BEAR XXXXXXX ASSET BACKED SECURITIES I LLC,
Depositor,
EMC MORTGAGE CORPORATION,
Seller and Master Servicer,
and
LASALLE BANK NATIONAL ASSOCIATION,
Trustee
____________________
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 2004
________________________________________
BEAR XXXXXXX ASSET BACKED SECURITIES I TRUST 2004-HE11
ASSET-BACKED CERTIFICATES, SERIES 2004-HE11
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms...............................................................................5
Section 1.02 Allocation of Certain Interest Shortfalls..................................................48
ARTICLE II
CONVEYANCE OF TRUST FUND REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Trust Fund...................................................................50
Section 2.02 Acceptance of the Mortgage Loans...........................................................52
Section 2.03 Representations, Warranties and Covenants of the Master Servicer and the Seller............54
Section 2.04 Representations and Warranties of the Depositor............................................59
Section 2.05 Delivery of Opinion of Counsel in Connection with Substitutions and Repurchases............60
Section 2.06 Countersignature and Delivery of Certificates..............................................61
ARTICLE III
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 3.01 The Master Servicer to act as Master Servicer..............................................62
Section 3.02 Due-on-Sale Clauses; Assumption Agreements.................................................63
Section 3.03 Subservicers...............................................................................64
Section 3.04 Documents, Records and Funds in Possession of the Master Servicer To Be Held for
Trustee....................................................................................65
Section 3.05 Maintenance of Hazard Insurance............................................................65
Section 3.06 Presentment of Claims and Collection of Proceeds...........................................66
Section 3.07 Maintenance of the Primary Mortgage Insurance Policies.....................................66
Section 3.08 Fidelity Bond, Errors and Omissions Insurance..............................................67
Section 3.09 Realization Upon Defaulted Mortgage Loans; Determination of Excess Liquidation
Proceeds and Realized Losses; Repurchases of Certain Mortgage Loans........................67
Section 3.10 Servicing Compensation.....................................................................70
Section 3.11 REO Property...............................................................................70
Section 3.12 Liquidation Reports........................................................................71
Section 3.13 Annual Certificate as to Compliance........................................................71
Section 3.14 Annual Independent Certified Public Accountants' Servicing Report..........................71
Section 3.15 Books and Records..........................................................................72
Section 3.16 Reports Filed with Securities and Exchange Commission......................................72
Section 3.17 UCC........................................................................................74
i
Section 3.18 Optional Purchase of Certain Mortgage Loans................................................74
Section 3.19 Obligations of the Master Servicer in Respect of Mortgage Rates and Scheduled
Payments...................................................................................75
Section 3.20 Reserve Fund...............................................................................75
Section 3.21 Advancing Facility.........................................................................76
ARTICLE IV
ACCOUNTS
Section 4.01 Collection of Mortgage Loan Payments; Protected Account....................................78
Section 4.02 Permitted Withdrawals From the Protected Account...........................................80
Section 4.03 Collection of Taxes; Assessments and Similar Items; Escrow Accounts........................81
Section 4.04 Distribution Account.......................................................................82
Section 4.05 Permitted Withdrawals and Transfers from the Distribution Account..........................83
Section 4.06 Class P Certificate Account................................................................83
ARTICLE V
DISTRIBUTIONS AND ADVANCES
Section 5.01 Advances...................................................................................84
Section 5.02 Compensating Interest Payments.............................................................85
Section 5.03 REMIC Distributions........................................................................85
Section 5.04 Distributions..............................................................................85
Section 5.05 Allocation of Realized Losses..............................................................90
Section 5.06 Monthly Statements to Certificateholders...................................................92
Section 5.07 REMIC Designations and REMIC Distributions.................................................95
ARTICLE VI
THE CERTIFICATES
Section 6.01 The Certificates...........................................................................98
Section 6.02 Certificate Register; Registration of Transfer and Exchange of Certificates................99
Section 6.03 Mutilated, Destroyed, Lost or Stolen Certificates.........................................103
Section 6.04 Persons Deemed Owners.....................................................................103
Section 6.05 Access to List of Certificateholders' Names and Addresses.................................103
Section 6.06 Book-Entry Certificates...................................................................103
Section 6.07 Notices to Depository.....................................................................104
Section 6.08 Definitive Certificates...................................................................105
Section 6.09 Maintenance of Office or Agency...........................................................105
ii
ARTICLE VII
THE DEPOSITOR AND THE MASTER SERVICER
Section 7.01 Liabilities of the Depositor and the Master Servicer......................................106
Section 7.02 Merger or Consolidation of the Depositor or the Master Servicer...........................106
Section 7.03 Indemnification of the Trustee and the Master Servicer....................................106
Section 7.04 Limitations on Liability of the Depositor, the Master Servicer and Others.................107
Section 7.05 Master Servicer Not to Resign.............................................................108
Section 7.06 Successor Master Servicer.................................................................108
Section 7.07 Sale and Assignment of Master Servicing...................................................108
ARTICLE VIII
DEFAULT; TERMINATION OF MASTER SERVICER
Section 8.01 Events of Default.........................................................................110
Section 8.02 Trustee to Act; Appointment of Successor..................................................112
Section 8.03 Notification to Certificateholders........................................................113
Section 8.04 Waiver of Defaults........................................................................113
ARTICLE IX
CONCERNING THE TRUSTEE
Section 9.01 Duties of Trustee.........................................................................114
Section 9.02 Certain Matters Affecting the Trustee.....................................................115
Section 9.03 Trustee Not Liable for Certificates or Mortgage Loans.....................................117
Section 9.04 Trustee May Own Certificates..............................................................118
Section 9.05 Trustee's Fees and Expenses...............................................................118
Section 9.06 Eligibility Requirements for Trustee......................................................118
Section 9.07 Insurance.................................................................................119
Section 9.08 Resignation and Removal of Trustee........................................................119
Section 9.09 Successor Trustee.........................................................................120
Section 9.10 Merger or Consolidation of Trustee........................................................120
Section 9.11 Appointment of Co-Trustee or Separate Trustee.............................................120
Section 9.12 Tax Matters...............................................................................122
ARTICLE X
TERMINATION
Section 10.01 Termination upon Liquidation or Repurchase of all Mortgage Loans..........................125
Section 10.02 Final Distribution on the Certificates....................................................125
Section 10.03 Additional Termination Requirements.......................................................127
iii
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment.................................................................................128
Section 11.02 Recordation of Agreement; Counterparts....................................................129
Section 11.03 Governing Law.............................................................................129
Section 11.04 Intention of Parties......................................................................130
Section 11.05 Notices...................................................................................130
Section 11.06 Severability of Provisions................................................................131
Section 11.07 Assignment................................................................................131
Section 11.08 Limitation on Rights of Certificateholders................................................131
Section 11.09 Inspection and Audit Rights...............................................................132
Section 11.10 Certificates Nonassessable and Fully Paid.................................................132
EXHIBITS
Exhibit A-1 Form of Class A Certificates
Exhibit A-2 Form of Class M Certificates
Exhibit A-3 Form of Class P Certificates
Exhibit A-4 Form of Class CE Certificates
Exhibit A-5 Form of Class R Certificates
Exhibit B Mortgage Loan Schedule
Exhibit C Form of Transfer Affidavit
Exhibit D Form of Transferor Certificate
Exhibit E Form of Investment Letter (Non-Rule 144A)
Exhibit F Form of Rule 144A and Related Matters Certificate
Exhibit G Form of Request for Release
Exhibit H DTC Letter of Representations
Exhibit I Schedule of Mortgage Loans with Lost Notes
Exhibit J Form of Custodial Agreement
Exhibit K Form of Back-Up Certification
Exhibit L Form of Mortgage Loan Purchase Agreement
Exhibit M Notional Amount Schedule and Cap Rate Schedule
iv
POOLING AND SERVICING AGREEMENT, dated as of December 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 master servicer
(in such capacity, the "Master Servicer") and LASALLE 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 elect to treat the segregated pool
of assets consisting of the Mortgage Loans and certain other related assets
subject to this Agreement (other than the Reserve Fund and the Yield Maintenance
Agreements) as 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 be
the sole class of "residual interests" in REMIC I for purposes of the REMIC
Provisions (as defined herein). The following table irrevocably sets forth the
Class 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 (as defined herein). None of the REMIC I
Regular Interests will be certificated.
UNCERTIFICATED REMIC I INITIAL UNCERTIFICATED LATEST POSSIBLE MATURITY
DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE DATE (1)
----------- ----------------- ----------------- --------
AA Variable(2) $ 802,173,847.96 December 25, 2034
I-A-1 Variable(2) $ 1,693,200.00 December 25, 2034
I-A-2 Variable(2) $ 766,055.00 December 25, 2034
I-A-3 Variable(2) $ 213,610.00 December 25, 2034
II-A-1 Variable(2) $ 2,972,700.00 December 25, 2034
II-A-2 Variable(2) $ 743,175.00 December 25, 2034
M-1 Variable(2) $ 589,350.00 December 25, 2034
M-2 Variable(2) $ 311,045.00 December 25, 2034
M-3 Variable(2) $ 257,845.00 December 25, 2034
M-4 Variable(2) $ 98,230.00 December 25, 2034
M-5 Variable(2) $ 106,410.00 December 25, 2034
M-6 Variable(2) $ 85,945.00 December 25, 2034
M-7 Variable(2) $ 118,690.00 December 25, 2034
ZZ Variable(2) $ 8,414,639.86 December 25, 2034
P 0.00% $ 100.00 December 25, 2034
1A Variable(2) $ 15,033.84 December 25, 2034
1B Variable(2) $ 68,491.14 December 25, 2034
2A Variable(2) $ 20,900.31 December 25, 2034
2B Variable(2) $ 95,217.81 December 25, 2034
XX Variable(2) $ 818,345,099.72 December 25, 2034
___________________________
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity
date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each REMIC I
Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC I
Pass-Through Rate" herein.
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.
The following table irrevocably sets forth the Class designation,
Pass-Through Rate, Initial Certificate Principal Balance and, solely for
purposes of satisfying Treasury Regulation Section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" for each Class of Certificates that represents
one or more of the "regular interests" in REMIC II created hereunder.
2
INITIAL CERTIFICATE LATEST POSSIBLE MATURITY
DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE DATE(1)
----------- ----------------- ----------------- -------
I-A-1 Variable(2) $ 338,640,000.00 December 25, 2034
I-A-2 Variable(2) $ 153,211,000.00 December 25, 2034
I-A-3 Variable(2) $ 42,722,000.00 December 25, 2034
II-A-1 Variable(2) $ 594,540,000.00 December 25, 2034
II-A-2 Variable(2) $ 148,635,000.00 December 25, 2034
M-1 Variable(2) $ 117,870,000.00 December 25, 2034
M-2 Variable(2) $ 62,209,000.00 December 25, 2034
M-3 Variable(2) $ 51,569,000.00 December 25, 2034
M-4 Variable(2) $ 19,646,000.00 December 25, 2034
M-5 Variable(2) $ 21,282,000.00 December 25, 2034
M-6 Variable(2) $ 17,189,000.00 December 25, 2034
M-7 Variable(2) $ 23,738,000.00 December 25, 2034
Class CE Interest Variable(2)(3) $ 45,838,485.64 December 25, 2034
Class P Interest 0.00%(4) $ 100.00 December 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 REMIC II
Regular Interest.
(2) Calculated in accordance with the definition of "Pass-Through Rate"
herein.
(3) The Class CE Interest will accrue interest at its variable Pass-Through
Rate on the Uncertificated Notional Amount of the Class CE Interest
outstanding from time to time which shall equal the Uncertificated
Principal Balance of the REMIC I Regular Interests (other than REMIC I
Regular Interest P). The Class CE Interest will not accrue interest on
its Certificate Principal Balance.
(4) The Class P Interest is not entitled to distributions in respect of
interest.
REMIC III
---------
As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the Class CE Interest as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC III." The Class R-3 Interest represents the sole class of
"residual interests" in REMIC III for purposes of the REMIC Provisions.
The following table sets forth the Class designation, Pass-Through
Rate, Initial Certificate Principal Balance and, solely for purposes of
satisfying Treasury Regulation Section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for the indicated Class of Certificates that represents a
"regular interest" in REMIC III created hereunder:
3
INITIAL AGGREGATE CERTIFICATE LATEST POSSIBLE
CLASS DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE MATURITY DATE(1)
----------------- ----------------- ----------------- ----------------
Class CE Certificates Variable(2) $45,838,485.64 December 25, 2034
___________________________
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity
date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for the Class CE
Certificates.
(2) The Class CE Certificates will receive 100% of amounts received in
respect of the Class CE Interest.
REMIC IV
--------
As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the Class P Interest as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC IV." The Class R-4 Interest represents the sole class of
"residual interests" in REMIC IV for purposes of the REMIC Provisions.
The following table sets forth the Class designation, Pass-Through
Rate, Initial Certificate Principal Balance and, solely for purposes of
satisfying Treasury Regulation Section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for the indicated Class of Certificates that represents a
"regular interest" in REMIC IV created hereunder:
INITIAL AGGREGATE
CERTIFICATE PRINCIPAL LATEST POSSIBLE
CLASS DESIGNATION PASS-THROUGH RATE BALANCE MATURITY DATE(1)
----------------- ----------------- ------- ----------------
Class P Certificates 0.00%(2) $100.00 December 25, 2034
___________________________
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity
date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for the Class P
Certificates.
(2) The Class P Certificates will receive 100% of amounts received in
respect of the Class P Interest.
The Trust Fund shall be named, and may be referred to as, the "Bear
Xxxxxxx Asset Backed Securities I Trust 2004-HE11." The Certificates issued
hereunder may be referred to as "Asset-Backed Certificates, Series 2004-HE11"
(including for purposes of any endorsement or assignment of a Mortgage Note or
Mortgage).
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer, the Seller and the Trustee agree as follows:
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 SERVICING PRACTICES: With respect to each 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 Reserve Account, the Class P
Certificate Account and the Protected Account.
ACCRUAL PERIOD: With respect to the Certificates (other than the Class
CE, Class P and the Residual Certificates) and any Distribution Date, the period
from and including the immediately preceding Distribution Date (or with respect
to the first Accrual Period, the Closing Date) to and including the day prior to
such Distribution Date. With respect to the Class CE Certificates and any
Distribution Date, the calendar month immediately preceding such Distribution
Date. All calculations of interest on the Certificates (other than the Class CE,
Class P and the Residual Certificates) will be made on the basis of the actual
number of days elapsed in the related Accrual Period. All calculations of
interest on the Class CE Certificates will be made on the basis of a 360-day
year consisting of twelve 30-day months.
ADVANCE: An advance of delinquent payments of principal or interest in
respect of a Mortgage Loan required to be made by the Master Servicer as
provided in Section 5.01 hereof.
AGREEMENT: This Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in accordance with the terms herein.
ADJUSTABLE RATE MORTGAGE LOAN: Each of the Mortgage Loans identified in
the Mortgage Loan Schedule as having a Mortgage Rate that is subject to
adjustment.
ADJUSTMENT DATE: With respect to each Adjustable Rate Mortgage Loan,
the first day of the month in which the Mortgage Rate of an Adjustable Rate
Mortgage Loan changes pursuant to the related Mortgage Note. The first
Adjustment Date following the Cut-off Date as to each Adjustable Rate Mortgage
Loan is set forth in the Mortgage Loan Schedule.
AMOUNT HELD FOR FUTURE DISTRIBUTION: As to any Distribution Date, the
aggregate amount held in the 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 Prepayments, Liquidation Proceeds,
Subsequent Recoveries and Insurance Proceeds received in respect of such
Mortgage Loans after the last day of the related Prepayment Period.
5
APPLIED REALIZED LOSS AMOUNT: With respect to any Distribution Date and
a Class of Class A Certificates and Class M Certificates, the sum of the
Realized Losses with respect to the Mortgage Loans which have been applied in
reduction of the Certificate Principal Balance of a Class of Certificates
pursuant to Section 5.05 of this Agreement which have not previously been
reimbursed or reduced by any Subsequent Recoveries applied to such Applied
Realized Loss Amount.
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.
BASIS RISK SHORTFALL CARRY FORWARD AMOUNT: With respect to any
Distribution Date and any Class of Class A Certificates and Class M Certificates
and any Distribution Date for which the Pass-Through Rate for such Certificates
is equal to the related Net Rate Cap, an amount equal to the sum of (A) the
excess, if any, of (a) the amount of Current Interest that such Class would have
been entitled to receive on such Distribution Date had the Pass-Though Rate
applicable to such Class been calculated at a per annum rate equal to One-Month
LIBOR plus the related Certificate Margin, over (b) the amount of Current
Interest that such Class received on such Distribution Date at a per annum rate
equal to the related Net Rate Cap and (B) the amount in clause (A) for all
previous Distribution Dates not previously paid, together with interest thereon
at a rate equal to the related Pass-Through Rate for such Distribution Date.
BANKRUPTCY CODE: Title 11 of the United States Code.
BOOK-ENTRY CERTIFICATES: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 6.06). As of the Closing
Date, each Class of Regular Certificates (other than the Class M-7, Class CE 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, Chicago,
Illinois, Minneapolis, Minnesota or the city in which the Corporate Trust Office
of the Trustee or the principal office of the Master Servicer is located are
authorized or obligated by law or executive order to be closed.
CAP RATE: With respect to each Yield Maintenance Agreement, the rates
set forth therefor in Exhibit M.
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-5.
6
CERTIFICATE MARGIN: With respect to the Class I-A-1 Certificates and,
for purposes of the definition of "One-Month LIBOR Pass-Through Rate", REMIC I
Regular Interest I-A-1, 0.150%.
With respect to the Class I-A-2 Certificates and, for purposes of the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I Regular Interest
I-A-2, 0.300% in the case of each Distribution Date through and including the
first possible Optional Termination Date and 0.600% in the case of each
Distribution Date thereafter.
With respect to the Class I-A-3 Certificates and, for purposes of the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I Regular Interest
I-A-3, 0.450% in the case of each Distribution Date through and including the
first possible Optional Termination Date and 0.900% in the case of each
Distribution Date thereafter.
With respect to the Class II-A-1 Certificates and, for purposes of the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I Regular Interest
II-A-1, 0.350% in the case of each Distribution Date through and including the
first possible Optional Termination Date and 0.700% in the case of each
Distribution Date thereafter.
With respect to the Class II-A-2 Certificates and, for purposes of the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I Regular Interest
II-A-2, 0.390% in the case of each Distribution Date through and including the
first possible Optional Termination Date and 0.780% in the case of each
Distribution Date thereafter.
With respect to the Class M-1 Certificates and, for purposes of the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I Regular Interest M-1,
0.590% in the case of each Distribution Date through and including the first
possible Optional Termination Date and 0.885% in the case of each Distribution
Date thereafter.
With respect to the Class M-2 Certificates and, for purposes of the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I Regular Interest M-2,
1.050% in the case of each Distribution Date through and including the first
possible Optional Termination Date and 1.575% in the case of each Distribution
Date thereafter.
With respect to the Class M-3 Certificates and, for purposes of the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I Regular Interest M-3,
1.250% in the case of each Distribution Date through and including the first
possible Optional Termination Date and 1.875% in the case of each Distribution
Date thereafter.
With respect to the Class M-4 Certificates and, for purposes of the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I Regular Interest M-4,
1.700% in the case of each Distribution Date through and including the first
possible Optional Termination Date and 2.550% in the case of each Distribution
Date thereafter.
With respect to the Class M-5 Certificates and, for purposes of the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I Regular Interest M-5,
1.800% in the case of each
7
Distribution Date through and including the first possible Optional Termination
Date and 2.700% in the case of each Distribution Date thereafter.
With respect to the Class M-6 Certificates and, for purposes of the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I Regular Interest M-6,
2.950% in the case of each Distribution Date through and including the first
possible Optional Termination Date and 4.425% in the case of each Distribution
Date thereafter.
With respect to the Class M-7 Certificates and, for purposes of the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I Regular Interest M-7,
4.000% in the case of each Distribution Date through and including the first
possible Optional Termination Date and 6.000% in the case of each Distribution
Date thereafter.
CERTIFICATE NOTIONAL AMOUNT: With respect to the Class CE Certificates
and any Distribution Date, an amount equal to the Stated Principal Balance of
the Mortgage Loans at the beginning of the related Due Period. The initial
Certificate Notional Amount of the Class CE Certificates shall be
$1,637,089,485.64. For federal income tax purposes, the Certificate Notional
Amount for any Distribution Date shall be an amount equal to the Uncertificated
Principal Balance of the REMIC I Regular Interests (other than REMIC I Regular
Interest P) 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 any
Class CE Certificate or Class R Certificate) and as of any Distribution Date,
the Initial Certificate Principal Balance of such Certificate plus, in the case
of a Class A Certificate and Class M Certificate, any Subsequent Recoveries
added to the Certificate Principal Balance of such Certificate pursuant to
Section 5.04(b), 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 5.04, and (ii) any Applied
Realized Loss Amounts allocated to such Certificate on previous Distribution
Dates.
CERTIFICATE REGISTER: The register maintained pursuant to Section 6.02
hereof.
CERTIFICATEHOLDER OR HOLDER: The person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository, in the case of any Book-Entry Certificates).
CLASS: All Certificates bearing the same Class designation as set forth
in Section 6.01 hereof.
CLASS A CERTIFICATES: Any of the Class I-A-1, Class I-A-2, Class I-A-3,
Class II-A-1 and Class II-A-2 Certificates.
CLASS A PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the Principal Distribution Amount for such
Distribution Date and (y) the excess,
8
if any, of (i) the aggregate Certificate Principal Balance of the Class A
Certificates immediately prior to such Distribution Date, over (ii) the lesser
of (a) the product of (1) 56.10% and (2) the aggregate Stated Principal Balance
of the Mortgage Loans as of the last day of the related Due Period, and (b) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period minus $8,185,447.
CLASS I-A CERTIFICATES: Any of the Class I-A-1, Class I-A-2 and Class
I-A-3 Certificates.
CLASS I-A-1 CERTIFICATE: Any Certificate designated as a "Class I-A-1
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class I-A-1 Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis Risk Shortfall
Carry Forward Amount from the Reserve Fund.
CLASS I-A-2 CERTIFICATE: Any Certificate designated as a "Class I-A-2
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class I-A-2 Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis Risk Shortfall
Carry Forward Amount from the Reserve Fund.
CLASS I-A-3 CERTIFICATE: Any Certificate designated as a "Class I-A-3
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class I-A-3 Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis Risk Shortfall
Carry Forward Amount from the Reserve Fund.
CLASS I-A PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date,
with respect to the Class I-A Certificates and any Distribution Date, is the
product of the Class A Principal Distribution Amount and a fraction, the
numerator of which is the Principal Funds for Loan Group I for such Distribution
Date and the denominator of which is the Principal Funds for both Loan Groups
for such Distribution Date.
CLASS II-A CERTIFICATES: Any of the Class II-A-1 Certificates and Class
II-A-2 Certificates.
CLASS II-A-1 CERTIFICATE: Any Certificate designated as a "Class II-A-1
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class II-A-1 Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis Risk Shortfall
Carry Forward Amount from the Reserve Fund.
CLASS II-A-2 CERTIFICATE: Any Certificate designated as a "Class II-A-2
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class II-A-2 Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis Risk Shortfall
Carry Forward Amount from the Reserve Fund.
9
CLASS II-A PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date,
with respect to the Class II-A Certificates and any Distribution Date, is the
product of the Class A Principal Distribution Amount and a fraction, the
numerator of which is the Principal Funds for Loan Group II for such
Distribution Date and the denominator of which is the Principal Funds for both
Loan Groups for such Distribution Date.
CLASS CE CERTIFICATE: Any Certificate designated as a "Class CE
Certificate" on the face thereof, in the form of Exhibit A-4 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class CE Certificates herein and evidencing a Regular Interest in REMIC III.
CLASS CE DISTRIBUTION AMOUNT: With respect to any Distribution Date,
the sum of (i) the Current Interest for the Class CE Interest for such
Distribution Date, (ii) any Overcollateralization Release Amount for such
Distribution Date and (iii) without duplication, any Subsequent Recoveries not
distributed to the Class A Certificates and Class M Certificates on such
Distribution Date; provided, however that on any Distribution Date after the
Distribution Date on which the Certificate Principal Balances of the Class A
Certificates and Class M Certificates have been reduced to zero, the Class CE
Distribution Amount shall include the Overcollateralization Amount.
CLASS CE INTEREST: An uncertificated interest in the Trust Fund held by
the Trustee on behalf of the Holders of the Class CE Certificates, evidencing a
Regular Interest in REMIC II for purposes of the REMIC Provisions.
CLASS M CERTIFICATES: Any of the Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5, Class M-6 and Class M-7 Certificates.
CLASS M-1 CERTIFICATE: Any Certificate designated as a "Class M-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 M-1 Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis Risk Shortfall
Carry Forward Amount from the Reserve Fund.
CLASS M-1 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the remaining Principal Distribution Amount
for such Distribution Date after distribution of the Class A Principal
Distribution Amount and (y) the excess, if any, of (a) the sum of (1) the
aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the distribution of the Class A Principal Distribution
Amount on such Distribution Date and (2) the Certificate Principal Balance of
the Class M-1 Certificates immediately prior to such Distribution Date, over (b)
the lesser of (1) the product of (x) 70.50% and (y) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period, and (2) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period minus $8,185,447.
CLASS M-2 CERTIFICATE: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of
10
distributions provided for the Class M-2 Certificates as set forth herein and
evidencing (i) a Regular Interest in REMIC II and (ii) the right to receive the
Basis Risk Shortfall Carry Forward Amount from the Reserve Fund.
CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the remaining Principal Distribution Amount
for such Distribution Date after distribution of the Class A Principal
Distribution Amount and the Class M-1 Principal Distribution Amount and (y) the
excess, if any, of (a) the sum of (1) the aggregate Certificate Principal
Balance of the Class A Certificates (after taking into account the distribution
of the Class A Principal Distribution Amount on such Distribution Date), (2) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the distribution of the Class M-1 Principal Distribution Amount on such
Distribution Date) and (3) the Certificate Principal Balance of the Class M-2
Certificates immediately prior to such Distribution Date, over (b) the lesser of
(1) the product of (x) 78.10% and (y) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period, and (2) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period minus $8,185,447.
CLASS M-3 CERTIFICATE: Any Certificate designated as a "Class M-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 M-3 Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis Risk Shortfall
Carry Forward Amount from the Reserve Fund.
CLASS M-3 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the remaining Principal Distribution Amount
for such Distribution Date after distribution of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution Amount and the Class
M-2 Principal Distribution Amount and (y) the excess, if any, of (a) the sum of
(1) the aggregate Certificate Principal Balance of the Class A Certificates
(after taking into account the distribution of the Class A Principal
Distribution Amount on such Distribution Date), (2) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (3) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date) and (4) the Certificate Principal
Balance of the Class M-3 Certificates immediately prior to such Distribution
Date, over (b) the lesser of (1) the product of (x) 84.40% and (y) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period, and (2) the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period minus $8,185,447.
CLASS M-4 CERTIFICATE: Any Certificate designated as a "Class M-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 M-4 Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis Risk Shortfall
Carry Forward Amount from the Reserve Fund.
11
CLASS M-4 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the remaining Principal Distribution Amount
for such Distribution Date after distribution of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount and the Class M-3 Principal Distribution Amount
and (y) the excess, if any, of (a) the sum of (1) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (2) the Certificate Principal Balance of the Class M-1 Certificates
(after taking into account the distribution of the Class M-1 Principal
Distribution Amount on such Distribution Date), (3) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), (4) the Certificate Principal Balance of the Class M-3 Certificates
(after taking into account the distribution of the Class M-3 Principal
Distribution Amount on such Distribution Date) and (5) the Certificate Principal
Balance of the Class M-4 Certificates immediately prior to such Distribution
Date, over (b) the lesser of (1) the product of (x) 86.80% and (y) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period, and (2) the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period minus $8,185,447.
CLASS M-5 CERTIFICATE: Any Certificate designated as a "Class M-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 M-5 Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis Risk Shortfall
Carry Forward Amount from the Reserve Fund.
CLASS M-5 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the remaining Principal Distribution Amount
for such Distribution Date after distribution of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution Amount and
the Class M-4 Principal Distribution Amount and (y) the excess, if any, of (a)
the sum of (1) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the Class A
Principal Distribution Amount on such Distribution Date), (2) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (3) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (4) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (5) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date) and (6) the Certificate Principal
Balance of the Class M-5 Certificates immediately prior to such Distribution
Date, over (b) the lesser of (1) the product of (x) 89.40% and (y) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period, and (2) the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period minus $8,185,447.
12
CLASS M-6 CERTIFICATE: Any Certificate designated as a "Class M-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 M-6 Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis Risk Shortfall
Carry Forward Amount from the Reserve Fund.
CLASS M-6 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the remaining Principal Distribution Amount
for such Distribution Date after distribution of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution Amount, the
Class M-4 Principal Distribution Amount and the Class M-5 Principal Distribution
Amount and (y) the excess, if any, of (a) the sum of (1) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the distribution of the Class A Principal Distribution Amount on such
Distribution Date), (2) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (3) the Certificate
Principal Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), (4) the Certificate Principal Balance of the Class M-3 Certificates
(after taking into account the distribution of the Class M-3 Principal
Distribution Amount on such Distribution Date), (5) the Certificate Principal
Balance of the Class M-4 Certificates (after taking into account the
distribution of the Class M-4 Principal Distribution Amount on such Distribution
Date), (6) the Certificate Principal Balance of the Class M-5 Certificates
(after taking into account the distribution of the Class M-5 Principal
Distribution Amount on such Distribution Date) and (7) the Certificate Principal
Balance of the Class M-6 Certificates immediately prior to such Distribution
Date, over (b) the lesser of (1) the product of (x) 91.50% and (y) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period, and (2) the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period minus $8,185,447.
CLASS M-7 CERTIFICATE: Any Certificate designated as a "Class M-7
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 M-7 Certificates as set forth herein and evidencing (i) a Regular
Interest in REMIC II and (ii) the right to receive the Basis Risk Shortfall
Carry Forward Amount from the Reserve Fund.
CLASS M-7 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the remaining Principal Distribution Amount
for such Distribution Date after distribution of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution Amount, the
Class M-4 Principal Distribution Amount, the Class M-5 Principal Distribution
Amount and the Class M-6 Principal Distribution Amount and (y) the excess, if
any, of (a) the sum of (1) the aggregate Certificate Principal Balance of the
Class A Certificates (after taking into account the distribution of the Class A
Principal Distribution Amount on such Distribution Date), (2) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
13
Date), (3) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (4) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (5) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date), (6) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date) (7) the Certificate Principal Balance of the Class M-6 Certificates (after
taking into account the distribution of the Class M-6 Principal Distribution
Amount on such Distribution Date) and (8) the Certificate Principal Balance of
the Class M-7 Certificates immediately prior to such Distribution Date, over (b)
the lesser of (1) the product of (x) 94.40% and (y) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period, and (2) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period minus $8,185,447.
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 IV.
CLASS P INTEREST: An uncertificated interest in the Trust Fund held by
the Trustee on behalf of the Holders of the Class P Certificates, evidencing a
Regular Interest in REMIC II for purposes of the REMIC Provisions.
CLASS P CERTIFICATE ACCOUNT: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 4.05 in the name of the Trustee
for the benefit of the Class P Certificateholders.
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-5 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-5 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 RX CERTIFICATE: Any Certificate designated a "Class RX
Certificate" on the face thereof, in substantially the form set forth in Exhibit
A-5 hereto, evidencing the ownership of the Class R-3 Interest and the Class R-4
Interest and representing the right to the Percentage Interest of distributions
provided for the Class RX Certificates as set forth herein.
CLASS R-3 INTEREST: The uncertificated Residual Interest in REMIC III.
CLASS R-4 INTEREST: The uncertificated Residual Interest in REMIC IV.
14
CLOSING DATE: December 29, 2004.
CODE: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
COMPENSATING INTEREST: An amount, not to exceed the Servicing Fee, to
be deposited in the Protected Account by the Master Servicer to the payment of a
Prepayment Interest Shortfall on a Mortgage Loan subject to this Agreement.
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 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx,
Attention: Global Securitization Trust Services Group - Bear Xxxxxxx Asset
Backed Securities I LLC, Series 2004-HE11, or at such other address as the
Trustee may designate from time to time.
CORRESPONDING CERTIFICATE: With respect to each Uncertificated REMIC I
Regular Interest (other than REMIC I Regular Interests AA, ZZ, 1A, 1B, 2A, 2B,
XX and P), the Certificate with the corresponding designation.
CURRENT INTEREST: As of any Distribution Date, with respect to the
Certificates of each Class (other than the Class P Certificates and the Residual
Certificates), (i) the interest accrued on the Certificate Principal Balance or
Certificate Notional Amount or Uncertificated Notional Amount, as applicable,
during the related Accrual Period at the applicable Pass-Through Rate plus any
amount previously distributed with respect to interest for such Certificate that
has been recovered as a voidable preference by a trustee in bankruptcy minus
(ii) the sum of (a) any Prepayment Interest Shortfall for such Distribution
Date, to the extent not covered by Compensating Interest and (b) any Relief Act
Interest Shortfalls during the related Due Period, provided, however, that for
purposes of calculating Current Interest for any such Class, amounts specified
in clause (ii) hereof for any such Distribution Date shall be allocated first to
the Class CE Certificates and Residual Certificates in reduction of amounts
otherwise distributable to such Certificates on such Distribution Date and then
any excess shall be allocated to each Class of Class A Certificates and Class M
Certificates pro rata based on the respective amounts of interest accrued
pursuant to clause (i) hereof for each such Class on such Distribution Date.
CURRENT SPECIFIED ENHANCEMENT PERCENTAGE: With respect to any
Distribution Date, the percentage obtained by dividing (x) the sum of (i) the
aggregate Certificate Principal Balance of the Class M Certificates and (ii) the
Overcollateralization Amount, in each case prior to the distribution of the
Principal Distribution Amount on such Distribution Date, by (y) the aggregate
Stated Principal Balance of the Mortgage Loans as of the end of the related Due
Period.
CUSTODIAL AGREEMENT: Any of the LaSalle Custodial Agreement or Xxxxx
Fargo Custodial Agreement.
CUSTODIANS: (i) Xxxxx Fargo Bank, National Association, or any
successor custodian appointed pursuant to the provisions hereof and the Xxxxx
Fargo Custodial Agreement and (ii)
15
LaSalle Bank National Association, or any successor custodian appointed pursuant
to the provisions hereof and the LaSalle Custodial Agreement.
CUT-OFF DATE: The close of business on December 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. The aggregate Cut-off
Date Principal Balance of the Mortgage Loans is $1,637,089,485.64.
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a reduction
by a court of competent jurisdiction in a proceeding under the Bankruptcy Code
in the Scheduled Payment for such Mortgage Loan that became final and
non-appealable, except such a reduction resulting from a Deficient Valuation or
any other reduction that results in a permanent forgiveness of principal.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation by
a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding indebtedness under such Mortgage Loan, or any
reduction in the amount of principal to be paid in connection with any Scheduled
Payment that results in a permanent forgiveness of principal, which valuation or
reduction results from an order of such court that is final and non-appealable
in a proceeding under the Bankruptcy Code.
DEFINITIVE CERTIFICATES: As defined in Section 6.06.
DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
DELINQUENCY EVENT: A Delinquency Event shall have occurred and be
continuing if at any time, (x) 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 (including for this purpose any such
Mortgage Loans in bankruptcy or foreclosure and Mortgage Loans with respect to
which the related Mortgaged Property is REO Property), and the denominator of
which is the aggregate Stated Principal Balance of all of the Mortgage Loans as
of the last day of the related Due Period exceeds (y) 35% of the Current
Specified Enhancement Percentage.
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.
16
DENOMINATION: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Principal Balance or Initial Notional Amount of
this Certificate".
DEPOSITOR: Bear Xxxxxxx Asset Backed Securities I LLC, a Delaware
limited liability company, or its successor in interest.
DEPOSITORY: The initial Depository shall be The Depository Trust
Company ("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(a)(5) of the
Uniform Commercial Code of the State of New York.
DEPOSITORY AGREEMENT: With respect to the Class of Book-Entry
Certificates, the agreement among the Depositor, the Trustee and the initial
Depository, dated as of the Closing Date, substantially in the form of Exhibit
H.
DEPOSITORY PARTICIPANT: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
DETERMINATION DATE: With respect to any Distribution Date, the 15th day
of the month of such Distribution Date or, if such 15th day is not a Business
Day, the immediately preceding Business Day.
DISTRIBUTION ACCOUNT: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 4.04 in the name of the Trustee
for the benefit of the Certificateholders designated "LaSalle Bank National
Association, in trust for registered holders of Bear Xxxxxxx Asset Backed
Securities I LLC, Asset-Backed Certificates, Series 2004-HE11". 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: The Business Day prior to each
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 January 2005.
DUE DATE: As to any Mortgage Loan, the date in each month on which the
related Scheduled Payment is due, as set forth in the related Mortgage Note.
DUE PERIOD: With respect to any Distribution Date, the period from the
second day of the calendar month preceding the calendar month in which such
Distribution Date occurs through close of business on the first day of the
calendar month in which such Distribution Date occurs.
ELIGIBLE ACCOUNT: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and
17
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, as evidenced in writing. 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, and its
successors and assigns.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA RESTRICTED CERTIFICATES: Any of the Class CE, Class P and
Residual Certificates.
EVENT OF DEFAULT: As defined in Section 8.01 hereof.
EXCESS CASHFLOW: With respect to any Distribution Date, an amount, if
any, equal to the sum of (a) the Remaining Excess Spread for such Distribution
Date and (b) the Overcollateralization Release Amount for such Distribution
Date.
EXCESS LIQUIDATION PROCEEDS: To the extent not required by law to be
paid to the related Mortgagor, the excess, if any, of any Liquidation Proceeds
with respect to a Mortgage Loan over the Stated Principal Balance of such
Mortgage Loan and accrued and unpaid interest at the related Mortgage Rate
through the last day of the month in which the Mortgage Loan has been
liquidated.
EXCESS SPREAD: With respect to any Distribution Date, the excess, if
any, of (i) the Interest Funds for such Distribution Date over (ii) the sum of
the Current Interest on the Class A Certificates and Class M Certificates and
Interest Carry Forward Amounts on the Class A Certificates (other than Interest
Carry Forward Amounts paid pursuant to Section 5.04(a)(4)(A)), in each case for
such Distribution Date.
EXEMPTION: Prohibited Transaction Exemption 90-30, as amended from time
to time.
EXTRA PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution
Date, the lesser of (i) the excess, if any, of the Overcollateralization Target
Amount for such Distribution Date over
18
the Overcollateralization Amount for such Distribution Date (after giving effect
to distributions of principal on the Certificates other than any Extra Principal
Distribution Amount) and (ii) the Excess Spread for such Distribution Date.
XXXXXX MAE: Xxxxxx Xxx (formerly, Federal National Mortgage
Association), or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FINAL CERTIFICATION: The certification substantially in the form of
Exhibit Three to the related Custodial Agreement.
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(c) or Section
10.01), a determination made by the Master Servicer that all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which the Master Servicer,
in its reasonable good faith judgment, expects to be finally recoverable in
respect thereof have been so recovered. The Trustee shall maintain records,
based solely on information provided by the Master Servicer, of each Final
Recovery Determination made thereby.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989.
FISCAL QUARTER: December 1 to February 29 (or the last day in such
month), March 1 to May 31, June 1 to August 31, or September 1 to November 30,
as applicable.
XXXXXXX MAC: Federal Home Loan Mortgage Corporation, or any successor
thereto.
GROSS MARGIN: With respect to each Adjustable Rate Mortgage Loan, the
fixed percentage set forth in the related Mortgage Note that is added to the
Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Rate for such Mortgage Loan.
GROUP I LOANS: The Mortgage Loans identified as such on the Mortgage
Loan Schedule.
GROUP I PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution
Date, the product of the Principal Distribution Amount for such Distribution
Date and a fraction, the numerator of which is the Principal Funds for the Loan
Group I for such Distribution Date and the denominator of which is the Principal
Funds for both Loan Groups for such Distribution Date.
GROUP II LOANS: The Mortgage Loans identified as such on the Mortgage
Loan Schedule.
GROUP II PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the product of the Principal Distribution Amount for such
Distribution Date and a fraction, the numerator of which is the Principal Funds
for the Loan Group II for such Distribution Date and
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the denominator of which is the Principal Funds for both Loan Groups for such
Distribution Date.
GROUP II SEQUENTIAL TRIGGER EVENT: With respect to any Distribution
Date, a trigger event is in effect if, on any Distribution Date before the 37th
Distribution Date, the aggregate amount of Realized Losses incurred since the
Cut-off Date through the last day of the related Prepayment Period divided by
the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off
Date exceeds 3.25% or if, on or after the 37th Distribution Date, a Trigger
Event is in effect.
INDEMNIFIED PERSONS: The Trustee, the Master Servicer, the Trust Fund
and their officers, directors, agents and employees and, with respect to the
Trustee, any separate co-trustee and its officers, directors, agents and
employees.
INDEX: With respect to each Adjustable Rate Mortgage Loan and with
respect to each related Adjustment Date, the index as specified in the related
Mortgage Note.
INITIAL CERTIFICATION: The certification substantially in the form of
Exhibit One to the related Custodial Agreement.
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 PROCEEDS: Proceeds paid in respect of the Mortgage Loans
pursuant to any Insurance Policy and any other insurance policy covering a
Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, the Master Servicer or the trustee under the deed of trust and are
not applied to the restoration of the related Mortgaged Property or released to
the Mortgagor in accordance with the procedures that the Master Servicer would
follow in servicing mortgage loans held for its own account, in each case other
than any amount included in such Insurance Proceeds in respect of Insured
Expenses.
INSURED EXPENSES: Expenses covered by any insurance policy with respect
to the Mortgage Loans.
INTEREST CARRY FORWARD AMOUNT: As of any Distribution Date and with
respect to each Class of Certificates (other than the Class CE, Class P and the
Residual Certificates), the sum of (i) the excess of (a) the Current Interest
for such Class with respect to such Distribution Date and any prior Distribution
Dates over (b) the amount actually distributed to such Class of Certificates
with respect to interest on such Distribution Dates and (ii) interest thereon
(to the extent permitted by applicable law) at the applicable Pass-Through Rate
for such Class for the related Accrual Period including the Accrual Period
relating to such Distribution Date.
INTEREST DETERMINATION DATE: Shall mean the second LIBOR Business Day
preceding the commencement of each Accrual Period.
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INTEREST FUNDS: With respect to each Loan Group and any Distribution
Date (i) the sum, without duplication, of (a) all scheduled interest during the
related Due Period with respect to the related Mortgage Loans less the Servicing
Fee, the Trustee Fee and the LPMI Fee, if any, (b) all Advances relating to
interest with respect to the related Mortgage Loans made on or prior to the
related Distribution Account Deposit Date, (c) all Compensating Interest with
respect to the related Mortgage Loans and required to be remitted by the Master
Servicer pursuant to this Agreement with respect to such Distribution Date, (d)
Liquidation Proceeds and Subsequent Recoveries with respect to the related
Mortgage Loans collected during the related Prepayment Period (to the extent
such Liquidation Proceeds and Subsequent Recoveries relate to interest), and (e)
all amounts relating to interest with respect to each Mortgage Loan in such Loan
Group repurchased by the Seller pursuant to Sections 2.02 and 2.03 and by EMC
pursuant to Section 3.18, in each case to the extent remitted by the Master
Servicer to the Distribution Account pursuant to this Agreement minus (ii) all
amounts relating to interest required to be reimbursed pursuant to Sections 4.02
and 4.05 or as otherwise set forth in this Agreement.
INTERIM CERTIFICATION: The certification substantially in the form of
Exhibit Two to the related Custodial Agreement.
LASALLE: LaSalle Bank National Association, and any successor thereto.
LASALLE CUSTODIAL AGREEMENT: The Custodial Agreement, dated as December
29, 2004, among the Depositor, the Seller, the Master Servicer and LaSalle Bank
National Association as Custodian and as Trustee relating to the Mortgage Loans
identified in such Custodial Agreement.
LAST SCHEDULED DISTRIBUTION DATE: Solely for purposes of the face of
the Certificates as follows: with respect to the Certificates, other than the
Class I-A-1 Certificates and Class I-A-2 Certificates, the Distribution Date in
December 2034; with respect to the Class I-A-1 Certificates and Class I-A-2
Certificates, the Distribution Date in February 2027 and April 2033,
respectively.
LATEST POSSIBLE MATURITY DATE: The Distribution Date in the month
following the final scheduled maturity date of the Mortgage Loan in the Trust
Fund having the latest scheduled maturity date as of the Cut-off Date. For
purposes of the Treasury Regulations under Code section 860A through 860G, the
latest possible maturity date of each regular interest issued by REMIC I, REMIC
II, REMIC III and REMIC IV 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 Master 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,
21
foreclosure sale or otherwise, or in connection with any condemnation or partial
release of a Mortgaged Property and any other proceeds received with respect to
an REO Property, less the sum of related unreimbursed Advances, Servicing Fees
and Servicing Advances and all expenses of liquidation, including property
protection expenses and foreclosure and sale costs, including court and
reasonable attorneys fees.
LOAN-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.
LOAN GROUP: Any of Loan Group I or Loan Group II.
LOAN GROUP I: The Mortgage Loans included as such on the Mortgage Loan
Schedule.
LOAN GROUP II: The Mortgage Loans included as such on the Mortgage Loan
Schedule.
LPMI FEE: 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
Master Servicer or the related subservicer of the related Mortgage Loan is
responsible for the payment of the LPMI Fee thereunder from collections on the
related Mortgage Loan.
MAJORITY CLASS CE CERTIFICATEHOLDER: The Holder of a 50.01% or greater
Percentage Interest in the Class CE Certificates.
MARKER RATE: With respect to the Class CE Interest and any Distribution
Date, a per annum rate equal to two (2) times the weighted average of the
Uncertificated REMIC I Pass-Through Rates for the REMIC I Regular Interests
(other than REMIC I Regular Interests AA, 1A, 1B, 2A, 2B, XX and P), with the
rate on each such REMIC I Regular Interest (other than REMIC I Regular Interest
ZZ) subject to a cap equal to the lesser of (i) the related One-Month LIBOR
Pass-Through Rate for the Corresponding Certificate and (ii) the Net Rate Cap
for the Corresponding Certificate for the purpose of this calculation for such
Distribution Date and with the rate on REMIC I Regular Interest ZZ subject to a
cap of zero for the purpose of this calculation.
MASTER SERVICER: EMC Mortgage Corporation, 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 Master Servicer 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
22
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.
MAXIMUM MORTGAGE RATE: With respect to each Adjustable Rate Mortgage
Loan, the percentage set forth in the related Mortgage Note as the maximum
Mortgage Rate thereunder.
MAXIMUM UNCERTIFICATED ACCRUED INTEREST DEFERRAL AMOUNT: With respect
to any Distribution Date, the excess of (i) accrued interest at the
Uncertificated REMIC I Pass-Through Rate applicable to REMIC I Regular Interest
ZZ for such Distribution Date on a balance equal to the Uncertificated Principal
Balance of REMIC I Regular Interest ZZ minus the REMIC I Overcollateralized
Amount, in each case for such Distribution Date, over (ii) the aggregate amount
of Uncertificated Accrued Interest for such Distribution Date on the REMIC I
Regular Interests (other than REMIC I Regular Interests AA, ZZ, 1A, 1B, 2A, 2B,
XX and P), with the rate on each such REMIC I Regular Interest subject to a cap
equal to the lesser of (x) the One-Month LIBOR Pass-Through Rate for the
Corresponding Certificate and (y) the Net Rate Cap for the Corresponding
Certificate for the purpose of this calculation for such Distribution Date.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS(R) SYSTEM: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS(R) System.
MINIMUM MORTGAGE RATE: With respect to each Adjustable Rate Mortgage
Loan, the percentage set forth in the related Mortgage Note as the minimum
Mortgage Rate thereunder.
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 5.06.
MOODY'S: Xxxxx'x Investors Service, Inc., and any successor thereto.
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MORTGAGE: The mortgage, deed of trust or other instrument creating a
first or second lien on or first or second 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 related Custodian to be added to the Mortgage File pursuant to this
Agreement and the related Custodial 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.
MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase Agreement,
dated as of December 29, 2004, between the Seller, as seller and the Depositor,
as purchaser, in the form attached hereto as Exhibit L.
MORTGAGE LOAN PURCHASE PRICE: The price, calculated as set forth in
Section 10.01, to be paid in connection with the repurchase of the Mortgage
Loans pursuant to Section 10.01.
MORTGAGE LOAN SCHEDULE: The list of Mortgage Loans (as from time to
time amended by the Seller or the Master Servicer to reflect the deletion of
Deleted Mortgage Loans and the addition of Replacement Mortgage Loans pursuant
to the provisions of this Agreement) transferred to the Trustee as part of the
Trust Fund and from time to time subject to this Agreement, the initial Mortgage
Loan Schedule being attached hereto as Exhibit B, setting forth the following
information with respect to each Mortgage Loan:
(i) the Mortgage Loan identifying number
(ii) the current gross mortgage rate;
(iii) the Servicing Fee Rate;
(iv) the master servicing fee rate, if applicable;
(v) the LPMI Fee, if applicable;
(vi) the Trustee Fee Rate;
(vii) the current net mortgage rate;
(viii) the maturity date;
(ix) the original principal balance;
(x) the current principal balance;
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(xi) the stated original term to maturity ;
(xii) the stated remaining term to maturity;
(xiii) the property type;
(xiv) the MIN with respect to each MOM Loan;
(xv) with respect to each Adjustable Rate Mortgage Loan,
the Minimum Mortgage Rate;
(xvi) with respect to each Adjustable Rate Mortgage Loan,
the Maximum Mortgage Rate;
(xvii) with respect to each Adjustable Rate Mortgage Loan,
the Gross Margin;
(xviii) with respect to each Adjustable Rate Mortgage Loan,
the next Adjustment Date;
(xix) with respect to each Adjustable Rate Mortgage Loan,
the Periodic Rate Cap;
(xx) the Loan Group;
(xxi) a code indicating whether such Mortgage Loan is a
first lien Mortgage Loan or a second lien Mortgage Loan; and
(xxii) the Custodian.
Such schedule shall also set forth the aggregate Cut-off Date Principal
Balance for all of the Mortgage Loans.
MORTGAGE NOTE: The original executed note or other evidence of
indebtedness of a Mortgagor under a Mortgage Loan.
MORTGAGE RATE: With respect to each fixed rate Mortgage Loan, the rate
set forth in the related Mortgage Note. With respect to each Adjustable Rate
Mortgage Loan, the annual rate at which interest accrues on such Mortgage Loan
from time to time in accordance with the provisions of the related Mortgage
Note, which rate (A) as of any date of determination until the first Adjustment
Date following the Cut-off Date shall be the rate set forth in the Mortgage Loan
Schedule as the Mortgage Rate in effect immediately following the Cut-off Date
and (B) as of any date of determination thereafter shall be the rate as adjusted
on the most recent Adjustment Date, to equal the sum, rounded to the next
highest or nearest 0.125% (as provided in the Mortgage Note), of the Index,
determined as set forth in the related Mortgage Note, plus the related Gross
Margin subject to the limitations set forth in the related Mortgage Note. With
respect to each Mortgage Loan that becomes an REO Property, as of any date of
determination,
25
the annual rate determined in accordance with the immediately preceding sentence
as of the date such Mortgage Loan became an REO Property.
MORTGAGED PROPERTY: The underlying property securing a Mortgage Loan.
MORTGAGOR: The obligors on a Mortgage Note.
NET MORTGAGE RATE: As to each Mortgage Loan, and at any time, the per
annum rate equal to the Mortgage Rate less the sum of (i) the Servicing Fee
Rate, (ii) the Trustee Fee Rate and (iii) the rate at which the LPMI Fee is
calculated, if any.
NET RATE CAP: With respect to the Class I-A-1, Class I-A-2 and Class
I-A-3 Certificates and any Distribution Date, a rate per annum equal to the
product of (x) the weighted average of the Net Mortgage Rates on the then
outstanding Mortgage Loans in Loan Group I, weighted based on their Stated
Principal Balances as of the first day of the calendar month preceding the month
in which the Distribution Date occurs and (y) a fraction, the numerator of which
is 30 and the denominator of which is the actual number of days elapsed in the
related Accrual Period. For federal income tax purposes, however, such rate
shall be the equivalent of the foregoing, expressed as the weighted average of
(adjusted for the actual number of days elapsed in the related Accrual Period)
the Uncertificated REMIC I Pass-Through Rate on REMIC I Regular Interest 1B,
weighted on the basis of the Uncertificated Principal Balance of such REMIC I
Regular Interest.
With respect to the Class II-A-1 Certificates and Class II-A-2
Certificates and any Distribution Date, a rate per annum equal to the product of
(x) the weighted average of the Net Mortgage Rates on the then outstanding
Mortgage Loans in Loan Group II, weighted based on their Stated Principal
Balances as of the first day of the calendar month preceding the month in which
the Distribution Date occurs and (y) a fraction, the numerator of which is 30
and the denominator of which is the actual number of days elapsed in the related
Accrual Period. For federal income tax purposes, however, such rate shall be the
equivalent of the foregoing, expressed as the weighted average of (adjusted for
the actual number of days elapsed in the related Accrual Period) the
Uncertificated REMIC I Pass-Through Rate on REMIC I Regular Interest 2B,
weighted on the basis of the Uncertificated Principal Balance of such REMIC I
Regular Interest.
With respect to the Class M Certificates and any Distribution Date, a
rate per annum equal to the product of (x) the weighted average of the weighted
average of the Net Mortgage Rates on the then outstanding Mortgage Loans in each
Loan Group, weighted in proportion to the results of subtracting from the
aggregate Stated Principal Balance of each such Loan Group as of the first day
of the calendar month preceding the month in which the Distribution Date, the
aggregate Certificate Principal Balance of the related Class or Classes of
Senior Certificates and (y) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days elapsed in the related Accrual
Period. For federal income tax purposes, however, such rate shall be the
equivalent of the foregoing, expressed as the weighted average (adjusted for the
actual number of days elapsed in the related Accrual Period) of the
Uncertificated REMIC I Pass-Through Rates on (a) REMIC I Regular Interest 1A,
subject to a cap and a floor equal to the
26
Uncertificated REMIC I Pass-Through Rate on REMIC I Regular Interest 1B, and (b)
REMIC I Regular Interest 2A, subject to a cap and a floor equal to the
Uncertificated REMIC I Pass-Through Rate on REMIC I Regular Interest 2B,
weighted on the basis of the Uncertificated Balance of each such REMIC I Regular
Interest.
NON-BOOK-ENTRY CERTIFICATE: Any Certificate other than a Book-Entry
Certificate.
NONRECOVERABLE ADVANCE: Any portion of an Advance previously made or
proposed to be made by the Master Servicer pursuant to this Agreement, that, in
the good faith judgment of the Master Servicer, will not or, in the case of a
proposed advance, would not, be ultimately recoverable by it from the related
Mortgagor, related Liquidation Proceeds, Insurance Proceeds or otherwise.
NOTIONAL AMOUNT: With respect to each Distribution Date and the Yield
Maintenance Agreements relating to the Class I-A, Class II-A and Class M
Certificates, the lesser of (i) the aggregate Certificate Principal Balance of
the Class I-A, Class II-A or the Class M Certificates, respectively, at the
beginning of the related calculation period, and (ii) the notional amount for
the related calculation period as set forth in the related schedule set forth in
Exhibit M.
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 and/or the Trustee, as the case
may be, as required by this Agreement.
ONE-MONTH LIBOR: With respect to any Accrual Period, the rate
determined by the Trustee on the related Interest Determination Date on the
basis of the rate for U.S. dollar deposits for one month that appears on
Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such Interest
Determination Date; provided that the parties hereto acknowledge that One-Month
LIBOR for the first Accrual Period shall equal 2.41688% per annum. If such rate
does not appear on such page (or such other page as may replace that page on
that service, or if such service is no longer offered, such other service for
displaying One-Month LIBOR or comparable rates as may be reasonably selected by
the Trustee), One-Month LIBOR for the applicable Accrual Period will be the
Reference Bank Rate. If no such quotations can be obtained by the Trustee and no
Reference Bank Rate is available, 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 Trustee and the Trustee's calculation
of the rate of interest applicable to the Class A Certificates and Class M
Certificates for the related Accrual Period shall, in the absence of manifest
error, be final and binding.
ONE-MONTH LIBOR PASS-THROUGH RATE: With respect to the Class I-A-1
Certificates and, for purposes of the definition of "Marker Rate" and "Maximum
Uncertificated Accrued Interest
27
Deferral Amount", REMIC I Regular Interest I-A-1, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.
With respect to the Class I-A-2 Certificates and, for purposes of the
definition of "Marker Rate" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest I-A-2, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.
With respect to the Class I-A-3 Certificates and, for purposes of the
definition of "Marker Rate" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest I-A-3, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.
With respect to the Class II-A-1 Certificates and, for purposes of the
definition of "Marker Rate" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest II-A-1, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.
With respect to the Class II-A-2 Certificates and, for purposes of the
definition of "Marker Rate" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest II-A-2, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-1 Certificates and, for purposes of the
definition of "Marker Rate" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest M-1, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-2 Certificates and, for purposes of the
definition of "Marker Rate" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest M-2, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-3 Certificates and, for purposes of the
definition of "Marker Rate" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest M-3, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-4 Certificates and, for purposes of the
definition of "Marker Rate" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest M-4, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-5 Certificates and, for purposes of the
definition of "Marker Rate" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest M-5, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.
With respect to the Class M-6 Certificates and, for purposes of the
definition of "Marker Rate" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest M-6, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.
28
With respect to the Class M-7 Certificates and, for purposes of the
definition of "Marker Rate" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest M-7, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.
OPINION OF COUNSEL: A written opinion of counsel, who may be counsel
for the Seller, the Depositor or the Master Servicer, reasonably acceptable to
each addressee of such opinion; provided that with respect to Section 2.05,
7.05, 7.07 or 11.01, or the interpretation or application of the REMIC
Provisions, such counsel must (i) in fact be independent of the Seller,
Depositor and the Master Servicer, (ii) not have any direct financial interest
in the Seller, the Depositor or the Master Servicer or in any affiliate of
either, and (iii) not be connected with the Seller, the Depositor 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 10.01 hereof.
OPTIONAL TERMINATION DATE: The Distribution Date on which the Stated
Principal Balance of all of the Mortgage Loans is equal to or less than 10% of
the Stated Principal Balance of all of the Mortgage Loans as of the Cut-off
Date.
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.
OTS: The Office of Thrift Supervision.
OUTSTANDING: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(a) Certificates theretofore canceled by the Trustee or delivered
to the Trustee for cancellation; and
(b) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to this
Agreement.
OUTSTANDING MORTGAGE LOAN: As of any date of determination, a Mortgage
Loan with a Stated Principal Balance greater than zero that was not the subject
of a Principal Prepayment in full, and that did not become a Liquidated Loan,
prior to the end of the related Prepayment Period.
OVERCOLLATERALIZATION AMOUNT: With respect to any Distribution Date,
the excess, if any, of the aggregate Stated Principal Balances of the Mortgage
Loans as of the last day of the related Due Period (including any reduction due
to Realized Losses) over the Certificate Principal Balances of the Certificates
on such Distribution Date (after taking into account the payment of principal
other than any Extra Principal Distribution Amount on such Certificates).
29
OVERCOLLATERALIZATION RELEASE AMOUNT: With respect to any Distribution
Date, the lesser of (x) the Principal Remittance Amount for such Distribution
Date and (y) the excess, if any, of (i) the Overcollateralization Amount for
such Distribution Date (assuming that 100% of the Principal Remittance Amount is
applied as a principal payment on such Distribution Date) over (ii) the
Overcollateralization Target Amount for such Distribution Date (with the amount
pursuant to clause (y) deemed to be $0 if the Overcollateralization Amount is
less than or equal to the Overcollateralization Target Amount on that
Distribution Date).
OVERCOLLATERALIZATION TARGET AMOUNT: With respect to any Distribution
Date (a) prior to the Stepdown Date, 2.80% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date, (b) on or after the
Stepdown Date and if a Trigger Event is not in effect, the greater of (i) the
lesser of (1) 2.80% of the aggregate Stated Principal Balance of the Mortgage
Loans as of the Cut-off Date and (2) 5.60% of the then current aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period and (ii) $8,185,447 or (c) on or after the Stepdown Date and if a Trigger
Event is in effect, the Overcollateralization Target Amount for the immediately
preceding Distribution Date.
OWNERSHIP INTEREST: As to any Certificate, any ownership interest in
such Certificate including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
PASS-THROUGH RATE: With respect to the Class A Certificates and Class M
Certificates and any Distribution Date, a rate per annum equal to the lesser of
(i) the related One-Month LIBOR Pass-Through Rate for such Distribution Date and
(ii) the related Net Rate Cap for such Distribution Date. The initial
Pass-Through Rates for the Class I-A-1, Class I-A-2, Class I-A-3, Class II-A-1,
Class II-A-2, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6
and Class M-7 Certificates will be 2.56688%, 2.71688%, 2.86688%, 2.76688%,
2.80688%, 3.00688%, 3.46688%, 3.66688%, 4.11688%, 4.21688%, 5.36688% and
6.41688%, respectively.
With respect to the Class CE Interest and any Distribution Date, a rate
per annum equal to the percentage equivalent of a fraction, the numerator of
which is the sum of the amount determined for each REMIC I Regular Interest
(other than REMIC I Regular Xxxxxxxxx 0X, 0X, 0X, 0X, XX and P) of the excess of
the Uncertificated REMIC I Pass-Through Rate for such REMIC I Regular Interest
over the Marker Rate, applied to a notional amount equal to the Uncertificated
Principal Balance of such REMIC I Regular Interest and the denominator of which
is the aggregate Uncertificated Principal Balances of such REMIC I Regular
Interests.
With respect to the Class CE Certificates: the Class CE Certificates
shall not have a Pass-Through Rate, but Current Interest for such Certificates
and each Distribution Date shall be an amount equal to 100% of the amounts
distributable to the Class CE Interest for such Distribution Date.
With respect to the Class P Certificates, 0.00% per annum.
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PERCENTAGE INTEREST: With respect to any Certificate of a specified
Class, the Percentage Interest set forth on the face thereof or the percentage
obtained by dividing the Denomination of such Certificate by the aggregate of
the Denominations of all Certificates of such Class.
PERIODIC RATE CAP: With respect to each Adjustable Rate Mortgage Loan
and any Adjustment Date therefor, the fixed percentage set forth in the related
Mortgage Note, which is the maximum amount by which the Mortgage Rate for such
Mortgage Loan may increase or decrease (without regard to the Maximum Mortgage
Rate or the Minimum Mortgage Rate) on such Adjustment Date from the Mortgage
Rate in effect immediately prior to such Adjustment Date.
PERMITTED INVESTMENTS: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency
thereof, provided such obligations are backed by the full faith and
credit of the United States;
(ii) general obligations of or obligations guaranteed by
any state of the United States or the District of Columbia receiving
the highest long-term debt rating of each Rating Agency, or such lower
rating as will not result in the downgrading or withdrawal of the
ratings then assigned to the Certificates by each Rating Agency, as
evidenced in writing;
(iii) commercial or finance company paper which is then
receiving the highest commercial or finance company paper rating of
each Rating Agency, or such lower rating as will not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by each Rating Agency, as evidenced in writing;
(iv) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or trust
company incorporated under the laws of the United States or of any
state thereof and subject to supervision and examination by federal
and/or state banking authorities (including the Trustee in its
commercial banking capacity), provided that the commercial paper and/or
long term unsecured debt obligations of such depository institution or
trust company are then rated one of the two highest long-term and the
highest short-term ratings of each such Rating Agency for such
securities, or such lower ratings as will not result in the downgrading
or withdrawal of the rating then assigned to the Certificates by any
Rating Agency, as evidenced in writing;
(v) 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, as evidenced in writing;
(vi) 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;
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(vii) 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 short term ratings of each Rating Agency (except if the
Rating Agency is Xxxxx'x, such rating shall be the highest commercial
paper rating of Xxxxx'x 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;
(viii) interests in any money market fund (including any
such fund managed or advised by the Trustee 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 short 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, as
evidenced in writing;
(ix) 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 the Master Servicer or any affiliate thereof)
which on the date of acquisition has been rated by each Rating Agency
in their respective highest applicable rating category or such lower
rating as will not result in the downgrading or withdrawal of the
ratings then assigned to the Certificates by each Rating Agency, as
evidenced in writing; and
(x) such other investments having a specified stated
maturity and bearing interest or sold at a discount acceptable to each
Rating Agency and 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 (viii) 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.
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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 United States, any state thereof or the District of
Columbia, an estate whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States, or a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States persons have authority to control all substantial decisions
of the 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, REMIC III or
REMIC IV 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.
PREPAYMENT ASSUMPTION: The applicable rate of prepayment as described
in the Prospectus Supplement.
PREPAYMENT CHARGE: Any prepayment premium, penalty or charge payable by
a Mortgagor in connection with any Principal Prepayment on a Mortgage Loan
pursuant to the terms of the related Mortgage Note.
PREPAYMENT INTEREST SHORTFALL: With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a partial Principal Prepayment, a
Principal Prepayment in full, or that became a Liquidated Loan during the
related Prepayment Period, (other than a Principal Prepayment in full resulting
from the purchase of a Mortgage Loan pursuant to Section 2.02, 2.03, 3.18 or
10.01 hereof), the amount, if any, by which (i) one month's interest at the
applicable Net Mortgage Rate on the Stated Principal Balance of such Mortgage
Loan immediately prior to such prepayment (or liquidation) or in the case of a
partial Principal Prepayment on the amount of such prepayment (or liquidation
proceeds) exceeds (ii) the amount
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of interest paid or collected in connection with such Principal Prepayment or
such liquidation proceeds less the sum of (a) the Trustee Fee, (b) the Servicing
Fee and (c) the LPMI Fee, if any.
PREPAYMENT PERIOD: As to any Distribution Date, 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.
PRIMARY MORTGAGE INSURANCE POLICY: Any primary mortgage guaranty
insurance policy issued in connection with a Mortgage Loan which provides
compensation to a Mortgage Note holder in the event of default by the obligor
under such Mortgage Note or the related security instrument, if any or any
replacement policy therefor through the related Accrual Period for such Class
relating to a Distribution Date.
PRINCIPAL DISTRIBUTION AMOUNT: With respect to each Distribution Date,
an amount equal to (x) the Principal Funds for such Distribution Date plus (y)
any Extra Principal Distribution Amount for such Distribution Date, less (z) any
Overcollateralization Release Amount.
PRINCIPAL FUNDS: With respect to each Loan Group and any Distribution
Date, (i) the sum, without duplication, of (a) all scheduled principal collected
during the related Due Period, (b) all Advances relating to principal made on or
before the Distribution Account Deposit Date, (c) Principal Prepayments
exclusive of prepayment charges or penalties collected during the related
Prepayment Period, (d) the Stated Principal Balance of each Mortgage Loan in the
related Loan Group that was repurchased by the Seller pursuant to Sections 2.02
and 2.03 or by EMC pursuant to Section 3.18, (e) the aggregate of all
Substitution Adjustment Amounts for the related Determination Date in connection
with the substitution of Mortgage Loans pursuant to Section 2.03(c), (f) all
Liquidation Proceeds and Subsequent Recoveries collected during the related
Prepayment Period (to the extent such Liquidation Proceeds and Subsequent
Recoveries relate to principal), in each case to the extent remitted by the
Master Servicer to the Distribution Account pursuant to this Agreement and (g)
amounts in respect of principal paid by the Majority Class CE Certificateholder
or the Master Servicer, as applicable, pursuant to Section 10.01, minus (ii) all
amounts required to be reimbursed pursuant to Sections 4.02 and 4.05 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 loans
purchased or repurchased under Sections 2.02, 2.03, 3.18 and 10.01 hereof) that
is received in advance of its scheduled Due Date and is not accompanied by an
amount as to interest representing scheduled interest due on any date or dates
in any month or months subsequent to the month of prepayment. Partial Principal
Prepayments shall be applied by the Master Servicer, as appropriate, in
accordance with the terms of the related Mortgage Note.
PRINCIPAL REMITTANCE AMOUNT: With respect to each Distribution Date,
the sum of the amounts listed in clauses (a) through (f) of the definition of
Principal Funds.
PRIVATE CERTIFICATES: Any of the Class M-7, Class P, Class CE and
Residual Certificates.
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PROSPECTUS SUPPLEMENT: The Prospectus Supplement dated December 22,
2004 relating to the public offering of the Class I-A-1, Class I-A-2, Class
I-A-3, Class II-A-1, Class II-A-2, Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5 and Class M-6 Certificates.
PROTECTED ACCOUNT: The separate Eligible Account established and
maintained by the Master Servicer with respect to the Mortgage Loans and REO
Property in accordance with Section 4.01 hereof.
PUD: A Planned Unit Development.
PURCHASE PRICE: With respect to any Mortgage Loan (x) required to be
repurchased by the Seller pursuant to Section 2.02 or 2.03 hereof or (y) that
EMC has a right to purchase pursuant to Section 3.18 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 (or if the related Mortgaged Property was acquired
with respect thereto, 100% of the Outstanding Principal Balance at the date of
the acquisition), 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 (iii) any costs and damages (if any) incurred by the Trust in connection
with any violation of such Mortgage Loan of any anti-predatory lending laws.
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 (iii) 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 Master Servicer pursuant to this Agreement. 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 recoveries are distributed
to any Class of Certificates or applied to increase Excess Spread on any
Distribution Date.
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With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, calculated in the case of each calendar month during such period (A)
at an annual rate equal to the annual rate at which interest was then accruing
on the related Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of the related Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, plus (iii) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such Final Recovery Determination was made, minus (iv)
the aggregate of all unreimbursed Advances and Servicing Advances.
With respect to each Mortgage Loan which has become the subject of a
Deficient Valuation, the difference between the principal balance of the
Mortgage Loan outstanding immediately prior to such Deficient Valuation and the
principal balance of the Mortgage Loan as reduced by the Deficient Valuation.
With respect to each Mortgage Loan which has become the subject of a
Debt Service Reduction, the portion, if any, of the reduction in each affected
Monthly Payment attributable to a reduction in the Mortgage Rate imposed by a
court of competent jurisdiction. Each such Realized Loss shall be deemed to have
been incurred on the Due Date for each affected Monthly Payment.
RECORD DATE: With respect to any Distribution Date and the Certificates
(other than the Class M-7, Class CE, Class P and Residual Certificates), so long
as such Classes of 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. With respect to the Class M-7, Class CE, Class P and Residual
Certificates, so long as such Classes of Certificates remain non Book-Entry
Certificates, 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 Trustee 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 Trustee 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
36
aggregate Certificate Principal Balance of the Class A Certificates and Class M
Certificates for such Accrual Period, provided that at least two such Reference
Banks provide such rate. If fewer than two offered rates appear, the Reference
Bank Rate will be the arithmetic mean, rounded upwards, if necessary, to the
nearest whole multiple of 0.03125%, of the rates quoted by one or more major
banks in New York City, selected by the Trustee, as of 11:00 a.m., New York City
time, on such date for loans in United States dollars to leading European banks
for a period of one month in amounts approximately equal to the aggregate
Certificate Principal Balance of the Class A Certificates and Class M
Certificates for such Accrual Period.
REGULAR CERTIFICATE: Any Certificate other than a Residual Certificate.
REGULAR INTEREST: A "regular interest" in a REMIC within the meaning of
Section 860G(a)(1) of the Code.
RELIEF ACT: The Servicemembers Civil Relief Act, as amended, or similar
state law.
RELIEF ACT INTEREST SHORTFALL: With respect to any Distribution Date
and any Mortgage Loan, any reduction in the amount of interest collectible on
such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Relief Act.
REMAINING EXCESS SPREAD: With respect to any Distribution Date, the
Excess Spread less any Extra Principal Distribution Amount, in each case for
such Distribution Date.
REMIC: A "real estate mortgage investment conduit" within the meaning
of section 860D of the Code.
REMIC I: The segregated pool of assets described in Section 5.07(a).
REMIC I INTEREST LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount (subject to adjustment based on the actual number
of days elapsed in the respective Accrual Period) equal to (a) the product of
(i) 50% of the aggregate Stated Principal Balance of the Mortgage Loans and REO
Properties then outstanding and (ii) the Uncertificated REMIC I Pass-Through
Rate for REMIC I Regular Interest AA minus the Marker Rate, divided by (b) 12.
REMIC I MARKER ALLOCATION PERCENTAGE: 50% of any amount payable or loss
attributable from the Mortgage Loans, which shall be allocated to REMIC I
Regular Interest AA, REMIC I Regular Interest I-A-1, REMIC I Regular Interest
I-A-2, REMIC I Regular Interest I-A-3, REMIC I Regular Interest II-A-1, REMIC I
Regular Interest II-A-2, REMIC I Regular Interest M-1, REMIC I Regular Interest
M-2, REMIC I Regular Interest M-3, REMIC I Regular Interest M-4, REMIC I Regular
Interest M-5, REMIC I Regular Interest M-6, REMIC I Regular Interest M-7 and
REMIC I Regular Interest ZZ.
REMIC I OVERCOLLATERALIZATION AMOUNT: With respect to any date of
determination, (i) 0.50% of the aggregate Uncertificated Principal Balances of
the REMIC I Regular Interests (other than REMIC I Regular Interest P) minus (ii)
the aggregate of the Uncertificated Principal Balances of REMIC I Regular
Interest I-A-1, REMIC I Regular Interest I-A-2, REMIC I Regular Interest I-A-3,
REMIC I Regular Interest II-A-1, REMIC I Regular Interest II-A-2, REMIC I
37
Regular Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular Interest
M-3, REMIC I Regular Interest M-4, REMIC I Regular Interest M-5 and REMIC I
Regular Interest M-6 and REMIC I Regular Interest M-7, in each case as of such
date of determination.
REMIC I PRINCIPAL LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a) the product of (i) 50% of the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate of the Uncertificated Principal Balances of REMIC I Regular Interest
I-A-1, REMIC I Regular Interest I-A-2, REMIC I Regular Interest I-A-3, REMIC I
Regular Interest II-A-1, REMIC I Regular Interest II-A-2, REMIC I Regular
Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular Interest M-3, REMIC
I Regular Interest M-4, REMIC I Regular Interest M-5, REMIC I Regular Interest
M-6, REMIC I Regular Interest M-7 and the denominator of which is the aggregate
of the Uncertificated Principal Balances of REMIC I Regular Interest I-A-1,
REMIC I Regular Interest I-A-2, REMIC I Regular Interest I-A-3, REMIC I Regular
Interest II-A-1, REMIC I Regular Interest II-A-2, REMIC I Regular Interest M-1,
REMIC I Regular Interest M-2, REMIC I Regular Interest M-3, REMIC I Regular
Interest M-4, REMIC I Regular Interest M-5, REMIC I Regular Interest M-6, REMIC
I Regular Interest M-7 and REMIC I Regular Interest ZZ.
REMIC I REGULAR INTEREST: Any of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
"regular interest" in REMIC I. Each REMIC I Regular Interest 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. The designations for the respective REMIC I Regular Interests are set
forth in the Preliminary Statement hereto.
REMIC I REGULAR INTEREST AA: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest AA shall accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST I-A-1: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-A-1 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST I-A-2: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-A-2 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal,
38
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
REMIC I REGULAR INTEREST I-A-3: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-A-3 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST II-A-1: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest II-A-1 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST II-A-2: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest II-A-2 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST M-1: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest M-1 shall accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST M-2: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest M-2 shall accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST M-3: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest M-3 shall accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, 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 I REGULAR INTEREST M-4: 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 M-4 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 M-5: 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 M-5 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 M-6: 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 M-6 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 M-7: 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 M-7 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 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 P 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 XX: 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 XX 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 ZZ: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest ZZ shall accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the
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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 1A: 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 1A 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 1B: 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 1B 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 2A: 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 2A 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 2B: 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 2B 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 SUB WAC ALLOCATION PERCENTAGE: 50% of any amount payable or
loss attributable from the Mortgage Loans, which shall be allocated to REMIC I
Regular Interest 1A, REMIC I Regular Interest 1B, REMIC I Regular Interest 2A,
REMIC I Regular Interest 2B and REMIC I Regular Interest XX.
REMIC I SUBORDINATED BALANCE RATIO: The ratio among the Uncertificated
Principal Balances of each REMIC I Regular Interest ending with the designation
"A", equal to the ratio among, with respect to each such REMIC I Regular
Interest, the excess of (x) the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group I or the Mortgage Loans in Loan Group II, as
applicable over (y) the current Certificate Principal Balance of the related
Class A Certificates.
REMIC I REQUIRED OVERCOLLATERALIZATION AMOUNT: 0.50% of the
Overcollateralization Target Amount.
REMIC II: The segregated pool of assets described in Section 5.07(a).
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REMIC II CERTIFICATE: Any Regular Certificate (other than the Class CE
Certificates and Class P Certificates).
REMIC II CERTIFICATEHOLDER: The Holder of any REMIC II Certificate.
REMIC II REGULAR INTEREST: Any Class A Certificate, Class M
Certificate, the Class CE Interest or Class P Interest.
REMIC III: The segregated pool of assets consisting of the Class CE
Interest conveyed in trust to the Trustee, for the benefit of the Holders of the
Class CE Certificates and the Class RX Certificate (in respect of the Class R-3
Interest), with respect to which a separate REMIC election is to be made.
REMIC III CERTIFICATE: Any Class CE Certificate or Class RX Certificate
(in respect of the Class R-3 Interest).
REMIC IV: The segregated pool of assets consisting of the Class P
Interest conveyed in trust to the Trustee, for the benefit of the Holders of the
Class P Certificates and the Class RX Certificate (in respect of the Class R-4
Interest), with respect to which a separate REMIC election is to be made.
REMIC IV CERTIFICATE: Any Class P Certificate or Class RX Certificate
(in respect of the Class R-4 Interest).
REMIC OPINION: Shall mean an Opinion of Counsel to the effect that the
proposed action will not cause any of REMIC I, REMIC II, REMIC III or REMIC IV
to fail to qualify as a REMIC at any time that any Certificates are outstanding.
REMIC PROVISIONS: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
proposed, temporary and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
REMITTANCE DATE: Shall mean the Business Day immediately preceding the
Distribution Account Deposit Date.
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 Master Servicer
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
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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) if the Replacement Mortgage Loan is a fixed rate Mortgage Loan, 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; (ix) if the Replacement
Mortgage Loan is an Adjustable Rate Mortgage Loan, have a Maximum Mortgage Rate
not less than the Maximum Mortgage Rate on the Deleted Mortgage Loan, (x) if the
Replacement Mortgage Loan is an Adjustable Rate Mortgage Loan, have a Minimum
Mortgage Rate not less than the Minimum Mortgage Rate of the Deleted Mortgage
Loan, (xi) if the Replacement Mortgage Loan is an Adjustable Rate Mortgage Loan,
have a Gross Margin equal to or greater than the Gross Margin of the Deleted
Mortgage Loan, (xii) if the Replacement Mortgage Loan is an Adjustable Rate
Mortgage Loan, have a next Adjustment Date not more than two months later than
the next Adjustment Date on the Deleted Mortgage Loan, (xiii) comply with each
representation and warranty set forth in Section 7 of the Mortgage Loan Purchase
Agreement and (xiv) the related Custodian has delivered a Final Certification
noting no defects or exceptions.
REQUEST FOR RELEASE: The Request for Release to be submitted by the
Seller or the Master Servicer to the related Custodian substantially in the form
of Exhibit G. Each Request for Release furnished to the related Custodian by the
Seller 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 related Custodian, shall be deemed to have been sent and executed by an
officer of such Person or a Servicing Officer) of the Master Servicer.
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.
RESERVE FUND: Shall mean the separate trust account created and
maintained by the Trustee pursuant to Section 3.20 hereof.
RESIDUAL CERTIFICATES: The Class R-1, Class R-2 and Class RX
Certificates (representing ownership of the Class R-3 Interest and Class R-4
Interest) each evidencing the sole class of "residual interests" (within the
meaning of Section 860G(a)(2) of the Code) in the related REMIC.
RESIDUAL INTEREST: The sole class of "residual interests" in a REMIC
within the meaning of Section 860G(a)(2) of the Code.
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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.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.,
and any successor thereto.
SCHEDULED PAYMENT: The scheduled monthly payment on a Mortgage Loan due
on any Due Date allocable to principal and/or interest on such Mortgage Loan.
SECURITIES ACT: The Securities Act of 1933, as amended.
SELLER: EMC Mortgage Corporation, a Delaware corporation, and its
successors and assigns, in its capacity as seller of the Mortgage Loans to the
Depositor.
SENIOR CERTIFICATES: Any of the Class I-A-1, Class I-A-2, Class I-A-3,
Class II-A-1 and Class II-A-2 Certificates.
SERVICING ADVANCES: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable legal fees) incurred in the
performance by the Master Servicer of its servicing obligations hereunder,
including, but not limited to, the cost of (i) the preservation, restoration and
protection of a Mortgaged Property, (ii) any enforcement or judicial
proceedings, including foreclosures, 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 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 or, in the event of any payment of interest that accompanies a Principal
Prepayment in full during the related Due Period made by the Mortgagor
immediately prior to such prepayment, interest at the Servicing Fee Rate on the
Stated Principal Balance of such Mortgage Loan for the period covered by such
payment of interest.
SERVICING FEE RATE: 0.500% per annum.
SERVICING MODIFICATION: With respect to any Mortgage Loan that is in
default or, in the reasonable judgment of the Master Servicer, as to which
default is reasonably foreseeable, any modification which is effected by the
Master Servicer in accordance with the terms of this 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.
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SERVICING OFFICER: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by the Master Servicer on the Closing Date pursuant to this
Agreement, as such list may from time to time be amended.
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 Master Servicer as recoveries of principal in accordance
with Section 3.09 with respect to such Mortgage Loan, that were received by the
Master Servicer as of the close of business on the last day of the Prepayment
Period related to such Distribution Date and (iii) any Realized Losses on such
Mortgage Loan incurred during the related Prepayment Period. The Stated
Principal Balance of a Liquidated Loan equals zero.
STEPDOWN DATE: The later to occur of (a) the Distribution Date in
January 2008 and (b) the first Distribution Date on which the Current Specified
Enhancement Percentage (calculated for this purpose only, prior to distributions
on the Certificates but following distributions on the Mortgage Loans for the
related Due Period) is greater than or equal to 43.90%.
SUBORDINATED CERTIFICATES: The Class M Certificates, Class CE
Certificates and Residual Certificates.
SUBSEQUENT RECOVERIES: As of any Distribution Date, amounts received by
the Master Servicer (net of any related expenses permitted to be reimbursed
pursuant to Section 4.02) 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 Mortgage Loan that
was the subject of a liquidation or final disposition of any REO Property prior
to the related Prepayment Period that resulted in a Realized Loss.
SUBSERVICING AGREEMENT: Any agreement entered into between the Master
Servicer and a subservicer with respect to the subservicing of any Mortgage Loan
hereunder by such subservicer.
SUBSTITUTION ADJUSTMENT AMOUNT: The meaning ascribed to such term
pursuant to Section 2.03(c).
SUCCESSOR MASTER SERVICER: The meaning ascribed to such term pursuant
to Section 8.02.
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.
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301.6231(a)(7)-1T. The holder of the greatest Percentage Interest in a Class of
Residual Certificates shall be the Tax Matters Person for the related REMIC. The
Trustee, or 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.
TRANSFER AFFIDAVIT: As defined in Section 6.02(c).
TRIGGER EVENT: With respect to any Distribution Date, a Trigger Event
exists if (i) a Delinquency Event shall have occurred and be continuing or (ii)
the aggregate amount of Realized Losses on the Mortgage Loans since the Cut-off
Date as a percentage of the Cut-off Date Principal Balance exceeds the
applicable percentages set forth below with respect to such Distribution Date:
DISTRIBUTION DATE PERCENTAGE
----------------- ----------
January 2008 to December 2008 3.25%
January 2009 to December 2009 5.00%
January 2010 to December 2010 6.50%
January 2011 and thereafter 7.25%
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 Distribution Account, the Class
P Certificate Account, the Reserve Fund and the Protected Account and all
amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed in lieu of foreclosure or otherwise; (iv) the mortgagee's
rights under the Insurance Policies with respect to the Mortgage Loans; (v) the
rights under the Yield Maintenance 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: LaSalle Bank National Association, a national banking
association, not in its individual capacity, but solely in its capacity as
trustee for the benefit of the Certificateholders under this Agreement, and any
successor thereto, and any corporation or national banking association resulting
from or surviving any consolidation or merger to which it or its successors may
be a party and any successor trustee as may from time to time be serving as
successor trustee hereunder.
46
TRUSTEE FEE: As to each Mortgage Loan and any Distribution Date, a per
annum fee equal to 0.0011% multiplied by the Stated Principal Balance of such
Mortgage Loan as of the last day of the related Due Period.
UNCERTIFICATED ACCRUED INTEREST: With respect to each REMIC I Regular
Interest on each Distribution Date, an amount equal to one month's interest at
the Uncertificated REMIC I Pass-Through Rate on the Uncertificated Principal
Balance of such REMIC I Regular Interest. In each case, Uncertificated Accrued
Interest will be reduced by any Prepayment Interest Shortfalls and Relief Act
Interest Shortfalls (allocated to such REMIC I Regular Interests as set forth in
Section 5.07).
UNCERTIFICATED NOTIONAL AMOUNT: With respect to the Class CE Interest
and any Distribution Date, an amount equal to the aggregate Uncertificated
Principal Balance of the REMIC I Regular Interests (other than REMIC I Regular
Interest P) for such Distribution Date.
UNCERTIFICATED PRINCIPAL BALANCE: The amount of the REMIC I Regular
Interests outstanding as of any date of determination. As of the Closing Date,
the Uncertificated Principal Balance of each REMIC I Regular Interest shall
equal the amount set forth in the Preliminary Statement hereto as its initial
uncertificated principal balance. On each Distribution Date, the Uncertificated
Principal Balance of the REMIC I Regular Interest shall be reduced by all
distributions of principal made on such REMIC I Regular Interest on such
Distribution Date pursuant to Section 5.07 and, if and to the extent necessary
and appropriate, shall be further reduced on such Distribution Date by Realized
Losses as provided in Section 5.05 and the Uncertificated Principal Balance of
REMIC I Regular Interest ZZ shall be increased by interest deferrals as provided
in Section 5.07(b)(1)(i). The Uncertificated Principal Balance of each REMIC I
Regular Interest shall never be less than zero. With respect to the Class CE
Interest as of any date of determination, an amount equal to the excess, if any,
of (A) the then aggregate Uncertificated Principal Balances of the REMIC I
Regular Interests over (B) the then aggregate Certificate Principal Balances of
the Class A Certificates, the Class M Certificates and the Class P Interest then
outstanding.
UNCERTIFICATED REMIC I PASS-THROUGH RATE: With respect to REMIC I
Regular Interest AA, REMIC I Regular Interest I-A-1, REMIC I Regular Interest
I-A-2, REMIC I Regular Interest I-A-3, REMIC I Regular Interest II-A-1, REMIC I
Regular Interest II-A-2, REMIC I Regular Interest M-1, REMIC I Regular Interest
M-2, REMIC I Regular Interest M-3, REMIC I Regular Interest M-4, REMIC I Regular
Interest M-5, REMIC I Regular Interest M-6, REMIC I Regular Interest M-7, REMIC
I Regular Interest ZZ, REMIC I Regular Interest 1A, REMIC I Regular Interest 2A
and REMIC I Regular Interest XX, the weighted average of the Net Mortgage Rates
of the Mortgage Loans. With respect to REMIC I Regular Interest 1B, the weighted
average of the Net Mortgage Rates of the Mortgage Loans in Loan Group I. With
respect to REMIC I Regular Interest 2B, the weighted average of the Net Mortgage
Rates of the Mortgage Loans in Loan Group II. With respect to REMIC I Regular
Interest P, 0.00%.
UNPAID REALIZED LOSS AMOUNT: With respect to any Class A Certificates
and as to any Distribution Date, is the excess of Applied Realized Loss Amounts
with respect to such Class over the sum of all distributions in reduction of the
Applied Realized Loss Amounts on all
47
previous Distribution Dates. Any amounts distributed to the Class A Certificates
in respect of any Unpaid Realized Loss Amount shall not be applied to reduce the
Certificate Principal Balance of such Class.
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) 93% to the Class A Certificates
and Class M Certificates, (ii) 3% to the Class CE Certificates until paid in
full, and (iii) 1% to each Class of Residual Certificates and Class P
Certificates, with the allocation among the Certificates (other than the Class
CE, Class P and Residual Certificates) to be in proportion to the Certificate
Principal Balance of each Class relative to the Certificate Principal Balance of
all other such Classes. Voting Rights will be allocated among the Certificates
of each such Class in accordance with their respective Percentage Interests.
XXXXX FARGO: Xxxxx Fargo Bank, National Association, and any successor
thereto.
XXXXX FARGO CUSTODIAL AGREEMENT: The Custodial Agreement, dated as
December 29, 2004, among the Depositor, the Seller, the Master Servicer, the
Trustee and Xxxxx Fargo Bank, National Association as Custodian relating to the
Mortgage Loans identified in such Custodial Agreement.
YIELD MAINTENANCE AGREEMENT: Any of the three Yield Maintenance
Agreements, each dated December 29, 2004, between the Trustee and Bear Xxxxxxx
Financial Products Inc.
Section 1.02 ALLOCATION OF CERTAIN INTEREST SHORTFALLS.
For purposes of calculating the amount of Current Interest for the
Class A Certificates, the Class M Certificates and the Class CE Certificates for
any Distribution Date, the aggregate amount of any Prepayment Interest
Shortfalls (to the extent not covered by payments by the Master Servicer
pursuant to Section 5.02) and any Relief Act Interest Shortfalls incurred in
respect of the Mortgage Loans for any Distribution Date shall be allocated
first, to the Class CE Certificates based on, and to the extent of, one month's
interest at the then applicable respective Pass-Through Rate on the Certificate
Notional Amount thereof and, thereafter, among the Class A Certificates and
Class M Certificates, in each case on a pro rata basis based on, and to the
extent of, one month's interest at the then applicable respective Pass-Through
Rate on the respective Certificate Principal Balance of each such Certificate.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC I Regular Interests for any Distribution Date:
(a) The REMIC I Marker Allocation Percentage of the aggregate
amount of any Prepayment Interest Shortfalls (to the extent not covered by
payments by the Master Servicer pursuant to Section 5.02) and the REMIC I Marker
Allocation Percentage of any Relief Act Interest Shortfalls incurred in respect
of the Mortgage Loans for any Distribution Date shall be allocated among REMIC I
Regular Interest I-A-1, REMIC I Regular Interest I-A-2, REMIC I Regular Interest
I-A-3, REMIC I Regular Interest II-A-1, REMIC I Regular Interest II-A-2, REMIC I
Regular Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular Interest
M-3, REMIC I Regular Interest M-4, REMIC I Regular Interest M-5, REMIC I Regular
Interest M-6,
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REMIC I Regular Interest M-7 and REMIC I Regular Interest ZZ, pro rata, based
on, and to the extent of, one month's interest at the then applicable respective
Uncertificated REMIC I Pass-Through Rate on the respective Uncertificated
Principal Balance of each such REMIC I Regular Interest;
(b) The REMIC I Sub WAC Allocation Percentage of the aggregate
amount of any Prepayment Interest Shortfalls (to the extent not covered by
payments by the Master Servicer pursuant to Section 5.02) and the REMIC I Sub
WAC Allocation Percentage of any Relief Act Interest Shortfalls incurred in
respect of the Mortgage Loans for any Distribution Date shall be allocated to
Uncertificated Accrued Interest payable to REMIC I Regular Interest 1A, REMIC I
Regular Interest 1B, REMIC I Regular Interest 2A, REMIC I Regular Interest 2B
and REMIC I Regular Interest XX, pro rata, based on, and to the extent of, one
month's interest at the then applicable respective Uncertificated REMIC I
Pass-Through Rate on the respective Uncertificated Principal Balance of each
such REMIC I Regular Interest; and
(c) The aggregate amount of any Prepayment Interest Shortfalls (to
the extent not covered by payments by the Master Servicer pursuant to Section
5.02) and any Relief Act Interest Shortfalls allocated to the Class CE
Certificates shall be deemed allocated to the Class CE Interest.
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ARTICLE II
CONVEYANCE OF TRUST FUND
REPRESENTATIONS AND WARRANTIES
Section 2.01 CONVEYANCE OF TRUST FUND.
Pursuant to the Mortgage Loan Purchase Agreement, the Seller sold,
transferred, assigned, set over and otherwise conveyed to the Depositor, without
recourse, all the right, title and interest of the Seller in and to the assets
in the Trust Fund.
The Seller has entered into this Agreement in consideration for the
purchase of the Mortgage Loans by the Depositor pursuant to the Mortgage Loan
Purchase Agreement and has agreed to take the actions specified herein.
The Depositor, concurrently with the execution and delivery hereof,
hereby sells, transfers, assigns, sets over and otherwise conveys to the Trustee
for the use and benefit of the Certificateholders, without recourse, all the
right, title and interest of the Depositor in and to the Trust Fund.
In connection with such sale, the Depositor has delivered to, and
deposited with, the Trustee or the related Custodian, as its agent, the
following documents or instruments with respect to each Mortgage Loan so
assigned: (i) the original Mortgage Note, including any riders thereto, endorsed
without recourse to the order of "LaSalle Bank National Association, as Trustee
for certificateholders of Bear Xxxxxxx Asset Backed Securities I LLC Asset
Backed Certificates, Series 2004-HE11," and showing 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 "LaSalle Bank
National Association, as Trustee for certificateholders of Bear Xxxxxxx Asset
Backed Securities I LLC Asset Backed Certificates, Series 2004-HE11," 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, with evidence of recording thereon, (v) the original
policy of title insurance or mortgagee's certificate of title insurance or
commitment or binder for title insurance, if available, or a copy thereof, or,
in the event that such original title insurance policy is unavailable, a
photocopy thereof, or in lieu thereof, a current lien search on the related
Mortgaged Property and (vi) originals or copies of all available assumption,
modification or substitution agreements, if any; provided, however, that in lieu
of the foregoing, the Seller may deliver the following documents, under the
circumstances set forth below: (x) if any Mortgage, assignment thereof to the
Trustee or intervening assignments thereof have been
50
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"; and (y) in lieu of the
Mortgage Notes relating to the Mortgage Loans identified in the list set forth
in Exhibit I, the Depositor may deliver a lost note affidavit and indemnity and
a copy of the original note, if available; and provided, further, however, that
in the case of Mortgage Loans which have been prepaid in full after the Cut-Off
Date and prior to the Closing Date, the Depositor, in lieu of delivering the
above documents, may deliver to the Trustee and the related 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 Protected
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 the related 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 (a) any assignment in any jurisdiction under the laws of
which, as evidenced by an Opinion of Counsel addressed to the Trustee delivered
by the Seller to the Trustee and the Rating Agencies, the recordation of such
assignment is not necessary to protect the Trustee's interest in the related
Mortgage Loan or (b) if MERS is identified on the Mortgage or on a properly
recorded assignment of the Mortgage as the mortgagee of record solely as nominee
for Seller and its successors and assigns. In the event that the Seller, the
Depositor or the Master Servicer gives written notice to the Trustee that a
court has recharacterized the sale of the Mortgage Loans as a financing, the
Seller shall submit or cause to be submitted for recording as specified above
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 Master Servicer as a result of such Person having completed a
Request for Release, the related Custodian shall, if not so completed, complete
the assignment of the related Mortgage in the manner specified in clause (iii)
above.
In connection with the assignment of any Mortgage Loan registered on
the MERS(R) System, the Seller further agrees that it will cause, at the
Seller's own expense, within 30 days after the Closing Date, the MERS(R) System
to indicate that such Mortgage Loans have been assigned by the Seller to the
Depositor and by the Depositor to the Trustee in accordance with this Agreement
for the benefit of the Certificateholders by including (or deleting, in the case
of Mortgage Loans which are repurchased in accordance with this Agreement) in
such computer files (a) the code in the field which identifies the specific
Trustee and (b) the code in the field "Pool Field" which identifies the series
of the Certificates issued in connection with such Mortgage Loans. The Seller
further agrees that it will not, and will not permit the Master Servicer to, and
the Master Servicer agrees that it will not, alter the codes referenced in this
paragraph with respect to any Mortgage Loan during the term of this Agreement
unless and until such Mortgage Loan is repurchased in accordance with the terms
of this Agreement or the Mortgage Loan Purchase Agreement.
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Section 2.02 ACCEPTANCE OF THE MORTGAGE LOANS.
(a) Based on the Initial Certification received by it from the
related Custodian, the Trustee acknowledges receipt of, subject to the further
review and exceptions reported by the related Custodian pursuant to the
procedures described below, the documents (or certified copies thereof)
delivered to the Trustee or the related 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 related Custodian on its
behalf will deliver one or more Initial Certifications, each in the form of
Exhibit One to the related Custodial Agreement, confirming whether or not it has
received the Mortgage File for each Mortgage Loan, but without review of such
Mortgage File, except to the extent necessary to confirm whether such Mortgage
File contains the original Mortgage Note or a lost note affidavit and indemnity
in lieu thereof. No later than 90 days after the Closing Date, the Trustee or
the related 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 the Master Servicer and, if reviewed by the related
Custodian or the Trustee, one or more Interim Certifications, each substantially
in the form of Exhibit Two to the related Custodial Agreement. In conducting
such review, the Trustee or the related Custodian on its behalf will ascertain
whether all required documents have been executed and received and whether those
documents relate, determined on the basis of the Mortgagor name, original
principal balance and loan number, to the Mortgage Loans identified in Exhibit B
to this Agreement, as supplemented (provided, however, that with respect to
those documents described in subclauses (iv) and (vi) of Section 2.01, such
obligations shall extend only to documents actually delivered pursuant to such
subclauses). In performing any such review, the Trustee and the related
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 related 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 related Custodian on its behalf shall
include such information in the exception report attached to the Interim
Certification. The Seller shall correct or cure any such defect or, if prior to
the end of the second anniversary of the Closing Date, the Seller may substitute
for the related Mortgage Loan a Replacement Mortgage Loan, which substitution
shall be accomplished in the manner and subject to the conditions set forth in
Section 2.03 or shall deliver to the Trustee 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.
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(b) No later than 180 days after the Closing Date, the Trustee or
the related 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 the Master Servicer and, if reviewed
by the related Custodian or the Trustee, one or more Final Certifications, each
substantially in the form of Exhibit Three to the related Custodial Agreement.
In conducting such review, the Trustee or the related 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 related Custodian on its behalf has received either an original or a copy
thereof, as required in Section 2.01 (provided, however, that with respect to
those documents described in subclauses (iv) and (vi) of Section 2.01, such
obligations shall extend only to documents actually delivered pursuant to such
subclauses). If the Trustee or the related 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 related Custodian on its behalf
shall note such defect in the exception report attached to the Final
Certification and shall promptly notify the Seller. The Seller shall correct or
cure any such defect or, if prior to the end of the second anniversary of the
Closing Date, the Seller may substitute for the related Mortgage Loan a
Replacement Mortgage Loan, which substitution shall be accomplished in the
manner and subject to the conditions set forth in Section 2.03 or shall deliver
to the Trustee an Opinion of Counsel addressed to the Trustee to the effect that
such defect does not materially or adversely affect the interests of
Certificateholders in such Mortgage Loan within 60 days from the date of notice
from the Trustee of the defect and if the Seller is unable within such period to
correct or cure such defect, or to substitute the related Mortgage Loan with a
Replacement Mortgage Loan or to deliver such opinion, the Seller shall, subject
to Section 2.03, within 90 days from the notification of the Trustee, purchase
such Mortgage Loan at the Purchase Price; provided, however, that if such defect
relates solely to the inability of the Seller to deliver the Mortgage,
assignment thereof to the Trustee or intervening assignments thereof with
evidence of recording thereon, because such documents have not been returned by
the applicable jurisdiction, the Seller shall not be required to purchase such
Mortgage Loan, if the Seller delivers such documents promptly upon receipt, but
in no event later than 360 days after the Closing Date. Notwithstanding anything
to the contrary, the Trustee shall have no responsibility with respect to the
custody or review of Mortgage Files held by the related Custodian pursuant to
the related Custodial Agreement. The Trustee shall have no liability for the
failure of the Custodians to perform their respective obligations under the
related Custodial Agreement.
(c) In the event that a Mortgage Loan is purchased by the Seller
in accordance with subsections 2.02(a) or (b) above or Section 2.03, the Seller
shall remit the applicable Purchase Price to the Master Servicer for deposit in
the Protected 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 Protected Account and upon receipt of a
Request for Release with respect to such Mortgage Loan, the Trustee or the
related 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 Protected Account
53
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 related
Custodian on its behalf, and Trustee agrees to accept the Mortgage Note and
other documents constituting the Mortgage File with respect to any Replacement
Mortgage Loan, which the Trustee or the related 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 MASTER
SERVICER AND THE SELLER.
(a) The Master Servicer hereby represents and warrants to the
Depositor and the Trustee as follows, as of the Closing Date:
(i) It is duly organized and is validly existing and in
good standing under the laws of the State of Delaware and is duly
authorized and qualified to transact any and all business contemplated
by this Agreement to be conducted by it in any state in which a
Mortgaged Property is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the
extent necessary to ensure its ability to enforce each Mortgage Loan,
to service the Mortgage Loans in accordance with the terms of the
Mortgage Loan Purchase Agreement and to perform any of its other
obligations under this Agreement in accordance with the terms hereof or
thereof.
(ii) It has the full corporate power and authority to
service each Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by this
Agreement and has duly authorized by all necessary corporate action on
its part the execution, delivery and performance of this Agreement; and
this Agreement, assuming the due authorization, execution and delivery
hereof by the other parties hereto or thereto, as applicable,
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, the
servicing of the Mortgage Loans by it under this Agreement, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof
and thereof are in its ordinary course of business and will not (A)
result in a breach of any term or provision of its charter or by-laws
or (B) conflict with, result in
54
a breach, violation or acceleration of, or result in a 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 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 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 thereby, or if
any such consent, approval, authorization or order is required, it has
obtained the same.
(vii) The Master Servicer has and will fully furnish for
each Group II Loan, in accordance with the Fair Credit Reporting Act
and its implementing regulations, accurate and complete information
(i.e., favorable and unfavorable) on its borrower credit files to
Equifax, Experian, and Trans Union Credit Information Company (three of
the credit repositories), on a monthly basis.
(b) The Seller hereby represents and warrants to the Depositor and
the Trustee as follows, as of the Closing Date:
(i) The Seller is duly organized as a Delaware
corporation and is validly existing and in good standing under the laws
of the State of Delaware and is duly authorized and qualified to
transact any and all business contemplated by this Agreement to be
conducted by the Seller in any state in which a Mortgaged Property is
located or is otherwise not required under applicable law to effect
such qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Mortgage Loan, to sell the Mortgage Loans in
accordance with the terms of the Mortgage Loan Purchase Agreement and
to perform any of its other obligations under this Agreement in
accordance with the terms hereof.
55
(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, assuming the due authorization, execution and delivery
hereof by the other parties hereto or thereto, as applicable,
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 and thereof are in the ordinary course
of business of the Seller and will not (A) result in a material breach
of any term or provision of the charter or by-laws of the Seller or (B)
conflict with, result in a breach, violation or acceleration of, or
result in a 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 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 perform any of its other obligations under
this Agreement in accordance with the terms hereof or thereof.
(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.
56
(vii) With respect to each Mortgage Loan as of the Closing
Date (or such other date as may be specified in Section 7 of the
Mortgage Loan Purchase Agreement), the Seller hereby remakes and
restates each of the representations and warranties set forth in
Section 7 of the Mortgage Loan Purchase Agreement to the Depositor and
the Trustee to the same extent as if fully set forth herein.
(c) Upon discovery by any of the parties hereto of a breach of a
representation or warranty set forth in the Mortgage Loan Purchase Agreement
with respect to the Mortgage Loans 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. Any
breach of a representation or warranty contained in clauses (gg), (hh) and (nn)
through (qq) of Section 7 of the Mortgage Loan Purchase Agreement in respect of
a Group II Loan, shall be deemed to materially adversely affect the interests of
the related Certificateholders. The Seller hereby covenants with respect to the
representations and warranties set forth in the Mortgage Loan Purchase Agreement
with respect to the Mortgage Loans, 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 Trustee shall give prompt written notice to the parties
hereto of the Seller's failure to cure such breach as set forth in the preceding
sentence. The Seller shall promptly reimburse the Master Servicer and the
Trustee for any expenses reasonably incurred by the Master Servicer or the
Trustee in respect of enforcing the remedies for such breach. To enable the
Master Servicer to amend the Mortgage Loan Schedule, the Seller shall, unless it
cures such breach in a timely fashion pursuant to this Section 2.03, promptly
notify the Master Servicer whether it intends either to repurchase, or to
substitute for, the Mortgage Loan affected by such breach. With respect to the
representations and warranties with respect to the Mortgage Loans that are made
to the best of the Seller's knowledge, if it is discovered by any of the
Depositor, the Master Servicer, the Seller, the Trustee or the related Custodian
that the substance of such representation and warranty is inaccurate and such
inaccuracy materially and adversely affects the value of the related Mortgage
Loan, notwithstanding the Seller's lack of knowledge with respect to the
substance of such representation or warranty, the Seller shall nevertheless be
required to cure, substitute for or repurchase the affected Mortgage Loan in
accordance with the foregoing.
With respect to any Replacement Mortgage Loan or Loans, the Seller
shall deliver to the Trustee or the related Custodian on its behalf for the
benefit of the Certificateholders such documents and agreements as are required
by Section 2.01. No substitution will be made in any calendar month after the
Determination Date for such month. Scheduled Payments due with
57
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 Master Servicer shall amend the
Mortgage Loan Schedule for the benefit of the Certificateholders to reflect the
removal of such Deleted Mortgage Loan and the substitution of the Replacement
Mortgage Loan or Loans and the Master Servicer shall deliver the amended
Mortgage Loan Schedule to the Trustee and the related Custodian. Upon such
substitution, the Replacement Mortgage Loan or Loans shall be subject to the
terms of this Agreement in all respects, and the Seller shall be deemed to have
made with respect to such Replacement Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties set forth in Section 7 of the
Mortgage Loan Purchase Agreement with respect to such Mortgage Loan. Upon any
such substitution and the deposit into the Protected Account of the amount
required to be deposited therein in connection with such substitution as
described in the following paragraph and receipt by the Trustee of a Request for
Release for such Mortgage Loan, the Trustee or the related 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 Protected 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 Protected Account, 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 related 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, as shall be necessary to transfer title from the Trustee for
the benefit of the Certificateholders and transfer the Trustee's interest to the
Seller to any Mortgage Loan purchased pursuant to this Section 2.03. It is
understood and agreed that the obligation under this Agreement of the Seller to
cure, repurchase or replace any Mortgage Loan as to which a breach
58
has occurred and is continuing shall constitute the sole remedies against the
Seller respecting such breach available to the Certificateholders, the Depositor
or the Trustee.
(d) The representations and warranties set forth in this Section
2.03 hereof shall survive delivery of the respective Mortgage Loans and Mortgage
Files to the Trustee or the related 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 and
the Trustee as follows, as of the date hereof and as of the Closing Date:
(i) The Depositor is duly organized and is validly
existing as a limited liability company in good standing under the laws
of the State of Delaware and has full power and authority necessary to
own or hold its properties and to conduct its business as now conducted
by it and to enter into and perform its obligations under this
Agreement.
(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, 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
and thereof are in the ordinary course of business of the Depositor and
will not (A) result in a material breach of any term or provision of
the certificate of formation or limited liability company agreement of
the Depositor or (B) conflict with, result in a breach, violation or
acceleration of, or result in a 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 violation of any statute,
order or regulation applicable to the Depositor of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Depositor; and the Depositor is not in breach or
violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of any
court, regulatory body, administrative agency or governmental body
having jurisdiction over it which breach or violation may materially
impair the Depositor's ability to perform or meet any of its
obligations under this Agreement.
(iv) No litigation is pending, or, to the best of the
Depositor's knowledge, threatened, against the Depositor that would
materially and adversely affect the
59
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 or thereof.
(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 thereby, 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 this Section 2.04 shall survive delivery of the Mortgage Files to the
Trustee or the related 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, 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, REMIC III or REMIC IV 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, REMIC III or REMIC IV 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 with respect to
substitutions are satisfied, a
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Replacement Mortgage Loan for the affected Mortgage Loan, or (ii) repurchase the
affected Mortgage Loan within 90 days of such discovery in the same manner as it
would a Mortgage Loan for a breach of representation or warranty in accordance
with Section 2.03. The Trustee shall reconvey to the Seller the Mortgage Loan to
be released pursuant hereto (and the related 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 in
accordance with 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 Regular Interests and the Class R-2
Certificates. 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 Regular Interests and the Class R-2 Certificates.
(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 Class CE Interest for the benefit of the holders of the REMIC III
Certificates. The Trustee acknowledges receipt of the Class CE Interest (which
are uncertificated) 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.
(d) 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 Class P Interest for the benefit of the holders of the REMIC IV
Certificates. The Trustee acknowledges receipt of the Class P Interest (which
are uncertificated) and declares that it holds and will hold the same in trust
for the exclusive use and benefit of the holders of the REMIC IV Certificates.
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ARTICLE III
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 3.01 THE MASTER SERVICER TO ACT AS MASTER SERVICER.
The Master Servicer shall service and administer the 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 Master Servicer 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 or Subsequent Recoveries, and (iv) subject to Section
3.09, to effectuate foreclosure or other conversion of the ownership of the
Mortgaged Property securing any Mortgage Loan; provided that the Master Servicer
shall take no action that is inconsistent with or prejudices the interests of
the Trust Fund or the Certificateholders in any Mortgage Loan or the rights and
interests of the Depositor or the Trustee under this Agreement.
Without limiting the generality of the foregoing, the Master Servicer,
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 Master Servicer 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 Mortgage Loans, and with respect to
the Mortgaged Properties held for the benefit of the Certificateholders. The
Master Servicer 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 Master Servicer to service and administer
the Mortgage Loans. Upon receipt of such documents, the Depositor and/or the
Trustee shall execute such documents and deliver them to the Master Servicer.
In accordance with the standards of the first paragraph of this Section
3.01, the Master Servicer 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, 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 Master
Servicer, if any, in effecting the timely payments of taxes and assessments on
the Mortgaged Properties 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 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 Master Servicer 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 Master Servicer is not required to exercise
such rights with respect to a 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 Master Servicer 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 Master Servicer 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 Master Servicer enters such agreement) by the applicable Required
Insurance Policies. The Master Servicer, 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 Master Servicer shall not be deemed to be in
default under this Section 3.02(a) by reason of any transfer or assumption that
the Master Servicer reasonably believes it is restricted by law from preventing.
(b) Subject to the Master Servicer'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 Mortgage Loan, the Master
Servicer 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 Mortgage Loan) may be changed. In addition, the substitute
Mortgagor and the Mortgaged Property must be acceptable to the Master Servicer
in accordance with its servicing standards as then in effect. The Master
Servicer shall notify the Trustee that
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any such substitution or assumption agreement has been completed by forwarding
to the Trustee the original of such substitution or assumption agreement, which
in the case of the original shall be added to the related Mortgage File and
shall, for all purposes, be considered a part of such Mortgage File to the same
extent as all other documents and instruments constituting a part thereof. Any
fee collected by the Master Servicer for entering into an assumption or
substitution of liability agreement will be retained by the Master Servicer as
additional servicing compensation.
Section 3.03 SUBSERVICERS.
The Master Servicer 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 Master Servicer of a
subservicer shall not release the Master Servicer from any of its obligations
hereunder and the Master Servicer shall remain responsible hereunder for all
acts and omissions of each subservicer as fully as if such acts and omissions
were those of the Master Servicer. The Master Servicer 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 Master Servicer hereunder.
At the cost and expense of the Master Servicer, without any right of
reimbursement from its Protected Account, the Master Servicer 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 Master Servicer, at the Master Servicer's option, from electing to
service the related Mortgage Loans itself. In the event that the Master
Servicer's responsibilities and duties under this Agreement are terminated
pursuant to Section 8.03, the Master Servicer shall at its own cost and expense
terminate the rights and responsibilities of each subservicer effective as of
the date of termination of the Master Servicer. The Master Servicer shall pay
all fees, expenses or penalties necessary in order to terminate the rights and
responsibilities of each subservicer from the Master Servicer's own funds
without reimbursement from the Trust Fund.
Notwithstanding the foregoing, the Master Servicer 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 Mortgage Loans. The Master Servicer shall be entitled to enter
into an agreement with a subservicer for indemnification of the Master Servicer
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 Mortgage Loans involving a subservicer shall be deemed to be
between such subservicer and the Master Servicer alone, and the Trustee shall
not have any obligations, duties or liabilities with respect to such subservicer
including any obligation, duty or liability of the Trustee to pay such
subservicer's fees and expenses. Each subservicing agreement shall provide that
such agreement may be assumed or terminated without cause or penalty by the
Trustee or other Successor Master Servicer in the event the Master Servicer is
terminated in accordance with this Agreement. For purposes of remittances to the
Trustee pursuant to this Agreement, the Master Servicer shall be
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deemed to have received a payment on a Mortgage Loan when a subservicer has
received such payment.
Section 3.04 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF THE MASTER
SERVICER TO BE HELD FOR TRUSTEE.
Notwithstanding any other provisions of this Agreement, the Master
Servicer shall transmit to the Trustee or the related Custodian on behalf of the
Trustee as required by this Agreement all documents and instruments in respect
of a Mortgage Loan coming into the possession of the Master Servicer from time
to time and shall account fully to the Trustee for any funds received by the
Master Servicer or that otherwise are collected by the Master Servicer as
Liquidation Proceeds, Insurance Proceeds or Subsequent Recoveries in respect of
any such Mortgage Loan. 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 Subsequent Recoveries, including but not limited to, any
funds on deposit in the Protected Account, shall be held by the Master Servicer
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 Master Servicer also agrees that it shall not create, incur or subject any
Mortgage File or any funds that are deposited in the Protected 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, a Mortgage Loan,
except, however, that the Master Servicer shall be entitled to set off against
and deduct from any such funds any amounts that are properly due and payable to
the Master Servicer under this Agreement.
Section 3.05 MAINTENANCE OF HAZARD INSURANCE.
The Master Servicer shall cause to be maintained, for each 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 Master Servicer shall also cause flood insurance
to be maintained on property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, to the extent described below. Pursuant to
Section 4.01, any amounts collected by the Master Servicer 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 Master Servicer's normal servicing
procedures) shall be deposited in the Protected Account. Any cost incurred by
the Master Servicer 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 Mortgage Loan so permit. Such costs
shall be recoverable by the Master Servicer out of late payments by the related
Mortgagor or out of Liquidation Proceeds to the extent
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permitted by Section 4.02. 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 Mortgage Loan in a federally designated special flood
hazard area and such area is participating in the national flood insurance
program, the Master Servicer shall cause flood insurance to be maintained with
respect to such Mortgage Loan. Such flood insurance shall be in an amount equal
to the least of (i) the Stated Principal Balance of the related Mortgage Loan,
(ii) minimum amount required to compensate for damage or loss on a replacement
cost basis or (iii) the maximum amount of such insurance available for the
related Mortgaged Property under the Flood Disaster Protection Act of 1973, as
amended.
In the event that the Master Servicer shall obtain and maintain a
blanket policy insuring against hazard losses on all of the 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 Master Servicer 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 the amount not otherwise payable under the blanket policy
because of such deductible clause. Such deposit shall be from the Master
Servicer's own funds without reimbursement therefor. In connection with its
activities as administrator and servicer of the Mortgage Loans, the Master
Servicer 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 Master Servicer shall prepare and present on behalf of the Trustee
and the Certificateholders all claims under the Insurance Policies and take such
actions (including the negotiation, settlement, compromise or enforcement of the
insured's claim) as shall be necessary to realize recovery under such Insurance
Policies. Any proceeds disbursed to the Master Servicer in respect of such
Insurance Policies shall be promptly deposited in the Protected Account upon
receipt, except that any amounts realized that are to be applied to the repair
or restoration of the related Mortgaged Property as a condition precedent to the
presentation of claims on the related Mortgage Loan to the insurer under any
applicable Insurance Policy need not be so deposited (or remitted).
Section 3.07 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES.
(a) The Master Servicer 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 Master Servicer would have been
covered thereunder. The Master Servicer shall use its best efforts 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. The Master Servicer shall not cancel or refuse to renew any such Primary
Mortgage Insurance Policy
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that is in effect at the date of the initial issuance of the Mortgage Note and
is required to be kept in force hereunder.
(b) The Master Servicer agrees to present on behalf of the
Trustee, the Certificateholders claims to the insurer under any Primary Mortgage
Insurance Policies and, in this regard, to take such reasonable action as shall
be necessary to permit recovery under any Primary Mortgage Insurance Policies
respecting defaulted Mortgage Loans. Pursuant to Section 4.01, any amounts
collected by the Master Servicer under any Primary Mortgage Insurance Policies
shall be deposited in the Protected Account, subject to withdrawal pursuant to
Section 4.02 hereof.
Section 3.08 FIDELITY BOND, ERRORS AND OMISSIONS INSURANCE.
The Master Servicer 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 Mortgage Loans and who handle funds, money,
documents and papers relating to the 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 Master Servicer 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 Master Servicer against losses in connection with the failure to maintain
any insurance policies required pursuant to this Agreement and the release or
satisfaction of a 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 Master
Servicer 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
Master Servicer shall deliver to the Trustee 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 Trustee. The
Master Servicer shall notify 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 Master Servicer shall use reasonable efforts to foreclose
upon or otherwise comparably convert the ownership of 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. In
connection with such foreclosure or other conversion, the Master Servicer 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 Master
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Servicer 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 Mortgage Loan after reimbursement to itself of such expenses
and (ii) that such expenses will be recoverable to it through Insurance
Proceeds, Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Protected Account pursuant to Section 4.02). If
the Master Servicer reasonably believes that Liquidation Proceeds with respect
to any such Mortgage Loan would not be increased as a result of such foreclosure
or other action, such Mortgage Loan will be charged-off and will become a
Liquidated Loan. The Master Servicer will give notice of any such charge-off to
the Trustee. The Master Servicer 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 4.02. If the Master Servicer has knowledge
that a Mortgaged Property that the Master Servicer 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
Master Servicer, the Master Servicer will, prior to acquiring the Mortgaged
Property, consider such risks and only take action in accordance with its
established environmental review procedures.
With respect to any REO Property, 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 Master Servicer 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
Master Servicer shall either itself or through an agent selected by the Master
Servicer 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 Master Servicer
deems to be in the best interest of the Master Servicer and the
Certificateholders for the period prior to the sale of such REO Property. The
Master Servicer shall prepare for and deliver to the Trustee a statement with
respect to each 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 no later than the close of business on each Determination
Date. The Master Servicer 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 a
Mortgage Loan, the Master Servicer 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
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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, REMIC III or REMIC IV as defined in section
860F of the Code or cause any of REMIC I, REMIC II, REMIC III or REMIC IV 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 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, REMIC III or REMIC IV 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 Master Servicer has agreed to indemnify and hold harmless the Trust Fund
with respect to the imposition of any such taxes.
The decision of the Master Servicer to foreclose on a defaulted
Mortgage Loan shall be subject to a determination by the Master Servicer 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 Master Servicer 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 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. 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 Mortgage Loan, such excess shall be considered to
be a partial Principal Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage Loan, net
of any payment to the Master Servicer as provided above, shall be deposited in
the Protected Account 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 Master Servicer 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 Master Servicer for any related unreimbursed Servicing Advances
and Servicing Fees, pursuant to Section 4.02 or this Section 3.09; second, to
reimburse the Master Servicer for any unreimbursed Advances, pursuant to Section
4.02 or this Section 3.09; third, to accrued and unpaid interest (to the extent
no Advance has been made for such amount) on the Mortgage Loan or related REO
Property, at the Net Mortgage Rate to the
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first day of the month in which such amounts are required to be distributed; and
fourth, as a recovery of principal of the Mortgage Loan.
(b) On each Determination Date, the Master Servicer shall
determine the respective aggregate amounts of Excess Liquidation Proceeds and
Realized Losses, if any, for the related Prepayment Period.
(c) The Master Servicer has no intent to foreclose on any Mortgage
Loan based on the delinquency characteristics as of the Closing Date; provided,
that the foregoing does not prevent the Master Servicer from initiating
foreclosure proceedings on any date hereafter if the facts and circumstances of
such Mortgage Loans including delinquency characteristics in the Master
Servicer's discretion so warrant such action.
Section 3.10 SERVICING COMPENSATION.
As compensation for its activities hereunder, the Master Servicer shall
be entitled to retain or withdraw from the Protected Account out of each payment
of interest on a 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 income and gain net of any
losses realized from Permitted Investments with respect to funds in or credited
to the Protected Account shall be retained by the Master Servicer to the extent
not required to be deposited in the Protected Account pursuant to Section 4.02.
The Master Servicer 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
4.02.
Section 3.11 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 sell any 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 Master
Servicer shall protect and conserve such REO Property in the manner and to the
extent required herein, in accordance with the REMIC Provisions.
(b) The Master Servicer shall deposit all funds collected and
received in connection with the operation of any REO Property into the Protected
Account.
(c) The Master Servicer, upon the final disposition of any REO
Property, shall be entitled to reimbursement for any related unreimbursed
Advances, unreimbursed Servicing Advances or Servicing Fees from Liquidation
Proceeds received in connection with the final disposition of such REO Property;
provided, that any such unreimbursed Advances or Servicing Fees as well as any
unpaid Servicing Fees may be reimbursed or paid, as the case may be, prior
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to final disposition, out of any net rental income or other net amounts derived
from such REO Property.
Section 3.12 LIQUIDATION REPORTS.
Upon the foreclosure of any Mortgaged Property or the acquisition
thereof by the Trust Fund pursuant to a deed-in-lieu of foreclosure, the Master
Servicer shall submit a liquidation report to the Trustee containing such
information as shall be mutually acceptable to the Master Servicer and the
Trustee with respect to such Mortgaged Property.
Section 3.13 ANNUAL CERTIFICATE AS TO COMPLIANCE.
(a) The Master Servicer will deliver to the Trustee and the Rating
Agencies 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 Master Servicer during the
preceding calendar year or portion thereof and of its performance under this
Agreement has been made under such officer's supervision, and (ii) to the best
of such officer's knowledge, based on such review, the Master Servicer has
fulfilled all of its obligations under this Agreement in all material respects
throughout such year or portion thereof, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof except for such defaults as such
officer in its good faith judgment believe to be immaterial.
(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).
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 Master Servicer at its expense shall cause a firm of independent
public accountants which is a member of the American Institute of Certified
Public Accountants to furnish a statement to the Trustee and the Rating Agencies
to the effect that, with respect to the preceding calendar year, such firm has
examined certain documents and records relating to the Master Servicer's
servicing of mortgage loans of the same type as the 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 Master
Servicer'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. 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
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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).
Section 3.15 BOOKS AND RECORDS.
The Master Servicer shall be responsible for maintaining, and shall
maintain, a complete set of books and records for the Mortgage Loans which shall
be appropriately identified in the Master Servicer's computer system to clearly
reflect the ownership of the Mortgage Loans by the Trust. In particular, the
Master Servicer shall maintain in its possession, available for inspection by
the Trustee and shall deliver to 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 Master
Servicer 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 Master Servicer complies with the requirements
of Accepted Servicing Practices.
The Master Servicer shall maintain with respect to each Mortgage Loan
and shall make available for inspection by the Trustee the related servicing
file during the time such Mortgage Loan is subject to this Agreement and
thereafter in accordance with applicable law.
Section 3.16 REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.
(a) The Depositor shall prepare or cause to be prepared the
initial current report on Form 8-K. Within 15 days after each Distribution Date,
the Trustee 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 monthly statement to be furnished by the Trustee to
the Certificateholders for such Distribution Date as an exhibit thereto. Prior
to January 30 in each year commencing in 2005, the Trustee shall, in accordance
with industry standards, file a Form 15 Suspension Notice with respect to the
Trust Fund, if applicable. Prior to (i) March 15, 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 Trustee with a Master
Servicer Certification, together with a copy of the annual independent
accountant's servicing report and annual statement of compliance to be delivered
by the Master Servicer pursuant to Sections 3.13 and 3.14. 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 Trustee shall, subject to
subsection (d) below, file a Form 10-K, in substance conforming to industry
standards, with respect to the Trust Fund. Such Form 10-K shall include the
Master Servicer Certification and other documentation provided by the Master
Servicer pursuant to the second preceding sentence and the Form 10-K
certification signed by the Depositor. The Depositor hereby grants to the
Trustee 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 Trustee 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 Trustee, from time to time upon
request, such further information, reports and financial statements within its
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control related to this Agreement, the Mortgage Loans as the Trustee reasonably
deems appropriate to prepare and file all necessary reports with the Commission.
The Trustee shall have no responsibility to file any items other than those
specified in this Section 3.16; provided, however, the Trustee 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
Trustee 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 Trustee
in connection with this Section 3.16 shall not be reimbursable from the Trust
Fund.
(b) In connection with the filing of any 10-K hereunder, the
Trustee shall sign a certification (in the form attached hereto as Exhibit K)
for the Depositor regarding certain aspects of the Form 10-K certification
signed by the Depositor, provided, however, that the Trustee shall not be
required to undertake an analysis of any accountant's report attached as an
exhibit to the Form 10-K.
(c) (i) The Trustee shall indemnify and hold harmless the
Depositor and its officers, directors and affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments and other costs and expenses arising out of or
based upon a breach of the Trustee's obligations under this Section 3.16 or the
Trustee's negligence, bad faith or willful misconduct in connection therewith.
(ii) The Depositor shall indemnify and hold harmless the
Trustee and its officers, directors and affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and
expenses arising out of or based upon a breach of the obligations of
the Depositor under this Section 3.16 or the Depositor's negligence,
bad faith or willful misconduct in connection therewith.
(iii) The Master Servicer shall indemnify and hold harmless
the Trustee and the Depositor and their respective officers, directors
and affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a
breach of the obligations of the Master Servicer under this Section
3.16 or the Master Servicer's negligence, bad faith or willful
misconduct in connection therewith.
(iv) If the indemnification provided for herein is
unavailable or insufficient to hold harmless the Depositor or the
Trustee, as applicable, then the defaulting party, in connection with a
breach of its respective obligations under this Section 3.16 or its
respective negligence, bad faith or willful misconduct in connection
therewith, agrees that it shall contribute to the amount paid or
payable by the other parties as a result of the losses, claims, damages
or liabilities of the other party in such proportion as is appropriate
to reflect the relative fault and the relative benefit of the Depositor
on the one hand and the Trustee on the other.
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(d) Nothing shall be construed from the foregoing subsections (a),
(b) and (c) to require the Trustee or any officer, director or Affiliate thereof
to sign any Form 10-K or any certification contained therein. Furthermore, the
inability of the Trustee to file a Form 10-K as a result of the lack of required
information as set forth in Section 3.16(a) or required signatures on such Form
10-K or any certification contained therein shall not be regarded as a breach by
the Trustee of any obligation under this Agreement.
(e) Notwithstanding the provisions of Section 11.01, this Section
3.16 may be amended without the consent of the Certificateholders.
Section 3.17 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 3.18 OPTIONAL PURCHASE OF CERTAIN MORTGAGE LOANS.
With respect to any Mortgage Loans which as of the first day of a
Fiscal 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 Purchase 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 Fiscal 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 Fiscal 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 Scheduled Payment is not made within thirty (30)
days of such Due Date. Such purchase shall be made at a price equal to the
Purchase Price.
If at any time EMC remits to the Master Servicer a payment for deposit
in the Protected Account covering the amount of the Purchase 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 Protected 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 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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Section 3.19 OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF MORTGAGE
RATES AND SCHEDULED PAYMENTS.
In the event that a shortfall in any collection on or liability with
respect to any Mortgage Loan results from or is attributable to adjustments to
Mortgage Rates, Scheduled Payments or Stated Principal Balances that were made
by the Master Servicer in a manner not consistent with the terms of the related
Mortgage Note and this Agreement, the Master Servicer, upon discovery or receipt
of notice thereof, immediately shall deliver to the Trustee for deposit in the
Distribution Account from its own funds the amount of any such shortfall and
shall indemnify and hold harmless the Trust Fund, the Trustee, the Depositor and
any successor Master Servicer in respect of any such liability. Such indemnities
shall survive the termination or discharge of this Agreement. Notwithstanding
the foregoing, this Section 3.19 shall not limit the ability of the Master
Servicer to seek recovery of any such amounts from the related Mortgagor under
the terms of the related Mortgage Note and Mortgage, to the extent permitted by
applicable law.
Section 3.20 RESERVE FUND.
(a) On or before the Closing Date, the Trustee shall establish a
Reserve Fund on behalf of the Holders of the Certificates. The Reserve Fund must
be an Eligible Account. The Reserve Fund shall be entitled "Reserve Fund,
LaSalle Bank National Association as Trustee for the benefit of holders of Bear
Xxxxxxx Asset Backed Securities I LLC, Asset-Backed Certificates, Series
2004-HE11". The Trustee shall demand payment of all money payable by Bear
Xxxxxxx Financial Products Inc. (the "Counterparty") under the Yield Maintenance
Agreements. The Trustee shall deposit in the Reserve Fund all payments received
from the Counterparty pursuant to the Yield Maintenance Agreements. On each
Distribution Date the Trustee shall remit amounts received from the Counterparty
to the Holders of the Class A Certificates, Class M Certificates and Class CE
Certificates in the manner provided in clause (b) below. In addition, on each
Distribution Date as to which there is a Basis Risk Shortfall Carry Forward
Amount payable to any Class of Class A Certificates and/or Class M Certificates,
the Trustee shall deposit the amounts distributable pursuant to clauses (C) and
(D) of Section 5.04(a)(4) into the Reserve Fund and the Trustee has been
directed by the Class CE Certificateholder to distribute such amounts to the
Holders of the Class A and/or Class M Certificates in the amounts and priorities
set forth in clauses (C) and (D) of Section 5.04(a)(4). Any amount paid to the
Holders of Class A Certificates and/or Class M Certificates pursuant to the
preceding sentence in respect of Basis Risk Shortfall Carry Forward Amount shall
be treated as distributed to the Class CE Certificateholder in respect of the
Class CE Certificates and paid by the Class CE Certificateholder to the Holders
of the Class A Certificates and/or Class M Certificates. Any payments to the
Holders of the Class A Certificates and/or Class M Certificates in respect of
Basis Risk Shortfall Carry Forward Amount, whether pursuant to the second
preceding sentence or pursuant to subsection (b) below, shall not be payments
with respect to a "regular interest" in a REMIC within the meaning of Code
Section 860(G)(a)(1).
(b) Amounts received from the Counterparty under the Yield
Maintenance Agreements shall be distributed in the following manner and order of
priority:
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(i) first, (A) from amounts received under the Yield
Maintenance Agreement related to the Class I-A Certificates, to the
Class I-A Certificates, pro rata based on the amount of Basis Risk
Shortfall Carry Forward Amount for such Classes of Certificates for the
related Distribution Date, (B) from amounts received under the Yield
Maintenance Agreement related to the Class II-A Certificates, to the
Class II-A Certificates, pro rata based on the amount of Basis Risk
Shortfall Carry Forward Amount for such Classes of Certificates for the
related Distribution Date and (C) from amounts received under the Yield
Maintenance Agreement related to the Class M Certificates, sequentially
to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6
and Class M-7 Certificates, in that order, the amount of any Basis Risk
Shortfall Carry Forward Amount for such Classes of Certificates for the
related Distribution Date;
(ii) second, from any remaining amounts received under the
non-related Yield Maintenance Agreements, to the Class A Certificates
and Class M Certificates, as applicable, pro rata, based on the
aggregate amount of Basis Risk Shortfall Carry Forward Amounts for the
Class A Certificates and Class M Certificates, as applicable, for such
Distribution Date to the extent not covered in clause (i) above, which
amounts shall be paid in the case of the Class I-A, Class II-A and
Class M Certificates in the order of priority in clauses (i) first (A),
(B) and (C) above; and
(iii) third, any remaining amounts received under the Yield
Maintenance Agreements, to the Class CE Certificates.
(c) The Reserve Fund is an "outside reserve fund" within the
meaning of Treasury Regulation ss.1.860G-2(h) and shall be an asset of the Trust
Fund but not an asset of any REMIC. The Trustee on behalf of the Trust shall be
the nominal owner of the Reserve Fund. The Class CE Certificateholder shall be
the beneficial owner of the Reserve Fund, subject to the power of the Trustee to
transfer amounts under Section 5.04. Amounts in the Reserve Fund shall, at the
direction of the Class CE Certificateholder, be invested in Permitted
Investments that mature no later than the Business Day prior to the next
succeeding Distribution Date. All net income and gain from such investments
shall be distributed to the Class CE Certificateholder, not as a distribution in
respect of any interest in any REMIC, on such Distribution Date. All amounts
earned on amounts on deposit in the Reserve Fund shall be taxable to the Class
CE Certificateholder. Any losses on such investments shall be deposited in the
Reserve Fund by the Class CE Certificateholder out of its own funds immediately
as realized.
Section 3.21 ADVANCING FACILITY.
(a) The Master Servicer and/or the Trustee on behalf of the Trust
Fund, in either case, with the consent of the Master Servicer in the case of the
Trustee and, in each case, with notice to the Rating Agencies, is hereby
authorized to enter into a facility (the "Advancing Facility") with any Person
which provides that such Person (an "Advancing Person") may fund Advances and/or
Servicing Advances to the Trust Fund under this Agreement, although no such
facility shall reduce or otherwise affect the Master Servicer's obligation to
fund such Advances and/or Servicing Advances. If the Master Servicer enters into
such an Advancing Facility pursuant to this Section 3.21, upon reasonable
request of the Advancing Person, the Trustee shall execute a
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letter of acknowledgment, confirming its receipt of notice of the existence of
such Advancing Facility. To the extent that an Advancing Person funds any
Advance or any Servicing Advance and provides the Trustee with notice
acknowledged by the Servicer that such Advancing Person is entitled to
reimbursement, such Advancing Person shall be entitled to receive reimbursement
pursuant to this Agreement for such amount to the extent provided in Section
3.21(b). Such notice from the Advancing Person must specify the amount of the
reimbursement, the Section of this Agreement that permits the applicable Advance
or Servicing Advance to be reimbursed and the section(s) of the Advancing
Facility that entitle the Advancing Person to request reimbursement from the
Trustee, rather than the Master Servicer, and include the Master Servicer's
acknowledgment thereto or proof of an Event of Default under the Advancing
Facility. The Trustee shall have no duty or liability with respect to any
calculation of any reimbursement to be paid to an Advancing Person and shall be
entitled to rely without independent investigation on the Advancing Person's
notice provided pursuant to this Section 3.21. An Advancing Person whose
obligations hereunder are limited to the funding of Advances and/or Servicing
Advances shall not be required to meet the qualifications of a Master Servicer
or a subservicer pursuant to Section 8.02 hereof and will not be deemed to be a
subservicer under this Agreement.
(b) If an Advancing Facility is entered into, then the Master
Servicer shall not be permitted to reimburse itself therefor under Section
4.02(a)(ii), Section 4.02(a)(iii) and Section 4.02(a)(v) prior to the remittance
to the Trust Fund, but instead the Master Servicer shall include such amounts in
the applicable remittance to the Trustee made pursuant to Section 4.02. The
Trustee is hereby authorized to pay to the Advancing Person, reimbursements for
Advances and Servicing Advances from the Distribution Account to the same extent
the Master Servicer would have been permitted to reimburse itself for such
Advances and/or Servicing Advances in accordance with Section 4.02(a)(ii),
Section 4.02(a)(iii) or Section 4.02(a)(v), as the case may be, had the Master
Servicer itself funded such Advance or Servicing Advance. The Trustee is hereby
authorized to pay directly to the Advancing Person such portion of the Servicing
Fee as the parties to any advancing facility agree.
(c) All Advances and Servicing Advances made pursuant to the terms
of this Agreement shall be deemed made and shall be reimbursed on a "first
in-first out" (FIFO) basis.
(d) Any amendment to this Section 3.21 or to any other provision
of this Agreement that may be necessary or appropriate to effect the terms of an
Advancing Facility as described generally in this Section 3.21, including
amendments to add provisions relating to a successor master servicer, may be
entered into by the Trustee and the Master Servicer without the consent of any
Certificateholder, notwithstanding anything to the contrary in this Agreement.
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ARTICLE IV
ACCOUNTS
Section 4.01 COLLECTION OF MORTGAGE LOAN PAYMENTS; PROTECTED ACCOUNT.
(a) The Master Servicer 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 are located
to collect all payments called for under the terms and provisions of the
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 Master Servicer may in its discretion (i)
waive any late payment charge and (ii) extend the due dates for payments due on
a Mortgage Note for a period not greater than 125 days. In the event of any such
arrangement, the Master Servicer shall make Advances on the related Mortgage
Loan during the scheduled period in accordance with the amortization schedule of
such Mortgage Loan without modification thereof by reason of such arrangements,
and shall be entitled to reimbursement therefor in accordance with Section 5.01.
The Master Servicer 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) a Mortgage Loan is
in default or default is imminent or (y) the Master Servicer 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 Mortgage Loan
will not result in the imposition of taxes on or disqualify any of REMIC I,
REMIC II, REMIC III or REMIC IV, the Master Servicer 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 5.00% with respect to any
Mortgage Loan and (B) amend any Mortgage Note to extend to the maturity thereof.
The Master Servicer shall not waive (or permit a sub-servicer to waive)
any Prepayment Charge 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 Master Servicer, maximize
recovery of total proceeds taking into account the value of such Prepayment
Charge and the related Mortgage Loan. If a Prepayment Charge is waived, but does
not meet the standards described above, then the Master Servicer 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 Trustee by the Distribution
Account Deposit Date.
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(b) The Master Servicer 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 Master Servicer for the benefit of the Trustee on
behalf of the Certificateholders and designated "EMC Mortgage Corporation, as
Master Servicer, for the benefit of LaSalle Bank National Association, in trust
for registered holders of Bear Xxxxxxx Asset Backed Securities I LLC,
Asset-Backed Certificates Series 2004-HE11". The Master Servicer 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 Mortgage Loans subsequent to the Cut-off Date (other than in
respect of principal and interest due on the 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 Mortgage Loans;
(ii) all payments on account of interest on the Mortgage
Loans net of the Servicing Fee permitted under Section 3.10 and LPMI
Fees, if any;
(iii) all Liquidation Proceeds, Subsequent Recoveries and
Insurance Proceeds, other than proceeds to be applied to the
restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with the Master Servicer's normal servicing
procedures;
(iv) any amount required to be deposited by the Master
Servicer pursuant to Section 4.01(c) in connection with any losses on
Permitted Investments;
(v) any amounts required to be deposited by the Master
Servicer pursuant to Section 3.05;
(vi) any Prepayment Charges collected on the Mortgage
Loans; and
(vii) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Master Servicer 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
Master Servicer. In the event that the Master Servicer shall remit any amount
not required to be remitted and not otherwise subject to withdrawal pursuant to
Section 4.02, 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 Master Servicer shall maintain adequate records
with respect to all withdrawals made pursuant to this Section. All funds
deposited in the Protected Account shall be held in trust for the
Certificateholders until withdrawn in accordance with Section 4.02.
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(c) The institution that maintains the Protected Account shall
invest the funds in the Protected Account, in the manner directed by the Master
Servicer, 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 Master
Servicer 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 Master Servicer into
the Protected Account, out of the Master Servicer's own funds.
(d) The Master Servicer shall give at least 30 days advance notice
to the Trustee, the Seller, each Rating Agency and the Depositor of any proposed
change of location of the Protected Account prior to any change thereof.
Section 4.02 PERMITTED WITHDRAWALS FROM THE PROTECTED ACCOUNT.
(a) The Master Servicer may from time to time make withdrawals
from the Protected Account for the following purposes:
(i) to pay itself (to the extent not previously paid to
or withheld by the Master Servicer), 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 Master Servicer for Advances made by
it with respect to the Mortgage Loans, provided, however, that the
Master Servicer's right of reimbursement pursuant to this subclause
(ii) shall be limited to amounts received on particular Mortgage
Loan(s) (including, for this purpose, Liquidation Proceeds, Insurance
Proceeds and Subsequent Recoveries) that represent late recoveries of
payments of principal and/or interest on such particular Mortgage
Loan(s) in respect of which any such Advance was made;
(iii) to reimburse the Master Servicer for any previously
made portion of a Servicing Advance or an Advance made by the Master
Servicer that, in the good faith judgment of the Master Servicer, 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 Master Servicer from Insurance
Proceeds for Insured Expenses covered by the related Insurance Policy;
(v) to pay the Master Servicer any unpaid Servicing Fees
and to reimburse it for any unreimbursed Servicing Advances, provided,
however, that the Master Servicer's right to reimbursement for
Servicing Advances pursuant to this subclause (v) with respect to any
Mortgage Loan shall be limited to amounts received on particular
Mortgage
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Loan(s) (including, for this purpose, Liquidation Proceeds, Insurance
Proceeds, Subsequent Recoveries 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 Mortgage Loan or property acquired in
respect thereof that has been purchased pursuant to Section 2.02, 2.03
or 3.18 of this Agreement, all amounts received thereon and not taken
into account in determining the related Stated Principal Balance of
such repurchased Mortgage Loan;
(vii) to pay any expenses recoverable by the Master
Servicer pursuant to Section 7.04 of this Agreement;
(viii) to withdraw pursuant to Section 4.01 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 10.01 hereof.
In addition, no later than 1:00 p.m. Eastern time on the Distribution
Account Deposit Date, the Master Servicer shall withdraw from the Protected
Account and remit to the Trustee the amount of Interest Funds for each Loan
Group (without taking into account any reduction in the amount of Interest Funds
attributable to the application of clause (c) of the definition thereof
contained in Article I of this Agreement) and Principal Funds for each Loan
Group collected, to the extent on deposit, and the Trustee shall deposit such
amount in the Distribution Account. In addition, on or before the Distribution
Account Deposit Date, the Master Servicer shall remit to the Trustee for deposit
in the Distribution Account any Advances or any payments of Compensating
Interest required to be made by the Master Servicer with respect to the Mortgage
Loans. Furthermore, on each Distribution Account Deposit Date, the Master
Servicer shall remit to the Trustee all Prepayment Charges collected by the
Master Servicer with respect to the Mortgage Loans during the related Prepayment
Period.
The Master Servicer 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), (vi) and (vii) above. Prior to making any withdrawal from the Protected
Account pursuant to subclause (iii), the Master Servicer 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 Master Servicer to
be a Nonrecoverable Advance and identifying the related Mortgage Loan(s), and
their respective portions of such Nonrecoverable Advance.
Section 4.03 COLLECTION OF TAXES; ASSESSMENTS AND SIMILAR ITEMS; ESCROW
ACCOUNTS.
With respect to each Mortgage Loan, to the extent required by the
related Mortgage Note, the Master Servicer 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 Master Servicer) for the
payment of taxes, assessments, hazard insurance premiums or
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comparable items for the account of the Mortgagors. Nothing herein shall require
the Master Servicer 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 Master Servicer out of related collections for any payments made with
respect to each 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 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 10.01 thereof. The Escrow Account
shall not be a part of the Trust Fund.
Section 4.04 DISTRIBUTION ACCOUNT.
(a) The Trustee shall establish and maintain in the name of the
Trustee, for the benefit of the Certificateholders, the Distribution Account as
a segregated trust account or accounts.
(b) All amounts deposited to the Distribution Account shall be
held by the Trustee in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement.
(c) The Distribution Account shall constitute an Eligible Account
of the Trust Fund segregated on the books of the Trustee and held by the Trustee
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 invested in the name of the Trustee,
in such Permitted Investments, or deposited in demand deposits with such
depository institutions, as determined by the Trustee. All Permitted Investments
shall mature or be subject to redemption or withdrawal on or before, and shall
be held until, the next succeeding Distribution Date if the obligor for such
Permitted Investment is the Trustee or, if such obligor is any other Person, the
Business Day preceding such Distribution Date. All investment earnings on
amounts on deposit in the Distribution Account or benefit from funds uninvested
therein from time to time shall be for the account of the Trustee. The Trustee
shall be permitted to withdraw or receive distribution of any and all investment
earnings from the Distribution Account on each Distribution Date. If there is
any loss on a Permitted Investment or demand deposit, the Trustee shall deposit
the amount of the loss in the Distribution Account not later than the applicable
Distribution Date on which the moneys so invested are required to be distributed
to the Certificateholders. 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 4.05 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION
ACCOUNT.
(a) The Trustee will make or cause to be made such withdrawals or
transfers from the Distribution Account for the following purposes:
(i) to pay to itself the Trustee Fee;
(ii) to reimburse the Trustee for expenses, costs and
liabilities incurred by or reimbursable to it pursuant to this
Agreement;
(iii) to pay investment income to the Trustee;
(iv) to remove amounts deposited in error; and
(v) to clear and terminate the Distribution Account
pursuant to Section 10.01.
(b) On each Distribution Date, the Trustee shall distribute
Interest Funds and Principal Funds in the Distribution Account for each Loan
Group to the holders of the Certificates in accordance with Section 5.04.
Section 4.06 CLASS P CERTIFICATE ACCOUNT.
(a) The Trustee shall establish and maintain in the name of the
Trustee, for the benefit of the Class P Certificateholders, the Class P
Certificate Account as a segregated trust account or accounts.
(b) On the Closing Date, the Depositor will deposit, or cause to
be deposited in the Class P Certificate Account, an amount equal to $100. All
amounts deposited to the Class P Certificate Account shall be held by the
Trustee in the name of the Trustee in trust for the benefit of the Class P
Certificateholders in accordance with the terms and provisions of this
Agreement. The amount on deposit in the Class P Certificate Account shall be
held uninvested.
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ARTICLE V
DISTRIBUTIONS AND ADVANCES
Section 5.01 ADVANCES.
The Master Servicer shall, or shall cause the related subservicer
pursuant to the Subservicing Agreement to, make an Advance and deposit such
Advance in the Protected Account. Each such Advance shall be remitted to the
Distribution Account no later than 1:00 p.m. Eastern time on the Distribution
Account Deposit Date in immediately available funds. The Master Servicer shall
be obligated to make any such Advance only to the extent that such advance would
not be a Nonrecoverable Advance. If the Master Servicer shall have determined
that it has made a Nonrecoverable Advance or that a proposed Advance or a lesser
portion of such Advance would constitute a Nonrecoverable Advance, the Master
Servicer shall deliver (i) to the Trustee for the benefit of the
Certificateholders funds constituting the remaining portion of such Advance, if
applicable, and (ii) to the Depositor, each Rating Agency and the Trustee an
Officer's Certificate setting forth the basis for such determination. Subject to
the Master Servicer's recoverability determination, in the event that a
subservicer fails to make a required Advance, the Master Servicer shall be
required to remit the amount of such Advance to the Distribution Account.
In lieu of making all or a portion of such Advance from its own funds,
the Master Servicer may (i) cause to be made an appropriate entry in its records
relating to the Protected Account that any Amount Held for Future Distributions
has been used by the Master Servicer in discharge of its obligation to make any
such Advance and (ii) transfer such funds from the Protected Account to the
Distribution Account. Any funds so applied and transferred shall be replaced by
the Master Servicer by deposit in the Distribution Account, no later than the
close of business on the Business Day immediately preceding the Distribution
Date on which such funds are required to be distributed pursuant to this
Agreement.
The Master Servicer shall be entitled to be reimbursed from the
Protected Account for all Advances of its own funds made pursuant to this
Section as provided in Section 4.02. The obligation to make Advances with
respect to any Mortgage Loan shall continue until such 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 5.01.
Subject to and in accordance with the provisions of Article VIII
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 5.01.
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Section 5.02 COMPENSATING INTEREST PAYMENTS.
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 Mortgage Loan, the Master Servicer shall, to the extent of the
Servicing Fee for such Distribution Date, deposit into the Distribution Account,
as a reduction of the Servicing Fee for such Distribution Date, no later than
the close of business on the Business Day immediately preceding such
Distribution Date, an amount equal to the Prepayment Interest Shortfall; and in
case of such deposit, the Master Servicer shall not be entitled to any recovery
or reimbursement from the Depositor, the Trustee, the Seller, the Trust Fund or
the Certificateholders.
Section 5.03 REMIC DISTRIBUTIONS.
On each Distribution Date the Trustee shall be deemed to have allocated
distributions to the REMIC I Regular Interests in accordance with Section 5.07
hereof.
Section 5.04 DISTRIBUTIONS.
(a) On each Distribution Date, an amount equal to the Interest
Funds and Principal Funds for each Loan Group for such Distribution Date shall
be withdrawn by the Trustee from the Distribution Account and distributed in the
following order of priority:
(1) Interest Funds shall be distributed in the following manner
and order of priority:
(A) From Interest Funds in respect of:
(i) Loan Group I, to the Class I-A-1, Class
I-A-2 and Class I-A-3 Certificates, the Current
Interest and any Interest Carry Forward Amount for
each such Class, on a pro rata basis based on the
entitlement of each such Class; and
(ii) Loan Group II, to the Class II-A-1
Certificates and Class II-A-2 Certificates, the
Current Interest and any Interest Carry Forward
Amount for each such Class, on a pro rata basis based
on the entitlement of each such Class;
(B) From remaining Interest Funds in respect of the
non-related Loan Group, to the Class I-A Certificates and Class II-A
Certificates, the remaining Current Interest, if any, and the remaining
Interest Carry Forward Amount, if any, for such Classes, pro rata based
on the entitlement of each such Class; and
(C) From remaining Interest Funds in respect of both Loan
Groups, sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class
M-4, Class M-5, Class M-6 and Class M-7 Certificates, in that order,
the Current Interest for each such Class.
Any Excess Spread to the extent necessary to meet a level of
overcollateralization equal to the Overcollateralization Target Amount will be
the Extra Principal Distribution Amount and will be included as part of the
Principal Distribution Amount. Any Remaining Excess Spread
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together with any Overcollateralization Release Amount will be applied as Excess
Cashflow and distributed pursuant to clauses (4)(A) through (G) below.
On any Distribution Date, any Relief Act Interest Shortfalls and any
Prepayment Interest Shortfalls to the extent not covered by Compensating
Interest will be allocated as set forth in the definition of "Current Interest"
herein.
(2) Principal Funds, including any Extra Principal Distribution
Amount, shall be distributed in the following manner and order of priority:
(A) For each Distribution Date (i) prior to the Stepdown
Date or (ii) on which a Trigger Event is in effect:
(i) To the Class A Certificates, the Principal
Distribution Amount for such Distribution Date to be
distributed as follows:
(1) from the Group I Principal
Distribution Amount for such Distribution
Date, sequentially, to the Class I-A-1,
Class I-A-2 and Class I-A-3 Certificates, in
that order, in each case until the
Certificate Principal Balance thereof is
reduced to zero; and
(2) from the Group II Principal
Distribution Amount for such Distribution
Date, pro rata to the Class II-A-1
Certificates and Class II-A-2 Certificates,
until the Certificate Principal Balances
thereof are reduced to zero; provided,
however, that if a Group II Sequential
Trigger Event is in effect, the Group II
Principal Distribution Amount for such
Distribution Date shall be distributed
sequentially to the Class II-A-1
Certificates and Class II-A-2 Certificates,
in that order, in each case until the
Certificate Principal Balance thereof is
reduced to zero;
(ii) To the Class M-1 Certificates, from any
remaining Principal Funds in respect of both Loan
Groups for such Distribution Date, the remaining
Principal Distribution Amount, until the Certificate
Principal Balance thereof is reduced to zero;
(iii) To the Class M-2 Certificates, from any
remaining Principal Funds in respect of both Loan
Groups for such Distribution Date, the remaining
Principal Distribution Amount, until the Certificate
Principal Balance thereof is reduced to zero;
(iv) To the Class M-3 Certificates, from any
remaining Principal Funds in respect of both Loan
Groups for such Distribution Date, the remaining
Principal Distribution Amount, until the Certificate
Principal Balance thereof is reduced to zero;
(v) To the Class M-4 Certificates, from any
remaining Principal Funds in respect of both Loan
Groups for such Distribution Date, the remaining
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Principal Distribution Amount, until the Certificate
Principal Balance thereof is reduced to zero;
(vi) To the Class M-5 Certificates, from any
remaining Principal Funds in respect of both Loan
Groups for such Distribution Date, the remaining
Principal Distribution Amount, until the Certificate
Principal Balance thereof is reduced to zero;
(vii) To the Class M-6 Certificates, from any
remaining Principal Funds in respect of both Loan
Groups for such Distribution Date, the remaining
Principal Distribution Amount, until the Certificate
Principal Balance thereof is reduced to zero; and
(viii) To the Class M-7 Certificates, from any
remaining Principal Funds in respect of both Loan
Groups for such Distribution Date, the remaining
Principal Distribution Amount, until the Certificate
Principal Balance thereof is reduced to zero.
(B) For each Distribution Date on or after the Stepdown
Date, so long as a Trigger Event is not in effect:
(i) To the Class A Certificates, the Principal
Distribution Amount for such Distribution Date to be
distributed as follows:
(1) from the Group I Principal
Distribution Amount for such Distribution
Date, sequentially, to the Class I-A-1,
Class I-A-2 and Class I-A-3 Certificates, in
that order, the Class I-A Principal
Distribution Amount for such Distribution
Date, in each case until the Certificate
Principal Balance thereof is reduced to
zero; and
(2) from the Group II Principal
Distribution Amount for such Distribution
Date, pro rata to the Class II-A-1
Certificates and Class II-A-2 Certificates,
the Class II-A Principal Distribution Amount
for such Distribution Date, until the
Certificate Principal Balances thereof are
reduced to zero;
(ii) To the Class M-1 Certificates, from any
remaining Principal Distribution Amount in respect of
both Loan Groups for such Distribution Date, the
Class M-1 Principal Distribution Amount, until the
Certificate Principal Balance thereof is reduced to
zero;
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(iii) To the Class M-2 Certificates, from any
remaining Principal Distribution Amount in respect of
both Loan Groups for such Distribution Date, the
Class M-2 Principal Distribution Amount, until the
Certificate Principal Balance thereof is reduced to
zero;
(iv) To the Class M-3 Certificates, from any
remaining Principal Distribution Amount in respect of
both Loan Groups for such Distribution Date, the
Class M-3 Principal Distribution Amount, until the
Certificate Principal Balance thereof is reduced to
zero;
(v) To the Class M-4 Certificates, from any
remaining Principal Distribution Amount in respect of
both Loan Groups for such Distribution Date, the
Class M-4 Principal Distribution Amount, until the
Certificate Principal Balance thereof is reduced to
zero;
(vi) To the Class M-5 Certificates, from any
remaining Principal Distribution Amount in respect of
both Loan Groups for such Distribution Date, the
Class M-5 Principal Distribution Amount, until the
Certificate Principal Balance thereof is reduced to
zero;
(vii) To the Class M-6 Certificates, from any
remaining Principal Distribution Amount in respect of
both Loan Groups for such Distribution Date, the
Class M-6 Principal Distribution Amount, until the
Certificate Principal Balance thereof is reduced to
zero; and
(viii) To the Class M-7 Certificates, from any
remaining Principal Distribution Amount in respect of
both Loan Groups for such Distribution Date, the
Class M-7 Principal Distribution Amount, until the
Certificate Principal Balance thereof is reduced to
zero.
(3) Notwithstanding the provisions of clauses (2)(A) and (B)
above, if on any Distribution Date the Class A Certificates related to a Loan
Group are no longer outstanding, the pro rata portion of the Principal
Distribution Amount or the applicable Class A Principal Distribution Amount, as
applicable, otherwise allocable to such Class A Certificates will be allocated
among the remaining group or groups of Class A Certificates pro rata and among
the Classes of each such certificate group in the same manner and order of
priority described above; and
(4) Any Excess Cashflow shall be distributed in the following
manner and order of priority:
(A) from any remaining Excess Cashflow, to the Class A
Certificates, (a) first, any remaining Interest Carry Forward Amount
for such Classes, pro rata, in accordance with the Interest Carry
Forward Amount due with respect to each such Class, to the extent not
fully paid pursuant to clauses (1) (A) and (B) above and (b) second,
any Unpaid Realized Loss Amount for such Classes for such Distribution
Date, pro rata, in accordance with the Applied Realized Loss Amount
allocated to each such Class;
(B) from any remaining Excess Cashflow, sequentially, to
the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6,
and Class M-7 Certificates, in that order, an amount equal to the
Interest Carry Forward Amount for each such Class for such Distribution
Date;
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(C) from any remaining Excess Cashflow otherwise
distributable to the Class CE Certificates, to the Reserve Fund to pay
to the Class I-A Certificates and Class II-A Certificates, any Basis
Risk Shortfall Carry Forward Amount for each such Class for such
Distribution Date, on a pro rata basis, based on the amount of the
Basis Risk Shortfall Carry Forward Amount for each such Class, and to
the extent not covered by the Yield Maintenance Agreements;
(D) from any remaining Excess Cashflow otherwise
distributable to the Class CE Certificates, to the Reserve Fund to pay
to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6
and Class M-7 Certificates, sequentially in that order, any Basis Risk
Shortfall Carry Forward Amount for each such Class for such
Distribution Date, if any, in each case to the extent not covered by
the Yield Maintenance Agreements;
(E) from any remaining Excess Cashflow, to the Class A
Certificates, on a pro rata basis, based on the entitlement of each
such Class, and then sequentially to the Class X-0, Xxxxx X-0, Class
M-3, Class M-4, Class M-5, Class M-6 and Class M-7 Certificates, in
that order, the amount of Relief Act Shortfalls and any Prepayment
Interest Shortfalls allocated to such Classes of Certificates, to the
extent not previously reimbursed;
(F) from any remaining Excess Cashflow, to the Class CE
Certificates, an amount equal to the Class CE Distribution Amount
reduced by amounts distributed in clauses (C) and (D) above; and
(G) any remaining amounts to each of the Class R-1, Class
R-2 and Class RX Certificates, based on the related REMIC in which such
amounts remain.
On each Distribution Date, all amounts in respect of Prepayment Charges
shall be distributed to the Holders of the Class P Certificates, provided that
such distributions shall not be in reduction of the principal balance thereof.
On the Distribution Date immediately following the expiration of the latest
Prepayment Charge term as identified on the Mortgage Loan Schedule, any amount
on deposit in the Class P Certificate Account will be distributed to the Holders
of the Class P Certificates in reduction of the Certificate Principal Balance
thereof.
In addition, notwithstanding the foregoing, on any Distribution Date
after the Distribution Date on which the Certificate Principal Balance of a
Class of Class A Certificates or Class M Certificates has been reduced to zero,
that Class of Certificates will be retired and will no longer be entitled to
distributions, including distributions in respect of Prepayment Interest
Shortfalls or Basis Risk Shortfall Carry Forward Amounts.
(b) In addition to the foregoing distributions, with respect to
any Subsequent Recoveries, the Master Servicer shall deposit such funds into the
Protected Account pursuant to Section 4.01(b)(iii). 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 Certificates with the highest
payment priority to
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which Realized Losses have been allocated, but not by more than the amount of
Realized Losses previously allocated to that Class of Certificates pursuant to
Section 5.05; provided, however, to the extent that no reductions to a
Certificate Principal Balance of any Class of Certificates currently exists as
the result of a prior allocation of a Realized Loss, such Subsequent Recoveries
will be applied as Excess Spread. The amount of any remaining Subsequent
Recoveries will be applied to increase the Certificate Principal Balance of the
Class of Certificates with the next highest payment priority, up to the amount
of such Realized Losses previously allocated to that Class of Certificates
pursuant to Section 5.05, and so on. Holders of such Certificates will not be
entitled to any payment in respect of Current Interest on the amount of such
increases for any Interest Accrual Period preceding the Distribution Date on
which such increase occurs. Any such increases shall be applied to the
Certificate Principal Balance of each Certificate of such Class in accordance
with its respective Percentage Interest.
(c) Subject to Section 10.02 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 such Holder has so
notified the Trustee at least 5 Business Days prior to the related Record Date,
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 10.02 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.
(d) 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 Trustee in electronic form (or by such other means as the Master
Servicer and the Trustee may agree from time to time) containing such data and
information, as agreed to by the Master Servicer and the Trustee such as to
permit the Trustee to prepare the Monthly Statement to Certificateholders and to
make the required distributions for the related Distribution Date.
Section 5.05 ALLOCATION OF REALIZED LOSSES.
(a) All Realized Losses on the Mortgage Loans allocated to any
REMIC I Regular Interest pursuant to Section 5.05(b) on the Mortgage Loans shall
be allocated by the Trustee on each Distribution Date as follows: first, to
Excess Spread; second, to the Class CE Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; third, to the Class M-7
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; fourth, to the Class M-6 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; fifth, to the Class M-5 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero; sixth,
to the Class M-4 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero; seventh, to the Class M-3 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; eighth, to the
Class M-2 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero; ninth, to the Class M-1 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; tenth, to related Class or
Classes of Class A Certificates, on a pro rata basis, until the Certificate
Principal Balances thereof have been reduced to zero; and eleventh, to the
unrelated Class or Classes of
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Class A Certificates, on a pro rata basis, until the Certificate Principal
Balances thereof have been reduced to zero; provided, however, any such Realized
Losses otherwise allocable to the Class II-A-1 Certificates shall be allocated
first to the Class II-A-2 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero, and then to the Class II-A-1 Certificates. All
Realized Losses to be allocated to the Certificate Principal Balances of all
Classes on any Distribution Date shall be so allocated after the actual
distributions to be made on such date as provided above. All references above to
the Certificate Principal Balance of any Class of Certificates shall be to the
Certificate Principal Balance of such Class immediately prior to the relevant
Distribution Date, before reduction thereof by any Realized Losses, in each case
to be allocated to such Class of Certificates, on such Distribution Date.
(b) Any allocation of Realized Losses to a Class of Certificates
on any Distribution Date shall be made by reducing the Certificate Principal
Balance thereof by the amount so allocated; any allocation of Realized Losses to
a Class CE Certificates shall be made by reducing the amount otherwise payable
in respect thereof pursuant to clause (F) of Section 5.04(a)(4). No allocations
of any Realized Losses shall be made to the Certificate Principal Balance of the
Class P Certificates.
As used herein, an allocation of a Realized Loss on a "pro rata basis"
among two or more specified Classes of Certificates means an allocation on a pro
rata basis, among the various Classes so specified, to each such Class of
Certificates on the basis of their then outstanding Certificate Principal
Balances prior to giving effect to distributions to be made on such Distribution
Date. All Realized Losses and all other losses allocated to a Class of
Certificates hereunder will be allocated among the Certificates of such Class in
proportion to the Percentage Interests evidenced thereby.
(c) (i) The REMIC I Marker Percentage of all Realized Losses on
the Mortgage Loans (without duplication of losses allocated pursuant to Section
1.02) shall be allocated by the Trustee on each Distribution Date to the
following REMIC I Regular Interests in the specified percentages, as follows:
first, to Uncertificated Accrued Interest payable to the REMIC I Regular
Interest AA and REMIC I Regular Interest ZZ up to an aggregate amount equal to
the REMIC I Interest Loss Allocation Amount, 98.00% and 2.00%, respectively;
second, to the Uncertificated Principal Balances of the REMIC I Regular Interest
AA and REMIC I Regular Interest ZZ up to an aggregate amount equal to the REMIC
I Principal Loss Allocation Amount, 98.00% and 2.00%, respectively; third, to
the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I
Regular Interest M-7 and REMIC I Regular Interest ZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Principal Balance of REMIC I Regular
Interest M-7 has been reduced to zero; fourth, to the Uncertificated Principal
Balances of REMIC I Regular Interest AA, REMIC I Regular Interest M-6 and REMIC
I Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the
Uncertificated Principal Balance of REMIC I Regular Interest M-6 has been
reduced to zero; fifth to the Uncertificated Principal Balances of REMIC I
Regular Interest AA, REMIC I Regular Interest M-5 and REMIC I Regular Interest
ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal
Balance of REMIC I Regular Interest M-5 has been reduced to zero; sixth, to the
Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I
Regular Interest M-4 and REMIC I Regular Interest ZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Principal
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Balance of REMIC I Regular Interest M-4 has been reduced to zero; seventh to the
Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I
Regular Interest M-3 and REMIC I Regular Interest ZZ, 98.00%, 1.00%, and 1.00%,
respectively, until the Uncertificated Principal Balance of REMIC I Regular
Interest M-3 has been reduced to zero; eighth to the Uncertificated Principal
Balances of REMIC I Regular Interest AA, REMIC I Regular Interest M-2 and REMIC
I Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the
Uncertificated Principal Balance of REMIC I Regular Interest M-2 has been
reduced to zero; ninth to the Uncertificated Principal Balances of REMIC I
Regular Interest AA, REMIC I Regular Interest M-1 and REMIC I Regular Interest
ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal
Balance of REMIC I Regular Interest M-1 has been reduced to zero; tenth with
respect to any Realized Losses on the Mortgage Loans, to the Uncertificated
Principal Balance of REMIC I Regular Interest AA, 98.00%, to the Uncertificated
Principal Balances of the related REMIC I Regular Interests X-X-0, X-X-0, X-X-0,
XX-X-0 xxx XX-X-0, 1.00% pro rata, and to the Uncertificated Principal Balance
of REMIC I Regular Interest ZZ, 1.00%, until the Uncertificated Principal
Balances of such REMIC I Regular Interests X-X-0, X-X-0, X-X-0, XX-X-0 and
II-A-2 have been reduced to zero; and eleventh with respect to any Realized
Losses on the Mortgage Loans, to the Uncertificated Principal Balance of REMIC I
Regular Interest AA, 98.00%, to the Uncertificated Principal Balances of the
unrelated REMIC I Regular Interests X-X-0, X-X-0, X-X-0, XX-X-0 xxx XX-X-0,
1.00% pro rata, and to the Uncertificated Principal Balance of REMIC I Regular
Interest ZZ, 1.00%, until the Uncertificated Principal Balances of such REMIC I
Regular Interests X-X-0, X-X-0, X-X-0, XX-X-0 and II-A-2 have been reduced to
zero; provided, however, any such Realized Losses otherwise allocable to the
REMIC I Regular Interest II-A-1 shall be allocated first to the REMIC I Regular
Interest II-A-2, until the Uncertificated Principal Balance thereof has been
reduced to zero, and then to the REMIC I Regular Interest II-A-1.
(ii) The REMIC I Sub WAC Allocation Percentage of all
Realized Losses shall be applied after all distributions have been made
on each Distribution Date first, so as to keep the Uncertificated
Principal Balance of each REMIC I Regular Interest ending with the
designation "B" equal to 0.01% of the aggregate Stated Principal
Balance of the Mortgage Loans in the related Loan Group; second, 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 current Certificate Principal Balance of the Class A
Certificates related to such Loan Group (except that if any such excess
is a larger number than in the preceding distribution period, the least
amount of Realized Losses shall be applied to such REMIC I Regular
Interests such that the REMIC I Subordinated Balance Ratio is
maintained); and third, any remaining Realized Losses shall be
allocated to REMIC I Regular Interest XX.
Section 5.06 MONTHLY STATEMENTS TO CERTIFICATEHOLDERS.
(a) Not later than each Distribution Date, the Trustee shall
prepare and make available to each Holder of Certificates, the Master Servicer
and the Depositor a statement setting forth for the Certificates:
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(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, (B) the
aggregate of all scheduled payments of principal included therein and
(C) the Extra Principal Distribution Amount (if any);
(ii) the amount of such distribution to Holders of each
Class allocable to interest and the portion thereof, if any, provided
by the Yield Maintenance Agreements;
(iii) the Interest Carry Forward Amount and any Basis Risk
Shortfall Carry Forward Amount for each Class of Certificates;
(iv) the Certificate Principal Balance or Certificate
Notional Amount, as applicable, 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;
(v) for each Loan Group, the aggregate of the Stated
Principal Balance of (A) all of the Mortgage Loans in such Loan Group,
(B) the first lien Mortgage Loans in such Loan Group, (C) the second
lien Mortgage Loans in such Loan Group, and (D) the Adjustable Rate
Mortgage Loans in such Loan Group, for the following Distribution Date;
(vi) the related amount of the Servicing Fees paid to or
retained by the Master Servicer for the related Due Period;
(vii) the Pass-Through Rate for each Class of Class A
Certificates and Class M Certificates with respect to the current
Accrual Period, and, if applicable, whether such Pass-Through Rate was
limited by the applicable Net Rate Cap;
(viii) the amount of Advances included in the distribution
on such Distribution Date;
(ix) the cumulative amount of Applied Realized Loss
Amounts to date;
(x) the number and aggregate Stated Principal Balance of
the Mortgage Loans in each Loan Group (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 and
separately identifying such information for the (1) first lien Mortgage
Loans, (2) second lien Mortgage Loans, and (3) Adjustable Rate Mortgage
Loans, in each such Loan Group;
(xi) with respect to any Mortgage Loan that was liquidated
during the preceding calendar month, the loan number and Stated
Principal Balance of, and Realized
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Loss on, such Mortgage Loan as of the close of business on the
Determination Date preceding such Distribution Date;
(xii) the total number and principal balance of any real
estate owned or REO Properties as of the close of business on the
Determination Date preceding such Distribution Date;
(xiii) 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 in each Loan Group 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 in such Loan
Group as of the last day of such Distribution Date and separately
identifying such information for the (1) first lien Mortgage Loans, (2)
second lien Mortgage Loans, and (3) Adjustable Rate Mortgage Loans, in
each such Loan Group;
(xiv) the Realized Losses during the related Prepayment
Period and the cumulative Realized Losses through the end of the
preceding month;
(xv) whether a Trigger Event exists; and
(xvi) the amount of the distribution made on such
Distribution Date to the Holders of the Class P Certificates allocable
to Prepayment Charges.
The Trustee 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 Trustee's internet
website. The Trustee's internet website shall initially be located at
"xxx.xxxxxxxx.xxx". Assistance in using the website can be obtained by calling
the Trustee'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 Trustee may change the way Monthly Statements are distributed in order
to make such distributions more convenient or more accessible to the above
parties.
(b) The Trustee'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 Trustee
will make available a copy of each statement provided pursuant to this Section
5.06 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 containing the information set forth in clauses (a)(i) and (a)(ii) of
this Section 5.06 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 pursuant to any
requirements of the Code as from time to time in effect.
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(d) Upon filing with the Internal Revenue Service, the Trustee
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 Realized Losses 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
(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 9.12.
Section 5.07 REMIC DESIGNATIONS AND REMIC DISTRIBUTIONS.
(a) The Trustee shall elect that each of REMIC I, REMIC II, REMIC
III and REMIC IV 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 Protected Account, any REO Property, any proceeds of the foregoing
and any other assets subject to this Agreement (other than the Reserve Fund and
the Yield Maintenance Agreements). The REMIC I Regular Interests shall
constitute the assets of REMIC
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II. The Class CE Interest shall constitute the assets of REMIC III and the Class
P Interest shall constitute the assets of REMIC IV.
(b) (1) On each Distribution Date, the following amounts, in the
following order of priority, shall 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) to Holders of each REMIC I Regular Interest (other
than REMIC I Regular Xxxxxxxxx 0X, 0X, 0X, 0X, XX and P) pro rata, in
an amount equal to (A) Uncertificated Accrued Interest for such REMIC I
Regular Interest for such Distribution Date, plus (B) any amounts in
respect thereof remaining unpaid from previous Distribution Dates.
Amounts payable as Uncertificated Accrued Interest in respect of REMIC
I Regular Interest ZZ shall be reduced when the REMIC I
Overcollateralization Amount is less than the REMIC I Required
Overcollateralization Amount, by the lesser of (x) the amount of such
difference and (y) the Maximum Uncertificated Accrued Interest Deferral
Amount and such amount will be payable to the Holders of REMIC I
Regular Interest I-A-1, REMIC I Regular Interest I-A-2, REMIC I Regular
Interest I-A-3, REMIC I Regular Interest II-A-1, REMIC I Regular
Interest II-A-2, REMIC I Regular Interest M-1, REMIC I Regular Interest
M-2, REMIC I Regular Interest M-3, REMIC I Regular Interest M-4, REMIC
I Regular Interest M-5, REMIC I Regular Interest M-6 and REMIC I
Regular Interest M-7 in the same proportion as the Extra Principal
Distribution Amount is allocated to the Corresponding Certificates and
the Uncertificated Principal Balance of REMIC I Regular Interest ZZ
shall be increased by such amount;
(ii) to Holders of REMIC I Regular Interest 1A, REMIC I
Regular Interest 1B, REMIC I Regular Interest 2A, REMIC I Regular
Interest 2B and REMIC I Regular Interest XX, pro rata, an amount equal
to (A) the Uncertificated Accrued Interest for such Distribution Date,
plus (B) any amounts in respect thereof remaining unpaid from previous
Distribution Dates;
(iii) to the Holders of REMIC I Regular Interests (other
than REMIC I Regular Xxxxxxxxx 0X, 0X, 0X, 0X, XX and P) in an amount
equal to the remainder of the REMIC I Marker Allocation Percentage of
the Interest Funds and Principal Funds for both Loan Groups for such
Distribution Date after the distributions made pursuant to clause (i)
above, allocated as follows:
(A) 98% of such remainder to the Holders of REMIC I
Regular Interest AA, until the Uncertificated Principal Balance of such
REMIC I Regular Interest is reduced to zero;
(B) 2% of such remainder, first, to the Holders of REMIC
I Regular Interest I-A-1, REMIC I Regular Interest I-A-2, REMIC I
Regular Interest I-A-3, REMIC I Regular Interest II-A-1, REMIC I
Regular Interest II-A-2, REMIC I Regular Interest M-1, REMIC I Regular
Interest M-2, REMIC I Regular Interest M-3, REMIC I Regular Interest
M-4, REMIC I Regular Interest M-5, REMIC I Regular Interest M-6 and
REMIC
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I Regular Interest M-7, in an aggregate amount equal to 1% of and in
the same proportion as principal payments are allocated to the
Corresponding Certificates, until the Uncertificated Principal Balances
of such REMIC I Regular Interests are reduced to zero; and second, to
the Holders of REMIC I Regular Interest ZZ, until the Uncertificated
Principal Balance of such REMIC I Regular Interest is reduced to zero;
then
(C) any remaining amount to the Holders of the Class R-1
Certificates;
(iv) to the Holders of REMIC I Regular Interest 1A, REMIC
I Regular Interest 1B, REMIC I Regular Interest 2A, REMIC I Regular
Interest 2B and REMIC I Regular Interest XX, in an amount equal to the
remainder of the REMIC I Sub WAC Allocation Percentage of the Interest
Funds and Principal Funds for both Loan Groups for such Distribution
Date after the distributions made pursuant to clause (ii) above, first,
so as to keep the Uncertificated Principal Balance of each REMIC I
Regular Interest ending with the designation "B" equal to 0.01% of the
aggregate Stated Principal Balance of the Mortgage Loans in the related
Loan Group; second, 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 current Certificate Principal Balance
of the Class A Certificate related to such Loan Group (except that if
any such excess is a larger number than in the preceding distribution
period, the least amount of principal shall be distributed to such
REMIC I Regular Interests such that the REMIC I Subordinated Balance
Ratio is maintained); and third, any remaining principal to REMIC I
Regular Interest XX.
(c) On each Distribution Date, all amounts representing Prepayment
Charges deemed distributed in respect of the Class P Interest shall be deemed
distributed in respect of REMIC I Regular Interest P, provided that such amounts
shall not reduce the Uncertificated Principal Balance of REMIC I Regular
Interest P. On the Distribution Date immediately following the expiration of the
latest Prepayment Charge term as identified on the Mortgage Loan Schedule, $100
shall be deemed distributed in respect of REMIC I Regular Interest P in
reduction of the Uncertificated Principal Balance thereof.
(d) On each Distribution Date, an amount equal to the amounts
distributed pursuant to Sections 5.04(a)(4)(C), (D) and (F) on such date shall
be deemed distributed from REMIC II to REMIC III in respect of the Class CE
Distribution Amount distributable to the Class CE Interest.
(e) On each Distribution Date, 100% of the amounts deemed
distributed on REMIC I Regular Interest P shall be deemed distributed by REMIC
II to REMIC IV in respect of the Class P Interest.
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ARTICLE VI
THE CERTIFICATES
Section 6.01 THE CERTIFICATES.
The Certificates shall be substantially in the forms attached hereto as
Exhibits A-1 through A-5. The Certificates shall be issuable in registered form,
in the minimum dollar denominations, integral dollar multiples in excess thereof
(except that one Certificate of each Class may be issued in a different amount
which must be in excess of the applicable minimum dollar denomination) and
aggregate dollar denominations as set forth in the following table:
MINIMUM INTEGRAL MULTIPLE IN ORIGINAL CERTIFICATE
CLASS DENOMINATION EXCESS OF MINIMUM PRINCIPAL BALANCE
----- ------------ ----------------- -----------------
I-A-1 $25,000 $1.00 $ 338,640,000.00
I-A-2 $25,000 $1.00 $ 153,211,000.00
I-A-3 $25,000 $1.00 $ 42,722,000.00
II-A-1 $25,000 $1.00 $ 594,540,000.00
II-A-2 $25,000 $1.00 $ 148,635,000.00
M-1 $25,000 $1.00 $ 117,870,000.00
M-2 $25,000 $1.00 $ 62,209,000.00
M-3 $25,000 $1.00 $ 51,569,000.00
M-4 $25,000 $1.00 $ 19,646,000.00
M-5 $25,000 $1.00 $ 21,282,000.00
M-6 $25,000 $1.00 $ 17,189,000.00
M-7 $25,000 $1.00 $ 23,738,000.00
CE 10% 1% $ 45,838,485.64
P $ 100 N/A $ 100.00
R-1 100% X/X X/X
X-0 000% X/X X/X
RX 100% N/A N/A
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such authentication and delivery. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate the countersignature
of the Trustee by manual signature, and such countersignature upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly countersigned and delivered hereunder. All
Certificates shall be dated the date of their countersignature. On the Closing
Date, the Trustee shall authenticate the Certificates to be issued at the
written direction of the Depositor, or any affiliate thereof.
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The Depositor shall provide, or cause to be provided, to the Trustee on
a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
Section 6.02 CERTIFICATE REGISTER; REGISTRATION OF TRANSFER AND
EXCHANGE OF CERTIFICATES.
(a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 6.09 hereof, a Certificate Register
for the Trust Fund in which, subject to the provisions of subsections (b) and
(c) below and 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. Upon surrender for registration of
Transfer of any Certificate, the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Certificates
of the same Class and of like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Trustee. Whenever any Certificates are
so surrendered for exchange, the Trustee shall execute, authenticate, and
deliver the Certificates that the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for registration
of Transfer or exchange shall be accompanied by a written instrument of Transfer
in form satisfactory to the Trustee duly executed by the holder thereof or his
attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but 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 may be required.
All Certificates surrendered for registration of Transfer or exchange
shall be canceled and subsequently destroyed by the Trustee in accordance with
the Trustee's customary procedures.
(b) No Transfer of a Private Certificate shall be made unless such
Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a Transfer is to be made in reliance upon an exemption
from the Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
Transfer and such Certificateholder's prospective transferee shall each certify
to the Trustee in writing the facts surrounding the Transfer by (x)(i) the
delivery to the Trustee by the Certificateholder desiring to effect such
transfer of a certificate substantially in the form set forth in Exhibit D (the
"Transferor Certificate") and (ii) the delivery by the Certificateholder's
prospective transferee of (A) a letter in substantially the form of Exhibit E
(the "Investment Letter") if the prospective transferee is an Institutional
Accredited Investor or (B) a letter in substantially the form of Exhibit F (the
"Rule 144A and Related Matters Certificate") if the prospective transferee is a
QIB or (y) there shall be delivered to the Trustee an Opinion of Counsel
addressed to the Trustee that such Transfer may
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be made pursuant to an exemption from the Securities Act, which Opinion of
Counsel shall not be an expense of the Depositor, the Seller, the Master
Servicer or the Trustee. The Depositor shall provide to any Holder of a Private
Certificate and any prospective transferee designated by any such Holder,
information regarding the related Certificates and the Mortgage Loans and such
other information as shall be necessary to satisfy the condition to eligibility
set forth in Rule 144A(d)(4) for Transfer of any such Certificate without
registration thereof under the Securities Act pursuant to the registration
exemption provided by Rule 144A. The Trustee and the Master Servicer shall
cooperate with the Depositor in providing the Rule 144A information referenced
in the preceding sentence, including providing to the Depositor such information
regarding the Certificates, the Mortgage Loans and other matters regarding the
Trust Fund as the Depositor shall reasonably request to meet its obligation
under the preceding sentence. Each Holder of a Private Certificate desiring to
effect such Transfer shall, and does hereby agree to, indemnify the Trustee, 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.
No Transfer of an ERISA Restricted Certificate or a Class M-7
Certificate shall be made unless either (i) the Trustee and the Master Servicer
shall have received a representation from the transferee of such Certificate
acceptable to and in form and substance satisfactory to the Trustee and the
Master Servicer, to the effect that such transferee is not an employee benefit
plan subject to Section 406 of ERISA or a plan subject to Section 4975 of the
Code (either a "plan"), or a Person acting on behalf of any such plan or using
the assets of any such plan, or (ii) in the case of any such ERISA Restricted
Certificate presented for registration in the name of an employee benefit plan
subject to ERISA, or a plan subject to Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a trustee of any such plan or any
other person acting on behalf of any such plan, the Trustee shall have received
an Opinion of Counsel for the benefit of the Trustee and the Master Servicer and
on which they may rely, satisfactory to the Trustee, to the effect that the
purchase and holding of such ERISA Restricted Certificate will not constitute or
result in the assets of the Trust being deemed to be "plan assets" under ERISA
or the Code, will not result in any prohibited transactions under ERISA or
Section 4975 of the Code and will not subject the Trustee, the Master Servicer
or the Depositor to any obligation in addition to those expressly undertaken in
this Agreement, which Opinion of Counsel shall not be an expense of the Trustee,
the Master Servicer or the Depositor, or (iii) in the case of a Class M-7
Certificate, the transferee provides a representation, or is deemed to represent
in the case of the Global Certificate or an opinion of counsel to the effect
that the proposed transfer or holding of such Class M-7 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 obligation on the part of the
Depositor, the Master Servicer or the Trustee. Notwithstanding anything else to
the contrary herein, any purported transfer of an ERISA Restricted Certificate
to or on behalf of an employee benefit plan subject to Section 406 of ERISA or a
plan subject to Section 4975 of the Code without the delivery of the Opinion of
Counsel as described above shall be void and of no effect; provided that the
restriction set forth in this sentence shall not be applicable if there has been
delivered to the Trustee an Opinion of Counsel meeting the requirements of
clause (ii) of the first sentence of this paragraph. Neither the Trustee nor the
Master Servicer shall be required to monitor, determine or inquire as to
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compliance with the transfer restrictions with respect to any ERISA Restricted
Certificate that is a Book-Entry Certificate, and neither the Trustee nor the
Master Servicer shall have any liability for transfers of any such Book-Entry
Certificates made through the book-entry facilities of any Depository or between
or among participants of the Depository or Certificate Owners made in violation
of the transfer restrictions set forth herein. Neither the Trustee nor the
Master Servicer shall be under any liability to any Person for any registration
of transfer of any ERISA Restricted Certificate that is in fact not permitted by
this Section 6.02(b) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder under the
provisions of this Agreement. The Trustee shall be entitled, but not obligated,
to recover from any Holder of any ERISA Restricted Certificate that was in fact
an employee benefit plan subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code or a Person acting on behalf of any such plan at the
time it became a Holder or, at such subsequent time as it became such a plan or
Person acting on behalf of such a plan, all payments made on such ERISA
Restricted Certificate at and after either such time. Any such payments so
recovered by the Trustee shall be paid and delivered by the Trustee to the last
preceding Holder of such Certificate that is not such a plan or Person acting on
behalf of a plan.
Each beneficial owner of a Class M Certificate (other than a Class M-7
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 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, Fitch Ratings or
Xxxxx'x, 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 PTE 95-60, and (3) the conditions in Sections I and III of PTCE 95-60
have been satisfied.
(c) Each Person who has or who acquires any Ownership Interest in
a Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall be a Permitted Transferee and
shall promptly notify the Trustee of any change or impending change in
its status as a Permitted Transferee.
(ii) No Ownership Interest in a Residual Certificate may
be registered on the Closing Date or thereafter transferred, and the
Trustee shall not register the Transfer of any Residual Certificate
unless, in addition to the certificates required to be delivered to the
Trustee under subparagraph (b) above, the Trustee shall have been
furnished with an affidavit (a "Transfer Affidavit") of the initial
owner or the proposed transferee in the form attached hereto as Exhibit
C.
(iii) Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall agree (A) to obtain a Transfer
Affidavit from any other Person to whom
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such Person attempts to Transfer its Ownership Interest in a Residual
Certificate, (B) to obtain a Transfer Affidavit from any Person for
whom such Person is acting as nominee, trustee or agent in connection
with any Transfer of a Residual Certificate and (C) not to Transfer its
Ownership Interest in a Residual Certificate or to cause the Transfer
of an Ownership Interest in a Residual Certificate to any other Person
if it has actual knowledge that such Person is not a Permitted
Transferee.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Residual Certificate in violation of the provisions of
this Section 6.02(c) shall be absolutely null and void and shall vest
no rights in the purported Transferee. If any purported transferee
shall become a Holder of a Residual Certificate in violation of the
provisions of this Section 6.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Residual
Certificate. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Residual Certificate that is in fact
not permitted by Section 6.02(b) and this Section 6.02(c) or for making
any payments due on such Certificate to the Holder thereof or taking
any other action with respect to such Holder under the provisions of
this Agreement so long as the Transfer was registered after receipt of
the related Transfer Affidavit. The Trustee shall be entitled but not
obligated to recover from any Holder of a Residual Certificate that was
in fact not a Permitted Transferee at the time it became a Holder or,
at such subsequent time as it became other than a Permitted Transferee,
all payments made on such Residual Certificate at and after either such
time. Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted Transferee of
such Certificate.
(v) The Master Servicer shall make available within 60
days of written request from the Trustee, all information necessary to
compute any tax imposed under Section 860E(e) of the Code as a result
of a Transfer of an Ownership Interest in a Residual Certificate to any
Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in this
Section 6.02(c) shall cease to apply (and the applicable portions of the legend
on a Residual Certificate may be deleted) with respect to Transfers occurring
after delivery to the Trustee of an Opinion of Counsel addressed to the Trustee,
which Opinion of Counsel shall not be an expense of the Trustee, the Seller or
the Master Servicer to the effect that the elimination of such restrictions will
not cause REMIC I, REMIC II, REMIC III or REMIC IV, as applicable, to fail to
qualify as a REMIC at any time that the Certificates are outstanding or result
in the imposition of any tax on the Trust Fund, a Certificateholder or another
Person. Each Person holding or acquiring any ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement that, based on an
Opinion of Counsel addressed to the Trustee and furnished to the Trustee, is
reasonably necessary (a) to ensure that the record ownership of, or any
beneficial interest in, a Residual Certificate is not transferred, directly or
indirectly, to a Person that is not a Permitted Transferee and (b) to provide
for a means to compel the Transfer of a Residual Certificate that is held by a
Person that is not a Permitted Transferee to a Holder that is a Permitted
Transferee.
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(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 6.02 shall not be an expense of the Trust
Fund, the Trustee, the Depositor, the Seller or the Master Servicer.
Section 6.03 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 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 6.03, 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 6.03 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 6.03 shall be
canceled and destroyed by the Trustee in accordance with its standard procedures
without liability on its part.
Section 6.04 PERSONS DEEMED OWNERS.
The Trustee and any agent of 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 Trustee nor any agent of the Trustee
shall be affected by any notice to the contrary.
Section 6.05 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 6.06 BOOK-ENTRY CERTIFICATES.
The Regular Certificates (other than the Class M-7, Class CE and Class
P Certificates), upon original issuance, shall be issued in the form of one or
more typewritten Certificates
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representing the Book-Entry Certificates, to be delivered to the Depository by
or on behalf of the Depositor. Such Certificates shall initially be registered
on the Certificate Register in the name of the Depository or its nominee, and no
Certificate Owner of such Certificates will receive a definitive certificate
representing such Certificate Owner's interest in such Certificates, except as
provided in Section 6.08. Unless and until definitive, fully registered
Certificates ("Definitive Certificates") have been issued to the Certificate
Owners of such Certificates pursuant to Section 6.08:
(a) the provisions of this Section shall be in full force and
effect;
(b) the Depositor and the Trustee may deal with the Depository and
the Depository Participants for all purposes (including the making of
distributions) as the authorized representative of the respective Certificate
Owners of such Certificates;
(c) registration of the Book-Entry Certificates may not be
transferred by the Trustee except to another Depository;
(d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 6.08, the Depository will make
book-entry transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;
(e) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants;
(f) the Trustee may rely and shall be fully protected in relying
upon information furnished by the Depository with respect to its Depository
Participants; and
(g) to the extent that the provisions of this Section conflict
with any other provisions of this Agreement, the provisions of this Section
shall control.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of the aggregate unpaid principal amount of
any Class of Certificates, such direction or consent may be given by Certificate
Owners (acting through the Depository and the Depository Participants) owning
Book-Entry Certificates evidencing the requisite percentage of principal amount
of such Class of Certificates.
Section 6.07 NOTICES TO DEPOSITORY.
Whenever any notice or other communication is required to be given to
Certificateholders of a Class with respect to which Book-Entry Certificates have
been issued, unless and until Definitive Certificates shall have been issued to
the related Certificate Owners, the Trustee shall give all such notices and
communications to the Depository.
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Section 6.08 DEFINITIVE CERTIFICATES.
If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) the Depositor or the Depository advises the Trustee that the
Depository is no longer willing or able to discharge properly its
responsibilities under the Depository Agreement with respect to such
Certificates and the Depositor is unable to locate a qualified successor or (b)
the Depositor, at its sole option, advises the Trustee that it elects to
terminate the book-entry system with respect to such Certificates through the
Depository, then the Trustee shall notify all Certificate Owners of such
Certificates, through the Depository, of the occurrence of any such event and of
the availability of Definitive Certificates to applicable Certificate Owners
requesting the same. The Depositor shall provide the Trustee with an adequate
inventory of certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon surrender to the Trustee of any such Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Trustee shall countersign and deliver such Definitive
Certificates. Neither the Depositor nor the Trustee shall be liable for any
delay in delivery of such instructions and each may conclusively rely on, and
shall be protected in relying on, such instructions.
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 Voting
Rights 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 Voting Right 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 Voting Rights 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.
Section 6.09 MAINTENANCE OF OFFICE OR AGENCY.
The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies at the Corporate Trust Office where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee initially designates its Corporate Trust Office, as the office for such
purposes. The Trustee will give prompt written notice to the Certificateholders
of any change in such location of any such office or agency.
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ARTICLE VII
THE DEPOSITOR AND THE MASTER SERVICER
Section 7.01 LIABILITIES OF THE DEPOSITOR AND THE MASTER SERVICER.
Each of the Depositor, 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 7.02 MERGER OR CONSOLIDATION OF THE DEPOSITOR OR THE MASTER
SERVICER.
(a) Each of the Depositor 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 or the Master Servicer may
be merged or consolidated, or any corporation resulting from any merger or
consolidation to which the Depositor or the Master Servicer shall be a party, or
any Person succeeding to the business of the Depositor or the Master Servicer,
shall be the successor of the Depositor 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 7.03 INDEMNIFICATION OF THE TRUSTEE AND THE MASTER SERVICER.
(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 any powers of attorney delivered
pursuant to this Agreement, the Custodial Agreements 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 survive the resignation or removal of the
Trustee or Master Servicer and the termination of this Agreement.
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(b) The Seller will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise paid or covered
pursuant to Subsection (a) above.
Section 7.04 LIMITATIONS ON LIABILITY OF THE DEPOSITOR, THE MASTER
SERVICER AND OTHERS. Subject to the obligation of the Master Servicer to
indemnify the Indemnified Persons pursuant to Section 7.03:
(a) Neither the Depositor, the Master Servicer nor any of the
directors, officers, employees or agents of the Depositor 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
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 Master Servicer and any director, officer,
employee or agent of the Depositor 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 Master Servicer, the Trustee, each
Custodian and any director, officer, employee or agent of the Depositor, the
Master Servicer, the Trustee, each 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 Custodial Agreement or the Certificates, other
than (i) in the case of the Master Servicer, (x) any such loss, liability or
expense 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 (y) any such
loss, liability or expense 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, (ii) in the case of the Trustee, 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 and (iii) in the case of either
Custodian, any such loss, liability or expense incurred by reason of such
Custodian's willful misfeasance, bad faith or negligence in the performance of
its duties under the related Custodial Agreement, or by reason of its reckless
disregard of obligations and duties thereunder.
(d) Neither the Depositor 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
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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 (expect any loss, liability or expense incurred by reason of
reckless disregard of obligations and duties hereunder) shall be expenses, costs
and liabilities of the Trust Fund, and the Master Servicer shall be entitled to
be reimbursed therefor out of the Protected Account as provided by Section 4.02.
Nothing in this Subsection 7.04(d) shall affect the Master Servicer's obligation
to service and administer the Mortgage Loans pursuant to Article III.
(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.
Section 7.05 MASTER SERVICER NOT TO RESIGN. Except as provided in
Section 7.07, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (i) with the prior consent of the Trustee
(which consents 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
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel,
addressed to and delivered to, the Trustee. No such resignation by the Master
Servicer shall become effective until 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 8.02 hereof. The Trustee shall notify the Rating Agencies of the
resignation of the Master Servicer.
Section 7.06 SUCCESSOR MASTER SERVICER. In connection with the
appointment of any successor Master Servicer or the assumption of the duties of
the Master Servicer, the Trustee may make such arrangements for the compensation
of such successor master servicer out of payments on the Mortgage Loans as 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 hereunder without the consent of all of the
Certificateholders.
Section 7.07 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; provided, however,
that: (i) the purchaser or transferee accepting such assignment and delegation
(a) shall be a Person which shall be qualified to service mortgage loans for
Xxxxxx Xxx or Xxxxxxx Mac; (b) shall have a net worth of not less than
$10,000,000 (unless 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
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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, the Trustee; and (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. 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 VIII
DEFAULT; TERMINATION OF MASTER SERVICER
Section 8.01 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 (other than any Advance), 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;
(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;
(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;
(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;
(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;
(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 7.05 or 7.07;
or
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(vii) The Master Servicer fails to deposit, or cause to be
deposited, in the Distribution Account any Advance (other than a
Nonrecoverable Advance) by 5:00 p.m. New York City time on the
Distribution Account Deposit Date.
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
in the case of any Event of Default described in clauses (i) through (vii)
above, 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
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 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 8.02 (a "Successor Master Servicer"). Such
Successor Master Servicer shall thereupon if such Successor Master Servicer is a
successor to the Master Servicer, make any Advance required by Article V,
subject, in the case of the Trustee, to Section 8.02. The Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the terminated
Master Servicer, 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 VII or Article IX. The Master Servicer
agrees to cooperate with the Trustee in effecting the termination of the Master
Servicer'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 Protected Account maintained pursuant
to Section 4.02, 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 4.02 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.
Notwithstanding the foregoing, if an Event of Default described in
clause (vii) of this Section 8.01 shall occur, the Trustee shall, by notice in
writing to the Master Servicer, which may be delivered by telecopy, immediately
terminate all of the rights and obligations of the Master Servicer thereafter
arising under this Agreement, but without prejudice to any rights it may have as
a Certificateholder or to reimbursement of Advances and other advances of its
own funds, and the Trustee shall act as provided in Section 8.02 to carry out
the duties of the Master Servicer, including the obligation to make any Advance
the nonpayment of which was an Event
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of Default described in clause (vii) of this Section 8.01. Any such action taken
by the Trustee must be prior to the distribution on the relevant Distribution
Date.
Section 8.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 8.01 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 V 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 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 indemnification 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, (iii) responsible for expenses of
the Master Servicer pursuant to Section 2.03 or (iv) 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 V 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 Xxx and Xxxxxxx Mac approved
seller/servicer in good standing, that has a net worth of at least $15,000,000,
(ii) be acceptable to the Trustee (which consent shall not be unreasonably
withheld) and (iii) be willing to act as successor servicer of any Mortgage
Loans under this Agreement, 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 8.01 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 8.02, 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 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
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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 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 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 9.05. 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 3.08.
Section 8.03 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 8.04 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.
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ARTICLE IX
CONCERNING THE TRUSTEE
Section 9.01 DUTIES OF TRUSTEE.
(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,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement as duties of the Trustee. 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 pursuant to any provision of this
Agreement, the Trustee shall examine them to determine whether they are in the
form required by this Agreement; provided, however, that the Trustee shall not
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 the Trustee shall not 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 5.04 and 10.01 herein.
(d) No provision of this Agreement shall be construed to relieve
the Trustee 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, the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall
not 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 and, in the absence of bad faith on the part of the Trustee,
the Trustee 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 the Trustee and conforming to the
requirements of this Agreement;
(ii) The Trustee shall not be liable in its individual
capacity for an error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the
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Trustee unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(iii) The Trustee shall not 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 (or such other percentage as specifically set forth
herein), 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 exercising any trust or other power conferred upon the
Trustee 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 knowledge, 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 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 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 has
been advised of the likelihood of such loss or damage and regardless of
the form of action; and
(vii) None of 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.
The Trustee shall not 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 to
perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer.
(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 9.02 CERTAIN MATTERS AFFECTING THE TRUSTEE.
(a) Except as otherwise provided in Section 10.01:
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(i) The Trustee may rely and shall be protected in acting
or refraining from acting in reliance on any resolution or certificate
of the Seller or the Master 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 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) The Trustee shall not 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 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) The Trustee shall not 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;
(v) The Trustee shall not 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 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
reasonably assured to the Trustee by the security afforded to it by the
terms of this Agreement. The Trustee 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 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 to perform any paying agent functions
under this Agreement without the express written consent of the Master
Servicer, which consents will not be unreasonably withheld. The Trustee
shall not be liable or responsible for the misconduct or negligence of
any of the Trustee's agents or
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attorneys or paying agent appointed hereunder by the Trustee with due
care and, when required, with the consent of the Master Servicer;
(vii) Should the Trustee deem the nature of any action
required on its part to be unclear, the Trustee may require prior to
such action that it be provided by the Depositor with reasonable
further instructions; the right of the Trustee to perform any
discretionary act enumerated in this Agreement shall not be construed
as a duty, and the Trustee shall not be accountable for other than its
negligence or willful misconduct in the performance of any such act;
(viii) The Trustee shall not 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 9.07; and
(ix) The Trustee shall not 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.
(b) The Trustee is hereby directed by the Depositor to execute and
deliver the Yield Maintenance Agreements. Amounts payable by the Trust on the
Closing Date pursuant to the Yield Maintenance Agreements shall be paid by the
Depositor or its designee. The Trustee in its individual capacity shall have no
responsibility for any of the undertakings, agreements or representations with
respect to the Yield Maintenance Agreements, including, without limitation, for
making any payments thereunder.
Section 9.03 TRUSTEE 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 the Trustee shall not have any
responsibility for their correctness. The Trustee makes no 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 related
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. The Trustee shall not 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,
the Trustee shall not 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. The Trustee shall not at any time have any responsibility or
liability for or with
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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. The Trustee shall not be responsible
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 9.04 TRUSTEE MAY OWN CERTIFICATES.
The Trustee in its individual capacity or in any capacity other than as
Trustee hereunder may become the owner or pledgee of any Certificates with the
same rights it would have if it were not the Trustee and may otherwise deal with
the parties hereto.
Section 9.05 TRUSTEE'S FEES AND EXPENSES.
The Trustee will be entitled to recover from the Distribution Account
pursuant to Section 4.05, the Trustee Fee, all reasonable out-of-pocket
expenses, disbursements and advances and the expenses of the Trustee in
connection with any Event of Default (or anything related thereto, including any
determination that an Event of Default does or does not exist), any breach of
this Agreement or any claim or legal action (including any pending or threatened
claim or legal action) incurred or made by the Trustee 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 hereunder. If funds in the Distribution
Account are insufficient therefor, the Trustee shall recover such expenses,
disbursements or advances from the Depositor and the Depositor hereby agrees to
pay such expenses, disbursements or advances. 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 9.06 ELIGIBILITY REQUIREMENTS FOR TRUSTEE.
The Trustee and any successor Trustee 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
$50,000,000, subject to supervision or examination by federal or state authority
and rated "BBB" or higher by Fitch with respect to their long-term rating and
rated "BBB" or higher by S&P and "Baa2" or higher by Xxxxx'x with respect to any
outstanding long-term unsecured unsubordinated debt, and, in the case of a
successor Trustee other than pursuant to Section 9.10, rated in one of the two
highest long-term debt categories by each Rating Agency (at least "AA-" in the
case of S&P) or otherwise acceptable to, each of the Rating Agencies and have a
short-term debt rating of at least "A-1" from S&P, or otherwise acceptable to,
S&P. 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 9.06 the combined capital and surplus of such
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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 shall cease to be eligible in accordance with the
provisions of this Section 9.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 9.08.
Section 9.07 INSURANCE.
The Trustee, at its 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"); provided, that
such insurance may be provided through self-insurance so long as the Trustee is
rated "A" or better by S&P and "A1" or better by Xxxxx'x. 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 as to the Trustee's compliance with this Section 9.07 shall be
furnished to any Certificateholder upon reasonable written request.
Section 9.08 RESIGNATION AND REMOVAL OF TRUSTEE.
The Trustee may at any time resign and be discharged from the Trust
hereby created by giving written notice thereof to the Depositor, the Seller 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
by written instrument, in triplicate, one copy of which instrument shall be
delivered to each of the resigning Trustee and the successor trustee. If no
successor trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee.
If at any time (i) the Trustee shall cease to be eligible in accordance
with the provisions of Section 9.06 hereof and shall fail to resign after
written request thereto by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee 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 Trust Fund is located, (B) the imposition of such tax would
be avoided by the appointment of a different trustee and (C) the Trustee fails
to indemnify the Trust Fund against such tax, then the Depositor or the Master
Servicer may remove the Trustee and appoint a successor trustee by written
instrument, in multiple copies, a copy of which instrument shall be delivered to
the Trustee, the Master Servicer and the successor trustee.
The Holders evidencing at least 51% of the Voting Rights of each Class
of Certificates may at any time remove the Trustee and appoint a successor
trustee 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 to the Master Servicer,
the Trustee so removed and the successor trustee so appointed. Notice of any
removal of the Trustee shall be given to each Rating Agency by the Trustee or
successor trustee.
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Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 9.08 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 9.09 hereof.
Section 9.09 SUCCESSOR TRUSTEE.
Any successor trustee appointed as provided in Section 9.08 hereof
shall execute, acknowledge and deliver to the Depositor, to its predecessor
trustee, the Master Servicer an instrument accepting such appointment hereunder
and thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee 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 herein.
No successor trustee shall accept appointment as provided in this
Section 9.09 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 9.07 hereof and its appointment
shall not adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 9.09, the successor trustee shall mail notice of the succession of
such trustee hereunder to all Holders of Certificates. If the successor trustee
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 9.10 MERGER OR CONSOLIDATION OF TRUSTEE.
Any corporation, state bank or national banking association into which
the Trustee 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 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, shall be the
successor of the Trustee hereunder, provided that such corporation shall be
eligible under the provisions of Section 9.06 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 9.11 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 9.11, 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
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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 9.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 9.09.
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 IX. 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 9.12 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
Trustee covenants and agrees that it shall act as agent (and the Trustee is
hereby appointed to act as agent) on behalf of the Trust Fund. The Trustee, as
agent on behalf of the Trust Fund, shall do or refrain from doing, as
applicable, the following: (a) the Trustee 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 Trustee 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
Trustee 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 Trustee 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) 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)
the Trustee shall not 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 9.12, 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 Trustee or any other appropriate Person from contesting any such tax in
appropriate proceedings and shall not prevent the Trustee from withholding
payment of
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such tax, if permitted by law, pending the outcome of such proceedings); (i) the
Trustee 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; (j) the Trustee shall, for
federal income tax purposes, maintain books and records with respect to the
REMICs on a calendar year and on an accrual basis; (k) the Trustee shall not
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 (l) as and when necessary and
appropriate, the Trustee, at the expense of the Trust Fund, 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 the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within 10 days after the Closing Date all information or data that the Trustee
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 promptly upon written request therefor, any such additional
information or data that the Trustee may, from time to time, request in order to
enable the Trustee to perform its duties as set forth herein. The Depositor
hereby indemnifies the Trustee for any losses, liabilities, damages, claims or
expenses of the Trustee arising from any errors or miscalculations of the
Trustee that result from any failure of the Depositor to provide, or to cause to
be provided, accurate information or data to the Trustee on a timely basis.
In the event that any tax is imposed on "prohibited transactions" of
any of REMIC I, REMIC II, REMIC III or REMIC IV 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 of REMIC I,
REMIC II, REMIC III or REMIC IV 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 of REMIC I,
REMIC II, REMIC III or REMIC IV, and is not paid as otherwise provided for
herein, such tax shall be paid by (i) the Trustee, if any such other tax arises
out of or results from a breach by the Trustee of any of its obligations under
this Agreement, (ii) any party hereto (other than the Trustee) 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 M-7 Certificates, second, to
the Class M-6 Certificates, third, to the
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Class M-5 Certificates, fourth, to the Class M-4 Certificates, fifth, to the
Class M-3 Certificates, sixth, to the Class M-2 Certificates, seventh, to the
Class M-1 Certificates, and eighth, to the Class A 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. The Trustee shall 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 agrees that, in the event it should obtain any information
necessary for the other party to perform its obligations pursuant to this
Section 9.12, it will promptly notify and provide such information to such other
party.
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ARTICLE X
TERMINATION
Section 10.01 TERMINATION UPON LIQUIDATION OR REPURCHASE OF ALL
MORTGAGE LOANS.
Subject to Section 10.03, the obligations and responsibilities of the
Depositor, the Master Servicer, the Seller and the Trustee created hereby with
respect to the Trust Fund shall terminate upon the earlier of (a) the purchase
by the Majority Class CE Certificateholder (or its designee) or the Master
Servicer, as applicable, 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, (iv) unreimbursed out-of pocket costs of 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, (v) any unreimbursed costs and expenses of the Trustee
payable pursuant to Section 9.05 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 by the
Majority Class CE Certificateholder 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. If the Majority Class CE Certificateholder does not
exercise this option, the Master Servicer has the right to repurchase all
Mortgage Loans and REO Properties pursuant to clause (a) in the preceding
paragraph, conditioned upon the Stated Principal Balance of all of the Mortgage
Loans in the Trust Fund, at the time of any such repurchase, aggregating 5% or
less of the aggregate Cut-off Date Principal Balance of all of the Mortgage
Loans.
Section 10.02 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 Protected Account, the Master Servicer
shall direct the Trustee to send a final distribution notice promptly to each
Certificateholder or (ii) the Trustee determines that a Class of
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Certificates shall be retired after a final distribution on such Class, the
Trustee 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 Corporate Trust Office of the Trustee. If the
Majority Class CE Certificateholder or the Master Servicer, as applicable,
elects to terminate the Trust Fund pursuant to Section 10.01, at least 20 days
prior to the date notice is to be mailed to the Certificateholders, the Majority
Class CE Certificateholder or the Master Servicer, as applicable, shall notify
the Depositor and the Trustee of the date the Majority Class CE
Certificateholder or the Master Servicer, as applicable, intends to terminate
the Trust Fund. The Master Servicer shall remit the Mortgage Loan Purchase Price
to the Trustee on the Business Day prior to the Distribution Date for such
Optional Termination by the Majority Class CE Certificateholder or the Master
Servicer, as applicable.
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 Trustee by letter to Certificateholders mailed not later than two
Business Days after the Determination Date in 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 Trustee 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 Protected 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
related Custodian shall promptly release to EMC 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 the amounts
allocable to such Certificates held in the Distribution Account in the order and
priority set forth in Section 5.04 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 Trustee 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
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cancellation, the Trustee 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.
Section 10.03 ADDITIONAL TERMINATION REQUIREMENTS.
(a) Upon exercise by the Majority Class CE Certificateholder or
the Master Servicer, as applicable, of its purchase option as provided in
Section 10.01, the Trust Fund shall be terminated in accordance with the
following additional requirements, unless the Trustee has been supplied with an
Opinion of Counsel addressed to the Trustee, at the expense of the Upon exercise
by the Majority Class CE Certificateholder or the Master Servicer, as
applicable, to the effect that the failure of the Trust Fund to comply with the
requirements of this Section 10.03 will not (i) result in the imposition of
taxes on "prohibited transactions" of a REMIC, or (ii) cause a REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding:
(1) The Majority Class CE Certificateholder or the Master
Servicer, as applicable, shall establish a 90-day liquidation period and notify
the Trustee thereof, and the Trustee shall in turn specify the first day of such
period in a statement attached to the tax return for any of REMIC I, REMIC II,
REMIC III and REMIC IV pursuant to Treasury Regulation Section 1.860F-1. The
Majority Class CE Certificateholder or the Master Servicer, as applicable, 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 the Majority Class CE Certificateholder or the Master
Servicer, as applicable;
(2) During such 90-day liquidation period, and at or prior to the
time of making the final payment on the Certificates, the Trustee shall sell all
of the assets of REMIC I, REMIC II, REMIC III and REMIC IV for cash; and
(3) At the time of the making of the final payment on the
Certificates, 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, REMIC III and REMIC IV, which authorization shall be binding upon all
successor Certificateholders.
(c) The Trustee as agent for each REMIC hereby agrees to adopt and
sign such a plan of complete liquidation upon the written request of the
Majority Class CE Certificateholder or the Master Servicer, as applicable, and
the receipt of the Opinion of Counsel referred to in Section 10.03(a)(1) and to
take such other action in connection therewith as may be reasonably requested by
the Majority Class CE Certificateholder or the Master Servicer, as applicable.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 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 Protected Account
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 any of REMIC I, REMIC II, REMIC III and REMIC IV as a REMIC under the Code or
to avoid or minimize the risk of the imposition of any tax on any of REMIC I,
REMIC II, REMIC III or REMIC IV pursuant to the Code that would be a claim
against any of REMIC I, REMIC II, REMIC III or REMIC IV 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 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 with the consent of 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 of REMIC I, REMIC II, REMIC III or REMIC IV 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.
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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, 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 of REMIC I, REMIC
II, REMIC III or REMIC IV or the Certificateholders or cause any of REMIC I,
REMIC II, REMIC III or REMIC IV 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, 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 11.02 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 11.03 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
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IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS).
Section 11.04 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 the Mortgage Loan Purchase Agreement or
this Agreement is held or deemed to create a security interest in such assets,
then (i) the Mortgage Loan Purchase Agreement and this Agreement shall each be
deemed to be a security agreement within the meaning of the Uniform Commercial
Code of the State of New York and (ii) the conveyance provided for in the
Mortgage Loan Purchase Agreement from the Seller to the Depositor, and the
conveyance provided for in this Agreement from the Depositor to the Trustee,
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 11.05 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
or the Trustee and the appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans
pursuant to Sections 2.02, 2.03, 3.18 and 10.01; and
(v) The final payment to Certificateholders.
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(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, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Chief Counsel; (ii) in the case of the
Seller or the Master Servicer, 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; (iii) 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 and (iv) 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 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 11.06 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 11.07 ASSIGNMENT.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 7.02, this Agreement may not be assigned by the
Master Servicer, the Seller or the Depositor.
Section 11.08 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
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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.
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 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 to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee 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 11.08, each and every Certificateholder or the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 11.09 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 and 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 11.09 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 9.05 hereof.
Section 11.10 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.
* * *
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IN WITNESS WHEREOF, the Depositor, the Master Servicer, the Seller 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 Master Servicer
By: /s/ Xxx Xxxxxxxx
Name: Xxx Xxxxxxxx
Title: Executive Vice President
LASALLE BANK NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Assistant Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 29th day of December, 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 TEXAS )
) ss.:
COUNTY OF DALLAS )
On this 29th day of December, 2004, before me, a notary public in and
for said State, appeared Xxx Xxxxxxxx, 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 ILLINOIS )
) ss.:
COUNTY OF XXXX )
On this 29th day of December, 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 LaSalle 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 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 AND REALIZED LOSSES ALLOCABLE HERETO.
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 Pass-Through Rate
Class [I-A-1][I-A-2][I-A-3][II-A-1][II-A-2]
Senior
Date of Pooling and Servicing Agreement Aggregate Initial Certificate
and Cut-off Date: December 1, 2004 Principal Balance of this
Certificate as of the Cut-off Date:
$[__________]
First Distribution Date: Initial Certificate Principal
January 25, 2005 Balance of this Certificate as of
the Cut-off Date:
$[__________]
Master Servicer: CUSIP: [_____]
EMC Mortgage Corporation
Last Scheduled Distribution Date:
[___________ , ___]
ASSET-BACKED CERTIFICATE
SERIES 2004-HE11
evidencing a fractional undivided interest in the distributions allocable
to the Class [I-A-1][I-A-2][I-A-3][II-A-1][II-A-2] Certificates with
respect to a Trust Fund consisting primarily of a pool of conventional,
closed-end, first and second lien, one- to four-family fixed and
adjustable 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 or the Trustee 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 or the
Trustee 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, closed-end first and second lien, fixed
and adjustable rate mortgage loans secured by one- to four- family residences
(collectively, the "Mortgage Loans") sold by Bear Xxxxxxx Asset Backed
Securities I LLC
A-1-2
("BSABS I"). The Mortgage Loans were sold by EMC Mortgage Corporation ("EMC") to
BSABS I. EMC 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 Master Servicer and LaSalle 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 from and including
the immediately preceding Distribution Date (or with respect to the First
Distribution Date, the Closing Date) to and including the day prior to the
current Distribution Date 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
Business Day immediately preceding such Distribution Date so long as such
Certificate remains in book-entry form (and otherwise, the close of business on
the last Business Day of the month immediately preceding the month of 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.
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 applicable
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.
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.
A-1-3
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 each Class 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 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 first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than a certain
percentage of the aggregate Stated Principal Balance of the Mortgage Loans as of
the Cut-off Date as set forth in the Agreement. The exercise of such right will
effect the early retirement of the Certificates. In no
A-1-4
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: _____________, ____ LASALLE BANK NATIONAL ASSOCIATION
not in its individual capacity but solely as
Trustee
By:_________________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class [I-A-1][I-A-2][I-A-3][II-A-1][II-A-2]
Certificates referred to in the within-mentioned Agreement.
LASALLE BANK NATIONAL ASSOCIATION
Authorized signatory of LaSalle 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 M-[1][2][3][4][5][6][7] Certificates
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
SENIOR CERTIFICATES [,] [AND] [CLASS M-1 CERTIFICATES] [,] [AND] [CLASS M-2
CERTIFICATES] [,] [AND] [CLASS M-3 CERTIFICATES] [,] [AND] [CLASS M-4
CERTIFICATES] [,] [AND] [CLASS M-5 CERTIFICATES] [,] [AND] [CLASS M-6
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 APPLICABLE
THERETO. 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 M-1, CLASS M-2, CLASS M-3, CLASS M-4, CLASS M-5 AND
CLASS M-6] [EACH BENEFICIAL OWNER OF A 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 2002-41 AS AMENDED ("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, FITCH RATINGS OR
XXXXX'X, 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.]
[FOR CLASS M-1, CLASS M-2, CLASS M-3, CLASS M-4, CLASS M-5 AND
CLASS M-6] [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
A-2-1
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 M-7] [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 M-7] [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
A-2-2
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 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
6.02 OF THE AGREEMENT IS PROVIDED.]
A-2-3
Certificate No.1 Variable Pass-Through Rate
Class M-[1][2][3][4][5][6][7] Subordinate
Date of Pooling and Servicing Agreement Aggregate Initial Certificate
and Cut-off Date: December 1, 2004 Principal Balance of this
Certificate as of the Cut-off Date:
$[__________]
First Distribution Date: Initial Certificate Principal
January 25, 2005 Balance of this Certificate as of
the Cut-off Date:
$[__________]
Master Servicer: CUSIP: [_____]
EMC Mortgage Corporation
Last Scheduled Distribution Date:
December 25, 2034
ASSET-BACKED CERTIFICATE
SERIES 2004-HE11
evidencing a fractional undivided interest in the distributions allocable
to the Class M-[1][2][3][4][5][6][7] Certificates with respect to a Trust
Fund consisting primarily of a pool of conventional, closed-end one- to
four-family first and second lien, fixed and adjustable 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 or the Trustee 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 or the
Trustee 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, closed-end first and second
lien, fixed and adjustable rate mortgage loans secured by one- to
A-2-4
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 I. EMC will act as master servicer
of the Mortgage Loans (in that capacity, 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 Master
Servicer and LaSalle 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 M-1, Class M-2, Class M-3, Class M-4, Class M-5 and
Class M-6] [Interest on this Certificate will accrue from and including the
immediately preceding Distribution Date (or with respect to the First
Distribution Date, the Closing Date) to and including the day prior to the
current Distribution Date 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
Business Day immediately preceding such Distribution Date so long as such
Certificate remains in book-entry form (and otherwise, the close of business on
the last Business Day of the month immediately preceding the month of 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.]
[For Class M-7] [Interest on this Certificate will accrue from
and including the immediately preceding Distribution Date (or with respect to
the First Distribution Date, the Closing Date) to and including the day prior to
the current Distribution Date 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
Business Day of the month immediately preceding the month of such Distribution
date so long as this Certificate remains in non-book entry form (and otherwise,
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.]
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
A-2-5
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.
[For Class M-7] [No transfer of this Class M-7 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 6.02 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 not 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, the Trustee shall
as a condition of the registration of any such transfer require the transferor
to furnish such other certifications, legal opinions or other information prior
to registering the transfer of this Certificate as shall be set forth in such
Opinion of Counsel.]
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.
A-2-6
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.
[For Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5 and
Class M-6] [Each beneficial owner of a 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 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, Fitch Ratings or Xxxxx'x, 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.]
[For Class M-7] [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 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 6.02 of the Agreement is provided. 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 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
A-2-7
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 first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than a certain
percentage of the aggregate Stated Principal Balance of the Mortgage Loans as of
the Cut-off Date as set forth in the Agreement. 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-2-8
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: ______________, _____ LASALLE BANK NATIONAL ASSOCIATION
not in its individual capacity but solely as
Trustee
By:_________________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class M-[1][2][3][4][5][6][7] Certificates referred to
in the within-mentioned Agreement.
LASALLE BANK NATIONAL ASSOCIATION
Authorized signatory of LaSalle 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 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.
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
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 6.02
OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE THAT THE
PURCHASE AND HOLDING OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW,
WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA") OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE TRUSTEE, MASTER
SERVICER OR THE DEPOSITOR TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE
UNDERTAKEN IN THE AGREEMENT.
A-3-2
Certificate No.1 Percentage Interest: 100%
Class P
Date of Pooling and Servicing Aggregate Initial Certificate
Agreement and Cut-off Date: December Principal Balance of this Certificate
1, 2004 as of the Cut-off Date:
$100.00
First Distribution Date: Initial Certificate Principal Balance
January 25, 2005 of this Certificate as of the Cut-off
Date:
$100.00
Master Servicer: CUSIP: [_____]
EMC Mortgage Corporation
Last Scheduled Distribution Date:
December 25, 2034
ASSET-BACKED CERTIFICATE
SERIES 2004-HE11
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, closed-end one- to four-family first
and second lien, fixed and adjustable 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 or the Trustee 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 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 primarily of a pool of fixed and adjustable
interest rate, conventional, closed-end mortgage loans that are secured by first
and second liens on one- to four-family residences (collectively, the "Mortgage
Loans") sold by Bear Xxxxxxx Asset Backed Securities I LLC ("BSABS I"). The
Mortgage Loans
A-3-3
were sold by EMC Mortgage Corporation ("EMC") to BSABS I. EMC will act as master
servicer of the Mortgage Loans (in that capacity, 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 Master
Servicer and LaSalle 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.
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.
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
A-3-4
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 D and either
Exhibit E or Exhibit F, 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 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 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.
No transfer of this Class P Certificate will be made unless
the Trustee shall have received either (i) the opinion of counsel set forth in
Section 6.02(b) of the Agreement or (ii) a representation letter under Section
6.02 of the Agreement, in the form as described by the Agreement, stating that
the transferee is not an employee benefit or other plan subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code (a
"Plan"), or any other person (including an investment manager, a named fiduciary
or a trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan.
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
A-3-5
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 first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than or equal
to a certain percentage of the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date as set forth in the Agreement. 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-3-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: ___________, ____ LASALLE 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.
LASALLE BANK NATIONAL ASSOCIATION
Authorized signatory of LaSalle 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 CE Certificates
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
SENIOR CERTIFICATES AND THE CLASS M 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").
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.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION
6.02(B) OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE MASTER
SERVICER AND THE TRUSTEE THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE IS
PERMISSIBLE
A-4-1
UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA") OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE
TRUSTEE TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE
AGREEMENT.
A-4-2
Certificate No.1 Percentage Interest: 100%
Class CE Variable Pass-Through Rate
Date of Pooling and Servicing Initial Certificate Notional Amount
Agreement and Cut-off Date: of this Certificate as of the Cut-off
December 1, 2004 Date:
$[__________]
First Distribution Date: Aggregate Certificate Notional Amount
January 25, 2005 of this Certificate as of the Cut-off
Date:
$[__________]
Master Servicer: CUSIP: [_____]
EMC Mortgage Corporation
Last Scheduled Distribution Date:
December 25, 2034
ASSET-BACKED CERTIFICATE
SERIES 2004-HE11
evidencing a fractional undivided interest in the distributions allocable
to the Class CE Certificates with respect to a Trust Fund consisting
primarily of a pool of fixed and adjustable interest rate, conventional,
closed-end mortgage loans that are secured by first and second liens on
one- to four-family residences 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 or the Trustee 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 or the
Trustee 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 primarily of a pool of fixed and adjustable interest
rate, conventional, closed-end mortgage loans that are secured by first and
second liens on 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
A-4-3
Mortgage Corporation ("EMC") to BSABS I. EMC will act as master servicer of the
Mortgage Loans (in that capacity, 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 Master Servicer and LaSalle
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.
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.
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.
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 D and either
Exhibit E or Exhibit F, 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, 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
A-4-4
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, 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.
No transfer of this Class CE Certificate will be made unless
the Trustee shall have received the opinion of counsel set forth in section
6.02(b) of the Agreement or (ii) a representation letter under Section 6.02 of
the Agreement, in the form as described by the Agreement, stating that the
transferee is not an employee benefit or other plan subject to the prohibited
transaction provisions of ERISA or Section 4975 of the Code (a "Plan"), or any
other person (including an investment manager, a named fiduciary or a trustee of
any Plan) acting, directly or indirectly, on behalf of or purchasing any
Certificate with "plan assets" of any Plan.
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, 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
A-4-5
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 first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than a certain
percentage of the aggregate Stated Principal Balance of the Mortgage Loans as of
the Cut-off Date as set forth in the Agreement. 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: ___________, ____ LASALLE BANK NATIONAL ASSOCIATION
not in its individual capacity but solely as
Trustee
By:_________________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class CE Certificates referred to in the
within-mentioned Agreement.
LASALLE BANK NATIONAL ASSOCIATION
Authorized signatory of LaSalle 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-5
Form of Class R[-1][-2][X] Certificates
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").
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION
6.02(B) OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE
THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE IS PERMISSIBLE UNDER
APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA") OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE
MASTER SERVICER OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY IN ADDITION TO
THOSE UNDERTAKEN IN THE AGREEMENT.
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 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
A-5-1
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-5-2
Certificate No.1
Class R[-1][-2][X] Percentage Interest: 100%
Date of Pooling and Servicing
Agreement and Cut-off Date: November
1, 2004
First Distribution Date:
January 25, 2005
Master Servicer: CUSIP: [_____]
EMC Mortgage Corporation
Last Scheduled Distribution Date:
December 25, 2034
ASSET-BACKED CERTIFICATE
SERIES 2004-HE11
evidencing a fractional undivided interest in the distributions allocable
to the Class R[-1][-2][X] Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional, closed-end first and
second lien one- to four-family fixed and adjustable 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 or the Trustee 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 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, closed-end first
and second lien, fixed and adjustable 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 I. EMC will act as master servicer
of the Mortgage Loans (in that capacity, the "Master Servicer," which term
includes any successors thereto under the Agreement referred
A-5-3
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
Master Servicer and LaSalle 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.
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.
No transfer of this Class R Certificate will be made unless
the Trustee shall have received either (i) the opinion of counsel set forth in
section 6.02 of the Agreement or (ii) a representation letter, in the form as
described by the Agreement, stating that the transferee is not an employee
benefit or other plan subject to the prohibited transaction provisions of ERISA
or Section 4975 of the Code (a "Plan"), or any other person (including an
investment manager, a
A-5-4
named fiduciary or a trustee of any Plan) acting, directly or indirectly, on
behalf of or purchasing any Certificate with "plan assets" of any Plan.
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, 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.
A-5-5
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 first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than or equal
to 10% of the aggregate Stated Principal Balance 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-5-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: ____________, ____ LASALLE 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[-1][-2][X] Certificates referred to in the
within-mentioned Agreement.
LASALLE BANK NATIONAL ASSOCIATION
Authorized signatory of LaSalle 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]
B-1
EXHIBIT C
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-HE11, Class R[-1][-2][X]
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.
C-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:
C-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___.
EXHIBIT D
FORM OF TRANSFEROR CERTIFICATE
______________,200___
Bear Xxxxxxx Asset Backed Securities I LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Bear Xxxxxxx Asset Backed Securities Trust 2004-HE11
Re: Bear Xxxxxxx Asset Backed Securities I LLC
Asset-Backed Certificates, Series 2004-He11, 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-HE11, Class _____ (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of December 1, 2004, among Bear Xxxxxxx Asset
Backed Securities I LLC, as depositor (the "Depositor"), EMC Mortgage
Corporation, as seller and master servicer and LaSalle 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.
D-1
Very truly yours,
__________________________________
(Seller)
By:_________________________
Name:_______________________
Title:______________________
EXHIBIT E
FORM OF INVESTMENT LETTER-NON RULE 144A
[Date]
[SELLER]
Bear Xxxxxxx Asset Backed Securities I LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Re: Bear Xxxxxxx Asset Backed Securities I Trust 2004-HE11, Asset-Backed
Certificates, Series 2004-HE11 (the "Certificates"), including the
Class __ 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) unless subsequently registered
under the Act and any applicable state securities or "Blue
Sky" laws or an exemption from the registration
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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
LaSalle 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, and/or section 4975 of the Internal
Revenue Code of 1986, as amended, or (ii) in the case of the
Privately Offered Certificates, have provided the Opinion of
Counsel required by 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
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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 M-7
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 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
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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 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
6.02 OF THE AGREEMENT IS PROVIDED.
[In the case of the Class P Certificates and Class CE
Certificates]: NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO
ANY PERSON, UNLESS THE TRANSFEREE PROVIDES EITHER A
CERTIFICATION PURSUANT TO SECTION 6.02 OF THE AGREEMENT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE THAT THE
PURCHASE AND HOLDING OF THIS CERTIFICATE IS PERMISSIBLE UNDER
APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")
OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE TRUSTEE,
MASTER SERVICER OR THE DEPOSITOR TO ANY OBLIGATION OR
LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.]
"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 December 1, 2004, among
Bear Xxxxxxx Asset Backed Securities I LLC, as depositor, EMC Mortgage
Corporation, as seller and master and LaSalle Bank National Association, as
Trustee (the "Pooling and Servicing 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.
Name of Nominee (if any):________________________
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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)
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)
EXHIBIT F
FORM OF RULE 144A AND RELATED MATTERS CERTIFICATE
[SELLER]
Bear Xxxxxxx Asset Backed Securities I LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Re: Bear Xxxxxxx Asset Backed Securities I Trust 2004-HE11, Asset-Backed
Certificates, Series 2004-HE11 (the "Certificates"), including the
Class __ 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 Act1; or
(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
-------------------
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.
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(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.
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
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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 December 1, 2004, among Bear Xxxxxxx Asset
Backed Securities I LLC, EMC Mortgage Corporation and LaSalle 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, and/or
section 4975 of the Internal Revenue Code of 1986, as amended, or (ii) in the
case of the Privately Offered Certificates, has provided the Opinion of Counsel
required by 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.
Name of Nominee (if any):_________________________
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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)
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)
EXHIBIT G
FORM OF REQUEST FOR RELEASE
To: LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
RE: Pooling and Servicing Agreement, dated as of December 1, 2004, among
Bear Xxxxxxx Asset Backed Securities I LLC, as Depositor, EMC Mortgage
Corporation, as seller and Master Servicer and Lasalle 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:_______________________________
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EXHIBIT H
DTC Letter of Representations
[provided upon request]
H-1
EXHIBIT I
Schedule of Mortgage Loans with Lost Notes
[provided upon request]
I-1
EXHIBIT J
FORM OF CUSTODIAL AGREEMENT
---------------------------
THIS CUSTODIAL AGREEMENT (as amended and supplemented from
time to time, the "Agreement"), dated as of December 29, 2004, by and among
LASALLE BANK NATIONAL ASSOCIATION, not individually but solely as trustee under
the Pooling and Servicing Agreement defined below (including its successors
under the Pooling and Servicing Agreement defined below, in that capacity the
"Trustee" [and as custodian together with any successor in interest or any
successor appointed hereunder, in that capacity, the "Custodian")], BEAR XXXXXXX
ASSET BACKED SECURITIES I LLC, as depositor (together with any successor in
interest, the "Depositor") [,][and] EMC MORTGAGE CORPORATION, as seller (in that
capacity, the "Seller") and master servicer (together with any successor in
interest or successor under the Pooling and Servicing Agreement referred to
below, the "Master Servicer") [and XXXXX FARGO BANK, NATIONAL ASSOCIATION, as
custodian (together with any successor in interest or any successor appointed
hereunder, the "Custodian")].
WITNESSETH THAT:
----------------
WHEREAS, the Depositor, the Seller, the Master Servicer and
the Trustee have entered into a Pooling and Servicing Agreement, dated as of
December 1, 2004, relating to the issuance of Bear Xxxxxxx Asset Backed
Securities I Trust 2004-HE11, Asset-Backed Certificates, Series 2004-HE11 (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 on behalf of the Certificateholders 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
Section 2.1. CUSTODIAN TO ACT AS AGENT: ACCEPTANCE OF MORTGAGE
FILES. The custodian, as the duly appointed custodial agent of the Trustee for
these purposes, acknowledges
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(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, the Master Servicer 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, for the benefit of Certificateholders, the Mortgage
Files as provided in Section 2.02 of the Pooling and Servicing Agreement and
deliver to the Seller, the Master Servicer 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
genuineness of any of the documents included in any Mortgage File or (ii) the
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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 Master 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 Protected 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 Master Servicer, 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 Master Servicer, the related Mortgage File. The Depositor
shall deliver to the Custodian and the Custodian agrees to review in accordance
with the provisions of the Custodial 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 Mortgage Insurance Policy or LPMI Policy, the Master Servicer 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 Master
Servicer 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 Master Servicer. The Master
Servicer shall cause each Mortgage File or any document therein so released to
be returned to the Custodian when the need therefore by the Master Servicer 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
Protected 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 Master Servicer has delivered to the
Custodian a certificate of a 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.
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At any time that the Master Servicer is required to deliver to
the Custodian a Request for Release, the Master Servicer shall deliver two
copies of the Request for Release if delivered in hard copy or the Master
Servicer 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 Master Servicer.
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, shall 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 custodial 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 and in the
Pooling and Servicing 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 Seller, the Depositor or the Master
Servicer or otherwise released from the possession of the Custodian.
Section 3.2. 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.
Section 3.3. 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,
J-4
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 3.4. 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 written notice of resignation, the
Trustee shall either take custody of the Mortgage Files itself and give prompt
written 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 written
notice of resignation, the resigning Custodian may petition any court of
competent jurisdiction for the appointment of a successor Custodian.
The Trustee, at the direction of 25% of the
Certificateholders, shall 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 Master Servicer 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 3.4
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. Notwithstanding anything
to the contrary set forth herein, no successor Custodian shall be appointed by
the Trustee without the prior approval of the Depositor and the Master Servicer.
Section 3.5. 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 3.6. 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 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.
Section 3.7. LIMITATION ON LIABILITY. Neither the Custodian
nor any of its directors, officers, agents or employees, shall be liable for any
action taken or omitted to be
J-5
taken by it or them hereunder or in connection herewith in good faith and
believed (which belief may be based upon the opinion or advice of counsel
selected by it in the exercise of reasonable care) by it or them to be within
the purview of this Agreement, except for its or their own negligence, lack of
good faith or willful misconduct. The Custodian and any director, officer,
employee or agent of the Custodian 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. In no event shall the Custodian or its directors,
officers, agents and employees be held liable for any special, indirect or
consequential damages resulting from any action taken or omitted to be taken by
it or them hereunder or in connection herewith even if advised of the
possibility of such damages.
Notwithstanding anything herein to the contrary, the Custodian
agrees to indemnify the Trust Fund, the Trustee and each of their respective
officers, directors and agents for any and all liabilities, obligations, losses,
damages, payments, costs or expenses of any kind whatsoever that may be imposed
on, incurred by or asserted against the Trustee or Trust Fund, due to any act or
omission by the Custodian with respect to the Mortgage Files; provided, however,
that the Custodian shall not be liable to any of the foregoing Persons for any
amount and any portion of any such amount resulting from the willful
misfeasance, bad faith or negligence of such Person. The provisions of this
Section 3.7 shall survive the termination of this Custodial Agreement.
The Custodian and its directors, officers, employees and
agents shall be entitled to indemnification and defense from the Trust Fund for
any loss, liability or expense incurred without negligence, willful misconduct,
bad faith on their part, arising out of, or in connection with, the acceptance
or administration of the custodial arrangement created hereunder, including the
costs and expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of their powers or duties
hereunder.
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 GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES
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THEREOF OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
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, 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: LASALLE BANK NATIONAL
ASSOCIATION, not individually but solely
as Trustee
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
By:_____________________________________
Attention: BSABS I 2004-HE11 Name:
Telecopy: Title:
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: Xxx Xxxxxxxx
Title: Executive Vice President
Address: [XXXXX FARGO BANK,
NATIONAL ASSOCIATION, as
[1015 Tenth Avenue Southeast Custodian][LASALLE BANK NATIONAL
Xxxxxxxxxxx, Xxxxxxxxx 00000] ASSOCIATION, as Custodian]
[2571 Xxxxx Xx., Suite 000
Xxx Xxxxx Xxxxxxx, XX 00000] By:_____________________________________
Name:
Title:
STATE OF ILLINOIS )
) ss:
COUNTY OF XXXX )
On the 29th day of December 2004 before me, a notary public in
and for said State, personally appeared __________________ , known to me to be
a(n) __________________of LaSalle Bank National Association, one of the parties
that executed the within agreement, and also known to me to be the person who
executed the within agreement on behalf of said party and acknowledged to me
that such party 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]
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the 29th day of December 2004 before me, a notary public in
and for said State, personally appeared Xxxxx Xxxxxxxxxxx, known to me to be a
Vice President of Bear Xxxxxxx Asset Backed Securities I LLC, and also known to
me to be the person who executed the within instrument on behalf of said party,
and acknowledged to me that such party 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]
STATE OF TEXAS )
) ss:
COUNTY OF DALLAS )
On the 29th day of December 2004 before me, a notary public in
and for said State, personally appeared Xxx Xxxxxxxx, known to me to be an
Executive Vice President of EMC Mortgage Corporation, one of the parties that
executed the within instrument, and also known to me to be the person who
executed the within instrument on behalf of said party, and acknowledged to me
that such party 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 [MINNESOTA] [ILLINOIS] )
) ss:
COUNTY OF [HENNEPIN] [XXXX] )
On the 29th day of December 2004 before me, a notary public in
and for said State, personally appeared ________________, known to me to be a[n]
_____________________ of [Xxxxx Fargo Bank, National Association]
[_________________] of [LaSalle Bank National Association], one of the parties
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said party, and acknowledged to me that such party
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 ONE
FORM OF CUSTODIAN INITIAL CERTIFICATION
December 29, 2004
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
EMC Mortgage Corporation
000 Xxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Bear Xxxxxxx Asset Backed Securities I LLC, Series 2004-HE11
Re: Custodial Agreement, dated as of December 29, 2004, by and among
LaSalle Bank National Association, as trustee, [LaSalle Bank
National Association, as Custodian][Xxxxx Fargo Bank, National
Association, as Custodian], Bear Xxxxxxx Asset Backed Securities I
LLC, as depositor and EMC Mortgage Corporation, as seller and master
servicer relating to Bear Xxxxxxx Asset Backed Securities I Trust
2004-HE11, Asset-Backed Certificates, Series 2004-He11
------------------------------------------------------
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.
J-1-1
[XXXXX FARGO BANK, NATIONAL
ASSOCIATION][LASALLE BANK
NATIONAL ASSOCIATION]
By:____________________________________
Name:__________________________________
Title:_________________________________
EXHIBIT TWO
FORM OF CUSTODIAN INTERIM CERTIFICATION
[DATE]
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
EMC Mortgage Corporation
000 Xxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Bear Xxxxxxx Asset Backed Securities I LLC, Series 2004-HE11
Re: Custodial Agreement, dated as of December 29, 2004, by and among
LaSalle Bank National Association, as trustee, [LaSalle Bank
National Association, as Custodian][Xxxxx Fargo Bank, National
Association, as Custodian], Bear Xxxxxxx Asset Backed Securities I
LLC, as depositor and EMC Mortgage Corporation, as seller and master
servicer relating to Bear Xxxxxxx Asset Backed Securities I Trust
2004-HE11, Asset-Backed Certificates, Series 2004-He11
-------------------------------------------------------------------
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.
J-2-1
[XXXXX FARGO BANK, NATIONAL
ASSOCIATION][LASALLE BANK NATIONAL
ASSOCIATION]
By:_______________________________
Name:_____________________________
Title:____________________________
EXHIBIT THREE
FORM OF CUSTODIAN FINAL CERTIFICATION
[DATE]
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
EMC Mortgage Corporation
000 Xxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Bear Xxxxxxx Asset Backed Securities I LLC, Series 2004-HE11
Re: Custodial Agreement, dated as of December 29, 2004, by and
among LaSalle Bank National Association, as trustee, [LaSalle
Bank National Association, as Custodian][Xxxxx Fargo Bank,
National Association, as Custodian], Bear Xxxxxxx Asset Backed
Securities I LLC, as depositor and EMC Mortgage Corporation,
as seller and master servicer relating to Bear Xxxxxxx Asset
Backed Securities I Trust 2004-HE11, Asset-Backed
Certificates, Series 2004-He11
-------------------------------------------------------------
Ladies and Gentlemen:
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][LASALLE BANK NATIONAL
ASSOCIATION]
By:________________________________
Name:______________________________
Title:_____________________________
J-3-1
SCHEDULE A
(Provided upon request)
J-3-2
EXHIBIT K
FORM OF BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE
This certificate is being delivered pursuant to Section 3.16 of the
Pooling and Servicing Agreement, dated as of December 1, 2004 (the "Agreement"),
among Bear Xxxxxxx Asset Backed Securities I LLC, as depositor (the
"Depositor"), EMC Mortgage Corporation as seller (in that capacity, the
"Seller") and master servicer (in that capacity, the "Master Servicer") and
LaSalle Bank National Association as trustee (the "Trustee"). Capitalized terms
used herein and not otherwise defined have the meanings set forth in the
Agreement.
I, [identify the certifying individual], on behalf of LaSalle Bank
National Association, as trustee (the "Trustee") certify that:
1. I have reviewed the annual report on Form 10-K for the fiscal
year [___], and all reports on Form 8-K containing distribution or servicing
reports filed in respect of periods included in the year covered by that annual
report, of the trust (the "Trust") created pursuant to the Pooling and Servicing
Agreement, dated December 1, 2004 (the "P&S Agreement"); and
2. Based on my knowledge, the distribution information in these
reports and any other information provided by the Trustee for inclusion in these
reports, 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 the statements were made, not misleading
as of the last day of the period covered by that annual report.
Date:_________________________________
[Signature]
Name:
Title:
K-1
EXHIBIT L
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
----------------------------------------
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of December 29,
2004, as amended and supplemented by any and all amendments hereto
(collectively, "THIS AGREEMENT"), by and between EMC MORTGAGE CORPORATION, a
Delaware corporation (the "MORTGAGE LOAN SELLER") and BEAR XXXXXXX ASSET BACKED
SECURITIES I LLC, a Delaware limited liability company (the "PURCHASER").
Upon the terms and subject to the conditions of this
Agreement, the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to
purchase, certain conventional, closed-end, fixed rate and adjustable rate,
first and second lien mortgage loans secured by one- to four-family residences
(collectively, the "MORTGAGE LOANS") as described herein. The Purchaser intends
to deposit the Mortgage Loans into a trust fund (the "TRUST FUND") and create
Bear Xxxxxxx Asset Backed Securities I Trust 2004-HE11, Asset-Backed
Certificates, Series 2004-HE11 (the "CERTIFICATES"), under a pooling and
servicing agreement, to be dated as of December 1, 2004 (the "POOLING AND
SERVICING AGREEMENT"), among the Purchaser, as depositor, the Mortgage Loan
Seller, as seller and master servicer (in that capacity, the "MASTER SERVICER")
and LaSalle Bank National Association, as trustee (the "TRUSTEE").
The Purchaser has filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement on Form S-3 (Number
333-113636) relating to its Mortgage Pass-Through Certificates and the offering
of certain series thereof (including certain classes of the Certificates) from
time to time in accordance with Rule 415 under the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder
(the "SECURITIES ACT"). Such registration statement, when it became effective
under the Securities Act, and the prospectus relating to the public offering of
certain classes of the Certificates by the Purchaser (the "PUBLIC OFFERING"), as
each may be amended or supplemented from time to time pursuant to the Securities
Act or otherwise, are referred to herein as the "REGISTRATION STATEMENT" and the
"Prospectus," respectively. The "PROSPECTUS SUPPLEMENT" shall mean that
supplement, dated December 22, 2004, to the Prospectus, dated April 26, 2004,
relating to certain classes of the Certificates. With respect to the Public
Offering of certain classes of the Certificates, Bear, Xxxxxxx & Co. Inc. ("BEAR
XXXXXXX"), WaMu Capital Corp. ("WCC"; and together with Bear Xxxxxxx, the
"Underwriters") and the Purchaser have entered into a terms agreement, dated as
of December 22, 2004, to an underwriting agreement, dated April 28, 2004
(together, the "UNDERWRITING AGREEMENT") among the Underwriters and the
Purchaser.
Now, therefore, in consideration of the premises and the
mutual agreements set forth herein, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. Certain terms are defined herein.
Capitalized terms used herein but not defined herein shall have the meanings
specified in the Pooling and Servicing Agreement. The following other terms are
defined as follows:
L-1
ACQUISITION PRICE: Cash in an amount equal to $ * (plus $ * in
accrued interest) and the retained certificates.
BEAR XXXXXXX: Bear, Xxxxxxx & Co. Inc.
CLOSING DATE: December 29, 2004.
CUSTODIAL AGREEMENT: Any of the LaSalle Custodial Agreement or
Xxxxx Fargo Custodial Agreement.
CUT-OFF DATE: December 1, 2004.
CUT-OFF DATE BALANCE: Shall mean $1,637,089,485.64.
DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be
replaced by a Replacement Mortgage Loan.
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.
LASALLE: LaSalle Bank National Association, or its successors
in interest.
LASALLE CUSTODIAL AGREEMENT: The custodial agreement, dated as
December 29, 2004, among the Depositor, the Seller, the Master Servicer and
LaSalle Bank National Association as Trustee and as Custodian relating to the
Mortgage Loans identified in such custodial agreement.
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.
MOODY'S: Xxxxx'x Investors Service, Inc., or its successors in
interest.
MORTGAGE: The mortgage, deed of trust or other instrument
creating a first or second lien on or first or second priority ownership
interest in an estate in fee simple in real property securing a Mortgage Note.
MORTGAGE FILE: The items referred to in EXHIBIT 1 pertaining
to a particular Mortgage Loan and any additional documents required to be added
to such documents pursuant to this Agreement.
MORTGAGE RATE: The annual rate of interest borne by a Mortgage
Note as stated herein.
MORTGAGOR: The obligor(s) on a Mortgage Note.
-----------------
* Please contact Bear Xxxxxxx for pricing information.
L-2
NET MORTGAGE RATE: As to each Mortgage Loan, and at any time, the
per annum rate equal to the Mortgage Rate less the sum of (i) the Servicing Fee
Rate, (ii) the Trustee Fee Rate and (iii) the rate at which the LPMI Fee is
calculated, if any.
OPINION OF COUNSEL: A written opinion of counsel, who may be counsel
for the Mortgage Loan Seller or the Purchaser, reasonably acceptable to the
Trustee.
PERSON: Any legal person, including any individual, corporation,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
PURCHASE PRICE: With respect to any Mortgage Loan required to be
purchased by the Mortgage Loan Seller pursuant to the applicable provisions of
this Agreement, an amount equal to the sum of (i) 100% of the principal
remaining unpaid on such Mortgage Loan as of the date of purchase (including if
a foreclosure has already occurred, the principal balance of the related
Mortgage Loan at the time the Mortgaged Property was acquired), (ii) accrued and
unpaid interest thereon at the Mortgage Interest Rate through and including the
last day of the month of purchase and (iii) any costs and damages (if any)
incurred by the Trust in connection with any violation of such Mortgage Loan of
any anti-predatory lending laws.
RATING AGENCIES: Standard & Poor's and Moody's, each a "RATING
AGENCY."
REPLACEMENT MORTGAGE LOAN: A mortgage loan substituted for a Deleted
Mortgage Loan which must meet on the date of such substitution the requirements
stated herein and in the Pooling and Servicing Agreement; upon such
substitution, such mortgage loan shall be a "Mortgage Loan" hereunder.
SECURITIES ACT: The Securities Act of 1933, as amended.
STANDARD & POOR'S: Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, Inc. or its successors in interest.
VALUE: The value of the Mortgaged Property at the time of
origination of the related Mortgage Loan, such value being the lesser of (i) the
value of such property set forth in an appraisal accepted by the applicable
originator of the Mortgage Loan or (ii) the sales price of such property at the
time of origination.
WCC: WaMu Capital Corp., or its successors in interest.
XXXXX FARGO: Xxxxx Fargo Bank, National Association, or its
successors in interest.
XXXXX FARGO CUSTODIAL AGREEMENT: The custodial agreement, dated as
December 29, 2004, among the Depositor, the Seller, the Master Servicer, the
Trustee and Xxxxx Fargo Bank, National Association as Custodian, relating to the
Mortgage Loans identified in such custodial agreement.
SECTION 2. PURCHASE AND SALE OF THE MORTGAGE LOANS AND RELATED
RIGHTS. (a) Upon satisfaction of the conditions set forth in Section 10 hereof,
the Mortgage
L-3
Loan Seller agrees to sell, and the Purchaser agrees to purchase Mortgage Loans
having an aggregate outstanding principal balance as of the Cut-off Date equal
to the Cut-off Date Balance.
(b) The closing for the purchase and sale of the Mortgage Loans and
the closing for the issuance of the Certificates will take place on the Closing
Date at the office of the Purchaser's counsel in New York, New York or such
other place as the parties shall agree.
(c) Upon the satisfaction of the conditions set forth in Section 10
hereof, on the Closing Date, the Purchaser shall pay to the Mortgage Loan Seller
the Acquisition Price for the Mortgage Loans in immediately available funds by
wire transfer to such account or accounts as shall be designated by the Mortgage
Loan Seller.
SECTION 3. MORTGAGE LOAN SCHEDULES. The Mortgage Loan Seller
agrees to provide to the Purchaser as of the date hereof a preliminary listing
of the Mortgage Loans (the "PRELIMINARY MORTGAGE LOAN SCHEDULE") setting forth
the information listed on EXHIBIT 2 to this Agreement with respect to each of
the Mortgage Loans being sold by the Mortgage Loan Seller. If there are changes
to the Preliminary Mortgage Loan Schedule, the Mortgage Loan Seller shall
provide to the Purchaser as of the Closing Date a final schedule (the "FINAL
MORTGAGE LOAN SCHEDULE") setting forth the information listed on EXHIBIT 2 to
this Agreement with respect to each of the Mortgage Loans being sold by the
Mortgage Loan Seller to the Purchaser. The Final Mortgage Loan Schedule shall be
delivered to the Purchaser on the Closing Date, shall be attached to an
amendment to this Agreement to be executed on the Closing Date by the parties
hereto and shall be in form and substance mutually agreed to by the Mortgage
Loan Seller and the Purchaser (the "AMENDMENT"). If there are no changes to the
Preliminary Mortgage Loan Schedule, the Preliminary Mortgage Loan Schedule shall
be the Final Mortgage Loan Schedule for all purposes hereof.
SECTION 4. MORTGAGE LOAN TRANSFER.
(a) The Purchaser will be entitled to all scheduled payments of
principal and interest on the Mortgage Loans due after the Cut-off Date
(regardless of when actually collected) and all payments thereof. The Mortgage
Loan Seller will be entitled to all scheduled payments of principal and interest
on the Mortgage Loans due on or before the Cut-off Date (including payments
collected after the Cut-off Date) and all payments thereof. Such principal
amounts and any interest thereon belonging to the Mortgage Loan Seller as
described above will not be included in the aggregate outstanding principal
balance of the Mortgage Loans as of the Cut-off Date as set forth on the Final
Mortgage Loan Schedule.
(b) Pursuant to various conveyancing documents to be executed on the
Closing Date and pursuant to the Pooling and Servicing Agreement, the Purchaser
will assign on the Closing Date all of its right, title and interest in and to
the Mortgage Loans to the Trustee for the benefit of the Certificateholders. In
connection with the transfer and assignment of the Mortgage Loans, the Mortgage
Loan Seller has delivered or will deliver or cause to be delivered to the
Trustee, or the related Custodian on behalf of the Trustee, by the Closing Date
or such later date as is agreed to by the Purchaser and the Mortgage Loan Seller
(each of the Closing Date and such later date is referred to as a "MORTGAGE FILE
DELIVERY DATE"), the items of each Custodian's respective Mortgage File,
PROVIDED, however, that in lieu of the foregoing, the Mortgage Loan Seller may
deliver the following documents, under the circumstances set forth
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below: (x) in lieu of the original Mortgage, assignments to the Trustee or
intervening assignments thereof which have been delivered, are being delivered
or will upon receipt of recording information relating to the Mortgage required
to be included thereon, be delivered to recording offices for recording and have
not been returned in time to permit their delivery as specified above, the
Mortgage Loan Seller may deliver a true copy thereof with a certification by the
Mortgage Loan Seller or the Master Servicer, 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 from the
Mortgage Loan Seller or the Master Servicer to such effect), the Mortgage Loan
Seller may deliver photocopies of such documents containing an 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, each identified in the list delivered by
the Purchaser to the Trustee on the Closing Date and attached hereto as EXHIBIT
5 the Mortgage Loan Seller may deliver lost note affidavits and indemnities of
the Mortgage Loan Seller; 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 Mortgage Loan Seller, in lieu of delivering the above
documents, may deliver to the Trustee a certification by the Mortgage Loan
Seller or the Master Servicer to such effect. The Mortgage Loan Seller shall
deliver such original documents (including any original documents as to which
certified copies had previously been delivered) or such certified copies to the
Trustee, or the related Custodian on behalf of the Trustee, promptly after they
are received. The Mortgage Loan Seller shall cause the Mortgage and intervening
assignments, if any, and the assignment of the Mortgage to be recorded not later
than 180 days after the Closing Date unless such assignment is not required to
be recorded under the terms set forth in Section 6(a) hereof.
(c) In connection with the assignment of any Mortgage Loan
registered on the MERS(R) System, the Mortgage Loan Seller further agrees that
it will cause, at the Mortgage Loan 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 Mortgage Loan Seller to the Purchaser and by the Purchaser
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 Mortgage Loan Seller further agrees
that it will not, and will not permit 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 the Pooling and Servicing
Agreement unless and until such Mortgage Loan is repurchased in accordance with
the terms of the Pooling and Servicing Agreement.
(d) The Mortgage Loan Seller and the Purchaser acknowledge hereunder
that all of the Mortgage Loans will ultimately be assigned to LaSalle Bank
National Association, as Trustee for the benefit of the Certificateholders, on
the date hereof.
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SECTION 5. EXAMINATION OF MORTGAGE FILES.
(a) On or before the Mortgage File Delivery Date, the Mortgage Loan
Seller will have made the Mortgage Files available to the Purchaser or its agent
for examination which may be at the offices of the Trustee or the Mortgage Loan
Seller and/or the Mortgage Loan Seller's custodian. The fact that the Purchaser
or its agent has conducted or has failed to conduct any partial or complete
examination of the Mortgage Files shall not affect the Purchaser's rights to
demand cure, repurchase, substitution or other relief as provided in this
Agreement. In furtherance of the foregoing, the Mortgage Loan Seller shall make
the Mortgage Files available to the Purchaser or its agent from time to time so
as to permit the Purchaser to confirm the Mortgage Loan Seller's compliance with
the delivery and recordation requirements of this Agreement and the Pooling and
Servicing Agreement. In addition, upon request of the Purchaser, the Mortgage
Loan Seller agrees to provide to the Purchaser, Bear Xxxxxxx and to any
investors or prospective investors in the Certificates information regarding the
Mortgage Loans and their servicing, to make the Mortgage Files available to the
Purchaser, Bear Xxxxxxx, and to such investors or prospective investors (which
may be at the offices of the Mortgage Loan Seller and/or the Mortgage Loan
Seller's custodian) and to make available personnel knowledgeable about the
Mortgage Loans for discussions with the Purchaser, Bear Xxxxxxx and such
investors or prospective investors, upon reasonable request during regular
business hours, sufficient to permit the Purchaser, Bear Xxxxxxx and such
investors or potential investors to conduct such due diligence as any such party
reasonably believes is appropriate.
(b) Pursuant to the Pooling and Servicing Agreement, on the Closing
Date the Trustee (or the related Custodian as obligated under the related
Custodial Agreement) for the benefit of the Certificateholders will review items
of the Mortgage Files as set forth on EXHIBIT 1 and will deliver to the Mortgage
Loan Seller an initial certification in the form attached as Exhibit One to the
related Custodial Agreement.
(c) Within 90 days of the Closing Date, the Trustee or the related
Custodian on its behalf shall, in accordance with the provisions of Section 2.02
of the Pooling and Servicing Agreement, deliver to the Mortgage Loan Seller and
the Trustee an Interim Certification in the form attached as Exhibit Two to the
related Custodial Agreement 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 related 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.
(d) The Trustee or the related Custodian on its behalf will review
the Mortgage Files within 180 days of the Closing Date and will deliver to the
Mortgage Loan Seller and the Master Servicer, and if reviewed by the related
Custodian, the Trustee, a final certification substantially in the form of
Exhibit Three to the related Custodial Agreement. If the Trustee or the related
Custodian on its behalf is unable to deliver a final certification with respect
to the items listed in EXHIBIT 1 due to any document that is missing, has not
been executed, is unrelated, determined on the basis of the Mortgagor name,
original principal balance and loan number, to the Mortgage Loans identified in
the Final Mortgage Loan Schedule (a "MATERIAL
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DEFECT"), the Trustee or the related Custodian on its behalf shall notify the
Mortgage Loan Seller of such Material Defect. The Mortgage Loan Seller shall
correct or cure any such Material Defect within 90 days from the date of notice
from the Trustee, the Depositor or the Master Servicer of the Material Defect
and if the Mortgage Loan Seller does not correct or cure such Material Defect
within such period and such defect materially and adversely affects the
interests of the Certificateholders in the related Mortgage Loan, the Mortgage
Loan Seller will, in accordance with the terms of the Pooling and Servicing
Agreement, within 90 days of the date of notice, provide the Trustee with a
Replacement Mortgage Loan (if within two years of the Closing Date) or purchase
the related Mortgage Loan at the applicable Purchase Price; PROVIDED, HOWEVER,
that if such defect relates solely to the inability of the Mortgage Loan Seller
to deliver the original security instrument or intervening assignments thereof,
or a certified copy because the originals of such documents, or a certified
copy, have not been returned by the applicable jurisdiction, the Mortgage Loan
Seller shall not be required to purchase such Mortgage Loan if the Mortgage Loan
Seller delivers such original documents or certified copy promptly upon receipt,
but in no event later than 360 days after the Closing Date. The foregoing
repurchase obligation shall not apply in the event that the Mortgage Loan Seller
cannot deliver such original or copy of any document submitted for recording to
the appropriate recording office in the applicable jurisdiction because such
document has not been returned by such office; provided that the Mortgage Loan
Seller shall instead deliver a recording receipt of such recording office or, if
such receipt is not available, a certificate of Mortgage Loan Seller or a
Servicing Officer confirming that such documents have been accepted for
recording, and delivery to the Trustee shall be effected by the Mortgage Loan
Seller within thirty days of its receipt of the original recorded document.
(e) At the time of any substitution, the Mortgage Loan Seller shall
deliver or cause to be delivered the Replacement Mortgage Loan, the related
Mortgage File and any other documents and payments required to be delivered in
connection with a substitution pursuant to the Pooling and Servicing Agreement.
At the time of any purchase or substitution, the Trustee shall (i) assign the
selected Mortgage Loan to the Mortgage Loan Seller and shall release or cause
the related Custodian to release the documents (including, but not limited to,
the Mortgage, Mortgage Note and other contents of the Mortgage File) in the
possession of the Trustee or the related Custodian, as applicable relating to
the Deleted Mortgage Loan and (ii) execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall be necessary to
vest in the Mortgage Loan Seller title to such Deleted Mortgage Loan.
SECTION 6. RECORDATION OF ASSIGNMENTS OF MORTGAGE.
(a) The Mortgage Loan Seller will, promptly after the Closing Date,
cause each Mortgage and each assignment of Mortgage from the Mortgage Loan
Seller to the Trustee, and all unrecorded intervening assignments, if any,
delivered on or prior to the Closing Date, to be recorded in all recording
offices in the jurisdictions where the related Mortgaged Properties are located;
PROVIDED, HOWEVER, the Mortgage Loan Seller need not cause to be recorded any
assignment which relates to a Mortgage Loan that is a MOM Loan or for which the
related Mortgaged Property is located in any jurisdiction under the laws of
which, as evidenced by an Opinion of Counsel delivered by the Mortgage Loan
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; PROVIDED, HOWEVER, notwithstanding the delivery of any Opinion of
Counsel, each assignment of Mortgage shall be submitted for recording by the
Mortgage Loan
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Seller in the manner described above, at no expense to the Trust Fund or
Trustee, upon the earliest to occur of (i) reasonable direction by the Holders
of Certificates evidencing Percentage Interests aggregating not less than 25% of
the Trust, (ii) the occurrence of an Event of Default, (iii) the occurrence of a
bankruptcy, insolvency or foreclosure relating to the Mortgage Loan Seller under
the Pooling and Servicing Agreement, (iv) the occurrence of a servicing transfer
or an assignment of the servicing as described in Section 7.07 of the Pooling
and Servicing Agreement or (iv) with respect to any one assignment of Mortgage,
the occurrence of a bankruptcy, insolvency or foreclosure relating to the
Mortgagor under the related Mortgage.
While each such Mortgage or assignment is being recorded, if
necessary, the Mortgage Loan Seller shall leave or cause to be left with the
Trustee or the related Custodian on its behalf a certified copy of such Mortgage
or assignment. In the event that, within 180 days of the Closing Date, the
Trustee has not been provided with an Opinion of Counsel as described above or
received evidence of recording with respect to each Mortgage Loan delivered to
the Purchaser pursuant to the terms hereof or as set forth above and the related
Mortgage Loan is not a MOM Loan, the failure to provide evidence of recording or
such Opinion of Counsel shall be considered a Material Defect, and the
provisions of Section 5(c) and (d) shall apply. All customary recording fees and
reasonable expenses relating to the recordation of the assignments of mortgage
to the Trustee or the Opinion of Counsel, as the case may be, shall be borne by
the Mortgage Loan Seller.
(b) It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Mortgage Loan Seller to the Purchaser,
as contemplated by this Agreement be, and be treated as, a sale. It is, further,
not the intention of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Mortgage Loan Seller to the Purchaser to secure a debt or
other obligation of the Mortgage Loan Seller. However, in the event that,
notwithstanding the intent of the parties, the Mortgage Loans are held by a
court to continue to be property of the Mortgage Loan Seller, then (a) this
Agreement shall also be deemed to be a security agreement within the meaning of
Articles 8 and 9 of the applicable Uniform Commercial Code; (b) the transfer of
the Mortgage Loans provided for herein shall be deemed to be a grant by the
Mortgage Loan Seller to the Purchaser of a security interest in all of the
Mortgage Loan Seller's right, title and interest in and to the Mortgage Loans
and all amounts payable to the holders of the Mortgage Loans in accordance with
the terms thereof and all proceeds of the conversion, voluntary or involuntary,
of the foregoing into cash, instruments, securities or other property, to the
extent the Purchaser would otherwise be entitled to own such Mortgage Loans and
proceeds pursuant to Section 4 hereof, including all amounts, other than
investment earnings, from time to time held or invested in any accounts created
pursuant to the Pooling and Servicing Agreement, whether in the form of cash,
instruments, securities or other property; (c) the possession by the Purchaser
or the Trustee (or the related Custodian on its behalf) of Mortgage Notes and
such other items of property as constitute instruments, money, negotiable
documents or chattel paper shall be deemed to be "possession by the secured
party" for purposes of perfecting the security interest pursuant to Section
9-305 (or comparable provision) of the applicable Uniform Commercial Code; and
(d) notifications to persons holding such property, and acknowledgments,
receipts or confirmations from persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Purchaser for the
purpose of perfecting such security interest under applicable law. Any
assignment of the interest of the Purchaser pursuant to any provision hereof or
pursuant to the Pooling and Servicing Agreement
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shall also be deemed to be an assignment of any security interest created
hereby. The Mortgage Loan Seller and the Purchaser shall, to the extent
consistent with this Agreement, take such actions as may be reasonably necessary
to ensure that, if this Agreement were deemed to create a security interest in
the Mortgage Loans, 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 Pooling and Servicing Agreement.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF MORTGAGE LOAN
SELLER CONCERNING THE MORTGAGE LOANS. The Mortgage Loan Seller hereby represents
and warrants to the Purchaser as of the Closing Date or such other date as may
be specified below with respect to each Mortgage Loan being sold by it:
(a) The information set forth in the Mortgage Loan Schedule on the
Closing Date is complete, true and correct.
(b) All payments required to be made prior to the Cut-off Date with
respect to each Mortgage Loan have been made and no Mortgage Loan is delinquent
thirty one or more days; and the Mortgage Loan Seller has not advanced funds, or
induced, solicited or knowingly received any advance of funds from a party other
than the owner of the Mortgaged Property subject to the Mortgage, directly or
indirectly, for the payment of any amount required under any Mortgage Loan.
(c) If any of the Mortgage Loans are secured by a leasehold
interest, with respect to each leasehold interest: the use of leasehold estates
for residential properties is an accepted practice in the area where the related
Mortgaged Property is located; residential property in such area consisting of
leasehold estates is readily marketable; the lease is recorded and no party is
in any way in breach of any provision of such lease; the leasehold is in full
force and effect and is not subject to any prior lien or encumbrance by which
the leasehold could be terminated or subject to any charge or penalty; and the
remaining term of the lease does not terminate less than ten years after the
maturity date of such Mortgage Loan.
(d) Except with respect to taxes, insurance and other amounts
previously advanced by a prior servicer with respect to any Mortgage Loan, there
are no delinquent taxes, water charges, sewer rents, assessments, insurance
premiums, leasehold payments, including assessments payable in future
installments, or other outstanding charges affecting the related Mortgaged
Property.
(e) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments which in the case of the Mortgage Loans are in the Mortgage File and
have been or will be recorded, if necessary to protect the interests of the
Trustee, and which have been or will be delivered to the Trustee, all in
accordance with this Agreement. The substance of any such waiver, alteration or
modification has been approved by the title insurer, to the extent required by
the related policy. No Mortgagor has been released, in whole or in part, except
in connection with an assumption agreement approved by the title insurer, to the
extent required by the policy, and which assumption agreement in the case of the
Mortgage Loans is part of the Mortgage File.
(f) The Mortgage Note and the Mortgage are not subject to any right
of rescission, set-off, counterclaim or defense, including the defense of usury,
nor will the operation
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of any of the terms of the Mortgage Note and the Mortgage, or the exercise of
any right thereunder, render the Mortgage unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense, including
the defense of usury and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto.
(g) All buildings upon, or comprising part of, the Mortgaged
Property are insured by an insurer acceptable to Xxxxxx Xxx and Xxxxxxx Mac
against loss by fire, hazards of extended coverage and such other hazards as are
customary in the area where the Mortgaged Property is located, and such insurer
is licensed to do business in the state where the Mortgaged Property is located.
All such insurance policies contain a standard mortgagee clause naming the
originator, its successors and assigns as mortgagee and Mortgage Loan Seller has
received no notice that all premiums thereon have not been paid. If upon
origination of the Mortgage Loan, the Mortgaged Property was, or was
subsequently deemed to be, in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available), which require under applicable law
that a flood insurance policy meeting the requirements of the current guidelines
of the Federal Insurance Administration (or any successor thereto) be obtained,
such flood insurance policy is in effect which policy is with a generally
acceptable carrier in an amount representing coverage not less than the least of
(A) the Stated Principal Balance of the related Mortgage Loan, (B) the minimum
amount required to compensate for damage or loss on a replacement cost basis, or
(C) the maximum amount of insurance that is available under the Flood Disaster
Protection Act of 1973. The Mortgage obligates the Mortgagor thereunder to
maintain all such insurance at Mortgagor's cost and expense and, on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to maintain
such insurance at Mortgagor's cost and expense and to obtain reimbursement
therefor from the Mortgagor.
(h) Each loan at the time it was made complied in all material
respects with applicable local, state, and federal laws, including, but not
limited to, all applicable anti-predatory laws.
(i) The Mortgage has not been satisfied, canceled, subordinated, or
rescinded, in whole or in part, and the Mortgaged Property has not been released
from the lien of the Mortgage, in whole or in part, nor has any instrument been
executed that would effect any such release, cancellation, subordination or
rescission.
(j) The Mortgage is a valid, existing and enforceable first or
second lien on the Mortgaged Property, including all improvements on the
Mortgaged Property, if any, subject only to (1) the lien of current real
property taxes and assessments not yet due and payable, (2) covenants,
conditions and restrictions, rights of way, easements and other matters of the
public record as of the date of recording being acceptable to mortgage lending
institutions generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan and which do
not adversely affect the Appraised Value of the Mortgaged Property and (3) other
matters to which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by the
Mortgage. The Mortgage Loan Seller has full right to sell and assign the
Mortgage to the Purchaser.
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(k) The Mortgage Note and the related Mortgage are genuine and each
is the legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency or reorganization or general principles of equity.
(l) All parties to the Mortgage Note and the Mortgage had the legal
capacity to enter into the Mortgage Loan transaction and to execute and deliver
the Mortgage Note and the Mortgage, and the Mortgage Note and the Mortgage have
been duly and properly executed by such parties.
(m) The proceeds of the Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder and any and all
requirements as to completion of any on-site or off-site improvement and as to
disbursements of any escrow funds therefor have been complied with. All costs,
fees and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage were paid, and the Mortgagor is not entitled to any
refund of any amounts paid or due under the Mortgage Note or Mortgage.
(n) Immediately prior to the conveyance of the Mortgage Loans by the
Mortgage Loan Seller to the Purchaser hereunder, the Mortgage Loan Seller was
the sole owner and holder of the Mortgage Loan; the related Originator or the
Mortgage Loan Seller was the custodian of the related escrow account, if
applicable; the Mortgage Loan had neither been assigned nor pledged, and the
Mortgage Loan Seller had good and marketable title thereto, and had full right
to transfer and sell the Mortgage Loan and the related servicing rights to the
Purchaser free and clear of any encumbrance, equity, lien, pledge, charge, claim
or security interest subject to the applicable servicing agreement and had full
right and authority subject to no interest or participation of, or agreement
with, any other party, to sell and assign the Mortgage Loan and the related
servicing rights, subject to the applicable servicing agreement, to the
Purchaser pursuant to the terms of this Agreement.
(o) All parties which have had any interest in the Mortgage, whether
as mortgagee, assignee, pledgee or otherwise, are (or, during the period in
which they held and disposed of such interest, were) (1) in compliance with any
and all applicable licensing requirements of the laws of the state wherein the
Mortgaged Property is located, and (2) organized under the laws of such state,
qualified to do business in such state, a federal savings and loan association
or national bank having principal offices in such state or not deemed to be
doing business in such state under applicable law.
(p) The Mortgage Loan is covered by an ALTA lender's title insurance
policy or equivalent form acceptable to the Department of Housing and Urban
Development, or any successor thereto, and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring (subject to the
exceptions contained in clause (i) above) the Mortgage Loan Seller (as
assignee), its successors and assigns as to the first priority lien of the
Mortgage in the original principal amount of the Mortgage Loan. Additionally,
such lender's title insurance policy affirmatively insures ingress and egress,
and against encroachments by or upon the Mortgaged Property or any interest
therein. With respect to each Mortgage Loan, the Mortgage Loan Seller (as
assignee) is the sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect. No claims have been
made under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the
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Mortgage Loan Seller, has done, by act or omission, anything which would impair
the coverage of such lender's title insurance policy.
(q) Except as provided in clause (b), immediately prior to the
Cut-off Date, there was no default, breach, violation or event of acceleration
existing under the Mortgage or the Mortgage Note and there was no event which,
with the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of acceleration,
and the Mortgage Loan Seller has not waived any default, breach, violation or
event of acceleration.
(r) There are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are outstanding that under
law could give rise to such lien) affecting the related Mortgaged Property which
are or may be liens prior to or equal with, the lien of the related Mortgage.
(s) At the time of origination, each Mortgaged Property was the
subject of an appraisal which conformed to the underwriting requirements of the
originator of the Mortgage Loan and, the appraisal is in a form acceptable to
Xxxxxx Xxx or FHLMC.
(t) The origination, servicing and collection practices with respect
to each Mortgage Note and Mortgage including, the establishment, maintenance and
servicing of the escrow accounts and escrow payments, if any, since origination,
have been conducted in all respects in accordance with the terms of Mortgage
Note and in compliance with all applicable laws and regulations and, unless
otherwise required by law or Xxxxxx Mae/Xxxxxxx Mac standards, in accordance
with the proper, prudent and customary practices in the mortgage origination and
servicing business. With respect to the escrow accounts and escrow payments, if
any, and a Mortgage Loan all such payments are in the possession or under the
control of the Mortgage Loan Seller (including pursuant to a Subservicing
Agreement) and there exists no deficiencies in connection therewith for which
customary arrangements for repayment thereof have not been made. Any interest
required to be paid pursuant to state and local law has been properly paid and
credited.
(u) The Mortgaged Property is free of material damage and waste and
there is no proceeding pending for the total or partial condemnation thereof.
(v) The Mortgage contains customary and enforceable provisions to
render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security
intended to be provided thereby, including, (1) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (2) otherwise by judicial
foreclosure. There is no other exemption available to the Mortgagor which would
interfere with the right to sell the Mortgaged Property at a trustee's sale or
the right to foreclose the Mortgage. The Mortgagor has not notified the Mortgage
Loan Seller and the Mortgage Loan Seller has no knowledge of any relief
requested or allowed to the Mortgagor under the Servicemembers Civil Relief Act.
(w) The Mortgage Note is not and has not been secured by any
collateral except the lien of the applicable Mortgage.
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(x) In the event the Mortgage constitutes a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the Certificateholders to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor.
(y) No Mortgage Loan contains a permanent or temporary "buydown"
provision. The Mortgage Loan is not a graduated payment mortgage loan.
(z) The Mortgagor has received all disclosure materials required by
applicable law with respect to the making of the Mortgage Loan.
(aa) No Mortgage Loan was made in connection with the construction
or rehabilitation of a Mortgaged Property.
(bb) To the best of Mortgage Loan Seller's knowledge, the Mortgaged
Property is lawfully occupied under applicable law and all inspections, licenses
and certificates required to be made or issued with respect to all occupied
portions of the Mortgaged Property and, with respect to the use and occupancy of
the same, including but not limited to certificates of occupancy, have been made
or obtained from the appropriate authorities.
(cc) The assignment of Mortgage with respect to a Mortgage Loan is
in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located.
(dd) The Mortgaged Property consists of a single parcel of real
property with or without a detached single family residence erected thereon, or
an individual condominium unit, or a 2-4 family dwelling, or an individual unit
in a planned unit development as defined by Xxxxxx Mae or a townhouse, each
structure of which is permanently affixed to the Mortgaged Property, and is
legally classified as real estate.
(ee) Each Mortgage Loan at the time of origination was underwritten
in general in accordance with guidelines not inconsistent with the guidelines
set forth in the Prospectus Supplement and generally accepted credit
underwriting guidelines.
(ff) No error, omission, misrepresentation, fraud or similar
occurrence with respect to a Mortgage Loan has taken place on the part of the
Mortgage Loan Seller or the related Originator.
(gg) None of the Mortgage Loans are (a) loans subject to 12 CFR Part
226.31, 12 CFR Part 226.32 or 12 CFR Part 226.34 of Regulation Z, the regulation
implementing TILA, which implements the Home Ownership and Equity Protection Act
of 1994 ("HOEPA") or (b) classified and/or defined as a "high cost home loan"
(or a similarly classified loan using different terminology under a law imposing
heightened regulatory scrutiny or additional legal liability for residential
mortgage loans having high interest rates, points and/or fees) under any
federal, state, or local law, including, but not limited to, the States of
Georgia or North Carolina.
(hh) None of the Mortgage Loans originated on or after October 1,
2002 and before March 7, 2003 was secured by property located in the State of
Georgia.
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(ii) None of the Mortgage Loans that are secured by property located
in the State of Illinois are in violation of the provisions of the Illinois
Interest Act.
(jj) None of the Mortgage Loans contains provisions pursuant to
which monthly payments are (a) paid or partially paid with funds deposited in
any separate account established by the Mortgage Loan Seller, the mortgagor, or
anyone on behalf of the mortgagor, (b) paid by any source other than the
mortgagor or (c) contains any other similar provisions which may constitute a
"buydown" provision. None of the Mortgage Loans is a graduated payment mortgage
loan and no Mortgage Loan has a shared appreciation or other contingent interest
feature;
(kk) Each Mortgage Loan that contains a provision for the assumption
substitution of liability, pursuant to which the original mortgagor is released
from liability and another person is substituted as the mortgagor and becomes
liable under the Mortgage Note, shall be effective only if such person satisfies
the then current underwriting practices and procedures of prudent mortgage
lenders in a state in which the mortgaged property is located.
(ll) The Mortgaged Property and all improvements thereon comply with
all requirements of any applicable zoning and subdivision laws and ordinances.
(mm) Each Mortgage is a valid and enforceable first or second lien,
as applicable on the property securing the related Mortgage Note and each
Mortgaged Property is owned by the Mortgagor in fee simple (except with respect
to common areas in the case of condominiums, PUDs and de minimis PUDs) or by
leasehold for a term longer than the term of the related Mortgage, subject only
to (i) the lien of current real property taxes and assessments, (ii) covenants,
conditions and restrictions, rights of way, easements and other matters of
public record as of the date of recording of such Mortgage, such exceptions
being acceptable to mortgage lending institutions generally or specifically
reflected in the appraisal obtained in connection with the origination of the
related Mortgage Loan or referred to in the lender's title insurance policy
delivered to the originator of the related Mortgage Loan and (iii) other matters
to which like properties are commonly subject which do not materially interfere
with the benefits of the security intended to be provided by such Mortgage
Appraisal Form 1004 or Form 2055 with an interior inspection for first lien
Mortgage Loans has been obtained. Form 704, 2065 or 2055 with an exterior only
inspection for junior lien Mortgage Loans has been obtained.
(nn) With respect to any mortgage loans in Loan Group II originated
on or after August 1, 2004, neither the related mortgage nor the related
mortgage note requires the borrower to submit to arbitration to resolve any
dispute arising out of or relating in any way to the mortgage loan transaction;
(oo) None of the Group II Loans originated before October 1, 2002
imposes a Prepayment Charge for a term exceeding five years; none of the Group
II Loans originated on or after October 1, 2002 imposes a Prepayment Charge for
a term exceeding three years.
(pp) No proceeds from any Group II Loan were used to finance
single-premium credit insurance policies.
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(qq) The conforming one- to four-family mortgage loans in Loan Group
II, which may include the balance of any subordinated lien, each have an
original principal balance that does not exceed Xxxxxxx Mac's dollar amount
limits.
(rr) Each Prepayment Charge is enforceable and was originated in
compliance with all applicable federal, state and local laws.
(ss) With respect to any Mortgage Loan that contains a provision
permitting imposition of a premium upon a prepayment prior to maturity, the
prepayment premium is disclosed to the borrower in the loan documents pursuant
to applicable state and federal law.
(tt) No Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable (as such terms are defined in Appendix E of the Standard & Poor's
Glossary For File Format For LEVELS(R) Version 5.6 Revised attached hereto as
EXHIBIT 6).
It is understood and agreed that the representations and warranties
set forth in this Section 7 will inure to the benefit of the Purchaser, its
successors and assigns, notwithstanding any restrictive or qualified endorsement
on any Mortgage Note or assignment of Mortgage or the examination of any
Mortgage File. Upon any substitution for a Mortgage Loan, the representations
and warranties set forth above shall be deemed to be made by the Mortgage Loan
Seller as to any Replacement Mortgage Loan as of the date of substitution.
Upon discovery or receipt of notice by the Mortgage Loan Seller, the
Purchaser or the Trustee of a breach of any representation or warranty of the
Mortgage Loan Seller set forth in this Section 7 which materially and adversely
affects the value of the interests of the Purchaser, the Certificateholders or
the Trustee in any of the Mortgage Loans delivered to the Purchaser pursuant to
this Agreement, the party discovering or receiving notice of such breach shall
give prompt written notice to the others. It is understood and agreed that a
breach of any one of the representations contained in clauses (gg), (hh) and
(nn) through (qq) above in respect of a Group II Loan will be deemed to
materially adversely affect the interests of the related Certificateholders. In
the case of any such breach of a representation or warranty set forth in this
Section 7, within 90 days from the date of discovery by the Mortgage Loan
Seller, or the date the Mortgage Loan Seller is notified by the party
discovering or receiving notice of such breach (whichever occurs earlier), the
Mortgage Loan Seller will (i) cure such breach in all material respects, (ii)
purchase the affected Mortgage Loan at the applicable Purchase Price or (iii) if
within two years of the Closing Date, substitute a qualifying Replacement
Mortgage Loan in exchange for such Mortgage Loan; provided that, (A) in the case
of a breach of the representation and warranty concerning the Mortgage Loan
Schedule contained in clause (a) of this Section 7, if such breach is material
and relates to any field on the Mortgage Loan Schedule which identifies any
Prepayment Charge or (B) in the case of a breach of the representation contained
in clause (rr) of this Section 7, then, in each case, in lieu of purchasing such
Mortgage Loan from the Trust Fund at the Purchase Price, the Mortgage Loan
Seller shall pay the amount of the Prepayment Charge (net of any amount
previously collected by or paid to the Trust Fund in respect of such Prepayment
Charge) from its own funds and without reimbursement therefor, and the Mortgage
Loan Seller shall have no obligation to repurchase or substitute for such
Mortgage Loan. The obligations of the Mortgage Loan Seller to cure, purchase or
substitute a qualifying Replacement Mortgage Loan shall constitute the
Purchaser's, the Trustee's and the Certificateholder's sole and exclusive remedy
under this Agreement or otherwise respecting a
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breach of representations or warranties hereunder with respect to the Mortgage
Loans, except for the obligation of the Mortgage Loan Seller to indemnify the
Purchaser for such breach as set forth in and limited by Section 13 hereof.
Any cause of action against the Mortgage Loan Seller or relating to
or arising out of a breach by the Mortgage Loan Seller of any representations
and warranties made in this Section 7 shall accrue as to any Mortgage Loan upon
(i) discovery of such breach by the Mortgage Loan Seller or notice thereof by
the party discovering such breach and (ii) failure by the Mortgage Loan Seller
to cure such breach, purchase such Mortgage Loan or substitute a qualifying
Replacement Mortgage Loan pursuant to the terms hereof.
SECTION 8. REPRESENTATIONS AND WARRANTIES CONCERNING THE
MORTGAGE LOAN SELLER. As of the date hereof and as of the Closing Date, the
Mortgage Loan Seller represents and warrants to the Purchaser as to itself in
the capacity indicated as follows:
(a) the Mortgage Loan Seller (i) is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and (ii) is qualified and in good standing to do business in each jurisdiction
where such qualification is necessary, except where the failure so to qualify
would not reasonably be expected to have a material adverse effect on the
Mortgage Loan Seller's business as presently conducted or on the Mortgage Loan
Seller's ability to enter into this Agreement and to consummate the transactions
contemplated hereby;
(b) the Mortgage Loan Seller has full power to own its property, to
carry on its business as presently conducted and to enter into and perform its
obligations under this Agreement;
(c) the execution and delivery by the Mortgage Loan Seller of this
Agreement has been duly authorized by all necessary action on the part of the
Mortgage Loan Seller; and neither the execution and delivery of this Agreement,
nor the consummation of the transactions herein contemplated, nor compliance
with the provisions hereof or thereof, will conflict with or result in a breach
of, or constitute a default under, any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on the Mortgage
Loan Seller or its properties or the charter or by-laws of the Mortgage Loan
Seller, except those conflicts, breaches or defaults which would not reasonably
be expected to have a material adverse effect on the Mortgage Loan Seller's
ability to enter into this Agreement and to consummate the transactions
contemplated hereby;
(d) the execution, delivery and performance by the Mortgage Loan
Seller of this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any state,
federal or other governmental authority or agency, except those consents,
approvals, notices, registrations or other actions as have already been
obtained, given or made and, in connection with the recordation of the
Mortgages, powers of attorney or assignments of Mortgages not yet completed;
(e) this Agreement has been duly executed and delivered by the
Mortgage Loan Seller and, assuming due authorization, execution and delivery by
the Purchaser or the parties thereto, constitutes a valid and binding obligation
of the Mortgage Loan Seller
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enforceable against it in accordance with its terms (subject to applicable
bankruptcy and insolvency laws and other similar laws affecting the enforcement
of the rights of creditors generally);
(f) there are no actions, suits or proceedings pending or, to the
knowledge of the Mortgage Loan Seller, threatened against the Mortgage Loan
Seller, before or by any court, administrative agency, arbitrator or
governmental body (i) with respect to any of the transactions contemplated by
this Agreement or (ii) with respect to any other matter which in the judgment of
the Mortgage Loan Seller could reasonably be expected to be determined adversely
to the Mortgage Loan Seller and if determined adversely to the Mortgage Loan
Seller materially and adversely affect the Mortgage Loan Seller's ability to
perform its obligations under this Agreement; and the Mortgage Loan Seller is
not in default with respect to any order of any court, administrative agency,
arbitrator or governmental body so as to materially and adversely affect the
transactions contemplated by this Agreement; and
(g) the Mortgage Loan Seller's Information (as defined in Section
13(a) hereof) does not include any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements made, in
light of the circumstances under which they were made, not misleading.
SECTION 9. REPRESENTATIONS AND WARRANTIES CONCERNING THE
PURCHASER. As of the date hereof and as of the Closing Date, the Purchaser
represents and warrants to the Mortgage Loan Seller as follows:
(a) the Purchaser (i) is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware
and (ii) is qualified and in good standing to do business in each jurisdiction
where such qualification is necessary, except where the failure so to qualify
would not reasonably be expected to have a material adverse effect on the
Purchaser's business as presently conducted or on the Purchaser's ability to
enter into this Agreement and to consummate the transactions contemplated
hereby;
(b) the Purchaser has full power to own its property, to carry on
its business as presently conducted and to enter into and perform its
obligations under this Agreement;
(c) the execution and delivery by the Purchaser of this Agreement
has been duly authorized by all necessary action on the part of the Purchaser;
and neither the execution and delivery of this Agreement, nor the consummation
of the transactions herein contemplated, nor compliance with the provisions
hereof or thereof, will conflict with or result in a breach of, or constitute a
default under, any of the provisions of any law, governmental rule, regulation,
judgment, decree or order binding on the Purchaser or its properties or the
certificate of formation or limited liability company agreement of the
Purchaser, except those conflicts, breaches or defaults which would not
reasonably be expected to have a material adverse effect on the Purchaser's
ability to enter into this Agreement and to consummate the transactions
contemplated hereby;
(d) the execution, delivery and performance by the Purchaser of this
Agreement and the consummation of the transactions contemplated hereby do not
require the consent or approval of, the giving of notice to, the registration
with, or the taking of any other action in respect of, any state, federal or
other governmental authority or agency, except those
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consents, approvals, notices, registrations or other actions as have already
been obtained, given or made;
(e) this Agreement has been duly executed and delivered by the
Purchaser and, assuming due authorization, execution and delivery by the
Mortgage Loan Seller, constitutes a valid and binding obligation of the
Purchaser enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally);
(f) there are no actions, suits or proceedings pending or, to the
knowledge of the Purchaser, threatened against the Purchaser, before or by any
court, administrative agency, arbitrator or governmental body (i) with respect
to any of the transactions contemplated by this Agreement or (ii) with respect
to any other matter which in the judgment of the Purchaser could reasonably be
expected to be determined adversely to the Purchaser and if determined adversely
to the Purchaser materially and adversely affect the Purchaser's ability to
perform its obligations under this Agreement; and the Purchaser is not in
default with respect to any order of any court, administrative agency,
arbitrator or governmental body so as to materially and adversely affect the
transactions contemplated by this Agreement; and
(g) the Purchaser's Information (as defined in Section 13(b) hereof)
does not include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.
SECTION 10. CONDITIONS TO CLOSING.
(a) The obligations of the Purchaser under this Agreement will be
subject to the satisfaction, on or prior to the Closing Date, of the following
conditions:
(1) Each of the obligations of the Mortgage Loan Seller
required to be performed at or prior to the Closing Date pursuant to the terms
of this Agreement shall have been duly performed and complied with in all
material respects; all of the representations and warranties of the Mortgage
Loan Seller under this Agreement shall be true and correct as of the date or
dates specified in all material respects; and no event shall have occurred
which, with notice or the passage of time, would constitute a default under this
Agreement or the Pooling and Servicing Agreement; and the Purchaser shall have
received certificates to that effect signed by authorized officers of the
Mortgage Loan Seller.
(2) The Purchaser shall have received all of the following
closing documents, in such forms as are agreed upon and reasonably acceptable to
the Purchaser, duly executed by all signatories other than the Purchaser as
required pursuant to the respective terms thereof:
(i) If required pursuant to Section 3 hereof, the
Amendment dated as of the Closing Date and any documents referred to
therein;
(ii) If required pursuant to Section 3 hereof, the Final
Mortgage Loan Schedule containing the information set forth on EXHIBIT 2
hereto, one copy to be attached to each counterpart of the Amendment;
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(iii) The Pooling and Servicing Agreement, in form and
substance reasonably satisfactory to the Trustee and the Purchaser, and
all documents required thereby duly executed by all signatories;
(iv) A certificate of an officer of the Mortgage Loan
Seller dated as of the Closing Date, in a form reasonably acceptable to
the Purchaser, and attached thereto the resolutions of the Mortgage Loan
Seller authorizing the transactions contemplated by this Agreement,
together with copies of the articles of incorporation, by-laws and
certificate of good standing of the Mortgage Loan Seller;
(v) One or more opinions of counsel from the Mortgage
Loan Seller's counsel otherwise in form and substance reasonably
satisfactory to the Purchaser, the Trustee and each Rating Agency;
(vi) A letter from each of the Rating Agencies giving
each Class of Certificates set forth on Schedule A hereto the rating set
forth therein; and
(vii) Such other documents, certificates (including
additional representations and warranties) and opinions as may be
reasonably necessary to secure the intended ratings from each Rating
Agency for the Certificates.
(3) The Certificates to be sold to Bear Xxxxxxx pursuant to
the Underwriting Agreement and the Purchase Agreement shall have been issued and
sold to Bear Xxxxxxx.
(4) The Mortgage Loan Seller shall have furnished to the
Purchaser such other certificates of its officers or others and such other
documents and opinions of counsel to evidence fulfillment of the conditions set
forth in this Agreement and the transactions contemplated hereby as the
Purchaser and its counsel may reasonably request.
(b) The obligations of the Mortgage Loan Seller under this Agreement
shall be subject to the satisfaction, on or prior to the Closing Date, of the
following conditions:
(1) The obligations of the Purchaser required to be performed
by it on or prior to the Closing Date pursuant to the terms of this Agreement
shall have been duly performed and complied with in all material respects, and
all of the representations and warranties of the Purchaser under this Agreement
shall be true and correct in all material respects as of the date hereof and as
of the Closing Date, and no event shall have occurred which would constitute a
breach by it of the terms of this Agreement or the Pooling and Servicing
Agreement, and the Mortgage Loan Seller shall have received a certificate to
that effect signed by an authorized officer of the Purchaser.
(2) The Mortgage Loan Seller shall have received copies of all
of the following closing documents, in such forms as are agreed upon and
reasonably acceptable to the Mortgage Loan Seller, duly executed by all
signatories other than the Mortgage Loan Seller as required pursuant to the
respective terms thereof:
(i) If required pursuant to Section 3 hereof, the
Amendment dated as of the Closing Date and any documents referred to
therein;
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(ii) The Pooling and Servicing Agreement, in form and
substance reasonably satisfactory to the Mortgage Loan Seller and the
Trustee, and all documents required thereby duly executed by all
signatories;
(iii) A certificate of an officer of the Purchaser dated
as of the Closing Date, in a form reasonably acceptable to the Mortgage
Loan Seller, and attached thereto the written consent of the member of the
Purchaser authorizing the transactions contemplated by this Agreement and
the Pooling and Servicing Agreement, together with copies of the
Purchaser's certificate of formation, limited liability company agreement
and evidence as to the good standing of the Purchaser dated as of a recent
date;
(iv) One or more opinions of counsel from the
Purchaser's counsel in form and substance reasonably satisfactory to the
Mortgage Loan Seller, the Trustee and the Rating Agencies; and
(v) Such other documents, certificates (including
additional representations and warranties) and opinions as may be
reasonably necessary to secure the intended rating from each Rating Agency
for the Certificates.
SECTION 11. FEES AND EXPENSES. Subject to Section 16 hereof,
the Mortgage Loan Seller shall pay on the Closing Date or such later date as may
be agreed to by the Purchaser (i) the fees and expenses of the Mortgage Loan
Seller's attorneys and the reasonable fees and expenses of the Purchaser's
attorneys, (ii) the fees and expenses of Deloitte & Touche llp, (iii) the fee
for the use of Purchaser's Registration Statement based on the aggregate
original principal amount of the Certificates and the filing fee of the
Commission as in effect on the date on which the Registration Statement was
declared effective, (iv) the fees and expenses including counsel's fees and
expenses in connection with any "blue sky" and legal investment matters, (v) the
fees and expenses of the Trustee which shall include without limitation the fees
and expenses of the Trustee (and the fees and disbursements of its counsel) with
respect to (A) legal and document review of this Agreement, the Pooling and
Servicing Agreement, the Certificates and related agreements, (B) attendance at
the Closing and (C) review of the Mortgage Loans to be performed by the Trustee
or the related Custodian on its behalf, (vi) the expenses for printing or
otherwise reproducing the Certificates, the Prospectus and the Prospectus
Supplement, (vii) the fees and expenses of each Rating Agency (both initial and
ongoing), (viii) the fees and expenses relating to the preparation and
recordation of mortgage assignments (including intervening assignments, if any
and if available, to evidence a complete chain of title from the originator to
the Trustee) from the Mortgage Loan Seller to the Trustee or the expenses
relating to the Opinion of Counsel referred to in Section 6(a) hereof, as the
case may be and (ix) Mortgage File due diligence expenses and other
out-of-pocket expenses incurred by the Purchaser in connection with the purchase
of the Mortgage Loans and by Bear Xxxxxxx in connection with the sale of the
Certificates. The Mortgage Loan Seller additionally agrees to pay directly to
any third party on a timely basis the fees provided for above which are charged
by such third party and which are billed periodically.
SECTION 12. ACCOUNTANTS' LETTERS.
(a) Deloitte & Touche llp will review the characteristics of a
sample of the Mortgage Loans described in the Final Mortgage Loan Schedule and
will compare those
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characteristics to the description of the Mortgage Loans contained in the
Prospectus Supplement under the captions "Summary--The Mortgage Loans" and "The
Mortgage Pool" and in Schedule A thereto. The Mortgage Loan Seller will
cooperate with the Purchaser in making available all information and taking all
steps reasonably necessary to permit such accountants to complete the review and
to deliver the letters required of them under the Underwriting Agreement.
Deloitte & Touche llp will also confirm certain calculations as set forth under
the caption "Yield, Prepayment and Maturity Considerations" in the Prospectus
Supplement.
(b) To the extent statistical information with respect to the
Mortgage Loan Seller's servicing portfolio is included in the Prospectus
Supplement under the caption "Servicing of the Mortgage Loans--The Master
Servicer--Delinquency and Foreclosure Experience of EMC," a letter from the
certified public accountant for the Mortgage Loan Seller will be delivered to
the Purchaser dated the date of the Prospectus Supplement, in the form
previously agreed to by the Mortgage Loan Seller and the Purchaser, with respect
to such statistical information.
SECTION 13. INDEMNIFICATION.
(a) The Mortgage Loan Seller shall indemnify and hold harmless the
Purchaser and its directors, officers and controlling persons (as defined in
Section 15 of the Securities Act) from and against any loss, claim, damage or
liability or action in respect thereof, to which they or any of them may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon (i) any untrue
statement of a material fact contained in the MORTGAGE LOAN SELLER'S INFORMATION
as identified in EXHIBIT 3, the omission to state in the Prospectus Supplement
or Prospectus (or any amendment thereof or supplement thereto approved by the
Mortgage Loan Seller and in which additional Mortgage Loan Seller's Information
is identified), in reliance upon and in conformity with Mortgage Loan Seller's
Information a material fact required to be stated therein or necessary to make
the statements therein in light of the circumstances in which they were made,
not misleading, (ii) any representation or warranty assigned or made by the
Mortgage Loan Seller in Section 7 or Section 8 hereof being, or alleged to be,
untrue or incorrect, or (iii) any failure by the Mortgage Loan Seller to perform
its obligations under this Agreement; and the Mortgage Loan Seller shall
reimburse the Purchaser and each other indemnified party for any legal and other
expenses reasonably incurred by them in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action.
The foregoing indemnity agreement is in addition to any liability
which the Mortgage Loan Seller otherwise may have to the Purchaser or any other
such indemnified party.
(b) The Purchaser shall indemnify and hold harmless the Mortgage
Loan Seller and its respective directors, officers and controlling persons (as
defined in Section 15 of the Securities Act) from and against any loss, claim,
damage or liability or action in respect thereof, to which they or any of them
may become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon (i) any
untrue statement of a material fact contained in the PURCHASER'S INFORMATION as
identified in EXHIBIT 4, the omission to state in the Prospectus Supplement or
Prospectus (or any amendment thereof or supplement thereto approved by the
Purchaser and in which additional Purchaser's Information is identified), in
reliance upon and in conformity with the Purchaser's Information, a
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material fact required to be stated therein or necessary to make the statements
therein in light of the circumstances in which they were made, not misleading,
(ii) any representation or warranty made by the Purchaser in Section 9 hereof
being, or alleged to be, untrue or incorrect, or (iii) any failure by the
Purchaser to perform its obligations under this Agreement; and the Purchaser
shall reimburse the Mortgage Loan Seller, and each other indemnified party for
any legal and other expenses reasonably incurred by them in connection with
investigating or defending or preparing to defend any such loss, claim, damage,
liability or action. The foregoing indemnity agreement is in addition to any
liability which the Purchaser otherwise may have to the Mortgage Loan Seller, or
any other such indemnified party.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 13 except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability which it may have otherwise). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent it may elect by written notice delivered to the
indemnified party promptly (but, in any event, within 30 days) after receiving
the aforesaid notice from such indemnified party, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party. Notwithstanding
the foregoing, the indemnified party or parties shall have the right to employ
its or their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such indemnified party or parties unless (i)
the employment of such counsel shall have been authorized in writing by one of
the indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to have charge of the
defense of such action within a reasonable time after notice of commencement of
the action, or (iii) such indemnified party or parties shall have reasonably
concluded that there is a conflict of interest between itself or themselves and
the indemnifying party in the conduct of the defense of any claim or that the
interests of the indemnified party or parties are not substantially co-extensive
with those of the indemnifying party (in which case the indemnifying parties
shall not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by the indemnifying parties (PROVIDED, HOWEVER, that the
indemnifying party shall be liable only for the fees and expenses of one counsel
in addition to one local counsel in the jurisdiction involved. Anything in this
subsection to the contrary notwithstanding, an indemnifying party shall not be
liable for any settlement or any claim or action effected without its written
consent; PROVIDED, however, that such consent was not unreasonably withheld.
(d) If the indemnification provided for in paragraphs (a) and (b) of
this Section 13 shall for any reason be unavailable to an indemnified party in
respect of any loss, claim, damage or liability, or any action in respect
thereof, referred to in Section 13, then the indemnifying party shall in lieu of
indemnifying the indemnified party contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, in such proportion as shall be appropriate to reflect
the relative benefits received by the Mortgage Loan Seller on the one hand and
the Purchaser on the other from the purchase and sale of the Mortgage Loans, the
offering of the Certificates and the other
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transactions contemplated hereunder. No person found liable for a fraudulent
misrepresentation shall be entitled to contribution from any person who is not
also found liable for such fraudulent misrepresentation.
(e) The parties hereto agree that reliance by an indemnified party
on any publicly available information or any information or directions furnished
by an indemnifying party shall not constitute negligence, bad faith or willful
misconduct by such indemnified party.
SECTION 14. NOTICES. All demands, notices and communications
hereunder shall be in writing but may be delivered by facsimile transmission
subsequently confirmed in writing. Notices to the Mortgage Loan Seller shall be
directed to EMC Mortgage Corporation, 000 Xxxxxx Xxxxx Xxxxx, Xxxxx 000 Xxxxxx,
Xxxxx 00000, (Telecopy: (972-444-2880)), and notices to the Purchaser shall be
directed to Bear Xxxxxxx Asset Backed Securities I LLC, 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, (Telecopy: (212-272-7206)), Attention: Chief Counsel; or
to any other address as may hereafter be furnished by one party to the other
party by like notice. Any such demand, notice or communication hereunder shall
be deemed to have been received on the date received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt) provided that it is received on a business day
during normal business hours and, if received after normal business hours, then
it shall be deemed to be received on the next business day.
SECTION 15. TRANSFER OF MORTGAGE LOANS. The Purchaser retains
the right to assign the Mortgage Loans and any or all of its interest under this
Agreement to the Trustee without the consent of the Mortgage Loan Seller, and,
upon such assignment, the Trustee shall succeed to the applicable rights and
obligations of the Purchaser hereunder; provided, however, the Purchaser shall
remain entitled to the benefits set forth in Sections 11, 13 and 17 hereto and
as provided in Section 2(a). Notwithstanding the foregoing, the sole and
exclusive right and remedy of the Trustee with respect to a breach of
representation or warranty of the Mortgage Loan Seller shall be the cure,
purchase or substitution obligations of the Mortgage Loan Seller contained in
Sections 5 and 7 hereof.
SECTION 16. TERMINATION. This Agreement may be terminated (a)
by the mutual consent of the parties hereto prior to the Closing Date, (b) by
the Purchaser, if the conditions to the Purchaser's obligation to close set
forth under Section 10(a) hereof are not fulfilled as and when required to be
fulfilled or (c) by the Mortgage Loan Seller, if the conditions to the Mortgage
Loan Seller's obligation to close set forth under Section 10(b) hereof are not
fulfilled as and when required to be fulfilled. In the event of termination
pursuant to clause (b), the Mortgage Loan Seller shall pay, and in the event of
termination pursuant to clause (c), the Purchaser shall pay, all reasonable
out-of-pocket expenses incurred by the other in connection with the transactions
contemplated by this Agreement. In the event of a termination pursuant to clause
(a), each party shall be responsible for its own expenses.
SECTION 17. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO
SURVIVE DELIVERY. All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers of the Mortgage Loan
Seller submitted pursuant hereto, shall remain operative and in full force and
effect and shall survive delivery of the Mortgage Loans to the Purchaser (and by
the Purchaser to the Trustee). Subsequent to the delivery of the Mortgage Loans
to the Purchaser, each of the Mortgage Loan Seller's representations and
warranties
L-23
contained herein with respect to the Mortgage Loans shall be deemed to relate to
the Mortgage Loans actually delivered to the Purchaser and included in the Final
Mortgage Loan Schedule and any Replacement Mortgage Loan and not to those
Mortgage Loans deleted from the Preliminary Mortgage Loan Schedule pursuant to
Section 3 hereof prior to the Closing.
SECTION 18. SEVERABILITY. If any provision of this Agreement
shall be prohibited or invalid under applicable law, this Agreement shall be
ineffective only to such extent, without invalidating the remainder of this
Agreement.
SECTION 19. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which will be an original, but which together shall
constitute one and the same agreement.
SECTION 20. AMENDMENT. This Agreement cannot be amended or
modified in any manner without the prior written consent of each party.
SECTION 21. GOVERNING LAW. THIS AGREEMENT shall be governed
by, and construed in accordance with, the laws of the State of New York, without
regard to conflict of laws principles thereof other than Section 5-1401 of the
New York General Obligations Law.
SECTION 22. FURTHER ASSURANCES. Each of the parties agrees to
execute and deliver such instruments and take such actions as another party may,
from time to time, reasonably request in order to effectuate the purpose and to
carry out the terms of this Agreement including any amendments hereto which may
be required by either Rating Agency.
SECTION 23. SUCCESSORS AND ASSIGNS.
(a) This Agreement shall bind and inure to the benefit of and be
enforceable by the Mortgage Loan Seller and the Purchaser and their permitted
successors and assigns and, to the extent specified in Section 13 hereof, Bear
Xxxxxxx, and their directors, officers and controlling persons (within the
meaning of federal securities laws), to the extent of its rights as a third
party beneficiary hereunder. The Mortgage Loan Seller acknowledges and agrees
that the Purchaser may assign its rights under this Agreement (including,
without limitation, with respect to the Mortgage Loan Seller's representations
and warranties respecting the Mortgage Loans) to the Trustee. Any person into
which the Mortgage Loan Seller may be merged or consolidated (or any person
resulting from any merger or consolidation involving the Mortgage Loan Seller),
any person resulting from a change in form of the Mortgage Loan Seller or any
person succeeding to the business of the Mortgage Loan Seller, shall be
considered the "successor" of the Mortgage Loan Seller hereunder and shall be
considered a party hereto without the execution or filing of any paper or any
further act or consent on the part of any party hereto. Except as provided in
the two preceding sentences, this Agreement cannot be assigned, pledged or
hypothecated by either party hereto without the written consent of the other
parties to this Agreement and any such assignment or purported assignment shall
be deemed null and void.
SECTION 24. THE MORTGAGE LOAN SELLER. The Mortgage Loan Seller
will keep in full force and effect its existence, all 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
L-24
foreign corporation in each jurisdiction in which such qualification is
necessary to perform its obligations under this Agreement.
SECTION 25. ENTIRE AGREEMENT. This Agreement contains the
entire agreement and understanding between the parties with respect to the
subject matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter hereof.
SECTION 26. NO PARTNERSHIP. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture between the parties
hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
L-25
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective duly authorized officers as of the date first
above written.
EMC MORTGAGE CORPORATION
By:_________________________________
Name: XXX XXXXXXXX
Title: EXECUTIVE VICE PRESIDENT
BEAR XXXXXXX ASSET BACKED
SECURITIES I LLC
By:_________________________________
Name: XXXXX XXXXXXXXXXX
Title: VICE PRESIDENT
EXHIBIT 1
---------
CONTENTS OF MORTGAGE FILE
-------------------------
With respect to each Mortgage Loan, the Mortgage File shall include each
of the following items, which shall be available for inspection by the Purchaser
or its designee, and which shall be delivered to the Purchaser or its designee
pursuant to the terms of this Agreement.
(i) The original Mortgage Note, including any riders
thereto, endorsed without recourse to the order of "LaSalle Bank National
Association", as Trustee for certificateholders of Bear Xxxxxxx Asset
Backed Securities I LLC Asset Backed Certificates, Series 2004-HE11," and
showing to the extent available to the Mortgage Loan 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 "LaSalle Bank National Association", as
Trustee for certificateholders of Bear Xxxxxxx Asset Backed Securities I
LLC Asset Backed Certificates, Series 2004-HE11," 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
Mortgage Loan Seller, with evidence of recording thereon;
(v) the original policy of title insurance or
mortgagee's certificate of title insurance or commitment or binder for
title insurance, if available, or a copy thereof, or, in the event that
such original title insurance policy is unavailable, a photocopy thereof,
or in lieu thereof, a current lien search on the related Mortgaged
Property and
(vi) originals or copies of all available assumption,
modification or substitution agreements, if any; provided, however, that
in lieu of the foregoing, the Mortgage Loan 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 Purchaser may deliver a true copy thereof with a
certification by the Mortgage Loan 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,
E-1-1
which has been transmitted for recording"; and (y) in lieu of the Mortgage
Notes relating to the Mortgage Loans identified in the list set forth in
Exhibit J to the Pooling and Servicing Agreement, the Purchaser 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 Purchaser, in lieu of delivering the above
documents, may deliver to the Trustee and its related 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
Protected Account or in the Distribution Account on the Closing Date. In
the case of the documents referred to in clause (x) above, the Purchaser
shall deliver such documents to the Trustee or its related Custodian
promptly after they are received. The Mortgage Loan 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 Mortgage Loan Seller need not cause to be
recorded any assignment (a) in any jurisdiction under the laws of which,
as evidenced by an Opinion of Counsel addressed to the Trustee delivered
by the Mortgage Loan 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 Mortgage Loan Seller and its successors
and assigns. In the event that the Mortgage Loan Seller, the Purchaser 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
Mortgage Loan Seller shall submit or cause to be submitted for recording
as specified above or, should the Mortgage Loan 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
Mortgage Loan Seller or the Master Servicer as a result of such Person
having completed a Request for Release, the related Custodian shall, if
not so completed, complete the assignment of the related Mortgage in the
manner specified in clause (iii) above.
E-1-2
EXHIBIT 2
---------
MORTGAGE LOAN SCHEDULE INFORMATION
----------------------------------
The Preliminary and Final Mortgage Loan Schedules shall set forth the
following information with respect to each Mortgage Loan:
(i) the Mortgage Loan identifying number;
(ii) the current gross mortgage rate;
(iii) the Servicing Fee Rate;
(iv) the master servicing fee rate, if applicable;
(v) the LPMI Fee, if applicable;
(vi) the Trustee Fee Rate;
(vii) the current net mortgage rate;
(viii) the maturity date;
(ix) the original principal balance;
(x) the current principal balance;
(xi) the stated original term to maturity;
(xii) the stated remaining term to maturity;
(xiii) the property type;
(xiv) the MIN with respect to each MOM Loan;
(xv) with respect to each Adjustable Rate Mortgage
Loan, the Minimum Mortgage Rate;
(xvi) with respect to each Adjustable Rate Mortgage
Loan, the Maximum Mortgage Rate;
(xvii) with respect to each Adjustable Rate Mortgage
Loan, the Gross Margin;
(xviii) with respect to each Adjustable Rate Mortgage
Loan, the next Adjustment Date;
E-2-1
(xix) with respect to each Adjustable Rate Mortgage
Loan, the Periodic Rate Cap;
(xx) the Loan Group;
(xxi) a code indicating whether such Mortgage Loan is
a first lien Mortgage Loan or a second lien
Mortgage Loan; and
(xxii) the Custodian.
E-2-2
EXHIBIT 3
---------
MORTGAGE LOAN SELLER'S INFORMATION
----------------------------------
All information in the Prospectus Supplement described under the following
captions: "SUMMARY -- The Mortgage Loans," "THE MORTGAGE POOL" and "SCHEDULE A
-- MortgagE Loan Statistical Data."
E-3-1
EXHIBIT 4
---------
PURCHASER'S INFORMATION
-----------------------
All information in the Prospectus Supplement and the Prospectus, except
the Mortgage Loan Seller's Information.
E-4-1
EXHIBIT 5
---------
SCHEDULE OF LOST NOTES
----------------------
(Available Upon Request)
E-5-1
EXHIBIT 6
REVISED OCTOBER 18, 0000
XXXXXXXX X - STANDARD & POOR'S ANTI-PREDATORY LENDING CATEGORIZATION
Standard & Poor's has categorized loans governed by anti-predatory lending laws
in the Jurisdictions listed below into three categories based upon a combination
of factors that include (a) the risk exposure associated with the assignee
liability and (b) the tests and thresholds set forth in those laws. Note that
certain loans classified by the relevant statute as Covered are included in
Standard & Poor's High Cost Loan Category because they included thresholds and
tests that are typical of what is generally considered High Cost by the
industry.
STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
-----------------------------------------------
--------------------------------------------------------------------------------
CATEGORY UNDER
APPLICABLE
NAME OF ANTI-PREDATORY LENDING ANTI-PREDATORY
STATE/JURISDICTION LAW/EFFECTIVE DATE LENDING LAW
--------------------------------------------------------------------------------
Arkansas Arkansas Home Loan Protection High Cost Home Loan
Act, Ark. Code Xxx.
xx.xx. 00-00-000 ET SEQ.
Effective July 16, 2003
--------------------------------------------------------------------------------
Cleveland Heights, OH Ordinance No. 72-2003 (PSH), Mun. Covered Loan
Code xx.xx. 757.01 ET SEQ.
Effective June 2, 2003
--------------------------------------------------------------------------------
Colorado Consumer Equity Protection, Colo. Covered Loan
Stat. Xxx. xx.xx. 5-3.5-101 ET SEQ.
Effective for covered loans
offered or entered into on or
after January 1, 2003. Other
provisions of the Act took effect
on June 7, 2002
--------------------------------------------------------------------------------
Connecticut Connecticut Abusive Home Loan High Cost Home Loan
Lending Practices Act, Conn. Gen.
Stat. xx.xx. 36a-746 ET SEQ.
Effective October 1, 2001
--------------------------------------------------------------------------------
District of Columbia Home Loan Protection Act, D.C. Covered Loan
Code xx.xx. 26-1151.01 ET SEQ.
Effective for loans closed on or
after January 28, 2003
--------------------------------------------------------------------------------
E-6-1
STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
-----------------------------------------------
--------------------------------------------------------------------------------
CATEGORY UNDER
APPLICABLE
NAME OF ANTI-PREDATORY LENDING ANTI-PREDATORY
STATE/JURISDICTION LAW/EFFECTIVE DATE LENDING LAW
--------------------------------------------------------------------------------
Florida Fair Lending Act, Fla. Stat. Xxx. High Cost Home Loan
xx.xx. 494.0078 ET SEQ.
Effective October 2, 2002
--------------------------------------------------------------------------------
Georgia (Oct. 1, 2002 Georgia Fair Lending Act, Ga. High Cost Home Loan
- Mar. 6, 2003) Code Xxx. xx.xx. 7-6A-1 ET SEQ.
Effective October 1, 2002 - March
6, 2003
--------------------------------------------------------------------------------
Georgia as amended Georgia Fair Lending Act, Ga. High Cost Home Loan
(Mar. 7, 2003 - Code Xxx. xx.xx. 7-6A-1 ET SEQ.
current)
Effective for loans closed on or
after March 7, 2003
--------------------------------------------------------------------------------
HOEPA Section 32 Home Ownership and Equity High Cost Loan
Protection Act of 1994, 15 U.S.C.
ss. 1639, 12 C.F.R. xx.xx. 226.32
and 226.34
Effective October 1, 1995,
amendments October 1, 2002
--------------------------------------------------------------------------------
Illinois High Risk Home Loan Act, Ill. High Risk Home Loan
Comp. Stat. tit. 815, xx.xx. 137/5 ET SEQ.
Effective January 1, 2004 (prior to this date,
regulations under Residential Mortgage License Act
effective from May 14, 2001)
--------------------------------------------------------------------------------
Indiana Indiana Home Loan Practices Act, High Cost Home Loan
Ind. Code Xxx. xx.xx. 24-9-1-1 ET
seq.
Effective for loans originated on
or after January 1, 2005.
--------------------------------------------------------------------------------
Kansas Consumer Credit Code, Kan. Stat. High Loan to Value
Xxx. xx.xx. 16a-1-101 ET SEQ. Consumer Loan (ID. ss.
16a-3-207) and;
Sections 16a-1-301 and 16a-3-207 High APR Consumer
became effective April 14, 1999; Loan (ID. ss.
Section 16a-3-308a became 16a-3-308a)
effective July 1, 1999
--------------------------------------------------------------------------------
E-6-2
STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
-----------------------------------------------
--------------------------------------------------------------------------------
CATEGORY UNDER
APPLICABLE
NAME OF ANTI-PREDATORY LENDING ANTI-PREDATORY
STATE/JURISDICTION LAW/EFFECTIVE DATE LENDING LAW
--------------------------------------------------------------------------------
Kentucky 2003 KY H.B. 287 - High Cost Home High Cost Home Loan
Loan Act, Ky. Rev. Stat. xx.xx.
360.100 ET SEQ.
Effective June 24, 2003
--------------------------------------------------------------------------------
Maine Truth in Lending, Me. Rev. Stat. High Rate High Fee
tit. 9-A, xx.xx. 8-101 ET SEQ. Mortgage
Effective September 29, 1995 and
as amended from time to time
--------------------------------------------------------------------------------
Massachusetts Part 40 and Part 32, 209 C.M.R. High Cost Home Loan
xx.xx. 32.00 ET SEQ. and 209 C.M.R.
xx.xx. 40.01 ET SEQ.
Effective March 22, 2001 and
amended from time to time
--------------------------------------------------------------------------------
Massachusetts Predatory Home Loan High Cost Home
Practices Act Mortgage Loan
Mass. Gen. Laws ch. 183C, xx.xx. 1 et SEQ.
Effective November 7, 2004
--------------------------------------------------------------------------------
Nevada Assembly Xxxx No. 284, Nev. Rev. Home Loan
Stat. xx.xx. 598D.010 ET SEQ.
Effective October 1, 2003
--------------------------------------------------------------------------------
New Jersey New Jersey Home Ownership High Cost Home Loan
Security Act of 2002, N.J. Rev.
Stat. xx.xx. 46:10B-22 ET SEQ.
Effective for loans closed on or
after November 27, 2003
--------------------------------------------------------------------------------
New Mexico Home Loan Protection Act, N.M. High Cost Home Loan
Rev. Stat. xx.xx. 58-21A-1 ET SEQ.
Effective as of January 1, 2004;
Revised as of February 26, 2004
--------------------------------------------------------------------------------
New York N.Y. Banking Law Article 6-l High Cost Home Loan
Effective for applications made
on or after April 1, 2003
--------------------------------------------------------------------------------
E-6-3
STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
-----------------------------------------------
--------------------------------------------------------------------------------
CATEGORY UNDER
APPLICABLE
NAME OF ANTI-PREDATORY LENDING ANTI-PREDATORY
STATE/JURISDICTION LAW/EFFECTIVE DATE LENDING LAW
--------------------------------------------------------------------------------
North Carolina Restrictions and Limitations on High Cost Home Loan
High Cost Home Loans, N.C. Gen.
Stat. xx.xx. 24-1.1E ET SEQ.
Effective July 1, 2000; amended
October 1, 2003 (adding open-end
lines of credit)
--------------------------------------------------------------------------------
Ohio H.B. 386 (codified in various Covered Loan
sections of the Ohio Code), Ohio
Rev. Code Xxx. xx.xx. 1349.25 ET SEQ.
Effective May 24, 2002
--------------------------------------------------------------------------------
Oklahoma Consumer Credit Code (codified in Subsection 10
various sections of Title 14A) Mortgage
Effective July 1, 2000; amended
effective January 1, 2004
--------------------------------------------------------------------------------
South Carolina South Carolina High Cost and High Cost Home Loan
Consumer Home Loans Act, S.C.
Code Xxx. xx.xx. 37-23-10 ET SEQ.
Effective for loans taken on or
after January 1, 2004
--------------------------------------------------------------------------------
West Virginia West Virginia Residential West Virginia Mortgage
Mortgage Lender, Broker and Loan Act
Mortgage Servicer Act, W. Va.
Code Xxx. xx.xx. Loan
31-17-1 ET SEQ.
Effective June 5, 2002
--------------------------------------------------------------------------------
STANDARD & POOR'S COVERED LOAN CATEGORIZATION
---------------------------------------------
--------------------------------------------------------------------------------
CATEGORY UNDER
APPLICABLE
NAME OF ANTI-PREDATORY LENDING ANTI-PREDATORY
STATE/JURISDICTION LAW/EFFECTIVE DATE LENDING LAW
--------------------------------------------------------------------------------
Georgia (Oct. 1, 2002 Georgia Fair Lending Act, Ga. Covered Loan
- Mar. 6, 2003) Code Xxx. xx.xx. 7-6A-1 ET SEQ.
E-6-4
--------------------------------------------------------------------------------
Effective October 1, 2002 - March
6, 2003
--------------------------------------------------------------------------------
New Jersey New Jersey Home Ownership Covered Home Loan
Security Act of 2002, N.J. Rev.
Stat. xx.xx. 46:10B-22 ET SEQ.
Effective November 27, 2003 -
July 5, 2004
--------------------------------------------------------------------------------
STANDARD & POOR'S HOME LOAN CATEGORIZATION
------------------------------------------
--------------------------------------------------------------------------------
CATEGORY UNDER
APPLICABLE
NAME OF ANTI-PREDATORY LENDING ANTI-PREDATORY
STATE/JURISDICTION LAW/EFFECTIVE DATE LENDING LAW
--------------------------------------------------------------------------------
Georgia (Oct. 1, 2002 Georgia Fair Lending Act, Ga. Home Loan
- Mar. 6, 2003) Code Xxx. xx.xx. 7-6A-1 ET SEQ.
Effective October 1, 2002 - March
6, 2003
--------------------------------------------------------------------------------
Indiana Indiana Home Loan Practices Act, Home Loan
Ind. Code Xxx. xx.xx. 24-9-1-1 ET
seq.
Effective for loans originated on or
after January 1, 2005.
--------------------------------------------------------------------------------
New Jersey New Jersey Home Ownership Home Loan
Security Act of 2002, N.J. Rev.
Stat. xx.xx. 46:10B-22 ET SEQ.
Effective for loans closed on or
after November 27, 2003
--------------------------------------------------------------------------------
New Mexico Home Loan Protection Act, N.M. Home Loan
Rev. Stat. xx.xx. 58-21A-1 ET SEQ.
Effective as of January 1, 2004;
Revised as of February 26, 2004
--------------------------------------------------------------------------------
North Carolina Restrictions and Limitations on Consumer Home Loan
High Cost Home Loans, N.C. Gen.
Stat. xx.xx. 24-1.1E ET SEQ.
Effective July 1, 2000; amended
October 1, 2003 (adding open-end
lines of credit)
--------------------------------------------------------------------------------
E-6-5
STANDARD & POOR'S HOME LOAN CATEGORIZATION
------------------------------------------
--------------------------------------------------------------------------------
CATEGORY UNDER
APPLICABLE
NAME OF ANTI-PREDATORY LENDING ANTI-PREDATORY
STATE/JURISDICTION LAW/EFFECTIVE DATE LENDING LAW
--------------------------------------------------------------------------------
South Carolina South Carolina High Cost and Consumer Home Loan
Consumer Home Loans Act, S.C.
Code Xxx. xx.xx. 37-23-10 ET SEQ.
Effective for loans taken on or
after January 1, 2004
--------------------------------------------------------------------------------
E-6-6
SCHEDULE A
REQUIRED RATINGS FOR EACH CLASS OF CERTIFICATES
PUBLIC CERTIFICATES
-------------------
Class S&P Xxxxx'x
----- --- -------
I-A-1 AAA Aaa
I-A-2 AAA Aaa
I-A-3 AAA Aaa
II-A-1 AAA Aaa
II-A-2 AAA Aaa
M-1 AA Aa2
M-2 A A2
M-3 A- A3
M-4 BBB+ Baa1
M-5 BBB Baa2
M-6 BBB- Baa3
PRIVATE CERTIFICATES
--------------------
Class S&P Xxxxx'x
----- --- -------
X-0 XX Xx0
CE Not Rated Not Rated
P Not Rated Not Rated
R-1 Not Rated Not Rated
R-2 Not Rated Not Rated
RX Not Rated Not Rated
None of the above ratings has been lowered, qualified or withdrawn since the
dates of issuance of such ratings by the Rating Agencies.
