BEAR STEARNS ASSET BACKED SECURITIES I LLC Depositor EMC MORTGAGE CORPORATION Seller and Company WELLS FARGO BANK, NATIONAL ASSOCIATION Master Servicer and Securities Administrator and Trustee POOLING AND SERVICING AGREEMENT Dated as of November 1,...
BEAR
▇▇▇▇▇▇▇ ASSET BACKED SECURITIES I LLC
Depositor
EMC
MORTGAGE CORPORATION
Seller
and Company
▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION
Master
Servicer and Securities Administrator
and
U.S.
BANK
NATIONAL ASSOCIATION
Trustee
____________________
Dated
as
of November 1, 2006
________________________________________
BEAR
▇▇▇▇▇▇▇ ASSET BACKED SECURITIES I TRUST 2006-AC5
ASSET-BACKED
CERTIFICATES, SERIES 2006-AC5
TABLE
OF CONTENTS
Page
ARTICLE
I
DEFINITIONS
|
Section
1.01
|
Defined
Terms.
|
|
Section
1.02
|
Allocation
of Certain Interest Shortfalls.
|
ARTICLE
II CONVEYANCE OF TRUST FUND REPRESENTATIONS AND WARRANTIES
|
Section
2.01
|
Conveyance
of Trust Fund.
|
|
Section
2.02
|
Acceptance
of the Mortgage Loans.
|
|
Section
2.03
|
Representations,
Warranties and Covenants of the Company, the Master Servicer and
the
Seller.
|
|
Section
2.04
|
Representations
and Warranties of the Depositor.
|
|
Section
2.05
|
Delivery
of Opinion of Counsel in Connection with Substitutions and
Repurchases.
|
|
Section
2.06
|
Countersignature
and Delivery of Certificates.
|
|
Section
2.07
|
Purposes
and Powers of the Trust.
|
ARTICLE
III ADMINISTRATION AND SERVICING OF EMC MORTGAGE LOANS BY COMPANY
|
Section
3.01
|
The
Company.
|
|
Section
3.02
|
Due-on-Sale
Clauses; Assumption Agreements.
|
|
Section
3.03
|
Subservicers.
|
|
Section
3.04
|
Documents,
Records and Funds in Possession of Company To Be Held for
Trustee.
|
|
Section
3.05
|
Maintenance
of Hazard Insurance.
|
|
Section
3.06
|
Presentment
of Claims and Collection of Proceeds.
|
|
Section
3.07
|
Maintenance
of the Primary Mortgage Insurance Policies.
|
|
Section
3.08
|
Fidelity
Bond, Errors and Omissions Insurance.
|
|
Section
3.09
|
Realization
Upon Defaulted Mortgage Loans; Determination of Excess Liquidation
Proceeds and Realized Losses; Repurchases of Certain Mortgage
Loans.
|
|
Section
3.10
|
Servicing
Compensation.
|
|
Section
3.11
|
REO
Property.
|
|
Section
3.12
|
Liquidation
Reports.
|
|
Section
3.13
|
Books
and Records.
|
ARTICLE
IV ADMINISTRATION AND MASTER SERVICING OF MORTGAGE LOANS BY MASTER
SERVICER
|
Section
4.01
|
Master
Servicer.
|
|
Section
4.02
|
REMIC-Related
Covenants.
|
|
Section
4.03
|
Monitoring
of Company and Servicer.
|
|
Section
4.04
|
Fidelity
Bond.
|
|
Section
4.05
|
Power
to Act; Procedures.
|
|
Section
4.06
|
Due-on-Sale
Clauses; Assumption Agreements.
|
|
Section
4.07
|
Release
of Mortgage Files.
|
|
Section
4.08
|
Documents,
Records and Funds in Possession of Master Servicer, Company and Servicer
To Be Held for Trustee.
|
|
Section
4.09
|
Standard
Hazard Insurance and Flood Insurance Policies.
|
|
Section
4.10
|
Presentment
of Claims and Collection of Proceeds.
|
|
Section
4.11
|
Maintenance
of the Primary Mortgage Insurance Policies.
|
|
Section
4.12
|
Trustee
to Retain Possession of Certain Insurance Policies and
Documents.
|
|
Section
4.13
|
Realization
Upon Defaulted Mortgage Loans.
|
|
Section
4.14
|
Compensation
for the Master Servicer.
|
|
Section
4.15
|
REO
Property.
|
|
Section
4.16
|
Annual
Statement as to Compliance.
|
|
Section
4.17
|
Assessments
of Compliance and Attestation Reports.
|
|
Section
4.18
|
Reports
Filed with Securities and Exchange Commission.
|
|
Section
4.19
|
Intention
of the Parties and Interpretation.
|
|
Section
4.20
|
UCC.
|
|
Section
4.21
|
Optional
Purchase of Certain Mortgage Loans.
|
ARTICLE
V
ACCOUNTS
|
Section
5.01
|
Collection
of Mortgage Loan Payments; Protected Account.
|
|
Section
5.02
|
Permitted
Withdrawals From the Protected Account.
|
|
Section
5.03
|
Reports
to Master Servicer.
|
|
Section
5.04
|
Collection
of Taxes; Assessments and Similar Items; Escrow Accounts.
|
|
Section
5.05
|
Servicer
Protected Accounts.
|
|
Section
5.06
|
[Reserved].
|
|
Section
5.07
|
[Reserved].
|
|
Section
5.08
|
Distribution
Account.
|
|
Section
5.09
|
Permitted
Withdrawals and Transfers from the Distribution Account.
|
ARTICLE
VI DISTRIBUTIONS AND ADVANCES
|
Section
6.01
|
Advances.
|
|
Section
6.02
|
Compensating
Interest Payments.
|
|
Section
6.03
|
REMIC
Distributions.
|
|
Section
6.04
|
Distributions.
|
|
Section
6.05
|
Allocation
of Realized Losses.
|
|
Section
6.06
|
Monthly
Statements to Certificateholders.
|
|
Section
6.07
|
REMIC
Designations and REMIC Distributions.
|
|
Section
6.08
|
Reserve
Fund.
|
|
Section
6.09
|
Class
P Certificate Account.
|
ARTICLE
VII THE CERTIFICATES
|
Section
7.01
|
The
Certificates.
|
|
Section
7.02
|
Certificate
Register; Registration of Transfer and Exchange of
Certificates.
|
|
Section
7.03
|
Mutilated,
Destroyed, Lost or Stolen Certificates.
|
|
Section
7.04
|
Persons
Deemed Owners.
|
|
Section
7.05
|
Access
to List of Certificateholders’ Names and Addresses.
|
|
Section
7.06
|
Book-Entry
Certificates.
|
|
Section
7.07
|
Notices
to Depository.
|
|
Section
7.08
|
Definitive
Certificates.
|
|
Section
7.09
|
Maintenance
of Office or Agency.
|
ARTICLE
VIII THE COMPANY AND THE MASTER SERVICER
|
Section
8.01
|
Liabilities
of the Depositor, the Company and the Master Servicer.
|
|
Section
8.02
|
Merger
or Consolidation of the Depositor, the Company or the Master
Servicer.
|
|
Section
8.03
|
Indemnification
of the Trustee, the Master Servicer and the Securities
Administrator.
|
|
Section
8.04
|
Limitations
on Liability of the Depositor, the Company, the Master Servicer and
Others.
|
|
Section
8.05
|
Master
Servicer and Company Not to Resign.
|
|
Section
8.06
|
Successor
Master Servicer.
|
|
Section
8.07
|
Sale
and Assignment of Master Servicing.
|
ARTICLE
IX DEFAULT; TERMINATION OF MASTER SERVICER; TERMINATION
OF COMPANY
|
Section
9.01
|
Events
of Default.
|
|
Section
9.02
|
Trustee
to Act; Appointment of Successor.
|
|
Section
9.03
|
Notification
to Certificateholders and Rating Agencies.
|
|
Section
9.04
|
Waiver
of Defaults.
|
|
Section
9.05
|
Company
Default.
|
|
Section
9.06
|
Waiver
of Company Defaults.
|
ARTICLE
X
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
|
Section
10.01
|
Duties
of Trustee and Securities Administrator.
|
|
Section
10.02
|
Certain
Matters Affecting the Trustee and the Securities
Administrator.
|
|
Section
10.03
|
Trustee
and Securities Administrator Not Liable for Certificates or Mortgage
Loans.
|
|
Section
10.04
|
Trustee
and Securities Administrator May Own Certificates.
|
|
Section
10.05
|
Trustee’s
and Securities Administrator’s Fees and Expenses.
|
|
Section
10.06
|
Eligibility
Requirements for Trustee and Securities Administrator.
|
|
Section
10.07
|
Insurance.
|
|
Section
10.08
|
Resignation
and Removal of Trustee and Securities Administrator.
|
|
Section
10.09
|
Successor
Trustee or Securities Administrator.
|
|
Section
10.10
|
Merger
or Consolidation of Trustee or Securities Administrator.
|
|
Section
10.11
|
Appointment
of Co-Trustee or Separate Trustee.
|
|
Section
10.12
|
Tax
Matters.
|
ARTICLE
XI TERMINATION
|
Section
11.01
|
Termination
upon Liquidation or Repurchase of all Mortgage Loans.
|
|
Section
11.02
|
Final
Distribution on the Certificates.
|
|
Section
11.03
|
Additional
Termination Requirements.
|
ARTICLE
XII MISCELLANEOUS PROVISIONS
|
Section
12.01
|
Amendment.
|
|
Section
12.02
|
Recordation
of Agreement; Counterparts.
|
|
Section
12.03
|
Governing
Law.
|
|
Section
12.04
|
Intention
of Parties.
|
|
Section
12.05
|
Notices.
|
|
Section
12.06
|
Severability
of Provisions.
|
|
Section
12.07
|
Assignment.
|
|
Section
12.08
|
Limitation
on Rights of Certificateholders.
|
|
Section
12.09
|
Inspection
and Audit Rights.
|
|
Section
12.10
|
Certificates
Nonassessable and Fully Paid.
|
Exhibits
|
Exhibit
A-1
|
Form
of Class A Certificates
|
|
Exhibit
A-2
|
Form
of Class M Certificates
|
|
Exhibit
A-3
|
Form
of Class B Certificates
|
|
Exhibit
A-4
|
Form
of Class C Certificates
|
|
Exhibit
A-5
|
Form
of Class P Certificates
|
|
Exhibit
A-6
|
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 to Form 10-K Certificate
|
|
Exhibit
L
|
Form
of Mortgage Loan Purchase Agreement
|
|
Exhibit
M
|
[Reserved]
|
|
Exhibit
N
|
Servicing
Criteria to Be Addressed in Assessment of Compliance
|
|
Exhibit
O
|
Form
10-D, Form 8-K and Form 10-K Reporting Responsibility
|
|
Exhibit
P
|
Additional
Disclosure Notification
|
|
Exhibit
Q-1
|
Greenpoint
Servicing Agreement
|
|
Exhibit
Q-2
|
National
City Servicing Agreement
|
|
Exhibit
R-1
|
Greenpoint
Assignment, Assumption and Recognition Agreement
|
|
Exhibit
R-2
|
National
City Assignment, Assumption and Recognition Agreement
|
|
Exhibit
S
|
Reporting
Data for Monthly Report
|
|
Exhibit
T
|
Reporting
Data for Defaulted Loans
|
|
Exhibit
U
|
Reporting
Data for Realized Losses and Gains
|
|
Exhibit
V
|
POOLING
AND SERVICING AGREEMENT, dated as of November 1, 2006, among BEAR ▇▇▇▇▇▇▇ ASSET
BACKED SECURITIES I LLC, a Delaware limited liability company, as depositor
(the
“Depositor”), EMC MORTGAGE CORPORATION, a Delaware corporation, as seller (in
such capacity, the “Seller”) and as company (in such capacity, the “Company”),
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as
master servicer (in such capacity, the “Master Servicer”) and as securities
administrator (in such capacity, the “Securities Administrator”), and U.S. BANK
NATIONAL ASSOCIATION, a national banking association, 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 Securities Administrator on behalf of the Trustee shall
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 any Prepayment Charge Waiver Amounts) as a REMIC (as defined
herein) for federal income tax purposes, and such segregated pool of assets
will
be designated as “REMIC I”. The Class R-1 Certificates will represent the sole
class of Residual Interests (as defined herein) in REMIC I for purposes of
the
REMIC Provisions (as defined herein). The following table irrevocably sets
forth
the designation, the Uncertificated REMIC I Pass-Through Rate, the initial
Uncertificated Principal Balance and, 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.
|
Designation
|
Initial
Uncertificated Principal Balance
|
Uncertificated
REMIC I
Pass-Through
Rate
|
Latest
Possible Maturity Date(1)
|
|||||||
|
AA
|
$
|
259,736,538.64
|
Variable(2)
|
|
December
25, 2036
|
|||||
|
A-1
|
$
|
2,011,900.00
|
Variable(2)
|
|
December
25, 2036
|
|||||
|
A-2
|
$
|
159,810.00
|
Variable(2)
|
|
December
25, 2036
|
|||||
|
A-3
|
$
|
260,000.00
|
Variable(2)
|
|
December
25, 2036
|
|||||
|
M-1
|
$
|
68,910.00
|
Variable(2)
|
|
December
25, 2036
|
|||||
|
M-2
|
$
|
38,430.00
|
Variable(2)
|
|
December
25, 2036
|
|||||
|
M-3
|
$
|
18,550.00
|
Variable(2)
|
|
December
25, 2036
|
|||||
|
M-4
|
$
|
13,250.00
|
Variable(2)
|
|
December
25, 2036
|
|||||
|
B-1
|
$
|
13,250.00
|
Variable(2)
|
|
December
25, 2036
|
|||||
|
B-2
|
$
|
9,280.00
|
Variable(2)
|
|
December
25, 2036
|
|||||
|
B-3
|
$
|
13,250.00
|
Variable(2)
|
|
December
25, 2036
|
|||||
|
B-4
|
$
|
17,230.00
|
Variable(2)
|
|
December
25, 2036
|
|||||
|
ZZ
|
$
|
2,676,885.69
|
Variable(2)
|
|
December
25, 2036
|
|||||
|
P
|
$
|
100.00
|
0.00%
|
|
December
25, 2036
|
|||||
___________________________
|
(1)
|
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 I Regular
Interest.
|
(2)
Calculated
in accordance with the definition of “Uncertificated REMIC I Pass-Through Rate”
herein.
REMIC
II
As
provided herein, the Securities Administrator on behalf of the Trustee shall
elect 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 designation, Pass-Through Rate,
Initial Certificate Principal Balance (or initial Uncertificated Principal
Balance, in the case of the Class C Interest or Class P Interest) and, for
purposes of satisfying Treasury Regulation Section 1.860G-1(a)(4)(iii), the
“latest possible maturity date” for each class of Certificates and interests
that represents ownership of one or more of the Regular Interests (as defined
herein) in REMIC II created hereunder.
|
Designation
|
Initial
Certificate or Uncertificated
Principal
Balance
|
Pass-Through
Rate
|
Latest
Possible Maturity Date(1)
|
|||||||
|
A-1
|
$
|
201,190,000.00
|
Class
A-1 Pass-Through Rate
|
December
25, 2036
|
||||||
|
A-2
|
$
|
15,981,000.00
|
Class
A-2 Pass-Through Rate
|
December
25, 2036
|
||||||
|
A-3
|
$
|
26,000,000.00
|
Class
A-3 Pass-Through Rate
|
December
25, 2036
|
||||||
|
M-1
|
$
|
6,891,000.00
|
Class
M-1 Pass-Through Rate
|
December
25, 2036
|
||||||
|
M-2
|
$
|
3,843,000.00
|
Class
M-2 Pass-Through Rate
|
December
25, 2036
|
||||||
|
M-3
|
$
|
1,855,000.00
|
Class
M-3 Pass-Through Rate
|
December
25, 2036
|
||||||
|
M-4
|
$
|
1,325,000.00
|
Class
M-4 Pass-Through Rate
|
December
25, 2036
|
||||||
|
B-1
|
$
|
1,325,000.00
|
Class
B-1 Pass-Through Rate
|
December
25, 2036
|
||||||
|
B-2
|
$
|
928,000.00
|
Class
B-2 Pass-Through Rate
|
December
25, 2036
|
||||||
|
B-3
|
$
|
1,325,000.00
|
Class
B-3 Pass-Through Rate
|
December
25, 2036
|
||||||
|
B-4
|
$
|
1,723,000.00
|
Class
B-4 Pass-Through Rate
|
December
25, 2036
|
||||||
|
Class
C Interest
|
$
|
2,651,284.33
|
Class
C Pass-Through Rate(2)
|
|
December
25, 2036
|
|||||
|
Class
P Interest
|
$
|
100.00
|
0.00%
|
|
December
25, 2036
|
|||||
___________________
|
(1)
|
For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the
Distribution Date in the month following the maturity date for the
Mortgage Loan with the latest maturity date has been designated as
the
“latest possible maturity date” for each Class of Class A, Class M and
Class B Certificates and the Class C Interest and the Class P
Interest.
|
|
(2)
|
The
Class C Interest will not accrue interest on its Uncertificated Principal
Balance, but will accrue interest at the Class C Pass-Through Rate
on its
Uncertificated Notional Amount (as defined herein) which shall equal
the
aggregate Uncertificated Principal Balance of the REMIC I Regular
Interests (other than REMIC I Regular Interest P).
|
REMIC
III
As
provided herein, the Securities Administrator on behalf of the Trustee shall
elect to treat the segregated pool of assets consisting of the Class C 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 will represent 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, 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:
|
Class
Designation
|
Pass-Through
Rate
|
Initial
Certificate Principal Balance
|
Latest
Possible
Maturity
Date(1)
|
|
C
|
(2)
|
$2,651,284.33
|
December
25, 2036
|
_______________
|
(1)
|
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 the Class C
Certificates.
|
|
(2)
|
The
Class C Certificates will receive 100% of the amounts received in
respect
of the Class C Interest.
|
REMIC
IV
As
provided herein, the Securities Administrator on behalf of the Trustee shall
elect 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 will represent 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, 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:
|
Class
Designation
|
Pass-Through
Rate
|
Initial
Certificate Principal Balance
|
Latest
Possible
Maturity
Date(1)
|
|
P
|
0.00%
|
$
100.00
|
December
25, 2036
|
_______________
|
(1)
|
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 the Class P
Certificates.
|
|
(2)
|
The
Class P Certificates will receive 100% of the amounts received in
respect
of the Class P Interest.
|
The
Trust
Fund shall be named, and may be referred to as, the “Bear ▇▇▇▇▇▇▇ Asset Backed
Securities I Trust 2006-AC5.” The Certificates issued hereunder may be referred
to as “Asset-Backed Certificates Series 2006-AC5” (including for purposes of any
endorsement or assignment of a Mortgage Note or Mortgage).
In
consideration of the mutual agreements herein contained, the Depositor, the
Master Servicer, the Securities Administrator, the Seller, the Company and
the
Trustee agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.01 Defined
Terms.
Whenever
used in this Agreement, the following words and phrases, unless the context
otherwise requires, shall have the following meanings:
Accepted
Master Servicing Practices:
With
respect to any Mortgage Loan, those customary mortgage servicing practices
of
prudent mortgage servicing institutions that master service mortgage loans
of
the same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the Trustee
or the Master Servicer (except in its capacity as successor to the Company
or a
Servicer).
Accepted
Servicing Practices:
With
respect to each EMC Mortgage Loan, those mortgage servicing practices (including
collection procedures) that are in accordance with all applicable statutes,
regulations and prudent mortgage banking practices for similar mortgage
loans.
Account:
The
Distribution Account, the Reserve Fund and any Protected Account.
Additional
Disclosure:
As
defined in Section 4.18.
Additional
Form 10-D Disclosure:
As
defined in Section 4.18.
Additional
Form 10-K Disclosure:
As
defined in Section 4.18.
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.
Advance:
An
advance of delinquent payments of principal or interest in respect of a Mortgage
Loan required to be made by the Company as provided in Section 6.01(a) hereof,
by the related Servicer in accordance with the related Servicing Agreement
or by
the Master Servicer as provided in Section 6.01(b) hereof.
Agreement:
This
Pooling and Servicing Agreement and any and all amendments or supplements hereto
made in accordance with the terms herein.
Amount
Held for Future Distribution:
As to
any Distribution Date, the aggregate amount held in the Company’s or the related
Servicer’s Protected Accounts 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 received in respect of such Mortgage
Loans after the last day of the related Prepayment Period, (iii) Liquidation
Proceeds and Insurance Proceeds received in respect of such Mortgage Loans
after
the last day of the related calendar month immediately preceding such
Distribution Date.
Annual
Statement of Compliance:
As
defined in Section 4.16.
Applied
Realized Loss Amount:
With
respect to any Distribution Date and a Class of Class A, Class M and Class
B
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 6.05 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.
Assignment
Agreement:
Shall
mean any of the Greenpoint Assignment Agreement or the National City Assignment
Agreement.
Assessment
of Compliance:
As
defined in Section 4.17.
Attesting
Party:
As
defined in Section 4.17.
Attestation
Report:
As
defined in Section 4.17.
Bankruptcy
Code:
Title
11 of the United States Code.
Basis
Risk Shortfall Carry Forward Amount:
With
respect to any Distribution Date and any Class of Class A, Class M and Class
B
Certificates, an amount equal to the sum of (A) if the Pass-Through Rate for
such Class for such Distribution Date is limited to the related Net Rate Cap,
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 not been reduced by the applicable Net Rate Cap on
such
Distribution Date, over (b) the amount of Current Interest that such Class
received on such Distribution Date and (B) the Basis Risk Shortfall Carry
Forward Amount for the previous Distribution Date not previously paid, together
with interest thereon at a rate equal to the related Pass-Through Rate for
the
current Distribution Date.
Book-Entry
Certificates:
Any of
the Certificates that shall be registered in the name of the Depository or
its
nominee, the ownership of which is reflected on the books of the Depository
or
on the books of a person maintaining an account with the Depository (directly,
as a “Depository Participant”, or indirectly, as an indirect participant in
accordance with the rules of the Depository and as described in Section 7.06).
As of the Closing Date, each Class of Offered 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, Columbia, Maryland, Minneapolis,
Minnesota or the city in which the Corporate Trust Office of the Trustee or
the
Securities Administrator or the principal office of the Company or the Master
Servicer is located are authorized or obligated by law or executive order to
be
closed.
Certificate:
Any one
of the certificates of any Class executed and authenticated by the Securities
Administrator in substantially the forms attached hereto as Exhibits A-1 through
A-6.
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).
Certificate
Owner:
With
respect to a Book-Entry Certificate, the Person that is the beneficial owner
of
such Book-Entry Certificate.
Certificate
Principal Balance:
As to
any Certificate (other than the Class C Certificates or Class R Certificates)
and as of any Distribution Date, the Initial Certificate Principal Balance
of
such Certificate plus 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. As to the Class C
Certificates and as of any Distribution Date, an amount equal to the
Uncertificated Principal Balance of the Class C Interest.
Certificate
Register:
The
register maintained pursuant to Section 7.02 hereof.
Class:
All
Certificates bearing the same Class designation as set forth in Section 7.01
hereof.
Class
A Certificate:
Any of
the Class A-1, Class A-2 and Class A-3 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 greater of (A) the
excess, if any, of (i) the aggregate Certificate Principal Balance of the Class
A Certificates immediately prior to such Distribution Date, over (ii) the lesser
of (a) the product of (1) 83.50% and (2) the aggregate Stated Principal Balance
of the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period,
to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period, and after reduction for Realized
Losses incurred during the prior calendar month), and (b) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the prior calendar month)
minus $1,325,186, and (B) the lesser of (I) $1,000, and (II) the aggregate
Certificate Principal Balance of the Class A Certificates on such Distribution
Date prior to principal distributions on such Certificates.
Class
A-1 Certificate:
Any
Certificate designated as a “Class A-1 Certificate” on the face thereof, in the
form of Exhibit A-1 hereto, representing the right to the Percentage Interest
of
distributions provided for the Class A-1 Certificates as set forth herein and
evidencing (i) a Regular Interest in REMIC II and (ii) the right to receive
Basis Risk Shortfall Carry Forward Amounts.
Class
A-1 Pass-Through Rate:
Shall
mean on any Distribution Date, 6.25% per annum, subject to the applicable Net
Rate Cap.
Class
A-2 Certificate:
Any
Certificate designated as a “Class 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 A-2 Certificates as set forth herein and
evidencing (i) a Regular Interest in REMIC II and (ii) the right to receive
Basis Risk Shortfall Carry Forward Amounts.
Class
A-2 Pass-Through Rate:
Shall
mean on any Distribution Date, 6.25% per annum, subject to the applicable Net
Rate Cap.
Class
A-3 Certificate:
Any
Certificate designated as a “Class 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 A-2 Certificates as set forth herein and
evidencing (i) a Regular Interest in REMIC II and (ii) the right to receive
Basis Risk Shortfall Carry Forward Amounts.
Class
A-3 Pass-Through Rate:
Shall
mean on any Distribution Date, 6.25% per annum, subject to the applicable Net
Rate Cap.
Class
B Certificates:
Any of
the Class B-1, Class B-2, Class B-3 and Class B-4 Certificates.
Class
B-1 Certificate:
Any
Certificate designated as a “Class B-1 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 B-1 Certificates as set forth herein and
evidencing (i) a Regular Interest in REMIC II and (ii) the right to receive
Basis Risk Shortfall Carry Forward Amounts.
Class
B-1 Pass-Through Rate:
Shall
mean (i) on any Distribution Date which occurs on or prior to the Optional
Termination Date, the lesser of (1) One-Month LIBOR plus 1.000% per annum and
(2) 11.00% per annum and (ii) for each Distribution Date thereafter, the lesser
of (1) One-Month LIBOR plus 1.500% per annum and (2) 11.00% per annum, in each
case subject to a cap equal to the related Net Rate Cap for such Distribution
Date.
Class
B-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, 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
payment 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 payment 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 payment 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
payment of the Class M-4 Principal Distribution Amount on such Distribution
Date) and (6) the Certificate Principal Balance of the Class B-1 Certificates
immediately prior to such Distribution Date, over (b) the lesser of (1) the
product of (x) 95.00% and (y) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period, and after reduction for Realized Losses
incurred during the prior calendar month), and (2) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the prior calendar month)
minus $1,325,186.
Class
B-2 Certificate:
Any
Certificate designated as a “Class B-2 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 B-2 Certificates as set forth herein and
evidencing (i) a Regular Interest in REMIC II and (ii) the right to receive
Basis Risk Shortfall Carry Forward Amounts.
Class
B-2 Pass-Through Rate:
Shall
mean (i) on any Distribution Date which occurs on or prior to the Optional
Termination Date, the lesser of (1) One-Month LIBOR plus 1.150% per annum and
(ii) 11.00% per annum and (ii) for each Distribution Date thereafter, the lesser
of (1) One-Month LIBOR plus 1.725% per annum and (ii) 11.00% per annum, in
each
case subject to a cap equal to the related Net Rate Cap for such Distribution
Date.
Class
B-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, 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
payment 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 payment 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 payment 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
payment of the Class M-4 Principal Distribution Amount on such Distribution
Date), (6) the Certificate Principal Balance of the Class B-1 Certificates
(after taking into account the payment of the Class B-1 Principal Distribution
Amount on such Distribution Date) and (7) the Certificate Principal Balance
of
the Class B-2 Certificates immediately prior to such Distribution Date, over
(b)
the lesser of (1) the product of (x) 95.70% and (y) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the prior calendar month),
and (2) the aggregate Stated Principal Balance of the Mortgage Loans as of
the
last day of the related Due Period (after giving effect to scheduled payments
of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period, and after reduction for Realized Losses incurred during the prior
calendar month) minus $1,325,186.
Class
B-3 Certificate:
Any
Certificate designated as a “Class B-3 Certificate” on the face thereof, in the
form of Exhibit A-3 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class B-3 Certificates as set forth herein and
evidencing (i) a Regular Interest in REMIC II and (ii) the right to receive
Basis Risk Shortfall Carry Forward Amounts.
Class
B-3 Pass-Through Rate:
Shall
mean (i) on any Distribution Date which occurs on or prior to the Optional
Termination Date, the lesser of (1) One-Month LIBOR plus 1.800% per annum and
(ii) 11.00% per annum and (ii) for each Distribution Date thereafter, the lesser
of (1) One-Month LIBOR plus 2.700% per annum and (ii) 11.00% per annum, in
each
case subject to a cap equal to the related Net Rate Cap for such Distribution
Date.
Class
B-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,
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
payment 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 payment 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 payment 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
payment of the Class M-4 Principal Distribution Amount on such Distribution
Date), (6) the Certificate Principal Balance of the Class B-1 Certificates
(after taking into account the payment of the Class B-1 Principal Distribution
Amount on such Distribution Date), (7) the Certificate Principal Balance of
the
Class B-2 Certificates (after taking into account the payment of the Class
B-2
Principal Distribution Amount on such Distribution Date) and (8) the Certificate
Principal Balance of the Class B-3 Certificates immediately prior to such
Distribution Date, over (b) the lesser of (1) the product of (x) 96.70% and
(y)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period, and after reduction for Realized Losses incurred during the prior
calendar month), and (2) the aggregate Stated Principal Balance of the Mortgage
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period, and after reduction for Realized Losses incurred
during the prior calendar month) minus $1,325,186.
Class
B-4 Certificate:
Any
Certificate designated as a “Class B-4 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 B-4 Certificates as set forth herein and
evidencing (i) a Regular Interest in REMIC II and (ii) the right to receive
Basis Risk Shortfall Carry Forward Amounts.
Class
B-4 Pass-Through Rate:
Shall
mean (i) on any Distribution Date which occurs on or prior to the Optional
Termination Date, the lesser of (1) One-Month LIBOR plus 1.800% per annum and
(ii) 11.00% per annum and (ii) for each Distribution Date thereafter, the lesser
of (1) One-Month LIBOR plus 2.700% per annum and (ii) 11.00% per annum, in
each
case subject to a cap equal to the related Net Rate Cap for such Distribution
Date.
Class
B-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, 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
payment 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 payment 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 payment 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
payment of the Class M-4 Principal Distribution Amount on such Distribution
Date), (6) the Certificate Principal Balance of the Class B-1 Certificates
(after taking into account the payment of the Class B-1 Principal Distribution
Amount on such Distribution Date), (7) the Certificate Principal Balance of
the
Class B-2 Certificates (after taking into account the payment of the Class
B-2
Principal Distribution Amount on such Distribution Date), (8) the Certificate
Principal Balance of the Class B-3 Certificates (after taking into account
the
payment of the Class B-3 Principal Distribution Amount on such Distribution
Date) and (9) the Certificate Principal Balance of the Class B-4 Certificates
immediately prior to such Distribution Date, over (b) the lesser of (1) the
product of (x) 98.00% and (y) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period, and after reduction for Realized Losses
incurred during the prior calendar month), and (2) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the prior calendar month)
minus $1,325,186.
Class
C Certificate:
Any
Certificate designated as a “Class C 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 C Certificates herein and evidencing (i)
a
Regular Interest in REMIC III and (ii) the obligation to pay Basis Risk
Shortfall Carry Forward Amounts.
Class
C Distribution Amount:
With
respect to any Distribution Date, the sum of (i) the Current Interest for the
Class C 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, Class M and Class B
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, Class M and Class B Certificates have been reduced
to
zero, the Class C Distribution Amount shall include the Overcollateralization
Amount.
Class
C Interest:
An
uncertificated interest in the Trust Fund held by the Trustee on behalf of
the
Holders of the Class C Certificates, evidencing a Regular Interest in REMIC
II
for purposes of the REMIC Provisions.
Class
C Pass-Through Rate:
With
respect to the Class C Interest, 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
Interest P) equal to the product of (x) the excess, if any, of the
Uncertificated REMIC I Pass-Through Rate for such REMIC I Regular Interest
over
the Marker Rate and (y) 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 Balance of such REMIC I Regular
Interests.
Class
M Certificates:
Any of
the Class M-1, Class M-2, Class M-3 and Class M-4 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
Basis Risk Shortfall Carry Forward Amounts.
Class
M-1 Pass-Through Rate:
Shall
mean (i) on any Distribution Date which occurs on or prior to the Optional
Termination Date, the lesser of (1) One-Month LIBOR plus 0.360% per annum and
(ii) 11.00% per annum and (ii) for each Distribution Date thereafter, the lesser
of (1) One-Month LIBOR plus 0.540% per annum and (ii) 11.00% per annum, in
each
case subject to a cap equal to the related Net Rate Cap for such Distribution
Date.
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) 88.70% and (y) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the prior calendar month),
and (2) the aggregate Stated Principal Balance of the Mortgage Loans as of
the
last day of the related Due Period (after giving effect to scheduled payments
of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period, and after reduction for Realized Losses incurred during the prior
calendar month) minus $1,325,186.
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
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
Basis Risk Shortfall Carry Forward Amounts.
Class
M-2 Pass-Through Rate:
Shall
mean (i) on any Distribution Date which occurs on or prior to the Optional
Termination Date, the lesser of (1) One-Month LIBOR plus 0.400% per annum and
(ii) 11.00% per annum and (ii) for each Distribution Date thereafter, the lesser
of (1) One-Month LIBOR plus 0.600% per annum and (ii) 11.00% per annum, in
each
case subject to a cap equal to the related Net Rate Cap for such Distribution
Date.
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) 91.60% and (y) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the prior calendar month),
and (2) the aggregate Stated Principal Balance of the Mortgage Loans as of
the
last day of the related Due Period (after giving effect to scheduled payments
of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period, and after reduction for Realized Losses incurred during the prior
calendar month) minus $1,325,186.
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
Basis Risk Shortfall Carry Forward Amounts.
Class
M-3 Pass-Through Rate:
Shall
mean (i) on any Distribution Date which occurs on or prior to the Optional
Termination Date, the lesser of (1) One-Month LIBOR plus 0.450% per annum and
(ii) 11.00% per annum and (ii) for each Distribution Date thereafter, the lesser
of (1) One-Month LIBOR plus 0.675% per annum and (ii) 11.00% per annum, in
each
case subject to a cap equal to the related Net Rate Cap for such Distribution
Date.
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) 93.00% and (y) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the prior calendar month),
and (2) the aggregate Stated Principal Balance of the Mortgage Loans as of
the
last day of the related Due Period (after giving effect to scheduled payments
of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period, and after reduction for Realized Losses incurred during the prior
calendar month) minus $1,325,186.
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
Basis Risk Shortfall Carry Forward Amounts.
Class
M-4 Pass-Through Rate:
Shall
mean (i) on any Distribution Date which occurs on or prior to the Optional
Termination Date, the lesser of (1) One-Month LIBOR plus 0.500% per annum and
(ii) 11.00% per annum and (ii) for each Distribution Date thereafter, the lesser
of (1) One-Month LIBOR plus 0.750% per annum and (ii) 11.00% per annum, in
each
case subject to a cap equal to the related Net Rate Cap for such Distribution
Date.
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) 94.00% and (y) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the prior calendar month),
and (2) the aggregate Stated Principal Balance of the Mortgage Loans as of
the
last day of the related Due Period (after giving effect to scheduled payments
of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period, and after reduction for Realized Losses incurred during the prior
calendar month) minus $1,325,186.
Class
P Certificate:
Any
Certificate designated as a “Class P Certificate” on the face thereof, in the
form of Exhibit A-5 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class P Certificates as set forth herein and
evidencing (i) a Regular Interest in REMIC IV and (ii) the right to receive
any
Prepayment Charge Waiver Amounts.
Class
P Certificate Account:
The
account established and maintained by the Securities Administrator pursuant
to
Section 6.09 hereof.
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
R Certificate:
Any of
the Class R-1, Class R-2 or Class RX Certificates.
Class
R-1 Certificate:
Any
Certificate designated a “Class R-1 Certificate” on the face thereof, in the
form set forth in Exhibit A-6 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 the
form set forth in Exhibit A-6 hereto, evidencing the Residual Interest in REMIC
II and representing the right to the Percentage Interest of distributions
provided for the Class R-2 Certificates as set forth herein.
Class
R-3 Interest:
The
uncertificated Residual Interest in REMIC III.
Class
R-4 Interest:
The
uncertificated Residual Interest in REMIC IV.
Class
RX Certificate:
Any
Certificate designated a “Class RX Certificate” on the face thereof, in the form
set forth in Exhibit A-6 hereto, evidencing the ownership of the Class R-3
Interest and Class R-4 Interest and representing the right to the Percentage
Interest of distributions provided for the Class RX Certificates as set forth
herein.
Closing
Date:
November 30, 2006.
Code:
The
Internal Revenue Code of 1986, including any successor or amendatory
provisions.
Company:
EMC.
Company
Information:
As
defined in Section 4.18(b).
Compensating
Interest:
An
amount, not to exceed the Servicing Fee, to be deposited in the Distribution
Account by the Company or the related Servicer with respect to the payment
of a
Prepayment Interest Shortfall on a Mortgage Loan subject to this Agreement;
provided that in the event the Company or the related Servicer fails to make
such payment, the Master Servicer shall be obligated to do so to the extent
provided in Section 6.02(c) hereof.
Corporate
Trust Office:
With
respect to the Trustee, the designated corporate trust 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 U.S. Bank National Association, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇
▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Services/BSABS 2006-AC5,
or such other address as the Trustee may designate from time to time, and (ii)
with respect to the Securities Administrator, the designated office of the
Securities Administrator at which 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 ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Corporate Trust Services, BSABS 2006-AC5
except for purposes of certificate transfer purposes, such term shall mean
the
office or agency of the Securities Administrator located at ▇▇▇▇▇ Fargo Bank,
N.A., Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479,
Attention: Corporate Trust Services, BSABS 2006-AC5.
Corresponding
Certificate:
With
respect to each REMIC I Regular Interest (other than REMIC I Regular Interests
AA, ZZ and P), the Certificate with the corresponding designation.
Current
Interest:
As of
any Distribution Date, with respect to the Certificates and interests of each
class (other than the Class P Interest, the Class P Certificates, the Residual
Interests and the Residual Certificates), (i) the interest accrued on the
Certificate Principal Balance or Notional Amount or Uncertificated Notional
Amount, as applicable, during the related Interest Accrual Period at the
applicable Pass-Through Rate, plus any amount previously distributed with
respect to interest for such Certificate or interest 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
C
Certificates and the Class C Interest in reduction of amounts otherwise
distributable to such Certificates and interest on such Distribution Date and
then any excess shall be allocated to each Class of Class A, Class M and Class
B
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
Report:
The
Current Report pursuant to Section 13 or 15(d) of the Exchange Act.
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 Class B 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 (after giving effect
to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period, and after reduction for Realized Losses incurred
during the prior calendar month).
Custodial
Agreement:
An
agreement, dated as of November 30, 2006, among the Depositor, the Seller,
the
Trustee, the Master Servicer, the Securities Administrator and the Custodian
in
substantially the form of Exhibit J hereto.
Custodian:
▇▇▇▇▇
Fargo Bank, National Association, or any successor custodian appointed pursuant
to the provisions hereof and the Custodial Agreement.
Cut-off
Date:
The
close of business on November 1, 2006.
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
$265,037,284.33.
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 7.06.
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 (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the prior calendar month)
exceeds (y) 42.40% 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. This method of determining
delinquencies is also referred to as the OTS method.
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
▇▇▇▇▇▇▇ Asset Backed Securities I LLC, a Delaware limited liability company,
or
its successor in interest.
Depositor
Information:
As
defined in Section 4.18(b).
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 between the
Issuing Entity 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 Securities Administrator
pursuant to Section 5.08 in the name of the Trustee for the benefit of the
Certificateholders and designated “U.S. Bank National Association, in trust for
registered Holders of Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC, Asset-Backed
Certificates, Series 2006-AC5” shall be held in trust for the Certificateholders
for the uses and purposes set forth in this Agreement.
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 December 2006.
Distribution
Account Deposit Date:
Two
Business Days prior to each Distribution Date.
Distribution
Report:
The
Asset-Backed Issuer Distribution Report pursuant to Section 13 or 15(d) of
the
Exchange Act.
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.
▇▇▇▇▇:
As
defined in Section 4.18.
Eligible
Account:
Any of
(i) an account or accounts maintained with a federal or state chartered
depository institution or trust company, the long-term unsecured debt
obligations and short-term unsecured debt obligations of which (or, in the
case
of a depository institution or trust company that is the principal subsidiary
of
a holding company, the debt obligations of such holding company, so long as
▇▇▇▇▇’▇ is not a Rating Agency) are rated by each Rating Agency in one of its
two highest long-term and its highest short-term rating categories respectively,
at the time any amounts are held on deposit therein, or (ii) an account or
accounts in a depository institution or trust company in which such accounts
are
insured by the FDIC (to the limits established by the FDIC) and the uninsured
deposits in which accounts are otherwise secured such that, as evidenced by
an
Opinion of Counsel delivered to the Trustee and to each Rating Agency, the
Certificateholders have a claim with respect to the funds in such account or
a
perfected first priority security interest against any collateral (which shall
be limited to Permitted Investments) securing such funds that is superior to
claims of any other depositors or creditors of the depository institution or
trust company in which such account is maintained, or (iii) a trust account
or
accounts maintained with the corporate trust department of a federal or state
chartered depository institution or trust company having capital and surplus
of
not less than $50,000,000, acting in its fiduciary capacity or (iv) any other
account acceptable to the Rating Agencies. Eligible Accounts may bear interest,
and may include, if otherwise qualified under this definition, accounts
maintained with the Trustee.
EMC:
EMC
Mortgage Corporation, a Delaware corporation, and its successors and
assigns.
EMC
Flow Loans:
The
Mortgage Loans purchased by EMC pursuant to a flow loan purchase
agreement.
EMC
Mortgage Loans:
Those
Mortgage Loans serviced by the Company pursuant to the terms of this
Agreement.
ERISA:
The
Employee Retirement Income Security Act of 1974, as amended.
ERISA
Restricted Certificates:
Any of
the Class C, Class P and Residual Certificates.
Event
of Default:
As
defined in Section 9.01 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, Class M and Class B Certificates and Interest Carry Forward Amounts
on
the Class A Certificates (other than Interest Carry Forward Amounts paid
pursuant to Section 6.04(a)(3)(A)), in each case for such Distribution
Date.
Exchange
Act:
Securities Exchange Act of 1934, as amended.
Exchange
Act Reports:
Any
reports required to be filed pursuant to Section 4.18 of this
Agreement.
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 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.
▇▇▇▇▇▇
▇▇▇:
▇▇▇▇▇▇
▇▇▇ (formally, Federal National Mortgage Association), or any successor
thereto.
FDIC:
The
Federal Deposit Insurance Corporation, or any successor thereto.
Final
Recovery Determination:
With
respect to any defaulted Mortgage Loan or any REO Property (other than a
Mortgage Loan or REO Property purchased by EMC pursuant to or as contemplated
by
Section 2.03(c) or Section 11.01), a determination made by the Company pursuant
to this Agreement or the applicable Servicer pursuant to the related Servicing
Agreement that all Insurance Proceeds, Liquidation Proceeds and other payments
or recoveries which the Company or such Servicer, in its reasonable good faith
judgment, expects to be finally recoverable in respect thereof have been so
recovered. The Master Servicer shall maintain records, based solely on
information provided by the Company and each Servicer, of each Final Recovery
Determination made thereby.
Final
Scheduled Distribution Date:
With
respect to the Certificates, December 25, 2036.
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 to November 30, as applicable.
Form
8-K Disclosure Information:
As
defined in Section 4.18(a)(ii)(A).
Freddie
Mac:
Freddie
Mac (formally, The Federal Home Loan Mortgage Corporation), or any successor
thereto.
Global
Certificate:
Any
Private Certificate registered in the name of the Depository or its nominee,
beneficial interests in which are reflected on the books of the Depository
or on
the books of a Person maintaining an account with such Depository (directly
or
as an indirect participant in accordance with the rules of such
depository).
Greenpoint:
GreenPoint Mortgage Funding, Inc.
Greenpoint
Assignment Agreement:
The
Assignment, Assumption and Recognition Agreement, dated as of November 30,
2006,
by and among the Seller, Greenpoint and the Trustee evidencing the assignment
of
the Greenpoint Servicing Agreement to the Trust, attached hereto as Exhibit
R-1.
Greenpoint
Servicing Agreement:
The
Purchase, Warranties and Servicing Agreement, dated as of September 1, 2003,
between the Seller and Greenpoint, as amended by Amendment Number One, dated
as
of January 1, 2006, attached hereto as Exhibit Q-1, as modified by the
Greenpoint Assignment Agreement.
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.
National
City:
National City Mortgage Co.
National
City Assignment Agreement:
The
Assignment, Assumption and Recognition Agreement, dated as of November 30,
2006,
by and among the Seller, National City and the Trustee evidencing the assignment
of the National City Servicing Agreement to the Trust, attached hereto as
Exhibit R-2.
National
City Servicing Agreement:
The
Amended and Restated Purchase, Warranties and Servicing Agreement, dated as
of
October 1, 2001, between the Seller and National City, as amended by Amendment
Reg AB dated as of March 1, 2006, attached hereto as Exhibit Q-2, as modified
by
the National City Assignment Agreement.
Indemnified
Persons:
The
Trustee, the Master Servicer, the Company, the Trust Fund and the Securities
Administrator and their officers, directors, agents and employees and, with
respect to the Trustee, any separate co-trustee and its officers, directors,
agents and employees.
Individual
Certificate:
Any
Private Certificate registered in the name of the Holder other than the
Depository or its nominee.
Initial
Certificate Principal Balance:
With
respect to any Certificate, the Certificate Principal Balance of such
Certificate or any predecessor Certificate on the Closing Date.
Insurance
Policy:
With
respect to any Mortgage Loan included in the Trust Fund, any insurance policy
or
LPMI Policy, including all riders and endorsements thereto in effect with
respect to such Mortgage Loan, including any replacement policy or policies
for
any Insurance Policies.
Insurance
Proceeds:
Proceeds paid in respect of the Mortgage Loans pursuant to any Insurance Policy
or any other insurance policy covering a Mortgage Loan, to the extent such
proceeds are payable to the mortgagee under the Mortgage, the Company, the
related Servicer or the Trustee under the deed of trust and are not applied
to
the restoration of the related Mortgaged Property or released to the Mortgagor
in accordance with the procedures that the Company or the related Servicer
would
follow in servicing mortgage loans held for its own account, in each case other
than any amount included in such Insurance Proceeds in respect of Insured
Expenses.
Insured
Expenses:
Expenses covered by an Insurance Policy or any other insurance policy with
respect to the Mortgage Loans.
Interest
Accrual Period:
With
respect to the Certificates (other than the Class A, Class C, Class P
Certificates and the Residual Certificates) and any Distribution Date, the
period from and including the 25th day of the calendar month preceding the
month
in which such Distribution Date occurs (or with respect to the Class M
Certificates and Class B Certificates and the first Interest Accrual Period,
the
Closing Date) to and including the 24th
day of
the calendar month in which such Distribution Date occurs. The Class R
Certificates and Class P Certificates are not entitled to distributions of
interest and do not have an Interest Accrual Period. With respect to the Class
A
Certificates, Class C Certificates and the Class C Interest and any Distribution
Date, the calendar month immediately preceding such Distribution Date. All
calculations of interest on the Class A Certificates and Class C Certificates
and the Class C Interest will be made on the basis of a 360-day year consisting
of twelve 30-day months. All calculations of interest on the Class M
Certificates and Class B Certificates will be made on the basis of the actual
number of days elapsed in the related Interest Accrual Period.
Interest
Carry Forward Amount:
As of
any Distribution Date and with respect to each Class of Certificates (other
than
the Class C, Class P and 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 Interest Accrual
Period including the Interest Accrual Period relating to such Distribution
Date.
Interest
Determination Date:
Shall
mean the second LIBOR Business Day preceding the commencement of each Interest
Accrual Period.
Interest
Funds:
For 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 Master Servicing Fee and the LPMI Fee, if
any,
(b) all Advances relating to interest with respect to the related Mortgage
Loans
remitted by the related Servicer, the Company or Master Servicer, as applicable,
on or prior to the related Remittance Date, (c) all Compensating Interest with
respect to the related Mortgage Loans required to be remitted by the Company
or
the Master Servicer pursuant to this Agreement or the related Servicer pursuant
to the related Servicing Agreement with respect to such Distribution Date,
(d)
Liquidation Proceeds and Subsequent Recoveries with respect to the related
Mortgage Loans collected during the prior calendar month (to the extent such
Liquidation Proceeds and Subsequent Recoveries relate to interest), (e) all
amounts relating to interest with respect to each Mortgage Loan repurchased
by
the Seller pursuant to Sections 2.02 and 2.03 and by EMC pursuant to Section
4.21, (f) all amounts in respect of interest paid by the Master Servicer
pursuant to Section 11.01, in each case to the extent remitted by the Company
or
the related Servicer, as applicable, to the Distribution Account pursuant to
this Agreement or the related Servicing Agreement and (g) the interest portion
of any proceeds received from the exercise of an Optional Termination pursuant
to Section 11.01 minus (ii) all amounts required to be reimbursed pursuant
to
Sections 5.02, 5.05 and 5.09 or as otherwise set forth in this
Agreement.
Issuing
Entity:
Bear
▇▇▇▇▇▇▇ Asset Backed Securities I Trust 2006-AC5.
Latest
Possible Maturity Date:
December 25, 2036, which is 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 Sections 860A through 860G of the Code, 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.
LIBOR
Certificates:
Any of
the Class M Certificates and Class B Certificates.
Liquidated
Loan:
With
respect to any Distribution Date, a defaulted Mortgage Loan that has been
liquidated through deed-in-lieu of foreclosure, foreclosure sale, trustee’s sale
or other realization as provided by applicable law governing the real property
subject to the related Mortgage and any security agreements and as to which
the
Company or the related Servicer has made a Final Recovery Determination with
respect thereto.
Liquidation
Proceeds:
Amounts, other than Insurance Proceeds, received in connection with the partial
or complete liquidation of a Mortgage Loan, whether through trustee’s sale,
foreclosure sale or otherwise, or in connection with any condemnation or partial
release of a Mortgaged Property and any other proceeds received with respect
to
an REO Property, less the sum of related unreimbursed Advances, Servicing Fees
and Servicing Advances and all expenses of liquidation, including property
protection expenses and foreclosure and sale costs, including court and
reasonable attorneys fees.
Loan-to-Value
Ratio:
The
fraction, expressed as a percentage, the numerator of which is the original
principal balance of the related Mortgage Loan and the denominator of which
is
the Appraised Value of the related Mortgaged Property.
Loss
Allocation Limitation:
The
meaning specified in Section 6.05(c) hereof.
LPMI
Fee:
Shall
mean the fee payable to the insurer for each Mortgage Loan subject to an LPMI
Policy as set forth in such LPMI Policy and on the Mortgage Loan
Schedule.
LPMI
Policy:
A
policy of mortgage guaranty insurance issued by an insurer meeting the
requirements of ▇▇▇▇▇▇ ▇▇▇ and Freddie Mac in which the Company or the related
Servicer of the related Mortgage Loan is responsible for the payment of the
LPMI
Fee thereunder from collections on the related Mortgage Loan.
Majority
Class C Certificateholder:
Shall
mean the Holder of a 50.01% or greater Percentage Interest in the Class C
Certificates.
Marker
Rate:
With
respect to the Class C 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 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 Pass-Through
Rate 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; provided, however, that
solely for this purpose, the related cap with respect to each REMIC I Regular
Interest (other than REMIC I Regular Interests AA, A-1, A-2, A-3, P and ZZ)
shall be multiplied by a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days in the related Interest
Accrual Period.
Master
Servicer:
▇▇▇▇▇
Fargo Bank, National Association, in its capacity as master servicer, and its
successors and assigns.
Master
Servicer Information:
As
defined in Section 4.18(b).
Master
Servicing Compensation:
For any
Distribution Date, the Master Servicing Fee for such Distribution Date and
any
amounts earned on permitted investments in the Distribution
Account.
Master
Servicing Fee:
As to
each Mortgage Loan and any Distribution Date, an amount equal to 1/12th of
the
Master Servicing Fee Rate multiplied by the Stated Principal Balance of such
Mortgage Loan as of the Due Date in the month preceding the month in which
such
Distribution Date occurs.
Master
Servicing Fee Rate:
0.020%
per annum.
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.
MERS:
Mortgage Electronic Registration Systems, Inc., a corporation organized and
existing under the laws of the State of Delaware, or any successor
thereto.
MERS®
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® 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 pursuant to Section 6.06.
Moody’s:
▇▇▇▇▇’▇
Investors Service, Inc., and any successor thereto.
Mortgage:
The
mortgage, deed of trust or other instrument creating a first lien on or first
priority ownership interest in an estate in fee simple in real property securing
a Mortgage Note.
Mortgage
File:
The
mortgage documents listed in Section 2.01 hereof pertaining to a particular
Mortgage Loan and any additional documents delivered to the Trustee or Custodian
on its behalf to be added to the Mortgage File pursuant to this
Agreement.
Mortgage
Loans:
Such of
the Mortgage Loans transferred and assigned to the Trustee pursuant to the
provisions hereof, as from time to time are held as a part of the Trust Fund
(including any REO Property), the mortgage loans so held being identified in
the
Mortgage Loan Schedule, notwithstanding foreclosure or other acquisition of
title of the related Mortgaged Property. Any mortgage loan that was intended
by
the parties hereto to be transferred to the Trust Fund as indicated by such
Mortgage Loan Schedule which is in fact not so transferred for any reason
including, without limitation, a breach of the representation contained in
Section 2.03(b)(v) hereof, shall continue to be a Mortgage Loan hereunder until
the Purchase Price with respect thereto has been paid to the Trust
Fund.
Mortgage
Loan Purchase Agreement:
Shall
mean the Mortgage Loan Purchase Agreement, dated as of November 30, 2006,
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 11.01, to be paid in connection with
the repurchase of the Mortgage Loans pursuant to Section 11.01.
Mortgage
Loan Schedule:
The
list of Mortgage Loans (as from time to time amended by the Seller 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:
(a) the
city,
state and zip code of the Mortgaged Property;
(b) the
property type;
(c) the
Mortgage Interest Rate;
(d) the
Servicing Fee Rate;
(e) the
Master Servicing Fee Rate;
(f) the
LPMI
Fee, if applicable;
(g) the
Trustee Fee Rate, if applicable;
(h) the
Net
Rate;
(i) the
maturity date;
(j) the
stated original term to maturity;
(k) the
stated remaining term to maturity;
(l) the
original Principal Balance;
(m) the
first
payment date;
(n) the
principal and interest payment in effect as of the Cut-off Date;
(o) the
unpaid Principal Balance as of the Cut-off Date;
(p) the
Loan-to-Value Ratio at origination;
(q) the
insurer of any Primary Mortgage Insurance Policy;
(r) the
MIN
with respect to each MOM Loan;
(s) the
Gross
Margin, if applicable;
(t) the
next
Adjustment Date, if applicable;
(u) the
Maximum Mortgage Rate, if applicable;
(v) the
Minimum Mortgage Rate, if applicable;
(w) the
Periodic Rate Cap, if applicable;
(x) the
Loan
Group, if applicable;
(y) a
code
indicating whether the Mortgage Loan is negatively amortizing;
(z) which
Mortgage Loans adjust after an initial fixed-rate period of one, two, three,
five, seven or ten years or any other period;
(aa) the
Prepayment Charge, if any;
(bb) lien
position (e.g., first lien or second lien);
(cc) a
code
indicating whether the Mortgage Loan is has a balloon payment;
(dd) a
code
indicating whether the Mortgage Loan is an interest-only loan;
(ee) the
interest-only term, if applicable;
(ff) the
Mortgage Loan Seller; and
(gg) the
original amortization term.
Such
schedule also shall set forth for all of the Mortgage Loans, the total number
of
Mortgage Loans, the total of each of the amounts described under (n) and (j)
above, the weighted average by principal balance as of the Cut-off Date of
each
of the rates described under (c) through (h) above, and the weighted average
remaining term to maturity by unpaid principal balance as of the Cut-off
Date.
Mortgage
Note:
The
original executed note or other evidence of indebtedness of a Mortgagor under
a
Mortgage Loan.
Mortgage
Rate:
The
annual rate of interest borne by a Mortgage Note.
Mortgaged
Property:
The
underlying property securing a Mortgage Loan.
Mortgagor:
The
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 Master Servicing
Fee
Rate and (iii) the rate at which the LPMI Fee is calculated, if
any.
Net
Rate Cap:
With
respect to the Class A Certificates and any Distribution Date, a per annum
rate
equal to the weighted average of the Net Mortgage Rates on the Mortgage Loans
as
of the first day of the related Due Period.
With
respect to the Class M Certificates and Class B Certificates and any
Distribution Date, a per annum rate equal to the weighted average of the Net
Mortgage Rates on the Mortgage Loans as of the first day of the related Due
Period, adjusted for the actual numbers of days elapsed in the Interest Accrual
Period.
For
federal income tax purposes, the Net Rate Cap with respect to each of the Class
A, Class M and Class B Certificates and any Distribution Date shall be equal
to
a per annum rate equal to the weighted average (adjusted for the actual number
of days elapsed in the related Intrest Accrual Period, in the case of the Class
M Certificates and Class B Certificates) of the Uncertificated REMIC I
Pass-Through Rates on the REMIC I Regular Interests (other than REMIC I Regular
Interest P), weighted on the basis of the Uncertificated Principal Balances
of
each such REMIC I Regular Interest immediately prior to such Distribution Date.
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 Company
or
the Master Servicer pursuant to this Agreement or the related Servicer pursuant
to the related Servicing Agreement, that, in the good faith judgment of the
Company, the Master Servicer or the related Servicer, will not or, in the case
of a proposed advance, would not, be ultimately recoverable by it from the
related Mortgagor, related Liquidation Proceeds, Insurance Proceeds or
otherwise.
Notional
Amount:
With
respect to the Class C Certificates and any Distribution Date, an amount equal
to the aggregate Stated Principal Balance of the Mortgage Loans. The initial
Notional Amount of the Class C Certificates shall be $265,037,284.33. For
federal income tax purposes, the Class C Certificates will have a Notional
Amount equal to the Uncertificated Notional Amount of the Class C
Interest.
Offered
Certificates:
Any of
the Class A-1, Class A-2, Class A-3, Class M-1, Class M-2, Class M-3, Class
M-4,
Class B-1, Class B-2 and Class B-3 Certificates.
Officer’s
Certificate:
A
certificate (i) signed by the Chairman of the Board, the Vice Chairman of the
Board, the President, a Vice President (however denominated), an Assistant
Vice
President, the Treasurer, the Secretary, or one of the assistant treasurers
or
assistant secretaries of the Depositor, the Seller, any Servicer or the Master
Servicer (or any other officer customarily performing functions similar to
those
performed by any of the above designated officers and also to whom, with respect
to a particular matter, such matter is referred because of such officer’s
knowledge of and familiarity with a particular subject) or (ii), if provided
for
in this Agreement, signed by a Servicing Officer, as the case may be, and
delivered to the Depositor, the Seller, the Securities Administrator, the Master
Servicer and/or the Trustee, as the case may be, as required by this
Agreement.
One-Month
LIBOR:
With
respect to any Interest Accrual Period and the LIBOR Certificates, the rate
determined by the Securities Administrator on the related Interest Determination
Date on the basis of the rate for U.S. dollar deposits for one month that
appears on Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such
Interest Determination Date. If
such
rate does not appear on such page (or such other page as may replace that page
on that service, or if such service is no longer offered, such other service
for
displaying One-Month LIBOR or comparable rates as may be reasonably selected
by
the Securities Administrator), One-Month LIBOR for the applicable Interest
Accrual Period will be the Reference Bank Rate. If no such quotations can be
obtained by the Securities Administrator and no Reference Bank Rate is
available, One-Month LIBOR shall be One-Month LIBOR applicable to the preceding
Interest Accrual Period. The establishment of One-Month LIBOR on each Interest
Determination Date by the Securities Administrator and the Securities
Administrator’s calculation of the rate of interest applicable to the LIBOR
Certificates for the related Interest Accrual Period shall, in the absence
of
manifest error, be final and binding. One-Month LIBOR for the Class M
Certificates and Class B Certificates and any Interest Accrual Period shall
be
calculated as described above.
Opinion
of Counsel:
A
written opinion of counsel, who may be counsel for the Seller, the Depositor,
the Company or the Master Servicer, reasonably acceptable to each addressee
of
such opinion; provided that with respect to Section 2.05, 8.05, 8.07 or 12.01,
or the interpretation or application of the REMIC Provisions, such counsel
must
(i) in fact be independent of the Seller, Depositor, the Company and the Master
Servicer, (ii) not have any direct financial interest in the Seller, Depositor,
the Company or the Master Servicer or in any affiliate of either, and (iii)
not
be connected with the Seller, Depositor, the Company or the Master Servicer
as
an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
Optional
Termination:
The
termination of the Trust created hereunder as a result of the purchase of all
of
the assets of the Trust and any related REO Property pursuant to Section
11.01.
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.
Originator:
With
respect to each Mortgage Loan, shall mean the originator set forth in the
Mortgage Loan Schedule for such Mortgage Loan.
OTS:
The
Office of Thrift Supervision.
Outstanding:
With
respect to the Certificates as of any date of determination, all Certificates
theretofore executed and authenticated under this Agreement except:
(a) Certificates
theretofore canceled by the Securities Administrator or delivered to the
Securities Administrator for cancellation; and
(b) Certificates
in exchange for which or in lieu of which other Certificates have been executed
and delivered by the Securities Administrator 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 Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the prior calendar month)
over the aggregate Certificate Principal Balance of the Certificates (other
than
the Class C Certificates and the Class P Certificates) on such Distribution
Date
(after taking into account the payment of principal other than any Extra
Principal Distribution Amount on such Certificates).
Overcollateralization
Release Amount:
With
respect to any Distribution Date, the lesser of (x) the Principal Funds 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 Funds
are
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, 1.00% 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) 1.00% of the aggregate Stated Principal Balance
of the Mortgage Loans as of the Cut-off Date and (2) 2.00% of the then current
aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of
the related Due Period (after giving effect to scheduled payments of principal
due during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period, and after reduction for Realized Losses incurred during the prior
calendar month) and (ii) $1,325,186 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
Transfer:
Any
transaction involving either (1) a sale or other transfer of mortgage loans
directly or indirectly to an issuing entity in connection with an issuance
of
publicly offered or privately placed, rated or unrated mortgage-backed
securities or (2) an issuance of publicly offered or privately placed, rated
or
unrated securities, the payments on which are determined primarily by reference
to one or more portfolios of residential mortgage loans.
Pass-Through
Rate:
With
respect to each Class of Certificates (other than the Class C Certificates)
and
the Class C Interest, the Class A-1 Pass-Through Rate, Class A-2 Pass-Through
Rate, Class A-3 Pass-Through Rate, Class M-1 Pass-Through Rate, Class M-2
Pass-Through Rate, Class M-3 Pass-Through Rate, Class M-4 Pass-Through Rate,
Class B-1 Pass-Through Rate, Class B-2 Pass-Through Rate, Class B-3 Pass-Through
Rate or Class B-4 Pass-Through Rate, as applicable, or with respect to the
Class
C Interest, the Class C Pass-Through Rate.
With
respect to the Class C Certificate,
the
Class C Certificate shall not have a Pass-Through Rate, but Current Interest
for
such Certificate and each Distribution Date shall be an amount equal to 100%
of
the amounts distributable to the Class C Interest for such Distribution
Date.
With
respect to the Class P Certificate and the Class P Interest, 0.00% per
annum.
Paying
Agent:
The
Securities Administrator, in its capacity as paying agent, and its successors
and assigns.
Percentage
Interest:
With
respect to any Certificate of a specified Class, the Percentage Interest set
forth on the face thereof or the percentage obtained by dividing the
Denomination of such Certificate by the aggregate of the Denominations of all
Certificates of the such Class.
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;
(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;
(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;
(v) demand
or
time deposits or certificates of deposit issued by any bank or trust company
or
savings institution to the extent that such deposits are fully insured by the
FDIC;
(vi) 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;
(vii) 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 (iv) above;
(viii) securities
(other than stripped bonds, stripped coupons or instruments sold at a purchase
price in excess of 115% of the face amount thereof) bearing interest or sold
at
a discount issued by any corporation incorporated under the laws of the United
States or any state thereof which, at the time of such investment, have one
of
the two highest long term ratings of each Rating Agency (except if the Rating
Agency is ▇▇▇▇▇’▇, such rating shall be the highest commercial paper rating of
▇▇▇▇▇’▇ 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;
(ix) interests
in any money market fund (including any such fund managed or advised by the
Trustee or Master Servicer or any affiliate thereof) which at the date of
acquisition of the interests in such fund and throughout the time such interests
are held in such fund has the highest applicable long term rating by each Rating
Agency rating such fund 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;
(x) short
term investment funds sponsored by any trust company or banking association
incorporated under the laws of the United States or any state thereof (including
any such fund managed or advised by the Trustee or any affiliate thereof) which
on the date of acquisition has been rated by each Rating Agency in their
respective highest applicable rating category or such lower rating as will
not
result in the downgrading or withdrawal of the ratings then assigned to the
Certificates by each Rating Agency; and
(xi) such
other investments having a specified stated maturity and bearing interest or
sold at a discount acceptable to each Rating Agency as will not result in the
downgrading or withdrawal of the rating then assigned to the Certificates by
any
Rating Agency, as evidenced by a signed writing delivered by each Rating
Agency;
provided,
that no such instrument shall be a Permitted Investment if such instrument
(i)
evidences the right to receive interest only payments with respect to the
obligations underlying such instrument, (ii) is purchased at a premium or (iii)
is purchased at a deep discount; provided further that no such instrument shall
be a Permitted Investment (A) if such instrument evidences principal and
interest payments derived from obligations underlying such instrument and the
interest payments with respect to such instrument provide a yield to maturity
of
greater than 120% of the yield to maturity at par of such underlying
obligations, or (B) if it may be redeemed at a price below the purchase price
(the foregoing clause (B) not to apply to investments in units of money market
funds pursuant to clause (vi) above); provided further that no amount
beneficially owned by any REMIC may be invested in investments (other than
money
market funds) treated as equity interests for federal income tax purposes,
unless the Master Servicer shall receive an Opinion of Counsel, at the expense
of the Master Servicer, to the effect that such investment will not adversely
affect the status of any such REMIC as a REMIC under the Code or result in
imposition of a tax on any such REMIC. Permitted Investments that are subject
to
prepayment or call may not be purchased at a price in excess of
par.
Permitted
Transferee:
Any
Person (x) 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 or (v) an electing large partnership within
the meaning of Section 775(a) of the Code, (y) that is a citizen or resident
of
the United States, a corporation, partnership (other than a partnership that
has
any direct or indirect foreign partners) or other entity (treated as a
corporation or a partnership for federal income tax purposes), created or
organized in or under the laws of the United States, any State thereof or the
District of Columbia, an estate whose income from sources without the United
States is includible in gross income for United States federal income tax
purposes regardless of its connection with the conduct of a trade or business
within the United States, or a trust if a court within the United States is
able
to exercise primary supervision over the administration of the trust and one
or
more United States persons have authority to control all substantial decisions
of the trust or if it has a valid election in effect under applicable U.S.
Treasury regulations to be treated as a United States person and (z) other
than
any other Person so designated by the Trustee or Securities Administrator based
upon an Opinion of Counsel addressed to the Trustee or Securities Administrator
(which shall not be an expense of the Trustee or Securities Administrator)
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 Freddie 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
Charge Waiver Amount:
Any
amount paid by the Company or related Servicer to the Master Servicer in respect
of waived Prepayment Charges pursuant to Section 5.01(a).
Prepayment
Interest Excess:
With
respect to any Distribution Date, for each EMC Mortgage Loan that was the
subject of a Principal Prepayment in full during the portion of the related
Prepayment Period occurring between the first day of the calendar month in
which
such Distribution Date occurs and the Determination Date of the calendar month
in which such Distribution Date occurs, an amount equal to interest (to the
extent received) at the applicable Net Mortgage Rate on the amount of such
Principal Prepayment for the number of days commencing on the first day of
the
calendar month in which such Distribution Date occurs and ending on the last
date through which interest is collected from the related
Mortgagor.
Prepayment
Interest Shortfall:
With
respect to any Distribution Date, for each Mortgage Loan that was the subject
of
a partial Principal Prepayment during the related Prepayment Period, or a
Principal Prepayment in full during the related Prepayment Period, or that
became a Liquidated Loan during the prior calendar month, (other than a
Principal Prepayment in full resulting from the purchase of a Mortgage Loan
pursuant to Section 2.02, 2.03, 4.21 or 11.01 hereof), the amount, if any,
by
which (i) one month’s interest at the applicable Net Mortgage Rate on the Stated
Principal Balance of such Mortgage Loan immediately prior to such prepayment
(or
liquidation) or in the case of a partial Principal Prepayment on the amount
of
such prepayment (or liquidation proceeds) exceeds (ii) the amount of interest
paid or collected in connection with such Principal Prepayment or such
liquidation proceeds less the sum of (a) the related Servicing Fee, (b) the
Master Servicing Fee Rate and (c) the LPMI Fee, if any.
Prepayment
Period:
As to
any Distribution Date (except the first Distribution Date) and each EMC Mortgage
Loan, for each Principal Prepayment in full, 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 (as to the first Distribution Date and any Mortgage Loan, the period
commencing on the Cut-off Date and ending on the 15th day of the month in which
such Distribution Date occurs) and for each partial Principal Prepayment, the
calendar month prior to the month in which such Distribution Date occurs. As
to
any Distribution Date and each Mortgage Loan that is not an EMC Mortgage Loan,
in accordance with the related Servicing Agreement
Primary
Mortgage Insurance Policy:
Any
primary mortgage guaranty insurance policy issued in connection with a Mortgage
Loan which provides compensation to a Mortgage Note holder in the event of
default by the obligor under such Mortgage Note or the related security
instrument, if any or any replacement policy therefor through the related
Interest 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 any Distribution Date, (i) the sum, without duplication, of (a)
all
scheduled principal collected on the Mortgage Loans during the related Due
Period, (b) all Advances relating to principal made with respect to the Mortgage
Loans remitted by the related Servicer or Master Servicer, as applicable, on
or
prior to the Remittance Date, (c) Principal Prepayments with respect to the
Mortgage Loans exclusive of Prepayment Charges or penalties collected during
the
related Prepayment Period, (d) the Stated Principal Balance of each Mortgage
Loan that was repurchased by the Seller pursuant to Sections 2.02 or 2.03 or
by
EMC pursuant to Section 4.21, (e) the aggregate of all Substitution Adjustment
Amounts with respect to the Mortgage Loans for the related Determination Date
in
connection with the substitution of related Mortgage Loans pursuant to Section
2.03(d), (f) all Liquidation Proceeds and Subsequent Recoveries with respect
to
the Mortgage Loans collected during the prior calendar month (to the extent
such
Liquidation Proceeds and Subsequent Recoveries relate to principal) and remitted
by the Company or the related Servicer to the Distribution Account pursuant
to
this Agreement or the related Servicing Agreement and (g) amounts in respect
of
principal paid by the Majority Class C Certificateholder pursuant to Section
11.01 minus (ii) all related amounts required to be reimbursed pursuant to
Sections 5.02, 5.05 and 5.09 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, 4.21 and 11.01 hereof) that is received in advance of its scheduled
Due Date and is not accompanied by an amount as to interest representing
scheduled interest due on any date or dates in any month or months subsequent
to
the month of prepayment. Partial Principal Prepayments shall be applied by
the
Company or the related Servicer, as appropriate, in accordance with the terms
of
the related Mortgage Note.
Private
Certificates:
Any of
the Class B-4, Class C, Class P and Class R Certificates.
Prospectus
Supplement:
The
Prospectus Supplement dated November 28, 2006 relating to the public offering
of
the Offered Certificates.
Protected
Account:
Each
account established and maintained by the Company with respect to receipts
on
the Mortgage Loans and REO Property in accordance with Section 5.01 hereof
or by
the related Servicer in accordance with the related Servicing
Agreement.
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 4.21 hereof, an amount equal to the sum of (i) 100% of
the
outstanding principal balance of the Mortgage Loan as of the date of such
purchase plus (ii) accrued interest thereon at the applicable Mortgage Rate
through the first day of the month in which the Purchase Price is to be
distributed to Certificateholders, reduced by any portion of the Servicing
Fee,
Servicing Advances and Advances payable to the purchaser of the Mortgage Loan
plus and (iii) any costs and damages (if any) incurred by the Trust in
connection with any violation of such Mortgage Loan of any predatory lending
laws.
Rating
Agency:
Each of
▇▇▇▇▇’▇ 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 Company pursuant to this Agreement or the related Servicer pursuant to
the
related Servicing Agreement. In addition, to the extent the Company, the related
Servicer or 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.
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
C,
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
C,
Class P Certificates 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 Securities Administrator and engaged in
transactions in Eurodollar deposits in the international Eurocurrency market
(i)
with an established place of business in London, (ii) which have been designated
as such by the Securities Administrator and (iii) which are not controlling,
controlled by, or under common control with, the Depositor, the Seller or the
Master Servicer.
Reference
Bank Rate:
With
respect to any Interest Accrual Period shall mean the arithmetic mean, rounded
upwards, if necessary, to the nearest whole multiple of 0.03125%, of the offered
rates for United States dollar deposits for one month that are quoted by the
Reference Banks as of 11:00 a.m., New York City time, on the related Interest
Determination Date to prime banks in the London interbank market for a period
of
one month in an amount approximately equal to the aggregate Certificate
Principal Balance of the LIBOR Certificates for such Interest 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
Securities Administrator, as of 11:00 a.m., New York City time, on such date
for
loans in United States dollars to leading European banks for a period of one
month in amounts approximately equal to the aggregate Certificate Principal
Balance of the LIBOR Certificates for such Interest 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.
Regulation
AB:
Subpart
229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to
such clarification and interpretation as have been provided by the Commission
in
the adopting release (Asset-Backed Securities, Securities Act Release No.
33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time
to
time.
Relief
Act:
The
Servicemembers Civil Relief Act, as amended, or any similar state or local
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 the Preliminary Statement and Section
6.07(a).
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 Interest Loss Allocation Amount:
With
respect to any Distribution Date, an amount equal to (a) the product of (i)
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 Overcollateralization Amount:
With
respect to any date of determination, (i) 1.00% of the aggregate Uncertificated
Principal Balance of the REMIC I Regular Interests (other than REMIC I Regular
Interest P) minus (ii) the aggregate Uncertificated Principal Balance of each
REMIC I Regular Interest (other than REMIC I Regular Interest P) for which
a
Class A, Class M or Class B Certificate is a Corresponding Certificate, in
each
case, as of such date of determination.
REMIC
I Overcollateralization Target Amount:
1.00%
of the Overcollateralization Target Amount.
REMIC
I Principal Loss Allocation Amount:
With
respect to any Distribution Date, an amount equal to the product of (i) 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 (2)
times
the aggregate Uncertificated Principal Balance of each REMIC I Regular Interest
(other than REMIC I Regular Interest P) for which a Class A, Class M or Class
B
Certificate is a Corresponding Certificate and the denominator of which is
the
aggregate Uncertificated Principal Balance of each REMIC I Regular Interest
(other than REMIC I Regular Interest P) for which a Class A, Class M or Class
B
Certificate is a Corresponding Certificate and REMIC I Regular Interest
ZZ.
REMIC
I Regular Interest ZZ Maximum Interest Deferral Amount:
With
respect to any Distribution Date, the excess, if any, 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
Overcollateralization Amount, in each case for such Distribution Date, over
(ii)
the Uncertificated Accrued Interest on each REMIC I Regular Interest (other
than
REMIC I Regular Interest P) for which a Class A, Class M or Class B Certificate
is a Corresponding Certificate, with the rate on each such REMIC I Regular
Interest subject to a cap equal to the Pass-Through Rate for the Corresponding
Certificate for the purpose of this calculation for such Distribution Date;
provided, however, that solely for this purpose, the related cap with respect
to
each REMIC I Regular Interest for which a Class M Certificate or Class B
Certificate is a Corresponding Certificate shall be multiplied by a fraction,
the numerator of which is 30 and the denominator of which is the actual number
of days in the related Interest Accrual Period.
REMIC
II:
The
segregated pool of assets described in the Preliminary Statement consisting
of
the REMIC I Regular Interests
REMIC
III:
The
segregated pool of assets consisting of the Class C Interest conveyed in trust
to the Trustee, for the benefit of the Holders of the Class C Certificates
and
the Class RX Certificates (in respect of the Class R-3 Interest), with respect
to which a separate REMIC election is to be made.
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 Certificates (in respect of the Class R-4 Interest), with respect
to which a separate REMIC election is to be made.
REMIC
Opinion:
Shall
mean an Opinion of Counsel to the effect that the proposed action will not
have
an adverse effect on any REMIC created hereunder.
REMIC
Provisions:
Provisions of the federal income tax law relating to real estate mortgage
investment conduits, which appear at Sections 860A through 860G 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 (i) with respect to the Company, the Distribution Account Deposit Date,
and
(ii) with respect to the related Servicer, the date specified in the related
Servicing Agreement.
Remittance
Report:
As
defined in Section 6.04(g).
REO
Imputed Interest:
As to
any REO Property, for any calendar month during which such REO Property was
at
any time part of REMIC I, one month’s interest at the applicable Net Mortgage
Rate on the Stated Principal Balance of such REO Property (or, in the case
of
the first such calendar month, of the related Mortgage Loan, if appropriate)
as
of the close of business on the Distribution Date in such calendar
month.
REO
Property:
A
Mortgaged Property acquired by the Company or the related Servicer through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Replacement
Mortgage Loan:
A
Mortgage Loan or Mortgage Loans in the aggregate substituted by the Seller
for a
Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release, (i) have a Stated Principal Balance, after
deduction of the principal portion of the Scheduled Payment due in the month
of
substitution, not in excess of, and not less than 90% of, the Stated Principal
Balance of the Deleted Mortgage Loan; (ii) have a fixed Mortgage Rate not less
than or more than 1% per annum higher than the Mortgage Rate of the Deleted
Mortgage Loan; (iii) have the same or higher credit quality characteristics
than
that of the Deleted Mortgage Loan; (iv) have a Loan-to-Value Ratio no higher
than that of the Deleted Mortgage Loan; (v) have a remaining term to maturity
no
greater than (and not more than one year less than) that of the Deleted Mortgage
Loan; (vi) not permit conversion of the Mortgage Rate from a fixed rate to
a
variable rate; (vii) have the same lien priority as the Deleted Mortgage Loan;
(viii) constitute the same occupancy type as the Deleted Mortgage Loan or be
owner occupied; and (ix) comply with each representation and warranty set forth
in Section 2.03 hereof.
Reportable
Event:
As
defined in Section 4.18.
Repurchase
Price:
With
respect to each Mortgage Loan, a price equal to (i) the outstanding principal
balance of such Mortgage Loan, plus (ii) interest on such outstanding principal
balance at the Mortgage Rate (net of the Servicing Fee Rate) from the last
date
through which interest has been paid to the end of the month of repurchase,
less
(iii) amounts advanced by the Company or the related Servicer in respect of
such
repurchased Mortgage Loan which are being held in the Distribution Account
for
remittance to the Securities Administrator plus (iv) 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.
Request
for Release:
The
Request for Release to be submitted by the Seller, the Company, the related
Servicer or the Master Servicer to the Custodian substantially in the form
of
Exhibit G. Each Request for Release furnished to the Custodian by the Seller,
the Company, the related Servicer or the Master Servicer shall be in duplicate
and shall be executed by an officer of such Person or a Servicing Officer (or,
if furnished electronically to the Custodian, shall be deemed to have been
sent
and executed by an officer of such Person or a Servicing Officer) of the Company
or the related Servicer, as applicable.
Required
Insurance Policy:
With
respect to any Mortgage Loan, any insurance policy that is required to be
maintained from time to time under this Agreement or the related Servicing
Agreement.
Reserve
Fund:
Shall
mean the separate trust account created and maintained by the Securities
Administrator pursuant to Section 6.08 hereof.
Reserve
Fund Deposit:
With
respect to the Reserve Fund, an amount equal to $5,000, which the Depositor
shall initially deposit into the Reserve Fund pursuant to Section 6.08
hereof.
Residual
Certificates:
The
Class R-1, Class R-2 and Class RX Certificates, each evidencing the sole class
of Residual Interests 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.
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 ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc.
Scheduled
Payment:
The
scheduled monthly payment on a Mortgage Loan due on any Due Date allocable
to
principal and/or interest on such Mortgage Loan.
Securities
Act:
The
Securities Act of 1933, as amended, and the rules and regulations
thereunder.
Securities
Administrator:
▇▇▇▇▇
Fargo Bank, National Association, in its capacity as securities administrator,
transfer agent and paying agent hereunder, and its successors and
assigns.
Securities
Administrator Information:
As
defined in Section 4.18(b).
Seller:
EMC in
its capacity as seller of the Mortgage Loans to the Depositor.
Senior
Certificates:
Any of
the Class A-1, Class A-2 and Class A-3 Certificates
Servicer:
Any of
EMC, Greenpoint and National City and their successors and assigns.
Servicing
Advances:
All
customary, reasonable and necessary “out of pocket” costs and expenses
(including reasonable legal fees) incurred in the performance by the Company
or
the related Servicer of its servicing obligations hereunder or under the related
Servicing Agreement, including, but not limited to, the cost of (i) the
preservation, restoration and protection of a Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, and including
any
expenses incurred in relation to any such proceedings that result from the
Mortgage Loan being registered in the MERS® System, (iii) the management and
liquidation of any REO Property (including, without limitation, realtor’s
commissions) and (iv) compliance with any obligations under Section 3.07 hereof
to cause insurance to be maintained.
Servicing
Agreement:
Any of
the Greenpoint Servicing Agreement or the National City Servicing
Agreement.
Servicing
Criteria:
The
“servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be
amended from time to time, or those Servicing Criteria otherwise mutually agreed
to by EMC, the Master Servicer, the Trustee and the applicable Servicer in
response to evolving interpretations of Regulation AB and incorporated into
a
revised Exhibit N.
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 Due Date in the month preceding the month in which such
Distribution Date occurs.
Servicing
Fee Rate:
0.25%
per annum.
Servicing
Modification:
With
respect to any Mortgage Loan that is in default or, in the reasonable judgment
of the Company or the related Servicer, as to which default is reasonably
foreseeable, any modification which is effected by the Company or the related
Servicer in accordance with the terms of this Agreement or the related Servicing
Agreement which results in any change in the outstanding Stated Principal
Balance, any change in the Mortgage Rate or any extension of the term of such
Mortgage Loan.
Servicing
Officer:
Any
officer of the Company or the related Servicer involved in, or responsible
for,
the administration and servicing of the Mortgage Loans (i) in the case of the
Company, whose name and facsimile signature appear on a list of servicing
officers furnished to the Trustee by the Company on the Closing Date pursuant
to
this Agreement, as such list may from time to time be amended and (ii) in the
case of the related Servicer, as to which evidence reasonably acceptable to
the
Trustee, as applicable, of due authorization, by such party has been furnished
from time to time to the Trustee.
Sponsor:
EMC
Mortgage Corporation, a Delaware corporation, and its successors and assigns,
in
its capacity as sponsor.
Startup
Day:
The
Startup Day for each REMIC formed hereunder shall be the Closing
Date.
Stated
Principal Balance:
With
respect to any Mortgage Loan or related REO Property and any Distribution Date,
the Cut-off Date Principal Balance thereof minus the sum of (i) the principal
portion of the Scheduled Payments due with respect to such Mortgage Loan during
each Due Period ending prior to such Distribution Date (and irrespective of
any
delinquency in their payment), (ii) all Principal Prepayments with respect
to
such Mortgage Loan received prior to or during the related Prepayment Period,
and all Liquidation Proceeds to the extent applied by the Company or the related
Servicer as recoveries of principal in accordance with Section 3.09 or the
related Servicing Agreement with respect to such Mortgage Loan, that were
received by the Company or the related Servicer as of the close of business
on
the last day of the calendar month immedediately preceding such Distribution
Date and (iii) any Realized Losses on such Mortgage Loan incurred during the
prior calendar month. The Stated Principal Balance of a Liquidated Loan equals
zero.
Stepdown
Date:
The
later to occur of (a) the Distribution Date in December 2009 and (b) the first
Distribution Date on which the Current Specified Enhancement Percentage is
greater than or equal to 16.50%.
Subordinated
Certificates:
The
Class M, Class B, Class C and Residual Certificates.
Subsequent
Recoveries:
As of
any Distribution Date, amounts received by the Master Servicer or any Servicer
(net of any related expenses permitted to be reimbursed pursuant to Section
6.05) or surplus amounts held by the Master Servicer and the related 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 as
of
the end of the prior calendar month that resulted in a Realized
Loss.
Subservicing
Agreement:
Any
agreement entered into between the Company and a subservicer with respect to
the
subservicing of any Mortgage Loan hereunder by such subservicer.
Substitution
Adjustment Amount:
The
meaning ascribed to such term pursuant to Section 2.03(d).
Successor
Master Servicer:
The
meaning ascribed to such term pursuant to Section 9.01.
Tax
Matters Person:
The
person designated as “tax matters person” in the manner provided under Treasury
Regulation Sections 1.860F-4(d) and 301.6231(a)(7)-1T. The Holder of the
greatest Percentage Interest in a Class of Residual Certificates shall be the
Tax Matters Person for the related REMIC. The Securities Administrator or any
successor thereto or assignee thereof shall serve as tax administrator hereunder
and as agent for the related Tax Matters Person.
Transfer
Affidavit:
As
defined in Section 7.02(c).
Transfer:
Any
direct or indirect transfer or sale of any Ownership Interest in a
Certificate.
Trigger
Event:
With
respect to any Distribution Date, 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 aggregate Cut-off Date Principal Balance of the Mortgage Loans exceeds
the
applicable percentages set forth below with respect to such Distribution
Date:
|
Distribution
Date
|
Percentage
|
|
December
2009 to November
2010
|
0.70%
with respect to December 2009, plus an additional 1/12th of the difference
between 1.20% and 0.70% for each month thereafter
|
|
December
2010 to November 2011
|
1.20%
with respect to December 2010, plus an additional 1/12th of the difference
between 1.70% and 1.20% for each month thereafter
|
|
December
2011 to November 2012
|
1.70%
with respect to December 2011, plus an additional 1/12th of the difference
between 2.00% and 1.70% for each month thereafter
|
|
December
2012 and thereafter
|
2.00%
|
Trust
or Trust Fund:
The
corpus of the trust created hereunder consisting of (i) the Mortgage Loans
and
all interest accruing and principal due with respect thereto after the Cut-off
Date to the extent not applied in computing the Cut-off Date Principal Balance
thereof; (ii) the Class P Certificate Account, the Reserve Fund, the
Distribution Account maintained by the Securities Administrator and the
Protected Accounts maintained by the Company and the Servicers and all amounts
deposited therein pursuant to the applicable provisions of this Agreement and
the Servicing Agreements; (iii) property that secured a Mortgage Loan and has
been acquired by foreclosure, deed in lieu of foreclosure or otherwise; (iv)
the
mortgagee’s rights under the Insurance Policies with respect to the Mortgage
Loans; (v) the Servicing Agreements and the Assignment Agreements; (vi) the
rights under the Mortgage Loan Purchase Agreement; and (vii) all proceeds of
the
foregoing, including proceeds of conversion, voluntary or involuntary, of any
of
the foregoing into cash or other liquid property. The Reserve Fund and
Prepayment Charge Waiver Amounts shall not be included in REMIC I, REMIC II,
REMIC III or REMIC IV.
Trustee:
U.S.
Bank National Association, a national banking association, as trustee for the
benefit of the Certificateholders under this Agreement, and any successor
thereto, and any corporation or national banking association resulting from
or
surviving any consolidation or merger to which it or its successors may be
a
party and any successor trustee as may from time to time be serving as successor
trustee hereunder.
Uncertificated
Accrued Interest:
With
respect to each REMIC I Regular Interest on each Distribution Date, an amount
equal to one month’s interest at the related 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 1.02).
Uncertificated
Notional Amount:
With
respect to the Class C 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:
With
respect to each REMIC I Regular Interest, the Class C Interest and the Class
P
Interest, the principal amount of such REMIC I Regular Interest, Class C
Interest and Class P Interest outstanding as of any date of determination.
As of
the Closing Date, the Uncertificated Principal Balance of each REMIC I Regular
Interest, Class C Interest and Class P 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 Interests and Class P Interest shall be reduced by all
distributions of principal made on such REMIC I Regular Interests and Class
P
Interest on such Distribution Date pursuant to Section 6.07 and, if and to
the
extent necessary and appropriate, shall be further reduced on such Distribution
Date by Realized Losses as provided in Section 6.05, and the Uncertificated
Principal Balance of REMIC I Regular Interest ZZ shall be increased by interest
deferrals as provided in Section 6.07(b)(i). The Uncertificated Principal
Balance of each REMIC I Regular Interest, Class P Interest and Class C Interest
shall never be less than zero. With respect to the Class C Interest as of any
date of determination, an amount equal to the excess, if any, of (A) the then
aggregate Uncertificated Principal Balance of the REMIC I Regular Interests
over
(B) the then aggregate Certificate Principal Balance of the Class A, Class
M,
Class B and Class P Certificates then outstanding.
Uncertificated
REMIC I Pass-Through Rate:
With
respect to any REMIC I Regular Interest (other than REMIC I Regular Interest
P)
and any Distribution Date, a per annum rate equal to the weighted average of
the
Net Mortgage Rates of the Mortgage Loans as of the first day of the related
Due
Period, weighted on the basis of the Stated Principal Balances thereof as of
the
first day of the related Due Period. With respect to REMIC I Regular Interest
P
and any Distribution Date, 0.00% per annum.
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
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, Class M and Class B Certificates, (ii)
3%
to the Class C Certificates until paid in full, and (iii) 1% to each of the
Class P, Class R-1, Class R-2 and Class RX Certificates, with the allocation
among the Certificates (other than the Class C 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.
Section
1.02 Allocation
of Certain Interest Shortfalls.
For
purposes of calculating the amount of Current Interest for the Class A, Class
M,
Class B and Class C Certificates for any Distribution Date, the aggregate amount
of any Prepayment Interest Shortfalls (to the extent not covered by payments
by
the related Servicer pursuant to the related Servicing Agreement, the Company
or
the Master Servicer pursuant to Section 6.02) and any Relief Act Interest
Shortfalls incurred in respect of the Mortgage Loans for any Distribution Date
shall be allocated first, to the Class C Interest based on, and to the extent
of, one month’s interest otherwise distributable thereto and, thereafter, among
the Class A, Class M and Class B 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 Rates on the respective Certificate Principal Balances
of each such Certificate.
For
purposes of calculating the amount of Uncertificated Accrued Interest for the
REMIC I Regular Interests (other than REMIC I Regular Interest P) for any
Distribution Date, the aggregate amount of any Prepayment Interest Shortfalls
(to the extent not covered by payments by the related Servicer pursuant to
the
related Servicing Agreement, the Company or the Master Servicer pursuant to
Section 6.02) and any Relief Act Interest Shortfalls incurred in respect of
the
Mortgage Loans for any Distribution Date shall be allocated first, to
Uncertificated Accrued Interest payable to 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% and 2%, respectively, and thereafter among REMIC
I
Regular Interest AA, each REMIC I Regular Interest (other than REMIC I Regular
Interest P) for which a Class A, Class M or Class B Certificate is the
Corresponding Interest 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 Rates on the respective Uncertificated
Principal Balances of each such REMIC I Regular Interest.
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,
or caused to be delivered to and deposited with, the Trustee or the 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 (A) in blank or to the order of “U.S. Bank
National Association, as Trustee for Certificateholders of Bear ▇▇▇▇▇▇▇ Asset
Backed Securities I LLC, Asset Backed Certificates, Series 2006-AC5”, or (B) in
the case of a loan registered on the MERS system, in blank, and in each case
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, for Mortgage Loans other than the EMC Flow Loans, 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 either a MOM Loan or has been assigned in the name
of MERS®, the assignment (either an original or a copy, which may be in the form
of a blanket assignment if permitted in the jurisdiction in which the Mortgaged
Property is located) to the Trustee of the Mortgage with respect to each
Mortgage Loan in the name of “U.S. Bank National Association, as Trustee for
Certificateholders of Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC, Asset Backed
Certificates, Series 2006-AC5,” 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) with respect to any Mortgage Loan, the original policy
of
title insurance or mortgagee’s certificate of title insurance or commitment or
binder for title insurance or, in the event such original title policy has
not
been received from the title insurer, such title policy will be delivered within
one year of the Closing Date or, in the event such original title policy is
unavailable, a photocopy of such title policy, 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 (other than the Mortgages related to the EMC Flow Loans), assignment
thereof to or intervening assignments thereof have been delivered or are being
delivered to recording offices for recording and have not been returned in
time
to permit their delivery as specified above, the Depositor may deliver, or
cause
to be delivered, a true copy thereof with a certification by the Seller or
the
title company issuing the commitment for title insurance, on the face of such
copy, substantially as follows: “Certified to be a true and correct copy of the
original, which has been transmitted for recording”; (y) in lieu of the Mortgage
(other than the Mortgages related to the EMC Flow Loans), assignment or
intervening assignments thereof, if the applicable jurisdiction retains the
originals of such documents (as evidenced by a certification from the Depositor
to such effect) the Depositor may deliver, or cause to be delivered, 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 identified
in the list set forth in Exhibit I, the Depositor may deliver, or cause to
be
delivered, 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,
or
cause to be delivered, to the Trustee and the 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, or cause to be delivered,
such documents to the Trustee or the Custodian promptly after they are received.
The
Seller shall cause, at its expense, the Mortgage and intervening assignments,
if
any, and to the extent required in accordance with the foregoing, the assignment
of the Mortgage to the Trustee to be submitted for recording promptly after
the
Closing Date 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 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 or, should
the
Seller fail to perform such obligations, the Master Servicer shall cause each
such previously unrecorded assignment to be submitted for recording as specified
above at the expense of the Trust. In the event a Mortgage File is released
to
the Company or the Servicer as a result of such Person having completed a
Request for Release, the Custodian shall, if not so completed, complete the
assignment of the related Mortgage in the manner specified in clause (iii)
above.
In
connection with the assignment of any Mortgage Loan registered on the MERS®
System, the Seller further agrees that it will cause, at the Seller’s own
expense, within 30 days after the Closing Date, the MERS® 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.
All
original documents relating to the Mortgage Loans that are not delivered to
the
Trustee or the Custodian on its behalf are and shall be held by or on behalf
of
the Seller or the Depositor, as the case may be, in trust for the benefit of
the
Trustee on behalf of the Certificateholders. Any such original document
delivered to or held by the Depositor, shall be delivered promptly to the
Custodian on the Trustee’s behalf.
Whenever
it is provided for in this Agreement that any document, evidence or information
relating to a Mortgage Loan to be included in a Mortgage File be delivered
or
supplied to the Trustee, such delivery or supply shall be made to the Custodian
pursuant to the Custodial Agreement.
Section
2.02 Acceptance
of the Mortgage Loans.
(a) Based
on
the Initial Certification received by it from the Custodian, the Trustee
acknowledges receipt of, subject to the further review and exceptions reported
by the Custodian pursuant to the procedures described below, the documents
(or
certified copies thereof) delivered to the Trustee or the Custodian on its
behalf pursuant to Section 2.01 and declares that it holds and will continue
to
hold directly or through a custodian those documents and any amendments,
replacements or supplements thereto and all other assets of the Trust Fund
delivered to it in trust for the use and benefit of all present and future
Holders of the Certificates. On the Closing Date, the Trustee or the Custodian
on its behalf will deliver the Seller, the Trustee an Initial Certification
confirming whether or not it has received the Mortgage File for each Mortgage
Loan, but without review of such Mortgage File, except to the extent necessary
to confirm whether such Mortgage File contains the original Mortgage Note or
a
lost note affidavit and indemnity in lieu thereof. No later than 90 days after
the Closing Date, the Trustee or the Custodian on its behalf shall, for the
benefit of the Certificateholders, review each Mortgage File delivered to it
and
execute and deliver to the Seller and, if reviewed by the Custodian, the
Trustee, an Interim Certification. In conducting such review, the Trustee or
the
Custodian on its behalf will ascertain whether all required documents have
been
executed and received and whether those documents relate, determined on the
basis of the Mortgagor name, original principal balance and loan number, to
the
Mortgage Loans identified in Exhibit B to this Agreement, as supplemented
(provided, however, that with respect to those documents described in subclauses
(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 Custodian may conclusively rely on the purported due
execution and genuineness of any such document and on the purported genuineness
of any signature thereon. If the Trustee or the Custodian on its behalf finds
any document constituting part of the Mortgage File not to have been executed
or
received, or to be unrelated to the Mortgage Loans identified in Exhibit B
or to
appear to be defective on its face, the Trustee or the Custodian on its behalf
shall include such information in the exception report. 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 90 days from the date of notice
from the Trustee of the defect and if the Seller fails to correct or cure the
defect or deliver such opinion within such period, the Seller will, subject
to
Section 2.03, within 90 days from the notification of the Trustee purchase
such
Mortgage Loan at the Purchase Price; provided, however, that if such defect
relates solely to the inability of the Seller to deliver the Mortgage,
assignment thereof to the Trustee, or intervening assignments thereof with
evidence of recording thereon because such documents have been submitted for
recording and have not been returned by the applicable jurisdiction, the Seller
shall not be required to purchase such Mortgage Loan if the Seller delivers
such
documents promptly upon receipt, but in no event later than 360 days after
the
Closing Date.
(b) No
later
than 180 days after the Closing Date, the Trustee or the Custodian on its behalf
will review, for the benefit of the Certificateholders, the Mortgage Files
and
will execute and deliver or cause to be executed and delivered to the Seller
and, if reviewed by the Custodian, to the Trustee, a Final Certification. In
conducting such review, the Trustee or the Custodian on its behalf will
ascertain whether each document required to be recorded has been returned from
the recording office with evidence of recording thereon and the Trustee or
the
Custodian on its behalf has received either an original or a copy thereof,
as
required in Section 2.01 (provided, however, that with respect to those
documents described in subclauses (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 Custodian on its behalf finds any document
with respect to a Mortgage Loan has not been received, or to be unrelated,
determined on the basis of the Mortgagor name, original principal balance and
loan number, to the Mortgage Loans identified in Exhibit B or to appear
defective on its face, the Trustee or the Custodian on its behalf shall note
such defect in the exception report attached to the Final Certification and
shall promptly notify the Seller. The Seller shall correct or cure any such
defect or, if prior to the end of the second anniversary of the Closing Date,
the Seller may substitute for the related Mortgage Loan a Replacement Mortgage
Loan, which substitution shall be accomplished in the manner and subject to
the
conditions set forth in Section 2.03 or shall deliver to the Trustee an Opinion
of Counsel addressed to the Trustee to the effect that such defect does not
materially or adversely affect the interests of Certificateholders in such
Mortgage Loan within 90 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.
(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 Securities Administrator, for deposit in the
Distribution Account and shall provide written notice to the Trustee detailing
the components of the Purchase Price, signed by a Servicing Officer. Upon
deposit of the Purchase Price in the Distribution Account and upon receipt
of a
Request for Release with respect to such Mortgage Loan, the Trustee or the
Custodian will release to the Seller the related Mortgage File and the Trustee
shall execute and deliver all instruments of transfer or assignment, without
recourse, representation or warranty furnished to it by the Seller, as are
necessary to vest in the Seller title to and rights under the Mortgage Loan.
Such purchase shall be deemed to have occurred on the date on which the deposit
into the Distribution Account was made. The Trustee shall promptly notify the
Rating Agencies of such repurchase. The obligation of the Seller to cure,
repurchase or substitute for any Mortgage Loan as to which a defect in a
constituent document exists shall be the sole remedies respecting such defect
available to the Certificateholders or to the Trustee on their
behalf.
(d) The
Seller shall deliver to the Trustee or the Custodian on its behalf, and Trustee
agrees to accept the Mortgage Note and other documents constituting the Mortgage
File with respect to any Replacement Mortgage Loan, which the Trustee or the
Custodian will review as provided in subsections 2.02(a) and 2.02(b), provided,
that the Closing Date referred to therein shall instead be the date of delivery
of the Mortgage File with respect to each Replacement Mortgage
Loan.
Section
2.03 Representations,
Warranties and Covenants of the Company, the Master Servicer and the
Seller.
(a) The
Company hereby represents and warrants to the Master Servicer, the Depositor,
the Securities Administrator and the Trustee as follows, as of the Closing
Date:
(i) It
is
duly organized and is validly existing and in good standing under the laws
of
the State of Delaware and is duly authorized and qualified to transact any
and
all business contemplated by this Agreement to be conducted by it in any state
in which a Mortgaged Property related to an EMC Mortgage Loan is located or
is
otherwise not required under applicable law to effect such qualification and,
in
any event, is in compliance with the doing business laws of any such state,
to
the extent necessary to ensure its ability to enforce each EMC Mortgage Loan,
to
service the EMC Mortgage Loans in accordance with the terms of this Agreement
and to perform any of its other obligations under this Agreement in accordance
with the terms hereof.
(ii) It
has
the full corporate power and authority to service each EMC Mortgage Loan, and
to
execute, deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary
corporate action 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 its legal, valid and binding obligation,
enforceable against it in accordance with its terms, except that (a) the
enforceability hereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors’ rights generally and
(b) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
of
the court before which any proceeding therefor may be brought.
(iii) The
execution and delivery of this Agreement by it, the servicing of the EMC
Mortgage Loans by it under this Agreement, the consummation of any other of
the
transactions contemplated by this Agreement, and the fulfillment of or
compliance with the terms hereof are in its ordinary course of business and
will
not (A) result in a breach of any term or provision of its charter or by-laws
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 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 ▇▇▇▇▇▇ ▇▇▇ or Freddie
Mac
and is a mortgagee approved by the Secretary of Housing and Urban Development
pursuant to sections 203 and 211 of the National Housing Act.
(v) No
litigation is pending or, to the best of its knowledge, threatened, against
it
that would materially and adversely affect the execution, delivery or
enforceability of this Agreement or its ability to service the EMC Mortgage
Loans or to perform any of its other obligations under this Agreement in
accordance with the terms hereof.
(vi) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for its execution, delivery and performance of, or compliance
with, this Agreement or the consummation of the transactions contemplated
hereby, or if any such consent, approval, authorization or order is required,
it
has obtained the same.
(vii) The
Company has delivered to the Depositor and the Master Servicer financial
statements of its parent, for its last two complete fiscal years. All such
financial information fairly presents the pertinent results of operations and
financial position for the period identified and has been prepared in accordance
with GAAP consistently applied throughout the periods involved, except as set
forth in the notes thereto. There has been no change in the servicing policies
and procedures (outside of the normal changes warranted by regulatory and
product type changes in the portfolio), business, operations, financial
condition, properties or assets of the Company since the date of the Company’s
financial information that would have a material adverse effect on its ability
to perform its obligations under this Agreement.
(b) The
Company hereby covenants to the Master Servicer, the Depositor, the Securities
Administrator and the Trustee as follows, as of the Closing Date:
(i) As
of the
Closing Date and except as has been otherwise disclosed to the Master Servicer
and the Depositor, or disclosed in any public filing: (1) no default or
servicing related performance trigger has occurred as to any other Pass-Through
Transfer due to any act or failure to act of the Company; (2) no material
noncompliance with applicable servicing criteria as to any other Pass-Through
Transfer has occurred, been disclosed or reported by the Company; (3) the
Company has not been terminated as servicer in a residential mortgage loan
Pass-Through Transfer, either due to a servicing default or to application
of a
servicing performance test or trigger; (4) no material changes to the Company’s
servicing policies and procedures for similar loans have occurred in the
preceding three years; (5) there are no aspects of the Company’s financial
condition that could have a material adverse impact on the performance by the
Company of its obligations hereunder; (6) there are no legal proceedings
pending, or known to be contemplated by governmental authorities, against the
Company that could be material to investors in the securities issued in such
Pass-Through Transfer; and (7) there are no affiliations, relationships or
transactions relating to the Company of a type that are described under Item
1119 of Regulation AB.
(ii) If
so
requested by the Depositor or the Master Servicer on any date, the Company
shall, within five Business Days following such request, confirm in writing
the
accuracy of the representations and warranties set forth in clause (b)(i) of
this Section or, if any such representation and warranty is not accurate as
of
the date of such request, provide reasonably adequate disclosure of the
pertinent facts, in writing, to the requesting party.
(iii) As
a
condition to the succession to the Company or any subservicer as servicer or
subservicer under this Agreement by any Person (i) into which the Company or
such subservicer may be merged or consolidated, or (ii) which may be appointed
as a successor to the Company or any subservicer, the Company shall provide
to
the Master Servicer and the Depositor, at least 15 calendar days prior to the
effective date of such succession or appointment, (x) written notice to the
Master Servicer and the Depositor of such succession or appointment and (y)
in
writing and in form and substance reasonably satisfactory to the Master Servicer
and the Depositor, all information reasonably requested by the Master Servicer
or the Depositor in order to comply with its reporting obligation under Item
6.02 of Form 8-K with respect to any class of asset-backed
securities.
(c) ▇▇▇▇▇
Fargo Bank, National Association, in its capacity as Master Servicer and
Securities Administrator hereby represents and warrants to the Seller, the
Depositor, the Trustee as follows, as of the Closing Date:
(i) It
is a
national banking association duly formed, validly existing and in good standing
under the laws of the United States of America and is duly authorized and
qualified to transact any and all business contemplated by this Agreement to
be
conducted by the Master Servicer and the Securities Administrator in any state
in which a Mortgaged Property 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 master service the Mortgage
Loans in accordance with the terms of this Agreement and to perform any of
its
other obligations under this Agreement in accordance with the terms hereof
or
thereof;
(ii) It
has
the full corporate power and authority to execute, deliver and perform, and
to
enter into and consummate the transactions contemplated by this Agreement and
has duly authorized by all necessary corporate action on its part the execution,
delivery and performance of this Agreement; and this, assuming the due
authorization, execution and delivery hereof by the other parties hereto,
constitutes its legal, valid and binding obligation, enforceable against it
in
accordance with its terms, except that (a) the enforceability hereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors’ rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(iii) The
execution and delivery of this Agreement by it, the consummation of any other
of
the transactions contemplated by this Agreement, and the fulfillment of or
compliance with the terms hereof are in its ordinary course of business and
will
not (A) result in a material breach of any term or provision of its charter
or
by-laws or (B) materially conflict with, result in a material breach, violation
or acceleration of, or result in a material default under, the terms of any
other material agreement or instrument to which it is a party or by which it
may
be bound, or (C) constitute a material violation of any statute, order or
regulation applicable to it of any court, regulatory body, administrative agency
or governmental body having jurisdiction over it; and it is not in breach or
violation of any material indenture or other material agreement or instrument,
or in violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction over it
which breach or violation may materially impair its ability to perform or meet
any of its obligations under this Agreement.
(iv) No
litigation is pending or, to the best of its knowledge, threatened, against
it
that would materially and adversely affect the execution, delivery or
enforceability of this Agreement or its ability to perform any of its other
obligations under this Agreement in accordance with the terms
hereof.
(v) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for its execution, delivery and performance of, or compliance
with, this Agreement or the consummation of the transactions contemplated hereby
or thereby, or if any such consent, approval, authorization or order is
required, it has obtained the same.
(d) The
Seller hereby represents and warrants to the Depositor, the Securities
Administrator, the Master Servicer and the Trustee as follows, as of the Closing
Date:
(i) The
Seller is duly organized as a Delaware corporation and is validly existing
and
in good standing under the laws of the State of Delaware and is duly authorized
and qualified to transact any and all business contemplated by this Agreement
and to be conducted by the Seller in any state in which a Mortgaged Property
is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing business laws
of any such state, to the extent necessary to ensure its ability to enforce
each
Mortgage Loan, to sell the Mortgage Loans in accordance with the terms of this
Agreement and to perform any of its other obligations under this Agreement
in
accordance with the terms hereof or thereof.
(ii) The
Seller has the full corporate power and authority to sell each Mortgage Loan,
and to execute, deliver and perform, and to enter into and consummate the
transactions contemplated by this Agreement and has duly authorized by all
necessary corporate action on the part of the Seller the execution, delivery
and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery hereof by the other parties hereto 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 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 ▇▇▇▇▇▇ ▇▇▇
or
Freddie Mac and is a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to sections 203 and 211 of the National Housing
Act.
(v) No
litigation is pending or, to the best of the Seller’s knowledge, threatened,
against the Seller that would materially and adversely affect the execution,
delivery or enforceability of this Agreement or the ability of the Seller to
sell the Mortgage Loans or to perform any of its other obligations under this
Agreement in accordance with the terms hereof 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 thereby, or if any such consent, approval,
authorization or order is required, the Seller has obtained the
same.
(vii) As
of the
Closing Date, the representations and warranties concerning the Mortgage Loans
set forth in Section 7 of the Mortgage Loan Purchase Agreement are true and
correct in all material respects.
(e) Upon
discovery by any of the parties hereto of a breach of a representation or
warranty set forth in Section 7 of the Mortgage Loan Purchase Agreement that
materially and adversely affects the interests of the Certificateholders in
any
Mortgage Loan, the party discovering such breach shall give prompt written
notice thereof to the other parties of this Agreement. The Seller hereby
covenants with respect to the representations and warranties set forth in
Section 7 of the Mortgage Loan Purchase Agreement, that within 90 days of the
discovery of a breach of any representation or warranty set forth therein that
materially and adversely affects the interests of the Certificateholders in
any
Mortgage Loan, it shall cure such breach in all material respects and, if such
breach is not so cured, (i) if such 90-day period expires prior to the second
anniversary of the Closing Date, remove such Mortgage Loan (a “Deleted Mortgage
Loan”) from the Trust Fund and substitute in its place a Replacement Mortgage
Loan, in the manner and subject to the conditions set forth in this Section;
or
(ii) repurchase the affected Mortgage Loan or Mortgage Loans from the Trustee
at
the Purchase Price in the manner set forth below; provided that, any such
substitution pursuant to (i) above or repurchase pursuant to (ii) above shall
not be effected prior to the delivery to the Trustee, the Securities
Administrator 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 Custodian of a Request for Release. The Seller shall,
or cause the related Servicer to, furnish to the Securities Administrator and
the Trustee the Officer’s Certificate required under Section 2.03(e) relating to
such cure. If the Trustee has received (or has given, as the case may be)
written notice of such a breach of a representation or warranty, the Trustee
shall give prompt written notice to the Master Servicer, the Securities
Administrator and the Seller, if within 90 days of its receipt (or giving,
as
the case may be) of such notice of breach, the Trustee does not receive an
Officer’s Certificate as described in the preceding sentence certifying as to
the cure of such breached representation or warranty. The Seller shall promptly
reimburse the Trustee for any expenses reasonably incurred by the Trustee in
respect of enforcing the remedies for such breach. To enable the Seller 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 Trustee
whether it intends either to repurchase, or to substitute for, the Mortgage
Loan
affected by such breach. With respect to the representations and warranties
in
Section 7 of the Mortgage Loan Purchase Agreement that are made to the best
of
the Seller’s knowledge, if it is discovered by any of the Depositor, the Master
Servicer, the Seller, the Securities Administrator, the Trustee that the
substance of such representation and warranty is inaccurate and such inaccuracy
materially and adversely affects the value of the related Mortgage Loan,
notwithstanding the Seller’s lack of knowledge with respect to the substance of
such representation or warranty, the Seller shall nevertheless be required
to
cure, substitute for or repurchase the affected Mortgage Loan in accordance
with
the foregoing.
With
respect to any Replacement Mortgage Loan or Loans, the Seller shall deliver
to
the Trustee for the benefit of the Certificateholders such documents and
agreements as are required by Section 2.01. No substitution shall be made in
any
calendar month after the Determination Date for such month. Scheduled Payments
due with respect to Replacement Mortgage Loans in the Due Period related to
the
Distribution Date on which such proceeds are to be distributed shall not be
part
of the Trust Fund and shall 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 Seller 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 Seller shall deliver the amended Mortgage Loan Schedule to
the
Trustee, the Master Servicer, the Securities Administrator and the Custodian.
Upon such substitution, the Replacement Mortgage Loan or Loans shall be subject
to the terms of this Agreement in all respects, and the Seller shall be deemed
to have made with respect to such Replacement Mortgage Loan or Loans, as of
the
date of substitution, the representations and warranties set forth in Section
7
of the Mortgage Loan Purchase Agreement with respect to such Mortgage Loan.
Upon
any such substitution and the deposit into the Distribution Account of the
amount required to be deposited therein in connection with such substitution
as
described in the following paragraph and receipt by the Securities Administrator
and the Trustee of a Request for Release for such Mortgage Loan, the Trustee
or
the Custodian shall release to the Seller the Mortgage File relating to such
Deleted Mortgage Loan and held for the benefit of the Certificateholders and
the
Trustee shall execute and deliver at the Seller’s direction such instruments of
transfer or assignment as have been prepared by the Seller, in each case without
recourse, representation or warranty as shall be necessary to vest in the
Seller, or its respective designee, title to the Trustee’s interest in any
Deleted Mortgage Loan substituted for pursuant to this Section
2.03.
For
any
month in which the Seller substitutes one or more Replacement Mortgage Loans
for
a Deleted Mortgage Loan, the Master Servicer will determine the amount (if
any)
by which the aggregate principal balance of all the Replacement Mortgage Loans
as of the date of substitution is less than the Stated Principal Balance (after
application of the principal portion of the Scheduled Payment due in the month
of substitution) of such Deleted Mortgage Loan. An amount equal to the aggregate
of such deficiencies, described in the preceding sentence for any Distribution
Date (such amount, the “Substitution Adjustment Amount”) shall be deposited into
the Distribution Account by the Securities Administrator upon receipt from
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 Distribution Account maintained by the
Securities Administrator, on the Determination Date for the Distribution Date
in
the month following the month during which the Seller became obligated to
repurchase or replace such Mortgage Loan and upon such deposit of the Purchase
Price, the delivery of an Opinion of Counsel if required by Section 2.05 and
the
receipt of a Request for Release, the Trustee or the Custodian shall release
the
related Mortgage File held for the benefit of the Certificateholders to the
Seller, and the Trustee shall execute and deliver at such Person’s direction the
related instruments of transfer or assignment prepared by the Seller, in each
case without recourse, representation or warranty as shall be necessary to
transfer title from the Trustee for the benefit of the Certificateholders and
transfer the Trustee’s interest to the Seller to any Mortgage Loan purchased
pursuant to this Section 2.03.
In
connection with any repurchase or substitution of a Mortgage Loan or the cure
of
a breach of a representation or warranty set forth in Section 7 of the Mortgage
Loan Purchase Agreement pursuant to this Section 2.03, the Seller shall, or
cause the related Servicer to, promptly furnish to the Securities Administrator
and the Trustee an Officer’s Certificate, signed by a duly authorized officer of
the Seller or the related servicer, as the case may be, to the effect that
such
repurchase, substitution or cure has been made in accordance with the terms
and
conditions of this Agreement and that all conditions precedent to such
repurchase, substitution or cure have been satisfied, including the delivery
to
the Securities Administrator of the Purchase Price or Substitution Adjustment
Amount, as applicable, for deposit into the Distribution Account, together
with
copies of any Opinion of Counsel required to be delivered pursuant to this
Agreement and the related Request for Release, on which the Securities
Administrator and the Trustee may rely. Solely for purposes of the Securities
Administrator providing an Assessment of Compliance, upon receipt of such
documentation, the Securities Administrator shall approve such repurchase,
substitution or cure, as applicable, and which approval shall consist solely
of
the Securities Administrator’s receipt of such documentation and deposits. It is
understood and agreed that the obligation under this Agreement of the Seller
to
cure the breach of a representation or warranty set forth in Section 7 of the
Mortgage Loan Purchase Agreement or to repurchase or replace any Mortgage Loan
as to which a breach has occurred and is continuing shall constitute the sole
remedies against the Seller respecting such breach available to
Certificateholders, the Depositor or the Trustee.
(f) The
representations and warranties set forth in Section 2.03 hereof shall survive
delivery of the respective Mortgage Loans and Mortgage Files to the Trustee
or
the Custodian for the benefit of the Certificateholders.
Section
2.04 Representations
and Warranties of the Depositor.
The
Depositor hereby represents and warrants to the Master Servicer, the Securities
Administrator and the Trustee as follows, as of the date hereof and as of the
Closing Date:
(i) The
Depositor is duly organized and is validly existing as 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 action on its part, the execution,
delivery and performance of this Agreement; and this Agreement, assuming the
due
authorization, execution and delivery hereof and thereof by the other parties
hereto and thereto, constitutes a legal, valid and binding obligation of the
Depositor, enforceable against the Depositor in accordance with its terms,
subject, as to enforceability, to (i) bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors’ rights generally and (ii)
general principles of equity, regardless of whether enforcement is sought in
a
proceeding in equity or at law.
(iii) The
execution and delivery of this Agreement by the Depositor, the consummation
of
the transactions contemplated by this Agreement, and the fulfillment of or
compliance with the terms hereof are in the ordinary course of business of
the
Depositor and will not (A) result in a breach of any term or provision of the
organizational documents 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 execution,
delivery or enforceability of this Agreement or the ability of the Depositor
to
perform its obligations under this Agreement in accordance with the terms
hereof.
(v) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Depositor
of, or compliance by the Depositor with, this Agreement or the consummation
of
the transactions contemplated hereby, or if any such consent, approval,
authorization or order is required, the Depositor has obtained the same;
and
(vi) The
Depositor has filed all reports required to be filed by Section 13 or Section
15(d) of the Exchange Act during the preceding 12 months (or for such shorter
period that the Depositor was required to file such reports) and it has been
subject to such filing requirements for the past 90 days.
The
Depositor hereby represents and warrants to the Trustee as of the Closing Date,
following the transfer of the Mortgage Loans to it by the Seller, the Depositor
had good title to the Mortgage Loans and the related Mortgage Notes were subject
to no offsets, claims, defenses or counterclaims.
It
is
understood and agreed that the representations and warranties set forth in
the
immediately preceding paragraph shall survive delivery of the Mortgage Files
to
the Trustee or the Custodian for the benefit of the Certificateholders. Upon
discovery by the Depositor, the Trustee of a breach of such representations
and
warranties, the party discovering such breach shall give prompt written notice
to the others and to each Rating Agency.
Section
2.05 Delivery
of Opinion of Counsel in Connection with Substitutions and
Repurchases.
(a) Notwithstanding
any contrary provision of this Agreement, with respect to any Mortgage Loan
that
is not in default or as to which default is not reasonably foreseeable, no
repurchase or substitution pursuant to Sections 2.02 or 2.03 shall be made
unless the Sponsor delivers to the Trustee and the Securities Administrator
an
Opinion of Counsel, addressed to the Trustee and the Securities Administrator,
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 a default becoming
reasonably foreseeable with respect to such Mortgage Loan and (b) receipt by
the
Trustee and the Securities Administrator of an Opinion of Counsel addressed
to
the Trustee and the Securities Administrator to the effect that such repurchase
or substitution, as applicable, will not result in the events described in
clause (i) or clause (ii) of the preceding sentence.
(b) Upon
discovery by the Depositor, the Seller, the Custodian 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, the Trustee and the Securities
Administrator. In connection therewith, the Trustee, or the Custodian on its
behalf, shall require the Seller, at the Seller’s option, to either (i)
substitute, if the conditions in Section 2.03(d) with respect to substitutions
are satisfied, a Replacement Mortgage Loan for the affected Mortgage Loan,
or
(ii) repurchase the affected Mortgage Loan within 90 days of such discovery
in
the same manner as it would a Mortgage Loan for a breach of representation
or
warranty contained in Section 2.03. The Trustee, or the Custodian on its behalf,
shall reconvey to the Seller the Mortgage Loan to be released pursuant hereto
(and the Custodian shall deliver the related Mortgage File) in the same manner,
and on the same terms and conditions, as it would a Mortgage Loan repurchased
for breach of a representation or warranty contained in Section
2.03.
Section
2.06 Countersignature
and Delivery of Certificates.
(a) The
Trustee acknowledges the sale, transfer and assignment to it of the Trust Fund
and, concurrently with such transfer and assignment, the Securities
Administrator 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 Certificates (other than the Class C, Class P and Class R
Certificates), the Class C Interest, the Class P Interest 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 Certificates (other than the Class C, Class P and Class R
Certificates), the Class C Interest, the Class P Interest 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
C Interest for the benefit of the Holders of the Class C Certificates and the
Class RX Certificates (in respect of the Class R-3 Interest). The Trustee
acknowledges receipt of the Class C Interest (which is uncertificated) and
declares that it holds and will hold the same in trust for the exclusive use
and
benefit of the Holders of the Class C Certificates and the Class RX Certificates
(in respect of the Class R-3 Interest).
(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 Class P Certificates and the
Class RX Certificates (in respect of the Class R-4 Interest). The Trustee
acknowledges receipt of the Class P Interest (which is uncertificated) and
declares that it holds and will hold the same in trust for the exclusive use
and
benefit of the Holders of the Class P Certificates and the Class RX Certificates
(in respect of the Class R-4 Interest).
Section
2.07 Purposes
and Powers of the Trust.
The
purpose of the common law trust, as created hereunder, is to engage in the
following activities:
(a) acquire
and hold the Mortgage Loans and the other assets of the Trust Fund and the
proceeds therefrom;
(b) to
issue
the Certificates sold to the Depositor in exchange for the Mortgage
Loans;
(c) to
make
distributions on the Certificates;
(d) to
engage
in those activities that are necessary, suitable or convenient to accomplish
the
foregoing or are incidental thereto or connected therewith; and
(e) subject
to compliance with this Agreement, to engage in such other activities as may
be
required in connection with conservation of the Trust Fund and the making of
distributions to the Certificateholders.
The
Trust
is hereby authorized to engage in the foregoing activities. The Trust shall
not
engage in any activity other than in connection with the foregoing or other
than
as required or authorized by the terms of this Agreement while any Certificate
is outstanding, and this Section 2.07.
ARTICLE
III
ADMINISTRATION
AND SERVICING OF
EMC
MORTGAGE LOANS BY COMPANY
Section
3.01 The
Company.
The
Company shall service and administer the EMC Mortgage Loans in accordance with
customary and usual standards of practice of prudent mortgage loan servicers
in
the respective states in which the related Mortgaged Properties are located.
In
connection with such servicing and administration, the Company shall have full
power and authority, acting alone and/or through subservicers as provided in
Section 3.03, to do or cause to be done any and all things that it may deem
necessary or desirable in connection with such servicing and administration,
including but not limited to, the power and authority, subject to the terms
hereof (i) to execute and deliver, on behalf of the Certificateholders, 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 EMC Mortgage Loan; provided that the Company shall take no action
that is inconsistent with or prejudices the interests of the Trust Fund or
the
Certificateholders in any EMC Mortgage Loan or the rights and interests of
the
Depositor or the Trustee under this Agreement.
Without
limiting the generality of the foregoing, the Company, in its own name or in
the
name of the Trust, the Depositor or the Trustee, is hereby authorized and
empowered by the Trust, the Depositor and the Trustee, when the Company believes
it appropriate in its reasonable judgment, to execute and deliver, on behalf
of
the Trustee, the Depositor, the Certificateholders or any of them, any and
all
instruments of satisfaction or cancellation, or of partial or full release
or
discharge and all other comparable instruments, with respect to the EMC Mortgage
Loans, and with respect to the related Mortgaged Properties held for the benefit
of the Certificateholders. The Company shall prepare and deliver to the
Depositor and/or the Trustee such documents requiring execution and delivery
by
any or all of them as are necessary or appropriate to enable the Company to
service and administer the EMC Mortgage Loans. Upon receipt of such documents,
the Depositor and/or the Trustee shall execute such documents and deliver them
to the Company.
In
accordance with the standards of the first paragraph of this Section 3.01,
the
Company shall advance or cause to be advanced funds as necessary for the purpose
of effecting the payment of taxes and assessments on the Mortgaged Properties
relating to the EMC Mortgage Loans, which advances shall be reimbursable in
the
first instance from related collections from the Mortgagors pursuant to Section
5.04, and further as provided in Section 5.02. All costs incurred by the
Company, if any, in effecting the timely payments of taxes and assessments
on
the Mortgaged Properties relating to the EMC Mortgage Loans and related
insurance premiums shall not, for the purpose of calculating monthly
distributions to the Certificateholders, be added to the Stated Principal
Balance under the related EMC Mortgage Loans, notwithstanding that the terms
of
such Mortgage Loans so permit.
Section
3.02 Due-on-Sale
Clauses; Assumption Agreements.
(a) Except
as
otherwise provided in this Section 3.02, when any property subject to a Mortgage
has been or is about to be conveyed by the Mortgagor, the Company shall to
the
extent that it has knowledge of such conveyance, enforce any due-on-sale clause
contained in any Mortgage Note or Mortgage, to the extent permitted under
applicable law and governmental regulations, but only to the extent that such
enforcement will not adversely affect or jeopardize coverage under any Required
Insurance Policy. Notwithstanding the foregoing, the Company is not required
to
exercise such rights with respect to an EMC Mortgage Loan if the Person to
whom
the related Mortgaged Property has been conveyed or is proposed to be conveyed
satisfies the terms and conditions contained in the Mortgage Note and Mortgage
related thereto and the consent of the mortgagee under such Mortgage Note or
Mortgage is not otherwise so required under such Mortgage Note or Mortgage
as a
condition to such transfer. In the event that the Company is prohibited by
law
from enforcing any such due-on-sale clause, or if coverage under any Required
Insurance Policy would be adversely affected, or if nonenforcement is otherwise
permitted hereunder, the Company is authorized, subject to Section 3.02(b),
to
take or enter into an assumption and modification agreement from or with the
person to whom such property has been or is about to be conveyed, pursuant
to
which such person becomes liable under the Mortgage Note and, unless prohibited
by applicable state law, the Mortgagor remains liable thereon, provided that
the
Mortgage Loan shall continue to be covered (if so covered before the Company
enters such agreement) by the applicable Required Insurance Policies. The
Company, subject to Section 3.02(b), is also authorized with the prior approval
of the insurers under any Required Insurance Policies to enter into a
substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted
as
Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the
foregoing, the Company shall not be deemed to be in default under this Section
3.02(a) by reason of any transfer or assumption that the Company reasonably
believes it is restricted by law from preventing.
(b) Subject
to the Company’s duty to enforce any due-on-sale clause to the extent set forth
in Section 3.02(a), in any case in which a Mortgaged Property has been conveyed
to a Person by a Mortgagor, and such Person is to enter into an assumption
agreement or modification agreement or supplement to the Mortgage Note or
Mortgage that requires the signature of the Trustee, or if an instrument of
release signed by the Trustee is required releasing the Mortgagor from liability
on the related EMC Mortgage Loan, the Company shall prepare and deliver or
cause
to be prepared and delivered to the Trustee for signature and shall direct,
in
writing, the Trustee to execute the assumption agreement with the Person to
whom
the Mortgaged Property is to be conveyed and such modification agreement or
supplement to the Mortgage Note or Mortgage or other instruments as are
reasonable or necessary to carry out the terms of the Mortgage Note or Mortgage
or otherwise to comply with any applicable laws regarding assumptions or the
transfer of the Mortgaged Property to such Person. In connection with any such
assumption, no material term of the Mortgage Note (including, but not limited
to, the Mortgage Rate, the amount of the Scheduled Payment and any other term
affecting the amount or timing of payment on the EMC Mortgage Loan) may be
changed. In addition, the substitute Mortgagor and the Mortgaged Property must
be acceptable to the Company in accordance with its servicing standards as
then
in effect. The Company shall notify the Trustee that any such substitution
or
assumption agreement has been completed by forwarding to the Trustee 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 Company for entering into an assumption or substitution of liability
agreement shall be retained by the Company as additional servicing
compensation.
Section
3.03 Subservicers.
The
Company shall perform all of its servicing responsibilities hereunder or may
cause a subservicer to perform any such servicing responsibilities on its
behalf, but the use by the Company of a subservicer shall not release the
Company from any of its obligations hereunder and the Company shall remain
responsible hereunder for all acts and omissions of each subservicer as fully
as
if such acts and omissions were those of the Company. The Company shall pay
all
fees of each subservicer from its own funds, and a subservicer’s fee shall not
exceed the Servicing Fee payable to the Company hereunder.
At
the
cost and expense of the Company, without any right of reimbursement from its
Protected Account, the Company shall be entitled to terminate the rights and
responsibilities of a subservicer and arrange for any servicing responsibilities
to be performed by a successor subservicer; provided, however, that nothing
contained herein shall be deemed to prevent or prohibit the Company, at the
Company’s option, from electing to service the related EMC Mortgage Loans
itself. In the event that the Company’s responsibilities and duties under this
Agreement are terminated pursuant to Section 9.05, the Company shall at its
own
cost and expense terminate the rights and responsibilities of each subservicer
effective as of the date of termination of the Company. The Company shall pay
all fees, expenses or penalties necessary in order to terminate the rights
and
responsibilities of each subservicer from the Company’s own funds without
reimbursement from the Trust Fund.
Notwithstanding
the foregoing, the Company shall not be relieved of its obligations hereunder
and shall be obligated to the same extent and under the same terms and
conditions as if it alone were servicing and administering the EMC Mortgage
Loans. The Company shall be entitled to enter into an agreement with a
subservicer for indemnification of the Company by the subservicer and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification.
Any
Subservicing Agreement and any other transactions or services relating to the
EMC Mortgage Loans involving a subservicer shall be deemed to be between such
subservicer and the Company alone, and neither the Master Servicer nor the
Trustee shall have any obligations, duties or liabilities with respect to such
subservicer including any obligation, duty or liability of either the Master
Servicer or the Trustee to pay such subservicer’s fees and expenses. For
purposes of remittances to the Master Servicer pursuant to this Agreement,
the
Company shall be deemed to have received a payment on an EMC Mortgage Loan
when
a subservicer has received such payment.
Section
3.04 Documents,
Records and Funds in Possession of Company To Be Held for Trustee.
Notwithstanding
any other provisions of this Agreement, the Company shall transmit to the
Trustee as required by this Agreement all documents and instruments in respect
of an EMC Mortgage Loan coming into the possession of the Company from time
to
time and shall account fully to the Trustee for any funds received by the
Company or that otherwise are collected by the Company as Liquidation Proceeds
or Insurance Proceeds in respect of any such Mortgage Loan. All Mortgage Files
and funds collected or held by, or under the control of, the Company in respect
of any EMC Mortgage Loans, whether from the collection of principal and interest
payments or from Liquidation Proceeds, including but not limited to, any funds
on deposit in the Protected Account maintained by the Company, shall be held
by
the Company for and on behalf of the Trustee and shall be and remain the sole
and exclusive property of the Trustee, subject to the applicable provisions
of
this Agreement. The Company also agrees that it shall not create, incur or
subject any Mortgage File or any funds that are deposited in the Protected
Account maintained by the Company or the Distribution Account or in any Escrow
Account, or any funds that otherwise are or may become due or payable to the
Trustee for the benefit of the Certificateholders, to any claim, lien, security
interest, judgment, levy, writ of attachment or other encumbrance, or assert
by
legal action or otherwise any claim or right of set off against any Mortgage
File or any funds collected on, or in connection with, an EMC Mortgage Loan,
except, however, that the Company shall be entitled to set off against and
deduct from any such funds any amounts that are properly due and payable to
the
Company under this Agreement.
Section
3.05 Maintenance
of Hazard Insurance.
The
Company shall cause to be maintained, for each EMC Mortgage Loan, hazard
insurance on buildings upon, or comprising part of, the Mortgaged Property
against loss by fire, hazards of extended coverage and such other hazards as
are
customary in the area where the related Mortgaged Property is located with
an
insurer which is licensed to do business in the state where the related
Mortgaged Property is located. Each such policy of standard hazard insurance
shall contain, or have an accompanying endorsement that contains, a standard
mortgagee clause. The Company shall also cause flood insurance to be maintained
on property acquired upon foreclosure or deed in lieu of foreclosure of any
EMC
Mortgage Loan, to the extent described below. Pursuant to Section 5.01, any
amounts collected by the Company under any such policies (other than the amounts
to be applied to the restoration or repair of the related Mortgaged Property
or
property thus acquired or amounts released to the Mortgagor in accordance with
the Company’s normal servicing procedures) shall be deposited in the Protected
Account maintained by the Company. Any cost incurred by the Company in
maintaining any such insurance shall not, for the purpose of calculating monthly
distributions to the Certificateholders or remittances to the Trustee for their
benefit, be added to the principal balance of the Mortgage Loan, notwithstanding
that the terms of the EMC Mortgage Loan so permit. Such costs shall be
recoverable by the Company out of late payments by the related Mortgagor or
out
of Liquidation Proceeds to the extent permitted by Section 5.02. It is
understood and agreed that no earthquake or other additional insurance is to
be
required of any Mortgagor or maintained on property acquired in respect of
a
Mortgage other than pursuant to such applicable laws and regulations as shall
at
any time be in force and as shall require such additional insurance. If the
Mortgaged Property is located at the time of origination of the related EMC
Mortgage Loan in a federally designated special flood hazard area and such
area
is participating in the national flood insurance program, the Company shall
cause flood insurance to be maintained with respect to such EMC Mortgage Loan.
Such flood insurance shall be in an amount equal to the least of (i) the Stated
Principal Balance of the related EMC Mortgage Loan, (ii) 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 Company shall obtain and maintain a blanket policy insuring
against hazard losses on all of the EMC Mortgage Loans, it shall conclusively
be
deemed to have satisfied its obligations as set forth in the first sentence
of
this Section 3.05, it being understood and agreed that such policy may contain
a
deductible clause on terms substantially equivalent to those commercially
available and maintained by comparable servicers. If such policy contains a
deductible clause, the Company shall, in the event that there shall not have
been maintained on the related Mortgaged Property a policy complying with the
first sentence of this Section 3.05, and there shall have been a loss that
would
have been covered by such policy, deposit in the Protected Account maintained
by
the Company the amount not otherwise payable under the blanket policy because
of
such deductible clause. Such deposit shall be from the Company’s own funds
without reimbursement therefor. In connection with its activities as
administrator and servicer of the EMC Mortgage Loans, the Company agrees to
present, on behalf of itself, the Depositor and the Trustee for the benefit
of
the Certificateholders, claims under any such blanket policy.
Section
3.06 Presentment
of Claims and Collection of Proceeds.
The
Company shall prepare and present on behalf of the Trustee and the
Certificateholders all claims under the Insurance Policies relating to the
EMC
Mortgage Loans and take such actions (including the negotiation, settlement,
compromise or enforcement of the insured’s claim) as shall be necessary to
realize recovery under such Insurance Policies. Any proceeds disbursed to the
Company in respect of such Insurance Policies shall be promptly deposited in
the
Protected Account maintained by the Company upon receipt, except that any
amounts that are to be applied upon request to the repair or restoration of
the
related Mortgaged Property, which repair or restoration the owner of such
Mortgaged Property or EMC, as applicable, has agreed to make as a condition
precedent to the presentation of claims on the related EMC Mortgage Loan under
the applicable Insurance Policy, need not be so deposited (or
remitted).
Section
3.07 Maintenance
of the Primary Mortgage Insurance Policies.
(a) The
Company shall not take any action that would result in noncoverage under any
applicable Primary Mortgage Insurance Policy of any loss which, but for the
actions of the Company would have been covered thereunder. The Company shall
use
its best efforts to keep in force and effect (to the extent that the EMC
Mortgage Loan requires the Mortgagor to maintain such insurance), Primary
Mortgage Insurance applicable to each EMC Mortgage Loan. The Company shall
not
cancel or refuse to renew any such Primary Mortgage Insurance Policy that is
in
effect at the date of the initial issuance of the related Mortgage Note and
is
required to be kept in force hereunder.
(b) The
Company agrees to present on behalf of the Trustee and the Certificateholders,
claims to the insurer under any Primary Mortgage Insurance Policies relating
to
the EMC Mortgage Loans and, in this regard, to take such reasonable action
as
shall be necessary to permit recovery under any Primary Mortgage Insurance
Policies respecting defaulted EMC Mortgage Loans. Pursuant to Section 5.01,
any
amounts collected by the Company under any Primary Mortgage Insurance Policies
shall be deposited in the Protected Account maintained by the Company, subject
to withdrawal pursuant to Section 5.02 hereof.
Section
3.08 Fidelity
Bond, Errors and Omissions Insurance.
The
Company shall maintain, at its own expense, a blanket fidelity bond and an
errors and omissions insurance policy, with broad coverage with responsible
companies on all officers, employees or other persons acting in any capacity
with regard to the EMC Mortgage Loans and who handle funds, money, documents
and
papers relating to the EMC Mortgage Loans. The fidelity bond and errors and
omissions insurance shall be in the form of the Mortgage Banker’s Blanket Bond
and shall protect and insure the Company against losses, including forgery,
theft, embezzlement, fraud, errors and omissions and negligent acts of such
persons. Such fidelity bond shall also protect and insure the Company against
losses in connection with the failure to maintain any insurance policies
required pursuant to this Agreement and the release or satisfaction of an EMC
Mortgage Loan which is not in accordance with Accepted Servicing Practices.
No
provision of this Section 3.08 requiring the fidelity bond and errors and
omissions insurance shall diminish or relieve the Company from its duties and
obligations as set forth in this Agreement. The minimum coverage under any
such
bond and insurance policy shall be at least equal to the corresponding amounts
required by Accepted Servicing Practices. The Company shall deliver to the
Master Servicer a certificate from the surety and the insurer as to the
existence of the fidelity bond and errors and omissions insurance policy and
shall obtain a statement from the surety and the insurer that such fidelity
bond
or insurance policy shall in no event be terminated or materially modified
without thirty days prior written notice to the Master Servicer and the Trustee.
The Company shall notify the Master Servicer and the Trustee within five
business days of receipt of notice that such fidelity bond or insurance policy
will be, or has been, materially modified or terminated. The Trustee for the
benefit of the Certificateholders must be named as loss payees on the fidelity
bond and as additional insured on the errors and omissions policy.
The
Company shall provide to the Master Servicer and the Depositor evidence of
the
authorization of the person signing any certification or statement, copies
or
other evidence of fidelity bond and errors and omissions insurance, financial
information and reports, and such other information related to the Company
or
any subservicer engaged by it or the Company’s or such subservicer’s performance
hereunder or under the related Subservicing Agreement as may be reasonably
requested by the Master Servicer or the Depositor.
Section
3.09 Realization
Upon Defaulted Mortgage Loans; Determination of Excess Liquidation Proceeds
and
Realized Losses; Repurchases of Certain Mortgage Loans.
(a) The
Company shall use reasonable efforts to foreclose upon or otherwise comparably
convert the ownership of properties securing such of the EMC Mortgage Loans
as
come into and continue in default and as to which no satisfactory arrangements
can be made for collection of delinquent payments. In connection with such
foreclosure or other conversion, the Company shall follow such practices and
procedures as it shall deem necessary or advisable and as shall be normal and
usual in its general mortgage servicing activities and the requirements of
the
insurer under any Required Insurance Policy; provided that the Company shall
not
be required to expend its own funds in connection with any foreclosure or
towards the restoration of any property unless it shall determine (i) that
such
restoration and/or foreclosure will increase the proceeds of liquidation of
the
EMC Mortgage Loan after reimbursement to itself of such expenses and (ii) that
such expenses will be recoverable to it through Insurance Proceeds or
Liquidation Proceeds (respecting which it shall have priority for purposes
of
withdrawals from the Protected Accounts maintained by the Company pursuant
to
Section 5.02). If the Company reasonably believes that Liquidation Proceeds
with
respect to any such EMC Mortgage Loan would not be increased as a result of
such
foreclosure or other action, such EMC Mortgage Loan will be charged-off and
will
become a Liquidated Loan. The Company will give notice of any such charge-off
to
the Trustee and the Securities Administrator. The Company shall be responsible
for all other costs and expenses incurred by it in any such proceedings;
provided that such costs and expenses shall be Servicing Advances and that
it
shall be entitled to reimbursement thereof from the proceeds of liquidation
of
the related Mortgaged Property, as contemplated in Section 5.02. If the Company
has knowledge that a Mortgaged Property that the Company is contemplating
acquiring in foreclosure or by deed- in-lieu of foreclosure is located within
a
one-mile radius of any site with environmental or hazardous waste risks known
to
the Company, the Company will, prior to acquiring the related Mortgaged
Property, consider such risks and only take action in accordance with its
established environmental review procedures.
With
respect to any REO Property relating to an EMC Mortgage Loan, the deed or
certificate of sale shall be taken in the name of the Trustee for the benefit
of
the Certificateholders (or the Trustee’s nominee on behalf of the
Certificateholders). The Trustee’s name shall be placed on the title to such REO
Property solely as the Trustee hereunder and not in its individual capacity.
The
Company shall ensure that the title to such REO Property references this
Agreement and the Trustee’s capacity hereunder. Pursuant to its efforts to sell
such REO Property, the Company shall either itself or through an agent selected
by the Company protect and conserve such REO Property in the same manner and
to
such extent as is customary in the locality where such REO Property is located
and may, incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Company deems
to
be in the best interest of the Company and the Certificateholders for the period
prior to the sale of such REO Property. The Company shall prepare for and
deliver to the Trustee and the Securities Administrator a statement with respect
to each such REO Property that has been rented showing the aggregate rental
income received and all expenses incurred in connection with the management
and
maintenance of such REO Property at such times as is necessary to enable the
Trustee to comply with the reporting requirements of the REMIC Provisions.
The
net monthly rental income, if any, from such REO Property shall be deposited
in
the Protected Account maintained by the Company no later than the close of
business on each Determination Date. The Company shall perform the tax reporting
and withholding related to foreclosures, abandonments and cancellation of
indebtedness income as specified by Sections 1445, 6050J and 6050P of the Code
by preparing and filing such tax and information returns, as may be
required.
In
the
event that the Trust Fund acquires any Mortgaged Property as aforesaid or
otherwise in connection with a default or a default becoming reasonably
foreseeable on an EMC Mortgage Loan, the Company shall dispose of such Mortgaged
Property prior to three years after its acquisition by the Trust Fund or, at
the
expense of the Trust Fund, request more than 60 days prior to the day on which
such three-year period would otherwise expire, an extension of the three-year
grace period unless the Trustee shall have been supplied with an Opinion of
Counsel addressed to the Trustee (such opinion not to be an expense of the
Trustee) to the effect that the holding by the Trust Fund of such Mortgaged
Property subsequent to such three-year period will not result in the imposition
of taxes on “prohibited transactions” of REMIC I, REMIC II, REMIC III or REMIC
IV as defined in Section 860F of the Code or cause either 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 Company has agreed to indemnify
and
hold harmless the Trust Fund with respect to the imposition of any such
taxes.
The
decision of the Company to foreclose on a defaulted EMC Mortgage Loan shall
be
subject to a determination by the Company that the proceeds of such foreclosure
would exceed the costs and expenses of bringing such a proceeding. The income
earned from the management of any Mortgaged Properties acquired through
foreclosure or other judicial proceeding, net of reimbursement to the Company
for expenses incurred (including any property or other taxes) in connection
with
such management and net of unreimbursed Servicing Fees, Advances, Servicing
Advances and any management fee paid or to be paid with respect to the
management of such Mortgaged Property, shall be applied to the payment of
principal of, and interest on, the related defaulted EMC Mortgage Loans (with
interest accruing as though such Mortgage Loans were still current) and all
such
income shall be deemed, for all purposes in the Agreement, to be payments on
account of principal and interest on the related Mortgage Notes and shall be
deposited into the Protected Accounts maintained by the Company. To the extent
the income received during a Prepayment Period is in excess of the amount
attributable to amortizing principal and accrued interest at the related
Mortgage Rate on the related EMC Mortgage Loan, such excess shall be considered
to be a partial Principal Prepayment for such Mortgage Loan for all purposes
hereof.
The
Liquidation Proceeds from any liquidation of a related EMC Mortgage Loan, net
of
any payment to the Company as provided above, shall be deposited in the related
Protected Account maintained by the Company on the next succeeding Determination
Date following receipt thereof for distribution on the related Distribution
Date, except that any Excess Liquidation Proceeds shall be retained by the
Company as additional servicing compensation.
The
proceeds of any Liquidated Loan, as well as any recovery resulting from a
partial collection of related Liquidation Proceeds or any income from a related
REO Property, shall be applied in the following order of priority: first, to
reimburse the Company for any related unreimbursed Servicing Advances and
Servicing Fees, pursuant to Section 5.02 or this Section 3.09; second, to
reimburse the Company for any unreimbursed Advances pursuant to Section 5.02
or
this Section 3.09; third, to accrued and unpaid interest (to the extent no
Advance has been made for such amount) on the EMC Mortgage Loan or related
REO
Property, at the Net Mortgage Rate to the first day of the month in which such
amounts are required to be distributed; and fourth, as a recovery of principal
of the EMC Mortgage Loan.
(b) On
each
Determination Date, the Company shall determine the respective aggregate amounts
of Excess Liquidation Proceeds and Realized Losses, if any, for the prior
calendar month.
(c) The
Company has no intent to foreclose on any EMC Mortgage Loan based on the
delinquency characteristics as of the Closing Date; provided, that the foregoing
does not prevent the Company from initiating foreclosure proceedings on any
date
hereafter if the facts and circumstances of such EMC Mortgage Loans including
delinquency characteristics in the Company’s discretion so warrant such
action.
Section
3.10 Servicing
Compensation.
As
compensation for its activities hereunder, the Company shall be entitled to
retain or withdraw from its Protected Accounts out of each payment of interest
on an EMC Mortgage Loan included in the Trust Fund an amount equal to the
Servicing Fee.
Additional
servicing compensation in the form of any Excess Liquidation Proceeds,
assumption fees, late payment charges, all Prepayment Interest Excess on any
EMC
Mortgage Loan, all income and gain net of any losses realized from Permitted
Investments with respect to funds in or credited to the Protected Accounts
maintained by the Company shall be retained by the Company to the extent not
required to be deposited in the Protected Accounts maintained by the Company
pursuant to Section 5.02. The Company shall be required to pay all expenses
incurred by it in connection with its servicing activities hereunder (including
payment of any premiums for hazard insurance, as required by Section 3.05 and
maintenance of the other forms of insurance coverage required by Section 3.07)
and shall not be entitled to reimbursement therefor except as specifically
provided in Section 5.02.
EMC
shall
be entitled to retain any Prepayment Interest Excess.
Section
3.11 REO
Property.
(a) In
the
event the Trust Fund acquires ownership of any REO Property in respect of any
related EMC Mortgage Loan, the deed or certificate of sale shall be issued
to
the Trustee, or to its nominee, on behalf of the Certificateholders. The Company
shall sell any such REO Property as expeditiously as possible and in accordance
with the provisions of this Agreement. Pursuant to its efforts to sell such
REO
Property, the Company shall protect and conserve such REO Property in the manner
and to the extent required herein, in accordance with the REMIC Provisions
and
in a manner that does not result in a tax on “net income from foreclosure
property” or cause such REO Property to fail to qualify as “foreclosure
property” within the meaning of Section 860G(a)(8) of the Code.
(b) The
Company shall deposit all funds collected and received in connection with the
operation of any REO Property in respect of any EMC Mortgage Loan into the
Protected Accounts maintained by the Company.
(c) The
Company, upon the final disposition of any REO Property in respect of any EMC
Mortgage Loan, shall be entitled to reimbursement for any related unreimbursed
Advances, unreimbursed Servicing Advances or Servicing Fees from Liquidation
Proceeds received in connection with the final disposition of such REO Property;
provided, that any such unreimbursed Advances or Servicing Fees as well as
any
unpaid Servicing Fees may be reimbursed or paid, as the case may be, prior
to
final disposition, out of any net rental income or other net amounts derived
from such REO Property.
Section
3.12 Liquidation
Reports.
Upon
the
foreclosure of any Mortgaged Property relating to an EMC Mortgage Loan or the
acquisition thereof by the Trust Fund pursuant to a deed-in-lieu of foreclosure,
the Company shall submit a liquidation report to the Master Servicer containing
such information as shall be mutually acceptable to the Company and the Master
Servicer with respect to such Mortgaged Property.
Section
3.13 Books
and
Records.
The
Company 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 Company’s computer system to clearly reflect the ownership of
the Mortgage Loans by the Trust. In particular, the Company shall maintain
in
its possession, available for inspection by the Securities Administrator and
the
Trustee and shall deliver to the Securities Administrator and the Trustee upon
demand, evidence of compliance with all federal, state and local laws, rules
and
regulations. To the extent that original documents are not required for purposes
of realization of Liquidation Proceeds or Insurance Proceeds, documents
maintained by the Company may be in the form of microfilm or microfiche or
such
other reliable means of recreating original documents, including, but not
limited to, optical imagery techniques so long as the Company complies with
the
requirements of Accepted Servicing Practices.
The
Company shall maintain with respect to each Mortgage Loan and shall make
available for inspection by the Securities Administrator and the Trustee the
related servicing file during the time such Mortgage Loan is subject to this
Agreement and thereafter in accordance with applicable law.
Payments
on the Mortgage Loans, including any payoffs, made in accordance with the
related Mortgage File will be entered in the Company’s set of books and records
no more than two business days after receipt and identification, and allocated
to principal or interest as specified in the related Mortgage File.
ARTICLE
IV
ADMINISTRATION
AND MASTER
SERVICING
OF MORTGAGE LOANS BY
MASTER
SERVICER
Section
4.01 Master
Servicer.
The
Master Servicer shall, beginning on the Closing Date, supervise, monitor and
oversee the obligation of the Company and the related Servicer to service and
administer the Mortgage Loans in accordance with the terms of this Agreement
and
the related Servicing Agreement and shall have full power and authority to
do
any and all things which it may deem necessary or desirable in connection with
such master servicing and administration. In performing its obligations
hereunder, the Master Servicer shall act in a manner consistent with Accepted
Master Servicing Practices. Furthermore, the Master Servicer shall oversee
and
consult with the Company and the related Servicer as necessary from time to
time
to carry out the Master Servicer’s obligations hereunder, shall receive, review
and evaluate all reports, information and other data provided to the Master
Servicer by the Company and the related Servicer and shall cause the Company
and
related Servicer to perform and observe the covenants, obligations and
conditions to be performed or observed by such Person under this Agreement
and
the related Servicing Agreement. The Master Servicer shall independently and
separately monitor the Company and the related Servicer’s servicing activities
with respect to each related Mortgage Loan, reconcile the results of such
monitoring with such information provided in the previous sentence on a monthly
basis and coordinate corrective adjustments to the Company’s, the related
Servicer’s and Master Servicer’s records, and based on such reconciled and
corrected information, the Master Servicer shall provide such information to
the
Securities Administrator as shall be necessary in order for it to prepare the
statements specified in Section 6.06 and any other information and statements
required hereunder. The Master Servicer shall reconcile the results of its
Mortgage Loan monitoring with the actual remittances of the Company to the
Securities Administrator and each Servicer pursuant to this Agreement and the
related Servicing Agreement.
In
addition to the foregoing, in connection with a modification of any Mortgage
Loan by a Servicer, if the Master Servicer is unable to enforce the obligations
of the Servicer with respect to such modification, the Master Servicer shall
notify the Depositor of such Servicer’s failure to comply with the terms of the
Servicing Agreement or this Agreement. If the Servicing Agreement or this
Agreement (in
the
case of the Company, as Servicer) requires
the approval of the Master Servicer for a modification to a Mortgage Loan,
the
Master Servicer shall approve such modification if, based upon its receipt
of
written notification from the related Servicer outlining the terms of such
modification and appropriate supporting documentation, the Master Servicer
determines that the modification is permitted under the terms of the Servicing
Agreement or this Agreement (in the case of the Company, as Servicer) and that
any conditions to such modification set forth in the Servicing Agreement or
this
Agreement have been satisfied. Furthermore, if the Servicing Agreement or this
Agreement (in the case of the Company, as Servicer) requires the oversight
and
monitoring of loss mitigation measures with respect to the related Mortgage
Loans, the Master Servicer will monitor any loss mitigation procedure or
recovery action related to a defaulted Mortgage Loan (to the extent it receives
notice of such from the related Servicer) and confirm that such loss mitigation
procedure or recovery action is initiated, conducted and concluded in accordance
with any timeframes and any other requirements set forth in the Servicing
Agreement or this Agreement (in the case of the Company, as Servicer), and
the
Master Servicer shall notify the Depositor in any case in which the Master
Servicer believes that the related Servicer is not complying with such
timeframes and/or other requirements.
The
Trustee shall furnish the Company, the Servicers and the Master Servicer, upon
written request from a servicing officer, with any powers of attorney and other
documents in form as provided to it necessary or appropriate to enable the
Company, the Servicer and the Master Servicer to service and administer the
related Mortgage Loans and REO Property.
The
Trustee or the Custodian on its behalf, the Company or the related Servicer
shall provide access to the records and documentation in possession of the
Trustee or the Custodian on its behalf, the Company or the related Servicer
regarding the related Mortgage Loans and REO Property and the servicing thereof
to the Certificateholders, the FDIC, and the supervisory agents and examiners
of
the FDIC, such access being afforded only upon reasonable prior written request
and during normal business hours at the office of the Trustee, the Custodian,
the Company or the related Servicer; provided, however, that, unless otherwise
required by law, neither the Trustee, the Custodian, the Company nor the related
Servicer shall be required to provide access to such records and documentation
if the provision thereof would violate the legal right to privacy of any
Mortgagor. The Trustee, the Custodian, the Company and the related Servicer
shall allow representatives of the above entities to photocopy any of the
records and documentation and shall provide equipment for that purpose at a
charge that covers the Trustee’s, the Custodian’s, the Company’s or the related
Servicer’s actual costs.
The
Trustee shall execute and deliver to the Company or the related Servicer and
the
Master Servicer, upon such party’s written instruction (which includes the
documents to be signed) any court pleadings, requests for trustee’s sale or
other appropriate documents necessary or desirable to (i) the foreclosure or
trustee’s sale with respect to a Mortgaged Property; (ii) any legal action
brought to obtain judgment against any Mortgagor on the Mortgage Note or
Security Instrument; (iii) obtain a deficiency judgment against the Mortgagor;
or (iv) enforce any other rights or remedies provided by the Mortgage Note
or
Security Instrument or otherwise available at law or equity.
Section
4.02 REMIC-Related
Covenants.
For
as
long as each REMIC created hereunder shall exist, the Trustee and the Securities
Administrator shall act in accordance herewith to assure continuing treatment
of
such REMIC as a REMIC, and the Trustee and the Securities Administrator shall
comply with any directions of the Seller, the Company, the Servicers or the
Master Servicer to assure such continuing treatment. In particular, the Trustee
shall not (except as otherwise expressly permitted by this Agreement) (a) sell
or permit the sale of all or any portion of the Mortgage Loans or of any
investment of deposits in an Account unless such sale is as a result of a
repurchase of the Mortgage Loans pursuant to this Agreement or the Trustee
has
received a REMIC Opinion addressed to the Trustee prepared at the expense of
the
Trust Fund; (b) other than with respect to a substitution pursuant to the
Mortgage Loan Purchase Agreement or Section 2.03 of this Agreement, as
applicable, accept any contribution to any REMIC after the Startup Day without
receipt of a REMIC Opinion; or (c) acquire any assets for any REMIC other than
any REO Property after the Startup Day without receipt of a REMIC
Opinion.
Section
4.03 Monitoring
of Company and Servicer.
(a) The
Master Servicer shall be responsible for reporting to the Trustee and the Seller
the non-compliance by the Company and the related Servicer with its duties
under
this Agreement and the related Servicing Agreement. In the review of the
Company’s and the related Servicer’s activities, the Master Servicer may rely
upon an Officer’s Certificate of the Company and the related Servicer with
regard to such Person’s compliance with the terms of this Agreement or the
related Servicing Agreement. In the event that the Master Servicer, in its
judgment, determines that the Company or the related Servicer should be
terminated in accordance with this Agreement or the related Servicing Agreement,
or that a notice should be sent pursuant to this Agreement or the related
Servicing Agreement with respect to the occurrence of an event that, unless
cured, would constitute grounds for such termination, the Master Servicer shall
notify the Seller and the Trustee and the Master Servicer shall issue such
notice or take such other action as it deems appropriate.
(b) The
Master Servicer, for the benefit of the Trustee and the Certificateholders,
shall enforce the obligations of the Company under this Agreement and the
related Servicer under the related Servicing Agreement, and
shall, in the event that the Company or the related Servicer fails to perform
its obligations in accordance with this Agreement or the related Servicing
Agreement, subject to the preceding paragraph, terminate the rights and
obligations of such Person thereunder and act as servicer of the related
Mortgage Loans or to cause the Trustee to enter into a new Servicing Agreement
with a successor Servicer selected by the Master Servicer; provided, however,
it
is understood and acknowledged by the parties hereto that there shall be a
period of transition (not to exceed 90 days) before the actual servicing
functions can be fully transferred to such successor Servicer; provided,
however, it is understood and acknowledged by the parties hereto that there
will
be a period of transition (not to exceed 90 days) before the actual servicing
functions can be fully transferred to such successor servicer. In either event,
such enforcement, including, without limitation, the legal prosecution of
claims, termination of the related Servicing Agreement and the pursuit of other
appropriate remedies, shall be in such form and carried out to such an extent
and at such time as the Master Servicer in its good faith business judgment,
would require were it the owner of the related Mortgage Loans. The Master
Servicer shall pay the costs of such enforcement at its own expense, subject
to
its right of reimbursement pursuant to the provisions of this Agreement or
the
related Servicing Agreement, provided that the Master Servicer shall not be
required to prosecute or defend any legal action except to the extent that
the
Master Servicer shall have received reasonable indemnity for its costs and
expenses in pursuing such action.
(c) To
the
extent that the costs and expenses of the Master Servicer or related to any
termination of a Servicer, or the enforcement or prosecution of related claims,
rights or remedies or the appointment of a successor Servicer or the transfer
and assumption of servicing by the Master Servicer with respect to this
Agreement or the related Servicing Agreement (including, without limitation,
(i)
all legal costs and expenses and all due diligence costs and expenses associated
with an evaluation of the potential termination of the Company or a Servicer
as
a result of an event of default by such Person and (ii) all costs and expenses
associated with the complete transfer of servicing, including all servicing
files and all servicing data and the completion, correction or manipulation
of
such servicing data as may be required by the successor servicer to correct
any
errors or insufficiencies in the servicing data or otherwise to enable the
successor service to service the Mortgage Loans in accordance with this
Agreement or the related Servicing Agreement) are not fully and timely
reimbursed by the terminated Servicer, the Master Servicer shall be entitled
to
reimbursement of such costs and expenses from the Distribution Account, pursuant
to Section 5.09.
(d) The
Master Servicer shall require the Company and the related Servicer to comply
with the remittance requirements and other obligations set forth in this
Agreement or the related Servicing Agreement, as applicable.
(e) If
the
Master Servicer acts as a servicer, it will not assume liability for the
representations and warranties of the Company or the related Servicer, if any,
that it replaces.
Section
4.04 Fidelity
Bond.
The
Master Servicer, at its expense, shall maintain in effect a blanket fidelity
bond and an errors and omissions insurance policy, affording coverage with
respect to all directors, officers, employees and other Persons acting on such
Master Servicer’s behalf, and covering errors and omissions in the performance
of the Master Servicer’s obligations hereunder. The errors and omissions
insurance policy and the fidelity bond shall be in such form and amount
generally acceptable for entities serving as master servicers or
trustees.
Section
4.05 Power
to
Act; Procedures.
The
Master Servicer shall master service the Mortgage Loans and shall have full
power and authority, subject to the REMIC Provisions and the provisions of
Article XI hereof, to do any and all things that it may deem necessary or
desirable in connection with the master servicing and administration of the
Mortgage Loans, including but not limited to the power and authority (i) to
execute and deliver, on behalf of the Certificateholders and the Trustee,
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages, (iii) to collect any Insurance Proceeds and
Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion
of
the ownership of the Mortgaged Property securing any Mortgage Loan, in each
case, in accordance with the provisions of this Agreement and the related
Servicing Agreement, as applicable; provided, however, that the Master Servicer
shall not (and, consistent with its responsibilities under Section 4.03, shall
not authorize the Company or the related Servicer to) knowingly or intentionally
take any action, or fail to take (or fail to cause to be taken) any action
reasonably within its control and the scope of duties more specifically set
forth herein, that, under the REMIC Provisions, if taken or not taken, as the
case may be, would cause REMIC I, REMIC II, REMIC III or REMIC IV to fail to
qualify as a REMIC or result in the imposition of a tax upon the Trust Fund
(including but not limited to the tax on prohibited transactions as defined
in
Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set
forth
in Section 860G(d) of the Code) unless the Master Servicer has received an
Opinion of Counsel (but not at the expense of the Master Servicer) to the effect
that the contemplated action will not cause REMIC I, ▇▇▇▇▇ ▇▇, REMIC III or
REMIC IV to fail to qualify as a REMIC or result in the imposition of a tax
upon
REMIC I, REMIC II, REMIC III or REMIC IV as the case may be. The Trustee shall
furnish the Master Servicer, upon written request from a Servicing Officer,
with
any powers of attorney empowering the Master Servicer, the Company or the
related Servicer to execute and deliver instruments of satisfaction or
cancellation, or of partial or full release or discharge, and to foreclose
upon
or otherwise liquidate Mortgaged Property, and to appeal, prosecute or defend
in
any court action relating to the Mortgage Loans or the Mortgaged Property,
in
accordance with the related Servicing Agreement and this Agreement, and the
Trustee shall execute and deliver such other documents, as the Master Servicer
may request, to enable the Master Servicer to master service and administer
the
Mortgage Loans and carry out its duties hereunder, in each case in accordance
with Accepted Master Servicing Practices (and the Trustee shall have no
liability for misuse of any such powers of attorney by the Master Servicer,
the
Company or the related Servicer). If the Master Servicer or the Trustee has
been
advised that it is likely that the laws of the state in which action is to
be
taken prohibit such action if taken in the name of the Trustee or that the
Trustee would be adversely affected under the “doing business” or tax laws of
such state if such action is taken in its name, the Master Servicer shall join
with the Trustee in the appointment of a co-trustee pursuant to Section 10.11
hereof. In the performance of its duties hereunder, the Master Servicer shall
be
an independent contractor and shall not, except in those instances where it
is
taking action in the name of the Trust, be deemed to be the agent of the Trust.
Section
4.06 Due-on-Sale
Clauses; Assumption Agreements.
To
the
extent provided in this Agreement or the related Servicing Agreement, to the
extent Mortgage Loans contain enforceable due-on-sale clauses, the Master
Servicer shall cause the Company and the related Servicer to enforce such
clauses in accordance with this Agreement or the related Servicing Agreement.
If
applicable law prohibits the enforcement of a due-on-sale clause or such clause
is otherwise not enforced in accordance with this Agreement or the related
Servicing Agreement, and, as a consequence, a Mortgage Loan is assumed, the
original Mortgagor may be released from liability in accordance with this
Agreement or the related Servicing Agreement.
Section
4.07 Release
of Mortgage Files.
(a) Upon
becoming aware of the payment in full of any Mortgage Loan, or the receipt
by
the Company or the related Servicer of a notification that payment in full
has
been escrowed in a manner customary for such purposes for payment to
Certificateholders on the next Distribution Date, the Company or the related
Servicer will, if required under the related Servicing Agreement (or if the
Company or the related Servicer does not, the Master Servicer may), promptly
furnish to the Custodian, on behalf of the Trustee, two copies of a
certification substantially in the form of Exhibit G (or as otherwise provided
in the Custodial Agreement) hereto signed by a Servicing Officer or in a
mutually agreeable electronic format which will, in lieu of a signature on
its
face, originate from a Servicing Officer (which certification shall include
a
statement to the effect that all amounts received in connection with such
payment that are required to be deposited in the Protected Account maintained
by
the Company or the Servicer pursuant to Article V or by the related Servicer
pursuant to the related Servicing Agreement have been or will be so deposited)
and shall request that the Custodian, on behalf of the Trustee, deliver to
the
Company or the related Servicer the related Mortgage File. Upon receipt of
such
certification and request, the Custodian, on behalf of the Trustee, shall
promptly release the related Mortgage File to the Company or the related
Servicer and the Trustee and Custodian shall have no further responsibility
with
regard to such Mortgage File. Upon any such payment in full, the Company or
the
related Servicer is authorized, to give, as agent for the Trustee, as the
mortgagee under the Mortgage that secured the Mortgage Loan, an instrument
of
satisfaction (or assignment of mortgage without recourse, representation or
warranty) regarding the Mortgaged Property subject to the Mortgage, which
instrument of satisfaction or assignment, as the case may be, shall be delivered
to the Person or Persons entitled thereto against receipt therefor of such
payment, it being understood and agreed that no expenses incurred in connection
with such instrument of satisfaction or assignment, as the case may be, shall
be
chargeable to the Protected Account.
(b) From
time
to time and as appropriate for the servicing or foreclosure of any Mortgage
Loan
and in accordance with this Agreement or the related Servicing Agreement, upon
written instruction from such Servicer or the Master Servicer, the Trustee
shall
execute such documents as shall be prepared and furnished to the Trustee by
the
Company, the related Servicer or the Master Servicer (in form reasonably
acceptable to the Trustee) and as are necessary to the prosecution of any such
proceedings. The Custodian, on behalf of the Trustee, shall, upon the request
of
the Company, the related Servicer or the Master Servicer, and delivery to the
Custodian, on behalf of the Trustee, of two copies of a request for release
signed by a Servicing Officer substantially in the form of Exhibit G (or in
a
mutually agreeable electronic format which will, in lieu of a signature on
its
face, originate from a Servicing Officer), release the related Mortgage File
held in its possession or control to the Company, the related Servicer or the
Master Servicer, as applicable. Such trust receipt shall obligate the Company,
the related Servicer or the Master Servicer to return the Mortgage File to
the
Custodian on behalf of the Trustee, when the need therefor by such Person no
longer exists unless the Mortgage Loan shall be liquidated, in which case,
upon
receipt of a certificate of a Servicing Officer similar to that hereinabove
specified, the Mortgage File shall be released by the Custodian, on behalf
of
the Trustee, to the Company, the related Servicer or the Master
Servicer.
Section
4.08 Documents,
Records and Funds in Possession of Master Servicer, Company and Servicer To
Be
Held for Trustee.
(a) The
Master Servicer shall transmit and the Company or the related Servicer (to
the
extent required by this Agreement or the related Servicing Agreement) shall
transmit to the Trustee or Custodian such documents and instruments coming
into
the possession of such Person from time to time as are required by the terms
hereof, or in the case of the related Servicer, the related Servicing Agreement,
to be delivered to the Trustee or Custodian. Any funds received by the Master
Servicer, the Company or by the related Servicer in respect of any Mortgage
Loan
or which otherwise are collected by the Master Servicer, the Company or by
the
related Servicer as Liquidation Proceeds or Insurance Proceeds in respect of
any
Mortgage Loan shall be held for the benefit of the Trustee and the
Certificateholders subject to the Securities Administrator’s right to retain or
withdraw from the Distribution Account, the Master Servicing Compensation and
other amounts provided in this Agreement, and to the right of the Company and
the related Servicer to retain its Servicing Fee and other amounts as provided
in this Agreement or the related Servicing Agreement. The Master Servicer,
the
Company and the related Servicer shall provide access to information and
documentation regarding the Mortgage Loans to the Trustee and, regarding the
Mortgage Loans and their respective agents and accountants at any time upon
reasonable request and during normal business hours, and to Certificateholders
that are savings and loan associations, banks or insurance companies, the Office
of Thrift Supervision, the FDIC and the supervisory agents and examiners of
such
Office and Corporation or examiners of any other federal or state banking or
insurance regulatory authority if so required by applicable regulations of
the
Office of Thrift Supervision or other regulatory authority, such access to
be
afforded without charge but only upon reasonable request in writing and during
normal business hours at the offices of the Master Servicer designated by it.
In
fulfilling such a request the Master Servicer shall not be responsible for
determining the sufficiency of such information.
(b) All
Mortgage Files and funds collected or held by, or under the control of, the
Master Servicer, in respect of any Mortgage Loans, whether from the collection
of principal and interest payments or from Liquidation Proceeds or Insurance
Proceeds, shall be held by the Master Servicer for and on behalf of the Trustee
and the Certificateholders and shall be and remain the sole and exclusive
property of the Trustee; provided, however, that the Master Servicer, the
Company and the related Servicer shall be entitled to setoff against, and deduct
from, any such funds any amounts that are properly due and payable to the Master
Servicer or such Servicer under this Agreement or the related Servicing
Agreement.
Section
4.09 Standard
Hazard Insurance and Flood Insurance Policies.
(a) For
each
Mortgage Loan, the Master Servicer shall enforce any obligation of the Company
and the related Servicer under this Agreement or the related Servicing Agreement
to maintain or cause to be maintained standard fire and casualty insurance
and,
where applicable, flood insurance, all in accordance with the provisions of
this
Agreement or the related Servicing Agreement. It is understood and agreed that
such insurance shall be with insurers meeting the eligibility requirements
set
forth in this Agreement and the related Servicing Agreement and that no
earthquake or other additional insurance is to be required of any Mortgagor
or
to be maintained on property acquired in respect of a defaulted loan, other
than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance.
(b) Pursuant
to Sections 5.01 and 5.04 any amounts collected by the Company, the Servicers
or
the Master Servicer, or by the Company or the Servicers, under any insurance
policies (other than amounts to be applied to the restoration or repair of
the
property subject to the related Mortgage or released to the Mortgagor in
accordance with this Agreement or the Servicing Agreements) shall be deposited
by the Company in its Protected Account or by the related Servicer or the Master
Servicer into the Distribution Account, subject to withdrawal pursuant to
Sections 5.02, 5.04 and 5.05, as applicable. Any cost incurred by the Master
Servicer, the Company or the related Servicer in maintaining any such insurance
if the Mortgagor defaults in its obligation to do so shall be added to the
amount owing under the Mortgage Loan where the terms of the Mortgage Loan so
permit; provided, however, that the addition of any such cost shall not be
taken
into account for purposes of calculating the distributions to be made to
Certificateholders and shall be recoverable by the Master Servicer, the Company
or the related Servicer pursuant to Sections 5.02, 5.04 and 5.05, as
applicable.
Section
4.10 Presentment
of Claims and Collection of Proceeds.
The
Master Servicer shall (to the extent provided in this Agreement and the related
Servicing Agreement) cause the Company or the Servicer to, prepare and present
on behalf of the Trustee and the Certificateholders all claims under the
Insurance Policies and take such actions (including the negotiation, settlement,
compromise or enforcement of the insured’s claim) as shall be necessary to
realize recovery under such policies. Any proceeds disbursed to the Master
Servicer (or disbursed to the Company or the related Servicer and remitted
to
the Master Servicer) in respect of such policies, bonds or contracts shall
be
promptly deposited in the Distribution Account upon receipt, except that any
amounts realized that are to be applied to the repair or restoration of the
related Mortgaged Property as a condition precedent to the presentation of
claims on the related Mortgage Loan to the insurer under any applicable
Insurance Policy need not be so deposited (or remitted).
Section
4.11 Maintenance
of the Primary Mortgage Insurance Policies.
(a) The
Master Servicer shall not take, or authorize the Company or the related Servicer
(to the extent such action is prohibited under this Agreement or the related
Servicing Agreement) to take, any action that would result in noncoverage under
any applicable Primary Mortgage Insurance Policy of any loss which, but for
the
actions of the Master Servicer, the Company or the related Servicer, would
have
been covered thereunder. The Master Servicer shall use its best reasonable
efforts to cause the Company and the related Servicer (to the extent required
under this Agreement and the related Servicing Agreement) to keep in force
and
effect (to the extent that the Mortgage Loan requires the Mortgagor to maintain
such insurance), primary mortgage insurance applicable to each Mortgage Loan
(including any LPMI Policy) in accordance with the provisions of this Agreement
and the related Servicing Agreement, as applicable. The Master Servicer shall
not, and shall not authorize the Company or the related Servicer (to the extent
required under this Agreement or the related Servicing Agreement) to, cancel
or
refuse to renew any such Primary Mortgage Insurance Policy that is in effect
at
the date of the initial issuance of the Mortgage Note and is required to be
kept
in force hereunder except in accordance with the provisions of this Agreement
and the related Servicing Agreement, as applicable.
(b) The
Master Servicer agrees to cause the Company and the related Servicer (to the
extent required under this Agreement and the related Servicing Agreement) to
present, on behalf of the Trustee and the Certificateholders, claims to the
insurer under any Primary Mortgage Insurance Policies and, in this regard,
to
take such reasonable action as shall be necessary to permit recovery under
any
Primary Mortgage Insurance Policies respecting defaulted Mortgage Loans.
Pursuant to Sections 5.01 and 5.05, any amounts collected by the Company or
the
related Servicer under any Primary Mortgage Insurance Policies shall be
deposited by the Company in its Protected Account or by the Securities
Administrator in the Distribution Account, subject to withdrawal pursuant to
Section 5.02.
Section
4.12 Trustee
to Retain Possession of Certain Insurance Policies and Documents.
The
Trustee (or the Custodian, as directed by the Trustee), shall retain possession
and custody of the originals (to the extent available) of any Primary Mortgage
Insurance Policies, or certificate of insurance if applicable, and any
certificates of renewal as to the foregoing as may be issued from time to time
as contemplated by this Agreement. Until all amounts distributable in respect
of
the Certificates have been distributed in full and the Master Servicer otherwise
has fulfilled its obligations under this Agreement, the Trustee (or its
Custodian, if any, as directed by the Trustee) shall also retain possession
and
custody of each Mortgage File in accordance with and subject to the terms and
conditions of this Agreement. The Master Servicer shall promptly deliver or
cause to be delivered to the Trustee (or the Custodian, as directed by the
Trustee), upon the execution or receipt thereof the originals of any Primary
Mortgage Insurance Policies, any certificates of renewal, and such other
documents or instruments that constitute portions of the Mortgage File that
come
into the possession of the Master Servicer from time to time.
Section
4.13 Realization
Upon Defaulted Mortgage Loans.
The
Master Servicer shall cause the Company and the related Servicer (to the extent
required under this Agreement and the related Servicing Agreement) to foreclose
upon, repossess or otherwise comparably convert the ownership of Mortgaged
Properties securing such of the Mortgage Loans as come into and continue in
default and as to which no satisfactory arrangements can be made for collection
of delinquent payments, all in accordance with this Agreement or the related
Servicing Agreement.
Section
4.14 Compensation
for the Master Servicer.
The
Master Servicer will be entitled to receive the Master Servicing Fee as
compensation for its activities under this Agreement. The Master Servicer will
also be entitled to all income and gain realized from any investment of funds
in
the Distribution Account for the performance of its activities hereunder. The
Master Servicer shall be required to pay all expenses incurred by it in
connection with its activities hereunder and shall not be entitled to
reimbursement therefor except as provided in this Agreement. However, the
aggregate Master Servicing Fee with respect to any Distribution Date shall
be
reduced by an amount equal to the Compensating Interest payable by the Master
Servicer for such Distribution Date pursuant to Section 6.02 hereof.
Section
4.15 REO
Property.
(a) In
the
event the Trust Fund acquires ownership of any REO Property in respect of any
related Mortgage Loan, the deed or certificate of sale shall be issued to the
Trustee, or to its nominee, on behalf of the related Certificateholders. The
Master Servicer shall, to the extent provided in this Agreement or the related
Servicing Agreement, cause the Company or the related Servicer to sell, any
REO
Property as expeditiously as possible and in accordance with the provisions
of
this Agreement and the related Servicing Agreement, as applicable. Pursuant
to
such efforts to sell such REO Property, the Master Servicer shall cause the
Company or the related Servicer to protect and conserve, such REO Property
in
the manner and to the extent required by this Agreement or the related Servicing
Agreement, in accordance with the REMIC Provisions and in a manner that does
not
result in a tax on “net income from foreclosure property” or cause such REO
Property to fail to qualify as “foreclosure property” within the meaning of
Section 860G(a)(8) of the Code.
(b) The
Master Servicer shall, to the extent required by this Agreement or the related
Servicing Agreement, cause the Company or the related Servicer to deposit all
funds collected and received in connection with the operation of any REO
Property in the Protected Account.
(c) The
Master Servicer and the Company or the related Servicer, upon the final
disposition of any REO Property, shall be entitled to reimbursement for any
related unreimbursed Advances and other unreimbursed advances as well as any
unpaid Servicing Fees from Liquidation Proceeds received in connection with
the
final disposition of such REO Property; provided, that any such unreimbursed
Monthly Advances as well as any unpaid Servicing Fees may be reimbursed or
paid,
as the case may be, prior to final disposition, out of any net rental income
or
other net amounts derived from such REO Property.
(d) To
the
extent provided in this Agreement or the related Servicing Agreement, the
Liquidation Proceeds from the final disposition of the REO Property, net of
any
payment to the Master Servicer and the Company or the related Servicer as
provided above shall be deposited in the Protected Account on or prior to the
Determination Date in the month following receipt thereof and be remitted by
wire transfer in immediately available funds to the Securities Administrator
for
deposit into the related Distribution Account on the next succeeding Remittance
Date.
Section
4.16 Annual
Statement as to Compliance.
The
Company as a Servicer, the Master Servicer and the Securities Administrator
shall deliver (or otherwise make available) to the Depositor and the Securities
Administrator not later than March 15th
of each
calendar year beginning in 2007, an Officer’s Certificate (an “Annual Statement
of Compliance”) stating, as to each signatory thereof, that (i) a review of the
activities of each such party during the preceding calendar year and of its
performance under this Agreement or other applicable servicing agreement has
been made under such officer’s supervision and (ii) to the best of such
officer’s knowledge, based on such review, such party has fulfilled all of its
obligations under this Agreement or other applicable servicing agreement in
all
material respects throughout such year, or, if there has been a failure to
fulfill any such obligation in any material respect, specifying each such
failure known to such officer and the nature and status of the cure provisions
thereof. Such Annual Statement of Compliance shall contain no restrictions
or
limitations on its use. The Master Servicer shall enforce the obligations of
each Servicer, to the extent set forth in the related Servicing Agreement,
to
deliver a similar Annual Statement of Compliance by that Servicer to the
Depositor and the Securities Administrator as described above as and when
required with respect to the Master Servicer. In the event that certain
servicing responsibilities with respect to any Mortgage Loan have been delegated
by the Company, the Master Servicer, the Securities Administrator or a Servicer
to a subservicer or subcontractor, each such entity shall cause such subservicer
or subcontractor (and with respect to each Servicer, the Master Servicer shall
enforce the obligation of such Servicer to the extent required under the related
Servicing Agreement) to deliver a similar Annual Statement of Compliance by
such
subservicer or subcontractor to the Depositor and the Securities Administrator
as described above as and when required with respect to the Master Servicer
or
the related Servicer (as the case may be).
Failure
of the Company to comply with this Section 4.16 (including with respect to
the
timeframes required herein) shall be deemed a Company Default, and the Master
Servicer shall, in addition to whatever rights the Master Servicer may have
under this Agreement and at law or equity or to damages, including injunctive
relief and specific performance, upon notice immediately terminate all of the
rights and obligations of the Company under this Agreement and in and to the
Mortgage Loans and the proceeds thereof without compensating the Company for
the
same. Failure of the Master Servicer to comply with this Section 4.16 (including
with respect to the timeframes required herein) shall be deemed an Event of
Default, and at the written direction of the Depositor the Trustee shall, in
addition to whatever rights the Trustee may have under this Agreement and at
law
or equity or to damages, including injunctive relief and specific performance,
upon notice immediately 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 without compensating the Master Servicer for the same. Failure
of the Securities Administrator to comply with this Section 4.16 (including
with
respect to the timeframes required in this Section) which failure results in
a
failure to timely file the related Form 10-K, shall be deemed a default and
the
Trustee at the written direction of the Depositor shall, in addition to whatever
rights the Trustee may have under this Agreement and at law or equity or to
damages, including injunctive relief and specific performance, upon notice
immediately terminate all of the rights and obligations of the Securities
Administrator under this Agreement and in and to the Mortgage Loans and the
proceeds thereof without compensating the Securities Administrator for the
same.
This paragraph shall supersede any other provision in this Agreement or any
other agreement to the contrary.
In
the
event the Company, the Master Servicer, the Securities Administrator or any
subservicer or subcontractor engaged by either such party is terminated or
resigns pursuant to the terms of the Agreement, or any other applicable
agreement in the case of a subservicer or subcontractor, as the case may be,
such party shall provide an Annual Statement of Compliance pursuant to this
Section 4.16 or to the related section of such other applicable agreement,
as
the case may be, as to the performance of its obligations with respect to the
period of time it was subject to this Agreement or any other applicable
agreement, as the case may be notwithstanding any such termination or
resignation.
Section
4.17 Assessments
of Compliance and Attestation Reports.
Pursuant
to Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation
AB,
each of the Company as a Servicer, the Master Servicer, the Securities
Administrator and the Custodian (to the extent set forth in this Section) (each,
an “Attesting Party”) at its own expense shall deliver (or otherwise make
available) to the Master Servicer, the Securities Administrator and the
Depositor on or before March 15th
of each
calendar year beginning in 2007, a report regarding such Attesting Party’s
assessment of compliance (an “Assessment of Compliance”) with the Servicing
Criteria during the preceding calendar year. The Assessment of Compliance,
as
set forth in Regulation AB, must contain the following:
(a) A
statement by an authorized officer of such Attesting Party of its authority
and
responsibility for assessing compliance with the Servicing Criteria applicable
to the related Attesting Party;
(b) A
statement by an authorized officer that such Attesting Party used the Servicing
Criteria attached as Exhibit N hereto, and which will also be attached to the
Assessment of Compliance, to assess compliance with the Servicing Criteria
applicable to the related Attesting Party;
(c) An
assessment by such officer of the related Attesting Party’s compliance with the
applicable Servicing Criteria for the period consisting of the preceding
calendar year, including disclosure of any material instance of noncompliance
with respect thereto during such period, which assessment shall be based on
the
activities such Attesting Party performs with respect to asset-backed securities
transactions taken as a whole involving the related Attesting Party, that are
backed by the same asset type as the Mortgage Loans;
(d) A
statement that a registered public accounting firm has issued an attestation
report on the related Attesting Party’s Assessment of Compliance for the period
consisting of the preceding calendar year; and
(e) A
statement as to which of the Servicing Criteria, if any, are not applicable
to
the
related Attesting
Party, which statement shall be based on the activities such Attesting Party
performs with respect to asset-backed securities transactions taken as a whole
involving such Attesting Party, that are backed by the same asset type as the
Mortgage Loans.
Such
report at a minimum shall address each of the Servicing Criteria specified
on
Exhibit N hereto which are indicated as applicable to the related Attesting
Party.
On
or
before March 15th
of each
calendar year beginning in 2007, each Attesting Party shall furnish to the
Master Servicer, the Depositor and the Securities Administrator a report (an
“Attestation Report”) by a registered public accounting firm that attests to,
and reports on, the Assessment of Compliance made by the related Attesting
Party, as required by Rules 13a-18 and 15d-18 of the Exchange Act and Item
1122(b) of Regulation AB, which Attestation Report must be made in accordance
with standards for attestation reports issued or adopted by the Public Company
Accounting Oversight Board.
The
Master Servicer shall enforce the obligation of each Servicer to deliver to
the
Securities Administrator, the Master Servicer and the Depositor an Assessment
of
Compliance and Attestation Report as and when provided in the related Servicing
Agreement. Each of the Company, the Master Servicer and the Securities
Administrator shall cause, and the Master Servicer shall enforce the obligation
(as and when provided in the related Servicing Agreement) of each Servicer
to
cause, any subservicer and each subcontractor (to the extent such subcontractor
is determined by the Company, the Master Servicer or the Securities
Administrator, as applicable, to be “participating in the servicing function”
within the meaning of Item 1122 of Regulation AB) that is engaged by the
Company, such Servicer, the Master Servicer or the Securities Administrator,
as
applicable, to deliver to the Securities Administrator, the Master Servicer
and
the Depositor an Assessment of Compliance and Attestation Report as and when
provided above. Such Assessment of Compliance, as to any subservicer or
subcontractor, shall at a minimum address the applicable Servicing Criteria
specified on Exhibit N hereto which are indicated as applicable to any “primary
servicer” to the extent such subservicer or subcontractor is performing any
servicing function for the party who engages it and to the extent such party
is
not itself addressing the Servicing Criteria related to such servicing function
in its own Assessment of Compliance. The Securities Administrator shall confirm
that each of the Assessments of Compliance delivered to it, taken as a whole,
address all of the Servicing Criteria and taken individually address the
Servicing Criteria for each party as set forth in Exhibit N and notify the
Depositor of any exceptions. Notwithstanding the foregoing, as to any
subcontractor, an Assessment of Compliance is not required to be delivered
unless it is required as part of a Form 10-K with respect to the Trust
Fund.
In
addition, for the avoidance of doubt and without duplication, the Company as
a
Servicer shall (and shall cause each subservicer engaged by it to) provide
the
following information to the Depositor and the Securities Administrator: (A)
any
Company Default hereunder and any subservicer event of default under the terms
of the related Subservicing Agreement, (B) any merger, consolidation or sale
of
substantially all of the assets of the Company or, to the best of the Company’s
knowledge, any such subservicer, and (C) the Company’s entry into an agreement
with a subservicer to perform or assist in the performance of any of the
Company’s obligations as Servicer.
In
addition, the Company as a Servicer, shall cause each subservicer engaged by
it
to provide the following information to the Depositor and the Securities
Administrator, to the extent applicable, within the timeframes that the Company
would otherwise have to provide such information:
(A) any
material modifications, extensions or waivers of pool asset terms, fees,
penalties or payments during the distribution period or that have cumulatively
become material over time (Item 1121(a)(11) of Regulation AB);
(B) material
breaches of pool asset representations or warranties or transaction covenants
(Item 1121(a)(12) of Regulation AB); and
(C) information
regarding new asset-backed securities issuances backed by the same pool assets,
any pool asset changes (such as, additions, substitutions or repurchases),
and
any material changes in origination, underwriting or other criteria for
acquisition or selection of pool assets (Item 1121(a)(14) of Regulation
AB).
The
Custodian shall deliver to the Master Servicer, the Securities Administrator
and
the Depositor an Assessment of Compliance and Attestation Report, as and when
provided above, which shall at a minimum address each of the Servicing Criteria
specified on Exhibit N hereto which are indicated as applicable to a
“custodian”. Notwithstanding the foregoing, an Assessment of Compliance or
Attestation Report is not required to be delivered by any Custodian unless
it is
required as part of a Form 10-K with respect to the Trust Fund.
Failure
of the Company to comply with this Section 4.17 (including with respect to
the
timeframes required herein) shall be deemed a Company Default, and the Master
Servicer shall, in addition to whatever rights the Master Servicer may have
under this Agreement and at law or equity or to damages, including injunctive
relief and specific performance, upon notice immediately terminate all of the
rights and obligations of the Company under this Agreement and in and to the
Mortgage Loans and the proceeds thereof without compensating the Company for
the
same. Failure of the Master Servicer to comply with this Section 4.17 (including
with respect to the timeframes required herein) shall
constitute an
Event
of Default, and at the written direction of the Depositor the Trustee shall,
in
addition to whatever rights the Trustee may have under this Agreement and at
law
or equity or to damages, including injunctive relief and specific performance,
upon notice immediately 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 without compensating the Master Servicer for the same (but
subject to the Master Servicer’s rights to payment of any Master Servicing
Compensation and reimbursement of all amounts for which it is entitled to be
reimbursed prior to the date of termination). Failure of the Securities
Administrator to comply with this Section 4.17 (including with respect to the
timeframes required in this Section) which failure results in a failure to
timely file the related Form 10-K, shall constitute a default and at the written
direction of the Depositor the Trustee shall, in addition to whatever rights
the
Trustee may have under this Agreement and at law or equity or to damages,
including injunctive relief and specific performance, upon notice immediately
terminate all of the rights and obligations of the Securities Administrator
under this Agreement and in and to the Mortgage Loans and the proceeds thereof
without compensating the Securities Administrator for the same (but subject
to
the Securities Administrator’s right to reimbursement of all amounts for which
it is entitled to be reimbursed prior to the date of termination). This
paragraph shall supersede any other provision in this Agreement or any other
agreement to the contrary.
In
the
event the Company, the Master Servicer, the Custodian, the Securities
Administrator or any subservicer or subcontractor engaged by any such party
is
terminated, assigns its rights and obligations under, or resigns pursuant to,
the terms of the Agreement, the Custodial Agreement, or any other applicable
agreement in the case of a subservicer or subcontractor, as the case may be,
such party shall provide an Assessment of Compliance and cause to be provided
an
Attestation Report pursuant to this Section 4.17 or to the related section
of
such other applicable agreement, as the case may be, notwithstanding any such
termination, assignment or resignation.
Section
4.18 Reports
Filed with Securities and Exchange Commission.
(a) (i)
(A)
Within
15 days after each Distribution Date (subject to permitted exceptions under
the
Exchange Act), the Securities Administrator shall, in accordance with industry
standards, prepare and file with the Commission via the Electronic Data
Gathering and Retrieval System (“▇▇▇▇▇”), a Distribution Report on Form 10-D,
signed by the Master Servicer, with a copy of the Monthly Statement to be
furnished by the Securities Administrator to the Certificateholders for such
Distribution Date attached thereto; provided that, the Securities Administrator
shall have received no later than five (5) calendar days after the related
Distribution Date, all information required to be provided to the Securities
Administrator as described in clause (a)(iv) below. Any disclosure that is
in
addition to the Monthly Statement and that is required to be included on Form
10-D (“Additional Form 10-D Disclosure”) shall
be
reported by the parties set forth on Exhibit O to the Securities Administrator
and the Depositor, pursuant to the paragraph immediately below, and approved
for
inclusion by the Depositor, and the Securities Administrator will have no duty
or liability for any failure hereunder to determine or prepare any Additional
Form 10-D Disclosure absent such reporting (other than in the case where the
Securities Administrator is the reporting party as set forth in Exhibit O)
and
approval.
(B) Within
five (5) calendar days after the related Distribution Date, (i) the parties
set
forth in Exhibit O shall be required to provide, and the Master Servicer shall
enforce the obligation of each Servicer (to the extent provided in the related
Servicing Agreement) to provide, pursuant to Section 4.18(a)(iv) below, to
the
Securities Administrator and the Depositor, to the extent known by a responsible
officer thereof, in ▇▇▇▇▇-compatible format, or in such other format as
otherwise agreed upon by the Securities Administrator and the Depositor and
such
party, the form and substance of any Additional Form 10-D Disclosure, if
applicable, and (ii) the Depositor will approve, as to form and substance,
or
disapprove, as the case may be, the inclusion of the Additional Form 10-D
Disclosure on Form 10-D. The Depositor shall be responsible for any reasonable
fees and expenses assessed or incurred by the Securities Administrator in
connection with including any Additional Form 10-D Disclosure on Form 10-D
pursuant to this Section.
(C) After
preparing the Form 10-D, the Securities Administrator shall forward
electronically a copy of the Form 10-D to the Depositor (in the case of any
Additional 10-D Disclosure and otherwise if requested by the Depositor) and
the
Master Servicer for review. Within
two Business Days after receipt of such copy, but no later than the 12th
calendar day after the Distribution Date (provided that, the Securities
Administrator forwards a copy of the Form 10-D no later than the 10th
calendar
day after the Distribution Date), the Depositor shall notify the Securities
Administrator in writing (which may be furnished electronically) of any changes
to or approval of such Form 10-D. In the absence of receipt of any written
changes or approval, the Securities Administrator shall be entitled to assume
that such Form 10-D is in final form and the Securities Administrator may
proceed with the execution and filing of the Form 10-D. No later than the 13th
calendar day after the related Distribution Date, a duly authorized officer
of
the Master Servicer shall sign the Form 10-D and, in the case where the Master
Servicer and the Securities Administrator are not affiliated, return an
electronic or fax copy of such signed Form 10-D (with an original executed
hard
copy to follow by overnight mail) to the Securities Administrator. If a Form
10-D cannot be filed on time or if a previously filed Form 10-D needs to be
amended, the Securities Administrator shall follow the procedures set forth
in
Section 4.18(a)(v)(B). Promptly (but no later than one (1) Business Day) after
filing with the Commission, the Securities Administrator shall make available
on
its internet website identified in Section 6.06 a final executed copy of each
Form 10-D filed by the Securities Administrator. The signing party at the Master
Servicer can be contacted as set forth in Section 12.05. Form 10-D requires
the
registrant to indicate (by checking “yes” or “no”) that it (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. The Depositor shall notify the Securities
Administrator in writing, no later than the fifth calendar day after the related
Distribution Date with respect to the filing of a report on Form 10-D if the
answer to the questions should be “no”. The Securities Administrator shall be
entitled to rely on the representations in Section 2.04(vi) and in any such
notice in preparing, executing and/or filing any such report. The parties to
this Agreement acknowledge that the performance by the Master Servicer and
the
Securities Administrator of their respective duties under Sections 4.18(a)(i)
and (v) related to the timely preparation, execution and filing of Form 10-D
is
contingent upon such parties strictly observing all applicable deadlines in
the
performance of their duties under such Sections. Neither the Master Servicer
nor
the Securities Administrator shall have any liability for any loss, expense,
damage, claim arising out of or with respect to any failure to properly prepare,
execute and/or timely file such Form 10-D, where such failure results from
a
party’s failure to deliver, on a timely basis, any information from such party
needed to prepare, arrange for execution or file such Form 10-D, not resulting
from its own negligence, bad faith or willful misconduct.
(ii) (A)
Within four (4) Business Days after the occurrence of an event requiring
disclosure on Form 8-K (each such event, a “Reportable Event”), the Securities
Administrator shall prepare and file, on behalf of the Trust, at the direction
of the Depositor, any Form 8-K, as required by the Exchange Act; provided that,
the Depositor shall file the initial Form 8-K in connection with the issuance
of
the Certificates. Any disclosure or information related to a Reportable Event
or
that is otherwise required to be included on Form 8-K (“Form 8-K Disclosure
Information”) shall be, pursuant to the paragraph immediately below, reported by
the parties set forth on Exhibit O to the Securities Administrator and the
Depositor and directed and approved for inclusion by the Depositor pursuant
to
the following paragraph, and the Securities Administrator will have no duty
or
liability for any failure hereunder to determine or prepare any Form 8-K
Disclosure Information absent such reporting (other than in the case where
the
Securities Administrator is the reporting party as set forth in Exhibit O)
and
approval.
(B) For
so
long as the Trust is subject to the Exchange Act reporting requirements, (i)
no
later than the close of business on the 2nd Business Day after the occurrence
of
a Reportable Event the parties set forth in Exhibit O shall be required pursuant
to Section 4.18(a)(iv) below to provide, and the Master Servicer shall enforce
the obligation of each Servicer (to the extent provided in the related Servicing
Agreement) to provide, to the Securities Administrator and the Depositor, to
the
extent known by a responsible officer thereof, in ▇▇▇▇▇-compatible format,
or in
such other form as otherwise agreed upon by the Securities Administrator and
the
Depositor and such party, the form and substance of any Form 8-K Disclosure
Information, if applicable, and (ii) the Depositor shall approve, as to form
and
substance, or disapprove, as the case may be, the inclusion of the Form 8-K
Disclosure Information on Form 8-K. The Depositor shall be responsible for
any
reasonable fees and expenses assessed or incurred by the Securities
Administrator in connection with including any Form 8-K Disclosure Information
on Form 8-K pursuant to this Section.
(C) After
preparing the Form 8-K, the Securities Administrator shall forward
electronically a copy of the Form 8-K to the Depositor and the Master Servicer
for review. No later than the close of business New York City time on the 3rd
Business Day after the Reportable Event, or in the case where the Master
Servicer and Securities Administrator are affiliated, no later than noon New
York City time on the 4th
Business
Day after the Reportable Event, a duly authorized officer of the Master Servicer
shall sign the Form 8-K and, in the case where the Master Servicer and the
Securities Administrator are not affiliated, return an electronic or fax copy
of
such signed Form 8-K (with an original executed hard copy to follow by overnight
mail) to the Securities Administrator. Promptly, but no later than the close
of
business on the 3rd Business Day after the Reportable Event (provided that,
the
Securities Administrator forwards a copy of the Form 8-K no later than noon
New
York time on the third Business Day after the Reportable Event), the Depositor
shall notify the Securities Administrator in writing (which may be furnished
electronically) of any changes to or approval of such Form 8-K. In the absence
of receipt of any written changes or approval, the Securities Administrator
shall be entitled to assume that such Form 8-K is in final form and the
Securities Administrator may proceed with the execution and filing of the Form
8-K. If a Form 8-K cannot be filed on time or if a previously filed Form 8-K
needs to be amended, the Securities Administrator shall follow the procedures
set forth in Section 4.18(a)(v)(B). Promptly (but no later than one (1) Business
Day) after filing with the Commission, the Securities Administrator shall,
make
available on its internet website a final executed copy of each Form 8-K filed
by the Securities Administrator. The signing party at the Master Servicer can
be
contacted as set forth in Section 12.05. The parties to this Agreement
acknowledge that the performance by Master ▇▇▇▇▇▇▇▇ and the Securities
Administrator of their respective duties under this Section 4.18(a)(ii) related
to the timely preparation, execution and filing of Form 8-K is contingent upon
such parties strictly observing all applicable deadlines in the performance
of
their duties under this Section 4.18(a)(ii). Neither the Master Servicer nor
the
Securities Administrator shall have any liability for any loss, expense, damage,
claim arising out of or with respect to any failure to properly prepare, execute
and/or timely file such Form 8-K, where such failure results from a party’s
failure to deliver, on a timely basis, any information from such party needed
to
prepare, arrange for execution or file such Form 8-K, not resulting from its
own
negligence, bad faith or willful misconduct.
(iii) (A)
On or
prior to the 90th day after the end of each fiscal year of the Trust or such
earlier date as may be required by the Exchange Act (the “10-K Filing Deadline”)
(it being understood that the fiscal year for the Trust ends on December 31st
of
each year), commencing in March 2007, the Securities Administrator shall prepare
and file on behalf of the Trust a Form 10-K, in form and substance as required
by the Exchange Act. Each such Form 10-K shall include the following items,
in
each case to the extent they have been delivered to the Securities Administrator
within the applicable time frames set forth in this Agreement, (I) an annual
compliance statement for the
Company as a Servicer,
the
Master Servicer, each Servicer, the Securities Administrator and any subservicer
or subcontractor, as applicable, as described under Section 4.16, (II)(A) the
annual reports on assessment of compliance with Servicing Criteria for the
Company as a Servicer, each Servicer, the Master Servicer, each subservicer
and
subcontractor participating in the servicing function, the Securities
Administrator and the Custodian, as described under Section 4.17, and (B) if
any
such report on assessment of compliance with Servicing Criteria described under
Section 4.17 identifies any material instance of noncompliance, disclosure
identifying such instance of noncompliance, or if any such report on assessment
of compliance with Servicing Criteria described under Section 4.17 is not
included as an exhibit to such Form 10-K, disclosure that such report is not
included and an explanation why such report is not included, (III)(A) the
registered public accounting firm attestation report for the Company, each
Servicer, the Master Servicer, the Securities Administrator, each subservicer,
each subcontractor, as applicable, and the Custodian, as described under Section
4.17, and (B) if any registered public accounting firm attestation report
described under Section 4.17 identifies any material instance of noncompliance,
disclosure identifying such instance of noncompliance, or if any such registered
public accounting firm attestation report is not included as an exhibit to
such
Form 10-K, disclosure that such report is not included and an explanation why
such report is not included, and (IV) a ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification as
described in Section 4.18(a)(iii)(D) below (provided, however, that the
Securities Administrator, at its discretion, may omit from the Form 10-K any
annual compliance statement, assessment of compliance or attestation report
that
is not required to be filed with such Form 10-K pursuant to Regulation AB).
Any
disclosure or information in addition to (I) through (IV) above that is required
to be included on Form 10-K (“Additional Form 10-K Disclosure”) shall be
reported by the parties set forth on Exhibit O to the Securities Administrator
and the Depositor and, pursuant to the paragraph immediately below, approved
for
inclusion by the Depositor, and the Securities Administrator will have no duty
or liability for any failure hereunder to determine or prepare any Additional
Form 10-K Disclosure absent such reporting (other than in the case where the
Securities Administrator is the reporting party as set forth in Exhibit O)
and
approval.
(B) No
later
than March 15th
of each
year that the Trust is subject to the Exchange Act reporting requirements,
commencing in 2007, (i) the parties set forth in Exhibit O shall be required
to
provide, and the Master Servicer shall enforce the obligation of each Servicer
(to the extent provided in the related Servicing Agreement) to provide, pursuant
to Section 4.18(a)(iv) below to the Securities Administrator and the Depositor,
to the extent known by a responsible officer thereof, in ▇▇▇▇▇-compatible
format, or in such other format as otherwise agreed upon by the Securities
Administrator and the Depositor and such party, the form and substance of any
Additional Form 10-K Disclosure, if applicable, and (ii) the Depositor will
approve, as to form and substance, or disapprove, as the case may be, the
inclusion of the Additional Form 10-K Disclosure on Form 10-K. The Depositor
shall be responsible for any reasonable fees and expenses assessed or incurred
by the Securities Administrator in connection with including any Additional
Form
10-K Disclosure on Form 10-K pursuant to this Section.
(C) After
preparing the Form 10-K, the Securities Administrator shall forward
electronically a copy of the Form 10-K to the Depositor (only in the case where
such Form 10-K includes Additional Form 10-K Disclosure and otherwise if
requested by the Depositor) and the Master Servicer for review. Within three
Business Days after receipt of such copy, but no later than March 25th
(provided that, the Securities Administrator forwards a copy of the Form 10-K
no
later than the third Business Day prior to March 25th), the Depositor shall
notify the Securities Administrator in writing (which may be furnished
electronically) of any changes to or approval of such Form 10-K. In the absence
of receipt of any written changes or approval, the Securities Administrator
shall be entitled to assume that such Form 10-K is in final form and the
Securities Administrator may proceed with the execution and filing of the Form
10-K. No later than the close of business Eastern Standard time on the 4th
Business Day prior to the 10-K Filing Deadline, an officer of the Master
Servicer in charge of the master servicing function shall sign the Form 10-K
and, in the case where the Master Servicer and the Securities Administrator
are
unaffiliated, return an electronic or fax copy of such signed Form 10-K (with
an
original executed hard copy to follow by overnight mail) to the Securities
Administrator. If a Form 10-K cannot be filed on time or if a previously filed
Form 10-K needs to be amended, the Securities Administrator will follow the
procedures set forth in Section 4.18(a)(v)(B). Promptly (but no later than
one
(1) Business Day) after filing with the Commission, the Securities Administrator
shall make available on its internet website a final executed copy of each
Form
10-K filed by the Securities Administrator. The signing party at the Master
Servicer can be contacted as set forth in Section 12.05. Form 10-K requires
the
registrant to indicate (by checking “yes” or “no”) that it (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. The Depositor shall notify the Securities
Administrator in writing, no later than March 15th of each year in which the
Trust is subject to the requirements of the Exchange Act with respect to the
filing of a report on Form 10-K, if the answer to the questions should be “no”.
The Securities Administrator shall be entitled to rely on the representations
in
Section 2.04(vi) and in any such notice in preparing, executing and/or filing
any such report. The parties to this Agreement acknowledge that the performance
by the Master Servicer and the Securities Administrator of their respective
duties under Sections 4.18(a)(iv) and (v) related to the timely preparation,
execution and filing of Form 10-K is contingent upon such parties strictly
observing all applicable deadlines in the performance of their duties under
such
Sections and Sections 4.16 and Section 4.17. Neither the Master Servicer nor
the
Securities Administrator shall have any liability for any loss, expense, damage,
claim arising out of or with respect to any failure to properly prepare, execute
and/or timely file such Form 10-K, where such failure results from the failure
of any party hereto to deliver on a timely basis, any information needed to
prepare, arrange for execution or file such Form 10-K.
(D) Each
Form
10-K shall include a certification (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification”) required
to be included therewith pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act which shall be
signed by the Certifying Person and delivered to the Securities Administrator
no
later than March 15th
of each
year in which the Trust is subject to the reporting requirements of the Exchange
Act. The Master Servicer shall cause any Servicer, and any subservicer or
subcontractor engaged by it to, provide to the Person who signs the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification (the “Certifying Person”), by March 10th of each
year in which the Trust is subject to the reporting requirements of the Exchange
Act (or such other date specified in the related Servicing Agreement) and
otherwise within a reasonable period of time upon request, a certification
(each, a “Back-Up Certification”), in the form attached hereto as Exhibit K,
upon which the Certifying Person, the entity for which the Certifying Person
acts as an officer, and such entity’s officers, directors and Affiliates
(collectively with the Certifying Person, “Certification Parties”) can
reasonably rely. In addition, the Company as a Servicer and, in the case where
the Master Servicer and Securities Administrator are not affiliated, the
Securities Administrator shall sign a Back-Up Certification substantially in
the
form of Exhibit V; provided, however, that the Company and the Securities
Administrator shall not be required to undertake an analysis of any accountant’s
report attached as an exhibit to the Form 10-K. An officer of the Master
Servicer in charge of the master servicing function shall serve as the
Certifying Person on behalf of the Trust. Such officer of the Certifying Person
can be contacted as set forth in Section 12.05.
(iv) With
respect to any Additional Form 10-D Disclosure, Additional Form 10-K Disclosure
or any Form 8-K Disclosure Information (collectively, the “Additional
Disclosure”) relating to the Trust Fund, the Securities Administrator’s
obligation to include such Additional Information in the applicable Exchange
Act
report is subject to receipt from the entity that is indicated in Exhibit O
as
the responsible party for providing that information, if other than the
Securities Administrator, as and when required as described in Section
4.18(a)(i) through (iii) above. Such Additional Disclosure shall be accompanied
by a notice substantially in the form of Exhibit P. Each of the Company as
a
Servicer, the Master Servicer, the Seller, the Securities Administrator and
the
Depositor hereby agrees to notify and provide, and the Master Servicer shall
enforce the obligation (to the extent provided in the related Servicing
Agreement) of each Servicer to notify and provide, to the extent known to the
Company as a Servicer, the Master Servicer, the Seller, the Securities
Administrator and the Depositor all Additional Disclosure relating to the Trust
Fund, with respect to which such party is indicated in Exhibit O as the
responsible party for providing that information. The Depositor shall be
responsible for any reasonable fees and expenses assessed or incurred by the
Securities Administrator in connection with including any Additional Disclosure
information pursuant to this Section.
So
long
as the Depositor is subject to the filing requirements of the Exchange Act
with
respect to the Trust Fund, the Trustee shall notify the Securities Administrator
and the Depositor of any bankruptcy or receivership with respect to the Trustee
or of any proceedings of the type described under Item 1117 of Regulation AB
that have occurred as of the related Due Period, together with a description
thereof, no later than the date on which such information is required of other
parties hereto as set forth under this Section 4.18. In addition, the Trustee
shall notify the Securities Administrator and the Depositor of any affiliations
or relationships that develop after the Closing Date between the Trustee and
the
Depositor, the Seller, the Securities Administrator, the Master Servicer or
the
Custodian of the type described under Item 1119 of Regulation AB, together
with
a description thereof, no later than March 15 of each year that the trust is
subject to the Exchange Act reporting requirements, commencing in 2007. Should
the identification of any of the Depositor, the Seller, the Securities
Administrator, the Master Servicer or the Custodian change, the Depositor shall
promptly notify the Trustee.
(v) (A)
On or
prior to January 30th of the first year in which the Securities Administrator
is
able to do so under applicable law, the Securities Administrator shall prepare
and file a Form 15 relating to the automatic suspension of reporting in respect
of the Trust under the Exchange Act.
(B) In
the
event that the Securities Administrator is unable to timely file with the
Commission all or any required portion of any Form 8-K, 10-D or 10-K required
to
be filed by this Agreement because required disclosure information was either
not delivered to it or delivered to it after the delivery deadlines set forth
in
this Agreement or for any other reason, the Securities Administrator shall
promptly notify the Depositor and the Master Servicer. In the case of Form
10-D
and 10-K, the Depositor, the Master Servicer and the Securities Administrator
shall cooperate to prepare and file a Form 12b-25 and a 10-DA and 10-KA as
applicable, pursuant to Rule 12b-25 of the Exchange Act. In the case of Form
8-K, the Securities Administrator will, upon receipt of all required Form 8-K
Disclosure Information and upon the approval and direction of the Depositor,
include such disclosure information on the next Form 10-D. In the event that
any
previously filed Form 8-K, 10-D or 10-K needs to be amended, and such amendment
relates to any Additional Disclosure, the Securities Administrator shall notify
the Depositor and the parties affected thereby and such parties will cooperate
to prepare any necessary Form 8-K, 10-DA or 10-KA. Any Form 15, Form 12b-25
or
any amendment to Form 8-K, 10-D or 10-K shall be signed by an appropriate
officer of the Master Servicer. The parties hereto acknowledge that the
performance by the Master Servicer and the Securities Administrator of their
respective duties under this Section 4.18(a)(v) related to the timely
preparation, execution and filing of Form 15, a Form 12b-25 or any amendment
to
Form 8-K, 10-D or 10-K is contingent upon the Master Servicer and the Depositor
timely performing their duties under this Section. Neither the Master Servicer
nor the Securities Administrator shall have any liability for any loss, expense,
damage, claim arising out of or with respect to any failure to properly prepare,
execute and/or timely file any such Form 15, Form 12b-25 or any amendments
to
Form 8-K, 10-D or 10-K, where such failure results from a party’s failure to
deliver, on a timely basis, any information from such party needed to prepare,
arrange for execution or file such Form 15, Form 12b-25 or any amendments to
Form 8-K, 10-D or 10-K.
The
Depositor agrees to promptly furnish to the Securities Administrator, from
time
to time upon request, such further information, reports and financial statements
within its control related to this Agreement, the Mortgage Loans as the
Securities Administrator reasonably deems appropriate to prepare and file all
necessary reports with the Commission. The Securities Administrator shall have
no responsibility to file any items other than those specified in this Section
4.18; provided, however, the Securities Administrator shall cooperate with
the
Depositor in connection with any additional filings with respect to the Trust
Fund as the Depositor deems necessary under the Exchange Act. Fees and expenses
incurred by the Securities Administrator in connection with this Section 4.18
shall not be reimbursable from the Trust Fund.
(b) The
Securities Administrator shall indemnify and hold harmless, the Company, the
Depositor and the Master Servicer and each of 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 Securities
Administrator’s obligations under Sections 4.16, 4.17 and 4.18 or the Securities
Administrator’s negligence, bad faith or willful misconduct in connection
therewith. In addition, the Securities Administrator shall indemnify and hold
harmless the Depositor and the Master Servicer and each of 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
(i)
any untrue statement or alleged untrue statement of any material fact contained
in any Back-Up Certification, any Annual Statement of Compliance, any Assessment
of Compliance or any Additional Disclosure provided by the Securities
Administrator on its behalf or on behalf of any subservicer or subcontractor
engaged by the Securities Administrator pursuant to Section 4.16, 4.17 or 4.18
(the
“Securities Administrator Information”), or (ii) any omission or alleged
omission to state therein 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; provided, by way of clarification, that this
paragraph shall be construed solely by reference to the Securities Administrator
Information and not to any other information communicated in connection with
the
Certificates, without regard to whether the Securities Administrator Information
or any portion thereof is presented together with or separately from such other
information.
The
Depositor shall indemnify and hold harmless the Securities Administrator and
the
Master Servicer and each of 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
Sections 4.16, 4.17 and 4.18 or the Depositor’s negligence, bad faith or willful
misconduct in connection therewith. In addition, the Depositor shall indemnify
and hold harmless the Master Servicer, the Securities Administrator and each
of
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 (i) any untrue statement or alleged untrue statement of any material fact
contained in any Additional Disclosure provided by the Depositor that is
required to be filed pursuant to this Section 4.18 (the
“Depositor Information”),
or
(ii)
any
omission or alleged omission to state therein 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; provided, by way of
clarification, that this paragraph shall be construed solely by reference to
the
Depositor Information that is required to be filed and not to any other
information communicated in connection with the Certificates, without regard
to
whether the Depositor Information or any portion thereof is presented together
with or separately from such other information.
The
Master Servicer shall indemnify and hold harmless the Company, the Securities
Administrator and the Depositor and each of its 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 Sections 4.16, 4.17 and 4.18 or the
Master Servicer’s negligence, bad faith or willful misconduct in connection
therewith. In addition, the Master Servicer shall indemnify and hold harmless
the Depositor and each of 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 (i) any untrue statement or alleged untrue
statement of any material fact contained in any Annual Statement of Compliance,
any Assessment of Compliance or any Additional Disclosure provided by the Master
Servicer on its behalf or on behalf of any subservicer or subcontractor engaged
by the Master Servicer pursuant to Section 4.16, 4.17 or 4.18 (the
“Master Servicer Information”), or (ii) any omission or alleged omission to
state therein 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; provided, by way of clarification, that this paragraph shall
be
construed solely by reference to the Master Servicer Information and not to
any
other information communicated in connection with the Certificates, without
regard to whether the Master Servicer Information or any portion thereof is
presented together with or separately from such other information.
The
Company shall indemnify and hold harmless the Depositor, the Securities
Administrator and the Master Servicer and each of 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
Company under Sections 4.16, 4.17 and 4.18 or the Company’s negligence, bad
faith or willful misconduct in connection therewith including any failure by
the
Company to identify any subcontractor “participating in the servicing function”
within the meaning of Item 1122 of Regulation AB. In addition, the Company
shall
indemnify and hold harmless the Depositor and the Master Servicer and each
of
their respective officers, directors and affiliates and the Master Servicer
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 (i) any untrue statement or alleged untrue
statement of any material fact contained in any Back-Up Certification, any
Annual Statement of Compliance, any Assessment of Compliance or any Additional
Disclosure provided by the Company on its behalf or on behalf of any subservicer
or subcontractor pursuant to Section 4.16, 4.17 or 4.18 (the
“Company Information”), (ii) any breach by the Company of a representation,
warranty or covenant set forth in Section 2.03(a)(vii) and Section
2.03(b)(i-iii) and (iii) any omission or alleged omission to state therein
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;
provided, by way of clarification, that this paragraph shall be construed solely
by reference to the Company Information and not to any other information
communicated in connection with the Certificates, without regard to whether
the
Company Information or any portion thereof is presented together with or
separately from such other information.
If
the
indemnification provided for herein is unavailable or insufficient to hold
harmless the Company, the Depositor, the Securities Administrator or the Master
Servicer, as applicable, then the defaulting party, in connection with any
conduct for which it is providing indemnification under this Section 4.18(b),
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 respective parties.
The
indemnification provisions set forth in this Section 4.18(b) shall survive
the
termination of this Agreement or the termination of any party to this
Agreement.
(c) Failure
of the Company to comply with this Section 4.18 (including with respect to
the
timeframes required herein) shall be deemed a Company Default, and the Master
Servicer shall, in addition to whatever rights the Master Servicer may have
under this Agreement and at law or equity or to damages, including injunctive
relief and specific performance, upon notice immediately terminate all of the
rights and obligations of the Company under this Agreement and in and to the
Mortgage Loans and the proceeds thereof without compensating the Company for
the
same. Failure of the Master Servicer to comply with this Section 4.18 (including
with respect to the timeframes required herein) shall, constitute an Event
of
Default, and at the written direction of the Depositor the Trustee shall, in
addition to whatever rights the Trustee may have under this Agreement and at
law
or equity or to damages, including injunctive relief and specific performance,
upon notice immediately 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 without compensating the Master Servicer for the same (but
subject to the Master Servicer rights to payment of any Master Servicing
Compensation and reimbursement of all amounts for which it is entitled to be
reimbursed prior to the date of termination). Failure of the Securities
Administrator to comply with this Section 4.18 (including with respect to the
timeframes required in this Section) which failure results in a failure to
timely file the related Form 10-K, shall, constitute a default and at the
written direction of the Depositor the Trustee shall, in addition to whatever
rights the Trustee may have under this Agreement and at law or equity or to
damages, including injunctive relief and specific performance, upon notice
immediately terminate all of the rights and obligations of the Securities
Administrator under this Agreement and in and to the Mortgage Loans and the
proceeds thereof without compensating the Securities Administrator for the
same
(but subject to the Securities Administrator’s right to reimbursement of all
amounts for which it is entitled to be reimbursed prior to the date of
termination). This paragraph shall supersede any other provision in this
Agreement or any other agreement to the contrary. In connection with the
termination of the Master Servicer or the Securities Administrator pursuant
to
this Section 4.18(d), the Trustee shall be entitled to reimbursement of all
costs and expenses associated with such termination to the extent set forth
in
Section 10.05. Notwithstanding anything to the contrary in this Agreement,
no
Event of Default by the Master Servicer or default by the Securities
Administrator shall have occurred with respect to any failure to properly
prepare, execute and/or timely file any report on Form 8-K, Form 10-D or Form
10-K, any Form 15 or Form 12b-25 or any amendments to Form 8-K, 10-D or 10-K,
where such failure results from any party’s inability or failure to deliver, on
a timely basis, any information from such party needed to prepare, arrange
for
execution or file any such report, Form or amendment, and does not result from
its own negligence, bad faith or willful misconduct.
In
the
case of any failure of performance described above, the Company shall promptly
reimburse the Depositor, the Master Servicer and the Securities Administrator
for all costs reasonably incurred by each such party in order to obtain the
information, report, certification, accountants’ letter or other material not
delivered pursuant to this Section 4.18 as required by the Company, any
subservicer or any subcontractor.
(d) Notwithstanding
the provisions of Section 12.01, this Section 4.18 may be amended without the
consent of the Certificateholders.
(e) Any
report, notice or notification to be delivered by the Company, the Master
Servicer or the Securities Administrator to the Depositor pursuant to this
Section 4.18, may be delivered via email to ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
or,
in
the case of a notification, telephonically by calling Reg AB Compliance Manager
at ▇▇▇-▇▇▇-▇▇▇▇.
Section
4.19 Intention
of the Parties and Interpretation.
Each
of
the parties acknowledges and agrees that the purpose of Sections 4.16, 4.17
and
4.18 of this Agreement is to facilitate compliance by the Seller, the Depositor
and the Master Servicer with the provisions of Regulation AB. Therefore, each
of
the parties agrees that (a) the obligations of the parties hereunder shall
be
interpreted in such a manner as to accomplish that purpose, (b) the parties’
obligations hereunder will be supplemented and modified as necessary to be
consistent with any such amendments, interpretive advice or guidance, convention
or consensus among active participants in the asset-backed securities markets,
advice of counsel, or otherwise in respect of the requirements of Regulation
AB,
(c) the parties shall comply with reasonable requests made by the Seller, the
Depositor, the Master Servicer or the Securities Administrator for delivery
of
additional or different information as the Seller, the Depositor, the Master
Servicer or the Securities Administrator may determine in good faith is
necessary to comply with the provisions of Regulation AB, and (d) no amendment
of this Agreement shall be required to effect any such changes in the
obligations of the parties to this transaction as are necessary to accommodate
evolving interpretations of the provisions of Regulation AB.
Section
4.20 UCC.
The
Seller shall file any financing statements, continuation statements or
amendments thereto required by any change in the Uniform Commercial
Code.
Section
4.21 Optional
Purchase of Certain Mortgage Loans.
With
respect to any Mortgage Loan which as of the first day of a Fiscal Quarter
is
delinquent in payment by 90 days or more or is an REO Property, the Seller
shall
have the right to purchase any such Mortgage Loan or REO Property from the
Trust
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.
This
right may be assigned by the Seller to a third party, including a holder of
a
Class of Certificates.
If
at any
time EMC remits to the Securities Administrator a payment for deposit in the
Distribution Account covering the amount of the Repurchase Price for such a
Mortgage Loan, and EMC provides to the Trustee a certification signed by a
Servicing Officer stating that the amount of such payment has been deposited
in
the Distribution 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.
ARTICLE
V
ACCOUNTS
Section
5.01 Collection
of Mortgage Loan Payments; Protected Account.
(a) The
Company shall make reasonable efforts in accordance with customary and usual
standards of practice of prudent mortgage lenders in the respective states
in
which the Mortgaged Properties related to the EMC Mortgage Loans are located
to
collect all payments called for under the terms and provisions of the EMC
Mortgage Loans to the extent such procedures shall be consistent with this
Agreement and the terms and provisions of any related Required Insurance Policy.
Consistent with the foregoing, the Company may in its discretion (i) waive
any
late payment charge and (ii) extend the due dates for payments due on a Mortgage
Note related to an EMC Mortgage Loan for a period not greater than 125 days.
In
the event of any such arrangement, the Company shall make Advances on the
related EMC Mortgage Loan during the scheduled period in accordance with the
amortization schedule of such EMC Mortgage Loan without modification thereof
by
reason of such arrangements, and shall be entitled to reimbursement therefor
in
accordance with Section 6.01. The Company shall not be required to institute
or
join in litigation with respect to collection of any payment (whether under
a
Mortgage, Mortgage Note or otherwise or against any public or governmental
authority with respect to a taking or condemnation) if it reasonably believes
that enforcing the provision of the Mortgage or other instrument pursuant to
which such payment is required is prohibited by applicable law. In
addition, if (x) an EMC Mortgage Loan is in default or default is reasonably
foreseeable, the Company may also waive, modify or vary any term of any EMC
Mortgage Loan or consent to the postponement of strict compliance with any
such
term or in any manner grant indulgence to any mortgagor, including without
limitation, to (1) capitalize any amounts owing on the EMC Mortgage Loan by
adding such amount to the outstanding principal balance of the EMC Mortgage
Loan, (2) defer such amounts to a later date or the final payment date of such
Mortgage Loan, (3) extend the maturity of any such EMC Mortgage Loan, but in
no
instance past the date on which the final payment is due on the latest maturing
Mortgage Loan as of the Cut-off Date, and/or (4) reduce the related Mortgage
Rate (subject to clause (y) below), provided that, in the Company’s
determination, such waiver, modification, postponement or indulgence is not
materially adverse to the interests of the Certificateholders (taking into
account any estimated Realized Loss that might result absent such action),
or
(y) the Company delivers to the Trustee a certification addressed to the
Trustee, based on the advice of counsel or certified public accountants, in
either case, that have a national reputation with respect to taxation of REMICs,
that a modification of such EMC Mortgage Loan will not result in the imposition
of taxes on or disqualify from REMIC status any of REMIC I, REMIC II, REMIC
III
or REMIC IV the Company may, (A) amend the related Mortgage Note to reduce
the
Mortgage Rate applicable thereto, provided that such reduced Mortgage Rate
shall
in no event be lower than 5.00% with respect to any EMC Mortgage Loan and (B)
amend any Mortgage Note related to an EMC Mortgage Loan to extend to the
maturity thereof.
In
accordance with the standards of the first paragraph of Section 3.01, the
Company shall not waive (or permit a sub-servicer to waive) any Prepayment
Charge related to an EMC Mortgage Loan unless: (i) the enforceability thereof
shall have been limited by bankruptcy, insolvency, moratorium, receivership
and
other similar laws relating to creditors’ rights generally, (ii) the enforcement
thereof is illegal, or any local, state or federal agency has threatened legal
action if the prepayment penalty is enforced, (iii) the mortgage debt has been
accelerated in connection with a foreclosure or other involuntary payment or
(iv) such waiver is standard and customary in servicing similar Mortgage Loans
and relates to a default or a reasonably foreseeable default and would, in
the
reasonable judgment of the Company, maximize recovery of total proceeds taking
into account the value of such Prepayment Charge and the related EMC Mortgage
Loan. If a Prepayment Charge is waived, but does not meet the standards
described above, then the Company is required to pay the amount of such waived
Prepayment Charge, for the benefit of Class P Certificates, by remitting such
amount to the Securities Administrator (or the Master Servicer, if the
Securities Administrator is no longer related to the Master Servicer) by the
Remittance Date.
(b) The
Company shall establish and maintain a Protected Account (which shall at all
times be an Eligible Account) with a depository institution in the name of
the
Company for the benefit of the Trustee on behalf of the Certificateholders
and
designated “U.S. Bank National Association, in trust for registered holders of
Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC, Asset-Backed Certificates Series
2006-AC5”. The Company shall deposit or cause to be deposited into the Protected
Account on a daily basis within two Business Days of receipt and identification,
except as otherwise specifically provided herein, the following payments and
collections remitted by subservicers or received by it in respect of the EMC
Mortgage Loans subsequent to the Cut-off Date (other than in respect of
principal and interest due on the EMC Mortgage Loans on or before the Cut-off
Date) and the following amounts required to be deposited hereunder:
(i) all
payments on account of principal, including Principal Prepayments, on the EMC
Mortgage Loans;
(ii) all
payments on account of interest on the EMC Mortgage Loans net of the related
Servicing Fee permitted under Section 3.10 and LPMI Fees, if any;
(iii) all
Liquidation Proceeds and Insurance Proceeds with respect to any EMC Mortgage
Loans, other than proceeds to be applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance with the Company’s
normal servicing procedures;
(iv) any
amount required to be deposited by the Company pursuant to Section 5.01(c)
in
connection with any losses on Permitted Investments;
(v) any
amounts required to be deposited by the Company pursuant to Section
3.05;
(vi) any
Prepayment Charges collected on the EMC Mortgage Loans; and
(vii) any
other
amounts required to be deposited hereunder.
The
foregoing requirements for remittance by the Company into the Protected Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges
or
assumption fees, if collected, need not be remitted by the Company. In the
event
that the Company shall remit any amount not required to be remitted and not
otherwise subject to withdrawal pursuant to Section 5.02, it may at any time
withdraw or direct the institution maintaining the Protected Account, to
withdraw such amount from the Protected Account, any provision herein to the
contrary notwithstanding. Such withdrawal or direction may be accomplished
by
delivering written notice thereof to the institution maintaining the Protected
Account, that describes the amounts deposited in error in the Protected Account.
The Company shall maintain adequate records with respect to all withdrawals
made
pursuant to this Section. Reconciliations will be prepared for the Protected
Account within 45 calendar days after the bank statement cut-off date. All
items
requiring reconciliation will be resolved within 90 calendar days of their
original identification. All funds deposited in the Protected Account shall
be
held in trust for the Certificateholders until withdrawn in accordance with
Section 5.02.
(c) The
institution that maintains the Protected Account shall invest the funds in
the
Protected Account, in the manner directed by the Company, in Permitted
Investments which shall mature not later than the Remittance Date and shall
not
be sold or disposed of prior to its maturity. All such Permitted Investments
shall be made in the name of the Trustee, for the benefit of the
Certificateholders. All income and gain net of any losses realized from any
such
investment shall be for the benefit of the Company as servicing compensation
and
shall be remitted to it monthly as provided herein. The amount of any losses
incurred in the Protected Account in respect of any such investments shall
be
deposited by the Company into the Protected Account, out of the Company’s own
funds.
(d) The
Company shall give at least 30 days advance notice to the Trustee, the Seller,
the Master Servicer, each Rating Agency and the Depositor of any proposed change
of location of the Protected Account prior to any change thereof.
(e) In
the
event that the Master Servicer and Securities Administrator are no longer
affiliated, the Master Servicer shall establish and maintain an account separate
from the Distribution Account into which any funds remitted by the Company
and
Servicers will be deposited. No later than noon New York time on the Business
Day prior to each Distribution Date, the Master Servicer shall remit any such
funds to the Paying Agent for deposit in the Distribution Account. The Master
Servicer shall make the following permitted withdrawals and transfers from
such
account:
(i) The
Master Servicer will, from time to time on demand of the Company, a Servicer
or
the Securities Administrator, make or cause to be made such withdrawals or
transfers from the account as the Master Servicer has designated for such
transfer or withdrawal pursuant to this Agreement and the related Servicing
Agreement. The Master Servicer may clear and terminate the account pursuant
to
Section 11.01 and remove amounts from time to time deposited in
error.
(ii) On
an
ongoing basis, the Master Servicer shall withdraw from the account (i) any
expenses, costs and liabilities recoverable by the Trustee, the Master Servicer
or the Securities Administrator or the Custodian pursuant to Sections 4.03,
8.04
and 10.05 and (ii) any amounts payable to the Master Servicer as set forth
in
Section 4.14; provided, however, that the Master Servicer shall be obligated
to
pay from its own funds any amounts which it is required to pay under Section
8.03(a).
(iii) In
addition, on or before each Business Day prior to each Distribution Date, the
Master Servicer shall deposit in the Distribution Account (or remit to the
Trustee for deposit therein) any Monthly Advances required to be made by the
Master Servicer with respect to the Mortgage Loans.
(iv) No
later
than noon New York time on each Business Day prior to each Distribution Date,
the Master Servicer will transfer all Available Funds on deposit in the account
with respect to the related Distribution Date to the Paying Agent for deposit
in
the Distribution Account.
Section
5.02 Permitted
Withdrawals From the Protected Account.
(a) The
Company 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 Company), as
servicing compensation in accordance with Section 3.10, that portion of any
payment of interest that equals the Servicing Fee for the period with respect
to
which such interest payment was made, and, as additional servicing compensation,
those other amounts set forth in Section 3.10;
(ii) to
reimburse the Company for Advances made by it with respect to the Mortgage
Loans, provided, however, that the Company’s right of reimbursement pursuant to
this subclause (ii) shall be limited to amounts received on particular EMC
Mortgage Loan(s) (including, for this purpose, Liquidation Proceeds and
Insurance Proceeds and Subsequent Recoveries) that represent late recoveries
of
payments of principal and/or interest on such particular EMC Mortgage Loan(s)
in
respect of which any such Advance was made;
(iii) to
reimburse the Company for any previously made portion of a Servicing Advance
or
an Advance made by the Company that, in the good faith judgment of the Company,
will not be ultimately recoverable by it from the related Mortgagor, any related
Liquidation Proceeds, Insurance Proceeds or otherwise (a “Nonrecoverable
Advance”), to the extent not reimbursed pursuant to clause (ii) or clause
(v);
(iv) to
reimburse the Company from Insurance Proceeds for Insured Expenses covered
by
the related Insurance Policy;
(v) to
pay
the Company any unpaid Servicing Fees and to reimburse it for any unreimbursed
Servicing Advances, provided, however, that the Company’s right to reimbursement
for Servicing Advances pursuant to this subclause (v) with respect to any EMC
Mortgage Loan shall be limited to amounts received on particular EMC Mortgage
Loan(s) (including, for this purpose, Liquidation Proceeds, Insurance Proceeds
and purchase and repurchase proceeds) that represent late recoveries of the
payments for which such Servicing Advances were made;
(vi) to
pay to
the Seller, the Depositor or itself, as applicable, with respect to each EMC
Mortgage Loan or property acquired in respect thereof that has been purchased
pursuant to Section 2.02, 2.03 or 4.21 of this Agreement, all amounts received
thereon and not taken into account in determining the related Stated Principal
Balance of such repurchased EMC Mortgage Loan;
(vii) to
pay
any expenses recoverable by the Company pursuant to Section 8.04 of this
Agreement;
(viii) to
withdraw pursuant to Section 5.01 any amount deposited in the Protected Account
and not required to be deposited therein; and
(ix) to
clear
and terminate the Protected Account upon termination of this Agreement pursuant
to Section 11.01 hereof.
In
addition, no later than 1:00 p.m. Eastern time on the Remittance Date, the
Company shall withdraw from the Protected Accounts and remit to the Securities
Administrator the amount required to be withdrawn therefrom pursuant to Section
5.05 hereof. With respect to any remittance received by the Securities
Administrator from EMC after the date on which such remittance was due, EMC
shall pay to the Securities Administrator interest on any such late remittance
at an annual rate equal to the prime rate announced to be in effect from time
to
time as published as the average rate in The Wall Street Journal (Northeast
Edition), plus two percentage points, but in no event greater than the maximum
amount permitted by applicable law. Such interest shall be deposited in EMC’s
Protected Account by EMC on the date such late payment is made and shall cover
the period commencing with the day following the date on which such remittance
was due and ending with the Business Day on which such remittance is made,
both
inclusive. Such interest shall be remitted along with the distribution payable
on the next succeeding Remittance Date. The payment by EMC of any such interest
shall not be deemed an extension of time for payment or a waiver of any Event
of
Default with respect to EMC.
The
Company shall keep and maintain separate accounting, on a Mortgage Loan by
Mortgage Loan basis, for the purpose of justifying any withdrawal from the
Protected Account pursuant to subclauses (i), (ii), (iv), (v) and (vi) above.
Prior to making any withdrawal from the Protected Account pursuant to subclause
(iii), the Company shall deliver to the Trustee an Officer’s Certificate of a
Servicing Officer indicating the amount of any previous Advance or Servicing
Advance determined by the Company to be a Nonrecoverable Advance and identifying
the related EMC Mortgage Loan(s), and their respective portions of such
Nonrecoverable Advance.
Section
5.03 Reports
to Master Servicer.
(i) On
or
before the tenth calendar day of each month, the Company shall furnish to the
Master Servicer electronically in a format acceptable to the Master Servicer
loan accounting reports in the investor’s assigned loan number order to document
the payment activity on each EMC Mortgage Loan on an individual mortgage loan
basis and containing the data required by the forms attached hereto as Exhibit
S, Exhibit T and Exhibit U or in a format mutually agreed upon between the
Company and the Master Servicer.
In
addition, the Company shall provide to the Master Servicer and the Depositor:
(i) any
and
all information and appropriate verification of information which may be
reasonably available to the Company, whether through letters of its auditors
and
counsel or otherwise, as the Depositor or any such other participant shall
request upon reasonable demand; and
(ii) such
additional representations, warranties, covenants, opinions of counsel, letters
from auditors, and certificates of public officials or officers of the Company
as are reasonably agreed upon by the Depositor and the Company or any such
other
participant.
Section
5.04 Collection
of Taxes; Assessments and Similar Items; Escrow Accounts.
With
respect to each EMC Mortgage Loan, to the extent required by the related
Mortgage Note, the Company shall establish and maintain one or more accounts
(each, an “Escrow Account”) and deposit and retain therein all collections from
the Mortgagors (or advances by the Company) for the payment of taxes,
assessments, hazard insurance premiums or comparable items for the account
of
the Mortgagors. Nothing herein shall require the Company to compel a Mortgagor
to establish an Escrow Account in violation of applicable law.
Withdrawals
of amounts so collected from the Escrow Accounts may be made only to effect
timely payment of taxes, assessments, hazard insurance premiums, condominium
or
PUD association dues, or comparable items, to reimburse the Company out of
related collections for any payments made with respect to each EMC Mortgage
Loan
pursuant to Section 3.01 (with respect to taxes and assessments and insurance
premiums) and Section 3.05 (with respect to hazard insurance), to refund to
any
Mortgagors for any EMC Mortgage Loans any sums as may be determined to be
overages, to pay interest, if required by law or the terms of the related
Mortgage or Mortgage Note, to such Mortgagors on balances in the Escrow Account
or to clear and terminate the Escrow Account at the termination of this
Agreement in accordance with Section 11.01 thereof. The Escrow Account shall
not
be a part of the Trust Fund.
Section
5.05 Servicer
Protected Accounts.
(a) The
Master Servicer shall enforce the obligation of the Company and the Servicers
to
establish and maintain a Protected Account in accordance with this Agreement
and
the Servicing Agreements, with records to be kept with respect thereto on a
Mortgage Loan by Mortgage Loan basis, into which accounts shall be deposited
within one Business Day (or as of such other time specified in the Servicing
Agreements) of receipt all collections of principal and interest on any Mortgage
Loan and with respect to any REO Property received by the Company or the related
Servicer, including Principal Prepayments, Insurance Proceeds, Liquidation
Proceeds, Subsequent Recoveries, and advances made from the Company’s or such
Servicer’s own funds (less servicing compensation as permitted by this Agreement
or the related Servicing Agreement) and all other amounts to be deposited in
the
Protected Accounts. Each of the Company and the Servicers are hereby authorized
to make withdrawals from and deposits to the related Protected Account for
purposes required or permitted by this Agreement. To the extent provided in
this
Agreement or any Servicing Agreement, the Protected Account shall be held in
a
Designated Depository Institution and segregated on the books of such
institution in the name of the Trustee for the benefit of
Certificateholders.
(b) To
the
extent provided in this Agreement or any Servicing Agreement, amounts on deposit
in a Protected Account may be invested in Permitted Investments in the name
of
the Trustee for the benefit of Certificateholders and, except as provided in
the
preceding paragraph, not commingled with any other funds, such Permitted
Investments to mature, or to be subject to redemption or withdrawal, no later
than the date on which such funds are required to be withdrawn for deposit
in
the Distribution Account, and shall be held until required for such deposit.
The
income earned from Permitted Investments made pursuant to this Section 5.05
shall be paid to the Company or the related Servicer under this Agreement or
the
related Servicing Agreement, and the risk of loss of moneys required to be
distributed to the Certificateholders resulting from such investments shall
be
borne by and be the risk of the Company or the related Servicer, as the case
may
be. The Company or the related Servicer (to the extent provided in this
Agreement or the related Servicing Agreement) shall deposit the amount of any
such loss in the Protected Account within two Business Days of receipt of
notification of such loss but not later than the second Business Day prior
to
the Distribution Date on which the moneys so invested are required to be
distributed to the Certificateholders.
(c) To
the
extent provided in this Agreement or the related Servicing Agreement and subject
to this Article V, on or before each Remittance Date, the Company or the related
Servicer shall withdraw or shall cause to be withdrawn from its Protected
Account and shall immediately deposit or cause to be deposited in the
Distribution Account amounts representing the following collections and payments
(other than with respect to principal of or interest on the Mortgage Loans
due
on or before the Cut-off Date):
(i) Scheduled
Payments on the Mortgage Loans received or any related portion thereof advanced
by the Company or the related Servicer pursuant to the related Servicing
Agreement which were due on or before the related Due Date, net of the amount
thereof comprising the Servicing Fees;
(ii) Full
Principal Prepayments and any Liquidation Proceeds received by the Company
or
the related Servicer with respect to such Mortgage Loans in the related
Prepayment Period, with interest to the date of prepayment or liquidation,
net
of the amount thereof comprising the Servicing Fees and LPMI Fees, if
any;
(iii) Partial
Principal Prepayments received by the Company or the related Servicer for such
Mortgage Loans in the related Prepayment Period;
(iv) Any
amount to be used as an Advance; and
(v) The
amount of any Prepayment Charges collected with respect to the Mortgage Loans
and the amount of any Prepayment Charges paid by the Company or the related
Servicer in connection with the waiver of a Prepayment Charge in a manner that
is not permitted under this Agreement or the related Servicing
Agreement.
(d) Withdrawals
may be made from a Protected Account by the Company as described in Section
5.02
hereof and by the Master Servicer or the related Servicer only to make
remittances as provided in Section 5.05(c); to reimburse the Master Servicer
or
the Servicer for Advances which have been recovered by subsequent collection
from the related Mortgagor; to remove amounts deposited in error; to remove
fees, charges or other such amounts deposited on a temporary basis; or to clear
and terminate the account at the termination of this Agreement in accordance
with Section 11.01. As provided in Section 5.05(c) certain amounts otherwise
due
to the related Servicer may be retained by the related Servicer and need not
be
deposited in the Distribution Account.
Section
5.06 [Reserved].
Section
5.07 [Reserved].
Section
5.08 Distribution
Account.
(a) The
Securities Administrator 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. The Distribution Account shall be an
Eligible Account. The Master Servicer or Servicer, as the case may be, will
remit to the Securities Administrator for deposit in the Distribution Account
the following amounts:
(i) any
Advance and any Compensating Interest Payments;
(ii) any
Insurance Proceeds, Liquidation Proceeds or Subsequent Recoveries received
by or
on behalf of the Master Servicer or which were not deposited in a Protected
Account;
(iii) the
Repurchase Price with respect to any Mortgage Loans purchased by the Seller
or
Section 2.02 or 2.03, any amounts which are to be treated pursuant to Section
5.09 of this Agreement as the payment of such a Repurchase Price, the Repurchase
Price with respect to any Mortgage Loans purchased by EMC pursuant to Section
4.21, and all proceeds of any Mortgage Loans or property acquired with respect
thereto repurchased by the Seller or its designee pursuant to Section
11.01;
(iv) any
amounts required to be deposited with respect to losses on investments of
deposits in an Account; and
(v) any
other
amounts received by or on behalf of the Master Servicer or the Trustee and
required to be deposited in the Distribution Account pursuant to this
Agreement.
(b) All
amounts deposited to the Distribution Account shall be held by the Securities
Administrator in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement. The requirements for crediting the Distribution Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges or assumption,
tax service, statement account or payoff, substitution, satisfaction, release
and other like fees and charges, need not be credited by the Master Servicer
or
the related Servicer to the Distribution Account. In the event that the Master
Servicer shall deposit or cause to be deposited to the Distribution Account
any
amount not required to be credited thereto, the Securities Administrator, upon
receipt of a written request therefor signed by a Servicing Officer of the
Master Servicer, shall promptly transfer such amount to the Master Servicer,
any
provision herein to the contrary notwithstanding.
(c) The
Distribution Account shall constitute a trust account of the Trust Fund
segregated on the books of the Securities Administrator and held by the
Securities Administrator 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 Securities Administrator
(whether made directly, or indirectly through a liquidator or receiver of the
Securities Administrator. The amount at any time credited to the Distribution
Account may be, as directed by the Master Servicer, held either uninvested
in a
trust or deposit account of the Securities Administrator with no liability
for
interest or other compensation thereof, except as otherwise agreed in writing
with the Master Servicer, or invested in the name of the Trustee, in such
Permitted Investments as may be selected by the Master Servicer on such
direction which mature not later than the Business Day next preceding the
succeeding Distribution Date, except if such Permitted Investment is an
obligation of or is managed by the institution that maintains such fund or
account, then such Permitted Investment shall mature not later than such
Distribution Date. Permitted Investments in respect of the Distribution Account
shall not be sold or disposed of prior to their maturity. All investment
earnings on amounts on deposit in the Distribution Account or benefit from
funds
uninvested therein from time to time shall be for the account of the Master
Servicer. The Master Servicer shall be permitted to receive distribution of
any
and all investment earnings from the Distribution Account on each Distribution
Date. If there is any loss on a Permitted Investment or demand deposit, the
Master Servicer shall deposit the amount of the loss in the Distribution
Account. With respect to the Distribution Account and the funds deposited
therein, the Securities Administrator 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 Securities Administrator) as provided by 12 U.S.C. § 92a(e), and applicable
regulations pursuant thereto, if applicable, or any applicable comparable state
statute applicable to state chartered banking corporations.
Section
5.09 Permitted
Withdrawals and Transfers from the Distribution Account.
(a) The
Securities Administrator will make such withdrawals or transfers from the
Distribution Account as the Master Servicer has designated for such transfer
or
withdrawal pursuant to this Agreement or any Servicing Agreement (limited in
the
case of amounts due the Master Servicer to those not withdrawn from the
Distribution Account in accordance with the terms of this Agreement; provided
that the Securities Administrator shall not be responsible for such
determination and may rely on the Master Servicer’s instructions under this
Section 5.09):
(i) to
reimburse the Master Servicer, the Company or the related Servicer for any
Advance or Servicing Advance of its own funds, the right of the Master Servicer,
the Company or the related Servicer to reimbursement pursuant to this subclause
(i) being limited to amounts received on a particular Mortgage Loan (including,
for this purpose, the Repurchase Price therefor, Insurance Proceeds and
Liquidation Proceeds) which represent late payments or recoveries of the
principal of or interest on such Mortgage Loan respecting which such Advance
or
Servicing Advance was made;
(ii) to
reimburse the Master Servicer, the Company or the related Servicer from
Insurance Proceeds or Liquidation Proceeds relating to a particular Mortgage
Loan for amounts expended by the Master Servicer, the Company or the related
Servicer in good faith in connection with the restoration of the related
Mortgaged Property which was damaged by an uninsured cause or in connection
with
the liquidation of such Mortgage Loan;
(iii) to
reimburse the Master Servicer, the Company or the related Servicer from
Insurance Proceeds relating to a particular Mortgage Loan for insured expenses
incurred with respect to such Mortgage Loan and to reimburse the Master
Servicer, the Company or the related Servicer from Liquidation Proceeds from
a
particular Mortgage Loan for Liquidation Expenses incurred with respect to
such
Mortgage Loan; provided that the Master Servicer shall not be entitled to
reimbursement for Liquidation Expenses with respect to a Mortgage Loan to the
extent that (i) any amounts with respect to such Mortgage Loan were paid as
Excess Liquidation Proceeds pursuant to clause (x) of this Subsection (a) to
the
Master Servicer; and (ii) such Liquidation Expenses were not included in the
computation of such Excess Liquidation Proceeds;
(iv) to
reimburse the Master Servicer, the Company or a Servicer for advances of funds
pursuant to this Agreement or the related Servicing Agreement, and the right
to
reimbursement pursuant to this subclause being limited to amounts received
on
the related Mortgage Loan (including, for this purpose, the Repurchase Price
therefor, Insurance Proceeds and Liquidation Proceeds) which represent late
recoveries of the payments for which such advances were made;
(v) to
reimburse the Master Servicer, the Company or a Servicer for any Advance or
advance, after a Realized Loss has been allocated with respect to the related
Mortgage Loan if the Advance or advance has not been reimbursed pursuant to
clauses (i) through (iv);
(vi) to
pay
the Master Servicer as set forth in Section 4.14;
(vii) to
reimburse the Master Servicer for expenses, costs and liabilities incurred
by
and reimbursable to it pursuant to Sections 4.03, 8.04(c) and (d) and 12.02
or
otherwise reimbursable to it pursuant to this Agreement;
(viii) to
pay to
the Master Servicer, as additional servicing compensation, any Excess
Liquidation Proceeds to the extent not retained by the Company or the related
Servicer;
(ix) to
reimburse or pay the Company or the related Servicer any such amounts as are
due
thereto under this Agreement or the related Servicing Agreement and have not
been retained by or paid to the Company or the related Servicer, to the extent
provided herein and in the related Servicing Agreement;
(x) to
reimburse the Trustee, the Custodian or the Securities Administrator for
expenses, costs and liabilities incurred by or reimbursable to it pursuant
to
this Agreement;
(xi) to
remove
amounts deposited in error; and
(xii) to
clear
and terminate the Distribution Account pursuant to Section 11.01.
(b) The
Master Servicer shall keep and maintain separate accounting,
on a
Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Distribution Account pursuant to subclauses (i) through
(iv), inclusive, and (vi) or with respect to any such amounts which would have
been covered by such subclauses had the amounts not been retained by the Master
Servicer without being deposited in the Distribution Account under Section
5.08.
(c) On
each
Distribution Date, the Securities Administrator shall distribute the Interest
Funds and Principal Funds to the extent of funds on deposit in the Distribution
Account to the Holders of the Certificates in accordance with the Remittance
Report upon which the Securities Administrator may conclusively
rely.
ARTICLE
VI
DISTRIBUTIONS
AND ADVANCES
Section
6.01 Advances.
(a) The
Company shall make an Advance with respect to any EMC Mortgage Loan and remit
such Advance to the Securities Administrator for deposit in the Distribution
Account no later than 1:00 p.m. Eastern time on the Remittance Date in
immediately available funds. The Master Servicer shall cause the related
Servicer to remit any such Advance required pursuant to the terms of the related
Servicing Agreement. The Company or the related Servicer, as applicable, shall
be obligated to make any such Advance only to the extent that such advance
would
not be a Nonrecoverable Advance. If the Company or the related Servicer shall
have determined that it has made a Nonrecoverable Advance or that a proposed
Advance or a lesser portion of such Advance would constitute a Nonrecoverable
Advance, the Company or the related Servicer, as the case may be, shall deliver
(i) to the Securities Administrator for the benefit of the Certificateholders
constituting the portion of such Advance that is not deemed nonrecoverable,
if
applicable, and (ii) to the Depositor, the Master Servicer, each Rating Agency
and the Trustee an Officer’s Certificate setting forth the basis for such
determination. Subject
to the Master Servicer’s recoverability determination, in the event that a
Servicer fails to make a required Advance, the Master Servicer, as successor
servicer, shall be required to remit the amount of such Advance to the
Distribution Account. Subject
to the Securities Administrator’s recoverability determination, in the event
that the Master Servicer fails to make a required Advance, the Securities
Administrator 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 Company
may
(i) cause to be made an appropriate entry in its records relating to the
Protected Account that any Amounts Held for Future Distribution has been used
by
the Company in discharge of its obligation to make any such Advance and (ii)
transfer such funds from the Protected Account to the Distribution Account.
Any
funds so applied and transferred shall be replaced by the Company by deposit
in
the Distribution Account, no later than the close of business on the Remittance
Date immediately preceding the Distribution Date on which such funds are
required to be distributed pursuant to this Agreement.
The
Company shall be entitled to be reimbursed from the Protected Account for all
Advances of its own funds made pursuant to this Section as provided in Section
5.02. The obligation to make Advances with respect to any EMC Mortgage Loan
shall continue until such EMC Mortgage Loan is paid in full or the related
Mortgaged Property or related REO Property has been liquidated or until the
purchase or repurchase thereof (or substitution therefor) from the Trust Fund
pursuant to any applicable provision of this Agreement, except as otherwise
provided in this Section 6.01.
(b) If
the
Company or the related Servicer was required to make an Advance pursuant to
this
Agreement or the related Servicing Agreement and fails to make any required
Advance, in whole or in part, the Master Servicer, as successor servicer, or
an
other successor servicer appointed by it, will remit to the Securities
Administrator, who in turn will deposit in the Distribution Account not later
than the Business Day prior to the Distribution Date an amount equal to such
required Advance to the extent not otherwise paid by the related Servicer,
net
of the Servicing Fee for such Mortgage Loan except to the extent the Master
Servicer determines any such Advance to be nonrecoverable from Liquidation
Proceeds, Insurance Proceeds or future payments on the Mortgage Loan for which
such Advance was made. Subject to the foregoing, the Master Servicer shall
continue to make such Advances through the date that the Company or the related
Servicer is required to do so under this Agreement or the related Servicing
Agreement, as applicable. If applicable, on the Business Day prior to the
related Distribution Date, the Master Servicer shall present an Officer’s
Certificate to the Trustee (i) stating that the Master Servicer elects not
to
make an Advance in a stated amount and (ii) detailing the reason it deems the
advance to be nonrecoverable.
Subject
to and in accordance with the provisions of Article IX hereof, in the event
the
Master Servicer fails to make such Advance, then the Trustee, as Successor
Master Servicer, shall be obligated to make such Advance, subject to the
provisions of this Section 6.01, in accordance with and subject to the terms
of
this Agreement (including its rights of reimbursement hereunder).
Section
6.02 Compensating
Interest Payments.
(a) In
the
event that there is a Prepayment Interest Shortfall arising from a voluntary
Principal Prepayment in part or in full by the Mortgagor with respect to any
EMC
Mortgage Loan, the Company shall, to the extent of the Servicing Fee for such
Distribution Date, deposit into the Distribution Account, as a reduction of
the
Servicing Fee for such Distribution Date, no later than the close of business
on
the Remittance Date immediately preceding such Distribution Date, an amount
equal to the Prepayment Interest Shortfall; and in case of such deposit, the
Company shall not be entitled to any recovery or reimbursement from the
Depositor, the Trustee, the Seller, the Master Servicer, the Securities
Administrator, the Trust Fund or the Certificateholders.
(b) The
Master Servicer shall cause each Servicer under the related Servicing Agreement
to remit any required Compensating Interest Payments to the Distribution Account
on the Remittance Date.
(c) The
Master Servicer shall be required to remit the amount of any such Prepayment
Interest Shortfalls required to be paid by the related Servicer pursuant to
Section 6.02(a), to the extent of the Master Servicing Compensation for such
Distribution Date, in the event the Company or the related Servicer fails to
do
so.
Section
6.03 REMIC
Distributions.
On
each
Distribution Date the Securities Administrator shall be deemed to have allocated
distributions to the REMIC I Regular Interests, the Class C Interest and the
Class P Interest in accordance with Section 6.07 hereof.
Section
6.04 Distributions.
(a) On
each
Distribution Date, an amount equal to the Interest Funds and Principal Funds
for
such Distribution Date shall be withdrawn by the Securities Administrator 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) to
the
Class A-1, Class A-2 and Class A-3 Certificates, the Current Interest and any
Interest Carry Forward Amount for each such Class, pro rata in accordance with
the amount of accrued interest due thereon; and
(B) From
remaining Interest Funds, sequentially, to the Class M-1, Class M-2, Class
M-3,
Class M-4, Class B-1, Class B-2, Class B-3 and Class B-4 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 together with any Overcollateralization
Release Amount will be applied as Excess Cashflow and distributed pursuant
to
clauses (3)(A) through (H) 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) On
each
Distribution Date, the 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-1 Certificates and Class A-2 Certificates, on a pro rata basis, based
on
the Certificate Principal Balance of each such Class, the Principal Distribution
Amount for such Distribution Date until the Certificate Principal Balances
thereof have been reduced to zero;
(ii) To
the
Class A-3 Certificates, the remaining Principal Distribution Amount for such
Distribution Date, until the Certificate Principal Balance thereof has been
reduced to zero;
(iii) To
the
Class M-1 Certificates, from any remaining Principal Funds for such Distribution
Date, until the Certificate Principal Balance thereof is reduced to
zero;
(iv) To
the
Class M-2 Certificates, from any remaining Principal Funds for such Distribution
Date, until the Certificate Principal Balance thereof is reduced to
zero;
(v) To
the
Class M-3 Certificates, from any remaining Principal Funds for such Distribution
Date, until the Certificate Principal Balance thereof is reduced to
zero;
(vi) To
the
Class M-4 Certificates, from any remaining Principal Funds for such Distribution
Date, until the Certificate Principal Balance thereof is reduced to
zero;
(vii) To
the
Class B-1 Certificates, from any remaining Principal Funds for such Distribution
Date, until the Certificate Principal Balance thereof is reduced to
zero;
(viii) To
the
Class B-2 Certificates, from any remaining Principal Funds for such Distribution
Date, until the Certificate Principal Balance thereof is reduced to
zero;
(ix) To
the
Class B-3 Certificates, from any remaining Principal Funds for such Distribution
Date, until the Certificate Principal Balance thereof is reduced to zero;
and
(x) To
the
Class B-4 Certificates, from any remaining Principal Funds for such Distribution
Date, 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-1 Certificates and Class A-2 Certificates, on a pro rata basis, based
on
the Certificate Principal Balance of each such class, the Class A Principal
Distribution Amount for such Distribution Date until the Certificate Principal
Balances thereof have been reduced to zero;
(ii) To
the
Class A-3 Certificates, the remaining Class A Principal Distribution Amount
for
such Distribution Date until the Certificate Principal Balance thereof has
been
reduced to zero;
(iii) To
the
Class M-1 Certificates, from any remaining Principal Distribution Amount for
such Distribution Date, the Class M-1 Principal Distribution Amount, until
the
Certificate Principal Balance thereof is reduced to zero;
(iv) To
the
Class M-2 Certificates, from any remaining Principal Distribution Amount for
such Distribution Date, the Class M-2 Principal Distribution Amount, until
the
Certificate Principal Balance thereof is reduced to zero;
(v) To
the
Class M-3 Certificates, from any remaining Principal Distribution Amount for
such Distribution Date, the Class M-3 Principal Distribution Amount, until
the
Certificate Principal Balance thereof is reduced to zero;
(vi) To
the
Class M-4 Certificates, from any remaining Principal Distribution Amount for
such Distribution Date, the Class M-4 Principal Distribution Amount, until
the
Certificate Principal Balance thereof is reduced to zero;
(vii) To
the
Class B-1 Certificates, from any remaining Principal Distribution Amount for
such Distribution Date, the Class B-1 Principal Distribution Amount, until
the
Certificate Principal Balance thereof is reduced to zero;
(viii) To
the
Class B-2 Certificates, from any remaining Principal Distribution Amount for
such Distribution Date, the Class B-2 Principal Distribution Amount, until
the
Certificate Principal Balance thereof is reduced to zero;
(ix) To
the
Class B-3 Certificates, from any remaining Principal Distribution Amount for
such Distribution Date, the Class B-3 Principal Distribution Amount, until
the
Certificate Principal Balance thereof is reduced to zero; and
(x) To
the
Class B-4 Certificates, from any remaining Principal Distribution Amount for
such Distribution Date, the Class B-4 Principal Distribution Amount, until
the
Certificate Principal Balance thereof is reduced to zero.
(3) Any
Excess Cashflow shall be distributed in the following manner and order of
priority:
(A) 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 clause
(1) (A) above and (b) second, any Unpaid Realized Loss Amount for the Class
A
Certificates, on a pro rata basis, for such Distribution Date, in accordance
with the Applied Realized Loss Amount allocated to each such Class;
(B) From
any
remaining Excess Cashflow, sequentially, to the Class M-1, Class M-2, Class
M-3,
Class M-4, Class B-1, Class B-2, Class B-3 and Class B-4 Certificates, in that
order, an amount equal to the Interest Carry Forward Amount for each such
Class;
(C) From
any
remaining Excess Cashflow otherwise distributable to the Class C Interest and
the Class C Certificates, to the Reserve Fund, (i) first, to pay to the Classes
of Class A Certificates, any Basis Risk Shortfall Carry Forward Amount for
such
Classes 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, to the extent
such amount exceeds the amounts then on deposit in the Reserve Fund, and (ii)
second, to maintain a balance in the Reserve Fund equal to the Reserve Fund
Deposit;
(D) From
any
remaining Excess Cashflow otherwise distributable to the Class C Interest and
the Class C Certificates, to the Reserve Fund, (i) first, to pay to the Class
M-1, Class M-2, Class M-3, Class M-4, Class B-1, Class B-2, Class B-3 and Class
B-4 Certificates, sequentially in that order, any Basis Risk Shortfall Carry
Forward Amount for each such Class, for such Distribution Date, if any, to
the
extent such amount exceeds the amounts then on deposit in the Reserve Fund,
and
(ii) second, to maintain a balance in the Reserve Fund equal to the Reserve
Fund
Deposit;
(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
M-1, Class M-2, Class M-3, Class M-4, Class B-1, Class B-2, Class B-3 and Class
B-4 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 C Interest and Class C Certificates,
an
amount equal to the Class C Distribution Amount reduced by amounts distributed
in clauses (C) and (D) above; and
(G) From
any
remaining Excess Cashflow, to each of the Class R-1, Class R-2 and Class RX
Certificates, based on the related REMIC in which such amount
remains.
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, Class B 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) Subject
to Section 11.02 hereof respecting the final distribution, on each Distribution
Date the Securities Administrator shall make distributions to each
Certificateholder of record on the preceding Record Date either by wire transfer
in immediately available funds to the account of such Holder at a bank or other
entity having appropriate facilities therefor, if (i) such Holder has so
notified the Securities Administrator at least 5 Business Days prior to the
related Record Date and (ii) such Holder shall hold Regular Certificates with
aggregate principal denominations of not less than $1,000,000 or evidencing
a
Percentage Interest aggregating 10% or more with respect to such Class or,
if
not, by check mailed by first class mail to such Certificateholder at the
address of such Holder appearing in the Certificate Register. Notwithstanding
the foregoing, but subject to Section 11.02 hereof respecting the final
distribution, distributions with respect to Certificates registered in the
name
of a Depository shall be made to such Depository in immediately available
funds.
(c) Prior
to
each Distribution Date, or if the Master Servicer and the Securities
Administrator are no longer affiliated, on or before 5:00 p.m. Eastern time
on
the fifth Business Day immediately preceding each Distribution Date, the Master
Servicer shall deliver a report to the Securities Administrator in the form
of a
computer readable magnetic tape (or by such other means as the Master Servicer
and the Securities Administrator may agree from time to time) containing such
data and information, as agreed to by the Master Servicer and the Securities
Administrator such as to permit the Securities Administrator to prepare the
Monthly Statement to Certificateholders and to direct the Securities
Administrator in writing to make the required distributions for the related
Distribution Date (the “Remittance Report”).
Section
6.05 Allocation
of Realized Losses.
(a) All
Realized Losses on the Mortgage Loans shall be allocated by the Securities
Administrator on each Distribution Date as follows: first, to Excess Spread
through an increased distribution of the Extra Principal Distribution Amount
for
such Distribution Date; second, to the Class C Interest and Class C
Certificates, until the Certificate Principal Balance or Uncertificated
Principal Balance thereof, as applicable, has been reduced to zero; third,
to
the Class B-4 Certificates, until the Certificate Principal Balance thereof
has
been reduced to zero; fourth, to the Class B-3 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; fifth, to the
Class B-2 Certificates, until the Certificate Principal Balance thereof has
been
reduced to zero; sixth, to the Class B-1 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; seventh, to the Class M-4
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; eighth, to the Class M-3 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; ninth, to the Class M-2 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero; tenth,
to the Class M-1 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero and eleventh, to the Class A Certificates, on a pro
rata basis, in reduction of the Certificate Principal Balances thereof, until
reduced to zero; provided, however, any Realized Losses otherwise allocable
to
the Class A-1 Certificates will first be allocated to the Class A-2
Certificates, until the Certificate Principal Balance of that class has been
reduced to zero, and then to the Class 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 or to the Class C
Interest on any Distribution Date shall be made by reducing the Certificate
Principal Balance or Uncertificated Principal Balance thereof by the amount
so
allocated; any allocation of Realized Losses to Excess Spread shall be made
by
reducing the amount otherwise payable in respect of the Class C Interest and
the
Class C Certificates pursuant to clause (F) of Section 6.04(a)(3).
Notwithstanding
the foregoing, no such allocation of any Realized Loss shall be made on a
Distribution Date to any Class of Certificates to the extent that such
allocation would result in the reduction of the aggregate Certificate Principal
Balance of all the Certificates as of such Distribution Date (other than the
Class C Certificates and Class P Certificates) after giving effect to all
distributions and prior allocations of Realized Losses on the Mortgage Loans
on
such date, to an amount less than the aggregate Stated Principal Balance of
all
of the Mortgage Loans as of the first day of the month of such Distribution
Date
(such limitation, the “Loss Allocation Limitation”). In addition in no event
will the Certificate Principal Balance of any Certificate be reduced more than
once in respect of any particular amount both (i) allocable to such Certificate
in respect of Realized Losses and (ii) payable as principal to the Holder of
such Certificate from Remaining Excess Spread.
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.
(i) All
Realized Losses on the Mortgage Loans shall be allocated by the Securities
Administrator on each Distribution Date to the following REMIC I Regular
Interests in the specified percentages, as follows: first, to Uncertificated
Accrued Interest payable to 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 (without duplication of shortfalls allocated pursuant to
Section 1.02), 98.00% and 2.00%, respectively; second, to the Uncertificated
Principal Balances of 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 B-4 and REMIC
I Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the
Uncertificated Principal Balance of REMIC I Regular Interest B-4 has been
reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC
I
Regular Interest AA, REMIC I Regular Interest B-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 B-3 has been reduced to zero; fifth, to
the
Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I
Regular Interest B-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 B-2 has been reduced to zero; sixth, to the Uncertificated Principal
Balances of REMIC I Regular Interest AA, REMIC I Regular Interest B-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 B-1 has been
reduced to zero; seventh, 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
Balance of REMIC I Regular Interest M-4 has been reduced to zero; eighth, 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; ninth, 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; tenth, 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; and eleventh,
to the Uncertificated Principal Balance of REMIC I Regular Interest AA, 98.00%,
to the Uncertificated Principal Balances of REMIC I Regular Interests A-1,
A-2
and A-3, 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 A-1, A-2 and A-3 have been reduced to zero; provided
that any such Realized Losses otherwise allocable to REMIC I Regular Interest
A-1 shall be first allocated to REMIC I Regular Interest A-2 until the
Uncertificated Principal Balance thereof has been reduced to zero.
Section
6.06 Monthly
Statements to Certificateholders.
(a) Not
later
than each Distribution Date, the Securities Administrator shall prepare and
make
available to each Holder of Certificates, the Trustee, the Master Servicer
and
the Depositor a statement setting forth for the Certificates:
(i) the
applicable accrual periods for calculating distributions and general
distribution dates;
(ii) the
total
cash flows received and the general sources thereof;
(iii) the
amount, if any, of fees or expenses accrued and paid, with an identification
of
the payee and the general purpose of such fees including the related amount
of
the Servicing Fees paid to or retained by the related Servicer or the Company
for the related Due Period;
(iv) the
amount of the related distribution to Holders of the Class A, Class M and Class
B Certificates (by 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);
(v) the
amount of such distribution to Holders of each Class of Class A, Class M and
Class B Certificates allocable to interest
(vi) the
amount of the distribution made on such Distribution Date to the Holders of
the
Class P Certificates allocable to Prepayment Charges
(vii) the
Interest Carry Forward Amounts and any Basis Risk Shortfall Carry Forward
Amounts for each Class of Certificates (if any);
(viii) the
Pass-Through Rate for each Class of Class A, Class M and Class B Certificates
with respect to the current Interest Accrual Period, and, if applicable, whether
such Pass-Through Rate was limited by the applicable Net Rate Cap;
(ix) the
number and Stated Principal Balance of all of the Mortgage Loans for the related
Distribution Date, together with updated pool composition information including
the following: weighted average mortgage rate and weighted average remaining
term;
(x) the
Certificate Principal Balance or Certificate Notional Amount, as applicable,
of
each Class before and 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;
(xi) the
number and aggregate Stated Principal Balance of the Mortgage Loans (A)
Delinquent (exclusive of Mortgage Loans in foreclosure and bankruptcy and those
Liquidated Mortgage Loans as of the end of a Prepayment Period) (1) 30 days
Delinquent, (2) 60 days Delinquent and (3) 90 days or more Delinquent, (B)
in
foreclosure and delinquent (1) 30 days Delinquent, (2) 60 days Delinquent and
(3) 90 days or more Delinquent and
(C)
in bankruptcy and delinquent (1) 30 days Delinquent, (2) 60 days Delinquent
and
(3) 90 days or more Delinquent, in each case as of the close of business on
the
last day of the calendar month preceding such Distribution Date;
(xii) the
amount of aggregate Advances included in the distribution on such Distribution
Date (including the general purpose of such Advances), the aggregate amount
of
unreimbursed Advances as of the end of the Due Period, and the general source
of
funds for reimbursements;
(xiii) the
amount of, if any, of excess cashflow or excess spread and the application
of
such excess cashflow;
(xiv) the
cumulative amount of Applied Realized Loss Amounts through the end of the
preceding month;
(xv) if
applicable, material modifications, extensions or waivers to Mortgage Loan
terms, fees, penalties or payments during the preceding calendar month or that
have become material over time;
(xvi) with
respect to any Mortgage Loan that was liquidated during the preceding calendar
month, the aggregate Stated Principal Balance of, and Realized Loss on, such
Mortgage Loans as of the close of business on the Determination Date preceding
such Distribution Date;
(xvii) unless
otherwise set forth in the Form 10-D relating to such distribution date,
material breaches of pool asset representation or warranties or transaction
covenants which have been reported to the securities administrator in accordance
with this Agremeetn or the related Servicing Agreement;
(xviii) the
total
number and principal balance of any real estate owned or REO Properties as
of
the end of the related Due Period;
(xix) the
three
month rolling average of the percent equivalent of a fraction, the numerator
of
which is the aggregate Stated Principal Balance of the Mortgage Loans that
are
60 days or more delinquent or are in bankruptcy or foreclosure or are REO
Properties, and the denominator of which is the aggregate Stated Principal
Balance of all of the Mortgage Loans in
each
case as of the end of the Prepayment Period;
(xx) the
Realized Losses as of the close of business on the last day of the calendar
month preceding such Distribution Date and the cumulative Realized Losses
through the end of the preceding month;
(xxi) whether
a
Trigger Event exists;
(xxii) information
on loss and delinquency used for determining early amortization, liquidation,
stepdowns or other performance triggers and whether the trigger was
met;
(xxiii) the
amount of the Prepayment Charges remitted by the Servicers and the amount on
deposit in the Reserve Fund; and
(xxiv) updated
pool composition data including the following: weighted average mortgage rate
and weighted average remaining term.
The
Securities Administrator may make the foregoing Monthly Statement (and, at
its
option, any additional files containing the same information in an alternative
format) available each month to Certificateholders via the Securities
Administrator’s internet website. The Securities Administrator’s internet
website shall initially be located at “▇▇▇.▇▇▇▇▇▇▇.▇▇▇”. Assistance in using the
website can be obtained by calling the Securities Administrator’s customer
service desk at (▇▇▇) ▇▇▇-▇▇▇▇. Parties that are unable to use the above
distribution options are entitled to have a paper copy mailed to them via first
class mail by calling the customer service desk and indicating such. The
Securities Administrator may change the way Monthly Statements are distributed
in order to make such distributions more convenient or more accessible to the
above parties.
(b) The
Securities Administrator’s responsibility for making the above information
available to the Certificateholders is limited to the availability, timeliness
and accuracy of the information derived from the Master Servicer, the Company
and the Servicers. The Securities Administrator will make available a copy
of
each statement provided pursuant to this Section 6.06 to each Rating
Agency.
(c) Within
a
reasonable period of time after the end of each calendar year, the Securities
Administrator shall furnish upon request to each Person who at any time during
the calendar year was a Certificateholder, the information set forth in clauses
(a)(iv) and (a)(v) of this Section 6.06 aggregated for such calendar year or
applicable portion thereof during which such Person was a Certificateholder.
Such obligation of the Securities Administrator shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee or the Securities Administrator pursuant to any
requirements of the Code as from time to time in effect.
(d) Upon
filing with the Internal Revenue Service, the Securities Administrator shall
furnish to the Holders of the Residual Certificates the applicable Form 1066
and
each applicable Form 1066Q and shall respond promptly to written requests made
not more frequently than quarterly by any Holder of a Residual Certificate
with
respect to the following matters:
(i) The
original projected principal and interest cash flows on the Closing Date on
each
class of Regular Interests 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 Interests 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 Interests 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 related 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 10.12.
Section
6.07 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
Accounts, any REO Property, any proceeds of the foregoing and any other assets
subject to this Agreement (other than the Reserve Fund and any Prepayment Charge
Waiver Amounts). The REMIC I Regular Interests shall constitute the assets
of
REMIC II. The Class C Interest shall constitute assets of REMIC III. The Class
P
Interest shall constitute assets of REMIC IV.
(b) On
each
Distribution Date, the Interest Funds and Principal Funds, in the following
order of priority, shall be deemed distributed by REMIC I to REMIC II on account
of the REMIC I Regular Interests (other than REMIC I Regular Interest P) or
withdrawn from the Distribution Account and distributed to the Holders of the
Class R-1 Certificates, as the case may be:
(i) to
the
holders of the REMIC I Regular Interests (other than REMIC I Regular Interest
P), pro rata, in an amount equal to (A) the Uncertificated Accrued Interest
for
each 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 and deferred when the REMIC I Overcollateralization
Amount is less than the REMIC I Overcollateralization Target Amount, by the
lesser of (x) the amount of such difference and (y) the REMIC I Regular Interest
ZZ Maximum Interest Deferral Amount, and such amount will be payable to the
holders of each REMIC I Regular Interest (other than REMIC I Regular Interest
P)
for which a Class A, Class M or Class B Certificate is the Corresponding
Certificate, allocated 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)
from
the
remainder of the Interest Funds and Principal Funds for such Distribution Date
after the distribution made pursuant to clause (i) above, allocated as
follows:
(A) 98.00%
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) 2.00%
of
such remainder, first, to the holders of each REMIC I Regular Interest for
which
a Class A, Class M or Class B Certificate is the Corresponding Certificate,
in
an aggregate amount equal to 1.00% 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; and
(C) any
remaining amount to the Holders of the Class R-1 Certificates.
(c) On
each
Distribution Date, all amounts representing Prepayment Charges 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 6.04(a)(3)(C), (D) and (F) on such date shall be deemed distributed
from REMIC II to REMIC III in respect of the Class C Distribution Amount
distributable on the Class C 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.
Section
6.08 Reserve
Fund.
(a) The
Securities Administrator shall establish a Reserve Fund on behalf of the Holders
of the Class
A,
Class
B, Class M and Class C Certificates. The Reserve Fund shall be an Eligible
Account. The Reserve Fund shall be entitled “Reserve Fund, ▇▇▇▇▇ Fargo Bank,
N.A. as Securities Administrator for the benefit of Holders of Bear ▇▇▇▇▇▇▇
Asset Backed Securities I LLC, Asset-Backed Certificates, Series 2006-AC5,
Class
A-1, Class A-2, Class A-3, Class M-1, Class M-2, Class M-3, Class M-4, Class
B-1, Class B-2, Class B-3, Class B-4 and Class C”. On the Closing Date, the
Depositor will deposit, or cause to be deposited, into the Reserve Fund an
amount equal to the Reserve Fund Deposit. On each Distribution Date as to which
there is a Basis Risk Shortfall Carry Forward Amount payable to any Class of
Certificates, the Securities Administrator shall deposit the amounts pursuant
to
clauses (C) and (D) of Section 6.04(a)(3) into the Reserve Fund, and the
Securities Administrator has been directed by the Class C Certificateholder
to
distribute any amounts then on deposit in the Reserve Fund to the Holders of
the
Class A, Class M and Class B Certificates in respect of the Basis Risk Shortfall
Carry Forward Amount for each such Class in the priorities set forth in clauses
(C) and (D) of Section 6.04(a)(3). Any amount paid to the Holders of Class
A,
Class M or Class B Certificates from amounts distributable pursuant to clauses
(C) and (D) of Section 6.04(a)(3) pursuant to the preceding sentence in respect
of Basis Risk Shortfall Carry Forward Amounts shall be treated as distributed
to
the Class C Certificateholder in respect of the Class C Certificates and paid
by
the Class C Certificateholder to the Holders of the Class A, Class M or Class
B
Certificates. Any payments to the Holders of the Class A, Class M or Class
B in
respect of Basis Risk Shortfall Carry Forwards Amounts pursuant to the second
preceding sentence shall not be payments with respect to a Regular Interest
in a
REMIC within the meaning of Section 860G(a)(1) of the Code.
(b) The
Reserve Fund is an “outside reserve fund” within the meaning of Treasury
Regulation Section 1.860G-2(h) and shall be an asset of the Trust Fund but
not
an asset of any REMIC. The Securities Administrator on behalf of the Trust
shall
be the nominal owner of the Reserve Fund. The Class C Certificateholders shall
be the beneficial owners of the Reserve Fund, subject to the power of the
Securities Administrator to transfer amounts under Section 6.04(a)(3). Amounts
in the Reserve Fund shall be held either uninvested in a trust or deposit
account of the Securities Administrator with no liability for interest or other
compensation thereof or, at the direction of the Class C 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 C 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 C Certificateholder. Any losses on such investments shall be deposited
in the Reserve Fund by the Class C Certificateholder out of its own funds
immediately as realized. In the event that the Class C Certificateholder shall
fail to provide investment instructions to the Securities Administrator, the
amounts on deposit in the Reserve Fund shall be held uninvested.
(c) For
federal tax return and information reporting, the right of the Holders of the
Class A, Class M and Class B Certificates to receive payments from the Reserve
Fund in respect of any Basis Risk Shortfall Carry Forward Amounts shall be
assigned a value of zero.
Section
6.09 Class
P
Certificate Account.
The
Securities Administrator shall establish and maintain with itself a separate,
segregated trust account for each of the Class P Certificates, titled “Bear
▇▇▇▇▇▇▇ Asset-Backed Securities I Trust 2006-AC5 Class P Certificate Account”
(the “Class P Certificate Account”). On the Closing Date, the Depositor will
deposit, or cause to be deposited in the Class P Certificate Account $100.00.
Prepayment charges shall be allocated to the Class P Certificate. The
amount on deposit in the Class P Certificate Account shall be held uninvested.
On the Distribution Date immediately following the expiration of the latest
Prepayment Charge term as identified on the Mortgage Loan Schedule, the
Securities Administrator shall withdraw the amount on deposit in the Class
P
Certificate Account and remit such amount to the Holders of the Class P
Certificates in reduction of the Certificate Principal Balance
thereof.
ARTICLE
VII
THE
CERTIFICATES
Section
7.01 The
Certificates.
The
Certificates shall be substantially in the forms attached hereto as Exhibits
A-1
through A-7. 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:
|
Class
|
Minimum
Denomination
|
Integral
Multiple in Excess of Minimum
|
Initial
Certificate Principal Balance
|
Pass-Through
Rate
|
||||||||
|
A-1
|
$
|
100,000
|
$
|
1,000
|
$
|
201,190,000.00
|
Class
A-1 Pass-Through Rate
|
|||||
|
A-2
|
$
|
100,000
|
$
|
1,000
|
$
|
15,981,000.00
|
Class
A-2 Pass-Through Rate
|
|||||
|
A-3
|
$
|
1,000
|
$
|
1
|
$
|
26,000,000.00
|
Class
A-3 Pass-Through Rate
|
|||||
|
M-1
|
$
|
100,000
|
$
|
1,000
|
$
|
6,891,000.00
|
Class
M-1 Pass-Through Rate
|
|||||
|
M-2
|
$
|
100,000
|
$
|
1,000
|
$
|
3,843,000.00
|
Class
M-2 Pass-Through Rate
|
|||||
|
M-3
|
$
|
100,000
|
$
|
1,000
|
$
|
1,855,000.00
|
Class
M-3 Pass-Through Rate
|
|||||
|
M-4
|
$
|
100,000
|
$
|
1,000
|
$
|
1,325,000.00
|
Class
M-4 Pass-Through Rate
|
|||||
|
B-1
|
$
|
100,000
|
$
|
1,000
|
$
|
1,325,000.00
|
Class
B-1 Pass-Through Rate
|
|||||
|
B-2
|
$
|
100,000
|
$
|
1,000
|
$
|
928,000.00
|
Class
B-2 Pass-Through Rate
|
|||||
|
B-3
|
$
|
100,000
|
$
|
1,000
|
$
|
1,325,000.00
|
Class
B-3 Pass-Through Rate
|
|||||
|
B-4
|
$
|
100,000
|
$
|
1,000
|
$
|
1,723,000.00
|
Class
B-4 Pass-Through Rate
|
|||||
|
C
|
$
|
100,000
|
$
|
1,000
|
$
|
265,037,284.33
|
(1)
|
(3)
|
||||
|
P
|
$
|
100
|
N/A
|
$
|
100.00
|
(2)
|
N/A
|
|||||
|
R-1
|
100
|
%
|
N/A
|
N/A
|
(2)
|
N/A
|
||||||
|
R-2
|
100
|
%
|
N/A
|
N/A
|
(2)
|
N/A
|
||||||
|
RX
|
100
|
%
|
N/A
|
N/A
|
(2)
|
N/A
|
||||||
|
(1)
|
This
is a notional amount.
|
|
(2)
|
The
Class P, Class R-1, Class R-2 and Class RX Certificates are not entitled
to distributions in respect of
interest
|
|
(3)
|
As
defined in “Pass-Through Rate”
definition.
|
The
Certificates shall be executed by manual or facsimile signature on behalf of
the
Securities Administrator 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 Securities
Administrator shall bind the Securities Administrator, 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 Securities Administrator
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 Securities Administrator
shall authenticate the Certificates to be issued at the written direction of
the
Depositor, or any affiliate thereof.
The
Depositor shall provide, or cause to be provided, to the Securities
Administrator on a continuous basis, an adequate inventory of Certificates
to
facilitate transfers.
Section
7.02 Certificate
Register; Registration of Transfer and Exchange of Certificates.
(a) The
Securities
Administrator
shall
maintain, or cause to be maintained in accordance with the provisions of Section
7.09 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 Securities
Administrator
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 Securities
Administrator 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 Securities Administrator. Whenever
any
Certificates are so surrendered for exchange, the Securities Administrator
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 Securities
Administrator 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 Securities Administrator in
accordance with the Securities Administrator’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 Securities
Administrator in writing the facts surrounding the Transfer in substantially
the
forms set forth in Exhibit D (the “Transferor Certificate”) and (x) deliver a
letter in substantially the form of either Exhibit E (the “Investment Letter”)
or Exhibit F (the “Rule 144A Letter”) or (y) there shall be delivered to the
Securities Administrator an Opinion of Counsel addressed to the Securities
Administrator that such Transfer may 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, the Securities Administrator or
the
Trustee; provided, however, that such representation letters will not be
required in connection with any transfer of any such Certificate by the
Depositor to an affiliate of the Depositor and the Trustee and the Securities
Administrator shall be entitled to conclusively rely upon a representation
(which, upon the request of the Trustee or the Securities Administrator, shall
be a written representation) from the Depositor of the status of such transferee
as an affiliate of the Depositor. 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 Securities Administrator
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. Notwithstanding
the
provisions of the immediately preceding sentence, no restrictions shall apply
with respect to the transfer or registration of transfer of a beneficial
interest in any Certificate that is a Global Certificate of a Class to a
transferee that takes delivery in the form of a beneficial interest in the
Global Certificate of such Class provided that each such transferee shall be
deemed to have made such representations and warranties contained in the Rule
144A and Related Matters Certificate as are sufficient to establish that it
is a
QIB. Each Holder of a Private Certificate desiring to effect such Transfer
shall, and does hereby agree to, indemnify the Trustee, the Depositor, the
Seller, the Securities Administrator 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 shall be made unless either (i)
the
Master Servicer and the Securities Administrator shall have received a
representation from the transferee of such Certificate acceptable to and in
form
and substance satisfactory to the Master Servicer and the Securities
Administrator, to the effect that such transferee is not an employee benefit
plan subject to Section 406 of ERISA and/or a plan subject to Section 4975
of
the Code, 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 Securities Administrator shall have
received an Opinion of Counsel for the benefit of the Trustee, the Master
Servicer and the Securities Administrator and on which they may rely,
satisfactory to the Securities Administrator, to the effect that the purchase
and holding of such ERISA Restricted Certificate is permissible under applicable
law, 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, the Depositor or the Securities Administrator
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, the Depositor or the Securities Administrator, or, in the case of
a
Class B-4 Certificate, the transferee provides a representation, or deemed
representation in the case of the Global Certificate or an opinion of counsel
to
the effect that the proposed transfer and holding of such Certificate and the
servicing, management and operation of the Trustee 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 Class Exemption (“PTCE”) 84-14, PTCE 91-38, PTCE 90-1,
PTCE 95-60 or PTCE 96-23 and (II) will not give rise to any additional
obligations on the part of the Depositor, the Securities Administrator, the
Master Servicer or the Trustee. 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 and/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 Securities Administrator an Opinion of Counsel meeting the
requirements of clause (ii) of the first sentence of this paragraph. None of
the
Trustee, the Securities Administrator or the Master Servicer shall be required
to monitor, determine or inquire as to compliance with the transfer restrictions
with respect to any ERISA Restricted Certificate that is a Book-Entry
Certificate, and none of the Trustee, the Securities Administrator or 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. None of the Trustee, the
Securities Administrator or 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 7.02(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
and
the Securities Administrator shall each 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 or the Securities Administrator shall be paid and
delivered by the Trustee or the Securities Administrator 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 and Class B Certificate, except for
a
Class B-4 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 ▇▇▇▇▇’▇, 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.
(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 Securities
Administrator 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 Securities
Administrator
shall
not register the Transfer of any Residual Certificate unless, in addition to
the
certificates required to be delivered to the Securities
Administrator
under
subparagraph (b) above, the Securities
Administrator
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
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 7.02(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 7.02(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. Neither the Trustee nor the Securities Administrator shall be
under
any liability to any Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by Section 7.02(b) and this Section
7.02(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 Securities
Administrator
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 Securities Administrator shall be paid and
delivered by the Securities Administrator to the last preceding Permitted
Transferee of such Certificate.
(v) The
Master Servicer shall make available within 60 days of written request from
the
Securities
Administrator,
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
7.02(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 Securities Administrator of an Opinion of Counsel addressed
to
the Securities Administrator, which Opinion of Counsel shall not be an expense
of the Trustee, the Securities Administrator, 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 Securities Administrator and furnished to the Securities
Administrator, 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.
(d) The
preparation and delivery of all certificates and opinions referred to above
in
this Section 7.02 shall not be an expense of the Trust Fund, the Trustee, the
Depositor, the Seller, the Securities Administrator or the Master
Servicer.
(e) Subject
to Subsection 7.02(i), so long as a Global Certificate of such Class is
outstanding and is held by or on behalf of the Depository, transfers of
beneficial interests in such Global Certificate, or transfers by holders of
Individual Certificates of such Class to transferees that take delivery in
the
form of beneficial interests in the Global Certificate, may be made only in
accordance with Subsection 7.02(b) and in accordance with the rules of the
Depository:
(i) In
the
case of a beneficial interest in the Global Certificate being transferred to
an
Institutional Accredited Investor, such transferee shall be required to take
delivery in the form of an Individual Certificate or Certificates and the
Securities Administrator shall register such transfer only upon compliance
with
the provisions of Subsection 7.02(b).
(ii) In
the
case of a beneficial interest in a Class of Global Certificates being
transferred to a transferee that takes delivery in the form of an Individual
Certificate or Certificates of such Class, except as set forth in clause (i)
above, the Securities Administrator shall register such transfer only upon
compliance with the provisions of Subsection 7.02(b).
(iii) In
the
case of an Individual Certificate of a Class being transferred to a transferee
that takes delivery in the form of a beneficial interest in a Global Certificate
of such Class, the Securities Administrator shall register such transfer if
the
transferee has provided the Securities Administrator with a Rule 144A and
Related Matters Certificate or comparable evidence as to its QIB
status.
(iv) No
restrictions shall apply with respect to the transfer or registration of
transfer of a beneficial interest in the Global Certificate of a Class to a
transferee that takes delivery in the form of a beneficial interest in the
Global Certificate of such Class; provided that each such transferee shall
be
deemed to have made such representations and warranties contained in the Rule
144A and Related Matters Certificate as are sufficient to establish that it
is a
QIB.
(f) Subject
to Subsection 7.02(h), an exchange of a beneficial interest in a Global
Certificate of a Class for an Individual Certificate or Certificates of such
Class, an exchange of an Individual Certificate or Certificates of a Class
for a
beneficial interest in the Global Certificate of such Class and an exchange
of
an Individual Certificate or Certificates of a Class for another Individual
Certificate or Certificates of such Class (in each case, whether or not such
exchange is made in anticipation of subsequent transfer, and, in the case of
the
Global Certificate of such Class, so long as such Certificate is outstanding
and
is held by or on behalf of the Depository) may be made only in accordance with
this Subsection 7.02(e) and in accordance with the rules of the
Depository:
(i) A
holder
of a beneficial interest in a Global Certificate of a Class may at any time
exchange such beneficial interest for an Individual Certificate or Certificates
of such Class.
(ii) A
holder
of an Individual Certificate or Certificates of a Class may exchange such
Certificate or Certificates for a beneficial interest in the Global Certificate
of such Class if such holder furnishes to the Securities Administrator a Rule
144A and Related Matters Certificate or comparable evidence as to its QIB
status.
(iii) A
holder
of an Individual Certificate of a Class may exchange such Certificate for an
equal aggregate principal amount of Individual Certificates of such Class in
different authorized denominations without any certification.
(g) (i)Upon
acceptance for exchange or transfer of an Individual Certificate of a Class
for
a beneficial interest in a Global Certificate of such Class as provided herein,
the Securities Administrator shall cancel such Individual Certificate and shall
(or shall request the Depository to) endorse on the schedule affixed to the
applicable Global Certificate (or on a continuation of such schedule affixed
to
the Global Certificate and made a part thereof) or otherwise make in its books
and records an appropriate notation evidencing the date of such exchange or
transfer and an increase in the certificate balance of the Global Certificate
equal to the certificate balance of such Individual Certificate exchanged or
transferred therefor.
(ii) Upon
acceptance for exchange or transfer of a beneficial interest in a Global
Certificate of a Class for an Individual Certificate of such Class as provided
herein, the Securities
Administrator shall
(or
shall request the Depository to) endorse on the schedule affixed to such Global
Certificate (or on a continuation of such schedule affixed to such Global
Certificate and made a part thereof) or otherwise make in its books and records
an appropriate notation evidencing the date of such exchange or transfer and
a
decrease in the certificate balance of such Global Certificate equal to the
certificate balance of such Individual Certificate issued in exchange therefor
or upon transfer thereof.
(h) Any
Individual Certificate issued in exchange for or upon transfer of another
Individual Certificate or of a beneficial interest in a Global Certificate
shall
bear the applicable legends set forth in Exhibit A-2.
(i) Subject
to the restrictions on transfer and exchange set forth in this Section 7.02,
the
holder of any Individual Certificate may transfer or exchange the same in whole
or in part (in an initial certificate balance equal to the minimum authorized
denomination set forth in Section 7.01 above or any integral multiple of $1.00
in excess thereof) by surrendering such Certificate at the Corporate Trust
Office, or at the office of any transfer agent, together with an executed
instrument of assignment and transfer satisfactory in form and substance to
the
Securities Administrator and the Securities Administrator in the case of
transfer and a written request for exchange in the case of exchange. The holder
of a beneficial interest in a Global Certificate may, subject to the rules
and
procedures of the Depository, cause the Depository (or its nominee) to notify
the Securities Administrator and the Securities Administrator in writing of
a
request for transfer or exchange of such beneficial interest for an Individual
Certificate or Certificates. Following a proper request for transfer or
exchange, the Securities Administrator shall, within five Business Days of
such
request made at the Corporate Trust Office, sign, countersign and deliver at
the
Corporate Trust Office, to the transferee (in the case of transfer) or holder
(in the case of exchange) or send by first class mail at the risk of the
transferee (in the case of transfer) or holder (in the case of exchange) to
such
address as the transferee or holder, as applicable, may request, an Individual
Certificate or Certificates, as the case may require, for a like aggregate
Percentage Interest and in such authorized denomination or denominations as
may
be requested. The presentation for transfer or exchange of any Individual
Certificate shall not be valid unless made at the Corporate Trust Office by
the
registered holder in person, or by a duly authorized
attorney-in-fact.
Neither
the Trustee nor the Securities Administrator nor the Master Servicer shall
be
required to monitor, determine or inquire as to compliance with the transfer
restrictions with respect to the Global Certificates. Any attempted or purported
transfer of any Certificate in violation of the provisions of Subsections (a)
or
(b) above shall be void ab initio and such Certificate shall be considered
to
have been held continuously by the prior permitted Certificateholder. Any
transferor of any Certificate in violation of such provisions, shall indemnify
and hold harmless the Trustee, the Securities Administrator and the Master
Servicer from and against any and all liabilities, claims, costs or expenses
incurred by the Securities Administrator, the Trustee or the Master Servicer
as
a result of such attempted or purported transfer. Neither the Trustee nor the
Securities Administrator shall have any liability for transfer of any such
Global Certificates in or through book-entry facilities of any Depository or
between or among Depository Participants or Certificate Owners made in violation
of the transfer restrictions set forth herein.
Section
7.03 Mutilated,
Destroyed, Lost or Stolen Certificates.
If
any
mutilated Certificate is surrendered to the Securities Administrator, or the
Securities Administrator receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and of the ownership
thereof.
Section
7.04 Persons
Deemed Owners.
The
Securities Administrator, the Trustee and any agent of the Securities
Administrator or the Trustee may treat the person in whose name any Certificate
is registered as the owner of such Certificate for the purpose of receiving
distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Securities Administrator, the Trustee nor any agent
of the Securities Administrator or the Trustee shall be affected by any notice
to the contrary.
Section
7.05 Access
to
List of Certificateholders’ Names and Addresses.
If
three
or more Certificateholders (a) request such information in writing from the
Securities Administrator, (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 Securities Administrator, then the Securities Administrator 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 Securities
Administrator, if any. The Depositor and every Certificateholder, by receiving
and holding a Certificate, agree that the Securities Administrator shall not
be
held accountable by reason of the disclosure of any such information as to
the
list of the Certificateholders hereunder, regardless of the source from which
such information was derived.
Section
7.06 Book-Entry
Certificates.
The
Offered Certificates, upon original issuance, shall be issued in the form of
one
or more typewritten Certificates 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 7.08. Unless and until
definitive, fully registered Certificates (“Definitive Certificates”) have been
issued to the Certificate Owners of such Certificates pursuant to Section
7.08:
(a) the
provisions of this Section shall be in full force and effect;
(b) the
Depositor, the Securities Administrator 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 Securities
Administrator 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 7.08, 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
Securities
Administrator
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.
The
Private Certificates shall initially be held in fully registered certificated
form. If at any time the Holders of all of the Certificates of one or more
such
Classes request that the Securities Administrator cause such Class to become
Global Certificates, the Depositor (with the assistance of the Securities
Administrator) will take such action as may be reasonably required to cause
the
Depository to accept such Class or Classes for trading if it may legally be
so
traded. If at anytime there are to be Global Certificates, the Global
Certificates shall be delivered to the Depository by the Depositor or deposited
with the Securities Administrator as custodian for the Depository.
All
transfers by Certificate Owners of such respective Classes of Book-Entry
Certificates and any Global Certificates shall be made in accordance with the
procedures established by the Depository Participant or brokerage firm
representing such Certificate Owners. Each Depository Participant shall only
transfer Book-Entry Certificates of Certificate Owners it represents or of
brokerage firms for which it acts as agent in accordance with the Depository’s
normal procedures.
Section
7.07 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 Securities Administrator shall give all such notices
and
communications to the Depository.
Section
7.08 Definitive
Certificates.
If,
after
Book-Entry Certificates have been issued with respect to any Certificates,
(a)
the Depositor or the Depository advises the Securities Administrator 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, (b)
the Depositor, at its sole option, advises the Securities Administrator that
it
elects to terminate the book-entry system with respect to such Certificates
through the Depository or (c) after the occurrence and continuation of an Event
of Default, Certificate Owners of such Book-Entry Certificates having not less
than 51% of the Voting Rights evidenced by any Class of Book-Entry Certificates
advise the Securities Administrator and the Depository in writing through the
Depository Participants that the continuation of a book-entry system with
respect to Certificates of such Class through the Depository (or its successor)
is no longer in the best interests of the Certificate Owners of such Class,
then
the Securities Administrator 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 Securities Administrator
with an adequate inventory of certificates to facilitate the issuance and
transfer of Definitive Certificates. Upon surrender to the Securities
Administrator of any such Certificates by the Depository, accompanied by
registration instructions from the Depository for registration, the Securities
Administrator shall countersign and deliver such Definitive Certificates.
Neither the Depositor nor the Securities Administrator 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. Upon the issuance of such
Definitive Certificates, all references herein to obligations imposed upon
or to
be performed by the Depository shall be deemed to be imposed upon and performed
by the Securities Administrator, to the extent applicable with respect to such
Definitive Certificates and the Trustee and the Securities Administrator shall
recognize the Holders of such Definitive Certificates as Certificateholders
hereunder.
Section
7.09 Maintenance
of Office or Agency.
The
Securities Administrator will maintain or cause to be maintained at its expense
an office or offices or agency or agencies at ▇▇▇▇▇ Fargo Bank, National
Association, Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479
where Certificates may be surrendered for registration of transfer or exchange.
The Securities Administrator will give prompt written notice to the
Certificateholders of any change in such location of any such office or
agency.
ARTICLE
VIII
THE
COMPANY AND THE MASTER SERVICER
Section
8.01 Liabilities
of the Depositor, the Company and the Master Servicer.
Each
of
the Depositor, the Company and the Master Servicer shall be liable in accordance
herewith only to the extent of the obligations specifically imposed upon and
undertaken by it herein.
Section
8.02 Merger
or
Consolidation of the Depositor, the Company or the Master Servicer.
(a) Each
of
the Depositor, the Company and the Master Servicer will keep in full force
and
effect its existence, rights and franchises as a corporation under the laws
of
the state of its incorporation, and will obtain and preserve its qualification
to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its duties under this Agreement.
(b) Any
Person into which the Depositor, the Company or the Master Servicer may be
merged or consolidated, or any corporation resulting from any merger or
consolidation to which the Depositor, the Company or the Master Servicer shall
be a party, or any Person succeeding to the business of the Depositor, the
Company or the Master Servicer, shall be the successor of the Depositor, the
Company or the Master Servicer hereunder, without the execution or filing of
any
paper or further act on the part of any of the parties hereto, anything herein
to the contrary notwithstanding.
Section
8.03 Indemnification
of the Trustee, the Master Servicer and the Securities
Administrator.
(a) The
Master Servicer agrees to indemnify the Indemnified Persons for, and to hold
them harmless against, any loss, liability or expense (including reasonable
legal fees and disbursements of counsel) incurred on their part that may be
sustained in connection with, arising out of, or relating to, any claim or
legal
action (including any pending or threatened claim or legal action) relating
to
this Agreement, including the powers of attorney delivered pursuant to Sections
4.01 and 4.05 hereof, the Assignment Agreements, the Custodial Agreement or
the
Certificates (i) related to the Master Servicer’s failure to perform its duties
in compliance with this Agreement (except as any such loss, liability or expense
shall be otherwise reimbursable pursuant to this Agreement) or (ii) incurred
by
reason of the Master Servicer’s willful misfeasance, bad faith or gross
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder, provided, in each case, that
with
respect to any such claim or legal action (or pending or threatened claim or
legal action), the Trustee shall have given the Master Servicer and the Seller
written notice thereof promptly after a responsible officer of the Trustee
shall
have with respect to such claim or legal action actual knowledge thereof;
provided, however, 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, Master Servicer or the
Securities Administrator and the termination of this Agreement.
(b) The
Company agrees to indemnify the Indemnified Persons and to hold them harmless
from and against any and all claims, losses, damages, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs,
fees
and expenses that the Indemnified Persons may sustain in any way related to
the
failure of the Company to perform in any way its duties and service the EMC
Mortgage Loans in strict compliance with the terms of this Agreement and for
breach of any representation or warranty of the Company contained herein. The
Company shall immediately notify the Master Servicer and the Trustee if a claim
is made by a third party with respect to this Agreement or the EMC Mortgage
Loans, assume (with the consent of the Master Servicer and the Trustee and
with
counsel reasonably satisfactory to the Master Servicer and the Trustee) the
defense of any such claim and pay all expenses in connection therewith,
including counsel fees, and promptly pay, discharge and satisfy any judgment
or
decree which may be entered against it or any Indemnified Person in respect
of
such claim but failure to so notify the Company shall not limit its obligations
hereunder. The Company agrees that it will not enter into any settlement of
any
such claim without the consent of the Indemnified Persons unless such settlement
includes an unconditional release of such Indemnified Persons from all liability
that is the subject matter of such claim. The provisions of this Section 8.03(b)
shall survive termination of this Agreement.
(c) The
Seller will indemnify any Indemnified Person for any loss, liability or expense
of any Indemnified Person not otherwise paid or covered pursuant to Subsections
(a) or (b) above.
Section
8.04 Limitations
on Liability of the Depositor, the Company, the Master Servicer and
Others.
Subject
to the obligation of the Seller, the Company and the Master Servicer to
indemnify the Indemnified Persons pursuant to Section 8.03:
(a) Neither
the Depositor, the Company, the Master Servicer nor any of the directors,
officers, employees or agents of the Depositor, the Company and the Master
Servicer shall be under any liability to the Indemnified Persons, the Trust
Fund
or the Certificateholders for taking any action or for refraining from taking
any action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the
Company, the Master Servicer or any such Person against any breach of warranties
or representations made herein or any liability which would otherwise be imposed
by reason of such Person’s willful misfeasance, bad faith or gross negligence in
the performance of duties or by reason of reckless disregard of obligations
and
duties hereunder.
(b) The
Depositor, the Company, the Master Servicer and any director, officer, employee
or agent of the Depositor, the Company and the Master Servicer may rely in
good
faith on any document of any kind prima facie properly executed and submitted
by
any Person respecting any matters arising hereunder.
(c) The
Depositor, the Company, the Master Servicer the Securities Administrator, the
Trustee, the Custodian and any director, officer, employee or agent of the
Depositor, the Company, the Master Servicer, the Securities Administrator,
the
Trustee or the Custodian shall be indemnified by the Trust and held harmless
thereby against any loss, liability or expense (including reasonable legal
fees
and disbursements of counsel) incurred on their part that may be sustained
in
connection with, arising out of, or related to, any claim or legal action
(including any pending or threatened claim or legal action) relating to this
Agreement, the Assignment Agreements, the Custodial Agreement, the Certificates
or the Servicing Agreements (except with respect to the Master Servicer only,
to
the extent that the Master Servicer is indemnified by the Company under this
Agreement or by the related Servicer under the related Servicing Agreement),
other than (i) any such loss, liability or expense related to the Company’s or
the Master Servicer’s failure to perform its respective duties in compliance
with this Agreement (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement), or to the Custodian’s
failure to perform its duties under the Custodial Agreement, or (ii) any such
loss, liability or expense incurred by reason of the Company’s, the Master
Servicer’s or the Custodian’s willful misfeasance, bad faith or gross negligence
in the performance of duties hereunder or under the Custodial Agreement, as
applicable, or by reason of reckless disregard of obligations and duties
hereunder or under the Custodial Agreement, as applicable.
(d) Neither
the Depositor, the Company nor the Master Servicer shall be under any obligation
to appear in, prosecute or defend any legal action that is not incidental to
its
duties under this Agreement and that in its opinion may involve it in any
expense or liability; provided, however, the Master Servicer may in its
discretion, with the consent of the Trustee (which consent shall not be
unreasonably withheld), undertake any such action which it may deem necessary
or
desirable with respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder. In such
event, the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
Master Servicer shall be entitled to be reimbursed therefor out of the
Distribution Account as provided by Section 5.08. Nothing in this Subsection
8.04(d) shall affect the Master Servicer’s obligation to supervise, or to take
such actions as are necessary to ensure, the servicing and administration of
the
Mortgage Loans pursuant to Subsection 4.01(a).
(e) In
taking
or recommending any course of action pursuant to this Agreement, unless
specifically required to do so pursuant to this Agreement, the Master Servicer
shall not be required to investigate or make recommendations concerning
potential liabilities which the Trust might incur as a result of such course
of
action by reason of the condition of the Mortgaged Properties but shall give
notice to the Trustee if it has notice of such potential
liabilities.
(f) The
Master Servicer shall not be liable for any acts or omissions of the Company
or
the Servicers, except as otherwise expressly provided herein.
Section
8.05 Master
Servicer and Company Not to Resign.
(a) Except
as
provided in Section 8.07, the Master Servicer shall not resign from the
obligations and duties hereby imposed on it except (i) with the prior written
consent of the Trustee (which consent shall not be unreasonably withheld) or
(ii) upon a determination that any such duties hereunder are no longer
permissible under applicable law and such impermissibility cannot be cured.
Any
such determination permitting the resignation of the Master Servicer shall
be
evidenced by an Opinion of Counsel to such effect, addressed to and delivered
to, the Trustee. No such resignation by the Master Servicer shall become
effective until EMC or the Trustee or a successor to the Master Servicer
reasonably satisfactory to the Trustee shall have assumed the responsibilities
and obligations of the Master Servicer in accordance with Section 9.02 hereof.
The Trustee shall notify the Rating Agencies of the resignation of the Master
Servicer.
(b) The
Company shall not resign from the obligations and duties hereby imposed on
it
except (i) upon the assignment of its servicing duties with respect to all
or a
portion of the EMC Mortgage Loans to an institution that is a ▇▇▇▇▇▇ ▇▇▇ and
Freddie Mac approved seller/servicer in good standing that has a net worth
of
not less than $10,000,000 and with the prior written consent of the Master
Servicer (which consent shall not be unreasonably withheld) or (ii) upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Company. Any
determination permitting the resignation of the Company shall be evidenced
by an
Opinion of Counsel to such effect addressed to and delivered, to the Master
Servicer and the Trustee which Opinion of Counsel shall be in form and substance
acceptable to the Master Servicer and the Trustee. No appointment of a successor
to the Company shall be effective hereunder unless (a) the Rating Agencies
have
confirmed in writing that such appointment will not result in a downgrade,
qualification or withdrawal of the then current ratings assigned to the
Certificates, (b) such successor shall have represented that it is meets the
eligibility criteria set forth in clause (i) above and (c) such successor has
agreed to assume the obligations of the Company hereunder to the extent of
the
EMC Mortgage Loans to be serviced by such successor. The Company shall provide
a
copy of the written confirmation of the Rating Agencies and the agreement
executed by such successor to the Master Servicer and the Trustee. No such
resignation shall become effective until a Qualified Successor or the Master
Servicer shall have assumed the Company’s responsibilities and obligations
hereunder. The Company shall notify the Master Servicer, the Trustee and the
Rating Agencies of the resignation of the Company or the assignment of all
or a
portion of its servicing duties hereunder in accordance with this Section
8.05.
Section
8.06 Successor
Master Servicer.
In
connection with the appointment of any successor Master Servicer or the
assumption of the duties of the Master Servicer, EMC or the Trustee may make
such arrangements for the compensation of such successor master servicer out
of
payments on the Mortgage Loans as EMC or the Trustee and such successor master
servicer shall agree. If the successor master servicer does not agree that
such
market value is a fair price, such successor master servicer shall obtain two
quotations of market value from third parties actively engaged in the servicing
of single-family mortgage loans. In no event shall the compensation of any
successor master servicer exceed that permitted the Master Servicer without
the
consent of all of the Certificateholders.
Section
8.07 Sale
and
Assignment of Master Servicing.
The
Master Servicer may sell and assign its rights and delegate its duties and
obligations in its entirety as Master Servicer under this Agreement and EMC
may
terminate the Master Servicer without cause and select a new Master Servicer;
provided, however, that: (i) the purchaser or transferee accepting such
assignment and delegation (a) shall be a Person which (or an Affiliate thereof
the primary business of which is the servicing of conventional residential
mortgage loans) shall be qualified to service mortgage loans for ▇▇▇▇▇▇ ▇▇▇
or
Freddie 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 satisfactory to the Trustee, which
contains an assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or observed by it
as
master servicer under this Agreement, any custodial agreement from and after
the
effective date of such agreement; (ii) each Rating Agency shall be given prior
written notice of the identity of the proposed successor to the Master Servicer
and each Rating Agency’s rating of the Certificates in effect immediately prior
to such assignment, sale and delegation will not be downgraded, qualified or
withdrawn as a result of such assignment, sale and delegation, as evidenced
by a
letter to such effect delivered to the Master Servicer and the Trustee; (iii)
the Master Servicer assigning and selling the master servicing shall deliver
to
the Trustee an Officer’s Certificate and an Opinion of Counsel addressed to the
Trustee, each stating that all conditions precedent to such action under this
Agreement have been completed and such action is permitted by and complies
with
the terms of this Agreement; and (iv) in the event the Master Servicer is
terminated without cause by EMC, EMC shall pay, from its own funds and without
any right of reimbursement, the terminated Master Servicer a termination fee
equal to 0.25% of the aggregate Stated Principal Balance of the Mortgage Loans
at the time the master servicing of the Mortgage Loans is transferred to the
successor Master Servicer. No such assignment or delegation shall affect any
liability of the Master Servicer arising prior to the effective date
thereof.
ARTICLE
IX
DEFAULT;
TERMINATION OF MASTER SERVICER;
TERMINATION
OF COMPANY
Section
9.01 Events
of
Default.
“Event
of
Default,” wherever used herein, means any one of the following
events:
(i) any
failure by the Master Servicer to remit to the Securities Administrator any
amounts received or collected by the Master Servicer in respect of the Mortgage
Loans and required to be remitted by it (other than any Advance) pursuant to
this Agreement, which failure shall continue unremedied for one Business Day
after the date on which written notice of such failure shall have been given
to
the Master Servicer by the Trustee or the Depositor, or to the Trustee and
the
Master Servicer by the Holders of Certificates evidencing not less than 25%
of
the Voting Rights evidenced by the Certificates; or
(ii) any
failure by the Master Servicer to observe or perform in any material respect
any
other of the covenants or agreements on the part of the Master Servicer
contained in this Agreement or any breach of a representation or warranty by
the
Master Servicer, which failure or breach shall continue unremedied for a period
of 60 days after the date on which written notice of such failure shall have
been given to Master Servicer by the Trustee or the Depositor, or to the Trustee
and the Master Servicer by the Holders of Certificates evidencing not less
than
25% of the Voting Rights evidenced by the Certificates; or
(iii) a
decree
or order of a court or agency or supervisory authority having jurisdiction
in
the premises for the appointment of a receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against the Master Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 consecutive days;
or
(iv) the
Master Servicer shall consent to the appointment of a receiver or liquidator
in
any insolvency, readjustment of debt, marshalling of assets and liabilities
or
similar proceedings of or relating to the Master Servicer or all or
substantially all of the property of the Master Servicer; or
(v) the
Master Servicer shall admit in writing its inability to pay its debts generally
as they become due, file a petition to take advantage of, or commence a
voluntary case under, any applicable insolvency or reorganization statute,
make
an assignment for the benefit of its creditors, or voluntarily suspend payment
of its obligations;
(vi) the
Master Servicer assigns or delegates its duties or rights under this Agreement
in contravention of the provisions permitting such assignment or delegation
under Sections 8.05 or 8.07; or
(vii) The
Master Servicer fails to deposit, or cause to be deposited, in the Distribution
Account any Advance required to be made by the Master Servicer (other than
a
Nonrecoverable Advance) by 5:00 p.m. New York City time on the Business Day
prior to the related Distribution 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, by notice in
writing to the Master Servicer,
with a
copy to the Rating Agencies, and with the consent of the Company, may terminate
all of the rights and obligations (but not the liabilities)
of the
Master Servicer (and the Securities Administrator if the Master Servicer and
the
Securities Administrator are the same entity) under this Agreement and in and
to
the Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder. On or after the receipt by the Master Servicer
of
such written notice, all authority and power of the Master Servicer (and, if
applicable, the Securities Administrator) hereunder, whether with respect to
the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee, or
any
successor appointed pursuant to Section 9.02 (a “Successor Master Servicer” and,
if applicable, “Successor Securities Administrator”). Such Successor Master
Servicer shall thereupon if such Successor Master Servicer is a successor to
the
Master Servicer, make any Advance required by Article VI, subject, in the case
of the Trustee, to Section 9.02. The Trustee is hereby authorized and empowered
to execute and deliver, on behalf of the terminated Master Servicer and, if
applicable, the terminated Securities Administrator, as attorney- in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of
such
notice of termination, whether to complete the transfer and endorsement or
assignment of any Mortgage Loans and related documents, or otherwise. Unless
expressly provided in such written notice, no such termination shall affect
any
obligation of the Master Servicer to pay amounts owed pursuant to Article VIII
or Article X. The Master Servicer and, if applicable, the Securities
Administrator agrees to cooperate with the Trustee in effecting the termination
of the Master Servicer’s and, if applicable, the Securities Administrator’s
responsibilities and rights hereunder, including, without limitation, the
transfer to the applicable Successor Master Servicer of all cash amounts which
shall at the time be credited to the Distribution Account maintained pursuant
to
Section 5.08, 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. The Securities Administrator shall
promptly notify the Trustee in writing of the occurrence of an Event of Default
under clauses (i) or (vii) above.
Notwithstanding
any termination of the activities of the Master Servicer hereunder, the Master
Servicer shall be entitled to receive, out of any late collection of a Scheduled
Payment on a Mortgage Loan that was due prior to the notice terminating the
Master Servicer’s rights and obligations as Master Servicer hereunder and
received after such notice, that portion thereof to which the Master Servicer
would have been entitled pursuant to Sections 5.05 and to receive any other
amounts payable to the Master Servicer hereunder the entitlement to which arose
prior to the termination of its activities hereunder.
Notwithstanding
the foregoing, if an Event of Default described in clause (vii) of this Section
9.01 shall occur and the Securities Administrator fails to make such Advance
described in clause (vii), the Trustee upon receiving notice or becoming aware
of such failure, and pursuant to the applicable terms of this Agreement, 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 of Default described in clause
(vii) of this Section 9.01. Any such action taken by the Trustee must be prior
to the distribution on the relevant Distribution Date.
Section
9.02 Trustee
to Act; Appointment of Successor.
On
and
after the time the Master Servicer receives a notice of termination pursuant
to
Section 9.01 hereof the Trustee shall automatically become the successor to
the
Master Servicer with respect to the transactions set forth or provided for
herein and after a transition period (not to exceed 90 days), shall have all
the
rights and powers of, and 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 the Company shall have the right
to
either (a) immediately assume the duties of the Master Servicer or (b) select
a
successor Master Servicer; provided, further, however that, pursuant to Article
VI hereof, the Trustee in its capacity as successor Master Servicer shall be
responsible for making any Advances required to be made by the Master Servicer
immediately upon the termination of the Master Servicer and any such Advance
shall be made on the Distribution Date on which such Advance was required to
be
made by the predecessor Master Servicer. Effective on the date of such notice
of
termination, as compensation therefor, the Trustee shall be entitled to all
compensation, reimbursement of expenses and indemnifications that the Master
Servicer would have been entitled to if it had continued to act hereunder,
provided, however, that the Trustee shall not be (i) liable for any acts or
omissions of the Master Servicer, (ii) obligated to make Advances if it is
prohibited from doing so under applicable law, (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 VI
or
if it is otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution
the
appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency as the successor to the Master Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Master Servicer hereunder. Any Successor Master Servicer
shall (i) be an institution that is a ▇▇▇▇▇▇ ▇▇▇ and Freddie Mac approved
seller/servicer in good standing, that has a net worth of at least $15,000,000
and (ii) be willing to act as successor servicer of any Mortgage Loans under
this Agreement or the related Servicing Agreement with respect to which the
Company or the original Servicer has been terminated as servicer, and shall
have
executed and delivered to the Depositor, the Trustee an agreement accepting
such
delegation and assignment, that contains an assumption by such Person of the
rights, powers, duties, responsibilities, obligations and liabilities of the
Master Servicer (other than any liabilities of the Master Servicer hereof
incurred prior to termination of the Master Servicer under Section 9.01 or
as
otherwise set forth herein), with like effect as if originally named as a party
to this Agreement, provided that each Rating Agency shall have acknowledged
in
writing that its rating of the Certificates in effect immediately prior to
such
assignment and delegation will not be qualified or reduced as a result of such
assignment and delegation. If the Trustee assumes the duties and
responsibilities of the Master Servicer in accordance with this Section 9.02,
the Trustee shall not resign as Master Servicer until a Successor Master
Servicer has been appointed and has accepted such appointment. Pending
appointment of a successor to the Master Servicer hereunder, the Trustee, unless
the Trustee is prohibited by law from so acting, shall, subject to Section
4.04
hereof, act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans or otherwise
as
it and such successor shall agree; provided that no such compensation unless
agreed to by the Certificateholders shall be in excess of that permitted the
Master Servicer hereunder. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate
any
such succession. Neither the Trustee nor any other Successor Master Servicer
shall be deemed to be in default hereunder by reason of any failure to make,
or
any delay in making, any distribution hereunder or any portion thereof or any
failure to perform, or any delay in performing, any duties or responsibilities
hereunder, in either case caused by the failure of the Master Servicer and
the
Securities Administrator to deliver or provide, or any delay in delivering
or
providing, any cash, information, documents or records to it.
The
costs
and expenses of the Trustee in connection with the termination of the Master
Servicer, appointment of a Successor Master Servicer and, if applicable, any
transfer of servicing, including, without limitation, all costs and expenses
associated with the complete transfer of all servicing data and the completion,
correction or manipulation of such servicing data as may be required by the
Trustee to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Trustee or the Successor Master Servicer to service
the
related Mortgage Loans properly and effectively, to the extent not paid by
the
terminated Master Servicer, shall be payable to the Trustee pursuant to Section
10.05. Any successor to the Master Servicer as successor servicer under any
Subservicing Agreement shall give notice to the applicable Mortgagors of such
change of servicer and shall, during the term of its service as successor
servicer maintain in force the policy or policies that the Master Servicer
is
required to maintain pursuant to Section 4.04.
Section
9.03 Notification
to Certificateholders and Rating Agencies.
(a) Upon
any
termination of or appointment of a successor to the Master Servicer, the Trustee
shall give prompt written notice thereof to Certificateholders and to each
Rating Agency.
(b) Within
60
days after the occurrence of any Event of Default, the Trustee shall transmit
by
mail to all Certificateholders notice of each such Event of Default hereunder
actually known to a Responsible Officer of the Trustee, unless such Event of
Default shall have been cured or waived.
Section
9.04 Waiver
of
Defaults.
The
Trustee shall transmit by mail to all Certificateholders, within 60 days after
the occurrence of any Event of Default actually known to a Responsible Officer
of the Trustee, unless such Event of Default shall have been cured, notice
of
each such Event of Default hereunder known to the Trustee. Holders of
Certificates evidencing not less than 51% of the Voting Rights may, on behalf
of
all Certificateholders, waive any default by the Master Servicer in the
performance of its obligations hereunder and the consequences thereof, except
a
default in the making of or the causing to be made of any required distribution
on the Certificates. Upon any such waiver of a past default, such default shall
be deemed to cease to exist, and any Event of Default arising therefrom shall
be
deemed to have been timely remedied for every purpose of this Agreement. No
such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon except to the extent expressly so waived. The Trustee shall
give notice of any such waiver to the Rating Agencies.
Section
9.05 Company
Default.
In
case
one or more of the following events of default by the Company (each, a “Company
Default”) shall occur and be continuing, that is to say:
(i) any
failure by the Company to remit to the Securities Administrator any payment
including any Advance required to be made under the terms of this Agreement
on
any Remittance Date; or
(ii) failure
on the part of the Company duly to observe or perform in any material respect
any other of the covenants or agreements (other than Sections 3.13 or 3.14)
on
the part of the Company set forth in this Agreement, the breach of which has
a
material adverse effect and which continue unremedied for a period of sixty
days
(except that such number of days shall be fifteen in the case of a failure
to
pay any premium for any insurance policy required to be maintained under this
Agreement and such failure shall be deemed to have a material adverse effect)
after the date on which written notice of such failure, requiring the same
to be
remedied, shall have been given to the Company by the Master Servicer;
or
(iii) a
decree
or order of a court or agency or supervisory authority having jurisdiction
for
the appointment of a conservator or receiver or liquidator in any insolvency,
bankruptcy, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Company and such decree or order shall have
remained in force undischarged or unstayed for a period of sixty days;
or
(iv) the
Company shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling
of
assets and liabilities or similar proceedings of or relating to the Company
or
of or relating to all or substantially all of its property; or
(v) the
Company shall admit in writing its inability to pay its debts generally as
they
become due, file a petition to take advantage of any applicable insolvency
or
reorganization statute, make an assignment for the benefit of its creditors,
or
voluntarily suspend payment of its obligations; or
(vi) the
Company attempts to assign its right to servicing compensation hereunder or
the
Company attempts to sell or otherwise dispose of all or substantially all of
its
property or assets or to assign this Agreement or the servicing responsibilities
hereunder or to delegate its duties hereunder or any portion thereof except
as
otherwise permitted herein;
(vii) the
Company ceases to be qualified to transact business in any jurisdiction where
it
is currently so qualified, but only to the extent such non-qualification
materially and adversely affects the Company’s ability to perform its
obligations hereunder; or
(viii) failure
by the Company to duly perform, within the required time period, its obligations
under Sections 4.16, 4.17 or Section 4.18;
then,
and
in each and every such case, so long as a Company Default shall not have been
remedied, the Master Servicer, by notice in writing to the Company may, in
addition to whatever rights the Master Servicer and the Trustee on behalf of
the
Certificateholders may have under Section 8.03 and at law or equity to damages,
including injunctive relief and specific performance, terminate all the rights
and obligations of the Company under this Agreement and in and to the EMC
Mortgage Loans and the proceeds thereof without compensating the Company for
the
same. On or after the receipt by the Company of such written notice, all
authority and power of Company under this Agreement, whether with respect to
the
EMC Mortgage Loans or otherwise, shall pass to and be vested in the Master
Servicer. Upon written request from the Master Servicer, the Company shall
prepare, execute and deliver, any and all documents and other instruments,
place
in the Master Servicer’s possession all Mortgage Files relating to the EMC
Mortgage Loans, and do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the EMC Mortgage Loans
and related documents, or otherwise, at the Company’s sole expense. The Company
agrees to pay any costs and expenses incurred by the Master Servicer in
accordance with Section 4.03(c) and to cooperate with the Master Servicer in
effecting the termination of the Company’s responsibilities and rights
hereunder, including, without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited
by
the Company to its Protected Account or Escrow Account or thereafter received
with respect to the EMC Mortgage Loans or any related REO Property.
Section
9.06 Waiver
of
Company Defaults.
The
Master Servicer, with the consent of the Trustee may waive only by written
notice any default by the Company in the performance of its obligations
hereunder and its consequences. Upon any such waiver of a past default, such
default shall cease to exist, and any Company Default arising therefrom shall
be
deemed to have been remedied for every purpose of this Agreement. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon except to the extent expressly so waived in writing.
ARTICLE
X
CONCERNING
THE TRUSTEE AND THE
SECURITIES
ADMINISTRATOR
Section
10.01 Duties
of
Trustee and Securities Administrator.
(a) The
Trustee, prior to the occurrence of an Event of Default and after the curing
or
waiver of all Events of Default which may have occurred, and the Securities
Administrator each undertake to perform such duties and only such duties as
are
specifically set forth in this Agreement as duties of the Trustee and the
Securities Administrator, respectively. If an Event of Default has occurred
and
has not been cured or waived, the Trustee shall exercise such of the rights
and
powers vested in it by this Agreement, and the same degree of care and skill
in
their exercise, as a prudent person would exercise under the circumstances
in
the conduct of such Person’s own affairs.
(b) Upon
receipt of all resolutions, certificates, statements, opinions, reports,
documents, orders or other instruments which are specifically required to be
furnished to the Trustee or the Securities Administrator pursuant to any
provision of this Agreement, the Trustee or the Securities Administrator,
respectively, shall examine them to determine whether they are, on their face,
in the form required by this Agreement; provided, however, that neither the
Trustee nor the Securities Administrator shall be responsible for the accuracy
or content of any resolution, certificate, statement, opinion, report, document,
order or other instrument furnished by the Master Servicer; provided, further,
that neither the Trustee nor the Securities Administrator shall be responsible
for the accuracy or verification of any calculation provided to it pursuant
to
this Agreement.
(c) On
each
Distribution Date, the Securities Administrator shall make monthly distributions
and the final distribution to the Certificateholders from funds in the
Distribution Account as provided in Sections 6.04 and 11.02 herein based solely
on the applicable Remittance Report.
(d) No
provision of this Agreement shall be construed to relieve the Trustee or the
Securities Administrator from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however,
that:
(i) Prior
to
the occurrence of an Event of Default, and after the curing or waiver of all
such Events of Default which may have occurred with respect to the Trustee
and
at all times with respect to the Securities Administrator, the duties and
obligations of the Trustee and the Securities Administrator shall be determined
solely by the express provisions of this Agreement, neither the Trustee nor
the
Securities Administrator shall be liable except for the performance of their
respective duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this Agreement
against the Trustee or the Securities Administrator and, in the absence of
bad
faith on the part of the Trustee or the Securities Administrator, respectively,
the Trustee or the Securities Administrator, respectively, may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the Trustee
or
the Securities Administrator, respectively, and conforming to the requirements
of this Agreement;
(ii) Neither
the Trustee nor the Securities Administrator shall be liable in its individual
capacity for an error of judgment made in good faith by a Responsible Officer
or
Responsible Officers of the Trustee or an officer or officers of the Securities
Administrator, respectively, unless it shall be proved that the Trustee or
the
Securities Administrator, respectively, was negligent in ascertaining the
pertinent facts;
(iii) Neither
the Trustee nor the Securities Administrator shall be liable with respect to
any
action taken, suffered or omitted to be taken by it in good faith in accordance
with the directions of the Holders of Certificates evidencing not less than
25%
of the aggregate Voting Rights of the Certificates (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 the Securities Administrator, respectively, or exercising any
trust or other power conferred upon the Trustee or the Securities Administrator,
respectively, under this Agreement;
(iv) The
Trustee shall not be required to take notice or be deemed to have notice or
knowledge of any default or Event of Default unless a Responsible Officer of
the
Trustee shall have actual knowledge thereof. In the absence of such notice,
the
Trustee may conclusively assume there is no such default or Event of
Default;
(v) The
Securities Administrator shall not in any way be liable by reason of any
insufficiency in any Account held in the name of Trustee unless it is determined
by a court of competent jurisdiction in a non-appealable judgment that the
Securities Administrator’s gross negligence or willful misconduct was the
primary cause of such insufficiency (except to the extent that the Securities
Administrator is obligor and has defaulted thereon);
(vi) The
Trustee shall not in any way be liable by reason of any insufficiency in any
Account held in the name of Trustee unless it is determined by a court of
competent jurisdiction in a non-appealable judgment that the Trustee’s gross
negligence or willful misconduct was the primary cause of such insufficiency
(except to the extent that the Trustee is obligor and has defaulted
thereon);
(vii) Anything
in this Agreement to the contrary notwithstanding, in no event shall the Trustee
or the Securities Administrator be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits), even if the Trustee or the Securities Administrator, respectively,
has
been advised of the likelihood of such loss or damage and regardless of the
form
of action; and
(viii) None
of
the Securities Administrator, the Master Servicer, the Seller, the Depositor
or
the Trustee shall be responsible for the acts or omissions of the other, it
being understood that this Agreement shall not be construed to render them
partners, joint venturers or agents of one another.
Neither
the Trustee nor the Securities Administrator shall be required to expend or
risk
its own funds or otherwise incur financial liability in the performance of
any
of its duties hereunder, or in the exercise of any of its rights or powers,
if
there is reasonable ground for believing that the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
to
it, and none of the provisions contained in this Agreement shall in any event
require the Trustee or the Securities Administrator to perform, or be
responsible for the manner of performance of, any of the obligations of the
Master Servicer or the Company hereunder or any Servicer under the related
Servicing Agreement.
(e) All
funds
received by the Securities Administrator and required to be deposited in the
Distribution Account pursuant to this Agreement shall be promptly so deposited
by the Securities Administrator.
Section
10.02 Certain
Matters Affecting the Trustee and the Securities Administrator.
(a) Except
as
otherwise provided in Section 10.01:
(i) The
Trustee and the Securities Administrator may rely and shall be protected in
acting or refraining from acting in reliance on any resolution or certificate
of
the Seller, the Company, the Master Servicer or the related Servicer, any
certificates of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper
or document believed by it to be genuine and to have been signed or presented
by
the proper party or parties;
(ii) The
Trustee and the Securities Administrator may consult with counsel and any advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection with respect to any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such advice or
Opinion of Counsel;
(iii) Neither
the Trustee nor the Securities Administrator shall be under any obligation
to
exercise any of the trusts or powers vested in it by this Agreement, other
than
its obligation to give notices pursuant to this Agreement, or to institute,
conduct or defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders pursuant to the provisions
of this Agreement, unless such Certificateholders shall have offered to the
Trustee or the Securities Administrator, as applicable, reasonable security
or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby. Nothing contained herein shall, however, relieve the Trustee
of the obligation, upon the occurrence of an Event of Default of which a
Responsible Officer of the Trustee has actual knowledge (which has not been
cured or waived), to exercise such of the rights and powers vested in it by
this
Agreement, and to use the same degree of care and skill in their exercise,
as a
prudent person would exercise under the circumstances in the conduct of his
own
affairs;
(iv) Prior
to
the occurrence of an Event of Default hereunder and after the curing or waiver
of all Events of Default which may have occurred with respect to the Trustee
and
at all times with respect to the Securities Administrator, neither the Trustee
nor the Securities Administrator shall be liable in its individual capacity
for
any action taken, suffered or omitted by it in good faith and believed by it
to
be authorized or within the discretion or rights or powers conferred upon it
by
this Agreement;
(v) Neither
the Trustee nor the Securities Administrator shall be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in writing to do
so
by Holders of Certificates evidencing not less than 25% of the aggregate Voting
Rights of the Certificates and provided that the payment within a reasonable
time to the Trustee or the Securities Administrator, as applicable, of the
costs, expenses or liabilities likely to be incurred by it in the making of
such
investigation is, in the opinion of the Trustee or the Securities Administrator,
as applicable, reasonably assured to the Trustee or the Securities
Administrator, as applicable, by the security afforded to it by the terms of
this Agreement. The Trustee or the Securities Administrator may require
reasonable indemnity against such expense or liability as a condition to taking
any such action. The reasonable expense of every such examination shall be
paid
by the Certificateholders requesting the investigation;
(vi) The
Trustee and the Securities Administrator may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or through Affiliates,
agents or attorneys; provided, however, that the Trustee may not appoint any
paying agent other than the Securities Administrator to perform any paying
agent
functions under this Agreement without the express written consent of the Master
Servicer, which consents will not be unreasonably withheld. Neither the Trustee
nor the Securities Administrator shall be liable or responsible for the
misconduct or negligence of any of the Trustee’s or the Securities
Administrator’s agents or attorneys or paying agent appointed hereunder by the
Trustee or the Securities Administrator with due care and, when required, with
the consent of the Master Servicer;
(vii) Should
the Trustee or the Securities Administrator deem the nature of any action
required on its part to be unclear, the Trustee or the Securities Administrator,
respectively, may require prior to such action that it be provided by the
Depositor with reasonable further instructions; the right of the Trustee or
the
Securities Administrator to perform any discretionary act enumerated in this
Agreement shall not be construed as a duty, and neither the Trustee nor the
Securities Administrator shall be accountable for other than its negligence
or
willful misconduct in the performance of any such act;
(viii) Neither
the Trustee nor the Securities Administrator shall be required to give any
bond
or surety with respect to the execution of the trust created hereby or the
powers granted hereunder, except as provided in Subsection 10.07;
and
(ix) Neither
the Trustee nor the Securities Administrator shall have any duty to conduct
any
affirmative investigation as to the occurrence of any condition requiring the
repurchase of any Mortgage Loan by any Person pursuant to this Agreement, or
the
eligibility of any Mortgage Loan for purposes of this Agreement.
(b) The
Trustee is hereby directed by the Depositor to execute and deliver the Insurance
Agreement.
Section
10.03 Trustee
and Securities Administrator Not Liable for Certificates or Mortgage
Loans.
The
recitals contained herein and in the Certificates (other than the signature
and
countersignature of the Securities Administrator on the Certificates) shall
be
taken as the statements of the Depositor, and neither the Trustee nor the
Securities Administrator shall have any responsibility for their correctness.
Neither the Trustee nor the Securities Administrator makes any representation
as
to the validity or sufficiency of the Certificates (other than the signature
and
countersignature of the Securities Administrator on the Certificates) or of
any
Mortgage Loan except as expressly provided in Sections 2.02 and 2.06 hereof;
provided, however, that the foregoing shall not relieve the Trustee, or the
Custodian on its behalf, of the obligation to review the Mortgage Files pursuant
to Section 2.02 of this Agreement. Neither the Trustee or the Securities
Administrator shall be accountable for the use or application by the Depositor
of any of the Certificates or of the proceeds of such Certificates, or for
the
use or application of any funds paid to the Depositor with respect to the
Mortgage Loans. Subject to Section 2.06, neither the Trustee nor the Securities
Administrator shall be responsible for the legality or validity of this
Agreement or any document or instrument relating to this Agreement, the validity
of the execution of this Agreement or of any supplement hereto or instrument
of
further assurance, or the validity, priority, perfection or sufficiency of
the
security for the Certificates issued hereunder or intended to be issued
hereunder. Neither the Trustee nor the Securities Administrator shall at any
time have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Mortgage or any Mortgage Loan, or the
perfection and priority of any Mortgage or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the Trust
Fund or its ability to generate the payments to be distributed to
Certificateholders, under this Agreement. Neither the Trustee nor the Securities
Administrator shall have any responsibility for filing any financing or
continuation statement in any public office at any time or to otherwise perfect
or maintain the perfection of any security interest or lien granted to it
hereunder or to record this Agreement.
Section
10.04 Trustee
and Securities Administrator May Own Certificates.
Each
of
the Trustee and the Securities Administrator in its individual capacity or
in
any capacity other than as Trustee or Securities Administrator hereunder may
become the owner or pledgee of any Certificates with the same rights it would
have if it were not the Trustee or the Securities Administrator, as applicable,
and may otherwise deal with the parties hereto.
Section
10.05 Trustee’s
and Securities Administrator’s Fees and Expenses.
The
fees
and expenses of the Trustee and the Securities Administrator shall be paid
in
accordance with a side letter agreement with the Master Servicer and at the
expense of the Master Servicer. In addition, the Trustee and the Securities
Administrator shall be entitled to recover from the Distribution Account
pursuant to Section 5.09 all reasonable out-of-pocket expenses, disbursements
and advances and the expenses of the Trustee and the Securities Administrator,
respectively, in connection with any Event of Default, any breach of this
Agreement or any claim or legal action (including any pending or threatened
claim or legal action) incurred or made by the Trustee or the Securities
Administrator, respectively, in the administration of the trusts hereunder
(including the reasonable compensation, expenses and disbursements of its
counsel) except any such expense, disbursement or advance as may arise from
its
negligence or intentional misconduct or which is the responsibility of the
Certificateholders or the Trust Fund hereunder. If funds in the Distribution
Account are insufficient therefor, the Trustee and the Securities Administrator
shall recover such expenses, disbursements or advances from the Depositor and
the Depositor hereby agrees to pay such expenses, disbursements or advances
upon
demand. Such compensation and reimbursement obligation shall not be limited
by
any provision of law in regard to the compensation of a trustee of an express
trust.
Section
10.06 Eligibility
Requirements for Trustee and Securities Administrator.
The
Trustee and any successor Trustee and the Securities Administrator and any
successor Securities Administrator shall during the entire duration of this
Agreement be a state bank or trust company or a national banking association
organized and doing business under the laws of a state or the United States
of
America, authorized under such laws to exercise corporate trust powers, having
a
combined capital and surplus and undivided profits of at least $40,000,000
or,
in the case of a successor Trustee, $50,000,000, subject to supervision or
examination by federal or state authority and, in the case of the Trustee,
rated
“BBB” or higher by Fitch, Inc. with respect to their long-term rating and rated
“BBB” or higher by Standard & Poor’s and “Baa2” or higher by ▇▇▇▇▇’▇ with
respect to any outstanding long-term unsecured unsubordinated debt, and, in
the
case of a successor Trustee or successor Securities Administrator other than
pursuant to Section 10.10, rated in one of the two highest long-term debt
categories of, or otherwise acceptable to, each of the Rating Agencies (which
consent shall not be unreasonably withheld). The Trustee shall not be an
Affiliate of the Master Servicer. If the Trustee publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 10.06
the combined capital and surplus of such corporation shall be deemed to be
its
total equity capital (combined capital and surplus) as set forth in its most
recent report of condition so published. In case at any time the Trustee or
the
Securities Administrator, as applicable, shall cease to be eligible in
accordance with the provisions of this Section 10.06, the Trustee or the
Securities Administrator shall resign immediately in the manner and with the
effect specified in Section 10.08.
Section
10.07 Insurance.
The
Trustee and the Securities Administrator, at their own expense, shall at all
times maintain and keep in full force and effect: (i) fidelity insurance, (ii)
theft of documents insurance and (iii) forgery insurance (which may be
collectively satisfied by a “Financial Institution Bond” and/or a “Bankers’
Blanket Bond”). All such insurance shall be in amounts, with standard coverage
and subject to deductibles, as are customary for insurance typically maintained
by banks or their affiliates which act as custodians for investor-owned mortgage
pools. A certificate of an officer of the Trustee or the Securities
Administrator as to the Trustee’s or the Securities Administrator’s,
respectively, compliance with this Section 10.07 shall be furnished to any
Certificateholder upon reasonable written request.
Section
10.08 Resignation
and Removal of Trustee and Securities Administrator.
The
Trustee and the Securities Administrator may at any time resign (including,
in
the case of the Securities Administrator, in connection with the resignation
or
termination of the Master Servicer) and be discharged from the Trust hereby
created by giving written notice thereof to the Depositor, the Seller, the
Securities Administrator (or the Trustee, if the Securities Administrator
resigns) and the Master Servicer, with a copy to the Rating Agencies. Upon
receiving such notice of resignation, the Depositor shall promptly appoint
a
successor trustee or successor securities administrator, as applicable, by
written instrument, in triplicate, one copy of which instrument shall be
delivered to each of the resigning trustee or securities administrator, as
applicable, and the successor trustee or securities administrator, as
applicable. If no successor trustee or successor securities administrator shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Trustee or Securities
Administrator may petition any court of competent jurisdiction for the
appointment of a successor trustee or securities administrator.
If
at any
time (i) the Trustee or the Securities Administrator shall cease to be eligible
in accordance with the provisions of Section 10.06 hereof and shall fail to
resign after written request thereto by the Depositor, (ii) the Trustee or
the
Securities Administrator shall become incapable of acting, or shall be adjudged
as bankrupt or insolvent, or a receiver of the Trustee or the Securities
Administrator or of its property shall be appointed, or any public officer
shall
take charge or control of the Trustee or the Securities Administrator or of
its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, or (iii)(A) a tax is imposed with respect to the Trust Fund by
any
state in which the Trustee or the Securities Administrator or the Trust Fund
is
located, (B) the imposition of such tax would be avoided by the appointment
of a
different trustee or securities administrator and (C) the Trustee or the
Securities Administrator, as applicable fails to indemnify the Trust Fund
against such tax, then the Depositor or the Master Servicer may remove the
Trustee or the Securities Administrator, as applicable, and appoint a successor
trustee or successor securities administrator, as applicable, by written
instrument, in multiple copies, a copy of which instrument shall be delivered
to
the Trustee, the Securities Administrator, each Master Servicer and the
successor trustee or successor securities administrator, as
applicable.
The
Holders evidencing at least 51% of the Voting Rights of each Class of
Certificates may at any time remove the Trustee or Securities Administrator
and
appoint a successor trustee or securities administrator by written instrument
or
instruments, in multiple copies, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered by the successor trustee or successor securities administrator
to
each of the Master Servicer, the Trustee or Securities Administrator so removed
and the successor trustee or securities administrator so appointed. Notice
of
any removal of the Trustee or Securities Administrator shall be given to each
Rating Agency by the Trustee or successor trustee.
Any
resignation or removal of the Trustee or Securities Administrator and
appointment of a successor trustee or securities administrator pursuant to
any
of the provisions of this Section 10.08 shall become effective upon acceptance
of appointment by the successor trustee or securities administrator as provided
in Section 10.09 hereof.
Section
10.09 Successor
Trustee or Securities Administrator.
Any
successor trustee or securities administrator appointed as provided in Section
10.08 hereof shall execute, acknowledge and deliver to the Depositor and to
its
predecessor trustee or predecessor securities administrator, as applicable,
and
the Master Servicer an instrument accepting such appointment hereunder and
thereupon the resignation or removal of the predecessor trustee or securities
administrator shall become effective and such successor trustee or securities
administrator, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor
hereunder, with the like effect as if originally named as trustee or securities
administrator herein.
No
successor trustee or securities administrator shall accept appointment as
provided in this Section 10.09 unless at the time of such acceptance such
successor trustee or securities administrator shall be eligible under the
provisions of Section 10.06 hereof and its appointment shall not adversely
affect the then current rating of the Certificates.
Upon
acceptance of appointment by a successor trustee or securities administrator
as
provided in this Section 10.09, the successor trustee or securities
administrator shall mail notice of the succession of such trustee or securities
administrator hereunder to all Holders of Certificates. If the successor trustee
or securities administrator fails to mail such notice within ten days after
acceptance of appointment, the Depositor shall cause such notice to be mailed
at
the expense of the Trust Fund.
Section
10.10 Merger
or
Consolidation of Trustee or Securities Administrator.
Any
corporation, state bank or national banking association into which the Trustee
or the Securities Administrator may be merged or converted or with which it
may
be consolidated or any corporation, state bank or national banking association
resulting from any merger, conversion or consolidation to which the Trustee
or
the Securities Administrator shall be a party, or any corporation, state bank
or
national banking association succeeding to substantially all of the corporate
trust business of the Trustee or of the business of the Securities
Administrator, shall be the successor of the Trustee or the Securities
Administrator hereunder, provided that such corporation shall be eligible under
the provisions of Section 10.06 hereof without the execution or filing of any
paper or further act on the part of any of the parties hereto, anything herein
to the contrary notwithstanding.
Section
10.11 Appointment
of Co-Trustee or Separate Trustee.
Notwithstanding
any other provisions of this Agreement, at any time, for the purpose of meeting
any legal requirements of any jurisdiction in which any part of the Trust Fund
or property securing any Mortgage Note may at the time be located, the Master
Servicer and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee to act as co-trustee or co-trustees jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust Fund,
and
to vest in such Person or Persons, in such capacity and for the benefit of
the
Certificateholders, such title to the Trust Fund or any part thereof, whichever
is applicable, and, subject to the other provisions of this Section 10.11,
such
powers, duties, obligations, rights and trusts as the Master Servicer and the
Trustee may consider necessary or desirable. If the Master Servicer shall not
have joined in such appointment within 15 days after the receipt by it of a
request to do so, or in the case an Event of Default shall have occurred and
be
continuing, the Trustee alone shall have the power to make such appointment.
No
co-trustee or separate trustee hereunder shall be required to meet the terms
of
eligibility as a successor trustee under Section 10.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 10.09.
Every
separate trustee and co-trustee shall, to the extent permitted by law, be
appointed and act subject to the following provisions and
conditions:
(i) All
rights, powers, duties and obligations conferred or imposed upon the Trustee,
except for the obligation of the Trustee under this Agreement to advance funds
on behalf of the Master Servicer, shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act), except
to
the extent that under any law of any jurisdiction in which any particular act
or
acts are to be performed (whether a Trustee hereunder or as a Successor Master
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Fund or any portion thereof in
any
such jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Trustee;
(ii) No
trustee hereunder shall be held personally liable by reason of any act or
omission of any other trustee hereunder; and
(iii) The
Trustee may at any time accept the resignation of or remove any separate trustee
or co-trustee.
Any
notice, request or other writing given to the Trustee shall be deemed to have
been given to each of the then separate trustees and co-trustees, as effectively
as if given to each of them. Every instrument appointing any separate trustee
or
co-trustee shall refer to this Agreement and the conditions of this Article
X.
Each separate trustee and co-trustee, upon its acceptance of the trusts
conferred, shall be vested with the estates or property specified in its
instrument of appointment, either jointly with the Trustee or separately, as
may
be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to
the
Master Servicer and the Depositor.
Any
separate trustee or co-trustee may, at any time, constitute the Trustee its
agent or attorney-in-fact, with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement
on
its behalf and in its name. If any separate trustee or co- trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section
10.12 Tax
Matters.
It
is
intended that the Trust Fund shall constitute one or more REMICs, and that
the
affairs of the Trust Fund shall be conducted so that each REMIC formed hereunder
qualifies as a “real estate mortgage investment conduit” as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Securities Administrator covenants and agrees that it shall act as agent for
so
long as it is also Master Servicer (and the Securities Administrator is hereby
appointed to act as agent) on behalf of the Trust Fund. The Trustee and/or
the
Securities Administrator, as agent on behalf of the Trust Fund, shall do or
refrain from doing, as applicable, the following: (a) the Securities
Administrator shall prepare and file, or cause to be prepared and filed, in
a
timely manner, U.S. Real Estate Mortgage Investment Conduit Income Tax Returns
(Form 1066 or any successor form adopted by the Internal Revenue Service) and
prepare and file or cause to be prepared and filed with the Internal Revenue
Service and applicable state or local tax authorities income tax or information
returns for each taxable year with respect to each such REMIC containing such
information and at the times and in the manner as may be required by the Code
or
state or local tax laws, regulations or rules, and furnish or cause to be
furnished, to Certificateholders the schedules, statements or information at
such times and in such manner as may be required thereby; (b) the Securities
Administrator shall apply for an employer identification number with the
Internal Revenue Service via a Form SS-4 or other comparable method for each
REMIC that is or becomes a taxable entity, and within thirty days of the Closing
Date, furnish or cause to be furnished to the Internal Revenue Service on Forms
8811 or as otherwise may be required by the Code, the name, title, address,
and
telephone number of the person that the Holders of the Certificates may contact
for tax information relating thereto, together with such additional information
as may be required by such form, and update such information at the time or
times in the manner required by the Code for the Trust Fund; (c) the Trustee
shall make, or cause to be made, elections on behalf of each REMIC formed
hereunder to be treated as a REMIC on the federal tax return of such REMIC
for
its first taxable year (and, if necessary, under applicable state law); (d)
the
Securities Administrator shall prepare and forward, or cause to be prepared
and
forwarded, to the Certificateholders and to the Internal Revenue Service and,
if
necessary, state tax authorities, all information returns and reports as and
when required to be provided to them in accordance with the REMIC Provisions,
including without limitation, the calculation of any original issue discount
using the Prepayment Assumption; (e) the Securities Administrator shall provide
information necessary for the computation of tax imposed on the transfer of
a
Residual Certificate to a Person that is not a Permitted Transferee, or an
agent
(including a broker, nominee or other middleman) of a Person that is not a
Permitted Transferee, or a pass-through entity in which a Person that is not
a
Permitted Transferee is the record Holder of an interest (the reasonable cost
of
computing and furnishing such information may be charged to the Person liable
for such tax); (f) each of the Securities Administrator and the Trustee shall,
to the extent under its control, conduct the affairs of the Trust Fund at all
times that any Certificates are outstanding so as to maintain the status of
each
REMIC formed hereunder as a REMIC under the REMIC Provisions; (g) neither the
Trustee nor the Securities Administrator shall knowingly or intentionally take
any action or omit to take any action that could (i) cause the termination
of
the REMIC status of any REMIC formed hereunder or (ii) result in the imposition
of a tax upon the Trust Fund (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code); (h) the
Securities Administrator shall pay, from the sources specified in this Section
10.12, 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, the Securities
Administrator at the written request of the Trustee, or any other appropriate
Person from contesting any such tax in appropriate proceedings and shall not
prevent the Securities Administrator from withholding payment of such tax,
if
permitted by law, pending the outcome of such proceedings); (i) the Trustee
shall sign or cause to be signed federal, state or local income tax or
information returns or any other document prepared by the Securities
Administrator pursuant to this Section 10.12 requiring a signature thereon
by
the Trustee; (j) the Securities Administrator shall maintain records relating
to
each REMIC formed hereunder including but not limited to the income, expenses,
assets and liabilities of each such REMIC and adjusted basis of the Trust Fund
property determined at such intervals as may be required by the Code, as may
be
necessary to prepare the foregoing returns, schedules, statements or
information; (k) the Securities Administrator shall, for federal income tax
purposes, maintain books and records with respect to the REMICs on a calendar
year and on an accrual basis; (l) neither the Trustee nor the Master Servicer
shall enter into any arrangement not otherwise provided for in this Agreement
by
which the REMICs will receive a fee or other compensation for services nor
permit the REMICs to receive any income from assets other than “qualified
mortgages” as defined in Section 860G(a)(3) of the Code or “permitted
investments” as defined in Section 860G(a)(5) of the Code; and (m) as and when
necessary and appropriate, the Trustee, or at the written request of the
Trustee, the Securities Administrator, shall represent the Trust Fund in any
administrative or judicial proceedings relating to an examination or audit
by
any governmental taxing authority, request an administrative adjustment as
to
any taxable year of any REMIC formed hereunder, enter into settlement agreements
with any governmental taxing agency, extend any statute of limitations relating
to any tax item of the Trust Fund, and otherwise act on behalf of each REMIC
formed hereunder in relation to any tax matter involving any such
REMIC.
In
order
to enable each of the Trustee and the Securities Administrator to perform its
duties as set forth herein, the Depositor shall provide, or cause to be
provided, to the Trustee or the Securities Administrator within 10 days after
the Closing Date all information or data that the Trustee or the Securities
Administrator requests in writing and determines to be relevant for tax purposes
to the valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows
of
the Certificates and the related Mortgage Loans. Thereafter, the Depositor
shall
provide to the Trustee or the Securities Administrator promptly upon written
request therefor, any such additional information or data that the Trustee
or
the Securities Administrator may, from time to time, request in order to enable
the Trustee or the Securities Administrator to perform its duties as set forth
herein. The Depositor hereby indemnifies each of Trustee and the Securities
Administrator for any losses, liabilities, damages, claims or expenses of the
Trustee or the Securities Administrator arising from any errors or
miscalculations of the Trustee or the Securities Administrator, as applicable,
that result from any failure of the Depositor to provide, or to cause to be
provided, accurate information or data to the Trustee or the Securities
Administrator, as applicable, on a timely basis.
In
the
event that any tax is imposed on “prohibited transactions” of any 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 (i) by the Master Servicer or the Securities Administrator, if any
such
tax arises out of or results from a breach by the Master Servicer or the
Securities Administrator of any of its obligations under this Agreement,
provided, however, in no event shall the Master Servicer or the Securities
Administrator have
any
liability (1) for any action or omission that is taken in accordance with and
compliance with the express terms of, or which is expressly permitted by the
terms of, this Agreement, (2) for any losses other than those arising out of
a
negligent performance by the Master Servicer or the Securities Administrator
of
its duties and obligations set forth herein, or (3) for any special or
consequential damages to Certificateholders (in addition to payment of principal
and interest on the Certificates), (ii) by
any
party
hereto (other than the Master Servicer or
the
Securities Administrator) to the extent any such
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), first with amounts otherwise to be distributed to the
Class
R Certificateholders, and second with amounts otherwise to be distributed to
all
the Holders of the following Certificates in the following order of priority:
first,
to
the
Class B-4 Certificates, second, to the Class B-3 Certificates, third, to the
Class B-2 Certificates, fourth, to the Class B-1 Certificates, fifth, to the
Class M-4 Certificates, sixth, to the Class M-3 Certificates, seventh, to the
Class M-2 Certificates, eighth, to the Class M-1 Certificates, and ninth, 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 Securities Administrator 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
Securities Administrator shall include in its Remittance Report instructions
as
to distributions to such parties taking into account the priorities described
in
the preceding sentence. The
Securities Administrator shall promptly notify in writing the party liable
for
any such tax of the amount thereof and the due date for the payment
thereof.
Notwithstanding
any other provision of this Agreement, the Securities Administrator shall comply
with all federal withholding requirements respecting payments to
Certificateholders of interest or original issue discount that the Securities
Administrator reasonably believes are applicable under the Code. The consent
of
Certificateholders shall not be required for such withholding. In the event
the
Securities Administrator does withhold any amount from interest or original
issue discount payments or advances thereof to any Certificateholder pursuant
to
federal withholding requirements, the Securities Administrator shall indicate
the amount withheld to such Certificateholders.
The
Trustee and the Securities Administrator each agree that, in the event it should
obtain any information necessary for the other party to perform its obligations
pursuant to this Section 10.12, it will promptly notify and provide such
information to such other party. Notwithstanding anything in this Agreement
to
the contrary, the Trustee agrees that, in the event that the Trustee obtains
actual knowledge that the Securities Administrator has breached any of its
obligations pursuant to this Section 10.12, the Trustee shall perform such
obligations on its behalf to the extent that the Trustee possesses all documents
necessary to so perform and receives reasonable compensation therefor, provided,
however, that the Trustee shall not be liable for any losses resulting from
any
such breach.
ARTICLE
XI
TERMINATION
Section
11.01 Termination
upon Liquidation or Repurchase of all Mortgage Loans.
Subject
to Section 11.03, the obligations and responsibilities of the Depositor, the
Master Servicer, the Securities
Administrator
and the
Trustee created hereby with respect to the Trust Fund shall terminate upon
the
earlier of (a) the exercise of the Majority Class C Certificateholder (or its
designee) of its right to repurchase all of the Mortgage Loans (and REO
Properties) remaining in the Trust Fund at a price (the “Mortgage Loan Purchase
Price”) equal to the sum of (i) 100% of the Stated Principal Balance of each
Mortgage Loan (other than in respect of REO Property), (ii) accrued interest
thereon at the applicable Mortgage Rate to, but not including, the first day
of
the month of such purchase, (iii) the appraised value of any REO Property in
the
Trust Fund (up to the Stated Principal Balance of the related Mortgage Loan),
such appraisal to be conducted by an appraiser mutually agreed upon by the
Master Servicer and the Trustee, and (iv) unreimbursed out-of pocket costs
of
the Company, the Servicers or 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 and the Securities Administrator
payable pursuant to Section 10.05, and (b) the later of (i) the maturity or
other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(ii) the distribution to Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement, as applicable. In no event
shall
the trusts created hereby continue beyond the earlier of (i) the expiration
of
21 years from the death of the last survivor of the descendants of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, the late Ambassador of the United States to the Court of St. ▇▇▇▇▇,
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 C
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.
Section
11.02 Final
Distribution on the Certificates.
If
on any
Determination Date, (i) the Master Servicer determines that there are no
Outstanding Mortgage Loans and no other funds or assets in the Trust Fund other
than the funds in the Distribution Account, the Master Servicer shall
direct
the
Securities
Administrator to send a final distribution notice promptly to each
Certificateholder or (ii) the Securities Administrator determines that a Class
of Certificates shall be retired after a final distribution on such Class,
the
Securities Administrator
shall
notify the Certificateholders within five (5) Business Days after such
Determination Date that the final distribution in retirement of such Class
of
Certificates is scheduled to be made on the immediately following Distribution
Date. Any final
distribution made pursuant to the immediately preceding sentence will be made
only upon presentation
and
surrender of the Certificates at the Corporate Trust Office of the Securities
Administrator. If the Majority Class C Certificateholder elects to terminate
the
Trust Fund pursuant to Section 11.01, at least 20 days prior to the date notice
is to be mailed to the Certificateholders, the Majority Class C
Certificateholder shall notify the Depositor, the Securities Administrator
and
the Trustee of the date the Majority Class C Certificateholder intends to
terminate the Trust Fund. The Majority Class C Certificateholder shall remit
the
Mortgage Loan Purchase Price to the Securities Administrator on the Business
Day
prior to the Distribution Date for such Optional Termination by the Majority
Class C Certificateholder.
Notice
of
any termination of the Trust Fund, specifying the Distribution Date on which
Certificateholders may surrender their Certificates for payment of the final
distribution and cancellation, shall be given promptly by the Securities
Administrator by letter to Certificateholders mailed not 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 Securities Administrator will give such notice to each Rating
Agency at the time such notice is given to Certificateholders.
Upon
such
final deposit with respect to the Trust Fund and the receipt by the Custodian
of
a Request for Release therefor, the Custodian shall promptly release to the
Master Servicer, as applicable the Mortgage Files for the Mortgage Loans and
the
Trustee shall execute and deliver any documents prepared and delivered to it
which are necessary to transfer any REO Property.
Upon
presentation and surrender of the Certificates, the Securities Administrator
shall distribute 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 6.04 hereof on the final Distribution Date and in proportion
to
their respective Percentage Interests.
In
the
event that any affected Certificateholders shall not surrender Certificates
for
cancellation within six months after the date specified in the above mentioned
written notice, the Securities Administrator shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice all the applicable Certificates shall not
have been surrendered for cancellation, the Securities Administrator may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their Certificates,
and
the cost thereof shall be paid out of the funds and other assets that remain
a
part of the Trust Fund. If within one year after the second notice all
Certificates shall not have been surrendered for cancellation, the Class R
Certificateholders shall be entitled to all unclaimed funds and other assets
of
the Trust Fund that remain subject hereto.
Section
11.03 Additional
Termination Requirements.
(a) Upon
exercise by the Majority Class C Certificateholder of its purchase option as
provided in Section 11.01, the Trust Fund shall be terminated in accordance
with
the following additional requirements, unless the Trustee and the Securities
Administrator have been supplied with an Opinion of Counsel addressed to the
Trustee and the Securities Administrator at the expense of the Majority Class
C
Certificateholder to the effect that the failure of the Trust Fund to comply
with the requirements of this Section 11.03 will not (i) result in the
imposition of taxes on “prohibited transactions” 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 C Certificateholder shall establish a 90-day liquidation period
and notify the Securities Administrator thereof, and the Securities
Administrator shall in turn specify the first day of such period in a statement
attached to the tax return for each of REMIC I, REMIC II, REMIC III and REMIC
IV
pursuant to Treasury Regulation Section 1.860F-1. The Majority Class C
Certificateholder 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 addressed to the Securities Administrator and the Trustee
obtained at the expense of the Majority Class C Certificateholder;
(2) During
such 90-day liquidation period, and at or prior to the time of making the final
payment on the Certificates, the Securities Administrator on behalf of the
Trustee, shall sell all of the assets of REMIC I for cash; and
(3) At
the
time of the making of the final payment on the Certificates, the Securities
Administrator 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 and the adoption of a plan of complete
liquidation for each of REMIC I, REMIC II, REMIC III and REMIC IV, which
authorization shall be binding upon all successor
Certificateholders.
(c) The
Securities Administrator as agent for each REMIC hereby agrees to adopt and
sign
such a plan of complete liquidation meeting the requirements for a qualified
liquidation under Section 860F of the Code and any regulations thereunder upon
the written request of the Majority Class C Certificateholder and the receipt
of
the Opinion of Counsel referred to in Section 11.03(a)(1) and to take such
other
action in connection therewith as may be reasonably requested by the Majority
Class C Certificateholder.
ARTICLE
XII
MISCELLANEOUS
PROVISIONS
Section
12.01 Amendment.
This
Agreement may be amended from time to time by parties hereto without the consent
of any of the Certificateholders to cure any ambiguity, to correct or supplement
any provisions herein (including to give effect to the expectations of
investors), to comply with any changes in the Code, to revise any provisions
to
reflect the obligations of the parties to this Agreement as they relate to
Regulation AB, to change the manner in which the Distribution Account maintained
by the Securities Administrator or the Protected Account maintained by the
Company is maintained or to make such other provisions with respect to matters
or questions arising under this Agreement as shall not be inconsistent with
any
other provisions herein if such action shall not, as evidenced by an Opinion
of
Counsel addressed to the Trustee, adversely affect in any material respect
the
interests of any Certificateholder; provided that any such amendment shall
be
deemed not to adversely affect in any material respect the interests of the
Certificateholders and no such Opinion of Counsel shall be required if the
Person requesting such amendment obtains a letter from each Rating Agency
stating that such amendment would not result in the downgrading or withdrawal
of
the respective ratings then assigned to the Certificates.
Notwithstanding
the foregoing, without the consent of the Certificateholders, the parties hereto
may at any time and from time to time amend this Agreement to modify, eliminate
or add to any of its provisions to such extent as shall be necessary or
appropriate to maintain the qualification of each of REMIC I, REMIC II, REMIC
III or 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 and the Securities Administrator have
been provided an Opinion of Counsel addressed to the Trustee and the Securities
Administrator, which opinion shall be an expense of the party requesting such
opinion but in any case shall not be an expense of the Trustee, the Securities
Administrator or the Trust Fund, to the effect that such action is necessary
or
appropriate to maintain such qualification or to avoid or minimize the risk
of
the imposition of such a tax.
This
Agreement may also be amended from time to time by the parties hereto 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.
Notwithstanding
any contrary provision of this Agreement, the Trustee shall not consent to
any
amendment to this Agreement unless it shall have first received an Opinion
of
Counsel addressed to the Trustee, which opinion shall be an expense of the
party
requesting such amendment but in any case shall not be an expense of the Trustee
or the Securities Administrator, 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 REMIC I, REMIC II,
REMIC
III or REMIC IV or the Certificateholders or cause 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 (i) that such amendment is permitted and is not prohibited by this
Agreement and (ii) that all requirements for amending this Agreement (including
any consent of the applicable Certificateholders) have been complied
with.
Promptly
after the execution of any amendment to this Agreement requiring the consent
of
Certificateholders, the Trustee shall furnish written notification of the
substance of such amendment to each Certificateholder and each Rating
Agency.
It
shall
not be necessary for the consent of Certificateholders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such consent shall approve the substance thereof. The manner
of
obtaining such consents and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable regulations
as
the Trustee may prescribe.
Section
12.02 Recordation
of Agreement; Counterparts.
To
the
extent permitted by applicable law, this Agreement is subject to recordation
in
all appropriate public offices for real property records in all of the counties
or other comparable jurisdictions in which any or all of the Mortgaged
Properties are situated, and in any other appropriate public recording office
or
elsewhere. The Master Servicer shall effect such recordation at the Trust’s
expense upon the request in writing of a Certificateholder, but only if such
direction is accompanied by an Opinion of Counsel (provided at the expense
of
the Certificateholder requesting recordation) to the effect that such
recordation would materially and beneficially affect the interests of the
Certificateholders or is required by law.
For
the
purpose of facilitating the recordation of this Agreement as herein provided
and
for other purposes, this Agreement may be executed simultaneously in any number
of counterparts, each of which counterparts shall be deemed to be an original,
and such counterparts shall constitute but one and the same
instrument.
Section
12.03 Governing
Law.
THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF (OTHER THAN
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS).
Section
12.04 Intention
of Parties.
It
is the
express intent of the parties hereto that the conveyance of the Mortgage Notes,
Mortgages, assignments of Mortgages, title insurance policies and any
modifications, extensions and/or assumption agreements and private mortgage
insurance policies relating to the Mortgage Loans by the Seller to the
Depositor, and by the Depositor to the Trustee be, and be construed as, an
absolute sale thereof to the Depositor or the Trustee, as applicable. It is,
further, not the intention of the parties that such conveyance be deemed a
pledge thereof by the Seller to the Depositor, or by the Depositor to the
Trustee. However, in the event that, notwithstanding the intent of the parties,
such assets are held to be the property of the Seller or the Depositor, as
applicable, or if for any other reason 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 shall be maintained
as such throughout the term of the Agreement.
Section
12.05 Notices.
(a) The
Trustee shall use its best efforts to promptly provide notice to each Rating
Agency with respect to each of the following of which a Responsible Officer
of
the Trustee has actual knowledge:
(i) Any
material change or amendment to this Agreement;
(ii) The
occurrence of any Event of Default that has not been cured;
(iii) The
resignation or termination of the Master Servicer, the Securities Administrator
or the Trustee and the appointment of any successor;
(iv) The
repurchase or substitution of Mortgage Loans pursuant to Sections 2.02, 2.03,
4.21 and 11.01; and
(v) The
final
payment to Certificateholders.
(b) All
directions, demands and notices hereunder shall be in writing and shall be
deemed to have been duly given when delivered at or mailed by registered mail,
return receipt requested, postage prepaid, or by recognized overnight courier,
or by facsimile transmission to a number provided by the appropriate party
if
receipt of such transmission is confirmed to (i) in the case of the Depositor,
Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Chief Counsel, and with respect to Regulation AB
notifications to the Depositor at ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇; (ii) in the
case
of the Seller or the Company, EMC Mortgage ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ Mortgage
Corporation, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇), attention: President or General Counsel 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; (iv) in the case of the Master Servicer or the Securities Administrator,
P. O. Box 98, Columbia, Maryland 21046 (or, for overnight deliveries, ▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇), Attention: BSABS I 2006-AC5 or such
other address as may be hereafter furnished to the other parties hereto by
the
Securities Administrator in writing, and (v) in the case of the Rating Agencies,
(x) ▇▇▇▇▇’▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Home Equity Monitoring and (y) Standard & Poor’s, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Mortgage Surveillance
Group. Any notice delivered to the Seller, the Master Servicer, the Securities
Administrator or the Trustee under this Agreement shall be effective only upon
receipt. Any notice required or permitted to be mailed to a Certificateholder,
unless otherwise provided herein, shall be given by first-class mail, postage
prepaid, at the address of such Certificateholder as shown in the Certificate
Register; any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
Section
12.06 Severability
of Provisions.
If
any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no
way
affect the validity or enforceability of the other provisions of this Agreement
or of the Certificates or the rights of the Holders thereof.
Section
12.07 Assignment.
Notwithstanding
anything to the contrary contained herein, except as provided pursuant to
Section 8.07, this Agreement may not be assigned by the Master Servicer, the
Seller or the Depositor.
Section
12.08 Limitation
on Rights of Certificateholders.
The
death
or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust Fund, nor entitle such Certificateholder’s legal
representative or heirs to claim an accounting or to take any action or commence
any proceeding in any court for a petition or winding up of the Trust Fund,
or
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
No
Certificateholder shall have any right to vote (except as provided herein)
or in
any manner otherwise control the operation and management of the Trust Fund,
or
the obligations of the parties hereto, nor shall anything herein set forth
or
contained in the terms of the Certificates be construed so as to constitute
the
Certificateholders from time to time as partners or members of an association;
nor shall any Certificateholder be under any liability to any third party by
reason of any action taken by the parties to this Agreement pursuant to any
provision hereof.
No
Certificateholder shall have any right by virtue or by availing itself of any
provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee or the Securities
Administrator, as appropriate, a written notice of an Event of Default and
of
the continuance thereof, as hereinbefore provided, the Holders of Certificates
evidencing not less than 25% of the Voting Rights evidenced by the Certificates
shall also have made written request to the Trustee or the Securities
Administrator, as appropriate to institute such action, suit or proceeding
in
its own name as Trustee or the Securities Administrator, as appropriate,
hereunder and shall have offered to the Trustee or the Securities Administrator,
as appropriate, such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the Trustee
or
the Securities Administrator, as appropriate, for 60 days after its receipt
of
such notice, request and offer of indemnity shall have neglected or refused
to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself
or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or
seek
to obtain priority over or preference to any other such Holder or to enforce
any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement
of
the provisions of this Section 12.08, each and every Certificateholder, the
Trustee or the Securities Administrator shall be entitled to such relief as
can
be given either at law or in equity.
Section
12.09 Inspection
and Audit Rights.
The
Master Servicer agrees that, on reasonable prior notice, it will permit any
representative of the Depositor or the Trustee during the Master Servicer’s
normal business hours, to examine all the books of account, records, reports
and
other papers of the Master Servicer relating to the Mortgage Loans, to make
copies and extracts therefrom, to cause such books to be audited by independent
certified public accountants selected by the Depositor or the Trustee and to
discuss its affairs, finances and accounts relating to such Mortgage Loans
with
its officers, employees and independent public accountants (and by this
provision the Master Servicer hereby authorizes such accountants to discuss
with
such representative such affairs, finances and accounts), all at such reasonable
times and as often as may be reasonably requested. Any out-of-pocket expense
incident to the exercise by the Depositor or the Trustee of any right under
this
Section 12.09 shall be borne by the party requesting such inspection, subject
to
such party’s right to reimbursement hereunder (in the case of the Trustee,
pursuant to Section 10.05 hereof).
Section
12.10 Certificates
Nonassessable and Fully Paid.
It
is the
intention of the Depositor that Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Securities Administrator pursuant to this Agreement, are and shall be deemed
fully paid.
*
*
*
IN
WITNESS WHEREOF, the Depositor, the Master Servicer, the Seller, the Company,
the Securities Administrator and the Trustee have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of
the
day and year first above written.
|
BEAR
▇▇▇▇▇▇▇ ASSET BACKED
SECURITIES
I LLC,
as
Depositor
|
|||||||
|
Name:
|
|||||||
|
Title:
|
|||||||
|
EMC
MORTGAGE CORPORATION,
as
Seller and Company
|
|||||||
|
Name:
|
|||||||
|
Title:
|
|||||||
|
▇▇▇▇▇
FARGO BANK, NATIONAL
ASSOCIATION,
as
Securities Administrator and Master Servicer
|
|||||||
|
Name:
|
|||||||
|
Title:
|
|||||||
|
U.S.
BANK NATIONAL ASSOCIATION,
as
Trustee
|
|||||||
|
Name:
|
|||||||
|
Title:
|
|||||||
|
STATE
OF NEW YORK
|
)
|
|
|
)
ss.:
|
||
|
COUNTY
OF NEW YORK
|
)
|
On
this
24th day of August, 2006, 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 Bear ▇▇▇▇▇▇▇ Asset
Backed Securities I LLC, one of the companies that executed the within
instrument, and also known to me to be the person who executed it on behalf
of
such limited liability company and acknowledged to me that such limited
liability company executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
|
Notary
Public
|
[Notarial
Seal]
|
STATE
OF MARYLAND
|
)
|
|
|
)
ss.:
|
||
|
COUNTY
OF BALTIMORE
|
)
|
On
this
24th day of August, 2006, 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 ▇▇▇▇▇ Fargo Bank,
National Association that executed the within instrument, and also known to
me
to be the person who executed it on behalf of such national banking association,
and acknowledged to me that such national banking association executed the
within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
|
Notary
Public
|
[Notarial
Seal]
|
STATE
OF TEXAS
|
)
|
|
|
)
ss.:
|
||
|
COUNTY
OF DALLAS
|
)
|
On
this
24th day of August, 2006, before me, a notary public in and for said State,
appeared ________________________, personally known to me on the basis of
satisfactory evidence to be an authorized representative of EMC Mortgage
Corporation, one of the corporations that executed the within instrument, and
also known to me to be the person who executed it on behalf of such corporation
and acknowledged to me that such corporation executed the within
instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
|
Notary
Public
|
[Notarial
Seal]
|
STATE
OF MASSACHUSETTS
|
)
|
|
|
)
ss.:
|
||
|
COUNTY
OF SUFFOLK
|
)
|
On
this
24th day of August, 2006, 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 U.S. Bank National
Association that executed the within instrument, and also known to me to be
the
person who executed it on behalf of such corporation, and acknowledged to me
that such corporation executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
|
Notary
Public
|
[Notarial
Seal]
EXHIBIT
A-1
FORM
OF CLASS A CERTIFICATES
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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 AS DESCRIBED
IN
THE AGREEMENT. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES,
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM
THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN
ITS
CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE SECURITIES ADMINISTRATOR
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.
|
Certificate
No.1
|
Fixed
Pass-Through Rate
|
|
Class
A-[1][2][3] Senior
|
|
|
Date
of Pooling and Servicing Agreement and Cut-off Date:
November
1, 2006
|
Aggregate
Initial Certificate Principal Balance of this Certificate as of
the
Cut-off Date:
$[_____________]
|
|
First
Distribution Date:
December
26, 2006
|
Initial
Certificate Principal Balance of this Certificate as of the Cut-off
Date:
$[_____________]
|
|
Master
Servicer:
▇▇▇▇▇
Fargo Bank, National Association
|
CUSIP:
[___________]
|
|
Assumed
Final Distribution Date:
December
25, 2036
|
|
ASSET-BACKED
CERTIFICATE
SERIES
2006-AC5
evidencing
a percentage interest in the distributions allocable to the Class A-[1][2][3]
Certificates with respect to a Trust Fund consisting primarily of a pool
of
conventional, one- to four-family, fixed interest rate mortgage loans sold
by
BEAR ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ Asset Backed Securities
I
LLC, the Master Servicer, the Trustee or the Securities Administrator referred
to below or any of their affiliates or any other person. Neither this
Certificate nor the underlying Mortgage Loans are guaranteed or insured by
any
governmental entity or by Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC, the
Master
Servicer, the Trustee or the Securities Administrator or any of their affiliates
or any other person. None of Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC,
the
Master Servicer or any of their affiliates will have any obligation with
respect
to any certificate or other obligation secured by or payable from payments
on
the Certificates.
This
certifies that Cede & Co. is the registered owner of the Percentage Interest
evidenced hereby in the beneficial ownership interest of Certificates of
the
same Class as this Certificate in a trust (the “Trust Fund”) generally
consisting of conventional, first lien, fixed rate mortgage loans secured
by
one- to four- family residences (collectively, the “Mortgage Loans”) sold by
Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC (“BSABS I”). The Mortgage Loans were
sold by EMC Mortgage Corporation (“EMC”) to BSABS ▇. ▇▇▇▇▇ Fargo Bank, National
Association will act as master servicer of the Mortgage Loans (the “Master
Servicer,” which term includes any successors thereto under the Agreement
referred to below). The Trust Fund was created pursuant to the Pooling and
Servicing Agreement, dated as of the Cut-off Date specified above (the
“Agreement”), among BSABS I, as depositor (the “Depositor”), EMC Mortgage
Corporation, as seller and company, ▇▇▇▇▇ Fargo Bank, National Association,
as
Master Servicer and securities administrator (the “Securities Administrator”)
and U.S. Bank National Association, as trustee (the “Trustee”), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, capitalized terms used herein shall have the meaning
ascribed to them in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.
Interest
on this Certificate will accrue from and including the 25th day of the calendar
month preceding the month in which a Distribution Date (as hereinafter defined)
occurs to and including the 24th day of the calendar month in which that
Distribution Date occurs on the Certificate Principal Balance hereof at a
per
annum rate equal to the Pass-Through Rate set forth above. The Securities
Administrator 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,
an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount (of interest and principal, if any) required to
be
distributed to the Holders of Certificates of the same Class as this
Certificate. The Assumed Final Distribution Date is the Distribution Date
in the
month following the latest scheduled maturity date of any Mortgage Loan and
is
not likely to be the date on which the Certificate Principal Balance of this
Class of Certificates will be reduced to zero.
Distributions
on this Certificate will be made by the Securities Administrator 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 Securities Administrator in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will
be
made after due notice by the Securities Administrator of the pendency of
such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator 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 thereto.
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
or the
Securities Administrator 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 and the Securities Administrator.
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 Securities
Administrator upon surrender of this Certificate for registration of transfer
at
the offices or agencies maintained by the Securities Administrator for such
purposes, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Securities Administrator 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 Securities Administrator 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 Securities Administrator,
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 Securities Administrator, 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 related 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 earlier of (i) the expiration
of 21
years after the death of certain persons identified in the Agreement and
(ii)
the Latest Possible Maturity Date (as defined in the Agreement).
Unless
this Certificate has been countersigned by an authorized signatory of the
Securities Administrator by manual signature, this Certificate shall not
be
entitled to any benefit under the Agreement, or be valid for any
purpose.
IN
WITNESS WHEREOF, the Securities Administrator has caused this
Certificate
to be duly executed.
|
Dated:
November 30, 2006
|
▇▇▇▇▇
FARGO BANK, NATIONAL
ASSOCIATION,
as
Securities Administrator
|
||||||||||||||
|
By:
|
|||||||||||||||
|
Authorized
Signatory
|
|||||||||||||||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class
A-[1][2][3] Certificates referred to in the within-mentioned
Agreement.
|
▇▇▇▇▇
FARGO BANK, NATIONAL
ASSOCIATION,
as
Securities Administrator
|
|||||||||||||||
|
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
This
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 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] AS
DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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 AS DESCRIBED
IN
THE AGREEMENT. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES,
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM
THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN
ITS
CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE SECURITIES ADMINISTRATOR
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.
EACH
HOLDER OF A CERTIFICATE OR BENEFICIAL OWNERSHIP SHALL BE DEEMED TO HAVE MADE
THE
REPRESENTATIONS SET FORTH IN SECTION 7.02(b) OF THE
AGREEMENT.
|
Certificate
No.1
|
Adjustable
Pass-Through Rate
|
|
Class
M-[1][2][3][4] Subordinate
|
|
|
Date
of Pooling and Servicing Agreement and Cut-off Date:
November
1, 2006
|
Aggregate
Initial Certificate Principal Balance of this Certificate as of
the
Cut-off Date:
$[________________]
|
|
First
Distribution Date:
December
26, 2006
|
Initial
Certificate Principal Balance of this Certificate as of the Cut-off
Date:
$[________________]
|
|
Master
Servicer:
▇▇▇▇▇
Fargo Bank, National Association
|
CUSIP:
[_______________]
|
|
Assumed
Final Distribution Date:
December
25, 2036
|
|
ASSET-BACKED
CERTIFICATE
SERIES
2006-AC5
evidencing
a percentage interest in the distributions allocable to the Class M-[1][2][3]
Certificates with respect to a Trust Fund consisting primarily of a pool
of
conventional, one- to four-family, fixed interest rate mortgage loans sold
by
BEAR ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ Asset Backed Securities
I
LLC, the Master Servicer, the Trustee or the Securities Administrator referred
to below or any of their affiliates or any other person. Neither this
Certificate nor the underlying Mortgage Loans are guaranteed or insured by
any
governmental entity or by Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC, the
Master
Servicer, the Trustee or the Securities Administrator or any of their affiliates
or any other person. None of Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC,
the
Master Servicer or any of their affiliates will have any obligation with
respect
to any certificate or other obligation secured by or payable from payments
on
the Certificates.
This
certifies that Cede & Co. is the registered owner of the Percentage Interest
evidenced hereby in the beneficial ownership interest of Certificates of
the
same Class as this Certificate in a trust (the “Trust Fund”) generally
consisting of conventional, first lien, fixed rate mortgage loans secured
by
one- to four- family residences (collectively, the “Mortgage Loans”) sold by
Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC (“BSABS I”). The Mortgage Loans were
sold by EMC Mortgage Corporation (“EMC”) to BSABS ▇. ▇▇▇▇▇ Fargo Bank, National
Association will act as master servicer of the Mortgage Loans (the “Master
Servicer,” which term includes any successors thereto under the Agreement
referred to below). The Trust Fund was created pursuant to the Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
“Agreement”), among BSABS I, as depositor (the “Depositor”), EMC Mortgage
Corporation, as seller and company, ▇▇▇▇▇ Fargo Bank, National Association,
as
Master Servicer and securities administrator (the “Securities Administrator”)
and U.S. Bank National Association as trustee (the “Trustee”), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, capitalized terms used herein shall have the meaning
ascribed to them in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.
Interest
on this Certificate will accrue from and including the 25th day of the calendar
month preceding the month in which a Distribution Date (as hereinafter defined)
occurs (or, with respect to the first accrual period, the Closing Date) to
and
including the 24th day of the calendar month in which that Distribution Date
occurs on the Certificate Principal Balance hereof at a per annum rate equal
to
the Pass-Through Rate set forth above and as further described in the Agreement.
The Securities Administrator 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, 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 immediately following the month of the latest scheduled maturity
date of any Mortgage Loan and is not likely to be the date on which the
Certificate Principal Balance of this Class of Certificates will be reduced
to
zero.
Distributions
on this Certificate will be made by the Securities Administrator 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 Securities Administrator in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of
such
distribution and only upon presentation and surrender of this Certificate
at the
office or agency appointed by the Securities Administrator for that purpose
and
designated in such notice. The Initial Certificate Principal Balance of this
Certificate is set forth above. The Certificate Principal Balance hereof
will be
reduced to the extent of distributions allocable to principal hereon and
any
Realized Losses allocable hereto.
This
Certificate 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.
Each
holder of a Certificate or beneficial ownership shall be deemed to have made
the
representations set forth in section 7.02(b) of 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
or the
Securities Administrator 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 and the Securities Administrator.
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 Securities
Administrator upon surrender of this Certificate for registration of transfer
at
the offices or agencies maintained by the Securities Administrator for such
purposes, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Securities Administrator 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 Securities Administrator 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 Securities Administrator,
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 Securities Administrator, 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 related 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 earlier of (i) the expiration
of 21
years after the death of certain persons identified in the Agreement and
(ii)
the Latest Possible Maturity Date (as defined in the Agreement).
Unless
this Certificate has been countersigned by an authorized signatory of the
Securities Administrator by manual signature, this Certificate shall not
be
entitled to any benefit under the Agreement, or be valid for any
purpose.
IN
WITNESS WHEREOF, the Securities Administrator has caused this Certificate
to be
duly executed.
|
Dated:
November 30, 2006
|
▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION,
as
Securities Administrator
|
||||||||||||
|
By:
|
|||||||||||||
|
Authorized
Signatory
|
|||||||||||||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class M-[1][2][3] Certificates referred to in the within-mentioned
Agreement.
|
▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION, as Securities
Administrator
|
|||||||||||||
|
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
This
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 B 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
B-1
CERTIFICATES] [,] [AND] [CLASS B-2 CERTIFICATES] [,] [CLASS B-3 CERTIFICATES]
AS
DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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 AS DESCRIBED
IN
THE AGREEMENT. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES,
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM
THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN
ITS
CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE SECURITIES ADMINISTRATOR
NAMED
HEREIN.
[For
Class B-1, Class B-2 and Class B-3] [UNLESS THIS CERTIFICATE IS PRESENTED
BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR
OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
AND
ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[For
Class B-1, Class B-2 and Class B-3] [EACH HOLDER OF A CERTIFICATE OR BENEFICIAL
OWNERSHIP SHALL BE DEEMED TO HAVE MADE THE REPRESENTATIONS SET FORTH IN SECTION
7.02(b) OF THE AGREEMENT.]
[For
Class B-4] [THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE
SECURITIES ACT OF 1933, AS AMENDED (THE “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 ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO
RULE
144A UNDER THE 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 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) (OR ANY ENTITY IN WHICH
ALL OF
THE EQUITY HOLDERS COME WITHIN SUCH PARAGRAPHS) OF REGULATION D UNDER THE
ACT
PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE ACT, SUBJECT TO (A) THE
RECEIPT BY THE SECURITIES ADMINISTRATOR OF A LETTER SUBSTANTIALLY IN THE
FORM
PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE SECURITIES ADMINISTRATOR
OF
AN OPINION OF COUNSEL AS TO COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS
OF
THE UNITED STATES. 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
CLASS EXEMPTION (“PTCE”) 84-14, PTCE 91-38, PTCE 90-1, PTCE 95-60 OR PTCE 96-23
AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART OF
THE
DEPOSITOR, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER OR THE TRUSTEE,
WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE
OR A
GLOBAL CERTIFICATE, OR PROVIDES AN OPINION OF COUNSEL TO SUCH
EFFECT.]
|
Certificate
No.1
|
Adjustable
Pass-Through Rate
|
|
Class
B-[1][2][3][4] Subordinate
|
|
|
Date
of Pooling and Servicing Agreement and Cut-off Date:
November
1, 2006
|
Aggregate
Initial Certificate Principal Balance of this Certificate as of
the
Cut-off Date:
$[________________]
|
|
First
Distribution Date:
December
26, 2006
|
Initial
Certificate Principal Balance of this Certificate as of the Cut-off
Date:
$[________________]
|
|
Master
Servicer:
▇▇▇▇▇
Fargo Bank, National Association
|
CUSIP:
[_______________]
|
|
Assumed
Final Distribution Date:
December
25, 2036
|
|
ASSET-BACKED
CERTIFICATE
SERIES
2006-AC5
evidencing
a percentage interest in the distributions allocable to the Class B-[1][2][3][4]
Certificates with respect to a Trust Fund consisting primarily of a pool
of
conventional, one- to four-family, fixed interest rate mortgage loans sold
by
BEAR ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ Asset Backed Securities
I
LLC, the Master Servicer, the Trustee or the Securities Administrator referred
to below or any of their affiliates or any other person. Neither this
Certificate nor the underlying Mortgage Loans are guaranteed or insured by
any
governmental entity or by Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC, the
Master
Servicer, the Trustee or the Securities Administrator or any of their affiliates
or any other person. None of Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC,
the
Master Servicer or any of their affiliates will have any obligation with
respect
to any certificate or other obligation secured by or payable from payments
on
the Certificates.
This
certifies that ___________ is the registered owner of the Percentage Interest
evidenced hereby in the beneficial ownership interest of Certificates of
the
same Class as this Certificate in a trust (the “Trust Fund”) generally
consisting of conventional, first lien, fixed rate mortgage loans secured
by
one- to four- family residences (collectively, the “Mortgage Loans”) sold by
Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC (“BSABS I”). The Mortgage Loans were
sold by EMC Mortgage Corporation (“EMC”) to BSABS ▇. ▇▇▇▇▇ Fargo Bank, National
Association will act as master servicer of the Mortgage Loans (the “Master
Servicer,” which term includes any successors thereto under the Agreement
referred to below). The Trust Fund was created pursuant to the Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
“Agreement”), among BSABS I, as depositor (the “Depositor”), EMC Mortgage
Corporation, as seller and company, ▇▇▇▇▇ Fargo Bank, National Association,
as
Master Servicer and securities administrator (the “Securities Administrator”)
and U.S. Bank National Association as trustee (the “Trustee”), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, capitalized terms used herein shall have the meaning
ascribed to them in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.
[For
Class B-1, Class B-2 and Class B-3] [Interest on this Certificate will accrue
from and including the 25th day of the calendar month preceding the month
in
which a Distribution Date (as hereinafter defined) occurs (or, with respect
to
the first accrual period, the Closing Date) to and including the 24th day
of the
calendar month in which that Distribution Date occurs on the Certificate
Principal Balance hereof at a per annum rate equal to the Pass-Through Rate
set
forth above and as further described in the Agreement. The Securities
Administrator 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,
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 immediately following the month of the latest scheduled maturity date
of
any Mortgage Loan and is not likely to be the date on which the Certificate
Principal Balance of this Class of Certificates will be reduced to
zero.]
[For
Class B-4] [Interest on this Certificate will accrue from and including the
25th
day of the calendar month preceding the month in which a Distribution Date
(as
hereinafter defined) occurs (or, with respect to the first accrual period,
the
Closing Date) to and including the 24th day of the calendar month in which
that
Distribution Date occurs on the Certificate Principal Balance hereof at a
per
annum rate equal to the Pass-Through Rate set forth above and as further
described in the Agreement. The Securities Administrator 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 Securities Administrator 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 Securities Administrator in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will
be
made after due notice by the Securities Administrator of the pendency of
such
distribution and only upon presentation and surrender of this Certificate
at the
office or agency appointed by the Securities Administrator 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 B-4] [No transfer of this Class B-4 Certificate will be made unless
such
transfer is (i) exempt from the registration requirements of the Securities
Act
of 1933, as amended, and any applicable state securities laws or is made
in
accordance with said Act and laws and (ii) made in accordance with Section
7.02
of the Agreement. In the event that such transfer is to be made the Securities
Administrator shall register such transfer if, (i) made to a transferee who
has
provided the Securities Administrator with evidence as to its QIB status;
or
(ii) (A) the transferor has advised the Securities Administrator in writing
that
the Certificate is being transferred to an Institutional Accredited Investor
and
(B) prior to such transfer the transferee furnishes to the Securities
Administrator 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 Securities Administrator 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.
[For
Class B-1, Class B-2 and Class B-3] [Each holder of a Certificate or beneficial
ownership shall be deemed to have made the representations set forth in section
7.02(b) of the Agreement.]
[For
Class B-4] [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 Class Exemption (“PTCE”)
84-14, PTCE 91-38, PTCE 90-1, PTCE 95-60 or PTCE 96-23 and (ii) will not
give
rise to any additional obligations on the part of the Depositor, the Master
Servicer, the Securities Administrator or the Trustee, which will be deemed
represented by an owner of a Book-Entry Certificate or a Global Certificate,
or
an Opinion of Counsel specified in section 7.02 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
Certificateholder, by its acceptance of this Certificate, agrees that it
will
look solely to the Trust Fund for payment hereunder and that the Trustee
or the
Securities Administrator 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 and the Securities Administrator.
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 Securities
Administrator upon surrender of this Certificate for registration of transfer
at
the offices or agencies maintained by the Securities Administrator for such
purposes, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Securities Administrator 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 Securities Administrator 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 Securities Administrator,
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 Securities Administrator, 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 related 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 earlier of (i) the expiration
of 21
years after the death of certain persons identified in the Agreement and
(ii)
the Latest Possible Maturity Date (as defined in the Agreement).
Unless
this Certificate has been countersigned by an authorized signatory of the
Securities Administrator by manual signature, this Certificate shall not
be
entitled to any benefit under the Agreement, or be valid for any
purpose.
IN
WITNESS WHEREOF, the Securities Administrator has caused this Certificate
to be
duly executed.
|
Dated:
November 30, 2006
|
▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION,
as
Securities Administrator
|
||||||||||||
|
By:
|
|||||||||||||
|
Authorized
Signatory
|
|||||||||||||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class B-[1][2][3][4] Certificates referred to in the within-mentioned
Agreement.
|
▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION, as Securities
Administrator
|
|||||||||||||
|
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
This
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
C CERTIFICATEs
SOLELY
FOR
U.S.
FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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 “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
ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE
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 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) (OR ANY ENTITY IN WHICH ALL OF
THE
EQUITY HOLDERS COME WITHIN SUCH PARAGRAPHS) OF REGULATION D UNDER THE ACT
PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE ACT, SUBJECT TO (A) THE
RECEIPT BY THE SECURITIES ADMINISTRATOR OF A LETTER SUBSTANTIALLY IN THE
FORM
PROVIDED IN THE AGREEMENT (as defined below) AND (B) THE RECEIPT BY THE
SECURITIES ADMINISTRATOR OF AN OPINION OF COUNSEL AS TO COMPLIANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES.
NO
TRANSFER OF THIS CERTIFICATE SHALL BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES EITHER (I) A CERTIFICATION PURSUANT TO SECTION 7.02(b) OF THE AGREEMENT
OR (II) AN OPINION OF COUNSEL PURSUANT TO 7.02(b) OF THE AGREEMENT, SATISFACTORY
TO THE SECURITIES ADMINISTRATOR THAT THE PURCHASE AND HOLDING OF THIS
CERTIFICATE ARE PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR
RESULT
IN ANY NON-EXEMPT PROHIBITED TRANSACTIONS 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, THE SECURITIES
ADMINISTRATOR, OR THE DEPOSITOR TO ANY OBLIGATION OR LIABILITY IN ADDITION
TO
THOSE UNDERTAKEN IN THE AGREEMENT.
|
Certificate
No. 1
|
Percentage
Interest: 100%
|
|
Class
C
|
|
|
Date
of Pooling and Servicing Agreement
and
Cut-off Date:
November
1, 2006
|
Aggregate
Certificate Notional Amount of this Certificate as of the Cut-off
Date:
$[____________]
|
|
First
Distribution Date:
December
26, 2006
|
Initial
Certificate Notional Amount of this Certificate as of the Cut-off
Date:
$[____________]
|
|
Master
Servicer:
▇▇▇▇▇
Fargo Bank, National Association
|
CUSIP:
[_______________]
|
|
Assumed
Final Distribution Date:
December
25, 2036
|
|
ASSET-BACKED
CERTIFICATE
SERIES
2006-AC5
evidencing
a percentage interest in the distributions allocable to the Class C Certificates
with respect to a Trust Fund consisting primarily of a pool of conventional,
one- to four-family, fixed interest rate mortgage loans sold by BEAR ▇▇▇▇▇▇▇
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 ▇▇▇▇▇▇▇ Asset Backed Securities
I
LLC, the Master Servicer, the Trustee or the Securities Administrator referred
to below or any of their affiliates or any other person. Neither this
Certificate nor the underlying Mortgage Loans are guaranteed or insured by
any
governmental entity or by Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC, the
Master
Servicer, the Trustee or the Securities Administrator or any of their affiliates
or any other person. None of Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC,
the
Master Servicer or any of their affiliates will have any obligation with
respect
to any certificate or other obligation secured by or payable from payments
on
the Certificates.
This
certifies that ________________ is the registered owner of the Percentage
Interest evidenced hereby in the beneficial ownership interest of Certificates
of the same Class as this Certificate in a trust (the “Trust Fund”) generally
consisting of conventional, first lien, fixed rate mortgage loans secured
by
one- to four- family residences (collectively, the “Mortgage Loans”) sold by
Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC (“BSABS I”). The Mortgage Loans were
sold by EMC Mortgage Corporation (“EMC”) to BSABS ▇. ▇▇▇▇▇ Fargo Bank, National
Association will act as master servicer of the Mortgage Loans (the “Master
Servicer,” which term includes any successors thereto under the Agreement
referred to below). The Trust Fund was created pursuant to the Pooling and
Servicing Agreement, dated as of the Cut-off Date specified above (the
“Agreement”), among BSABS I, as depositor (the “Depositor”), EMC Mortgage
Corporation, as seller and company, ▇▇▇▇▇ Fargo Bank, National Association,
as
Master Servicer and securities administrator (the “Securities Administrator”)
and U.S. Bank National Association, as trustee (the “Trustee”), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, capitalized terms used herein shall have the meaning
ascribed to them in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.
The
Securities Administrator will distribute on the 25th day of each month, or,
if
such 25th day is not a Business Day, the immediately following Business Day
(each, a “Distribution Date”), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered
at
the close of business on the last day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the calendar
month
immediately preceding the month in which the Distribution Date occurs, an
amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amounts required to be distributed to the Holders of Certificates
of the
same Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month following the latest scheduled maturity date
of
any Mortgage Loan.
Distributions
on this Certificate will be made by the Securities Administrator 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 Securities Administrator in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will
be
made after due notice by the Securities Administrator of the pendency of
such
distribution and only upon presentation and surrender of this Certificate
at the
office or agency appointed by the Securities Administrator 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
Securities Administrator 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, the Securities Administrator or the Master Servicer
in
their respective capacities as such), together with copies of the written
certification(s) of the Holder of the Certificate desiring to effect the
transfer and/or such Holder’s prospective transferee upon which such Opinion of
Counsel is based. Neither the Depositor nor the Securities Administrator
is
obligated to register or qualify the Class of Certificates specified on the
face
hereof under the 1933 Act or any other securities law or to take any action
not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Securities Administrator, the Depositor, the Seller and the
Master
Servicer against any liability that may result if the transfer is not so
exempt
or is not made in accordance with such federal and state laws.
No
transfer of this Certificate shall be made to any person, unless the transferee
provides either (i) a certification pursuant to section 7.02(b) of the Agreement
or an (ii) Opinion of Counsel pursuant to section 7.02(b) of the Agreement,
satisfactory to the Securities Administrator that the purchase and holding
of
this Certificate are permissible under applicable law, will not constitute
or
result in any non-exempt prohibited transactions under Section 406 ERISA
or
Section 4975 of the Code and will not subject the Trustee, Master Servicer,
the
Securities Administrator, or the Depositor to any obligation or liability
in
addition to those undertaken in the Agreement.
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
or the
Securities Administrator 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 and the Securities Administrator.
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 Securities
Administrator upon surrender of this Certificate for registration of transfer
at
the offices or agencies maintained by the Securities Administrator for such
purposes, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Securities Administrator 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 Securities Administrator 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 Securities Administrator
and
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 Securities Administrator, 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 related 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 earlier of (i) the expiration
of 21
years after the death of certain persons identified in the Agreement and
(ii)
the Latest Possible Maturity Date (as defined in the Agreement).
Unless
this Certificate has been countersigned by an authorized signatory of the
Securities Administrator by manual signature, this Certificate shall not
be
entitled to any benefit under the Agreement, or be valid for any
purpose.
IN
WITNESS WHEREOF, the Securities Administrator has caused this Certificate
to be
duly executed.
|
Dated:
November 30, 2006
|
▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION,
as
Securities Administrator
|
||||||||||||
|
By:
|
|||||||||||||
|
Authorized
Signatory
|
|||||||||||||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class C Certificates referred to in the within-mentioned
Agreement.
|
▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION,
as
Securities Administrator
|
|||||||||||||
|
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
This
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 P CERTIFICATES
SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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 SECURITIES
ADMINISTRATOR NAMED HEREIN.
THIS
CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF
1933, AS AMENDED (THE “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
ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE
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 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) (OR ANY ENTITY IN WHICH ALL OF
THE
EQUITY HOLDERS COME WITHIN SUCH PARAGRAPHS) OF REGULATION D UNDER THE ACT
PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE ACT, SUBJECT TO (A) THE
RECEIPT BY THE SECURITIES ADMINISTRATOR OF A LETTER SUBSTANTIALLY IN THE
FORM
PROVIDED IN THE AGREEMENT (AS DEFINED BELOW) AND (B) THE RECEIPT BY THE
SECURITIES ADMINISTRATOR OF AN OPINION OF COUNSEL AS TO COMPLIANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES.
NO
TRANSFER OF THIS CERTIFICATE SHALL BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES EITHER (I) A CERTIFICATION PURSUANT TO SECTION 7.02(b) OF THE AGREEMENT
OR (II) AN OPINION OF COUNSEL PURSUANT TO 7.02(b) OF THE AGREEMENT, SATISFACTORY
TO THE SECURITIES ADMINISTRATOR THAT THE PURCHASE AND HOLDING OF THIS
CERTIFICATE ARE PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR
RESULT
IN ANY NON-EXEMPT PROHIBITED TRANSACTIONS 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, THE SECURITIES
ADMINISTRATOR, OR THE DEPOSITOR TO ANY OBLIGATION OR LIABILITY IN ADDITION
TO
THOSE UNDERTAKEN IN THE AGREEMENT.
|
Certificate
No.1
|
Percentage
Interest: 100%
|
|
Class
P
|
|
|
Date
of Pooling and Servicing Agreement and Cut-off Date:
November
1, 2006
|
Aggregate
Initial Certificate Principal Balance of this Certificate as of
the
Cut-off Date:
$100.00
|
|
First
Distribution Date:
December
26, 2006
|
Initial
Certificate Principal Balance of this Certificate as of the Cut-off
Date:
$100.00
|
|
Master
Servicer:
▇▇▇▇▇
Fargo Bank, National Association
|
CUSIP:
[_________________]
|
|
Assumed
Final Distribution Date:
December
25, 2036
|
|
ASSET-BACKED
CERTIFICATE
SERIES
2006-AC5
evidencing
a percentage interest in the distributions allocable to the Class P Certificates
with respect to a Trust Fund consisting primarily of a pool of conventional,
one- to four-family, fixed interest rate mortgage loans sold by BEAR ▇▇▇▇▇▇▇
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 ▇▇▇▇▇▇▇ Asset Backed Securities
I
LLC, the Master Servicer, the Trustee or the Securities Administrator referred
to below or any of their affiliates or any other person. Neither this
Certificate nor the underlying Mortgage Loans are guaranteed or insured by
any
governmental entity or by Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC, the
Master
Servicer, the Trustee or the Securities Administrator or any of their affiliates
or any other person. None of Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC,
the
Master Servicer or any of their affiliates will have any obligation with
respect
to any certificate or other obligation secured by or payable from payments
on
the Certificates.
This
certifies that ________________ is the registered owner of the Percentage
Interest evidenced hereby in the beneficial ownership interest of Certificates
of the same Class as this Certificate in a trust (the “Trust Fund”) generally
consisting of conventional, first lien, fixed rate mortgage loans secured
by
one- to four- family residences (collectively, the “Mortgage Loans”) sold by
Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC (“BSABS I”). The Mortgage Loans were
sold by EMC Mortgage Corporation (“EMC”) to BSABS ▇. ▇▇▇▇▇ Fargo Bank, National
Association will act as master servicer of the Mortgage Loans (the “Master
Servicer,” which term includes any successors thereto under the Agreement
referred to below). The Trust Fund was created pursuant to the Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
“Agreement”), among BSABS I, as depositor (the “Depositor”), EMC Mortgage
Corporation, as seller and company, ▇▇▇▇▇ Fargo Bank, National Association,
as
Master Servicer and securities administrator (the “Securities Administrator”)
and U.S. Bank National Association, as trustee (the “Trustee”), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, capitalized terms used herein shall have the meaning
ascribed to them in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.
Each
Holder of this Certificate will be deemed to have agreed to be bound by the
restrictions set forth in the Agreement to the effect that (i) each person
holding or acquiring any Ownership Interest in this Certificate must be a
United
States Person and a Permitted Transferee, (ii) the transfer of any Ownership
Interest in this Certificate will be conditioned upon the delivery to the
Securities Administrator 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
Securities Administrator will distribute on the 25th
day of
each month, or, if such 25th day is not a Business Day, the immediately
following Business Day (each, a “Distribution Date”), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last day (or if such last day
is
not a Business Day, the Business Day immediately preceding such last day)
of the
calendar month immediately preceding the month in which the Distribution
Date
occurs, an amount equal to the product of the Percentage Interest evidenced
by
this Certificate and the amounts required to be distributed to the Holders
of
Certificates of the same Class as this Certificate. The Assumed Final
Distribution Date is the Distribution Date in the month following the latest
scheduled maturity date of any Mortgage Loan.
Distributions
on this Certificate will be made by the Securities Administrator 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 Securities Administrator in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will
be
made after due notice by the Securities Administrator of the pendency of
such
distribution and only upon presentation and surrender of this Certificate
at the
office or agency appointed by the Securities Administrator 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
Securities Administrator 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 E or 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, the Securities Administrator or the Master Servicer in their respective
capacities as such), together with copies of the written certification(s)
of the
Holder of the Certificate desiring to effect the transfer and/or such Holder’s
prospective transferee upon which such Opinion of Counsel is based. Neither
the
Depositor nor the Securities Administrator is obligated to register or qualify
the Class of Certificates specified on the face hereof under the 1933 Act
or any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration
or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Securities Administrator,
the
Depositor, the Seller and the Master Servicer against any liability that
may
result if the transfer is not so exempt or is not made in accordance with
such
federal and state laws.
No
transfer of this Certificate shall be made to any person, unless the transferee
provides either (i) a certification pursuant to section 7.02(b) of the Agreement
or an (ii) Opinion of Counsel pursuant to section 7.02(b) of the Agreement,
satisfactory to the Securities Administrator that the purchase and holding
of
this Certificate are permissible under applicable law, will not constitute
or
result in any non-exempt prohibited transactions under Section 406 ERISA
or
Section 4975 of the Code and will not subject the Trustee, Master Servicer,
the
Securities Administrator, or the Depositor to any obligation or liability
in
addition to those undertaken in the Agreement.
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
or the
Securities Administrator 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 and the Securities Administrator.
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 Securities
Administrator
upon
surrender of this Certificate for registration of transfer at the offices
or
agencies maintained by the Securities Administrator for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Securities Administrator 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 Securities Administrator 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 Securities Administrator,
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 Securities Administrator, 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 related 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 earlier of (i) the expiration
of 21
years after the death of certain persons identified in the Agreement and
(ii)
the Latest Possible Maturity Date (as defined in the Agreement).
Unless
this Certificate has been countersigned by an authorized signatory of the
Securities Administrator by manual signature, this Certificate shall not
be
entitled to any benefit under the Agreement, or be valid for any
purpose.
IN
WITNESS WHEREOF, the Securities Administrator has caused this Certificate
to be
duly executed.
|
Dated:
November 30, 2006
|
▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION,
as
Securities Administrator
|
||||||||||||
|
By:
|
|||||||||||||
|
Authorized
Signatory
|
|||||||||||||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class P Certificates referred to in the within-mentioned
Agreement.
|
▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION,
as
Securities Administrator
|
|||||||||||||
|
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
This
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-6
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 SHALL BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES EITHER (I) A CERTIFICATION PURSUANT TO SECTION 7.02(b) OF THE AGREEMENT
(AS DEFINED BELOW) OR (II) AN OPINION OF COUNSEL PURSUANT TO 7.02(b) OF THE
AGREEMENT, SATISFACTORY TO THE SECURITIES ADMINISTRATOR THAT THE PURCHASE
AND
HOLDING OF THIS CERTIFICATE ARE PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN ANY NON-EXEMPT PROHIBITED TRANSACTIONS 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,
THE
SECURITIES ADMINISTRATOR, OR THE DEPOSITOR 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 SECURITIES
ADMINISTRATOR 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 FREDDIE 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 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, (3) SUCH TRANSFEREE SATISFIES
CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE
PROPOSED TRANSFEREE AND (4) SUCH TRANSFEREE IS A UNITED STATES PERSON.
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 OR A NON-UNITED STATES PERSON, 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.
|
Certificate
No.1
|
|
|
Class
R-[1][2][X]
|
|
|
Percentage
Interest: 100%
|
|
|
Date
of Pooling and Servicing Agreement and Cut-off Date:
November
1, 2006
|
|
|
First
Distribution Date:
December
26, 2006
|
|
|
Master
Servicer:
▇▇▇▇▇
Fargo Bank, National Association
|
|
|
CUSIP:
[____________]
|
|
|
Assumed
Final Distribution Date:
December
25, 2036
|
|
ASSET-BACKED
CERTIFICATE
SERIES
2006-AC5
evidencing
a percentage 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, one- to four-family, fixed interest rate mortgage loans sold
by
BEAR ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ Asset Backed Securities
I
LLC, the Master Servicer, the Trustee or the Securities Administrator referred
to below or any of their affiliates or any other person. Neither this
Certificate nor the underlying Mortgage Loans are guaranteed or insured by
any
governmental entity or by Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC, the
Master
Servicer, the Trustee or the Securities Administrator or any of their affiliates
or any other person. None of Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC,
the
Master Servicer or any of their affiliates will have any obligation with
respect
to any certificate or other obligation secured by or payable from payments
on
the Certificates.
This
certifies that ________________ is the registered owner of the Percentage
Interest evidenced hereby in the beneficial ownership interest of Certificates
of the same Class as this Certificate in a trust (the “Trust Fund”) generally
consisting of conventional, first lien, fixed rate mortgage loans secured
by
one- to four- family residences (collectively, the “Mortgage Loans”) sold by
Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC (“BSABS I”). The Mortgage Loans were
sold by EMC Mortgage Corporation (“EMC”) to BSABS ▇. ▇▇▇▇▇ Fargo Bank, National
Association will act as master servicer of the Mortgage Loans (the “Master
Servicer,” which term includes any successors thereto under the Agreement
referred to below). The Trust Fund was created pursuant to the Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
“Agreement”), among BSABS I, as depositor (the “Depositor”), EMC Mortgage
Corporation, as seller and company, ▇▇▇▇▇ Fargo Bank, National Association,
as
Master Servicer and securities administrator (the “Securities Administrator”)
and U.S. Bank National Association, as trustee (the “Trustee”), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, capitalized terms used herein shall have the meaning
ascribed to them in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.
Each
Holder of this Certificate will be deemed to have agreed to be bound by the
restrictions set forth in the Agreement to the effect that (i) each person
holding or acquiring any Ownership Interest in this Certificate must be a
United
States Person and a Permitted Transferee, (ii) the transfer of any Ownership
Interest in this Certificate will be conditioned upon the delivery to the
Securities Administrator 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
Securities Administrator will distribute on the 25th day of each month, or,
if
such 25th day is not a Business Day, the immediately following Business Day
(each, a “Distribution Date”), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered
at
the close of business on the last day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the calendar
month
immediately preceding the month in which the Distribution Date occurs, an
amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amounts required to be distributed to the Holders of Certificates
of the
same Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month following the latest scheduled maturity date
of
any Mortgage Loan.
Distributions
on this Certificate will be made by the Securities Administrator 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 Securities Administrator in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will
be
made after due notice by the Securities Administrator of the pendency of
such
distribution and only upon presentation and surrender of this Certificate
at the
office or agency appointed by the Securities Administrator for that purpose
and
designated in such notice.
No
transfer of this Certificate shall be made to any person, unless the transferee
provides either (i) a certification pursuant to section 7.02(b) of the Agreement
or an (ii) Opinion of Counsel pursuant to section 7.02(b) of the Agreement,
satisfactory to the Securities Administrator that the purchase and holding
of
this Certificate are permissible under applicable law, will not constitute
or
result in any non-exempt prohibited transactions under Section 406 ERISA
or
Section 4975 of the Code and will not subject the Trustee, Master Servicer,
the
Securities Administrator, or the Depositor to any obligation or liability
in
addition to those undertaken in the Agreement.
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 or the
Securities Administrator 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 and the Securities Administrator.
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 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 Securities
Administrator upon surrender of this Certificate for registration of transfer
at
the offices or agencies maintained by the Securities Administrator for such
purposes, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Securities Administrator 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 Securities Administrator 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 Securities Administrator,
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 Securities Administrator, 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 related 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 earlier of (i) the expiration
of 21
years after the death of certain persons identified in the Agreement and
(ii)
the Latest Possible Maturity Date (as defined in the Agreement).
Unless
this Certificate has been countersigned by an authorized signatory of the
Securities Administrator by manual signature, this Certificate shall not
be
entitled to any benefit under the Agreement, or be valid for any
purpose.
IN
WITNESS WHEREOF, the Securities Administrator has caused this Certificate
to be
duly executed.
|
Dated:
November 30, 2006
|
▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION,
as
Securities Administrator
|
||||||||||||
|
By:
|
|||||||||||||
|
Authorized
Signatory
|
|||||||||||||
CERTIFICATE
OF AUTHENTICATION
This
is
one of the Class R-[1][2][X] Certificates referred to in the within-mentioned
Agreement.
|
▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION,
as
Securities Administrator
|
|||||||||||||
|
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
This
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
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 ▇▇▇▇▇▇▇ Asset-Backed Securities I LLC
Asset-Backed Certificates, Series 2006-AC5, Class R-__ Certificates (the
“Residual Certificates”) for the account of a disqualified organization; (iii)
it consents to any amendment of the Pooling and Servicing Agreement that
shall
be deemed necessary by Bear ▇▇▇▇▇▇▇ 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 Aforeign
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.
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:
|
||||||||||||||
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
▇▇▇▇▇▇▇ Asset Backed Securities I LLC
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
New
York,
New York 10179
▇▇▇▇▇
Fargo Bank, National Association
Sixth
Street and Marquette Avenue
Minneapolis,
MN 55479
Attention:
Bear ▇▇▇▇▇▇▇ Asset Backed Securities I Trust 2006-AC5
|
Re:
|
Bear
▇▇▇▇▇▇▇ Asset Backed Securities I LLC Asset-Backed
Certificates, Series 2006-AC5, 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 2006-AC5, Class _____ (the “Certificates”), issued pursuant
to the Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”),
dated as of November 1, 2006, among Bear ▇▇▇▇▇▇▇ Asset-Backed Securities
I LLC,
as depositor (the “Depositor”), EMC Mortgage Corporation, as seller and company,
▇▇▇▇▇ Fargo Bank, National Association, as master servicer and securities
administrator, and U.S. Bank National Association, as trustee (the “Trustee”).
The Seller hereby certifies, represents and warrants to, a covenants with,
the
Depositor, the Certificate Registrar 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.
|
Very
truly yours,
|
|||||||||||||||
|
(Seller)
|
|||||||||||||||
|
By:
|
|||||||||||||||
|
Name:
|
|||||||||||||||
|
Title:
|
|||||||||||||||
EXHIBIT
E
FORM
OF
INVESTMENT LETTER (NON-RULE 144A)
[Date]
[SELLER]
Bear
▇▇▇▇▇▇▇ Asset Backed Securities I LLC
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
New
York,
New York 10179
▇▇▇▇▇
Fargo Bank, National Association
Sixth
Street and Marquette Avenue
Minneapolis,
MN 55479
|
Re:
|
Bear
▇▇▇▇▇▇▇ Asset Backed Securities I Trust 2006-AC5, Asset-Backed
Certificates, Series 2006-AC5 (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)(1), (2), (3) or (7) 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
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 Securities Administrator) 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 ▇▇▇▇▇ Fargo Bank National
Association (the “Securities Administrator”) 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,
or (iii) in the case of the Class B-4 Certificates, are providing
a
representation to the effect that the proposed transfer and holding
of
such Certificate and servicing, management and operation of the
Trust and
its assets: (I) will not result in any prohibited transaction which
is not
covered under Prohibited Transaction Class Exemption (“PTCE”) 84-14, PTCE
91-38, PTCE 90-1, PTCE 95-60, PTCE 96-23 and (II) will not give
rise to
any additional obligations on the part of the Depositor, the Master
Servicer, the Securities Administrator or the
Trustee.
|
(ix)
We
understand that each of the Privately Offered Certificates bears, and will
continue to bear, a legend to substantiate the following effect: THIS
CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF
1933, AS AMENDED (THE “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
ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE
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 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) (OR ANY ENTITY IN WHICH ALL OF
THE
EQUITY HOLDERS COME WITHIN SUCH PARAGRAPHS) OF REGULATION D UNDER THE ACT
PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE ACT, SUBJECT TO (A) THE
RECEIPT BY THE SECURITIES ADMINISTRATOR OF A LETTER SUBSTANTIALLY IN THE
FORM
PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE SECURITIES ADMINISTRATOR
OF
AN OPINION OF COUNSEL AS TO COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS
OF
THE UNITED STATES. [In
the
case of the Class B-4 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 TRANSACTION WHICH IS NOT COVERED UNDER
AN
INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT NOT
LIMITED
TO, PROHIBITED TRANSACTION CLASS EXEMPTION (“PTCE”) 84-14, PTCE 91-38, PTCE
90-1, PTCE 95-60 OR PTCE 96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL
OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE SECURITIES ADMINISTRATOR, THE
MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER
OF
A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE, OR PROVIDES AN OPINION
OF
COUNSEL TO SUCH EFFECT. [In
the
case of the Class P, Class C, Class R-1, Class R-2, Class R-3 and Class R-X
Certificates]:
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE TO ANY PERSON, UNLESS THE
TRANSFEREE PROVIDES EITHER (I) A CERTIFICATION PURSUANT TO SECTION 7.02(b)
OF
THE AGREEMENT OR (II) AN OPINION OF COUNSEL PURSUANT TO 7.02(b) OF THE
AGREEMENT, SATISFACTORY TO THE SECURITIES ADMINISTRATOR THAT THE PURCHASE
AND
HOLDING OF THIS CERTIFICATE ARE PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN ANY NON-EXEMPT PROHIBITED TRANSACTIONS 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,
THE
SECURITIES ADMINISTRATOR, 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 November 1, 2006 (the “Pooling and
Servicing Agreement”), among Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC, as
depositor, U.S. Bank National Association, as trustee, ▇▇▇▇▇ Fargo Bank,
National Association, as master servicer and securities administrator, and
EMC
Mortgage Corporation, as seller and company.
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): ________________
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
▇▇▇▇▇▇▇ Asset Backed Securities I LLC
38▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
New
York,
New York 10179
▇▇▇▇▇
Fargo Bank, National Association
Sixth
Street and Marquette Avenue
Minneapolis,
MN 55479
|
Re:
|
Bear
▇▇▇▇▇▇▇ Asset Backed Securities I Trust 2006-AC5, Asset-Backed
Certificates, Series 2006-AC5 (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
|
|
(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
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 November 1, 2006, among Bear ▇▇▇▇▇▇▇ Asset
Backed Securities I LLC, as depositor, ▇▇▇▇▇ Fargo Bank, National Association,
as securities administrator and master servicer, EMC Mortgage Corporation,
as
seller and company, and U.S. 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,
or (iii) in the case of the Class B-4 Certificates, are providing a
representation to the effect that the proposed transfer and holding of such
Certificate and servicing, management and operation of the Trust and its
assets:
(I) will not result in any prohibited transaction which is not covered under
Prohibited Transaction Class Exemption (“PTCE”) 84-14, PTCE 91-38, PTCE 90-1,
PTCE 95-60, PTCE 96-23 and (II) will not give rise to any additional obligations
on the part of the Depositor, the Master Servicer, the Securities Administrator
or the Trustee.
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.
| 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.
|
Name
of
Nominee (if any):
IN
WITNESS WHEREOF, this document has been executed by the undersigned who is
duly
authorized to do so on behalf of the undersigned Eligible Purchaser on the
____
day of ___________, 20___.
|
Very
truly yours,
|
|||||||||||||||
|
[PURCHASER]
|
|||||||||||||||
|
By:
|
|||||||||||||||
|
(Authorized
Officer)
|
|||||||||||||||
|
[By:
|
|||||||||||||||
|
Attorney-in-fact]
|
|||||||||||||||
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: ▇▇▇▇▇
Fargo Bank, National Association
10▇▇
▇▇▇▇
▇▇▇▇▇▇ ▇.▇.
Minneapolis,
Minnesota 55414-0031
|
Re:
|
Custodial
Agreement, dated as of November 30, 2006, between Bear ▇▇▇▇▇▇▇
Asset
Backed Securities I LLC, as Depositor, EMC Mortgage Corporation,
as seller
and company, ▇▇▇▇▇ Fargo Bank, National Association, as master
servicer,
custodian and securities administrator, and U.S. Bank National
Association, as trustee
|
In
connection with the administration of the Mortgage Loans held by you pursuant
to
the above-captioned Custodial 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:
|
||||||||||||||
EXHIBIT
H
DTC
LETTER OF REPRESENTATIONS
[Provided
upon Request]
EXHIBIT
I
SCHEDULE
OF MORTGAGE LOANS WITH LOST NOTES
[Provided
upon Request]
EXHIBIT
J
FORM
OF
CUSTODIAL AGREEMENT
THIS
CUSTODIAL AGREEMENT (as amended and supplemented from time to time, the
“Agreement”), dated as of November 30, 2006, by and among U.S. BANK NATIONAL
ASSOCIATION, as trustee under the Pooling and Servicing Agreement defined
below
(including its successors under the Pooling and Servicing Agreement defined
below, the “Trustee”), BEAR ▇▇▇▇▇▇▇ ASSET BACKED SECURITIES I LLC, as depositor
(together with any successor in interest, the “Depositor”), EMC MORTGAGE
CORPORATION, as seller (the “Seller”) and company (together with any successor
in interest or successor under the Pooling and Servicing Agreement referred
to
below, the “Company”), and ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, as master
servicer (together with any successor in interest or successor under the
Pooling
and Servicing Agreement referred to below, the “Master Servicer”), securities
administrator and custodian (together with any successor in interest or any
successor appointed ▇▇▇▇▇▇▇▇▇, 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 November 1, 2006, relating
to the
issuance of Bear ▇▇▇▇▇▇▇ Asset Backed Securities I Trust 2006-AC5, Asset-Backed
Certificates, Series 2006-AC5 (as in effect on the date of this Agreement,
the
“Original Pooling and Servicing Agreement,” and as amended and supplemented from
time to time, the “Pooling and Servicing Agreement”); and
WHEREAS,
the Custodian has agreed to act as agent for the Trustee for the purposes
of
receiving and holding certain documents and other instruments delivered by
the
Depositor, the Seller or the Master Servicer under the Pooling and Servicing
Agreement and the Servicers under their respective Servicing Agreements,
all
upon the terms and conditions and subject to the limitations hereinafter
set
forth;
NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter set forth, the Trustee, the Depositor, the Seller,
the
Master Servicer and the Custodian hereby agree as follows:
ARTICLE
I.
DEFINITIONS
Capitalized
terms used in this Agreement and not defined herein shall have the meanings
assigned in the Original Pooling and Servicing Agreement, unless otherwise
required by the context herein.
ARTICLE
II.
CUSTODY
OF MORTGAGE DOCUMENTS
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 (subject to any exceptions noted in the Initial
Certification referred to in Section 2.3(a)) receipt of the Mortgage Files
relating to the Mortgage Loans identified on the schedule attached hereto
(the
“Mortgage Files”) and declares that it holds and will hold such Mortgage Files
as agent for the Trustee, in trust, for the use and benefit of all present
and
future Certificateholders.
Section
2.2. Recordation
of Assignments.
If any
Mortgage File includes one or more assignments of Mortgage that have not
been
recorded pursuant to the provisions of Section 2.01 of the Pooling and Servicing
Agreement and the related Mortgage Loan is not a MOM Loan or the related
Mortgaged Properties are located in jurisdictions specifically excluded by
the
Opinion of Counsel delivered to the Trustee pursuant to Section 2.01 of the
Pooling and Servicing Agreement, each such assignment shall be delivered
by the
Custodian to the Seller for the purpose of recording it in the appropriate
public office for real property records, and the Seller, at no expense to
the
Custodian, shall promptly cause to be recorded in the appropriate public
office
for real property records each such assignment of Mortgage and, upon receipt
thereof from such public office, shall return each such assignment of Mortgage
to the Custodian.
Section
2.3. Review
of Mortgage Files.
(a) On
or
prior to the Closing Date, in accordance with Section 2.02 of the Pooling
and
Servicing Agreement, the Custodian shall deliver to the Seller and the Trustee
an Initial Certification in the form annexed hereto as Exhibit One evidencing
receipt (subject to any exceptions noted therein) of a Mortgage File for
each of
the Mortgage Loans listed on the Schedule attached hereto (the “Mortgage Loan
Schedule”).
(b) Within
90
days of the Closing Date, the Custodian agrees, for the benefit of
Certificateholders, to review, in accordance with the provisions of Section
2.02
of the Pooling and Servicing Agreement, each such document, and shall deliver
to
the Seller and the Trustee an Interim Certification in the form annexed hereto
as Exhibit Two to the effect that all such documents have been executed and
received and that such documents relate to the Mortgage Loans identified
on the
Mortgage Loan Schedule, except for any exceptions listed on Schedule A attached
to such Interim Certification. The Custodian shall be under no duty or
obligation to inspect, review or examine said documents, instruments,
certificates or other papers to determine that the same are genuine,
enforceable, or appropriate for the represented purpose or that they have
actually been recorded or that they are other than what they purport to be
on
their face.
(c) Not
later
than 180 days after the Closing Date, the Custodian shall review the Mortgage
Files as provided in Section 2.02 of the Pooling and Servicing Agreement
and
deliver to the Seller and the Trustee a Final Certification in the form annexed
hereto as Exhibit Three evidencing the completeness of the Mortgage
Files.
(d) In
reviewing the Mortgage Files as provided herein and in the Pooling and Servicing
Agreement, the Custodian shall make no representation as to and shall not
be
responsible to verify (i) the validity, legality, enforceability, due
authorization, recordability, sufficiency or genuineness of any of the documents
included in any Mortgage File or (ii) the collectability, insurability,
effectiveness or suitability of any of the documents in any Mortgage
File.
Upon
receipt of written request from the Trustee, the Custodian shall as soon
as
practicable supply the Trustee with a list of all of the documents relating
to
the Mortgage Loans missing from the Mortgage Files.
Section
2.4. Notification
of Breaches of Representations and Warranties.
Upon
discovery by the Custodian of a breach of any representation or warranty
made by
the Depositor as set forth in the Pooling and Servicing Agreement with respect
to a Mortgage Loan relating to a Mortgage File, the Custodian shall give
prompt
written notice to the Depositor, the related Servicer and the
Trustee.
Section
2.5. Custodian
to Cooperate: Release of Mortgage Files.
Upon
receipt of written notice from the Trustee that the Seller has repurchased
a
Mortgage Loan pursuant to Article II of the Pooling and Servicing Agreement,
and
a request for release (a “Request for Release”) confirming that the purchase
price therefore has been deposited in the Master Servicer Collection Account
or
the Distribution Account, then the Custodian agrees to promptly release to
the
Seller the related Mortgage File.
Upon
the
Custodian’s receipt of a Request for Release substantially in the form of
Exhibit G to the Pooling and Servicing Agreement signed by a Servicing Officer
of a 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 Servicer, the related
Mortgage File. The Depositor shall deliver to the Custodian and the Custodian
agrees to review in accordance with the provisions of their Agreement the
Mortgage Note and other documents constituting the Mortgage File with respect
to
any Replacement Mortgage Loan.
From
time
to time as is appropriate for the servicing or foreclosure of any Mortgage
Loan,
including, for this purpose, collection under any Primary Insurance Policy
or
PMI Policy, the Company or the related Servicer, as applicable, shall deliver
to
the Custodian a Request for Release signed by a Servicing Officer requesting
that possession of all of the Mortgage File be released to the Company or
the
related Servicer, as applicable, and certifying as to the reason for such
release and that such release will not invalidate any insurance coverage
provided in respect of the Mortgage Loan under any of the Insurance Policies.
Upon receipt of the foregoing, the Custodian shall deliver the Mortgage File
to
the Company or the related Servicer, as applicable. The Company or the related
Servicer, as applicable, shall cause each Mortgage File or any document therein
so released to be returned to the Custodian when the need therefore by the
Company or the related Servicer, as applicable, no longer exists, unless
(i) the
Mortgage Loan has been liquidated and the Liquidation Proceeds relating to
the
Mortgage Loan have been deposited in the Master Servicer Collection Account
or
the Distribution Account or (ii) the Mortgage File or such document has been
delivered to an attorney, or to a public trustee or other public official
as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially
or
non-judicially, and the Company or the related Servicer, as applicable, 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.
At
any
time that the Company or the related Servicer is required to deliver to the
Custodian a Request for Release, the Company or the related Servicer, as
applicable, shall deliver two copies of the Request for Release if delivered
in
hard copy or the Company or the related Servicer, as applicable, may furnish
such Request for Release electronically to the Custodian, in which event
the
Servicing Officer transmitting the same shall be deemed to have signed the
Request for Release. In connection with any Request for Release of a Mortgage
File because of a repurchase of a Mortgage Loan, such Request for Release
shall
be accompanied by an assignment of mortgage, without recourse, representation
or
warranty from the Trustee to the Seller (unless such Mortgage Loan is a MOM
Loan) and the related Mortgage Note shall be endorsed without recourse,
representation or warranty by the Trustee (unless such Mortgage Loans is
registered on the MERS System) and be returned to the Seller. In connection
with
any Request for Release of a Mortgage File because of the payment in full
of a
Mortgage Loan, such Request for Release shall be accompanied by a certificate
of
satisfaction or other similar instrument to be executed by or on behalf of
the
Trustee and returned to the Company or the related Servicer, as
applicable.
Section
2.6. Assumption
Agreements.
In the
event that any assumption agreement, substitution of liability agreement
or sale
of servicing agreement is entered into with respect to any Mortgage Loan
subject
to this Agreement in accordance with the terms and provisions of the Pooling
and
Servicing Agreement, the Master Servicer, to the extent provided in the Pooling
and Servicing Agreement or the related Servicing Agreement, shall cause the
Company or the related Servicer, as applicable, to notify the Custodian that
such assumption or substitution agreement has been completed by forwarding
to
the Custodian the original of such assumption or substitution agreement,
which
shall be added to the related Mortgage File and, for all purposes, shall
be
considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting parts thereof.
ARTICLE
III.
CONCERNING
THE CUSTODIAN
Section
3.1. Custodian
a Bailee and Agent of the Trustee.
With
respect to each Mortgage Note, Mortgage and other documents constituting
each
Mortgage File which are delivered to the Custodian, the Custodian is exclusively
the bailee and 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 Company, the Depositor, any Servicer
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, 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 ▇▇▇▇▇▇▇▇▇.
The
Trustee may remove the Custodian at any time upon 60 days prior written notice
to Custodian. In such event, the Trustee shall appoint, or petition a court
of
competent jurisdiction to appoint, a successor Custodian hereunder. Any
successor Custodian shall be a depository institution subject to supervision
or
examination by federal or state authority shall be able to satisfy the other
requirements contained in Section 3.6 and shall be unaffiliated with the
Servicers, the Company and the Depositor.
Any
resignation or removal of the Custodian and appointment of a successor Custodian
pursuant to any of the provisions of this Section 3.4 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. No successor ▇▇▇▇▇▇▇▇▇ 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.
ARTICLE
IV.
COMPLIANCE
WITH REGULATION AB
Section
4.1. Intent
of the parties; Reasonableness.
The
parties hereto acknowledge and agree that the purpose of this Article IV
is to
facilitate compliance by the Depositor with the provisions of Regulation
AB and
related rules and regulations of the Commission. The Depositor shall not
exercise its right to request delivery of information or other performance
under
these provisions other than in good faith, or for purposes other than compliance
with the Securities Act, the Exchange Act and the rules and regulations of
the
Commission under the Securities Act and the Exchange Act. Each of the parties
hereto acknowledges that interpretations of the requirements of Regulation
AB
may change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the mortgage-backed
securities markets, advice of counsel, or otherwise, and agrees to comply
with
requests made by the Depositor in good faith for delivery of information
under
these provisions on the basis of evolving interpretations of Regulation AB
to
the extent reasonably practicable. The Custodian shall cooperate reasonably
with
the Depositor to deliver to the Depositor (including any of its assignees
or
designees), any and all disclosure, statements, reports, certifications,
records
and any other information necessary in the reasonable, good faith determination
of the Depositor to permit the Depositor to comply with the provisions of
Regulation AB.
Section
4.2. Additional
Representations and Warranties of the Custodian.
(a) The
Custodian hereby represents and warrants that the information set forth in
the
Prospectus Supplement under the caption "Description of the Certificates
- The
Custodian" (the "Custodian Disclosure") does not contain any untrue statement
of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) The
Custodian shall be deemed to represent to the Depositor as of the date hereof
and on each date on which information is provided to the Depositor under
Section
4.3 that, except as disclosed in writing to the Depositor prior to such date:
(i) there are no aspects of its financial condition that could have a material
adverse effect on the performance by it of its Custodian obligations under
this
Agreement or any other Securitization Transaction as to which it is the
custodian; (ii) there are no material legal or governmental proceedings pending
(or known to be contemplated) against it; and (iii) there are no affiliations,
relationships or transactions relating to the Custodian with respect to the
Depositor or any sponsor, issuing entity, servicer, trustee, originator,
significant obligor, enhancement or support provider or other material
transaction party (as such terms are used in Regulation AB) relating to the
Securitization Transaction contemplated by the Agreement, as identified by
the
Depositor to the Custodian in writing as of the Closing Date (each, a
"Transaction Party").
(c) If
so
requested by the Depositor on any date following the Closing Date, the Custodian
shall, within five Business Days following such request, confirm in writing
the
accuracy of the representations and warranties set forth in paragraph (a)
of
this Section or, if any such representation and warranty is not accurate
as of
the date of such confirmation, provide reasonably adequate disclosure of
the
pertinent facts, in writing, to the requesting party. Any such request from
the
Depositor shall not be given more than once each calendar quarter, unless
the
Depositor shall have a reasonable basis for a determination that any of the
representations and warranties may not be accurate.
Section
4.3. Additional
Information to Be Provided by the Custodian.
For so
long as the Certificates are outstanding, for the purpose of satisfying the
Depositor 's reporting obligation under the Exchange Act with respect to
any
class of Certificates, the Custodian shall (a) notify the Depositor in writing
of any material litigation or governmental proceedings pending against the
Custodian that would be material to Certificateholders, and (b) provide to
the
Depositor a written description of such proceedings. Any notices and
descriptions required under this Section 4.3 shall be given no later than
five
Business Days prior to the Determination Date following the month in which
the
Custodian has knowledge of the occurrence of the relevant event. As of the
date
the Depositor or Master Servicer files each Report on Form 10-D or Form 10-K
with respect to the Certificates, the Custodian will be deemed to represent
that
any information previously provided under this Section 4.3, if any, is
materially correct and does not have any material omissions unless the Custodian
has provided an update to such information.
Section
4.4. Report
on
Assessment of Compliance and Attestation.
(a) On
or
before March 15 of each calendar year, the Custodian shall:
(i) deliver
to the Master Servicer, the Depositor and the Securities Administrator a
report
(in form and substance reasonably satisfactory to the Depositor) regarding
the
Custodian’s assessment of compliance with the Servicing Criteria during the
immediately preceding calendar year, as required under Rules 13a-18 and 15d-18
of the Exchange Act and Item 1122 of Regulation AB. Such report shall be
addressed to the Master Servicer, the Depositor and the Securities Administrator
and signed by an authorized officer of the Custodian, and shall address each
of
the Servicing Criteria specified on a certification substantially in the
form of
Exhibit Four attached hereto; and
(ii) deliver
to the Master Servicer, the Depositor and the Securities Administrator a
report
of a registered public accounting firm reasonably acceptable to the Depositor
that attests to, and reports on, the assessment of compliance made by the
Custodian and delivered pursuant to the preceding paragraph. Such attestation
shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X
under
the Securities Act and the Exchange Act.
(b) In
the
event the Custodian is terminated under, or resigns pursuant to, the terms
of
this Agreement, the Custodian shall provide an Assessment of Compliance and
cause to be provided an Attestation Report pursuant to this Section 4.4
notwithstanding any such termination or resignation.
Section
4.5. Indemnification;
Remedies.
(a) The
Custodian shall indemnify the Depositor, each affiliate of the Depositor,
EMC
and each broker dealer acting as underwriter, placement agent or initial
purchaser of the Certificates or each Person who controls any of such parties
(within the meaning of Section 15 of the Securities Act and Section 20 of
the
Exchange Act); and the respective present and former directors, officers,
employees and agents of each of the foregoing, and shall hold each of them
harmless from and against any losses, damages, penalties, fines, forfeitures,
legal fees and expenses and related costs, judgments, and any other costs,
fees
and expenses that any of them may sustain arising out of or based
upon:
(i) (A)
any
untrue statement of a material fact contained or alleged to be contained
in the
Custodian Disclosure and any information, report, certification, accountants’
attestation or other material provided under this Article IV by or on behalf
of
the Custodian (collectively, the “Custodian Information”), or (B) the omission
or alleged omission to state in the Custodian Information a material fact
required to be stated in the Custodian Information or necessary in order
to make
the statements therein, in the light of the circumstances under which they
were
made, not misleading; or
(ii) any
failure by the Custodian to deliver any information, report, certification,
accountants’ attestation or other material when and as required under this
Article IV.
(iii) the
negligence, bad faith or willful misconduct of the Custodian in the performance
of its obligations under this Article IV.
(b) In
the
case of any failure of performance described in clause (ii) of Section 4.5(a),
the Custodian shall promptly reimburse the Depositor for all costs reasonably
incurred by the Depositor in order to obtain the information, report,
certification, accountants’ letter or other material not delivered as required
by the Custodian.
(c) In
no
event shall the Custodian or its directors, officers, and employees be liable
for any special, indirect or consequential damages 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.
This
indemnification shall survive the termination of this Agreement or the
termination of the Custodian.
ARTICLE
V.
MISCELLANEOUS
PROVISIONS
Section
5.1. 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
5.2. [Reserved].
Section
5.3. 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
5.4. 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
5.5. 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
5.6. 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.
[Signature
Page Follows]
IN
WITNESS WHEREOF, this Agreement is executed as of the date first above
written.
|
Address:
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
BSABS
I 2006-AC5
Telecopy:
(▇▇▇) ▇▇▇-▇▇▇▇
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U.S.
BANK NATIONAL ASSOCIATION, not individually but solely as
Trustee
By: _________________________________
Name:
Title:
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|
Address:
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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BEAR
▇▇▇▇▇▇▇ ASSET BACKED SECURITIES I LLC
By: _________________________________
Name:
Title:
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Address:
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
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EMC
MORTGAGE CORPORATION
By: _________________________________
Name:
Title:
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Address:
▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇
FARGO BANK,
NATIONAL
ASSOCIATION,
as
Master Servicer
By: _________________________________
Name:
Title:
|
|
Address:
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
Minneapolis,
Minnesota 55414-0031
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▇▇▇▇▇
FARGO BANK,
NATIONAL
ASSOCIATION, as Custodian
By: _________________________________
Name:
Title:
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|
)
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||
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)
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ss.:
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|
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COUNTY
OF SUFFOLK
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)
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On
the
30th
day of
November 2006 before me, a notary public in and for said State, personally
appeared __________________________, known to me to be a(n)
__________________________ of U.S. Bank National Association, a national
banking
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.
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Notary
Public
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[SEAL]
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STATE
OF NEW YORK
|
)
|
|
|
)
|
ss.:
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|
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COUNTY
OF NEW YORK
|
)
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On
the
30th
day of
November 2006 before me, a notary public in and for said State, personally
appeared __________________________, known to me to be a(n)
__________________________ of Bear ▇▇▇▇▇▇▇ 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.
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Notary
Public
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[SEAL]
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STATE
OF TEXAS
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)
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|
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)
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ss.:
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COUNTY
OF DALLAS
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)
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On
the
30th
day of
November 2006 before me, a notary public in and for said State, personally
appeared __________________________, known to me to be an authorized
representative 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.
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Notary
Public
|
[Notarial
Seal]
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STATE
OF MARYLAND
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)
|
|
|
)
|
ss.:
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|
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COUNTY
OF ▇▇▇▇▇▇
|
)
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On
the
30th
day of
November 2006 before me, a notary public in and for said State, personally
appeared __________________________, known to me to be a(n)
__________________________ of ▇▇▇▇▇ Fargo Bank, National Association, a national
banking 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.
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Notary
Public
|
[Notarial
Seal]
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STATE
OF MINNESOTA
|
)
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|
|
)
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ss.:
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|
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COUNTY
OF___________
|
)
|
On
the
30th
day of
November 2006 before me, a notary public in and for said State, personally
appeared __________________________, known to me to be a(n)
__________________________ of ▇▇▇▇▇ Fargo Bank, National Association, a national
banking 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.
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Notary
Public
|
[Notarial
Seal]
EXHIBIT
ONE
FORM
OF
CUSTODIAN INITIAL CERTIFICATION
November
30, 2006
U.S.
Bank
National Association
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, 3rd
Floor
Boston,
MA 02110
EMC
Mortgage Corporation
▇▇▇▇
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇,
Lewisville,
Texas 75067
Attention:
Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC, Series 2006-AC5
|
Re:
|
Custodial
Agreement, dated as of November 30, 2006, by and among U.S. Bank
National
Association, ▇▇▇▇▇ Fargo Bank, National Association, Bear ▇▇▇▇▇▇▇
Asset
Backed Securities I LLC and EMC Mortgage Corporation relating to
Bear
▇▇▇▇▇▇▇ Asset Backed Securities I Trust 2006-AC5, Asset-Backed
Certificates, Series 2006-AC5
|
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.
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▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION
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|
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By:
|
|
|
Name:
|
|
|
Title:
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SCHEDULE
A
(PROVIDED
UPON REQUEST)
EXHIBIT
TWO
FORM
OF
CUSTODIAN INTERIM CERTIFICATION
[DATE]
U.S.
Bank
National Association
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, 3rd
Floor
Boston,
MA 02110
EMC
Mortgage Corporation
▇▇▇▇
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇,
Lewisville,
Texas 75067
Attention:
Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC, Series 2006-AC5
|
Re:
|
Custodial
Agreement, dated as of November 30, 2006, by and among U.S. Bank
National
Association, ▇▇▇▇▇ Fargo Bank, National Association, Bear ▇▇▇▇▇▇▇
Asset
Backed Securities I LLC and EMC Mortgage Corporation relating to
Bear
▇▇▇▇▇▇▇ Asset Backed Securities I Trust 2006-AC5, Asset-Backed
Certificates, Series 2006-AC5
|
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 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.
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▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION
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|
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By:
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|
|
Name:
|
|
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Title:
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SCHEDULE
A
(PROVIDED
UPON REQUEST)
EXHIBIT
THREE
FORM
OF
CUSTODIAN FINAL CERTIFICATION
[DATE]
U.S.
Bank
National Association
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, 3rd
Floor
Boston,
MA 02110
EMC
Mortgage Corporation
▇▇▇▇
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇,
Lewisville,
Texas 75067
Attention:
Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC, Series 2006-AC5
|
Re:
|
Custodial
Agreement, dated as of November 30, 2006, by and among U.S. Bank
National
Association, ▇▇▇▇▇ Fargo Bank, National Association, Bear ▇▇▇▇▇▇▇
Asset
Backed Securities I LLC and EMC Mortgage Corporation relating to
Bear
▇▇▇▇▇▇▇ Asset Backed Securities I Trust 2006-AC5, Asset-Backed
Certificates, Series 2006-AC5
|
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.
|
▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
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SCHEDULE
A
(PROVIDED
UPON REQUEST)
EXHIBIT
FOUR
SERVICING
CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The
assessment of compliance to be delivered by the Custodian shall address,
at a
minimum, the criteria identified below as “Applicable Servicing
Criteria”:
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
Reference
|
Criteria
|
|
|
General
Servicing Considerations
|
||
|
1122(d)(1)(i)
|
Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction
agreements
|
|
|
1122(d)(1)(ii)
|
If
any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities
|
|
|
1122(d)(1)(iii)
|
Any
requirements in the transaction agreements to maintain a back-up
servicer
for the pool assets are maintained.
|
|
|
1122(d)(1)(iv)
|
A
fidelity bond and errors and omissions policy is in effect on the
party
participating in the servicing function throughout the reporting
period in
the amount of coverage required by and otherwise in accordance
with the
terms of the transaction agreements.
|
|
|
Cash
Collection and Administration
|
||
|
1122(d)(2)(i)
|
Payments
on pool assets are deposited into the appropriate custodial bank
accounts
and related bank clearing accounts no more than two business days
following receipt, or such other number of days specified in the
transaction agreements.
|
|
|
1122(d)(2)(ii)
|
Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
|
|
|
1122(d)(2)(iii)
|
Advances
of funds or guarantees regarding collections, cash flows or distributions,
and any interest or other fees charged for such advances are made,
reviewed and approved as specified in the transaction
agreements.
|
|
|
1122(d)(2)(iv)
|
The
related accounts for the transaction, such as cash reserve accounts
or
accounts established as a form of overcollateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth
in the
transaction agreements.
|
|
|
1122(d)(2)(v)
|
Each
custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes
of
this criterion, “federally insured depository institutions” with respect
to a foreign financial institution means a foreign financial institution
that meets the requirements of Rule 13k-1(b)(1) of the Securities
Exchange
Act.
|
|
|
1122(d)(2)(vi)
|
Unissued
checks are safeguarded so as to prevent unauthorized
access.
|
|
|
1122(d)(2)(vii)
|
Reconciliations
are prepared on a monthly basis for all asset-backed securities
related
bank accounts, including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically accurate;
(B)
prepared within 30 calendar days after the bank statement cutoff
date, or
such other number of days specified in the transaction agreements;
(C)
reviewed and approved by someone other than the person who prepared
the
reconciliations; and (D) contain explanations for reconciling items,
These
reconciling items are resolved within 90 calendar days of their
original
identification, or such other number of days specified in the transaction
agreements.
|
|
|
Investor
Remittances and Reporting
|
||
|
1122(d)(3)(i)
|
Reports
to investors, including those to be filed with the Commission,
are
maintained in accordance with the transaction agreements and applicable
Commission requirements. Specifically, such reports (A) are prepared
in
accordance with timeframes and other terms set forth in the transaction
agreements, (B) provide information calculated in accordance with
the
terms specified in the transaction agreements; (C) are filed with
the
Commission as required by its rules and regulations; and (D) agree
with
investors; or the trustee’s records as to the total unpaid principal
balance and number of pool assets serviced by the
servicer.
|
|
|
1122(d)(3)(ii)
|
Amounts
due to investors are allocated and remitted in accordance with
timeframes,
distribution priority and other terms set forth in the transaction
agreements.
|
|
|
1122(d)(3)(iii)
|
Disbursements
made to an investor are posted within two business days to the
servicer’s
investor records, or such other number of days specified in the
transaction agreements.
|
|
|
1122(d)(3)(iv)
|
Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank
statements.
|
|
|
Pool
Asset Administration
|
||
|
1122(d)(4)(i)
|
Collateral
or security on pool assets is maintained as required by the transaction
agreements or related asset pool documents.
|
√
|
|
1122(d)(4)(ii)
|
Pool
assets and related documents are safeguarded as required by the
transaction agreements.
|
√
|
|
1122(d)(4)(iii)
|
Any
additions, removals or substitutions to the asset pool are made,
reviewed
and approved in accordance with any conditions or requirements
in the
transaction agreements
|
|
|
1122(d)(4)(iv)
|
Payments
on pool assets, including any payoffs, made in accordance with
the related
pool asset documents are posted to the servicer’s obligor records
maintained no more than two business days after receipt, or such
other
number of days specified in the transaction agreements, and allocated
to
principal, interest or other items (e.g., escrow) in accordance
with the
related pool asset documents.
|
|
|
1122(d)(4)(v)
|
The
servicer’s records regarding the pool assets agree with the servicer’s
records with respect to an obligor’s unpaid principal
balance.
|
|
|
1122(d)(4)(vi)
|
Changes
with respect to the terms or status of an obligor’s pool asset (e.g., loan
modifications or re-agings) are made, reviewed and approved by
authorized
personnel in accordance with the transaction agreements and related
pool
asset documents.
|
|
|
1122(d)(4)(vii)
|
Loss
mitigation of recovery actions (e.g., forbearance plans, modifications
and
deed in lieu of foreclosure, foreclosures and repossessions, as
applicable) are initiated, conducted and concluded in accordance
with the
timeframes or other requirements established by the transaction
documents.
|
|
|
1122(d)(4)(viii)
|
Records
documenting collection efforts are maintained during the period
a pool
asset is delinquent in accordance with the transaction agreements.,
Such
records are maintained in at least a monthly basis, or such other
period
specified in the transaction agreements, and describe the entity’s
activities in monitoring delinquent pool assets including, for
example,
phone calls, letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or
unemployment).
|
|
|
1122(d)(4)(ix)
|
Adjustments
to interest rates or rates of return for pool assets with variable
rates
are computed based on the related pool asset documents.
|
|
|
1122(d)(4)(x)
|
Regarding
any funds held in trust for an obligor (such as escrow accounts);
(A) such
funds are analyzed, in accordance with the obligor’s pool asset documents,
on at least an annual basis, or such other period specified in
the
transaction agreements; (B) interest on such funds is paid, or
credited,
to obligors in accordance with applicable pool asset documents
and state
laws; and (C) such funds are returned to the obligor within 3-
calendar
days of full repayment of the related pool asset, or such other
number of
days specified in the transaction agreements.
|
|
|
1122(d)(4)(xi)
|
Payments
made on behalf of an obligor (such as tax ore insurance payments)
are made
on or before the related penalty or expiration dates, as indicated
on the
appropriate bills or notices for such payments, provided that such
support
has been received by the service at least 30 calendar days prior
to these
dates, or such other number of days specified in the transaction
agreements.
|
|
|
1122(d)(4)(xii)
|
Any
late payment penalties in connection with any payment to be made
on behalf
of an obligor are paid from the servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or
omission.
|
|
|
1122(d)(4)(xiii)
|
Disbursements
made on behalf of an obligor are posted within two business days
to the
obligor’s records maintained by the servicer, or such other number of days
specified in the transaction agreements.
|
|
|
1122(d)(4)(xiv)
|
Delinquencies,
charge-offs and uncollectible funds are recognized and recorded
in
accordance with the transaction agreements.
|
|
|
1122(d)(4)(xv)
|
Any
external enhancement or other support, identified in item 1114(a)(1)
through (3) or item 1115 of Regulation AB, is maintained as set
forth in
the transaction agreements.
|
|
EXHIBIT
K
FORM
OF BACK-UP CERTIFICATION
TO FORM 10-K CERTIFICATE
The
[ ]
agreement dated as of [ ],
200[ ]
(the “Agreement”), among [IDENTIFY PARTIES]
I,
________________________________, the _______________________ of [NAME OF
COMPANY], certify to [the Purchaser], [the Depositor], and the [Master Servicer]
[Trustee], and their officers, with the knowledge and intent that they will
rely
upon this certification, that:
(1) I
have
reviewed the servicer compliance statement of the Company provided in accordance
with Item 1123 of Regulation AB (the “Compliance Statement”), the report on
assessment of the Company’s compliance with the servicing criteria set forth in
Item 1122(d) of Regulation AB (the “Servicing Criteria”), provided in accordance
with Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as amended
(the “Exchange Act”) and Item 1122 of Regulation AB (the “Servicing
Assessment”), the registered public accounting firm’s attestation report
provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act
and
Section 1122(b) of Regulation AB (the “Attestation
Report”), and all servicing reports, officer’s certificates and other
information relating to the servicing of the Mortgage Loans by the Company
during 200[ ] that were delivered by the Company to the [Depositor] [Master
Servicer] [Trustee] pursuant to the Agreement (collectively, the “Company
Servicing Information”);
(2) Based
on
my knowledge, the Company Servicing Information, 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 the light of the circumstances
under
which such statements were made, not misleading with respect to the period
of
time covered by the Company Servicing Information;
(3) Based
on
my knowledge, all of the Company Servicing Information required to be provided
by the Company under the Agreement has been provided to the [Depositor] [Master
Servicer] [Trustee];
(4) I
am
responsible for reviewing the activities performed by the Company as servicer
under the Agreement, and based on my knowledge and the compliance review
conducted in preparing the Compliance Statement and except as disclosed in
the
Compliance Statement, the Servicing Assessment or the Attestation Report,
the
Company has fulfilled its obligations under the Agreement in all material
respects; and
(5) The
Compliance Statement required to be delivered by the Company pursuant to
the
Agreement, and the Servicing Assessment and Attestation Report required to
be
provided by the Company and by any Subservicer or Subcontractor pursuant
to the
Agreement, have been provided to the [Depositor] [Master Servicer]. Any material
instances of noncompliance described in such reports have been disclosed
to the
[Depositor] [Master Servicer]. Any material instance of noncompliance with
the
Servicing Criteria has been disclosed in such reports.
|
Date:
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
EXHIBIT
L
FORM
OF
MORTGAGE LOAN PURCHASE AGREEMENT
MORTGAGE
LOAN PURCHASE AGREEMENT
between
EMC
MORTGAGE CORPORATION
as
Mortgage Loan Seller
and
BEAR
▇▇▇▇▇▇▇ ASSET BACKED SECURITIES I LLC
as
Purchaser
Dated
as
of
November
30, 2006
TABLE
OF CONTENTS
|
SECTION
1.
|
Definitions
|
|
SECTION
2.
|
Purchase
and Sale of the Mortgage Loans and Related Rights
|
|
SECTION
3.
|
Mortgage
Loan Schedules
|
|
SECTION
4.
|
Mortgage
Loan Transfer
|
|
SECTION
5.
|
Examination
of Mortgage Files
|
|
SECTION
6.
|
Recordation
of Assignments of Mortgage.
|
|
SECTION
7.
|
Representations
and Warranties of the Mortgage Loan Seller Concerning the Mortgage
Loans
|
|
SECTION
8.
|
Representations
and Warranties Concerning the Mortgage Loan Seller
|
|
SECTION
9.
|
Representations
and Warranties Concerning the Purchaser
|
|
SECTION
10.
|
Conditions
to Closing
|
|
SECTION
11.
|
Fees
and Expenses
|
|
SECTION
12.
|
Accountants’
Letters
|
|
SECTION
13.
|
Indemnification.
|
|
SECTION
14.
|
Notices
|
|
SECTION
15.
|
Transfer
of Mortgage Loans
|
|
SECTION
16.
|
Termination
|
|
SECTION
17.
|
Representations,
Warranties and Agreements to Survive Delivery
|
|
SECTION
18.
|
Severability
|
|
SECTION
19.
|
Counterparts
|
|
SECTION
20.
|
Amendment
|
|
SECTION
21.
|
Governing
Law
|
|
SECTION
22.
|
Further
Assurances
|
|
SECTION
23.
|
Successors
and Assigns
|
|
SECTION
24.
|
The
Mortgage Loan Seller
|
|
SECTION
25.
|
Entire
Agreement
|
|
SECTION
26.
|
No
Partnership
|
EXHIBITS
AND SCHEDULE TO
MORTGAGE
LOAN PURCHASE AGREEMENT
|
Exhibit
1
|
Contents
of Mortgage File
|
|
Exhibit
2
|
Mortgage
Loan Schedule Information
|
|
Exhibit
3
|
Mortgage
Loan Seller’s Information
|
|
Exhibit
4
|
Purchaser’s
Information
|
|
Exhibit
5
|
Schedule
of Lost Notes
|
|
Exhibit
6
|
Standard
& Poor’s Anti-Predatory Lending Categorization
|
|
Schedule
A
|
Required
Ratings for each Class of
Certificates
|
MORTGAGE
LOAN PURCHASE AGREEMENT
MORTGAGE
LOAN PURCHASE AGREEMENT, dated as of November 30, 2006, as amended and
supplemented by any and all amendments hereto (collectively, “this
Agreement”),
by
and between EMC MORTGAGE CORPORATION, a Delaware corporation (“EMC”
or
the
“Mortgage
Loan Seller”),
and
BEAR ▇▇▇▇▇▇▇ 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,
fixed rate, first 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 ▇▇▇▇▇▇▇ Asset Backed Securities I Trust 2006-AC5, Asset-Backed
Certificates, Series 2006-AC5 (the “Certificates”),
under
a pooling and servicing agreement, to be dated as of November 1, 2006 (the
“Pooling
and Servicing Agreement”),
among
the Purchaser, as depositor, the Mortgage Loan Seller, as seller and company,
▇▇▇▇▇ Fargo Bank, National Association, as master servicer (the “Master
Servicer”)
and as
securities administrator (the “Securities
Administrator”),
and
U.S. 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 333-131374) relating to its
Asset-Backed 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 November 28, 2006, to the Prospectus, dated October
18, 2006, relating to certain classes of the Certificates. With respect to
the
Public Offering of certain classes of the Certificates, the Purchaser and
Bear,
▇▇▇▇▇▇▇ & Co. Inc. (“Bear
▇▇▇▇▇▇▇”)
have
entered into a terms agreement, dated as of June 19, 2006, to an underwriting
agreement, dated April 13, 2006, between the Purchaser and Bear ▇▇▇▇▇▇▇
(together, the “Underwriting
Agreement”).
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:
Acquisition
Price:
Cash in
an amount equal to $
*
(plus
$ *
in
accrued interest).
Bear
▇▇▇▇▇▇▇:
Bear,
▇▇▇▇▇▇▇ & Co. Inc.
Closing
Date:
November 30, 2006.
Custodial
Agreement:
An
agreement, dated as of November 30, 2006 among the Depositor, the Mortgage
Loan
Seller, the Trustee, the Master Servicer, the Securities Administrator and
the
Custodian.
Cut-off
Date Balance:
Shall
mean $265,037,284.33.
Deleted
Mortgage Loan:
A
Mortgage Loan replaced or to be replaced by a Replacement Mortgage
Loan.
Due
Date:
With
respect to each Mortgage Loan, the date in each month on which its scheduled
payment is due, as set forth in the related Mortgage Note.
EMC
Flow Loans:
The
Mortgage Loans purchased by EMC pursuant to a flow loan purchase
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®
System:
The
system of recording transfers of Mortgages electronically maintained by
MERS.
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.
Moody’s:
▇▇▇▇▇’▇
Investors Service, Inc., or its successors in interest.
Mortgage:
The
mortgage or deed of trust creating a first lien on an interest 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 therein.
Mortgagor:
The
obligor(s) on a Mortgage Note.
Net
Mortgage Rate:
For
each Mortgage Loan, the Mortgage Rate for such Mortgage Loan less (i) the
Master
Servicing Fee Rate, (ii) the Servicing Fee Rate and (ii) the rate at which
the
LPMI Fee is calculated, if applicable.
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
Rate through and including the last day of the month of purchase, plus any
portion of the Servicing Advances payable to the purchaser of the Mortgage
Loan,
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 ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or its
successors in interest.
Transaction
Documents:
This Agreement, the Pooling and Servicing Agreement, the Custodial Agreement
and
the Underwriting Agreement.
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.
▇▇▇▇▇
Fargo:
▇▇▇▇▇
Fargo Bank, National Association.
* Please
contact Bear ▇▇▇▇▇▇▇ for pricing information.
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
Loan
Seller agrees to sell, and the Purchaser agrees to purchase Mortgage Loans
sold
by the Mortgage Loan Seller having an aggregate outstanding principal balance
as
of the Cut-off Date equal to the related 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 sold by the Mortgage Loan Seller in immediately available
funds by wire transfer to such account or accounts as shall be designated
by the
Mortgage Loan Seller.
(d) In
addition to the foregoing, on the Closing Date the Mortgage Loan Seller assigns
to the Purchaser all of its right, title and interest in the Servicing
Agreements.
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
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 Mortgage File, provided,
however,
that in
lieu of the foregoing, the Mortgage Loan Seller may deliver the following
documents, under the circumstances set forth below: (x) in lieu of the original
Mortgage (other than the Mortgages related to the EMC Flow Loans), 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 (other than the Mortgages related to the EMC Flow Loans), 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 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®
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® 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 any Servicer or the Master Servicer to, and the Master Servicer
agrees that it will not, alter the codes referenced in this paragraph with
respect to any Mortgage Loan during the term of 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 and the related servicing, will ultimately be assigned to
U.S.
Bank National Association, as Trustee for the benefit of the Certificateholders,
on the date hereof.
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 ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ and such
investors or prospective investors, upon reasonable request during regular
business hours, sufficient to permit the Purchaser, Bear ▇▇▇▇▇▇▇ 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
Custodian as obligated under the 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 Custodial Agreement.
(c) Within
90
days of the Closing Date, the Trustee or the 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 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 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 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 Custodian, the Trustee, a final
certification substantially in the form of Exhibit Three to the Custodial
Agreement. If the Trustee or the 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
Defect”),
the
Trustee or the Custodian on its behalf shall notify the Mortgage Loan Seller of
such Material Defect. The Mortgage Loan Seller (on its own behalf as a Mortgage
Loan Seller) shall correct or cure any such Material Defect within 90 days
from
the date of notice from the Trustee 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 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
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 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 a Company 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 as
described in Section 9.05 of the Pooling and Servicing Agreement or an
assignment of the servicing as described in Section 8.05(b) 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 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
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 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 the 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, that:
(a) The
information set forth in the Mortgage Loan Schedule hereto is true and correct
in all material respects.
(b) Immediately
prior to the transfer to the Purchaser, the Mortgage Loan Seller was the
sole
owner of beneficial title and holder of each Mortgage and Mortgage Note relating
to the Mortgage Loans and is conveying the same free and clear of any and
all
liens, claims, encumbrances, participation interests, equities, pledges,
charges
or security interests of any nature and the Mortgage Loan Seller has full
right
and authority to sell or assign the same pursuant to this
Agreement.
(c) Each
Mortgage Loan at the time it was made complied in all material respects with
all
applicable federal, state and local laws and regulations, including, without
limitation, usury, equal credit opportunity, disclosure and recording laws
and
all applicable predatory, abusive and fair lending laws; and each Mortgage
Loan
has been serviced in all material respects in accordance with all applicable
laws and regulations, including, without limitation, usury, equal credit
opportunity, disclosure and recording laws and all applicable anti-predatory
lending laws and the terms of the related Mortgage Note, the Mortgage and
other
loan documents.
(d) There
is
no monetary default existing under any Mortgage or the related Mortgage Note
and
there is no material event which, with the passage of time or with notice
and
the expiration of any grace or cure period, would constitute a default, breach
or event of acceleration; and neither the Mortgage Loan Seller, any of its
affiliates nor any servicer of any related Mortgage Loan has taken any action
to
waive any default, breach or event of acceleration; and no foreclosure action
is
threatened or has been commenced with respect to the Mortgage Loan.
(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, (i) if required by
law
in the jurisdiction where the Mortgaged Property is located, or (ii) to protect
the interests of the Trustee on behalf of the Certificateholders.
(f) No
selection procedure reasonably believed by the Mortgage Loan Seller to be
adverse to the interests of the Certificateholders was utilized in selecting
the
Mortgage Loans.
(g) Each
Mortgage is a valid and enforceable first or second lien 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.
(h) There
is
no mechanics’ lien or claim for work, labor or material affecting the premises
subject to any Mortgage which is or may be a lien prior to, or equal with,
the
lien of such Mortgage except those which are insured against by the title
insurance policy referred to in clause (m) below.
(i) There
was
no delinquent tax or assessment lien against the property subject to any
Mortgage, except where such lien was being contested in good faith and a
stay
had been granted against levying on the property.
(j) There
is
no valid offset, defense or counterclaim to any Mortgage Note or Mortgage,
including the obligation of the Mortgagor to pay the unpaid principal and
interest on such Mortgage Note.
(k) The
physical property subject to any Mortgage is free of material damage and
is in
good repair and there is no proceeding pending or threatened for the total
or
partial condemnation of any Mortgaged Property.
(l) The
Mortgaged Property and all improvements thereon comply with all requirements
of
any applicable zoning and subdivision laws and ordinances.
(m) A
lender’s title insurance policy (on an ALTA or CLTA form) or binder, or other
assurance of title customary in the relevant jurisdiction therefor in a form
acceptable to ▇▇▇▇▇▇ ▇▇▇ or Freddie Mac, was issued on the date that each
Mortgage Loan was created by a title insurance company which, to the best
of the
Mortgage Loan Seller’s knowledge, was qualified to do business in the
jurisdiction where the related Mortgaged Property is located, insuring the
Mortgage Loan Seller and its successors and assigns that the Mortgage is
a first
priority lien on the related Mortgaged Property in the original principal
amount
of the Mortgage Loan. The Mortgage Loan Seller is the sole insured under
such
lender’s title insurance policy, and such policy, binder or assurance is valid
and remains in full force and effect, and each such policy, binder or assurance
shall contain all applicable endorsements including a negative amortization
endorsement, if applicable.
(n) 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 ▇▇▇▇▇▇ ▇▇▇ or
Freddie Mac.
(o) The
improvements on each Mortgaged Property securing a Mortgage Loan are insured
(by
an insurer which is acceptable to the Mortgage Loan Seller) against loss
by fire
and such hazards as are covered under a standard extended coverage endorsement
in the locale in which the Mortgaged Property is located, in an amount which
is
not less than the lesser of the maximum insurable value of the improvements
securing such Mortgage Loan or the outstanding principal balance of the Mortgage
Loan, but in no event in an amount less than an amount that is required to
prevent the Mortgagor from being deemed to be a co-insurer thereunder; if
the
improvement on the Mortgaged Property is a condominium unit, it is included
under the coverage afforded by a blanket policy for the condominium project;
if
upon origination of the related Mortgage Loan, the improvements on the Mortgaged
Property were in an area identified as a federally designated flood area,
a
flood insurance policy is in effect in an amount representing coverage not
less
than the least of (i) the outstanding principal balance of the Mortgage Loan,
(ii) the restorable cost of improvements located on such Mortgaged Property
or
(iii) the maximum coverage available under federal law; and each Mortgage
obligates the Mortgagor thereunder to maintain the insurance referred to
above
at the Mortgagor’s cost and expense.
(p) Each
Mortgage Loan constitutes a “qualified mortgage” under Section 860G(a)(3)(A) of
the Code and Treasury Regulation Section 1.860G-2(a)(1), (2), (4), (5), (6),
(7)
and (9) without reliance on the provisions of Treasury Regulation Section
1.860G-2(a)(3) or Treasury Regulation Section 1.860G-2(f)(2) or any other
provision that would allow a Mortgage Loan to be treated as a “qualified
mortgage” notwithstanding its failure to meet the requirements of Section
860G(a)(3)(A) of the Code and Treasury Regulation Section 1.860G-2(a)(1),
(2),
(4), (5), (6), (7) and (9).
(q) 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, as
amended or (b) “high cost home,” “covered” (excluding home loans defined as
“covered home loans” in the New Jersey Home
Ownership Security Act of 2002 that were originated between November 26,
2003
and July 7, 2004), “high risk home” or “predatory” loans under any applicable
state, federal or local law (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).
(r) The
information set forth in Schedule A of the Prospectus Supplement with respect
to
the Mortgage Loans
is true
and correct in all material respects.
(s) No
Mortgage Loan (a) is a “high cost loan” or “covered loan” as applicable (as such
terms
are
defined in the then current Standard & Poor’s LEVELS® Glossary, which is now
Version 5.6(d), Appendix E, attached hereto as Exhibit 6) or (b) was originated
on or after October 1, 2002 through March 6, 2003 and is governed by the
Georgia
Fair Lending Act.
(t) Each
Mortgage Loan was originated in accordance with the underwriting guidelines
of
the related originator.
(u) Each
original Mortgage has been recorded or is in the process of being recorded
in
accordance with the requirements of Section 2.01 of the Pooling and Servicing
Agreement in the appropriate jurisdictions wherein such recordation is required
to perfect the lien thereof for the benefit of the Trust Fund.
(v) The
related Mortgage File contains each of the documents and instruments listed
in
Section 2.01 of the Pooling and Servicing Agreement, subject to any exceptions,
substitutions and qualifications as are set forth in such Section.
(w) The
Mortgage Loans are currently being serviced in accordance with accepted
servicing practices.
(x) With
respect to each Mortgage Loan that has a prepayment penalty feature, each
such
prepayment penalty is enforceable and will be enforced by the Mortgage Loan
Seller and each prepayment penalty
is
permitted pursuant to federal, state and local law, provided
that
(i) no
Mortgage Loan will impose a prepayment penalty for a term in excess of five
years from the date such Mortgage Loan was originated and (ii) such prepayment
penalty is at least equal to the lesser of (A) the maximum amount permitted
under applicable law and (B) six months interest at the related Mortgage
Interest Rate on the amount prepaid in excess of 20% of the original principal
balance of such Mortgage Loan.
(y) 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.
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. 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 (x) 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 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 or any other Transaction Document to
which
it is a party and to consummate the transactions contemplated hereby or
thereby;
(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 or any other Transaction Document to which it is a
party;
(c) the
execution and delivery by the Mortgage Loan Seller of this Agreement and
any
other Transaction Document to which it is a party 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 or any other Transaction Document
to
which it is a party, nor the consummation of the transactions herein or therein
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 or any
other Transaction Document to which it is a party and to consummate the
transactions contemplated hereby or thereby;
(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) each
of
this Agreement and the other Transaction Document to which it is a party
has
been duly executed and delivered by the Mortgage Loan Seller and, assuming
due
authorization, execution and delivery by the Purchaser, constitutes a valid
and
binding obligation of the Mortgage Loan Seller 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 any other
Transaction Document to which it is a party 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 will
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 or any other Transaction Document to which it is a party; 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 or any other Transaction Document to which it is a party and to
consummate the transactions contemplated hereby or thereby;
(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 or any other Transaction Document to which it is a party;
(c) the
execution and delivery by the Purchaser of this Agreement or any other
Transaction Document to which it is a party 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 or any
other Transaction Document to which it is a party and to consummate the
transactions contemplated hereby or thereby;
(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 consents, approvals, notices, registrations
or
other actions as have already been obtained, given or made;
(e) each
of
this Agreement and the other Transaction Documents to which it is a party
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 and the other Transaction Documents to which
it
is a party or (ii) with respect to any other matter which in the judgment
of the
Purchaser will be determined adversely to the Purchaser and will if determined
adversely to the Purchaser materially and adversely affect the Purchaser’s
ability to perform its obligations under this Agreement and the other
Transaction Documents to which it is a party; 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 the other Transaction Documents
to which it is a party; 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 any of the Transaction Documents;
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;
(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 and the other Transaction Documents to which
it
is a party, 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 ▇▇▇▇▇▇▇ pursuant to the Underwriting Agreement
shall have been issued and sold to Bear ▇▇▇▇▇▇▇.
(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 their respective
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 any of the Transaction Documents,
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;
(ii) The
Pooling and Servicing Agreement, in form and substance reasonably satisfactory
to the Mortgage Loan Seller, 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 other Transaction Documents to which
it
is a party, 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 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 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 ▇▇▇▇▇▇▇ 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
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—EMC—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 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 Term Sheet Supplement, 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; 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 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 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; 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 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,
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, (Telecopy: ((▇▇▇)▇▇▇-▇▇▇▇),
Attention: President or General Counsel, and notices to the Purchaser shall
be
directed to Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (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,
the Mortgage Loan Seller’s representations and warranties 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 ▇▇▇▇▇▇▇,
and
their directors, officers and controlling persons (within the meaning of
federal
securities laws). 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
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]
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.
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EMC
MORTGAGE CORPORATION
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By:
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Name:
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Title:
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BEAR
▇▇▇▇▇▇▇ ASSET BACKED
SECURITIES
I LLC
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By:
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Name:
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Title:
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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 “U.S. Bank National Association”, as Trustee for
certificateholders of Bear ▇▇▇▇▇▇▇ Asset Backed Securities I LLC Asset-Backed
Certificates, Series 2006-AC5,” or to blank 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, for Mortgage Loans other than the
EMC
Flow Loans, if the original is not available, a copy), with evidence of such
recording indicated thereon (or if clause (x) in the proviso below applies,
shall be in recordable form);
(iii) unless
the Mortgage Loan is a MOM Loan, the assignment (either an original or a
copy,
which may be in the form of a blanket assignment if permitted in the
jurisdiction in which the Mortgaged Property is located) to the Trustee of
the
Mortgage with respect to each Mortgage Loan in the name of “U.S. Bank National
Association”, as Trustee for certificateholders of Bear ▇▇▇▇▇▇▇ Asset Backed
Securities I LLC Asset-Backed Certificates, Series 2006-AC5,” 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, 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 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 Custodian a certification
of
a Servicing Officer to such effect and in such case shall deposit all amounts
paid in respect of such Mortgage Loans, in the Master Servicer Collection
Account or in the Distribution Account on the Closing Date. In the case of
the
documents referred to in clause (x) above, the Purchaser shall deliver such
documents to the Trustee or its 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 Company or the related Servicer as a result of such Person
having completed a Request for Release, the Custodian shall, if not so
completed, complete the assignment of the related Mortgage in the manner
specified in clause (iii) above.
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:
(a) the
city,
state and zip code of the Mortgaged Property;
(b) the
property type;
(c) the
Mortgage Interest Rate;
(d) the
Servicing Fee Rate;
(e) the
Master Servicer’s Fee Rate;
(f) the
LPMI
Fee, if applicable;
(g) the
Trustee Fee Rate, if applicable;
(h) the
Net
Rate;
(i) the
maturity date;
(j) the
stated original term to maturity;
(k) the
stated remaining term to maturity;
(l) the
original Principal Balance;
(m) the
first
payment date;
(n) the
principal and interest payment in effect as of the Cut-off Date;
(o) the
unpaid Principal Balance as of the Cut-off Date;
(p) the
Loan-to-Value Ratio at origination;
(q) the
insurer of any Primary Mortgage Insurance Policy;
(r) the
MIN
with respect to each MOM Loan;
(s) the
Gross
Margin, if applicable;
(t) the
next
Adjustment Date, if applicable;
(u) the
Maximum Lifetime Mortgage Rate, if applicable;
(v) the
Minimum Lifetime Mortgage Rate, if applicable;
(w) the
Periodic Rate Cap, if applicable;
(x) the
Loan
Group, if applicable;
(y) a
code
indicating whether the Mortgage Loan is negatively amortizing;
(z)
which
Mortgage Loans adjust after an initial fixed-rate period of one, two, three,
five, seven or ten years or any other period;
(aa) the
Prepayment Charge, if any;
(bb) lien
position (e.g., first lien or second lien);
(cc) a
code
indicating whether the Mortgage Loan is has a balloon payment;
(dd) a
code
indicating whether the Mortgage Loan is an interest-only loan;
(ee) the
interest-only term, if applicable;
(ff) the
Mortgage Loan Seller; and
(gg) the
original amortization term.
Such
schedule also shall set forth for all of the Mortgage Loans, the total number
of
Mortgage Loans, the total of each of the amounts described under (n) and
(j)
above, the weighted average by principal balance as of the Cut-off Date of
each
of the rates described under (c) through (h) above, and the weighted average
remaining term to maturity by unpaid principal balance as of the Cut-off
Date.
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,” “THE SPONSOR” and “SCHEDULE
A - Mortgage Loan Statistical Data.”
EXHIBIT
4
PURCHASER’S
INFORMATION
All
information in the Prospectus Supplement and the Prospectus, except the Mortgage
Loan Seller’s Information.
EXHIBIT
5
SCHEDULE
OF LOST NOTES
Available
Upon Request
EXHIBIT
6
REVISED
April 18, 2006
APPENDIX
E - Standard & Poor’s Predatory Lending Categories
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
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending
Law/Effective
Date
|
Category
under
Applicable
Anti-
Predatory
Lending Law
|
|
Arkansas
|
Arkansas
Home Loan Protection Act,
Ark.
Code ▇▇▇. §§ ▇▇-▇▇-▇▇▇ et
seq.
Effective
July 16, 2003
|
High
Cost Home Loan
|
|
Cleveland
Heights, OH
|
Ordinance
No. 72-2003 (PSH), Mun.
Code
§§ 757.01 et
seq.
Effective
June 2, 2003
|
Covered
Loan
|
|
Colorado
|
Consumer
Equity Protection, Colo. Stat.
▇▇▇.
§§ 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
|
Covered
Loan
|
|
Connecticut
|
Connecticut
Abusive Home Loan
Lending
Practices Act, Conn. Gen. Stat.
§§
36a-746 et
seq.
Effective
October 1, 2001
|
High
Cost Home Loan
|
|
District
of Columbia
|
Home
Loan Protection Act, D.C. Code
§§
26-1151.01 et
seq.
Effective
for loans closed on or after January 28, 2003
|
Covered
Loan
|
|
Florida
|
Fair
Lending Act, Fla. Stat. ▇▇▇. §§
494.0078
et
seq.
Effective
October 2, 2002
|
High
Cost Home Loan
|
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending
Law/Effective
Date
|
Category
under
Applicable
Anti-
Predatory
Lending Law
|
|
Georgia
(Oct. 1, 2002 -
Mar.
6, 2003)
|
Georgia
Fair Lending Act, Ga. Code
▇▇▇.
§§ 7-6A-1 et
seq.
Effective
October 1, 2002 - March 6 2003
|
High
Cost Home Loan
|
|
Georgia
as amended
(Mar.
7, 2003 - current)
|
Georgia
Fair Lending Act, Ga. Code
▇▇▇.
§§ 7-6A-1 et
seq.
Effective
for loans closed on or after
March
7, 2003
|
High
Cost Home Loan
|
|
HOEPA
Section 32
|
Home
Ownership and Equity Protection
Act
of 1994, 15 U.S.C. § 1639, 12
C.F.R.
§§ 226.32 and 226.34
Effective
October 1, 1995, amendments
October
1, 2002
|
High
Cost Loan
|
|
Illinois
|
High
Risk Home Loan Act, Ill. Comp.
Stat.
tit. 815, §§ 137/5 et
seq.
Effective
January 1, 2004 (prior to this date, regulations under
Residential
Mortgage
License Act effective from May 14, 2001)
|
High
Risk Home Loan
|
|
Kansas
|
Consumer
Credit Code, Kan. Stat. ▇▇▇.
§§
16a-1-101 et
seq.
Sections
16a-1-301 and 16a-3-207 became effective April 14, 1999;
Section
16a-3-308a became effective July 1, 1999
|
High
Loan to Value Consumer Loan (id.
§
16a-3-207) and;
|
|
High
APR Consumer Loan (id.
§
16a-3-308a)
|
||
|
Kentucky
|
2003
KY H.B. 287 - High Cost Home
Loan
Act, Ky. Rev. Stat. §§ 360.100 et seq.
Effective
June 24, 2003
|
High
Cost Home Loan
|
|
Maine
|
Truth
in Lending, Me. Rev. Stat. tit. 9-
A,
§§ 8-101 et
seq.
Effective
September 29, 1995 and as amended from time to time
|
High
Rate High Fee Mortgage
|
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending
Law/Effective
Date
|
Category
under
Applicable
Anti-
Predatory
Lending Law
|
|
Massachusetts
|
Part
40 and Part 32, 209 C.M.R. §§
32.00
et
seq.
and 209 C.M.R. §§ 40.01 et
seq.
Effective
March 22, 2001 and amended from time to time
|
High
Cost Home Loan
|
|
Nevada
|
Assembly
Bill No. 284, Nev. Rev. Stat.
§§
598D.010 et
seq.
Effective
October 1, 2003
|
Home
Loan
|
|
New
Jersey
|
New
Jersey Home Ownership Security
Act
of 2002, N.J. Rev. Stat. §§ 46:10B- 22 et
seq.
Effective
for loans closed on or after November 27, 2003
|
High
Cost Home Loan
|
|
New
Mexico
|
Home
Loan Protection Act, N.M. Rev.
Stat.
§§ 58-21A-1 et
seq.
Effective
as of January 1, 2004; Revised
as
of February 26, 2004
|
High
Cost Home Loan
|
|
New
York
|
N.Y.
Banking Law Article 6-1
Effective
for applications made on or after April 1, 2003
|
High
Cost Home Loan
|
|
North
Carolina
|
Restrictions
and Limitations on High
Cost
Home Loans, N.C. Gen. Stat. §§ 24-1.1E et
seq.
Effective
July 1, 2000; amended October 1, 2003 (adding open-end lines of
credit)
|
High
Cost Home Loan
|
|
Ohio
|
H.B.
386 (codified in various sections of the Ohio Code), Ohio Rev.
Code ▇▇▇.
§§ 1349.25 et
seq.
Effective
May 24, 2002
|
Covered
Loan
|
|
Oklahoma
|
Consumer
Credit Code (codified in various sections of Title 14A)
Effective
July 1, 2000; amended effective January 1, 2004
|
Subsection
10 Mortgage
|
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending
Law/Effective
Date
|
Category
under
Applicable
Anti-
Predatory
Lending Law
|
|
South
Carolina
|
South
Carolina High Cost and
Consumer
Home Loans Act, S.C. Code
▇▇▇.
§§ 37-23-10 et
seq.
Effective
for loans taken on or after January 1, 2004
|
High
Cost Home Loan
|
|
West
Virginia
|
West
Virginia Residential Mortgage Lender, Broker and Servicer Act,
W.
Va.
Code ▇▇▇. §§ 31-17-1 et
seq.
Effective
June 5, 2002
|
West
Virginia Mortgage Loan Act Loan
|
Standard
& Poor’s Covered Loan Categorization
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending
Law/Effective
Date
|
Category
under
Applicable
Anti-
Predatory
Lending Law
|
|
Georgia
(Oct. 1, 2002 -
Mar.
6, 2003)
|
Georgia
Fair Lending Act, Ga. Code
▇▇▇.
§§ 7-6A-1 et
seq.
Effective
October 1, 2002 - March 6, 2003
|
Covered
Loan
|
|
New
Jersey
|
New
Jersey Home Ownership Security
Act
of 2002, N.J. Rev. Stat. §§ 46:10B 22 et
seq.
Effective
November 27, 2003 - July 5, 2004
|
Covered
Home Loan
|
Standard
& Poor’s Home Loan Categorization
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending
Law/Effective
Date
|
Category
under
Applicable
Anti-
Predatory
Lending Law
|
|
Georgia
(Oct. 1, 2002 -
Mar.
6, 2003)
|
Georgia
Fair Lending Act, Ga. Code
▇▇▇.
§§ 7-6A-1 et
seq.
Effective
October 1, 2002 - March 6, 2003
|
Home
Loan
|
|
New
Jersey
|
New
Jersey Home Ownership Security
Act
of 2002, N.J. Rev. Stat. §§ 46:10B- 22 et
seq.
Effective
for loans closed on or after November 27, 2003
|
Home
Loan
|
|
New
Mexico
|
Home
Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et
seq.
Effective
as of January 1, 2004; Revised as of February 26, 2004
|
Home
Loan
|
|
North
Carolina
|
Restrictions
and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§
24-1.1E
et
seq.
Effective
July 1, 2000; amended October 1, 2003 (adding open-end lines of
credit)
|
Consumer
Home Loan
|
|
South
Carolina
|
South
Carolina High Cost and Consumer Home Loans Act, S.C. Code ▇▇▇.
§§ 37-23-10
et
seq.
Effective
for loans taken on or after January 1, 2004
|
Consumer
Home Loan
|
SCHEDULE
A
REQUIRED
RATINGS FOR EACH CLASS OF CERTIFICATES
Public
Certificates
|
Class
|
▇▇▇▇▇’▇
|
S&P
|
|
A-1
|
Aaa
|
AAA
|
|
A-2
|
Aaa
|
AAA
|
|
A-3
|
Aa1
|
AAA
|
|
M-1
|
Aa2
|
AA
|
|
M-2
|
A1
|
A+
|
|
M-3
|
A2
|
A
|
|
M-4
|
A3
|
A-
|
|
B-1
|
Baa1
|
BBB+
|
|
B-2
|
Baa2
|
BBB
|
|
B-3
|
Baa3
|
BBB-
|
None
of
the above ratings has been lowered, qualified or withdrawn since the dates
of
issuance of such ratings by the Rating Agencies.
Private
Certificates
|
Class
|
S&P
|
▇▇▇▇▇’▇
|
|
B-4
|
[Ba2]
|
[BB]
|
|
C
|
Not
Rated
|
Not
Rated
|
|
P
|
Not
Rated
|
Not
Rated
|
|
R-1
|
Not
Rated
|
Not
Rated
|
|
R-2
|
Not
Rated
|
Not
Rated
|
|
R-3
|
Not
Rated
|
Not
Rated
|
|
RX
|
Not
Rated
|
Not
Rated
|
EXHIBIT
M
[Reserved]
EXHIBIT
N
SERVICING
CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
Definitions
Primary
Servicer - transaction party having borrower contact
Master
Servicer - aggregator of pool assets
Securities
Administrator - waterfall calculator
Back-up
Servicer - named in the transaction (in the event a Back up Servicer becomes
the
Primary Servicer, follow Primary Servicer obligations)
Custodian
- safe keeper of pool assets
Trustee
-
fiduciary of the transaction
Note:
The
definitions above describe the essential function that the party performs,
rather than the party’s title. So, for example, in a particular transaction, the
trustee may perform the “paying agent” and “securities administrator” functions,
while in another transaction, the securities administrator may perform these
functions.
Where
there are multiple checks for criteria the attesting party will identify
in
their management assertion that they are attesting only to the portion of
the
distribution chain they are responsible for in the related transaction
agreements.
Key:
X
- obligation
[X]
- under consideration for obligation
|
Reg
AB Reference
|
Servicing
Criteria
|
Primary
Servicer
|
Master
Servicer
|
Securities
Admin
|
Custodian
|
Trustee
(nominal)
|
|
General
Servicing Considerations
|
||||||
|
1122(d)(1)(i)
|
Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction
agreements.
|
X
|
X
|
X
|
||
|
1122(d)(1)(ii)
|
If
any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities.
|
X
|
X
|
|||
|
1122(d)(1)(iii)
|
Any
requirements in the transaction agreements to maintain a back-up
servicer
for the Pool Assets are maintained.
|
|||||
|
1122(d)(1)(iv)
|
A
fidelity bond and errors and omissions policy is in effect on
the party
participating in the servicing function throughout the reporting
period in
the amount of coverage required by and otherwise in accordance
with the
terms of the transaction agreements.
|
X
|
X
|
|||
|
Cash
Collection and Administration
|
||||||
|
1122(d)(2)(i)
|
Payments
on pool assets are deposited into the appropriate custodial bank
accounts
and related bank clearing accounts no more than two business
days
following receipt, or such other number of days specified in
the
transaction agreements.
|
X
|
X
|
X
|
||
|
1122(d)(2)(ii)
|
Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
|
X
|
X
|
X
|
||
|
1122(d)(2)(iii)
|
Advances
of funds or guarantees regarding collections, cash flows or distributions,
and any interest or other fees charged for such advances, are
made,
reviewed and approved as specified in the transaction agreements.
|
X
|
X
|
X
|
||
|
1122(d)(2)(iv)
|
The
related accounts for the transaction, such as cash reserve accounts
or
accounts established as a form of over collateralization, are
separately
maintained (e.g., with respect to commingling of cash) as set
forth in the
transaction agreements.
|
X
|
X
|
X
|
||
|
1122(d)(2)(v)
|
Each
custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes
of
this criterion, “federally insured depository institution” with respect to
a foreign financial institution means a foreign financial institution
that
meets the requirements of Rule 13k-1(b)(1) of the Securities
Exchange Act.
|
X
|
X
|
X
|
||
|
1122(d)(2)(vi)
|
Unissued
checks are safeguarded so as to prevent unauthorized access.
|
X
|
X
|
|||
|
1122(d)(2)(vii)
|
Reconciliations
are prepared on a monthly basis for all asset-backed securities
related
bank accounts, including custodial accounts and related bank
clearing
accounts. These reconciliations are (A) mathematically accurate;
(B)
prepared within 30 calendar days after the bank statement cutoff
date, or
such other number of days specified in the transaction agreements;
(C)
reviewed and approved by someone other than the person who prepared
the
reconciliation; and (D) contain explanations for reconciling
items. These
reconciling items are resolved within 90 calendar days of their
original
identification, or such other number of days specified in the
transaction
agreements.
|
X
|
X
|
X
|
||
|
Investor
Remittances and Reporting
|
||||||
|
1122(d)(3)(i)
|
Reports
to investors, including those to be filed with the Commission,
are
maintained in accordance with the transaction agreements and
applicable
Commission requirements. Specifically, such reports (A) are prepared
in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance
with the
terms specified in the transaction agreements; (C) are filed
with the
Commission as required by its rules and regulations; and (D)
agree with
investors’ or the trustee’s records as to the total unpaid principal
balance and number of Pool Assets serviced by the Servicer.
|
X
|
X
|
X
|
||
|
1122(d)(3)(ii)
|
Amounts
due to investors are allocated and remitted in accordance with
timeframes,
distribution priority and other terms set forth in the transaction
agreements.
|
X
|
X
|
X
|
||
|
1122(d)(3)(iii)
|
Disbursements
made to an investor are posted within two business days to the
Servicer’s
investor records, or such other number of days specified in the
transaction agreements.
|
X
|
X
|
X
|
||
|
1122(d)(3)(iv)
|
Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank statements.
|
X
|
X
|
X
|
||
|
Pool
Asset Administration
|
||||||
|
1122(d)(4)(i)
|
Collateral
or security on pool assets is maintained as required by the transaction
agreements or related pool asset documents.
|
X
|
X
|
|||
|
1122(d)(4)(ii)
|
Pool
assets and related documents are safeguarded as required by the
transaction agreements
|
X
|
X
|
|||
|
1122(d)(4)(iii)
|
Any
additions, removals or substitutions to the asset pool are made,
reviewed
and approved in accordance with any conditions or requirements
in the
transaction agreements.
|
X
|
X
|
|||
|
1122(d)(4)(iv)
|
Payments
on pool assets, including any payoffs, made in accordance with
the related
pool asset documents are posted to the Servicer’s obligor records
maintained no more than two business days after receipt, or such
other
number of days specified in the transaction agreements, and allocated
to
principal, interest or other items (e.g., escrow) in accordance
with the
related pool asset documents.
|
X
|
||||
|
1122(d)(4)(v)
|
The
Servicer’s records regarding the pool assets agree with the Servicer’s
records with respect to an obligor’s unpaid principal balance.
|
X
|
||||
|
1122(d)(4)(vi)
|
Changes
with respect to the terms or status of an obligor's pool assets
(e.g.,
loan modifications or re-agings) are made, reviewed and approved
by
authorized personnel in accordance with the transaction agreements
and
related pool asset documents.
|
X
|
X
|
|||
|
1122(d)(4)(vii)
|
Loss
mitigation or recovery actions (e.g., forbearance plans, modifications
and
deeds in lieu of foreclosure, foreclosures and repossessions,
as
applicable) are initiated, conducted and concluded in accordance
with the
timeframes or other requirements established by the transaction
agreements.
|
X
|
X
|
|||
|
1122(d)(4)(viii)
|
Records
documenting collection efforts are maintained during the period
a pool
asset is delinquent in accordance with the transaction agreements.
Such
records are maintained on at least a monthly basis, or such other
period
specified in the transaction agreements, and describe the entity’s
activities in monitoring delinquent pool assets including, for
example,
phone calls, letters and payment rescheduling plans in cases
where
delinquency is deemed temporary (e.g., illness or unemployment).
|
X
|
||||
|
1122(d)(4)(ix)
|
Adjustments
to interest rates or rates of return for pool assets with variable
rates
are computed based on the related pool asset documents.
|
X
|
||||
|
1122(d)(4)(x)
|
Regarding
any funds held in trust for an obligor (such as escrow accounts):
(A) such
funds are analyzed, in accordance with the obligor’s pool asset documents,
on at least an annual basis, or such other period specified in
the
transaction agreements; (B) interest on such funds is paid, or
credited,
to obligors in accordance with applicable pool asset documents
and state
laws; and (C) such funds are returned to the obligor within 30
calendar
days of full repayment of the related pool assets, or such other
number of
days specified in the transaction agreements.
|
X
|
||||
|
1122(d)(4)(xi)
|
Payments
made on behalf of an obligor (such as tax or insurance payments)
are made
on or before the related penalty or expiration dates, as indicated
on the
appropriate bills or notices for such payments, provided that
such support
has been received by the servicer at least 30 calendar days prior
to these
dates, or such other number of days specified in the transaction
agreements.
|
X
|
||||
|
1122(d)(4)(xii)
|
Any
late payment penalties in connection with any payment to be made
on behalf
of an obligor are paid from the Servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or
omission.
|
X
|
||||
|
1122(d)(4)(xiii)
|
Disbursements
made on behalf of an obligor are posted within two business days
to the
obligor’s records maintained by the servicer, or such other number of
days
specified in the transaction agreements.
|
X
|
||||
|
1122(d)(4)(xiv)
|
Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
|
X
|
X
|
|||
|
1122(d)(4)(xv)
|
Any
external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set
forth in
the transaction agreements. (In this transaction there is no
external
enhancement or other support.)
|
X
|
X
|
EXHIBIT
O
FORM
10-D, FORM 8-K AND FORM 10-K
REPORTING
RESPONSIBILITY
As
to
each item described below, the entity indicated as the Responsible Party
shall
be primarily responsible for reporting the information to the party identified
as responsible for preparing the Securities Exchange Act Reports pursuant
to
Section 4.18 of the Pooling and Servicing Agreement.
Under
Item 1 of Form 10-D: a) items marked “Monthly Statements to Certificateholders”
are required to be included in the periodic Distribution Date statement under
Section 6.06, provided by the Securities Administrator based on information
received from the party providing such information; and b) items marked “Form
10-D report” are required to be in the Form 10-D report but not the Monthly
Statements to Certificateholders, provided by the party indicated. Information
under all other Items of Form 10-D is to be included in the Form 10-D report.
All such information and any other Items on Form 8-K and Form 10-D set forth
in
this Exhibit shall be sent to the Securities Administrator and the
Depositor.
|
Form
|
Item
|
Description
|
Servicers
|
Master
Servicer
|
Securities
Administrator
|
Custodian
|
Trustee
(nominal)
|
Depositor
|
Sponsor
|
|
|
10-D
|
Must
be filed within 15 days of the distribution date for the asset-backed
securities.
|
|||||||||
|
1
|
Distribution
and Pool Performance Information
|
|||||||||
|
Item
1121(a) - Distribution and Pool Performance
Information
|
||||||||||
|
(1)
Any applicable record dates, accrual dates, determination dates
for
calculating distributions and actual distribution dates for the
distribution period.
|
X
(Monthly
Statements to Certificateholders)
|
|||||||||
|
(2)
Cash flows received and the sources thereof for distributions,
fees and
expenses.
|
X
(Monthly
Statements to Certificateholders)
|
|||||||||
|
(3)
Calculated amounts and distribution of the flow of funds for
the period
itemized by type and priority of payment, including:
|
X
(Monthly
Statements to Certificateholders)
|
|||||||||
|
(i)
Fees or expenses accrued and paid, with an identification of
the general
purpose of such fees and the party receiving such fees or
expenses.
|
X
(Monthly
Statements to Certificateholders)
|
|||||||||
|
(ii)
Payments accrued or paid with respect to enhancement or other
support
identified in Item 1114 of Regulation AB (such as insurance premiums
or
other enhancement maintenance fees), with an identification of
the general
purpose of such payments and the party receiving such
payments.
|
X
(Monthly
Statements to Certificateholders)
|
|||||||||
|
(iii)
Principal, interest and other distributions accrued and paid
on the
asset-backed securities by type and by class or series and any
principal
or interest shortfalls or carryovers.
|
X
(Monthly
Statements to Certificateholders)
|
|||||||||
|
(iv)
The amount of excess cash flow or excess spread and the disposition
of
excess cash flow.
|
X
(Monthly
Statements to Certificateholders)
|
|||||||||
|
(4)
Beginning and ending principal balances of the asset-backed
securities.
|
X
(Monthly
Statements to Certificateholders)
|
|||||||||
|
(5)
Interest rates applicable to the pool assets and the asset-backed
securities, as applicable. Consider providing interest rate information
for pool assets in appropriate distributional groups or incremental
ranges.
|
X
(Monthly
Statements to Certificateholders)
|
|||||||||
|
(6)
Beginning and ending balances of transaction accounts, such as
reserve
accounts, and material account activity during the period.
|
X
(Monthly
Statements to Certificateholders)
|
|||||||||
|
(7)
Any amounts drawn on any credit enhancement or other support
identified in
Item 1114 of Regulation AB, as applicable, and the amount of
coverage
remaining under any such enhancement, if known and
applicable.
|
X
(Monthly
Statements to Certificateholders)
|
|||||||||
|
(8)
Number and amount of pool assets at the beginning and ending
of each
period, and updated pool composition information, such as weighted
average
coupon, weighted average remaining term, pool factors and prepayment
amounts.
|
X
(Monthly
Statements to Certificateholders)
|
Updated
pool composition information fields to be as specified by Depositor
from
time to time
|
||||||||
|
(9)
Delinquency and loss information for the period.
|
X
|
X
|
X
(Monthly
Statements to Certificateholders)
|
|||||||
|
In
addition, describe any material changes to the information specified
in
Item 1100(b)(5) of Regulation AB regarding the pool assets.
(methodology)
|
X
|
|||||||||
|
(10)
Information on the amount, terms and general purpose of any advances
made
or reimbursed during the period, including the general use of
funds
advanced and the general source of funds for
reimbursements.
|
X
|
X
|
X
(Monthly
Statements to Certificateholders)
|
|||||||
|
(11)
Any material modifications, extensions or waivers to pool asset
terms,
fees, penalties or payments during the distribution period or
that have
cumulatively become material over time.
|
X
|
X
|
X
(Monthly
Statements to Certificateholders)
|
|||||||
|
(12)
Material breaches of pool asset representations or warranties
or
transaction covenants.
|
X
|
X
|
X
(if
agreed upon by the parties)
|
X
|
||||||
|
(13)
Information on ratio, coverage or other tests used for determining
any
early amortization, liquidation or other performance trigger
and whether
the trigger was met.
|
X
(Monthly
Statements to Certificateholders)
|
|||||||||
|
(14)
Information regarding any new issuance of asset-backed securities
backed
by the same asset pool,
|
X
|
|||||||||
|
information
regarding any pool asset changes (other than in connection with
a pool
asset converting into cash in accordance with its terms), such
as
additions or removals in connection with a prefunding or revolving
period
and pool asset substitutions and repurchases (and purchase rates,
if
applicable), and cash flows available for future purchases, such
as the
balances of any prefunding or revolving accounts, if
applicable.
|
X
|
X
|
X
|
X
|
||||||
|
Disclose
any material changes in the solicitation, credit-granting, underwriting,
origination, acquisition or pool selection criteria or procedures,
as
applicable, used to originate, acquire or select the new pool
assets.
|
X
|
X
|
||||||||
|
Item
1121(b) - Pre-Funding or Revolving Period Information
Updated
pool information as required under Item 1121(b).
|
X
|
|||||||||
|
2
|
Legal
Proceedings
|
|||||||||
|
Item
1117 - Legal proceedings pending against the following entities,
or their
respective property, that is material to Certificateholders,
including
proceedings known to be contemplated by governmental
authorities:
|
||||||||||
|
Sponsor
(Seller)
|
X
|
|||||||||
|
Depositor
|
X
|
|||||||||
|
Trustee
|
||||||||||
|
Issuing
entity
|
X
|
|||||||||
|
Master
Servicer, affiliated Servicer, other Servicer servicing 20% or
more of
pool assets at time of report, other material servicers
|
X
|
X
|
||||||||
|
Securities
Administrator
|
X
|
|||||||||
|
Originator
of 20% or more of pool assets as of the Cut-off Date
|
X
|
|||||||||
|
Custodian
|
X
|
|||||||||
|
3
|
Sales
of Securities and Use of Proceeds
|
|||||||||
|
Information
from Item 2(a) of Part II of Form 10-Q:
With
respect to any sale of securities by the sponsor, depositor or
issuing
entity, that are backed by the same asset pool or are otherwise
issued by
the issuing entity, whether or not registered, provide the sales
and use
of proceeds information in Item 701 of Regulation S-K. Pricing
information
can be omitted if securities were not registered.
|
X
|
|||||||||
|
4
|
Defaults
Upon Senior Securities
|
|||||||||
|
Information
from Item 3 of Part II of Form 10-Q:
Report
the occurrence of any Event of Default (after expiration of any
grace
period and provision of any required notice)
|
X
|
|||||||||
|
5
|
Submission
of Matters to a Vote of Security Holders
|
|||||||||
|
Information
from Item 4 of Part II of Form 10-Q
|
X
|
|||||||||
|
6
|
Significant
Obligors of Pool Assets
|
|||||||||
|
Item
1112(b) - Significant
Obligor Financial Information*
|
X
|
|||||||||
|
*This
information need only be reported on the Form 10-D for the distribution
period in which updated information is required pursuant to the
Item.
|
||||||||||
|
7
|
Significant
Enhancement Provider Information
|
|||||||||
|
Item
1114(b)(2) - Credit Enhancement Provider Financial
Information*
|
||||||||||
|
Determining
applicable disclosure threshold
|
X
|
|||||||||
|
Obtain
required financial information or effecting incorporation by
reference
|
X
|
|||||||||
|
Item
1115(b) - Derivative Counterparty Financial
Information*
|
||||||||||
|
Determining
current maximum probable exposure
|
X
|
|||||||||
|
Determining
current significance percentage
|
X
|
|||||||||
|
Notify
derivative counterparty of significance percentage and request
required
financial information
|
X
|
|||||||||
|
Obtain
required financial information or effecting incorporation by
reference
|
X
|
|||||||||
|
*This
information need only be reported on the Form 10-D for the distribution
period in which updated information is required pursuant to the
Items.
|
||||||||||
|
8
|
Other
Information
|
|||||||||
|
Disclose
any information required to be reported on Form 8-K during the
period
covered by the Form 10-D but not reported
|
The
Responsible Party for the applicable Form 8-K item as indicated
below.
|
|||||||||
|
9
|
Exhibits
|
|||||||||
|
Distribution
report
|
X
|
|||||||||
|
Exhibits
required by Item 601 of Regulation S-K, such as material
agreements
|
X
|
|||||||||
|
8-K
|
Must
be filed within four business days of an event reportable on
Form
8-K.
|
|||||||||
|
1.01
|
Entry
into a Material Definitive Agreement
|
|||||||||
|
Disclosure
is required regarding entry into or amendment of any definitive
agreement
that is material to the securitization, even if depositor is
not a party.
Examples:
servicing agreement, custodial agreement.
Note:
disclosure not required as to definitive agreements that are
fully
disclosed in the prospectus
|
X
|
X
|
X
|
X
|
X
|
|||||
|
1.02
|
Termination
of a Material Definitive Agreement
|
X
|
X
|
X
|
X
|
X
|
||||
|
Disclosure
is required regarding termination of any definitive agreement
that is
material to the securitization (other than expiration in accordance
with
its terms), even if depositor is not a party.
Examples:
servicing agreement, custodial agreement.
|
||||||||||
|
1.03
|
Bankruptcy
or Receivership
|
|||||||||
|
Disclosure
is required regarding the bankruptcy or receivership, if known
to the
Master Servicer, with respect to any of the following:
Sponsor
(Seller), Depositor, Master Servicer, affiliated Servicer, other
Servicer
servicing 20% or more of pool assets at time of report, other
material
servicers, Certificate Administrator, Trustee, significant obligor,
credit
enhancer (10% or more), derivatives counterparty,
Custodian
|
X
|
X
|
X
|
X
|
X
|
X
|
||||
|
2.04
|
Triggering
Events that Accelerate or Increase a Direct Financial Obligation
or an
Obligation under an Off-Balance Sheet Arrangement
|
|||||||||
|
Includes
an early amortization, performance trigger or other event, including
event
of default, that would materially alter the payment priority/distribution
of cash flows/amortization schedule.
Disclosure
will be made of events other than waterfall triggers which are
disclosed
in the Monthly Statement to Certificateholders
|
X
|
X
|
||||||||
|
3.03
|
Material
Modification to Rights of Security Holders
|
|||||||||
|
Disclosure
is required of any material modification to documents defining
the rights
of Certificateholders, including the Pooling and Servicing
Agreement
|
X
|
X
|
||||||||
|
5.03
|
Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal
Year
|
|||||||||
|
Disclosure
is required of any amendment “to the governing documents of the issuing
entity”
|
X
|
|||||||||
|
5.06
|
Change
in Shell Company Status
|
|||||||||
|
[Not
applicable to ABS issuers]
|
X
|
|||||||||
|
6.01
|
ABS
Informational and Computational Material
|
|||||||||
|
[Not
included in reports to be filed under Section 3.18]
|
X
|
|||||||||
|
6.02
|
Change
of Servicer or Trustee
|
|||||||||
|
Requires
disclosure of any removal, replacement, substitution or addition
of any
master servicer, affiliated servicer, other servicer servicing
10% or more
of pool assets at time of report, other material servicers, certificate
administrator or trustee.
|
X
|
X
|
X
|
X
|
||||||
|
Reg
AB disclosure about any new servicer is also required.
|
X
|
|||||||||
|
Reg
AB disclosure about any new trustee is also required.
|
X
(to
the extent of a new trustee)
|
|||||||||
|
Reg
AB disclosure about any new securities administrator is also
required.
|
X
|
|||||||||
|
6.03
|
Change
in Credit Enhancement or Other External Support [In this transaction
there
is no external enhancement or other support.]
|
|||||||||
|
Covers
termination of any enhancement in manner other than by its terms,
the
addition of an enhancement, or a material change in the enhancement
provided. Applies to external credit enhancements as well as
derivatives.
|
X
|
X
|
||||||||
|
Reg
AB disclosure about any new enhancement provider is also
required.
|
X
|
X
|
||||||||
|
6.04
|
Failure
to Make a Required Distribution
|
X
|
||||||||
|
6.05
|
Securities
Act Updating Disclosure
|
|||||||||
|
If
any material pool characteristic differs by 5% or more at the
time of
issuance of the securities from the description in the final
prospectus,
provide updated Reg AB disclosure about the actual asset
pool.
|
X
|
|
||||||||
|
If
there are any new servicers or originators required to be disclosed
under
Regulation AB as a result of the foregoing, provide the information
called
for in Items 1108 and 1110 respectively.
|
X
|
|||||||||
|
7.01
|
Regulation
FD Disclosure
|
X
|
X
|
X
|
X
|
X
|
||||
|
8.01
|
Other
Events
|
|||||||||
|
Any
event, with respect to which information is not otherwise called
for in
Form 8-K, that the registrant deems of importance to security
holders.
|
X
|
|||||||||
|
9.01
|
Financial
Statements and Exhibits
|
The
Responsible Party applicable to reportable event.
|
||||||||
|
10-K
|
Must
be filed within 90 days of the fiscal year end for the
registrant.
|
|||||||||
|
9B
|
Other
Information
|
|||||||||
|
Disclose
any information required to be reported on Form 8-K during the
fourth
quarter covered by the Form 10-K but not reported
|
The
Responsible Party for the applicable Form 8-K item as indicated
above.
|
|||||||||
|
15
|
Exhibits
and Financial Statement Schedules
|
|||||||||
|
Item
1112(b) - Significant
Obligor Financial Information
|
X
|
|||||||||
|
Item
1114(b)(2) - Credit Enhancement Provider Financial
Information
|
||||||||||
|
Determining
applicable disclosure threshold
|
X
|
|||||||||
|
Obtain
required financial information or effecting incorporation by
reference
|
X
|
|||||||||
|
Item
1115(b) - Derivative Counterparty Financial
Information
|
||||||||||
|
Determining
current maximum probable exposure
|
X
|
|||||||||
|
Determining
current significance percentage
|
X
|
|||||||||
|
Notify
derivative counterparty of significance percentage and request
required
financial information
|
X
|
|||||||||
|
Obtain
required financial information or effecting incorporation by
reference
|
X
|
|||||||||
|
Item
1117 - Legal proceedings pending against the following entities,
or their
respective property, that is material to Certificateholders,
including
proceedings known to be contemplated by governmental
authorities:
|
||||||||||
|
Sponsor
(Seller)
|
X
|
|||||||||
|
Depositor
|
X
|
|||||||||
|
Trustee
|
||||||||||
|
Issuing
entity
|
X
|
|||||||||
|
Master
Servicer, affiliated Servicer, other Servicer servicing 20% or
more of
pool assets at time of report, other material servicers
|
X
|
X
|
||||||||
|
Securities
Administrator
|
X
|
|||||||||
|
Originator
of 20% or more of pool assets as of the Cut-off Date
|
X
|
|||||||||
|
Custodian
|
X
|
|||||||||
|
Item
1119 - Affiliations and relationships between the following entities,
or
their respective affiliates, that are material to
Certificateholders:
|
||||||||||
|
Sponsor
(Seller)
|
X
|
|||||||||
|
Depositor
|
X
|
|||||||||
|
Trustee
|
||||||||||
|
Master
Servicer, affiliated Servicer, other Servicer servicing 20% or
more of
pool assets at time of report, other material servicers
|
X
|
X
|
||||||||
|
Securities
Administrator
|
X
|
|||||||||
|
Originator
|
X
|
|||||||||
|
Custodian
|
X
|
|||||||||
|
Credit
Enhancer/Support Provider
|
X
|
|||||||||
|
Significant
Obligor
|
X
|
|||||||||
|
Item
1122 - Assessment of Compliance with Servicing
Criteria
|
X
|
X
|
X
|
X
|
||||||
|
Item
1123 - Servicer Compliance Statement
|
X
|
X
|
||||||||
EXHIBIT
P
ADDITIONAL
DISCLOSURE NOTIFICATION
Bear
▇▇▇▇▇▇▇ Asset Backed Securities I LLC
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
New
York,
New York 10179
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
E-mail:
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
▇▇▇▇▇
Fargo Bank, N.A. as Securities Administrator
▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Columbia,
Maryland 21045
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
E-mail:
▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
Attn:
Corporate Trust Services - BSABS I 2006-AC5-SEC REPORT PROCESSING
RE:
**Additional Form [ ]
Disclosure**Required
Ladies
and Gentlemen:
In
accordance with Section 4.18 of the Pooling and Servicing Agreement, dated
as of
November 1, 2006, among EMC Mortgage Corporation, as Seller and Company,
▇▇▇▇▇
Fargo Bank, National Association, as Master Servicer and Securities
Administrator and U.S. Bank National Association as Trustee. The Undersigned
hereby notifies you that certain events have come to our attention that
[will][may] need to be disclosed on Form [ ].
Description
of Additional Form [ ]
Disclosure:
List
of
Any Attachments hereto to be included in the Additional Form [ ]
Disclosure:
Any
inquiries related to this notification should be directed to [ ], phone
number: [ ]; email address:
[ ].
|
[NAME
OF PARTY]
as
[role]
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
EXHIBIT
Q-1
GREENPOINT
SERVICING AGREEMENT
(See
Tab
# __)
EXHIBIT
Q-2
NATIONAL
CITY SERVICING AGREEMENT
(See
Tab
# __)
EXHIBIT
R-1
GREENPOINT
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
(See
Tab
# __)
EXHIBIT
R-2
NATIONAL
CITY ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
(See
Tab
# __)
EXHIBIT
S
REPORTING
DATA FOR MONTHLY REPORT
|
Standard
File Layout - Master Servicing
|
||||
|
Column
Name
|
Description
|
Decimal
|
Format
Comment
|
Max
Size
|
|
SER_INVESTOR_NBR
|
A
value assigned by the Servicer to define a group of loans.
|
Text
up to 10 digits
|
20
|
|
|
LOAN_NBR
|
A
unique identifier assigned to each loan by the investor.
|
Text
up to 10 digits
|
10
|
|
|
SERVICER_LOAN_NBR
|
A
unique number assigned to a loan by the Servicer. This may be different
than the LOAN_NBR.
|
Text
up to 10 digits
|
10
|
|
|
BORROWER_NAME
|
The
borrower name as received in the file. It is not separated by first
and
last name.
|
Maximum
length of 30 (Last, First)
|
30
|
|
|
SCHED_PAY_AMT
|
Scheduled
monthly principal and scheduled interest payment that a borrower
is
expected to pay, P&I constant.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
NOTE_INT_RATE
|
The
loan interest rate as reported by the Servicer.
|
4
|
Max
length of 6
|
6
|
|
NET_INT_RATE
|
The
loan gross interest rate less the service fee rate as reported
by the
Servicer.
|
4
|
Max
length of 6
|
6
|
|
SERV_FEE_RATE
|
The
servicer's fee rate for a loan as reported by the
Servicer.
|
4
|
Max
length of 6
|
6
|
|
SERV_FEE_AMT
|
The
servicer's fee amount for a loan as reported by the
Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
NEW_PAY_AMT
|
The
new loan payment amount as reported by the Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
NEW_LOAN_RATE
|
The
new loan rate as reported by the Servicer.
|
4
|
Max
length of 6
|
6
|
|
ARM_INDEX_RATE
|
The
index the Servicer is using to calculate a forecasted
rate.
|
4
|
Max
length of 6
|
6
|
|
ACTL_BEG_PRIN_BAL
|
The
borrower's actual principal balance at the beginning of the processing
cycle.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
ACTL_END_PRIN_BAL
|
The
borrower's actual principal balance at the end of the processing
cycle.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
BORR_NEXT_PAY_DUE_DATE
|
The
date at the end of processing cycle that the borrower's next payment
is
due to the Servicer, as reported by Servicer.
|
MM/DD/YYYY
|
10
|
|
|
SERV_CURT_AMT_1
|
The
first curtailment amount to be applied.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SERV_CURT_DATE_1
|
The
curtailment date associated with the first curtailment
amount.
|
MM/DD/YYYY
|
10
|
|
|
CURT_ADJ_
AMT_1
|
The
curtailment interest on the first curtailment amount, if
applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SERV_CURT_AMT_2
|
The
second curtailment amount to be applied.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SERV_CURT_DATE_2
|
The
curtailment date associated with the second curtailment
amount.
|
MM/DD/YYYY
|
10
|
|
|
CURT_ADJ_
AMT_2
|
The
curtailment interest on the second curtailment amount, if
applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SERV_CURT_AMT_3
|
The
third curtailment amount to be applied.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SERV_CURT_DATE_3
|
The
curtailment date associated with the third curtailment
amount.
|
MM/DD/YYYY
|
10
|
|
|
CURT_ADJ_AMT_3
|
The
curtailment interest on the third curtailment amount, if
applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
PIF_AMT
|
The
loan "paid in full" amount as reported by the Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
PIF_DATE
|
The
paid in full date as reported by the Servicer.
|
MM/DD/YYYY
|
10
|
|
|
Action
Code Key: 15=Bankruptcy, 30=Foreclosure, , 60=PIF, 63=Substitution,
65=Repurchase,70=REO
|
2
|
|||
|
ACTION_CODE
|
The
standard FNMA numeric code used to indicate the default/delinquent
status
of a particular loan.
|
|||
|
INT_ADJ_AMT
|
The
amount of the interest adjustment as reported by the
Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SOLDIER_SAILOR_ADJ_AMT
|
The
Soldier and Sailor Adjustment amount, if applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
NON_ADV_LOAN_AMT
|
The
Non Recoverable Loan Amount, if applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
LOAN_LOSS_AMT
|
The
amount the Servicer is passing as a loss, if applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SCHED_BEG_PRIN_BAL
|
The
scheduled outstanding principal amount due at the beginning of
the cycle
date to be passed through to investors.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SCHED_END_PRIN_BAL
|
The
scheduled principal balance due to investors at the end of a processing
cycle.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SCHED_PRIN_AMT
|
The
scheduled principal amount as reported by the Servicer for the
current
cycle -- only applicable for Scheduled/Scheduled Loans.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SCHED_NET_INT
|
The
scheduled gross interest amount less the service fee amount for
the
current cycle as reported by the Servicer -- only applicable for
Scheduled/Scheduled Loans.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
ACTL_PRIN_AMT
|
The
actual principal amount collected by the Servicer for the current
reporting cycle -- only applicable for Actual/Actual
Loans.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
ACTL_NET_INT
|
The
actual gross interest amount less the service fee amount for the
current
reporting cycle as reported by the Servicer -- only applicable
for
Actual/Actual Loans.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
PREPAY_PENALTY_
AMT
|
The
penalty amount received when a borrower prepays on his loan as
reported by
the Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
PREPAY_PENALTY_
WAIVED
|
The
prepayment penalty amount for the loan waived by the
servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
MOD_DATE
|
The
Effective Payment Date of the Modification for the loan.
|
MM/DD/YYYY
|
10
|
|
|
MOD_TYPE
|
The
Modification Type.
|
Varchar
- value can be alpha or numeric
|
30
|
|
|
DELINQ_P&I_ADVANCE_AMT
|
The
current outstanding principal and interest advances made by
Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
EXHIBIT
T
REPORTING
DATA FOR DEFAULTED LOANS
Standard
File Layout - Delinquency Reporting
|
Column/Header
Name
|
Description
|
Decimal
|
Format
Comment
|
|
SERVICER_LOAN_NBR
|
A
unique number assigned to a loan by the Servicer. This may be different
than the LOAN_NBR
|
|
|
|
LOAN_NBR
|
A
unique identifier assigned to each loan by the originator.
|
|
|
|
CLIENT_NBR
|
Servicer
client number
|
||
|
SERV_INVESTOR_NBR
|
Contains
a unique number as assigned by an external servicer to identify
a group of
loans in their system.
|
|
|
|
BORROWER_FIRST_NAME
|
First
name of the borrower.
|
||
|
BORROWER_LAST_NAME
|
Last
name of the borrower.
|
||
|
PROP_ADDRESS
|
Street
name and number of property
|
|
|
|
PROP_STATE
|
The
state where the property located.
|
|
|
|
PROP_ZIP
|
Zip
code where the property is located.
|
|
|
|
BORR_NEXT_PAY_DUE_DATE
|
The
date that the borrower's next payment is due to the servicer at
the end of
processing cycle, as reported by Servicer.
|
MM/DD/YYYY
|
|
|
LOAN_TYPE
|
Loan
type (i.e. FHA, VA, Conv)
|
|
|
|
BANKRUPTCY_FILED_DATE
|
The
date a particular bankruptcy claim was filed.
|
MM/DD/YYYY
|
|
|
BANKRUPTCY_CHAPTER_CODE
|
The
chapter under which the bankruptcy was filed.
|
|
|
|
BANKRUPTCY_CASE_NBR
|
The
case number assigned by the court to the bankruptcy
filing.
|
|
|
|
POST_PETITION_DUE_DATE
|
The
payment due date once the bankruptcy has been approved by the
courts
|
MM/DD/YYYY
|
|
|
BANKRUPTCY_DCHRG_DISM_DATE
|
The
date the loan Is removed from bankruptcy. Either by dismissal,
discharge
and/or a motion for relief was granted.
|
MM/DD/YYYY
|
|
|
LOSS_MIT_APPR_DATE
|
The
date the loss mitigation was approved by the servicer
|
MM/DD/YYYY
|
|
|
LOSS_MIT_TYPE
|
The
type of loss mitigation approved for a loan such as;
|
||
|
LOSS_MIT_EST_COMP_DATE
|
The
date the loss mitigation plan Is scheduled to end/close
|
MM/DD/YYYY
|
|
|
LOSS_MIT_ACT_COMP_DATE
|
The
date the loss mitigation Is actually completed
|
MM/DD/YYYY
|
|
|
FRCLSR_APPROVED_DATE
|
The
date DA Admin sends a letter to the servicer with instructions
to begin
foreclosure proceedings.
|
MM/DD/YYYY
|
|
|
ATTORNEY_REFERRAL_DATE
|
Date
file was referred to attorney to pursue foreclosure
|
MM/DD/YYYY
|
|
|
FIRST_LEGAL_DATE
|
Notice
of 1st legal filed by an attorney in a foreclosure action
|
MM/DD/YYYY
|
|
|
FRCLSR_SALE_EXPECTED_DATE
|
The
date by which a foreclosure sale is expected to occur.
|
MM/DD/YYYY
|
|
|
FRCLSR_SALE_DATE
|
The
actual date of the foreclosure sale.
|
MM/DD/YYYY
|
|
|
FRCLSR_SALE_AMT
|
The
amount a property sold for at the foreclosure sale.
|
2
|
No
commas(,) or dollar signs ($)
|
|
EVICTION_START_DATE
|
The
date the servicer initiates eviction of the borrower.
|
MM/DD/YYYY
|
|
|
EVICTION_COMPLETED_DATE
|
The
date the court revokes legal possession of the property from the
borrower.
|
MM/DD/YYYY
|
|
|
LIST_PRICE
|
The
price at which an REO property is marketed.
|
2
|
No
commas(,) or dollar signs ($)
|
|
LIST_DATE
|
The
date an REO property is listed at a particular price.
|
MM/DD/YYYY
|
|
|
OFFER_AMT
|
The
dollar value of an offer for an REO property.
|
2
|
No
commas(,) or dollar signs ($)
|
|
OFFER_DATE_TIME
|
The
date an offer is received by DA Admin or by the Servicer.
|
MM/DD/YYYY
|
|
|
REO_CLOSING_DATE
|
The
date the REO sale of the property is scheduled to close.
|
MM/DD/YYYY
|
|
|
REO_ACTUAL_CLOSING_DATE
|
Actual
date Of REO sale
|
MM/DD/YYYY
|
|
|
OCCUPANT_CODE
|
Classification
of how the property is occupied.
|
|
|
|
PROP_CONDITION_CODE
|
A
code that indicates the condition of the property.
|
|
|
|
PROP_INSPECTION_DATE
|
The
date a property inspection is performed.
|
MM/DD/YYYY
|
|
|
APPRAISAL_DATE
|
The
date the appraisal was done.
|
MM/DD/YYYY
|
|
|
CURR_PROP_VAL
|
The
current "as is" value of the property based on brokers price opinion
or
appraisal.
|
2
|
|
|
REPAIRED_PROP_VAL
|
The
amount the property would be worth if repairs are completed pursuant
to a
broker's price opinion or appraisal.
|
2
|
|
|
If
applicable:
|
|
|
|
|
DELINQ_STATUS_CODE
|
FNMA
code describing status of loan
|
||
|
DELINQ_REASON_CODE
|
The
circumstances which caused a borrower to stop paying on a loan.
Code
indicates the reason why the loan is in default for this
cycle.
|
||
|
MI_CLAIM_FILED_DATE
|
Date
mortgage insurance claim was filed with mortgage insurance
company.
|
MM/DD/YYYY
|
|
|
MI_CLAIM_AMT
|
Amount
of mortgage insurance claim filed
|
No
commas(,) or dollar signs ($)
|
|
|
MI_CLAIM_PAID_DATE
|
Date
mortgage insurance company disbursed claim payment
|
MM/DD/YYYY
|
|
|
MI_CLAIM_AMT_PAID
|
Amount
mortgage insurance company paid on claim
|
2
|
No
commas(,) or dollar signs ($)
|
|
POOL_CLAIM_FILED_DATE
|
Date
claim was filed with pool insurance company
|
MM/DD/YYYY
|
|
|
POOL_CLAIM_AMT
|
Amount
of claim filed with pool insurance company
|
2
|
No
commas(,) or dollar signs ($)
|
|
POOL_CLAIM_PAID_DATE
|
Date
claim was settled and the check was issued by the pool
insurer
|
MM/DD/YYYY
|
|
|
POOL_CLAIM_AMT_PAID
|
Amount
paid on claim by pool insurance company
|
2
|
No
commas(,) or dollar signs ($)
|
|
FHA_PART_A_CLAIM_FILED_DATE
|
Date
FHA Part A Claim was filed with HUD
|
MM/DD/YYYY
|
|
|
FHA_PART_A_CLAIM_AMT
|
Amount
of FHA Part A claim filed
|
2
|
No
commas(,) or dollar signs ($)
|
|
FHA_PART_A_CLAIM_PAID_DATE
|
Date
HUD disbursed Part A claim payment
|
MM/DD/YYYY
|
|
|
FHA_PART_A_CLAIM_PAID_AMT
|
Amount
HUD paid on Part A claim
|
2
|
No
commas(,) or dollar signs ($)
|
|
FHA_PART_B_CLAIM_FILED_DATE
|
Date
FHA Part B claim was filed with HUD
|
MM/DD/YYYY
|
|
|
FHA_PART_B_CLAIM_AMT
|
Amount
of FHA Part B claim filed
|
2
|
No
commas(,) or dollar signs ($)
|
|
FHA_PART_B_CLAIM_PAID_DATE
|
Date
HUD disbursed Part B claim payment
|
MM/DD/YYYY
|
|
|
FHA_PART_B_CLAIM_PAID_AMT
|
Amount
HUD paid on Part B claim
|
2
|
No
commas(,) or dollar signs ($)
|
|
VA_CLAIM_FILED_DATE
|
Date
VA claim was filed with the Veterans Admin
|
MM/DD/YYYY
|
|
|
VA_CLAIM_PAID_DATE
|
Date
Veterans Admin. disbursed VA claim payment
|
MM/DD/YYYY
|
|
|
VA_CLAIM_PAID_AMT
|
Amount
Veterans Admin. paid on VA claim
|
2
|
No
commas(,) or dollar signs ($)
|
Exhibit
2: Standard
File Codes - Delinquency Reporting
The
Loss
Mit Type
field
should show the approved Loss Mitigation Code as follows:
|
· ASUM-
|
Approved
Assumption
|
|
· BAP-
|
Borrower
Assistance Program
|
|
· CO-
|
Charge
Off
|
|
· DIL-
|
Deed-in-Lieu
|
|
· FFA-
|
Formal
Forbearance Agreement
|
|
· MOD-
|
Loan
Modification
|
|
· PRE-
|
Pre-Sale
|
|
· SS-
|
Short
Sale
|
|
· MISC
|
Anything
else approved by the PMI or Pool
Insurer
|
NOTE:
▇▇▇▇▇ Fargo Bank will accept alternative Loss Mitigation Types to those above,
provided that they are consistent with industry standards. If Loss Mitigation
Types other than those above are used, the Servicer must supply ▇▇▇▇▇ Fargo
Bank
with a description of each of the Loss Mitigation Types prior to sending
the
file.
The
Occupant
Code
field should show the current status of the property code as
follows:
|
· Mortgagor
|
|
· Tenant
|
|
· Unknown
|
|
· Vacant
|
The
Property
Condition
field should show the last reported condition of the property as follows:
|
· Damaged
|
|
· Excellent
|
|
· Fair
|
|
· Gone
|
|
· Good
|
|
· Poor
|
|
· Special
Hazard
|
|
· Unknown
|
Exhibit
2: Standard
File Codes - Delinquency Reporting, Continued
The
FNMA
Delinquent Reason Code
field should show the Reason for Delinquency as follows:
|
Delinquency
Code
|
Delinquency
Description
|
|
001
|
FNMA-Death
of principal mortgagor
|
|
002
|
FNMA-Illness
of principal mortgagor
|
|
003
|
FNMA-Illness
of mortgagor’s family member
|
|
004
|
FNMA-Death
of ▇▇▇▇▇▇▇▇▇’s family member
|
|
005
|
FNMA-Marital
difficulties
|
|
006
|
FNMA-Curtailment
of income
|
|
007
|
FNMA-Excessive
Obligation
|
|
008
|
FNMA-Abandonment
of property
|
|
009
|
FNMA-Distant
employee transfer
|
|
011
|
FNMA-Property
problem
|
|
012
|
FNMA-Inability
to sell property
|
|
013
|
FNMA-Inability
to rent property
|
|
014
|
FNMA-Military
Service
|
|
015
|
FNMA-Other
|
|
016
|
FNMA-Unemployment
|
|
017
|
FNMA-Business
failure
|
|
019
|
FNMA-Casualty
loss
|
|
022
|
FNMA-Energy
environment costs
|
|
023
|
FNMA-Servicing
problems
|
|
026
|
FNMA-Payment
adjustment
|
|
027
|
FNMA-Payment
dispute
|
|
029
|
FNMA-Transfer
of ownership pending
|
|
030
|
FNMA-Fraud
|
|
031
|
FNMA-Unable
to contact borrower
|
|
INC
|
FNMA-Incarceration
|
Exhibit
2: Standard
File Codes - Delinquency Reporting, Continued
The
FNMA
Delinquent Status Code
field should show the Status of Default as follows:
|
Status
Code
|
Status
Description
|
|
09
|
Forbearance
|
|
17
|
Pre-foreclosure
Sale Closing Plan Accepted
|
|
24
|
Government
Seizure
|
|
26
|
Refinance
|
|
27
|
Assumption
|
|
28
|
Modification
|
|
29
|
Charge-Off
|
|
30
|
Third
Party Sale
|
|
31
|
Probate
|
|
32
|
Military
Indulgence
|
|
43
|
Foreclosure
Started
|
|
44
|
Deed-in-Lieu
Started
|
|
49
|
Assignment
Completed
|
|
61
|
Second
Lien Considerations
|
|
62
|
Veteran’s
Affairs-No Bid
|
|
63
|
Veteran’s
Affairs-Refund
|
|
64
|
Veteran’s
Affairs-Buydown
|
|
65
|
Chapter
7 Bankruptcy
|
|
66
|
Chapter
11 Bankruptcy
|
|
67
|
Chapter
13 Bankruptcy
|
EXHIBIT
U
REPORTING
DATA FOR REALIZED LOSSES AND GAINS
Calculation
of Realized Loss/Gain Form 332- Instruction Sheet
NOTE:
Do not net or combine items. Show all expenses individually and all credits
as
separate line items. Claim packages are due within 90 days of liquidation.
Late
submissions may result in claims not being passed until the following month.
The
Servicer is responsible to remit all funds pending loss approval and /or
resolution of any disputed items.
(a)
(b) The
numbers on the 332 form correspond with the numbers listed below.
Liquidation
and Acquisition Expenses:
|
1.
|
The
Actual Unpaid Principal Balance of the Mortgage Loan. For documentation,
an Amortization Schedule from date of default through liquidation
breaking
out the net interest and servicing fees advanced is
required.
|
|
2.
|
The
Total Interest Due less the aggregate amount of servicing fee that
would
have been earned if all delinquent payments had been made as agreed.
For
documentation, an Amortization Schedule from date of default through
liquidation breaking out the net interest and servicing fees advanced
is
required.
|
|
3.
|
Accrued
Servicing Fees based upon the Scheduled Principal Balance of the
Mortgage
Loan as calculated on a monthly basis. For documentation, an Amortization
Schedule from date of default through liquidation breaking out
the net
interest and servicing fees advanced is
required.
|
|
4-12.
|
Complete
as applicable. Required
documentation:
|
*
For
taxes and insurance advances - see page 2 of 332 form - breakdown required
showing period
of
coverage, base tax, interest, penalty. Advances prior to default require
evidence of servicer efforts to recover advances.
*
For
escrow advances - complete payment history
(to
calculate advances from last positive escrow balance forward)
*
Other
expenses - copies of corporate advance history showing all payments
*
REO
repairs > $1500 require explanation
*
REO
repairs >$3000 require evidence of at least 2 bids.
*
Short
Sale or Charge Off require P&L supporting the decision and WFB’s approved
Officer Certificate
*
Unusual
or extraordinary items may require further documentation.
13.
The
total
of lines 1 through 12.
(c) Credits:
|
14-21.
|
Complete
as applicable. Required
documentation:
|
*
Copy of
the HUD 1 from the REO sale. If a 3rd
Party
Sale, bid instructions and Escrow Agent / Attorney
Letter
of
Proceeds Breakdown.
*
Copy of
EOB for any MI or gov't guarantee
*
All
other credits need to be clearly defined on the 332
form
|
22.
|
The
total of lines 14 through 21.
|
Please
Note: For
HUD/VA loans, use line (18a) for Part A/Initial proceeds and line (18b) for
Part
B/Supplemental proceeds.
Total
Realized Loss (or Amount of Any Gain)
23. The
total
derived from subtracting line 22 from 13. If the amount represents a realized
gain, show the amount in parenthesis ( ).
|
Calculation
of Realized Loss/Gain Form
332
|
Prepared
by: __________________ Date:
_______________
Phone:
______________________ Email
Address:_____________________
|
Servicer
Loan No.
|
Servicer
Name
|
Servicer
Address
|
▇▇▇▇▇
FARGO BANK, N.A. Loan No._____________________________
Borrower's
Name: _________________________________________________________
Property
Address: _________________________________________________________
Liquidation
Type: REO
Sale
3rd
Party Sale Short
Sale Charge
Off
Was
this loan granted a Bankruptcy deficiency or cramdown Yes No
If
“Yes”,
provide deficiency or cramdown amount
_______________________________
Liquidation
and Acquisition Expenses:
|
(1)
|
Actual
Unpaid Principal Balance of Mortgage Loan
|
|
$ |
(1)
|
|||
|
(2)
|
Interest
accrued at Net Rate
|
|
(2)
|
||||
|
(3)
|
Accrued
Servicing Fees
|
|
(3)
|
||||
|
(4)
|
Attorney's
Fees
|
|
(4)
|
||||
|
(5)
|
Taxes
(see page 2)
|
|
(5)
|
||||
|
(6)
|
Property
Maintenance
|
|
(6)
|
||||
|
(7)
|
MI/Hazard
Insurance Premiums (see page 2)
|
|
(7)
|
||||
|
(8)
|
Utility
Expenses
|
|
(8)
|
||||
|
(9)
|
Appraisal/BPO
|
|
(9)
|
||||
|
(10)
|
Property
Inspections
|
|
(10)
|
||||
|
(11)
|
FC
Costs/Other Legal Expenses
|
(11)
|
|||||
|
(12)
|
Other
(itemize)
|
|
(12)
|
||||
|
Cash
for Keys
|
|
(12)
|
|||||
|
HOA/Condo
Fees
|
|
(12)
|
|||||
|
|
|
(12)
|
|||||
|
Total
Expenses
|
$ |
(13)
|
|||||
|
Credits:
|
|||||||
|
(14)
|
Escrow
Balance
|
$
|
(14)
|
||||
|
(15)
|
HIP
Refund
|
(15)
|
|||||
|
(16)
|
Rental
Receipts
|
|
(16)
|
||||
|
(17)
|
Hazard
Loss Proceeds
|
|
(17)
|
||||
|
(18)
|
Primary
Mortgage Insurance / Gov’t Insurance
|
|
(18a) | ||||
|
HUD
Part A
|
|||||||
|
HUD
Part B
|
(18b) | ||||||
|
(19)
|
Pool
Insurance Proceeds
|
|
(19)
|
||||
|
(20)
|
Proceeds
from Sale of Acquired Property
|
|
(20)
|
||||
|
(21)
|
Other
(itemize)
|
|
(21)
|
||||
|
|
|
|
(21)
|
||||
|
Total
Credits
|
$
|
(22)
|
|||||
|
Total
Realized Loss (or Amount of Gain)
|
|
|
$
|
(23)
|
|||
|
Type
(Tax
/Ins.)
|
Date
Paid
|
Period
of Coverage
|
Total
Paid
|
Base
Amount
|
Penalties
|
Interest
|
|
|
||||||
|
|
||||||
|
|
EXHIBIT
V
FORM
OF
CERTIFICATION TO BE
PROVIDED
BY THE SECURITIES ADMINISTRATOR TO DEPOSITOR
|
Re:
|
Bear
▇▇▇▇▇▇▇ Asset Backed Securities I Trust 2006-AC5 (the “Trust”), Mortgage
Pass-Through Certificates, Series 20006-AC5, issued pursuant to
the
Pooling and Servicing Agreement, dated as of June 1, 20006 among
Bear
▇▇▇▇▇▇▇ Asset Backed Securities I LLC, as Depositor, EMC Mortgage
Corporation, as seller and company, ▇▇▇▇▇ Fargo Bank, National
Association, as Securities Administrator and master servicer, and
U.S.
Bank National Association, as
trustee.
|
The
Securities Administrator hereby certifies to the Depositor, and its officers,
directors and affiliates, and with the knowledge and intent that they will
rely
upon this certification, that:
(1) I
have
reviewed the annual report on Form 10-K for the fiscal year [____] (the “Annual
Report”), and all reports on Form 10-D required to be filed in respect of period
covered by the Annual Report (collectively with the Annual Report, the
“Reports”), of the Trust;
(2) To
my
knowledge, (a) the Reports, taken as a whole, do not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by the Annual
Report, and (b) the Securities Administrator’s assessment of compliance and
related attestation report referred to below, taken as a whole, do not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which
such statements were made, not misleading with respect to the period covered
by
such assessment of compliance and attestation report;
(3) To
my
knowledge, the distribution information required to be provided by the
Securities Administrator under the Pooling and Servicing Agreement for inclusion
in the Reports is included in the Reports;
(4) I
am
responsible for reviewing the activities performed by the Securities
Administrator under the Pooling and Servicing Agreement, and based on my
knowledge and the compliance review conducted in preparing the compliance
statement of the Securities Administrator required by the Pooling and Servicing
Agreement, and except as disclosed in the Reports, the Securities Administrator
has fulfilled its obligations under the Pooling and Servicing Agreement in
all
material respects; and
(5) The
report on assessment of compliance with servicing criteria applicable to
the
Securities Administrator for asset-backed securities of the Securities
Administrator and each Subcontractor utilized by the Securities Administrator
and related attestation report on assessment of compliance with servicing
criteria applicable to it required to be included in the Annual Report in
accordance with Item 1122 of Regulation AB and Exchange Act Rules 13a-18
and
15d-18 has been included as an exhibit to the Annual Report. Any material
instances of non-compliance are described in such report and have been disclosed
in the Annual Report.
In
giving
the certifications above, the Securities Administrator has reasonably relied
on
information provided to it by the following unaffiliated parties: [names
of
servicer(s), master servicer, subservicer, depositor, trustee,
custodian(s)]
|
Date:
|
|
|
[Signature]
|
|
|
[Title:]
|
|