Filed On 10/3/06 5:04pm ET · SEC File 333-131374-20 · Accession Number 882377-6-3331
As Of Filer Filing As/For/On Docs:Pgs Issuer Agent
10/03/06 SACO I Trust 2006-8 8-K/A{9} 9/15/06 2:277 Thacher Proffitt..LLP/FA
Amendment to Current Report · Form 8-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 8-K/A Bear Stearns Asset Backed Securities I Llc HTML 20K
2: EX-99.1 Sale and Servicing Agreement HTML 7,049K
EX-99.1 · Sale and Servicing Agreement
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BEAR
STEARNS ASSET BACKED SECURITIES I LLC,
as
Depositor
SACO
I
TRUST 2006-8,
as
Issuing Entity
CITIBANK,
N.A.,
LASALLE
BANK NATIONAL ASSOCIATION,
as
Master
Servicer and Securities Administrator
and
EMC
MORTGAGE CORPORATION,
as
Sponsor and Company
___________________________
| |
|
SALE
AND SERVICING AGREEMENT
|
| |
|
|
___________________________
Bear
Stearns Asset Backed Securities I LLC
SACO
I
Trust 2006-8,
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.
|
|
|
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
Stearns 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 (“EDGAR”), 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 EDGAR-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 EDGAR-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 Sarbanes-Oxley Certification (“Sarbanes-Oxley
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 EDGAR-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 “Sarbanes-Oxley
Certification”),
required to be included therewith pursuant to the Sarbanes-Oxley 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 Sarbanes-Oxley 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
Sarbanes-Oxley 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, Stearns & Co. Inc., Attn: Managing Director
Analysis and Control, One Metrotech Center North, Brooklyn, New York 11202-3859.
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.
(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 RegABNotifications@bear.com or, in the case of a notification,
telephonically by calling Reg AB Compliance Manager at
212-272-7525.
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 Stearns 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;
(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 Fannie Mae or Freddie 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
Fannie Mae- or Freddie 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, 383 Madison Avenue, New York, New York
10179, 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, 2780 Lake Vista Drive, Lewisville, Texas 75067, 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,
135
South
LaSalle Street, Suite 1511, Chicago, IL 60603 (Attention: Global Securities
and
Trust Services - SACO I Trust 2006-8), facsimile no.: (312) 904-1368, 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, 1100 North Market Street, Wilmington, Delaware 19890;
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, 1100 North Market Street,
Wilmington, Delaware 19890; 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 McGraw-Hill Companies, Inc., 55 Water Street, New York, New
York 10041, and Moody’s Investors Service, Inc., 99 Church Street, New York, New
York 10007, and (viii) in the case of the Note Insurer, Ambac Assurance
Corporation, One State Street Plaza, New York, New York 10004, 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.
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BEAR
STEARNS ASSET BACKED SECURITIES I LLC, as Depositor
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Title:
Vice President
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SACO
I TRUST 2006-8, as Issuing Entity
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By:
WILMINGTON TRUST COMPANY, not in its individual capacity, but solely
as
Owner Trustee
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Title:
Vice President
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Title:
Vice President
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EMC
MORTGAGE CORPORATION, as Sponsor and Company
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Title: Senior
Vice President
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LASALLE
BANK NATIONAL ASSOCIATION, as Master Servicer
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Title:
Assistant Vice President
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LASALLE
BANK NATIONAL ASSOCIATION, as Securities Administrator
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Title:
Assistant Vice President
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STATE
OF NEW YORK
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)
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)
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ss.:
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COUNTY
OF NEW YORK
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)
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On
the
15th day of September, 2006 before me, a notary public in and for said State,
personally appeared Baron Silverstein, known to me to be a Vice President of
Bear Stearns 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.
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______________________________________
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Notary
Public
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[Notarial
Seal]
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STATE
OF DELAWARE
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)
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)
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ss.:
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COUNTY
OF _____________
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)
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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.
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______________________________________
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Notary
Public
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[Notarial
Seal]
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STATE
OF _____________
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)
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)
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ss.:
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COUNTY
OF ___________
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)
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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.
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______________________________________
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Notary
Public
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[Notarial
Seal]
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STATE
OF _____________
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)
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)
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ss.:
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COUNTY
OF ___________
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)
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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.
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______________________________________
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Notary
Public
|
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|
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[Notarial
Seal]
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STATE
OF _______________
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)
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)
|
ss.:
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|
COUNTY
OF _____________
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)
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|
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.
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______________________________________
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Notary
Public
|
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[Notarial
Seal]
|
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STATE
OF _________________
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)
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)
|
ss.:
|
|
COUNTY
OF _______________
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)
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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.
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_____________________________________
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Notary
Public
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[Notarial
Seal]
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EXHIBIT
A
MORTGAGE
LOAN SCHEDULE
CITY1 STATE ZIP_CODE PROPTYPE CURRENT_GROSS_COUPON SERV_FEE LPMI MSERV CURRENT_NET_ COUPON MATURITY_DATE STATED_ ORIGINAL_TERM STATED_REM_ TERM
----- ----- -------- -------- -------------------- -------- ---- ----- ------------------- ------------- ------- ------------- ----------------
1 St. Clair Shores MI 48081 Single Family 9.25 0.5 0 0.0195 8.7305 9/15/2019 180 157
2 Charlotte NC 28227 Single Family 10.5 0.5 0 0.0195 9.9805 8/1/2019 180 156
3 Polson MT 59860 Single Family 11 0.5 0 0.0195 10.4805 8/15/2029 300 276
4 Wexford PA 15090 Condominium 10.5 0.5 0 0.0195 9.9805 9/15/2019 180 157
5 Chicago IL 60610 Hi-Rise Condo 10.75 0.5 0 0.0195 10.2305 7/15/2019 180 155
6 Sun City CA 92586 PUD 11.25 0.5 0 0.0195 10.7305 7/15/2019 180 155
7 MIAMI FL 33135 Single Family 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
8 COLORADO SPRINGS CO 80903 Single Family 12 0.5 0 0.0195 11.4805 3/1/2031 300 295
9 PAYSON UT 84651 Single Family 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
10 MIAMI FL 33177 Single Family 12.5 0.5 0 0.0195 11.9805 3/1/2031 300 295
11 LAKEWOOD CO 80227 PUD 11 0.5 0 0.0195 10.4805 3/1/2031 300 295
12 LITHIA FL 33547 PUD 10.75 0.5 0 0.0195 10.2305 3/1/2031 300 295
13 MONTEBELLO CA 90640 Single Family 10.05 0.5 0 0.0195 9.5305 5/11/2030 300 285
14 LOS ANGELES (SA CA 90732 Condominium 10.525 0.5 0 0.0195 10.0055 5/26/2030 300 285
15 FALLS CHURCH VA 22042 Single Family 10.425 0.5 0 0.0195 9.9055 5/30/2030 300 285
16 PALM HARBOR FL 34683 PUD 10.65 0.5 0 0.0195 10.1305 6/10/2030 300 286
17 LONG BEACH CA 90813 Single Family 10.4 0.5 0 0.0195 9.8805 5/16/2030 300 285
18 DAVENPORT CA 95017 Single Family 9.575 0.5 0 0.0195 9.0555 5/19/2030 300 285
19 GARDENA CA 90247 Single Family 10.275 0.5 0 0.0195 9.7555 6/4/2030 300 286
20 PERRIS CA 92571 Single Family 10.4 0.5 0 0.0195 9.8805 6/1/2030 300 286
21 LAKESIDE CA 92040 Condominium 10.8 0.5 0 0.0195 10.2805 5/26/2030 300 285
22 SAN JOSE CA 95132 Single Family 10.55 0.5 0 0.0195 10.0305 5/27/2030 300 285
23 OVERLAND PARK KS 66204 Single Family 9.775 0.5 0 0.0195 9.2555 5/20/2030 300 285
24 INGLEWOOD CA 90301 Single Family 10.275 0.5 0 0.0195 9.7555 5/27/2030 300 285
25 SAN JOSE CA 95121 PUD 9.775 0.5 0 0.0195 9.2555 5/16/2030 300 285
26 ELK GROVE CA 95757 Single Family 10.65 0.5 0 0.0195 10.1305 5/11/2030 300 285
27 BOWIE MD 20716 PUD 10.8 0.5 0 0.0195 10.2805 6/20/2030 300 286
28 MASSAPEQUA PARK NY 11762 Single Family 10.975 0.5 0 0.0195 10.4555 5/11/2030 300 285
29 ROLLING HILLS ESTATES CA 90274 Condominium 10.05 0.5 0 0.0195 9.5305 5/10/2030 300 285
30 LINCOLN CA 95648 Single Family 10.525 0.5 0 0.0195 10.0055 5/6/2030 300 285
31 PHOENIX AZ 85003 Single Family 9.525 0.5 0 0.0195 9.0055 5/19/2030 300 285
32 WHITTIER CA 90604 Single Family 10.675 0.5 0 0.0195 10.1555 5/18/2030 300 285
33 PEMBROKE PINES FL 33026 PUD 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
34 CLOVIS CA 93611 Single Family 11 0.5 0 0.0195 10.4805 3/1/2031 300 295
35 ATLANTA GA 30318 Single Family 9.75 0.5 0 0.0195 9.2305 3/1/2031 300 295
36 WOODBRIDGE VA 22192 PUD 11.5 0.5 0 0.0195 10.9805 3/1/2031 300 295
37 PALM COAST FL 32137 PUD 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
38 MIRAMAR FL 33023 Single Family 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
39 ATWATER CA 95301 Single Family 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
40 DUBLIN OH 43016 Condominium 12.75 0.5 0 0.0195 12.2305 3/1/2031 300 295
41 BLAINE MN 55434 Townhouse 9.875 0.5 0 0.0195 9.3555 3/1/2031 300 295
42 AUSTELL GA 30168 Single Family 12.75 0.5 0 0.0195 12.2305 3/1/2031 300 295
43 OXFORD MI 48371 Single Family 13.25 0.5 0 0.0195 12.7305 3/1/2031 300 295
44 CONCORD CA 94518 Single Family 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
45 GAINESVILLE GA 30506 Single Family 12.75 0.5 0 0.0195 12.2305 3/1/2031 300 295
46 TUCSON AZ 85743 PUD 12 0.5 0 0.0195 11.4805 3/1/2031 300 295
47 VIRGINIA BEACH VA 23453 Single Family 12.5 0.5 0 0.0195 11.9805 3/1/2031 300 295
48 SAFETY HARBOR FL 34695 PUD 12.5 0.5 0 0.0195 11.9805 3/1/2031 300 295
49 AVONDALE AZ 85323 PUD 10.625 0.5 0 0.0195 10.1055 3/1/2031 300 295
50 PEORIA AZ 85383 PUD 9.25 0.5 0 0.0195 8.7305 3/1/2031 300 295
51 CHELSEA AL 35043 PUD 12.5 0.5 0 0.0195 11.9805 3/1/2031 300 295
52 BETHEL CT 6801 Single Family 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
53 KAYSVILLE UT 84037 Single Family 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
54 NORTH MIAMI BEACH FL 33160 Condominium 12.5 0.5 0 0.0195 11.9805 3/1/2031 300 295
55 GILBERT AZ 85297 PUD 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
56 AVENTURA FL 33180 Condominium 12.5 0.5 0 0.0195 11.9805 3/1/2031 300 295
57 MIAMI FL 33196 PUD 12.5 0.5 0 0.0195 11.9805 3/1/2031 300 295
58 KISSIMMEE FL 34759 PUD 11.5 0.5 0 0.0195 10.9805 3/1/2031 300 295
59 FALLS CHURCH VA 22042 PUD 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
60 FORT LAUDERDALE FL 33311 Single Family 11 0.5 0 0.0195 10.4805 3/1/2031 300 295
61 MIAMI FL 33165 Single Family 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
62 TAMPA FL 33634 Single Family 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
63 ORLANDO FL 32811 Single Family 12.5 0.5 0 0.0195 11.9805 3/1/2031 300 295
64 GRAND TERRACE CA 92313 Single Family 11.375 0.5 0 0.0195 10.8555 3/1/2031 300 295
65 OVIEDO FL 32765 PUD 10.75 0.5 0 0.0195 10.2305 3/1/2031 300 295
66 LAS VEGAS NV 89106 PUD 11.5 0.5 0 0.0195 10.9805 3/1/2031 300 295
67 MIDLAND GA 31820 Single Family 11.5 0.5 0 0.0195 10.9805 3/1/2031 300 295
68 WEST BRANCH IA 52358 Single Family 12.5 0.5 0 0.0195 11.9805 4/1/2031 300 296
69 LAS VEGAS NV 89103 Single Family 12.5 0.5 0 0.0195 11.9805 3/1/2031 300 295
70 COLORADO SPRINGS CO 80922 PUD 12.75 0.5 0 0.0195 12.2305 3/1/2031 300 295
71 FORT MILL SC 29715 Single Family 11.625 0.5 0 0.0195 11.1055 3/1/2031 300 295
72 FAIRFAX VA 22033 Single Family 13 0.5 0 0.0195 12.4805 3/1/2031 300 295
73 FRESNO CA 93706 Single Family 12.5 0.5 0 0.0195 11.9805 3/1/2031 300 295
74 PORT RICHEY FL 34668 PUD 11.5 0.5 0 0.0195 10.9805 3/1/2031 300 295
75 ANNANDALE VA 22003 Single Family 8 0.5 0 0.0195 7.4805 7/20/2031 300 299
76 TUCKER GA 30084 Single Family 8 0.5 0 0.0195 7.4805 7/20/2031 300 299
77 SILVER SPRING MD 20905 Single Family 8 0.5 0 0.0195 7.4805 7/20/2031 300 299
78 NORTH MIAMI BEACH FL 33162 Single Family 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
79 HENDERSONVILLE NC 28791 Single Family 13.75 0.5 0 0.0195 13.2305 3/1/2031 300 295
80 ATLANTA GA 30309 Hi-Rise Condo 14.25 0.5 0 0.0195 13.7305 3/1/2031 300 295
81 BOONES MILL VA 24065 Single Family 9.875 0.5 0 0.0195 9.3555 3/1/2031 300 295
82 COLORADO SPRINGS CO 80915 Single Family 12 0.5 0 0.0195 11.4805 3/1/2031 300 295
83 HIALEAH FL 33016 Condominium 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
84 ACWORTH GA 30102 Single Family 12.5 0.5 0 0.0195 11.9805 3/1/2031 300 295
85 APISON TN 37302 Single Family 10.25 0.5 0 0.0195 9.7305 3/1/2021 180 175
86 MELBOURNE FL 32935 PUD 11.5 0.5 0 0.0195 10.9805 3/1/2031 300 295
87 NEWNAN GA 30265 PUD 12 0.5 0 0.0195 11.4805 3/1/2031 300 295
88 SAN DIEGO CA 92116 Condominium 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
89 LAS VEGAS NV 89115 Single Family 12 0.5 0 0.0195 11.4805 3/1/2031 300 295
90 LAUDERDALE BY THE SEA FL 33062 Condominium 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
91 KISSIMMEE FL 34759 PUD 12.5 0.5 0 0.0195 11.9805 3/1/2031 300 295
92 WESTON FL 33327 PUD 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
93 WINTER HAVEN FL 33884 PUD 12.5 0.5 0 0.0195 11.9805 3/1/2031 300 295
94 WOODBRIDGE VA 22193 PUD 8 0.5 0 0.0195 7.4805 7/20/2031 300 299
95 MANASSAS VA 20111 Townhouse 8 0.5 0 0.0195 7.4805 7/20/2031 300 299
96 DAMASCUS MD 20872 Townhouse 8 0.5 0 0.0195 7.4805 7/20/2031 300 299
97 GAINESVILLE VA 20155 PUD 8 0.5 0 0.0195 7.4805 7/20/2031 300 299
98 SUWANEE GA 30024 PUD 8 0.5 0 0.0195 7.4805 7/20/2031 300 299
99 POTTERVILLE MI 48876 Single Family 11.625 0.5 0 0.0195 11.1055 3/1/2031 300 295
100 GALLOWAY OH 43119 Single Family 13.5 0.5 0 0.0195 12.9805 3/1/2031 300 295
101 WINTER HAVEN FL 33884 PUD 12.5 0.5 0 0.0195 11.9805 3/1/2031 300 295
102 OAKLAND CA 94605 Condominium 11.75 0.5 0 0.0195 11.2305 4/1/2031 300 296
103 SANTA CLARITA CA 91350 PUD 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
104 MIAMI FL 33172 Condominium 11.75 0.5 0 0.0195 11.2305 2/1/2031 300 294
105 INDIO CA 92201 PUD 11 0.5 0 0.0195 10.4805 2/1/2031 300 294
106 CHARLESTON SC 29414 Single Family 12.5 0.5 0 0.0195 11.9805 2/1/2031 300 294
107 NOLENSVILLE TN 37135 PUD 12.25 0.5 0 0.0195 11.7305 2/1/2031 300 294
108 CONIFER CO 80433 Single Family 11.75 0.5 0 0.0195 11.2305 2/1/2031 300 294
109 PARKER CO 80138 Single Family 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
110 DETROIT MI 48202 Condominium 12.75 0.5 0 0.0195 12.2305 3/1/2031 300 295
111 DENVER CO 80204 Condominium 11.5 0.5 0 0.0195 10.9805 2/1/2031 300 294
112 HIALEAH FL 33016 Condominium 12.5 0.5 0 0.0195 11.9805 3/1/2031 300 295
113 BONITA SPRINGS FL 34135 Single Family 11.75 0.5 0 0.0195 11.2305 2/1/2031 300 294
114 ORLANDO FL 32829 PUD 12.25 0.5 0 0.0195 11.7305 2/1/2031 300 294
115 KENNESAW GA 30144 PUD 12 0.5 0 0.0195 11.4805 3/1/2031 300 295
116 WARWICK RI 2888 2-4 Family 12 0.5 0 0.0195 11.4805 3/1/2031 300 295
117 JACKSONVILLE FL 32225 PUD 10.875 0.5 0 0.0195 10.3555 3/1/2031 300 295
118 ANTIOCH CA 94531 Single Family 11.5 0.5 0 0.0195 10.9805 3/1/2031 300 295
119 BEAUFORT SC 29906 Single Family 12.25 0.5 0 0.0195 11.7305 3/1/2031 300 295
120 COLORADO SPRINGS CO 80921 PUD 11.5 0.5 0 0.0195 10.9805 3/1/2031 300 295
121 BESSEMER AL 35022 Single Family 11.5 0.5 0 0.0195 10.9805 2/1/2031 300 294
122 LAKE ELSINORE CA 92532 Single Family 10.5 0.5 0 0.0195 9.9805 3/1/2031 300 295
123 OPA LOCKA FL 33056 Single Family 11.25 0.5 0 0.0195 10.7305 3/1/2031 300 295
124 MARIETTA GA 30060 Single Family 12.5 0.5 0 0.0195 11.9805 2/1/2031 300 294
125 NORTHRIDGE CA 91343 Single Family 11 0.5 0 0.0195 10.4805 3/1/2031 300 295
126 HOPKINS SC 29061 Single Family 12.25 0.5 0 0.0195 11.7305 3/1/2031 300 295
127 WINDSOR CT 6095 Single Family 12 0.5 0 0.0195 11.4805 2/1/2031 300 294
128 DURHAM NC 27703 PUD 10.75 0.5 0 0.0195 10.2305 3/1/2031 300 295
129 HOMESTEAD FL 33032 PUD 11.125 0.5 0 0.0195 10.6055 2/1/2031 300 294
130 HAMPTON VA 23666 PUD 12 0.5 0 0.0195 11.4805 3/1/2031 300 295
131 SAN CLEMENTE CA 92672 PUD 11 0.5 0 0.0195 10.4805 3/1/2031 300 295
132 BISMARCK ND 58503 Single Family 12 0.5 0 0.0195 11.4805 3/1/2031 300 295
133 PORT SAINT LUCIE FL 34983 Single Family 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
134 ELYRIA OH 44035 Single Family 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
135 ATLANTA GA 30340 Single Family 11 0.5 0 0.0195 10.4805 3/1/2031 300 295
136 HOMESTEAD FL 33032 PUD 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
137 FAYETTEVILLE GA 30215 Single Family 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
138 MERIDIAN ID 83642 PUD 11.375 0.5 0 0.0195 10.8555 3/1/2031 300 295
139 STAFFORD VA 22554 PUD 10.375 0.5 0 0.0195 9.8555 3/1/2031 300 295
140 GLENDALE AZ 85381 Single Family 12.5 0.5 0 0.0195 11.9805 3/1/2031 300 295
141 CARLSBAD CA 92009 Condominium 12.5 0.5 0 0.0195 11.9805 3/1/2031 300 295
142 COLORADO SPRINGS CO 80906 Single Family 11 0.5 0 0.0195 10.4805 3/1/2031 300 295
143 CHANDLER AZ 85226 PUD 11.75 0.5 0 0.0195 11.2305 3/1/2031 300 295
144 NEW RIVER AZ 85087 Single Family 13 0.5 0 0.0195 12.4805 3/1/2031 300 295
145 COLORADO SPRINGS CO 80921 PUD 11 0.5 0 0.0195 10.4805 3/1/2031 300 295
146 FORT MYERS FL 33913 PUD 12.25 0.5 0 0.0195 11.7305 3/1/2031 300 295
147 ORANGE PARK FL 32065 PUD 10.375 0.5 0 0.0195 9.8555 3/1/2031 300 295
148 BULLHEAD CITY AZ 86442 Single Family 11.375 0.5 0 0.0195 10.8555 3/1/2031 300 295
149 HIGHLANDS RANCH CO 80130 PUD 10.75 0.5 0 0.0195 10.2305 3/1/2031 300 295
150 WINDERMERE 