BEAR STEARNS ASSET BACKED SECURITIES I LLC, as Depositor SACO I TRUST 2006-8, as Issuing Entity CITIBANK, N.A., as Indenture Trustee LASALLE BANK NATIONAL ASSOCIATION, as Master Servicer and Securities Administrator and EMC MORTGAGE CORPORATION, as...
BEAR
XXXXXXX ASSET BACKED SECURITIES I LLC,
as
Depositor
as
Issuing Entity
CITIBANK,
N.A.,
as
Indenture Trustee
LASALLE
BANK NATIONAL ASSOCIATION,
as
Master
Servicer and Securities Administrator
and
EMC
MORTGAGE CORPORATION,
as
Sponsor and Company
___________________________
SALE
AND SERVICING AGREEMENT
|
Dated
as of September 15, 2006
|
___________________________
Bear
Xxxxxxx Asset Backed Securities I LLC
Mortgage-Backed
Notes, Series 2006-8
ARTICLE
I.
DEFINITIONS
|
|
Section
1.01.
|
Definitions
|
Section
1.02.
|
Other
Definitional Provisions.
|
ARTICLE
II.
CONVEYANCE
OF HELOCS
|
|
Section
2.01.
|
Conveyance
of HELOCs; Obligation to Fund Advances Under Credit Line
Agreements.
|
Section
2.02.
|
Acceptance
of HELOCs by the Issuing Entity.
|
Section
2.03.
|
Assignment
of Interest in the Mortgage Loan Purchase Agreement
|
Section
2.04.
|
Substitution
of HELOCs
|
Section
2.05.
|
Delivery
of Opinion of Counsel in Connection with Substitutions and
Repurchases.
|
Section
2.06.
|
Representations
and Warranties Concerning the Depositor
|
Section
2.07.
|
Representations
and Warranties Regarding the Master Servicer
|
Section
2.08.
|
Assignment
of Agreement
|
ARTICLE
III.
ADMINISTRATION
AND SERVICING OF EMC HELOCS BY THE COMPANY
|
|
Section
3.01.
|
The
Company.
|
Section
3.02.
|
Due-on-Sale
Clauses; Assumption Agreements.
|
Section
3.03.
|
Subservicers.
|
Section
3.04.
|
Optional
Purchase of Certain HELOCs.
|
Section
3.05.
|
Documents,
Records and Funds in Possession of the Company to Be Held for
Trustee.
|
Section
3.06.
|
Maintenance
of Hazard Insurance.
|
Section
3.07.
|
Presentment
of Claims and Collection of Proceeds.
|
Section
3.08.
|
Maintenance
of the Primary Mortgage Insurance Policies.
|
Section
3.09.
|
Fidelity
Bond, Errors and Omissions Insurance.
|
Section
3.10.
|
Realization
Upon Defaulted HELOCs; Determination of Excess Liquidation Proceeds
and
Realized Losses; Repurchases of Certain HELOCs.
|
Section
3.11.
|
Servicing
Compensation.
|
Section
3.12.
|
REO
Property.
|
Section
3.13.
|
Liquidation
Reports.
|
Section
3.14.
|
Annual
Statement as to Compliance.
|
Section
3.15.
|
Assessments
of Compliance and Attestation Reports.
|
Section
3.16.
|
Books
and Records.
|
ARTICLE
IV.
ADMINISTRATION
AND MASTER SERVICING OF HELOCS
|
|
Section
4.01.
|
Master
Servicer
|
Section
4.02.
|
Monitoring
of Servicers
|
Section
4.03.
|
Fidelity
Bond
|
Section
4.04.
|
Power
to Act; Procedures
|
Section
4.05.
|
Due-on-Sale
Clauses; Assumption Agreements
|
Section
4.06.
|
Release
of Mortgage Files
|
Section
4.07.
|
Documents,
Records and Funds in Possession of Master Servicer To Be Held for
Issuing
Entity and Indenture Trustee.
|
Section
4.08.
|
Standard
Hazard Insurance and Flood Insurance Policies.
|
Section
4.09.
|
Presentment
of Claims and Collection of Proceeds
|
Section
4.10.
|
Maintenance
of the Insurance Policies.
|
Section
4.11.
|
Indenture
Trustee to Retain Possession of Certain Insurance Policies and
Documents.
|
Section
4.12.
|
Realization
Upon Defaulted HELOCs
|
Section
4.13.
|
Compensation
for the Master Servicer and the Indenture Trustee.
|
Section
4.14.
|
REO
Property.
|
Section
4.15.
|
[Reserved].
|
Section
4.16.
|
Reports
Filed with Securities and Exchange Commission.
|
Section
4.17.
|
UCC
|
Section
4.18.
|
Optional
Purchase of Certain HELOCs.
|
Section
4.19.
|
Information
Required by the Internal Revenue Service and Reports Regarding
Mortgaged
Property
|
ARTICLE
V.
ACCOUNTS
|
|
Section
5.01.
|
Collection
of HELOC Payments; Protected Account of the Company.
|
Section
5.02.
|
Permitted
Withdrawals From the Protected Account.
|
Section
5.03.
|
Reports
to Master Servicer.
|
Section
5.04.
|
Protected
Accounts
|
Section
5.05.
|
Master
Servicer Collection Account
|
Section
5.06.
|
Permitted
Withdrawals and Transfers from the Master Servicer Collection
Account
|
Section
5.07.
|
Payment
Account
|
Section
5.08.
|
Permitted
Withdrawals and Transfers from the Payment Account
|
Section
5.09.
|
Net
WAC Cap Rate Carryover Reserve Account.
|
Section
5.10.
|
The
Certificate Distribution Account.
|
ARTICLE
VI.
THE
MASTER SERVICER
|
|
Section
6.01.
|
Liabilities
of the Master Servicer
|
Section
6.02.
|
Merger
or Consolidation of the Master Servicer.
|
Section
6.03.
|
Indemnification
of the Indenture Trustee, Owner Trustee, the Company, the Note
Insurer,
the Master Servicer and the Securities Administrator
|
Section
6.04.
|
Limitations
on Liability of the Master Servicer and Others
|
Section
6.05.
|
Master
Servicer Not to Resign
|
Section
6.06.
|
Successor
Master Servicer
|
Section
6.07.
|
Sale
and Assignment of Master Servicing
|
ARTICLE
VII.
DEFAULT
|
|
Section
7.01.
|
Master
Servicer Events of Default
|
Section
7.02.
|
Indenture
Trustee to Act; Appointment of Successor
|
Section
7.03.
|
Notification
to Noteholders and the Note Insurer
|
Section
7.04.
|
Waiver
of Defaults
|
Section
7.05.
|
Company
Default
|
Section
7.06.
|
Waiver
of Company Defaults
|
ARTICLE
VIII.
MISCELLANEOUS
PROVISIONS
|
|
Section
8.01.
|
Amendment
|
Section
8.02.
|
Recordation
of Agreement
|
Section
8.03.
|
Governing
Law
|
Section
8.04.
|
Notices
|
Section
8.05.
|
Severability
of Provisions
|
Section
8.06.
|
Successors
and Assigns
|
Section
8.07.
|
Article
and Section Headings
|
Section
8.08.
|
Counterparts
|
Section
8.09.
|
Notice
to Rating Agencies and the Note Insurer
|
Section
8.10.
|
Termination
|
Section
8.11.
|
No
Petition
|
Section
8.12.
|
No
Recourse
|
Section
8.13.
|
Additional
Terms Regarding Indenture
|
Section
8.14.
|
Third
Party Beneficiary
|
Section
8.15.
|
Limitation
of Liability
|
Section
8.16.
|
Benefit
of Agreement
|
EXHIBITS
Exhibit
A
|
-
|
Mortgage
Loan Schedule
|
Exhibit
B
|
-
|
Request
for Release of Documents
|
Exhibit
C-1
|
-
|
GMACM
Servicing Agreement
|
Exhibit
C-2
|
-
|
Form
of Mortgage Loan Purchase Agreement
|
Exhibit
D
|
-
|
Form
of Company Certification
|
Exhibit
E
|
-
|
Form
of Policy
|
Exhibit
F
|
-
|
Servicing
Criteria to Be Addressed in Assessment of Compliance
|
Exhibit
G
|
-
|
Form
10-D, Form 8-K and Form 10-K Reporting Responsibility
|
Exhibit
H
|
-
|
Additional
Disclosure Notification
|
SALE
AND
SERVICING AGREEMENT
Sale
and
Servicing Agreement dated as of September 15, 2006 (the “Agreement”), among Bear
Xxxxxxx Asset Backed Securities I LLC, a Delaware limited liability company,
as
depositor (the “Depositor”), SACO I Trust 2006-8, a Delaware statutory trust, as
the issuing entity (the “Issuing Entity”), Citibank, N.A., a national banking
association, not in its individual capacity but solely as indenture trustee
(the
“Indenture Trustee”), LaSalle Bank National Association (“LaSalle Bank”), as
master servicer (in that capacity, the “Master Servicer”) and as securities
administrator (in that capacity, the “Securities Administrator”), and EMC
Mortgage Corporation, as seller and sponsor (in that capacity, the “Sponsor”)
and as company (in that capacity, the “Company”).
PRELIMINARY
STATEMENT
WHEREAS,
the Sponsor has acquired the HELOCs from the Originators and at the Closing
Date
is the owner of the HELOCs and the other property being conveyed by it to the
Issuing Entity hereunder for inclusion in the Trust Estate;
WHEREAS,
such HELOCs consist of certain home equity lines of credit
(“HELOCs”);
WHEREAS,
on the Closing Date, the Depositor will acquire the HELOCs from the Sponsor
in
consideration for its transfer to the Sponsor of the Certificates and the
proceeds from the sale of the Notes;
WHEREAS,
on the Closing Date, the Depositor will acquire the Notes and the Certificates
from the Issuing Entity, as consideration for its transfer to the Issuing Entity
of the HELOCs and the other property constituting the Trust Estate;
WHEREAS,
the Depositor has duly authorized the execution and delivery of this Agreement
to provide for the conveyance to the Issuing Entity of the HELOCs and the other
property constituting the Trust Estate;
WHEREAS,
pursuant to the Indenture, the Issuing Entity will pledge the HELOCs and the
other property constituting the Trust Estate to the Indenture Trustee as
security for the Notes;
WHEREAS,
the HELOCs will have an Outstanding Principal Balance as of the Cut-off Date,
after deducting all Scheduled Principal due on or before the Cut-off Date,
of
$361,200,413.29.
NOW,
THEREFORE, in consideration of the mutual agreements herein contained, each
of
the Depositor, the Issuing Entity, the Master Servicer, the Securities
Administrator, the Sponsor, the Company and the Indenture Trustee undertakes
and
agrees to perform their respective duties hereunder as follows:
ARTICLE
I.
Definitions
Section
1.01. Definitions.
For all
purposes of this Agreement, except as otherwise expressly provided herein or
unless the context otherwise requires, capitalized
terms used in this Agreement and not defined herein shall have the meanings
assigned in Appendix A to the Indenture,
which is
incorporated by reference herein. All other capitalized terms used herein shall
have the meanings specified herein.
Section
1.02. Other
Definitional Provisions.
(a) All
terms
defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein.
(b) As
used
in this Agreement and in any certificate or other document made or delivered
pursuant hereto or thereto, accounting terms not defined in this Agreement
or in
any such certificate or other document, and accounting terms partly defined
in
this Agreement or in any such certificate or other document, to the extent
not
defined, shall have the respective meanings given to them under generally
accepted accounting principles. To the extent that the definitions of accounting
terms in this Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Agreement or in any such
certificate or other document shall control.
(c) The
words
“hereof,” “herein,” “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement; Section and Exhibit references contained in this
Agreement are references to Sections and Exhibits in or to this Agreement unless
otherwise specified; and the term “including” shall mean “including without
limitation”.
(d) The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as the feminine
and neuter genders of such terms.
(e) Any
agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such agreement,
instrument or statute as from time to time amended, modified or supplemented
and
includes (in the case of agreements or instruments) references to all
attachments thereto and instruments incorporated therein; references to a Person
are also to its permitted successors and assigns.
ARTICLE
II.
Conveyance
of HELOCs
Section
2.01. Conveyance
of
HELOCs; Obligation to Fund Advances Under Credit Line Agreements.
(a) As
of the
Closing Date, in consideration of the Issuing Entity’s delivery of the proceeds
from the sale of the Notes and the Certificates to the Sponsor, and
concurrently with
the
execution and delivery of this Agreement, the Sponsor does hereby sell,
transfer, assign, set over, deposit with and otherwise convey to the Depositor,
without recourse, and the Depositor does hereby sell, transfer, assign, set
over, deposit with and otherwise convey to the Issuing Entity, without recourse,
and the Issuing Entity, pursuant to the Indenture, is granting to the Indenture
Trustee, all of its right, title and interest in and to the HELOCs. Such
conveyances include, without limitation, (i) each HELOC, including its principal
balance (including the right to make Draws related thereto) and all collections
in respect thereof received after the Cut-Off Date (excluding interest
collections due on or prior to the Cut-Off Date); (ii) property that secured
a
HELOC that is acquired by foreclosure or deed in lieu of foreclosure; (iii)
the
related Originator’s rights under the Insurance Policies; (iv) the Master
Servicer Collection Account and the Payment Account; and (v) any proceeds of
the
foregoing and any other property owned by the Trust and all other assets
included or to be included in the Issuing Entity for the benefit of the
Noteholders and the Certificateholders; provided,
however,
none of
the Indenture Trustee, the Securities Administrator, the Master Servicer nor
the
Issuing Entity assumes or shall assume the obligation under any Credit Line
Agreement that provides for the funding of Draws to the Mortgagor thereunder,
and none of the Securities Administrator, the Master Servicer nor the Indenture
Trustee shall be obligated or permitted to fund any such Draws. With respect
to
the HELOCs, Draws shall be part of the related principal balance and are hereby
transferred to the Issuing Entity on the Closing Date pursuant to this Section
2.01(a), and are therefore part of the Trust Estate. The Indenture Trustee
declares that, subject to the Custodian’s review provided for in Section 2.02,
it, or the Custodian on its behalf, has received and shall hold the Trust
Estate, as Indenture Trustee, in trust, for the benefit and use of the
Noteholders and the Note Insurer and for the purposes and subject to the terms
and conditions set forth in this Agreement and the Indenture, and, concurrently
with such receipt, the Issuing Entity has issued and delivered the Notes to
or
upon the order of the Depositor, in exchange for the Trust Estate. The
Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, assign, set over and otherwise convey in trust to the Issuing Entity
without recourse all the right, title and interest of the Depositor in and
to
the REMIC I Regular Interests and the other assets of REMIC II for the benefit
of the holders of the REMIC II Regular Interests and the Class R-1 Certificates.
The Issuing Entity acknowledges receipt of the REMIC I Regular Interests (which
are uncertificated) and the other assets of REMIC II and declares that it holds
and will hold the same in trust for the exclusive use and benefit of the holders
of the REMIC II Regular Interests and the Class R-1 Certificates. The Depositor,
concurrently with the execution and delivery hereof, does hereby transfer,
assign, set over and otherwise convey in trust to the Issuing Entity without
recourse all the right, title and interest of the Depositor in and to the REMIC
II Regular Interests and the other assets of REMIC III for the benefit of the
Holders of the Notes, the Class E Interest and the Class R-2 Certificates.
The
Issuing Entity acknowledges receipt of the REMIC II Regular Interests (which
are
uncertificated) and the other assets of REMIC III and declares that it holds
and
will hold the same in trust for the exclusive use and benefit of the holders
of
the Holders of the Notes, the Class E Interest and the Class R-2 Certificates.
The Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, assign, set over and otherwise convey in trust to the Issuing Entity
without recourse all the right, title and interest of the Depositor in and
to
the Class E Interest and the other assets of REMIC IV for the benefit of the
holders of the Class E Certificates and the Class RX Certificates. The Issuing
Entity acknowledges receipt of the Class E Interest (which is uncertificated)
and the other assets of REMIC IV and declares that it holds and will hold the
same in trust for the exclusive use and benefit of the holders of the Class
E
Certificates and the Class RX Certificates.
(b) The
Securities Administrator does hereby agree to direct funds from the holder
of
the Class S Certificates to reimburse Servicer advances made to fund additional
Draws on the HELOCs. Each additional balance during the Managed Amortization
Period shall first be funded from collections of principal deposited in an
account managed by the related Servicer. On a designated remittance date, as
described in this Agreement and the Servicing Agreement, the related Servicer
shall, to the extent set forth in this Agreement and the Servicing Agreement,
then deliver to the holder of the Class S Certificate, with a copy to the Master
Servicer, its monthly remittance report, which shall indicate the aggregate
additional balance funded by the related Servicer. To the extent that the
purchase price for any additional balance exceeds such principal amount on
deposit in such collection account on such day, during the Managed Amortization
Period, the difference shall be funded by the Class S Certificateholder. During
the Rapid Amortization Period, the entire balance of additional Draws shall
be
funded by the Class S Certificateholder. The Holder of the Class S Certificate,
by accepting such Certificate, hereby agrees to reimburse the Servicers for
such
aggregate advances, which is the amount by which the principal balance of the
Class S Certificate shall accumulate each month.
The
Master Servicer and the Securities Administrator have no liability or obligation
to reimburse any Servicer for any additional Draws to the extent that the holder
of the Class S Certificate fails to do so.
(c) It
is
agreed and understood by the Sponsor, the Depositor and the Issuing Entity
(and
the Depositor so represents and recognizes) that it is not intended that any
HELOC to be included in the Trust Estate be (i) a “High-Cost Home Loan” as
defined in the New Jersey Home Ownership Act effective November 27, 2003, (ii)
a
“High-Cost Home Loan” as defined in the New Mexico Home Loan Protection Act
effective January 1, 2004, (iii) a “High-Cost Home Mortgage Loan” as defined in
the Massachusetts Predatory Home Loan Practices Act effective November 7, 2004;
(iv) a “High Cost Home Loan” as defined in the Indiana Home Loan Practices Act
effective January 1, 2005; or (v) 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 5.7 Revised, Appendix E attached as
Exhibit 6 to the Mortgage Loan Purchase Agreement).
(d) In
connection with such transfers and assignments of the HELOCs, the Sponsor shall
deliver to, and deposit with, or cause to be delivered to and deposited with,
the Indenture Trustee, and/or the Custodian acting on the Indenture Trustee’s
behalf, the following documents or instruments with respect to each HELOC so
transferred and assigned on or before the Closing Date:
(i) the
original Credit Line Agreement;
(ii) if
such
HELOC is not a MERS Mortgage Loan, an original Assignment of Mortgage in blank
signed by the Sponsor;
(iii) (A)
if
such HELOC is not a MERS Mortgage Loan, the original recorded Mortgage or,
if in
connection with such HELOC, the original recorded Mortgage with evidence of
recording thereon cannot be delivered on or prior to the Closing Date because
of
a delay caused by the public recording office where such original Mortgage
has
been delivered for recordation or because such original Mortgage has been lost,
the Sponsor shall deliver or cause to be delivered to the Custodian, a true
and
correct copy of such Mortgage, together with (i) in the case of a delay caused
by the public recording office, a certification of the Originator, title
company, escrow agent or closing attorney stating that such original Mortgage
has been dispatched to the appropriate public recording official or (ii) in
the
case of an original Mortgage that has been lost, a certificate by the
appropriate county recording office where such Mortgage is recorded, and (B)
if
such HELOC is a MERS Mortgage Loan, the original Mortgage, noting the presence
of the “Mortgage Identification Number” of such MERS Mortgage Loan;
(iv) if
such
HELOC is not a MERS Mortgage Loan, if applicable, the original Intervening
Assignments, if any, with evidence of recording thereon, showing a complete
chain of title to the related Mortgage from the Mortgagor to the related
Originator (and endorsed in blank in accordance with clause (ii) above) or,
if
any such original Intervening Assignment has not been returned from the
applicable recording office or has been lost, a true and correct copy thereof,
together with (i) in the case of a delay caused by the public recording office,
a certification of the Originator, title company, escrow agent or closing
attorney stating that such original Intervening Assignment has been dispatched
to the appropriate public recording official for recordation or (ii) in the
case
of an original Intervening Assignment that has been lost, a certificate by
the
appropriate county recording office where such Mortgage is
recorded;
(v) either
a
title insurance policy or guaranty title with respect to the related Mortgaged
Property;
(vi) the
original of any guaranty executed in connection with such HELOC;
(vii) the
original of each assumption, modification, consolidation or substitution
agreement, if any, relating to such HELOC; and
(viii) any
security agreement, chattel mortgage or equivalent instrument executed in
connection with the related Mortgage.
(e) (i)
Upon
the occurrence of a Recordation Event, the Sponsor shall submit to the
appropriate recording offices Assignments of Mortgage to the Indenture Trustee
on behalf of the Trust, which may be blanket assignments if permitted by
applicable law, for the HELOCs. In lieu of recording any such Assignments of
Mortgage, the Sponsor may provide to the Indenture Trustee an Opinion of Counsel
in a form reasonably acceptable to the Indenture Trustee, to the effect that
recordation of an Assignment of Mortgage in the state where the related
Mortgaged Property is located is not necessary to protect the interests of
the
Owner Trustee, the Indenture Trustee or the Securityholders in the related
Mortgage. In the event that any such Assignment of Mortgage is lost or returned
unrecorded because of a defect therein, the Sponsor shall promptly prepare
a
substitute Assignment of Mortgage or cure such defect, as the case may be,
and
thereafter the Sponsor shall submit each such Assignment of Mortgage for
recording.
(ii) In
instances where a title insurance policy is required to be delivered to the
Indenture Trustee or the Custodian on behalf of the Indenture Trustee under
clause (d)(v) above and is not so delivered, the Sponsor shall provide a copy
of
such title insurance policy to the Indenture Trustee, or to the Custodian on
behalf of the Indenture Trustee, as promptly as practicable after the execution
and delivery hereof, but in any case within 180 days of the Closing
Date.
(iii) For
HELOCs (if any) that 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,
herewith shall deliver to the Indenture Trustee, or to the Custodian on behalf
of the Indenture Trustee and the Master Servicer, an Officer’s Certificate which
shall include a statement to the effect that all amounts received in connection
with such prepayment that are required to be deposited in the Collection Account
pursuant to this Agreement or the Servicing Agreement have been so deposited.
All original documents that are not delivered to the Indenture Trustee or the
Custodian on behalf of the Indenture Trustee shall be held by the Servicers
in
trust for the benefit of the Indenture Trustee and the
Securityholders.
Section
2.02. Acceptance
of HELOCs by the Issuing Entity.
(a) The
Issuing Entity acknowledges the sale, transfer and assignment of the Trust
Estate to it by the Depositor and receipt of, subject to further review by
the
Custodian and the exceptions which may be noted by the Custodian on behalf
of
the Indenture Trustee, pursuant to the procedures described below, and the
Issuing Entity will cause the Custodian to hold, the documents (or certified
copies thereof) delivered to the Custodian, pursuant to Section 2.01, and any
amendments, replacements or supplements thereto and all other assets of the
Trust Estate delivered to it, in trust for the use and benefit of (i) all
present and future Holders of the Notes issued pursuant to the Indenture and
the
Certificates issued pursuant to the Trust Agreement and (ii) the Note Insurer.
On the Closing Date, with respect to the HELOCs, in accordance with the
Custodial Agreement, the Custodian shall acknowledge with respect to each HELOC
by delivery to the Depositor, the Sponsor, the Master Servicer, the Indenture
Trustee, the Note Insurer and the Issuing Entity of an Initial Certification,
receipt of the Mortgage File, but without review of such Mortgage File, except
to the extent necessary to confirm that such Mortgage File contains the related
Mortgage Note or lost note affidavit. No later than 90 days after the Closing
Date (or with respect to any Substitute HELOC, within five Business Days after
the receipt by the Custodian thereof), the Custodian, in accordance with the
Custodial Agreement, shall review each Mortgage File delivered to it and shall
execute and deliver to the Depositor, the Sponsor, the Master Servicer, the
Indenture Trustee, the Note Insurer, and the Issuing Entity an Interim
Certification. In conducting such review, the Custodian will ascertain whether
all documents required to be reviewed by it have been executed and received,
and
based on the Mortgage Loan Schedule, whether the Mortgage Notes relate,
determined on the basis of the Mortgagor name, original principal balance and
loan number, to the HELOCs it has received, as identified in the Mortgage Loan
Schedule. In performing any such review, 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 Custodian finds any
document constituting part of the Mortgage File has not been executed or
received, or is unrelated, determined on the basis of the Mortgagor name,
original principal balance and loan number, to the HELOCs identified in Exhibit
A, or does not conform on its face to the review criteria specified in this
Section (a “Material Defect”), the Custodian shall notify the Sponsor, the
Depositor, the Master Servicer, the Issuing Entity, the Note Insurer and the
Indenture Trustee of such Material Defect in writing. In accordance with the
Mortgage Loan Purchase Agreement, the Sponsor shall correct or cure any such
Material Defect within ninety (90) days from the date of notice from the
Custodian of the defect and if the Sponsor fails to correct or cure the Material
Defect within such period, the Indenture Trustee shall enforce the Sponsor’s
obligation under the Mortgage Loan Purchase Agreement to provide a Substitute
HELOC or purchase such HELOC at the Repurchase Price; provided, however, that
if
such Material Defect relates solely to the inability of the Sponsor 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 Sponsor shall not be
required to purchase or replace such HELOC if the Sponsor 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 or substitution
obligation shall not apply in the event that the Sponsor 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 Sponsor shall instead deliver
a
recording receipt of such recording office or, if such receipt is not available,
a certificate confirming that such documents have been accepted for recording,
and delivery to the Custodian shall be effected by the Sponsor within thirty
days of its receipt of the original recorded document.
(b) No
later
than 180 days after the Closing Date, the Custodian, in accordance with the
Custodial Agreement, will review the Mortgage Files delivered to it and will
execute and deliver or cause to be executed and delivered to the Depositor,
the
Sponsor, the Master Servicer, the Indenture Trustee, the Note Insurer and the
Issuing Entity a Final Certification. In conducting such review, the Custodian
will ascertain whether an original of each document required to be recorded
has
been returned from the recording office with evidence of recording thereon
or a
certified copy has been obtained from the recording office. If the Custodian
finds a Material Defect, the Custodian shall promptly notify the Sponsor, the
Depositor, the Master Servicer, the Issuing Entity, the Note Insurer and the
Indenture Trustee in writing (provided, however, that with respect to those
documents described in subsections (b)(iv), (v) and (vii) of Section 2.01,
the
Custodian’s obligations shall extend only to the documents actually delivered to
the Custodian pursuant to such subsections). In accordance with the Mortgage
Loan Purchase Agreement, the Sponsor shall correct or cure any such Material
Defect within 90 days from the date of notice from the Custodian or the
Indenture Trustee of the Material Defect and if the Sponsor is unable to cure
such Material Defect within such period, and if such Material Defect materially
and adversely affects the interests of the Noteholders, Certificateholders
or
the Note Insurer in the related HELOC, the Indenture Trustee shall enforce
the
Sponsor’s obligation under the Mortgage Loan Purchase Agreement to provide a
Substitute HELOC or purchase such HELOC at the Repurchase Price; provided,
however, that if such defect relates solely to the inability of the Sponsor
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 Sponsor shall not
be
required to purchase or replace such HELOC, if the Sponsor 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 or
substitution obligation shall not apply in the event that the Sponsor 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 Sponsor shall
instead deliver a recording receipt of such recording office or, if such receipt
is not available, a certificate confirming that such documents have been
accepted for recording, and delivery to the Custodian on behalf of the Indenture
Trustee shall be effected by the Sponsor within thirty days of its receipt
of
the original recorded document.
(c) In
the
event that a HELOC is purchased by the Sponsor in accordance with Subsections
2.02(a) or (b) above, the Sponsor shall remit to the Master Servicer the
Repurchase Price for deposit in the Master Servicer Collection Account and
the
Sponsor shall provide to the Master Servicer, Securities Administrator, the
Note
Insurer and the Indenture Trustee written notification detailing the components
of the Repurchase Price. Upon deposit of the Repurchase Price in the Master
Servicer Collection Account, the Depositor shall notify the Indenture Trustee,
the Note Insurer and the Custodian, and the Indenture Trustee (upon receipt
of a
Request for Release in the form of Exhibit B attached hereto with respect to
such HELOC and certification that the Repurchase Price has been deposited in
the
Master Servicer Collection Account) shall cause the Custodian to release to
the
Sponsor the related Mortgage File and the Indenture Trustee shall execute and
deliver all instruments of transfer or assignment, without recourse,
representation or warranty, furnished to it by the Sponsor, as are necessary
to
vest in the Sponsor title to and rights under the HELOC. Such purchase shall
be
deemed to have occurred on the date on which the Repurchase Price in available
funds is deposited in the Master Servicer Collection Account. The Master
Servicer shall amend the Mortgage Loan Schedule, which was previously delivered
to it by the Depositor in a form agreed to between the Depositor, the Indenture
Trustee and the Custodian, to reflect such repurchase and shall promptly deliver
to the Rating Agencies, the Indenture Trustee, the Note Insurer, the Custodian
and the Issuing Entity a copy of such amendment. The obligation of the Sponsor
to repurchase or substitute for any HELOC a Substitute HELOC as to which such
a
Material Defect in a constituent document exists shall be the sole remedy
respecting such Material Defect available to the Issuing Entity, the
Noteholders, the Certificateholders or to the Indenture Trustee or Owner
Trustee, as applicable, on their behalf.
Section
2.03. Assignment
of Interest in the Mortgage Loan Purchase Agreement.
(a)The
Depositor hereby assigns to the Issuing Entity, all of its right, title and
interest in the Mortgage Loan Purchase Agreement, including but not limited
to
the Depositor’s rights and obligations pursuant to the Servicing Agreement or
this Agreement (noting that the Sponsor has retained the right in the event
of
breach of the representations, warranties and covenants, if any, with respect
to
the HELOCs of the related Servicer under the Servicing Agreement or this
Agreement, as applicable, to enforce the provisions thereof and to seek all
or
any available remedies). The Depositor hereby acknowledges that such right,
title and interest in the Mortgage Loan Purchase Agreement, will be pledged
by
the Issuing Entity to the Indenture Trustee pursuant to the Indenture. The
obligations of the Sponsor to substitute or repurchase, as applicable, a HELOC
shall be the Issuing Entity’s, the Indenture Trustee’s and the Noteholders’ and
the Certificateholder’s sole remedy for any breach thereof. At the request of
the Issuing Entity or the Indenture Trustee, the Depositor shall take such
actions as may be necessary to enforce the above right, title and interest
on
behalf of the Issuing Entity, the Indenture Trustee, the Noteholders, the
Certificateholders and the Note Insurer and shall execute such further documents
as the Issuing Entity or the Indenture Trustee may reasonably require in order
to enable the Indenture Trustee to carry out such enforcement.
(b) If
the
Depositor, the Securities Administrator, the Master Servicer, the Custodian,
the
Issuing Entity, the Note Insurer or the Indenture Trustee discovers a breach
of
any of the representations and warranties set forth in the Mortgage Loan
Purchase Agreement, which breach materially and adversely affects the value
of
the interests of the Issuing Entity, the Noteholders, the Certificateholders,
the Note Insurer or the Indenture Trustee in the related HELOC, the party
discovering the breach shall give prompt written notice of the breach to the
other parties. The Sponsor, within 90 days of its discovery or receipt of notice
that such breach has occurred (whichever occurs earlier), shall cure the breach
in all material respects or, subject to the Mortgage Loan Purchase Agreement,
shall purchase the HELOC or any property acquired with respect thereto from
the
Issuing Entity; provided, however, that if there is a breach of any
representation set forth in the Mortgage Loan Purchase Agreement, and the HELOC
or the related property acquired with respect thereto has been sold, then the
Sponsor shall pay, in lieu of the Repurchase Price, any excess of the Repurchase
Price over the Net Liquidation Proceeds received upon such sale. If the Net
Liquidation Proceeds exceed the Repurchase Price, any excess shall be paid
to
the Sponsor to the extent not required by law to be paid to the borrower. Any
such purchase by the Sponsor shall be made by providing an amount equal to
the
Repurchase Price to the Master Servicer for deposit in the Master Servicer
Collection Account and written notification detailing the components of such
Repurchase Price. The Depositor shall submit to the Indenture Trustee and the
Custodian a Request for Release, and the Indenture Trustee shall cause the
Custodian to release, upon receipt of certification from the Master Servicer
that the Repurchase Price has been deposited in the Master Servicer Collection
Account, to the Sponsor the related Mortgage File and the Indenture Trustee
shall execute and deliver all instruments of transfer or assignment furnished
to
it by the Sponsor, without recourse, representation or warranty as are necessary
to vest in the Sponsor title to and rights under the HELOC or any property
acquired with respect thereto. Such purchase shall be deemed to have occurred
on
the date on which the Repurchase Price in available funds is deposited in the
Master Servicer Collection Account. The Master Servicer shall amend the Mortgage
Loan Schedule to reflect such repurchase and shall promptly deliver to the
Issuing Entity, Indenture Trustee, Securities Administrator, the Note Insurer,
the Custodian and the Rating Agencies a copy of such amendment. Enforcement
of
the obligation of the Sponsor to purchase (or substitute a Substitute HELOC
for)
any HELOC or any property acquired with respect thereto (or pay the Repurchase
Price as set forth in the above proviso) as to which a breach has occurred
and
is continuing shall constitute the sole remedy respecting such breach available
to the Issuing Entity, the Noteholders or the Indenture Trustee on their
behalf.
Section
2.04. Substitution
of HELOCs.
Notwithstanding anything to the contrary in this Agreement, in lieu of
purchasing a HELOC pursuant to the Mortgage Loan Purchase Agreement or Sections
2.02 or 2.03 of this Agreement, the Sponsor may, no later than the date by
which
such purchase by the Sponsor would otherwise be required, tender to the
Indenture Trustee a Substitute HELOC, if such substitution occurs within two
years following the Closing Date, accompanied by a certificate of an authorized
officer of the Sponsor that such Substitute HELOC conforms to the requirements
set forth in the definition of “Substitute HELOC” in this Agreement. The
Indenture Trustee shall cause the Custodian to examine the Mortgage File for
any
Substitute HELOC in the manner set forth in Section 2.02(a) and the Indenture
Trustee shall cause the Custodian to notify the Sponsor, in writing, within
five
Business Days after receipt, whether or not the documents relating to the
Substitute HELOC satisfy the requirements of Section 2.02. Within two Business
Days after such notification, the Sponsor shall provide to the Master Servicer
for deposit in the Master Servicer Collection Account the amount, if any, by
which the Outstanding Principal Balance as of the next preceding Due Date of
the
HELOC for which substitution is being made, after giving effect to the Scheduled
Principal due on such date, exceeds the Outstanding Principal Balance as of
such
date of the Substitute HELOC, after giving effect to Scheduled Principal due
on
such date, which amount shall be treated for the purposes of this Agreement
as
if it were the payment by the Sponsor of the Repurchase Price for the purchase
of a HELOC by the Sponsor. After such notification to the Sponsor and, if any
such excess exists, upon receipt of certification from the Master Servicer
that
such excess has been deposited in the Master Servicer Collection Account, the
Indenture Trustee shall accept such Substitute HELOC which shall thereafter
be
deemed to be a HELOC hereunder. In the event of such a substitution, accrued
interest on the Substitute HELOC for the month in which the substitution occurs
and any Principal Prepayments made thereon during such month shall be the
property of the Trust Estate and accrued interest for such month on the HELOC
for which the substitution is made and any Principal Prepayments made thereon
during such month shall be the property of the Sponsor. The Scheduled Principal
Balance on a Substitute HELOC due on the Due Date in the month of substitution
shall be the property of the Sponsor and the Scheduled Principal Balance on
the
HELOC for which the substitution is made due on such Due Date shall be the
property of the Trust Estate. Upon acceptance of the Substitute HELOC (and
delivery to the Indenture Trustee and the Custodian of a Request for Release
for
such HELOC), the Indenture Trustee shall cause the Custodian to release to
the
Sponsor the related Mortgage File related to any HELOC released pursuant to
the
Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable, and shall execute and deliver all instruments of transfer or
assignment, without recourse, representation or warranty in form as provided
to
it as are necessary to vest in the Sponsor title to and rights under any HELOC
released pursuant to the Mortgage Loan Purchase Agreement or this Section 2.04,
as applicable. The Sponsor shall deliver to the Custodian the documents related
to the Substitute HELOC in accordance with the provisions of the Mortgage Loan
Purchase Agreement and Subsection 2.02(b) of this Agreement, as applicable,
with
the date of acceptance of the Substitute HELOC deemed to be the Closing Date
for
purposes of the time periods set forth in those Subsections. The representations
and warranties set forth in the Mortgage Loan Purchase Agreement shall be deemed
to have been made by the Sponsor with respect to each Substitute HELOC as of
the
date of acceptance of such HELOC by the Indenture Trustee. The Master Servicer
shall amend the Mortgage Loan Schedule to reflect such substitution and shall
provide a copy of such amended Mortgage Loan Schedule to the Issuing Entity,
the
Indenture Trustee, the Custodian and the Rating Agencies. Notwithstanding
anything to the contrary, no substitution shall occur unless such substitution
takes place prior to two years following the Closing Date.
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 HELOC that is
not
in default or as to which default is not reasonably foreseeable, no repurchase
or substitution pursuant to Sections 2.02, 2.03 or 2.04 shall be made unless
the
Sponsor delivers to the Indenture Trustee, the Note Insurer, the Securities
Administrator and the Owner Trustee an Opinion of Counsel, addressed to the
Indenture Trustee, Note Insurer, Securities Administrator and Owner Trustee,
to
the effect that such repurchase or substitution would not (i) result in the
imposition of the tax on “prohibited transactions” of any REMIC created pursuant
to the Indenture or contributions after the Closing Date, as defined in sections
860F(a)(2) and 860G(d) of the Code, respectively, or (ii) cause any REMIC
created pursuant to the Indenture to fail to qualify as a REMIC at any time
that
any Notes or Certificates are outstanding. Any HELOC 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,
2.03 or 2.04) upon the earlier of (a) the occurrence of a default or reasonably
foreseeable default with respect to such HELOC and (b) receipt by the Indenture
Trustee and Owner Trustee of an Opinion of Counsel addressed to the Indenture
Trustee, Note Insurer and Owner Trustee to the effect that such repurchase
or
substitution, as applicable, will not result in the events described in clause
(i) or clause (ii) of the preceding sentence.
(b) Upon
discovery by the Depositor, the Sponsor or the Master Servicer that any HELOC
does not constitute a “qualified mortgage” within the meaning of section
860G(a)(3) of the Code, the party discovering such fact shall promptly (and
in
any event within 5 Business Days of discovery) give written notice thereof
to
the other parties and the Indenture Trustee, Note Insurer and Owner Trustee.
In
connection therewith, the Indenture Trustee and Owner Trustee shall require
the
Sponsor, at its option, to either (i) substitute, if the conditions in Section
2.04 with respect to substitutions are satisfied, a Substitute HELOC for the
affected HELOC, or (ii) repurchase the affected HELOC within 90 days of such
discovery in the same manner as it would a HELOC for a breach of representation
or warranty in accordance with Section 2.03. The Indenture Trustee shall
reconvey to the Sponsor the HELOC 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 HELOC repurchased for breach of
a
representation or warranty in accordance with Section 2.03.
Section
2.06. Representations
and Warranties Concerning the Depositor.
The
Depositor hereby represents and warrants to the Issuing Entity, the Indenture
Trustee, the Note Insurer, the Master Servicer and the Securities Administrator
as follows:
(i) the
Depositor (a) is a limited liability company duly organized, validly existing
and in good standing under the laws of the State of Delaware and (b) is
qualified and in good standing as a foreign company 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 Depositor’s business as presently conducted or on the Depositor’s ability to
enter into this Agreement and to consummate the transactions contemplated
hereby;
(ii) the
Depositor has full corporate power to own its property, to carry on its business
as presently conducted and to enter into and perform its obligations under
this
Agreement;
(iii) the
execution and delivery by the Depositor of this Agreement have been duly
authorized by all necessary corporate action on the part of the Depositor;
and
neither the execution and delivery of this Agreement, nor the consummation
of
the transactions herein contemplated, nor compliance with the provisions hereof,
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 Depositor or its properties or the certificate of formation
or by-laws of the Depositor, except those conflicts, breaches or defaults which
would not reasonably be expected to have a material adverse effect on the
Depositor’s ability to enter into this Agreement and to consummate the
transactions contemplated hereby;
(iv) the
execution, delivery and performance by the Depositor 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;
(v) this
Agreement has been duly executed and delivered by the Depositor and, assuming
due authorization, execution and delivery by the other parties hereto,
constitutes a valid and binding obligation of the Depositor 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);
(vi) there
are
no actions, suits or proceedings pending or, to the knowledge of the Depositor,
threatened against the Depositor, before or by any court, administrative agency,
arbitrator or governmental body with respect to any of the transactions
contemplated by this Agreement; or
(vii) with
respect to any other matter which in the judgment of the Depositor will be
determined adversely to the Depositor and will if determined adversely to the
Depositor materially and adversely affect the Depositor’s ability to enter into
this Agreement or perform its obligations under this Agreement; and the
Depositor 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;
(viii) immediately
prior to the transfer and assignment to the Issuing Entity, each Mortgage Note
and each Mortgage were not subject to an assignment or pledge, and the Depositor
had good and marketable title to and was the sole owner thereof and had full
right to transfer and sell such HELOC to the Issuing Entity free and clear
of
any encumbrance, equity, lien, pledge, charge, claim or security interest;
and
(ix) The
Depositor 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 Depositor was required to file such reports) and it has been subject to
such
filing requirement for the past 90 days.
Section
2.07. Representations
and Warranties Regarding the Master Servicer.
The
Master Servicer represents and warrants to the Issuing Entity, the Depositor,
the Sponsor, the Note Insurer, and the Indenture Trustee for the benefit of
the
Noteholders, as follows:
(i) The
Master Servicer is a national banking association duly organized, validly
existing and in good standing under the laws of the United States of America
and
has the corporate power to own its assets and to transact the business in which
it is currently engaged. The Master Servicer is duly qualified to do business
as
a foreign corporation and is in good standing in each jurisdiction in which
the
character of the business transacted by it or properties owned or leased by
it
requires such qualification and in which the failure to so qualify would have
a
material adverse effect on the business, properties, assets, or condition
(financial or other) of the Master Servicer or the validity or enforceability
of
this Agreement;
(ii) The
Master Servicer has the power and authority to make, execute, deliver and
perform this Agreement and all of the transactions contemplated under this
Agreement, and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement. When executed and
delivered, this Agreement will constitute the legal, valid and binding
obligation of the Master Servicer enforceable in accordance with its terms,
except as enforcement of such terms may be limited by bankruptcy, insolvency
or
similar laws affecting the enforcement of creditors’ rights generally and by the
availability of equitable remedies;
(iii) The
Master Servicer is not required to obtain the consent of any other Person or
any
consent, license, approval or authorization from, or registration or declaration
with, any governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this Agreement,
except for such consent, license, approval or authorization, or registration
or
declaration, as shall have been obtained or filed, as the case may
be;
(i) The
execution and delivery of this Agreement and the performance of the transactions
contemplated hereby by the Master Servicer will not violate any provision of
any
existing law or regulation or any order or decree of any court applicable to
the
Master Servicer or any provision of the certificate of incorporation or bylaws
of the Master Servicer, or constitute a material breach of any mortgage,
indenture, contract or other agreement to which the Master Servicer is a party
or by which the Master Servicer may be bound; and
(iv) No
litigation or administrative proceeding of or before any court, tribunal or
governmental body is currently pending (other than litigation with respect
to
which pleadings or documents have been filed with a court, but not served on
the
Master Servicer), or to the knowledge of the Master Servicer threatened, against
the Master Servicer or any of its properties or with respect to this Agreement
or the Notes or the Certificates which, to the knowledge of the Master Servicer,
has a reasonable likelihood of resulting in a material adverse effect on the
transactions contemplated by this Agreement.
The
foregoing representations and warranties shall survive any termination of the
Master Servicer hereunder.
Section
2.08. Assignment
of Agreement.
The
Sponsor, the Depositor and the Master Servicer hereby acknowledge and agree
that
the Issuing Entity may assign its interest under this Agreement to the Indenture
Trustee, for the benefit of the Noteholders and the Note Insurer, as may be
required to effect the purposes of the Indenture, without further notice to,
or
consent of, the Sponsor, the Depositor or the Master Servicer, and the Indenture
Trustee shall succeed to such of the rights of the Issuing Entity hereunder
as
shall be so assigned. The Issuing Entity shall, pursuant to the Indenture,
assign all of its right, title and interest in and to the HELOCs and its right
to exercise the remedies created by Article II of this Agreement for breaches
of
the representations, warranties, agreements and covenants of the Sponsor
contained in the Mortgage Loan Purchase Agreement, to the Indenture Trustee,
for
the benefit of the Noteholders and the Note Insurer. The Sponsor agrees that,
upon such assignment to the Indenture Trustee, such representations, warranties,
agreements and covenants will run to and be for the benefit of the Indenture
Trustee and the Note Insurer, and the Indenture Trustee may enforce, without
joinder of the Depositor or the Issuing Entity, the repurchase obligations
of
the Sponsor set forth herein and in the Mortgage Loan Purchase Agreement with
respect to breaches of such representations, warranties, agreements and
covenants. Any such assignment to the Indenture Trustee shall not be deemed
to
constitute an assignment to the Indenture Trustee of any obligations or
liabilities of the Issuing Entity under this Agreement.
ARTICLE
III.
Administration
and Servicing of EMC HELOCs by the Company
Section
3.01. The
Company.
The
Company shall service and administer the EMC HELOCs in accordance with this
Agreement and with Accepted Servicing Practices. 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
and
consistent with the terms of this Agreement and customary servicing practices
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 Noteholders, Certificateholders, the Note Insurer, the
Securities Administrator, the Master Servicer and the Indenture 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 HELOC; provided that the Company shall take no action that
is
inconsistent with or prejudices the interests of the Trust Fund or the
Noteholders, Certificateholders or the Note Insurer or this Agreement in any
EMC
HELOC or the rights and interests of the Depositor, the Master Servicer, the
Securities Administrator or the Indenture 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, the Securities Administrator, the Master
Servicer or the Indenture Trustee, is hereby authorized and empowered by the
Trust, the Depositor, the Securities Administrator, the Master Servicer and
the
Indenture Trustee, when the Company believes it appropriate in its reasonable
judgment, to execute and deliver, on behalf of the Securities Administrator,
the
Master Servicer, the Indenture Trustee, the Depositor, the Noteholders, the
Certificateholders, the Note Insurer 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 HELOCs, and with respect
to the related Mortgaged Properties held for the benefit of the Noteholders,
the
Certificateholders and the Note Insurer, in each case to the extent not
inconsistent with Accepted Servicing Practices and the terms of this Agreement.
The Company shall prepare and deliver to the Depositor, the Securities
Administrator, the Master Servicer and/or the Indenture 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 HELOCs.
Upon
receipt of such documents, the Depositor, the Securities Administrator, the
Master Servicer and/or the Indenture 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 HELOCs, which advances shall be reimbursable
in
the first instance from collections 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 HELOCs and related
insurance premiums shall not, for the purpose of calculating monthly
distributions to the Noteholders and the Certificateholders, be added to the
Stated Principal Balance under the related EMC HELOCs, notwithstanding that
the
terms of such HELOCs so permit.
The
Indenture Trustee shall furnish each Servicer with any powers of attorney and
other documents in form as provided to it necessary or appropriate to enable
each Servicer to service and administer the HELOCs and REO Property, 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
HELOCs or the Mortgaged Property, in accordance with the Servicing Agreement
and
this Agreement.
With
respect to each HELOC, the Company may consent to the placing of a lien senior
to that of the Mortgage on the related Mortgaged Property; provided, the
Combined Loan-to-Value Ratio, which may be based on a new appraisal, of the
HELOC immediately following the modification is not greater than the Combined
Loan-to-Value Ratio of such HELOC as of the date such HELOC was
originated.
Notwithstanding
anything in this Agreement to the contrary, the Company shall not make any
future advances with respect to a HELOC (other than the Servicing Advances)
and
the Company shall not (i) permit any modification with respect to any HELOC
that
would change the Mortgage Rate, reduce or increase the principal balance of
any
HELOC (except for reductions resulting from actual payments of principal) or
change the final maturity date on such HELOC (unless the Mortgagor is in default
with respect to the HELOC or such default is, in the judgment of the Company,
reasonably foreseeable) or (ii) permit any modification, waiver or amendment
of
any term of any HELOC that would both (A) effect an exchange or reissuance
of
such HELOC under Section 1001 of the Code (or Treasury regulations promulgated
thereunder) and (B) cause any REMIC created pursuant to the Indenture to fail
to
qualify as a REMIC under the Code or the imposition of any tax on “prohibited
transactions” or “contributions after the startup date” under the REMIC
Provisions.
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 HELOC 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
HELOC shall continue to be covered (if so covered before the Company enters
such
agreement) by the applicable Required Insurance Policies and comply with
representations and warranties set forth in Section 7 of the Mortgage Loan
Purchase Agreement. 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 Indenture Trustee, or if
an
instrument of release signed by the Indenture Trustee is required releasing
the
Mortgagor from liability on the related EMC HELOC, the Company shall prepare
and
deliver or cause to be prepared and delivered to the Indenture Trustee for
signature and shall direct, in writing, the Indenture 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 Monthly Payment, and any other term affecting the amount or timing of
payment on the EMC HELOC) 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 and must meet the original
underwriting guidelines. The Company shall notify the Securities Administrator
and the Indenture Trustee that any such substitution or assumption agreement
has
been completed by forwarding to the applicable Custodian on behalf of the
Securities Administrator 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 will be retained by the Company as
additional servicing compensation.
Section
3.03. Subservicers.
The
Company shall perform all of its servicing responsibilities hereunder or may
cause a subservicer to perform any such servicing responsibilities on its
behalf, but the use by the Company of a subservicer shall not release the
Company from any of its obligations hereunder and the Company shall remain
responsible hereunder for all acts and omissions of each subservicer as fully
as
if such acts and omissions were those of the Company. The Company shall pay
all
fees of each subservicer from its own funds, and a subservicer’s fee shall not
exceed the Servicing Fee payable to the Company hereunder.
At
the
cost and expense of the Company, without any right of reimbursement, 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 HELOCs itself. In the event that the Company’s responsibilities and
duties under this Agreement are terminated pursuant to Section 9.03, the
Company shall at its own cost and expense terminate the rights and
responsibilities of each subservicer effective as of the date of termination
of
the Company. The Company shall pay all fees, expenses or penalties necessary
in
order to terminate the rights and responsibilities of each subservicer from
the
Company’s own funds without reimbursement from the Trust Fund.
Notwithstanding
the foregoing, the Company shall not be relieved of its obligations hereunder
and shall be obligated to the same extent and under the same terms and
conditions as if it alone were servicing and administering the EMC HELOCs.
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 HELOCs involving a subservicer shall be deemed to be between such
subservicer and the Company alone, and neither the Master Servicer nor the
Indenture 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 Indenture Trustee to pay such subservicer’s fees and
expenses. For purposes of remittances to the Securities Administrator pursuant
to this Agreement, the Company shall be deemed to have received a payment on
an
EMC HELOC when a subservicer has received such payment.
Section
3.04. Optional
Purchase of Certain HELOCs.
With
respect to any HELOCs which as of the first day of a Fiscal Quarter is
delinquent in payment by 91 days or more or is an REO Property, EMC shall have
the right to purchase any HELOC from the Trust which becomes 91 days or more
delinquent or becomes an REO Property at a price equal to the Repurchase Price;
provided however (i) that such HELOC is still 91 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 HELOC
thereafter again becomes 91 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.
If
at any
time EMC remits to the Master Servicer a payment for deposit in the Master
Servicer Collection
Account
covering the amount of the Purchase Price for such a HELOC, and EMC provides
to
the Master Servicer, Securities Administrator and Indenture Trustee an Officer’s
Certificate stating that the amount of such payment has been deposited in the
Master
Servicer Collection
Account,
then the Indenture Trustee shall execute the assignment of such HELOC prepared
and delivered to the Indenture Trustee, at the request of EMC, without recourse,
representation or warranty, to EMC which shall succeed to all the Indenture
Trustee’s right, title and interest in and to such HELOC, 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 Indenture Trustee, the
Noteholders and the Certificateholders with respect thereto.
Section
3.05. Documents,
Records and Funds in Possession of the Company to Be Held for
Trustee.
Notwithstanding
any other provisions of this Agreement, the Company shall transmit to the
Indenture Trustee or the Custodian on behalf of the Indenture Trustee as
required by this Agreement all documents and instruments in respect of an EMC
HELOC coming into the possession of the Company from time to time and shall
account fully to the Master Servicer for any funds received by the Company
or
that otherwise are collected by the Company as Liquidation Proceeds, Insurance
Proceeds, Recoveries or Subsequent Recoveries in respect of any such HELOC. All
Mortgage Files and funds collected or held by, or under the control of, the
Company in respect of any EMC HELOCs, whether from the collection of principal
and interest payments or from Liquidation Proceeds, Recoveries or Subsequent
Recoveries, 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 Indenture Trustee and shall be and remain the sole and exclusive
property of the Indenture 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 any funds that otherwise are or may become due
or
payable to the Securities Administrator for the benefit of the Noteholders
or
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 HELOC, 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.
All
funds
collected or held by, or under the control of, the Company, in respect of any
HELOCs, whether from the collection of principal and interest payments or from
Liquidation Proceeds or Insurance Proceeds, shall be held by the Company for
and
on behalf of the Indenture Trustee, the Noteholders, the Certificateholders
and
the Note Insurer and shall be and remain the sole and exclusive property of
the
Indenture Trustee; provided, however, that the Company shall be entitled to
setoff against, and deduct from, any such funds any amounts that are properly
due and payable to the Company under this Agreement.
Section
3.06. Maintenance
of Hazard Insurance.
The
Company shall cause to be maintained, for each EMC HELOC, 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 HELOC, 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 Noteholders and the Certificateholders or remittances to the Securities
Administrator for their benefit, be added to the principal balance of the HELOC,
notwithstanding that the terms of the EMC HELOC 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
HELOC 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 HELOC. The Company
shall have no obligation to cause flood insurance to be maintained on any second
lien HELOC. Such flood insurance shall be in an amount equal to the least of
(i)
the Stated Principal Balance of the related EMC HELOC, (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 HELOCs, 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 HELOCs, the Company agrees
to present, on behalf of itself and the Indenture Trustee for the benefit of
the
Noteholders and the Certificateholders claims under any such blanket
policy.
Section
3.07. Presentment
of Claims and Collection of Proceeds.
The
Company shall prepare and present on behalf of the Indenture Trustee, the
Noteholders and the Certificateholders all claims under the Required Insurance
Policies relating to the EMC HELOCs 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 Required Insurance Policies.
Any proceeds disbursed to the Company in respect of such Required Insurance
Policies shall be promptly deposited in the Protected Account maintained by
the
Company upon receipt, except that any amounts realized that are to be applied
to
the repair or restoration of the related Mortgaged Property as a condition
precedent to the presentation of claims on the related EMC HELOC to the insurer
under any applicable Insurance Policy need not be so deposited (or
remitted).
Section
3.08. 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 HELOC
requires the Mortgagor to maintain such insurance), Primary Mortgage Insurance
Policy applicable to each EMC HELOC. 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 Mortgage Note and is required to be kept in
force
hereunder.
(b) The
Company agrees to present on behalf of the Indenture Trustee, the Noteholders
and the Certificateholders claims to the insurer under any Primary Mortgage
Insurance Policies relating to the EMC HELOCs 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 HELOCs. 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
3.09. 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 HELOCs and who handle funds, money, documents and papers
relating to the EMC HELOCs. 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 HELOC which is not in
accordance with Accepted Servicing Practices. No provision of this
Section 3.09 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 Indenture Trustee. The Company shall
notify the Master Servicer, the Securities Administrator and the Indenture
Trustee in writing 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 Indenture Trustee for the benefit of the Noteholders and the
Certificateholders must be named as loss payees on the fidelity bond and as
additional insured on the errors and omissions policy.
Section
3.10. Realization
Upon Defaulted HELOCs; Determination of Excess Liquidation Proceeds and Realized
Losses; Repurchases of Certain HELOCs.
(a) The
Company shall use reasonable efforts to foreclose upon or otherwise comparably
convert the ownership of properties securing such of the EMC HELOCs 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 HELOC
after reimbursement to itself of such expenses and (ii) that such expenses
will
be recoverable to it through Insurance Proceeds or Liquidation Proceeds
(respecting which it shall have priority for purposes of withdrawals from the
Protected Account maintained by the Company pursuant to Section 5.02). If
the Company reasonably believes that Liquidation Proceeds with respect to any
such EMC HELOC would not be increased as a result of such foreclosure or other
action, such EMC HELOC will be charged-off and will become a Liquidated Loan.
The Company will give notice of any such charge-off to the Indenture Trustee
and
the Master Servicer. 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 HELOC, the deed or certificate
of
sale shall be taken in the name of the Indenture Trustee for the benefit of
the
Noteholders, the Certificateholders and the Note Insurer (or the Indenture
Trustee’s nominee on behalf of the Noteholders and the Certificateholders). The
Indenture Trustee’s name shall be placed on the title to such REO Property
solely as the Indenture Trustee hereunder and not in its individual capacity.
The Company shall ensure that the title to such REO Property references this
Agreement and the Indenture 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 Noteholders, the Certificateholders and the Note Insurer,
rent
the same, or any part thereof, as the Company deems to be in the best interest
of the Company and the Noteholders, the Certificateholders and the Note Insurer
for the period prior to the sale of such REO Property. The Company shall prepare
for and deliver to the Indenture Trustee, the Master Servicer 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 Securities Administrator 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 Estate acquires any Mortgaged Property as aforesaid or
otherwise in connection with a default or reasonably foreseeable default on
an
EMC HELOC, the Company shall dispose of such Mortgaged Property prior to three
years after its acquisition by the Trust Estate or, at the expense of the Trust
Estate, 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 Indenture Trustee and the Securities Administrator shall have been
supplied with an Opinion of Counsel addressed to the Indenture Trustee and
the
Securities Administrator (such opinion not to be an expense of the Indenture
Trustee and the Securities Administrator) to the effect that the holding by
the
Trust Estate of such Mortgaged Property subsequent to such three-year period
will not result in the imposition of taxes on “prohibited transactions” of
REMIC
I,
REMIC II, REMIC III or REMIC IV
as
defined in Section 860F of the Code or cause any of REMIC I, REMIC II, REMIC
III
or REMIC IV to fail to qualify as a REMIC at any time that any Notes or
Certificates are outstanding, in which case the Trust Estate 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 Estate 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 Estate with respect to the imposition
of
any such taxes.
The
decision of the Company to foreclose on a defaulted EMC HELOC 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, 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 HELOCs (with interest accruing as though
such HELOCs were still current) and all such income shall be deemed, for all
purposes in the Agreement, to be payments on account of principal and interest
on the related Mortgage Notes and shall be deposited into the Protected Account
maintained by the Company. To the extent the income received during a Collection
Period is in excess of the amount attributable to amortizing principal and
accrued interest at the related Mortgage Rate on the related EMC HELOC, such
excess shall be considered to be a partial Principal Prepayment for all purposes
hereof.
The
Liquidation Proceeds from any liquidation of an EMC HELOC, net of any payment
to
the Company as provided above, shall be deposited in the Protected Account
maintained by the Company upon
receipt and made available on
the
next succeeding Determination Date following receipt thereof for distribution
on
the related Payment Date, except that any Excess Liquidation Proceeds shall
be
retained by the Company as additional servicing compensation.
The
proceeds of any Liquidated HELOC, as well as any recovery resulting from a
partial collection of Liquidation Proceeds or any income from an REO Property,
will be applied in the following order of priority: first, to reimburse the
Company and the Master Servicer for any related unreimbursed Servicing Advances
and Servicing Fees, pursuant to Section 5.02 or this Section 3.10; second,
to
accrued and unpaid interest on the EMC HELOC 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 third, as a recovery of principal of the EMC
HELOC.
(b) On
each
Determination Date, the Company shall determine the respective aggregate amounts
of Excess Liquidation Proceeds and Realized Losses, if any, for the related
Collection Period.
(c) The
Company has no intent to foreclose on any EMC HELOC 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 HELOCs including
delinquency characteristics in the Company’s discretion so warrant such
action.
Section
3.11. Servicing
Compensation.
As
compensation for its activities hereunder, the Company shall be entitled to
retain or withdraw from the Protected Account out of each payment of interest
on
an EMC HELOC included in the Trust Fund an amount equal to the Servicing Fee.
The related Servicer shall be entitled to retain any Termination Fees related
to
any HELOC.
Additional
servicing compensation in the form of any Excess Liquidation Proceeds,
assumption fees, other ancillary income, late payment charges and all income
and
gain net of any losses realized from Permitted Investments with respect to
funds
in or credited to the Protected Account maintained by the Company shall be
retained by the Company to the extent not required to be deposited in the
Protected Account maintained by the Company pursuant to Section 5.01. 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.
Section
3.12. REO
Property.
(a) In
the
event the Trust Estate acquires ownership of any REO Property in respect of
any
related EMC HELOC, the deed or certificate of sale shall be issued to the
Indenture Trustee, or to its nominee, on behalf of the Noteholders, the
Certificateholders or the Note Insurer. The Company shall sell any such REO
Property as expeditiously as possible and in accordance with the provisions
of
this Agreement. Pursuant to its efforts to sell such REO Property, the Company
shall protect and conserve such REO Property in the manner and to the extent
required herein, in accordance with the REMIC Provisions.
(b) The
Company shall deposit all funds collected and received in connection with the
operation of any REO Property in respect of any EMC HELOC into the Protected
Account maintained by the Company.
(c) The
Company and the Master Servicer, upon the final disposition of any REO Property
in respect of any EMC HELOC, shall be entitled to reimbursement for any related
unreimbursed Servicing Advances, Servicing Fees and Master Servicing Fees from
Liquidation Proceeds received in connection with the final disposition of such
REO Property; provided, that any such unreimbursed or unpaid Servicing Fees
and
Master 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
3.13. Liquidation
Reports.
Upon
the
foreclosure of any Mortgaged Property relating to an EMC HELOC 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
3.14. Annual
Statement as to Compliance.
Each
of
the Company, the Securities Administrator and the Master Servicer shall deliver
to the Securities Administrator, the Depositor and the Note Insurer, 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 and/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, each
such party has fulfilled all of its obligations under this Agreement and/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. In the
event
that the Company, the Securities Administrator or the Master Servicer has
delegated any servicing responsibilities with respect to the HELOCs to a
subservicer or subcontractor, the Company, the Master Servicer or the Securities
Administrator (as the case may be) shall cause to be delivered a similar Annual
Statement of Compliance by that subservicer or subcontractor to the Depositor,
the Securities Administrator and the Note Insurer as described above as and
when
required with respect to the Company, the Securities Administrator and the
Master Servicer.
Failure
of the Master Servicer to comply with this Section 3.14 (including with respect
to the time frames required in this Section) shall be deemed a Master Servicer
Event of Default with respect to such party, and the Indenture Trustee at the
direction of the Depositor, shall, in addition to whatever rights the Indenture
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 HELOCs and the proceeds thereof without compensating
the Master Servicer for the same. Failure of the Company to comply with this
Section 3.14 (including with respect to the timeframes required in this Section)
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 HELOCs and the proceeds thereof without
compensating the Company for the same. Failure of the Securities Administrator
to comply with this Section 3.14 (including with respect to the timeframes
required in this Section) shall be deemed a default and the Indenture Trustee
at
the direction of the Depositor shall, in addition to whatever rights the
Indenture 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 HELOCs 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 3.14 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
3.15. 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, the Master Servicer, the Securities Administrator and
the
Custodian (each, an “Attesting Party”) shall deliver to the Securities
Administrator, the Depositor and the Note Insurer 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 F 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 HELOCs;
(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 applicable Servicing Criteria on Exhibit F hereto,
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 HELOCs.
Such
report at a minimum shall address each of the Servicing Criteria specified
on
Exhibit F 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
specified in this Section shall furnish to the Securities Administrator, the
Note Insurer and the Depositor 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.
Each
of
the Company and the Master Servicer shall cause any subservicer, and each
subcontractor determined by it to be “participating in the servicing function”
within the meaning of Item 1122 of Regulation AB, to deliver to the Securities
Administrator, the Note Insurer and the Depositor an Assessment of Compliance
and Attestation Report as and when provided above along with an indication
of
what Servicing Criteria are addressed in such assessment.
The
Securities Administrator shall confirm that the assessments, taken as a whole,
address all of the Servicing Criteria and taken individually address the
Servicing Criteria for each party as set forth on Exhibit F 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.
Failure
of the applicable party to comply with this Section 3.15 (including with respect
to the timeframes required in this Section) shall be deemed an Event of Default
with respect to such party, and the Master Servicer or the Indenture Trustee
at
the direction of the Depositor shall, in addition to whatever rights the Master
Servicer or the Indenture 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 the rights and obligations of the applicable
party under this Agreement and in and to the HELOCs and the proceeds thereof
without compensating the applicable party for the same. This paragraph shall
supersede any other provision in this Agreement or any other agreement to the
contrary.
The
Securities Administrator shall also provide 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 F hereto which are indicated
as applicable to the “securities administrator.” In addition, the Custodian
shall deliver to the Securities Administrator, the Note Insurer 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 F hereto which are indicated as applicable to a
“custodian.” Notwithstanding the foregoing, as to the Securities Administrator
and the Custodian, 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
the
event the Company, the Master Servicer, each 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 related 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 3.15 or to the related
section of such other applicable agreement, as the case may be, notwithstanding
any such termination, assignment or resignation.
Section
3.16. Books
and Records.
The
Company shall be responsible for maintaining, and shall maintain, a complete
set
of books and records for the EMC HELOCs which shall be appropriately identified
in the Company’s computer system to clearly reflect the ownership of the EMC
HELOCs by the Trust. In particular, the Company shall maintain in its
possession, available for inspection by the Master Servicer, the Securities
Administrator and the Indenture Trustee and shall deliver to the Master
Servicer, the Securities Administrator and the Indenture Trustee upon demand,
evidence of compliance with all federal, state and local laws, rules and
regulations. The Indenture Trustee, the Securities Administrator and the Master
Servicer, and any governmental or regulatory agency with jurisdiction over
the
Indenture Trustee, the Securities Administrator or the Master Servicer, as
applicable, shall have the right, upon reasonable advance notice to the Company,
to inspect and examine the books and records of the Company. 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. During the term of this Agreement, the Company shall, upon reasonable
advance notice, make available a Servicing Officer to the Master Servicer for
answering questions and responding to inquiries.
The
Company shall maintain with respect to each EMC HELOC and shall make available
for inspection by the Master Servicer and the Indenture Trustee the related
servicing file during the time such EMC HELOC is subject to this Agreement
and
thereafter in accordance with applicable law.
Payments
on the HELOCs, 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 HELOCs
Section
4.01. Master
Servicer.
The
Master Servicer, beginning on the Closing Date, shall supervise, monitor and
oversee the obligations of the Servicers to service and administer their
respective HELOCs in accordance with the terms of the Servicing Agreement
or
this
Agreement, as applicable, 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. 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 Servicers as necessary from time-to-time to carry
out the Master Servicer’s obligations hereunder, shall receive and review
certain reports, information and other data provided to the Master Servicer
by
the Servicers and shall enforce the respective obligations, conditions and
covenants of the Servicers to the extent set forth in this Agreement or the
Servicing Agreement. The Master Servicer shall monitor the related Servicer’s
servicing activities with respect to the HELOCs, reconcile the results of such
monitoring with such information provided in the previous sentence on a monthly
basis and coordinate corrective adjustments to 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 7.03 of the Indenture, and prepare any other information and statements
required to be forwarded by the Master Servicer hereunder. The Master Servicer
shall reconcile the results of its HELOC monitoring with the actual remittances
of the related Servicer pursuant to the Servicing Agreement or this Agreement,
as applicable.
The
Master Servicer shall be entitled to conclusively rely on the HELOC data
provided to it by each Servicer and shall have no liability for any errors
in
such HELOC data.
The
Indenture Trustee shall furnish the Servicers and the Master Servicer with
any
powers of attorney and other documents in form as provided to it necessary
or
appropriate to enable the Servicers to service and administer and the Master
Servicer to master service the related HELOCs and REO Property. The Indenture
Trustee shall not be liable for the Servicers’ or the Master Servicer’s use or
misuse of such powers of attorney.
The
Master Servicer, Securities Administrator and Indenture Trustee shall provide
access to the records and documentation in their possession regarding the
related HELOCs and REO Property to the Noteholders, the Note Insurer, 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 Master Servicer, Securities Administrator and Indenture
Trustee, as the case may be; provided, however, that, unless otherwise required
by law, the Master Servicer, Securities Administrator and Indenture Trustee
shall not be required to provide access to such records and documentation to
the
Noteholders if the provision thereof would violate the legal right to privacy
of
any Mortgagor. The Master Servicer, Securities Administrator and Indenture
Trustee 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 Master Servicer, Securities Administrator and Indenture
Trustee’s actual costs.
The
Indenture Trustee, at the request of the Servicers or Master Servicer, as
applicable, shall execute and deliver to the Servicers or the Master Servicer,
as the case may be, any court pleadings, requests for trustee’s sale or other
documents necessary or reasonably desirable to (i) effect the foreclosure or
trustee’s sale with respect to a Mortgaged Property; (ii) take 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. Monitoring
of Servicers.
(a)
In the
review of the related Servicer’s activities, the Master Servicer may rely upon
an officer’s certificate of the related Servicer (or similar document signed by
an officer of the related Servicer) with regard to such Servicer’s compliance
with the terms of the Servicing Agreement or this Agreement. In the event that
the Master Servicer, in its judgment, determines that the related Servicer
should be terminated in accordance with the Servicing Agreement or this
Agreement, or that a notice should be sent pursuant to the Servicing Agreement
or this Agreement with respect to the occurrence of an event that, unless cured,
would constitute grounds for such termination, the Master Servicer shall notify
the Depositor, the Issuing Entity, the Securities Administrator, the Note
Insurer and the Indenture Trustee thereof and the Master Servicer shall issue
such notice or take such other action as it deems appropriate.
(b) The
Master Servicer, for the benefit of the Issuing Entity, the Indenture Trustee,
the Noteholders, the Certificateholders and the Note Insurer, shall enforce
the
respective obligations of the Servicers under the Servicing Agreement and this
Agreement, as applicable, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the Servicing Agreement or this
Agreement, subject to the preceding paragraph and with the prior written consent
of the Note Insurer (so long as no Note Insurer Default exists), terminate
the
rights and obligations of such Servicer thereunder and act as servicer of the
related HELOCs or cause the Issuing Entity and the Indenture Trustee to enter
into a new Servicing Agreement with a successor servicer selected by the Master
Servicer and approved by the Note Insurer in writing; 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, provided further, if a Servicer
has failed to make any payment such that the Master Servicer and/or the Note
Insurer had to advance funds, the Master Servicer may terminate such Servicer.
Such enforcement, including, without limitation, the legal prosecution of
claims, termination of the Servicing Agreement or this 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 HELOCs. 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
Servicing Agreement, as applicable, provided that the Master Servicer shall
not
be required to prosecute or defend any legal action except to the extent that
the Master Servicer shall have received reasonable indemnity for its costs
and
expenses in pursuing such action.
(c) To
the
extent that the costs and expenses of the Master Servicer related to any
termination of the related Servicer, appointment of a successor servicer or
the
transfer and assumption of servicing by the Master Servicer with respect to
the
Servicing Agreement or this Agreement (including, without limitation, (i) all
out of pocket legal costs and expenses and all due diligence costs and expenses
associated with an evaluation of the potential termination of a Servicer as
a
result of an event of default by such Servicer and (ii) all costs and expenses
associated with the complete transfer of servicing, including all servicing
files and all servicing data and the completion, correction or manipulation
of
such servicing data as may be required by the successor servicer to correct
any
errors or insufficiencies in the servicing data or otherwise to enable the
successor service to service the HELOCs in accordance with the Servicing
Agreement or this 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 Master Servicer Collection Account as
Extraordinary Trust Fund Expenses.
(d) The
Master Servicer shall require the Servicers to comply with the remittance
requirements and other obligations set forth in the Servicing Agreement or
this
Agreement, as applicable.
(e) If
the
Master Servicer acts as a servicer, it will not assume liability for the
representations and warranties of the related Servicer, if any, that it
replaces.
(f) No
later
than four (4) Business Days prior to each Payment Date, the Master Servicer
shall provide data to the Securities Administrator (in a format mutually agreed
upon) sufficient for the Securities Administrator to make payments on the Notes
and, in its role as Certificate Paying Agent, distributions on the Certificates
and prepare the monthly statement to Securityholders.
Section
4.03. Fidelity
Bond.
The
Master Servicer, at its expense, shall (i) 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 or (ii) self insure if LaSalle
Bank National Association maintains with any Rating Agency the equivalent of
a
long term unsecured debt rating of “A”. The errors and omissions insurance
policy and the fidelity bond referred to in (i) above shall be in such form
and
amount generally acceptable for entities serving as master servicers or
trustees.
Section
4.04. Power
to Act; Procedures.
The
Master Servicer shall master service the HELOCs and shall have full power and
authority to do any and all things that it may deem necessary or desirable
in
connection with the master servicing and administration of the HELOCs, including
but not limited to the power and authority (i) to execute and deliver, on behalf
of the Issuing Entity, Noteholders and the Indenture 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 HELOC, in each case, in accordance with the
provisions of this Agreement and the Servicing Agreement, as applicable;
provided, however, that the Master Servicer shall not (and, consistent with
its
responsibilities under Section 4.02, shall not permit 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, or failure to take action, will
not
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 REMIC I, REMIC II, REMIC III or REMIC
IV,
as the case may be. The Indenture Trustee shall furnish the Master Servicer,
upon written request from a Servicing Officer, with any powers of attorney
empowering the Master Servicer or the Servicers 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 HELOCs or
the
Mortgaged Property, in accordance with the Servicing Agreement and this
Agreement, and the Indenture 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 HELOCs and carry out its duties hereunder,
in
each case in accordance with Accepted Master Servicing Practices (and the
Indenture Trustee shall have no liability for use or misuse of any such powers
of attorney by the Master Servicer or the Servicers). If the Master Servicer
or
the Indenture 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 Indenture Trustee or that the Indenture 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 Indenture Trustee
in
the appointment of a co-trustee pursuant to Section 6.11 of the Indenture.
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 Issuing Entity or the Indenture Trustee, be
deemed to be the agent of the Issuing Entity or the Indenture
Trustee.
Section
4.05. Due-on-Sale
Clauses; Assumption Agreements.
To the
extent provided in the Servicing Agreement or this Agreement, to the extent
HELOCs contain enforceable due-on-sale clauses, the Master Servicer shall
enforce the obligation of the Servicers to enforce such clauses in accordance
with the Servicing Agreement or this Agreement. If applicable law prohibits
the
enforcement of a due-on-sale clause or such clause is otherwise not enforced
in
accordance with the Servicing Agreement or this Agreement, and, as a
consequence, a HELOC is assumed, the original Mortgagor may be released from
liability in accordance with the Servicing Agreement or this
Agreement.
Section
4.06. Release
of Mortgage Files.
(a)
Upon
becoming aware of the payment in full of any HELOC, or the receipt by the
related Servicer of a notification that payment in full has been escrowed in
a
manner customary for such purposes for payment to Noteholders on the next
Payment Date, the related Servicer will, if required under the Servicing
Agreement or this Agreement, as applicable, promptly furnish to the Indenture
Trustee and the Custodian two copies of a certification substantially in the
form of Exhibit B 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
such Servicer pursuant to the Servicing Agreement or this Agreement, as
applicable, have been so deposited) and shall request that the Indenture Trustee
deliver or cause the Custodian to deliver to such Servicer the related Mortgage
File. Upon receipt of such certification and request, the Indenture Trustee
shall promptly release or cause the Custodian to release the related Mortgage
File to the related Servicer and the Indenture Trustee shall have no further
responsibility with regard to such Mortgage File. Upon any such payment in
full,
the related Servicer is authorized, to give, as agent for the Indenture Trustee,
as the mortgagee under the Mortgage that secured the HELOC, an instrument of
satisfaction (or assignment of mortgage without recourse) regarding the
Mortgaged Property subject to the Mortgage, which instrument of satisfaction
or
assignment, as the case may be, shall be delivered to the Person or Persons
entitled thereto against receipt therefor of such payment, it being understood
and agreed that no expenses incurred in connection with such instrument of
satisfaction or assignment, as the case may be, shall be chargeable to the
Protected Account.
(b) From
time
to time and as appropriate for the servicing or foreclosure of any HELOC and
in
accordance with the Servicing Agreement or this Agreement, the Indenture Trustee
shall execute such documents as shall be prepared and furnished to the Indenture
Trustee by the related Servicer or the Master Servicer (in form reasonably
acceptable to the Indenture Trustee) and as are necessary to the prosecution
of
any such proceedings. The Indenture Trustee shall, upon the request of the
related Servicer or the Master Servicer, and delivery to the Indenture Trustee
and the Custodian, of two copies of a request for release signed by a Servicing
Officer substantially in the form of Exhibit B (or in a mutually agreeable
electronic format which will, in lieu of a signature on its face, originate
from
a Servicing Officer), release or cause the Custodian to release the related
Mortgage File held in its or the Custodian’s possession or control to the
related Servicer or the Master Servicer, as applicable. The Servicers or the
Master Servicer shall be obligated to return the Mortgage File to the Indenture
Trustee or the Custodian when the need therefor by such Servicer or the Master
Servicer, as it reasonably determines, no longer exists unless the HELOC 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 Indenture Trustee or the Custodian to the Servicers or the
Master Servicer.
Section
4.07. Documents,
Records and Funds in Possession of Master Servicer To Be Held for Issuing Entity
and Indenture Trustee.
(a) The
Master Servicer shall transmit and the Servicers (to the extent required by
the
Servicing Agreement or this Agreement) shall transmit to the Indenture Trustee,
or to the Custodian on behalf of the Indenture Trustee, such documents and
instruments coming into the possession of the Master Servicer or the Servicers
from time to time as are required by the terms hereof, or in the case of the
Servicer, the Servicing Agreement or this Agreement, as applicable, to be
delivered to the Indenture Trustee. Any funds received by the Master Servicer
or
by the Servicers in respect of any HELOC or which otherwise are collected by
the
Master Servicer or by the Servicers as Liquidation Proceeds or Insurance
Proceeds in respect of any HELOC shall be held for the benefit of the Issuing
Entity, the Indenture Trustee and the Owner Trustee subject to the Master
Servicer’s right to retain or withdraw from the Master Servicer Collection
Account the Master Servicing Compensation and other amounts provided in this
Agreement and the right of the related Servicer to retain its Servicing Fee
and
other amounts as provided in the Servicing Agreement or this Agreement. The
Master Servicer shall, and (to the extent provided in the Servicing Agreement
or
this Agreement) shall enforce the obligation of the related Servicer to, provide
access to information and documentation regarding the HELOCs to the Issuing
Entity, the Securities Administrator, the Indenture Trustee, and their
respective agents and accountants at any time upon reasonable request and during
normal business hours, and to Noteholders 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 HELOCs, 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 Issuing
Entity, the Indenture Trustee, the Noteholders, the Note Insurer and the
Certificateholders shall be and remain the sole and exclusive property of the
Issuing Entity, subject to the pledge to the Indenture Trustee; provided,
however, that the Master 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 under this Agreement.
Section
4.08. Standard
Hazard Insurance and Flood Insurance Policies.
(a) For
each
HELOC, the Master Servicer shall enforce any obligation of the related Servicer
under the Servicing Agreement or this Agreement, as applicable, to maintain
or
cause to be maintained standard fire and casualty insurance and, where
applicable, flood insurance, all in accordance with the provisions of the
Servicing Agreement or this Agreement. It is understood and agreed that such
insurance shall be with insurers meeting the eligibility requirements set forth
in the Servicing Agreement or this 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 Section 5.04 and 5.05, any amounts collected by the Servicers or the Master
Servicer, under any insurance policies (other than amounts to be applied to
the
restoration or repair of the property subject to the related Mortgage or
released to the Mortgagor in accordance with the Servicing Agreement or this
Agreement) shall be deposited into the Master Servicer Collection Account,
subject to withdrawal pursuant to Section 5.05 and 5.06. Any cost incurred
by
the Master Servicer or the Servicers in maintaining any such insurance if the
Mortgagor defaults in its obligation to do so shall be added to the amount
owing
under the HELOC where the terms of the HELOC 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 Noteholders and shall be recoverable
by the Master Servicer or such Servicer pursuant to Section 5.05 and
5.06.
Section
4.09. Presentment
of Claims and Collection of Proceeds.
The
Master Servicer shall (to the extent provided in the Servicing Agreement or
this
Agreement) enforce the obligations of the Servicers to prepare and present
on
behalf of the Issuing Entity, the Indenture Trustee, the Noteholders, the Note
Insurer 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 Servicers and remitted to the Master Servicer) in respect of such
policies, bonds or contracts shall be promptly deposited in the Master Servicer
Collection Account upon receipt, except that any amounts that are to be applied
upon receipt to the repair or restoration of the related Mortgaged Property,
which repair or restoration the owner of such Mortgaged Property has agreed
to
make as a condition precedent to the presentation of its claims on the related
HELOC under the applicable Insurance Policy, need not be so deposited (or
remitted).
Section
4.10. Maintenance
of the Insurance Policies.
(a) The
Master Servicer shall enforce any provision under the Servicing Agreement or
this Agreement, as applicable, prohibiting the Servicers from taking any action
that would result in noncoverage under any applicable Insurance Policy of any
loss which, but for the actions of the Servicers, would have been covered
thereunder. The Master Servicer shall use its best reasonable efforts to enforce
any obligation of the related Servicer under the Servicing Agreement or this
Agreement, as applicable, to keep in force and effect (to the extent that the
HELOC requires the Mortgagor to maintain such insurance), insurance applicable
to each HELOC in accordance with the provisions of this Agreement and the
Servicing Agreement. The Master Servicer shall enforce any provision under
the
Servicing Agreement or this Agreement prohibiting the Servicers from canceling
or refusing to renew any such Insurance Policy that is in effect at the date
of
the initial issuance of the HELOC and is required to be kept in force thereunder
except in accordance with the provisions of the Servicing Agreement or this
Agreement.
(b) The
Master Servicer agrees to enforce the obligation of each Servicer (to the extent
required under the Servicing Agreement or this Agreement) to present, on behalf
of the Issuing Entity, the Indenture Trustee, the Noteholders, the Note Insurer
and the Certificateholders, claims to the insurer under any Insurance Policies
and, in this regard, to take such reasonable action as shall be necessary to
permit recovery under any Insurance Policies respecting defaulted HELOCs.
Pursuant to Section 5.04 and 5.05, any amounts collected by the Master Servicer
or the Servicers under any Insurance Policies shall be deposited in the Master
Servicer Collection Account, subject to withdrawal pursuant to Sections 5.01
and
5.02.
Section
4.11. Indenture
Trustee to Retain Possession of Certain Insurance Policies and
Documents.
The
Indenture Trustee shall retain or shall cause the Custodian to retain possession
and custody of the originals (to the extent available) of any 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 Notes
have
been distributed in full and the Indenture has been satisfied and discharged
in
accordance with the Indenture, the Indenture Trustee shall also retain, or
shall
cause the Custodian to 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 Indenture
Trustee, or to the Custodian on behalf of the Indenture Trustee, upon the
execution or receipt thereof the originals of any 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
4.12. Realization
Upon Defaulted HELOCs.
For
each HELOC that comes into and continues in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments,
the
Master Servicer shall enforce the obligation of the Servicers (to the extent
required under the Servicing Agreement or this Agreement) to foreclose upon,
repossess or otherwise comparably convert the ownership of Mortgaged Properties
securing such HELOCs, all in accordance with the Servicing Agreement or this
Agreement. Pursuant to the Servicing Agreement or this Agreement, as applicable,
the related Servicer shall be responsible for all costs and expenses incurred
by
it in any such proceedings or sale; provided, however, that such costs and
expenses will be recoverable as Servicing Advances by the related Servicer
as
contemplated in the Servicing Agreement or this Agreement, as
applicable.
Section
4.13. Compensation
for the Master Servicer and the Indenture Trustee.
On
each
Payment Date, the Master Servicer shall be entitled to receive a fee equal
to
1/12 of the Master Servicing Fee Rate multiplied by the Stated Principal Balance
of the HELOCs as of the Due Date in the month preceding the month in which
such
Payment Date occurs (the “Master Servicer Compensation”). The
Master Servicer will pay the fees of the Indenture Trustee from the Master
Servicer Compensation. 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 otherwise provided in this
Agreement.
Section
4.14. REO
Property.
(a) In
the
event the Trust Estate acquires ownership of any REO Property in respect of
any
related HELOC, the deed or certificate of sale shall be issued to the Indenture
Trustee, or to its nominee, on behalf of the Noteholders, the Certificateholders
or the Note Insurer. The Master Servicer shall, to the extent provided in the
Servicing Agreement and this Agreement, cause the related Servicer to sell
any
REO Property as expeditiously as possible and in accordance with the provisions
of the Servicing Agreement or this Agreement, as applicable. The Master Servicer
shall enforce any obligations of the related Servicer to protect and conserve,
such REO Property in the manner and to the extent required by this Agreement
or
the 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 the Servicing Agreement and
this Agreement, enforce the obligation of the Servicers to deposit all funds
collected and received in connection with the operation of any REO Property
in
the Protected Account.
Section
4.15. [Reserved].
Section
4.16. Reports
Filed with Securities and Exchange Commission.
(a) (i)
(A)
Within 15 days after each Payment 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 (“XXXXX”), a Form 10-D, signed by the Master
Servicer, with a copy of the monthly statement to be furnished by the Securities
Administrator to the Securityholders for such Payment Date, provided that the
Securities Administrator shall have received no later than five (5) calendar
days after the related Payment Date all information required to be provided
to
the Securities Administrator as described in clause (a)(iv) below. Any
disclosure in addition to the monthly statement that is required to be included
on Form 10-D (“Additional Form 10-D Disclosure”) shall be, pursuant to the
paragraph immediately below, reported by the parties set forth on Exhibit G
and
the Indenture Trustee to the Securities Administrator and the Depositor and
approved 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 G)
and
approval.
Within
seven (7) calendar days after the related Payment Date,
(i) the parties set forth in Exhibit G and the Indenture Trustee shall be
required to provide, pursuant to section 4.16(a)(iv) below, to the Securities
Administrator and the Depositor, to the extent known by a responsible officer
thereof, in XXXXX-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 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.
Subject to the foregoing, the Securities Administrator has no duty under this
Agreement to monitor or enforce the performance by the other parties listed
on
Exhibit G or by the Indenture Trustee of their duties under this paragraph
or to
proactively solicit or procure from such parties any Additional Form 10-D
Disclosure information. The
Depositor will be responsible for any out-of-pocket expenses incurred by the
Securities Administrator in connection with including any Additional Form 10-D
Disclosure on Form 10-D pursuant to this Section.
(B)
After
preparing the Form 10-D, the Securities Administrator shall forward
electronically a draft copy of the Form 10-D to the Depositor and the Master
Servicer for review. No later than two (2) Business Days prior to the
15th
calendar
day after the related Payment Date, a duly authorized officer of the Master
Servicer shall sign the Form 10-D and 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 will follow the procedures set forth in Section 4.16(a)(v).
Promptly (but no later than one (1) Business Day) after filing with the
Commission, the Securities Administrator will make available on its internet
website identified in Section 7.04 of the Indenture a final executed copy of
each Form 10-D. The signing party at the Master Servicer can be contacted as
set
forth in Section 8.04. 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 Payment Date with respect to the filing
of a report on Form 10-D, if the answer to either question should be "no."
The
Securities Administrator shall be entitled to rely on the representations made
by the Depositor in Section 2.06(ix) in preparing, executing and/or filing
any
such Form 10-D. The parties to this Agreement acknowledge that the performance
by the Securities Administrator of its duties under Sections 4.16(a)(i), (iv)
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. The parties to this Agreement
acknowledge that the performance by each of the Master Servicer and the
Securities Administrator of its duties under this Section 4.16(a)(i) related
to
the timely preparation, execution and filing of Form 10-D is also contingent
upon the Servicers, the Custodian and any subservicers or subcontractors
strictly observing deadlines no later than those set forth in this paragraph
that are applicable to the parties to this Agreement in the delivery to the
Securities Administrator of any necessary Additional Form 10-D Disclosure
pursuant to this Agreement or the Servicing Agreement, as applicable, Custodial
Agreement or any other applicable agreement. The Securities Administrator shall
have no liability for any loss, expense, damage, claim arising out of or with
respect to any failure to properly prepare, arrange for execution and/or timely
file such Form 10-D, where such failure results from the Securities
Administrator’s inability or failure to receive, on a timely basis, any
information from any other party hereto 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, at the direction of the
Depositor, on behalf of the Trust 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 Securities. 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 G and by the Indenture Trustee to the Securities Administrator
and the Depositor and approved by the Depositor, 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 G) and approval.
(B)
For
so long as the Trust is subject to the Exchange Act reporting requirements,
no
later than 12:00 noon New York City time on the 2nd Business Day after the
occurrence of a Reportable Event
(i) the parties set forth in Exhibit H and the Indenture Trustee shall be
required pursuant to Section 4.16(a)(iv) below to provide to the Securities
Administrator and the Depositor, to the extent known by a responsible officer
thereof, in XXXXX-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 will 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.
Subject
to the foregoing, the Securities Administrator has no duty under this Agreement
to monitor or enforce the performance by the other parties listed on Exhibit
G
or by the Indenture Trustee of their duties under this paragraph or to
proactively solicit or procure from such parties any Form 8-K Disclosure
Information. The Depositor will be responsible for any reasonable out-of-pocket
expenses 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 draft 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, a duly authorized officer of the Master Servicer
shall sign the Form 8-K and 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. 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
will
follow the procedures set forth in Section 4.16(a)(v). Promptly (but
no
later than one Business Day) after filing with the Commission, the Securities
Administrator will, make available on its internet website identified in Section
7.04 of the Indenture a final executed copy of each Form 8-K. The signing party
at the Master Servicer can be contacted as set forth in Section 8.04. The
parties to this Agreement acknowledge that the performance by the Securities
Administrator of its duties under this Section 4.16(a)(ii), (iv) and (v) 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 such Sections. It is understood by the parties hereto that
the performance by each of the Master Servicer and the Securities Administrator
of its duties under this Section 4.16(a)(ii) related to the timely preparation,
execution and filing of Form 8-K is also contingent upon the Servicers, the
Custodian and any subservicers or subcontractors strictly observing deadlines
no
later than those set forth in this paragraph that are applicable to the parties
to this Agreement in the delivery to the Securities Administrator of any
necessary Form 8-K Disclosure Information pursuant to this Agreement or the
Servicing Agreement, as applicable, Custodial Agreement or any other applicable
agreement. The Securities Administrator shall have no liability for any loss,
expense, damage, claim arising out of or with respect to any failure to properly
prepare, arrange for execution and/or timely file such Form 8-K, where such
failure results from the Securities Administrator’s inability or failure to
receive, on a timely basis, any information from any other party hereto 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
Statement of Compliance for the Master Servicer, the Securities Administrator,
the Company, the Servicers and any subservicer or subcontractor (to the extent
Regulation AB requires the Annual Statement of Compliance of any such
subservicer and subcontractor to be attached to Form 10-K), as described under
Section 3.14, (II)(A) the Assessment of Compliance with Servicing Criteria
for
the Master Servicer, the Company, the Servicers, each subservicer and
subcontractor participating in the servicing function, the Securities
Administrator and the Custodian, as described under Section 3.15, and (B) if
the
Assessment of Compliance of the Master Servicer, the Company, the Servicers,
each subservicer and subcontractor, the Securities Administrator or the
Custodian described under Section 3.15 identifies any material instance of
noncompliance, disclosure identifying such instance of noncompliance, or if
the
Assessment of Compliance of the Master Servicer, the Servicers, the subservicer,
the subcontractor, the Securities Administrator or the Custodian described
under
Section 3.15 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 Master
Servicer, the subservicer, the subcontractor, the Company, the Servicers, the
Securities Administrator and the Custodian, as described under Section 3.15,
and
(B) if any registered public accounting firm Attestation Report described under
Section 3.15 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 Xxxxxxxx-Xxxxx Certification (“Xxxxxxxx-Xxxxx
Certification”) as described in this Section 4.16(a)(iii)(D) below. 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 G and by the Indenture Trustee
to
the Securities Administrator and the Depositor and, pursuant to the paragraph
immediately below, approved 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 with
respect to when it is the reporting party as set forth in Exhibit G) 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 G and the Indenture Trustee shall be
required to provide pursuant to Section 4.16(a)(iv) below to the Securities
Administrator and the Depositor, to the extent known, in XXXXX-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
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. Subject to the
foregoing, the Securities Administrator has no duty under this Agreement to
monitor or enforce the performance by the other parties listed on Exhibit G
and
the Indenture Trustee of their duties under this paragraph or to proactively
solicit or procure from such parties any Addition Form 10-K Disclosure
information. The
Depositor will be responsible for any reasonable out-of-pocket expenses 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 draft copy of the Form 10-K to the Depositor and the Master
Servicer for review. 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 the 15th
calendar day of March in any year in which the Trust is subject to the reporting
requirements of the Exchange Act, if the answer to either question should be
"no." The Securities Administrator shall be entitled to rely on the
representations made by the Depositor in Section 2.06(ix) in preparing,
executing and/or filing any such Form 10-K. No later than 12:00 p.m. New York
City time on the 4th Business Day prior to the 10-K Filing Deadline, a senior
officer of the Master Servicer in charge of the master servicing function shall
sign the Form 10-K and 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 4.16(a)(v). Promptly (but no
later than one Business Day) after filing with the Commission, the Securities
Administrator will make available on its internet website identified in Section
7.04 of the Indenture a final executed copy of each Form 10-K. The signing
party
at the Master Servicer can be contacted as set forth in Section 8.04. The
parties to this Agreement acknowledge that the performance by the Securities
Administrator of its duties under Sections 4.16(a)(iii), (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, Section 3.14 and Section 3.15. It is
understood by the parties hereto that the performance by the Master Servicer
and
the Securities Administrator of its duties under this Section 4.16(a)(iii)
related to the timely preparation, execution and filing of Form 10-K is also
contingent upon the Servicers, the Custodian and any subservicer or
subcontractor strictly observing deadlines no later than those set forth in
this
paragraph that are applicable to the parties to this Agreement in the delivery
to the Securities Administrator of any necessary Additional Form 10-K
Disclosure, any annual statement of compliance and any Assessment of Compliance
and attestation pursuant to this Agreement or the Servicing Agreements, as
applicable, the Custodial Agreement or any other applicable agreement. The
Securities Administrator shall have no liability for any loss, expense, damage,
claim arising out of or with respect to any failure to properly prepare, arrange
for execution and/or timely file such Form 10-K, where such failure results
from
the Securities Administrator’s inability or failure to receive, on a timely
basis, any information from any other party hereto needed to prepare, arrange
for execution or file such Form 10-K, not resulting from its own negligence,
bad
faith or willful misconduct.
(D)
Each
Form 10-K shall include a certification (the “Xxxxxxxx-Xxxxx
Certification”),
required to be included therewith pursuant to the Xxxxxxxx-Xxxxx Act. The
Company, the Master Servicer and the Securities Administrator shall, and the
Company, the Master Servicer and the Securities Administrator shall cause any
subservicer or subcontractor engaged by it to, provide to the Person who signs
the Xxxxxxxx-Xxxxx Certification (the “Certifying
Person”),
by
March 15th of each year in which the Trust is subject to the reporting
requirements of the Exchange Act and otherwise within a reasonable period of
time upon request, a certification (each, a “Back-Up
Certification”),
in
the form attached hereto as Exhibit
D,
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; provided, however, that the Securities Administrator and the
Company shall not be required to undertake an analysis of any accountant’s
report attached as an exhibit to the Form 10-K. The senior 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 8.04. In the event the Securities
Administrator is terminated or resigns pursuant to the terms of this Agreement
or any subcontractor or subservicer is terminated pursuant to the related
servicing agreement, the Securities Administrator, subcontractor or subservicer,
as applicable, shall provide a Back-Up Certification to the Certifying Person
pursuant to this Section 4.16(a)(iii) with respect to the period of time it
was
subject to this Agreement or the Servicing Agreement, as applicable.
Notwithstanding the foregoing, (i) the Master Servicer and the Securities
Administrator shall not be required to deliver a Back-Up Certification to each
other if both are the same Person and the Master Servicer is the Certifying
Person and (ii) the Master Servicer shall not be obligated to sign the
Xxxxxxxx-Xxxxx Certification in the event that it does not receive any Back-Up
Certification required to be furnished to it pursuant to this section or the
Servicing Agreement or Custodial Agreement.
(iv)
With
respect to any Additional Form 10-D Disclosure, Additional From 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 G
as
the responsible party for providing that information, if other than the
Securities Administrator, as and when required as described in Section
4.16(a)(i) through (iii) above. Such Additional Disclosure shall be accompanied
by a notice substantially in the form of Exhibit H. Each of the Master Servicer,
Sponsor, Company and Depositor hereby agree to notify and provide to the extent
known to the Securities Administrator and the Depositor all Additional
Disclosure relating to the Trust Fund, with respect to which such party is
indicated in Exhibit H as the responsible party for providing that
information.
So
long
as the Depositor is subject to the filing requirements of the Exchange Act
with
respect to the Trust Fund, the Indenture Trustee shall notify the Securities
Administrator and the Depositor of any bankruptcy or receivership with respect
to the Indenture Trustee or of any proceedings of the type described under
Item
1117 of Regulation AB that have occurred as of the end of the related Due
Period, together with a description thereof, no later than the date on which
such information is required to be reported to the Securities Administrator
and
the Depositor by the other parties hereto as set forth under this Section
4.16.
In addition, the Indenture Trustee shall notify the Securities Administrator
and
the Depositor of (i) any affiliations or relationships that develop after
the
Closing Date between the Indenture Trustee and the Depositor, the Sponsor,
the
Securities Administrator, the Master Servicer, the Note Insurer or the Custodian
of the type described under Item 1119 of Regulation AB, and (ii) the occurrence
of an Event of Default (with respect to the Master Servicer) actually
known to a Responsible Officer of the Indenture Trustee
together, in each case, with a description thereof, no later than the date
on
which such information is required to be reported to the Securities
Administrator and the Depositor by the other parties hereto as set forth
under
this Section 4.16. 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 Indenture 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, Form 10-D or Form 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 will promptly notify the Depositor and the Master Servicer. In
the
case of Form 10-D and Form 10-K, the parties hereto will cooperate to prepare
and file a Form 12b-25 and a 10-D/A and 10-K/A 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, the Securities Administrator will notify
the Depositor and the Master Servicer and the parties hereto will cooperate
to
prepare any necessary 8-K/A, 10-D/A or 10-K/A. Any Form 15, Form 12b-25 or
any
amendment to Form 8-K, Form 10-D or Form 10-K shall be signed by an appropriate
officer of the Master Servicer. The parties hereto acknowledge that the
performance by the Securities Administrator of its duties under this Section
4.16(a)(v) related to the timely preparation and filing of Form 15, a Form
12b-25 or any amendment to Form 8-K, Form 10-D or Form 10-K is contingent upon
such parties performing their duties under this Section. The Securities
Administrator shall have no liability for any loss, expense, damage, claim
arising out of or with respect to any failure to properly prepare, arrange
for
execution and/or timely file any such Form 15, Form 12b-25 or any amendments
to
Forms 8-K, 10-D or 10-K, where such failure results from the Securities
Administrator’s inability or failure to receive, on a timely basis, any
information from any other party hereto needed to prepare, arrange for execution
or file such Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K,
not resulting from its own negligence, bad faith or willful
misconduct.
The
parties hereto agree 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 HELOCs 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
4.16; 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. Copies of all
reports filed by the Securities Administrator under the Exchange Act shall
be
sent to: the Depositor c/o Bear, Xxxxxxx & Co. Inc., Attn: Managing Director
Analysis and Control, Xxx Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000-0000.
Fees and expenses incurred by the Securities Administrator in connection with
this Section 4.16 shall not be reimbursable from the Trust Fund. The Depositor
shall be responsible for any reasonable fees and expenses assessed or incurred
by the Securities Administrator to the extent set forth in this Section
4.16.
(b) The
Securities Administrator shall indemnify and hold harmless each of the Company,
the Depositor and the Master Servicer (if the Master Servicer is unaffiliated
with the Securities Administrator) and their respective officers, directors
and
affiliates from and against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments and other
costs
and expenses arising out of or based upon a breach of the Securities
Administrator’s obligations under Sections 3.14, 3.15 and 4.16 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 (if the Master Servicer is
unaffiliated with the Securities Administrator) and each of their 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, the Annual Statement of Compliance, the Assessment of
Compliance, any Additional Disclosure or other information provided by the
Securities Administrator pursuant to Section 3.14, 3.15 and 4.16 (the
“Securities Administrator Information”), or (ii) the 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 clause
(ii) of this paragraph shall be construed solely by reference to the Securities
Administrator Information and not to any other information communicated in
connection with the Notes or 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 each of the Company, the Securities
Administrator and the Master Servicer and their 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 3.14, 3.15 and 4.16 or the Depositor’s negligence, bad
faith or willful misconduct in connection therewith.
The
Master Servicer shall indemnify and hold harmless each of the Company, the
Securities Administrator (if the Securities Administrator is unaffiliated with
the Master Servicer) and the Depositor and their respective officers, directors
and affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon a breach of the
obligations of the Master Servicer under Sections 3.14, 3.15 and 4.16 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, any Attestation Report, any Additional Disclosure
or other information provided by the Master Servicer pursuant to Section 3.14,
3.15 and 4.16 (the “Master Servicer Information”), or (ii) the 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
clause (ii) of this paragraph shall be construed solely by reference to the
Master Servicer Information and not to any other information communicated in
connection with the Notes or 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 each of the Depositor, the Securities
Administrator and the Master Servicer and their respective officers, directors
and affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon a breach of the
obligations of the Company under Sections 3.14, 3.15 and 4.16 or the Company’s
negligence, bad faith or willful misconduct in connection therewith. In
addition, the Company shall indemnify and hold harmless each of the Depositor,
the Securities Administrator and the Master Servicer and their respective
officers, directors and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of or based upon
(i)
any untrue statement or alleged untrue statement of any material fact contained
in any Back-Up Certification, the Annual Statement of Compliance, the Assessment
of Compliance, any Attestation Report, any Additional Disclosure or other
information provided by or on behalf of the Company or on behalf of any
subservicer or subcontractor of the Company pursuant to Section 3.14, 3.15
and
4.16 (the “Company Information”), or (ii) the 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 clause (ii) of this
paragraph shall be construed solely by reference to the Company Information
and
not to any other information communicated in connection with the Notes or
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 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 for under this Section 4.16(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 4.16(b) shall survive
the
termination of this Agreement or the termination of any party to this
Agreement.
(c) [reserved];
(d) Nothing
shall be construed from the foregoing subsections (a), (b) and (c) to require
the Securities Administrator or any officer, director or Affiliate thereof
to
sign any Form 10-K or any certification contained therein. Furthermore, the
inability of the Securities Administrator to file a Form 10-K as a result of
the
lack of required information as set forth in Section 4.16(a) or required
signatures on such Form 10-K or any certification contained therein shall not
be
regarded as a breach by the Securities Administrator of any obligation under
this Agreement.
(e) Notwithstanding
the provisions of Section 8.01, this Section 4.16 may be amended without the
consent of the Noteholders.
(f) 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 4.16, may be delivered via facsimile to Reg AB Compliance Manager,
via
email to XxxXXXxxxxxxxxxxxx@xxxx.xxx or, in the case of a notification,
telephonically by calling Reg AB Compliance Manager at
000-000-0000.
Section
4.17. UCC.
The
Company shall file any financing statements, continuation statements or
amendments thereto required by any change in the Uniform Commercial
Code.
Section
4.18. Optional
Purchase of Certain HELOCs.
(a) With
respect to any HELOC which as of the first day of a Calendar Quarter is
delinquent in payment by 90 days or more or is an REO Property, the Class E
Certificateholder shall have the right to purchase such HELOC from the Trust
Estate at a price equal to the Repurchase Price; provided however (i) that
such
HELOC is still 90 days or more delinquent or is an REO Property as of the date
of such purchase and (ii) this purchase option, if not theretofore exercised,
shall terminate on the date prior to the last day of the related Calendar
Quarter. This purchase option, if not exercised, shall not be thereafter
reinstated unless the delinquency is cured and the HELOC thereafter again
becomes 90 days or more delinquent or becomes an REO Property, in which case
the
option shall again become exercisable as of the first day of the related
Calendar Quarter.
(b) If
at any
time the Class E Certificateholder remits to the Master Servicer a payment
for
deposit in the Master Servicer Collection Account covering the amount of the
Repurchase Price for a HELOC in accordance with Section 4.18(a) above, and
the
Master Servicer provides to the Indenture Trustee a certification signed by
a
Servicing Officer stating that the amount of such payment has been deposited
in
the Master Servicer Collection Account, then the Indenture Trustee shall execute
the assignment of such HELOC to the Class E Certificateholder, without recourse,
representation or warranty and the Class E Certificateholder shall succeed
to
all of the Indenture Trustee’s right, title and interest in and to such HELOC,
and all security and documents relative thereto. Such assignment shall be an
assignment outright and not for security. The Class E Certificateholder will
thereupon own such Mortgage, and all such security and documents, free of any
further obligation to the Issuing Entity, the Indenture Trustee, the Noteholders
or the Certificateholders with respect thereto.
Section
4.19. Information
Required by the Internal Revenue Service and Reports Regarding Mortgaged
Property.
The
Servicers shall prepare for and deliver to the Securities Administrator a
statement with respect to each Mortgaged Property that has been rented showing
the aggregate rental income received and all expenses incurred in connection
with the management and maintenance of such Mortgaged Property at such times
as
is necessary to enable the Securities Administrator to comply with the reporting
requirements of the REMIC Provisions. The net monthly rental income, if any,
from such Mortgaged Property shall be deposited by the Servicers in the related
Protected Account no later than the close of business on each Determination
Date. The Servicers 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.
ARTICLE
V.
Accounts
Section
5.01. Collection
of HELOC Payments; Protected Account of the Company.
(a) The
Company shall make reasonable efforts in accordance with Accepted Servicing
Practices to collect all payments called for under the terms and provisions
of
the EMC HELOCs 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 HELOC for a period not greater than 125 days. 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
instances in which an EMC HELOC is in default or if default is reasonably
foreseeable, and if determined by the Company to be in the best interest
of the
Noteholders and the Note Insurer, the Company may permit servicing modifications
of the EMC HELOCs rather than proceeding with foreclosure. However, the
Company’s ability to permit servicing modifications will be subject to some
limitations, including but not limited to the following. Any amounts added
to
the principal balance of the EMC HELOC, or capitalized amounts added to the
EMC
HELOC, will be required to be fully amortized over the remaining term, or
the
extended term, of the EMC HELOC, unless there is a balloon payment as provided
in the modification document. All capitalizations are to be implemented in
accordance with the sponsor’s standards and may be implemented only by the
related servicer for that purpose. The final maturity of any EMC HELOC
shall not be extended beyond one month prior to the Final
Scheduled Payment Date.
No
servicing modification with respect to an EMC HELOC will have the effect
of
reducing the EMC HELOC rate below one half of the HELOC rate as in effect
on the
cut-off date, but not less than the Expense Fee Rate. Further, the
aggregate current principal balance of all EMC HELOCs subject to modifications
can be no more than five percent (5%) of the aggregate principal balance
of the
EMC HELOCs as of the cut off date, but this limit may increase from time
to time
with the consent of the rating agencies and the Note Insurer.
(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 Indenture Trustee on behalf of the
Securityholders and the Note Insurer and designated “EMC Mortgage Corporation as
Servicer, on behalf of Citibank, N.A., as Indenture Trustee, for the benefit
of
the securityholders, in trust for registered holders of Bear Xxxxxxx Asset
Backed Securities I, LLC, Mortgage Pass-Through Notes and Certificates, Series
2006-8”. The Company shall deposit or cause to be deposited into the Protected
Account on a daily basis within one Business Day of receipt, except as otherwise
specifically provided herein, the following payments and collections remitted
by
subservicers or received by it in respect of the EMC HELOCs subsequent to the
Cut-off Date (other than in respect of principal and interest due on the EMC
HELOCs 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
HELOCs;
(ii) all
payments on account of interest on the EMC HELOCs net of the related Servicing
Fee or any fees with respect to any lender-paid primary mortgage insurance
policy;
(iii) all
Liquidation Proceeds, Subsequent Recoveries and Insurance Proceeds with respect
to any EMC HELOCs, 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 the Permitted Investments;
(v) any
amounts required to be deposited by the Company pursuant to Section 3.06;
and
(vi) any
other
amounts required to be deposited hereunder.
The
foregoing requirements for deposit 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 deposited by
the
Company. In the event that the Company shall deposit any amount not required
to
be deposited 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. All funds deposited in the
Protected Account shall be held in trust for the Securityholders 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 Business Day
immediately preceding the Servicer 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 Indenture Trustee, for the benefit of the Securityholders.
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 Indenture Trustee, the Securities
Administrator, the Note Insurer, the Master Servicer, each Rating Agency and
the
Depositor of any proposed change of location of the Protected Account prior
to
any change thereof.
Section
5.02. Permitted
Withdrawals From the Protected Account.
(a) The
Company
may from
time to time make withdrawals from 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 3.11, 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 3.11;
(ii) to
reimburse the Company for any previously made portion of a Servicing Advance
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 (iv) or clause (v);
(iii) to
reimburse the Company from Insurance Proceeds for insured expenses covered
by
the related Insurance Policy;
(iv) 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 (iv) with
respect to any HELOC shall be limited to amounts received on particular HELOC(s)
(including, for this purpose, Liquidation Proceeds, Insurance Proceeds,
Recoveries, Subsequent Recoveries and purchase and repurchase proceeds) that
represent late recoveries of the payments for which such Servicing Advances
were
made;
(v) to
pay to
EMC (in its capacity as a Sponsor), the Depositor or itself, as applicable,
with
respect to each EMC HELOC or property acquired in respect thereof that has
been
purchased pursuant to Section 2.02 or 3.04 of this Agreement, all amounts
received thereon and not taken into account in determining the related Stated
Principal Balance of such repurchased EMC HELOC;
(vi) to
pay
any expenses recoverable by the Company pursuant to Section 6.04 of this
Agreement;
(vii) to
withdraw any amount received from a Mortgagor that is recoverable and sought
to
be recovered as a voidable preference by a trustee in bankruptcy pursuant to
the
Bankruptcy Code in accordance with a final, nonappealable order of a court
having competent jurisdiction;
(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 8.10 hereof.
In
addition, no later than 1:00 p.m. New York City time on the Servicer Remittance
Date, the Company shall withdraw from the Protected Account and remit to the
Master Servicer, for deposit in the Master Servicer Collection Account the
amount required to be withdrawn therefrom pursuant to Section 5.04
hereof.
With
respect to any remittance received by the Master Servicer from EMC after the
date on which such remittance was due, EMC shall pay to the Master Servicer
interest on any such late payment at an annual rate equal to the Prime Rate,
adjusted as of the date of each change, plus two percentage points, but in
no
event greater that the maximum amount permitted by applicable law. Such interest
shall be remitted to the Master Servicer 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. 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 HELOC by HELOC basis, for the
purpose of justifying any withdrawal from the Protected Account pursuant to
subclauses (i), (iii), (iv) and (v) above. Prior to making any withdrawal from
the Protected Account pursuant to subclause (ii), the Company shall deliver
to
the Master Servicer 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 HELOC(s),
and their respective portions of such Nonrecoverable Advance.
Section
5.03. Reports
to Master Servicer.
On
or
before the tenth calendar day of each month, the Company shall furnish to the
Master Servicer electronically in a format acceptable to the Master Servicer
loan accounting reports in the investor’s assigned loan number order to document
the payment activity on each EMC HELOC on an individual mortgage loan basis.
With respect to each month, such loan accounting reports shall be in the format
agreed to by the Company and the Master Servicer, including but not limited
to
the following information with respect to each EMC HELOC:
(i) with
respect to each Monthly Payment (on an actual basis with respect to HELOC
balances and paid-through dates), the amount of such remittance allocable to
principal (including a separate breakdown of any Principal Prepayment, including
the amount of any Interest Shortfall);
(ii) with
respect to each Monthly Payment, the amount of such remittance allocable to
interest;
(iii) the
amount of servicing compensation received by the Company during the prior
calendar month;
(iv) the
aggregate principal balance of the EMC HELOCs;
(v) the
aggregate of any expenses reimbursed to the Company during the prior calendar
month pursuant to Section 5.02;
(vi) the
aggregate Additional Balances created during the prior calendar month;
and
(vii) the
number and aggregate outstanding principal balances of EMC HELOCs (a)
delinquent, exclusive of EMC HELOCs in foreclosure, (1) 31 to 60 days, (2)
61 to
90 days and (3) 91 or more days, (B) in foreclosure and delinquent (1) 31 to
60
days, (2) 61 to 90 days and (3) 91 or more days and (C) in bankruptcy and
delinquent (1) 31 to 60 days, (2) 61 to 90 days and (3) 91 or more days, in
each
case as of the close of business on the last day of the calendar month preceding
such Payment Date.
The
Master Servicer and the Securities Administrator shall be entitled to rely
conclusively on the HELOC data provided by the related Servicer and shall have
no liability for any errors in such HELOC data.
Section
5.04. Protected
Accounts.
(a)
The
Master Servicer shall enforce the obligation of the Servicers under the
Servicing Agreement and this Agreement, as applicable, to establish and maintain
a Protected Account in accordance with the Servicing Agreement and this
Agreement, as applicable, with records to be kept with respect thereto on a
HELOC by HELOC basis, into which account shall be deposited within one (1)
Business Day (or as of such other time specified in the Servicing Agreement
or
this Agreement) of receipt, all collections of principal and interest on any
HELOC and any REO Property received by the Servicers, including Principal
Prepayments, Insurance Proceeds, Liquidation Proceeds, and advances made from
the related Servicer’s own funds (less servicing compensation as permitted by
the Servicing Agreement or this Agreement) and all other amounts to be deposited
in the related Protected Account. Each Protected Account shall be an Eligible
Account. The Servicers are authorized under the Servicing Agreement and this
Agreement, as applicable, to make withdrawals from and deposits to the related
Protected Account for purposes required or permitted by the Servicing Agreement
or this Agreement, as applicable. To the extent provided in the Servicing
Agreement and this Agreement, as applicable, the Protected Account shall be
held
by a Designated Depository Institution and segregated on the books of such
institution in the name of the Indenture Trustee for the benefit of the
Noteholders.
To
the
extent set forth in the Servicing Agreement and this Agreement, as applicable,
each of the Servicers will establish and maintain one or more custodial accounts
(referred to herein as “Protected Accounts”) into which it will deposit daily or
at such other time as specified in the Servicing Agreement or this Agreement,
all collections of principal and interest on any HELOCs, including principal
prepayments, Insurance Proceeds, Liquidation Proceeds, Recoveries and Subsequent
Recoveries, less the applicable servicing fee, and net monthly rental income
from Mortgage Properties in accordance with Section 4.19. All Protected Accounts
and amounts at any time credited thereto shall comply with the requirements
of
the Servicing Agreement or this Agreement and shall meet the requirements of
the
rating agencies.
(b) On
the
date specified in the Servicing Agreement or this Agreement, as applicable,
the
related Servicer will withdraw from its Protected Account amounts on deposit
therein and will remit them to the Master Servicer for deposit in the Master
Servicer Collection Account.
(c) To
the
extent provided in the Servicing Agreement or this Agreement, amounts on deposit
in the Protected Account may be invested in Permitted Investments in the name
of
the Indenture Trustee for the benefit of Noteholders, the Note Insurer and
Certificateholders and, except as provided in the preceding paragraph, not
commingled with any other funds. Such Permitted Investments shall mature, or
shall be subject to redemption or withdrawal, no later than the date on which
such funds are required to be withdrawn for deposit in the Master Servicer
Collection Account, and shall be held until required for such deposit. The
income earned from Permitted Investments made pursuant to this Section 5.04
shall be paid to the related Servicer under the Servicing Agreement or this
Agreement, as applicable, and the risk of loss of moneys required to be
distributed to the Noteholders and Certificateholders resulting from such
investments shall be borne by and be the risk of the related Servicer. The
related Servicer (to the extent required by the Servicing Agreement or this
Agreement, as applicable) 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 Payment Date on
which the moneys so invested are required to be distributed to the Noteholders
and Certificateholders.
(d) To
the
extent required by the Servicing Agreement or this Agreement, on or before
the
Servicer Remittance Date, the related Servicer shall withdraw or shall cause
to
be withdrawn from its Protected Account and shall immediately deposit or cause
to be deposited in the Master Servicer Collection Account amounts representing
the following collections and payments (other than with respect to principal
of
or interest on the HELOCs due on or before the Cut-off Date):
(i) Payments
on the HELOCs received by the Servicers pursuant to the Servicing Agreement
or
this Agreement, as applicable, which were due on or before the related Due
Date,
net of the amount thereof comprising the Servicing Fee or any fees with respect
to any lender-paid primary mortgage insurance policy;
(ii) Principal
Prepayments in full, any Liquidation Proceeds, Subsequent Recoveries or
Insurance Proceeds in excess of amounts payable or reimbursable to the Servicer
received by the related Servicer with respect to the HELOCs in the related
Prepayment Period, with interest to the date of prepayment or liquidation,
net
of the amount thereof comprising the Servicing Fee; and
(iii) Principal
Prepayments in part received by the related Servicer for the HELOCs in the
related Prepayment Period.
(e) To
the
extent set forth in the Servicing Agreement or this Agreement, withdrawals
may
be made from the Protected Account to make remittances as described in Section
5.02; to reimburse the related Servicer for unreimbursed Servicing Advances
which have been recovered by subsequent collections 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 the Servicing Agreement or this Agreement. As provided in
Sections 5.01(a) certain amounts otherwise due to the related Servicer may
be
retained by it and need not be remitted to the Master Servicer for deposit
in
the Master Servicer Collection Account.
Section
5.05. Master
Servicer Collection Account.
(a)
The
Master Servicer shall establish and maintain in the name of the Indenture
Trustee, for the benefit of the Noteholders and the Note Insurer, the Master
Servicer Collection Account as a segregated trust account or accounts. The
Master Servicer Collection Account shall be an Eligible Account. The Master
Servicer will deposit in the Master Servicer Collection Account as received
by
the Master Servicer, the following amounts:
(i) Any
amounts withdrawn from the Protected Account;
(ii) Any
Insurance Proceeds, Subsequent Recoveries or Net Liquidation Proceeds received
by or on behalf of the Master Servicer or which were not deposited in the
Protected Account;
(iii) The
Repurchase Price with respect to any HELOCs purchased by the Sponsor pursuant
to
the Mortgage Loan Purchase Agreement or Sections 2.02 or 2.03 hereof, any
amounts which are to be treated pursuant to Section 2.04 of this Agreement
as
the payment of a Repurchase Price in connection with the tender of a Substitute
HELOC by the Sponsor and the Repurchase Price with respect to any HELOCs
purchased by the Class E Certificateholder pursuant to Section
4.18;
(iv) Any
amounts required to be deposited by the Master Servicer with respect to losses
on investments of deposits in the Master Servicer Collection Account or Payment
Account; and
(v) Any
other
amounts received by or on behalf of the Master Servicer and required to be
deposited in the Master Servicer Collection Account pursuant to this
Agreement.
(b) All
amounts deposited to the Master Servicer Collection Account shall be held by
the
Master Servicer in the name of the Indenture Trustee in trust for the benefit
of
the Noteholders, the Certificateholders and the Note Insurer in accordance
with
the terms and provisions of this Agreement and the Indenture. The requirements
for crediting the Master Servicer Collection Account or the Payment Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of (i) prepayment or late
payment charges or assumption, tax service, statement account or payoff,
substitution, satisfaction, release and other like fees and charges and (ii)
the
items enumerated in Subsections 5.05(a)(i), (ii), (iii), (iv), (vi), and (vii),
need not be credited by the Master Servicer or the Servicers to the Master
Servicer Collection Account or remitted by the Master Servicer or Servicer
to
the Securities Administrator for deposit in the Payment Account, as applicable.
In the event that the Master Servicer shall remit or cause to be remitted to
the
Securities Administrator for deposit to the Payment 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
amount at any time credited to the Master Servicer Collection Account may be
invested, in the name of the Indenture Trustee, or its nominee, for the benefit
of the Noteholders, the Certificateholders and the Note Insurer, in Permitted
Investments as directed by Master Servicer. All Permitted Investments shall
mature or be subject to redemption or withdrawal on or before, and shall be
held
until, the next succeeding Payment Account Deposit Date. Any and all investment
earnings on amounts on deposit in the Master Servicer Collection Account from
time to time shall be for the account of the Master Servicer. The Master
Servicer from time to time shall be permitted to withdraw or receive
distribution of any and all investment earnings from the Master Servicer
Collection Account. The risk of loss of moneys required to be distributed to
the
Noteholders and Certificateholders resulting from such investments shall be
borne by and be the risk of the Master Servicer. The Master Servicer shall
deposit the amount of any such loss in the Master Servicer Collection Account
within two Business Days of receipt of notification of such loss but not later
than the second Business Day prior to the Payment Date on which the moneys
so
invested are required to be distributed to the Noteholders.
Section
5.06. Permitted
Withdrawals and Transfers from the Master Servicer Collection
Account. (a) The
Master Servicer will, from time to time on demand of the Servicers or the
Securities Administrator, make or cause to be made such withdrawals or transfers
from the Master Servicer Collection Account as the Master Servicer has
designated for such transfer or withdrawal pursuant to this Agreement and the
Servicing Agreement. The Master Servicer may clear and terminate the Master
Servicer Collection Account pursuant to Section 8.10 and remove amounts from
time to time deposited in error.
(b) On
an
ongoing basis, the Master Servicer shall withdraw from the Master Servicer
Collection Account (i) any expenses, costs and liabilities recoverable by the
Master Servicer or the Securities Administrator pursuant to Sections 4.02 and
6.04 hereof and Section 6.07 of the Indenture and (ii) any amounts payable
to
the Master Servicer as set forth in Section 4.13; 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 6.03.
(c) No
later
than 3:00 p.m. New York time on each Payment Account Deposit Date, the Master
Servicer will transfer all Available Funds on deposit in the Master Servicer
Collection Account with respect to the related Payment Date to the Securities
Administrator for deposit in the Payment Account.
Section
5.07. Payment
Account.
(a) The
Securities Administrator shall establish and maintain in the name of the
Indenture Trustee, for the benefit of the Noteholders and the Note Insurer,
and
in the name of the Certificate Paying Agent, for the benefit of the
Certificateholders, the Payment Account as a segregated trust account or
accounts.
(a) (b)All
amounts deposited to the Payment Account shall be held by the Securities
Administrator in the name of the Indenture Trustee in trust for the benefit
of
the Noteholders and the Note Insurer, and in the name of the Certificate Paying
Agent for the benefit of the Certificateholders in accordance with the terms
and
provisions of this Agreement.
(b) The
Payment Account shall constitute a non-interest bearing trust account of the
Trust Estate segregated on the books of the Securities Administrator and held
by
the Securities Administrator in trust, and the Payment 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 Payment Account shall be an
Eligible Account.
(c) The
amount at any time credited to the Payment Account shall be (i) held in cash
or
(ii) invested, in the name of the Indenture Trustee, for the benefit of the
Noteholders and the Note Insurer, and in the name of the Securities
Administrator, for the benefit of the Certificateholders, but only in Permitted
Investments as directed by Securities Administrator. All Permitted Investments
shall mature or be subject to redemption or withdrawal on or before, and shall
be held until, the next succeeding Payment Date if the obligor for such
Permitted Investment is the Securities Administrator, or if such obligor is
any
other Person, the Business Day preceding such Payment Date. All investment
earnings on amounts on deposit in the Payment Account or benefit from funds
uninvested therein from time to time shall be for the account of the Securities
Administrator. The Securities Administrator shall withdraw all investment
earnings from the Payment Account on each Payment Date. If there is any loss
on
a Permitted Investment, the Securities Administrator shall deposit the amount
of
the loss in the Payment Account.
(d) The
Securities Administrator or its Affiliates are permitted to receive additional
compensation that could be deemed to be in the Securities Administrator’s
economic self-interest for (i) servicing as investment advisor, administrator,
shareholder, servicing agent, custodian or sub-custodian with respect to certain
of the Permitted Investments, (ii) using Affiliates to effect transactions
in
certain Permitted Investments and (iii) effecting transactions in certain
Permitted Investments. Such compensation shall not be considered an amount
that
is reimbursable or payable pursuant to Section 4.13.
Section
5.08. Permitted
Withdrawals and Transfers from the Payment Account.
(a)
The
Securities Administrator will, from time to time on demand of the Master
Servicer, make or cause to be made such withdrawals or transfers from the
Payment Account as the Master Servicer has designated for such transfer or
withdrawal pursuant to the Indenture, this Agreement and the Servicing Agreement
or as the Securities Administrator has instructed hereunder for the following
purposes (limited in the case of amounts due the Master Servicer to those not
withdrawn from the Master Servicer Collection Account as certified by the
Securities Administrator in accordance with the terms of this Agreement) but
not
in any order of priority:
(i) to
reimburse the Master Servicer or the Servicers from Insurance Proceeds or
Liquidation Proceeds relating to a particular HELOC for amounts expended by
the
Master Servicer or such 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 HELOC;
(ii) to
reimburse the Master Servicer or the Servicers from Insurance Proceeds relating
to a particular HELOC for insured expenses incurred with respect to such HELOC
and to reimburse the Master Servicer or the Servicers from Liquidation Proceeds
from a particular HELOC for Liquidation Expenses incurred with respect to such
HELOC; provided that the Master Servicer shall not be entitled to reimbursement
for Liquidation Expenses with respect to a HELOC to the extent that (i) any
amounts with respect to such HELOC were paid as Excess Liquidation Proceeds
pursuant to clause (viii) of this Subsection 5.08 (a) to the Master Servicer;
and (ii) such Liquidation Expenses were not included in the computation of
such
Excess Liquidation Proceeds;
(iii) to
pay
the Master Servicer as set forth in Section 4.13; 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 6;
(iv) to
reimburse the Master Servicer for expenses, costs and liabilities incurred
by
and reimbursable to it pursuant to Sections 4.02, 6.04(c) and (d), to the extent
that the Master Servicer has not already reimbursed itself for such amounts
from
the Master Servicer Collection Account;
(v) [Reserved]
(vi) to
reimburse or pay the Servicers any such amounts as are due thereto under the
Servicing Agreement or this Agreement, as applicable, and have not been retained
by or paid to the related Servicer, to the extent provided in the Servicing
Agreement or this Agreement, as applicable, as Extraordinary Trust Fund
Expenses, subject to the Extraordinary Trust Fund Expenses Cap;
(vii) to
reimburse or pay the Indenture Trustee, the Owner Trustee, the Master Servicer
and the Securities Administrator any amounts due or expenses, costs and
liabilities incurred by or reimbursable to it pursuant to this Agreement, the
Indenture, the Custodial Agreement, the Administrative Agreement and the Trust
Agreement, to the extent such amounts have not already been previously paid
or
reimbursed to such party from the Master Servicer Collection Account, as
Extraordinary Trust Fund Expenses, subject to the Extraordinary Trust Fund
Expenses Cap;
(viii) to
remove
amounts deposited in error; and
(ix) to
clear
and terminate the Payment Account pursuant to Section 8.10.
(b) The
Master Servicer shall keep and maintain separate accounting, on a HELOC by
HELOC
basis, for the purpose of accounting for any reimbursement from the Payment
Account pursuant to subclauses (i) through (iv) 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 Payment
Account under Section 5.07.
(c) On
each
Payment Date, pursuant to Section 3.03 of the Indenture, the Securities
Administrator shall distribute the Available Funds to the extent on deposit
in
the Payment Account to the Holders of the Notes and to the Certificate Paying
Agent for distribution to the Certificates, in accordance with Section 3.03
of
the Indenture.
Section
5.09. Net
WAC Cap Rate Carryover Reserve Account.
(a) On
or
before the Closing Date, the Securities Administrator shall establish a Net
WAC
Cap Rate Carryover Reserve Account on behalf of the Holders of the Notes. On
the
Closing Date, the Depositor shall cause an amount equal to the Net WAC Cap
Rate
Carryover Reserve Account Deposit to be deposited in the Net WAC Cap Rate
Carryover Reserve Account. The Net WAC Cap Rate Carryover Reserve Account shall
be an Eligible Account. The Net WAC Cap Rate Carryover Reserve Account shall
be
entitled “Net WAC Cap Rate Carryover Reserve Account, LaSalle Bank National
Association, as Securities Administrator, on behalf of Citibank, N.A., as
Indenture Trustee, for the benefit of the Securityholders. On each Payment
Date
as to which there is a Net WAC Cap Rate Carryover Amount payable to any Class
of
Notes, the Securities Administrator shall deposit the amounts distributable
pursuant to Section
3.02(a)(9) of the Indenture
into the
Net WAC Cap Rate Carryover Reserve Account and the Securities Administrator
has
been directed by the Class E Certificateholder to distribute amounts in the
Net
WAC Cap Rate Carryover Reserve Account to the Holders of the applicable Class
of
Notes in the priorities set forth in Sections 3.02(a)(9) of the Indenture.
Any
amount paid to the Holders of Notes pursuant to the preceding sentence in
respect of Net WAC Cap Rate Carryover Amounts shall be treated as distributed
to
the Class E Certificateholder in respect of the Class E Certificates and paid
by
the Class E Certificateholder to the applicable Holders of Notes. Any payments
to the Holders of Notes in respect of Net WAC Cap Rate Carryover 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 860(G)(a)(1)
of the Code.
(b) The
Net
WAC Cap Rate Carryover Reserve Account is an “outside reserve fund” within the
meaning of Treasury Regulation Section 1.860G-2(h) and shall be an asset of
the
Trust Estate but not an asset of any REMIC. The Securities Administrator on
behalf of the Trust shall be the nominal owner of the Net WAC Cap Rate Carryover
Reserve Account. The Class E Certificateholder shall be the beneficial owner
of
the Net WAC Cap Rate Carryover Reserve Account, subject to the power of the
Securities Administrator to transfer amounts under this Section 5.09. Amounts
in
the Net WAC Cap Rate Carryover Reserve Account shall, at the written direction
of the Class E Certificateholder, be invested in Permitted Investments that
mature no later than the Business Day prior to the next succeeding Payment
Date.
In the absence of written instructions, amounts on deposit in the Net WAC Cap
Rate Carryover Reserve Account shall remain uninvested. All net income and
gain
from such investments shall be distributed to the Class E Certificateholders,
not as a distribution in respect of any interest in any REMIC, on such Payment
Date. All amounts earned on amounts on deposit in the Net WAC Cap Rate Carryover
Reserve Account shall be taxable to the Class E Certificateholder. Any losses
on
such investments shall be deposited in the Net WAC Cap Rate Carryover Reserve
Account by the Class E Certificateholder out of its own funds immediately as
realized.
Section
5.10. The
Certificate Distribution Account.
(a) The
Securities Administrator, for the benefit of the Certificateholders, shall
establish and maintain in the name of the Securities Administrator on behalf
of
the Certificateholders an account (the “Certificate
Distribution Account”)
entitled “Certificate Distribution Account, LaSalle Bank National Association,
as Securities Administrator, in trust for the holders of SACO I Trust 2006-8,
Certificates.” The Certificate Distribution Account may be a subaccount of the
Payment Account
(b) On
each
Payment Date, the Securities Administrator shall withdraw from the Payment
Account all amounts required to be deposited in the Certificate Distribution
Account pursuant to Section 3.10(c) of the Trust Agreement and deposit such
amount into the Certificate Distribution Account. On each Payment Date, the
Securities Administrator shall distribute all amounts on deposit in the
Certificate Distribution Account to the Certificateholders in respect of the
Certificates as provided in the Trust Agreement. On the Payment Date on which
the Note Balance is reduced to zero, the Securities Administrator shall
distribute all amounts remaining on deposit in the Certificate Distribution
Account to the Certificateholders in respect of the Certificates in order to
clear and terminate the Certificate Distribution Account in connection with
the
termination of this Agreement.
(c) All
distributions made on the Certificates shall be made by wire transfer of
immediately available funds to the account of such Certificateholders. The
final
distribution on the Certificates will be made in like manner, but only upon
presentment and surrender of such Certificates at the location specified in
the
notice to the Certificateholders of such final distribution.
(d) The
Securities Administrator may (but is under no obligation to) invest, or cause
to
be invested, funds held in the Certificate Distribution Account in Eligible
Investments (which may be obligations of the Securities Administrator). All
such
investments must be payable on demand or mature no later than one Business
Day
prior to the next Payment Date, and shall not be sold or disposed of prior
to
their maturity. All such Eligible Investments will be made in the name of the
Securities Administrator (in its capacity as such) or its nominee. The amount
of
any losses incurred in respect of any such investments shall be paid by the
Securities Administrator for deposit in the Certificate Distribution Account
out
of its own funds, without any right of reimbursement therefore, immediately
as
realized. All income and gain realized from any such investment shall be
compensation to the Securities Administrator and shall be subject to its
withdrawal on order from time to time.
ARTICLE
VI.
The
Master Servicer
Section
6.01. Liabilities
of the Master Servicer.
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
6.02. Merger
or Consolidation of the Master Servicer.
(a) 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
Notes or any of the HELOCs and to perform its duties under this
Agreement.
(b) Any
Person into which the Master Servicer may be merged or consolidated, or any
corporation resulting from any merger or consolidation to which the Master
Servicer shall be a party, or any Person succeeding to the business of the
Master Servicer, shall be the successor of 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
6.03. Indemnification
of the Indenture Trustee, Owner Trustee, the Company, the Note Insurer, 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 relating to this Agreement (i) related to the Master Servicer’s failure
to perform its duties in compliance with this Agreement (except as to any such
loss, liability or expense that 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 Indemnified Person
shall have given the Master Servicer and EMC written notice thereof promptly
after such Indemnified Person shall have with respect to such claim or legal
action knowledge thereof; provided, however that the failure to give such notice
shall not relieve the Master Servicer of its indemnification obligations
hereunder except to the extent the Master Servicer is prejudiced thereby. This
indemnity shall survive the resignation or removal of the Indenture 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
(i)
the failure of the Company to perform in any way its duties hereunder and
service the EMC HELOCs in strict compliance with the terms of this Agreement,
(ii) breach of any representation or warranty of the Company contained herein
or
(iii) incurred by reason of the Company’s willful misfeasance, bad faith or
negligence in the performance of its duties hereunder or by reason of reckless
disregard of its obligations and duties hereunder. The Company shall immediately
notify the Master Servicer and the Indenture Trustee if a claim is made by
a
third party with respect to this Agreement or the EMC HELOCs, assume (with
the
consent of the Master Servicer and the Indenture Trustee and with counsel
reasonably satisfactory to the Master Servicer and the Indenture 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 of the Company to give such notice 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 6.03(b) shall survive termination of this
Agreement.
(c) The
Sponsor agrees to indemnify the Owner Trustee for any loss, liability or expense
for which the Depositor is required to indemnify the Owner Trustee pursuant
to
Section 7.02 of the Trust Agreement, other than (x) any loss liability or
expense required to be covered by the Master Servicer pursuant to this Section
6.03 and (y) any loss, liability or expense already paid by the Depositor in
accordance with Section 7.02 of the Trust Agreement.
Section
6.04. Limitations
on Liability of the Master Servicer and Others.
Subject
to the obligation of the Master Servicer and the Company to indemnify the
Indemnified Persons pursuant to Section 6.03:
(a) Neither
the Master Servicer or the Company nor any of the directors, officers, employees
or agents of the Master Servicer and the Company shall be under any liability
to
the Indemnified Persons, the Depositor, the Trust Estate or the Noteholders
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 Master Servicer, the Company 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
Master Servicer, the Company and any director, officer, employee or agent of
the
Master Servicer and the Company 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
Master Servicer, the Company and any director, officer, employee or agent of
the
Master Servicer and the Company shall be indemnified by the Trust Estate 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, or the performance of its obligation under, this Agreement, the
Indenture, the Custodial Agreement, the Notes, the Assignment Agreement or
the
Servicing Agreement (except to the extent that the Master Servicer is
indemnified by the Servicers thereunder), other than (i) any such loss,
liability or expense related to the Master Servicer’s or the Company’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) any such loss, liability or expense incurred by reason
of
the Master Servicer’s or the Company’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.
(d) Neither
the Master Servicer nor the Company 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
undertake any such action which it may deem necessary or desirable with respect
to this Agreement, the Trust Agreement or the Indenture and the rights and
duties of the parties hereto and the interests of the Noteholders and
Certificateholders hereunder and thereunder. 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 Estate as Extraordinary Trust
Fund
Expenses, and the Master Servicer shall be entitled to be reimbursed therefor
out of the Master Servicer Collection Account as provided by Section 5.06.
Nothing in this Subsection 6.04(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 HELOCs pursuant to Section 4.01.
(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 Estate might incur as a result of such
course of action by reason of the condition of the Mortgaged Properties but
shall give written notice to the Indenture Trustee if it has notice of such
potential liabilities.
(f) The
Master Servicer shall not be liable for any acts or omissions of the
Servicers.
(g) The
Master Servicer may perform any of its duties hereunder or exercise its rights
hereunder either directly or through Affiliates, agents or
attorneys.
Section
6.05. Master
Servicer Not to Resign.
Except
as provided in Section 6.07, the Master Servicer shall not resign from the
obligations and duties hereby imposed on it except upon a determination that
any
such duties hereunder are no longer permissible under applicable law and such
impermissibility cannot be cured. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
addressed to the Indenture Trustee, the Note Insurer, the Securities
Administrator and the Issuing Entity to such effect delivered to the Indenture
Trustee, the Note Insurer and the Issuing Entity. No such resignation by the
Master Servicer shall become effective until the Company or the Indenture
Trustee or a successor to the Master Servicer reasonably satisfactory to the
Indenture Trustee, the Note Insurer and Company shall have assumed the
responsibilities and obligations of the Master Servicer in accordance with
Section 7.02 hereof. The Indenture Trustee shall notify the Rating Agencies
of
the resignation of the Master Servicer. Any resignation of the Master Servicer
shall result in the automatic resignation of the Securities
Administrator.
Section
6.06. Successor
Master Servicer.
In
connection with the appointment of any successor master servicer or the
assumption of the duties of the Master Servicer, the Note Insurer must consent
in writing (so long as no Note Insurer Default exists), and the Company or
the
Indenture Trustee may make such arrangements for the compensation of such
successor master servicer out of payments on the HELOCs as the Company or the
Indenture 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.
Notwithstanding the foregoing, the compensation payable to a successor master
servicer may not exceed the compensation which the Master Servicer would have
been entitled to retain if the Master Servicer had continued to act as Master
Servicer hereunder.
Section
6.07. 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 the
Company may, with the written consent of the Note Insurer, so long as no Note
Insurer Default exists, 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 shall
be
qualified to service mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac; (b) shall
have a net worth of not less than $15,000,000 (unless otherwise approved by
each
Rating Agency pursuant to clause (ii) below); (c) shall be reasonably
satisfactory to the Indenture Trustee, Note Insurer and Company; and (d) shall
execute and deliver to the Indenture Trustee an agreement, in form and substance
reasonably satisfactory to the Issuing Entity and the Indenture 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; (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 Notes in effect immediately
prior to such assignment, sale and delegation (without regard to the Policy)
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, Issuing Entity, Note Insurer and Indenture Trustee; (iii)
the
Master Servicer assigning and selling the master servicing shall deliver to
the
Issuing Entity, the Note Insurer and the Indenture Trustee an Officer’s
Certificate and an Opinion of Counsel addressed to the Issuing Entity, Note
Insurer, the Securities Administrator and Indenture 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 the
Company, the Company shall pay the terminated Master Servicer a termination
fee
equal to 0.25% of the aggregate Scheduled Principal Balance of the HELOCs at
the
time the master servicing of the HELOCs 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
VII.
Default
Section
7.01. Master
Servicer Events of Default.
“Master
Servicer Event of Default,” wherever used herein, means any one of the following
events (whatever the reason for such Master Servicer Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of
law
or pursuant to any judgment, decree or order of any court or any order, rule
or
regulation of any administrative or governmental body) and only with respect
to
the defaulting Master Servicer:
(i) The
Master Servicer fails to cause to be deposited in the Payment Account any amount
so required to be deposited pursuant to this Agreement (other than a Servicing
Advance), and such failure continues unremedied for a period of one Business
Day
after the date upon which written notice of such failure, requiring the same
to
be remedied, shall have been given to the Master Servicer; or
(ii) The
Master Servicer fails to observe or perform in any material respect any other
material covenants and agreements set forth in this Agreement to be performed
by
it, which covenants and agreements materially affect the rights of Noteholders,
Certificateholders or the Note Insurer, and such failure continues unremedied
for a period of 30 days after the date on which written notice of such failure,
properly requiring the same to be remedied, shall have been given to the Master
Servicer by the Indenture Trustee or to the Master Servicer and the Indenture
Trustee by the Note Insurer or the Holders of Notes aggregating at least 25%
of
the Note Principal Balance of the Notes; or
(iii) There
is
entered against the Master Servicer a decree or order by a court or agency
or
supervisory authority having jurisdiction in the premises for the appointment
of
a conservator, receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for the winding
up or liquidation of its affairs, and the continuance of any such decree or
order is unstayed and in effect for a period of 60 consecutive days, or an
involuntary case is commenced against the Master Servicer under any applicable
insolvency or reorganization statute and the petition is not dismissed within
60
days after the commencement of the case; or
(iv) The
Master Servicer consents to the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to the Master Servicer or
substantially all of its property; or the Master Servicer admits in writing
its
inability to pay its debts generally as they become due, files a petition to
take advantage of any applicable insolvency or reorganization statute, makes
an
assignment for the benefit of its creditors, or voluntarily suspends payment
of
its obligations; and
(v) 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 6.05 or 6.07.
In
each
and every such case, so long as such Master Servicer Event of Default with
respect to the Master Servicer shall not have been remedied, either the
Indenture Trustee or the Note Insurer, or, if a Note Insurer Default exists,
the
Holders of Notes aggregating at least 51% of the Note Principal Balance of
the
Notes, by notice in writing to the Master Servicer (and to the Indenture Trustee
if given by the Note Insurer or such Noteholders), with a copy to the Rating
Agencies, and with the consent of the Company and the Note Insurer (so long
as
no Note Insurer Default exists) in writing, may terminate all of the rights
and
obligations (but not the liabilities) of the Master Servicer under this
Agreement and in and to the HELOCs and/or the REO Property serviced by the
Master Servicer and the proceeds thereof. Upon the receipt by the Master
Servicer of the written notice, all authority and power of the Master Servicer
under this Agreement, whether with respect to the Notes, the HELOCs, REO
Property or under any other related agreements (but only to the extent that
such
other agreements relate to the HELOCs or related REO Property) shall, subject
to
Section 7.02, automatically and without further action pass to and be vested
in
the Indenture Trustee pursuant to this Section 7.01; and, without limitation,
the Indenture Trustee is hereby authorized and empowered to execute and deliver,
on behalf of the Master Servicer as attorney-in-fact or otherwise, any and
all
documents and other instruments and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement or assignment of the HELOCs
and
related documents, or otherwise. The Master Servicer agrees to cooperate with
the Indenture Trustee in effecting the termination of the Master Servicer’s
rights and obligations hereunder, including, without limitation, the transfer
to
the Indenture Trustee of (i) the property and amounts which are then or should
be part of the Trust Estate or which thereafter become part of the Trust Estate;
and (ii) originals or copies of all documents of the Master Servicer reasonably
requested by the Indenture Trustee to enable it to assume the Master Servicer’s
duties thereunder. In addition to any other amounts which are then, or,
notwithstanding the termination of its activities under this Agreement, may
become payable to the Master Servicer under this Agreement, the Master Servicer
shall be entitled to receive, out of any amount received on account of a HELOC
or related REO Property, that portion of such payments which it would have
received as reimbursement under this Agreement if notice of termination had
not
been given. The termination of the rights and obligations of the Master Servicer
shall not affect any obligations incurred by the Master Servicer prior to such
termination.
Section
7.02. Indenture
Trustee to Act; Appointment of Successor.
(a)
Upon the
receipt by the Master Servicer of a notice of termination pursuant to Section
7.01 or an Opinion of Counsel pursuant to Section 6.05 to the effect that the
Master Servicer is legally unable to act or to delegate its duties to a Person
which is legally able to act, the Indenture Trustee shall automatically become
the successor in all respects to the Master Servicer in its capacity under
this
Agreement and the transactions set forth or provided for herein and shall
thereafter be subject to all the responsibilities, duties, liabilities and
limitations on liabilities relating thereto placed on the Master Servicer by
the
terms and provisions hereof; provided, however, that the Sponsor 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 the
Indenture Trustee shall have no obligation whatsoever with respect to any
liability (including advances deemed recoverable and not previously made with
respect to the relevant Payment Date giving rise to the Master Servicer Event
of
Default which shall be made by such successor Master Servicer) incurred by
the
Master Servicer at or prior to the time of termination. As compensation
therefor, but subject to Section 5.09, the Indenture Trustee shall be entitled
to compensation which the Master Servicer would have been entitled to retain
if
the Master Servicer had continued to act hereunder, except for those amounts
due
the Master Servicer as reimbursement permitted under this Agreement for advances
previously made or expenses previously incurred. Notwithstanding the above,
the
Indenture Trustee may, if it shall be unwilling so to act, or shall, if it
is
legally unable so to act, appoint or petition a court of competent jurisdiction
to appoint, any established housing and home finance institution which is a
Xxxxxx Mae- or Xxxxxxx Mac-approved servicer, and with respect to a successor
to
the Master Servicer only, having a net worth of not less than $15,000,000,
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; provided, that the Indenture Trustee shall obtain a letter from
each
Rating Agency that the ratings, if any, on each of the Notes (without regard
to
the Policy) will not be lowered as a result of the selection of the successor
to
the Master Servicer. Pending appointment of a successor to the Master Servicer
hereunder, the Indenture Trustee shall be the successor and act in such capacity
as hereinabove provided. In connection with such appointment and assumption,
the
Indenture Trustee may make such arrangements for the compensation of such
successor out of payments on the HELOCs as it and such successor shall agree;
provided, however, that the provisions of Section 6.06 shall apply, the
compensation shall not be in excess of that which the Master Servicer would
have
been entitled to if the Master Servicer had continued to act hereunder, and
that
such successor shall undertake and assume the obligations of the Master Servicer
to pay compensation to any third Person acting as an agent or independent
contractor in the performance of master servicing responsibilities hereunder.
The Indenture Trustee and such successor shall take such action, consistent
with
this Agreement, as shall be necessary to effectuate any such
succession.
(b) If
the
Indenture Trustee shall succeed to any duties of the Master Servicer respecting
the HELOCs as provided herein, it shall do so in a separate capacity and not
in
its capacity as Indenture Trustee and, accordingly, the provisions of Article
VI
of the Indenture shall be inapplicable to the Indenture Trustee in its duties
as
the successor to the Master Servicer in the servicing of the HELOCs (although
such provisions shall continue to apply to the Indenture Trustee in its capacity
as Indenture Trustee); the provisions of Article V, however, shall apply to
it
in its capacity as successor master servicer.
Section
7.03. Notification
to Noteholders and the Note Insurer.
Upon
any termination or appointment of a successor to the Master Servicer, the
Indenture Trustee shall give prompt written notice thereof to Noteholders and
Certificateholders at their respective addresses appearing in the Note Register
and to the Rating Agencies and the Note Insurer at its address appearing in
the
Insurance Agreement.
Section
7.04. Waiver
of Defaults.
The
Indenture Trustee shall transmit by mail to all Noteholders, Certificateholders
and the Note Insurer, within 60 days after the occurrence of any Master Servicer
Event of Default of which a Responsible Officer of the Indenture Trustee
received written notice or has actual knowledge, unless such Master Servicer
Event of Default shall have been cured, notice of each such Master Servicer
Event of Default. The Note Insurer of, if a Note Insurer Default exists, Holders
of Notes aggregating at least 51% of the Note Principal Balance of the Notes
may, on behalf of all Noteholders, 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 any required
distribution on the Notes, which default may only be waived by the Note Insurer
and the Holders of Notes aggregating 100% of the Note Principal Balance of
the
Notes. Upon any such waiver of a past default, such default shall be deemed
to
cease to exist, and any Master Servicer 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 Indenture
Trustee shall give notice of any such waiver to the Rating Agencies and the
Note
Insurer.
Section
7.05. Company
Default.
In case
one or more of the following events of default by the Company (each, a “Company
Default”) shall occur and be continuing, that is to say:
(i) any
failure by the Company to remit to the Master Servicer any payment required
to
be made under the terms of this Agreement on any Servicer 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 3.14, 3.15 or
4.16) 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; or
(vii) the
Company ceases to be qualified to transact business in any jurisdiction where
it
is currently so qualified, but only to the extent such non-qualification
materially and adversely affects the Company’s ability to perform its
obligations hereunder; or
(viii) failure
by the Company to duly perform, within the required time period, its obligations
under Section 3.14, 3.15 or 4.16 which failure continues unremedied for the
cure
period;
then,
and
in each and every such case, so long as a Company Default shall not have been
remedied, the Master Servicer or the Note Insurer, by notice in writing to
the
Company may, in addition to whatever rights the Master Servicer and the
Indenture Trustee on behalf of the Certificateholders and the Note Insurer
may
have under Section 6.03 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 HELOCs 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 HELOCs or otherwise, shall
pass
to and be vested in the Master Servicer after a transition period (not to exceed
90 days). Upon written request from the Master Servicer or the Note Insurer,
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 HELOCs, 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 HELOCs
and related documents, or otherwise, at the Company’s sole expense. The Company
agrees to cooperate with the Master Servicer and the Note Insurer 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 thereafter received with respect to the EMC HELOCs
or
any related REO Property.
The
costs
and expenses of the Master Servicer in connection with the termination of the
Company, appointment of a successor to the Company, 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
Master Servicer or other successor to the Company to correct any errors or
insufficiencies in the servicing data or otherwise to enable the Master Servicer
or such successor to service the related HELOCs properly and effectively, to
the
extent not previously paid by the terminated Company, shall be payable to the
Master Servicer or such successor pursuant to Section 5.06 and shall not be
subject to the cap on Extraordinary Trust Fund Expenses.
Section
7.06. Waiver
of Company Defaults.
The
Master Servicer, with the consent of the Note Insurer, 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
VIII.
Miscellaneous
Provisions
Section
8.01. Amendment.
(a)
This
Agreement may be amended from time to time by the Issuing Entity, the Company,
the Depositor, the Master Servicer, the Securities Administrator, the Indenture
Trustee, without notice to or the consent of any of the Noteholders or
Certificateholders, but with the prior written consent of the Note Insurer
(so
long as no Note Insurer Default exists) not to be unreasonably withheld, to
cure
any ambiguity, to correct or supplement any provisions herein or therein that
may be defective or inconsistent with any other provisions herein or therein,
to
comply with any changes in the Code or to make any other provisions with respect
to matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement; provided, however, that
such
action shall not, as evidenced by an Opinion of Counsel, addressed to the
Indenture Trustee and Owner Trustee, adversely affect in any material respect
the interests of any Noteholder, Certificateholder or the Note
Insurer.
Notwithstanding
the foregoing, without the prior written consent of the Noteholders,
Certificateholders or the Note Insurer (so long as no Note Insurer Default
exists), the parties hereto may at any time and from time to time amend this
Agreement to modify, eliminate or add to any of its provisions to such extent
as
shall be necessary or appropriate to maintain the qualification of any REMIC
created pursuant to the Indenture as a REMIC under the Code or to avoid or
minimize the risk of the imposition of any tax on any REMIC created pursuant
to
the Indenture pursuant to the Code that would be a claim against any such REMIC
at any time prior to the final redemption of the Notes, provided that the
Indenture Trustee and Owner Trustee have been provided an Opinion of Counsel
addressed to the Indenture Trustee, Note Insurer, Securities Administrator
and
Owner Trustee, which opinion shall be an expense of the party requesting such
opinion but in any case shall not be an expense of the Indenture Trustee, the
Note Insurer, the Owner Trustee or the Trust Estate, 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.
(b) This
Agreement may also be amended from time to time by the Issuing Entity, the
Company, the Master Servicer, the Depositor, the Securities Administrator,
the
Indenture Trustee, with the prior written consent of the Note Insurer (so long
as no Note Insurer Default exists) and Holders of Notes aggregating at least
51%
of Note Principal Balance of the Notes, 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 Noteholders; provided,
however, that no such amendment shall (i) reduce in any manner the amount of,
or
delay the timing of, payments received on HELOCs which are required to be
distributed on any Note or Certificate without the consent of the Holder of
such
Note or Certificate, (ii) reduce the aforesaid percentage of Notes or
Certificates the Holders of which are required to consent to any such amendment,
without the consent of the Holders of all Notes or Certificates then outstanding
or (iii) cause any REMIC created pursuant to the Indenture to cease to qualify
as a REMIC. Notwithstanding any other provision of this Agreement, for purposes
of the giving or withholding of consents pursuant to this Section 8.01(b),
Notes
registered in the name of or held for the benefit of the Issuing Entity, the
Depositor, the Securities Administrator, the Master Servicer, the Note Insurer
or the Indenture Trustee or any Affiliate thereof shall be entitled to vote
their Percentage Interests with respect to matters affecting such
Notes.
(c) Promptly
after the execution of any such amendment, the Securities Administrator shall
furnish a copy of such amendment or written notification of the substance of
such amendment to each Noteholder, Certificateholder and the Note Insurer,
with
a copy to the Rating Agencies.
(d) In
the
case of an amendment under Subsection 8.01(b) above, it shall not be necessary
for the Noteholders or Certificateholders to approve the particular form of
such
an amendment. Rather, it shall be sufficient if the Noteholders or
Certificateholders approve the substance of the amendment. The manner of
obtaining such consents and of evidencing the authorization of the execution
thereof by Noteholders shall be subject to such reasonable regulations as the
Indenture Trustee may prescribe.
(e) Prior
to
the execution of any amendment to this Agreement, the Indenture Trustee or
Owner
Trustee shall be entitled to receive and rely upon an Opinion of Counsel
addressed to the Indenture Trustee, Owner Trustee and Note Insurer stating
that
the execution of such amendment is authorized or permitted by this Agreement.
The Indenture Trustee, the Owner Trustee, the Master Servicer and the Securities
Administrator may, but shall not be obligated to, enter into any such amendment
which affects its own respective rights, duties or immunities under this
Agreement.
(f) Any
amendment affecting the rights of the Owner Trustee shall require the Owner
Trustee’s written consent, which consent shall not be unreasonably
withheld.
Section
8.02. 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 Mortgaged Properties
are situated, and in any other appropriate public recording office or elsewhere.
The Depositor shall effect such recordation, at the expense of the Trust Estate
upon the request in writing of a Noteholder, the Note Insurer or
Certificateholder, but only if such direction is accompanied by an Opinion
of
Counsel (provided at the expense of the Noteholder, the Note Insurer or
Certificateholder requesting recordation) to the effect that such recordation
would materially and beneficially affect the interests of the Noteholders or
Certificateholders or is required by law.
Section
8.03. Governing
Law.
THIS
AGREEMENT AND THE NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAWS RULES (OTHER THAN
SECTION 5--1401 OF THE GENERAL OBLIGATIONS LAW, WHICH THE PARTIES HERETO
EXPRESSLY RELY UPON IN THE CHOICE OF SUCH LAW AS THE GOVERNING LAW HEREUNDER)
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section
8.04. Notices.
All
demands and notices hereunder shall be in writing and shall be deemed given
when
delivered at (including delivery by facsimile) or mailed by registered mail,
return receipt requested, postage prepaid, or by recognized overnight courier,
to (i) in the case of the Depositor, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: General Counsel, or to such other address as may hereafter
be
furnished to the other parties hereto in writing; (ii) in the case of the
Indenture Trustee, at the Corporate Trust Office or such other address as may
hereafter be furnished to the other parties hereto in writing; (iii) in the
case
of the Company, 0000 Xxxx Xxxxx Xxxxx, Xxxxxxxxxx, Xxxxx 00000, Attention:
President or General Counsel, or to such other address as may hereafter be
furnished to the other parties hereto in writing; (iv) in the case of the Master
Servicer or Securities Administrator, LaSalle Bank National Association,
000
Xxxxx
XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000 (Attention: Global Securities
and
Trust Services - SACO I Trust 2006-8), facsimile no.: (000) 000-0000, or such
other address as may hereafter be furnished to the other parties hereto in
writing; or (v) in the case of the Issuing Entity, to SACO I Trust 2006-8 c/o
Wilmington Trust Company, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000;
Attention: Corporate Trust Administration, or such other address as may
hereafter be furnished to the other parties hereto in writing; (vi) in the
case
of the Owner Trustee, to Wilmington Trust Company, 0000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000; Attention: Corporate Trust Administration; or such
other address as may hereafter be furnished to the other parties hereto in
writing; (vii) in the case of the Rating Agencies, Standard & Poor’s, a
division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, and Xxxxx’x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, and (viii) in the case of the Note Insurer, Ambac Assurance
Corporation, Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Risk
Management, Consumer Asset-Backed Securities (SACO I Trust 2006-8, Policy
No.
AB1020BE),
with a
copy to the General Counsel at the above address, and in each case in which
a
demand, notice or other communication to the Note Insurer refers to a Default,
an Event of Default or any event with respect to which failure on the part
of
the Note Insurer to respond shall be deemed to constitute consent or acceptance,
then such demand, notice or other communication shall be marked to indicate
“URGENT MATERIAL ENCLOSED”; or
such
other address as may hereafter be furnished to the other parties hereto in
writing. Any notice delivered to the Depositor, the Master Servicer, the
Securities Administrator, the Indenture Trustee, the Issuing Entity, the Note
Insurer or the Owner Trustee under this Agreement shall be effective only upon
receipt. Any notice required or permitted to be mailed to a Noteholder, unless
otherwise provided herein, shall be given by first-class mail, postage prepaid,
at the address of such Noteholder as shown in the Note Register. Any notice
so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given when mailed, whether or not the Noteholder
receives such notice.
Section
8.05. 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 severed 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 Notes or Certificates or the rights of the Noteholders or
Certificateholders thereof.
Section
8.06. Successors
and Assigns.
The
provisions of this Agreement shall be binding upon the parties hereto, the
Noteholders, the Certificateholders and their respective successors and assigns.
The Indenture Trustee shall have the right to exercise all rights of the Issuing
Entity under this Agreement.
Section
8.07. Article
and Section Headings.
The
article and section headings herein are for convenience of reference only,
and
shall not limit or otherwise affect the meaning hereof.
Section
8.08. Counterparts.
This
Agreement may be executed in two or more counterparts each of which when so
executed and delivered shall be an original but all of which together shall
constitute one and the same instrument.
Section
8.09. Notice
to Rating Agencies and the Note Insurer.
The
Indenture Trustee, with respect to (a), (b) and (c), and the Securities
Administrator, with respect to (d) shall promptly provide notice to each Rating
Agency and the Note Insurer with respect to each of the following of which
a
Responsible Officer of the Indenture Trustee has actual knowledge or written
notice:
(a) Any
material change or amendment to this Agreement;
(b) The
occurrence of any Master Servicer Event of Default that has not been
cured;
(c) The
resignation or termination of the Master Servicer, the Indenture Trustee, the
Owner Trustee or the Securities Administrator; and
(d) Any
change in the location of the Master Servicer Collection Account.
Section
8.10. Termination.
The
respective obligations and responsibilities of the parties hereto created hereby
shall terminate upon the satisfaction and discharge of the Indenture pursuant
to
Section 4.10 thereof and, if applicable, the optional redemption of the Notes
pursuant to Section 8.06 thereof. In the event that this Agreement is terminated
by reason of the payment or liquidation of all HELOCs or the disposition of
all
property acquired with respect to all HELOCs under this Section, the Master
Servicer shall deliver to the Securities Administrator for deposit in the
Payment Account all distributable amounts remaining in the Master Servicer
Collection Account. Upon the presentation and surrender of the Notes and
Certificates, the Securities Administrator shall distribute to the remaining
Noteholders, Certificateholders and the Note Insurer, in accordance with their
respective interests, all distributable amounts remaining in the Payment
Account. Upon deposit by the Master Servicer of such distributable amounts,
and
following such final Payment Date, the Indenture Trustee shall, or shall cause
the Custodian to, release promptly to the Issuing Entity or its designee the
Mortgage Files for the remaining HELOCs, and the Master Servicer Collection
Account and the Payment Account shall terminate, subject to the Securities
Administrator’s obligation to hold any amounts payable to the Noteholders in
trust without interest pending final distributions pursuant to the
Indenture.
Section
8.11. No
Petition.
Each
party to this Agreement (and with respect to LaSalle Bank, solely in its
capacities as Master Servicer and Securities Administrator and not in its
individual or corporate capacity) by entering into this Agreement, hereby
covenants and agrees that it will not at any time institute against the Issuing
Entity, or join in any institution against the Issuing Entity, any bankruptcy
proceedings under any United States federal or state bankruptcy or similar
law
in connection with any obligations of the Issuing Entity. This section shall
survive the termination of this Agreement by one year.
Section
8.12. No
Recourse.
The
Master Servicer acknowledges that no recourse may be had against the Issuing
Entity, except as may be expressly set forth in this Agreement.
Section
8.13. Additional
Terms Regarding Indenture.
The
Indenture Trustee shall have only such duties and obligations under this
Agreement as are expressly set forth herein, and no implied duties on its part
shall be read into this Agreement. In entering into and acting under this
Agreement, the Indenture Trustee shall be entitled to all of the rights,
immunities, indemnities and other protections set forth in Article VI of the
Indenture.
Section
8.14. Third
Party Beneficiary.
The
parties hereto agree that the Owner Trustee is a third party beneficiary to
this
Agreement.
Section
8.15. Limitation
of Liability.
Notwithstanding anything contained herein to the contrary, it is expressly
understood and agreed by the parties hereto that (a) this Agreement is executed
and delivered by the Owner Trustee, not individually or personally but solely
as
Owner Trustee, in the exercise of the powers and authority conferred and vested
in it under the Trust Agreement, (b) each of the representations, undertakings
and agreements herein made on the part of the Issuing Entity is made and
intended not as personal representations, undertakings and agreements by
Wilmington Trust Company but is made and intended for the purpose for binding
only the Issuing Entity and (c) under no circumstances shall Wilmington Trust
Company be personally liable for the payment of any indebtedness or expenses
of
the Issuing Entity or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Issuing Entity
under this Agreement or the other related documents.
Section
8.16. Benefit
of Agreement.
The
Note Insurer and any successor and assign shall be a third-party beneficiary
to
the provisions of this Agreement. To the extent that this Agreement confers
upon
or gives or grants to the Note Insurer any right, remedy or claim under or
by
reason of this Agreement, the Note Insurer may enforce any such right, remedy
or
claim conferred, given or granted hereunder. Nothing in this Agreement, express
or implied, shall give to any Person, other than the parties hereto and their
successors hereunder, and the Securityholders and the Note Insurer, any benefit
or any legal or equitable right, remedy or claim under this
Agreement.
IN
WITNESS WHEREOF, the Depositor, the Issuing Entity, the Company, the Indenture
Trustee, the Master Servicer and the Securities Administrator have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the day and year first above written.
BEAR
XXXXXXX ASSET BACKED SECURITIES I LLC, as Depositor
|
|
By:
/s/ Xxxxx Xxxxxxxxxxx
|
|
Name:
Xxxxx Xxxxxxxxxxx
|
|
Title:
Vice President
|
|
SACO
I TRUST 2006-8, as Issuing Entity
|
|
By:
WILMINGTON TRUST COMPANY, not in its individual capacity, but solely
as
Owner Trustee
|
|
By:
/s/ Xxxxxxxx X. Xxxxx
|
|
Name:
Xxxxxxxx X. Xxxxx
|
|
Title:
Vice President
|
|
CITIBANK,
N.A., as Indenture Trustee
|
|
By:
/s/ Xxxx Xxxxxx
|
|
Name:
Xxxx Xxxxxx
|
|
Title:
Vice President
|
|
EMC
MORTGAGE CORPORATION, as Sponsor and Company
|
|
By:
/s/ Xxxxxx Xxxxx
|
|
Name:
Xxxxxx Xxxxx
|
|
Title: Senior
Vice President
|
|
LASALLE
BANK NATIONAL ASSOCIATION, as Master Servicer
|
|
By:
/s/ Xxxxx X. Xxxx
|
|
Name:
Xxxxx X. Xxxx
|
|
Title:
Assistant Vice President
|
|
LASALLE
BANK NATIONAL ASSOCIATION, as Securities Administrator
|
|
By:
/s/ Xxxxx X. Xxxx
|
|
Name:
Xxxxx X. Xxxx
|
|
Title:
Assistant Vice President
|
On
the
15th day of September, 2006 before me, a notary public in and for said State,
personally appeared Xxxxx Xxxxxxxxxxx, known to me to be a Vice President of
Bear Xxxxxxx Asset Backed Securities I LLC, the limited liability company that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said 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 DELAWARE
|
)
|
|
)
|
ss.:
|
|
COUNTY
OF _____________
|
)
|
|
On
the
15th day of September, 2006 before me, a notary public in and for said State,
personally appeared _____________________, known to me to be a
_____________________ of Wilmington Trust Company, the entity that executed
the
within instrument, and also known to me to be the person who executed it on
behalf of said entity, and acknowledged to me that such entity 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 _____________
|
)
|
|
)
|
ss.:
|
|
COUNTY
OF ___________
|
)
|
|
On
the
15th day of September, 2006 before me, a notary public in and for said State,
personally appeared ______________________, known to me to be a Vice President
of Citibank, N.A., the entity that executed the within instrument, and also
known to me to be the person who executed it on behalf of said entity, and
acknowledged to me that such entity 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 _____________
|
)
|
|
)
|
ss.:
|
|
COUNTY
OF ___________
|
)
|
|
On
the
15th day of September, 2006 before me, a notary public in and for said State,
personally appeared [____________], known to me to be a Vice President of
LaSalle Bank National Association, the entity that executed the within
instrument, and also known to me to be the person who executed it on behalf
of
said entity, and acknowledged to me that such entity 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 _______________
|
)
|
|
)
|
ss.:
|
|
COUNTY
OF _____________
|
)
|
|
On
the
15th day of September, 2006, 2006 before me, a notary public in and for said
State, personally appeared _______________ known to me to be a Vice President
of
LaSalle Bank National Association, the entity that executed the within
instrument, and also known to me to be the person who executed it on behalf
of
said entity, and acknowledged to me that such entity 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 _________________
|
)
|
|
)
|
ss.:
|
|
COUNTY
OF _______________
|
)
|
|
On
the
15th day of September, 2006, 2006 before me, a notary public in and for said
State, personally appeared _______________, known to me to be an
___________________ of EMC Mortgage Corporation, the corporation that executed
the within instrument, and also known to me to be the person who executed it
on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
_____________________________________
|
|
Notary
Public
|
|
[Notarial
Seal]
|
EXHIBIT
A
MORTGAGE
LOAN SCHEDULE
EXHIBIT
B
REQUEST
FOR RELEASE OF DOCUMENTS
To:
|
Citibank,
N.A. (the “Indenture Trustee”)
000
Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Structured Finance Agency and Trust, SACO Trust 2006-8
|
LaSalle
Bank National Association
(the “Custodian”)
0000
Xxxxx Xx, Xxxxx 000
Xxx
Xxxxx Xxxxxxx, Xxxxxxxx 00000
|
|
RE:
|
Custodial
Agreement, dated as of September 15, 2006, by and among Citibank,
N.A.,
LaSalle Bank National Association, Bear Xxxxxxx Asset Backed Securities
I
LLC, EMC Mortgage Corporation relating to SACO I Trust 2006-8, Mortgage
Pass-Through Certificates, Series 2006-8
|
In
connection with the administration of the HELOCs held by the Custodian for
the
benefit of the Indenture Trustee pursuant to the above-captioned Sale and
Servicing Agreement, we request the release, and hereby acknowledge receipt,
of
the Mortgage File for the HELOC described below, for the reason
indicated.
This
release will not invalidate any insurance coverage provided in respect of the
HELOC under any of the Insurance Policies.
Mortgagor
Name, Address & Zip Code:
HELOC
Number:
Reason
for Requesting Documents (check one):
____
|
1.
|
Mortgage
Paid in Full and proceeds have been deposited into the Master Servicer
Collection Account
|
|
____
|
2.
|
HELOC
in foreclosure
|
|
____
|
3.
|
Repurchase.
(The [Master Servicer] [Securities Administrator] hereby certifies
that
the repurchase price has been credited to
_________________________.)
|
|
____
|
4.
|
Other
(explain):
|
|
By:
_________________________________
|
|||
(authorized
signer)
|
|||
Issuing
Entity:_______________________
|
|||
Address:____________________________
|
|||
Date:_______________________________
|
|||
EXHIBIT
C-1
GMACM
SERVICING AGREEMENT
[Provided
Upon Request]
EXHIBIT C-2
MORTGAGE
LOAN PURCHASE AGREEMENT
MORTGAGE
LOAN PURCHASE AGREEMENT
between
EMC
MORTGAGE CORPORATION
as
HELOC
Seller,
and
BEAR
XXXXXXX ASSET BACKED SECURITIES I LLC
as
Purchaser
Dated
as
of September 15, 2006
TABLE
OF CONTENTS
SECTION
1.
|
Definitions
|
SECTION
2.
|
Purchase
and Sale of the HELOCs and Related Rights
|
SECTION
3.
|
Mortgage
Loan Schedule
|
SECTION
4.
|
HELOC
Transfer
|
SECTION
5.
|
Examination
of Mortgage Files
|
SECTION
6.
|
Recordation
of Assignments of Mortgage
|
SECTION
7.
|
Representations
and Warranties of the HELOC Seller Concerning
|
the
HELOCs
|
9
|
SECTION
8.
|
Representations
and Warranties Concerning EMC
|
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 HELOCs
|
SECTION
16.
|
Termination
|
SECTION
17.
|
Representations,
Warranties and Agreements to Survive Delivery
|
SECTION
18.
|
Severability
|
SECTION
19.
|
Counterparts
|
SECTION
21.
|
Amendment
|
SECTION
22.
|
GOVERNING
LAW
|
SECTION
23.
|
Further
Assurances
|
SECTION
24.
|
Successors
and Assigns
|
SECTION
25.
|
The
HELOC Seller
|
SECTION
26.
|
Entire
Agreement
|
SECTION
27.
|
No
Partnership
|
EXHIBITS
AND SCHEDULE TO
MORTGAGE
LOAN PURCHASE AGREEMENT
Exhibit
1 Contents of Mortgage File
Exhibit
2 Mortgage Loan Schedule Information
Exhibit
3 HELOC Seller’s Information
Exhibit
4 Purchaser’s Information
Exhibit
5 Schedule of Lost Notes
Exhibit
6 Standard & Poor’s Appendix E to
Glossary
Schedule
A Required Ratings for Each Class of Certificates
MORTGAGE
LOAN PURCHASE AGREEMENT
MORTGAGE
LOAN PURCHASE AGREEMENT, dated as of September 15, 2006, as amended and
supplemented by any and all amendments hereto (collectively, “this Agreement”),
by and between EMC MORTGAGE CORPORATION, a Delaware corporation (a “HELOC
Seller”) and BEAR XXXXXXX ASSET BACKED SECURITIES I LLC, a Delaware limited
liability company (the “Purchaser”).
Upon
the
terms and subject to the conditions of this Agreement, the HELOC Seller agrees
to sell, and the Purchaser agrees to purchase, certain first and junior lien
home equity lines of credit (the “HELOCs”) as described herein. The Purchaser
has established SACO I Trust 2006-8, a Delaware statutory trust (the “Issuer”)
pursuant to a Short Form Trust Agreement, dated as of September 6, 2006,
as
amended and restated as of September 15, 2006 (the “Trust Agreement”), among the
Purchaser, Wilmington Trust Company (the “Owner Trustee”) and LaSalle Bank
National Association (“LaSalle Bank” in such capacity, “Securities
Administrator”). The Purchaser intends to sell the HELOCs to the Issuer pursuant
to a Sale and Servicing Agreement, dated as of September 15, 2006 (the “Sale and
Servicing Agreement”) among the Purchaser, as Depositor, the Issuer, the HELOC
Seller, Citibank, N.A., as indenture trustee (the “Indenture Trustee”) and the
LaSalle Bank as Securities Administrator and as master servicer (in such
capacity, the “Master Servicer”). The Issuer, pursuant to an Indenture, dated as
of September 15, 2006 (the “Indenture”) among the Issuer, the Indenture Trustee
and the Securities Administrator intends to pledge the HELOCs to the Indenture
Trustee and, issue and transfer to the Purchaser the SACO I Trust 2006-8,
Mortgage-Backed Notes, Series 2006-8 and the Certificates issued pursuant
to the
Trust Agreement (the “Certificates”). Certain Certificates will be transferred
by the Purchaser to the HELOC Seller as partial consideration for the sale
of
the HELOCs. The Master Servicer will master service the HELOCs on behalf
of the
Issuer pursuant to the Sale and Servicing Agreement. The servicing of the
HELOCs
will be provided by EMC Mortgage Corporation, as servicer, pursuant to the
Sale
and Servicing Agreement and by GMAC Mortgage Corporation pursuant to its
servicing agreement as specified in Appendix A to the Indenture which will
be
assigned to the Issuer on the Closing Date pursuant to the related Assignment
Agreement. The representations and warranties made by the HELOC Seller and
the
remedies for breach thereof will be assigned to the Issuer on the Closing
Date
pursuant to, and to the extent provided in the Assignment
Agreement.
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
Mortgage-Backed Notes 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
Notes
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 “Free Writing Prospectus” shall mean the free writing
prospectus, dated September 7, 2006. The “Prospectus
Supplement”
shall
mean that supplement, dated September 14, 2006, to the Prospectus, dated
September 5, 2006, relating to certain classes of the Notes. With respect
to the
Public Offering of certain classes of the Notes, Bear, Xxxxxxx & Co. Inc.
(“Bear
Xxxxxxx”)
and the
Purchaser have entered into a terms agreement, dated as of September 7, 2006,
to
an underwriting agreement, dated April 13, 2006 (together, the “Underwriting
Agreement”)
between
Bear Xxxxxxx and the Purchaser.
Now,
therefore, in consideration of the premises and the mutual agreements set
forth
herein, the parties hereto agree as follows:
*
Please
contact Bear Xxxxxxx for pricing information.
SECTION
1. Definitions.
Certain
terms are defined herein. Capitalized terms used herein but not defined herein
shall have the meanings specified in the Sale and Servicing Agreement. The
following other terms are defined as follows:
Acquisition
Price:
With
respect to EMC and the sale of the HELOCs, cash in an amount equal to
$
*
(plus
$
*
in
accrued interest) and the retained certificates.
Bear
Xxxxxxx:
Bear,
Xxxxxxx & Co. Inc.
Closing
Date:
September 15, 2006.
Custodial
Agreement:
The
custodial agreement, dated as September 15, 2006, among the Depositor, the
HELOC
Seller, the Master Servicer, the Indenture Trustee and LaSalle Bank National
Association as Custodian relating to the HELOCs identified in such custodial
agreement.
Cut-off
Date:
August
15, 2006.
Cut-off
Date Balance:
Shall
mean $361,200,413.29 with respect to the HELOCs.
Deleted
HELOC:
A HELOC
replaced or to be replaced by a Substitute HELOC.
Due
Date:
As to
any HELOC, the date in each month on which the related Scheduled Payment
is due,
as set forth in the related Mortgage Note.
EMC:
EMC
Mortgage Corporation.
HELOC:
The
HELOCs identified as such on the Mortgage Loan Schedule for which EMC is
the
applicable HELOC Seller.
LaSalle
Bank:
LaSalle
Bank National Association, or its successors in interest.
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.
Moody’s:
Xxxxx’x
Investors Service, Inc., or its successors in interest.
Mortgage:
The
mortgage or deed of trust or other instrument creating a first or junior
lien on
an interest in an estate in fee simple in real property securing a Mortgage
Note.
Mortgage
File:
The
items referred to in Exhibit 1 pertaining to a particular HELOC and any
additional documents required to be added to such documents pursuant to this
Agreement.
Mortgage
Rate:
The
annual rate of interest borne by a Mortgage Note as stated herein.
Mortgagor:
The
obligor(s) on a Mortgage Note.
Net
Mortgage Rate:
As to
each HELOC, and at any time, the per annum rate equal to the Mortgage Rate
less
the sum of (i) the Servicing Fee Rate, (ii) the Indenture Trustee Fee Rate
and
(iii) the rate at which the LPMI Fee is calculated, if any.
Opinion
of Counsel:
A
written opinion of counsel, who may be counsel for the HELOC Seller or the
Purchaser, reasonably acceptable to the Indenture 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 HELOC required to be purchased by the HELOC 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 HELOC as of the date of purchase
(including if a foreclosure has already occurred, the principal balance of
the
related HELOC at the time the Mortgaged Property was acquired), (ii) accrued
and
unpaid interest thereon at the Mortgage Interest Rate through and including
the
last day of the month of purchase and (iii) any costs and damages (if any)
incurred by the Trust in connection with any violation of such HELOC of any
anti-predatory lending laws.
Rating
Agency:
Each of
Moody’s and Standard & Poor’s.
Substitute
HELOC:
A home
equity line of credit substituted for a Deleted HELOC which must (i) have
a
Stated Principal Balance, after deduction of the principal portion of the
Monthly Payment due in the month of substitution, not in excess of, and not
less
than 95% of, the Stated Principal Balance of the Deleted HELOC; (ii) have
the
same or higher credit quality characteristics than that of the Deleted HELOC;
(iii) have a Combined Loan-to-Value Ratio no higher than that of the Deleted
HELOC; (iv) have a remaining term to maturity no greater than (and not more
than
one year less than) that of the Deleted HELOC; (v) have the same lien priority
as the Deleted HELOC; (vi) constitute the same occupancy type as the Deleted
HELOC or be owner occupied, (vii) have a maximum Mortgage Rate determined
in
accordance with then current underwriting standards; (viii) have a Margin
that
is not less than the Margin of the Deleted HELOC; and (ix) comply with each
representation and warranty set forth in Section 7 hereof; provided
Substitute HELOCs shall have at least the same seasoning as the Deleted HELOC
being replaced. Upon such substitution, such home equity line of credit shall
be
a “HELOC” hereunder.
Securities
Act:
The
Securities Act of 1933, as amended.
Standard
& Poor’s:
Standard & Poor’s, a division of The XxXxxx-Xxxx Companies, Inc. or its
successors in interest.
Value:
The
value of the Mortgaged Property at the time of origination of the related
HELOC,
such value being the lesser of (i) the value of such property set forth in
an
appraisal accepted by the applicable originator of the HELOC or (ii) the
sales
price of such property at the time of origination.
SECTION
2. Purchase
and Sale of the HELOCs and Related Rights.
(a) Upon
satisfaction of the conditions set forth in Section 11 hereof, the HELOC
Seller
agrees to sell, and the Purchaser agrees to purchase the HELOCs sold by such
HELOC Seller having an aggregate outstanding principal balance as of the
Cut-off
Date equal to the aggregate Cut-off Date Balances of the HELOCs (including
all
additional balances resulting from Draws made pursuant to the related HELOC
prior to the termination of the Trust; provided however, that the Purchaser
does
not assume any obligation under any HELOC to fund any such future Draws,
and the
Purchaser will not be obligated or permitted to fund such future
Draws).
(b) The
closing for the purchase and sale of the HELOCs and the closing for the issuance
of the Securities 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 HELOC Seller the cash portion of the
Acquisition Price for the HELOCs sold by the HELOC Seller in immediately
available funds by wire transfer to such account or accounts as shall be
designated by the HELOC Seller and shall deliver the Securities to the HELOC
Seller or its designee.
SECTION
3. Mortgage
Loan Schedule.
The
HELOC
Seller agrees to provide to the Purchaser as of the date hereof a listing
of the
HELOCs (the “Mortgage
Loan Schedule”)
setting forth the information listed on Exhibit
2
to this
Agreement with respect to each of the HELOCs being sold by the HELOC Seller.
SECTION
4. HELOC
Transfer.
(a)
The
Purchaser will be entitled to all scheduled payments of principal and interest
on the HELOCs due after the Cut-off Date (regardless of when actually collected)
and all payments thereof. The HELOC Seller will be entitled to all scheduled
payments of principal and interest on the HELOCs sold by it to the Purchaser
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 HELOC Seller as described above will not be included in
the
aggregate outstanding principal balance of the HELOCs as of the Cut-off Date
as
set forth on the Mortgage Loan Schedule.
(b) Pursuant
to various conveyancing documents to be executed on the Closing Date and
pursuant to the Sale and Servicing Agreement, the Purchaser will sell, assign
and transfer on the Closing Date all of its right, title and interest in
and to
the HELOCs to the Issuer and, pursuant to the Indenture, the Issuer will
assign
all of its right, title and interest to the HELOCs to the Indenture Trustee
for
the benefit of the Noteholders and the Note Insurer, to secure the Notes
issued
pursuant to the Indenture. In connection with such transfers and assignments
of
the HELOCs, the HELOC Seller has delivered or will deliver or cause to be
delivered to the Indenture Trustee, or the Custodian on its behalf, by the
Closing Date or such later date as is agreed to by the Purchaser and the
HELOC
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 HELOC Seller may deliver the following documents,
under the circumstances set forth below: (i) in lieu of the original Security
Instrument (including the Mortgage), assignments to the Indenture Trustee
or
intervening assignments thereof which have been delivered, are being delivered
or will, upon receipt of recording information relating to the Security
Instruments required to be included thereon, be delivered to recording offices
for recording and have not been returned to the HELOC Seller in time to permit
their delivery as specified above, the HELOC Seller may deliver a true copy
thereof with a certification by the HELOC Seller, 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”; (ii) in lieu of the
Security Instrument, assignments to the Indenture Trustee or intervening
assignments thereof, if the applicable jurisdiction retains the originals
of
such documents (as evidenced by a certification from the HELOC Seller to
such
effect) the HELOC 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; (iii) in lieu of the Mortgage
Notes relating to the HELOCs, each identified in the list delivered by the
Purchaser to the Indenture Trustee on the Closing Date and attached hereto
as
Exhibit 5, the HELOC Seller may deliver lost note affidavits and indemnities
of
the HELOC Seller; and (iv) the HELOC Seller shall not be required to deliver
intervening assignments or Mortgage Note endorsements between the related
originator and the HELOC Seller, between the HELOC Seller and the Depositor,
between the Depositor and the Issuer and between the Issuer and the Indenture
Trustee; and provided further, however, that in the case of HELOCs which
have
been prepaid in full after the Cut-off Date and prior to the Closing Date,
the
HELOC Seller, in lieu of delivering the above documents, may deliver to the
Indenture Trustee and the Custodian a certification by the HELOC Seller or
the
Master Servicer to such effect and shall deposit all amounts paid in respect
of
such HELOCs in the Master Servicer Collection Account on the Closing Date.
The
HELOC 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 Indenture Trustee promptly after they are received.
The
HELOC Seller shall cause the Mortgage and intervening assignments, if any,
and
the assignment of the Security Instrument 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 HELOC registered on the MERS® System, the
HELOC Seller further agrees that it will cause, at the HELOC
Seller’s
own
expense, within 30 days after the Closing Date, the MERS® System to indicate
that such HELOCs have been assigned by the HELOC Seller to the Purchaser,
by the
Purchaser to the Issuer and by the Issuer to the Indenture Trustee in accordance
with this Agreement for the benefit of the Noteholders by including (or
deleting, in the case of HELOCs which are repurchased in accordance with
this
Agreement) in such computer files (a) the code in the field which identifies
the
specific Indenture Trustee and (b) the code in the field “Pool Field” which
identifies the series of the Notes issued in connection with such HELOCs.
The
HELOC 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 HELOC during
the term of the Indenture unless and until such HELOC is repurchased in
accordance with the terms of the Sale and Servicing Agreement.
(d) The
HELOC
Seller and the Purchaser acknowledge hereunder that all of the HELOCs will
ultimately be assigned to Citibank, N.A., as Indenture Trustee for the benefit
of the Noteholders, on the date hereof.
SECTION
5. Examination
of Mortgage Files.
(a)
On or
before the Mortgage File Delivery Date, the HELOC Seller will have made the
related Mortgage Files available to the Purchaser or its agent for examination
which may be at the offices of the Indenture Trustee or such HELOC Seller
and/or
such HELOC 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
related 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 HELOC Seller shall make the related Mortgage
Files available to the Purchaser or its agent from time to time so as to
permit
the Purchaser to confirm such HELOC Seller’s compliance with the delivery and
recordation requirements of this Agreement and the Sale and Servicing Agreement.
In addition, upon request of the Purchaser, the HELOC Seller agrees to provide
to the Purchaser, Bear Xxxxxxx and to any investors or prospective investors
in
the Certificates information regarding the HELOCs and their servicing, to
make
the related Mortgage Files available to the Purchaser, Bear Xxxxxxx and to
such
investors or prospective investors (which may be at the offices of the HELOC
Seller and/or such HELOC Seller’s custodian) and to make available personnel
knowledgeable about the related HELOCs for discussions with the Purchaser,
Bear
Xxxxxxx and such investors or prospective investors, upon reasonable request
during regular business hours, sufficient to permit the Purchaser, Bear Xxxxxxx
and such investors or potential investors to conduct such due diligence as
any
such party reasonably believes is appropriate.
(b) Pursuant
to the Custodial Agreement, on the Closing Date the Custodian, on behalf
of the
Indenture Trustee, for the benefit of the Noteholders and the Note Insurer,
will
acknowledge receipt of each HELOC, by delivery to the HELOC Seller, the
Purchaser, the Note Insurer and the Issuer of an initial certification in
the
form attached as Exhibit One to the Custodial Agreement.
(c) Pursuant
to the Custodial Agreement and in accordance with the provisions of Section
2.02
of the Sale and Servicing Agreement, within 90 days of the Closing Date,
the
Indenture Trustee will review or shall cause the Custodian to review items
of
the Mortgage Files as set forth on Exhibit
1
and will
deliver to the HELOC Seller, the Purchaser, the Note Insurer and the Indenture
Trustee an interim certification substantially in the form of 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 HELOCs 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
Indenture Trustee or the Custodian on its behalf will review the Mortgage
Files
within 180 days of the Closing Date and will deliver to the HELOC Seller,
the
Note Insurer and the Master Servicer, and if reviewed by the Custodian, the
Indenture Trustee, a final certification substantially in the form of Exhibit
3
to the Custodial Agreement. If the Indenture Trustee or the related Custodian
on
its behalf is unable to deliver a final certification with respect to the
items
listed in Exhibit 1 due to any document that is missing, has not been executed,
is unrelated, determined on the basis of the Mortgagor name, original principal
balance and loan number, to the HELOCs identified in the Mortgage Loan Schedule
(a “Material Defect”), the Indenture Trustee or the Custodian on its behalf
shall notify the HELOC Seller, the Note Insurer and the Indenture Trustee
in
writing of such Material Defect. The HELOC Seller shall correct or cure any
such
Material Defect within 90 days from the date of notice from the Indenture
Trustee, the Depositor or the Master Servicer of the Material Defect and
if the
HELOC Seller does not correct or cure such Material Defect within such period
and such defect materially and adversely affects the interests of the
Noteholders or the Note Insurer in the related HELOC, the HELOC Seller will,
in
accordance with the terms of the Sale and Servicing Agreement, within 90
days of
the date of notice, provide the Indenture Trustee with a Substitute HELOC
(if
within two years of the Closing Date) or purchase the related HELOC at the
applicable Purchase Price; provided,
however,
that if
such defect relates solely to the inability of the HELOC 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 HELOC Seller shall not be required
to purchase such HELOC if the HELOC 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 HELOC 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 HELOC Seller shall instead deliver a recording receipt
of such
recording office or, if such receipt is not available, a certificate of the
HELOC Seller or a Servicing Officer confirming that such documents have been
accepted for recording, and delivery to the Indenture Trustee shall be effected
by the HELOC Seller within thirty days of its receipt of the original recorded
document.
(e) At
the
time of any substitution, the HELOC Seller shall deliver or cause to be
delivered the Substitute HELOC, the related Mortgage File and any other
documents and payments required to be delivered in connection with a
substitution pursuant to the Sale and Servicing Agreement. At the time of
any
purchase or substitution, the Indenture Trustee in accordance with the terms
of
the Sale and Servicing Agreement shall (i) assign to the HELOC Seller and
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 Custodian relating to the Deleted HELOC and (ii) execute
and
deliver such instruments of transfer or assignment, in each case without
recourse, as shall be necessary to vest in the HELOC Seller title to such
Deleted HELOC.
SECTION
6. Recordation
of Assignments of Mortgage.
(a) The
HELOC
Seller shall cause each assignment of the Security Instrument from the HELOC
Seller to the Indenture Trustee to be recorded not later than 180 days after
the
Closing Date, unless (a) such recordation is not required by the Rating Agencies
or an Opinion of Counsel has been provided to the Indenture Trustee (with
a copy
to the Custodian and the Note Insurer) which states that the recordation
of such
assignments is not necessary to protect the interests of the Noteholders
and the
Note Insurer in the related HELOCs or (b) MERS is identified on the Mortgage
or
on a properly recorded assignment of the Mortgage, as the Mortgagee of record
solely as nominee for the HELOC Seller and its successors and assigns;
provided,
however,
notwithstanding the delivery of any such Opinion of Counsel, each assignment
of
Mortgage shall be submitted for recording by the HELOC Seller in the manner
described above, at no expense to the Issuer or the Indenture Trustee, upon
the
earliest to occur of (i) reasonable direction by the Holders of Notes
aggregating at least 25% of the Note Principal Balance of the Notes, (ii)
the
occurrence of a Master Servicer Event of Default or an Event of Default,
(iii)
the occurrence of a bankruptcy, insolvency or foreclosure relating to the
HELOC
Seller and, (iv) the occurrence of a master servicing transfer as described
in
Section 7.02 of the Sale and Servicing Agreement.
While
each such Mortgage or assignment is being recorded, if necessary, the HELOC
Seller shall leave or cause to be left with the Indenture Trustee a certified
copy of such Mortgage or assignment. In the event that, within 180 days of
the
Closing Date, the Indenture Trustee has not been provided with an Opinion
of
Counsel as described above or received evidence of recording with respect
to
each HELOC delivered to the Purchaser pursuant to the terms hereof or as
set
forth above and the related HELOC 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 Indenture Trustee or the Opinion of Counsel,
as
the case may be, shall be borne by the HELOC Seller.
(b) It
is the
express intent of the parties hereto that the conveyance of the HELOCs by
the
HELOC 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 HELOCs by the HELOC Seller to the Purchaser
to secure a debt or other obligation of the HELOC Seller. However, in the
event
that, notwithstanding the intent of the parties, the HELOCs are held by a
court
to continue to be property of the HELOC Seller, then (i) 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; (ii) the transfer of the HELOCs
provided for herein shall be deemed to be a grant by the HELOC Seller to
the
Purchaser of a security interest in all of the HELOC Seller’s right, title and
interest in and to the HELOCs and all amounts payable to the holders of the
HELOCs 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 HELOCs 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 Indenture or the Sale and Servicing Agreement,
whether in the form of cash, instruments, securities or other property; (iii)
the possession by the Purchaser, the Issuer or the Indenture Trustee 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 9-313 (or comparable provision) of the applicable Uniform Commercial
Code; and (iv) 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 Sale and Servicing Agreement and any subsequent
assignment pursuant to the Indenture shall also be deemed to be an assignment
of
any security interest created hereby. The HELOC 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 HELOCs, 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 Indenture.
SECTION
7. Representations
and Warranties of the HELOC Seller Concerning the HELOCs.
The
HELOC
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 HELOC being
sold by it, that:
(a) The
information set forth in the Mortgage Loan Schedule on the Closing Date is
complete, true and correct.
(b) Each
HELOC is a revolving home equity loan. Each Mortgage Note provides for (a)
Monthly Payments which are at least equal to accrued interest during such
Accrual Period and (b) at the maturity of the related HELOC, payment in full
of
the principal balance of such Mortgage Note.
(c) The
Mortgage Note bears a variable Mortgage rate.
(d) No
HELOC
had a Combined Loan to Value Ratio at the time of origination of more than
100%.
(e) As
of the
Closing Date, the HELOC Seller has not received a notice of default of a
senior
or junior lien which has not been cured.
(f) All
payments required to be made prior to the Cut-off Date with respect to each
HELOC have been made and no HELOC is delinquent thirty one or more days;
and the
HELOC Seller has not advanced funds, or induced, solicited or knowingly received
any advance of funds from a party other than the owner of the Mortgaged Property
subject to the Mortgage, directly or indirectly, for the payment of any amount
required under any HELOC.
(g) The
Mortgaged Property is a fee simple property located in the state identified
in
the Mortgage Loan Schedule except that with respect to real property located
in
jurisdictions in which the use of leasehold estates for residential properties
is a widely-accepted practice, the Mortgaged Property may be a leasehold
estate
and consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling or a high-rise
dwelling, or an individual residential condominium unit in a low-rise
condominium project or a cooperative dwelling, or an individual unit in a
planned unit development and that no residence or dwelling is (i) a mobile
home
or (ii) a manufactured home.
(h) If
any of
the HELOCs 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
HELOC.
(i) Except
with respect to taxes, insurance and other amounts previously advanced by
a
prior servicer with respect to any HELOC, there are no delinquent taxes,
water
charges, sewer rents, assessments, insurance premiums, leasehold payments,
including assessments payable in future installments, or other outstanding
charges affecting the related Mortgaged Property.
(j) With
respect to the HELOCs, the Mortgage Note and the Mortgage and any other
agreement executed and delivered by a Mortgagor in connection with a HELOC
are
genuine, and each is the legal, valid and binding obligation of the maker
thereof enforceable in accordance with its terms, except as such enforcement
may
be limited by bankruptcy, insolvency, reorganization, receivership, moratorium
or other similar laws relating to or affecting the rights of creditors
generally, and by general equity principles (regardless of whether such
enforcement is considered a proceeding in equity or a law). All parties to
the
Mortgage Note, the Mortgage and any other such related agreement had legal
capacity to enter into the HELOC and to execute and deliver the Mortgage
Note,
the Mortgage and any such agreement, and the Mortgage Note, the Mortgage
and any
other such related agreement have been duly and properly executed by other
such
related parties. No fraud, error, omission, misrepresentation, gross negligence
or similar occurrence with respect to a HELOC has taken place on the part
of any
Person, including without limitation, the Mortgagor, any appraiser, any builder
or developer, or any other party involved in the origination or servicing
of the
HELOC.
(k) The
terms
of the Mortgage Note and the Mortgage have not been impaired, waived, altered
or
modified in any respect, except by written instruments which in the case
of the
HELOCs are in the Mortgage File and have been or will be recorded, if necessary
to protect the interests of the Indenture Trustee, and which have been or
will
be delivered to the Indenture Trustee, all in accordance with this Agreement.
The substance of any such waiver, alteration or modification has been approved
by the title insurer, to the extent required by the related policy. No Mortgagor
has been released, in whole or in part, except in connection with an assumption
agreement approved by the title insurer, to the extent required by the policy,
and which assumption agreement in the case of the HELOCs is part of the Mortgage
File.
(l) The
Mortgage Note and the Mortgage are not subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, nor will
the
operation of any of the terms of the Mortgage Note and the Mortgage, or the
exercise of any right thereunder, render the Mortgage unenforceable, in whole
or
in part, or subject to any right of rescission, set-off, counterclaim or
defense, including the defense of usury and no such right of rescission,
set-off, recoupment, counterclaim or defense has been asserted with respect
thereto.
(m) All
buildings upon, or comprising part of, the Mortgaged Property are insured
by an
insurer acceptable to Xxxxxx Xxx and Xxxxxxx Mac against loss by fire, hazards
of extended coverage and such other hazards as are customary in the area
where
the Mortgaged Property is located, and such insurer is licensed to do business
in the state where the Mortgaged Property is located. All such insurance
policies contain a standard mortgagee clause naming the originator, its
successors and assigns as mortgagee and the HELOC Seller has not received
any
notice that all premiums thereon have not been paid. If upon origination
of the
HELOC, the Mortgaged Property was, or was subsequently deemed to be, in an
area
identified in the Federal Register by the Federal Emergency Management Agency
as
having special flood hazards (and such flood insurance has been made available),
which require under applicable law that a flood insurance policy meeting
the
requirements of the current guidelines of the Federal Insurance Administration
(or any successor thereto) be obtained, such flood insurance policy is in
effect
which policy is with a generally acceptable carrier in an amount representing
coverage not less than the least of (A) the Stated Principal Balance of the
related HELOC, (B) the minimum amount required to compensate for damage or
loss
on a replacement cost basis, or (C) the maximum amount of insurance that
is
available under the Flood Disaster Protection Act of 1973. The Mortgage
obligates the Mortgagor thereunder to maintain all such insurance at Mortgagor’s
cost and expense and, on the Mortgagor’s failure to do so, authorizes the holder
of the Mortgage to maintain such insurance at Mortgagor’s cost and expense and
to obtain reimbursement therefor from the Mortgagor.
(n) Each
loan
at the time it was made complied in all material respects with applicable
local,
state, and federal laws, including, but not limited to, all applicable
anti-predatory lending laws.
(o) The
Mortgage has not been satisfied, canceled, subordinated, or rescinded, in
whole
or in part, and the Mortgaged Property has not been released from the lien
of
the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such release, cancellation, subordination or
rescission.
(p) The
Mortgage is a valid, existing and enforceable first or second lien on the
Mortgaged Property, including all improvements on the Mortgaged Property,
if
any, subject only to (1) the lien of current real property taxes and assessments
not yet due and payable, (2) covenants, conditions and restrictions, rights
of
way, easements and other matters of the public record as of the date of
recording being acceptable to mortgage lending institutions generally and
specifically referred to in the lender’s title insurance policy delivered to the
originator of the HELOC and which do not adversely affect the Appraised Value
of
the Mortgaged Property and (3) other matters to which like properties are
commonly subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage. The HELOC Seller has full
right to sell and assign the Mortgage to the Purchaser.
(q) The
Mortgage Note and the related Mortgage are genuine and each is the legal,
valid
and binding obligation of the maker thereof, enforceable in accordance with
its
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency or reorganization or general principles of equity.
(r) All
parties to the Mortgage Note and the Mortgage had the legal capacity to enter
into the HELOC transaction and to execute and deliver the Mortgage Note and the
Mortgage, and the Mortgage Note and the Mortgage have been duly and properly
executed by such parties.
(s) The
proceeds of the HELOC have been fully disbursed and there is no requirement
for
future advances thereunder and any and all requirements as to completion
of any
on-site or off-site improvement and as to disbursements of any escrow funds
therefor have been complied with. All costs, fees and expenses incurred in
making or closing the HELOC and the recording of the Mortgage were paid,
and the
Mortgagor is not entitled to any refund of any amounts paid or due under
the
Mortgage Note or Mortgage.
(t) Immediately
prior to the conveyance of the HELOCs by the HELOC Seller to the Purchaser
hereunder, such HELOC Seller was the sole owner and holder of the HELOC;
the
related originator or such HELOC Seller was the custodian of the related
escrow
account, if applicable; the HELOC had neither been assigned nor pledged,
and
such HELOC Seller had good and marketable title thereto, and had full right
to
transfer and sell the HELOC and the related servicing rights to the Purchaser
free and clear of any encumbrance, equity, lien, pledge, charge, claim or
security interest subject to the applicable servicing agreement and had full
right and authority subject to no interest or participation of, or agreement
with, any other party, to sell and assign the HELOC and the related servicing
rights, subject to the applicable servicing agreement, to the Purchaser pursuant
to the terms of this Agreement.
(u) All
parties which have had any interest in the Mortgage, whether as mortgagee,
assignee, pledgee or otherwise, are (or, during the period in which they
held
and disposed of such interest, were) (1) in compliance with any and all
applicable licensing requirements of the laws of the state wherein the Mortgaged
Property is located, and (2) organized under the laws of such state, qualified
to do business in such state, a federal savings and loan association or national
bank having principal offices in such state or not deemed to be doing business
in such state under applicable law.
(v) The
HELOC
is covered by an ALTA lender’s title insurance policy or equivalent form
acceptable to the Department of Housing and Urban Development, or any successor
thereto, and qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring (subject to the exceptions contained in clause
(i)
above) the HELOC Seller (as assignee), its successors and assigns as to the
first priority lien of the Mortgage in the original principal amount of the
HELOC. Additionally, such lender’s title insurance policy affirmatively insures
ingress and egress, and against encroachments by or upon the Mortgaged Property
or any interest therein. With respect to each HELOC, the HELOC Seller (as
assignee) is the sole insured of such lender’s title insurance policy, and such
lender’s title insurance policy is in full force and effect. No claims have been
made under such lender’s title insurance policy, and no prior holder of the
related Mortgage, including the HELOC Seller, has done, by act or omission,
anything which would impair the coverage of such lender’s title insurance
policy.
(w) Except
as
provided in clause (f), immediately prior to the Cut-off Date, there was
no
default, breach, violation or event of acceleration existing under the Mortgage
or the Mortgage Note and there was no event which, with the passage of time
or
with notice and the expiration of any grace or cure period, would constitute
a
default, breach, violation or event of acceleration, and the HELOC Seller
has
not waived any default, breach, violation or event of acceleration.
(x) There
are
no mechanics’ or similar liens or claims which have been filed for work, labor
or material (and no rights are outstanding that under law could give rise
to
such lien) affecting the related Mortgaged Property which are or may be liens
prior to or equal with, the lien of the related Mortgage.
(y) 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
HELOC
and, the appraisal is in a form acceptable to Xxxxxx Xxx or Xxxxxxx
Mac.
(z) The
origination, servicing and collection practices with respect to each Mortgage
Note and Mortgage, including the establishment, maintenance and servicing
of the
escrow accounts and escrow payments, if any, since origination, have been
conducted in all respects in accordance with the terms of Mortgage Note and
in
compliance with all applicable laws and regulations and, unless otherwise
required by law or Xxxxxx Mae/Xxxxxxx Mac standards, in accordance with the
proper, prudent and customary practices in the mortgage origination and
servicing business. With respect to the escrow accounts and escrow payments,
if
any, and a HELOC all such payments are in the possession or under the control
of
the HELOC Seller (including pursuant to a Subservicing Agreement) and there
exists no deficiencies in connection therewith for which customary arrangements
for repayment thereof have not been made. Any interest required to be paid
pursuant to state and local law has been properly paid and
credited.
(aa) The
Mortgaged Property is free of material damage and waste and there is no
proceeding pending for the total or partial condemnation thereof.
(bb) The
Mortgage contains customary and enforceable provisions to render the rights
and
remedies of the holder thereof adequate for the realization against the
Mortgaged Property of the benefits of the security intended to be provided
thereby, including, (1) in the case of a Mortgage designated as a deed of
trust,
by indenture trustee’s sale, and (2) otherwise by judicial foreclosure. There is
no other exemption available to the Mortgagor which would interfere with
the
right to sell the Mortgaged Property at a indenture trustee’s sale or the right
to foreclose the Mortgage. The Mortgagor has not notified the HELOC Seller
and
the HELOC Seller has no knowledge of any relief requested or allowed to the
Mortgagor under the Servicemembers Civil Relief Act.
(cc) The
Mortgage Note is not and has not been secured by any collateral except the
lien
of the applicable Mortgage.
(dd) In
the
event the Mortgage constitutes a deed of trust, a trustee, duly qualified
under
applicable law to serve as such, has been properly designated and currently
so
serves and is named in the Mortgage, and no fees or expenses are or will
become
payable by the Certificateholders to the indenture trustee under the deed
of
trust, except in connection with a indenture trustee’s sale after default by the
Mortgagor.
(ee) The
Mortgagor has received all disclosure materials required by applicable law
with
respect to the making of the HELOC.
(ff) No
HELOC
was made in connection with the construction or rehabilitation of a Mortgaged
Property.
(gg) The
Mortgaged Property is lawfully occupied under applicable law and all
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect
to
the use and occupancy of the same, including but not limited to certificates
of
occupancy, have been made or obtained from the appropriate
authorities.
(hh) The
assignment of Mortgage with respect to a HELOC is in recordable form and
is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located.
(ii) The
Mortgaged Property consists of a single parcel of real property with or without
a detached single family residence erected thereon, or an individual condominium
unit, a 2-4 family dwelling or an individual unit in a planned unit development
as defined by Xxxxxx Mae, or a townhouse, each structure of which is permanently
affixed to the Mortgaged Property, and is legally classified as real
estate.
(jj) Each
HELOC at the time of origination was underwritten in general in accordance
with
guidelines not inconsistent with the guidelines set forth in the Prospectus
Supplement and generally accepted credit underwriting guidelines.
(kk) No
error,
omission, misrepresentation, fraud or similar occurrence with respect to
a HELOC
has taken place on the part of either HELOC Seller or the related
Originator.
(ll) None
of
the HELOCs are (a) loans subject to 12 CFR Part 226.31, 12 CFR Part 226.32
or 12
CFR Part 226.34 of Regulation Z, the regulation implementing TILA, which
implements the Home Ownership and Equity Protection Act of 1994 (“HOEPA”) or (b)
classified and/or defined as a “high cost home loan” (or a similarly classified
loan using different terminology under a law imposing heightened regulatory
scrutiny or additional legal liability for residential mortgage loans having
high interest rates, points and/or fees) under any federal, state, or local
law,
rule, regulation or ordinance, including, but not limited to, the States
of
Georgia or North Carolina.
(mm) None
of
the HELOCs originated on or after October 1, 2002 and before March 7, 2003
was
secured by property located in the State of Georgia.
(nn) None
of
the HELOCs contains provisions pursuant to which monthly payments are (a)
paid
or partially paid with funds deposited in any separate account established
by
the HELOC Seller, the mortgagor, or anyone on behalf of the mortgagor, (b)
paid
by any source other than the mortgagor or (c) contains any other similar
provisions which may constitute a “buydown” provision. None of the HELOCs is a
graduated payment mortgage loan and no HELOC has a shared appreciation or
other
contingent interest feature.
(oo) Each
HELOC that contains a provision for the assumption or substitution of liability,
pursuant to which the original mortgagor is released from liability and another
person is substituted as the mortgagor and becomes liable under the Mortgage
Note, shall be effective only if such person satisfies the then current
underwriting practices and procedures of prudent mortgage lenders in a state
in
which the mortgaged property is located and the assumption is of equivalent
credit quality as the assigning mortgagor.
(pp) The
Mortgaged Property and all improvements thereon comply with all requirements
of
any applicable zoning and subdivision laws and ordinances.
(qq) 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 HELOC or referred to in the
lender’s title insurance policy delivered to the originator of the related HELOC
and (iii) other matters to which like properties are commonly subject which
do
not materially interfere with the benefits of the security intended to be
provided by such Mortgage Appraisal Form 1004 or Form 2055 with an interior
inspection for first lien HELOCs has been obtained. Form 704, 2065 or 2055
with
an exterior only inspection for junior lien HELOCs has been
obtained.
(rr) None
of
the HELOCs that are secured by property located in the State of Illinois
are in
violation of the provisions of the Illinois Interest Act.
(ss) Each
Prepayment Charge is enforceable and was originated in compliance with all
applicable federal, state and local laws.
(tt) With
respect to any HELOC that contains a provision permitting imposition of a
premium upon a prepayment prior to maturity, the prepayment premium is disclosed
to the borrower in the loan documents pursuant to applicable state and federal
law.
(uu) No
HELOC
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
5.7, Appendix E attached hereto as Exhibit 6).
It
is
understood and agreed that the representations and warranties set forth in
this
Section 7 will inure to the benefit of the Purchaser, its successors and
assigns, notwithstanding any restrictive or qualified endorsement on any
Mortgage Note or assignment of Mortgage or the examination of any Mortgage
File.
Upon any substitution for a HELOC, the representations and warranties set
forth
above shall be deemed to be made by the HELOC Seller as to any Substitute
HELOC
as of the date of substitution.
Upon
discovery or receipt of notice by the HELOC Seller, the Purchaser, the Issuer,
the Note Insurer or the Indenture Trustee of a breach of any representation
or
warranty of the HELOC Seller set forth in this Section 7 which materially
and
adversely affects the value of the interests of the Purchaser, the Issuer,
the
Note Insurer, the Noteholders or the Indenture Trustee in any of the HELOCs
delivered to the Purchaser pursuant to this Agreement or which adversely
affects
the interests of the Note Insurer, 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 HELOC Seller, or the date the HELOC
Seller is notified by the party discovering or receiving notice of such breach
(whichever occurs earlier), the HELOC Seller will (i) cure such breach in
all
material respects, (ii) purchase the affected HELOC at the applicable Purchase
Price, or (iii) if within two years of the Closing Date, substitute a qualifying
Substitute HELOC in exchange for such HELOC; 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 (kk) of this Section 7, then, in each case, in lieu of purchasing
such
HELOC from the Trust Estate at the Purchase Price, the HELOC Seller shall
pay
the amount of the Prepayment Charge (net of any amount previously collected
by
or paid to the Trust Estate in respect of such Prepayment Charge) from its
own
funds and without reimbursement therefor, and the HELOC Seller shall have
no
obligation to repurchase or substitute for such HELOC. The obligations of
the
HELOC Seller to cure, purchase or substitute a qualifying Substitute HELOC
shall
constitute the Purchaser’s, the Indenture Trustee’s, the Note Insuer’s and the
Noteholder’s sole and exclusive remedy under this Agreement or otherwise
respecting a breach of representations or warranties hereunder with respect
to
the HELOCs, except for the obligation of the HELOC Seller to indemnify the
Purchaser for such breach as set forth in and limited by Section 14
hereof.
Any
cause
of action against the HELOC Seller or relating to or arising out of a breach
by
the HELOC Seller of any representations and warranties made in this Section
7
shall accrue as to any HELOC upon (i) discovery of such breach by the HELOC
Seller or notice thereof by the party discovering such breach and (ii) failure
by the HELOC Seller to cure such breach, purchase such HELOC or substitute
a
qualifying Substitute HELOC pursuant to the terms hereof.
SECTION
8. Representations
and Warranties Concerning the HELOC Seller.
(a) As
of the
date hereof and as of the Closing Date, the HELOC Seller represents and warrants
to the Purchaser as to itself in the capacity indicated as follows:
(b) The
HELOC
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 HELOC Seller’s business as
presently conducted or on the HELOC Seller’s ability to enter into this
Agreement and to consummate the transactions contemplated hereby;
(c) the
HELOC
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;
(d) the
execution and delivery by the HELOC Seller of this Agreement has been duly
authorized by all necessary action on the part of the HELOC Seller; and neither
the execution and delivery of this Agreement, nor the consummation of the
transactions herein contemplated, nor compliance with the provisions hereof
or
thereof, will conflict with or result in a breach of, or constitute a default
under, any of the provisions of any law, governmental rule, regulation,
judgment, decree or order binding on the HELOC Seller or its properties or
the
charter or by-laws of the HELOC Seller, except those conflicts, breaches
or
defaults which would not reasonably be expected to have a material adverse
effect on the HELOC Seller’s ability to enter into this Agreement and to
consummate the transactions contemplated hereby;
(e) the
execution, delivery and performance by the HELOC 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;
(f) this
Agreement has been duly executed and delivered by the HELOC Seller and, assuming
due authorization, execution and delivery by the Purchaser or the parties
thereto, constitutes a valid and binding obligation of the HELOC 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);
(g) there
are
no actions, suits or proceedings pending or, to the knowledge of the HELOC
Seller, threatened against the HELOC Seller, before or by any court,
administrative agency, arbitrator or governmental body (i) with respect to
any
of the transactions contemplated by this Agreement or (ii) with respect to
any
other matter which in the judgment of the HELOC Seller could reasonably be
expected to be determined adversely to the HELOC Seller and if determined
adversely to the HELOC Seller materially and adversely affect the HELOC Seller’s
ability to perform its obligations under this Agreement; and the HELOC 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
(h) the
HELOC
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 HELOC Seller as follows:
(a) the
Purchaser (i) is a limited liability company duly organized, validly existing
and in good standing under the laws of the State of Delaware and (ii) is
qualified and in good standing to do business in each jurisdiction where
such
qualification is necessary, except where the failure so to qualify would
not
reasonably be expected to have a material adverse effect on the Purchaser’s
business as presently conducted or on the Purchaser’s ability to enter into this
Agreement and to consummate the transactions contemplated hereby;
(b) the
Purchaser has full power to own its property, to carry on its business as
presently conducted and to enter into and perform its obligations under this
Agreement;
(c) the
execution and delivery by the Purchaser of this Agreement has been duly
authorized by all necessary action on the part of the Purchaser; and neither
the
execution and delivery of this Agreement, nor the consummation of the
transactions herein contemplated, nor compliance with the provisions hereof,
will conflict with or result in a breach of, or constitute a default under,
any
of the provisions of any law, governmental rule, regulation, judgment, decree
or
order binding on the Purchaser or its properties or the certificate of formation
or limited liability company agreement of the Purchaser, except those conflicts,
breaches or defaults which would not reasonably be expected to have a material
adverse effect on the Purchaser’s ability to enter into this Agreement and to
consummate the transactions contemplated hereby or thereby;
(d) the
execution, delivery and performance by the Purchaser of this Agreement and
the
consummation of the transactions contemplated hereby or thereby 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) this
Agreement has been duly executed and delivered by the Purchaser and, assuming
due authorization, execution and delivery by the HELOC Seller, constitutes
a
valid and binding obligation of the Purchaser enforceable against it in
accordance with its terms (subject to applicable bankruptcy and insolvency
laws
and other similar laws affecting the enforcement of the rights of creditors
generally);
(f) there
are
no actions, suits or proceedings pending or, to the knowledge of the Purchaser,
threatened against the Purchaser, before or by any court, administrative
agency,
arbitrator or governmental body (i) with respect to any of the transactions
contemplated by this Agreement or (ii) with respect to any other matter which
in
the judgment of the Purchaser could reasonably be expected to be determined
adversely to the Purchaser and if determined adversely to the Purchaser
materially and adversely affect the Purchaser’s ability to perform its
obligations under this Agreement; and the Purchaser is not in default with
respect to any order of any court, administrative agency, arbitrator or
governmental body so as to materially and adversely affect the transactions
contemplated by this Agreement; and
(g) the
Purchaser’s Information (as defined in Section 13(b) hereof) does not include
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading.
SECTION
10. Conditions
to Closing.
(a)
The
obligations of the Purchaser under this Agreement will be subject to the
satisfaction, on or prior to the Closing Date, of the following
conditions:
(1) Each
of
the obligations of the HELOC 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 HELOC Seller under this Agreement shall be true and
correct as of the date or dates specified in all material respects; and no
event
shall have occurred which, with notice or the passage of time, would constitute
a default under this Agreement or the Sale and Servicing Agreement; and the
Purchaser shall have received certificates to that effect signed by authorized
officers of the HELOC 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) The
Trust
Agreement, in form and substance reasonably satisfactory to the Purchaser,
and
all documents required thereby duly executed by all signatories;
(ii) The
Sale
and Servicing Agreement, in form and substance reasonably satisfactory to
the
HELOC Seller, Issuer, Indenture Trustee, Securities Administrator and the
Purchaser, and all documents required thereby duly executed by all
signatories;
(iii) The
Indenture, in form and substance reasonably satisfactory to the Indenture
Trustee, Securities Administrator, the Issuer and the Purchaser, and all
documents required thereby duly executed by all signatories;
(iv) A
certificate of an officer of the HELOC Seller dated as of the Closing Date,
in a
form reasonably acceptable to the Purchaser, and attached thereto the
resolutions of the HELOC Seller authorizing the transactions contemplated
by
this Agreement, together with copies of the charter and by-laws of the HELOC
Seller;
(v) One
or
more opinions of counsel from the HELOC Seller’s counsel otherwise in form and
substance reasonably satisfactory to the Purchaser, the Issuer, the Note
Insurer, the Indenture Trustee and each Rating Agency;
(vi) A
letter
from each of the Rating Agencies giving each Class of Notes set forth on
Schedule A the rating set forth on Schedule A; 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 Notes.
(2) The
Notes
to be sold to Bear Xxxxxxx pursuant to the Underwriting Agreement and the
Purchase Agreement shall have been issued and sold to Bear Xxxxxxx.
(3) The
HELOC
Seller shall have furnished to the Purchaser such other certificates of its
officers or others and such other documents and opinions of counsel to evidence
fulfillment of the conditions set forth in this Agreement and the transactions
contemplated hereby as the Purchaser and its counsel may reasonably
request.
(b) The
obligations of the HELOC 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, and the HELOC Seller shall have received
a
certificate to that effect signed by an authorized officer of the
Purchaser.
(2) The
HELOC
Seller shall have received copies of all of the following closing documents,
in
such forms as are agreed upon and reasonably acceptable to the HELOC Seller,
duly executed by all signatories other than the HELOC Seller as required
pursuant to the respective terms thereof:
(i) The
Trust
Agreement, in form and substance reasonably satisfactory to the HELOC Seller,
and all documents required thereby duly executed by all
signatories;
(ii) The
Sale
and Servicing Agreement, in form and substance reasonably satisfactory to
the
HELOC Seller, Issuer, the Note Insurer, Indenture Trustee, Securities
Administrator and the Purchaser, and all documents required thereby duly
executed by all signatories;
(iii) The
Indenture, in form and substance reasonably satisfactory to the Indenture
Trustee, the Note Insurer, Securities Administrator, the Issuer and the
Purchaser, and all documents required thereby duly executed by all
signatories;
(iv) A
certificate of an officer of the Purchaser dated as of the Closing Date,
in a
form reasonably acceptable to the HELOC Seller, and attached thereto the
resolutions of the Purchaser authorizing the transactions contemplated by
this
Agreement and the Sale and Servicing Agreement, together with copies of the
Purchaser’s articles of incorporation, and evidence as to the good standing of
the Purchaser dated as of a recent date;
(v) One
or
more opinions of counsel from the Purchaser’s counsel in form and substance
reasonably satisfactory to the HELOC Seller; and
(vi) 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 Notes;
SECTION
11. Fees
and Expenses.
Subject
to Section 16 hereof, the HELOC 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
HELOC 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 Notes 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 Indenture Trustee which shall include without limitation
the
fees and expenses of the Indenture Trustee (and the fees and disbursements
of
its counsel) with respect to (A) legal and document review of this Agreement,
the Trust Agreement, the Indenture, the Sale and Servicing Agreement, the
Notes
and related agreements, (B) attendance at the Closing and (C) review of the
HELOCs to be performed by the Custodian, (vi) the expenses for printing or
otherwise reproducing the Notes, 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
Indenture Trustee) from the HELOC Seller to the Indenture 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 HELOCs and by Bear Xxxxxxx in connection with the sale of the Notes.
The
HELOC 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 HELOCs
described in the Mortgage Loan Schedule and will compare those characteristics
to the description of the HELOCs contained in the Free Writing Prospectus
under
the captions “Summary—HELOCs” and “The Mortgage Pool” and in Schedule A thereto.
Deloitte & Touche LLP will review the characteristics of a sample of the
HELOCs described in the Mortgage Loan Schedule and will compare those
characteristics to the description of the HELOCs contained in the Prospectus
Supplement under the captions “Summary—HELOCs” and “The Mortgage Pool” and in
Schedule A thereto. The HELOC 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 Master Servicer’s or a
Servicer’s servicing portfolio is included in the Prospectus Supplement under
the caption “Servicing of the HELOCs—The Master Servicer—Delinquency and
Foreclosure Experience of EMC,” a letter from the certified public accountant
for the Master Servicer and such Servicer or Servicers will be delivered
to the
Purchaser dated the date of the Prospectus Supplement, in the form previously
agreed to by the HELOC Seller and the Purchaser, with respect to such
statistical information.
SECTION
13. Indemnification.
(a) The
HELOC
Seller shall indemnify and hold harmless the Purchaser and its directors,
officers and controlling persons (as defined in Section 15 of the Securities
Act) from and against any loss, claim, damage or liability or action in respect
thereof, to which they or any of them may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon (i) any untrue statement of a material fact
contained in the HELOC Seller’s Information as identified in Exhibit 3, the
omission to state in the Free Writing Prospectus, the Prospectus Supplement
or
Prospectus (or any amendment thereof or supplement thereto approved by the
HELOC
Seller and in which additional HELOC Seller’s Information is identified), in
reliance upon and in conformity with HELOC Seller’s Information a material fact
required to be stated therein or necessary to make the statements therein
in
light of the circumstances in which they were made, not misleading, (ii)
any
representation or warranty assigned or made by the HELOC Seller in Section
7 or
Section 8 hereof being, or alleged to be, untrue or incorrect, or (iii) any
failure by the HELOC Seller to perform its obligations under this Agreement;
and
the HELOC 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 HELOC
Seller otherwise may have to the Purchaser or any other such indemnified
party.
(b) The
Purchaser shall indemnify and hold harmless the HELOC Seller and its respective
directors, officers and controlling persons (as defined in Section 15 of
the
Securities Act) from and against any loss, claim, damage or liability or
action
in respect thereof, to which they or any of them may become subject, under
the
Securities Act or otherwise, insofar as such loss, claim, damage, liability
or
action arises out of, or is based upon (i) any untrue statement of a material
fact contained in the Purchaser’s Information as identified in Exhibit 4, or 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, (ii) any representation or warranty made
by the
Purchaser in Section 9 hereof being, or alleged to be, untrue or incorrect,
or
(iii) any failure by the Purchaser to perform its obligations under this
Agreement; and the Purchaser shall reimburse the HELOC 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
HELOC
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 14 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 HELOC Seller on the one hand and the Purchaser on
the
other from the purchase and sale of the HELOCs, the offering of the Notes
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 HELOC Seller shall be directed to EMC Mortgage Corporation, 0000 Xxxx
Xxxxx Xxxxx, Xxxxxxxxxx, XX 00000, Attention: President (Telecopy:
(000)000-0000); notices to the Purchaser shall be directed to Bear Xxxxxxx
Asset
Backed Securities I LLC, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (Telecopy
# (000) 000-0000), Attention: Chief Counsel; and notices to the Note Insurer
shall be directed to Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn:
Consumer Asset-Backed Securities Group - SACO I Trust 2006-8, Policy No.
AB1020BE),
with a
copy to the General Counsel at the above address, 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 HELOCs.
The
Purchaser retains the right to assign the HELOCs and any or all of its interest
under this Agreement to the Issuer, with the understanding that the Issuer
will
then assign such rights to the Indenture Trustee pursuant to the Indenture,
without the consent of the HELOC Seller, and, upon such assignment, the
Indenture Trustee, as the ultimate assignee, 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 Issuer or the Indenture Trustee
with
respect to a breach of representation or warranty of the HELOC Seller shall
be
the cure, purchase or substitution obligations of the HELOC 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 11(a) hereof are not
fulfilled as and when required to be fulfilled or (c) by the HELOC Seller,
if
the conditions to the HELOC Seller’s obligation to close set forth under Section
11(b) hereof are not fulfilled as and when required to be fulfilled. In the
event of termination pursuant to clause (b), the HELOC 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 HELOC Seller submitted pursuant
hereto, shall remain operative and in full force and effect and shall survive
delivery of the HELOCs to the Purchaser (and by the Purchaser to the Indenture
Trustee). Subsequent to the delivery of the HELOCs to the Purchaser, each
of the
HELOC Seller’s representations and warranties contained herein with respect to
the HELOCs shall be deemed to relate to the HELOCs actually delivered to
the
Purchaser and included in the Mortgage Loan Schedule and any Substitute
HELOC.
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.
This
Agreement shall bind and inure to the benefit of and be enforceable by the
HELOC
Seller and the Purchaser and their permitted successors and assigns and,
to the
extent specified in Section 14 hereof, Bear Xxxxxxx, and their directors,
officers and controlling persons (within the meaning of federal securities
laws). The HELOC Seller acknowledges and agrees that the Purchaser may assign
its rights under this Agreement (including, without limitation, with respect
to
the HELOC Seller’s representations and warranties respecting the HELOCs) to the
Indenture Trustee. Any person into which any HELOC Seller may be merged or
consolidated (or any person resulting from any merger or consolidation involving
such HELOC Seller), any person resulting from a change in form of such HELOC
Seller or any person succeeding to the business of such HELOC Seller, shall
be
considered the “successor” of such HELOC 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
HELOC Seller.
The
HELOC 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.
SECTION
27. Benefit
of Agreement.
The Note
Insurer and any successor and assign shall be a third-party beneficiary to
the
provisions of this Agreement. To the extent that this Agreement confers upon
or
gives or grants to the Note Insurer any right, remedy or claim under or by
reason of this Agreement, the Note Insurer may enforce any such right, remedy
or
claim conferred, given or granted hereunder. Nothing in this Agreement, express
or implied, shall give to any Person, other than the parties hereto and their
successors hereunder, and the Noteholders and the Note Insurer, any benefit
of
any legal or equitable right, remedy or claim under this Agreement.
[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.
EMC
MORTGAGE CORPORATION
|
|
By:________________________________________
|
|
Name:
|
|
Title:
|
|
BEAR
XXXXXXX ASSET BACKED SECURITIES LLC
|
|
By:________________________________________
|
|
Name:
|
|
Title:
|
EXHIBIT
1
CONTENTS
OF MORTGAGE FILE
With
respect to each HELOC, 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 Citibank, N.A., as Indenture Trustee for Noteholders of
SACO
I
Trust 2006-8, Mortgage-Backed Notes, Series 2006-8,”
showing to the extent available to the HELOC Seller an unbroken chain of
endorsements from the original payee thereof to the Person endorsing it to
the
Indenture Trustee.
(ii) The
original Mortgage and if the related HELOC is a MOM Loan, noting the presence
of
the MIN and language indicating that such HELOC is a MOM Loan, which shall
have
been recorded (or if the original is not available, a copy), with evidence
of
such recording indicated thereon (or if clause (x) in the proviso below applies,
shall be in recordable form);
(iii) unless
the HELOC 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 Indenture Trustee of the Mortgage
with
respect to each HELOC in the name of “Citibank, N.A., as Indenture Trustee for
Noteholders of SACO I Trust 2006-8, Mortgage-Backed Notes, Series 2006-8,” 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 HELOC 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 HELOC Seller may deliver the
following documents, under the circumstances set forth below: (x) if any
Mortgage, assignment thereof to the Indenture 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 HELOC 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 HELOCs identified in the list set forth in Exhibit 1 to the Sale 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 HELOCs 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 Indenture 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 HELOCs, in the Protected Account
or
in the Distribution Account on the Closing Date. In the case of the documents
referred to in clause (x) above, the Purchaser shall deliver such documents
to
the Indenture Trustee or its related Custodian promptly after they are received.
The HELOC 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 Indenture Trustee to be
submitted for recording promptly after the Closing Date; provided that the
HELOC
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
Indenture Trustee delivered by the HELOC Seller to the Indenture Trustee,
and
the Rating Agencies, the recordation of such assignment is not necessary
to
protect the Indenture Trustee’s interest in the related HELOCor (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 the HELOC Seller and its successors
and assigns. In the event that the HELOC Seller, the Purchaser or the Master
Servicer gives written notice to the Indenture Trustee that a court has
recharacterized the sale of the HELOCs as a financing, the HELOC Seller shall
submit or cause to be submitted for recording as specified above or, should
the
HELOC 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 HELOC Seller or the Master Servicer as a result of such Person
having completed a Request for Release, the related Custodian shall, if not
so
completed, complete the assignment of the related Mortgage in the manner
specified in clause (iii) above.
EXHIBIT
2
MORTGAGE
LOAN SCHEDULE INFORMATION
The
Mortgage Loan Schedule shall set forth the following information with respect
to
each HELOC:
(i) |
the
HELOC identifying number;
|
(ii) |
the
current mortgage rate;
|
(iii) |
the
Master Servicing Fee;
|
(iv) |
the
Indenture Trustee Fee;
|
(v) |
the
lender paid primary mortgage insurance fee, if
any;
|
(vi) |
the
current net mortgage rate;
|
(vii) |
the
stated maturity date;
|
(viii) |
the
original principal balance;
|
(ix) |
the
current principal balance;
|
(x) |
the
stated original term to maturity;
|
(xi) |
the
stated remaining term to maturity;
|
(xii) |
the
property type;
|
(xiii) |
the
MIN with respect to each MOM Loan;
|
(xiv) |
a
code indicating whether the HELOC is a HELOC;
and
|
(xv) |
the
Custodian.
|
Such
schedule shall also set forth the aggregate Cut-off Date Principal Balance
for
all of the HELOCs.
EXHIBIT
3
HELOC
SELLER’S INFORMATION
All
information in the Prospectus Supplement described under the following captions:
“Summary—HELOCS”, “The Mortgage Pool”, “The Sponsor” and “Schedule A-Mortgage
Pool Information.”
EXHIBIT
4
PURCHASER’S
INFORMATION
All
information in the Prospectus Supplement and the Prospectus, except the HELOC
Seller’s Information.
EXHIBIT
5
SCHEDULE
OF LOST NOTES
Available
Upon Request
EXHIBIT
6
REVISED
April 18, 0000
XXXXXXXX
X - 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 Xxx. §§ 00-00-000 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.
Xxx.
§§ 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. Xxx. §§
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
Xxx.
§§ 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
Xxx.
§§ 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. Xxx.
§§
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. 000 - Xxxx Xxxx Xxxx
Xxxx
Xxx, Xx. 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
Xxxx 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 Xxx.
§§ 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
Xxx.
§§ 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 Xxx. §§ 31-17-1 et
seq.
Effective
June 5, 0000
|
Xxxx
Xxxxxxxx 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
Xxx.
§§ 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
Xxx.
§§ 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 Xxx.
§§ 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 NOTES
Public
Notes
Class
|
S&P
|
Xxxxx’x
|
Class
A
|
AAA
|
Aaa
|
Class
A-IO
|
AAA
|
Aaa
|
Class
B
|
BB
|
Ba2
|
None
of
the above ratings has been lowered since the respective dates of such
letters.
EXHIBIT
D
Form
of
Company Certification
FORM
OF
BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE
Re: 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]
[Securities Administrator] [Indenture 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 HELOCs by the Company during 200[
]
that were delivered by the Company to the [Depositor] [Master Servicer]
[Securities Administrator] [Indenture 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] [Securities Administrator] [Indenture 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
E
Form
of
Policy
[TO
BE
INCLUDED]
EXHIBIT
F
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
Indenture
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
indenture 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
|
IndentureTrustee
(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
|
||||||||||
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 indenture trustee’s records as to the total unpaid
principal balance and number of Pool Assets serviced by the related
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 related
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
|
X
|
X1
|
|||||||
1122(d)(4)(iv)
|
Payments
on pool assets, including any payoffs, made in accordance with the
related
pool asset documents are posted to the related 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
related Servicer’s records regarding the pool assets agree with the
related 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
|
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 related 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.
|
X
|
X
|
___________
(1)
Only with respect to the logistics of
adding/removing or substituting HELOC files.
EXHIBIT
G
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 4.16.
Under
Item 1 of Form 10-D: a) items marked “Indenture 7.04 Statement” are required to
be included in the periodic Payment Date statement under Section 7.04 of the
Indenture, provided by the Securities Administrator based on information
received from the Master Servicer and each applicable Servicer; and b) items
marked “Form 10-D report” are required to be in the Form 10-D report but not the
Indenture 7.04 Statement, 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 of Form 8-K and Form 10-K set forth in this
exhibit shall be sent to the Securities Administrator and the
Depositor.
Form
|
Item
|
Description
|
Servicers
|
Master
Servicer
|
Securities
Administrator
|
Custodian
|
Indenture
Trustee
(nominal)
|
Depositor
|
Sponsor
|
|
10-D
|
Must
be filed within 15 days of the payment 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 payment dates for the payment
period.
|
X
(Indenture
7.04 Statement)
|
|||||||||
(2)
Cash flows received and the sources thereof for distributions, fees
and
expenses.
|
X
(Indenture
7.04 Statement)
|
|||||||||
(3)
Calculated amounts and distribution of the flow of funds for the
period
itemized by type and priority of payment, including:
|
X
(Indenture
7.04 Statement)
|
|||||||||
(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
(Indenture
7.04 Statement)
|
|||||||||
(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
(Indenture
7.04 Statement)
|
|||||||||
(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
(Indenture
7.04 Statement)
|
|||||||||
(iv)
The amount of excess cash flow or excess spread and the disposition
of
excess cash flow.
|
X
(Indenture
7.04 Statement)
|
|||||||||
(4)
Beginning and ending principal balances of the asset-backed
securities.
|
X
(Indenture
7.04 Statement)
|
|||||||||
(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
(Indenture
7.04 Statement)
|
|||||||||
(6)
Beginning and ending balances of transaction accounts, such as reserve
accounts, and material account activity during the period.
|
X
(Indenture
7.04 Statement)
|
|||||||||
(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
(Indenture
7.04 Statement)
|
|||||||||
(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
(Indenture
7.04 Statement)
|
Updated
pool composition information fields to be as specified by Depositor
from
time to time
|
||||||||
(9)
Delinquency and loss information for the period.
|
X
(Indenture
7.04 Statement)
|
|||||||||
In
addition, describe any material changes to the information specified
in
Item 1100(b)(5) of Regulation AB regarding the pool assets.
(methodology)
|
X
|
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
(Indenture
7.04 Statement)
|
|||||||||
(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
(Indenture
7.04 Statement)
|
|||||||||
(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
(Indenture
7.04 Statement)
|
|||||||||
(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 Securityholders, including
proceedings known to be contemplated by governmental
authorities:
|
||||||||||
Sponsor
(Seller)
|
X
|
|||||||||
Depositor
|
X
|
|||||||||
Indenture
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
(only
with respect to any servicer event of default)
|
|
||||||||
5
|
Submission
of Matters to a Vote of Securityholders
|
|||||||||
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
|
|||||||||
Requesting
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
|
|||||||||
Requesting
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, Securities 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 6.06 statement
|
[X]
|
X
|
[X]
|
|||||||
3.03
|
Material
Modification to Rights of Securityholders
|
|||||||||
Disclosure
is required of any material modification to documents defining the
rights
of Securityholders, including the Sale and Servicing Agreement, the
Indenture and the Trust 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 4.16]
|
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, securities
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 required by successor indenture trustee)
|
|||||||||
Reg
AB disclosure about any new securities administrator is also
required.
|
X
|
|||||||||
6.03
|
Change
in Credit Enhancement or Other External 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
Securityholders.
|
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
|
|||||||||
Requesting
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
|
|||||||||
Requesting
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 Securityholders, 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
Securityholders:
|
||||||||||
Sponsor
(Seller)
|
X
|
|||||||||
Depositor
|
X
|
|||||||||
Indenture
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
|
X
|
EXHIBIT
H
Additional
Disclosure Notification
Bear
Xxxxxxx Asset Backed Securities I LLC
000
Xxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Fax:
(000) 000-0000
E-mail:
xxxxxxxxxxxxxxxxxx@xxxx.xxx
LaSalle
Bank National Association, as Securities Administrator
000
X.
XxXxxxx Xx., Xxxxx 0000
Xxxxxxx,
Xxxxxxxx 00000
Fax:
(000) 000-0000
E-mail:
xxxxx@xxxxxxx.xxx
Attn:
Global Securities and Trust Services Group - SACO I TRUST 2006-8 - SEC REPORT
PROCESSING
RE:
**Additional Form [ ] Disclosure**Required
Ladies
and Gentlemen:
In
accordance with Section 4.16 of the Sale and Servicing Agreement, dated as
of
September 15, 2006, among Bear Xxxxxxx Asset Backed Securities I LLC, as
depositor, SACO I Trust 2006-8, as issuing entity, Citibank, N.A., as indenture
trustee, LaSalle Bank National Association, as master servicer and as securities
administrator, and EMC Mortgage Corporation, as seller and company, the
Undersigned, as [Name of Party], 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: