a).
REMIC I CERTIFICATES: The REMIC I Regular Interests and the Class R-1
Certificate.
REMIC I REGULAR INTEREST LTI-IA: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-IA shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST LTI-I-IO: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-I-IO shall accrue
interest at the related Uncertificated REMIC I Pass- Through Rate in effect from
time to time, and shall not be entitled to distributions of principal.
REMIC I REGULAR INTEREST LTI-I-PO: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-I-PO shall not accrue
interest and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST LTI-I-ZZZ: One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest LTI-I-ZZZ
shall accrue interest at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
REMIC I REGULAR INTEREST LTI-IIA: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-IIA shall accrue
interest at the related Uncertificated REMIC I Pass-Through
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Rate in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC I REGULAR INTEREST LTI-II-IO: One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest LTI-II-IO
shall accrue interest at the related Uncertificated REMIC I Pass- Through Rate
in effect from time to time, and shall not be entitled to distributions of
principal.
REMIC I REGULAR INTEREST LTI-II-PO: One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest LTI-II-PO
shall not accrue interest and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
REMIC I REGULAR INTEREST LTI-II-ZZZ: One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest LTI-II-ZZZ
shall accrue interest at the related Uncertificated REMIC I Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC I REGULAR INTEREST LTI-P: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-P shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto. REMIC I Regular Interest LTI-P shall
not be entitled to distributions of interest.
REMIC I REGULAR INTEREST LTI-R2: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-R2 shall accrue
interest at the related Uncertificated REMIC I Pass- Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST LTI-R3: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-R3 shall accrue
interest at the related Uncertificated REMIC I Pass- Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTERESTS: REMIC I Regular Interest LTI-IA, REMIC I
Regular Interest LTI-I-IO, REMIC I Regular Interest LTI-I-PO, REMIC I Regular
Interest LTI-I-ZZZ, REMIC I Regular Interest LTI-IIA, REMIC I Regular Interest
LTI-II-IO, REMIC I Regular Interest LTI-II-PO,
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REMIC I Regular Interest LTI-II-ZZZ, REMIC I Regular Interest LTI-P, REMIC I
Regular Interest LTI-R2 and REMIC I Regular Interest LTI-R3.
REMIC I SUBORDINATED BALANCE RATIO: The ratio among the Uncertificated
Principal Balances of each of the REMIC I Regular Interests ending with the
designation "A," equal to the ratio among:
(1) the excess of (x) the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group I over (y) the Certificate Principal Balance of the
Senior Certificates related to Loan Group I; and
(2) the excess of (x) the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group II over (y) the Certificate Principal Balance of
the Senior Certificates related to Loan Group II.
REMIC II: The segregated pool of assets, described in the Preliminary
Statement, consisting of the REMIC I Regular Interests.
REMIC II REGULAR INTEREST LTII-I-A1: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest
LTII-I-A1 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC II REGULAR INTEREST LTII-I-A2: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest
LTII-I-A2 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC II REGULAR INTEREST LTII-I-A3: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest
LTII-I-A3 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC II REGULAR INTEREST LTII-I-PO: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest
LTII-I-PO shall not accrue interest and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
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REMIC II REGULAR INTEREST LTII-I-X: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest LTII-I-X
shall accrue interest as provided herein and shall not be entitled to
distributions of principal.
REMIC II REGULAR INTEREST LTII-II-A: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest
LTII-II-A shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC II REGULAR INTEREST LTII-II-PO: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest
LTII-II-PO shall not accrue interest and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC II REGULAR INTEREST LTII-II-X: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest
LTII-II-X shall accrue interest as provided herein and shall not be entitled to
distributions of principal.
REMIC II REGULAR INTEREST LTII-B1: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-B1 shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC II REGULAR INTEREST LTII-B2: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-B2 shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC II REGULAR INTEREST LTII-B3: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-B3 shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC II REGULAR INTEREST LTII-B4: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC
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II. REMIC II Regular Interest LTII-B4 shall accrue interest at the related
Uncertificated REMIC II Pass-Through Rate in effect from time to time, and shall
be entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Principal
Balance as set forth in the Preliminary Statement hereto.
REMIC II REGULAR INTEREST LTII-B5: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-B5 shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC III REGULAR INTEREST LTII-B6: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest LTII-B6
shall accrue interest at the related Uncertificated REMIC II Pass-Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC II REGULAR INTEREST LTII-P: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-P shall be entitled
to distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto. REMIC II Regular Interest LTII-P
shall not be entitled to distributions of interest.
REMIC II REGULAR INTEREST LTII-R3: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-R3 shall accrue
interest at the related Uncertificated REMIC II Pass- Through Rate in effect
from time to time, and shall be entitled to distributions of principal, subject
to the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC II REGULAR INTERESTS: REMIC II Regular Interest LTII-I-A1, REMIC
II Regular Interest LTII-I-A2, REMIC II Regular Interest LTII-I-A3, REMIC II
Regular Interest LTII-I-X, REMIC II Regular Interest LTII-I-PO, REMIC II Regular
Interest LTII-II-A, REMIC II Regular Interest LTII-II-X, REMIC II Regular
Interest LTII-II-PO, REMIC II Regular Interest LTII-B1, REMIC II Regular
Interest LTII-B2, REMIC II Regular Interest LTII-B3, REMIC II Regular Interest
LTII-B4, REMIC II Regular Interest LTII-B5, REMIC II Regular Interest LTII-B6,
REMIC II Regular Interest LTII-P and REMIC II Regular Interest LTII-R3.
REMIC III: The segregated pool of assets described in the Preliminary
Statement, consisting of the REMIC II Regular Interests.
REMIC III CERTIFICATES: The Certificates and the Class R-3
Certificates.
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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.
REMIC REGULAR INTEREST: A REMIC I Regular Interest, REMIC II Regular
Interest or Regular Certificate.
REMITTANCE DATE: Shall mean (i) with respect to the Company, the
Business Day immediately preceding the Distribution Account Deposit Date and
(ii) with respect to any Servicer, the date specified in the related Servicing
Agreement.
REMITTANCE REPORT: As defined in Section 6.04(d).
REO IMPUTED INTEREST: As to any REO Property, for any calendar month
during which such REO Property was at any time part of REMIC I, one month's
interest at the applicable Net Mortgage Rate on the Stated Principal Balance of
such REO Property (or, in the case of the first such calendar month, of the
related Mortgage Loan, if appropriate) as of the close of business on the
Distribution Date in such calendar month.
REO PROPERTY: A Mortgaged Property acquired by the Company or a
Servicer through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
REPLACEMENT MORTGAGE LOAN: A Mortgage Loan or Mortgage Loans in the
aggregate substituted by the Seller for a Deleted Mortgage Loan, which must, on
the date of such substitution, as confirmed in a Request for Release, (i) have a
Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of, the Stated Principal Balance of the Deleted Mortgage Loan;
(ii) have a fixed Mortgage Rate not less than or more than 1% per annum higher
than the Mortgage Rate of the Deleted Mortgage Loan; (iii) have the same or
higher credit quality characteristics than that of the Deleted Mortgage Loan;
(iv) have a Loan-to-Value Ratio no higher than that of the Deleted Mortgage
Loan; (v) have a remaining term to maturity no greater than (and not more than
one year less than) that of the Deleted Mortgage Loan; (vi) not permit
conversion of the Mortgage Rate from a fixed rate to a variable rate; (vii) have
the same lien priority as the Deleted Mortgage Loan; (viii) constitute the same
occupancy type as the Deleted Mortgage Loan or be owner occupied; and (ix)
comply with each representation and warranty set forth in Section 2.03 hereof.
REPURCHASE PRICE: With respect to each Mortgage Loan, a price equal to
(i) the outstanding Stated Principal Balance of such Mortgage Loan, plus (ii)
interest on such outstanding Stated Principal Balance at the Mortgage Rate (net
of the Servicing Fee Rate in the case of an EMC Mortgage Loan) from the last
date through which interest has been paid to the end of the month of repurchase,
less (iii) amounts advanced by the Company or the related Servicer in respect of
such repurchased Mortgage Loan which are being held in the Master Servicer
Collection Account for remittance to the Trustee plus (iv) any costs and damages
(if any) incurred by the Trust in connection with any violation of such Mortgage
Loan of any predatory lending laws.
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REQUEST FOR RELEASE: The Request for Release to be submitted by the
Seller, the Company, the related Servicer or the Master Servicer to the
Custodian substantially in the form of Exhibit H. Each Request for Release
furnished to the Custodian by the Seller, the Company, the related Servicer or
the Master Servicer shall be in duplicate and shall be executed by an officer of
such Person or a Servicing Officer (or, if furnished electronically to the
Custodian, shall be deemed to have been sent and executed by an officer of such
Person or a Servicing Officer) of the Company or the related Servicer, as
applicable.
REQUIRED INSURANCE POLICY: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement or the related Servicing Agreement.
RESIDUAL CERTIFICATES: The Class R-1, Class R-2 and Class R-3
Certificates each evidencing the sole class of "residual interests" (within the
meaning of Section 860G(a)(2) of the Code) in the related REMIC.
RESPONSIBLE OFFICER: With respect to the Trustee, any Vice President,
any Assistant Vice President, the Secretary, any Assistant Secretary, or any
Trust Officer with specific responsibility for the transactions contemplated
hereby, any other officer customarily performing functions similar to those
performed by any of the above designated officers or other officers of the
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.
RULE 144A CERTIFICATE: The certificate to be furnished by each
purchaser of a Private Certificate (which is also a Physical Certificate) which
is a Qualified Institutional Buyer as defined under Rule 144A promulgated under
the Securities Act, substantially in the form set forth as Exhibit G hereto.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.
---
SCHEDULED PAYMENT: The scheduled monthly payment on a Mortgage Loan due
on any Due Date allocable to principal and/or interest on such Mortgage Loan.
SECURITIES ACT: The Securities Act of 1933, as amended.
SECURITIES ADMINISTRATOR: Xxxxx Fargo Bank, National Association, in
its capacity as securities administrator hereunder, and its successors and
assigns.
SECURITIES LEGEND: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS
CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL
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BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT
OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN
EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM
TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH
ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY
THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE
THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION. THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR
ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED [in
the case of a Residual Certificate or a Class P Certificate:] UNLESS THE
PROPOSED TRANSFEREE PROVIDES THE TRUSTEE WITH AN OPINION OF COUNSEL ADDRESSED TO
THE DEPOSITOR, TRUSTEE, MASTER SERVICER AND SECURITIES ADMINISTRATOR AND ON
WHICH THEY MAY RELY THAT IS SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE OF
CERTIFICATES ON BEHALF OF SUCH PERSON WILL NOT RESULT IN OR CONSTITUTE A
NONEXEMPT PROHIBITED TRANSACTION, IS PERMISSIBLE UNDER APPLICABLE LAW AND WILL
NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE
MASTER SERVICER, THE SECURITIES ADMINISTRATOR OR THE TRUSTEE [in the case of the
Class B-4, Class B-5 and Class B-6 Certificates:], UNLESS THE TRANSFEREE
CERTIFIES OR REPRESENTS THAT THE PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE
AND THE SERVICING, MANAGEMENT AND OPERATION OF THE TRUST AND ITS ASSETS: (I)
WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED UNDER AN
INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED
TO, PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14, XXX 00-00, XXX 00-0, XXX
95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON
THE PART OF THE DEPOSITOR, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER,
ANY SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A
BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE OR UNLESS AN OPINION OF COUNSEL
SPECIFIED IN SECTION 5.07 OF THE AGREEMENT IS PROVIDED."
SECURITY AGREEMENT: With respect to a Cooperative Loan, the agreement
creating a security interest in favor of the originator in the related
Cooperative Stock.
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SELLER: EMC Mortgage Corporation, a Delaware corporation, and its
successors and assigns, in its capacity as seller of the Mortgage Loans to the
Depositor.
SENIOR CERTIFICATES: The Class I-A1, Class I-A2, Class I-A3, Class
I-A4, Class II-A, Class I- X, Class II-X, Class I-PO, Class II-PO, Class P,
Class R-1, Class R-2 and Class R-3 Certificates.
SENIOR PERCENTAGE: For the Group I Certificates and Group II
Certificates (other than the Interest Only Certificates and Class PO
Certificates) on any Distribution Date will equal the lesser of (i) 100% and
(ii) the percentage (carried to six places rounded up) obtained by dividing the
aggregate Certificate Principal Balance of the Group I Certificates or Group II
Certificates (other than the Interest Only Certificates and Class PO
Certificates) immediately preceding such Distribution Date by the aggregate
Stated Principal Balance of the Mortgage Loans in the related Loan Group (other
than the applicable PO Percentage thereof, with respect to the related Discount
Mortgage Loans) as of the beginning of the related Due Period. The initial
Senior Percentages for the Group I Certificates and Group II Certificates will
be equal to approximately 92.92% and 92.98%, respectively.
SENIOR PREPAYMENT PERCENTAGE: For the Group I Certificates and Group II
Certificates (other than the Interest Only Certificates and Class PO
Certificates) on any Distribution Date occurring during the periods set forth
below will be as follows:
PERIOD (DATES INCLUSIVE) SENIOR PREPAYMENT PERCENTAGE
May 25, 2004 - April 25, 2009 100%
May 25, 2009 - April 25, 2010 Senior Percentage for the related Senior
Certificates plus 70% of the related
Subordinate Percentage.
May 25, 2010 - April 25, 2011 Senior Percentage for the related Senior
Certificates plus 60% of the related
Subordinate Percentage.
May 25, 2011 - April 25, 2012 Senior Percentage for the related Senior
Certificates plus 40% of the related
Subordinate Percentage.
May 25, 2012 - April 25, 2013 Senior Percentage for the related Senior
Certificates plus 20% of the related
Subordinate Percentage.
May 25, 2013 and thereafter Senior Percentage for the related Senior
Certificates.
In addition, no reduction of the Senior Prepayment Percentage for the
Group I Certificates or Group II Certificates shall occur on any Distribution
Date unless, as of the last day of the month
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preceding such Distribution Date, (A) the aggregate Stated Principal Balance of
the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the sum of the aggregate Certificate
Principal Balance of the Subordinated Certificates does not exceed 50%; and (B)
cumulative Realized Losses on the Mortgage Loans do not exceed (a) 30% of the
aggregate Certificate Principal Balances of the Subordinated Certificates as of
the Cut-off Date (the "Original Subordinate Principal Balance") if such
Distribution Date occurs between and including May 2009 and April 2010, (b) 35%
of the Original Subordinate Principal Balance if such Distribution Date occurs
between and including May 2010 and April 2011, (c) 40% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including May 2011 and April 2012, (d) 45% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including May 2012 and
April 2013, and (e) 50% of the Original Subordinate Principal Balance if such
Distribution Date occurs during or after May 2013.
Notwithstanding the foregoing, if on any Distribution Date, the
percentage, the numerator of which is the aggregate Certificate Principal
Balance of the Senior Certificates related to a Loan Group (other than the
Interest Only Certificates and Class PO Certificates) immediately preceding such
Distribution Date, and the denominator of which is the Stated Principal Balance
of the Mortgage Loans in such Loan Group (other than the applicable PO
Percentage thereof, with respect to the related Discount Mortgage Loans) as of
the beginning of the related Due Period, exceeds such percentage as of the
Cut-off Date, then the Senior Prepayment Percentage for all of the Senior
Certificates (other than the Interest Only Certificates and Class PO
Certificates) for such Distribution Date will equal 100%.
SERVICER: Shall mean either Cendant, Countrywide, GMACM, HSBC, National
City, Nexstar or Union Federal.
SERVICING ADVANCES: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable legal fees) incurred in the
performance by the Company or the related Servicer of its servicing obligations
hereunder or under the related Servicing Agreement, including, but not limited
to, the cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
and including any expenses incurred in relation to any such proceedings that
result from the Mortgage Loan being registered in the MERS(R) System, (iii) the
management and liquidation of any REO Property (including, without limitation,
realtor's commissions) and (iv) compliance with any obligations under Section
3.07 hereof to cause insurance to be maintained.
SERVICING AGREEMENT: Shall mean either the Cendant Servicing Agreement,
the Countrywide Servicing Agreement, the GMACM Servicing Agreement, the HSBC
Servicing Agreement, the National City Servicing Agreement, the Nexstar
Servicing Agreement or the Union Federal Servicing Agreement.
SERVICING FEE: As to each Mortgage Loan and any Distribution Date, an
amount equal to 1/12th of the Servicing Fee Rate multiplied by the Stated
Principal Balance of such Mortgage Loan as of the last day of the related Due
Period.
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SERVICING FEE RATE: 0.250% per annum.
SERVICING MODIFICATION: With respect to any Mortgage Loan that is in
default or, in the reasonable judgment of the Company or the related Servicer,
as to which default is reasonably foreseeable, any modification which is
effected by the Company or the related Servicer in accordance with the terms of
this Agreement or the related Servicing Agreement which results in any change in
the outstanding Stated Principal Balance, any change in the Mortgage Rate or any
extension of the term of such Mortgage Loan.
SERVICING OFFICER: Any officer of the Company or the related Servicer
involved in, or responsible for, the administration and servicing of the
Mortgage Loans (i) in the case of the Company, whose name and facsimile
signature appear on a list of servicing officers furnished to the Trustee by the
Company on the Closing Date pursuant to this Agreement, as such list may from
time to time be amended and (ii) in the case of a Servicer, as to which evidence
reasonably acceptable to the Trustee, as applicable, of due authorization, by
such party has been furnished from time to time to the Trustee.
STARTUP DAY: The Startup Day for each REMIC formed hereunder shall be
the Closing Date.
STATED PRINCIPAL BALANCE: With respect to any Mortgage Loan or related
REO Property and any Distribution Date, the Cut-off Date Principal Balance
thereof minus the sum of (i) the principal portion of the Scheduled Payments due
with respect to such Mortgage Loan during each Due Period ending prior to such
Distribution Date (and irrespective of any delinquency in their payment), (ii)
all Principal Prepayments with respect to such Mortgage Loan received prior to
or during the related Prepayment Period, and all Liquidation Proceeds to the
extent applied by the Company or the related Servicer as recoveries of principal
in accordance with Section 3.09 or the related Servicing Agreement with respect
to such Mortgage Loan, that were received by the Company or the related Servicer
as of the close of business on the last day of the Prepayment Period related to
such Distribution Date and (iii) any Realized Losses on such Mortgage Loan
incurred during the related Prepayment Period. The Stated Principal Balance of a
Liquidated Loan equals zero. References herein to the Stated Principal Balance
of a Loan Group at any time shall mean the aggregate Stated Principal Balance of
all Mortgage Loans in such Loan Group.
SUBORDINATE OPTIMAL PRINCIPAL AMOUNT: For the Subordinated Certificates
with respect to each Distribution Date means an amount equal to the sum of the
Group I Subordinate Optimal Principal Amount and the Group II Subordinate
Optimal Principal Amount.
SUBORDINATE PERCENTAGE: For the Subordinated Certificates and with
respect to each Loan Group on any Distribution Date, means 100% minus the
related Senior Percentage for the Senior Certificates related to such Loan
Group. The initial Subordinate Percentages for Loan Group I and Loan Group II
will be equal to approximately 7.08% and 7.02%, respectively.
SUBORDINATE PREPAYMENT PERCENTAGE: For the Subordinated Certificates
and with respect to each Loan Group on any Distribution Date will equal 100%
minus the related Senior Prepayment Percentage for the Senior Certificates
related to such Loan Group, except that on any Distribution Date after the
Certificate Principal Balance of each class of Senior Certificates related to a
Loan
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Group have each been reduced to zero, if (A) the weighted average of the
Subordinate Percentages on such distribution date equals or exceeds two times
the initial weighted average of the Subordinate Percentages and (B) the
aggregate Stated Principal Balance of the Mortgage Loans delinquent 60 days or
more (including for this purpose any such Mortgage Loans in foreclosure and
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months, as a percentage of
the sum of the aggregate Certificate Principal Balance of the Subordinated
Certificates does not exceed 100%, the Subordinate Prepayment Percentage for the
Subordinated Certificates with respect to such Loan Group will equal 100%. If
the above test is not satisfied on any distribution date after the Certificate
Principal Balance of each Class of Senior Certificates related to a Loan Group
have each been reduced to zero, then the Subordinate Prepayment Percentage with
respect to such Loan Group shall equal zero for such Distribution Date.
SUBORDINATED CERTIFICATES: The Class B-1, Class B-2, Class B-3, Class
B-4, Class B-5 and Class B-6 Certificates.
SUBSEQUENT RECOVERIES: As of any Distribution Date, amounts received by
the Master Servicer during the related Due Period or surplus amounts held by the
Master Servicer to cover estimated expenses (including, but not limited to,
recoveries in respect of the representations and warranties made by the Seller
pursuant to the Mortgage Loan Purchase Agreement) specifically related to a
Liquidated Mortgage Loan or disposition of an REO Property prior to the related
Prepayment Period that resulted in a Realized Loss, after the liquidation or
disposition of such Mortgage Loan.
SUBSERVICING AGREEMENT: Any agreement entered into between the Company
and a subservicer with respect to the subservicing of any Mortgage Loan
hereunder by such subservicer.
SUBSTITUTION ADJUSTMENT AMOUNT: The meaning ascribed to such term
pursuant to Section 2.03(d).
SUCCESSOR MASTER SERVICER: The meaning ascribed to such term pursuant
to Section 9.01.
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 Securities Administrator, or any successor thereto or
assignee thereof shall serve as tax administrator hereunder and as agent for the
related Tax Matters Person.
TRANSFER: Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
TRANSFEROR CERTIFICATE: The certificate to be furnished by each Holder
of a Private Certificate (which is also a Physical Certificate) to the Trustee
pursuant to Article VII, in connection with the offer, sale, transfer or other
disposition of such Private Certificate, substantially in the form set forth as
Exhibit E hereto.
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TRUST FUND: The corpus of the trust created hereunder consisting of (i)
the Mortgage Loans and all interest accruing and principal due with respect
thereto after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof; (ii) the Class P Certificate Account,
the Distribution Account, the Master Servicer Collection Account maintained by
the Master Servicer and the Protected Accounts maintained by the Company and the
Servicers and all amounts deposited therein pursuant to the applicable
provisions of this Agreement and the Servicing Agreements; (iii) property that
secured a Mortgage Loan and has been acquired by foreclosure, deed in lieu of
foreclosure or otherwise; (iv) the mortgagee's rights under the Insurance
Policies with respect to the Mortgage Loans; (v) the Servicing Agreements and
the Assignment Agreements; (vi) the rights under the Mortgage Loan Purchase
Agreement, and (vii) all proceeds of the foregoing, including proceeds of
conversion, voluntary or involuntary, of any of the foregoing into cash or other
liquid property.
TRUSTEE: U.S. Bank National Association, a national banking
association, not in its individual capacity, but solely in its capacity as
trustee for the benefit of the Certificateholders under this Agreement, and any
successor thereto, and any corporation or national banking association resulting
from or surviving any consolidation or merger to which it or its successors may
be a party and any successor trustee as may from time to time be serving as
successor trustee hereunder.
UNCERTIFICATED ACCRUED INTEREST: With respect to each Uncertificated
REMIC Regular Interest on each Distribution Date, an amount equal to one month's
interest at the related Uncertificated Pass-Through Rate on the Uncertificated
Principal Balance or Uncertificated Notional Amount, as applicable, of such
REMIC Regular Interest. In each case, Uncertificated Accrued Interest will be
reduced by any Prepayment Interest Shortfalls and shortfalls resulting from
application of the Relief Act (allocated to such REMIC Regular Interests as set
forth in Sections 6.06 and 6.07).
UNCERTIFICATED NOTIONAL AMOUNT: With respect to REMIC I Regular
Interest LTI-I-IO, the aggregate Stated Principal Balance of the Non-Discount
Mortgage Loans in Loan Group I. With respect to REMIC I Regular Interest
LTI-II-IO, the aggregate Stated Principal Balance of the Non- Discount Mortgage
Loans in Loan Group II. REMIC II Regular Interest LTII-I-X and REMIC II Regular
Interest LTII-II-X will not have Uncertificated Notional Balances, and
Uncertificated Accrued Interest for any Distribution Date for such REMIC II
Regular Interests shall be an amount equal to 100% of the interest distributed
on REMIC I Regular Interest LTI-I-IO and REMIC I Regular Interest LTI-II-IO,
respectively, for such Distribution Date.
UNCERTIFICATED PASS-THROUGH RATE: Any Uncertificated REMIC I
Pass-Through Rate or Uncertificated REMIC II Pass-Through Rate.
UNCERTIFICATED PRINCIPAL BALANCE: With respect to each REMIC Regular
Interest (other than REMIC I Regular Interest LTI-I-IO, REMIC I Regular Interest
LTI-II-IO, REMIC II Regular Interest LTII-I-X and REMIC II Regular Interest
LTII-II-X), the principal amount of such REMIC Regular Interest outstanding as
of any date of determination. As of the Closing Date, the Uncertificated
Principal Balance of each REMIC Regular Interest (other than REMIC I Regular
Interest LTI-I-IO, REMIC I Regular Interest LTI-II-IO, REMIC II Regular Interest
LTII-I-X and REMIC II Regular Interest LTII-II-X) shall equal the amount set
forth in the Preliminary Statement hereto as its initial Uncertificated
Principal Balance. On each Distribution Date, the Uncertificated Principal
Balance
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of each REMIC Regular Interest shall be reduced by all distributions of
principal made on such REMIC Regular Interest on such Distribution Date pursuant
to Sections 6.06 and 6.07 and, if and to the extent necessary and appropriate,
shall be further reduced on such Distribution Date by Realized Losses as
provided in Sections 6.06 and 6.07. The Uncertificated Principal Balance of each
REMIC Regular Interest shall never be less than zero. REMIC I Regular Interest
LTI-I-IO, REMIC I Regular Interest LTI-II-IO, REMIC II Regular Interest LTII-I-X
and REMIC II Regular Interest LTII-II-X will not have an Uncertificated
Principal Balance.
UNCERTIFICATED REMIC I PASS-THROUGH RATE: With respect to each
Uncertificated REMIC I Regular Interest (other than REMIC I Regular Interest
LTI-I-IO and REMIC I Regular Interest LTI- II-IO), the Uncertificated REMIC I
Pass-Through Rate as provided in the Preliminary Statement. With respect to
REMIC I Regular Interest LTI-I-IO, the weighted average of the excess of (a) the
Net Mortgage Rate on each Non-Discount Mortgage Loan in Loan Group I over (b)
6.00% per annum. With respect to REMIC I Regular Interest LTI-II-IO, the
weighted average of the excess of (a) the Net Mortgage Rate on each Non-Discount
Mortgage Loan in Loan Group II over (b) 5.00% per annum.
UNCERTIFICATED REMIC II PASS-THROUGH RATE: With respect to each
Uncertificated REMIC II Regular Interest (other than REMIC II Regular Interest
LTII-I-X, LTII-II-X, LTII-B1, LTII-B2, LTII-B3, LTII-B4, LTII-B5 and LTII-B6),
the Uncertificated REMIC II Pass-Through Rate as provided in the Preliminary
Statement. REMIC II Regular Interest LTII-I-X and REMIC II Regular Interest
LTII-II-X will not have an Uncertificated REMIC II Pass-Through Rate, but
Uncertificated Accrued Interest thereon for any Distribution Date shall be an
amount equal to 100% of the interest distributed on REMIC I Regular Interest
LTI-I-IO and REMIC I Regular Interest LTII-I-IO, respectively, for such
Distribution Date. With respect to REMIC II Regular Interests LTII-B1, LTII-B2,
LTII-B3, LTII-B4, LTII-B5 and LTII-B6, a per annum rate equal to the weighted
average of the Pass-Through Rates on REMIC I Regular Interests LTII-IA and
LTI-IIA, weighted on the basis of their respective Uncertificated Principal
Balance.
UNCERTIFICATED REMIC REGULAR INTEREST: The REMIC I Regular Interests
and the REMIC II Regular Interests.
UNION FEDERAL: Union Federal Bank of Indianapolis.
UNION FEDERAL ASSIGNMENT AGREEMENT: Shall mean the Assignment,
Assumption and Recognition Agreement, dated April 30, 2004, by and among the
Seller, Union Federal and the Trustee acknowledging the assignment of the Union
Federal Servicing Agreement and the Union Federal Loans to the Trust.
UNION FEDERAL LOANS: Those Mortgage Loans subject to this Agreement
which were purchased by the Seller from Union Federal pursuant to the Union
Federal Servicing Agreement.
UNION FEDERAL SERVICING AGREEMENT: Shall mean the Amended and Restated
Forward Commitment Flow Mortgage Loan Purchase and Servicing Agreement, dated as
of March 4, 2003, between the Seller and Union Federal, as modified by the Union
Federal Assignment Agreement.
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VOTING RIGHTS: The portion of the voting rights of all the Certificates
that is allocated to any Certificate for purposes of the voting provisions
hereunder. Voting Rights shall be allocated (i) 94.50% to the Certificates
(other than the Class I-A4, Class I-X, Class II-X, Class P and the Residual
Certificates), (ii) 1% to each of the Class I-A4, Class I-X, Class II-X and
Class P Certificates and (iii) 0.50% to each Class of Residual Certificates,
with the allocation among the Certificates (other than the Class I-A4, Class
I-X, Class II-X, Class P 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.
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ARTICLE II
CONVEYANCE OF TRUST FUND
REPRESENTATIONS AND WARRANTIES
Section 2.01 CONVEYANCE OF TRUST FUND.
The Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without recourse, all the right, title and
interest of the Seller in and to the assets in the Trust Fund.
The Seller has entered into this Agreement in consideration
for the purchase of the Mortgage Loans by the Depositor and has agreed to take
the actions specified herein.
The Depositor, concurrently with the execution and delivery
hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to the
Trustee for the use and benefit of the Certificateholders, without recourse, all
the right, title and interest of the Depositor in and to the Trust Fund.
In connection with such sale, the Depositor has delivered to,
and deposited with, the Trustee or the Custodian, as its agent, the following
documents or instruments (I) with respect to each Mortgage Loan (other than a
Cooperative Loan) so assigned: (i) the original Mortgage Note, including any
riders thereto, endorsed without recourse to the order of "U.S. Bank National
Association, as Trustee for certificateholders of Bear Xxxxxxx Asset Backed
Securities I LLC, Asset Backed Certificates, Series 2004- AC2," and showing to
the extent available to the Seller an unbroken chain of endorsements from the
original payee thereof to the Person endorsing it to the Trustee, (ii) the
original Mortgage and, if the related Mortgage Loan is a MOM Loan, noting the
presence of the MIN and language indicating that such Mortgage Loan is a MOM
Loan, which shall have been recorded (or if the original is not available, a
copy), with evidence of such recording indicated thereon (or if clause (x) in
the proviso below applies, shall be in recordable form), (iii) unless the
Mortgage Loan is a MOM Loan, the assignment (either an original or a copy, which
may be in the form of a blanket assignment if permitted in the jurisdiction in
which the Mortgaged Property is located) to the Trustee of the Mortgage with
respect to each Mortgage Loan in the name of "U.S. Bank National Association, as
Trustee for certificateholders of Bear Xxxxxxx Asset Backed Securities I LLC,
Asset Backed Certificates, Series 2004-AC2," which shall have been recorded (or
if clause (x) in the proviso below applies, shall be in recordable form), (iv)
an original or a copy of all intervening assignments of the Mortgage, if any, to
the extent available to the Seller, with evidence of recording thereon, (v) the
original policy of title insurance or mortgagee's certificate of title insurance
or commitment or binder for title insurance, if available, or a copy thereof,
or, in the event that such original title insurance policy is unavailable, a
photocopy thereof, or in lieu thereof, a current lien search on the related
Mortgaged Property and (vi) originals or copies of all available assumption,
modification or substitution agreements, if any, and (II) with respect to each
Cooperative Loan so assigned: (i) the original Mortgage Note, endorsed without
recourse to the order of the Trustee and showing to the extent available to the
Seller an unbroken chain of endorsements from the originator thereof to the
Person endorsing it to the Trustee, or lost note affidavit, together
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with a copy of the related Mortgage Note, (ii) a counterpart of the Cooperative
Lease and the Assignment of Proprietary Lease to the originator of the
Cooperative Loan with intervening assignments showing an unbroken chain of title
from such originator to the Trustee, (iii) the related Cooperative Stock
Certificate, representing the related Cooperative Stock pledged with respect to
such Cooperative Loan, together with an undated stock power (or other similar
instrument) executed in blank, (iv) the original recognition agreement by the
Cooperative of the interests of the mortgagee with respect to the related
Cooperative Loan and any transfer documents related to the recognition
agreement, (v) the Security Agreement, (vi) copies of the original UCC-1
financing statement, and any continuation statements, filed by the originator of
such Cooperative Loan as secured party, each with evidence of recording thereof,
evidencing the interest of the originator under the Security Agreement and the
Assignment of Proprietary Lease, (vii) copies of the filed UCC-3 assignments of
the security interest referenced in clause (vi) above showing an unbroken chain
of title from the originator to the Trustee, each with evidence of recording
thereof, evidencing the interest of the originator under the Security Agreement
and the Assignment of Proprietary Lease, (vii) an executed assignment of the
interest of the originator in the Security Agreement and Assignment of
Proprietary Lease, showing an unbroken chain of title from the originator to the
Trustee and (ix) the original of each modification, assumption agreement or
preferred loan agreement, if any, relating to such Cooperative Loan; provided,
however, that in the case of both (I) and (II) above, in lieu of the foregoing,
the Seller may deliver the following documents, under the circumstances set
forth below: (x) if any Mortgage, assignment thereof to the Trustee or
intervening assignments thereof have been delivered or are being delivered to
recording offices for recording and have not been returned in time to permit
their delivery as specified above, the Depositor may deliver a true copy thereof
with a certification by the Seller or the title company issuing the commitment
for title insurance, on the face of such copy, substantially as follows:
"Certified to be a true and correct copy of the original, which has been
transmitted for recording"; (y) in lieu of the Mortgage, assignments to the
Trustee or intervening assignments thereof, if the applicable jurisdiction
retains the originals of such documents or if the originals are lost (in each
case, as evidenced by a certification of the Seller or the Depositor to such
effect), the Depositor may deliver photocopies of such documents containing as
original certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded and (z) in lieu of the Mortgage
Notes relating to the Mortgage Loans identified in the list set forth in Exhibit
J, the Depositor may deliver a lost note affidavit and indemnity and a copy of
the original note, if available; and provided, further, however, that in the
case of Mortgage Loans which have been prepaid in full after the Cut-Off Date
and prior to the Closing Date, the Depositor, in lieu of delivering the above
documents, may deliver to the Trustee and its Custodian a certification of a
Servicing Officer to such effect and in such case shall deposit all amounts paid
in respect of such Mortgage Loans, in the Master Servicer Collection Account or
in the Distribution Account on the Closing Date. In the case of the documents
referred to in clause (x) above, the Depositor shall deliver such documents to
the Trustee or its Custodian promptly after they are received. The Seller shall
cause, at its expense, the Mortgage and intervening assignments, if any, and to
the extent required in accordance with the foregoing, the assignment of the
Mortgage to the Trustee to be submitted for recording promptly after the Closing
Date; provided that the Seller need not cause to be recorded any assignment (a)
in any jurisdiction under the laws of which, as evidenced by an Opinion of
Counsel addressed to the Trustee and delivered by the Seller to the Trustee and
the Rating Agencies, the recordation of such assignment is not necessary to
protect the Trustee's interest in the related Mortgage Loan or (b) if MERS is
identified on the Mortgage or on a properly recorded assignment of the Mortgage
as mortgagee of record solely as nominee for Seller and its successors and
assigns.
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In the event that the Seller, the Depositor or the Master Servicer gives written
notice to the Trustee that a court has recharacterized the sale of the Mortgage
Loans as a financing, the Seller shall submit or cause to be submitted for
recording as specified above or, should the Seller fail to perform such
obligations, the Master Servicer shall cause each such previously unrecorded
assignment to be submitted for recording as specified above at the expense of
the Trust. In the event a Mortgage File is released to the Company or the
Servicer as a result of such Person having completed a Request for Release, the
Custodian shall, if not so completed, complete the assignment of the related
Mortgage in the manner specified in clause (I)(iii) above.
In connection with the assignment of any Mortgage Loan
registered on the MERS(R) System, the Seller further agrees that it will cause,
at the Seller's own expense, within 30 days after the Closing Date, the MERS(R)
System to indicate that such Mortgage Loans have been assigned by the Seller to
the Depositor and by the Depositor to the Trustee in accordance with this
Agreement for the benefit of the Certificateholders by including (or deleting,
in the case of Mortgage Loans which are repurchased in accordance with this
Agreement) in such computer files (a) the code in the field which identifies the
specific Trustee and (b) the code in the field "Pool Field" which identifies the
series of the Certificates issued in connection with such Mortgage Loans. The
Seller further agrees that it will not, and will not permit the Company, any
Servicer or the Master Servicer to, and the Master Servicer agrees that it will
not, alter the codes referenced in this paragraph with respect to any Mortgage
Loan during the term of this Agreement unless and until such Mortgage Loan is
repurchased in accordance with the terms of this Agreement or the Mortgage Loan
Purchase Agreement.
Section 2.02 ACCEPTANCE OF THE MORTGAGE LOANS.
(a) Based on the Initial Certification received by it from the
Custodian, the Trustee acknowledges receipt of, subject to the further review
and exceptions reported by the Custodian pursuant to the procedures described
below, the documents (or certified copies thereof) delivered to the Trustee or
the Custodian on its behalf pursuant to Section 2.01 and declares that it holds
and will continue to hold directly or through a custodian those documents and
any amendments, replacements or supplements thereto and all other assets of the
Trust Fund delivered to it in trust for the use and benefit of all present and
future Holders of the Certificates. On the Closing Date, the Trustee or the
Custodian on its behalf will deliver an Initial Certification in the form
annexed hereto as Exhibit C-1 confirming whether or not it has received the
Mortgage File for each Mortgage Loan, but without review of such Mortgage File,
except to the extent necessary to confirm whether such Mortgage File contains
the original Mortgage Note or a lost note affidavit and indemnity in lieu
thereof. No later than 90 days after the Closing Date, the Trustee or the
Custodian on its behalf shall, for the benefit of the Certificateholders, review
each Mortgage File delivered to it and execute and deliver to the Seller and, if
reviewed by the Custodian, the Trustee an Interim Certification substantially in
the form annexed hereto as Exhibit C-2. In conducting such review, the Trustee
or the Custodian on its behalf will ascertain whether all required documents
have been executed and received and whether those documents relate, determined
on the basis of the Mortgagor name, original principal balance and loan number,
to the Mortgage Loans identified in Exhibit B to this Agreement, as supplemented
(provided, however, that with respect to those documents described in subclauses
(I)(iv) and (vi) of Section 2.01 and subclause (II)(ix) of Section 2.01, such
obligations shall extend only to documents actually delivered pursuant to such
subclauses). In performing any
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such review, the Trustee and the Custodian may conclusively rely on the
purported due execution and genuineness of any such document and on the
purported genuineness of any signature thereon. If the Trustee or the Custodian
on its behalf finds any document constituting part of the Mortgage File not to
have been executed or received, or to be unrelated to the Mortgage Loans
identified in Exhibit B or to appear to be defective on its face, the Trustee or
the Custodian on its behalf shall include such information in the exception
report attached to Exhibit C-2. The Seller shall correct or cure any such defect
or, if prior to the end of the second anniversary of the Closing Date, the
Seller may substitute for the related Mortgage Loan a Replacement Mortgage Loan,
which substitution shall be accomplished in the manner and subject to the
conditions set forth in Section 2.03 or shall deliver to the Trustee an Opinion
of Counsel addressed to the Trustee to the effect that such defect does not
materially or adversely affect the interests of the Certificateholders in such
Mortgage Loan within 60 days from the date of notice from the Trustee of the
defect and if the Seller fails to correct or cure the defect or deliver such
opinion within such period, the Seller will, subject to Section 2.03, within 90
days from the notification of the Trustee purchase such Mortgage Loan at the
Purchase Price; provided, however, that if such defect relates solely to the
inability of the Seller to deliver the Mortgage, assignment thereof to the
Trustee, or intervening assignments thereof with evidence of recording thereon
because such documents have been submitted for recording and have not been
returned by the applicable jurisdiction, the Seller shall not be required to
purchase such Mortgage Loan if the Seller delivers such documents promptly upon
receipt, but in no event later than 360 days after the Closing Date.
(b) No later than 180 days after the Closing Date, the Trustee
or the Custodian on its behalf will review, for the benefit of the
Certificateholders, the Mortgage Files and will execute and deliver or cause to
be executed and delivered to the Seller and, if reviewed by the Custodian, the
Trustee, a Final Certification substantially in the form annexed hereto as
Exhibit C-3. In conducting such review, the Trustee or the Custodian on its
behalf will ascertain whether each document required to be recorded has been
returned from the recording office with evidence of recording thereon and the
Trustee or the Custodian on its behalf has received either an original or a copy
thereof, as required in Section 2.01 (provided, however, that with respect to
those documents described in subclauses (I)(iv) and (vi) of Section 2.01 and
subclause (II)(ix) of Section 2.01, such obligations shall extend only to
documents actually delivered pursuant to such subclauses). If the Trustee or the
Custodian on its behalf finds any document with respect to a Mortgage Loan has
not been received, or to be unrelated, determined on the basis of the Mortgagor
name, original principal balance and loan number, to the Mortgage Loans
identified in Exhibit B or to appear defective on its face, the Trustee or the
Custodian on its behalf shall note such defect in the exception report attached
to the Final Certification and shall promptly notify the Seller. The Seller
shall correct or cure any such defect or, if prior to the end of the second
anniversary of the Closing Date, the Seller may substitute for the related
Mortgage Loan a Replacement Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03 or shall deliver to the Trustee an Opinion of Counsel addressed to the
Trustee to the effect that such defect does not materially or adversely affect
the interests of Certificateholders in such Mortgage Loan within 60 days from
the date of notice from the Trustee of the defect and if the Seller is unable
within such period to correct or cure such defect, or to substitute the related
Mortgage Loan with a Replacement Mortgage Loan or to deliver such opinion, the
Seller shall, subject to Section 2.03, within 90 days from the notification of
the Trustee, purchase such Mortgage Loan at the Purchase Price; provided,
however, that if such defect relates solely to the inability of the Seller to
deliver the
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Mortgage, assignment thereof to the Trustee or intervening assignments thereof
with evidence of recording thereon, because such documents have not been
returned by the applicable jurisdiction, the Seller shall not be required to
purchase such Mortgage Loan, if the Seller delivers such documents promptly upon
receipt, but in no event later than 360 days after the Closing Date.
(c) In the event that a Mortgage Loan is purchased by the
Seller in accordance with subsections 2.02(a) or (b) above or Section 2.03, the
Seller shall remit the applicable Purchase Price to the Master Servicer for
deposit in the Master Servicer Collection Account and shall provide written
notice to the Trustee detailing the components of the Purchase Price, signed by
a Servicing Officer. Upon deposit of the Purchase Price in the Master Servicer
Collection Account and upon receipt of a Request for Release with respect to
such Mortgage Loan, the Trustee or the Custodian will release to the Seller the
related Mortgage File and the Trustee shall execute and deliver all instruments
of transfer or assignment, without recourse, representation or warranty
furnished to it by the Seller, as are necessary to vest in the Seller title to
and rights under the Mortgage Loan. Such purchase shall be deemed to have
occurred on the date on which the deposit into the Master Servicer Collection
Account was made. The Trustee shall promptly notify the Rating Agencies of such
repurchase. The obligation of the Seller to cure, repurchase or substitute for
any Mortgage Loan as to which a defect in a constituent document exists shall be
the sole remedies respecting such defect available to the Certificateholders or
to the Trustee on their behalf.
(d) The Seller shall deliver to the Trustee or the Custodian
on its behalf, and 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 will review as provided in
subsections 2.02(a) and 2.02(b), provided, that the Closing Date referred to
therein shall instead be the date of delivery of the Mortgage File with respect
to each Replacement Mortgage Loan.
Section 2.03 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY,
THE MASTER SERVICER AND THE SELLER.
(a) The Company hereby represents and warrants to the Master
Servicer, the Depositor, the Securities Administrator and the Trustee as
follows, as of the Closing Date:
(i) It is duly organized 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 it in any
state in which a Mortgaged Property related to an EMC Mortgage Loan is
located or is otherwise not required under applicable law to effect
such qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each EMC Mortgage Loan, to service the EMC Mortgage
Loans in accordance with the terms of this Agreement and to perform any
of its other obligations under this Agreement in accordance with the
terms hereof.
(ii) It has the full corporate power and authority to service
each EMC Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by this
Agreement and has duly authorized by all necessary corporate action
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on its part the execution, delivery and performance of this Agreement;
and this Agreement, assuming the due authorization, execution and
delivery hereof by the other parties hereto, constitutes its legal,
valid and binding obligation, enforceable against it in accordance with
its terms, except that (a) the enforceability hereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement by it, the
servicing of the EMC Mortgage Loans by it under this Agreement, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof
are in its ordinary course of business and will not (A) result in a
material breach of any term or provision of its charter or by-laws or
(B) materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of
any other material agreement or instrument to which it is a party or by
which it may be bound, or (C) constitute a material violation of any
statute, order or regulation applicable to it of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it; and it is not in breach or violation of any material indenture
or other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it
which breach or violation may materially impair its ability to perform
or meet any of its obligations under this Agreement.
(iv) It is an approved servicer of conventional mortgage loans
for Xxxxxx Mae or Xxxxxxx Mac and is a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to sections 203 and
211 of the National Housing Act.
(v) No litigation is pending or, to the best of its knowledge,
threatened, against it that would materially and adversely affect the
execution, delivery or enforceability of this Agreement or its ability
to service the EMC Mortgage Loans or to perform any of its other
obligations under this Agreement in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court
or governmental agency or body is required for its execution, delivery
and performance of, or compliance with, this Agreement or the
consummation of the transactions contemplated hereby, or if any such
consent, approval, authorization or order is required, it has obtained
the same.
(b) Xxxxx Fargo Bank, National Association, in its capacity as
Master Servicer and Securities Administrator hereby represents and warrants to
the Seller, the Depositor and the Trustee as follows, as of the Closing Date:
(i) It is a national banking association duly formed, validly
existing and in good standing under the laws of the United States of
America and is duly authorized and qualified to transact any and all
business contemplated by this Agreement to be conducted by the Master
Servicer and the Securities Administrator in any state in which a
Mortgaged Property
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is located or is otherwise not required under applicable law to effect
such qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Mortgage Loan, to service the Mortgage Loans in
accordance with the terms of this Agreement and to perform any of its
other obligations under this Agreement in accordance with the terms
hereof.
(ii) It has the full corporate power and authority to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary
corporate action on its part the execution, delivery and performance of
this Agreement; and this Agreement, assuming the due authorization,
execution and delivery hereof by the other parties hereto, constitutes
its legal, valid and binding obligation, enforceable against it in
accordance with its terms, except that (a) the enforceability hereof
may be limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally and (b) the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(iii) The execution and delivery of this Agreement by it, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof
are in its ordinary course of business and will not (A) result in a
material breach of any term or provision of its charter or by-laws or
(B) materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of
any other material agreement or instrument to which it is a party or by
which it may be bound, or (C) constitute a material violation of any
statute, order or regulation applicable to it of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it; and it is not in breach or violation of any material indenture
or other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it
which breach or violation may materially impair its ability to perform
or meet any of its obligations under this Agreement.
(iv) No litigation is pending or, to the best of its
knowledge, threatened, against it that would materially and adversely
affect the execution, delivery or enforceability of this Agreement or
its ability to perform any of its other obligations under this
Agreement in accordance with the terms hereof.
(v) No consent, approval, authorization or order of any court
or governmental agency or body is required for its execution, delivery
and performance of, or compliance with, this Agreement or the
consummation of the transactions contemplated hereby, or if any such
consent, approval, authorization or order is required, it has obtained
the same.
(c) The Seller hereby represents and warrants to the
Depositor, the Securities Administrator, the Master Servicer and the Trustee as
follows, as of the Closing Date:
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(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 the Mortgage
Loan Purchase Agreement, the consummation of any other of the
transactions contemplated by this Agreement, and the fulfillment of or
compliance with the terms hereof 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 Xxxxxx Xxx or Xxxxxxx Mac and is a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to sections 203 and
211 of the National Housing Act.
(v) No litigation is pending or, to the best of the Seller's
knowledge, threatened, against the Seller that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement or the ability of the Seller to sell the Mortgage Loans or to
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perform any of its other obligations under this Agreement in accordance
with the terms hereof.
(vi) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Seller of, or compliance by the Seller with,
this Agreement or the consummation of the transactions contemplated
hereby, or if any such consent, approval, authorization or order is
required, the Seller has obtained the same.
(vii) As of the Closing Date, the representations and
warranties concerning the Mortgage Loans set forth in Section 7 of the
Mortgage Loan Purchase Agreement are true and correct in all material
respects.
(d) Upon discovery by any of the parties hereto of a breach of
a representation or warranty set forth in Section 7 of the Mortgage Loan
Purchase Agreement that materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the party discovering such breach shall
give prompt written notice thereof to the other parties. The Seller hereby
covenants with respect to the representations and warranties set forth in
Section 7 of the Mortgage Loan Purchase Agreement, that within 90 days of the
discovery of a breach of any representation or warranty set forth therein that
materially and adversely affects the interests of the Certificateholders in any
Mortgage Loan, it shall cure such breach in all material respects and, if such
breach is not so cured, (i) if such 90-day period expires prior to the second
anniversary of the Closing Date, remove such Mortgage Loan (a "Deleted Mortgage
Loan") from the Trust Fund and substitute in its place a Replacement Mortgage
Loan, in the manner and subject to the conditions set forth in this Section; or
(ii) repurchase the affected Mortgage Loan or Mortgage Loans from the Trustee at
the Purchase Price in the manner set forth below; provided that any such
substitution pursuant to (i) above or repurchase pursuant to (ii) above shall
not be effected prior to the delivery to the Trustee of an Opinion of Counsel if
required by Section 2.05 hereof and any such substitution pursuant to (i) above
shall not be effected prior to the additional delivery to the Trustee of a
Request for Release. The Seller shall promptly reimburse the Master Servicer and
the Trustee for any expenses reasonably incurred by the Master Servicer or the
Trustee in respect of enforcing the remedies for such breach. To enable the
Securities Administrator to amend the Mortgage Loan Schedule, the Seller shall,
unless it cures such breach in a timely fashion pursuant to this Section 2.03,
promptly notify the Securities Administrator whether it intends either to
repurchase, or to substitute for, the Mortgage Loan affected by such breach.
With respect to the representations and warranties in Section 7 of the Mortgage
Loan Purchase Agreement that are made to the best of the Seller's knowledge, if
it is discovered by any of the Depositor, the Master Servicer, the Seller, the
Securities Administrator or the Trustee that the substance of such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan, notwithstanding the
Seller's lack of knowledge with respect to the substance of such representation
or warranty, the Seller shall nevertheless be required to cure, substitute for
or repurchase the affected Mortgage Loan in accordance with the foregoing.
With respect to any Replacement Mortgage Loan or Loans, the
Seller shall deliver to the Trustee for the benefit of the Certificateholders
such documents and agreements as are required by Section 2.01. No substitution
will be made in any calendar month after the
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Determination Date for such month. Scheduled Payments due with respect to
Replacement Mortgage Loans in the Due Period related to the Distribution Date on
which such proceeds are to be distributed shall not be part of the Trust Fund
and will be retained by the Seller. For the month of substitution, distributions
to Certificateholders will include the Scheduled Payment due on any Deleted
Mortgage Loan for the related Due Period and thereafter the Seller shall be
entitled to retain all amounts received in respect of such Deleted Mortgage
Loan. The Securities Administrator shall amend the Mortgage Loan Schedule for
the benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Replacement Mortgage Loan or Loans and
the Securities Administrator shall deliver the amended Mortgage Loan Schedule to
the Trustee and the Custodian. Upon such substitution, the Replacement Mortgage
Loan or Loans shall be subject to the terms of this Agreement in all respects,
and the Seller shall be deemed to have made with respect to such Replacement
Mortgage Loan or Loans, as of the date of substitution, the representations and
warranties set forth in Section 7 of the Mortgage Loan Purchase Agreement with
respect to such Replacement Mortgage Loan or Loans. Upon any such substitution
and the deposit into the Master Servicer Collection Account of the amount
required to be deposited therein in connection with such substitution as
described in the following paragraph and receipt by the Trustee or the Custodian
of a Request for Release for such Mortgage Loan, the Trustee or the Custodian
shall release to the Seller the Mortgage File relating to such Deleted Mortgage
Loan and held for the benefit of the Certificateholders and the Trustee shall
execute and deliver at the Seller's direction such instruments of transfer or
assignment as have been prepared by the Seller, in each case without recourse,
representation or warranty as shall be necessary to vest in the Seller, or its
respective designee, title to the Trustee's interest in any Deleted Mortgage
Loan substituted for pursuant to this Section 2.03.
For any month in which the Seller substitutes one or more
Replacement Mortgage Loans for a Deleted Mortgage Loan, the Master Servicer will
determine the amount (if any) by which the aggregate principal balance of all
the Replacement Mortgage Loans as of the date of substitution is less than the
Stated Principal Balance (after application of the principal portion of the
Scheduled Payment due in the month of substitution) of such Deleted Mortgage
Loan. An amount equal to the aggregate of such deficiencies, described in the
preceding sentence for any Distribution Date (such amount, the "Substitution
Adjustment Amount") shall be deposited into the Master Servicer Collection
Account, by the Seller delivering such Replacement Mortgage Loan on the
Determination Date for the Distribution Date relating to the Prepayment Period
during which the related Mortgage Loan became required to be purchased or
replaced hereunder.
In the event that the Seller shall have repurchased a Mortgage
Loan, the Purchase Price therefor shall be deposited into the Master Servicer
Collection Account maintained by the Master Servicer, on the Determination Date
for the Distribution Date in the month following the month during which the
Seller became obligated to repurchase or replace such Mortgage Loan and upon
such deposit of the Purchase Price, the delivery of an Opinion of Counsel if
required by Section 2.05 and the receipt of a Request for Release, the Trustee
or the Custodian shall release the related Mortgage File held for the benefit of
the Certificateholders to the Seller, and the Trustee shall execute and deliver
at such Person's direction the related instruments of transfer or assignment
prepared by the Seller, in each case without recourse, representation or
warranty as shall be necessary to transfer title from the Trustee for the
benefit of the Certificateholders and transfer the Trustee's interest to the
Seller to any Mortgage Loan purchased pursuant to this Section 2.03. It is
understood
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and agreed that the obligation under this Agreement of the Seller to cure,
repurchase or replace any Mortgage Loan as to which a breach has occurred and is
continuing shall constitute the sole remedies against the Seller respecting such
breach available to Certificateholders, the Depositor or the Trustee.
(d) The representations and warranties set forth in Section
2.03 hereof shall survive delivery of the respective Mortgage Loans and Mortgage
Files to the Trustee or the Custodian for the benefit of the Certificateholders.
Section 2.04 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
The Depositor hereby represents and warrants to the Master
Servicer, the Securities Administrator and the Trustee as follows, as of the
date hereof and as of the Closing Date:
(i) The Depositor is duly organized and is validly existing as
a limited liability company in good standing under the laws of the
State of Delaware and has full power and authority (corporate and
other) necessary to own or hold its properties and to conduct its
business as now conducted by it and to enter into and perform its
obligations under this Agreement.
(ii) The Depositor has the full power and authority to
execute, deliver and perform, and to enter into and consummate the
transactions contemplated by, this Agreement and has duly authorized,
by all necessary corporate action on its part, the execution, delivery
and performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery hereof by the other parties
hereto, constitutes a legal, valid and binding obligation of the
Depositor, enforceable against the Depositor in accordance with its
terms, subject, as to enforceability, to (i) bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and (ii) general principles of equity, regardless of
whether enforcement is sought in a proceeding in equity or at law.
(iii) The execution and delivery of this Agreement by the
Depositor, the consummation of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof
are in the ordinary course of business of the Depositor and will not
(A) result in a material breach of any term or provision of the
certificate of formation or the limited liability company agreement of
the Depositor or (B) materially conflict with, result in a material
breach, violation or acceleration of, or result in a material default
under, the terms of any other material agreement or instrument to which
the Depositor is a party or by which it may be bound or (C) constitute
a material violation of any statute, order or regulation applicable to
the Depositor of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Depositor; and the
Depositor is not in breach or violation of any material indenture or
other material agreement or instrument, or in violation of any statute,
order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the Depositor's ability to perform or
meet any of its obligations under this Agreement.
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(iv) No litigation is pending, or, to the best of the
Depositor's knowledge, threatened, against the Depositor that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Depositor to
perform its obligations under this Agreement in accordance with the
terms hereof.
(v) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Depositor of, or compliance by the Depositor
with, this Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval, authorization or
order is required, the Depositor has obtained the same.
The Depositor hereby represents and warrants to the Trustee as
of the Closing Date, following the transfer of the Mortgage Loans to it by the
Seller, the Depositor had good title to the Mortgage Loans and the related
Mortgage Notes were subject to no offsets, claims, defenses or counterclaims.
It is understood and agreed that the representations and
warranties set forth in the immediately preceding paragraph shall survive
delivery of the Mortgage Files to the Trustee or the Custodian for the benefit
of the Certificateholders. Upon discovery by the Depositor or the Trustee of a
breach of such representations and warranties, the party discovering such breach
shall give prompt written notice to the others and to each Rating Agency.
Section 2.05 DELIVERY OF OPINION OF COUNSEL IN CONNECTION WITH
SUBSTITUTIONS AND REPURCHASES.
(a) Notwithstanding any contrary provision of this Agreement,
with respect to any Mortgage Loan that is not in default or as to which default
is not imminent, no repurchase or substitution pursuant to Sections 2.02 or 2.03
shall be made unless the Seller delivers to the Trustee an Opinion of Counsel,
addressed to the Trustee, to the effect that such repurchase or substitution
would not (i) result in the imposition of the tax on "prohibited transactions"
of REMIC I, REMIC II or REMIC III or contributions after the Closing Date, as
defined in sections 860F(a)(2) and 860G(d) of the Code, respectively or (ii)
cause any of REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC at any
time that any Certificates are outstanding. Any Mortgage Loan as to which
repurchase or substitution was delayed pursuant to this paragraph shall be
repurchased or the substitution therefor shall occur (subject to compliance with
Sections 2.02 or 2.03) upon the earlier of (a) the occurrence of a default or
imminent default with respect to such Mortgage Loan and (b) receipt by the
Trustee of an Opinion of Counsel addressed to the Trustee to the effect that
such repurchase or substitution, as applicable, will not result in the events
described in clause (i) or clause (ii) of the preceding sentence.
(b) Upon discovery by the Depositor, the Seller or the Master
Servicer that any Mortgage Loan does not constitute a "qualified mortgage"
within the meaning of section 860G(a)(3) of the Code, the party discovering such
fact shall promptly (and in any event within 5 Business Days of discovery) give
written notice thereof to the other parties and the Trustee. In connection
therewith, the Trustee shall require the Seller, at the Seller's option, to
either (i) substitute, if the conditions in Section 2.03(c) with respect to
substitutions are satisfied, a Replacement Mortgage Loan for the
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affected Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within 90
days of such discovery in the same manner as it would a Mortgage Loan for a
breach of representation or warranty contained in Section 2.03. The Trustee
shall reconvey to the Seller the Mortgage Loan to be released pursuant hereto
(and the Custodian shall deliver the related Mortgage File) in the same manner,
and on the same terms and conditions, as it would a Mortgage Loan repurchased
for breach of a representation or warranty contained in Section 2.03.
Section 2.06 COUNTERSIGNATURE AND DELIVERY OF CERTIFICATES.
(a) The Trustee acknowledges the sale, transfer and assignment
to it of the Trust Fund and, concurrently with such transfer and assignment, has
executed, countersigned and delivered, to or upon the order of the Depositor,
the Certificates in authorized denominations evidencing the entire ownership of
the Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the
rights referred to above for the benefit of all present and future Holders of
the Certificates and to perform the duties set forth in this Agreement in
accordance with its terms.
(b) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and interest of the
Depositor in and to the REMIC I Regular Interests, and the other assets of REMIC
II for the benefit of the holders of the REMIC II Interests. The Trustee
acknowledges receipt of the REMIC I Regular Interests (which are uncertificated)
and the other assets of REMIC II and declares that it holds and will hold the
same in trust for the exclusive use and benefit of the holders of the REMIC II
Interests.
(c) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and interest of the
Depositor in and to the REMIC II Regular Interests, and the other assets of
REMIC III for the benefit of the holders of the REMIC III Certificates. The
Trustee acknowledges receipt of the REMIC II Regular Interests (which are
uncertificated) and the other assets of REMIC III and declares that it holds and
will hold the same in trust for the exclusive use and benefit of the holders of
the REMIC III Certificates.
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ARTICLE III
ADMINISTRATION AND SERVICING OF EMC MORTGAGE LOANS BY COMPANY
Section 3.01 THE COMPANY.
The Company shall service and administer the EMC Mortgage
Loans in accordance with customary and usual standards of practice of prudent
mortgage loan servicers in the respective states in which the related Mortgaged
Properties are located. In connection with such servicing and administration,
the Company shall have full power and authority, acting alone and/or through
subservicers as provided in Section 3.03, to do or cause to be done any and all
things that it may deem necessary or desirable in connection with such servicing
and administration, including but not limited to, the power and authority,
subject to the terms hereof (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any related Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided herein), (iii) to collect any Insurance Proceeds and
other Liquidation Proceeds, and (iv) subject to Section 3.09, to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any EMC Mortgage Loan; provided that the Company shall take no action
that is inconsistent with or prejudices the interests of the Trust Fund or the
Certificateholders in any EMC Mortgage Loan or the rights and interests of the
Depositor and the Trustee under this Agreement.
Without limiting the generality of the foregoing, the Company,
in its own name or in the name of the Trust, the Depositor or the Trustee, is
hereby authorized and empowered by the Trust, the Depositor and the Trustee,
when the Company believes it appropriate in its reasonable judgment, to execute
and deliver, on behalf of the Trustee, the Depositor, the Certificateholders or
any of them, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge and all other comparable instruments, with
respect to the EMC Mortgage Loans, and with respect to the related Mortgaged
Properties held for the benefit of the Certificateholders. The Company shall
prepare and deliver to the Depositor and/or the Trustee such documents requiring
execution and delivery by any or all of them as are necessary or appropriate to
enable the Company to service and administer the EMC Mortgage Loans. Upon
receipt of such documents, the Depositor and/or the Trustee shall execute such
documents and deliver them to the Company.
In accordance with the standards of the first paragraph of
this Section 3.01, the Company shall advance or cause to be advanced funds as
necessary for the purpose of effecting the payment of taxes and assessments on
the Mortgaged Properties relating to the EMC Mortgage Loans, which advances
shall be reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 5.03, and further as provided in Section 5.02.
All costs incurred by the Company, if any, in effecting the timely payments of
taxes and assessments on the Mortgaged Properties relating to the EMC Mortgage
Loans and related insurance premiums shall not, for the purpose of calculating
monthly distributions to the Certificateholders, be added to the Stated
Principal Balance under the related EMC Mortgage Loans, notwithstanding that the
terms of such Mortgage Loans so permit.
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Section 3.02 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS.
(a) Except as otherwise provided in this Section 3.02, when
any property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Company shall to the extent that it has knowledge of such
conveyance, enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Company is not required to exercise such
rights with respect to an EMC Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In the event that the Company is prohibited by law from enforcing
any such due-on-sale clause, or if coverage under any Required Insurance Policy
would be adversely affected, or if nonenforcement is otherwise permitted
hereunder, the Company is authorized, subject to Section 3.02(b), to take or
enter into an assumption and modification agreement from or with the person to
whom such property has been or is about to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, unless prohibited by
applicable state law, the Mortgagor remains liable thereon, provided that the
Mortgage Loan shall continue to be covered (if so covered before the Company
enters such agreement) by the applicable Required Insurance Policies. The
Company, subject to Section 3.02(b), is also authorized with the prior approval
of the insurers under any Required Insurance Policies to enter into a
substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted as
Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the
foregoing, the Company shall not be deemed to be in default under this Section
3.02(a) by reason of any transfer or assumption that the Company reasonably
believes it is restricted by law from preventing.
(b) Subject to the Company's duty to enforce any due-on-sale
clause to the extent set forth in Section 3.02(a), in any case in which a
Mortgaged Property has been conveyed to a Person by a Mortgagor, and such Person
is to enter into an assumption agreement or modification agreement or supplement
to the Mortgage Note or Mortgage that requires the signature of the Trustee, or
if an instrument of release signed by the Trustee is required releasing the
Mortgagor from liability on the related EMC Mortgage Loan, the Company shall
prepare and deliver or cause to be prepared and delivered to the Trustee for
signature and shall direct, in writing, the Trustee to execute the assumption
agreement with the Person to whom the Mortgaged Property is to be conveyed and
such modification agreement or supplement to the Mortgage Note or Mortgage or
other instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
In connection with any such assumption, no material term of the Mortgage Note
(including, but not limited to, the Mortgage Rate, the amount of the Scheduled
Payment and any other term affecting the amount or timing of payment on the EMC
Mortgage Loan) may be changed. In addition, the substitute Mortgagor and the
Mortgaged Property must be acceptable to the Company in accordance with its
servicing standards as then in effect. The Company shall notify the Trustee that
any such substitution or assumption agreement has been completed by forwarding
to the Trustee or the Custodian the original of such substitution or assumption
agreement, which in the case
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of the original shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. Any fee collected
by the Company for entering into an assumption or substitution of liability
agreement will be retained by the Company as additional servicing compensation.
Section 3.03 SUBSERVICERS.
The Company shall perform all of its servicing
responsibilities hereunder or may cause a subservicer to perform any such
servicing responsibilities on its behalf, but the use by the Company of a
subservicer shall not release the Company from any of its obligations hereunder
and the Company shall remain responsible hereunder for all acts and omissions of
each subservicer as fully as if such acts and omissions were those of the
Company. The Company shall pay all fees of each subservicer from its own funds,
and a subservicer's fee shall not exceed the Servicing Fee payable to the
Company hereunder.
At the cost and expense of the Company, without any right of
reimbursement from its Protected Account, the Company shall be entitled to
terminate the rights and responsibilities of a subservicer and arrange for any
servicing responsibilities to be performed by a successor subservicer; provided,
however, that nothing contained herein shall be deemed to prevent or prohibit
the Company, at the Company's option, from electing to service the related EMC
Mortgage Loans itself. In the event that the Company's responsibilities and
duties under this Agreement are terminated pursuant to Section 9.03, the Company
shall at its own cost and expense terminate the rights and responsibilities of
each subservicer effective as of the date of termination of the Company. The
Company shall pay all fees, expenses or penalties necessary in order to
terminate the rights and responsibilities of each subservicer from the Company's
own funds without reimbursement from the Trust Fund.
Notwithstanding the foregoing, the Company shall not be
relieved of its obligations hereunder and shall be obligated to the same extent
and under the same terms and conditions as if it alone were servicing and
administering the EMC Mortgage Loans. The Company shall be entitled to enter
into an agreement with a subservicer for indemnification of the Company by the
subservicer and nothing contained in this Agreement shall be deemed to limit or
modify such indemnification.
Any subservicing agreement and any other transactions or
services relating to the EMC Mortgage Loans involving a subservicer shall be
deemed to be between such subservicer and the Company alone, and neither the
Master Servicer nor the Trustee shall have any obligations, duties or
liabilities with respect to such subservicer including any obligation, duty or
liability of either the Master Servicer or the Trustee to pay such subservicer's
fees and expenses. For purposes of remittances to the Master Servicer pursuant
to this Agreement, the Company shall be deemed to have received a payment on an
EMC Mortgage Loan when a subservicer has received such payment.
Section 3.04 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF COMPANY TO
BE HELD FOR TRUSTEE.
Notwithstanding any other provisions of this Agreement, the
Company shall transmit to the Trustee as required by this Agreement all
documents and instruments in respect of an EMC
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Mortgage Loan coming into the possession of the Company from time to time and
shall account fully to the Trustee for any funds received by the Company or that
otherwise are collected by the Company as Liquidation Proceeds or Insurance
Proceeds in respect of any such Mortgage Loan. All Mortgage Files and funds
collected or held by, or under the control of, the Company in respect of any EMC
Mortgage Loans, whether from the collection of principal and interest payments
or from Liquidation Proceeds, including but not limited to, any funds on deposit
in the Protected Account maintained by the Company, shall be held by the Company
for and on behalf of the Trustee and shall be and remain the sole and exclusive
property of the Trustee, subject to the applicable provisions of this Agreement.
The Company also agrees that it shall not create, incur or subject any Mortgage
File or any funds that are deposited in the Protected Account maintained by the
Company or the Master Servicer Collection Account or in any Escrow Account, or
any funds that otherwise are or may become due or payable to the Trustee for the
benefit of the Certificateholders, to any claim, lien, security interest,
judgment, levy, writ of attachment or other encumbrance, or assert by legal
action or otherwise any claim or right of set off against any Mortgage File or
any funds collected on, or in connection with, an EMC Mortgage Loan, except,
however, that the Company shall be entitled to set off against and deduct from
any such funds any amounts that are properly due and payable to the Company
under this Agreement.
Section 3.05 MAINTENANCE OF HAZARD INSURANCE.
The Company shall cause to be maintained, for each EMC
Mortgage Loan, hazard insurance on buildings upon, or comprising part of, the
Mortgaged Property against loss by fire, hazards of extended coverage and such
other hazards as are customary in the area where the related Mortgaged Property
is located with an insurer which is licensed to do business in the state where
the related Mortgaged Property is located. Each such policy of standard hazard
insurance shall contain, or have an accompanying endorsement that contains, a
standard mortgagee clause. The Company shall also cause flood insurance to be
maintained on property acquired upon foreclosure or deed in lieu of foreclosure
of any EMC Mortgage Loan, to the extent described below. Pursuant to Section
5.01, any amounts collected by the Company under any such policies (other than
the amounts to be applied to the restoration or repair of the related Mortgaged
Property or property thus acquired or amounts released to the Mortgagor in
accordance with the Company's normal servicing procedures) shall be deposited in
the Protected Account maintained by the Company. Any cost incurred by the
Company in maintaining any such insurance shall not, for the purpose of
calculating monthly distributions to the Certificateholders or remittances to
the Trustee for their benefit, be added to the principal balance of the Mortgage
Loan, notwithstanding that the terms of the EMC Mortgage Loan so permit. Such
costs shall be recoverable by the Company out of late payments by the related
Mortgagor or out of Liquidation Proceeds to the extent permitted by Section
5.02. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor or maintained on property acquired
in respect of a Mortgage other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property is located at the time of
origination of the related EMC Mortgage Loan in a federally designated special
flood hazard area and such area is participating in the national flood insurance
program, the Company shall cause flood insurance to be maintained with respect
to such EMC Mortgage Loan. Such flood insurance shall be in an amount equal to
the least of (i) the Stated Principal Balance of the related EMC Mortgage Loan,
(ii) the minimum amount required to compensate for damage or loss on a
replacement cost basis or (iii) the maximum amount of such
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insurance available for the related Mortgaged Property under the Flood Disaster
Protection Act of 1973, as amended.
In the event that the Company shall obtain and maintain a
blanket policy insuring against hazard losses on all of the EMC Mortgage Loans,
it shall conclusively be deemed to have satisfied its obligations as set forth
in the first sentence of this Section 3.05, it being understood and agreed that
such policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the Company shall, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section 3.05, and there shall have
been a loss that would have been covered by such policy, deposit in the
Protected Account maintained by the Company the amount not otherwise payable
under the blanket policy because of such deductible clause. Such deposit shall
be from the Company's own funds without reimbursement therefor. In connection
with its activities as administrator and servicer of the EMC Mortgage Loans, the
Company agrees to present, on behalf of itself, the Depositor and the Trustee
for the benefit of the Certificateholders, claims under any such blanket policy.
Section 3.06 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS.
The Company shall prepare and present on behalf of the Trustee
and the Certificateholders all claims under the Insurance Policies relating to
the EMC Mortgage Loans and take such actions (including the negotiation,
settlement, compromise or enforcement of the insured's claim) as shall be
necessary to realize recovery under such Insurance Policies. Any proceeds
disbursed to the Company in respect of such Insurance Policies shall be promptly
deposited in the Protected Account maintained by the Company upon receipt,
except that any amounts realized that are to be applied to the repair or
restoration of the related Mortgaged Property as a condition precedent to the
presentation of claims on the related EMC Mortgage Loan to the insurer under any
applicable Insurance Policy need not be so deposited (or remitted).
Section 3.07 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES.
(a) The Company shall not take any action that would result in
noncoverage under any applicable Primary Mortgage Insurance Policy of any loss
which, but for the actions of the Company would have been covered thereunder.
The Company shall use its best efforts to keep in force and effect (to the
extent that the EMC Mortgage Loan requires the Mortgagor to maintain such
insurance), Primary Mortgage Insurance applicable to each EMC Mortgage Loan. The
Company shall not cancel or refuse to renew any such Primary Mortgage Insurance
Policy that is in effect at the date of the initial issuance of the related
Mortgage Note and is required to be kept in force hereunder.
(b) The Company agrees to present on behalf of the Trustee and
the Certificateholders, claims to the insurer under any Primary Mortgage
Insurance Policies relating to the EMC Mortgage Loans and, in this regard, to
take such reasonable action as shall be necessary to permit recovery under any
Primary Mortgage Insurance Policies respecting defaulted EMC Mortgage Loans.
Pursuant to Section 5.01, any amounts collected by the Company under any
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Primary Mortgage Insurance Policies shall be deposited in the Protected Account
maintained by the Company, subject to withdrawal pursuant to Section 5.02
hereof.
Section 3.08 FIDELITY BOND, ERRORS AND OMISSIONS INSURANCE.
The Company shall maintain, at its own expense, a blanket
fidelity bond and an errors and omissions insurance policy, with broad coverage
with responsible companies on all officers, employees or other persons acting in
any capacity with regard to the EMC Mortgage Loans and who handle funds, money,
documents and papers relating to the EMC Mortgage Loans. The fidelity bond and
errors and omissions insurance shall be in the form of the Mortgage Banker's
Blanket Bond and shall protect and insure the Company against losses, including
forgery, theft, embezzlement, fraud, errors and omissions and negligent acts of
such persons. Such fidelity bond shall also protect and insure the Company
against losses in connection with the failure to maintain any insurance policies
required pursuant to this Agreement and the release or satisfaction of an EMC
Mortgage Loan which is not in accordance with Accepted Servicing Practices. No
provision of this Section 3.08 requiring the fidelity bond and errors and
omissions insurance shall diminish or relieve the Company from its duties and
obligations as set forth in this Agreement. The minimum coverage under any such
bond and insurance policy shall be at least equal to the corresponding amounts
required by Accepted Servicing Practices. The Company shall deliver to the
Master Servicer a certificate from the surety and the insurer as to the
existence of the fidelity bond and errors and omissions insurance policy and
shall obtain a statement from the surety and the insurer that such fidelity bond
or insurance policy shall in no event be terminated or materially modified
without thirty days prior written notice to the Master Servicer and the Trustee.
The Company shall notify the Master Servicer and the Trustee within five
business days of receipt of notice that such fidelity bond or insurance policy
will be, or has been, materially modified or terminated. The Trustee for the
benefit of the Certificateholders must be named as loss payees on the fidelity
bond and as additional insured on the errors and omissions policy.
Section 3.09 REALIZATION UPON DEFAULTED MORTGAGE LOANS; DETERMINATION
OF EXCESS LIQUIDATION PROCEEDS AND REALIZED LOSSES;
REPURCHASES OF CERTAIN MORTGAGE LOANS.
(a) The Company shall use reasonable efforts to foreclose upon
or otherwise comparably convert the ownership of properties securing such of the
EMC Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Company shall follow
such practices and procedures as it shall deem necessary or advisable and as
shall be normal and usual in its general mortgage servicing activities and the
requirements of the insurer under any Required Insurance Policy; provided that
the Company shall not be required to expend its own funds in connection with any
foreclosure or towards the restoration of any property unless it shall determine
(i) that such restoration and/or foreclosure will increase the proceeds of
liquidation of the EMC Mortgage Loan after reimbursement to itself of such
expenses and (ii) that such expenses will be recoverable to it through Insurance
Proceeds or Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Protected Account maintained by the Company
pursuant to Section 5.02). If the Company reasonably believes that Liquidation
Proceeds with respect to any such EMC Mortgage Loan would not be increased as a
result of such foreclosure or
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other action, such EMC Mortgage Loan will be charged-off and will become a
Liquidated Loan. The Company will give notice of any such charge-off to the
Trustee and the Securities Administrator. The Company shall be responsible for
all other costs and expenses incurred by it in any such proceedings; provided
that such costs and expenses shall be Servicing Advances and that it shall be
entitled to reimbursement thereof from the proceeds of liquidation of the
related Mortgaged Property, as contemplated in Section 5.02. If the Company has
knowledge that a Mortgaged Property that the Company is contemplating acquiring
in foreclosure or by deed- in-lieu of foreclosure is located within a one-mile
radius of any site with environmental or hazardous waste risks known to the
Company, the Company will, prior to acquiring the related Mortgaged Property,
consider such risks and only take action in accordance with its established
environmental review procedures.
With respect to any REO Property relating to an EMC Mortgage
Loan, the deed or certificate of sale shall be taken in the name of the Trustee
for the benefit of the Certificateholders (or the Trustee's nominee on behalf of
the Certificateholders). The Trustee's name shall be placed on the title to such
REO Property solely as the Trustee hereunder and not in its individual capacity.
The Company shall ensure that the title to such REO Property references this
Agreement and the Trustee's capacity hereunder. Pursuant to its efforts to sell
such REO Property, the Company shall either itself or through an agent selected
by the Company protect and conserve such REO Property in the same manner and to
such extent as is customary in the locality where such REO Property is located
and may, incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Company deems to
be in the best interest of the Company and the Certificateholders for the period
prior to the sale of such REO Property. The Company shall prepare for and
deliver to the Trustee and the Securities Administrator a statement with respect
to each such REO Property that has been rented showing the aggregate rental
income received and all expenses incurred in connection with the management and
maintenance of such REO Property at such times as is necessary to enable the
Trustee to comply with the reporting requirements of the REMIC Provisions. The
net monthly rental income, if any, from such REO Property shall be deposited in
the Protected Account maintained by the Company no later than the close of
business on each Determination Date. The Company shall perform the tax reporting
and withholding related to foreclosures, abandonments and cancellation of
indebtedness income as specified by Sections 1445, 6050J and 6050P of the Code
by preparing and filing such tax and information returns, as may be required.
In the event that the Trust Fund acquires any Mortgaged
Property as aforesaid or otherwise in connection with a default or imminent
default on an EMC Mortgage Loan, the Company shall dispose of such Mortgaged
Property prior to three years after its acquisition by the Trust Fund or, at the
expense of the Trust Fund, request more than 60 days prior to the day on which
such three-year period would otherwise expire, an extension of the three-year
grace period unless the Trustee shall have been supplied with an Opinion of
Counsel addressed to the Trustee (such opinion not to be an expense of the
Trustee) to the effect that the holding by the Trust Fund of such Mortgaged
Property subsequent to such three-year period will not result in the imposition
of taxes on "prohibited transactions" of REMIC I, REMIC II or REMIC III as
defined in section 860F of the Code or cause either REMIC I, REMIC II or REMIC
III to fail to qualify as a REMIC at any time that any Certificates are
outstanding, in which case the Trust Fund may continue to hold such Mortgaged
Property (subject to any conditions contained in such Opinion of Counsel).
Notwithstanding any other provision of this Agreement, no Mortgaged Property
acquired by the
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Trust Fund shall be rented (or allowed to continue to be rented) or otherwise
used for the production of income by or on behalf of the Trust Fund in such a
manner or pursuant to any terms that would (i) cause such Mortgaged Property to
fail to qualify as "foreclosure property" within the meaning of section
860G(a)(8) of the Code or (ii) subject any of REMIC I, REMIC II or REMIC III to
the imposition of any federal, state or local income taxes on the income earned
from such Mortgaged Property under section 860G(c) of the Code or otherwise,
unless the Company has agreed to indemnify and hold harmless the Trust Fund with
respect to the imposition of any such taxes.
The decision of the Company to foreclose on a defaulted EMC
Mortgage Loan shall be subject to a determination by the Company that the
proceeds of such foreclosure would exceed the costs and expenses of bringing
such a proceeding. The income earned from the management of any Mortgaged
Properties acquired through foreclosure or other judicial proceeding, net of
reimbursement to the Company for expenses incurred (including any property or
other taxes) in connection with such management and net of unreimbursed
Servicing Fees, Advances, Servicing Advances and any management fee paid or to
be paid with respect to the management of such Mortgaged Property, shall be
applied to the payment of principal of, and interest on, the related defaulted
EMC Mortgage Loans (with interest accruing as though such Mortgage Loans were
still current) and all such income shall be deemed, for all purposes in the
Agreement, to be payments on account of principal and interest on the related
Mortgage Notes and shall be deposited into the Protected Account maintained by
the Company. To the extent the income received during a Prepayment Period is in
excess of the amount attributable to amortizing principal and accrued interest
at the related Mortgage Rate on the related EMC Mortgage Loan, such excess shall
be considered to be a partial Principal Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of an EMC
Mortgage Loan, net of any payment to the Company as provided above, shall be
deposited in the Protected Account maintained by the Company on the next
succeeding Determination Date following receipt thereof for distribution on the
related Distribution Date, except that any Excess Liquidation Proceeds shall be
retained by the Company as additional servicing compensation.
The proceeds of any Liquidated Loan, as well as any recovery
resulting from a partial collection of Liquidation Proceeds or any income from
an REO Property, will be applied in the following order of priority: first, to
reimburse the Company for any related unreimbursed Servicing Advances and
Servicing Fees, pursuant to Section 5.02 or this Section 3.09; second, to
reimburse the Company for any unreimbursed Advances, pursuant to Section 5.02 or
this Section 3.09; third, to accrued and unpaid interest (to the extent no
Advance has been made for such amount) on the EMC Mortgage Loan or related REO
Property, at the Net Mortgage Rate to the first day of the month in which such
amounts are required to be distributed; and fourth, as a recovery of principal
of the EMC Mortgage Loan.
(b) On each Determination Date, the Company shall determine
the respective aggregate amounts of Excess Liquidation Proceeds and Realized
Losses, if any, for the related Prepayment Period.
(c) The Company has no intent to foreclose on any EMC Mortgage
Loan based on the delinquency characteristics as of the Closing Date; provided,
that the foregoing does not
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prevent the Company from initiating foreclosure proceedings on any date
hereafter if the facts and circumstances of such EMC Mortgage Loans, including
delinquency characteristics in the Company's discretion, so warrant such action.
Section 3.10 SERVICING COMPENSATION.
As compensation for its activities hereunder, the Company
shall be entitled to retain or withdraw from its Protected Account out of each
payment of interest on an EMC Mortgage Loan included in the Trust Fund an amount
equal to the Servicing Fee.
Additional servicing compensation in the form of any Excess
Liquidation Proceeds, assumption fees, late payment charges, all Prepayment
Interest Excess on any EMC Mortgage Loan, all income and gain net of any losses
realized from Permitted Investments with respect to funds in or credited to the
Protected Account maintained by the Company shall be retained by the Company to
the extent not required to be deposited in the Protected Account maintained by
the Company pursuant to Section 5.02. The Company shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
(including payment of any premiums for hazard insurance, as required by Section
3.05 and maintenance of the other forms of insurance coverage required by
Section 3.07) and shall not be entitled to reimbursement therefor except as
specifically provided in Section 5.02.
EMC will be entitled to retain any Prepayment Interest Excess
pursuant to Section 5.02(a).
Section 3.11 REO PROPERTY.
(a) In the event the Trust Fund acquires ownership of any REO
Property in respect of any related EMC Mortgage Loan, the deed or certificate of
sale shall be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Company shall sell any such REO Property as
expeditiously as possible and in accordance with the provisions of this
Agreement. Pursuant to its efforts to sell such REO Property, the Company shall
protect and conserve such REO Property in the manner and to the extent required
herein, in accordance with the REMIC Provisions.
(b) The Company shall deposit all funds collected and received
in connection with the operation of any REO Property in respect of any EMC
Mortgage Loan into the Protected Account maintained by the Company.
(c) The Company, upon the final disposition of any REO
Property in respect of any EMC Mortgage Loan, shall be entitled to reimbursement
for any related unreimbursed Advances, unreimbursed Servicing Advances or
Servicing Fees from Liquidation Proceeds received in connection with the final
disposition of such REO Property; provided, that any such unreimbursed Advances
or Servicing Fees as well as any unpaid Servicing Fees may be reimbursed or
paid, as the case may be, prior to final disposition, out of any net rental
income or other net amounts derived from such REO Property.
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Section 3.12 LIQUIDATION REPORTS.
Upon the foreclosure of any Mortgaged Property relating to an
EMC Mortgage Loan or the acquisition thereof by the Trust Fund pursuant to a
deed-in-lieu of foreclosure, the Company shall submit a liquidation report to
the Master Servicer containing such information as shall be mutually acceptable
to the Company and the Master Servicer with respect to such Mortgaged Property.
Section 3.13 ANNUAL CERTIFICATE AS TO COMPLIANCE.
(a) The Company will deliver to the Master Servicer not later
than March 1, 2005 and not later than March 1 of each year thereafter, a
certificate of a Servicing Officer stating, as to each signatory thereof, that
(i) a review of the activities of the Company during the preceding calendar year
and of performance under this Agreement has been made under such officers'
supervision, and (ii) to the best of such officers' knowledge, based on such
review, the Company has fulfilled all of its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officers and the
nature and status thereof except for such defaults as such officer in its good
faith judgment believe to be immaterial.
(b) (i) The Company will deliver to the Master Servicer, on or
before March 1 of each year beginning March 1, 2005 (or, if any such day is not
a Business Day, the immediately preceding Business Day), or on any alternative
date specified by the Master Servicer upon thirty (30) days written request, a
certification containing the information set forth in Exhibit L. Such
certification shall be signed by the senior officer in charge of servicing of
the Company. In addition, the Company shall provide such other information with
respect to the EMC Mortgage Loans and the servicing and administration thereof
within the control of the Company which shall be required to enable the Master
Servicer to comply with the reporting requirements of the Securities and
Exchange Act of 1934, as amended.
(ii) The Company shall indemnify and hold harmless
the Master Servicer and its officers, directors, agents and affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable legal
fees and related costs, judgments and other costs and expenses arising out of or
based upon a breach by the Company or any of its officers, directors, agents or
affiliates of its obligations under this Section 3.13(b) or the Company's
negligence, bad faith or willful misconduct in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless the Master Servicer, then the Company agrees that it shall contribute
to the amount paid or payable by the Master Servicer as a result of the losses,
claims, damages or liabilities of the Master Servicer in such proportion as is
appropriate to reflect the relative fault of the Master Servicer on the one hand
and the Company on the other in connection with a breach of the Company's
obligations under this Section 3.13(b).
Section 3.14 ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' SERVICING
REPORT.
Not later than March 1, 2005 and not later than March 1 of
each year thereafter, the Company at its expense shall cause a firm of
independent public accountants which is a member of
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the American Institute of Certified Public Accountants to furnish a statement to
the Master Servicer to the effect that, with respect to the preceding calendar
year such firm has examined certain documents and records relating to the
Company's servicing of mortgage loans of the same type as the EMC Mortgage Loans
pursuant to servicing agreements substantially similar to this Agreement, which
agreements may include this Agreement, and that, on the basis of such an
examination, conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers, such firm is of the opinion that the
Company's servicing has been conducted in compliance with the agreements
examined pursuant to this Section 3.14, except for (i) such exceptions as such
firm shall believe to be immaterial,(ii) such other exceptions as shall be set
forth in such statement and (iii) such exceptions that the Uniform Single
Attestation Program for Mortgage Bankers requires it to report.
Section 3.15 BOOKS AND RECORDS.
The Company shall be responsible for maintaining, and shall
maintain, a complete set of books and records for the EMC Mortgage Loans which
shall be appropriately identified in the Company's computer system to clearly
reflect the ownership of the EMC Mortgage Loans by the Trust. In particular, the
Company shall maintain in its possession, available for inspection by the Master
Servicer and the Trustee and shall deliver to Master Servicer and the Trustee
upon demand, evidence of compliance with all federal, state and local laws,
rules and regulations. To the extent that original documents are not required
for purposes of realization of Liquidation Proceeds or Insurance Proceeds,
documents maintained by the Company may be in the form of microfilm or
microfiche or such other reliable means of recreating original documents,
including, but not limited to, optical imagery techniques so long as the Company
complies with the requirements of Accepted Servicing Practices.
The Company shall maintain with respect to each EMC Mortgage
Loan and shall make available for inspection by the Master Servicer and the
Trustee the related servicing file during the time such EMC Mortgage Loan is
subject to this Agreement and thereafter in accordance with applicable law.
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ARTICLE IV
ADMINISTRATION AND MASTER SERVICING OF MORTGAGE LOANS BY MASTER
SERVICER
Section 4.01 MASTER SERVICER. The Master Servicer shall supervise,
monitor and oversee the obligation of the Company and the related Servicer to
service and administer their respective Mortgage Loans in accordance with the
terms of this Agreement and the related Servicing Agreement and shall have full
power and authority to do any and all things which it may deem necessary or
desirable in connection with such master servicing and administration. In
performing its obligations hereunder, the Master Servicer shall act in a manner
consistent with Accepted Master Servicing Practices. Furthermore, the Master
Servicer shall oversee and consult with the Company and the related Servicer as
necessary from time-to-time to carry out the Master Servicer's obligations
hereunder, shall receive, review and evaluate all reports, information and other
data provided to the Master Servicer by the Company and the related Servicer and
shall cause the Company and related Servicer to perform and observe the
covenants, obligations and conditions to be performed or observed by such Person
under this Agreement and the related Servicing Agreement. The Master Servicer
shall independently and separately monitor the Company and the related
Servicer's servicing activities with respect to each related Mortgage Loan,
reconcile the results of such monitoring with such information provided in the
previous sentence on a monthly basis and coordinate corrective adjustments to
the Company's, the related Servicer's and Master Servicer's records, and based
on such reconciled and corrected information, prepare the statements specified
in Section 6.05 and any other information and statements required hereunder. The
Master Servicer shall reconcile the results of its Mortgage Loan monitoring with
the actual remittances of the Company and each Servicer pursuant to this
Agreement and the related Servicing Agreement.
The Trustee shall furnish the Company, the Servicers and the
Master Servicer with any powers of attorney and other documents in form as
provided to it necessary or appropriate to enable the Company, the Servicer and
the Master Servicer to service and administer the related Mortgage Loans and REO
Property.
The Trustee and the Securities Administrator shall provide
access to the records and documentation in possession of the Trustee or the
Securities Administrator regarding the related Mortgage Loans and REO Property
and the servicing thereof to the Certificateholders, the FDIC, and the
supervisory agents and examiners of the FDIC, such access being afforded only
upon reasonable prior written request and during normal business hours at the
office of the Trustee or the Securities Administrator; provided, however, that,
unless otherwise required by law, neither the Trustee nor the Securities
Administrator shall be required to provide access to such records and
documentation if the provision thereof would violate the legal right to privacy
of any Mortgagor. The Trustee and the Securities Administrator shall allow
representatives of the above entities to photocopy any of the records and
documentation and shall provide equipment for that purpose at a charge that
covers the Trustee's or the Securities Administrator's actual costs.
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The Trustee shall execute and deliver to the Company or the
related Servicer and the Master Servicer any court pleadings, requests for
trustee's sale or other documents necessary or desirable to (i) the foreclosure
or trustee's sale with respect to a Mortgaged Property; (ii) any legal action
brought to obtain judgment against any Mortgagor on the Mortgage Note or
Security Instrument; (iii) obtain a deficiency judgment against the Mortgagor;
or (iv) enforce any other rights or remedies provided by the Mortgage Note or
Security Instrument or otherwise available at law or equity.
Section 4.02 REMIC-RELATED COVENANTS. For as long as each REMIC shall
exist, the Trustee and the Securities Administrator shall act in accordance
herewith to assure continuing treatment of each REMIC as a REMIC, and the
Trustee and the Securities Administrator shall comply with any directions of the
Seller, the Company, the Servicers or the Master Servicer to assure such
continuing treatment. In particular, the Trustee shall not (a) sell or permit
the sale of all or any portion of the Mortgage Loans or of any investment of
deposits in an Account unless such sale is as a result of a repurchase of the
Mortgage Loans pursuant to this Agreement or the Trustee has received a REMIC
Opinion addressed to the Trustee prepared at the expense of the Trust Fund; and
(b) other than with respect to a substitution pursuant to the Mortgage Loan
Purchase Agreement or Section 2.03 of this Agreement, as applicable, accept any
contribution to any REMIC after the Startup Day without receipt of a REMIC
Opinion.
Section 4.03 MONITORING OF COMPANY AND SERVICER. (a) The Master
Servicer shall be responsible for reporting to the Trustee and the Seller the
compliance by the Company and the related Servicer with its duties under this
Agreement and the related Servicing Agreement. In the review of the Company's
and the related Servicer's activities, the Master Servicer may rely upon an
Officer's Certificate of the Company and the related Servicer with regard to
such Person's compliance with the terms of this Agreement or the related
Servicing Agreement. In the event that the Master Servicer, in its judgment,
determines that the Company or the related Servicer should be terminated in
accordance with this Agreement or the related Servicing Agreement, or that a
notice should be sent pursuant to this Agreement or the related Servicing
Agreement with respect to the occurrence of an event that, unless cured, would
constitute grounds for such termination, the Master Servicer shall notify the
Seller and the Trustee thereof and the Master Servicer shall issue such notice
or take such other action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Trustee and
the Certificateholders, shall enforce the obligations of the Company under this
Agreement and the related Servicer under the related Servicing Agreement, and
shall, in the event that the Company or the related Servicer fails to perform
its obligations in accordance with this Agreement or the related Servicing
Agreement, subject to the preceding paragraph, terminate the rights and
obligations of such Person thereunder and act as servicer of the related
Mortgage Loans or to cause the Trustee to enter in to a new Servicing Agreement
with a successor Servicer selected by the Master Servicer; provided, however, it
is understood and acknowledged by the parties hereto that there will be a period
of transition (not to exceed 90 days) before the actual servicing functions can
be fully transferred to such successor Servicer. Such enforcement, including,
without limitation, the legal prosecution of claims, termination of the related
Servicing Agreement and the pursuit of other appropriate remedies, shall be in
such form and carried out to such an extent and at such time as the Master
Servicer, in its good faith business judgment, would require were it the owner
of the related Mortgage Loans.
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The Master Servicer shall pay the costs of such enforcement at its own expense,
subject to its right of reimbursement pursuant to the provisions of this
Agreement or the related Servicing Agreement, provided that the Master Servicer
shall not be required to prosecute or defend any legal action except to the
extent that the Master Servicer shall have received reasonable indemnity for its
costs and expenses in pursuing such action.
(c) To the extent that the costs and expenses of the Master
Servicer related to any termination of the Company or the related Servicer,
appointment of a successor Servicer or the transfer and assumption of servicing
by the Master Servicer with respect to this Agreement or the related Servicing
Agreement (including, without limitation, (i) all legal costs and expenses and
all due diligence costs and expenses associated with an evaluation of the
potential termination of the Company or the related Servicer as a result of an
event of default by such Person and (ii) all costs and expenses associated with
the complete transfer of servicing, including all servicing files and all
servicing data and the completion, correction or manipulation of such servicing
data as may be required by the successor servicer to correct any errors or
insufficiencies in the servicing data or otherwise to enable the successor
service to service the Mortgage Loans in accordance with this Agreement or the
related Servicing Agreement) are not fully and timely reimbursed by the Company
or the terminated Servicer, the Master Servicer shall be entitled to
reimbursement of such costs and expenses from the Master Servicer Collection
Account.
(d) The Master Servicer shall require the Company and the
related Servicer to comply with the remittance requirements and other
obligations set forth in this Agreement or the related Servicing Agreement, as
applicable.
(e) If the Master Servicer acts as a servicer, it will not
assume liability for the representations and warranties of the Company or the
related Servicer, if any, that it replaces.
Section 4.04 FIDELITY BOND. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions insurance
policy, affording coverage with respect to all directors, officers, employees
and other Persons acting on such Master Servicer's behalf, and covering errors
and omissions in the performance of the Master Servicer's obligations hereunder.
The errors and omissions insurance policy and the fidelity bond shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees.
Section 4.05 POWER TO ACT; PROCEDURES. The Master Servicer shall master
service the Mortgage Loans and shall have full power and authority, subject to
the REMIC Provisions and the provisions of Article XI hereof, to do any and all
things that it may deem necessary or desirable in connection with the master
servicing and administration of the Mortgage Loans, including but not limited to
the power and authority (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages, (iii) to
collect any Insurance Proceeds and Liquidation Proceeds, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan, in each case, in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable; provided,
however, that the Master Servicer shall not (and, consistent with its
responsibilities under Section 4.03, shall not permit the Company or the related
Servicer to)
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knowingly or intentionally take any action, or fail to take (or fail to cause to
be taken) any action reasonably within its control and the scope of duties more
specifically set forth herein, that, under the REMIC Provisions, if taken or not
taken, as the case may be, would cause REMIC I, REMIC II or REMIC III to fail to
qualify as a REMIC or result in the imposition of a tax upon the Trust Fund
(including but not limited to the tax on prohibited transactions as defined in
Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set forth
in Section 860G(d) of the Code) unless the Master Servicer has received an
Opinion of Counsel (but not at the expense of the Master Servicer) to the effect
that the contemplated action will not would cause REMIC I, REMIC II or REMIC III
to fail to qualify as a REMIC or result in the imposition of a tax upon REMIC I,
REMIC II or REMIC III, as the case may be. The Trustee shall furnish the Master
Servicer, upon written request from a Servicing Officer, with any powers of
attorney empowering the Master Servicer, the Company or the related Servicer to
execute and deliver instruments of satisfaction or cancellation, or of partial
or full release or discharge, and to foreclose upon or otherwise liquidate
Mortgaged Property, and to appeal, prosecute or defend in any court action
relating to the Mortgage Loans or the Mortgaged Property, in accordance with the
related Servicing Agreement and this Agreement, and the Trustee shall execute
and deliver such other documents, as the Master Servicer may request, to enable
the Master Servicer to master service and administer the Mortgage Loans and
carry out its duties hereunder, in each case in accordance with Accepted Master
Servicing Practices (and the Trustee shall have no liability for misuse of any
such powers of attorney by the Master Servicer, the Company or the related
Servicer). If the Master Servicer or the Trustee has been advised that it is
likely that the laws of the state in which action is to be taken prohibit such
action if taken in the name of the Trustee or that the Trustee would be
adversely affected under the "doing business" or tax laws of such state if such
action is taken in its name, the Master Servicer shall join with the Trustee in
the appointment of a co-trustee pursuant to Section 10.11 hereof. In the
performance of its duties hereunder, the Master Servicer shall be an independent
contractor and shall not, except in those instances where it is taking action in
the name of the Trustee, be deemed to be the agent of the Trustee.
Section 4.06 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS. To the extent
provided in this Agreement or the related Servicing Agreement, to the extent
Mortgage Loans contain enforceable due-on-sale clauses, the Master Servicer
shall cause the Company and the related Servicer to enforce such clauses in
accordance with this Agreement or the related Servicing Agreement. If applicable
law prohibits the enforcement of a due-on-sale clause or such clause is
otherwise not enforced in accordance with this Agreement or the related
Servicing Agreement, and, as a consequence, a Mortgage Loan is assumed, the
original Mortgagor may be released from liability in accordance with this
Agreement or the related Servicing Agreement.
Section 4.07 RELEASE OF MORTGAGE FILES. (a) Upon becoming aware of the
payment in full of any Mortgage Loan, or the receipt by the Company or the
related Servicer of a notification that payment in full has been escrowed in a
manner customary for such purposes for payment to Certificateholders on the next
Distribution Date, the Company or the related Servicer will, if required under
the related Servicing Agreement (or if the Company or the related Servicer does
not, the Master Servicer may), promptly furnish to the Custodian, on behalf of
the Trustee, two copies of a certification substantially in the form of Exhibit
H hereto signed by a Servicing Officer or in a mutually agreeable electronic
format which will, in lieu of a signature on its face, originate from a
Servicing Officer (which certification shall include a statement to the effect
that all amounts received
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in connection with such payment that are required to be deposited in the
Protected Account maintained by the Company or the Servicer pursuant to Article
V or by the related Servicer pursuant to the related Servicing Agreement have
been or will be so deposited) and shall request that the Custodian, on behalf of
the Trustee, deliver to the Company or the related Servicer the related Mortgage
File. Upon receipt of such certification and request, the Custodian, on behalf
of the Trustee, shall promptly release the related Mortgage File to the Company
or the related Servicer and the Trustee and Custodian shall have no further
responsibility with regard to such Mortgage File. Upon any such payment in full,
the Company or the related Servicer is authorized, to give, as agent for the
Trustee, as the mortgagee under the Mortgage that secured the Mortgage Loan, an
instrument of satisfaction (or assignment of mortgage without recourse,
representation or warranty) regarding the Mortgaged Property subject to the
Mortgage, which instrument of satisfaction or assignment, as the case may be,
shall be delivered to the Person or Persons entitled thereto against receipt
therefor of such payment, it being understood and agreed that no expenses
incurred in connection with such instrument of satisfaction or assignment, as
the case may be, shall be chargeable to the Protected Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in accordance with this Agreement or the
related Servicing Agreement, the Trustee shall execute such documents as shall
be prepared and furnished to the Trustee by the Company, the related Servicer or
the Master Servicer (in form reasonably acceptable to the Trustee) and as are
necessary to the prosecution of any such proceedings. The Custodian, on behalf
of the Trustee, shall, upon the request of the Company, the related Servicer or
the Master Servicer, and delivery to the Custodian, on behalf of the Trustee, of
two copies of a request for release signed by a Servicing Officer substantially
in the form of Exhibit H (or in a mutually agreeable electronic format which
will, in lieu of a signature on its face, originate from a Servicing Officer),
release the related Mortgage File held in its possession or control to the
Company, the related Servicer or the Master Servicer, as applicable. Such trust
receipt shall obligate the Company, the related Servicer or the Master Servicer
to return the Mortgage File to the Custodian on behalf of the Trustee, when the
need therefor by such Person no longer exists unless the Mortgage Loan shall be
liquidated, in which case, upon receipt of a certificate of a Servicing Officer
similar to that hereinabove specified, the Mortgage File shall be released by
the Custodian, on behalf of the Trustee, to the Company, the related Servicer or
the Master Servicer.
Section 4.08 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER
SERVICER, COMPANY AND SERVICER TO BE HELD FOR TRUSTEE.
(a) The Master Servicer shall transmit and the Company or the
related Servicer (to the extent required by this Agreement or the related
Servicing Agreement) shall transmit to the Trustee or Custodian such documents
and instruments coming into the possession of such Person from time to time as
are required by the terms hereof, or in the case of the related Servicer, the
related Servicing Agreement, to be delivered to the Trustee or Custodian. Any
funds received by the Master Servicer, the Company or by the related Servicer in
respect of any Mortgage Loan or which otherwise are collected by the Master
Servicer, the Company or by the related Servicer as Liquidation Proceeds or
Insurance Proceeds in respect of any Mortgage Loan shall be held for the benefit
of the Trustee and the Certificateholders subject to the Master Servicer's right
to retain or withdraw from the Master Servicer Collection Account the Master
Servicing Compensation and
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other amounts provided in this Agreement, and to the right of the Company and
the related Servicer to retain its Servicing Fee and other amounts as provided
in this Agreement or the related Servicing Agreement. The Master Servicer shall,
and (to the extent provided in this Agreement or the related Servicing
Agreement) shall cause the Company and the related Servicer to, provide access
to information and documentation regarding the Mortgage Loans to the Trustee,
its agents and accountants at any time upon reasonable request and during normal
business hours, and to Certificateholders that are savings and loan
associations, banks or insurance companies, the Office of Thrift Supervision,
the FDIC and the supervisory agents and examiners of such Office and Corporation
or examiners of any other federal or state banking or insurance regulatory
authority if so required by applicable regulations of the Office of Thrift
Supervision or other regulatory authority, such access to be afforded without
charge but only upon reasonable request in writing and during normal business
hours at the offices of the Master Servicer designated by it. In fulfilling such
a request the Master Servicer shall not be responsible for determining the
sufficiency of such information.
(b) All Mortgage Files and funds collected or held by, or
under the control of, the Master Servicer, in respect of any Mortgage Loans,
whether from the collection of principal and interest payments or from
Liquidation Proceeds or Insurance Proceeds, shall be held by the Master Servicer
for and on behalf of the Trustee and the Certificateholders and shall be and
remain the sole and exclusive property of the Trustee; provided, however, that
the Master Servicer, the Company and the related Servicer shall be entitled to
setoff against, and deduct from, any such funds any amounts that are properly
due and payable to the Master Servicer or such Servicer under this Agreement or
the related Servicing Agreement.
Section 4.09 STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES.
(a) For each Mortgage Loan, the Master Servicer shall enforce
any obligation of the Company and the related Servicer under this Agreement or
the related Servicing Agreement to maintain or cause to be maintained standard
fire and casualty insurance and, where applicable, flood insurance, all in
accordance with the provisions of this Agreement or the related Servicing
Agreement. It is understood and agreed that such insurance shall be with
insurers meeting the eligibility requirements set forth in this Agreement and
the related Servicing Agreement and that no earthquake or other additional
insurance is to be required of any Mortgagor or to be maintained on property
acquired in respect of a defaulted loan, other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require such
additional insurance.
(b) Pursuant to Sections 5.01, 5.03 and 5.04 any amounts
collected by the Company, the Servicers or the Master Servicer, or by the
Company or the Servicers, under any insurance policies (other than amounts to be
applied to the restoration or repair of the property subject to the related
Mortgage or released to the Mortgagor in accordance with this Agreement or the
Servicing Agreements) shall be deposited by the Company in its Protected Account
or by the related Servicer or the Master Servicer into the Master Servicer
Collection Account, subject to withdrawal pursuant to Sections 5.02, 5.03, 5.04
and 5.06, as applicable. Any cost incurred by the Master Servicer, the Company
or the related Servicer in maintaining any such insurance if the Mortgagor
defaults in its obligation to do so shall be added to the amount owing under the
Mortgage Loan where the terms of the Mortgage Loan so permit; provided, however,
that the addition of any
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such cost shall not be taken into account for purposes of calculating the
distributions to be made to Certificateholders and shall be recoverable by the
Master Servicer, the Company or the related Servicer pursuant to Sections 5.02,
5.03, 5.04 and 5.06, as applicable.
Section 4.10 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS. The
Master Servicer shall (to the extent provided in this Agreement and the related
Servicing Agreement) cause the Company or the Servicer to, prepare and present
on behalf of the Trustee and the Certificateholders all claims under the
Insurance Policies and take such actions (including the negotiation, settlement,
compromise or enforcement of the insured's claim) as shall be necessary to
realize recovery under such policies. Any proceeds disbursed to the Master
Servicer (or disbursed to the Company or the related Servicer and remitted to
the Master Servicer) in respect of such policies, bonds or contracts shall be
promptly deposited in the Master Servicer Collection Account upon receipt,
except that any amounts realized that are to be applied to the repair or
restoration of the related Mortgaged Property as a condition precedent to the
presentation of claims on the related Mortgage Loan to the insurer under any
applicable Insurance Policy need not be so deposited (or remitted).
Section 4.11 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES.
(a) The Master Servicer shall not take, or permit the Company
or the related Servicer (to the extent such action is prohibited under this
Agreement or the related Servicing Agreement) to take, any action that would
result in noncoverage under any applicable Primary Mortgage Insurance Policy of
any loss which, but for the actions of the Master Servicer, the Company or the
related Servicer, would have been covered thereunder. The Master Servicer shall
use its best reasonable efforts to cause the Company and each Servicer (to the
extent required under this Agreement and the related Servicing Agreement) to
keep in force and effect (to the extent that the Mortgage Loan requires the
Mortgagor to maintain such insurance), primary mortgage insurance applicable to
each Mortgage Loan (including any LPMI Policy) in accordance with the provisions
of this Agreement and the related Servicing Agreement, as applicable. The Master
Servicer shall not, and shall not permit the Company or the related Servicer (to
the extent required under this Agreement or the related Servicing Agreement) to,
cancel or refuse to renew any such Primary Mortgage Insurance Policy that is in
effect at the date of the initial issuance of the Mortgage Note and is required
to be kept in force hereunder except in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable.
(b) The Master Servicer agrees to cause the Company and the
related Servicer (to the extent required under this Agreement and the related
Servicing Agreement) to present, on behalf of the Trustee and the
Certificateholders, claims to the insurer under any Primary Mortgage Insurance
Policies and, in this regard, to take such reasonable action as shall be
necessary to permit recovery under any Primary Mortgage Insurance Policies
respecting defaulted Mortgage Loans. Pursuant to Sections 5.01, 5.03 and 5.04,
any amounts collected by the Company or the related Servicer under any Primary
Mortgage Insurance Policies shall be deposited by the Company in its Protected
Account or by the related Servicer in the Master Servicer Collection Account,
subject to withdrawal pursuant to Section 5.03 or 5.04, as applicable.
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Section 4.12 TRUSTEE TO RETAIN POSSESSION OF CERTAIN INSURANCE POLICIES
AND DOCUMENTS.
The Trustee (or the Custodian, as directed by the Trustee),
shall retain possession and custody of the originals (to the extent available)
of any Primary Mortgage Insurance Policies, or certificate of insurance if
applicable, and any certificates of renewal as to the foregoing as may be issued
from time to time as contemplated by this Agreement. Until all amounts
distributable in respect of the Certificates have been distributed in full and
the Master Servicer otherwise has fulfilled its obligations under this
Agreement, the Trustee (or its Custodian, if any, as directed by the Trustee)
shall also retain possession and custody of each Mortgage File in accordance
with and subject to the terms and conditions of this Agreement. The Master
Servicer shall promptly deliver or cause to be delivered to the Trustee (or the
Custodian, as directed by the Trustee), upon the execution or receipt thereof
the originals of any Primary Mortgage Insurance Policies, any certificates of
renewal, and such other documents or instruments that constitute portions of the
Mortgage File that come into the possession of the Master Servicer from time to
time.
Section 4.13 REALIZATION UPON DEFAULTED MORTGAGE LOANS. The Master
Servicer shall cause the Company and the related Servicer (to the extent
required under this Agreement and the related Servicing Agreement) to foreclose
upon, repossess or otherwise comparably convert the ownership of Mortgaged
Properties securing such of the Mortgage Loans as come into and continue in
default and as to which no satisfactory arrangements can be made for collection
of delinquent payments, all in accordance with this Agreement or the related
Servicing Agreement.
Section 4.14 COMPENSATION FOR THE MASTER SERVICER.
The Master Servicer shall be entitled to the Master Servicing
Fee on each Distribution Date as compensation for the performance of its
obligations hereunder. In addition, the Master Servicer shall be entitled to all
income and gain realized from any investment of funds on Permitted Investments
in the Master Servicer Collection Account and Distribution Account as
compensation for the performance of its obligations hereunder (the "Additional
Master Servicing Compensation"). The Master Servicer will be entitled to retain,
as additional compensation, any interest remitted by the related Servicer in
connection with a Principal Prepayment in full or otherwise in excess of amounts
required to be remitted to the Master Servicer Collection Account. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its activities hereunder and shall not be entitled to reimbursement therefor
except as provided in this Agreement.
Section 4.15 REO PROPERTY.
(a) In the event the Trust Fund acquires ownership of any REO
Property in respect of any related Mortgage Loan, the deed or certificate of
sale shall be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in this
Agreement or the related Servicing Agreement, cause the Company or the related
Servicer to sell, any REO Property as expeditiously as possible and in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable. Pursuant to its efforts to sell such REO Property, the
Master Servicer shall cause the Company or the related Servicer to protect and
conserve such REO Property in the manner and to the extent required by this
Agreement or the related Servicing Agreement, in accordance with the REMIC
Provisions and in a manner that does
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not result in a tax on "net income from foreclosure property" or cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code.
(b) The Master Servicer shall, to the extent required by this
Agreement or the related Servicing Agreement, cause the Company or the related
Servicer to deposit all funds collected and received in connection with the
operation of any REO Property in the related Protected Account.
(c) The Master Servicer and the Company or the related
Servicer, upon the final disposition of any REO Property, shall be entitled to
reimbursement for any related unreimbursed Advances and other unreimbursed
advances as well as any unpaid Master Servicing Fees and Servicing Fees from
Liquidation Proceeds received in connection with the final disposition of such
REO Property; provided, that any such unreimbursed Advances as well as any
unpaid Master Servicing Fees and Servicing Fees may be reimbursed or paid, as
the case may be, prior to final disposition, out of any net rental income or
other net amounts derived from such REO Property.
(d) To the extent provided in this Agreement or the related
Servicing Agreement, the Liquidation Proceeds from the final disposition of the
REO Property, net of any payment to the Master Servicer and the Company or the
related Servicer as provided above shall be deposited in the Protected Account
on or prior to the Determination Date in the month following receipt thereof and
be remitted by wire transfer in immediately available funds to the Master
Servicer for deposit into the Master Servicer Collection Account on the next
succeeding Remittance Date.
Section 4.16 ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.
(a) The Master Servicer shall deliver to the Securities
Administrator, the Trustee and the Rating Agencies on or before March 1 of each
year, commencing on March 1, 2005, an Officer's Certificate, certifying that
with respect to the period ending December 31 of the prior year: (i) such
Servicing Officer has reviewed the activities of the Master Servicer during the
preceding calendar year or portion thereof and its performance under this
Agreement, (ii) to the best of such Servicing Officer's knowledge, based on such
review, the Master Servicer has performed and fulfilled its duties,
responsibilities and obligations under this Agreement in all material respects
throughout such year, or, if there has been a default in the fulfillment of any
such duties, responsibilities or obligations, specifying each such default known
to such Servicing Officer and the nature and status thereof, (iii) nothing has
come to the attention of such Servicing Officer to lead such Servicing Officer
to believe that the Company or any Servicer has failed to perform any of its
duties, responsibilities and obligations under this Agreement or the related
Servicing Agreement in all material respects throughout such year, or, if there
has been a material default in the performance or fulfillment of any such
duties, responsibilities or obligations, specifying each such default known to
such Servicing Officer and the nature and status thereof.
(b) Copies of such statements shall be provided to any
Certificateholder upon request, by the Master Servicer or by the Trustee at the
Master Servicer's expense if the Master Servicer failed to provide such copies
(unless (i) the Master Servicer shall have failed to provide the Trustee with
such statement or (ii) the Trustee shall be unaware of the Master Servicer's
failure to provide such statement).
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Section 4.17 ANNUAL INDEPENDENT ACCOUNTANT'S SERVICING REPORT. If the
Master Servicer has, during the course of any fiscal year, directly serviced any
of the Mortgage Loans, then the Master Servicer at its expense shall cause a
nationally recognized firm of independent certified public accountants to
furnish a statement to the Securities Administrator, the Trustee, the Rating
Agencies and the Seller on or before March 1 of each year, commencing on March
1, 2005 to the effect that, with respect to the most recently ended fiscal year,
such firm has examined certain records and documents relating to the Master
Servicer's performance of its servicing obligations under this Agreement and
pooling and servicing and trust agreements in material respects similar to this
Agreement and to each other and that, on the basis of such examination conducted
substantially in compliance with the audit program for mortgages serviced for
Xxxxxxx Mac or the Uniform Single Attestation Program for Mortgage Bankers, such
firm is of the opinion that the Master Servicer's activities have been conducted
in compliance with this Agreement, or that such examination has disclosed no
material items of noncompliance except for (i) such exceptions as such firm
believes to be immaterial, (ii) such other exceptions as are set forth in such
statement and (iii) such exceptions that the Uniform Single Attestation Program
for Mortgage Bankers or the Audit Program for Mortgages Serviced by Xxxxxxx Mac
requires it to report. Copies of such statements shall be provided to any
Certificateholder upon request by the Master Servicer, or by the Trustee at the
expense of the Master Servicer if the Master Servicer shall fail to provide such
copies (unless (i) the Master Servicer shall have failed to provide the Trustee
with such statement or (ii) the Trustee shall be unaware of the Master
Servicer's failure to provide such statement). If such report discloses
exceptions that are material, the Master Servicer shall advise the Trustee
whether such exceptions have been or are susceptible of cure, and will take
prompt action to do so.
Section 4.18 REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.
Within 15 days after each Distribution Date, the Securities Administrator shall,
in accordance with industry standards, file with the Commission via the
Electronic Data Gathering and Retrieval System ("XXXXX"), a Form 8-K with a copy
of the statement to the Certificateholders for such Distribution Date as an
exhibit thereto. Prior to January 30 in each year, the Securities Administrator
shall, in accordance with industry standards and only if instructed by the
Depositor, file a Form 15 Suspension Notice with respect to the Trust Fund, if
applicable. Prior to (i) March 15, 2005 and (ii) unless and until a Form 15
Suspension Notice shall have been filed, prior to March 15 of each year
thereafter, the Master Servicer shall provide the Securities Administrator with
a Master Servicer Certification, together with a copy of the annual independent
accountant's servicing report and annual statement of compliance of the Company
to be delivered pursuant to this Agreement and each Servicer, in each case,
required to be delivered pursuant to the related Servicing Agreement, and, if
applicable, the annual independent accountant's servicing report and annual
statement of compliance to be delivered by the Master Servicer pursuant to
Sections 4.16 and 4.17. Prior to (i) March 31, 2005 and (ii) unless and until a
Form 15 Suspension Notice shall have been filed, March 31 of each year
thereafter, the Securities Administrator shall file a Form 10-K, in substance
conforming to industry standards, with respect to the Trust. Such Form 10-K
shall include the Master Servicer Certification and other documentation provided
by the Master Servicer pursuant to the second preceding sentence. The Depositor
hereby grants to the Securities Administrator a limited power of attorney to
execute and file each such document on behalf of the Depositor. Such power of
attorney shall continue until either the earlier of (i) receipt by the
Securities Administrator from the Depositor of written termination of such power
of attorney and (ii) the termination of the Trust Fund. The Depositor agrees to
promptly furnish to the Securities Administrator, from time to time upon
request,
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such further information, reports and financial statements within its control
related to this Agreement, the Mortgage Loans as the Securities Administrator
reasonably deems appropriate to prepare and file all necessary reports with the
Commission. The Securities Administrator shall have no responsibility to file
any items other than those specified in this Section 4.18; provided, however,
the Securities Administrator will cooperate with the Depositor in connection
with any additional filings with respect to the Trust Fund as the Depositor
deems necessary under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Copies of all reports filed by the Securities Administrator
under the Exchange Act shall be sent to: the Depositor c/o Bear, Xxxxxxx & Co.
Inc., Attn: Managing Director-Analysis and Control, Xxx Xxxxxxxxx Xxxxxx Xxxxx,
Xxxxxxxx, Xxx Xxxx 00000-0000. Fees and expenses incurred by the Securities
Administrator in connection with this Section 4.18 shall not be reimbursable
from the Trust Fund.
Section 4.19 EMC. On the Closing Date, EMC will receive from the
Depositor a payment of $5,000.
Section 4.20 UCC. The Trustee agrees to file continuation statements
for any Uniform Commercial Code financing statements which the Seller has
informed the Trustee were filed on the Closing Date in connection with the
Trust. The Seller shall file any financing statements or amendments thereto
required by any change in the Uniform Commercial Code.
Section 4.21 OPTIONAL PURCHASE OF CERTAIN MORTGAGE LOANS.
With respect to any Mortgage Loans which as of the first day
of a Calendar Quarter is delinquent in payment by 90 days or more or is an REO
Property, EMC shall have the right to purchase any Mortgage Loan from the Trust
which becomes 90 days or more delinquent or becomes an REO Property at a price
equal to the Repurchase Price; provided however (i) that such Mortgage Loan is
still 90 days or more delinquent or is an REO Property as of the date of such
purchase and (ii) this purchase option, if not theretofore exercised, shall
terminate on the date prior to the last day of the related Calendar Quarter.
This purchase option, if not exercised, shall not be thereafter reinstated
unless the delinquency is cured and the Mortgage Loan thereafter again becomes
90 days or more delinquent or becomes an REO Property, in which case the option
shall again become exercisable as of the first day of the related Calendar
Quarter.
In addition, EMC shall, at its option, purchase any Mortgage
Loan from the Trust if the first Due Date for such Mortgage Loan is subsequent
to the Cut-off Date and the initial Monthly Payment is not made within thirty
(30) days of such Due Date. Such purchase shall be made at a price equal to the
Repurchase Price.
If at any time EMC remits to the Master Servicer a payment for
deposit in the Master Servicer Collection Account covering the amount of the
Repurchase Price for such a Mortgage Loan, and EMC provides to the Trustee a
certification signed by a Servicing Officer stating that the amount of such
payment has been deposited in the Master Servicer Collection Account, then the
Trustee shall execute the assignment of such Mortgage Loan prepared and
delivered to the Trustee, at the request of EMC, without recourse,
representation or warranty, to EMC which shall succeed to all the Trustee's
right, title and interest in and to such Mortgage Loan, and all security and
documents relative thereto. Such assignment shall be an assignment outright and
not for security. EMC will
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thereupon own such Mortgage, and all such security and documents, free of any
further obligation to the Trustee or the Certificateholders with respect
thereto.
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ARTICLE V
ACCOUNTS
Section 5.01 COLLECTION OF MORTGAGE LOAN PAYMENTS; PROTECTED ACCOUNT.
(a) The Company shall make reasonable efforts in accordance
with customary and usual standards of practice of prudent mortgage lenders in
the respective states in which the Mortgaged Properties related to the EMC
Mortgage Loans are located to collect all payments called for under the terms
and provisions of the EMC Mortgage Loans to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related
Required Insurance Policy. Consistent with the foregoing, the Company may in its
discretion (i) waive any late payment charge and (ii) extend the due dates for
payments due on a Mortgage Note related to an EMC Mortgage Loan for a period not
greater than 125 days. In the event of any such arrangement, the Company shall
make Advances on the related EMC Mortgage Loan during the scheduled period in
accordance with the amortization schedule of such EMC Mortgage Loan without
modification thereof by reason of such arrangements, and shall be entitled to
reimbursement therefor in accordance with Section 6.01. The Company shall not be
required to institute or join in litigation with respect to collection of any
payment (whether under a Mortgage, Mortgage Note or otherwise or against any
public or governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law. In addition, if (x) an EMC Mortgage Loan is in default or
default is imminent or (y) the Company delivers to the Trustee a certification
addressed to the Trustee, based on the advice of counsel or certified public
accountants, in either case, that have a national reputation with respect to
taxation of REMICs, that a modification of such EMC Mortgage Loan will not
result in the imposition of taxes on or disqualify any of REMIC I, REMIC II or
REMIC III, the Company may, (A) amend the related Mortgage Note to reduce the
Mortgage Rate applicable thereto, provided that such reduced Mortgage Rate shall
in no event be lower than 6.00% with respect to any EMC Mortgage Loan in Loan
Group I and 5.00% with respect to any EMC Mortgage Loan in Loan Group II and (B)
amend any Mortgage Note related to an EMC Mortgage Loan to extend to the
maturity thereof.
In accordance with the standards of the first paragraph of
Section 3.01, the Company shall not waive (or permit a sub-servicer to waive)
any Prepayment Charge related to an EMC Mortgage Loan unless: (i) the
enforceability thereof shall have been limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors' rights
generally, (ii) the enforcement thereof is illegal, or any local, state or
federal agency has threatened legal action if the prepayment penalty is
enforced, (iii) the collectability thereof shall have been limited due to
acceleration in connection with a foreclosure or other involuntary payment or
(iv) such waiver is standard and customary in servicing similar Mortgage Loans
and relates to a default or a reasonably foreseeable default and would, in the
reasonable judgment of the Company, maximize recovery of total proceeds taking
into account the value of such Prepayment Charge and the related EMC Mortgage
Loan. In no event will the Company waive a Prepayment Charge in connection with
a refinancing of an EMC Mortgage Loan that is not related to a default or a
reasonably foreseeable default. If a Prepayment Charge is waived, but does not
meet the standards described above, then the
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Company is required to pay the amount of such waived Prepayment Charge, for the
benefit of the Class P Certificates, by remitting such amount to the Master
Servicer by the Remittance Date.
(b) The Company shall establish and maintain a Protected
Account (which shall at all times be an Eligible Account) with a depository
institution in the name of the Company for the benefit of the Trustee on behalf
of the Certificateholders and designated "U.S. Bank National Association, in
trust for registered holders of Bear Xxxxxxx Asset Backed Securities I LLC,
Asset- Backed Certificates Series 2004-AC2". The Company shall deposit or cause
to be deposited into the Protected Account on a daily basis within one Business
Day of receipt, except as otherwise specifically provided herein, the following
payments and collections remitted by subservicers or received by it in respect
of the EMC Mortgage Loans subsequent to the Cut-off Date (other than in respect
of principal and interest due on the EMC Mortgage Loans on or before the Cut-off
Date) and the following amounts required to be deposited hereunder:
(i) all payments on account of principal, including Principal
Prepayments, on the EMC Mortgage Loans;
(ii) all payments on account of interest on the EMC Mortgage
Loans net of the related Servicing Fee permitted under Section 3.10 and
LPMI Fees, if any;
(iii) all Liquidation Proceeds and Insurance Proceeds with
respect to any EMC Mortgage Loan, other than proceeds to be applied to
the restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with the Company's normal servicing procedures;
(iv) any amount required to be deposited by the Company
pursuant to Section 5.01(c) in connection with any losses on Permitted
Investments;
(v) any amounts required to be deposited by the Company
pursuant to Section 3.05;
(v) any Prepayment Charges collected on the EMC Mortgage
Loans; and
(vii) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Company into
the Protected Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments in the nature of late
payment charges or assumption fees, if collected, need not be remitted by the
Company. In the event that the Company shall remit any amount not required to be
remitted and not otherwise subject to withdrawal pursuant to Section 5.02, it
may at any time withdraw or direct the institution maintaining the Protected
Account, to withdraw such amount from the Protected Account, any provision
herein to the contrary notwithstanding. Such withdrawal or direction may be
accomplished by delivering written notice thereof to the institution maintaining
the Protected Account, that describes the amounts deposited in error in the
Protected Account. The Company shall maintain adequate records with respect to
all withdrawals made pursuant to this
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Section. All funds deposited in the Protected Account shall be held in trust for
the Certificateholders until withdrawn in accordance with Section 5.02.
(c) The institution that maintains the Protected Account shall
invest the funds in the Protected Account, in the manner directed by the
Company, in Permitted Investments which shall mature not later than the
Remittance Date and shall not be sold or disposed of prior to its maturity. All
such Permitted Investments shall be made in the name of the Trustee, for the
benefit of the Certificateholders. All income and gain net of any losses
realized from any such investment shall be for the benefit of the Company as
servicing compensation and shall be remitted to it monthly as provided herein.
The amount of any losses incurred in the Protected Account in respect of any
such investments shall be deposited by the Company into the Protected Account,
out of the Company's own funds.
(d) The Company shall give at least 30 days advance notice to
the Trustee, the Seller, the Master Servicer, each Rating Agency and the
Depositor of any proposed change of location of the Protected Account prior to
any change thereof.
Section 5.02 PERMITTED WITHDRAWALS FROM THE PROTECTED ACCOUNT.
(a) The Company may from time to time make withdrawals from
its Protected Account for the following purposes:
(i) to pay itself (to the extent not previously paid to or
withheld by the Company), as servicing compensation in accordance with
Section 3.10, that portion of any payment of interest that equals the
Servicing Fee for the period with respect to which such interest
payment was made, and, as additional servicing compensation, those
other amounts set forth in Section 3.10;
(ii) to reimburse the Company for Advances made by it with
respect to the Mortgage Loans, provided, however, that the Company's
right of reimbursement pursuant to this subclause (ii) shall be limited
to amounts received on particular EMC Mortgage Loan(s) (including, for
this purpose, Liquidation Proceeds and Insurance Proceeds) that
represent late recoveries of payments of principal and/or interest on
such particular EMC Mortgage Loan(s) in respect of which any such
Advance was made;
(iii) to reimburse the Company for any previously made portion
of a Servicing Advance or an Advance made by the Company that, in the
good faith judgment of the Company, will not be ultimately recoverable
by it from the related Mortgagor, any related Liquidation Proceeds,
Insurance Proceeds or otherwise (a "Nonrecoverable Advance"), to the
extent not reimbursed pursuant to clause (ii) or clause (v);
(iv) to reimburse the Company from Insurance Proceeds for
Insured Expenses covered by the related Insurance Policy;
(v) to pay the Company any unpaid Servicing Fees and to
reimburse it for any unreimbursed Servicing Advances, provided,
however, that the Company's right to
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reimbursement for Servicing Advances pursuant to this subclause (v)
with respect to any EMC Mortgage Loan shall be limited to amounts
received on particular EMC Mortgage Loan(s) (including, for this
purpose, Liquidation Proceeds, Insurance Proceeds and purchase and
repurchase proceeds) that represent late recoveries of the payments for
which such Servicing Advances were made;
(vi) to pay to the Seller, the Depositor or itself, as
applicable, with respect to each EMC Mortgage Loan or property acquired
in respect thereof that has been purchased pursuant to Section 2.02,
2.03 or 4.21 of this Agreement, all amounts received thereon and not
taken into account in determining the related Stated Principal Balance
of such repurchased EMC Mortgage Loan;
(vii) to pay any expenses recoverable by the Company pursuant
to Section 8.04 of this Agreement;
(viii) to withdraw pursuant to Section 5.01 any amount
deposited in the Protected Account and not required to be deposited
therein; and
(ix) to clear and terminate the Protected Account upon
termination of this Agreement pursuant to Section 11.01 hereof.
In addition, no later than 1:00 p.m. Eastern time on the
Remittance Date, the Company shall withdraw from the Protected Account and remit
to the Master Servicer the amount required to be withdrawn therefrom pursuant to
Section 5.04 hereof. In addition, on or before the Remittance Date, the Company
shall remit to the Master Servicer for deposit in the Master Servicer Collection
Account any Advances or any payments of Compensating Interest required to be
made by the Company with respect to the EMC Mortgage Loans.
The Company shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Protected Account pursuant to subclauses (i), (ii), (iv),
(v) and (vi) above. Prior to making any withdrawal from the Protected Account
pursuant to subclause (iii), the Company shall deliver to the Trustee an
Officer's Certificate of a Servicing Officer indicating the amount of any
previous Advance or Servicing Advance determined by the Company to be a
Nonrecoverable Advance and identifying the related EMC Mortgage Loan(s), and
their respective portions of such Nonrecoverable Advance.
Section 5.02A REPORTS TO MASTER SERVICER.
On or before the tenth calendar day of each month, the Company
shall furnish to the Master Servicer electronically in a format acceptable to
the Master Servicer loan accounting reports in the investor's assigned loan
number order to document the payment activity on each EMC Mortgage Loan on an
individual mortgage loan basis. With respect to each month, such loan accounting
reports shall contain the following:
(i) With respect to each Scheduled Payment (on both an actual
and scheduled basis with respect to mortgage loan balances and on an
actual basis with respect to paid-through
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dates), the amount of such remittance allocable to principal (including
a separate breakdown of any Principal Prepayment, including the amount
of any Prepayment Interest Shortfall);
(ii) with respect to each Monthly Payment, the amount of such
remittance allocable to scheduled interest;
(iii) the amount of servicing compensation received by the
Company during the prior calendar month;
(iv) the aggregate scheduled principal balance of the EMC
Mortgage Loans;
(v) the aggregate amount of Advances made by the Company
pursuant to Section 6.01;
(vi) the aggregate of any expenses reimbursed to the Company
during the prior calender month pursuant to Section 5.02;
(vii) the number and aggregate outstanding principal balances
of EMC Mortgage Loans (a) delinquent (1) 30 to 59 days, (2) 60 to 89
days, (3) 90 days or more; (b) as to which foreclosure has commenced;
and (c) as to which REO Property has been acquired; and
(viii) the amount of any Prepayment Charges collected by the
Company and the amount of Prepayment Charges paid by the Company in
connection with a waiver that is not permitted under this Agreement.
Section 5.03 COLLECTION OF TAXES; ASSESSMENTS AND SIMILAR ITEMS; ESCROW
ACCOUNTS.
With respect to each EMC Mortgage Loan, to the extent required
by the related Mortgage Note, the Company shall establish and maintain one or
more accounts (each, an "Escrow Account") and deposit and retain therein all
collections from the Mortgagors (or advances by the Company) for the payment of
taxes, assessments, hazard insurance premiums or comparable items for the
account of the Mortgagors. Nothing herein shall require the Company to compel a
Mortgagor to establish an Escrow Account in violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts
may be made only to effect timely payment of taxes, assessments, hazard
insurance premiums, condominium or PUD association dues, or comparable items, to
reimburse the Company out of related collections for any payments made with
respect to each EMC Mortgage Loan pursuant to Section 3.01 (with respect to
taxes and assessments and insurance premiums) and Section 3.05 (with respect to
hazard insurance), to refund to any Mortgagors for any EMC Mortgage Loans any
sums as may be determined to be overages, to pay interest, if required by law or
the terms of the related Mortgage or Mortgage Note, to such Mortgagors on
balances in the Escrow Account or to clear and terminate the Escrow Account at
the termination of this Agreement in accordance with Section 11.01 thereof. The
Escrow Account shall not be a part of the Trust Fund.
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Section 5.04 SERVICER PROTECTED ACCOUNTS. (a) The Master Servicer shall
enforce the obligation of the Company and each Servicer to establish and
maintain a Protected Account in accordance with this Agreement and the Servicing
Agreements, with records to be kept with respect thereto on a Mortgage Loan by
Mortgage Loan basis, into which accounts shall be deposited within one Business
Day (or as of such other time specified in the Servicing Agreements) of receipt
all collections of principal and interest on any Mortgage Loan and with respect
to any REO Property received by the Company or the related Servicer, including
Principal Prepayments, Insurance Proceeds, Liquidation Proceeds, and advances
made from the Company's or such Servicer's own funds (less servicing
compensation as permitted by this Agreement or the related Servicing Agreement)
and all other amounts to be deposited in the Protected Accounts. Each of the
Company and the Servicers are hereby authorized to make withdrawals from and
deposits to the related Protected Account for purposes required or permitted by
this Agreement. To the extent provided in this Agreement or any Servicing
Agreement, the Protected Account shall be held in a Designated Depository
Institution and segregated on the books of such institution in the name of the
Trustee for the benefit of Certificateholders.
(b) To the extent provided in this Agreement or any Servicing
Agreement, amounts on deposit in a Protected Account may be invested in
Permitted Investments in the name of the Trustee for the benefit of
Certificateholders and, except as provided in the preceding paragraph, not
commingled with any other funds, such Permitted Investments to mature, or to be
subject to redemption or withdrawal, no later than the date on which such funds
are required to be withdrawn for deposit in the Master Servicer Collection
Account, and shall be held until required for such deposit. The income earned
from Permitted Investments made pursuant to this Section 5.04 shall be paid to
the Company or the related Servicer under this Agreement or the related
Servicing Agreement, and the risk of loss of moneys required to be distributed
to the Certificateholders resulting from such investments shall be borne by and
be the risk of the Company or the related Servicer, as the case may be. The
Company or the related Servicer (to the extent provided in this Agreement or the
related Servicing Agreement) shall deposit the amount of any such loss in the
Protected Account within two Business Days of receipt of notification of such
loss but not later than the second Business Day prior to the Distribution Date
on which the moneys so invested are required to be distributed to the
Certificateholders.
(c) To the extent provided in this Agreement or the related
Servicing Agreement and subject to this Article V, on or before each Remittance
Date, the Company or the related Servicer shall withdraw or shall cause to be
withdrawn from its Protected Account and shall immediately deposit or cause to
be deposited in the Master Servicer Collection Account amounts representing the
following collections and payments (other than with respect to principal of or
interest on the Mortgage Loans due on or before the Cut-off Date):
(i) Scheduled Payments on the Mortgage Loans received or any
related portion thereof advanced by the Company pursuant to this Agreement or
the related Servicer pursuant to the related Servicing Agreement which were due
on or before the related Due Date, net of the amount thereof comprising the
Servicing Fees;
(ii) Full Principal Prepayments and any Liquidation Proceeds
received by the Company or the related Servicer with respect to such Mortgage
Loans in the related Prepayment
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Period, with interest to the date of prepayment or liquidation, net of the
amount thereof comprising the Servicing Fees and LPMI Fees, if any;
(iii) Partial Principal Prepayments received by the Company or
the related Servicer for such Mortgage Loans in the related Prepayment Period;
(iv) Any amount to be used as an Advance; and
(v) The amount of any Prepayment Charges collected with
respect to the Mortgage Loans and the amount of any Prepayment Charges paid by
the Company or the related Servicer in connection with the waiver of a
Prepayment Charge in a manner that is not permitted under this Agreement or the
related Servicing Agreement.
(d) Withdrawals may be made from a Protected Account by the
Company as described in Section 5.02 hereof and by the Master Servicer or the
related Servicer only to make remittances as provided in Section 5.04(c), 5.05
and 5.06; to reimburse the Master Servicer or the Servicer for Advances which
have been recovered by subsequent collection from the related Mortgagor; to
remove amounts deposited in error; to remove fees, charges or other such amounts
deposited on a temporary basis; or to clear and terminate the account at the
termination of this Agreement in accordance with Section 11.01. As provided in
Sections 5.04(a) and 5.05(b) certain amounts otherwise due to the related
Servicer may be retained by the related Servicer and need not be deposited in
the Master Servicer Collection Account.
Section 5.05 MASTER SERVICER COLLECTION ACCOUNT. (a) The Master
Servicer shall establish and maintain in the name of the Trustee, for the
benefit of the Certificateholders, the Master Servicer Collection Account which
shall be an Eligible Account. The Master Servicer will deposit in the Master
Servicer Collection Account as identified by the Master Servicer and as received
by the Master Servicer, the following amounts:
(a) Any amounts withdrawn from a Protected Account;
(ii) Any Advance and any Compensating Interest Payments;
(iii) Any Insurance Proceeds or Liquidation Proceeds received
by or on behalf of the Master Servicer or which were not deposited in a
Protected Account;
(iv) The Purchase Price with respect to any Mortgage Loans
purchased by the Seller pursuant to the Mortgage Loan Purchase Agreement or
Section 2.02 or 2.03, any amounts which are to be treated pursuant to Section
2.03 of this Agreement as the payment of a Purchase Price in connection with the
tender of a Replacement Mortgage Loan by the Seller, the Repurchase Price with
respect to any Mortgage Loans purchased by EMC pursuant to Section 4.21, and all
proceeds of any Mortgage Loans or property acquired with respect thereto
repurchased by the EMC or its designee pursuant to Section 11.01;
(v) Any amounts required to be deposited with respect to
losses on investments of deposits in an Account; and
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(vi) Any other amounts received by or on behalf of the Master
Servicer or the Trustee and required to be deposited in the Master Servicer
Collection Account pursuant to this Agreement.
(b) All amounts deposited to the Master Servicer Collection
Account shall be held by the Master Servicer in the name of the Trustee in trust
for the benefit of the Certificateholders in accordance with the terms and
provisions of this Agreement. The requirements for crediting the Master Servicer
Collection Account or the Distribution Account shall be exclusive, it being
understood and agreed that, without limiting the generality of the foregoing,
payments in the nature of late payment charges or assumption, tax service,
statement account or payoff, substitution, satisfaction, release and other like
fees and charges, need not be credited by the Master Servicer or the related
Servicer to the Distribution Account or the Master Servicer Collection Account,
as applicable. In the event that the Master Servicer shall deposit or cause to
be deposited to the Distribution Account any amount not required to be credited
thereto, the Trustee, upon receipt of a written request therefor signed by a
Servicing Officer of the Master Servicer, shall promptly transfer such amount to
the Master Servicer, any provision herein to the contrary notwithstanding.
(c) The amount at any time credited to the Master Servicer
Collection Account may be invested, in the name of the Trustee, or its nominee,
for the benefit of the Certificateholders, in Permitted Investments or be held
in cash as directed by Master Servicer. All Permitted Investments shall mature
or be subject to redemption or withdrawal on or before, and shall be held until,
the next succeeding Distribution Account Deposit Date. Any and all investment
earnings from the Master Servicer Collection Account shall be paid to the Master
Servicer. The risk of loss of moneys required to be distributed to the
Certificateholders resulting from such investments shall be borne by and be the
risk of the Master Servicer. The Master Servicer shall deposit the amount of any
such loss in the Master Servicer Collection Account within two Business Days of
receipt of notification of such loss but not later than the second Business Day
prior to the Distribution Date on which the moneys so invested are required to
be distributed to the Certificateholders.
Section 5.06 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE MASTER
SERVICER COLLECTION ACCOUNT. (a) The Master Servicer will, from time to time on
demand of the Master Servicer or the Securities Administrator, make or cause to
be made such withdrawals or transfers from the Master Servicer Collection
Account as the Master Servicer has designated for such transfer or withdrawal
pursuant to this Agreement and the related Servicing Agreement. The Master
Servicer may clear and terminate the Master Servicer Collection Account pursuant
to Section 11.01 and remove amounts from time to time deposited in error.
(b) On an ongoing basis, the Master Servicer shall withdraw
from the Master Servicer Collection Account to pay itself as provided in Section
4.14 and to pay any expenses, costs and liabilities recoverable by the Trustee,
the Master Servicer, the Custodian or the Securities Administrator pursuant to
Sections 4.03, 8.03, 8.04 and 10.05; provided however, that the Master Servicer
shall be obligated to pay from its own funds any amounts which it is required to
pay under Section 8.03(a).
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(c) In addition, on or before each Distribution Account
Deposit Date, the Master Servicer shall deposit in the Distribution Account (or
remit to the Trustee for deposit therein) any Advances required to be made by
the Master Servicer with respect to the Mortgage Loans.
(d) No later than 3:00 p.m. New York time on each Distribution
Account Deposit Date, the Master Servicer will transfer all available funds on
deposit in the Master Servicer Collection Account with respect to the related
Distribution Date to the Trustee for deposit in the Distribution Account.
Section 5.07 DISTRIBUTION ACCOUNT.
(a) The Trustee shall establish and maintain in the name of
the Trustee, for the benefit of the Certificateholders, the Distribution Account
as a segregated trust account or accounts.
(b) All amounts deposited to the Distribution Account shall be
held by the Trustee in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement.
(c) The Distribution Account shall constitute an Eligible
Account of the Trust Fund segregated on the books of the Trustee and held by the
Trustee and the Distribution Account and the funds deposited therein shall not
be subject to, and shall be protected from, all claims, liens, and encumbrances
of any creditors or depositors of the Trustee (whether made directly, or
indirectly through a liquidator or receiver of the Trustee). The amount at any
time credited to the Distribution Account may be, as directed by the Master
Servicer, held either uninvested in a trust or deposit account of the Trustee
with no liability for interest or other compensation thereof, except as
otherwise agreed in writing with the Master Servicer, or invested in the name of
the Trustee, in such Permitted Investments as may be selected by the Master
Servicer on such direction which mature not later than the Business Day next
preceding the succeeding Distribution Date, except if such Permitted Investment
is an obligation of or is managed by the institution that maintains such fund or
account, then such Permitted Investment shall mature not later than such
Distribution Date. Permitted Investments in respect of the Distribution Account
shall not be sold or disposed of prior to their maturity. All investment
earnings on amounts on deposit in the Distribution Account or benefit from funds
uninvested therein from time to time shall be for the account of the Master
Servicer. The Master Servicer shall be permitted to receive distribution of any
and all investment earnings from the Distribution Account on each Distribution
Date. If there is any loss on a Permitted Investment or demand deposit, the
Master Servicer shall deposit the amount of the loss in the Distribution
Account. With respect to the Distribution Account and the funds deposited
therein, the Trustee shall take such action as may be necessary to ensure that
the Certificateholders shall be entitled to the priorities afforded to such a
trust account (in addition to a claim against the estate of the Trustee) as
provided by 12 U.S.C. ss. 92a(e), and applicable regulations pursuant thereto,
if applicable, or any applicable comparable state statute applicable to state
chartered banking corporations.
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Section 5.08 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION
ACCOUNT.
(a) The Trustee will, from time to time on demand of the
Master Servicer or the Securities Administrator, make or cause to be made such
withdrawals or transfers from the Distribution Account as the Master Servicer
has designated for such transfer or withdrawal pursuant to this Agreement or any
Servicing Agreement or as the Securities Administrator has instructed hereunder
for the following purposes (limited in the case of amounts due the Master
Servicer to those not withdrawn from the Master Servicer Collection Account in
accordance with the terms of this Agreement); provided that the Trustee shall
not be responsible for such determination and may rely on the Master Servicer's
or the Securities Administrator's instructions under this Section 5.08):
(i) to reimburse the Master Servicer, the Company or the
related Servicer for any Advance or Servicing Advance of its own funds, the
right of the Master Servicer, the Company or a Servicer to reimbursement
pursuant to this subclause (i) being limited to amounts received on a particular
Mortgage Loan (including, for this purpose, the Repurchase Price therefor,
Insurance Proceeds and Liquidation Proceeds) which represent late payments or
recoveries of the principal of or interest on such Mortgage Loan respecting
which such Advance or Servicing Advance was made;
(ii) to reimburse the Master Servicer, the Company or the
related Servicer from Insurance Proceeds or Liquidation Proceeds relating to a
particular Mortgage Loan for amounts expended by the Master Servicer, the
Company or the related Servicer in good faith in connection with the restoration
of the related Mortgaged Property which was damaged by an uninsured cause or in
connection with the liquidation of such Mortgage Loan;
(iii) to reimburse the Master Servicer, the Company or the
related Servicer from Insurance Proceeds relating to a particular Mortgage Loan
for insured expenses incurred with respect to such Mortgage Loan and to
reimburse the Master Servicer, the Company or the related Servicer from
Liquidation Proceeds from a particular Mortgage Loan for Liquidation Expenses
incurred with respect to such Mortgage Loan; provided that the Master Servicer
shall not be entitled to reimbursement for Liquidation Expenses with respect to
a Mortgage Loan to the extent that (i) any amounts with respect to such Mortgage
Loan were paid as Excess Liquidation Proceeds pursuant to clause (x) of this
Subsection (a) to the Master Servicer; and (ii) such Liquidation Expenses were
not included in the computation of such Excess Liquidation Proceeds;
(iv) [reserved];
(v) [reserved];
(vi) to reimburse the Master Servicer, the Company or a
Servicer for advances of funds pursuant to this Agreement or the related
Servicing Agreement, and the right to reimbursement pursuant to this subclause
being limited to amounts received on the related Mortgage Loan (including, for
this purpose, the Repurchase Price therefor, Insurance Proceeds and Liquidation
Proceeds) which represent late recoveries of the payments for which such
advances were made;
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(vii) to reimburse the Master Servicer, the Company or a
Servicer for any Advance or advance, after a Realized Loss has been allocated
with respect to the related Mortgage Loan if the Advance or advance has not been
reimbursed pursuant to clauses (i) and (vi);
(viii) to pay the Master Servicer as set forth in Section
4.14;
(ix) to reimburse the Master Servicer for expenses, costs and
liabilities incurred by and reimbursable to it pursuant to Sections 4.03,
8.04(c) and (d) and 12.02 or otherwise reimbursable to it pursuant to this
Agreement;
(x) to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds to the extent not retained by the
Company or the related Servicer;
(xi) to reimburse or pay the Company or the related Servicer
any such amounts as are due thereto under this Agreement or the related
Servicing Agreement and have not been retained by or paid to the Company or the
related Servicer, to the extent provided herein and in the related Servicing
Agreement;
(xii) to reimburse the Trustee, the Custodian or the
Securities Administrator for expenses, costs and liabilities incurred by or
reimbursable to it pursuant to this Agreement (to the extent not reimbursed from
the Master Servicer Collection Account in accordance with Section 5.06);
(xiii) to remove amounts deposited in error; and
(xiv) to clear and terminate the Distribution Account pursuant
to Section 11.01.
(b) The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
accounting for any reimbursement from the Distribution Account pursuant to
subclauses (i) through (vi), inclusive, and (viii) or with respect to any such
amounts which would have been covered by such subclauses had the amounts not
been retained by the Master Servicer without being deposited in the Distribution
Account under Section 5.06.
(c) On each Distribution Date, the Trustee shall distribute
the Group I Available Funds and Group II Available Funds to the extent of funds
on deposit in the Distribution Account to the holders of the Certificates in
accordance with the Remittance Report upon which the Trustee may conclusively
rely.
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ARTICLE VI
DISTRIBUTIONS AND ADVANCES
Section 6.01 ADVANCES.
(a) The Company shall make an Advance with respect to any EMC
Mortgage Loan and deposit such Advance in the Master Servicer Collection Account
no later than 1:00 p.m. Eastern time on the Remittance Date in immediately
available funds. The Master Servicer shall cause each Servicer to remit any such
Advance required pursuant to the terms of the related Servicing Agreement. The
Company or the related Servicer, as applicable, shall be obligated to make any
such Advance only to the extent that such advance would not be a Nonrecoverable
Advance. If the Company or the related Servicer shall have determined that it
has made a Nonrecoverable Advance or that a proposed Advance or a lesser portion
of such Advance would constitute a Nonrecoverable Advance, the Company or the
related Servicer, as the case may be, shall deliver (i) to the Trustee for the
benefit of the Certificateholders funds constituting the remaining portion of
such Advance, if applicable, and (ii) to the Depositor, the Master Servicer,
each Rating Agency and the Trustee an Officer's Certificate setting forth the
basis for such determination.
In lieu of making all or a portion of such Advance from its
own funds, the Company may (i) cause to be made an appropriate entry in its
records relating to the Protected Account that any Amounts Held for Future
Distribution has been used by the Company in discharge of its obligation to make
any such Advance and (ii) transfer such funds from its Protected Account to the
Distribution Account. Any funds so applied and transferred shall be replaced by
the Company by deposit in the Distribution Account, no later than the close of
business on the Remittance Date immediately preceding the Distribution Date on
which such funds are required to be distributed pursuant to this Agreement.
The Company shall be entitled to be reimbursed from its
Protected Account for all Advances of its own funds made pursuant to this
Section as provided in Section 5.02. The obligation to make Advances with
respect to any EMC Mortgage Loan shall continue until such EMC Mortgage Loan is
paid in full or the related Mortgaged Property or related REO Property has been
liquidated or until the purchase or repurchase thereof (or substitution
therefor) from the Trust Fund pursuant to any applicable provision of this
Agreement, except as otherwise provided in this Section 6.01.
(b) If the Scheduled Payment on a Mortgage Loan that was due
on a related Due Date and is delinquent other than as a result of application of
the Relief Act and for which the Company or the related Servicer was required to
make an Advance pursuant to this Agreement or the related Servicing Agreement
exceeds the amount deposited in the Master Servicer Collection Account which
will be used for an Advance with respect to such Mortgage Loan, the Master
Servicer will deposit in the Master Servicer Collection Account not later than
the Distribution Account Deposit Date immediately preceding the related
Distribution Date an amount equal to such deficiency, net of the Master
Servicing Fee and the Servicing Fee for such Mortgage Loan except to the extent
the Master Servicer determines any such Advance to be nonrecoverable from
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Liquidation Proceeds, Insurance Proceeds or future payments on the Mortgage Loan
for which such Advance was made. Subject to the foregoing, the Master Servicer
shall continue to make such Advances through the date that the Company or the
related Servicer is required to do so under this Agreement or the related
Servicing Agreement, as applicable. If applicable, on the Distribution Account
Deposit Date, the Master Servicer shall present an Officer's Certificate to the
Trustee (i) stating that the Master Servicer elects not to make an Advance in a
stated amount and (ii) detailing the reason it deems the advance to be
nonrecoverable.
Subject to and in accordance with the provisions of Article IX
hereof, in the event the Master Servicer fails to make such Advance, then the
Trustee, as Successor Master Servicer, shall be obligated to make such Advance,
subject to the provisions of this Section 6.01.
Section 6.02 COMPENSATING INTEREST PAYMENTS.
(a) In the event that there is a Prepayment Interest Shortfall
arising from a voluntary Principal Prepayment in part or in full by the
Mortgagor with respect to any EMC Mortgage Loan, the Company shall, to the
extent of the Servicing Fee for such Distribution Date, deposit into the Master
Servicer Collection Account, as a reduction of the Servicing Fee for such
Distribution Date, no later than the close of business on the Remittance Date
immediately preceding such Distribution Date, an amount equal to the Prepayment
Interest Shortfall; and in case of such deposit, the Company shall not be
entitled to any recovery or reimbursement from the Depositor, the Trustee, the
Seller, the Securities Administrator, the Trust Fund or the Certificateholders.
(b) The Master Servicer shall cause each Servicer under the
related Servicing Agreement to remit any required Compensating Interest Payments
to the Master Servicer Collection Account on the Remittance Date.
(c) The Master Servicer shall be required to remit the amount
of any such Prepayment Interest Shortfalls, to the extent of the Master
Servicing Compensation for such Distribution Date, in the event the Company or
the related Servicer is required to make such payment but fails to do so.
Section 6.03 REMIC DISTRIBUTIONS.
On each Distribution Date the Securities Administrator, as
agent for the Trustee, shall be deemed to make distributions (i) to the REMIC I
Regular Interests in accordance with Section 6.06 hereof and (ii) to the REMIC
II Regular Interests in accordance with Section 6.07 hereof.
Section 6.04 DISTRIBUTIONS.
(a) On each Distribution Date, an amount equal to the Group I
Available Funds and the Group II Available Funds for such Distribution Date
shall be withdrawn by the Trustee to the extent of funds on deposit in the
Distribution Account and distributed as directed in accordance with the
Remittance Report for such Distribution Date, in the following order of
priority:
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(i) on each Distribution Date, the Group I Available Funds
will be distributed to the Group I Certificates as follows:
FIRST, to the Class I-A1, Class I-A2, Class I-A3, Class I-A4
and Class I-X Certificates, on a pro rata basis, the Accrued
Certificate Interest on each such Class for such Distribution Date. As
described below, Accrued Certificate Interest on the Class I-A1, Class
I-A2, Class I-A3, Class I-A4 and Class I-X Certificates is subject to
reduction in the event of certain Net Interest Shortfalls allocable
thereto. Any Net Interest Shortfalls shall be allocated among such
classes as described below;
SECOND, to the Class I-A1, Class I-A2, Class I-A3, Class I-A4
and Class I-X Certificates, on a pro rata basis, any Accrued
Certificate Interest thereon remaining undistributed from previous
Distribution Dates, to the extent of remaining Group I Available Funds;
THIRD, concurrently, (i) sequentially, in the following order,
to the Class I-A1 Certificates and Class I-A2 Certificates, in
reduction of the Certificate Principal Balances thereof,
72.72727278281% of the Group I Senior Optimal Principal Amount for such
Distribution Date, (ii) to the Class I-A3 Certificates, in reduction of
the Certificate Principal Balance thereof, 27.27272721719% of the Group
I Senior Optimal Principal Amount for such Distribution Date and (iii)
to the Class I-PO Certificates, the Class I-PO Certificate Principal
Distribution Amount for such Distribution Date, in each case, to the
extent of remaining Group I Available Funds, until the Certificate
Principal Balance of each such class has been reduced to zero; and
FOURTH, the Class I-PO Certificate Deferred Amount to the
Class I-PO Certificates, provided, that (i) such distributions shall
not reduce the Certificate Principal Balance of the Class I-PO
Certificates and (iii) no distribution will be made in respect of the
Class I-PO Certificate Deferred Amount on or after the Cross-Over Date.
(ii) On each Distribution Date, the Group II Available Funds
will be distributed to the Group II Certificates as follows:
FIRST, to the Class II-A, Class II-X, Class R-1, Class R-2
and Class R-3 Certificates, on a pro rata basis, the Accrued
Certificate Interest on each such class for such Distribution Date. As
described below, Accrued Certificate Interest on the Class II-A, Class
II-X, Class R-1, Class R-2 and Class R-3 Certificates is subject to
reduction in the event of certain Net Interest Shortfalls allocable
thereto;
SECOND, to the Class II-A, Class II-X, Class R-1, Class R-2
and Class R-3 Certificates, on a pro rata basis, any Accrued
Certificate Interest thereon remaining undistributed from previous
Distribution Dates, to the extent of remaining Group II Available
Funds;
THIRD, to the Class R-1, Class R-2 and Class R-3 Certificates,
on a pro rata basis, in reduction of the Certificate Principal Balances
thereof, the Group II Senior Optimal Principal Amount for such
Distribution Date, in each case, to the extent of remaining Group II
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Available Funds, until the Certificate Principal Balance of each such
Class has been reduced to zero;
FOURTH, concurrently, (i) to the Class II-A Certificates, in
reduction of the Certificate Principal Balance thereof, the remaining
Group II Senior Optimal Principal Amount for such Distribution Date and
(ii) to the Class II-PO Certificates, the Class II-PO Certificate
Principal Distribution Amount for such Distribution Date, in each case,
to the extent of remaining Group II Available Funds, until the
Certificate Principal Balance of each such Class has been reduced to
zero; and
FIFTH, the Class II-PO Certificate Deferred Amount to the
Class II-PO Certificates, provided, that (i) such distributions shall
not reduce the Certificate Principal Balance of the Class II-PO
Certificates and (ii) no distribution will be made in respect of the
Class II- PO Certificate Deferred Amount on or after the Cross-over
Date.
(iii) Except as provided in paragraphs (iv) and (v) below, on
each Distribution Date on or prior to the Cross-Over Date, an amount equal to
the sum of the remaining Group I Available Funds and Group II Available Funds
after the distributions in (i) and (ii) above will be distributed sequentially,
in the following order, to the Class B-1, Class B-2, Class B-3, Class B-4, Class
B-5 and Class B-6 Certificates, in each case up to an amount equal to and in the
following order: (a) the Accrued Certificate Interest thereon for such
Distribution Date, (b) any Accrued Certificate Interest thereon remaining
undistributed from previous Distribution Dates and (c) such Class's Allocable
Share, if any, for such Distribution Date, in each case, to the extent of the
sum of the remaining Group I Available Funds and Group II Available Funds.
(iv) On each Distribution Date prior to the Cross-Over Date
but after the reduction of the Certificate Principal Balance of all of the Group
I Certificates (other than the Interest Only Certificates and Class PO
Certificates) or all of the Group II Certificates (other than the Interest Only
Certificates and Class PO Certificates) to zero, the remaining class or classes
of Senior Certificates in the remaining Certificate Group (other than the
Interest Only Certificates and Class PO Certificates) will be entitled to
receive in reduction of their Certificate Principal Balances, pro rata based
upon their Certificate Principal Balances immediately prior to such Distribution
Date, in addition to any Principal Prepayments related to such remaining Senior
Certificates' respective Loan Group allocated to such Senior Certificates, 100%
of the applicable Non-PO Percentage of the Principal Prepayments on any Mortgage
Loan in the Loan Group relating to the Class or Classes of Senior Certificates
of the fully repaid Certificate Group; provided, however, that if (A) the
weighted average of the Subordinate Percentages on such Distribution Date equals
or exceeds two times the initial weighted average of the Subordinate Percentages
and (B) the aggregate Stated Principal Balance of the Mortgage Loans delinquent
60 days or more (including for this purpose any such Mortgage Loans in
foreclosure and Mortgage Loans with respect to which the related Mortgaged
Property has been acquired by the Trust), averaged over the last six months, as
a percentage of the sum of the aggregate Certificate Principal Balance of the
Subordinated Certificates does not exceed 50%, then the additional allocation of
Principal Prepayments to the senior certificates in accordance with this clause
(iv) will not be made and 100% of the Non-PO Percentage of the Principal
Prepayments on any Mortgage Loan in the Loan Group relating to the Class or
Classes of Senior Certificates of the fully repaid Certificate Group will be
allocated to the Subordinated Certificates.
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(v) If on any Distribution Date on which the aggregate
Certificate Principal Balance of the Group I Certificates or Group II
Certificates (other than the Interest Only Certificates and the Class PO
Certificates) would be greater than the aggregate Stated Principal Balance of
the Mortgage Loans in its related Loan Group (other than the applicable PO
Percentage of the related Discount Mortgage Loans) and any Subordinated
Certificates are still outstanding in each case after giving effect to
distributions to be made on such Distribution Date, (i) 100% of amounts
otherwise allocable to the Subordinated Certificates in respect of principal
will be distributed to the Group I Certificates or Group II Certificates (other
than the Interest Only Certificates and the Class PO Certificates), as
applicable, in reduction of the Certificate Principal Balances thereof, until
the aggregate Certificate Principal Balance of the Group I Certificates or Group
II Certificates (other than the Interest Only Certificates and the Class PO
Certificates), as applicable, is an amount equal to the aggregate Stated
Principal Balance of the Mortgage Loans in the related Loan Group (other than
the applicable PO Percentage of the related Discount Mortgage Loans), and (ii)
the Accrued Certificate Interest otherwise allocable to the Subordinated
Certificates on such Distribution Date will be reduced, if necessary, and
distributed to such Class or Classes of Senior Certificates in an amount equal
to the Accrued Certificate Interest for such Distribution Date on the excess of
(x) the aggregate Certificate Principal Balance of such Class or Classes of
Senior Certificates over (y) the aggregate Stated Principal Balance of the
Mortgage Loans in the related Loan Group (other than the applicable PO
Percentage of the related Discount Mortgage Loans). Any such reduction in the
Accrued Certificate Interest on the Subordinated Certificates will be allocated
in reverse order of the Subordinated Certificates numerical designations,
commencing with the Class B-6 Certificates.
(vi) If, after distributions have been made pursuant to
priorities FIRST through SECOND of clauses (i) and (ii) above on any
Distribution Date, the remaining Group I Available Funds or Group II Available
Funds are less than the sum of the Group I Senior Optimal Principal Distribution
Amount and the Class I-PO Certificate Principal Distribution Amount or the sum
of the Group II Senior Optimal Principal Amount and the Class II-PO Certificate
Principal Distribution Amount, respectively, such amounts shall be
proportionately reduced, and such remaining Group Available Funds will be
distributed to the Class I-A1, Class I-A2, Class I-A3 and Class I-PO
Certificates, or the Class II-A, Class R-1, Class R-2, Class R-3 and Class II-PO
Certificates, as applicable, on the basis of such reduced amount.
Notwithstanding any reduction in principal distributable to the Class I-PO
Certificates or Class II-PO Certificates pursuant to this paragraph, the
Certificate Principal Balance of the Class I-PO Certificates or Class II-PO
Certificates, as applicable, shall be reduced not only by principal so
distributed but also (x) with respect to the Class I-PO Certificates, by the
difference between (i) principal distributable to the Class I-PO Certificates in
accordance with priority THIRD under clause (i) above and (ii) principal
actually distributed to the Class I-PO Certificate after giving effect to this
paragraph (such difference, the "Class I-PO Certificate Cash Shortfall") and (y)
with respect to the Class II-PO Certificates, by the difference between (i)
principal distributable to the Class II-PO Certificates in accordance with
priority FOURTH under clause (ii) above and (ii) principal actually distributed
to the Class II-PO Certificate after giving effect to this paragraph (such
difference, the "Class II-PO Certificate Cash Shortfall"). The Class I-PO
Certificate Cash Shortfall with respect to any Distribution Date will be added
to the Class I-PO Certificate Deferred Amount and the Class II-PO Certificate
Cash Shortfall with respect to any Distribution Date will be added to the Class
II-PO Certificate Deferred Amount.
(vii) On each Distribution Date, any Group Available Funds
remaining after
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payment of interest and principal to the Classes of Certificates entitled
thereto, as described above, will be distributed to the Class R-3 Certificates;
provided that if on any Distribution Date there are any Group I Available Funds
or Group II Available Funds remaining after payment of interest and principal to
a Class or Classes of Certificates entitled thereto, such amounts will be
distributed to the other Classes of Senior Certificates, pro rata, based upon
their Certificate Principal Balances, until all amounts due to all Classes of
Senior Certificates have been paid in full, before any amounts are distributed
to the Class R-3 Certificates. It is not anticipated that there will be any
significant amounts remaining for such distribution.
(viii) On each Distribution Date, all amounts representing
Prepayment Charges in respect of the Mortgage Loans, other than the Countrywide
Loans for which such Prepayment Charges will be retained by Countrywide
Servicing as part of its servicing compensation, received during the related
Prepayment Period and deposited in the Distribution Account will be withdrawn
from the Distribution Account and distributed by the Trustee in accordance with
the Remittance Report to the Class P Certificates and shall not be available for
distribution to the holders of any other Class of Certificates. The payment of
such Prepayment Charges shall not reduce the Certificate Principal Balance of
the Class P Certificates.
(b) Subject to Section 11.02 hereof respecting the final
distribution, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor, if (i) such Holder has
so notified the Trustee at least 5 Business Days prior to the related Record
Date and (ii) such Holder shall hold Regular Certificates with aggregate
principal denominations of not less than $1,000,000 or evidencing a Percentage
Interest aggregating 10% or more with respect to such Class or, if not, by check
mailed by first class mail to such Certificateholder at the address of such
holder appearing in the Certificate Register. Notwithstanding the foregoing, but
subject to Section 11.02 hereof respecting the final distribution, distributions
with respect to Certificates registered in the name of a Depository shall be
made to such Depository in immediately available funds.
(c) On or before 5:00 p.m. Eastern time on the fifth Business
Day immediately preceding each Distribution Date, the Master Servicer shall
deliver a report to the Securities Administrator in the form of a computer
readable magnetic tape (or by such other means as the Master Servicer and the
Securities Administrator may agree from time to time) containing such data and
information, as agreed to by the Master Servicer and the Securities
Administrator such as to permit the Securities Administrator to prepare the
Monthly Statement to Certificateholders and to direct the Trustee in writing to
make the required distributions for the related Distribution Date (the
"Remittance Report"). The Securities Administrator shall deliver a Remittance
Report to the Trustee on or before 5:00 p.m. Eastern time on the Business Day
immediately preceding each Distribution Date.
Section 6.04A ALLOCATION OF REALIZED LOSSES.
(a) On or prior to each Determination Date, the Master
Servicer shall determine the amount of any Realized Loss in respect of each
Mortgage Loan that occurred during the immediately preceding calendar month.
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(b) With respect to any Certificates on any Distribution Date,
the principal portion of each Realized Loss on a Mortgage Loan shall be
allocated as follows:
(i) The applicable PO Percentage of any Realized Loss on a
Discount Mortgage Loan in Loan Group I and any Class I-PO Certificate
Cash Shortfall shall be allocated to the Class I-PO Certificates;
(ii) The applicable PO Percentage of any Realized Loss on a
Discount Mortgage Loan in Loan Group II and any Class II-PO Certificate
Cash Shortfall shall be allocated to the Class II-PO Certificates; and
(iii) The applicable Non-PO Percentage of any Realized Loss on
a Mortgage Loan in Loan Group I and Loan Group II shall be allocated as
follows:
FIRST, to the Class B-6 Certificates until the
Certificate Principal Balance thereof has been
reduced to zero;
SECOND, to the Class B-5 Certificates until the
Certificate Principal Balance thereof has been
reduced to zero;
THIRD, to the Class B-4 Certificates until the
Certificate Principal Balance thereof has been
reduced to zero;
FOURTH, to the Class B-3 Certificates until the
Certificate Principal Balance thereof has been
reduced to zero;
FIFTH, to the Class B-2 Certificates until the
Certificate Principal Balance thereof has been
reduced to zero;
SIXTH, to the Class B-1 Certificates until the
Certificate Principal Balance thereof has been
reduced to zero;
SEVENTH, to the Classes of related Senior
Certificates (other than the Interest Only
Certificates, Class PO Certificates and the Class P
Certificates), pro rata, in accordance with their
Certificate Principal Balances; and
EIGHTH, to the Senior Certificates (other than the
Interest Only Certificates, Class PO Certificates and
the Class P Certificates), pro rata, in accordance
with their Certificate Principal Balances.
(c) Notwithstanding the foregoing clause (b), no such
allocation of any Realized Loss shall be made on a Distribution Date to any
Class of Certificates to the extent that such allocation would result in the
reduction of the aggregate Certificate Principal Balances of all the
Certificates as of such Distribution Date, after giving effect to all
distributions and prior allocations of Realized Losses on such date, to an
amount less than the aggregate Stated Principal Balance of
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all of the Mortgage Loans as of the first day of the month of such Distribution
Date (such limitation, the "Loss Allocation Limitation").
(d) Any Realized Losses allocated to a Class of Certificates
shall be allocated among the Certificates of such Class in proportion to their
respective Certificate Principal Balances. Any allocation of Realized Losses
shall be accomplished by reducing the Certificate Principal Balances of the
related Certificates on the related Distribution Date.
(e) Realized Losses shall be allocated on the Distribution
Date in the month following the month in which such loss was incurred and, in
the case of the principal portion thereof, after giving effect to distributions
made on such Distribution Date, except that the aggregate amount of Realized
Losses to be allocated to the Class I-PO Certificates and Class II-PO
Certificates on any Distribution Date through the Cross-Over Date will be taken
into account in determining distributions in respect of the Class I-PO
Certificate Deferred Amount and Class II-PO Certificate Deferred Amount,
respectively, for such Distribution Date.
(f) On each Distribution Date, the Securities Administrator,
based upon information received from the Servicers, shall determine the Applied
Realized Loss Amount. Any such Applied Realized Loss Amount shall effect a
corresponding reduction in the Certificate Principal Balance of (i) if prior to
the Cross-Over Date, the Subordinated Certificates, in the reverse order of
their numerical Class designations and (ii) from and after the Cross-Over Date,
the Senior Certificates (other than the Interest Only Certificates and the Class
P Certificates) as specified in clauses (b)(i), (ii) and (iii) above, which
reduction shall occur on such Distribution Date after giving effect to
distributions made on such Distribution Date.
(g) On each Distribution Date, on or prior to the Cross-Over
Date the Securities Administrator shall determine the Class I-PO Certificate
Deferred Payment Writedown Amount with respect to the Class I-PO Certificates
and the Class II-PO Certificate Deferred Payment Writedown Amount with respect
to the Class II-PO Certificates, if any. Any such Class I-PO Certificate
Deferred Payment Writedown Amount or Class II-PO Certificate Deferred Payment
Writedown Amount shall effect a corresponding reduction in the Certificate
Principal Balance of the Subordinated Certificates, in the reverse order of
their numerical Class designations, through the application of the Applied
Realized Loss Amount pursuant to clause (f) above.
(h) Any Net Interest Shortfall will be allocated among the
Classes of Certificates (other than the Class PO Certificates and the Class P
Certificates) in proportion to the respective amounts of Accrued Certificate
Interest that would have been allocated thereto in the absence of such Net
Interest Shortfall for such Distribution Date. The interest portion of any
Realized Losses with respect to the Mortgage Loans occurring on or prior to the
Cross-Over Date will not be allocated among any Certificates, but will reduce
the amount of Group Available Funds on the related Distribution Date. As a
result of the subordination of the Subordinated Certificates in right of
distribution, such Realized Losses will be borne by the Subordinated
Certificates in inverse order of their numerical Class designations. Following
the Cross-Over Date, the interest portion of Realized Losses on the Mortgage
Loans in any Loan Group will be allocated to the related Senior Certificates
(other than the Class P Certificates and the Class PO Certificates).
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(i) In addition, in the event that the Master Servicer
receives any Subsequent Recoveries from a Servicer, the Master Servicer shall
deposit such funds into the Master Servicer Collection Account pursuant to
Section 5.05. If, after taking into account such Subsequent Recoveries, the
amount of a Realized Loss is reduced, the amount of such Subsequent Recoveries
will be applied to increase the Certificate Principal Balance of the Class of
Subordinate Certificates with the highest payment priority to which Realized
Losses have been allocated, but not by more than the amount of Realized Losses
previously allocated to that Class of Subordinate Certificates pursuant to this
Section 6.04A. The amount of any remaining Subsequent Recoveries will be applied
to sequentially increase the Certificate Principal Balance of the Subordinate
Certificates, beginning with the Class of Subordinate Certificates with the next
highest payment priority, up to the amount of such Realized Losses previously
allocated to such Class of Certificates pursuant to this Section 6.04A. Holders
of such Certificates will not be entitled to any payment in respect of current
interest on the amount of such increases for any Accrual Period preceding the
Distribution Date on which such increase occurs. Any such increases shall be
applied to the Certificate Principal Balance of each Subordinate Certificate of
such Class in accordance with its respective Percentage Interest.
Section 6.05 MONTHLY STATEMENTS TO CERTIFICATEHOLDERS.
(a) Not later than each Distribution Date, the Securities
Administrator shall prepare and make available to each Holder of Certificates,
the Trustee, the Master Servicer and the Depositor a statement setting forth for
the Certificates:
(i) the amount of the related distribution to Holders of each
Class allocable to principal, separately identifying (A) the aggregate
amount of any Principal Prepayments included therein and (B) the
aggregate of all scheduled payments of principal included therein;
(ii) the amount of such distribution to Holders of each Class
(other than the Class P Certificates and Class PO Certificates)
allocable to interest;
(iii) the Certificate Principal Balance or Certificate
Notional Balance of each Class after giving effect (i) to all
distributions allocable to principal on such Distribution Date and (ii)
the allocation of any Applied Realized Loss Amounts for such
Distribution Date;
(iv) the aggregate of the Stated Principal Balances of all of
the Mortgage Loans and of the Mortgage Loans in each Loan Group for the
following Distribution Date;
(v) the amount of the Master Servicing Fee paid to or retained
by the Master Servicer for the related Due Period and the amount of the
Servicing Fees paid to or retained by the Company and the related
Servicer for the related Due Period;
(vi) the Pass-Through Rate for each Class of Certificates with
respect to the current Accrual Period;
(vii) the amount of Advances for each Loan Group included in
the distribution on such Distribution Date;
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(viii) the cumulative amount of Applied Realized Loss Amounts
to date;
(ix) the number and aggregate principal amounts of Mortgage
Loans in each Loan Group for each such Loan Group and the mortgage pool
(A) Delinquent (exclusive of Mortgage Loans in foreclosure and
bankruptcy) (1) 31 to 60 days, (2) 61 to 90 days and (3) 91 or more
days, (B) in foreclosure and delinquent (1) 31 to 60 days, (2) 61 to 90
days and (3) 91 or more days and (C) in bankruptcy and delinquent (1)
31 to 60 days, (2) 61 to 90 days and (3) 91 or more days, in each case
as of the close of business on the last day of the calendar month
preceding such Distribution Date;
(x) with respect to any Mortgage Loan that was liquidated
during the preceding calendar month in each Loan Group and the mortgage
pool, the loan number and Stated Principal Balance of, and Realized
Loss on, such Mortgage Loan as of the end of the related Prepayment
Period;
(xi) the total number and principal balance of any real estate
owned or REO Properties in each Loan Group as of the end of the related
Prepayment Period;
(xii) 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 60 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 calendar month
preceding such Distribution Date;
(xiii) the Realized Losses for each Loan Group during the
related Prepayment Period and the cumulative Realized Losses for each
Loan Group and the mortgage pool through the end of the preceding
month;
(xiv) the then applicable Senior Percentages, the Senior
Prepayment Percentages, the Subordinate Percentages and the Subordinate
Prepayment Percentages; and
(xv) the amount of the distribution made on such Distribution
Date to the Holders of the Class P Certificates allocable to Prepayment
Charges.
The Securities Administrator may make the foregoing Monthly
Statement (and, at its option, any additional files containing the same
information in an alternative format) available each month to Certificateholders
via the Securities Administrator's internet website. The Securities
Administrator's internet website shall initially be located at
"xxx.xxxxxxx.xxx". Assistance in using the website can be obtained by calling
the Securities Administrator's customer service desk at (000) 000-0000. Parties
that are unable to use the above distribution options are entitled to have a
paper copy mailed to them via first class mail by calling the customer service
desk and indicating such. The Securities Administrator may change the way
Monthly Statements are distributed in order to make such distributions more
convenient or more accessible to the above parties.
To the extent timely received from the Securities Administrator, the
Trustee will also make the related Monthly Statements available to
Certificateholders via the Trustee's internet website.
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The Trustee's internet website will initially be located at
"xxxxx://xxxxxxxxxxxxxxxxxxxxxx.xxxxxx.xxx". Assistance in using the Trustee's
internet website can be obtained by calling the Trustee's customer service desk
at (000) 000-0000.
(b) The Securities Administrator's responsibility for making
the above information available to the Certificateholders is limited to the
availability, timeliness and accuracy of the information derived from the Master
Servicer, the Company and the Servicers. The Securities Administrator will make
available a copy of each statement provided pursuant to this Section 6.05 to
each Rating Agency.
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished upon request to each
Person who at any time during the calendar year was a Certificateholder, a
statement based on the information provided by the Securities Administrator
containing the information set forth in clauses (a)(i) and (a)(ii) of this
Section 6.05 aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee or the Securities
Administrator pursuant to any requirements of the Code as from time to time in
effect.
(d) Upon filing with the Internal Revenue Service, the
Securities Administrator shall furnish to the Holders of the Residual
Certificates the applicable Form 1066 and each applicable Form 1066Q and shall
respond promptly to written requests made not more frequently than quarterly by
any Holder of a Residual Certificate with respect to the following matters:
(i) The original projected principal and interest cash flows
on the Closing Date on each Class of regular and residual interests
created hereunder and on the Mortgage Loans, based on the Prepayment
Assumption;
(ii) The projected remaining principal and interest cash flows
as of the end of any calendar quarter with respect to each Class of
regular and residual interests created hereunder and the Mortgage
Loans, based on the Prepayment Assumption;
(iii) The applicable Prepayment Assumption and any interest
rate assumptions used in determining the projected principal and
interest cash flows described above;
(iv) The original issue discount (or, in the case of the
Mortgage Loans, market discount) or premium accrued or amortized
through the end of such calendar quarter with respect to each Class of
regular or residual interests created hereunder and to the Mortgage
Loans, together with each constant yield to maturity used in computing
the same;
(v) The treatment of losses realized with respect to the
Mortgage Loans or the regular interests created hereunder, including
the timing and amount of any cancellation of indebtedness income of a
REMIC with respect to such regular interests or bad debt deductions
claimed with respect to the Mortgage Loans;
(vi) The amount and timing of any non-interest expenses of a
REMIC; and
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(vii) Any taxes (including penalties and interest) imposed on
the REMIC, including, without limitation, taxes on "prohibited
transactions," "contributions" or "net income from foreclosure
property" or state or local income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and (iv)
above shall be provided by the Depositor pursuant to Section 10.12.
Section 6.06 REMIC DESIGNATIONS AND REMIC I ALLOCATIONS.
(a) The Trustee shall elect that each of REMIC I, REMIC II and
REMIC III and shall be treated as a REMIC under Section 860D of the Code. Any
inconsistencies or ambiguities in this Agreement or in the administration of
this Agreement shall be resolved in a manner that preserves the validity of such
REMIC elections. The assets of REMIC I shall include the Mortgage Loans and all
interest owing in respect of and principal due thereon, the Distribution
Account, the Master Servicer Collection Account, the Protected Accounts
maintained by the Company and the Servicers, any REO Property, any proceeds of
the foregoing and any other assets subject to this Agreement. The REMIC I
Regular Interests shall constitute the assets of REMIC II. The REMIC II Regular
Interests shall constitute the assets of REMIC III.
(b) On each Distribution Date, the Trustee shall cause the
Group I Available Funds and the Group II Available Funds, in the following order
of priority and in accordance with the Remittance Report, to be distributed by
REMIC I to REMIC II on account of the REMIC I Regular Interests or withdrawn
from the Distribution Account and distributed to the Holders of the Class R-1
Certificates, as the case may be:
(i) Uncertificated Accrued Interest on the Uncertificated
REMIC I Regular Interests for such Distribution Date, plus any
Uncertificated Accrued Interest thereon remaining unpaid from
any previous Distribution Date; and
(ii) In accordance with the priorities set forth in Section
6.06(c), an amount equal to the sum of the amounts
distributable in respect of principal on the REMIC III
Certificates (other than the Interest Only Certificates) under
Section 6.04.
(c) The amount described in Section 6.06(b)(ii) shall be
deemed distributed as follows:
FIRST, to each REMIC I Regular Interest ending with the
designation "A," so that the Uncertificated Principal Balance of each such REMIC
I Regular Interest is equal to 0.01% of the excess of (x) the aggregate Stated
Principal Balance of the Mortgage Loans in the related Loan Group over (y) the
Certificate Principal Balance of the Senior Certificates in the related Loan
Group; provided, however, that if any such excess is a larger number than in the
preceding distribution period, the least amount of principal shall be deemed
distributed to such REMIC I Regular Interests such that the REMIC I Subordinated
Balance Ratio is maintained; provided, further that all distributions on such
REMIC I Regular Interests shall be deemed to be from principal received on
Mortgage Loans in the related Loan Group;
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SECOND, REMIC I Regular Interest LTI-I-PO shall be deemed
distributed a portion of the principal received on the Discount Mortgage Loans
in Loan Group I in an amount equal to the amount deemed distributed on REMIC II
Regular Interest LTII-I-PO on such Distribution Date and REMIC I Regular
Interest LTI-II-PO shall be deemed distributed a portion of the principal
received on the Discount Mortgage Loans in Loan Group II in an amount equal to
the amount deemed distributed on REMIC II Regular Interest LTII-II-PO on such
Distribution Date; and
THIRD, any remaining principal received on Mortgage Loans in
each Loan Group shall be deemed distributed to the related REMIC I Regular
Interest ending with the designation "ZZZ."
On each Distribution Date, all amounts representing Prepayment
Charges in respect of the Mortgage Loans received during the related Prepayment
Period will be distributed by REMIC I to the Holders of REMIC I Regular Interest
LTI-P. The payment of such Prepayment Charges to the Holders of REMIC I Regular
Interest LTI-P shall not reduce the Uncertificated Principal Balance thereof. On
the Distribution Date immediately following the Prepayment Period in which the
last Prepayment Charge is collectible on the Mortgage Loans, the amount on
deposit in the Class P Certificate Account shall be deemed distributed to REMIC
I Regular Interest LTI-P in reduction of the Uncertificated Principal Balance
thereof.
(d) In determining from time to time the REMIC I Regular
Interest distribution amounts, Realized Losses on the Mortgage Loans in Loan
Group I allocated to the REMIC II Regular Interests shall be allocated to the
REMIC I Regular Interests as follows:
FIRST, to each REMIC I Regular Interest ending with the
designation "A," so that the Uncertificated Principal Balance of each such REMIC
I Regular Interest is equal to 0.01% of the excess of (x) the aggregate Stated
Principal Balance of the Mortgage Loans in the related Loan Group over (y) the
Certificate Principal Balance of the Senior Certificates in the related Loan
Group; provided, however, that if any such excess is a larger number than in the
preceding distribution period, the least amount of Realized Losses principal
shall be applied to such REMIC I Regular Interests such that the REMIC I
Subordinated Balance Ratio is maintained; provided, further that all Realized
Losses applied to such REMIC I Regular Interests shall be deemed to be Realized
Losses on Mortgage Loans in the related Loan Group;
SECOND, Realized Losses applied to REMIC II Regular Interest
LTII-I-PO shall be deemed applied to REMIC I Regular Interest LTI-I-PO and
Realized Losses applied to REMIC II Regular Interest LTII-II-PO shall be deemed
applied to REMIC I Regular Interest LTI-II-PO; and
THIRD, any remaining Realized Losses with respect to Mortgage
Loans in each Loan Group shall be applied to the related REMIC I Regular
Interest ending with the designation "ZZZ."
(e) Notwithstanding the deemed distributions on the REMIC I
Regular Interests described in this Section 6.06, distributions of funds from
the Distribution Account shall be made only in accordance with Section 6.04.
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Section 6.07 REMIC II ALLOCATIONS.
(a) On each Distribution Date, the Trustee shall cause the
Group I Available Funds and the Group II Available Funds, in the following order
of priority and in accordance with the Remittance Report, to be distributed by
REMIC II to REMIC III on account of the REMIC II Regular Interests or withdrawn
from the Distribution Account and distributed to the Holders of the Class R-2
Certificates, as the case may be:
(i) Uncertificated Accrued Interest on the Uncertificated
REMIC II Regular Interests for such Distribution Date, plus
any Uncertificated Accrued Interest thereon remaining unpaid
from any previous Distribution Date; and
(ii) In accordance with the priorities set forth in Section
6.07(b), an amount equal to the sum of the amounts
distributable in respect of principal on the REMIC III
Certificates (other than the Interest Only Certificates).
On each Distribution Date, all amounts representing Prepayment
Charges in respect of the Mortgage Loans received during the related Prepayment
Period by REMIC I Regular Interest LTI-P shall be deemed distributed to REMIC II
Regular Interest LTII-P. The payment of such amounts to the Holders of REMIC II
Regular Interest LTII-P shall not reduce the Uncertificated Principal Balance
thereof. On the Distribution Date immediately following the Prepayment Period in
which the last Prepayment Charge is collectible on the Mortgage Loans, the
amount on deposit in the Class P Certificate Account shall be deemed distributed
to REMIC II Regular Interest LTII-P in reduction of the Uncertificated Principal
Balance thereof.
(b) The amount described in Section 6.07(a)(ii) shall be
deemed distributed to the REMIC II Regular Interests (other than REMIC II
Regular Interests LTII-I-X and LTII-II-X) in amounts equal to the amounts
distributed to the Corresponding Certificates.
(c) Realized Losses allocated pursuant to Section 6.04A shall
be allocated to the REMIC II Regular Interests (other than REMIC II Regular
Interests LTII-I-X and LTII-II-X) in amounts equal to the amounts allocated to
the Corresponding Certificates.
(d) Notwithstanding the deemed distributions on the REMIC II
Regular Interests described in this Section 6.07, distributions of funds from
the Distribution Account shall be made only in accordance with Section 6.04.
Section 6.08 CLASS P CERTIFICATE ACCOUNT. The Trustee shall establish
and maintain with itself a separate, segregated trust account titled "Bear
Xxxxxxx Asset Backed Securities I Trust 2004-AC2 Class P Certificate Account".
On the Closing Date, the Depositor will deposit, or cause to be deposited in the
Class P Certificate Account $100.00. The amount on deposit in the Class P
Certificate Account shall be held uninvested. On the April 2009 Distribution
Date, the Trustee shall withdraw the amount on deposit in the Class P
Certificate Account and remit such amount to the holders of the Class P
Certificates in reduction of the Certificate Principal Balance thereof.
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ARTICLE VII
THE CERTIFICATES
Section 7.01 THE CERTIFICATES.
(a) The Depository, the Depositor and the Trustee have entered
into a Depository Agreement dated as of the Closing Date (the "Depository
Agreement"). Except for the Residual Certificates, the Private Certificates and
the Individual Certificates and as provided in Subsection 7.01(b), the
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times: (i) registration of such Certificates may not
be transferred by the Trustee except to a successor to the Depository; (ii)
ownership and transfers of registration of such Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iii) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (iv) the Trustee shall deal with the
Depository as representative of such Certificate Owners of the respective Class
of Certificates for purposes of exercising the rights of Certificateholders
under this Agreement, and requests and directions for and votes of such
representative shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; and (v) the Trustee may rely and shall
be fully protected in relying upon information furnished by the Depository with
respect to its Depository Participants.
The Residual Certificates and the Private Certificates are
initially Physical Certificates. If at any time the Holders of all of the
Certificates of one or more such Classes request that the Trustee cause such
Class to become Global Certificates, the Trustee and the Depositor will take
such action as may be reasonably required to cause the Depository to accept such
Class or Classes for trading if it may legally be so traded.
All transfers by Certificate Owners of such respective Classes
of Book-Entry Certificates and any Global Certificates shall be made in
accordance with the procedures established by the Depository Participant or
brokerage firm representing such Certificate Owners. Each Depository Participant
shall only transfer Book-Entry Certificates of Certificate Owners it represents
or of brokerage firms for which it acts as agent in accordance with the
Depository's normal procedures.
(b) If (i)(A) the Depositor advises the Trustee in writing
that the Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Depositor is unable to locate a
qualified successor within 30 days or (ii) the Depositor at its option advises
the Trustee in writing that it elects to terminate the book-entry system through
the Depository, the Trustee shall request that the Depository notify all
Certificate Owners of the occurrence of any such event and of the availability
of definitive, fully registered Certificates to Certificate Owners requesting
the same. Upon surrender to the Trustee of the Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall issue the definitive Certificates. Neither the Depositor nor
the Trustee shall be liable for any delay in delivery of any instructions
required under this section and may conclusively rely on, and shall be protected
in relying on, such instructions.
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In addition, if an Event of Default has occurred and is
continuing, each Certificate Owner materially adversely affected thereby may at
its option request a definitive Certificate evidencing such Certificate Owner's
Percentage Interest in the related Class of Certificates. In order to make such
request, such Certificate Owner shall, subject to the rules and procedures of
the Depository, provide the Depository or the related Depository Participant
with directions for the Trustee to exchange or cause the exchange of the
Certificate Owner's interest in such Class of Certificates for an equivalent
Percentage Interest in fully registered definitive form. Upon receipt by the
Trustee of instructions from the Depository directing the Trustee to effect such
exchange (such instructions to contain information regarding the Class of
Certificates and the Certificate Principal Balance being exchanged, the
Depository Participant account to be debited with the decrease, the registered
holder of and delivery instructions for the definitive Certificate, and any
other information reasonably required by the Trustee), (i) the Trustee shall
instruct the Depository to reduce the related Depository Participant's account
by the aggregate Certificate Principal Balance of the definitive Certificate,
(ii) the Trustee shall execute, authenticate and deliver, in accordance with the
registration and delivery instructions provided by the Depository, a definitive
Certificate evidencing such Certificate Owner's Percentage Interest in such
Class of Certificates and (iii) the Trustee shall execute and authenticate a new
Book-Entry Certificate reflecting the reduction in the Certificate Principal
Balance of such Class of Certificates by the amount of the definitive
Certificates.
The Certificates will have the following initial Certificate
Principal Balances and Pass-Through Rates as set forth in the following table:
Original Certificate Principal
Class Balance Pass-Through Rate
----- ------- -----------------
I-A1 $ 114,500,000.00 Class I-A1 Pass-Through Rate
I-A2 $ 4,537,091.00 Class I-A2 Pass-Through Rate
I-A3 $ 44,638,909.00 Class I-A3 Pass-Through Rate
I-A4 N/A Class I-A4 Pass-Through Rate
II-A $ 85,959,000.00 Class II-A Pass-Through Rate
I-X N/A Class I-X Pass-Through Rate
II-X N/A Class II-X Pass-Through Rate
I-PO $ 1,920,994.00 N/A
II-PO $ 256,831.00 N/A
B-1 $ 7,040,000.00 Class B Pass-Through Rate
B-2 $ 3,926,600.00 Class B Pass-Through Rate
B-3 $ 2,572,000.00 Class B Pass-Through Rate
B-4 $ 2,031,000.00 Class B Pass-Through Rate
B-5 $ 812,000.00 Class B Pass-Through Rate
B-6 $ 2,573,178.01 Class B Pass-Through Rate
P $ 100.00 N/A
R-1 $ 50.00 Class R Pass-Through Rate
R-2 $ 50.00 Class R Pass-Through Rate
R-3 $ 50.00 Class R Pass-Through Rate
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(c) The Certificates shall be substantially in the forms set
forth in Exhibits X-0, X-0, X-0 and A-4. On original issuance, the Trustee shall
sign, countersign and shall deliver them at the direction of the Depositor.
Pending the preparation of definitive Certificates of any Class, the Trustee may
sign and countersign temporary Certificates that are printed, lithographed or
typewritten, in authorized denominations for Certificates of such Class,
substantially of the tenor of the definitive Certificates in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers or authorized signatories executing such
Certificates may determine, as evidenced by their execution of such
Certificates. If temporary Certificates are issued, the Depositor will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office of the Trustee, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Certificates, the
Trustee shall sign and countersign and deliver in exchange therefor a like
aggregate principal amount, in authorized denominations for such Class, of
definitive Certificates of the same Class. Until so exchanged, such temporary
Certificates shall in all respects be entitled to the same benefits as
definitive Certificates.
(d) Each Class of Book-Entry Certificates will be registered
as a single Certificate of such Class held by a nominee of the Depository or the
DTC Custodian, and beneficial interests will be held by investors through the
book-entry facilities of the Depository in minimum denominations of, in the case
of the Senior Certificates (other than the Class P Certificates and the Residual
Certificates) and the Offered Subordinated Certificates, $25,000 and in each
case increments of $1,000 in excess thereof, except that one Certificate of each
such Class may be issued in a different amount so that the sum of the
denominations of all outstanding Certificates of such Class shall equal the
Certificate Principal Balance of such Class on the Closing Date. On the Closing
Date, the Trustee shall execute and countersign Physical Certificates all in an
aggregate principal amount that shall equal the Certificate Principal Balance of
such Class on the Closing Date. The Private Certificates shall be issued in
certificated fully-registered form in minimum dollar denominations of $25,000
and integral multiples of $1,000 in excess thereof, except that one Private
Certificate of each Class may be issued in a different amount so that the sum of
the denominations of all outstanding Private Certificates of such Class shall
equal the Certificate Principal Balance of such Class on the Closing Date. The
Class P Certificate shall be issued in certificated fully-registered form, in
the denomination of $100. The Residual Certificates shall each be issued in
certificated fully-registered form, each, in the denomination of $50. Each Class
of Global Certificates, if any, shall be issued in fully registered form in
minimum dollar denominations of $25,000 and integral multiples of $1,000 in
excess thereof, except that one Certificate of each Class may be in a different
denomination so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Certificate Principal Balance of such
Class on the Closing Date. On the Closing Date, the Trustee shall execute and
countersign (i) in the case of each Class of Offered Certificates, the
Certificate in the entire Certificate Principal Balance of the respective Class
on the Closing Date, (ii) in the case of each Class of Private Certificates
(other than the Class P Certificate), Individual Certificates all in an
aggregate principal amount that shall equal the Certificate Principal Balance of
each such respective Class on the Closing Date and (iii) in the case of the
Class P Certificate, the Certificate in the entire Certificate Principal Balance
of such Class on the Closing Date. The Certificates referred to in clause (i)
and if at any time there are to be Global Certificates, the Global Certificates
shall be delivered by the Depositor to the Depository or pursuant
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to the Depository's instructions, shall be delivered by the Depositor on behalf
of the Depository to and deposited with the DTC Custodian. The Trustee shall
sign the Certificates by facsimile or manual signature and countersign them by
manual signature on behalf of the Trustee by one or more authorized signatories,
each of whom shall be Responsible Officers of the Trustee or its agent. A
Certificate bearing the manual and facsimile signatures of individuals who were
the authorized signatories of the Trustee or its agent at the time of issuance
shall bind the Trustee, notwithstanding that such individuals or any of them
have ceased to hold such positions prior to the delivery of such Certificate.
(e) No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
the manually executed countersignature of the Trustee or its agent, and such
countersignature upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly executed and delivered hereunder.
All Certificates issued on the Closing Date shall be dated the Closing Date. All
Certificates issued thereafter shall be dated the date of their
countersignature.
(f) The following legend shall be placed on the Residual
Certificates and the Class P Certificates, whether upon original issuance or
upon issuance of any other Certificate of any such Class in exchange therefor or
upon transfer thereof:
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY
BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, UNLESS THE PROPOSED TRANSFEREE PROVIDES THE TRUSTEE WITH AN OPINION OF
COUNSEL ADDRESSED TO THE DEPOSITOR, TRUSTEE, MASTER SERVICER AND SECURITIES
ADMINISTRATOR AND ON WHICH THEY MAY RELY THAT IS SATISFACTORY TO THE TRUSTEE
THAT THE PURCHASE OF CERTIFICATES ON BEHALF OF SUCH PERSON WILL NOT RESULT IN OR
CONSTITUTE A NONEXEMPT PROHIBITED TRANSACTION, IS PERMISSIBLE UNDER APPLICABLE
LAW AND WILL NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART OF THE
DEPOSITOR, THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR OR THE TRUSTEE.
The following legend shall be placed upon the Private Certificates (other than
the Class P Certificates), whether upon original issuance or upon issuance of
any other Certificate of any such Class in exchange therefor or upon transfer
thereof:
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY
BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, UNLESS THE TRANSFEREE CERTIFIES OR REPRESENTS THAT THE PROPOSED
TRANSFER AND HOLDING OF A CERTIFICATE AND THE SERVICING, MANAGEMENT AND
OPERATION OF THE TRUST AND ITS ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED
TRANSACTION WHICH IS NOT
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COVERED UNDER AN INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION,
INCLUDING, BUT NOT LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14,
XXX 00-00, XXX 00-0, XXX 95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY
ADDITIONAL OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE SECURITIES
ADMINISTRATOR, THE MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED
REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE OR
UNLESS THE OPINION SPECIFIED IN SECTION 7.08 OF THE AGREEMENT IS PROVIDED.
Section 7.02 CERTIFICATE REGISTER; REGISTRATION OF TRANSFER AND
EXCHANGE OF CERTIFICATES.
(a) The Trustee shall maintain an office or agency at which a
Certificate Register shall be maintained, in which, subject to such reasonable
regulations as it may prescribe, the Trustee shall provide for the registration
of Certificates and of transfers and exchanges of Certificates as herein
provided. Such office is currently located at U.S. Bank National Association,60
Xxxxxxxxxx Avenue, Bond Drop Window, Xx. Xxxx, Xxxxxxxxx 00000. The Trustee will
give prompt written notice to the Certificateholders of any change in the
location of such office or agency.
(b) Subject to Subsection 7.01(a) and, in the case of any
Global Certificate or Individual Certificate upon the satisfaction of the
conditions set forth below, upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee maintained for such purpose,
the Trustee shall sign, countersign and shall deliver, in the name of the
designated transferee or transferees, a new Certificate of a like Class and
aggregate Percentage Interest, but bearing a different number.
(c) By acceptance of an Individual Certificate, whether upon
original issuance or subsequent transfer, each holder of such a Certificate
acknowledges the restrictions on the transfer of such Certificate set forth in
the Securities Legend and agrees that it will transfer such a Certificate only
as provided herein. In addition to the provisions of Subsection 7.02(h), the
following restrictions shall apply with respect to the transfer and registration
of transfer of an Individual Certificate to a transferee that takes delivery in
the form of an Individual Certificate:
(i) The Trustee shall register the transfer of an Individual
Certificate if the requested transfer is being made to a transferee who has
provided the Trustee with a Rule 144A Certificate or comparable evidence as to
its QIB status and the transferor has provided the Trustee with a Transferor
Certificate.
(ii) The Trustee shall register the transfer of any Individual
Certificate if (x) the transferor has advised the Trustee in writing that the
Certificate is being transferred to an Institutional Accredited Investor and the
transferor has provided the Trustee with a Transferor Certificate; and (y) prior
to the transfer the transferee furnishes to the Trustee an Investment Letter
(and the Trustee shall be fully protected in so doing), provided that, if based
upon an Opinion of Counsel addressed to the Trustee to the effect that the
delivery of (x) and (y) above are not sufficient to confirm that the proposed
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and other
applicable laws, the Trustee shall as a condition of the registration of any
such transfer require the transferor
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to furnish such other certifications, legal opinions or other information prior
to registering the transfer of an Individual Certificate as shall be set forth
in such Opinion of Counsel.
(d) Subject to Subsection 7.02(h), so long as a Global
Certificate of such Class is outstanding and is held by or on behalf of the
Depository, transfers of beneficial interests in such Global Certificate, or
transfers by holders of Individual Certificates of such Class to transferees
that take delivery in the form of beneficial interests in the Global
Certificate, may be made only in accordance with this Subsection 7.02(d) and in
accordance with the rules of the Depository:
(i) In the case of a beneficial interest in the Global
Certificate being transferred to an Institutional Accredited Investor, such
transferee shall be required to take delivery in the form of an Individual
Certificate or Certificates and the Trustee shall register such transfer only
upon compliance with the provisions of Subsection 7.02(c)(ii).
(ii) In the case of a beneficial interest in a Class of Global
Certificates being transferred to a transferee that takes delivery in the form
of an Individual Certificate or Certificates of such Class, except as set forth
in clause (i) above, the Trustee shall register such transfer only upon
compliance with the provisions of Subsection 7.02(c)(i).
(iii) In the case of an Individual Certificate of a Class
being transferred to a transferee that takes delivery in the form of a
beneficial interest in a Global Certificate of such Class, the Trustee shall
register such transfer if the transferor has provided the Trustee with a
Transferor Certificate and the transferee has provided the Trustee with a Rule
144A Certificate or comparable evidence as to its QIB status.
(iv) No restrictions shall apply with respect to the transfer
or registration of transfer of a beneficial interest in the Global Certificate
of a Class to a transferee that takes delivery in the form of a beneficial
interest in the Global Certificate of such Class; provided that each such
transferor shall be deemed to have made such representations and warranties
contained in the Transferor Certificate and each such transferee shall be deemed
to have made such representations and warranties contained in the Rule 144A
Certificate as are sufficient to establish that it is a QIB.
(e) Subject to Subsection 7.02(h), an exchange of a beneficial
interest in a Global Certificate of a Class for an Individual Certificate or
Certificates of such Class, an exchange of an Individual Certificate or
Certificates of a Class for a beneficial interest in the Global Certificate of
such Class and an exchange of an Individual Certificate or Certificates of a
Class for another Individual Certificate or Certificates of such Class (in each
case, whether or not such exchange is made in anticipation of subsequent
transfer, and, in the case of the Global Certificate of such Class, so long as
such Certificate is outstanding and is held by or on behalf of the Depository)
may be made only in accordance with this Subsection 7.02(e) and in accordance
with the rules of the Depository:
(i) A holder of a beneficial interest in a Global Certificate
of a Class may at any time exchange such beneficial interest for an Individual
Certificate or Certificates of such Class.
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(ii) A holder of an Individual Certificate or Certificates of
a Class may exchange such Certificate or Certificates for a beneficial interest
in the Global Certificate of such Class if such holder furnishes to the Trustee
a Rule 144A Certificate or comparable evidence as to its QIB status.
(iii) A holder of an Individual Certificate of a Class may
exchange such Certificate for an equal aggregate principal amount of Individual
Certificates of such Class in different authorized denominations without any
certification.
(f) (i) Upon acceptance for exchange or transfer of an
Individual Certificate of a Class for a beneficial interest in a Global
Certificate of such Class as provided herein, the Trustee shall cancel such
Individual Certificate and shall (or shall request the Depository to) endorse on
the schedule affixed to the applicable Global Certificate (or on a continuation
of such schedule affixed to the Global Certificate and made a part thereof) or
otherwise make in its books and records an appropriate notation evidencing the
date of such exchange or transfer and an increase in the certificate balance of
the Global Certificate equal to the certificate balance of such Individual
Certificate exchanged or transferred therefor.
(ii) Upon acceptance for exchange or transfer of a beneficial
interest in a Global Certificate of a Class for an Individual Certificate of
such Class as provided herein, the Trustee shall (or shall request the
Depository to) endorse on the schedule affixed to such Global Certificate (or on
a continuation of such schedule affixed to such Global Certificate and made a
part thereof) or otherwise make in its books and records an appropriate notation
evidencing the date of such exchange or transfer and a decrease in the
certificate balance of such Global Certificate equal to the certificate balance
of such Individual Certificate issued in exchange therefor or upon transfer
thereof.
(g) The Securities Legend shall be placed on any Individual
Certificate issued in exchange for or upon transfer of another Individual
Certificate or of a beneficial interest in a Global Certificate.
(h) Subject to the restrictions on transfer and exchange set
forth in this Section 7.02, the holder of any Individual Certificate may
transfer or exchange the same in whole or in part (in an initial Certificate
Principal Balance equal to the minimum authorized denomination set forth in
Section 7.01(d) above or any integral multiple of $1,000 in excess thereof) by
surrendering such Certificate at the office of the Trustee set forth in clause
(a) above, or at the office of any transfer agent, together with an executed
instrument of assignment and transfer satisfactory in form and substance to the
Trustee in the case of transfer and a written request for exchange in the case
of exchange. The holder of a beneficial interest in a Global Certificate may,
subject to the rules and procedures of the Depository, cause the Depository (or
its nominee) to notify the Trustee in writing of a request for transfer or
exchange of such beneficial interest for an Individual Certificate or
Certificates. Following a proper request for transfer or exchange, subject to
the applicable requirements of this Section 7.02, the Trustee shall, within five
Business Days of such request made at the office of the Trustee set forth in
clause (a) above, sign, countersign and deliver at such office, to the
transferee (in the case of transfer) or holder (in the case of exchange) or send
by first class mail at the risk of the transferee (in the case of transfer) or
holder (in the case of exchange) to such address as the transferee or holder, as
applicable, may request, an Individual Certificate or Certificates, as the case
may require, for a like aggregate Percentage Interest and in such authorized
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denomination or denominations as may be requested. The presentation for transfer
or exchange of any Individual Certificate shall not be valid unless made at the
office of the Trustee set forth in clause (a) above by the registered holder in
person, or by a duly authorized attorney-in-fact.
(i) Subject to Section 7.02(e), at the option of the
Certificateholders, Certificates may be exchanged for other Certificates of
authorized denominations of a like Class and aggregate Percentage Interest, upon
surrender of the Certificates to be exchanged at the office of the Trustee set
forth in clause (a) above; provided, however, that no Certificate may be
exchanged for new Certificates unless the original Percentage Interest
represented by each such new Certificate (i) is at least equal to the minimum
authorized denomination or (ii) is acceptable to the Depositor as indicated to
the Trustee in writing. Whenever any Certificates are so surrendered for
exchange, the Trustee shall sign and countersign and the Trustee shall deliver
the Certificates which the Certificateholder making the exchange is entitled to
receive.
(j) If the Trustee so requires, every Certificate presented or
surrendered for transfer or exchange shall be duly endorsed by, or be
accompanied by a written instrument of transfer, with a signature guarantee, in
form satisfactory to the Trustee, duly executed by the holder thereof or his or
her attorney duly authorized in writing.
(k) No service charge shall be made for any transfer or
exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
(l) The Trustee shall cancel all Certificates surrendered for
transfer or exchange but shall retain such Certificates in accordance with its
standard retention policy or for such further time as is required by the record
retention requirements of the Securities Exchange Act of 1934, as amended, and
thereafter may destroy such Certificates.
Section 7.03 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (a) any mutilated Certificate is surrendered to the
Trustee, or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and of the ownership thereof and
(b) there is delivered to the Securities Administrator and the Trustee such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Trustee that such Certificate has been
acquired by a bona fide purchaser, the Trustee shall execute, authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like Class, tenor and Percentage
Interest. In connection with the issuance of any new Certificate under this
Section 7.03, the Trustee may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Trustee) connected
therewith. Any replacement Certificate issued pursuant to this Section 7.03
shall constitute complete and indefeasible evidence of ownership in the Trust
Fund, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time. All Certificates surrendered to the
Trustee under the terms of this Section 7.03 shall be canceled and destroyed by
the Trustee in accordance with its standard procedures without liability on its
part.
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Section 7.04 PERSONS DEEMED OWNERS.
Prior to due presentation of a Certificate for registration
and transfer, the Securities Administrator, the Trustee and any agent of the
Securities Administrator or the Trustee may treat the person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Securities Administrator, the Trustee nor any agent
of the Securities Administrator or the Trustee shall be affected by any notice
to the contrary.
Section 7.05 ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES.
If three or more Certificateholders (a) request such
information in writing from the Trustee, (b) state that such Certificateholders
desire to communicate with other Certificateholders with respect to their rights
under this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders propose to transmit or if the
Depositor or the Master Servicer shall request such information in writing from
the Trustee, then the Trustee shall, within ten Business Days after the receipt
of such request, provide the Depositor, the Master Servicer or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of the Trust Fund held by the Trustee, if any. The Depositor
and every Certificateholder, by receiving and holding a Certificate, agree that
the Trustee shall not be held accountable by reason of the disclosure of any
such information as to the list of the Certificateholders hereunder, regardless
of the source from which such information was derived.
Section 7.06 TRANSFER RESTRICTIONS ON RESIDUAL CERTIFICATES.
(a) Residual Certificates, or interests therein, may not be
transferred without the prior express written consent of the Tax Matters Person
and the Depositor. As a prerequisite to such consent, the proposed transferee
must provide the Tax Matters Person, the Depositor and the Trustee with an
affidavit that the proposed transferee is a Permitted Transferee (and an
affidavit that it is a U.S. Person) as provided in Subsection 7.06(b).
(b) No transfer, sale or other disposition of a Residual
Certificate (including a beneficial interest therein) may be made unless, prior
to the transfer, sale or other disposition of a Residual Certificate, the
proposed transferee (including the initial purchasers thereof) delivers to the
Tax Matters Person, the Trustee and the Depositor an affidavit in the form
attached hereto as Exhibit D stating, among other things, that as of the date of
such transfer (i) such transferee is a Permitted Transferee and that (ii) such
transferee is not acquiring such Residual Certificate for the account of any
person who is not a Permitted Transferee. The Tax Matters Person shall not
consent to a transfer of a Residual Certificate if it has actual knowledge that
any statement made in the affidavit issued pursuant to the preceding sentence is
not true. Notwithstanding any transfer, sale or other disposition of a Residual
Certificate to any Person who is not a Permitted Transferee, such transfer, sale
or other disposition shall be deemed to be of no legal force or effect
whatsoever and such Person shall not be deemed to be a Holder of a Residual
Certificate for any purpose hereunder, including, but not limited to, the
receipt of distributions thereon. If any purported transfer shall be in
violation of the provisions of this Subsection 7.06(b), then the prior Holder
thereof shall, upon discovery that the transfer of such Residual Certificate was
not in fact permitted by this Subsection 7.06(b), be restored
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to all rights as a Holder thereof retroactive to the date of the purported
transfer. None of the Trustee, the Tax Matters Person or the Depositor shall be
under any liability to any Person for any registration or transfer of a Residual
Certificate that is not permitted by this Subsection 7.06(b) or for making
payments due on such Residual Certificate to the purported Holder thereof or
taking any other action with respect to such purported Holder under the
provisions of this Agreement so long as the written affidavit referred to above
was received with respect to such transfer, and the Tax Matters Person, the
Trustee and the Depositor, as applicable, had no knowledge that it was untrue.
The prior Holder shall be entitled to recover from any purported Holder of a
Residual Certificate that was in fact not a permitted transferee under this
Subsection 7.06(b) at the time it became a Holder all payments made on such
Residual Certificate. Each Holder of a Residual Certificate, by acceptance
thereof, shall be deemed for all purposes to have consented to the provisions of
this Subsection 7.06(b) and to any amendment of this Agreement deemed necessary
(whether as a result of new legislation or otherwise) by counsel of the Tax
Matters Person or the Depositor to ensure that the Residual Certificates are not
transferred to any Person who is not a Permitted Transferee and that any
transfer of such Residual Certificates will not cause the imposition of a tax
upon the Trust or cause any REMIC to fail to qualify as a REMIC.
(c) The Residual Certificates (including a beneficial interest
therein) may not be purchased by or transferred to any person who is not a
United States Person.
(d) By accepting a Residual Certificate, the purchaser thereof
agrees to be a Tax Matters Person, and appoints the Securities Administrator to
act as its agent with respect to all matters concerning the tax obligations of
the Trust.
Section 7.07 RESTRICTIONS ON TRANSFERABILITY OF CERTIFICATES.
(a) No offer, sale, transfer or other disposition (including
pledge) of any Private Certificate shall be made by any Holder thereof unless
registered under the Securities Act and any applicable state securities or "Blue
Sky" laws or is exempt from the registration requirements under the Securities
Act and such state securities or "Blue Sky" laws. Except in the case of the
initial sale and transfer of the Private Certificates from the Depositor to
Bear, Xxxxxxx & Co. Inc., as initial purchaser, in the event that an offer,
sale, transfer or other disposition of a Private Certificate is to be made in
reliance upon an exemption from the registration requirements of the Securities
Act and such state securities or "Blue Sky" laws, the Holder desiring to effect
such transfer and such Holder's prospective transferee shall each certify to the
Trustee in writing the facts surrounding the transfer by (i) the delivery to the
Trustee by the Holder desiring to effect such transfer of the Tranferor
Certificate, in the form set forth in Exhibit E hereto, and (ii) the delivery by
the Holder's prospective transferee of (x) an Investment Letter, if the
transferee is an Institutional Accredited Investor, in the form set forth as
Exhibit F hereto, or (y) a Rule 144A Certificate, if the transferee is a QIB, in
the form set forth as Exhibit G hereto. Notwithstanding the provisions of the
immediately preceding sentence, no restrictions shall apply with respect to the
transfer or registration of transfer of a beneficial interest in any Certificate
that is a Global Certificate of a Class to a transferee that takes delivery in
the form of a beneficial interest in the Global Certificate of such Class
provided that each such transferor shall be deemed to have made such
representations and warranties contained in the Transferor Certificate and each
such transferee shall be deemed to have made such representations and warranties
contained in the Rule 144A Certificate as are sufficient
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to establish that it is a QIB. In the case of a proposed transfer of any
Certificate to a transferee other than a QIB, the Trustee may (but shall not be
obligated to) require an Opinion of Counsel addressed to the Trustee that such
transaction is exempt from the registration requirements of the Securities Act.
The cost of such opinion shall not be an expense of the Trustee or the Trust
Fund.
(b) The Private Certificates shall each bear a Securities
Legend.
Section 7.08 ERISA RESTRICTIONS.
(a) Subject to the provisions of subsection (b), no Residual
Certificates or Private Certificates may be acquired directly or indirectly by,
or on behalf of, an employee benefit plan or other retirement arrangement which
is subject to Title I of ERISA or Section 4975 of the Code, unless the proposed
transferee provides either (i) the Trustee, with an Opinion of Counsel addressed
to the Depositor, the Trustee, the Master Servicer and the Securities
Administrator (upon which they may rely) which is satisfactory to the Trustee,
which opinion will not be at the expense of the Depositor, the Trustee, the
Master Servicer or the Securities Administrator, that the purchase of such
Certificates by or on behalf of such Plan is permissible under applicable law,
will not constitute or result in a nonexempt prohibited transaction under ERISA
or Section 4975 of the Code and will not subject the Depositor, the Master
Servicer, the Securities Administrator or the Trustee to any obligation in
addition to those undertaken in the Agreement or (ii) in the case of the Class
B-4, Class B-5 and Class B-6 Certificates, a representation or certification to
the Trustee (upon which the Trustee is authorized to rely) to the effect that
the proposed transfer and holding of such a Certificate and the servicing,
management and operation of the Trust: (I) will not result in a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code which is not
covered under an individual or class prohibited transaction exemption including
but not limited to Department of Labor Prohibited Transaction Exemption ("PTE")
84-14 (Class Exemption for Plan Asset Transactions Determined by Independent
Qualified Professional Asset Managers); PTE 91-38 (Class Exemption for Certain
Transactions Involving Bank Collective Investment Funds); PTE 90-1 (Class
Exemption for Certain Transactions Involving Insurance Company Pooled Separate
Accounts), PTE 95-60 (Class Exemption for Certain Transactions Involving
Insurance Company General Accounts), and PTCE 96-23 (Class Exemption for Plan
Asset Transactions Determined by In-House Asset Managers and (II) will not
subject the Depositor, the Securities Administrator, the Master Servicer or the
Trustee to any obligation in addition to those undertaken in the Agreement.
(b) Each beneficial owner of a Class B-1, Class B-2 and Class
I-B-3 Certificate or any interest therein shall be deemed to have represented,
by virtue of its acquisition or holding of that certificate or interest therein,
that either (i) it is not a Plan or investing with "Plan Assets", (ii) it has
acquired and is holding such certificate in reliance on Prohibited Transaction
Exemption 90-30, as amended from time to time (the "Exemption"), and that it
understands that there are certain conditions to the availability of the
Exemption, including that the certificate must be rated, at the time of
purchase, not lower than "BBB-" (or its equivalent) by S&P or Xxxxx'x Investors
Service, Inc., and the certificate is so rated or (iii) (1) it is an insurance
company, (2) the source of funds used to acquire or hold the certificate or
interest therein is an "insurance company general account," as such term is
defined in Prohibited Transaction Class Exemption ("PTCE") 95-60, and (3) the
conditions in Sections I and III of PTCE 95-60 have been satisfied.
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(c) Any Person acquiring an interest in a Global Certificate
which is a Private Certificate, by acquisition of such Certificate, shall be
deemed to have represented to the Trustee that in the case of the Class B-4,
Class B-5 and Class B-6 Certificates, either: (i) it is not acquiring an
interest in such Certificate directly or indirectly by, or on behalf of, an
employee benefit plan or other retirement arrangement which is subject to Title
I of ERISA or Section 4975 of the Code, or (ii) the transfer and holding of an
interest in such Certificate to that Person and the subsequent servicing,
management and operation of the Trust and its assets: (I) will not result in any
prohibited transaction which is not covered under an individual or class
prohibited transaction exemption, including, but not limited to, XXX 00-00, XXX
00-00, XXX 00-0, XXX 95-60 or PTE 96-23 and (II) will not subject the Depositor,
the Securities Administrator, the Master Servicer or the Trustee to any
obligation in addition to those undertaken in the Agreement.
(d) Neither the Trustee, the Master Servicer nor the
Securities Administrator will be required to monitor, determine or inquire as to
compliance with the transfer restrictions with respect to the Global
Certificates. Any attempted or purported transfer of any Certificate in
violation of the provisions of Subsections (a) or (b) above shall be void ab
initio and such Certificate shall be considered to have been held continuously
by the prior permitted Certificateholder. Any transferor of any Certificate in
violation of such provisions, shall indemnify and hold harmless the Trustee, the
Securities Administrator and the Master Servicer from and against any and all
liabilities, claims, costs or expenses incurred by the Trustee, the Securities
Administrator or the Master Servicer as a result of such attempted or purported
transfer. The Trustee shall have no liability for transfer of any such Global
Certificates in or through book-entry facilities of any Depository or between or
among Depository Participants or Certificate Owners made in violation of the
transfer restrictions set forth herein.
Section 7.09 RULE 144A INFORMATION.
For so long as any Certificates are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) of the Securities
Act, (1) the Depositor will provide or cause to be provided to any holder of
such Certificates and any prospective purchaser thereof designated by such a
holder, upon the request of such holder or prospective purchaser, the
information required to be provided to such holder or prospective purchaser by
Rule 144A(d)(4) under the Securities Act; and (2) the Depositor shall update
such information from time to time in order to prevent such information from
becoming false and misleading and will take such other actions as are necessary
to ensure that the safe harbor exemption from the registration requirements of
the Securities Act under Rule 144A is and will be available for resales of such
Certificates conducted in accordance with Rule 144A.
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ARTICLE VIII
THE COMPANY AND THE MASTER SERVICER
Section 8.01 LIABILITIES OF THE DEPOSITOR, THE COMPANY AND THE MASTER
SERVICER. Each of the Depositor, the Company and the Master Servicer shall be
liable in accordance herewith only to the extent of the obligations specifically
imposed upon and undertaken by it herein.
Section 8.02 MERGER OR CONSOLIDATION OF THE DEPOSITOR, THE COMPANY OR
THE MASTER SERVICER.
(a) Each of the Depositor, the Company and the Master Servicer
will keep in full force and effect its existence, rights and franchises as a
corporation under the laws of the state of its incorporation, and will obtain
and preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, the Certificates or any of the
Mortgage Loans and to perform its duties under this Agreement.
(b) Any Person into which the Depositor, the Company or the
Master Servicer may be merged or consolidated, or any corporation resulting from
any merger or consolidation to which the Depositor, the Company or the Master
Servicer shall be a party, or any Person succeeding to the business of the
Depositor, the Company or the Master Servicer, shall be the successor of the
Depositor, the Company or the Master Servicer hereunder, without the execution
or filing of any paper or further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
Section 8.03 INDEMNIFICATION OF THE TRUSTEE, THE MASTER SERVICER AND
THE SECURITIES ADMINISTRATOR.
(a) The Master Servicer agrees to indemnify the Indemnified
Persons for, and to hold them harmless against, any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on their
part that may be sustained in connection with, arising out of, or relating to,
any claim or legal action (including any pending or threatened claim or legal
action) relating to this Agreement, including the powers of attorney delivered
pursuant to Sections 4.01 and 4.05 hereof, the Assignment Agreements, the
Custodial Agreement or the Certificates (i) related to the Master Servicer's
failure to perform its duties in compliance with this Agreement (except as any
such loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) or (ii) incurred by reason of the Master Servicer's willful
misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder, provided, in each case, that with respect to any such claim or legal
action (or pending or threatened claim or legal action), the Trustee shall have
given the Master Servicer and the Seller written notice thereof promptly after
the Trustee shall have with respect to such claim or legal action knowledge
thereof; provided, however that the failure to give such notice shall not
relieve the Master Servicer of its indemnification obligations hereunder. This
indemnity shall
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survive the resignation or removal of the Trustee, Master Servicer or the
Securities Administrator and the termination of this Agreement.
(b) The Company agrees to indemnify the Indemnified Persons
and to hold them harmless from and against any and all claims, losses, damages,
penalties, fines, forfeitures, legal fees and related costs, judgments, and any
other costs, fees and expenses that the Indemnified Persons may sustain in any
way related to the failure of the Company to perform in any way its duties and
service the EMC Mortgage Loans in strict compliance with the terms of this
Agreement and for breach of any representation or warranty of the Company
contained herein. The Company shall immediately notify the Master Servicer and
the Trustee if a claim is made by a third party with respect to this Agreement
or the EMC Mortgage Loans, assume (with the consent of the Master Servicer and
the Trustee and with counsel reasonably satisfactory to the Master Servicer and
the Trustee) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or any Indemnified Person in
respect of such claim but failure to so notify the Company shall not limit its
obligations hereunder. The Company agrees that it will not enter into any
settlement of any such claim without the consent of the Indemnified Persons
unless such settlement includes an unconditional release of such Indemnified
Persons from all liability that is the subject matter of such claim. The
provisions of this Section 8.03(b) shall survive termination of this Agreement.
(c) The Seller will indemnify any Indemnified Person for any
loss, liability or expense of any Indemnified Person not otherwise paid or
covered pursuant to Subsections (a) or (b) above.
Section 8.04 LIMITATIONS ON LIABILITY OF THE DEPOSITOR, THE COMPANY,
THE MASTER SERVICER AND OTHERS. Subject to the obligation of the Seller, the
Company and the Master Servicer to indemnify the Indemnified Persons pursuant to
Section 8.03:
(a) Neither the Depositor, the Company, the Master Servicer
nor any of the directors, officers, employees or agents of the Depositor, the
Company and the Master Servicer shall be under any liability to the Indemnified
Persons, the Trust Fund or the Certificateholders for taking any action or for
refraining from taking any action in good faith pursuant to this Agreement, or
for errors in judgment; provided, however, that this provision shall not protect
the Depositor, the Company, the Master Servicer or any such Person against any
breach of warranties or representations made herein or any liability which would
otherwise be imposed by reason of such Person's willful misfeasance, bad faith
or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder.
(b) The Depositor, the Company, the Master Servicer and any
director, officer, employee or agent of the Depositor, the Company and the
Master Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder.
(c) The Depositor, the Company, the Master Servicer, the
Trustee, the Custodian and any director, officer, employee or agent of the
Depositor, the Company, the Master Servicer, the
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Trustee or the Custodian shall be indemnified by the Trust and held harmless
thereby against any loss, liability or expense (including reasonable legal fees
and disbursements of counsel) incurred on their part that may be sustained in
connection with, arising out of, or related to, any claim or legal action
(including any pending or threatened claim or legal action) relating to this
Agreement, the Assignment Agreements, the Custodial Agreement, the Certificates
or the Servicing Agreements (except with respect to the Master Servicer only, to
the extent that the Master Servicer is indemnified by the Company under this
Agreement or by a Servicer under the related Servicing Agreement), other than
(i) any such loss, liability or expense related to the Company's or the Master
Servicer's failure to perform its respective duties in compliance with this
Agreement (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement), or to the Custodian's failure to
perform its duties under the Custodial Agreement, or (ii) any such loss,
liability or expense incurred by reason of the Company's, the Master Servicer's
or the Custodian's willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder or under the Custodial Agreement, as
applicable, or by reason of its reckless disregard of obligations and duties
hereunder or under the Custodial Agreement, as applicable, or (iii) any such
loss, liability or expense incurred by reason of the Trustee's willful
misfeasance, bad faith or negligence in the performance of its duties hereunder,
or by reason of its reckless disregard of obligations and duties hereunder.
(d) Neither the Depositor, the Company nor the Master Servicer
shall be under any obligation to appear in, prosecute or defend any legal action
that is not incidental to its duties under this Agreement and that in its
opinion may involve it in any expense or liability; provided, however, the
Master Servicer may in its discretion, with the consent of the Trustee (which
consent shall not be unreasonably withheld), undertake any such action which it
may deem necessary or desirable with respect to this Agreement and the rights
and duties of the parties hereto and the interests of the Certificateholders
hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust Fund, and the Master Servicer shall be entitled to be reimbursed therefor
out of the Master Servicer Collection Account as provided by Section 5.05.
Nothing in this Subsection 8.04(d) shall affect the Master Servicer's obligation
to supervise, or to take such actions as are necessary to ensure, the servicing
and administration of the Mortgage Loans pursuant to Subsection 4.01(a).
(e) In taking or recommending any course of action pursuant to
this Agreement, unless specifically required to do so pursuant to this
Agreement, the Master Servicer shall not be required to investigate or make
recommendations concerning potential liabilities which the Trust might incur as
a result of such course of action by reason of the condition of the Mortgaged
Properties but shall give notice to the Trustee if it has notice of such
potential liabilities.
(f) The Master Servicer shall not be liable for any acts or
omissions of the Company or the Servicers, except as otherwise expressly
provided herein.
Section 8.05 MASTER SERVICER AND COMPANY NOT TO RESIGN. (a) Except as
provided in Section 8.07, the Master Servicer shall not resign from the
obligations and duties hereby imposed on it except (i) with the prior written
consent of the Trustee (which consent shall not be unreasonably withheld) or
(ii) upon a determination that any such duties hereunder are no longer
permissible under applicable law and such impermissibility cannot be cured. Any
such determination permitting the
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resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
to such effect, addressed to and delivered to, the Trustee. No such resignation
by the Master Servicer shall become effective until EMC or the Trustee or a
successor to the Master Servicer reasonably satisfactory to the Trustee shall
have assumed the responsibilities and obligations of the Master Servicer in
accordance with Section 9.02 hereof. The Trustee shall notify the Rating
Agencies of the resignation of the Master Servicer.
(b) The Company shall not resign from the obligations and
duties hereby imposed on it except (i) upon the assignment of its servicing
duties with respect to all or a portion of the EMC Mortgage Loans to an
institution that is a Xxxxxx Xxx and Xxxxxxx Mac approved seller/servicer in
good standing that has a net worth of not less than $10,000,000 and with the
prior written consent of the Master Servicer (which consent shall not be
unreasonably withheld) or (ii) upon the determination that its duties hereunder
are no longer permissible under applicable law and such incapacity cannot be
cured by the Company. Any determination permitting the resignation of the
Company shall be evidenced by an Opinion of Counsel to such effect addressed to
and delivered, to the Master Servicer and the Trustee which Opinion of Counsel
shall be in form and substance acceptable to the Master Servicer and the
Trustee. No appointment of a successor to the Company shall be effective
hereunder unless (a) the Rating Agencies have confirmed in writing that such
appointment will not result in a downgrade, qualification or withdrawal of the
then current ratings assigned to the Certificates, (b) such successor shall have
represented that it is meets the eligibility criteria set forth in clause (i)
above and (c) such successor has agreed to assume the obligations of the Company
hereunder to the extent of the EMC Mortgage Loans to be serviced by such
successor. The Company shall provide a copy of the written confirmation of the
Rating Agencies and the agreement executed by such successor to the Master
Servicer and the Trustee. No such resignation shall become effective until a
Qualified Successor or the Master Servicer shall have assumed the Company's
responsibilities and obligations hereunder. The Company shall notify the Master
Servicer, the Trustee and the Rating Agencies of the resignation of the Company
or the assignment of all or a portion of its servicing duties hereunder in
accordance with this Section 8.05.
Section 8.06 SUCCESSOR MASTER SERVICER. In connection with the
appointment of any successor Master Servicer or the assumption of the duties of
the Master Servicer, EMC or the Trustee may make such arrangements for the
compensation of such successor master servicer out of payments on the Mortgage
Loans as EMC or the Trustee and such successor master servicer shall agree. If
the successor master servicer does not agree that such market value is a fair
price, such successor master servicer shall obtain two quotations of market
value from third parties actively engaged in the servicing of single-family
mortgage loans. In no event shall the compensation of any successor master
servicer exceed that permitted the Master Servicer without the consent of all of
the Certificateholders.
Section 8.07 SALE AND ASSIGNMENT OF MASTER SERVICING. The Master
Servicer may sell and assign its rights and delegate its duties and obligations
in its entirety as Master Servicer under this Agreement and EMC may terminate
the Master Servicer without cause and select a new Master Servicer; provided,
however, that: (i) the purchaser or transferee accepting such assignment and
delegation (a) shall be a Person which (or an Affiliate thereof the primary
business of which is the servicing of conventional residential mortgage loans)
shall be qualified to service mortgage loans for Xxxxxx Mae or Xxxxxxx Mac; (b)
shall have a net worth of not less than $10,000,000 (unless
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otherwise approved by each Rating Agency pursuant to clause (ii) below); (c)
shall be reasonably satisfactory to the Trustee (as evidenced in a writing
signed by the Trustee); and (d) shall execute and deliver to the Trustee an
agreement, in form and substance reasonably satisfactory to the Trustee, which
contains an assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or observed by it as
master servicer under this Agreement, any custodial agreement from and after the
effective date of such agreement; (ii) each Rating Agency shall be given prior
written notice of the identity of the proposed successor to the Master Servicer
and each Rating Agency's rating of the Certificates in effect immediately prior
to such assignment, sale and delegation will not be downgraded, qualified or
withdrawn as a result of such assignment, sale and delegation, as evidenced by a
letter to such effect delivered to the Master Servicer and the Trustee; (iii)
the Master Servicer assigning and selling the master servicing shall deliver to
the Trustee an Officer's Certificate and an Opinion of Counsel addressed to the
Trustee, each stating that all conditions precedent to such action under this
Agreement have been completed and such action is permitted by and complies with
the terms of this Agreement; and (iv) in the event the Master Servicer is
terminated without cause by EMC, EMC shall pay, from its own funds and without
any right of reimbursement, the terminated Master Servicer a termination fee
equal to 0.25% of the aggregate Stated Principal Balance of the Mortgage Loans
at the time the master servicing of the Mortgage Loans is transferred to the
successor Master Servicer. No such assignment or delegation shall affect any
liability of the Master Servicer arising prior to the effective date thereof.
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ARTICLE IX
DEFAULT; TERMINATION OF MASTER SERVICER;
TERMINATION OF COMPANY
Section 9.01 EVENTS OF DEFAULT.
"Event of Default," wherever used herein, means any one of the
following events:
(i) any failure by the Master Servicer to remit to the Trustee
any amounts received or collected by the Master Servicer in respect of
the Mortgage Loans and required to be remitted by it hereunder or any
Advance required to be made by it pursuant to this Agreement, which
failure shall continue unremedied for one Business Day after the date
on which written notice of such failure shall have been given 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; or
(ii) any failure by the Master Servicer to observe or perform
in any material respect any other of the covenants or agreements on the
part of the Master Servicer contained in this Agreement or any breach
of a representation or warranty by the Master Servicer, which failure
or breach shall continue unremedied for a period of 60 days after the
date on which written notice of such failure shall have been given to
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; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Master Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60
consecutive days; or
(iv) the Master Servicer shall consent to the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or all or substantially all of the
property of the Master Servicer; or
(v) the Master Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take
advantage of, or commence a voluntary case under, any applicable
insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its
obligations; or
(vi) the Master Servicer assigns or delegates its duties or
rights under this Agreement in contravention of the provisions
permitting such assignment or delegation under Sections 8.05 or 8.07.
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If an Event of Default shall occur, then, and in each and
every such case, so long as such Event of Default shall not have been remedied,
the Trustee may, and at the direction of the Holders of Certificates evidencing
not less than 25% of the Voting Rights evidenced by the Certificates, the
Trustee shall, by notice in writing to the Master Servicer (with a copy to each
Rating Agency), terminate all of the rights and obligations of the Master
Servicer (and the Securities Administrator if the Master Servicer and the
Securities Administrator are the same entity) under this Agreement and in and to
the Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder. On or after the receipt by the Master Servicer of
such written notice, all authority and power of the Master Servicer (and, if
applicable, the Securities Administrator) hereunder, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee, or any
successor appointed pursuant to Section 9.02 (a "Successor Master Servicer" and,
if applicable, "Successor Securities Administrator"). Such Successor Master
Servicer shall thereupon if such Successor Master Servicer is a successor to the
Master Servicer, make any Advance required by Article VI, subject, in the case
of the Trustee, to Section 9.02. The Trustee is hereby authorized and empowered
to execute and deliver, on behalf of the terminated Master Servicer and, if
applicable, the terminated Securities Administrator, as attorney- in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of any Mortgage Loans and related documents, or otherwise. Unless
expressly provided in such written notice, no such termination shall affect any
obligation of the Master Servicer to pay amounts owed pursuant to Article VIII
or Article X. The Master Servicer and, if applicable, the Securities
Administrator agrees to cooperate with the Trustee in effecting the termination
of the Master Servicer's and, if applicable, the Securities Administrator's
responsibilities and rights hereunder, including, without limitation, the
transfer to the applicable Successor Master Servicer of all cash amounts which
shall at the time be credited to the Master Servicer Collection Account
maintained pursuant to Section 5.05, or thereafter be received with respect to
the applicable Mortgage Loans. The Trustee shall promptly notify the Rating
Agencies of the occurrence of an Event of Default known to the Trustee.
Notwithstanding any termination of the activities of the
Master Servicer hereunder, the Master Servicer shall be entitled to receive, out
of any late collection of a Scheduled Payment on a Mortgage Loan that was due
prior to the notice terminating the Master Servicer's rights and obligations as
Master Servicer hereunder and received after such notice, that portion thereof
to which the Master Servicer would have been entitled pursuant to Sections 5.05
and to receive any other amounts payable to the Master Servicer hereunder the
entitlement to which arose prior to the termination of its activities hereunder.
Section 9.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 9.01 hereof the Trustee shall automatically
become the successor to the Master Servicer with respect to the transactions set
forth or provided for herein and after a transition period (not to exceed 90
days), shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Master Servicer by the terms and provisions
hereof; provided, however that, pursuant to Article VI hereof, the Trustee in
its capacity as successor Master Servicer shall be responsible for making any
Advances required to be made by the Master Servicer immediately upon the
termination
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of the Master Servicer and any such Advance shall be made on the Distribution
Date on which such Advance was required to be made by the predecessor Master
Servicer. Effective on the date of such notice of termination, as compensation
therefor, the Trustee shall be entitled to all compensation, reimbursement of
expenses and indemnifications that the Master Servicer would have been entitled
to if it had continued to act hereunder, provided, however, that the Trustee
shall not be (i) liable for any acts or omissions of the Master Servicer, (ii)
obligated to make Advances if it is prohibited from doing so under applicable
law or (iii)obligated to deposit losses on any Permitted Investment directed by
the Master Servicer. Notwithstanding the foregoing, the Trustee may, if it shall
be unwilling to so act, or shall, if it is prohibited by applicable law from
making Advances pursuant to Article VI or if it is otherwise unable to so act,
appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution the appointment of which does
not adversely affect the then current rating of the Certificates by each Rating
Agency as the successor to the Master Servicer hereunder in the assumption of
all or any part of the responsibilities, duties or liabilities of the Master
Servicer hereunder. Any Successor Master Servicer shall (i) be an institution
that is a Xxxxxx Mae and Xxxxxxx Mac approved seller/servicer in good standing,
that has a net worth of at least $15,000,000 and (ii) be willing to act as
successor servicer of any Mortgage Loans under this Agreement or the related
Servicing Agreement with respect to which the Company or the original Servicer
has been terminated as servicer, and shall have executed and delivered to the
Depositor and the Trustee an agreement accepting such delegation and assignment,
that contains an assumption by such Person of the rights, powers, duties,
responsibilities, obligations and liabilities of the Master Servicer (other than
any liabilities of the Master Servicer hereof incurred prior to termination of
the Master Servicer under Section 9.01 or as otherwise set forth herein), with
like effect as if originally named as a party to this Agreement, provided that
each Rating Agency shall have acknowledged in writing that its rating of the
Certificates in effect immediately prior to such assignment and delegation will
not be qualified or reduced as a result of such assignment and delegation. If
the Trustee assumes the duties and responsibilities of the Master Servicer in
accordance with this Section 9.02, the Trustee shall not resign as Master
Servicer until a Successor Master Servicer has been appointed and has accepted
such appointment. Pending appointment of a successor to the Master Servicer
hereunder, the Trustee, unless the Trustee is prohibited by law from so acting,
shall, subject to Section 4.04 hereof, act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments on
Mortgage Loans or otherwise as it and such successor shall agree; provided that
no such compensation unless agreed to by the Certificateholders shall be in
excess of that permitted the Master Servicer hereunder. The Trustee and such
successor shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession. Neither the Trustee nor any other
Successor Master Servicer shall be deemed to be in default hereunder by reason
of any failure to make, or any delay in making, any distribution hereunder or
any portion thereof or any failure to perform, or any delay in performing, any
duties or responsibilities hereunder, in either case caused by the failure of
the Master Servicer and the Securities Administrator to deliver or provide, or
any delay in delivering or providing, any cash, information, documents or
records to it.
The costs and expenses of the Trustee in connection with the
termination of the Master Servicer, appointment of a Successor Master Servicer
and, if applicable, any transfer of servicing, including, without limitation,
all costs and expenses associated with the complete transfer of all servicing
data and the completion, correction or manipulation of such servicing data as
may
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be required by the Trustee to correct any errors or insufficiencies in the
servicing data or otherwise to enable the Trustee or the Successor Master
Servicer to service the related Mortgage Loans properly and effectively, to the
extent not paid by the terminated Master Servicer, shall be payable to the
Trustee pursuant to Section 10.05. Any successor to the Master Servicer as
successor servicer under any Subservicing Agreement shall give notice to the
applicable Mortgagors of such change of servicer and shall, during the term of
its service as successor servicer maintain in force the policy or policies that
the Master Servicer is required to maintain pursuant to Section 4.04.
Section 9.03 NOTIFICATION TO CERTIFICATEHOLDERS.
(a) Upon any termination of or appointment of a successor to
the Master Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of
Default, the Trustee shall transmit by mail to all Certificateholders notice of
each such Event of Default hereunder actually known to a Responsible Officer of
the Trustee, unless such Event of Default shall have been cured or waived.
Section 9.04 WAIVER OF DEFAULTS.
The Trustee shall transmit by mail to all Certificateholders,
within 60 days after the occurrence of any Event of Default actually known to a
Responsible Officer of the Trustee, unless such Event of Default shall have been
cured, notice of each such Event of Default hereunder known to the Trustee. The
Holders of Certificates evidencing not less than 51% of the Voting Rights may,
on behalf of all Certificateholders, waive any default by the Master Servicer in
the performance of its obligations hereunder and the consequences thereof,
except a default in the making of or the causing to be made of any required
distribution on the Certificates. Upon any such waiver of a past default, such
default shall be deemed to cease to exist, and any Event of Default arising
therefrom shall be deemed to have been timely remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.
The Trustee shall give notice of any such waiver to the Rating Agencies.
Section 9.05 COMPANY DEFAULT.
In case one or more of the following events of default by the
Company (each, a "Company Default") shall occur and be continuing, that is to
say:
(i) any failure by the Company to remit to the Master Servicer
any payment required to be made under the terms of this Agreement on any
Remittance Date; or
(ii) failure on the part of the Company duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of the Company set forth in this Agreement, the breach of which has a
material adverse effect and which continue unremedied for a period of sixty days
(except that such number of days shall be fifteen in the case of a failure to
pay any premium for any insurance policy required to be maintained under this
Agreement and such failure shall be deemed to have a material adverse effect)
after the date on which written notice of
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such failure, requiring the same to be remedied, shall have been given to the
Company by the Master Servicer; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Company and such
decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or
(iv) the Company shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to the Company or of or relating to all or
substantially all of its property; or
(v) the Company shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(vi) the Company attempts to assign its right to servicing
compensation hereunder or the Company attempts to sell or otherwise dispose of
all or substantially all of its property or assets or to assign this Agreement
or the servicing responsibilities hereunder or to delegate its duties hereunder
or any portion thereof except as otherwise permitted herein; or
(vii) the Company ceases to be qualified to transact business
in any jurisdiction where it is currently so qualified, but only to the extent
such non-qualification materially and adversely affects the Company's ability to
perform its obligations hereunder;
then, and in each and every such case, so long as a Company Default
shall not have been remedied, the Master Servicer, by notice in writing to the
Company may, in addition to whatever rights the Master Servicer and the Trustee
on behalf of the Certificateholders may have under Section 8.03 and at law or
equity to damages, including injunctive relief and specific performance,
terminate all the rights and obligations of the Company under this Agreement and
in and to the EMC Mortgage Loans and the proceeds thereof without compensating
the Company for the same. On or after the receipt by the Company of such written
notice, all authority and power of Company under this Agreement, whether with
respect to the EMC Mortgage Loans or otherwise, shall pass to and be vested in
the Master Servicer. Upon written request from the Master Servicer, the Company
shall prepare, execute and deliver, any and all documents and other instruments,
place in the Master Servicer's possession all Mortgage Files relating to the EMC
Mortgage Loans, and do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the EMC Mortgage Loans
and related documents, or otherwise, at the Company's sole expense. The Company
agrees to cooperate with the Master Servicer in effecting the termination of the
Company's responsibilities and rights hereunder, including, without limitation,
the transfer to such successor for administration by it of all cash amounts
which shall at the time be credited by the Company to its Protected Account or
Escrow
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Account or thereafter received with respect to the EMC Mortgage Loans or any
related REO Property.
Section 9.06 WAIVER OF COMPANY DEFAULTS.
The Master Servicer, with the consent of the Trustee, may waive only by
written notice any default by the Company in the performance of its obligations
hereunder and its consequences. Upon any such waiver of a past default, such
default shall cease to exist, and any Company Default arising therefrom shall be
deemed to have been remedied for every purpose of this Agreement. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon except to the extent expressly so waived in writing.
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ARTICLE X
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 10.01 DUTIES OF TRUSTEE AND SECURITIES ADMINISTRATOR.
(a) The Trustee, prior to the occurrence of an Event of
Default and after the curing or waiver of all Events of Default which may have
occurred, and the Securities Administrator each undertake to perform such duties
and only such duties as are specifically set forth in this Agreement as duties
of the Trustee and the Securities Administrator, respectively. If an Event of
Default has occurred and has not been cured or waived, the Trustee shall
exercise such of the rights and powers vested in it by this Agreement, and the
same degree of care and skill in their exercise, as a prudent person would
exercise under the circumstances in the conduct of such Person's own affairs.
(b) Upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments which are specifically
required to be furnished to the Trustee or the Securities Administrator pursuant
to any provision of this Agreement, the Trustee or the Securities Administrator,
respectively, shall examine them to determine whether they are, on their face,
in the form required by this Agreement; provided, however, that neither the
Trustee nor the Securities Administrator shall be responsible for the accuracy
or content of any resolution, certificate, statement, opinion, report, document,
order or other instrument furnished by the Master Servicer; provided, further,
that neither the Trustee nor the Securities Administrator shall be responsible
for the accuracy or verification of any calculation provided to it pursuant to
this Agreement.
(c) On each Distribution Date, the Trustee shall make monthly
distributions and the final distribution to the Certificateholders from funds in
the Distribution Account as provided in Sections 6.04 and 11.01 herein based
solely on the applicable Remittance Report.
(d) No provision of this Agreement shall be construed to
relieve the Trustee or the Securities Administrator from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after
the curing or waiver of all such Events of Default which may have
occurred with respect to the Trustee and at all times with respect to
the Securities Administrator, the duties and obligations of the Trustee
and the Securities Administrator shall be determined solely by the
express provisions of this Agreement, neither the Trustee nor the
Securities Administrator shall be liable except for the performance of
their respective duties and obligations as are specifically set forth
in this Agreement, no implied covenants or obligations shall be read
into this Agreement against the Trustee or the Securities Administrator
and, in the absence of bad faith on the part of the Trustee or the
Securities Administrator, respectively, the Trustee or the Securities
Administrator, respectively, may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to
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the Trustee or the Securities Administrator, respectively, and
conforming to the requirements of this Agreement;
(ii) Neither the Trustee nor the Securities Administrator
shall be liable in its individual capacity for an error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee or an officer or officers of the Securities Administrator,
respectively, unless it shall be proved that the Trustee or the
Securities Administrator, respectively, was negligent in ascertaining
the pertinent facts;
(iii) Neither the Trustee nor the Securities Administrator
shall be liable with respect to any action taken, suffered or omitted
to be taken by it in good faith in accordance with the directions of
the Holders of Certificates evidencing not less than 25% of the
aggregate Voting Rights of the Certificates, if such action or
non-action relates to the time, method and place of conducting any
proceeding for any remedy available to the Trustee or the Securities
Administrator, respectively, or exercising any trust or other power
conferred upon the Trustee or the Securities Administrator,
respectively, under this Agreement;
(iv) The Trustee shall not be required to take notice or be
deemed to have notice or knowledge of any default or Event of Default
unless a Responsible Officer of the Trustee shall have actual knowledge
thereof. In the absence of such notice, the Trustee may conclusively
assume there is no such default or Event of Default;
(v) The Trustee shall not in any way be liable by reason of
any insufficiency in any Account held by or in the name of Trustee
unless it is determined by a court of competent jurisdiction in a
non-appealable judgment that the Trustee's gross negligence or willful
misconduct was the primary cause of such insufficiency (except to the
extent that the Trustee is obligor and has defaulted thereon);
(vi) Anything in this Agreement to the contrary
notwithstanding, in no event shall the Trustee or the Securities
Administrator be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including but not limited to lost
profits), even if the Trustee or the Securities Administrator,
respectively, has been advised of the likelihood of such loss or damage
and regardless of the form of action;
(vii) None of the Securities Administrator, the Master
Servicer, the Seller, the Depositor or the Trustee shall be responsible
for the acts or omissions of the other, it being understood that this
Agreement shall not be construed to render them partners, joint
venturers or agents of one another; and
(viii) Neither the Trustee nor the Securities Administrator
shall be required to expend or risk its own funds or otherwise incur
financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it, and none of the provisions contained in this Agreement
shall in any event require the Trustee or the Securities Administrator
to perform, or be responsible for the manner of performance of, any of
the obligations of the Master
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Servicer or the Company hereunder or any Servicer under the related
Servicing Agreement, except during such time, if any, as the Trustee
shall be the successor to, and be vested with the rights, duties,
powers and privileges of, the Master Servicer in accordance with this
Agreement.
(e) All funds received by the Trustee and required to be
deposited in the Distribution Account pursuant to this Agreement will be
promptly so deposited by the Trustee.
Section 10.02 CERTAIN MATTERS AFFECTING THE TRUSTEE AND THE SECURITIES
ADMINISTRATOR.
(a) Except as otherwise provided in Section 10.01:
(i) The Trustee and the Securities Administrator may rely and
shall be protected in acting or refraining from acting in reliance on
any resolution or certificate of the Seller, the Company, the Master
Servicer or the related Servicer, any certificates of auditors or any
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(ii) The Trustee and the Securities Administrator may consult
with counsel and any advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection with respect to
any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such advice or Opinion of Counsel;
(iii) Neither the Trustee nor the Securities Administrator
shall be under any obligation to exercise any of the trusts or powers
vested in it by this Agreement, other than its obligation to give
notices pursuant to this Agreement, or to institute, conduct or defend
any litigation hereunder or in relation hereto at the request, order or
direction of any of the Certificateholders pursuant to the provisions
of this Agreement, unless such Certificateholders shall have offered to
the Trustee or the Securities Administrator, as applicable, reasonable
security or indemnity against the costs, expenses and liabilities which
may be incurred therein or thereby. Nothing contained herein shall,
however, relieve the Trustee of the obligation, upon the occurrence of
an Event of Default of which a Responsible Officer of the Trustee has
actual knowledge (which has not been cured or waived), to exercise such
of the rights and powers vested in it by this Agreement, and to use the
same degree of care and skill in their exercise, as a prudent person
would exercise under the circumstances in the conduct of his own
affairs;
(iv) Prior to the occurrence of an Event of Default hereunder
and after the curing or waiver of all Events of Default which may have
occurred with respect to the Trustee and at all times with respect to
the Securities Administrator, neither the Trustee nor the Securities
Administrator shall be liable in its individual capacity for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
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(v) Neither the Trustee nor the Securities Administrator shall
be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or
document, unless requested in writing to do so by Holders of
Certificates evidencing not less than 25% of the aggregate Voting
Rights of the Certificates and provided that the payment within a
reasonable time to the Trustee or the Securities Administrator, as
applicable, of the costs, expenses or liabilities likely to be incurred
by it in the making of such investigation is, in the opinion of the
Trustee or the Securities Administrator, as applicable, reasonably
assured to the Trustee or the Securities Administrator, as applicable,
by the security afforded to it by the terms of this Agreement. The
Trustee or the Securities Administrator may require reasonable
indemnity against such expense or liability as a condition to taking
any such action. The reasonable expense of every such examination shall
be paid by the Certificateholders requesting the investigation;
(vi) The Trustee and the Securities Administrator may execute
any of the trusts or powers hereunder or perform any duties hereunder
either directly or through Affiliates, agents or attorneys; provided,
however, that the Trustee may not appoint any paying agent other than
the Securities Administrator to perform any paying agent functions
under this Agreement without the express written consent of the Master
Servicer, which consent will not be unreasonably withheld. Neither the
Trustee nor the Securities Administrator shall be liable or responsible
for the misconduct or negligence of any of the Trustee's or the
Securities Administrator's agents or attorneys or paying agent
appointed hereunder by the Trustee or the Securities Administrator with
due care and, when required, with the consent of the Master Servicer;
(vii) Should the Trustee or the Securities Administrator deem
the nature of any action required on its part to be unclear, the
Trustee or the Securities Administrator, respectively, may require
prior to such action that it be provided by the Depositor with
reasonable further instructions; the right of the Trustee or the
Securities Administrator to perform any discretionary act enumerated in
this Agreement shall not be construed as a duty, and neither the
Trustee nor the Securities Administrator shall be accountable for other
than its negligence or willful misconduct in the performance of any
such act;
(viii) Neither the Trustee nor the Securities Administrator
shall be required to give any bond or surety with respect to the
execution of the trust created hereby or the powers granted hereunder,
except as provided in Subsection 10.07; and
(ix) Neither the Trustee nor the Securities Administrator
shall have any duty to conduct any affirmative investigation as to the
occurrence of any condition requiring the repurchase of any Mortgage
Loan by any Person pursuant to this Agreement, or the eligibility of
any Mortgage Loan for purposes of this Agreement.
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Section 10.03 TRUSTEE AND SECURITIES ADMINISTRATOR NOT LIABLE FOR
CERTIFICATES OR MORTGAGE LOANS.
The recitals contained herein and in the Certificates (other
than the signature and countersignature of the Trustee on the Certificates)
shall be taken as the statements of the Depositor, and neither the Trustee nor
the Securities Administrator shall have any responsibility for their
correctness. Neither the Trustee nor the Securities Administrator makes any
representation as to the validity or sufficiency of the Certificates (other than
the signature and countersignature of the Trustee on the Certificates) or of any
Mortgage Loan except as expressly provided in Sections 2.02 and 2.06 hereof;
provided, however, that the foregoing shall not relieve the Trustee, or the
Custodian on its behalf, of the obligation to review the Mortgage Files pursuant
to Section 2.02 of this Agreement. The Trustee's signature and countersignature
(or countersignature of its agent) on the Certificates shall be solely in its
capacity as Trustee and shall not constitute the Certificates an obligation of
the Trustee in any other capacity. Neither the Trustee or the Securities
Administrator shall be accountable for the use or application by the Depositor
of any of the Certificates or of the proceeds of such Certificates, or for the
use or application of any funds paid to the Depositor with respect to the
Mortgage Loans. Subject to Section 2.06, neither the Trustee nor the Securities
Administrator shall be responsible for the legality or validity of this
Agreement or any document or instrument relating to this Agreement, the validity
of the execution of this Agreement or of any supplement hereto or instrument of
further assurance, or the validity, priority, perfection or sufficiency of the
security for the Certificates issued hereunder or intended to be issued
hereunder. Neither the Trustee nor the Securities Administrator shall at any
time have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Mortgage or any Mortgage Loan, or the
perfection and priority of any Mortgage or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the Trust
Fund or its ability to generate the payments to be distributed to
Certificateholders, under this Agreement. Neither the Trustee nor the Securities
Administrator shall have any responsibility for filing any financing or
continuation statement in any public office at any time or to otherwise perfect
or maintain the perfection of any security interest or lien granted to it
hereunder or to record this Agreement.
Section 10.04 TRUSTEE AND SECURITIES ADMINISTRATOR MAY OWN
CERTIFICATES.
Each of the Trustee and the Securities Administrator in its
individual capacity or in any capacity other than as Trustee or Securities
Administrator hereunder may become the owner or pledgee of any Certificates with
the same rights it would have if it were not the Trustee or the Securities
Administrator, as applicable, and may otherwise deal with the parties hereto.
Section 10.05 TRUSTEE'S AND SECURITIES ADMINISTRATOR'S FEES AND
EXPENSES.
The fees and expenses of the Trustee and the Securities
Administrator shall be paid in accordance with a side letter agreement with the
Master Servicer and at the expense of the Master Servicer. In addition, the
Trustee and the Securities Administrator will be entitled to recover from the
Master Servicer Collection Account pursuant to Section 5.06 all reasonable
out-of-pocket expenses, disbursements and advances and the expenses of the
Trustee and the Securities Administrator, respectively, in connection with any
Event of Default, any breach of this Agreement or any claim or legal action
(including any pending or threatened claim or legal action) incurred or
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made by the Trustee or the Securities Administrator, respectively, in the
administration of the trusts hereunder (including the reasonable compensation,
expenses and disbursements of its counsel) except any such expense, disbursement
or advance as may arise from its negligence or intentional misconduct or which
is the responsibility of the Certificateholders or the Trust Fund hereunder. If
funds in the Master Servicer Collection Account are insufficient therefor, the
Trustee and the Securities Administrator shall recover such expenses,
disbursements or advances from the Depositor and the Depositor hereby agrees to
pay such expenses, disbursements or advances upon demand. Such compensation and
reimbursement obligation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust.
Section 10.06 ELIGIBILITY REQUIREMENTS FOR TRUSTEE AND SECURITIES
ADMINISTRATOR.
The Trustee and any successor Trustee and the Securities
Administrator and any successor Securities Administrator shall during the entire
duration of this Agreement be a state bank or trust company or a national
banking association organized and doing business under the laws of a state or
the United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus and undivided profits of at
least $40,000,000 or, in the case of a successor Trustee, $50,000,000, subject
to supervision or examination by federal or state authority and, in the case of
the Trustee, rated "BBB" or higher by Fitch Ratings with respect to their
long-term rating and rated "BBB" or higher by Standard & Poor's and "Baa2" or
higher by Moody's with respect to any outstanding long-term unsecured
unsubordinated debt, and, in the case of a successor Trustee or successor
Securities Administrator other than pursuant to Section 10.10, rated in one of
the two highest long-term debt categories of, or otherwise acceptable to, each
of the Rating Agencies. The Trustee shall not be an Affiliate of the Master
Servicer. If the Trustee publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 10.06 the combined capital and
surplus of such corporation shall be deemed to be its total equity capital
(combined capital and surplus) as set forth in its most recent report of
condition so published. In case at any time the Trustee or the Securities
Administrator, as applicable, shall cease to be eligible in accordance with the
provisions of this Section 10.06, the Trustee or the Securities Administrator
shall resign immediately in the manner and with the effect specified in Section
10.08.
Section 10.07 INSURANCE.
The Trustee and the Securities Administrator, at their own
expense, shall at all times maintain and keep in full force and effect: (i)
fidelity insurance, (ii) theft of documents insurance and (iii) forgery
insurance (which may be collectively satisfied by a "Financial Institution Bond"
and/or a "Bankers' Blanket Bond"). All such insurance shall be in amounts, with
standard coverage and subject to deductibles, as are customary for insurance
typically maintained by banks or their affiliates which act as custodians for
investor-owned mortgage pools. A certificate of an officer of the Trustee or the
Securities Administrator as to the Trustee's or the Securities Administrator's,
respectively, compliance with this Section 10.07 shall be furnished to any
Certificateholder upon reasonable written request.
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Section 10.08 RESIGNATION AND REMOVAL OF TRUSTEE AND SECURITIES
ADMINISTRATOR.
The Trustee and the Securities Administrator may at any time
resign (including, in the case of the Securities Administrator, in connection
with the resignation or termination of the Master Servicer) and be discharged
from the Trust hereby created by giving written notice thereof to the Depositor,
the Seller, the Securities Administrator (or the Trustee, if the Securities
Administrator resigns) and the Master Servicer, with a copy to the Rating
Agencies. Upon receiving such notice of resignation, the Depositor shall
promptly appoint a successor trustee or successor securities administrator, as
applicable, by written instrument, in triplicate, one copy of which instrument
shall be delivered to each of the resigning trustee or securities administrator,
as applicable, and the successor trustee or securities administrator, as
applicable. If no successor trustee or successor securities administrator shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Trustee or Securities
Administrator may petition any court of competent jurisdiction for the
appointment of a successor trustee or securities administrator.
If at any time (i) the Trustee or the Securities Administrator
shall cease to be eligible in accordance with the provisions of Section 10.06
hereof and shall fail to resign after written request thereto by the Depositor,
(ii) the Trustee or the Securities Administrator shall become incapable of
acting, or shall be adjudged as bankrupt or insolvent, or a receiver of the
Trustee or the Securities Administrator or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or the
Securities Administrator or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or (iii)(A) a tax is imposed with
respect to the Trust Fund by any state in which the Trustee or the Securities
Administrator or the Trust Fund is located, (B) the imposition of such tax would
be avoided by the appointment of a different trustee or securities administrator
and (C) the Trustee or the Securities Administrator, as applicable fails to
indemnify the Trust Fund against such tax, then the Depositor or the Master
Servicer may remove the Trustee or the Securities Administrator, as applicable,
and appoint a successor trustee or successor securities administrator, as
applicable, by written instrument, in multiple copies, a copy of which
instrument shall be delivered to the Trustee, the Securities Administrator, each
Master Servicer and the successor trustee or successor securities administrator,
as applicable.
The Holders evidencing at least 51% of the Voting Rights of
each Class of Certificates may at any time remove the Trustee or Securities
Administrator and appoint a successor trustee or securities administrator by
written instrument or instruments, in multiple copies, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered by the successor trustee or successor securities
administrator to each of the Master Servicer, the Trustee or Securities
Administrator so removed and the successor trustee or securities administrator
so appointed. Notice of any removal of the Trustee or Securities Administrator
shall be given to each Rating Agency by the Trustee or successor trustee.
Any resignation or removal of the Trustee or Securities
Administrator and appointment of a successor trustee or securities administrator
pursuant to any of the provisions of this Section 10.08 shall become effective
upon acceptance of appointment by the successor trustee or securities
administrator as provided in Section 10.09 hereof.
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Section 10.09 SUCCESSOR TRUSTEE OR SECURITIES ADMINISTRATOR.
Any successor trustee or securities administrator appointed as
provided in Section 10.08 hereof shall execute, acknowledge and deliver to the
Depositor and to its predecessor trustee or predecessor securities
administrator, as applicable, and the Master Servicer an instrument accepting
such appointment hereunder and thereupon the resignation or removal of the
predecessor trustee or securities administrator shall become effective and such
successor trustee or securities administrator, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee or securities administrator herein.
No successor trustee or securities administrator shall accept
appointment as provided in this Section 10.09 unless at the time of such
acceptance such successor trustee or securities administrator shall be eligible
under the provisions of Section 10.07 hereof and its appointment shall not
adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee or
securities administrator as provided in this Section 10.09, the successor
trustee or securities administrator shall mail notice of the succession of such
trustee or securities administrator hereunder to all Holders of Certificates. If
the successor trustee or securities administrator fails to mail such notice
within ten days after acceptance of appointment, the Depositor shall cause such
notice to be mailed at the expense of the Trust Fund.
Section 10.10 MERGER OR CONSOLIDATION OF TRUSTEE OR SECURITIES
ADMINISTRATOR.
Any corporation, state bank or national banking association
into which the Trustee or the Securities Administrator may be merged or
converted or with which it may be consolidated or any corporation, state bank or
national banking association resulting from any merger, conversion or
consolidation to which the Trustee or the Securities Administrator shall be a
party, or any corporation, state bank or national banking association succeeding
to substantially all of the corporate trust business of the Trustee or of the
business of the Securities Administrator, shall be the successor of the Trustee
or the Securities Administrator hereunder, provided that such corporation shall
be eligible under the provisions of Section 10.06 hereof without the execution
or filing of any paper or further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
Section 10.11 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Fund or property securing any Mortgage Note may at
the time be located, the Master Servicer and the Trustee acting jointly shall
have the power and shall execute and deliver all instruments to appoint one or
more Persons approved by the Trustee to act as co-trustee or co-trustees jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of the Trust Fund, and to vest in such Person or Persons, in such capacity and
for the benefit of the Certificateholders, such title to the Trust Fund or any
part thereof, whichever is applicable, and, subject to the other provisions of
this Section
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10.11, such powers, duties, obligations, rights and trusts as the Master
Servicer and the Trustee may consider necessary or desirable. If the Master
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request to do so, or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 10.06 and
no notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 10.09.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) All rights, powers, duties and obligations conferred or
imposed upon the Trustee, except for the obligation of the Trustee
under this Agreement to advance funds on behalf of the Master Servicer,
shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized
to act separately without the Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether a Trustee hereunder
or as a Successor Master Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Trust Fund or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article X. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Trustee. Every such instrument shall be filed with the Trustee and a copy
thereof given to the Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co- trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
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Section 10.12 TAX MATTERS.
It is intended that the Trust Fund shall constitute, and that
the affairs of the Trust Fund shall be conducted so that each REMIC formed
hereunder qualifies as, a "real estate mortgage investment conduit" as defined
in and in accordance with the REMIC Provisions. In furtherance of such
intention, the Securities Administrator covenants and agrees that it shall act
as agent for so long as it is also the Master Servicer (and the Securities
Administrator is hereby appointed to act as agent) on behalf of the Trust Fund.
The Trustee and/or the Securities Administrator, as agent on behalf of the Trust
Fund, shall do or refrain from doing, as applicable, the following: (a) the
Securities Administrator shall prepare and file, or cause to be prepared and
filed, in a timely manner, U.S. Real Estate Mortgage Investment Conduit Income
Tax Returns (Form 1066 or any successor form adopted by the Internal Revenue
Service) and prepare and file or cause to be prepared and filed with the
Internal Revenue Service and applicable state or local tax authorities income
tax or information returns for each taxable year with respect to each such REMIC
containing such information and at the times and in the manner as may be
required by the Code or state or local tax laws, regulations, or rules, and
furnish or cause to be furnished to Certificateholders the schedules, statements
or information at such times and in such manner as may be required thereby; (b)
the Securities Administrator shall apply for an employer identification number
with the Internal Revenue Service via a Form SS-4 or other comparable method for
each REMIC that is or becomes a taxable entity, and within thirty days of the
Closing Date, furnish or cause to be furnished to the Internal Revenue Service,
on Forms 8811 or as otherwise may be required by the Code, the name, title,
address, and telephone number of the person that the holders of the Certificates
may contact for tax information relating thereto, together with such additional
information as may be required by such Form, and update such information at the
time or times in the manner required by the Code for the Trust Fund; (c) the
Trustee shall make or cause to be made elections, on behalf of each REMIC formed
hereunder to be treated as a REMIC on the federal tax return of such REMIC for
its first taxable year (and, if necessary, under applicable state law); (d) the
Securities Administrator shall prepare and forward, or cause to be prepared and
forwarded, to the Certificateholders and to the Internal Revenue Service and, if
necessary, state tax authorities, all information returns and reports as and
when required to be provided to them in accordance with the REMIC Provisions,
including without limitation, the calculation of any original issue discount
using the Prepayment Assumption; (e) the Securities Administrator shall provide
information necessary for the computation of tax imposed on the transfer of a
Residual Certificate to a Person that is not a Permitted Transferee, or an agent
(including a broker, nominee or other middleman) of a Person that is not a
Permitted Transferee, or a pass- through entity in which a Person that is not a
Permitted Transferee is the record holder of an interest (the reasonable cost of
computing and furnishing such information may be charged to the Person liable
for such tax); (f) each of the Securities Administrator and the Trustee shall,
to the extent under its control, conduct the affairs of the Trust Fund at all
times that any Certificates are outstanding so as to maintain the status of each
REMIC formed hereunder as a REMIC under the REMIC Provisions; (g) neither the
Trustee nor the Securities Administrator shall knowingly or intentionally take
any action or omit to take any action that would cause the termination of the
REMIC status of any REMIC formed hereunder; (h) the Trustee shall pay, from the
sources specified in the penultimate paragraph of this Section 10.12, as
directed by the Securities Administrator in its Remittance Report, the amount of
any federal, state and local taxes, including prohibited transaction taxes as
described below, imposed on any REMIC formed hereunder prior to the termination
of the Trust Fund when and as the same shall be due and payable (but such
obligation shall not prevent the
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Trustee, the Securities Administrator at the written request of the Trustee, or
any other appropriate Person from contesting any such tax in appropriate
proceedings and shall not prevent the Securities Administrator from withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings); (i) the Trustee shall sign or cause to be signed federal, state or
local income tax or information returns or any other document prepared by the
Securities Administrator pursuant to this Section 10.12 requiring a signature
thereon by the Trustee; (j) the Securities Administrator shall maintain records
relating to each REMIC formed hereunder including but not limited to the income,
expenses, assets and liabilities of each such REMIC and adjusted basis of the
Trust Fund property determined at such intervals as may be required by the Code,
as may be necessary to prepare the foregoing returns, schedules, statements or
information; (k) the Securities Administrator shall, for federal income tax
purposes, maintain books and records with respect to the REMICs on a calendar
year and on an accrual basis; (l) neither the Trustee nor the Master Servicer
shall enter into any arrangement not otherwise provided for in this Agreement by
which the REMICs will receive a fee or other compensation for services nor
permit the REMICs to receive any income from assets other than "qualified
mortgages" as defined in Section 860G(a)(3) of the Code or "permitted
investments" as defined in Section 860G(a)(5) of the Code; and (m) as and when
necessary and appropriate, the Trustee, or at the written request of the
Trustee, the Securities Administrator, shall represent the Trust Fund in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of any REMIC formed hereunder, enter into settlement agreements
with any governmental taxing agency, extend any statute of limitations relating
to any tax item of the Trust Fund, and otherwise act on behalf of each REMIC
formed hereunder in relation to any tax matter involving any such REMIC.
In order to enable each of the Trustee and the Securities
Administrator to perform its duties as set forth herein, the Depositor shall
provide, or cause to be provided, to the Trustee or the Securities Administrator
within 10 days after the Closing Date all information or data that the Trustee
or the Securities Administrator requests in writing and determines to be
relevant for tax purposes to the valuations and offering prices of the
Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flows of the Certificates and the Mortgage Loans.
Thereafter, the Depositor shall provide to the Trustee or the Securities
Administrator promptly upon written request therefor, any such additional
information or data that the Trustee or the Securities Administrator may, from
time to time, request in order to enable the Trustee or the Securities
Administrator to perform its duties as set forth herein. The Depositor hereby
indemnifies each of Trustee and the Securities Administrator for any losses,
liabilities, damages, claims or expenses of the Trustee or the Securities
Administrator arising from any errors or miscalculations of the Trustee or the
Securities Administrator, as applicable, that result from any failure of the
Depositor to provide, or to cause to be provided, accurate information or data
to the Trustee or the Securities Administrator, as applicable, on a timely
basis.
In the event that any tax is imposed on "prohibited
transactions" of any REMIC as defined in Section 860F(a)(2) of the Code, on the
"net income from foreclosure property" of the Trust Fund as defined in Section
860G(c) of the Code, on any contribution to any REMIC after the startup day
pursuant to Section 860G(d) of the Code, or any other tax is imposed, including,
without limitation, any federal, state or local tax or minimum tax imposed upon
any REMIC and is not paid as otherwise provided for herein, such tax shall be
paid by (i) the Trustee or the Securities Administrator, if any such other tax
arises out of or results from a breach by the Trustee or the
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Securities Administrator, respectively, of any of its obligations under this
Agreement, (ii) any party hereto (other than the Trustee or the Securities
Administrator) to the extent any such other tax arises out of or results from a
breach by such other party of any of its obligations under this Agreement or
(iii) in all other cases, or in the event that any liable party hereto fails to
honor its obligations under the preceding clauses (i) or (ii), any such tax will
be paid first with amounts otherwise to be distributed to the Class R
Certificateholders, and second with amounts otherwise to be distributed to all
other Certificateholders in the following order of priority: first, to the Class
B-6 Certificates, second, to the Class B-5 Certificates, third, to the Class B-4
Certificates, fourth to the Class B-3 Certificates, fifth to the Class B-2
Certificates, sixth to the Class B-1 Certificates and seventh, to the Senior
Certificates (pro rata based on the amounts to be distributed). Notwithstanding
anything to the contrary contained herein, to the extent that such tax is
payable by the Holder of any Certificates, the Trustee is hereby authorized to
retain on any Distribution Date, from the Holders of the Class R Certificates
(and, if necessary, second, from the Holders of the other Certificates in the
priority specified in the preceding sentence), funds otherwise distributable to
such Holders in an amount sufficient to pay such tax. Following written
notification to the Securities Administrator by the Trustee of any amount
payable out of distributions to the Certificateholders pursuant to the preceding
two sentences, the Securities Administrator shall include in its Remittance
Report instructions as to distributions to such parties taking into account the
priorities described in the second preceding sentence. The Securities
Administrator, on written request by the Trustee, agrees to promptly notify in
writing the party liable for any such tax of the amount thereof and the due date
for the payment thereof.
The Trustee and the Securities Administrator each agree that,
in the event it should obtain any information necessary for the other party to
perform its obligations pursuant to this Section 10.12, it will promptly notify
and provide such information to such other party. Notwithstanding anything in
this Agreement to the contrary, the Trustee agrees that, in the event that the
Trustee obtains actual knowledge that the Securities Administrator has breached
any of its obligations pursuant to this Section 10.12, the Trustee shall perform
such obligations on its behalf to the extent that the Trustee possesses all
documents necessary to so perform and receives reasonable compensation therefor,
provided, however, that the Trustee shall not be liable for any losses resulting
from any such breach.
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ARTICLE XI
TERMINATION
Section 11.01 TERMINATION UPON LIQUIDATION OR REPURCHASE OF ALL
MORTGAGE LOANS.
Subject to Section 11.03, the obligations and responsibilities
of the Depositor, the Master Servicer, the Securities Administrator, the Seller
and the Trustee created hereby with respect to the Trust Fund shall terminate
upon the earlier of (a) the purchase by EMC of all of the Mortgage Loans (and
REO Properties) remaining in the Trust Fund at a price (the "Mortgage Loan
Purchase Price") equal to the sum of (i) 100% of the Stated Principal Balance of
each Mortgage Loan (other than in respect of REO Property), (ii) accrued
interest thereon at the applicable Mortgage Rate to, but not including, the
first day of the month of such purchase, (iii) the appraised value of any REO
Property in the Trust Fund (up to the Stated Principal Balance of the related
Mortgage Loan), such appraisal to be conducted by an appraiser mutually agreed
upon by the Master Servicer and the Trustee and (iv) unreimbursed out-of pocket
costs of the Company, the Servicers and the Master Servicer, including
unreimbursed servicing advances and the principal portion of any unreimbursed
Advances, made on the Mortgage Loans prior to the exercise of such repurchase
right and (v) any unreimbursed costs and expenses of the Trustee and the
Securities Administrator payable pursuant to Section 10.05 and (b) the later of
(i) the maturity or other liquidation (or any Advance with respect thereto) of
the last Mortgage Loan remaining in the Trust Fund and the disposition of all
REO Property and (ii) the distribution to Certificateholders of all amounts
required to be distributed to them pursuant to this Agreement, as applicable. In
no event shall the trusts created hereby continue beyond the earlier of (i) the
expiration of 21 years from the death of the last survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to the Court of St.
Xxxxx, living on the date hereof and (ii) the Latest Possible Maturity Date.
The right to repurchase all Mortgage Loans and REO Properties
pursuant to clause (a) in the preceding paragraph shall be conditioned upon the
Stated Principal Balance of all of the Mortgage Loans in the Trust Fund, at the
time of any such repurchase, aggregating 10% or less of the aggregate Cut-off
Date Principal Balance of all of the Mortgage Loans.
Section 11.02 FINAL DISTRIBUTION ON THE CERTIFICATES.
If on any Determination Date, (i) the Master Servicer
determines that there are no Outstanding Mortgage Loans and no other funds or
assets in the Trust Fund other than the funds in the Master Servicer Collection
Account, the Master Servicer shall direct the Securities Administrator to send a
final distribution notice promptly to each Certificateholder or (ii) the
Securities Administrator determines that a Class of Certificates shall be
retired after a final distribution on such Class, the Securities Administrator
shall notify the Certificateholders within five (5) Business Days after such
Determination Date that the final distribution in retirement of such Class of
Certificates is scheduled to be made on the immediately following Distribution
Date. Any final distribution made pursuant to the immediately preceding sentence
will be made only upon presentation and surrender of the related Certificates at
the office of the Trustee specified in the final distribution notice to
Certificateholders. If EMC elects to terminate the Trust Fund pursuant to
Section 11.01, at least 20
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days prior to the date notice is to be mailed to the Certificateholders, EMC
shall notify the Depositor, the Securities Administrator, the Trustee of the
date EMC intends to terminate the Trust Fund. EMC shall remit the Mortgage Loan
Purchase Price to the Trustee on the Business Day prior to the Distribution Date
for such Optional Termination by EMC.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Securities Administrator by letter to Certificateholders mailed not
earlier than the 10th day and no later than the 15th day of the month
immediately preceding the month of such final distribution. Any such notice
shall specify (a) the Distribution Date upon which final distribution on the
Certificates will be made upon presentation and surrender of Certificates at the
office therein designated, (b) the amount of such final distribution, (c) the
location of the office or agency at which such presentation and surrender must
be made and (d) that the Record Date otherwise applicable to such Distribution
Date is not applicable, distributions being made only upon presentation and
surrender of the Certificates at the office therein specified. The Securities
Administrator will give such notice to each Rating Agency at the time such
notice is given to Certificateholders.
In the event such notice is given, the Master Servicer shall
cause all funds in the Master Servicer Collection Account to be remitted to the
Trustee for deposit in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the Trust
Fund and the receipt by the Trustee of a Request for Release therefor, the
Trustee or the Custodian shall promptly release to the Master Servicer, as
applicable the Mortgage Files for the Mortgage Loans and the Trustee shall
execute and deliver any documents prepared and delivered to it which are
necessary to transfer any REO Property.
Upon presentation and surrender of the Certificates, the
Trustee shall cause to be distributed to Certificateholders of each Class in
accordance with the Remittance Report the amounts allocable to such Certificates
held in the Distribution Account in the order and priority set forth in Section
6.04 hereof on the final Distribution Date and in proportion to their respective
Percentage Interests.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Securities Administrator
shall give a second written notice to the remaining Certificateholders to
surrender their Certificates for cancellation and receive the final distribution
with respect thereto. If within six months after the second notice all the
applicable Certificates shall not have been surrendered for cancellation, the
Securities Administrator may take appropriate steps, or may appoint an agent to
take appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets that remain a part of the Trust Fund. If within one year
after the second notice all Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets of the Trust Fund that remain subject hereto.
-151-
Section 11.03 ADDITIONAL TERMINATION REQUIREMENTS.
(a) Upon exercise by EMC of its purchase option as provided in
Section 11.01, the Trust Fund shall be terminated in accordance with the
following additional requirements, unless each of the Trustee and the Securities
Administrator have been supplied with an Opinion of Counsel, at the expense of
EMC, to the effect that the failure of the Trust Fund to comply with the
requirements of this Section 11.03 will not (i) result in the imposition of
taxes on "prohibited transactions" on any REMIC, or (ii) cause any REMIC to fail
to qualify as a REMIC at any time that any Certificates are outstanding:
(1) EMC shall establish a 90-day liquidation period and notify
the Trustee and Securities Administrator thereof, and the Securities
Administrator shall in turn specify the first day of such period in a statement
attached to the tax return for each of REMIC I, REMIC II and REMIC III pursuant
to Treasury Regulation Section 1.860F-1. EMC shall satisfy all the requirements
of a qualified liquidation under Section 860F of the Code and any regulations
thereunder, as evidenced by an Opinion of Counsel obtained at the expense of
EMC;
(2) During such 90-day liquidation period, and at or prior to
the time of making the final payment on the Certificates, the Securities
Administrator as agent of the Trustee shall sell all of the assets of REMIC I,
REMIC II and REMIC III for cash; and
(3) At the time of the making of the final payment on the
Certificates, the Securities Administrator as agent for the Trustee shall
distribute or credit, or cause to be distributed or credited, to the Holders of
the Residual Certificates all cash on hand (other than cash retained to meet
claims), and REMIC I shall terminate at that time.
(b) By their acceptance of the Certificates, the Holders
thereof hereby authorize the adoption of a 90-day liquidation period for REMIC
I, REMIC II and REMIC III, which authorization shall be binding upon all
successor Certificateholders.
(c) The Securities Administrator as agent for each REMIC
hereby agrees to adopt and sign such a plan of complete liquidation upon the
written request of EMC, and the receipt of the Opinion of Counsel referred to in
Section 11.03(a)(1) and to take such other action in connection therewith as may
be reasonably requested by EMC.
-152-
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 AMENDMENT.
This Agreement may be amended from time to time by parties
hereto, without the consent of any of the Certificateholders to cure any
ambiguity, to correct or supplement any provisions herein (including to give
effect to the expectations of investors), to change the manner in which the
Master Servicer Collection Account maintained by the Master Servicer or the
Protected Account maintained by the Company is maintained or to make such other
provisions with respect to matters or questions arising under this Agreement as
shall not be inconsistent with any other provisions herein if such action shall
not, as evidenced by an Opinion of Counsel addressed to the Trustee, adversely
affect in any material respect the interests of any Certificateholder; provided
that any such amendment shall be deemed not to adversely affect in any material
respect the interests of the Certificateholders and no such Opinion of Counsel
shall be required if the Person requesting such amendment obtains a letter from
each Rating Agency stating that such amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates.
Notwithstanding the foregoing, without the consent of the
Certificateholders, the parties hereto may at any time and from time to time
amend this Agreement to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or appropriate to maintain the qualification
of each REMIC as a REMIC under the Code or to avoid or minimize the risk of the
imposition of any tax on any REMIC pursuant to the Code that would be a claim
against any REMIC at any time prior to the final redemption of the Certificates,
provided that the Trustee has been provided an Opinion of Counsel addressed to
the Trustee, which opinion shall be an expense of the party requesting such
opinion but in any case shall not be an expense of the Trustee, the Securities
Administrator or the Trust Fund, to the effect that such action is necessary or
appropriate to maintain such qualification or to avoid or minimize the risk of
the imposition of such a tax.
This Agreement may also be amended from time to time by the
parties hereto and the Holders of each Class of Certificates affected thereby
evidencing over 50% of the Voting Rights of such Class or Classes for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the Holders of Certificates; provided that no such amendment shall (i) reduce in
any manner the amount of, or delay the timing of, payments required to be
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) cause any REMIC to cease to qualify as a REMIC or (iii) reduce
the aforesaid percentages of Certificates of each Class the Holders of which are
required to consent to any such amendment without the consent of the Holders of
all Certificates of such Class then outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel addressed to the Trustee, which
opinion shall be an expense of the party requesting such amendment but in any
case shall not be an expense of the Trustee or the Securities Administrator,
-153-
to the effect that such amendment will not (other than an amendment pursuant to
clause (ii) of, and in accordance with, the preceding paragraph) cause the
imposition of any tax on any REMIC or the Certificateholders or cause any REMIC
to cease to qualify as a REMIC at any time that any Certificates are
outstanding. Further, nothing in this Agreement shall require the Trustee to
enter into an amendment without receiving an Opinion of Counsel addressed to the
Trustee, satisfactory to the Trustee that (i) such amendment is permitted and is
not prohibited by this Agreement and that all requirements for amending this
Agreement (including any consent of the applicable Certificateholders) have been
complied with.
Promptly after the execution of any amendment to this
Agreement requiring the consent of Certificateholders, the Trustee shall furnish
written notification of the substance of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of
Certificateholders under this Section to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Section 12.02 RECORDATION OF AGREEMENT; COUNTERPARTS.
To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all of the counties or other comparable jurisdictions in which any or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere. The Master Servicer shall effect such
recordation at the Trust's expense upon the request in writing of a
Certificateholder, but only if such direction is accompanied by an Opinion of
Counsel (provided at the expense of the Certificateholder requesting
recordation) to the effect that such recordation would materially and
beneficially affect the interests of the Certificateholders or is required by
law.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
Section 12.03 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT
REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAWS).
-154-
Section 12.04 INTENTION OF PARTIES.
It is the express intent of the parties hereto that the
conveyance of the Mortgage Notes, Mortgages, assignments of Mortgages, title
insurance policies and any modifications, extensions and/or assumption
agreements and private mortgage insurance policies relating to the Mortgage
Loans by the Seller to the Depositor, and by the Depositor to the Trustee be,
and be construed as, an absolute sale thereof to the Depositor or the Trustee,
as applicable. It is, further, not the intention of the parties that such
conveyance be deemed a pledge thereof by the Seller to the Depositor, or by the
Depositor to the Trustee. However, in the event that, notwithstanding the intent
of the parties, such assets are held to be the property of the Seller or the
Depositor, as applicable, or if for any other reason this Agreement is held or
deemed to create a security interest in such assets, then (i) this Agreement
shall be deemed to be a security agreement within the meaning of the Uniform
Commercial Code of the State of New York and (ii) each conveyance provided for
in this Agreement shall be deemed to be an assignment and a grant by the Seller
or the Depositor, as applicable , for the benefit of the Certificateholders, of
a security interest in all of the assets that constitute the Trust Fund, whether
now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall,
to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the assets of the Trust Fund, such security interest would be deemed
to be a perfected security interest of first priority under applicable law and
will be maintained as such throughout the term of the Agreement.
Section 12.05 NOTICES.
(a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency with respect to each of the following of which a
Responsible Officer of the Trustee has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been
cured;
(iii) The resignation or termination of the Master Servicer,
the Securities Administrator or the Trustee and the appointment of any
successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant
to Sections 2.02, 2.03, 4.21 and 11.01; and
(v) The final payment to Certificateholders.
(b) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when delivered at or mailed
by registered mail, return receipt requested, postage prepaid, or by recognized
overnight courier, or by facsimile transmission to a number provided by the
appropriate party if receipt of such transmission is confirmed to (i) in the
case of the Depositor, Bear Xxxxxxx Asset Backed Securities I LLC, 000 Xxxxxxx
Xxxxxx, New
-155-
York, New York 10179, Attention: Chief Counsel; (ii) in the case of the Seller
or the Company, EMC Mortgage Corporation, 000 Xxxxxx Xxxxx Xxxxx, Xxxxxx, Xxxxx
00000, Attention: Xxxxxx Xxxxx or such other address as may be hereafter
furnished to the other parties hereto by the Master Servicer in writing; (iv) in
the case of the Trustee, at each Corporate Trust Office or such other address as
the Trustee may hereafter furnish to the other parties hereto; (v) in the case
of the Master Servicer or the Securities Administrator, P. O. Xxx 00, Xxxxxxxx,
Xxxxxxxx 00000 (or, for overnight deliveries, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx 00000), Attention: BSABS I 2004-AC2 or such other address as may be
hereafter furnished to the other parties hereto by the Securities Administrator
in writing and (vi) in the case of the Rating Agencies, (x) Xxxxx'x Investors
Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Home
Equity Monitoring and (y) Standard & Poor's, 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Mortgage Surveillance Group. Any notice
delivered to the Seller, the Master Servicer, the Securities Administrator or
the Trustee under this Agreement shall be effective only upon receipt. Any
notice required or permitted to be mailed to a Certificateholder, unless
otherwise provided herein, shall be given by first-class mail, postage prepaid,
at the address of such Certificateholder as shown in the Certificate Register;
any notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
Section 12.06 SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
Section 12.07 ASSIGNMENT.
Notwithstanding anything to the contrary contained herein,
except as provided pursuant to Section 8.07, this Agreement may not be assigned
by the Master Servicer, the Seller or the Depositor.
Section 12.08 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the Trust Fund, or otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
-156-
No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee or the
Securities Administrator, as appropriate, a written notice of an Event of
Default and of the continuance thereof, as hereinbefore provided, the Holders of
Certificates evidencing not less than 25% of the Voting Rights evidenced by the
Certificates shall also have made written request to the Trustee or the
Securities Administrator, as appropriate to institute such action, suit or
proceeding in its own name as Trustee or the Securities Administrator, as
appropriate, hereunder and shall have offered to the Trustee or the Securities
Administrator, as appropriate, such reasonable indemnity as it may require
against the costs, expenses, and liabilities to be incurred therein or thereby,
and the Trustee or the Securities Administrator, as appropriate, for 60 days
after its receipt of such notice, request and offer of indemnity shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner whatever
by virtue or by availing itself or themselves of any provisions of this
Agreement to affect, disturb or prejudice the rights of the Holders of any other
of the Certificates, or to obtain or seek to obtain priority over or preference
to any other such Holder or to enforce any right under this Agreement, except in
the manner herein provided and for the common benefit of all Certificateholders.
For the protection and enforcement of the provisions of this Section 12.08, each
and every Certificateholder, the Trustee or the Securities Administrator shall
be entitled to such relief as can be given either at law or in equity.
Section 12.09 INSPECTION AND AUDIT RIGHTS. The Master Servicer agrees
that, on reasonable prior notice, it will permit any representative of the
Depositor or the Trustee during the Master Servicer's normal business hours, to
examine all the books of account, records, reports and other papers of the
Master Servicer relating to the Mortgage Loans, to make copies and extracts
therefrom, to cause such books to be audited by independent certified public
accountants selected by the Depositor or the Trustee and to discuss its affairs,
finances and accounts relating to such Mortgage Loans with its officers,
employees and independent public accountants (and by this provision the Master
Servicer hereby authorizes such accountants to discuss with such representative
such affairs, finances and accounts), all at such reasonable times and as often
as may be reasonably requested. Any out-of-pocket expense incident to the
exercise by the Depositor or the Trustee of any right under this Section 12.09
shall be borne by the party requesting such inspection, subject to such party's
right to reimbursement hereunder (in the case of the Trustee, pursuant to
Section 10.05 hereof).
Section 12.10 CERTIFICATES NONASSESSABLE AND FULLY PAID.
It is the intention of the Depositor that Certificateholders
shall not be personally liable for obligations of the Trust Fund, that the
interests in the Trust Fund represented by the Certificates shall be
nonassessable for any reason whatsoever, and that the Certificates, upon due
authentication thereof by the Trustee pursuant to this Agreement, are and shall
be deemed fully paid.
* * *
-157-
IN WITNESS WHEREOF, the Depositor, the Master Servicer, the
Seller, the Company, the Securities Administrator and the Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized as of the day and year first above written.
BEAR XXXXXXX ASSET BACKED SECURITIES
I LLC
as Depositor
By: /s/ Xxxxx Xxxxxxxxxxx
------------------------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: Vice President
EMC MORTGAGE CORPORATION,
as Seller and Company
By: /s/ Xxx Xxxxxxxx
------------------------------------------------
Name: Xxx Xxxxxxxx
Title: Executive Vice President
XXXXX FARGO BANK, NATIONAL
ASSOCIATION
as Securities Administrator and Master
Servicer
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------------------
Name: Xxxxxx Xxxxxx
Title: Assistant Vice President
U.S. BANK NATIONAL ASSOCIATION
as Trustee
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 30th day of April, 2004, before me, a notary public in
and for said State, appeared Xxxxx Xxxxxxxxxxx, personally known to me on the
basis of satisfactory evidence to be an authorized representative of Bear
Xxxxxxx Asset Backed Securities I LLC, one of the companies that executed the
within instrument, and also known to me to be the person who executed it on
behalf of such limited liability company and acknowledged to me that such
limited liability company executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------
Notary Public
[Notarial Seal]
STATE OF MARYLAND )
) ss.:
COUNTY OF XXXXXX )
On this 30th day of April, 2004, before me, a notary public in
and for said State, appeared Xxxxxx Xxxxxx, personally known to me on the basis
of satisfactory evidence to be an authorized representative of Xxxxx Fargo Bank,
National Association that executed the within instrument, and also known to me
to be the person who executed it on behalf of such corporation, and acknowledged
to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------
Notary Public
[Notarial Seal]
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On this 30th day of April, 2004, before me, a notary public in
and for said State, appeared _________________, personally known to me on the
basis of satisfactory evidence to be an authorized representative of EMC
Mortgage Corporation, one of the corporations that executed the within
instrument, and also known to me to be the person who executed it on behalf of
such corporation and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------
Notary Public
[Notarial Seal]
STATE OF MASSACHUSETTS )
) ss.:
COUNTY OF BOSTON )
On this 30th day of April, 2004, before me, a notary public in
and for said State, appeared Xxxxxx X. Xxxxxxx, personally known to me on the
basis of satisfactory evidence to be an authorized representative of U.S. Bank
National Association that executed the within instrument, and also known to me
to be the person who executed it on behalf of such corporation, and acknowledged
to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------
Notary Public
[Notarial Seal]
EXHIBIT A-1
FORM OF CLASS [_-A_][_-X][_-PO] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
[THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON. ACCORDINGLY, FOLLOWING THE INITIAL
ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE NAMED HEREIN.]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
A-1-1
Certificate No.1 [Variable][Fixed] Pass-Through Rate
Class [_-A_][_-X][_-PO] Senior
Date of Pooling and Servicing Agreement Aggregate Initial Certificate
and Cut-off Date: [Principal][Notional] Balance of this
April 1, 2004 Certificate as of the Cut-off Date:
$[____________]
First Distribution Date: Initial [Certificate Principal][Notional] Balance
May 25, 2004 of this Certificate as of the Cut-off Date:
$[_______________]
Master Servicer:
Xxxxx Fargo Bank, National Association CUSIP: ___________
Assumed Final Distribution Date:
May 25, 2034
ASSET-BACKED CERTIFICATE
SERIES 2004-AC2
evidencing a fractional undivided interest in the distributions
allocable to the Class [_-A_][_-X][_-PO] Certificates with
respect to a Trust Fund consisting primarily of a pool of
conventional one- to four-family fixed interest rate mortgage
loans sold by BEAR XXXXXXX ASSET BACKED SECURITIES I LLC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Xxxxxxx
Asset Backed Securities I LLC, the Master Servicer, the Trustee or the
Securities Administrator referred to below or any of their affiliates or any
other person. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental entity or by Bear Xxxxxxx Asset Backed
Securities I LLC, the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Xxxxxxx Asset Backed Securities I LLC, the Master Servicer or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in a trust (the "Trust Fund")
generally consisting of conventional first lien, fixed rate mortgage loans
secured by one- to four- family residences (collectively, the "Mortgage Loans")
sold by Bear Xxxxxxx Asset Backed Securities I LLC ("BSABS I"). The Mortgage
Loans were sold by
A-1-2
EMC Mortgage Corporation ("EMC") to BSABS X. Xxxxx Fargo Bank, National
Association will act as master servicer of the Mortgage Loans (the "Master
Servicer," which term includes any successors thereto under the Agreement
referred to below). The Trust Fund was created pursuant to the Pooling and
Servicing Agreement, dated as of the Cut-off Date specified above (the
"Agreement"), among BSABS I, as depositor (the "Depositor"), EMC Mortgage
Corporation as seller and company, Xxxxx Fargo Bank, National Association, as
Master Servicer and securities administrator (the "Securities Administrator")
and U.S. Bank National Association, as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, capitalized terms used herein shall have the meaning
ascribed to them in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.
[For Class I-A1, Class I-A2, Class II-A, Class I-X and Class
II-X Certificates: Interest on this Certificate will accrue during the month
prior to the month in which a Distribution Date (as hereinafter defined) occurs
on the Certificate [Principal][Notional] Balance hereof at a per annum rate
equal to the Pass-Through Rate set forth above. The Trustee will distribute on
the 25th day of each month, or, if such 25th day is not a Business Day, the
immediately following Business Day (each, a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last day (or if such
last day is not a Business Day, the Business Day immediately preceding such last
day), of the calendar month immediately preceding the month in which the
Distribution Date occurs, an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount (of interest [and
principal], if any) required to be distributed to the Holders of Certificates of
the same Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month following the latest scheduled maturity date of
any Mortgage Loan [and is not likely to be the date on which the Certificate
Principal Balance of this Class of Certificates will be reduced to zero.]
[For Class I-PO and Class II-PO Certificates: The Trustee will
distribute on the 25th day of each month, or, if such 25th day is not a Business
Day, the immediately following Business Day (each, a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the last
day (or if such last day is not a Business Day, the Business Day immediately
preceding such last day, of the calendar month immediately preceding the month
in which the Distribution Date occurs, an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount (of principal,
if any) required to be distributed to the Holders of Certificates of the same
Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month following the latest scheduled maturity date of
any Mortgage Loan and is not likely to be the date on which the Certificate
Principal Balance of this Class of Certificates will be reduced to zero.]
[For Class I-A3 and Class I-A4 Certificates: Interest on this
Certificate will accrue from and including the 25th day of the calendar month
preceding the month in which a Distribution Date (as hereinafter defined) occurs
to and including the 24th day of the calendar month in which that Distribution
Date occurs on the Certificate [Principal][Notional] Balance hereof at a per
annum rate equal to the Pass-Through Rate set forth above. The Trustee will
distribute on the 25th day of each month, or, if such 25th day is not a Business
Day, the immediately following Business Day (each,
A-1-3
a "Distribution Date"), commencing on the First Distribution Date specified
above, to the Person in whose name this Certificate is registered at the close
of business on the Business Day immediately preceding such Distribution Date an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount (of interest [and principal], if any) required to be
distributed to the Holders of Certificates of the same Class as this
Certificate. The Assumed Final Distribution Date is the Distribution Date in the
month following the latest scheduled maturity date of any Mortgage Loan [and is
not likely to be the date on which the Certificate Principal Balance of this
Class of Certificates will be reduced to zero.]
[Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. [The
Initial Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses allocable
hereto.] [The Class [I-A4][I-X][II-X] Certificates have no Certificate Principal
Balance. The Initial Certificate Notional Balance of this Certificate is set
forth above.]
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of the Class or Classes of Certificates affected thereby evidencing over
50% of the Voting Rights of such Class or Classes. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for
A-1-4
registration of transfer at the offices or agencies maintained by the Trustee
for such purposes, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Trustee duly executed by the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates in authorized denominations representing a like aggregate
Percentage Interest will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of Depositor, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than the
percentage of the aggregate Stated Principal Balance specified in the Agreement
of the Mortgage Loans at the Cut-off Date. The exercise of such right will
effect the early retirement of the Certificates. In no event, however, will the
Trust Fund created by the Agreement continue beyond the expiration of 21 years
after the death of certain persons identified in the Agreement.
Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.
A-1-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: __________, 20__ U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Trustee
By: _______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class [_-A_][_-X][_-PO] Certificates
referred to in the within- mentioned Agreement.
U.S. BANK NATIONAL ASSOCIATION
Authorized signatory of U.S. Bank
National Association, not in its
individual capacity but solely as
Trustee
By: _______________________________
Authorized Signatory
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:
_____________________________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the
assignee named above, or ________________________, as its agent.
EXHIBIT A-2
FORM OF CLASS B-[_] CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO
THE SENIOR CERTIFICATES [AND THE CLASS B-_ CERTIFICATES] AS
DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES, CLASS I-PO
CERTIFICATE DEFERRED PAYMENT WRITEDOWN AMOUNTS AND CLASS II-PO CERTIFICATE
DEFERRED PAYMENT WRITEDOWN AMOUNTS ALLOCABLE HERETO AS DESCRIBED IN THE
AGREEMENT. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
[FOR CLASS B-1, CLASS B-2 AND CLASS B-3] UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
[FOR CLASS B-1, CLASS B-2 AND CLASS B-3] EACH BENEFICIAL OWNER
OF THIS CERTIFICATE OR ANY INTEREST HEREIN SHALL BE DEEMED TO HAVE REPRESENTED,
BY VIRTUE OF ITS ACQUISITION OR HOLDING OF THIS CERTIFICATE OR INTEREST HEREIN,
THAT EITHER (I) IT IS NOT AN
EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED ("PLAN"), OR INVESTING WITH ASSETS OF A PLAN OR (II) IT HAS ACQUIRED AND
IS HOLDING SUCH CERTIFICATE IN RELIANCE ON PROHIBITED TRANSACTION EXEMPTION
A-2-1
90-30, AS AMENDED FROM TIME TO TIME ("EXEMPTION"), AND THAT IT UNDERSTANDS THAT
THERE ARE CERTAIN CONDITIONS TO THE AVAILABILITY OF THE EXEMPTION, INCLUDING
THAT THE CERTIFICATE MUST BE RATED, AT THE TIME OF PURCHASE, NOT LOWER THAN
"BBB-" (OR ITS EQUIVALENT) BY STANDARD & POOR'S, FITCH, INC. OR XXXXX'X
INVESTORS SERVICE, INC., AND THE CERTIFICATE IS SO RATED OR (III) (1) IT IS AN
INSURANCE COMPANY, (2) THE SOURCE OF FUNDS USED TO ACQUIRE OR HOLD THE
CERTIFICATE OR INTEREST HEREIN IS AN "INSURANCE COMPANY GENERAL ACCOUNT", AS
SUCH TERM IS DEFINED IN PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60,
AND (3) THE CONDITIONS IN SECTIONS I AND III OF PTCE 95-60 HAVE BEEN SATISFIED.
[FOR CLASS B-4, CLASS B-5 AND CLASS B-6][THIS CERTIFICATE HAS
NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF,
BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES
ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"),
PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB,
WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR"
WITHIN THE MEANING THEREOF IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D
UNDER THE ACT OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT,
SUBJECT TO (A) THE RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM
PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER
EVIDENCE ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER
IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH
CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND
ANY OTHER APPLICABLE JURISDICTION.]
[FOR CLASS B-4, CLASS B-5 AND CLASS B-6] [THIS CERTIFICATE MAY
NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, UNLESS THE TRANSFEREE CERTIFIES OR
REPRESENTS THAT THE PROPOSED TRANSFER AND HOLDING OF A
A-2-2
CERTIFICATE AND THE SERVICING, MANAGEMENT AND OPERATION OF THE TRUST AND ITS
ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED
UNDER AN INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT
NOT LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14, XXX 00-00, XXX
00-0, XXX 95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL
OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE SECURITIES ADMINISTRATOR, THE
MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF
A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE OR UNLESS THE OPINION SPECIFIED
IN SECTION 7.08(A) OF THE AGREEMENT IS PROVIDED.]
A-2-3
Certificate No.1 Variable Pass-Through Rate
Class B-[_] Subordinate
Date of Pooling and Servicing Agreement Aggregate Initial Certificate Principal Balance
and Cut-off Date: of this Certificate as of the Cut-off Date:
April 1, 2004 $________________
First Distribution Date: Initial Certificate Principal Balance of this
May 25, 2004 Certificate as of the Cut-off Date:
$----------------
Master Servicer:
Xxxxx Fargo Bank, National Association CUSIP: _______________
Assumed Final Distribution Date:
May 25, 2034
ASSET-BACKED CERTIFICATE
SERIES 2004-AC2
evidencing a fractional undivided interest in the distributions
allocable to the Class B-[_] Certificates with respect to a
Trust Fund consisting primarily of a pool of conventional one-
to four-family fixed interest rate mortgage loans sold by BEAR
XXXXXXX ASSET BACKED SECURITIES I LLC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Xxxxxxx
Asset Backed Securities I LLC, the Master Servicer, the Trustee or the
Securities Administrator referred to below or any of their affiliates or any
other person. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental entity or by Bear Xxxxxxx Asset Backed
Securities I LLC, the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Xxxxxxx Asset Backed Securities I LLC, the Master Servicer or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This certifies that ________________ is the registered owner
of the Percentage Interest evidenced hereby in the beneficial ownership interest
of Certificates of the same Class as this Certificate in a trust (the "Trust
Fund") generally consisting of conventional first lien, fixed rate mortgage
loans secured by one- to four- family residences (collectively, the "Mortgage
Loans") sold by Bear Xxxxxxx Asset Backed Securities I LLC ("BSABS I"). The
Mortgage Loans were sold by EMC Mortgage Corporation ("EMC") to BSABS X. Xxxxx
Fargo Bank, National Association will act as master servicer of the Mortgage
Loans (the "Master Servicer," which term
A-2-4
includes any successors thereto under the Agreement referred to below). The
Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the "Agreement"), among BSABS I, as
depositor (the "Depositor"), EMC Mortgage Corporation as seller and company,
Xxxxx Fargo Bank, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and U.S. Bank National
Association as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
capitalized terms used herein shall have the meaning ascribed to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.
Interest on this Certificate will accrue during the month
prior to the month in which a Distribution Date (as hereinafter defined) occurs
on the Certificate Principal Balance hereof at a per annum rate equal to the
Pass-Through Rate set forth above. The Trustee will distribute on the 25th day
of each month, or, if such 25th day is not a Business Day, the immediately
following Business Day (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
calendar month immediately preceding the month in which the Distribution Date
occurs, an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount (of interest and principal, if any) required to
be distributed to the Holders of Certificates of the same Class as this
Certificate. The Assumed Final Distribution Date is the Distribution Date in the
month following the latest scheduled maturity date of any Mortgage Loan and is
not likely to be the date on which the Certificate Principal Balance of this
Class of Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
Initial Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses, Class I-PO
Certificate Deferred Payment Writedown Amounts and Class II-PO Certificate
Deferred Payment Writedown Amounts allocable hereto.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
[For Class B-1, Class B-2 and Class B-3: Each beneficial owner
of this Certificate or any interest herein shall be deemed to have represented,
by virtue of its acquisition or holding of this certificate or interest herein,
that either (i) it is not an employee benefit plan subject to the Employee
Retirement Income Security Act of 1974, as amended or section 4975 of the
Internal
A-2-5
Revenue Code of 1986, as amended ("Plan"), or investing with assets of a Plan or
(ii) it has acquired and is holding such certificate in reliance on Prohibited
Transaction Exemption 90-30, as amended from time to time ("Exemption"), and
that it understands that there are certain conditions to the availability of the
Exemption, including that the certificate must be rated, at the time of
purchase, not lower than "BBB-" (or its equivalent) by Standard & Poor's, Fitch,
Inc. or Xxxxx'x Investors Service, Inc., and the certificate is so rated or
(iii) (1) it is an insurance company, (2) the source of funds used to acquire or
hold the certificate or interest herein is an "insurance company general
account", as such term is defined in Prohibited Transaction Class Exemption
("PTCE") 95-60, and (3) the conditions in Sections I and III of PTCE 95-60 have
been satisfied.]
[For Class B-4, Class B-5 and Class B-6 Certificates: No
transfer of this Class B- [4][5][6] certificate will be made unless such
transfer is (i) exempt from the registration requirements of the Securities Act
of 1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws and (ii) made in accordance with Section 7.07
of the Agreement. In the event that such transfer is to be made the Trustee
shall register such transfer if, (i) made to a transferee who has provided the
Trustee with evidence as to its QIB status; or (ii) (A) the transferor has
advised the Trustee in writing that the Certificate is being transferred to an
Institutional Accredited Investor and (B) prior to such transfer the transferee
furnishes to the Trustee an Investment Letter; provided that if based upon an
Opinion of Counsel to the effect that (A) and (B) above are met sufficient to
confirm that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act
and other applicable laws.]
This Certificate may not be acquired directly or indirectly
by, or on behalf of, an employee benefit plan or other retirement arrangement
which is subject to Title I of the Employee Retirement Income Security Act of
1974, as amended, or Section 4975 of the Internal Revenue Code of 1986, as
amended, unless the transferee certifies or represents that the proposed
transfer and holding of a Certificate and the servicing, management and
operation of the trust and its assets: (i) will not result in any prohibited
transaction which is not covered under an individual or class prohibited
transaction exemption, including, but not limited to, Prohibited Transaction
Exemption ("PTE") 84-14, XXX 00-00, XXX 00-0, XXX 00-00 or PTE 96-23 and (ii)
will not give rise to any additional obligations on the part of the Depositor,
the Securities Administrator, the Master Servicer or the Trustee, which will be
deemed represented by an owner of a Book-Entry Certificate or a Global
Certificate or unless the opinion specified in section 7.08(a) of the Agreement
is provided.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
A-2-6
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of the Class or Classes of Certificates affected thereby evidencing over
50% of the Voting Rights of such Class or Classes. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Percentage Interest
will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Depositor, the Master Servicer,
the Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than the
percentage of the aggregate Stated Principal Balance specified in the Agreement
of the Mortgage Loans at the Cut-off Date. The exercise of such right will
effect the early retirement of the Certificates. In no event, however, will the
Trust Fund created by the Agreement continue beyond the expiration of 21 years
after the death of certain persons identified in the Agreement.
A-2-7
Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.
A-2-8
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: __________, 20__ U.S. BANK NATIONAL
ASSOCIATION,
not in its individual capacity but
solely as Trustee
By: _______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class B-[_] Certificates referred to in the
within-mentioned Agreement.
U.S. BANK NATIONAL ASSOCIATION
Authorized signatory of U.S. Bank
National Association, not in its
individual capacity but solely as
Trustee
By: _______________________________
Authorized Signatory
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:
_____________________________________________________
Signature by or on behalf of assignor
___________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to ____________________________.
This information is provided by __________________, the
assignee named above, or ________________________, as its agent.
EXHIBIT A-3
FORM OF CLASS P CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON. ACCORDINGLY, FOLLOWING THE INITIAL
ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE NAMED HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY
STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES
THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY
(1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON
THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN
"INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH
ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY
THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE
THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION.
A-3-1
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY
BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, UNLESS THE PROPOSED TRANSFEREE PROVIDES THE TRUSTEE WITH AN OPINION OF
COUNSEL ADDRESSED TO THE TRUSTEE, DEPOSITOR, MASTER SERVICER AND SECURITIES
ADMINISTRATOR AND ON WHICH THEY MAY RELY THAT IS SATISFACTORY TO THE TRUSTEE
THAT THE PURCHASE OF CERTIFICATES ON BEHALF OF SUCH PERSON WILL NOT RESULT IN OR
CONSTITUTE A NONEXEMPT PROHIBITED TRANSACTION, IS PERMISSIBLE UNDER APPLICABLE
LAW AND WILL NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART OF THE
DEPOSITOR, THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR OR THE TRUSTEE.
A-3-2
Certificate No.1 Percentage Interest: 100%
Class P
Date of Pooling and Servicing Agreement Aggregate Initial Certificate Principal Balance
and Cut-off Date: of this Certificate as of the Cut-off Date:
April 1, 2004 $100.00
First Distribution Date: Initial Certificate Principal Balance of this
May 25, 2004 Certificate as of the Cut-off Date:
$100.00
Master Servicer:
Xxxxx Fargo Bank, National Association CUSIP: _________________
Assumed Final Distribution Date:
May 25, 2034
ASSET-BACKED CERTIFICATE
SERIES 2004-AC2
evidencing a fractional undivided interest in the distributions
allocable to the Class P Certificates with respect to a Trust
Fund consisting primarily of a pool of conventional one- to
four-family fixed interest rate mortgage loans sold by BEAR
XXXXXXX ASSET BACKED SECURITIES I LLC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Xxxxxxx
Asset Backed Securities I LLC, the Master Servicer, the Trustee or the
Securities Administrator referred to below or any of their affiliates or any
other person. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental entity or by Bear Xxxxxxx Asset Backed
Securities I LLC, the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Xxxxxxx Asset Backed Securities I LLC, the Master Servicer or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This certifies that Bear, Xxxxxxx Securities Corp. is the
registered owner of the Percentage Interest evidenced hereby in the beneficial
ownership interest of Certificates of the same Class as this Certificate in a
trust (the "Trust Fund") generally consisting of conventional first lien, fixed
rate mortgage loans secured by one- to four- family residences (collectively,
the "Mortgage Loans") sold by Bear Xxxxxxx Asset Backed Securities I LLC ("BSABS
I"). The Mortgage Loans were sold by EMC Mortgage Corporation ("EMC") to BSABS
X. Xxxxx Fargo
A-3-3
Bank, National Association will act as master servicer of the Mortgage Loans
(the "Master Servicer," which term includes any successors thereto under the
Agreement referred to below). The Trust Fund was created pursuant to the Pooling
and Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement"), among BSABS I, as depositor (the "Depositor"), EMC Mortgage
Corporation as seller and company, Xxxxx Fargo Bank, National Association, as
Master Servicer and securities administrator (the "Securities Administrator")
and U.S. Bank National Association, as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, capitalized terms used herein shall have the meaning
ascribed to them in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.
Each Holder of this Certificate will be deemed to have agreed
to be bound by the restrictions set forth in the Agreement to the effect that
(i) each person holding or acquiring any Ownership Interest in this Certificate
must be a United States Person and a Permitted Transferee, (ii) the transfer of
any Ownership Interest in this Certificate will be conditioned upon the delivery
to the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Depositor will have the right, in
its sole discretion and without notice to the Holder of this Certificate, to
sell this Certificate to a purchaser selected by the Depositor, which purchaser
may be the Depositor, or any affiliate of the Depositor, on such terms and
conditions as the Depositor may choose.
The Trustee will distribute on the 25th day of each month, or,
if such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the calendar month
immediately preceding the month in which the Distribution Date occurs, an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amounts required to be distributed to the Holders of Certificates of the
same Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month following the latest scheduled maturity date of
any Mortgage Loan.
Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice.
A-3-4
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit E and either F
or G, as applicable, and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee, the Securities Administrator or the
Master Servicer in their respective capacities as such), together with copies of
the written certification(s) of the Holder of the Certificate desiring to effect
the transfer and/or such Holder's prospective transferee upon which such Opinion
of Counsel is based. Neither the Depositor nor the Trustee is obligated to
register or qualify the Class of Certificates specified on the face hereof under
the 1933 Act or any other securities law or to take any action not otherwise
required under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be required to indemnify the Trustee, the Securities
Administrator, the Depositor, the Seller and the Master Servicer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
This certificate may not be acquired directly or indirectly
by, or on behalf of, an employee benefit plan or other retirement arrangement
which is subject to title I of the Employee Retirement Income Security Act of
1974, as amended, or section 4975 of the Internal Revenue Code of 1986, as
amended, unless the proposed transferee provides the Trustee with an opinion of
counsel addressed to the Trustee, Master Servicer and the Securities
Administrator and on which they may rely (which shall not be at the expense of
the Trustee, Master Servicer or the Securities Administrator) which is
acceptable to the Trustee, that the purchase of this Certificate will not result
in or constitute a nonexempt prohibited transaction, is permissible under
applicable law and will not give rise to any additional obligations on the part
of the Depositor, the Master Servicer, the Securities Administrator or the
Trustee.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
A-3-5
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of the Class or Classes of Certificates affected thereby evidencing over
50% of the Voting Rights of such Class or Classes. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Percentage Interest
will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Depositor, the Master Servicer,
the Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than the
percentage of the aggregate Stated Principal Balance specified in the Agreement
of the Mortgage Loans at the Cut-off Date. The exercise of such right will
effect the early retirement of the Certificates. In no event, however, will the
Trust Fund created by the Agreement continue beyond the expiration of 21 years
after the death of certain persons identified in the Agreement.
A-3-6
Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.
A-3-7
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: __________, 20__ U.S. BANK NATIONAL
ASSOCIATION,
not in its individual capacity but
solely as Trustee
By: _______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class P Certificates referred to in the
within-mentioned Agreement.
U.S. BANK NATIONAL ASSOCIATION
Authorized signatory of U.S. Bank
National Association, not in its
individual capacity but solely as
Trustee
By: _______________________________
Authorized Signatory
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:
_____________________________________________________
Signature by or on behalf of assignor
___________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _________________________.
This information is provided by __________________, the
assignee named above, or ________________________, as its agent.
EXHIBIT A-4
FORM OF CLASS R-[_] CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A
NON-UNITED STATES PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY
BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, UNLESS THE PROPOSED TRANSFEREE PROVIDES THE TRUSTEE WITH AN OPINION OF
COUNSEL ADDRESSED TO THE TRUSTEE, DEPOSITOR, MASTER SERVICER AND SECURITIES
ADMINISTRATOR AND ON WHICH THEY MAY RELY THAT IS SATISFACTORY TO THE TRUSTEE
THAT THE PURCHASE OF CERTIFICATES ON BEHALF OF SUCH PERSON WILL NOT RESULT IN OR
CONSTITUTE A NONEXEMPT PROHIBITED TRANSACTION, IS PERMISSIBLE UNDER APPLICABLE
LAW AND WILL NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART OF THE
DEPOSITOR, THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR OR THE TRUSTEE.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE
MASTER SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED
STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY POSSESSION OF THE UNITED
STATES, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN AN
INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS ACTIVITIES ARE SUBJECT TO
TAX AND EXCEPT FOR XXXXXXX MAC, A MAJORITY OF ITS BOARD OF DIRECTORS IS NOT
SELECTED BY SUCH GOVERNMENTAL UNIT), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C)
ANY ORGANIZATION (OTHER THAN CERTAIN FARMERS' COOPERATIVES DESCRIBED IN SECTION
521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX
A-4-1
IMPOSED BY SECTION 511 OF THE CODE (INCLUDING THE TAX IMPOSED BY SECTION 511 OF
THE CODE ON UNRELATED BUSINESS TAXABLE INCOME), (D) RURAL ELECTRIC AND TELEPHONE
COOPERATIVES DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE, (E) AN ELECTING
LARGE PARTNERSHIP UNDER SECTION 775(A) OF THE CODE (ANY SUCH PERSON DESCRIBED IN
THE FOREGOING CLAUSES (A), (B), (C), (D) OR (E) BEING HEREIN REFERRED TO AS A
"DISQUALIFIED ORGANIZATION"), OR (F) AN AGENT OF A DISQUALIFIED ORGANIZATION,
(2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX
AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE
FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION
IN THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED
ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE
OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
PARAGRAPH.
A-4-2
Certificate No.1
Variable Pass-Through Rate
Class R-[_]
Percentage Interest: 100%
Date of Pooling and Servicing Agreement
and Cut-off Date:
April 1, 2004
Aggregate Initial Certificate Principal Balance
of this Certificate as of the Cut-off Date:$50.00
First Distribution Date:
March 25, 2004
Initial Certificate Principal Balance of this
Certificate as of the Cut-off Date: $50.00
Master Servicer:
Xxxxx Fargo Bank, National Association
CUSIP: [____________]
Assumed Final Distribution Date:
March 25, 2034
ASSET-BACKED CERTIFICATE
SERIES 2004-AC2
evidencing a fractional undivided interest in the distributions
allocable to the Class R-[_] Certificates with respect to a
Trust Fund consisting primarily of a pool of conventional one-
to four-family fixed interest rate mortgage loans sold by BEAR
XXXXXXX ASSET BACKED SECURITIES I LLC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Xxxxxxx
Asset Backed Securities I LLC, the Master Servicer, the Trustee or the
Securities Administrator referred to below or any of their affiliates or any
other person. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental entity or by Bear Xxxxxxx Asset Backed
Securities I LLC, the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Xxxxxxx Asset Backed Securities I LLC, the Master Servicer or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This certifies that __________________ is the registered owner
of the Percentage Interest evidenced hereby in the beneficial ownership interest
of Certificates of the same Class as this Certificate in a trust (the "Trust
Fund") generally consisting of conventional first lien, fixed rate mortgage
loans secured by one- to four- family residences (collectively, the "Mortgage
Loans") sold by Bear Xxxxxxx Asset Backed Securities I LLC ("BSABS I"). The
Mortgage Loans
A-4-3
were sold by EMC Mortgage Corporation ("EMC") to BSABS X. Xxxxx Fargo Bank,
National Association will act as master servicer of the Mortgage Loans (the
"Master Servicer," which term includes any successors thereto under the
Agreement referred to below). The Trust Fund was created pursuant to the Pooling
and Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement"), among BSABS I, as depositor (the "Depositor"), EMC Mortgage
Corporation as seller and company, Xxxxx Fargo Bank, National Association, as
Master Servicer and securities administrator (the "Securities Administrator")
and U.S. Bank National Association as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, capitalized terms used herein shall have the meaning
ascribed to them in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.
Each Holder of this Certificate will be deemed to have agreed
to be bound by the restrictions set forth in the Agreement to the effect that
(i) each person holding or acquiring any Ownership Interest in this Certificate
must be a United States Person and a Permitted Transferee, (ii) the transfer of
any Ownership Interest in this Certificate will be conditioned upon the delivery
to the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Depositor will have the right, in
its sole discretion and without notice to the Holder of this Certificate, to
sell this Certificate to a purchaser selected by the Depositor, which purchaser
may be the Depositor, or any affiliate of the Depositor, on such terms and
conditions as the Depositor may choose.
Interest on this Certificate will accrue during the month
prior to the month in which a Distribution Date (as hereinafter defined) occurs
on the Certificate Principal Balance hereof at a per annum rate equal to the
Pass-Through Rate set forth above. The Trustee will distribute on the 25th day
of each month, or, if such 25th day is not a Business Day, the immediately
following Business Day (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
calendar month immediately preceding the month in which the Distribution Date
occurs, an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount (of interest and principal, if any) required to
be distributed to the Holders of Certificates of the same Class as this
Certificate. The Assumed Final Distribution Date is the Distribution Date in the
month following the latest scheduled maturity date of any Mortgage Loan.
Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation
A-4-4
and surrender of this Certificate at the office or agency appointed by the
Trustee for that purpose and designated in such notice.
The Initial Certificate Principal Balance of this Certificate
is set forth above. The Certificate Principal Balance hereof will be reduced to
the extent of distributions allocable to principal hereon and any Realized
Losses allocable hereto.
This certificate may not be acquired directly or indirectly
by, or on behalf of, an employee benefit plan or other retirement arrangement
which is subject to title I of the Employee Retirement Income Security Act of
1974, as amended, or section 4975 of the Internal Revenue Code of 1986, as
amended, unless the proposed transferee provides the Trustee with an opinion of
counsel addressed to the Trustee, Master Servicer and the Securities
Administrator and on which they may rely (which shall not be at the expense of
the Trustee, Master Servicer or the Securities Administrator) which is
acceptable to the Trustee, that the purchase of this Certificate will not result
in or constitute a nonexempt prohibited transaction, is permissible under
applicable law and will not give rise to any additional obligations on the part
of the Depositor, the Master Servicer, the Securities Administrator or the
Trustee.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of the Class or Classes of Certificates affected thereby evidencing over
50% of the Voting Rights of such Class or Classes. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing,
A-4-5
and thereupon one or more new Certificates in authorized denominations
representing a like aggregate Percentage Interest will be issued to the
designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of Depositor, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than the
percentage of the aggregate Stated Principal Balance specified in the Agreement
of the Mortgage Loans at the Cut-off Date. The exercise of such right will
effect the early retirement of the Certificates. In no event, however, will the
Trust Fund created by the Agreement continue beyond the expiration of 21 years
after the death of certain persons identified in the Agreement.
Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.
A-4-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: __________, 20__ U.S. BANK NATIONAL
ASSOCIATION,
not in its individual capacity but
solely as Trustee
By: _______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class R-[_] Certificates referred to in the
within-mentioned Agreement.
U.S. BANK NATIONAL ASSOCIATION
Authorized signatory of U.S. Bank
National Association, not in its
individual capacity but solely as
Trustee
By: _______________________________
Authorized Signatory
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:
____________________________________________________
Signature by or on behalf of assignor
___________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _________________________________.
This information is provided by __________________, the
assignee named above, or ________________________, as its agent.
EXHIBIT B
MORTGAGE LOAN SCHEDULE
----------------------
[provided upon request]
X-0
XXXXXXX X
[Xxxxxxxx]
X-0
XXXXXXX X
FORM OF TRANSFER AFFIDAVIT
Affidavit pursuant to Section 860E(e)(4)
of the Internal Revenue Code of 1986, as
amended, and for other purposes
STATE OF )
)ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he/she is [Title of Officer] of [Name of Investor] (the
"Investor"), a [savings institution] [corporation] duly organized and existing
under the laws of [the State of _____] [the United States], on behalf of which
he makes this affidavit.
2. That (i) the Investor is not a "disqualified organization" as
defined in Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended
(the "Code"), and will not be a disqualified organization as of [Closing Date]
[date of purchase]; (ii) it is not acquiring the Bear Xxxxxxx Asset-Backed
Securities I LLC Asset-Backed Certificates, Series 2004-AC2, Class R-__
Certificates (the "Residual Certificates") for the account of a disqualified
organization; (iii) it consents to any amendment of the Pooling and Servicing
Agreement that shall be deemed necessary by Bear Xxxxxxx Asset Backed Securities
I LLC (upon advice of counsel) to constitute a reasonable arrangement to ensure
that the Residual Certificates will not be owned directly or indirectly by a
disqualified organization; and (iv) it will not transfer such Residual
Certificates unless (a) it has received from the transferee an affidavit in
substantially the same form as this affidavit containing these same four
representations and (b) as of the time of the transfer, it does not have actual
knowledge that such affidavit is false.
3. That the Investor is one of the following: (i) a citizen or resident
of the United States, (ii) a corporation or partnership (including an entity
treated as a corporation or partnership for federal income tax purposes) created
or organized in, or under the laws of, the United States or any state thereof or
the District of Columbia (except, in the case of a partnership, to the extent
provided in regulations), provided that no partnership or other entity treated
as a partnership for United States federal income tax purposes shall be treated
as a United States Person unless all persons that own an interest in such
partnership either directly or through any entity that is not a corporation for
United States federal income tax purposes are United States Persons, (iii) an
estate whose income is subject to United States federal income tax regardless of
its source, or (iv) a trust other than a "foreign trust," as defined in Section
7701 (a)(31) of the Code.
4. That the Investor's taxpayer identification number is
______________________.
5. That no purpose of the acquisition of the Residual Certificates is
to avoid or impede the assessment or collection of tax.
D-1
6. That the Investor understands that, as the holder of the Residual
Certificates, the Investor may incur tax liabilities in excess of any cash flows
generated by such Residual Certificates.
7. That the Investor intends to pay taxes associated with holding the
Residual Certificates as they become due.
IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[Title of Officer] this ____ day of _________, 20__.
[NAME OF INVESTOR]
By: ________________________________
[Name of Officer]
[Title of Officer]
[Address of Investor for receipt
of distributions]
Address of Investor
for receipt of tax
information:
D-2
Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Investor, and acknowledged to me that he/she
executed the same as his/her free act and deed and the free act and deed of the
Investor.
Subscribed and sworn before me this ___ day of _________, 20___.
NOTARY PUBLIC
COUNTY OF
STATE OF
My commission expires the ___ day of ___________________, 20___.
D-3
EXHIBIT E
FORM OF TRANSFEROR CERTIFICATE
______________,200___
Bear Xxxxxxx Asset Backed Securities I LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
U.S. Bank National Association
Xxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
Attention: Bear Xxxxxxx Asset Backed Securities I Trust 2004-AC2
Re: Bear Xxxxxxx Asset Backed Securities I LLC
Asset-Backed Certificates, Series 2004-AC2, Class__
---------------------------------------------------
Ladies and Gentlemen:
In connection with the sale by ___________ (the "Seller") to ________
(the "Purchaser") of $_________ Initial Certificate Principal Balance of
Asset-Backed Certificates, Series 2004-AC2, Class _____ (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of April 1, 2004, among Bear Xxxxxxx
Asset-Backed Securities I LLC, as depositor (the "Depositor"), EMC Mortgage
Corporation, as seller and company, Xxxxx Fargo Bank, National Association, as
master servicer and securities administrator and U.S. Bank National Association,
as trustee (the "Trustee"). The Seller hereby certifies, represents and warrants
to, a covenants with, the Depositor and the Trustee that:
Neither the Seller nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the "Act"), that would render the disposition of any Certificate a violation of
Section 5 of the Act or any state securities law, or that would require
registration or qualification pursuant thereto. The Seller will not act in any
manner set forth in the foregoing sentence with respect to any Certificate. The
Seller has not and will not sell or otherwise transfer any of the Certificates,
except in compliance with the provisions of the Pooling and Servicing Agreement.
E-1
Very truly yours,
___________________________________
(Seller)
By: _______________________________
Name: _____________________________
Title: ____________________________
E-2
EXHIBIT F
FORM OF INVESTMENT LETTER
[Date]
[SELLER]
Bear Xxxxxxx Asset Backed Securities I LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
U.S. Bank National Association
Xxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
Re: Bear Xxxxxxx Asset Backed Securities I Trust 2004-AC2,
Asset-Backed Certificates, Series 2004-AC2 (the "Certificates"),
including the Class B-4, Class B-5, Class B-6 and Class P
Certificates (the "Privately Offered Certificates")
----------------------------------------------------------------
Dear Ladies and Gentlemen:
In connection with our purchase of Privately Offered Certificates, we
confirm that:
(i) we understand that the Privately Offered Certificates
are not being registered under the Securities Act of
1933, as amended (the "Act") or any applicable state
securities or "Blue Sky" laws, and are being sold to
us in a transaction that is exempt from the
registration requirements of such laws;
(ii) any information we desired concerning the
Certificates, including the Privately Offered
Certificates, the trust in which the Certificates
represent the entire beneficial ownership interest
(the "Trust") or any other matter we deemed relevant
to our decision to purchase Privately Offered
Certificates has been made available to us;
(iii) we are able to bear the economic risk of investment
in Privately Offered Certificates; we are an
institutional "accredited investor" as defined in
Section 501(a) of Regulation D promulgated under the
Act and a sophisticated institutional investor;
(iv) we are acquiring Privately Offered Certificates for
our own account, not as nominee for any other person,
and not with a present view to any distribution or
other disposition of the Privately Offered
Certificates;
(v) we agree the Privately Offered Certificates must be
held indefinitely by us (and may not be sold,
pledged, hypothecated or in any way disposed of)
F-1
unless subsequently registered under the Act and any
applicable state securities or "Blue Sky" laws or an
exemption from the registration requirements of the
Act and any applicable state securities or "Blue Sky"
laws is available;
(vi) we agree that in the event that at some future time
we wish to dispose of or exchange any of the
Privately Offered Certificates (such disposition or
exchange not being currently foreseen or
contemplated), we will not transfer or exchange any
of the Privately Offered Certificates unless:
(A) (1) the sale is to an Eligible Purchaser
(as defined below), (2) if required by the Pooling
and Servicing Agreement (as defined below) a letter
to substantially the same effect as either this
letter or, if the Eligible Purchaser is a Qualified
Institutional Buyer as defined under Rule 144A of the
Act, the Rule 144A and Related Matters Certificate in
the form attached to the Pooling and Servicing
Agreement (as defined below) (or such other
documentation as may be acceptable to the Trustee) is
executed promptly by the purchaser and delivered to
the addressees hereof and (3) all offers or
solicitations in connection with the sale, whether
directly or through any agent acting on our behalf,
are limited only to Eligible Purchasers and are not
made by means of any form of general solicitation or
general advertising whatsoever; and
(B) if the Privately Offered Certificate is
not registered under the Act (as to which we
acknowledge you have no obligation), the Privately
Offered Certificate is sold in a transaction that
does not require registration under the Act and any
applicable state securities or "blue sky" laws and,
if U.S. Bank National Association (the "Trustee") so
requests, a satisfactory Opinion of Counsel is
furnished to such effect, which Opinion of Counsel
shall be an expense of the transferor or the
transferee;
(vii) we agree to be bound by all of the terms (including
those relating to restrictions on transfer) of the
Pooling and Servicing, pursuant to which the Trust
was formed; we have reviewed carefully and understand
the terms of the Pooling and Servicing Agreement;
(viii) we either: (i) are not acquiring the Privately
Offered Certificate directly or indirectly by, or on
behalf of, an employee benefit plan or other
retirement arrangement which is subject to Title I of
the Employee Retirement Income Security Act of 1974,
as amended, or section 4975 of the Internal Revenue
Code of 1986, as amended, or (ii) in the case of the
Class B-4, Class B-5 and Class B-6 Certificates, are
providing a representation to the effect that the
proposed transfer and holding of a Privately Offered
Certificate and the servicing, management and
operation of the Trust and its assets: (I) will not
result in any prohibited transaction which is not
covered under an individual or class prohibited
transaction exemption, including, but not limited to,
F-2
Prohibited Transaction Exemption ("PTE") 84-14, XXX
00-00, XXX 00-0, XXX 95-60, or PTE 96-23 and (II)
will not give rise to any additional obligations on
the part of the Depositor, the Master Servicer, the
Securities Administrator or the Trustee or (iii) in
the case of the Privately Offered Securities have
attached hereto the opinion specified in Section
7.02(b) of the Agreement.
(ix) We understand that each of the Privately Offered
Certificates bears, and will continue to bear, a
legend to substantiate the following effect: "THIS
CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR UNDER ANY STATE SECURITIES
LAWS. THE HOLDER HEREOF, BY PURCHASING THIS
CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON
THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
(A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE,
PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED
FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN
THE MEANING THEREOF IN RULE 501(a)(1), (2), (3) or
(7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN
WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE
RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN
THE FORM PROVIDED IN THE AGREEMENT AND (B) THE
RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE
ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE,
PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH
CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION. [In the case of the Class B-4, Class
B-5 and Class B-6 Certificates: THIS CERTIFICATE MAY
NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, UNLESS THE
F-3
PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE AND
THE SERVICING, MANAGEMENT AND OPERATION OF THE TRUST
AND ITS ASSETS: (1) WILL NOT RESULT IN ANY PROHIBITED
TRANSACTION WHICH IS NOT COVERED UNDER AN INDIVIDUAL
OR CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING,
BUT NOT LIMITED TO, PROHIBITED TRANSACTION EXEMPTION
("PTE") 84-14, XXX 00-00, XXX 00-0, XXX 95-60 OR PTE
96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL
OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE MASTER
SERVICER, THE SECURITIES ADMINISTRATOR OR THE
TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER
OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE
OR UNLESS THE OPINION PROVIDED IN SECTION 5.07 OF THE
AGREEMENT IS PROVIDED."] [In the case of the Class P
Certificates: THIS CERTIFICATE MAY NOT BE ACQUIRED
DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF, AN
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED,
OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED, UNLESS THE PROPOSED TRANSFEREE PROVIDES
THE TRUSTEE WITH AN OPINION OF COUNSEL ADDRESSED TO
THE TRUSTEE, DEPOSITOR, MASTER SERVICER AND
SECURITIES ADMINISTRATOR AND ON WHICH THEY MAY RELY
THAT IS SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE
OF CERTIFICATES ON BEHALF OF SUCH PERSON WILL NOT
RESULT IN OR CONSTITUTE A NONEXEMPT PROHIBITED
TRANSACTION, IS PERMISSIBLE UNDER APPLICABLE LAW AND
WILL NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON
THE PART OF THE DEPOSITOR, THE MASTER SERVICER, THE
SECURITIES ADMINISTRATOR OR THE TRUSTEE.]
"ELIGIBLE PURCHASER" means a corporation, partnership or other entity
which we have reasonable grounds to believe and do believe (i) can make
representations with respect to itself to substantially the same effect as the
representations set forth herein, and (ii) is either a Qualified Institutional
Buyer as defined under Rule 144A of the Act or an institutional "Accredited
Investor" as defined under Rule 501 of the Act.
Terms not otherwise defined herein shall have the meanings assigned to
them in the Pooling and Servicing Agreement, dated as of April 1, 2004, between
Bear Xxxxxxx Asset Backed Securities I LLC, as depositor, EMC Mortgage
Corporation, as seller and company, Xxxxx Fargo Bank, National Association, as
master servicer and securities administrator and U.S. Bank National Association,
as Trustee (the "Pooling and Servicing Agreement').
F-4
If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.
Name of Nominee (if any): _________________________
F-5
IN WITNESS WHEREOF, this document has been executed by the undersigned who is
duly authorized to do so on behalf of the undersigned Eligible Purchaser on the
___ day of ________, 20___.
Very truly yours,
[PURCHASER]
By: _________________________________
(Authorized Officer)
[By: ________________________________
Attorney-in-fact]
F-6
Nominee Acknowledgment
The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.
[NAME OF NOMINEE]
By: _________________________________
(Authorized Officer)
[By: _______________________________
Attorney-in-fact]
F-7
EXHIBIT G
FORM OF RULE 144A AND RELATED MATTERS CERTIFICATE
[SELLER]
Bear Xxxxxxx Asset Backed Securities I LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
U.S. Bank National Association
Xxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
Re: Bear Xxxxxxx Asset Backed Securities I Trust 2004-AC2,
Asset-Backed Certificates, Series 2004-AC2 (the "Certificates"),
including the Class B-4, Class B-5, Class B-6 and Class P
Certificates (The "Privately Offered Certificates")
----------------------------------------------------------------
Dear Ladies and Gentlemen:
In connection with our purchase of Privately Offered Certificates, the
undersigned certifies to each of the parties to whom this letter is addressed
that it is a qualified institutional buyer (as defined in Rule 144A under the
Securities Act of 1933, as amended (the "Act")) as follows:
1. It owned and/or invested on a discretionary basis eligible securities
(excluding affiliate's securities, bank deposit notes and CD's, loan
participations, repurchase agreements, securities owned but subject to
a repurchase agreement and swaps), as described below:
Date: ______________, 20__ (must be on or after the close of its most
recent fiscal year)
Amount: $ _____________________; and
2. The dollar amount set forth above is:
a. greater than $100 million and the undersigned is one of the
following entities:
(x) /_/ an insurance company as defined in Section 2(13)
of the Act/1; or
--------------------
1 A purchase by an insurance company for one or more of its separate
accounts, as defined by Section 2(a)(37) of the Investment Company Act
of 1940, which are neither registered nor required to be registered
thereunder, shall be deemed to be a purchase for the account of such
insurance company.
G-1
(y) /_/ an investment company registered under the
Investment Company Act or any business development
company as defined in Section 2(a)(48) of the
Investment Company Act of 1940; or
(z) /_/ a Small Business Investment Company licensed by
the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business
Investment Act of 1958; or
(aa) /_/ a plan (i) established and maintained by a state,
its political subdivisions, or any agency or
instrumentality of a state or its political
subdivisions, the laws of which permit the
purchase of securities of this type, for the
benefit of its employees and (ii) the governing
investment guidelines of which permit the purchase
of securities of this type; or
(bb) /_/ a business development company as defined in
Section 202(a)(22) of the Investment Advisers Act
of 1940; or
(cc) /_/ a corporation (other than a U.S. bank, savings and
loan association or equivalent foreign
institution), partnership, Massachusetts or
similar business trust, or an organization
described in Section 501(c)(3) of the Internal
Revenue Code; or
(dd) /_/ a U.S. bank, savings and loan association or
equivalent foreign institution, which has an
audited net worth of at least $25 million as
demonstrated in its latest annual financial
statements; or
(ee) /_/ an investment adviser registered under the
Investment Advisers Act; or
b. /_/ greater than $10 million, and the undersigned is a
broker-dealer registered with the SEC; or
c. /_/ less than $ 10 million, and the undersigned is a broker-dealer
registered with the SEC and will only purchase Rule 144A
securities in transactions in which it acts as a riskless
principal (as defined in Rule 144A); or
d. /_/ less than $100 million, and the undersigned is an investment
company registered under the Investment Company Act of 1940,
which, together with one or more registered investment
companies having the same or an affiliated investment adviser,
owns at least $100 million of eligible securities; or
e. /_/ less than $100 million, and the undersigned is an entity, all
the equity owners of which are qualified institutional buyers.
G-2
The undersigned further certifies that it is purchasing a Privately
Offered Certificate for its own account or for the account of others that
independently qualify as "Qualified Institutional Buyers" as defined in Rule
144A. It is aware that the sale of the Privately Offered Certificates is being
made in reliance on its continued compliance with Rule 144A. It is aware that
the transferor may rely on the exemption from the provisions of Section 5 of the
Act provided by Rule 144A. The undersigned understands that the Privately
Offered Certificates may be resold, pledged or transferred only to (i) a person
reasonably believed to be a Qualified Institutional Buyer that purchases for its
own account or for the account of a Qualified Institutional Buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance in Rule
144A, or (ii) an institutional "accredited investor," as such term is defined
under Rule 501 of the Act in a transaction that otherwise does not constitute a
public offering.
The undersigned agrees that if at some future time it wishes to dispose
of or exchange any of the Privately Offered Certificates, it will not transfer
or exchange any of the Privately Offered Certificates to a Qualified
Institutional Buyer without first obtaining a Rule 144A and Related Matters
Certificate in the form hereof from the transferee and delivering such
certificate to the addressees hereof. Prior to making any transfer of Privately
Offered Certificates, if the proposed Transferee is an institutional "accredited
investor," the transferor shall obtain from the transferee and deliver to the
addressees hereof an Investment Letter in the form attached to the Pooling and
Servicing Agreement, dated as of April 1, 2004, among Bear Xxxxxxx Asset Backed
Securities I LLC, Xxxxx Fargo Bank, National Association, EMC Mortgage
Corporation and U.S. Bank Bank National Association, as Trustee, pursuant to
which the Certificates were issued.
The undersigned certifies that it either: (i) is not acquiring the
Privately Offered Certificate directly or indirectly by, or on behalf of, an
employee benefit plan or other retirement arrangement which is subject to Title
I of the Employee Retirement Income Security Act of 1974, as amended, or section
4975 of the Internal Revenue Code of 1986, as amended, or (ii) in the case of
the Class B-4, Class B-5 and Class B-6 Certificates, is providing a
representation to the effect that the proposed transfer and holding of a
Privately Offered Certificate and the servicing, management and operation of the
Trust and its assets: (I) will not result in any prohibited transaction which is
not covered under a prohibited transaction exemption, including, but not limited
to, Prohibited Transaction Exemption ("PTE") 84-14, XXX 00-00, XXX 00-0, XXX
00-00, XXX 00-00 and (II) will not give rise to any additional obligations on
the part of the Depositor, the Master Servicer, the Securities Administrator or
the Trustee or (iii) in the case of the Privately Offered Certificates, has
attached hereto the opinion specified in Section 7.08(a) of the Agreement.
If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.
G-3
Name of Nominee (if any):
IN WITNESS WHEREOF, this document has been executed by the undersigned who is
duly authorized to do so on behalf of the undersigned Eligible Purchaser on the
____ day of ___________, 20___.
Very truly yours,
[PURCHASER]
By: _________________________________
(Authorized Officer)
[By: ________________________________
Attorney-in-fact]
G-4
Nominee Acknowledgment
The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.
[NAME OF NOMINEE]
By: _________________________________
(Authorized Officer)
[By: ________________________________
Attorney-in-fact]
G-5
EXHIBIT H
FORM OF REQUEST FOR RELEASE
To: U.S. Bank National Association
Xxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
RE: Pooling and Servicing Agreement, dated as of April 1, 2004, between
Bear Xxxxxxx Asset Backed Securities I LLC, as Depositor, EMC Mortgage
Corporation, as seller and company, Xxxxx Fargo Bank, National
Association, as master servicer and securities administrator and U.S.
Bank National Association, as Trustee
-------------------------------------
In connection with the administration of the Mortgage Loans held by you
pursuant to the above-captioned Pooling and Servicing Agreement, we request the
release, and hereby acknowledge receipt, of the Mortgage File for the Mortgage
Loan described below, for the reason indicated.
MORTGAGE LOAN NUMBER:
MORTGAGOR NAME, ADDRESS & ZIP CODE:
REASON FOR REQUESTING DOCUMENTS (CHECK ONE):
_____ 1. Mortgage Paid in Full and proceeds have been deposited into the
Custodial Account
_____ 2. Foreclosure
_____ 3. Substitution
_____ 4. Other Liquidation
_____ 5. Nonliquidation Reason: ________________________
_____ 6. California Mortgage Loan paid in full
By: ____________________________
(authorized signer)
Issuer: ________________________
Address: _______________________
Date: __________________________
H-1
EXHIBIT I
DTC Letter of Representations
[provided upon request]
I-1
EXHIBIT J
Schedule of Mortgage Loans with Lost Notes
[provided upon request]
J-1
EXHIBIT K
FORM OF CUSTODIAL AGREEMENT
---------------------------
THIS CUSTODIAL AGREEMENT (as amended and supplemented from
time to time, the "Agreement'), dated as of April 30, 2004, by and among U.S.
BANK NATIONAL ASSOCIATION, as trustee (including its successors under the
Pooling and Servicing Agreement defined below, the "Trustee"), BEAR XXXXXXX
ASSET BACKED SECURITIES I LLC, as depositor (together with any successor in
interest, the "Depositor"), EMC MORTGAGE CORPORATION, as seller (the "Seller")
and company (together with any successor in interest or successor under the
Pooling and Servicing Agreement referred to below, the "Company") and XXXXX
FARGO BANK, NATIONAL ASSOCIATION, as master servicer (together with any
successor in interest or successor under the Pooling and Servicing Agreement
referred to below, the "Master Servicer"), securities administrator and
custodian (together with any successor in interest or any successor appointed
hereunder, the "Custodian").
WITNESSETH THAT:
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WHEREAS, the Depositor, the Seller, the Master Servicer and
the Trustee have entered into a Pooling and Servicing Agreement, dated as of
April 1, 2004, relating to the issuance of Bear Xxxxxxx Asset Backed Securities
I Trust 2004-AC2, Asset-Backed Certificates, Series 2004-AC2 (as in effect on
the date of this agreement, the "Original Pooling and Servicing Agreement," and
as amended and supplemented from time to time, the "Pooling and Servicing
Agreement'); and
WHEREAS, the Custodian has agreed to act as agent for the
Trustee for the purposes of receiving and holding certain documents and other
instruments delivered by the Depositor, the Seller or the Master Servicer under
the Pooling and Servicing Agreement and the Servicers under their respective
Servicing Agreements, all upon the terms and conditions and subject to the
limitations hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements hereinafter set forth, the Trustee, the
Depositor, the Seller, the Master Servicer and the Custodian hereby agree as
follows:
ARTICLE I.
DEFINITIONS
Capitalized terms used in this Agreement and not defined
herein shall have the meanings assigned in the Original Pooling and Servicing
Agreement, unless otherwise required by the context herein.
ARTICLE II.
CUSTODY OF MORTGAGE DOCUMENTS
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Section 2.1. CUSTODIAN TO ACT AS AGENT: ACCEPTANCE OF MORTGAGE
FILES. The custodian, as the duly appointed agent of the Trustee for these
purposes, acknowledges (subject to any exceptions noted in the Initial
Certification referred to in Section 2.3(a) receipt of the Mortgage Files
relating to the Mortgage Loans identified on the schedule attached hereto (the
"Mortgage Files") and declares that it holds and will hold such Mortgage Files
as agent for the Trustee, in trust, for the use and benefit of all present and
future Certificateholders.
Section 2.2. RECORDATION OF ASSIGNMENTS. If any Mortgage File
includes one or more assignments of Mortgage that have not been recorded
pursuant to the provisions of Section 2.01 of the Pooling and Servicing
Agreement and the related Mortgage Loan is not a MOM Loan or the related
Mortgaged Properties are located in jurisdictions specifically excluded by the
Opinion of Counsel delivered to the Trustee pursuant to Section 2.01 of the
Pooling and Servicing Agreement, each such assignment shall be delivered by the
Custodian to the Seller for the purpose of recording it in the appropriate
public office for real property records, and the Seller, at no expense to the
Custodian, shall promptly cause to be recorded in the appropriate public office
for real property records each such assignment of Mortgage and, upon receipt
thereof from such public office, shall return each such assignment of Mortgage
to the Custodian.
Section 2.3. REVIEW OF MORTGAGE FILES.
(a) On or prior to the Closing Date, in accordance with
Section 2.02 of the Pooling and Servicing Agreement, the Custodian shall deliver
to the Seller and the Trustee an Initial Certification in the form annexed
hereto as Exhibit One evidencing receipt (subject to any exceptions noted
therein) of a Mortgage File for each of the Mortgage Loans listed on the
Schedule attached hereto (the "Mortgage Loan Schedule").
(b) Within 90 days of the Closing Date, the Custodian agrees,
for the benefit of Certificateholders, to review, in accordance with the
provisions of Section 2.02 of the Pooling and Servicing Agreement, each such
document, and shall deliver to the Seller and the Trustee an Interim
Certification in the form annexed hereto as Exhibit Two to the effect that all
such documents have been executed and received and that such documents relate to
the Mortgage Loans identified on the Mortgage Loan Schedule, except for any
exceptions listed on Schedule A attached to such Interim Certification. The
Custodian shall be under no duty or obligation to inspect, review or examine
said documents, instruments, certificates or other papers to determine that the
same are genuine, enforceable, or appropriate for the represented purpose or
that they have actually been recorded or that they are other than what they
purport to be on their face.
(c) Not later than 180 days after the Closing Date, the
Custodian shall review the Mortgage Files as provided in Section 2.02 of the
Pooling and Servicing Agreement and deliver to the Seller and the Trustee a
Final Certification in the form annexed hereto as Exhibit Three evidencing the
completeness of the Mortgage Files.
(d) In reviewing the Mortgage Files as provided herein and in
the Pooling and Servicing Agreement, the Custodian shall make no representation
as to and shall not be responsible to verify (i) the validity, legality,
enforceability, due authorization, recordability, sufficiency or
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genuineness of any of the documents included in any Mortgage File or (ii) the
collectibility, insurability, effectiveness or suitability of any of the
documents in any Mortgage File.
Upon receipt of written request from the Trustee, the Custodian shall
as soon as practicable supply the Trustee with a list of all of the documents
relating to the Mortgage Loans missing from the Mortgage Files.
Section 2.4. NOTIFICATION OF BREACHES OF REPRESENTATIONS AND
WARRANTIES. Upon discovery by the Custodian of a breach of any representation or
warranty made by the Depositor as set forth in the Pooling and Servicing
Agreement with respect to a Mortgage Loan relating to a Mortgage File, the
Custodian shall give prompt written notice to the Depositor, the related
Servicer and the Trustee.
Section 2.5. CUSTODIAN TO COOPERATE: RELEASE OF MORTGAGE
FILES. Upon receipt of written notice from the Trustee that the Seller has
repurchased a Mortgage Loan pursuant to Article II of the Pooling and Servicing
Agreement, and a request for release (a "Request for Release") confirming that
the purchase price therefore has been deposited in the Master Servicer
Collection Account or the Distribution Account, then the Custodian agrees to
promptly release to the Seller the related Mortgage File.
Upon the Custodian's receipt of a Request for Release
substantially in the form of Exhibit H to the Pooling and Servicing Agreement
signed by a Servicing Officer of the Company or the Servicer, as applicable,
stating that it has received payment in full of a Mortgage Loan or that payment
in full will be escrowed in a manner customary for such purposes, the Custodian
agrees promptly to release to the Company or the Servicer, as applicable, the
related Mortgage File. The Depositor shall deliver to the Custodian and the
Custodian agrees to review in accordance with the provisions of their Agreement
the Mortgage Note and other documents constituting the Mortgage File with
respect to any Replacement Mortgage Loan.
From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Primary Insurance Policy or LPMI Policy, the Company or the Servicer, as
applicable, shall deliver to the Custodian a Request for Release signed by a
Servicing Officer requesting that possession of all of the Mortgage File be
released to the Company or the Servicer, as applicable, and certifying as to the
reason for such release and that such release will not invalidate any insurance
coverage provided in respect of the Mortgage Loan under any of the Insurance
Policies. Upon receipt of the foregoing, the Custodian shall deliver the
Mortgage File to the Company or the Servicer, as applicable. The Company or the
Servicer, as applicable, shall cause each Mortgage File or any document therein
so released to be returned to the Custodian when the need therefore by the
Company or the Servicer, as applicable, no longer exists, unless (i) the
Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the
Mortgage Loan have been deposited in the Master Servicer Collection Account or
the Distribution Account or (ii) the Mortgage File or such document has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Company or the Servicer, as applicable, has delivered to
the Custodian a certificate of a
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Servicing Officer certifying as to the name and address of the Person to which
such Mortgage File or such document was delivered and the purpose or purposes of
such delivery.
At any time that the Company or the Servicer is required to
deliver to the Custodian a Request for Release, the Company or the Servicer, as
applicable, shall deliver two copies of the Request for Release if delivered in
hard copy or the Company or the Servicer, as applicable, may furnish such
Request for Release electronically to the Custodian, in which event the
Servicing Officer transmitting the same shall be deemed to have signed the
Request for Release. In connection with any Request for Release of a Mortgage
File because of a repurchase of a Mortgage Loan, such Request for Release shall
be accompanied by an assignment of mortgage, without recourse, representation or
warranty from the Trustee to the Seller (unless such Mortgage Loan is a MOM
Loan) and the related Mortgage Note shall be endorsed without recourse,
representation or warranty by the Trustee and be returned to the Seller. In
connection with any Request for Release of a Mortgage File because of the
payment in full of a Mortgage Loan, such Request for Release shall be
accompanied by a certificate of satisfaction or other similar instrument to be
executed by or on behalf of the Trustee and returned to the Company or the
Servicer, as applicable.
Section 2.6. ASSUMPTION AGREEMENTS. In the event that any
assumption agreement, substitution of liability agreement or sale of servicing
agreement is entered into with respect to any Mortgage Loan subject to this
Agreement in accordance with the terms and provisions of the Pooling and
Servicing Agreement, the Master Servicer, to the extent provided in the Pooling
and Servicing Agreement or National City Servicing Agreement, shall cause the
Company or the Servicer, as applicable, to notify the Custodian that such
assumption or substitution agreement has been completed by forwarding to the
Custodian the original of such assumption or substitution agreement, which shall
be added to the related Mortgage File and, for all purposes, shall be considered
a part of such Mortgage File to the same extent as all other documents and
instruments constituting parts thereof.
ARTICLE III.
CONCERNING THE CUSTODIAN
Section 3.1. CUSTODIAN A BAILEE AND AGENT OF THE TRUSTEE. With
respect to each Mortgage Note, Mortgage and other documents constituting each
Mortgage File which are delivered to the Custodian, the Custodian is exclusively
the bailee and agent of the Trustee and has no instructions to hold any Mortgage
Note or Mortgage for the benefit of any person other than the Trustee and the
Certificateholders and undertakes to perform such duties and only such duties as
are specifically set forth in this Agreement. Except upon compliance with the
provisions of Section 2.5 of this Agreement, no Mortgage Note, Mortgage or
Mortgage File shall be delivered by the Custodian to the Company, the Depositor,
the Servicer or the Master Servicer or otherwise released from the possession of
the Custodian.
Section 3.2. RESERVED.
Section 3.3. CUSTODIAN MAY OWN CERTIFICATES. The Custodian in
its individual or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not Custodian.
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Section 3.4. MASTER SERVICER TO PAY CUSTODIAN'S FEES AND
EXPENSES. The Master Servicer covenants and agrees to pay to the Custodian from
time to time, and the Custodian shall be entitled to, reasonable compensation
for all services rendered by it in the exercise and performance of any of the
powers and duties hereunder of the Custodian, and the Master Servicer will pay
or reimburse the Custodian upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Custodian in accordance with
any of the provisions of this Agreement (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ), except any such expense, disbursement or advance as
may arise from its negligence or bad faith or to the extent that such cost or
expense is indemnified by the Depositor pursuant to the Pooling and Servicing
Agreement.
Section 3.5. CUSTODIAN MAY RESIGN; TRUSTEE MAY REMOVE
CUSTODIAN. The Custodian may resign from the obligations and duties hereby
imposed upon it as such obligations and duties relate to its acting as Custodian
of the Mortgage Loans. Upon receiving such notice of resignation, the Trustee
shall either take custody of the Mortgage Files itself and give prompt notice
thereof to the Depositor, the Master Servicer and the Custodian, or promptly
appoint a successor Custodian by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning Custodian and one copy to
the successor Custodian. If the Trustee shall not have taken custody of the
Mortgage Files and no successor Custodian shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Custodian may petition any court of competent
jurisdiction for the appointment of a successor Custodian.
The Trustee may remove the Custodian at any time upon 60 days
prior written notice to Custodian. In such event, the Trustee shall appoint, or
petition a court of competent jurisdiction to appoint, a successor Custodian
hereunder. Any successor Custodian shall be a depository institution subject to
supervision or examination by federal or state authority shall be able to
satisfy the other requirements contained in Section 3.7 and shall be
unaffiliated with the Servicers, the Company and the Depositor.
Any resignation or removal of the Custodian and appointment of
a successor Custodian pursuant to any of the provisions of this Section 3.5
shall become effective upon acceptance of appointment by the successor
Custodian. The Trustee shall give prompt notice to the Depositor and the Master
Servicer of the appointment of any successor Custodian. No successor Custodian
shall be appointed by the Trustee without the prior approval of the Depositor
and the Master Servicer.
Section 3.6. MERGER OR CONSOLIDATION OF CUSTODIAN. Any Person
into which the Custodian may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Custodian shall be a party, or any Person succeeding
to the business of the Custodian, shall be the successor of the Custodian
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 3.7. REPRESENTATIONS OF THE CUSTODIAN. The Custodian
hereby represents that it is a depository institution subject to supervision or
examination by a federal or state authority, has
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a combined capital and surplus of at least $15,000,000 and is qualified to do
business in the jurisdictions in which it will hold any Mortgage File.
ARTICLE IV.
MISCELLANEOUS PROVISIONS
Section 4.1. NOTICES. All notices, requests, consents and
demands and other communications required under this Agreement or pursuant to
any other instrument or document delivered hereunder shall be in writing and,
unless otherwise specifically provided, may be delivered personally, by telegram
or telex, or by registered or certified mail, postage prepaid, return receipt
requested, at the addresses specified on the signature page hereof (unless
changed by the particular party whose address is stated herein by similar notice
in writing), in which case the notice will be deemed delivered when received.
Section 4.2. AMENDMENTS. No modification or amendment of or
supplement to this Agreement shall be valid or effective unless the same is in
writing and signed by all parties hereto. The Trustee shall give prompt notice
to the Custodian of any amendment or supplement to the Pooling and Servicing
Agreement and furnish the Custodian with written copies thereof.
Section 4.3. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
Section 4.4. RECORDATION OF AGREEMENT. To the extent permitted
by applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Depositor and at the Trust's expense on
direction by the Trustee, but only upon direction accompanied by an Opinion of
Counsel reasonably satisfactory to the Depositor to the effect that the failure
to effect such recordation is likely to materially and adversely affect the
interests of the Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
Section 4.5. SEVERABILITY OF PROVISIONS. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
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IN WITNESS WHEREOF, this Agreement is executed as of the date first
above written.
Address: U.S. BANK NATIONAL ASSOCIATION,
as Trustee
Xxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
By: _________________________________
Attention: Corporate Trust Services, Name:
BSABS I 2004-AC2 Title:
Telecopy: (000)000-0000
Confirmation:
Address: BEAR XXXXXXX ASSET BACKED
SECURITIES I LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
By: _________________________________
Name:
Title:
Address: EMC MORTGAGE CORPORATION
000 Xxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000 By: _________________________________
Name:
Title:
Address: XXXXX FARGO BANK,
NATIONAL ASSOCIATION, as Custodian
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000 By: _________________________________
Name:
Title:
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the ______ day of April 2004 before me, a notary public in
and for said State, personally appeared _______________, known to me to be a
_________________of U.S. Bank National Association, a national banking
association that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation and acknowledged to me that
such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_____________________________________
Notary Public
[SEAL]
X-0
XXXXX XX XXX XXXX )
) ss:
COUNTY OF NEW YORK )
On the ______ day of April 2004 before me, a notary public in
and for said State, personally appeared ________________, known to me to be a
_____________ of Bear Xxxxxxx Asset Backed Securities I LLC, that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_____________________________________
Notary Public
[SEAL]
X-0
XXXXX XX XXXXX )
) ss:
COUNTY OF DALLAS )
On the ______ day of April 2004 before me, a notary public in
and for said State, personally appeared ________________, known to me to be a
__________________ of EMC Mortgage Corporation, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_____________________________________
Notary Public
[Notarial Seal]
X-00
XXXXX XX XXXXXXXX )
) ss:
COUNTY OF XXXXXX )
On the ______ day of April 2004 before me, a notary public in
and for said State, personally appeared ____________, known to me to be a of
Xxxxx Fargo Bank, National Association, one of the national associations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said national association, and acknowledged to me that
such national association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_____________________________________
Notary Public
[Notarial Seal]
K-11
EXHIBIT ONE TO CUSTODIAL AGREEMENT
FORM OF CUSTODIAN INITIAL CERTIFICATION
April 30, 2004
U.S. Bank National Association
Xxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
EMC Mortgage Corporation
000 Xxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Bear Xxxxxxx Asset Backed Securities I LLC, Series 2004-AC2
Re: Custodial Agreement, dated as of April 30, 2004, by and
among U.S. Bank National Association, Xxxxx Fargo Bank,
National Association, Bear Xxxxxxx Asset Backed Securities
I LLC and EMC Mortgage Corporation relating to Bear
Xxxxxxx Asset Backed Securities I Trust 2004-AC2, Asset-
Backed Certificates, Series 2004-AC2
----------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.3(a) of the above-captioned
Custodial Agreement, and subject to Section 2.02(a) of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File (which contains an original Mortgage Note or lost note
affidavit) to the extent required in Section 2.01 of the Pooling and Servicing
Agreement with respect to each Mortgage Loan listed in the Mortgage Loan
Schedule, with any exceptions listed on Schedule A attached hereto.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK, NATIONAL
ASSOCIATION
By: _________________________________
Name: _______________________________
Title: ______________________________
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EXHIBIT TWO TO CUSTODIAL AGREEMENT
FORM OF CUSTODIAN INTERIM CERTIFICATION
____________, 2004
U.S. Bank National Association
Xxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
EMC Mortgage Corporation
000 Xxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Bear Xxxxxxx Asset Backed Securities I LLC, Series 2004-AC2
Re: Custodial Agreement, dated as of April 30, 2004, by and
among U.S. Bank National Association, Xxxxx Fargo Bank,
National Association, Bear Xxxxxxx Asset Backed Securities
I LLC and EMC Mortgage Corporation relating to Bear
Xxxxxxx Asset Backed Securities I Trust 2004-AC2, Asset-
Backed Certificates, Series 2004-AC2
------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.3(b) of the above-captioned
Custodial Agreement and subject to Section 2.02(a) of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File to the extent required pursuant to Section 2.01 of the Pooling
and Servicing Agreement with respect to each Mortgage Loan listed in the
Mortgage Loan Schedule, and it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: all required documents have been executed
and received and that such documents related to the Mortgage Loans identified on
the Mortgage Loan Schedule, with any exceptions listed on Schedule A attached
hereto.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK, NATIONAL
ASSOCIATION
By: _________________________________
Name: _______________________________
Title: ______________________________
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EXHIBIT THREE TO CUSTODIAL AGREEMENT
FORM OF CUSTODIAN FINAL CERTIFICATION
____________, 2004
U.S. Bank National Association
Xxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
EMC Mortgage Corporation
000 Xxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Bear Xxxxxxx Asset Backed Securities I LLC, Series 2004-AC2
Re: Custodial Agreement, dated as of April 30, 2004, by and
among U.S. Bank National Association, Xxxxx Fargo Bank,
National Association, Bear Xxxxxxx Asset Backed Securities
I LLC and EMC Mortgage Corporation relating to Bear
Xxxxxxx Asset Backed Securities I Trust 2004-AC2, Asset-
Backed Certificates, Series 2004-AC2
----------------------------------------
In accordance with Section 2.3(c) of the above-captioned
Custodial Agreement and, subject to Section 2.02(b) of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File to the extent required pursuant to Section 2.01 of the Pooling
and Servicing Agreement with respect to each Mortgage Loan listed in the
Mortgage Loan Schedule, and it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: all required documents have been executed
and received and that such documents relate to the Mortgage Loans identified on
the Mortgage Loan Schedule, with any exceptions listed on Schedule A attached
hereto.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement
or in the Pooling and Servicing Agreement, as applicable.
XXXXX FARGO BANK, NATIONAL
ASSOCIATION
By: _________________________________
Name: _______________________________
Title: ______________________________
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K-3-3
EXHIBIT L
FORM OF COMPANY CERTIFICATION
This certificate is being delivered pursuant to Section 3.13(b) of the
Pooling and Servicing Agreement, dated as of April 1, 2004 (the "Agreement"),
among Bear Xxxxxxx Asset Backed Securities I LLC, as depositor, EMC Mortgage
Corporation (the "Company"), as seller and servicer, Xxxxx Fargo Bank, National
Association, as master servicer and securities administrator, and U.S. Bank
National Association, as trustee. Capitalized terms used herein and not
otherwise defined have the meanings set forth in the Agreement.
I certify that:
(i) I am a ____________________ of the Company.
(ii) Based on my knowledge, the information in the annual statement
of compliance furnished in March 20__ pursuant to Section
3.13(b) of the Agreement and the annual independent certified
public accountants' servicing report delivered pursuant to
Section 3.14 thereof (collectively, the "Reports"), and all
servicing reports, officer's certificates and other
information relating to the EMC Mortgage Loans submitted to
the Master Servicer taken as a whole, does not contain any
untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light
of the circumstances under which such statements were made,
not misleading as of the date of this certification.
(iii) The servicing information required to be provided to the
Master Servicer by the Company under the Agreement has been
provided to the Master Servicer.
(iv) I am responsible for reviewing the servicing activities
performed by the Company pursuant to this Agreement, and
except as disclosed in the Reports, the Company has, as of the
date of this certification, fulfilled its obligations under
the Agreement.
(v) I have disclosed to the Master Servicer all significant
deficiencies relating to the Company's compliance with the
minimum servicing standards in accordance with a review
conducted in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or similar standard as set forth
in the Agreement.
----------------------
Dated: March __, 20__
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