Document:

OPTEUM MORTGAGE ACCEPTANCE CORPORATION,

COMPANY,

WELLS FARGO BANK, N.A.

MASTER SERVICER AND SECURITIES ADMINISTRATOR,

AND

HSBC BANK USA, NATIONAL ASSOCIATION

TRUSTEE

POOLING AND SERVICING AGREEMENT

DATED AS OF JUNE 1, 2005

________________________

ASSET-BACKED PASS-THROUGH CERTIFICATES

SERIES 2005-3

 

 

TABLE OF CONTENTS

ARTICLE I

 

DEFINITIONS

	
            Section 1.01
 	
            Defined Terms.
 	
             

	
             
	
            Accepted Master Servicing Practices 
 
	
             
	
            Accrual Period 
 
	
             
	
            Accrued Certificate Interest 
 
	
             
	
            Adjustable Rate Mortgage Loans 
 
	
             
	
            Advance 
 
	
             
	
            Affected Party 
 
	
             
	
            Affiliate 
 
	
             
	
            Aggregate Stated Principal Balance 
 
	
             
	
            Agreement 
 
	
             
	
            Allocated Realized Loss Amount 
 
	
             
	
            Assignment 
 
	
             
	
            Assignment Agreement 
 
	
             
	
            Available Distribution Amount 
 
	
             
	
            Bankruptcy Code 
 
	
             
	
            Basic Principal Distribution Amount 
 
	
             
	
            Basis Risk Shortfall 
 
	
             
	
            Basis Risk Shortfall Carry-Forward Amount 
 
	
             
	
            Basis Risk Shortfall Reserve Fund 
 
	
             
	
            Book-Entry Certificate 
 
	
             
	
            Business Day 
 
	
             
	
            Cash Liquidation 
 
	
             
	
            Cenlar 
 
	
             
	
            Cenlar Servicing Agreement 
 
	
             
	
            Certificate 
 
	
             
	
            Certificate Account 
 
	
             
	
            Certificate Account Deposit Date 
 
	
             
	
            Certificateholder  or  Holder 
 
	
             
	
            Certificate Margin 
 
	
             
	
            Certificate Owner 
 
	
             
	
            Certificate Principal Balance 
 
	
             
	
            Certificate Register 
 
	
             
	
            Class 
 
	
             
	
            Class A Certificate 
 
	
             
	
            Class A Principal Distribution Amount 
 
	
             
	
            Class A-1 Certificate 
 
	
             
	
            Class A-1A Certificate 
 
	
             
	
            Class A-1B Certificate 
 
	
             
	
            Class A-1C Certificate 
 
	
             
	
            Class A-PT Certificate 
 
				

 

 

 

 

	
            Class A-2 Certificate 
 
	
            Class C Certificate 
 
	
            Class IO Interest 
 
	
            Class M Certificates 
 
	
            Class M-1 Certificate 
 
	
            Class M-1 Principal Distribution Amount 
 
	
            Class M-2 Certificate 
 
	
            Class M-2 Principal Distribution Amount 
 
	
            Class M-3 Certificate 
 
	
            Class M-3 Principal Distribution Amount 
 
	
            Class M-4 Certificate 
 
	
            Class M-4 Principal Distribution Amount 
 
	
            Class M-5 Certificate 
 
	
            Class M-5 Principal Distribution Amount 
 
	
            Class M-6 Certificate 
 
	
            Class M-6 Principal Distribution Amount 
 
	
            Class M-7 Certificate 
 
	
            Class M-7 Principal Distribution Amount 
 
	
            Class M-8 Certificate 
 
	
            Class M-8 Principal Distribution Amount 
 
	
            Class M-9 Certificate 
 
	
            Class M-9 Principal Distribution Amount 
 
	
            Class M-10 Certificate 
 
	
            Class M-10 Principal Distribution Amount 
 
	
            Class P Certificate 
 
	
            Class R Certificate 
 
	
            Class R-1 Interest 
 
	
            Class R-2 Interest 
 
	
            Class R-3 Interest 
 
	
            Closing Date 
 
	
            Code 
 
	
            Collateral Value 
 
	
            Commission 
 
	
            Company 
 
	
            Compensating Interest 
 
	
            Corporate Trust Office 
 
	
            Corresponding Certificate 
 
	
            Curtailment 
 
	
            Custodial Account 
 
	
            Custodial Agreement 
 
	
            Custodian 
 
	
            Cut-off Date 
 
	
            Defaulting Party 
 
	
            Deficient Valuation 
 
	
            Definitive Certificate 
 

 

 

 

 

	
            Deleted Mortgage Loan 
 
	
            Delinquent 
 
	
            Depository 
 
	
            Depository Participant 
 
	
            Determination Date 
 
	
            Disqualified Organization 
 
	
            Distribution Date 
 
	
            Due Date 
 
	
            Due Period 
 
	
            EDGAR 
 
	
            Eligible Account 
 
	
            ERISA Restricted Certificates 
 
	
            Event of Default 
 
	
            Exchange Act 
 
	
            Extra Principal Distribution Amount 
 
	
            Fannie Mae 
 
	
            FDIC 
 
	
            Fitch 
 
	
            Fixed Rate Mortgage Loans 
 
	
            Freddie Mac 
 
	
            Indenture 
 
	
            Indenture Trustee 
 
	
            Initial Certificate Principal Balance 
 
	
            Initial Notional Amount 
 
	
            Insurance Policy 
 
	
            Insurance Proceeds 
 
	
            Interest Carry Forward Amount 
 
	
            Interest Determination Date 
 
	
            Interest Remittance Amount 
 
	
            Late Collections 
 
	
            Lender-Paid Insured Loans 
 
	
            Lender-Paid Primary Insurance Policy 
 
	
            Lender-Paid Primary Insurance Rate 
 
	
            LIBOR 
 
	
            LIBOR Business Day 
 
	
            Liquidated Mortgage Loan 
 
	
            Liquidation Proceeds 
 
	
            Loan-to-Value Ratio 
 
	
            Lost Note Affidavit 
 
	
            Majority Class C Certificateholder 
 
	
            Marker Rate 
 
	
            Master Servicer 
 
	
            Master Servicing Fees 
 
	
            Master Servicing Fee Rate 
 
	
            Maximum Uncertificated Accrued Interest Deferral Amount 
 

 

 

 

 

	
            MERS 
 
	
            MERS® System 
 
	
            MIN 
 
	
            MOM Loan 
 
	
            Monthly Payment 
 
	
            Moody’s 
 
	
            Mortgage 
 
	
            Mortgage File 
 
	
            Mortgage Loan 
 
	
            Mortgage Loan Purchase Agreement 
 
	
            Mortgage Loan Schedule 
 
	
            Mortgage Note 
 
	
            Mortgage Rate 
 
	
            Mortgaged Property 
 
	
            Mortgagor 
 
	
            Net Liquidation Proceeds 
 
	
            Net Monthly Excess Cashflow 
 
	
            Net Mortgage Rate 
 
	
            Net Prepayment Interest Shortfall 
 
	
            Net Swap Payment 
 
	
            Net WAC Rate 
 
	
            Nonrecoverable Advance 
 
	
            Non-United States Person 
 
	
            Note Account 
 
	
            Note Administrator 
 
	
            Notional Amount 
 
	
            Offered Certificates 
 
	
            Officers’ Certificate 
 
	
            Opinion of Counsel 
 
	
            Optional Termination Date 
 
	
            OTS 
 
	
            Outstanding Mortgage Loan 
 
	
            Overcollateralization Deficiency Amount 
 
	
            Overcollateralization Floor Amount 
 
	
            Overcollateralization Release Amount 
 
	
            Overcollateralization Target Amount 
 
	
            Overcollateralized Amount 
 
	
            Ownership Interest 
 
	
            Pass-Through Rate 
 
	
            Percentage Interest 
 
	
            Permitted Investment 
 
	
            Permitted Transferee 
 
	
            Person 
 
	
            Prepayment Assumption 
 
	
            Prepayment Charge 
 

 

 

 

 

	
            Prepayment Interest Shortfall 
 
	
            Prepayment Period 
 
	
            Primary Hazard Insurance Policy 
 
	
            Primary Insurance Policy 
 
	
            Principal Allocation Amount 
 
	
            Principal Distribution Amount 
 
	
            Principal Prepayment 
 
	
            Principal Prepayment in Full 
 
	
            Principal Remittance Amount 
 
	
            Prospectus Supplement 
 
	
            Protected Account 
 
	
            Purchase Price 
 
	
            Qualified Insurer 
 
	
            Qualified Substitute Mortgage Loan 
 
	
            Rating Agency 
 
	
            Realized Loss 
 
	
            Record Date 
 
	
            Regular Certificate 
 
	
            Relief Act 
 
	
            Relief Act Interest Shortfall 
 
	
            REMIC 
 
	
            REMIC 1 
 
	
            REMIC 1 Regular Interest 
 
	
            REMIC 2 
 
	
            REMIC 2 Interest Loss Allocation Amount 
 
	
            REMIC 2 Overcollateralized Amount 
 
	
            REMIC 2 Principal Loss Allocation Amount 
 
	
            REMIC 2 Overcollateralization Target Amount 
 
	
            REMIC 2 Regular Interests  
 
	
            REMIC 3 
 
	
            REMIC Provisions 
 
	
            REMIC Regular Interest 
 
	
            Remittance Report 
 
	
            REO Acquisition 
 
	
            REO Disposition 
 
	
            REO Imputed Interest 
 
	
            REO Proceeds 
 
	
            REO Property 
 
	
            Request for Release 
 
	
            Residual Certificates 
 
	
            Residual Interest 
 
	
            Responsible Officer 
 
	
            Securities Administrator 
 
	
            Seller 
 
	
            Senior Enhancement Percentage 
 

 

 

 

 

	
            Sequential Trigger Event 
 
	
            Servicer 
 
	
            Servicer Remittance Date 
 
	
            Servicing Advances 
 
	
            Servicing Agreement 
 
	
            Servicing Fee 
 
	
            Servicing Fee Rate 
 
	
            Servicing Officer 
 
	
            Single Certificate 
 
	
            Standard & Poor’s 
 
	
            Startup Day 
 
	
            Stated Principal Balance 
 
	
            Step-Up Date 
 
	
            Stepdown Date 
 
	
            Subservicer 
 
	
            Subservicer Remittance Date 
 
	
            Subservicing Agreement 
 
	
            Subsequent Recoveries 
 
	
            Substitution Adjustment 
 
	
            Supplemental Interest Trust 
 
	
            Swap Agreement 
 
	
            Swap LIBOR 
 
	
            Swap Principal Payment Amount 
 
	
            Swap Provider 
 
	
            Swap Provider Trigger Event 
 
	
            Swap Termination Payment 
 
	
            Tax Returns 
 
	
            Transfer 
 
	
            Transferor 
 
	
            Trigger Event 
 
	
            Trust Fund 
 
	
            Trust REMIC 
 
	
            Trustee 
 
	
            Uncertificated Accrued Interest 
 
	
            Uncertificated Notional Amount 
 
	
            Uncertificated Principal Balance 
 
	
            Uncertificated Pass-Through Rate 
 
	
            Uncertificated REMIC 1 Pass-Through Rate 
 
	
            Uncertificated REMIC 2 Pass-Through Rate 
 
	
            United States Person 
 
	
            Voting Rights 
 
	
            Weighted Average Net Mortgage Rate 
 

 

	
            Section 1.02
 	
            Determination of LIBOR. 
 
	
            Section 1.03
 	
            Allocation of Certain Interest Shortfalls. 
 

 

 

 

ARTICLE II

 

CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES

	
            Section 2.01
 	
            Conveyance of Mortgage Loans. 
 
	
            Section 2.02
 	
            Acceptance of the Trust Fund by the Trustee. 
 
	
            Section 2.03
 	
            Representations, Warranties and Covenants of the Master Servicer and the Company. 
 
	
            Section 2.04
 	
            Assignment of Interest in the Mortgage Loan Purchase Agreement. 
 
	
            Section 2.05
 	
            Issuance of Certificates; Conveyance of REMIC Regular Interests and Acceptance of REMIC 1, REMIC 2 and REMIC 3 by the Trustee. 
 
	
            Section 2.06
 	
            Negative Covenants of the Trustee and Master Servicer. 
 

ARTICLE III

 

ADMINISTRATION AND SERVICING OF THE TRUST FUND

	
            Section 3.01
 	
            Administration and Servicing of Mortgage Loans. 
 
	
            Section 3.02
 	
            REMIC-Related Covenants. 
 
	
            Section 3.03
 	
            Monitoring of Servicer. 
 
	
            Section 3.04
 	
            Fidelity Bond. 
 
	
            Section 3.05
 	
            Power to Act; Procedures. 
 
	
            Section 3.06
 	
            Due-on-Sale Clauses; Assumption Agreements. 
 
	
            Section 3.07
 	
            Release of Mortgage Files. 
 
	
            Section 3.08
 	
            Documents, Records and Funds in Possession of Master Servicer To Be Held for Trustee. 
 
	
            Section 3.09
 	
            Standard Hazard Insurance and Flood Insurance Policies. 
 
	
            Section 3.10
 	
            Presentment of Claims and Collection of Proceeds. 
 
	
            Section 3.11
 	
            Maintenance of the Primary Mortgage Insurance Policies. 
 
	
            Section 3.12
 	
            Trustee to Retain Possession of Certain Insurance Policies and Documents. 
 
	
            Section 3.13
 	
            Realization Upon Defaulted Mortgage Loans. 
 
	
            Section 3.14
 	
            Compensation for the Master Servicer. 
 
	
            Section 3.15
 	
            REO Property. 
 
	
            Section 3.16
 	
            Protected Accounts. 
 
	
            Section 3.17
 	
            Custodial Account. 
 
	
            Section 3.18
 	
            Permitted Withdrawals and Transfers from the Custodial Account. 
 
	
            Section 3.19
 	
            Certificate Account. 
 
	
            Section 3.20
 	
            Permitted Withdrawals and Transfers from the Certificate Account. 
 
	
            Section 3.21
 	
            Annual Officer’s Certificate as to Compliance. 
 
	
            Section 3.22
 	
            Annual Independent Accountant’s Servicing Report. 
 

 

 

 

 

	
            Section 3.23
 	
            Reports Filed with Securities and Exchange Commission. 
 
	
            Section 3.24
 	
            UCC. 
 
	
            Section 3.25
 	
            Optional Purchase of Defaulted Mortgage Loans. 
 

ARTICLE IV

 

PAYMENTS TO CERTIFICATEHOLDERS

	
            Section 4.01
 	
            Distributions. 
 
	
            Section 4.02
 	
            Statements to Certificateholders. 
 
	
            Section 4.03
 	
            Remittance Reports; Advances by the Master Servicer. 
 
	
            Section 4.04
 	
            Distributions on the REMIC Regular Interests. 
 
	
            Section 4.05
 	
            Allocation of Realized Losses. 
 
	
            Section 4.06
 	
            Information Reports to Be Filed by the Servicer. 
 
	
            Section 4.07
 	
            Compliance with Withholding Requirements. 
 
	
            Section 4.08
 	
            Basis Risk Shortfall Reserve Fund. 
 
	
            Section 4.09
 	
            Supplemental Interest Trust. 
 
	
            Section 4.10
 	
            Tax Treatment of Swap Payments and Swap Termination Payments. 
 

ARTICLE V

 

THE CERTIFICATES

	
            Section 5.01
 	
            The Certificates. 
 
	
            Section 5.02
 	
            Registration of Transfer and Exchange of Certificates. 
 
	
            Section 5.03
 	
            Mutilated, Destroyed, Lost or Stolen Certificates. 
 
	
            Section 5.04
 	
            Persons Deemed Owners. 
 
	
            Section 5.05
 	
            Rule 144A Information. 
 

ARTICLE VI

 

THE COMPANY AND THE MASTER SERVICER

	
            Section 6.01
 	
            Liability of the Company and the Master Servicer. 
 
	
            Section 6.02
 	
            Merger, Consolidation or Conversion of the Company or the Master Servicer. 
 
	
            Section 6.03
 	
            Limitation on Liability of the Company, the Master Servicer, the Securities Administrator and Others. 
 
	
            Section 6.04
 	
            Limitation on Resignation of the Master Servicer. 
 
	
            Section 6.05
 	
            Sale and Assignment of Master Servicing. 
 

ARTICLE VII

 

DEFAULT

	
            Section 7.01
 	
            Events of Default. 
 
	
            Section 7.02
 	
            Trustee to Act; Appointment of Successor. 
 

 

 

 

 

	
            Section 7.03
 	
            Notification to Certificateholders. 
 
	
            Section 7.04
 	
            Waiver of Events of Default. 
 
	
            Section 7.05
 	
            List of Certificateholders. 
 

ARTICLE VIII

 

CONCERNING THE TRUSTEE AND SECURITIES ADMINISTRATOR

	
            Section 8.01
 	
            Duties of Trustee and the Securities Administrator. 
 
	
            Section 8.02
 	
            Certain Matters Affecting the Trustee and the Securities Administrator. 
 
	
            Section 8.03
 	
            Trustee and Securities Administrator Not Liable for Certificates or Mortgage Loans. 
 
	
            Section 8.04
 	
            Trustee and Securities Administrator May Own Certificates. 
 
	
            Section 8.05
 	
            Trustee’s and Securities Administrator’s Fees. 
 
	
            Section 8.06
 	
            Eligibility Requirements for Trustee and the Securities Administrator. 
 
	
            Section 8.07
 	
            Resignation and Removal of the Trustee and the Securities Administrator. 
 
	
            Section 8.08
 	
            Successor Trustee and Successor Securities Administrator. 
 
	
            Section 8.09
 	
            Merger or Consolidation of Trustee or Securities Administrator. 
 
	
            Section 8.10
 	
            Appointment of Co-Trustee or Separate Trustee. 
 

ARTICLE IX

 

TERMINATION

	
            Section 9.01
 	
            Termination Upon Repurchase or Liquidation of All Mortgage Loans or upon Purchase of Certificates. 
 
	
            Section 9.02
 	
            Termination of REMIC 2, and REMIC 3. 
 
	
            Section 9.03
 	
            Additional Termination Requirements. 
 

ARTICLE X

 

REMIC PROVISIONS

	
            Section 10.01
 	
            REMIC Administration. 
 
	
            Section 10.02
 	
            Prohibited Transactions and Activities. 
 
	
            Section 10.03
 	
            Master Servicer, Securities Administrator and Trustee Indemnification. 
 

 

 

 

ARTICLE XI

 

MISCELLANEOUS PROVISIONS

	
            Section 11.01
 	
            Amendment. 
 
	
            Section 11.02
 	
            Recordation of Agreement; Counterparts. 
 
	
            Section 11.03
 	
            Limitation on Rights of Certificateholders. 
 
	
            Section 11.04
 	
            Governing Law. 
 
	
            Section 11.05
 	
            Notices. 
 
	
            Section 11.06
 	
            Severability of Provisions. 
 
	
            Section 11.07
 	
            Successors and Assigns. 
 
	
            Section 11.08
 	
            Article and Section Headings. 
 
	
            Section 11.09
 	
            Notice to Rating Agencies. 
 
	
            Section 11.10
 	
            Third Party Rights. 
 

 

 

Signatures

Acknowledgments

	
            Exhibit A
 	
            Form of Class A Certificate
 
	
            Exhibit B-1
 	
            Form of Class M Certificate
 
	
            Exhibit B-2
 	
            Form of Class C Certificate
 
	
            Exhibit B-3
 	
            Form of Class P Certificate
 
	
            Exhibit B-4
 	
            Form of Class R Certificate
 
	
            Exhibit C
 	
            Form of Custodian Initial Certification
 
	
            Exhibit D
 	
            Form of Custodian Final Certification
 
	
            Exhibit E
 	
            Form of Remittance Report
 
	
            Exhibit F
 	
            Form of Request for Release
 
	
            Exhibit G-1
 	
            Form of Investor Representation Letter
 
	
            Exhibit G-2
 	
            Form of Transferor Representation Letter
 
	
            Exhibit G-3
 	
            Form of Rule 144A Investment Representation
 
	
            Exhibit G-4
 	
            Form of Transferor Certificate for Transfers of Residual Certificates
 
	
            Exhibit G-5
 	
            Form of Transfer Affidavit and Agreement for Transfers of Residual Certificates
 
	
            Exhibit H
 	
            Mortgage Loan Schedule
 
	
            Exhibit I
 	
            [Reserved]
 
	
            Exhibit J
 	
            [Reserved]
 
	
            Exhibit K
 	
            Form of Assignment Agreement
 
	
            Exhibit L-1
 	
            Form 10-K Certification
 
	
            Exhibit L-2
 	
            Form 10-K Back-up Certification (Master Servicer)
 
	
            Exhibit L-3
 	
            Form 10-K Back-up Certification (Trustee)
 
	
            Exhibit M-1
 	
            Cenlar Servicing Agreement
 
	
            Exhibit N
 	
            Form of Custodial Agreement
 
	Exhibit O	Interest Rate Swap Agreement
	
            Exhibit P
 	
            Form of Mortgage Loan Purchase Agreement
 

 

 

This Pooling and Servicing Agreement, dated and effective as of June 1, 2005, is entered into among Opteum Mortgage Acceptance Corporation, as company (the “Company”), Wells Fargo Bank, N.A., as master servicer (in such capacity, the “Master Servicer”) and as securities administrator (in such capacity, the “Securities Administrator”), and HSBC Bank USA, National Association, as trustee (the “Trustee”).

PRELIMINARY STATEMENT:

The Company intends to sell pass-through certificates (collectively, the “Certificates”), to be issued hereunder in multiple classes, which in the aggregate will evidence the entire beneficial ownership interest in the Trust Fund created hereunder.  The Certificates will consist of eighteen classes of certificates, designated as (i) the Class A-1A, Class A-1B, Class A-1C, Class A-PT, Class A-2 Certificates, (ii) the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates, (iii) the Class C Certificates, (iv) the Class P Certificates and (v) the Class R Certificates.

 

 

REMIC 1

As provided herein, the Trustee will make an election to treat the segregated pool of assets consisting of the Trust Fund (exclusive of the Basis Risk Shortfall Reserve Fund and, for the avoidance of doubt, the Supplemental Interest Trust and the Swap Agreement) as a REMIC for federal income tax purposes, and such segregated pool of assets will be designated as “REMIC 1”.  The Class R-1 Interest will represent the sole class of “residual interests” in REMIC 1 for purposes of the REMIC Provisions.

The following table irrevocably sets forth the designation, the Uncertificated REMIC 1 Pass-Through Rate, the initial Uncertificated Principal Balance, and for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for each of the REMIC 1 Regular Interests.  None of the REMIC 1 Regular Interests will be certificated.

 

	
            Designation
  	
            Uncertificated REMIC 1

Pass-Through Rate
  	
             
  	
            Initial Certificate

Principal Balance
  	
            Assumed Final

Maturity Date(1)
  
	
            I
 	
            (2)
 	
            $
 	
            70,918,441.07 
 	
            July 25, 2035
 
	
            I-1-A
 	
            (2)
 	
            $
 	
            5,029,407.68 
 	
            July 25, 2035
 
	
            I-1-B
 	
            (2)
 	
            $
 	
            5,029,407.68 
 	
            July 25, 2035
 
	
            I-2-A
 	
            (2)
 	
            $
 	
            6,232,338.84 
 	
            July 25, 2035
 
	
            I-2-B
 	
            (2)
 	
            $
 	
            6,232,338.84 
 	
            July 25, 2035
 
	
            I-3-A
 	
            (2)
 	
            $
 	
            7,427,841.44 
 	
            July 25, 2035
 
	
            I-3-B
 	
            (2)
 	
            $
 	
            7,427,841.44 
 	
            July 25, 2035
 
	
            I-4-A
 	
            (2)
 	
            $
 	
            8,605,808.23 
 	
            July 25, 2035
 
	
            I-4-B
 	
            (2)
 	
            $
 	
            8,605,808.23 
 	
            July 25, 2035
 
	
            I-5-A
 	
            (2)
 	
            $
 	
            9,755,777.05 
 	
            July 25, 2035
 
	
            I-5-B
 	
            (2)
 	
            $
 	
            9,755,777.05 
 	
            July 25, 2035
 
	
            I-6-A
 	
            (2)
 	
            $
 	
            10,866,713.16 
 	
            July 25, 2035
 
	
            I-6-B
 	
            (2)
 	
            $
 	
            10,866,713.16 
 	
            July 25, 2035
 
	
            I-7-A
 	
            (2)
 	
            $
 	
            11,927,352.40 
 	
            July 25, 2035
 
	
            I-7-B
 	
            (2)
 	
            $
 	
            11,927,352.40 
 	
            July 25, 2035
 
	
            I-8-A
 	
            (2)
 	
            $
 	
            12,927,849.61 
 	
            July 25, 2035
 
	
            I-8-B
 	
            (2)
 	
            $
 	
            12,927,849.61 
 	
            July 25, 2035
 
	
            I-9-A
 	
            (2)
 	
            $
 	
            13,829,298.84 
 	
            July 25, 2035
 
	
            I-9-B
 	
            (2)
 	
            $
 	
            13,829,298.84 
 	
            July 25, 2035
 
	
            I-10-A
 	
            (2)
 	
            $
 	
            14,325,953.53 
 	
            July 25, 2035
 
	
            I-10-B
 	
            (2)
 	
            $
 	
            14,325,953.53 
 	
            July 25, 2035
 
	
            I-11-A
 	
            (2)
 	
            $
 	
            13,760,130.30 
 	
            July 25, 2035
 
	
            I-11-B
 	
            (2)
 	
            $
 	
            13,760,130.30 
 	
            July 25, 2035
 
	
            I-12-A
 	
            (2)
 	
            $
 	
            13,154,652.27 
 	
            July 25, 2035
 
	
            I-12-B
 	
            (2)
 	
            $
 	
            13,154,652.27 
 	
            July 25, 2035
 
	
            I-13-A
 	
            (2)
 	
            $
 	
            12,576,837.99 
 	
            July 25, 2035
 
	
            I-13-B
 	
            (2)
 	
            $
 	
            12,576,837.99 
 	
            July 25, 2035
 
	
            I-14-A
 	
            (2)
 	
            $
 	
            12,025,492.52 
 	
            July 25, 2035
 
	
            I-14-B
 	
            (2)
 	
            $
 	
            12,025,492.52 
 	
            July 25, 2035
 
	
            I-15-A
 	
            (2)
 	
            $
 	
            11,499,371.24 
 	
            July 25, 2035
 
	
            I-15-B
 	
            (2)
 	
            $
 	
            11,499,371.24 
 	
            July 25, 2035
 
	
            I-16-A
 	
            (2)
 	
            $
 	
            10,997,289.03 
 	
            July 25, 2035
 
	
            I-16-B
 	
            (2)
 	
            $
 	
            10,997,289.03 
 	
            July 25, 2035
 

 

 

 

 

	
            I-17-A
 	
            (2)
 	
            $
 	
            10,518,117.27 
 	
            July 25, 2035
 
	
            I-17-B
 	
            (2)
 	
            $
 	
            10,518,117.27 
 	
            July 25, 2035
 
	
            I-18-A
 	
            (2)
 	
            $
 	
            10,060,781.13 
 	
            July 25, 2035
 
	
            I-18-B
 	
            (2)
 	
            $
 	
            10,060,781.13 
 	
            July 25, 2035
 
	
            I-19-A
 	
            (2)
 	
            $
 	
            9,624,257.16 
 	
            July 25, 2035
 
	
            I-19-B
 	
            (2)
 	
            $
 	
            9,624,257.16 
 	
            July 25, 2035
 
	
            I-20-A
 	
            (2)
 	
            $
 	
            9,207,570.53 
 	
            July 25, 2035
 
	
            I-20-B
 	
            (2)
 	
            $
 	
            9,207,570.53 
 	
            July 25, 2035
 
	
            I-21-A
 	
            (2)
 	
            $
 	
            8,810,472.70 
 	
            July 25, 2035
 
	
            I-21-B
 	
            (2)
 	
            $
 	
            8,810,472.70 
 	
            July 25, 2035
 
	
            I-22-A
 	
            (2)
 	
            $
 	
            58,359,988.20 
 	
            July 25, 2035
 
	
            I-22-B
 	
            (2)
 	
            $
 	
            58,359,988.20 
 	
            July 25, 2035
 
	
            I-23-A
 	
            (2)
 	
            $
 	
            5,634,372.47 
 	
            July 25, 2035
 
	
            I-23-B
 	
            (2)
 	
            $
 	
            5,634,372.47 
 	
            July 25, 2035
 
	
            I-24-A
 	
            (2)
 	
            $
 	
            5,406,747.38 
 	
            July 25, 2035
 
	
            I-24-B
 	
            (2)
 	
            $
 	
            5,406,747.38 
 	
            July 25, 2035
 
	
            I-25-A
 	
            (2)
 	
            $
 	
            5,188,929.04 
 	
            July 25, 2035
 
	
            I-25-B
 	
            (2)
 	
            $
 	
            5,188,929.04 
 	
            July 25, 2035
 
	
            I-26-A
 	
            (2)
 	
            $
 	
            4,980,508.83 
 	
            July 25, 2035
 
	
            I-26-B
 	
            (2)
 	
            $
 	
            4,980,508.83 
 	
            July 25, 2035
 
	
            I-27-A
 	
            (2)
 	
            $
 	
            4,781,061.13 
 	
            July 25, 2035
 
	
            I-27-B
 	
            (2)
 	
            $
 	
            4,781,061.13 
 	
            July 25, 2035
 
	
            I-28-A
 	
            (2)
 	
            $
 	
            4,590,180.19 
 	
            July 25, 2035
 
	
            I-28-B
 	
            (2)
 	
            $
 	
            4,590,180.19 
 	
            July 25, 2035
 
	
            I-29-A
 	
            (2)
 	
            $
 	
            4,407,479.19 
 	
            July 25, 2035
 
	
            I-29-B
 	
            (2)
 	
            $
 	
            4,407,479.19 
 	
            July 25, 2035
 
	
            I-30-A
 	
            (2)
 	
            $
 	
            4,232,589.35 
 	
            July 25, 2035
 
	
            I-30-B
 	
            (2)
 	
            $
 	
            4,232,589.35 
 	
            July 25, 2035
 
	
            I-31-A
 	
            (2)
 	
            $
 	
            4,065,159.09 
 	
            July 25, 2035
 
	
            I-31-B
 	
            (2)
 	
            $
 	
            4,065,159.09 
 	
            July 25, 2035
 
	
            I-32-A
 	
            (2)
 	
            $
 	
            3,904,853.11 
 	
            July 25, 2035
 
	
            I-32-B
 	
            (2)
 	
            $
 	
            3,904,853.11 
 	
            July 25, 2035
 
	
            I-33-A
 	
            (2)
 	
            $
 	
            3,751,634.17 
 	
            July 25, 2035
 
	
            I-33-B
 	
            (2)
 	
            $
 	
            3,751,634.17 
 	
            July 25, 2035
 
	
            I-34-A
 	
            (2)
 	
            $
 	
            10,410,913.15 
 	
            July 25, 2035
 
	
            I-34-B
 	
            (2)
 	
            $
 	
            10,410,913.15 
 	
            July 25, 2035
 
	
            I-35-A
 	
            (2)
 	
            $
 	
            3,131,891.82 
 	
            July 25, 2035
 
	
            I-35-B
 	
            (2)
 	
            $
 	
            3,131,891.82 
 	
            July 25, 2035
 
	
            I-36-A
 	
            (2)
 	
            $
 	
            3,013,187.44 
 	
            July 25, 2035
 
	
            I-36-B
 	
            (2)
 	
            $
 	
            3,013,187.44 
 	
            July 25, 2035
 
	
            I-37-A
 	
            (2)
 	
            $
 	
            2,899,363.82 
 	
            July 25, 2035
 
	
            I-37-B
 	
            (2)
 	
            $
 	
            2,899,363.82 
 	
            July 25, 2035
 
	
            I-38-A
 	
            (2)
 	
            $
 	
            2,790,207.15 
 	
            July 25, 2035
 
	
            I-38-B
 	
            (2)
 	
            $
 	
            2,790,207.15 
 	
            July 25, 2035
 
	
            I-39-A
 	
            (2)
 	
            $
 	
            2,685,513.37 
 	
            July 25, 2035
 
	
            I-39-B
 	
            (2)
 	
            $
 	
            2,685,513.37 
 	
            July 25, 2035
 
	
            I-40-A
 	
            (2)
 	
            $
 	
            2,585,087.71 
 	
            July 25, 2035
 
	
            I-40-B
 	
            (2)
 	
            $
 	
            2,585,087.71 
 	
            July 25, 2035
 

 

 

 

 

	
            I-41-A
 	
            (2)
 	
            $
 	
            2,488,744.35 
 	
            July 25, 2035
 
	
            I-41-B
 	
            (2)
 	
            $
 	
            2,488,744.35 
 	
            July 25, 2035
 
	
            I-42-A
 	
            (2)
 	
            $
 	
            2,396,305.91 
 	
            July 25, 2035
 
	
            I-42-B
 	
            (2)
 	
            $
 	
            2,396,305.91 
 	
            July 25, 2035
 
	
            I-43-A
 	
            (2)
 	
            $
 	
            2,307,603.07 
 	
            July 25, 2035
 
	
            I-43-B
 	
            (2)
 	
            $
 	
            2,307,603.07 
 	
            July 25, 2035
 
	
            I-44-A
 	
            (2)
 	
            $
 	
            2,222,474.21 
 	
            July 25, 2035
 
	
            I-44-B
 	
            (2)
 	
            $
 	
            2,222,474.21 
 	
            July 25, 2035
 
	
            I-45-A
 	
            (2)
 	
            $
 	
            2,140,765.07 
 	
            July 25, 2035
 
	
            I-45-B
 	
            (2)
 	
            $
 	
            2,140,765.07 
 	
            July 25, 2035
 
	
            I-46-A
 	
            (2)
 	
            $
 	
            2,062,328.35 
 	
            July 25, 2035
 
	
            I-46-B
 	
            (2)
 	
            $
 	
            2,062,328.35 
 	
            July 25, 2035
 
	
            I-47-A
 	
            (2)
 	
            $
 	
            1,987,023.41 
 	
            July 25, 2035
 
	
            I-47-B
 	
            (2)
 	
            $
 	
            1,987,023.41 
 	
            July 25, 2035
 
	
            I-48-A
 	
            (2)
 	
            $
 	
            1,914,715.99 
 	
            July 25, 2035
 
	
            I-48-B
 	
            (2)
 	
            $
 	
            1,914,715.99 
 	
            July 25, 2035
 
	
            I-49-A
 	
            (2)
 	
            $
 	
            1,845,277.85 
 	
            July 25, 2035
 
	
            I-49-B
 	
            (2)
 	
            $
 	
            1,845,277.85 
 	
            July 25, 2035
 
	
            I-50-A
 	
            (2)
 	
            $
 	
            1,778,586.61 
 	
            July 25, 2035
 
	
            I-50-B
 	
            (2)
 	
            $
 	
            1,778,586.61 
 	
            July 25, 2035
 
	
            I-51-A
 	
            (2)
 	
            $
 	
            1,714,525.24 
 	
            July 25, 2035
 
	
            I-51-B
 	
            (2)
 	
            $
 	
            1,714,525.24 
 	
            July 25, 2035
 
	
            I-52-A
 	
            (2)
 	
            $
 	
            1,652,982.13 
 	
            July 25, 2035
 
	
            I-52-B
 	
            (2)
 	
            $
 	
            1,652,982.13 
 	
            July 25, 2035
 
	
            I-53-A
 	
            (2)
 	
            $
 	
            1,593,850.54 
 	
            July 25, 2035
 
	
            I-53-B
 	
            (2)
 	
            $
 	
            1,593,850.54 
 	
            July 25, 2035
 
	
            I-54-A
 	
            (2)
 	
            $
 	
            1,537,028.61 
 	
            July 25, 2035
 
	
            I-54-B
 	
            (2)
 	
            $
 	
            1,537,028.61 
 	
            July 25, 2035
 
	
            I-55-A
 	
            (2)
 	
            $
 	
            1,482,418.96 
 	
            July 25, 2035
 
	
            I-55-B
 	
            (2)
 	
            $
 	
            1,482,418.96 
 	
            July 25, 2035
 
	
            I-56-A
 	
            (2)
 	
            $
 	
            1,429,928.58 
 	
            July 25, 2035
 
	
            I-56-B
 	
            (2)
 	
            $
 	
            1,429,928.58 
 	
            July 25, 2035
 
	
            I-57-A
 	
            (2)
 	
            $
 	
            5,467,958.90 
 	
            July 25, 2035
 
	
            I-57-B
 	
            (2)
 	
            $
 	
            5,467,958.90 
 	
            July 25, 2035
 
	
            I-58-A
 	
            (2) 
 	
            $
 	
            6,327,091.88 
 	
            July 25, 2035
 
	
            I-58-B
 	
            (2)
 	
            $
 	
            6,327,091.88 
 	
            July 25, 2035
 
	
            I-59-A
 	
            (2)
 	
            $
 	
            841,610.62 
 	
            July 25, 2035
 
	
            I-59-B
 	
            (2)
 	
            $
 	
            841,610.62 
 	
            July 25, 2035
 
	
            I-60-A
 	
            (2)
 	
            $
 	
            818,313.68 
 	
            July 25, 2035
 
	
            I-60-B
 	
            (2)
 	
            $
 	
            818,313.68 
 	
            July 25, 2035
 
	
            I-61-A
 	
            (2)
 	
            $
 	
            795,678.96 
 	
            July 25, 2035
 
	
            I-61-B
 	
            (2)
 	
            $
 	
            795,678.96 
 	
            July 25, 2035
 
	
            I-62-A
 	
            (2)
 	
            $
 	
            773,686.73 
 	
            July 25, 2035
 
	
            I-62-B
 	
            (2)
 	
            $
 	
            773,686.73 
 	
            July 25, 2035
 
	
            I-63-A
 	
            (2)
 	
            $
 	
            752,317.91 
 	
            July 25, 2035
 
	
            I-63-B
 	
            (2)
 	
            $
 	
            752,317.91 
 	
            July 25, 2035
 
	
            I-64-A
 	
            (2)
 	
            $
 	
            731,554.00 
 	
            July 25, 2035
 
	
            I-64-B
 	
            (2)
 	
            $
 	
            731,554.00 
 	
            July 25, 2035
 

 

 

 

 

	
            I-65-A
 	
            (2)
 	
            $
 	
            711,377.12 
 	
            July 25, 2035
 
	
            I-65-B
 	
            (2)
 	
            $
 	
            711,377.12 
 	
            July 25, 2035
 
	
            I-66-A
 	
            (2)
 	
            $
 	
            691,769.94 
 	
            July 25, 2035
 
	
            I-66-B
 	
            (2)
 	
            $
 	
            691,769.94 
 	
            July 25, 2035
 
	
            I-67-A
 	
            (2)
 	
            $
 	
            672,715.66 
 	
            July 25, 2035
 
	
            I-67-B
 	
            (2)
 	
            $
 	
            672,715.66 
 	
            July 25, 2035
 
	
            I-68-A
 	
            (2)
 	
            $
 	
            654,198.04 
 	
            July 25, 2035
 
	
            I-68-B
 	
            (2)
 	
            $
 	
            654,198.04 
 	
            July 25, 2035
 
	
            I-69-A
 	
            (2)
 	
            $
 	
            636,201.32 
 	
            July 25, 2035
 
	
            I-69-B
 	
            (2)
 	
            $
 	
            636,201.32 
 	
            July 25, 2035
 
	
            I-70-A
 	
            (2)
 	
            $
 	
            618,710.27 
 	
            July 25, 2035
 
	
            I-70-B
 	
            (2)
 	
            $
 	
            618,710.27 
 	
            July 25, 2035
 
	
            I-71-A
 	
            (2)
 	
            $
 	
            601,710.09 
 	
            July 25, 2035
 
	
            I-71-B
 	
            (2)
 	
            $
 	
            601,710.09 
 	
            July 25, 2035
 
	
            I-72-A
 	
            (2)
 	
            $
 	
            585,186.47 
 	
            July 25, 2035
 
	
            I-72-B
 	
            (2)
 	
            $
 	
            585,186.47 
 	
            July 25, 2035
 
	
            I-73-A
 	
            (2)
 	
            $
 	
            569,125.54 
 	
            July 25, 2035
 
	
            I-73-B
 	
            (2)
 	
            $
 	
            569,125.54 
 	
            July 25, 2035
 
	
            I-74-A
 	
            (2)
 	
            $
 	
            553,513.85 
 	
            July 25, 2035
 
	
            I-74-B
 	
            (2)
 	
            $
 	
            553,513.85 
 	
            July 25, 2035
 
	
            I-75-A
 	
            (2)
 	
            $
 	
            538,338.38 
 	
            July 25, 2035
 
	
            I-75-B
 	
            (2)
 	
            $
 	
            538,338.38 
 	
            July 25, 2035
 
	
            I-76-A
 	
            (2)
 	
            $
 	
            523,586.48 
 	
            July 25, 2035
 
	
            I-76-B
 	
            (2)
 	
            $
 	
            523,586.48 
 	
            July 25, 2035
 
	
            I-77-A
 	
            (2)
 	
            $
 	
            509,245.93 
 	
            July 25, 2035
 
	
            I-77-B
 	
            (2)
 	
            $
 	
            509,245.93 
 	
            July 25, 2035
 
	
            I-78-A
 	
            (2)
 	
            $
 	
            495,304.82 
 	
            July 25, 2035
 
	
            I-78-B
 	
            (2)
 	
            $
 	
            495,304.82 
 	
            July 25, 2035
 
	
            I-79-A
 	
            (2)
 	
            $
 	
            481,751.71 
 	
            July 25, 2035
 
	
            I-79-B
 	
            (2)
 	
            $
 	
            481,751.71 
 	
            July 25, 2035
 
	
            I-80-A
 	
            (2)
 	
            $
 	
            468,575.42 
 	
            July 25, 2035
 
	
            I-80-B
 	
            (2)
 	
            $
 	
            468,575.42 
 	
            July 25, 2035
 
	
            I-81-A
 	
            (2)
 	
            $
 	
            455,765.08 
 	
            July 25, 2035
 
	
            I-81-B
 	
            (2)
 	
            $
 	
            455,765.08 
 	
            July 25, 2035
 
	
            I-82-A
 	
            (2)
 	
            $
 	
            537,850.25 
 	
            July 25, 2035
 
	
            I-82-B
 	
            (2)
 	
            $
 	
            537,850.25 
 	
            July 25, 2035
 
	
            I-83-A
 	
            (2)
 	
            $
 	
            475,413.74 
 	
            July 25, 2035
 
	
            I-83-B
 	
            (2)
 	
            $
 	
            475,413.74 
 	
            July 25, 2035
 
	
            I-84-A
 	
            (2)
 	
            $
 	
            412,671.35 
 	
            July 25, 2035
 
	
            I-84-B
 	
            (2)
 	
            $
 	
            412,671.35 
 	
            July 25, 2035
 
	
            I-85-A
 	
            (2)
 	
            $
 	
            401,552.08 
 	
            July 25, 2035
 
	
            I-85-B
 	
            (2)
 	
            $
 	
            401,552.08 
 	
            July 25, 2035
 
	
            I-86-A
 	
            (2)
 	
            $
 	
            390,733.40 
 	
            July 25, 2035
 
	
            I-86-B
 	
            (2)
 	
            $
 	
            390,733.40 
 	
            July 25, 2035
 
	
            I-87-A
 	
            (2)
 	
            $
 	
            380,207.11 
 	
            July 25, 2035
 
	
            I-87-B
 	
            (2)
 	
            $
 	
            380,207.11 
 	
            July 25, 2035
 
	
            I-89-A
 	
            (2)
 	
            $
 	
            369,965.20 
 	
            July 25, 2035
 
	
            I-88-B
 	
            (2)
 	
            $
 	
            369,965.20 
 	
            July 25, 2035
 

 

 

 

 

	
            I-89-A
 	
            (2)
 	
            $
 	
            359,999.90 
 	
            July 25, 2035
 
	
            I-89-B
 	
            (2)
 	
            $
 	
            359,999.90 
 	
            July 25, 2035
 
	
            I-90-A
 	
            (2)
 	
            $
 	
            350,303.66 
 	
            July 25, 2035
 
	
            I-90-B
 	
            (2)
 	
            $
 	
            350,303.66 
 	
            July 25, 2035
 
	
            I-91-A
 	
            (2)
 	
            $
 	
            340,869.15 
 	
            July 25, 2035
 
	
            I-91-B
 	
            (2)
 	
            $
 	
            340,869.15 
 	
            July 25, 2035
 
	
            I-92-A
 	
            (2)
 	
            $
 	
            331,689.22 
 	
            July 25, 2035
 
	
            I-92-B
 	
            (2)
 	
            $
 	
            331,689.22 
 	
            July 25, 2035
 
	
            I-93-A
 	
            (2)
 	
            $
 	
            322,756.92 
 	
            July 25, 2035
 
	
            I-94-B
 	
            (2)
 	
            $
 	
            322,756.92 
 	
            July 25, 2035
 
	
            I-94A
 	
            (2)
 	
            $
 	
            314,065.53 
 	
            July 25, 2035
 
	
            I-94-B
 	
            (2)
 	
            $
 	
            314,065.53 
 	
            July 25, 2035
 
	
            I-95-A
 	
            (2)
 	
            $
 	
            11,297,043.19 
 	
            July 25, 2035
 
	
            I-95-B
 	
            (2)
 	
            $
 	
            11,297,043.19 
 	
            July 25, 2035
 
	
            P
 	
            (2)
 	
            $
 	
            100.00 
 	
            July 25, 2035
 

 

	
            (1)
 	
            For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution Date in the month following the maturity date for the Mortgage Loan with the latest possible maturity date has been designated as the “latest possible maturity date” for each REMIC 1 Regular Interest.
 
	
            (2)
 	
            Calculated in accordance with the definition of “Uncertificated REMIC 1 Pass-Through Rate” herein.
 

 

 

 

 

REMIC 2

As provided herein, the Trustee will make an election to treat the segregated pool of assets consisting of the REMIC 1 Regular Interests as a REMIC for federal income tax purposes, and such segregated pool of assets will be designated as “REMIC 2”.  The Class R-2 Interest will represent the sole class of “residual interests” in REMIC 2 for purposes of the REMIC Provisions.

The following table irrevocably sets forth the designation, the Uncertificated REMIC 2 Pass-Through Rate, the initial Uncertificated Principal Balance, and for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for each of the REMIC 2 Regular Interests.  None of the REMIC 2 Regular Interests will be certificated.

 

	
            Designation
  	
            Uncertificated  REMIC 2

Pass-Through  Rate
  	
             
  	
            Initial  Certificate

Principal  Balance
  	
            Assumed Final

Maturity Date(1)
  
	
            LT-AA
 	
            (2)
 	
            $
 	
            918,372,049.87 
 	
            July 25, 2035
 
	
            LT-A1A
 	
            (2)
 	
            $
 	
            2,379,550.00 
 	
            July 25, 2035
 
	
            LT-A1B
 	
            (2)
 	
            $
 	
            2,630,870.00 
 	
            July 25, 2035
 
	
            LT-A1C
 	
            (2)
 	
            $
 	
            1,000,450.00 
 	
            July 25, 2035
 
	
            LT-APT
 	
            (2)
 	
            $
 	
            1,740,000.00 
 	
            July 25, 2035
 
	
            LT-A2
 	
            (2) 
 	
            $
 	
            861,210.00 
 	
            July 25, 2035
 
	
            LT-M1
 	
            (2)
 	
            $
 	
            140,560.00 
 	
            July 25, 2035
 
	
            LT-M2
 	
            (2)
 	
            $
 	
            126,510.00 
 	
            July 25, 2035
 
	
            LT-M3
 	
            (2)
 	
            $
 	
            79,650.00 
 	
            July 25, 2035
 
	
            LT-M4
 	
            (2)
 	
            $
 	
            60,910.00 
 	
            July 25, 2035
 
	
            LT-M5
 	
            (2)
 	
            $
 	
            60,910.00 
 	
            July 25, 2035
 
	
            LT-M6
 	
            (2)
 	
            $
 	
            56,230.00 
 	
            July 25, 2035
 
	
            LT-M7
 	
            (2)
 	
            $
 	
            46,860.00 
 	
            July 25, 2035
 
	
            LT-M8
 	
            (2)
 	
            $
 	
            46,860.00 
 	
            July 25, 2035
 
	
            LT-M9
 	
            (2)
 	
            $
 	
            46,860.00 
 	
            July 25, 2035
 
	
            LT-M10
 	
            (2)
 	
            $
 	
            46,850.00 
 	
            July 25, 2035
 
	
            LT-ZZ
 	
            (2)
 	
            $
 	
            9,418,006.73 
 	
            July 25, 2035
 
	
            LT-IO
 	
            (2)
 	
             
 	
            (3)
 	
            July 25, 2035
 
	
            LT-P
 	
            (2)
 	
            $
 	
            100.00
 	
            July 25, 2035
 

 

	
            (1)
 	
            For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution Date in the month following the maturity date for the Mortgage Loan with the latest possible maturity date has been designated as the “latest possible maturity date” for each REMIC 1 Regular Interest.
 
	
            (2)
 	
            Calculated in accordance with the definition of “Uncertificated REMIC 2 Pass-Through Rate” herein.
 
	
            (3)
 	
            REMIC 2 Regular Interest LT-IO will not have a Certificate Principal Balance, but will accrue interest on its Uncertificated Notional Amount, as defined herein.
 

 

 

 

REMIC 3

As provided herein, the Trustee will make an election to treat the segregated pool of assets consisting of the REMIC 2 Regular Interests as a REMIC for federal income tax purposes, and such segregated pool of assets will be designated as “REMIC 3”.  The Class R-3 Interest will represent the sole class of “residual interests” in REMIC 3 for purposes of the REMIC Provisions.

The following table irrevocably sets forth the Class designation, Pass-Through Rate and Initial Certificate Principal Balance for each Class of Certificates and Interests that represents ownership of one or more of the “regular interests” in REMIC 3 created hereunder.

 

Each Certificate, other than the Class P Certificate, the Class C Certificate and the Class R Certificates, represents ownership of a regular interest in REMIC 3 and also represents (i) the right to receive payments with respect to the Basis Risk Shortfall Carry-Forward Amount and (ii) the obligation to pay the Class IO Distribution Amount (as defined herein).  The entitlement to principal of  each REMIC 3 Regular Interest ownership of which is represented by a regular interest which corresponds to each Certificate shall be equal in amount and timing to the entitlement to principal of such Certificate.

 

	
            Class  Designation
  	
             
  	
            Initial  Certificate 
Principal  Balance
  	
            Pass-Through  Rate
  	
            Assumed Final Maturity Date(1)
  
	
            Class A-1A(2)
 	
            $
 	
            237,955,000.00
 	
            Adjustable(3)
 	
            July 25, 2035
 
	
            Class A-1B(2)
 	
            $
 	
            263,087,000.00
 	
            Adjustable(3)
 	
            July 25, 2035
 
	
            Class A-1C(2)
 	
            $
 	
            100,045,000.00
 	
            Adjustable(3)
 	
            July 25, 2035
 
	
            Class A-PT(2)
 	
            $
 	
            174,000,000.00
 	
            Adjustable(3)
 	
            July 25, 2035
 
	
            Class A-2(2)
 	
            $
 	
            86,121,000.00
 	
            Adjustable(3)
 	
            July 25, 2035
 
	
            Class M-1(2)
 	
            $
 	
            14,056,000.00
 	
            Adjustable(3)
 	
            July 25, 2035
 
	
            Class M-2(2)
 	
            $
 	
            12,651,000.00
 	
            Adjustable(3)
 	
            July 25, 2035
 
	
            Class M-3(2)
 	
            $
 	
            7,965,000.00
 	
            Adjustable(3)
 	
            July 25, 2035
 
	
            Class M-4(2)
 	
            $
 	
            6,091,000.00
 	
            Adjustable(3)
 	
            July 25, 2035
 
	
            Class M-5(2)
 	
            $
 	
            6,091,000.00
 	
            Adjustable(3)
 	
            July 25, 2035
 
	
            Class M-6(2)
 	
            $
 	
            5,623,000.00
 	
            Adjustable(3)
 	
            July 25, 2035
 
	
            Class M-7(2)
 	
            $
 	
            4,686,000.00
 	
            Adjustable(3)
 	
            July 25, 2035
 
	
            Class M-8(2)
 	
            $
 	
            4,686,000.00
 	
            Adjustable(3)
 	
            July 25, 2035
 
	
            Class M-9(2)
 	
            $
 	
            4,686,000.00
 	
            Adjustable(3)
 	
            July 25, 2035
 
	
            Class M-10(2)
 	
            $
 	
            4,685,000.00
 	
            Adjustable(3)
 	
            July 25, 2035
 
	
            Class C
 	
            $
 	
            4,586,336.60
 	
            Variable(4)
 	
            July 25, 2035
 
	
            Class P
 	
            $
 	
            100.00
 	
            (5)
 	
            July 25, 2035
 
						

	
            Class IO Interest
 	
             
 	
            (6)
 	
            (7)
 	
            July 25, 2035
 

 

	
            (1)
 	
            For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution Date in the month following the maturity date for the Mortgage Loan with the latest possible maturity date has been designated as the “latest possible maturity date” for each REMIC 3 Regular Interest.
 
	
            (2)
 	
            This Class of Certificates represents ownership of a “regular interest” in REMIC 3.  Any amount distributed on this Class of Certificates on any Distribution Date in excess of the amount distributable on the related REMIC 3 Regular Interest on such Distribution Date shall be treated for federal income tax purposes as having been paid from the Basis Risk Shortfall Reserve Fund or the Supplemental Interest Trust, as applicable, and any amount distributable on such REMIC 3 regular interest on such Distribution Date in excess of the amount distributable on such Class of Certificates on such Distribution Date shall be treated as having been paid in respect of such certificate and paid by the holder thereof to the Supplemental Interest Trust, all pursuant to and as further provided in Section 4.09 hereof.
 
	
            (3)
 	
            Calculated in accordance with the definition of “Pass-Through Rate” herein.  Each REMIC 3 Regular Interest the ownership of which is represented by a Class A Certificate or Class M Certificate will have the same Pass-Through Rate as such Certificate, except with respect to the Net WAC Rate.  The Net WAC Rate for each such REMIC 3 Regular Interest and Certificate are specified in the definition of Net WAC Rate.
 
	
            (4)
 	
            The Class C Certificates will accrue interest at its variable Pass-Through Rate on the Notional Amount of the Class C Certificates outstanding from time to time which shall equal the aggregate of the Uncertificated Principal Balances of the REMIC 2 Regular Interests (other than REMIC 2 Regular Interest LT-P).  The Class C Certificates will not accrue interest on its Certificate Principal Balance.
 
	
            (5)
 	
            The Class P Certificates do not accrue interest.
 
	
            (6)
 	
            For federal income tax purposes, the Class IO Interest will not have a Pass-Through Rate, but will be entitled to 100% of the amounts distributed on REMIC 2 Regular Interest LT-IO. 
 
	
            (7)
 	
            For federal income tax purposes, the Class IO Interest will not have an Uncertificated Principal Balance, but will have a notional amount equal to the Uncertificated Notional Amount of REMIC 2 Regular Interest IO.  
 

 

 

 

 

 

ARTICLE I

 

DEFINITIONS

	
            Section 1.01
 	
            Defined Terms.
 

Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the meanings specified in this Article. Unless otherwise specified, all calculations in respect of interest on the Class A Certificates and the Class M Certificates shall be made on the basis of a 360-day year consisting of the actual number of days in the related Accrual Period. All calculations of interest with regard to the Class C Certificates, Class IO Interest, REMIC 1 Regular Interests and REMIC 2 Regular Interest shall be on the basis of a 360-day year consisting of twelve 30-days months.  The Class P Certificates and Class R Certificates do not accrue interest.

“Accepted Master Servicing Practices”:  With respect to any Mortgage Loan, as applicable, either (x) those customary mortgage master servicing practices of prudent mortgage master servicing institutions that master service mortgage loans of the same type and quality as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located, to the extent applicable to the Trustee or the Master Servicer (except in its capacity as successor to the Servicer), or (y) as provided in this Agreement, to the extent applicable to the Master Servicer, but in no event below the standard set forth in clause (x).

“Accrual Period”:  With respect to any Distribution Date, the Class A Certificates and Class M Certificates, the period commencing on the immediately preceding Distribution Date (or, in the case of the first Distribution Date, the Closing Date) and ending on the day immediately preceding the current Distribution Date.  With respect to any Distribution Date and the Class C Certificates, the calendar month preceding the month in which such Distribution Date occurs. The Class P Certificates and Class R Certificates will not accrue any interest and therefore have no Accrual Period.

“Accrued Certificate Interest”:  With respect to the Class A Certificates, Class M Certificates and Class C Certificates and any Distribution Date, the amount of interest accrued during the related Accrual Period at the related Pass-Through Rate on the Certificate Principal Balance (or Notional Amount in the case of the Class C Certificates) of such Class immediately prior to such Distribution Date, in each case, reduced by any Net Prepayment Interest Shortfalls and Relief Act Interest Shortfalls (allocated to such Certificate as set forth in Section 1.03).  The Accrued Certificate Interest on the Class A Certificates and Class M Certificates will be calculated on the basis of a 360-day year and the actual number of days in the related Accrual Period.  The Accrued Certificate Interest on the Class C Certificates will be calculated on the basis of a 360-day year consisting of
twelve 30-days months.

“Adjustable Rate Mortgage Loans”:  The Mortgage Loans identified in the Mortgage Loan Schedule as having a Mortgage Rate which is adjustable at any point during the life of the related Mortgage, including any Mortgage Loans delivered in replacement thereof.

 

 

“Advance”:  As to any Mortgage Loan, any advance made by the Servicer or the Master Servicer on any Distribution Date pursuant to Section 4.03.

“Affected Party”:  As defined in the Swap Agreement.

“Affiliate”:  With respect to any Person, any other Person controlling, controlled by or under common control with such Person. For purposes of this definition, “control” means the power to direct the management and policies of a Person, directly or indirectly, whether through ownership of voting securities, by contract or otherwise and “controlling” and “controlled” shall have meanings correlative to the foregoing.

“Aggregate Stated Principal Balance”:  As of any date of determination, the aggregate Stated Principal Balance of the Mortgage Loans.

“Agreement”:  This Pooling and Servicing Agreement and all amendments hereof.

“Allocated Realized Loss Amount”:  With respect to any Distribution Date and any Class of Class M Certificates or Class A-2 Certificates, an amount equal to the sum of any Realized Loss allocated to that class of Certificates on that Distribution Date and any Allocated Realized Loss Amount for that class remaining unpaid from any previous Distribution Date.

“Assignment”:  An assignment of Mortgage, notice of transfer or equivalent instrument, in recordable form, which is sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect a record the sale of the Mortgage.

“Assignment Agreement”:  The Assignment, Assumption and Recognition Agreement, dated as of the Closing Date, among the Company, the Trustee and the Seller, whereby the Servicing Agreement is being assigned to the Trust, and attached hereto as Exhibit K.

“Available Distribution Amount”:  With respect to any Distribution Date, an amount equal to the aggregate of the following amounts with respect to the Mortgage Loans:  (a) all previously undistributed payments on account of principal and all previously undistributed payments on account of interest received after the Cut-off Date and on or prior to the related Determination Date, (b) any Advances and Compensating Interest paid by the Servicers or the Master Servicer with respect to such Distribution Date and (c) any reimbursed amount in connection with losses on investments of deposits in an account, except:  (i) all payments that were due on or before the Cut-off Date; (ii) all Principal Prepayments, Liquidation Proceeds and Subsequent Recoveries received after the applicable Prepayment Period; (iii) all payments, other than Principal Prepayments, that represent early receipt
of scheduled payments due on a date or dates subsequent to the related Due Date; (iv) amounts received on particular Mortgage Loans as late payments of principal or interest and respecting which, and to the extent that, there are any unreimbursed Advances; (v) any investment earnings on amounts on deposit in the Custodial Account and the Certificate Account and amounts permitted to be withdrawn from the Custodial Account and the Certificate Account pursuant to this Agreement; (vi) amounts needed to pay the Servicing Fees and Master Servicing Fees or to reimburse the Servicer or the Master Servicer for amounts due under the applicable Servicing Agreement and the Agreement to the extent such amounts have not been retained by, or paid previously to, the Servicer or the Master Servicer; (vii) to pay any fees with respect to the Lender-Paid Primary Insurance Policy and (viii) any 

 

amounts reimbursable to the Trustee, the Master Servicer, the Securities Administrator and the Custodian pursuant to this Agreement.

“Bankruptcy Code”:  The Bankruptcy Code of 1978, as amended.

“Basic Principal Distribution Amount”:  With respect to any Distribution Date, the excess, if any, of (x) the Principal Remittance Amount for such Distribution Date, over (y) the Overcollateralization Release Amount.

“Basis Risk Shortfall”:  With respect to any Class of the Class A Certificates and Class M Certificates, on each Distribution Date where clause (ii) of the related definition of “Pass-Through Rate” is less than clause (i) of the definition of “Pass-Through Rate”, the excess, if any, of (x) the aggregate Accrued Certificate Interest thereon for such Distribution Date calculated pursuant to clause (i) of the definition of “Pass-Through Rate” over (y) interest accrued on the Mortgage Loans at the Net WAC Rate.

“Basis Risk Shortfall Carry-Forward Amount”:  With respect to each Class of the Class A Certificates and Class M Certificates and any Distribution Date, as determined separately for each such Class of the Class A Certificates or Class M Certificates, an amount equal to the aggregate amount of Basis Risk Shortfall for such Certificates on such Distribution Date, if any, plus any unpaid Basis Risk Shortfall for such Class of Certificates from prior Distribution Dates, plus interest thereon at the Pass-Through Rate for such Distribution Date, to the extent previously unreimbursed by the Net Monthly Excess Cashflow or the Supplemental Interest Trust.

“Basis Risk Shortfall Reserve Fund”:  A reserve fund established by the Securities Administrator on behalf of the Trustee for the benefit of the Holders of the Class A Certificates and Class M Certificates.  The Basis Risk Shortfall Reserve Fund is an “outside reserve fund” within the meaning of Treasury regulation Section 1.860G-2(h), which is not an asset of any REMIC, ownership of which is evidenced by the Class C Certificates, and which is established and maintained pursuant to Section 4.08.

“Book-Entry Certificate”:  Any Certificate registered in the name of the Depository or its nominee.

“Business Day”:  Any day other than (i) a Saturday or a Sunday, or (ii) a day on which the New York Stock Exchange or Federal Reserve is closed or on which banking institutions in the jurisdiction in which the Trustee, the Master Servicer, the Servicer, any Subservicer or the Corporate Trust Office of the Securities Administrator is located are authorized or obligated by law or executive order to be closed.

“Cash Liquidation”:  As to any defaulted Mortgage Loan other than a Mortgage Loan as to which an REO Acquisition occurred, a determination by the Servicer that it has received all Insurance Proceeds, Liquidation Proceeds and other payments or cash recoveries which the Servicer reasonably and in good faith expects to be finally recoverable with respect to such Mortgage Loan.

“Cenlar”:  Cenlar FSB.

 

 

“Cenlar Servicing Agreement”:  The Servicing Agreement dated March 5, 2004, between Wells Fargo Bank, N.A. as master servicer and Opteum Financial Services, LLC (f/k/a Home Star Mortgage Services, LLC) as seller and servicer.

“Certificate”:  Any Class A, Class M, Class C, Class P or Class R Certificate.

“Certificate Account”:  The trust account or accounts created and maintained pursuant to Section 3.19, which shall be entitled “HSBC Bank USA, National Association, in trust for registered holders of Opteum Mortgage Acceptance Corporation, Asset-Backed Pass-Through Certificates, Series 2005-3”, and which account or accounts must each be an Eligible Account.

“Certificate Account Deposit Date”:  With respect to any Distribution Date, the Business Day immediately preceding such Distribution Date.

“Certificateholder” or “Holder”:  The Person in whose name a Certificate is registered in the Certificate Register, except that only a Permitted Transferee shall be a holder of a Residual Certificate for any purposes hereof and, solely for the purposes of giving any consent pursuant to this Agreement, any Certificate registered in the name of the Company or the Master Servicer or any affiliate thereof shall be deemed not to be outstanding and the Voting Rights to which such Certificate is entitled shall not be taken into account in determining whether the requisite percentage of Voting Rights necessary to effect any such consent has been obtained, except as otherwise provided in Section 11.01.  The Trustee and the Securities Administrator shall be entitled to rely upon a certification of the Company or the Master Servicer in determining if any Certificates are
registered in the name of the respective affiliate.  All references herein to “Holders” or “Certificateholders” shall reflect the rights of Certificate Owners as they may indirectly exercise such rights through the Depository and participating members thereof, except as otherwise specified herein; provided, however, that the Trustee and the Securities Administrator shall be required to recognize as a “Holder” or “Certificateholder” only the Person in whose name a Certificate is registered in the Certificate Register.

“Certificate Margin”:  With respect to the Class A-1A, Class A-1B, Class A-1C, Class A-PT, Class A-2, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates and solely for the purposes of the definition of Marker Rate and Maximum Uncertificated Accrued Interest Deferral Amount, the REMIC 2 Regular Interests (other than REMIC 2 Regular Interests LT-AA, LT-ZZ and LT-P), on any Distribution Date prior to the Optional Termination Date, 0.110%, 0.260%, 0.370%, 0.290%, 0.340%, 0.460%, 0.480%, 0.500%, 0.650%, 0.680%, 0.720%, 1.250%, 1.350%, 1.800% and 1.85% per annum, respectively, and on any Distribution Date on and after the Step-Up Date, 0.220%, 0.520%, 0.740%, 0.580%, 0.680%, 0.690%, 0.720%, 0.750%, 0.975%, 1.020%, 1.080%, 1.875%, 2.025%, 2.700% and 2.775%  per annum, respectively.

“Certificate Owner”:  With respect to a Book-Entry Certificate, the Person who is the beneficial owner of such Certificate, as reflected on the books of an indirect participating brokerage firm for which a Depository Participant acts as agent, if any, and otherwise on the books of a Depository Participant, if any, and otherwise on the books of the Depository.

 

 

“Certificate Principal Balance”:  With respect to any Class of Class A Certificates or Class M Certificates immediately prior to any Distribution Date, the Initial Certificate Principal Balance thereof, plus any Subsequent Recoveries added to the Certificate Principal Balance of such Certificate, reduced by the sum of (a) all amounts actually distributed in respect of principal of such Class and, (b) in the case of a Class M Certificate and Class A-2 Certificate, Realized Losses allocated thereto on all prior Distribution Dates. With respect to the Class C Certificates as of any date of determination, an amount equal to the excess, if any, of (A) the then aggregate Uncertificated Principal Balances of the REMIC 2 Regular Interests over (B) the then aggregate Certificate Principal Balances of the Class A Certificates, the Class M Certificates and the Class P Certificates then outstanding.

“Certificate Register”:  The register maintained pursuant to Section 5.02.

“Class”:  Collectively, all of the Certificates bearing the same designation.

“Class A Certificate”:  Class A-1A, Class A-1B, Class A-1C, Class A-PT or Class A-2 Certificates.

“Class A Principal Distribution Amount”:  For any applicable Distribution Date on or after the Stepdown Date as long as a Trigger Event has not occurred with respect to such Distribution Date, an amount equal to the excess (if any) of (x) the aggregate Certificate Principal Balance of the Class A Certificates immediately prior to such Distribution Date over (y) the lesser of (a) the Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period) multiplied by 83.80% and (b) the amount, if any, by which (i) the Aggregate Stated Principal Balance
of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period) exceeds (ii) the Overcollateralization Floor Amount.

“Class A-1 Certificate”:  Class A-1A, Class A-1B or Class A-1C Certificate.

“Class A-1A Certificate”:  Any one of the Class A-1A Certificates as designated on the face thereof substantially in the form annexed hereto as Exhibit A, executed by the Securities Administrator and authenticated and delivered by the Securities Administrator, representing the right to distributions as set forth herein and therein and evidencing (i) a REMIC Regular Interest in REMIC 3, (ii) the right to receive the related Basis Risk Shortfall Carry-Forward Amount and (iii) the obligation to pay any Class IO Distribution Amount.

“Class A-1B Certificate”:  Any one of the Class A-1B Certificates as designated on the face thereof substantially in the form annexed hereto as Exhibit A, executed by the Securities Administrator and authenticated and delivered by the Securities Administrator, representing the right to distributions as set forth herein and therein and evidencing (i) a REMIC Regular Interest 

 

in REMIC 3, (ii) the right to receive the related Basis Risk Shortfall Carry-Forward Amount and (iii) the obligation to pay any Class IO Distribution Amount.

“Class A-1C Certificate”:  Any one of the Class A-1C Certificates as designated on the face thereof substantially in the form annexed hereto as Exhibit A, executed by the Securities Administrator and authenticated and delivered by the Securities Administrator, representing the right to distributions as set forth herein and therein and evidencing (i) a REMIC Regular Interest in REMIC 3, (ii) the right to receive the related Basis Risk Shortfall Carry-Forward Amount and (iii) the obligation to pay any Class IO Distribution Amount.

“Class A-PT Certificate”:  Any one of the Class A-PT Certificates as designated on the face thereof substantially in the form annexed hereto as Exhibit A, executed by the Securities Administrator and authenticated and delivered by the Securities Administrator, representing the right to distributions as set forth herein and therein and evidencing (i) a REMIC Regular Interest in REMIC 3, (ii) the right to receive the related Basis Risk Shortfall Carry-Forward Amount and (iii) the obligation to pay any Class IO Distribution Amount.

“Class A-2 Certificate”:  Any one of the Class A-2 Certificates as designated on the face thereof substantially in the form annexed hereto as Exhibit A, executed by the Securities Administrator and authenticated and delivered by the Securities Administrator, representing the right to distributions as set forth herein and therein and evidencing (i) a REMIC Regular Interest in REMIC 3, (ii) the right to receive the related Basis Risk Shortfall Carry-Forward Amount and (iii) the obligation to pay any Class IO Distribution Amount.

“Class C Certificate”:  Any one of the Class C Certificates as designated on the face thereof substantially in the form annexed hereto as Exhibit B-2, executed by the Securities Administrator and authenticated and delivered by the Securities Administrator, representing the right to distributions as set forth herein and therein and evidencing a REMIC Regular Interest in REMIC 3.

“Class IO Distribution Amount”:  As defined in Section 4.09 hereof.  For purposes of clarity, the Class IO Distribution Amount for any Distribution Date shall equal the amount payable to the Supplemental Interest Trust on such Distribution Date in excess of the amount payable on the Class IO Interest on such Distribution Date, all as further provided in Section 4.09 hereof.

“Class IO Interest”:  An uncertificated interest in the Trust Fund held by the Trustee, evidencing a REMIC Regular Interest in REMIC 3 for purposes of the REMIC Provisions.

“Class M Certificates”:  The Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates.

“Class M-1 Certificate”:  Any one of the Class M-1 Certificates as designated on the face thereof substantially in the form annexed hereto as Exhibit B-1, executed by the Securities Administrator and authenticated and delivered by the Securities Administrator, representing the right to distributions as set forth herein and therein and evidencing (i) a REMIC Regular Interest in REMIC 3, (ii) the right to receive the related Basis Risk Shortfall Carry-Forward Amount and (iii) the obligation to pay any Class IO Distribution Amount.

 

 

“Class M-1 Principal Distribution Amount”:  For any applicable Distribution Date on or after the Stepdown Date as long as a Trigger Event has not occurred with respect to such Distribution Date, an amount equal to the excess (if any) of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the distribution of the Class A Principal Distribution Amount on such Distribution Date) and (ii) the Certificate Principal Balance of the Class M-1 Certificates immediately prior to such Distribution Date over (y) the lesser of (a) the Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related
Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period) multiplied by 86.80% and (b) the amount, if any, by which (i) the Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period) exceeds (ii) the Overcollateralization Floor Amount.

“Class M-2 Certificate”:  Any one of the Class M-2 Certificates as designated on the face thereof substantially in the form annexed hereto as Exhibit B-1, executed by the Securities Administrator and authenticated and delivered by the Securities Administrator, representing the right to distributions as set forth herein and therein and evidencing (i) a REMIC Regular Interest in REMIC 3, (ii) the right to receive the related Basis Risk Shortfall Carry-Forward Amount and (iii) the obligation to pay any Class IO Distribution Amount.

“Class M-2 Principal Distribution Amount”:  For any applicable Distribution Date on or after the Stepdown Date as long as a Trigger Event has not occurred with respect to such Distribution Date, an amount equal to the excess (if any) of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates and Class M-1 Certificates (after taking into account the distribution of the Class A and Class M-1 Principal Distribution Amounts on such Distribution Date) and (ii) the Certificate Principal Balance of the Class M-2 Certificates immediately prior to such Distribution Date over (y) the lesser of (a) the Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections
of principal received during the related Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period) multiplied by 89.50% and (b) the amount, if any, by which (i) the Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period) exceeds (ii) the Overcollateralization Floor Amount.

“Class M-3 Certificate”:  Any one of the Class M-3 Certificates as designated on the face thereof substantially in the form annexed hereto as Exhibit B-1, executed by the Securities Administrator and authenticated and delivered by the Securities Administrator, representing the right to distributions as set forth herein and therein and evidencing (i) a REMIC Regular Interest 

 

in REMIC 3, (ii) the right to receive the related Basis Risk Shortfall Carry-Forward Amount and (iii) the obligation to pay any Class IO Distribution Amount.

“Class M-3 Principal Distribution Amount”:  For any applicable Distribution Date on or after the Stepdown Date as long as a Trigger Event has not occurred with respect to such Distribution Date, an amount equal to the excess (if any) of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A, Class M-1 and Class M-2 Certificates (after taking into account the distributions of the Class A, Class M-1 and Class M-2 Principal Distribution Amounts on such Distribution Date) and (ii) the Certificate Principal Balance of the Class M-3 Certificates immediately prior to such Distribution Date over (y) the lesser of (a) the Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period) multiplied by 91.20% and (b) the amount, if any, by which (i) the Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period) exceeds (ii) the Overcollateralization Floor Amount.

“Class M-4 Certificate”:  Any one of the Class M-4 Certificates as designated on the face thereof substantially in the form annexed hereto as Exhibit B-1, executed by the Securities Administrator and authenticated and delivered by the Securities Administrator, representing the right to distributions as set forth herein and therein and evidencing (i) a REMIC Regular Interest in REMIC 3, (ii) the right to receive the related Basis Risk Shortfall Carry-Forward Amount and (iii) the obligation to pay any Class IO Distribution Amount.

“Class M-4 Principal Distribution Amount”:  For any applicable Distribution Date on or after the Stepdown Date as long as a Trigger Event has not occurred with respect to such Distribution Date, an amount equal to the excess (if any) of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A, Class M-1, Class M-2 and Class M-3 Certificates (after taking into account the distribution of the Class A, Class M-1, Class M-2 and Class M-3 Principal Distribution Amounts on such Distribution Date) and (ii) the Certificate Principal Balance of the Class M-4 Certificates immediately prior to such Distribution Date over (y) the lesser of (a) the Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or
advanced, and unscheduled collections of principal received during the related Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period) multiplied by 92.50% and (b) the amount, if any, by which (i) the Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period) exceeds (ii) the Overcollateralization Floor Amount.

 

 

“Class M-5 Certificate”:  Any one of the Class M-5 Certificates as designated on the face thereof substantially in the form annexed hereto as Exhibit B-1, executed by the Securities Administrator and authenticated and delivered by the Securities Administrator, representing the right to distributions as set forth herein and therein and evidencing (i) a REMIC Regular Interest in REMIC 3, (ii) the right to receive the related Basis Risk Shortfall Carry-Forward Amount and (iii) the obligation to pay any Class IO Distribution Amount.

“Class M-5 Principal Distribution Amount”:  For any applicable Distribution Date on or after the Stepdown Date as long as a Trigger Event has not occurred with respect to such Distribution Date, an amount equal to the excess (if any) of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A, Class M-1, Class M-2, Class M-3 and Class M-4 Certificates (after taking into account the distribution of the Class A, Class M-1, Class M-2, Class M-3 and Class M-4 Principal Distribution Amounts on such Distribution Date) and (ii) the Certificate Principal Balance of the Class M-5 Certificates immediately prior to such Distribution Date over (y) the lesser of (a) the Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period) multiplied by 93.80% and (b) the amount, if any, by which (i) the Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period) exceeds (ii) the Overcollateralization Floor Amount.

“Class M-6 Certificate”:  Any one of the Class M-6 Certificates as designated on the face thereof substantially in the form annexed hereto as Exhibit B-1, executed by the Securities Administrator and authenticated and delivered by the Securities Administrator, representing the right to distributions as set forth herein and therein and evidencing (i) a REMIC Regular Interest in REMIC 3, (ii) the right to receive the related Basis Risk Shortfall Carry-Forward Amount and (iii) the obligation to pay any Class IO Distribution Amount.

“Class M-6 Principal Distribution Amount”:  For any applicable Distribution Date on or after the Stepdown Date as long as a Trigger Event has not occurred with respect to such Distribution Date, an amount equal to the excess (if any) of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A, Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5 Certificates (after taking into account the distribution of the Class A, Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5 Principal Distribution Amounts on such Distribution Date) and (ii) the Certificate Principal Balance of the Class M-6 Certificates immediately prior to such Distribution Date over (y) the lesser of (a) the Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period) multiplied by 95.00% and (b) the amount, if any, by which (i) the Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled 

 

payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period) exceeds (ii) the Overcollateralization Floor Amount.

“Class M-7 Certificate”:  Any one of the Class M-7 Certificates as designated on the face thereof substantially in the form annexed hereto as Exhibit B-1, executed by the Securities Administrator and authenticated and delivered by the Securities Administrator, representing the right to distributions as set forth herein and therein and evidencing (i) a REMIC Regular Interest in REMIC 3, (ii) the right to receive the related Basis Risk Shortfall Carry-Forward Amount and (iii) the obligation to pay any Class IO Distribution Amount.

“Class M-7 Principal Distribution Amount”:  For any applicable Distribution Date on or after the Stepdown Date as long as a Trigger Event has not occurred with respect to such Distribution Date, an amount equal to the excess (if any) of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class M-6 Certificates (after taking into account the distribution of the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class M-6 Principal Distribution Amounts on such Distribution Date) and (ii) the Certificate Principal Balance of the Class M-7 Certificates immediately prior to such Distribution Date over (y) the lesser of (a) the Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal
due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period) multiplied by 96.00% and (b) the amount, if any, by which (i) the Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period) exceeds (ii) the Overcollateralization Floor Amount.

“Class M-8 Certificate”:  Any one of the Class M-8 Certificates as designated on the face thereof substantially in the form annexed hereto as Exhibit B-1, executed by the Securities Administrator and authenticated and delivered by the Securities Administrator, representing the right to distributions as set forth herein and therein and evidencing (i) a REMIC Regular Interest in REMIC 3, (ii) the right to receive the related Basis Risk Shortfall Carry-Forward Amount and (iii) the obligation to pay any Class IO Distribution Amount.

“Class M-8 Principal Distribution Amount”:  For any applicable Distribution Date on or after the Stepdown Date as long as a Trigger Event has not occurred with respect to such Distribution Date, an amount equal to the excess (if any) of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class M-7 Certificates (after taking into account the distribution of the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class M-7 Principal Distribution Amounts on such Distribution Date) and (ii) the Certificate Principal Balance of the Class M-8 Certificates immediately prior to such Distribution Date over (y) the lesser of (a) the Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due 

 

Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period) multiplied by 97.00% and (b) the amount, if any, by which (i) the Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period) exceeds (ii) the Overcollateralization Floor Amount.

“Class M-9 Certificate”:  Any one of the Class M-9 Certificates as designated on the face thereof substantially in the form annexed hereto as Exhibit B-1, executed by the Securities Administrator and authenticated and delivered by the Securities Administrator, representing the right to distributions as set forth herein and therein and evidencing (i) a REMIC Regular Interest in REMIC 3, (ii) the right to receive the related Basis Risk Shortfall Carry-Forward Amount and (iii) the obligation to pay any Class IO Distribution Amount.

“Class M-9 Principal Distribution Amount”:  For any applicable Distribution Date on or after the Stepdown Date as long as a Trigger Event has not occurred with respect to such Distribution Date, an amount equal to the excess (if any) of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7 and Class M-8 Certificates (after taking into account the distribution of the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7 and Class M-8 Principal Distribution Amounts on such Distribution Date) and (ii) the Certificate Principal Balance of the Class M-9 Certificates immediately prior to such Distribution Date over (y) the lesser of (a) the Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period) multiplied by 98.00% and (b) the amount, if any, by which (i) the Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period) exceeds (ii) the Overcollateralization Floor Amount.

“Class M-10 Certificate”:  Any one of the Class M-10 Certificates as designated on the face thereof substantially in the form annexed hereto as Exhibit B-1, executed by the Securities Administrator and authenticated and delivered by the Securities Administrator, representing the right to distributions as set forth herein and therein and evidencing (i) a REMIC Regular Interest in REMIC 3, (ii) the right to receive the related Basis Risk Shortfall Carry-Forward Amount and (iii) the obligation to pay any Class IO Distribution Amount.

“Class M-10 Principal Distribution Amount”:  For any applicable Distribution Date on or after the Stepdown Date as long as a Trigger Event has not occurred with respect to such Distribution Date, an amount equal to the excess (if any) of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class 

 

M-5, Class M-6, Class M-7, Class M-8 and Class M-9 Certificates (after taking into account the distribution of the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9 Principal Distribution Amounts on such Distribution Date) and (ii) the Certificate Principal Balance of the Class M-10 Certificates immediately prior to such Distribution Date over (y) the lesser of (a) the Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period) multiplied by 99.00% and (b) the amount, if any, by which (i) the Aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period) exceeds (ii) the Overcollateralization Floor Amount.

“Class P Certificate”:  Any one of the Class P Certificates as designated on the face thereof substantially in the form annexed hereto as Exhibit B-3, executed by the Securities Administrator and authenticated and delivered by the Securities Administrator, representing the right to distributions as set forth herein and therein and evidencing a REMIC Regular Interest in REMIC 3.

“Class R Certificate”:  Any one of the Class R Certificates as designated on the face thereof substantially in the form annexed hereto as Exhibit B-4, executed by the Securities Administrator and authenticated and delivered by the Securities Administrator, evidencing the ownership of the Class R-1 Interest, Class R-2 Interest and Class R-3 Interest.

“Class R-1 Interest”:  The uncertificated Residual Interest in REMIC 1.

“Class R-2 Interest”:  The uncertificated Residual Interest in REMIC 2.

“Class R-3 Interest”:  The uncertificated Residual Interest in REMIC 3.

“Closing Date”:  June 17, 2005.

“Code”:  The Internal Revenue Code of 1986, as amended.

“Collateral Value”:  The appraised value of a Mortgaged Property based upon the lesser of (i) the appraisal made at the time of the origination of the related Mortgage Loan, or (ii) the sales price of such Mortgaged Property at such time of origination.  With respect to a Mortgage Loan the proceeds of which were used to refinance an existing mortgage loan, the appraised value of the Mortgaged Property based upon the appraisal obtained at the time of refinancing.

“Commission”:  The Securities and Exchange Commission.

“Company”:  Opteum Mortgage Acceptance Corporation, or its successor in interest.

 

 

“Compensating Interest”:  With respect to any Distribution Date, an amount equal to Prepayment Interest Shortfalls resulting from Principal Prepayments during the related Prepayment Period, but not more than the Servicing Fees for the immediately preceding Due Period.

“Corporate Trust Office”:  With respect to the Trustee, the principal corporate trust office of the Trustee at which at any particular time its corporate trust business related to this Agreement shall be administered, which office at the date of the execution of this Agreement is located at 452 Fifth Avenue, New York, New York 10018, Attention:  Corporate Trust Services - Opteum, and with respect to the Securities Administrator, for Certificate transfer purposes, Wells Fargo Center, Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479, Attn:  Corporate Trust Services – Opteum 2005-3, and for all other purposes, 9062 Old Annapolis Road, Columbia, Maryland, 21045, Attn:  Corporate Trust Services – Opteum 2005-3.

“Corresponding Certificate”:  With respect to:

	
            (i)
 	
            REMIC 2 Regular Interest LT-A1A, the Class A-1-A Certificates,
 
	
            (ii)
 	
            REMIC 2 Regular Interest LT-A1B, the Class A-1-B Certificates,
 
	
            (iii)
 	
            REMIC 2 Regular Interest LT-A1C, the Class A-1-C Certificates,
 
	
            (iv)
 	
            REMIC 2 Regular Interest LT-APT, the Class A-PT Certificates,
 
	
            (v)
 	
            REMIC 2 Regular Interest LT-A2, the Class A-2 Certificates,
 
	
            (vi)
 	
            REMIC 2 Regular Interest LT-M1, the Class M-1 Certificates,
 
	
            (vii)
 	
            REMIC 2 Regular Interest LT-M2, the Class M-2 Certificates,
 
	
            (viii)
 	
            REMIC 2 Regular Interest LT-M3, the Class M-3 Certificates,
 
	
            (ix)
 	
            REMIC 2 Regular Interest LT-M4, the Class M-4 Certificates,
 
	
            (x)
 	
            REMIC 2 Regular Interest LT-M5, the Class M-5 Certificates,
 
	
            (xi)
 	
            REMIC 2 Regular Interest LT-M6, the Class M-6 Certificates,
 
	
            (xii)
 	
            REMIC 2 Regular Interest LT-M7, the Class M-7 Certificates,
 
	
            (xiii)
 	
            REMIC 2 Regular Interest LT-M8, the Class M-8 Certificates;
 
	
            (xiv)
 	
            REMIC 2 Regular Interest LT-M9, the Class M-9 Certificates;
 
	
            (xv)
 	
            REMIC 2 Regular Interest LT-M10, the Class M-10 Certificates; and
 
	
            (xvi)
 	
            REMIC 2 Regular Interest LT-P, the Class P Certificates.
 

“Curtailment”:  Any Principal Prepayment made by a Mortgagor which is not a Principal Prepayment in Full.

“Custodial Account”:  The custodial account or accounts created and maintained by the Master Servicer pursuant to Section 3.17 in the name of a depository institution, as custodian for the Holders of the Certificates.  Any such account or accounts shall be an Eligible Account.

 

 

“Custodial Agreement”:  An agreement, dated as of the Closing Date among the Company, the Master Servicer, the Trustee and the Custodian in substantially the form of Exhibit N hereto.

“Custodian”:  Wells Fargo Bank, N.A., or any successor custodian appointed pursuant to the provisions hereof and of the Custodial Agreement.

“Cut-off Date”:  June 1, 2005.

“Defaulting Party”:  As defined in the Swap Agreement.

“Deficient Valuation”:  With respect to any Mortgage Loan, a valuation by a court of competent jurisdiction of the Mortgaged Property in an amount less than the then outstanding indebtedness under the Mortgage Loan, or any reduction in the amount of principal to be paid in connection with any scheduled Monthly Payment that constitutes a permanent forgiveness of principal, which valuation or reduction results from a proceeding under the Bankruptcy Code.

“Definitive Certificate”:  Any definitive, fully registered Certificate.

“Deleted Mortgage Loan”:  A Mortgage Loan replaced or to be replaced with a Qualified Substitute Mortgage Loan.

“Delinquent”:  A Mortgage Loan is “delinquent” if any payment due thereon is not made pursuant to the terms of such Mortgage Loan by the close of business on the day such payment is scheduled to be due. A Mortgage Loan is “30 days delinquent” if such payment has not been received by the close of business on the corresponding day of the month immediately succeeding the month in which such payment was due, or, if there is no such corresponding day (e.g., as when a 30-day month follows a 31-day month in which a payment was due on the 31st day of such month), then on the last day of such immediately succeeding month. Similarly for “60 days delinquent,” “90 days delinquent” and so on.

“Depository”:  The Depository Trust Company, or any successor Depository hereafter named.  The nominee of the initial Depository for purposes of registering those Certificates that are to be Book-Entry Certificates is Cede & Co.  The Depository shall at all times be a “clearing corporation” as defined in Section 8-102(5) of the Uniform Commercial Code of the State of New York and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended.

“Depository Participant”:  A broker, dealer, bank or other financial institutions or other Person for whom from time to time a Depository effects book-entry transfers and pledges of securities deposited with the Depository.

“Determination Date”:  The 15th day (or if such 15th day is not a Business Day, the Business Day immediately preceding such 15th day) of the month of the related Distribution Date.

“Disqualified Organization”:  Any organization defined as a “disqualified organization” under Section 860E(e)(5) of the Code, which includes any of the following:  (i) the United 

 

States, any State or political subdivision thereof, any possession of the United States, or any agency or instrumentality of any of the foregoing (other than an instrumentality which is a corporation if all of its activities are subject to tax and, except for the Freddie Mac, a majority of its board of directors is not selected by such governmental unit), (ii) a foreign government, any international organization, or any agency or instrumentality of any of the foregoing, (iii) any organization (other than certain farmers’ cooperatives described in Section 521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on unrelated business taxable income), (iv) rural electric and telephone cooperatives described in Section 1381(a)(2)(C) of the Code and (v) any other Person so designated by the Securities Administrator based upon an
Opinion of Counsel that the holding of an Ownership Interest in a Residual Certificate by such Person may cause any REMIC or any Person having an Ownership Interest in any Class of Certificates (other than such Person) to incur a liability for any federal tax imposed under the Code that would not otherwise be imposed but for the Transfer of an Ownership Interest in a Residual Certificate to such Person.  The terms “United States”, “State” and “international organization” shall have the meanings set forth in Section 7701 of the Code or successor provisions.

“Distribution Date”:  The 25th day of any month, or if such 25th day is not a Business Day, the Business Day immediately following such 25th day, commencing in July 2005.

“Due Date”:  With respect to all of the Mortgage Loans, the first day of the month.

“Due Period”:  With respect to any Distribution Date, the period commencing on the second day of the month preceding the month of such Distribution Date (or, with respect to the first Due Period, the day following the Cut-off Date) and ending on the first day of the month of the related Distribution Date.

“EDGAR”:  The Electronic Data Gathering and Retrieval System of the Commission.

“Eligible Account”:  Any of (i) a segregated account maintained with a federal or state chartered depository institution (A) the short-term obligations of which are rated A-1+ or better by Standard & Poor’s and P-1 by Moody’s at the time of any deposit therein or (B) insured by the FDIC (to the limits established by such Corporation), the uninsured deposits in which account are otherwise secured such that, as evidenced by an Opinion of Counsel (obtained by the Person requesting that the account be held pursuant to this clause (ii)) delivered to the Trustee prior to the establishment of such account, the Certificateholders will have a claim with respect to the funds in such account and a perfected first priority security interest against any collateral (which shall be limited to Permitted Investments, each of which shall mature not later than the Business Day
immediately preceding the Distribution Date next following the date of investment in such collateral or the Distribution Date if such Permitted Investment is an obligation of the institution that maintains the Certificate Account or Custodial Account) securing such funds that is superior to claims of any other depositors or general creditors of the depository institution with which such account is maintained, (ii) a segregated trust account or accounts maintained with a federal or state chartered depository institution or trust company subject to regulations regarding fiduciary funds on deposit similar to Title 12 of the Code of Federal Regulations Section 9.10(b), which, in either case, has corporate trust powers, acting in its fiduciary capacity or (iii) a segregated account or accounts of a depository institution acceptable to the Rating Agencies (as 

 

evidenced in writing by a letter from the Rating Agencies to the Trustee that use of any such account as the Custodial Account or the Certificate Account will not have an adverse effect on the then-current ratings assigned to the Classes of the Certificates then rated by the Rating Agencies).  Eligible Accounts may bear interest.

“ERISA Restricted Certificates”:  Prior to the termination of the Swap Agreement, all of the Certificates.  Subsequent to the termination of the Swap Agreement, any of the Class M-10, Class C, Class P and Class R Certificates.

“Event of Default”:  One or more of the events described in Section 7.01.

“Exchange Act”:  The Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Extra Principal Distribution Amount”:  With respect to any Distribution Date, is the lesser of (x) the Overcollateralization Deficiency Amount for such Distribution Date and (y) the sum of (i) the Net Monthly Excess Cashflow Amount for such Distribution Date and (ii) amounts available from the Supplemental Interest Trust to pay principal as provided in Section 4.01(g)(2).

“Fannie Mae”:  Federal National Mortgage Association or any successor.

“FDIC”:  Federal Deposit Insurance Corporation or any successor.

“Fitch”:  Fitch, Inc., or its successor in interest.

“Fixed Rate Mortgage Loans”:  The Mortgage Loans identified in the Mortgage Loan Schedule as having a Mortgage Rate which is fixed for the life of the related Mortgage, including any Mortgage Loans delivered in replacement thereof.

“Freddie Mac”:  Federal Home Loan Mortgage Corporation or any successor.

“Indenture”:  the Indenture, dated as of June 17, 2005, among Opteum NIM Trust 2005-3, as issuer, Wells Fargo Bank, N.A., a national banking association, not in its individual capacity, but solely as Note Administrator, and HSBC Bank USA, National Association, not in its individual capacity, but solely as Indenture Trustee.

“Indenture Trustee”:  The Indenture Trustee as defined in the Indenture.

“Initial Certificate Principal Balance”:  With respect to each Class of Regular Certificates, the Initial Certificate Principal Balance of such Class of Certificates as set forth in the Preliminary Statement hereto, or with respect to any single Certificate, the Initial Certificate Principal Balance as stated on the face thereof.

“Initial Notional Amount”:  With respect to any Class C Certificates, the aggregate of the initial Uncertificated Principal Balance of the REMIC 2 Regular Interests (other than REMIC 2 Regular Interest LT-P).

 

 

“Insurance Policy”:  With respect to any Mortgage Loan, any insurance policy (including the Lender-Paid Primary Insurance Policy) which is required to be maintained from time to time under this Agreement in respect of such Mortgage Loan.

“Insurance Proceeds”:  Proceeds paid in respect of the Mortgage Loans pursuant to any Insurance Policy, to the extent such proceeds are payable to the mortgagee under the Mortgage, any Subservicer, the Master Servicer or the Trustee and are not applied to the restoration of the related Mortgaged Property or released to the Mortgagor in accordance with the procedures that the Master Servicer would follow in servicing mortgage loans held for its own account.

“Interest Carry Forward Amount”:  With respect to each Class of the Class A Certificates and Class M Certificates and each Distribution Date, the excess of (a) the Accrued Certificate Interest for such Class with respect to prior Distribution Dates, over (b) the amount actually distributed to such Class with respect to interest on such prior Distribution Dates, with interest on such excess at the related Pass-Through Rate.

“Interest Determination Date”:  With respect to the first Accrual Period, the second LIBOR Business Day preceding the Closing Date, and with respect to each Accrual Period thereafter, the second LIBOR Business Day preceding the related Distribution Date on which such Accrual Period commences.

“Interest Remittance Amount”:  With respect to any Distribution Date, that portion of the Available Distribution Amount for such Distribution Date allocable to interest received or advanced on the Mortgage Loans, less an amount equal to the product of (x) any Net Swap Payment or Swap Termination Payment (not due to a Swap Provider Trigger Event) deposited in the Supplemental Interest Trust for payment to the Swap Provider and (y) a fraction, the numerator of which is equal to the aggregate Stated Principal Balance of the Mortgage Loans as of the first day of the related Due Period and the denominator of which is equal to the aggregate Stated Principal Balance of the Mortgage Loans as of the first day of the related Due Period.

“Late Collections”:  With respect to any Mortgage Loan, all amounts received during any Due Period, whether as late payments of Monthly Payments or as Insurance Proceeds, Liquidation Proceeds or otherwise, which represent late payments or collections of Monthly Payments due but delinquent for a previous Due Period and not previously recovered.

“Lender-Paid Insured Loans”:  The Mortgage Loans included in the Trust Fund covered by the Lender-Paid Primary Insurance Policy, as applicable, as indicated on the Mortgage Loan Schedule.

“Lender-Paid Primary Insurance Policy”:  The lender-paid Primary Insurance Policy issued by United Guaranty Corporation, as assigned to the Trust on the Closing Date, or any replacement policy therefore.

“Lender-Paid Primary Insurance Rate”:  With respect to any Lender-Paid Insured Loan covered by the Lender-Paid Primary Insurance Policy, the rate per annum at which the premium on the Lender-Paid Primary Insurance Policy accrues.

 

 

“LIBOR”:  With respect to any Distribution Date and the Pass-Through Rates on the Offered Certificates and the Class M-10 Certificates, the arithmetic mean of the Loan interbank offered rate quotations of reference banks (which will be selected by the Securities Administrator) for one-month U.S. dollar deposits, expressed on a per annum basis, determined in accordance with Section 1.02.

“LIBOR Business Day”:  A day on which banks are open for dealing in foreign currency and exchange in London and New York City.

“Liquidated Mortgage Loan”:  As to any Distribution Date, any Mortgage Loan in respect of which the Servicer has determined, in accordance with the servicing procedures specified in the Servicing Agreement, as of the end of the related Prepayment Period, that all Liquidation Proceeds which it expects to recover with respect to the liquidation of the Mortgage Loan or disposition of the related REO Property have been recovered.

“Liquidation Proceeds”:  Amounts (other than Insurance Proceeds) received by the Servicer or Master Servicer in connection with the taking of an entire Mortgaged Property by exercise of the power of eminent domain or condemnation or in connection with the liquidation of a defaulted Mortgage Loan through trustee’s sale, foreclosure sale or otherwise and any Subsequent Recoveries, other than amounts received in respect of any REO Property.

“Loan-to-Value Ratio”:  As of any date of determination, the fraction, expressed as a percentage, the numerator of which is the current principal balance of the related Mortgage Loan at the date of determination and the denominator of which is the Collateral Value of the related Mortgaged Property.

“Lost Note Affidavit”:  With respect to any Mortgage Loan as to which the original Mortgage Note has been permanently lost, misplaced or destroyed and has not been replaced, an affidavit from the Seller certifying that the original Mortgage Note has been lost, misplaced or destroyed (together with a copy of the related Mortgage Note) and indemnifying the Trust Fund against any loss, cost or liability resulting from the failure to deliver the original Mortgage Note in the form of Exhibit J hereto.

“Majority Class C Certificateholder”:  With respect to the Class C Certificates and any Distribution Date, the Holder of a 50.01% or greater Percentage Interest of the Class C Certificates.

“Marker Rate”:  With respect to the Class C Certificates and any Distribution Date, a per annum rate equal to two (2) times the weighted average of the Uncertificated REMIC 2 Pass-Through Rates for each REMIC 2 Regular Interest (other than REMIC 2 Regular Interest LT-AA, LT-IO and LT-P) subject to a cap (for each such REMIC 2 Regular Interest other than REMIC 2 Regular Interest LT-ZZ) equal to the Pass-Through Rate for the REMIC 3 Regular Interest the ownership of which is represented by the Corresponding Certificate for the purpose of this calculation; with the rate on REMIC 2 Regular Interest LT-ZZ subject to a cap of zero for the purpose of this calculation;  provided, however, that solely for this purpose, calculations of the Uncertificated REMIC 2 Pass-Through Rate and the related caps with respect to each such REMIC 2 Regular Interest, other than REMIC 2 Regular Interest
LT-ZZ, shall be multiplied by a 

 

fraction, the numerator of which is the actual number of days in the Interest Accrual Period and the denominator of which is 30.

“Master Servicer”:  Wells Fargo Bank, N.A., or any successor master servicer appointed as herein provided.

“Master Servicing Fees”:  As to each Mortgage Loan, an amount, equal to interest at the Master Servicing Fee Rate on the Stated Principal Balance of such Mortgage Loan as of the Due Date in the calendar month preceding the month in which the payment of the Master Servicing Fee is due.

“Master Servicing Fee Rate”:  With respect to each Mortgage Loan, the per annum rate of 0.0125%.

“Maximum Uncertificated Accrued Interest Deferral Amount”:  With respect to any Distribution Date, the excess of (a) accrued interest at the Uncertificated REMIC 2 Pass-Through Rate applicable to REMIC 2 Regular Interest LT-ZZ for such Distribution Date on a balance equal to the excess of (i) the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-ZZ over (ii) the REMIC 2 Overcollateralized Amount, in each case for such Distribution Date over (b) the sum of (I) Uncertificated Accrued Interest on REMIC 2 Regular Interest LT-A1A, REMIC 2 Regular Interest LT-A1B, REMIC 2 Regular Interest LT-A1C, REMIC 2 Regular Interest LT-APT, REMIC 2 Regular Interest LT-A2, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular
Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9 and REMIC 2 Regular Interest LT-M10 with the rate on each such REMIC 2 Regular Interest subject to a cap equal to the Pass-Through Rate for the REMIC 3 Regular Interest the ownership of which is represented by the Corresponding Certificate; provided, however, that solely for this purpose, calculations of the Uncertificated REMIC 2 Pass-Through Rate and the related caps with respect to REMIC 2 Regular Interest LT-A1A, REMIC 2 Regular Interest LT-A1B, REMIC 2 Regular Interest LT-A1C, REMIC 2 Regular Interest LT-APT, REMIC 2 Regular Interest LT-A2, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9 and REMIC 2 Regular Interest LT-M10 shall be multiplied by a fraction, the
numerator of which is the actual number of days in the Interest Accrual Period and the denominator of which is 30.

“MERS”:  Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware, or any successor thereto.

“MERS® System”:  The system of recording transfers of Mortgages electronically maintained by MERS.

“MIN”:  The Mortgage Identification Number for Mortgage Loans registered with MERS on the MERS® System.

 

 

“MOM Loan”:  With respect to any Mortgage Loan, MERS acting as the mortgagee of such Mortgage Loan, solely as nominee for the originator of such Mortgage Loan and its successors and assigns, at the origination thereof.

“Monthly Payment”:  With respect to any Mortgage Loan, the scheduled monthly payment of principal and interest on such Mortgage Loan which is payable by a Mortgagor from time to time under the related Mortgage Note as originally executed (after adjustment, if any, for Deficient Valuations occurring prior to such Due Date, and after any adjustment by reason of any bankruptcy or similar proceeding or any moratorium or similar waiver or grace period).

“Moody’s”:  Moody’s Investors Service, Inc., or its successor in interest.

“Mortgage”:  The mortgage, deed of trust or any other instrument securing the Mortgage Loan.

“Mortgage File”:  The mortgage documents listed in Section 2.01 pertaining to a particular Mortgage Loan and any additional documents required to be added to the Mortgage File pursuant to this Agreement; provided, that whenever the term “Mortgage File” is used to refer to documents actually received by the Custodian as agent for the Trustee, such term shall not be deemed to include such additional documents required to be added unless they are actually so added.

“Mortgage Loan”:  Each of the mortgage loans, transferred and assigned to the Trustee pursuant to Section 2.01, 2.04 or 2.06 and from time to time held in the Trust Fund (including any Qualified Substitute Mortgage Loans), the Mortgage Loans so transferred, assigned and held being identified in the Mortgage Loan Schedule.  As used herein, the term “Mortgage Loan” includes the related Mortgage Note and Mortgage.

“Mortgage Loan Purchase Agreement”:  The Mortgage Loan Purchase Agreement dated as the Cut-off Date, between Opteum Financial Services, LLC as seller and the Company as purchaser, and all amendments thereof and supplements thereto, a form of which is attached hereto as Exhibit P.

“Mortgage Loan Schedule”:  As of any date of determination, the schedule of Mortgage Loans included in the Trust Fund.  The initial schedule of Mortgage Loans with accompanying information transferred on the Closing Date to the Trustee as part of the Trust Fund for the Certificates, attached hereto as Exhibit H (as amended from time to time to reflect the addition of Qualified Substitute Mortgage Loans) (and, for purposes of the Trustee pursuant to Section 2.02, in computer-readable form as delivered to the Trustee), which list shall set forth the following information with respect to each Mortgage Loan:

	
            (i)
 	
            the loan number;
 
	
            (ii)
 	
            the city, state and zip code of the Mortgaged Property;
 
	
            (iii)
 	
            the original term to maturity;
 
	
            (iv)
 	
            the original principal balance and the original Mortgage Rate;
 

 

 

 

 

	
            (v)
 	
            the first Distribution Date;
 
	
            (vi)
 	
            [reserved];
 
	
            (vii)
 	
            the type of Mortgaged Property;
 
	
            (viii)
 	
            the Monthly Payment in effect as of the Cut-off Date;
 
	
            (ix)
 	
            the principal balance as of the Cut-off Date;
 
	
            (x)
 	
            the Mortgage Rate as of the Cut-off Date;
 
	
            (xi)
 	
            the occupancy status;
 
	
            (xii)
 	
            the purpose of the Mortgage Loan;
 
	
            (xiii)
 	
            the Collateral Value of the Mortgaged Property;
 
	
            (xiv)
 	
            the original term to maturity;
 
	
            (xv)
 	
            the paid-through date of the Mortgage Loan;
 
	
            (xvi)
 	
            the Master Servicing Fee Rate;
 
	
            (xvii)
 	
            the Servicing Fee Rate;
 
	
            (xviii)
 	
            the Net Mortgage Rate for such Mortgage Loan;
 
	
            (xix)
 	
            whether the Mortgage Loan is covered by a private mortgage insurance policy or an original certificate of private mortgage insurance;
 
	
            (xx)
 	
            the documentation type;
 
	
            (xxi)
 	
            the type and term of the related Prepayment Charge, if any;
 
	
            (xxii)
 	
            whether such Mortgage Loan is a Lender-Paid Insured Loan and, if so, the Lender-Paid Primary Insurance Rate;
 
	
            (xxiii)
 	
            with respect to each Adjustable Rate Mortgage Loan.
 
	
             
	
            (a)
 	
            the frequency of each Adjustment Date;
 
	
             
	
            (b)
 	
            the next Adjustment Date;
 
	
             
	
            (c)
 	
            the Maximum Mortgage Rate;
 
	
             
	
            (d)
 	
            the Minimum Mortgage Rate;
 
	
             
	
            (e)
 	
            the Mortgage Rate as of the Cut-off Date;
 
	
             
	
            (f)
 	
            the related Periodic Rate Cap;
 
	
             
	
            (g)
 	
            the Gross Margin; and
 
	
             
	
            (h)
 	
            the purpose of the Mortgage Loan.
 

“Mortgage Note”:  The note or other evidence of the indebtedness of a Mortgagor under a Mortgage Loan.

“Mortgage Rate”:  With respect to any Mortgage Loan, the annual rate at which interest accrues on such Mortgage Loan, as adjusted from time to time in accordance with the provisions of the Mortgage Note.

 

 

“Mortgaged Property”:  The underlying property securing a Mortgage Loan.

“Mortgagor”:  The obligor or obligors on a Mortgage Note.

“Net Liquidation Proceeds”:  With respect to any Liquidated Mortgage Loan or any other disposition of related Mortgaged Property (including REO Property) the related Liquidation Proceeds net of Advances, Servicing Advances, Servicing Fees and any other accrued and unpaid servicing fees received and retained in connection with the liquidation of such Mortgage Loan or Mortgaged Property.

“Net Monthly Excess Cashflow”:  For any Distribution Date, the excess of (x) the Available Distribution Amount for such distribution date over (y) the sum for such Distribution Date of (A) the aggregate Accrued Certificate Interest for the Class A Certificates and Class M Certificates, (B) the aggregate Interest Carry Forward Amount for the Class A Certificates and (C) the Principal Remittance Amount.

“Net Mortgage Rate”:  With respect to each Mortgage Loan Due Date, a per annum rate of interest equal to the then-applicable Mortgage Rate on such Mortgage Loan less the sum of (i) the Master Servicing Fee Rate, (ii) the Servicing Fee Rate and (iii) with respect to the Lender-Paid Insured Loans, the Lender-Paid Primary Insurance Rate calculated on the basis of a 360-day year and the number of days in the related Accrual Period.

“Net Prepayment Interest Shortfall”:  With respect to any Distribution Date, the excess, if any, of any Prepayment Interest Shortfalls for such date over the related Compensating Interest.

“Net Swap Payment”:  With respect to each Distribution Date, the net payment required to be made pursuant to the terms of the Swap Agreement by either the Swap Provider or the Supplemental Interest Trust, which net payment shall not take into account any Swap Termination Payment.

“Net WAC Rate”:  With respect to the Offered Certificates and the Class M-10 Certificates and any distribution date, a per annum rate equal to the excess, if any, of (A) a per annum rate equal to the weighted average of the Net Mortgage Rates of the mortgage loans as of the first day of the month preceding the month in which such distribution date occurs over (B) the sum of (1) a per annum rate equal to the Net Swap Payment payable to the Swap Provider on such distribution date, divided by the outstanding Stated Principal Balance of the mortgage loans as of the first day of the calendar month preceding the month in which the distribution date occurs, multiplied by 12, and (2) any Swap Termination Payment not due to a Swap Provider Trigger Event payable to the Swap Provider on such distribution date, divided by the outstanding Stated Principal Balance of the mortgage loans as of
the first day of the calendar month preceding the month in which the distribution date occurs, expressed as a per annum rate, multiplied by 12.  The Net WAC Rate will be adjusted to an effective rate reflecting the accrual of interest on an actual/360 basis. For federal income tax purposes, the equivalent of the foregoing shall be expressed as the weighted average of the Uncertificated REMIC 1 Pass-Through Rate on each REMIC 1 Regular Interest, weighted on the basis of the Uncertificated Principal Balance of each such REMIC 1 Regular Interest. 

 

 

“Nonrecoverable Advance”:  Any Advance or Servicing Advance previously made or proposed to be made in respect of a Mortgage Loan which, in the good faith judgment of the Servicer or the Master Servicer, will not or, in the case of a proposed Advance or Servicing Advance, would not be ultimately recoverable from related Late Collections, Insurance Proceeds, Liquidation Proceeds or REO Proceeds.  The determination by the Servicer or the Master Servicer that it has made a Nonrecoverable Advance or that any proposed Advance or Servicing Advance would constitute a Nonrecoverable Advance, shall be evidenced by a certificate of a Servicing Officer delivered, in the case of the Servicer, to the Company and the Master Servicer, and in the case of the Master Servicer, to the Company and the Trustee.

“Non-United States Person”:  Any Person other than a United States Person.

“Note Account”:  The Note Account as defined in the Indenture.  

“Note Administrator”:  The Note Administrator as defined in the Indenture.

“Notional Amount”:  With respect to the Class C Certificates, immediately prior to any Distribution Date, the aggregate of the Uncertificated Principal Balances of the REMIC 2 Regular Interests, other than REMIC 2 Regular Interest LT-P.

“Offered Certificates”:  The Class A Certificates and Class M Certificates (except for the Class M-10 Certificates).

“Officers’ Certificate”:  A certificate signed by the Chairman of the Board, the Vice Chairman of the Board, the President or a vice president and by the Treasurer, the Secretary, or one of the assistant treasurers or assistant secretaries of the Company, the Seller, the Master Servicer or of any Subservicer and delivered to the Company and Trustee.

“Opinion of Counsel”:  A written opinion of counsel, who may be counsel for the Company, the Seller, or the Master Servicer, reasonably acceptable to the Trustee and Securities Administrator; except that any opinion of counsel relating to (a) the qualification of any account required to be maintained pursuant to this Agreement as an Eligible Account, (b) the qualification of each REMIC  as a REMICs, (c) compliance with the REMIC Provisions or (d) resignation of the Master Servicer pursuant to Section 6.04 must be an opinion of counsel who (i) is in fact independent of the Company and the Master Servicer, (ii) does not have any direct financial interest or any material indirect financial interest in the Company or the Master Servicer or in an affiliate of either and (iii) is not connected with the Company or the Master Servicer as an officer, employee, director or person
performing similar functions.

“Optional Termination Date”:  The first Distribution Date following the first Distribution Date after the Aggregate Stated Principal Balance of the Mortgage Loans, and properties acquired in respect thereof, remaining in the Trust Fund has been reduced to less than or equal to 10% of the Aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

“OTS”:  Office of Thrift Supervision or any successor.

“Outstanding Mortgage Loan”:  As to any Due Date, a Mortgage Loan (including an REO Property) which was not the subject of a Principal Prepayment in Full, Cash Liquidation or 

 

REO Disposition and which was not purchased prior to such Due Date pursuant to Sections 2.02, 2.04 or 3.14.

“Overcollateralization Deficiency Amount”:  With respect to any Distribution Date, the amount, if any, by which the Overcollateralization Target Amount exceeds the Overcollateralized Amount (calculated for the purpose of this definition only, solely after giving effect to distributions in respect of the Principal Remittance Amount on such Distribution Date) on such Distribution Date.

“Overcollateralization Floor Amount”:  An amount equal to approximately 0.50% of the Aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

“Overcollateralization Release Amount”:  With respect to any Distribution Date, the lesser of (x) the Principal Remittance Amount for such Distribution Date and (y) the excess, if any, of (i) the Overcollateralized Amount (after giving effect to distributions in respect of the Principal Remittance Amount to be made on such Distribution Date) for such Distribution Date over (ii) the Overcollateralization Target Amount for such Distribution Date.

“Overcollateralization Target Amount”:  With respect to any Distribution Date, 0.50% of the Aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

“Overcollateralized Amount”:  With respect to any Distribution Date, the amount, if any, by which (i) the Aggregate Stated Principal Balance of the Mortgage Loans (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period and any Realized Losses on the Mortgage Loans) exceeds (ii) the aggregate Certificate Principal Balance of the Class A Certificates and Class M Certificates as of such Distribution Date (after giving effect to distributions on such Distribution Date).

“Ownership Interest”:  As to any Certificate, any ownership or security interest in such Certificate, including any interest in such Certificate as the Holder thereof and any other interest therein, whether direct or indirect, legal or beneficial, as owner or as pledgee.

“Pass-Through Rate”:  With respect to each Distribution Date and each Class of the Class A Certificates and Class M Certificates, a floating rate equal to the lesser of (i) One-Month LIBOR plus the related Certificate Margin and (ii) the Net WAC Rate with respect to such Distribution Date times a fraction equal to (x) 30 over (y) the number of days in the related Accrual Period.

With respect to any Distribution Date and the Class C Certificates, a per annum rate equal to the percentage equivalent of a fraction, the numerator of which is (x) the sum of the amounts calculated pursuant to clauses (A) through (R) below, and the denominator of which is (y) the aggregate of the Uncertificated Principal Balances of the REMIC 2 Regular Interests (other than REMIC 1 Regular Interests LT-P and LT-IO).  For purposes of calculating the Pass-Through Rate for the Class C Certificates, the numerator is equal to the sum of the following components:

 

 

(A)       the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT-AA minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest LT- AA;

(B)        the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT-A1A minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-A1A;

(C)       the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT-A1B minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-A1B;

(D)       the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT-A1C minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-A1C;

(E)        the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT-APT minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-APT;

(F)        the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT-A2 minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-A2;

(G)       the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT-M1 minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-M1;

(H)       the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT-M2 minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-M2;

(I)         the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT-M3 minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-M3;

(J)         the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT-M4 minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-M4;

(K)       the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT-M5 minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-M5;

(L)        the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT-M6 minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-M6;

 

 

(M)       the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT-M7 minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-M7;

(N)       the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT-M8 minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-M8;

(O)       the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT-M9 minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-M9;

(P)        the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT-M10 minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-M10;

(Q)       the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT-ZZ minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-ZZ; and

	
            (R)
 	
            100% of the interest on REMIC 2 Regular Interest LT-P.
 

The Class P Certificates and Class R Certificates will not accrue interest and therefore will not have a Pass-Through Rate.

“Percentage Interest”:  With respect to any Certificate (other than a Class R Certificate), the undivided percentage ownership interest in the related Class evidenced by such Certificate, which percentage ownership interest shall be equal to the Initial Certificate Principal Balance thereof or Initial Notional Amount, as applicable, thereof divided by the aggregate Initial Certificate Principal Balance or Initial Notional Amount, as applicable, of all of the Certificates of the same Class.  With respect to any Class R Certificate, the interest in distributions to be made with respect to such Class evidenced thereby, expressed as a percentage, as stated on the face of each such Certificate.

“Permitted Investment”:  One or more of the following:

(i)         obligations of or guaranteed as to principal and interest by the United States or any agency or instrumentality thereof when such obligations are backed by the full faith and credit of the United States;

(ii)         repurchase agreements on obligations specified in clause (i) maturing not more than one month from the date of acquisition thereof, provided that the unsecured obligations of the party agreeing to repurchase such obligations are at the time rated by each Rating Agency in its highest short-term rating available;

(iii)        federal funds, certificates of deposit, demand deposits, time deposits and bankers’ acceptances (which shall each have an original maturity of not more than 90 days and, in the case of bankers’ acceptances, shall in no event have an original maturity of more than 365 days or a 

 

remaining maturity of more than 30 days) denominated in United States dollars of any U.S. depository institution or trust company incorporated under the laws of the United States or any state thereof or of any domestic branch of a foreign depository institution or trust company; provided that the debt obligations of such depository institution or trust company (or, if the only Rating Agency is Standard & Poor’s, in the case of the principal depository institution in a depository institution holding company, debt obligations of the depository institution holding company) at the date of acquisition thereof have been rated by each Rating Agency in its highest short-term rating available; and provided further that, if the only Rating Agency is Standard & Poor’s and if the depository or trust company is a principal subsidiary of a bank holding company and the debt obligations of such
subsidiary are not separately rated, the applicable rating shall be that of the bank holding company; and, provided further that, if the original maturity of such short-term obligations of a domestic branch of a foreign depository institution or trust company shall exceed 30 days, the short-term rating of such institution shall be A-1+ in the case of Standard & Poor’s if Standard & Poor’s is the Rating Agency;

(iv)        commercial paper (having original maturities of not more than 365 days) of any corporation incorporated under the laws of the United States or any state thereof which on the date of acquisition has been rated by Moody’s and Standard & Poor’s in their highest short-term ratings available; provided that such commercial paper shall have a remaining maturity of not more than 30 days;

(v)        a money market fund or a qualified investment fund rated by Moody’s in its highest long-term ratings available and rated AAAm or AAAm-G by Standard & Poor’s, including any such funds for which Wells Fargo Bank, N.A. or any affiliate thereof serves as an investment advisor, manager, administrator, shareholder, servicing agent, and/or custodian or sub-custodian; and

(vi)        other obligations or securities that are acceptable to each Rating Agency as a Permitted Investment hereunder and will not reduce the rating assigned to any Class of Certificates by such Rating Agency below the lower of the then-current rating or the rating assigned to such Certificates as of the Closing Date by such Rating Agency, as evidenced in writing;

provided, however, that no instrument shall be a Permitted Investment if it represents, either (1) the right to receive only interest payments with respect to the underlying debt instrument or (2) the right to receive both principal and interest payments derived from obligations underlying such instrument and the principal and interest payments with respect to such instrument provide a yield to maturity greater than 120% of the yield to maturity at par of such underlying obligations.

“Permitted Transferee”:  Any transferee of a Residual Certificate other than a Disqualified Organization, a Non-United States Person or an “electing large partnership” (as defined in Section 775 of the Code).

“Person”:  Any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

 

 

“Prepayment Assumption”:  As defined in the Prospectus Supplement.

“Prepayment Charge”:  With respect to any Mortgage Loan, the charges, penalties or premiums, if any, due in connection with a full or partial prepayment of such Mortgage Loan in accordance with the terms of the related Mortgage Note (or any rider or annex thereto), or any amounts in respect thereof paid by the Seller in accordance with the Mortgage Loan Purchase Agreement or the Servicer in accordance with the Servicing Agreement.

“Prepayment Interest Shortfall”:  As to any Distribution Date and any Mortgage Loan (other than a Mortgage Loan relating to an REO Property) that was the subject of (a) a Principal Prepayment in Full during the related Prepayment Period, an amount equal to the excess of one month’s interest at the Net Mortgage Rate on the Stated Principal Balance of such Mortgage Loan over the amount of interest (adjusted to the Net Mortgage Rate) paid by the Mortgagor for such Prepayment Period to the date of such Principal Prepayment in Full or (b) a Curtailment during the prior calendar month, an amount equal to one month’s interest at the Mortgage Rate on the amount of such Curtailment.

“Prepayment Period”:  As to any Distribution Date, the calendar month preceding the month in which such Distribution Date occurs.

“Primary Hazard Insurance Policy”:  Each primary hazard insurance policy required to be maintained pursuant to Section 3.13.

“Primary Insurance Policy”:  Any primary policy of mortgage guaranty insurance including the Lender-Paid Primary Insurance Policy or any replacement policy therefor.

“Principal Allocation Amount”:  With respect to any Distribution Date, the sum of (a) the Principal Remittance Amount for that Distribution Date and (b) the aggregate amount of Realized Losses on the Mortgage Loans in the calendar month preceding that Distribution Date, to the extent covered by the Net Monthly Excess Cashflow for that Distribution Date or by the Swap Agreement for that Distribution Date.

“Principal Distribution Amount”:  With respect to any Distribution Date, an amount equal to the sum of the Basic Principal Distribution Amount plus the Extra Principal Distribution Amount.

“Principal Prepayment”:  Any payment of principal made by the Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due Date and which is not accompanied by an amount of interest representing scheduled interest due on any date or dates in any month or months subsequent to the month of prepayment.

“Principal Prepayment in Full”:  Any Principal Prepayment made by a Mortgagor of the entire unpaid principal balance of the Mortgage Loan.

“Principal Remittance Amount”:  With respect to any Distribution Date, the sum (net of any amounts due the Servicer or Master Servicer) of (i) each scheduled payment of principal collected or advanced on the Mortgage Loans by the Servicer or Master Servicer that was due during the related Due Period, (ii) the principal portion of all partial and full Principal 

 

Prepayments of the Mortgage Loans applied by the Servicer or Master Servicer during the related Prepayment Period, (iii) the principal portion of all Net Liquidation Proceeds, REO Proceeds, Insurance Proceeds and Subsequent Recoveries received during the related Prepayment Period, (iv) the principal portion of proceeds of Mortgage Loan purchases made pursuant to Section 2.02, 2.04 or 3.06, in each case received or made during the related Prepayment Period, (v) the principal portion of any related Substitution Adjustments deposited in the Custodial Account during the related Prepayment Period and (vi) on the Distribution Date on which the Trust Fund is to be terminated pursuant to Section 9.01, the principal portion of the termination price received from the Servicer or the Master Servicer, as applicable, in connection with a termination of the Trust Fund to occur on such Distribution Date, less any Net Swap Payment or Swap Termination Payment (not due to a Swap Provider Trigger Event) deposited in the Supplemental Interest Trust for payment to the Swap Provider on such Distribution Date (to the extent not paid from interest collections).

“Prospectus Supplement”:  That certain Prospectus Supplement dated June 13, 2005, relating to the public offering of the Offered Certificates.

“Protected Account”:  An account established and maintained for the benefit of Certificateholders by the Servicer with respect to the related Mortgage Loans and with respect to REO Property pursuant to the Servicing Agreement.

“Purchase Price”:  With respect to any Mortgage Loan (or REO Property) required to be purchased pursuant to Section 2.02, 2.04 or 3.06, an amount equal to the sum of (i) 100% of the Stated Principal Balance thereof, (ii) unpaid accrued interest (or REO Imputed Interest) at the applicable Net Mortgage Rate on the Stated Principal Balance thereof outstanding during each Due Period that such interest was not paid or advanced, from the date through which interest was last paid by the Mortgagor or advanced and distributed to Certificateholders together with unpaid Master Servicing Fees and Servicing Fees and, if such Mortgage Loan is a Lender-Paid Insured Loan, the premium payable at the Lender-Paid Primary Insurance Rate, from the date through which interest was last paid by the Mortgagor, in each case to the first day of the month in which such Purchase Price is to be distributed,
plus (iii) the aggregate of all Advances and Servicing Advances made in respect thereof that were not previously reimbursed and (iv) costs and damages incurred by the Trust Fund in connection with a repurchase pursuant to Section 2.04 hereof that arises out of a violation of any anti-predatory lending law which also constitutes an actual breach of representations (xxxii), (xxxiii), (xxxiv), (xxxv), (xxxvi) or (xxxvii) of Section 3.1(b) of the Mortgage Loan Purchase Agreement.

“Qualified Insurer”:  Any insurance company duly qualified as such under the laws of the state or states in which the related Mortgaged Property or Mortgaged Properties is or are located, duly authorized and licensed in such state or states to transact the type of insurance business in which it is engaged and approved as an insurer by the Master Servicer, so long as the claims paying ability of which is acceptable to the Rating Agencies for pass-through certificates having the same rating as the Certificates rated by the Rating Agencies as of the Closing Date.

“Qualified Substitute Mortgage Loan”:  A Mortgage Loan substituted by the Company for a Deleted Mortgage Loan which must, on the date of such substitution, as confirmed in an Officers’ Certificate of the Seller delivered to the Trustee, (i) have an outstanding principal 

 

balance, after deduction of the principal portion of the monthly payment due in the month of substitution (or in the case of a substitution of more than one Mortgage Loan for a Deleted Mortgage Loan, an aggregate outstanding principal balance, after such deduction), not in excess of the Stated Principal Balance of the Deleted Mortgage Loan (the amount of any shortfall to be paid to the Master Servicer for deposit in the Custodial Account in the month of substitution); (ii) have a Mortgage Rate and a Net Mortgage Rate no lower than and not more than 1% per annum higher than the Mortgage Rate and Net Mortgage Rate, respectively, of the Deleted Mortgage Loan as of the date of substitution; (iii) have a Loan-to-Value Ratio at the time of substitution no higher than that of the Deleted Mortgage Loan at the time of substitution; (iv) have a remaining term to stated maturity not greater than (and not more than
one year less than) that of the Deleted Mortgage Loan; (v) comply with each representation and warranty set forth in Section 2.04 hereof; and, (vi) comply with each non-statistical representation and warranty set forth in the Mortgage Loan Purchase Agreement.

“Rating Agency”:  Standard & Poor’s and Moody’s and each of their successors.  If such agencies and their successors are no longer in existence, “Rating Agency” shall be such nationally recognized statistical rating agency, or other comparable Person, designated by the Company, notice of which designation shall be given to the Trustee, the Securities Administrator and Master Servicer.  References herein to the two highest long term debt ratings of a Rating Agency shall mean “AA” or better in the case of Standard & Poor’s and “Aa2” or better in the case of Moody’s and references herein to the two highest short-term debt ratings of a Rating Agency shall mean “A-1+” in the case of Standard & Poor’s and “P-1” in the case of Moody’s, and in the case of any other Rating Agency such references
shall mean such rating categories without regard to any plus or minus.

“Realized Loss”:  With respect to each Mortgage Loan or REO Property as to which a Cash Liquidation or REO Disposition has occurred, an amount (not less than zero) equal to (i) the Stated Principal Balance of the Mortgage Loan as of the date of Cash Liquidation or REO Disposition, plus (ii) interest (and REO Imputed Interest, if any) at the Net Mortgage Rate from the Due Date as to which interest was last paid or advanced to Certificateholders up to the date of the Cash Liquidation or REO Disposition on the Stated Principal Balance of such Mortgage Loan outstanding during each Due Period that such interest was not paid or advanced, minus (iii) the proceeds, if any, received during the month in which such Cash Liquidation or REO Disposition occurred, to the extent applied as recoveries of interest at the Net Mortgage Rate and to principal of the Mortgage Loan, net of the portion
thereof reimbursable to the Master Servicer or the Servicer with respect to related Advances or Servicing Advances not previously reimbursed.  With respect to each Mortgage Loan which has become the subject of a Deficient Valuation, the difference between the principal balance of the Mortgage Loan outstanding immediately prior to such Deficient Valuation and the principal balance of the Mortgage Loan as reduced by the Deficient Valuation.  In addition, to the extent the Servicer or Master Servicer receives Subsequent Recoveries with respect to any Mortgage Loan, the amount of the Realized Loss with respect to that Mortgage Loan will be reduced to the extent such recoveries are applied to reduce the Certificate Principal Balance of any Class of Certificates on any Distribution Date.

“Record Date”:  With respect to any Book-Entry Certificates and any Distribution Date, the close of business on the Business Day immediately preceding such distribution date.  With 

 

respect to any Certificates that are not Book-Entry Certificates, the close of business on the last Business Day of the calendar month preceding such Distribution Date.

“Regular Certificate”:  Any of the Certificates other than a Residual Certificate.

“Regular Interest”:  A “regular interest” in a REMIC within the meaning of Section 860G(a)(1) of the Code.

“Relief Act”:  The Servicemembers Civil Relief Act, f/k/a Soldiers’ and Sailors’ Civil Relief Act of 1940, as amended.

“Relief Act Interest Shortfall”:  With respect to any Distribution Date, for any Mortgage Loan with respect to which there has been a reduction in the amount of interest collectible thereon for the most recently ended Due Period as a result of the application of the Relief Act, the amount by which (i) interest collectible on such Mortgage Loan during such Due Period is less than (ii) one month’s interest on the Principal Balance of such Mortgage Loan at the Loan Rate for such Mortgage Loan before giving effect to the application of the Relief Act.

“REMIC”:  A “real estate mortgage investment conduit” within the meaning of Section 860D of the Code.

“REMIC 1”:  The segregated pool of assets subject hereto (exclusive of the Basis Risk Shortfall Reserve Fund and the Supplemental Interest Trust) with respect to which a REMIC election is to be made, conveyed in trust to the Trustee, for the benefit of the Holders of the REMIC 1 Regular Interests and the Holders of the Class R Certificates (as holders of the Class R-1 Interest), consisting of:  (i) each Mortgage Loan (exclusive of payments of principal and interest due on or before the Cut-off Date, if any, received by the Master Servicer which shall not constitute an asset of the Trust Fund) as from time to time are subject to this Agreement and all payments under and proceeds of such Mortgage Loans (exclusive of any prepayment fees and late payment charges received on the Mortgage Loans), together with all documents included in the related Mortgage File, subject to Section
2.01; (ii) such funds or assets as from time to time are deposited in the Custodial Account or the Certificate Account and belonging to the Trust Fund; (iii) any REO Property; (iv) the Primary Hazard Insurance Policies, if any, the Primary Insurance Policies, if any, and all other Insurance Policies with respect to the Mortgage Loans; and (v) the Company’s interest in respect of the representations and warranties made by the Seller in the Mortgage Loan Purchase Agreement as assigned to the Trustee pursuant to Section 2.04 hereof.  REMIC 1 specifically does not include the Basis Risk Shortfall Reserve Fund and the Supplemental Interest Trust.

“REMIC 1 Regular Interest”:  Any of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a “regular interest” in REMIC 1. Each REMIC 1 Regular Interest shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto. The designations for the respective REMIC 1 Regular Interests are set forth in the Preliminary Statement hereto.  

 

 

“REMIC 2”:  The segregated pool of assets consisting of all of the REMIC 1 Regular Interests conveyed in trust to the Trustee, for the benefit of the Holders of the REMIC 2 Regular Interests and the Holders of the Class R (as holders of the Class R-2 Interest), pursuant to Article II hereunder, and all amounts deposited therein, with respect to which a separate REMIC election is to be made.

“REMIC 2 Interest Loss Allocation Amount”:  With respect to any Distribution Date, an amount equal to (a) the product of (i) the aggregate Principal Balance of the mortgage loans and related REO Properties then outstanding and (ii) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT-AA minus the Marker Rate, divided by (b) 12.

“REMIC 2 Overcollateralized Amount”:  With respect to any date of determination, (i) 1% of the aggregate Uncertificated Principal Balances of REMIC 2 Regular Interest LT-AA, REMIC 2 Regular Interest LT-A1A, REMIC 2 Regular Interest LT-A1B, REMIC 2 Regular Interest LT-A1C, REMIC 2 Regular Interest LT-APT, REMIC 2 Regular Interest LT-A2, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9, REMIC 2 Regular Interest LT-M10, REMIC 2 Regular Interest LT-ZZ and REMIC 2 Regular Interest LT-P, minus (ii) the aggregate of the Uncertificated Principal Balances of REMIC 2 Regular Interest LT-A1A, REMIC 2 Regular Interest LT-A1B, REMIC 2 Regular Interest
LT-A1C, REMIC 2 Regular Interest LT-APT, REMIC 2 Regular Interest LT-A2, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9, REMIC 2 Regular Interest LT-M10 and REMIC 2 Regular Interest LT-P, in each case as of such date of determination.

“REMIC 2 Principal Loss Allocation Amount”:  With respect to any Distribution Date and the mortgage loans, an amount equal to (a) the product of (i) the aggregate Principal Balance of the mortgage loans and related REO Properties then outstanding and (ii) 1 minus a fraction, the numerator of which is two times the aggregate of the Uncertificated Principal Balances of REMIC 2 Regular Interest LT-A1A, REMIC 2 Regular Interest LT-A1B, REMIC 2 Regular Interest LT-A1C, REMIC 2 Regular Interest LT-APT, REMIC 2 Regular Interest LT-A2, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9 and REMIC 2 Regular Interest LT-M10 and the denominator of which is
the aggregate of the Uncertificated Principal Balances of REMIC 2 Regular Interest LT-A1A, REMIC 2 Regular Interest LT-A1B, REMIC 2 Regular Interest LT-A1C, REMIC 2 Regular Interest LT-APT, REMIC 2 Regular Interest LT-A2, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9, REMIC 2 Regular Interest LT-M10 and REMIC 2 Regular Interest LT-ZZ.

 

 

“REMIC 2 Overcollateralization Target Amount”:  1.00% of the Overcollateralization Target Amount.

“REMIC 2 Regular Interests “:  Any one of the separate non-certificated beneficial ownership interests in REMIC 2 issued hereunder and designated as a “regular interest” in REMIC 2 and identified in the Preliminary Statement.  Each REMIC 2 Regular Interest shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal (other than REMIC 2 Regular Interest LT-IO), subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto. REMIC 2 Regular Interest LT-P shall also be entitled to any Prepayment Charges received by the Trust Fund.

“REMIC 3”:  The segregated pool of assets consisting of all of the REMIC 2 Regular Interests conveyed in trust to the Trustee, for the benefit of the Holders of the Regular Certificates, Class IO Interest and the Holders of the Class R Certificates (as holders of the Class R-3 Interest), pursuant to Article II hereunder, and all amounts deposited therein, with respect to which a separate REMIC election is to be made.

“REMIC 3 Regular Interest”:  The Class IO Interest and any “regular interest” in REMIC 3 the ownership of which is represented by a Class A Certificate or Class M Certificate.

“REMIC Provisions”:  Provisions of the federal income tax law relating to real estate mortgage investment conduits, which appear at Sections 860A through 860G of Subchapter M of Chapter 1 of the Code, and related provisions, and proposed, temporary and final regulations and published rulings, notices and announcements promulgated thereunder, as the foregoing may be in effect from time to time.

“REMIC Regular Interest”:  A REMIC 1 Regular Interest, REMIC 2 Regular Interest, REMIC 3 Regular Interest or Class IO Interest.

“Remittance Report”:  A report prepared by the Master Servicer (and delivered to the Securities Administrator) providing the information set forth in Exhibit E attached hereto.

“REO Acquisition”:  The acquisition by the Servicer on behalf of the Trust Fund for the benefit of the Certificateholders of any REO Property pursuant to Section 3.15.

“REO Disposition”:  The receipt by the Servicer of Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries and other payments and recoveries (including proceeds of a final sale) which the Servicer expects to be finally recoverable from the sale or other disposition of the REO Property.

“REO Imputed Interest”:  As to any REO Property, for any period, an amount equivalent to interest (at the Mortgage Rate that would have been applicable to the related Mortgage Loan had it been outstanding) on the unpaid principal balance of the Mortgage Loan as of the date of acquisition thereof (as such balance is reduced pursuant to Section 3.15 by any income from the REO Property treated as a recovery of principal).

 

 

“REO Proceeds”:  Proceeds, net of directly related expenses, received in respect of any REO Property (including, without limitation, proceeds from the rental of the related Mortgaged Property and of any REO Disposition), which proceeds are required to be deposited into the Custodial Account as and when received.

“REO Property”:  A Mortgaged Property acquired by the Servicer on behalf of the Trust Fund through foreclosure or deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan.

“Request for Release”:  A release signed by a Servicing Officer, in the form of Exhibit F attached hereto.

“Residual Certificates”:  The Class R Certificates.

“Residual Interest”:  The sole class of “residual interests” in a REMIC within the meaning of Section 860G(a)(2) of the Code.

“Responsible Officer”:  When used with respect to the Trustee shall mean any officer within the Corporate Trust Office of the Trustee with direct responsibility for the administration of this Agreement and also, with respect to a particular matter, any other officer of the Trustee to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject. When used with respect to the Securities Administrator shall mean any officer assigned with direct responsibility for the administration of this Agreement and also, with respect to a particular matter, any other officer of the Securities Administrator to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

“Securities Administrator”:  Wells Fargo Bank, N.A., or its successor in interest, or any successor securities administrator appointed as herein provided.

“Seller”:  Opteum Financial Services, LLC, or its successor in interest.

“Senior Enhancement Percentage”:  For any Distribution Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Certificate Principal Balance of the Class M Certificates and (ii) the related Overcollateralization Amount, in each case prior to the distribution of the Principal Distribution Amount on such Distribution Date, by (y) the Aggregate Stated Principal Balance of the Mortgage Loans after giving effect to distributions to be made on that Distribution Date.

“Sequential Trigger Event”:  With respect to any Distribution Date (i) prior to the Distribution Date in May 2008, if cumulative Realized Losses on the Mortgage Loans for such Distribution Date as a percentage of the Aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date are greater than 1.00%, and (ii) in or after May 2008, if a Trigger Event is in effect.

“Servicer”:  Opteum Financial Services, LLC, or its successor in interest.

 

 

“Servicer Remittance Date”:  The 18th day of any month, or if such 18th day is not a Business Day, the first Business Day immediately preceding such 18th day. The first Remittance Date shall occur on July 18, 2005.

“Servicing Advances”:  All customary, reasonable and necessary “out of pocket” costs and expenses incurred in connection with a default, delinquency or other unanticipated event in the performance by the Master Servicer, the Servicer or any Subservicer of its servicing obligations, including, but not limited to, the cost of (i) the preservation, restoration and protection of a Mortgaged Property, (ii) any enforcement or judicial proceedings, including foreclosures, including any expenses incurred in relation to any such proceedings that result from the Mortgage Loan being registered on the MERS System, (iii) the management and liquidation of any REO Property, including reasonable fees paid to any independent contractor in connection therewith, and (iv) compliance with the obligations under the second paragraph of Section 3.01, Section 3.09 and Section 3.13 (other than
any deductible described in the last paragraph thereof).

“Servicing Agreement”:  The Cenlar Servicing Agreement, attached hereto as Exhibit M-1.

“Servicing Fee”:  With respect to each Mortgage Loan, accrued interest at the Servicing Fee Rate with respect to the Mortgage Loan on the same principal balance on which interest on the Mortgage Loan accrues for the calendar month.  The Servicing Fee consists of servicing and other related compensation payable to the Servicer or to the Master Servicer if the Master Servicer is directly servicing the loan, and includes any amount payable to any Subservicer by the Servicer.

“Servicing Fee Rate”:  With respect to each mortgage loan, the servicing fee rate set forth in the Mortgage Loan Schedule.  With respect to each fixed rate mortgage loan, the Servicing Fee Rate ranges from 0.25% to 0.50% per annum. With respect to each adjustable rate mortgage loan, the Servicing Fee Rate ranges from 0.375% to 0.50% per annum; provided that, if any adjustable rate mortgage loan has an initial fixed rate interest period, that rate will range from 0.25% to 0.50% per annum following such initial fixed rate period.

“Servicing Officer”:  Any officer of the Master Servicer involved in, or responsible for, the administration and servicing of the Mortgage Loans, whose name and specimen signature appear on a list of servicing officers furnished to the Trustee by the Master Servicer, as such list may from time to time be amended.

“Single Certificate”:  A Regular Certificate of any Class (other than a Class P Certificate) evidencing an Initial Certificate Principal Balance or Initial Notional Amount, as applicable, of $1,000, or, in the case of a Class P Certificate, a Certificate of such Class evidencing an Initial Certificate Principal Balance of $100.

“Standard & Poor’s”:  Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., or its successor in interest.

“Startup Day”:  The day designated as such pursuant to Article X hereof.

 

 

“Stated Principal Balance”:  With respect to any Mortgage Loan or related REO Property at any given time, (i) the principal balance of the Mortgage Loan outstanding as of the Cut-off Date, after application of principal payments due on or before such date, whether or not received, minus (ii) the sum of (a) the principal portion of the Monthly Payments due with respect to such Mortgage Loan or REO Property during each Due Period ending prior to the most recent Distribution Date which were received or with respect to which an Advance was made, and (b) all Principal Prepayments with respect to such Mortgage Loan or REO Property, and all Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries and REO Proceeds to the extent applied by the Master Servicer as recoveries of principal in accordance with Section 3.15 with respect to such Mortgage Loan or REO Property, which were
distributed pursuant to Section 4.01 on any previous Distribution Date, and (c) any Realized Loss with respect thereto allocated pursuant to Section 4.07 for any previous Distribution Date.

“Step-Up Date”:  The first Distribution Date following the first Distribution Date on which the aggregate unpaid principal balance of the Mortgage Loans, and properties acquired in respect thereof, remaining in the Trust Fund has been reduced to less than or equal to 10% of the Aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

“Stepdown Date”:  The later to occur of (x) the Distribution Date occurring in July 2008 and (y) the first Distribution Date for which the Senior Enhancement Percentage is greater than or equal to approximately 16.20%.

 “Subservicer”:  Any Subservicer appointed by the Servicer pursuant to the Servicing Agreement.  Initially, the Subservicer shall be Cenlar.

“Subservicer Remittance Date”:  The 18th day of each month, or if such day is not a Business Day, the immediately preceding Business Day.

“Subservicing Agreement”:  The written contract between the Servicer and a Subservicer and any successor Subservicer relating to servicing and administration of certain Mortgage Loans as provided in the Servicing Agreement.

“Subsequent Recoveries”:  As of any Distribution Date, amounts received by the Servicer or Master Servicer (net of any related expenses permitted to be reimbursed pursuant to Section 4.02) or surplus amounts held by the Servicer or Master Servicer to cover estimated expenses (including, but not limited to, recoveries in respect of the representations and warranties made by the Seller pursuant to the Mortgage Loan Purchase Agreement) specifically related to a Mortgage Loan that was the subject of a liquidation or final disposition of any REO Property prior to the related Prepayment Period that resulted in a Realized Loss.

“Substitution Adjustment”:  As defined in Section 2.04 hereof.

“Supplemental Interest Trust”:  The corpus of a trust created pursuant to Section 4.09 of this Agreement and designated as the “Supplemental Interest Trust,” consisting of the Swap Agreement, Class IO Interest and the right to receive payments in respect of the Class IO Distribution Amount.  For the avoidance of doubt, the Supplemental Interest Trust does not constitute a part of the Trust Fund.

 

 

“Swap Agreement”:  The interest rate swap agreement, dated June 17, 2005, between HSBC Bank USA, National Association, as trustee on behalf of the Supplemental Interest Trust, and the Swap Provider, which agreement provides for Net Swap Payments and Swap Termination Payments to be paid, as provided therein, together with any schedules, confirmations or other agreements relating thereto, attached hereto as Exhibit O.

“Swap LIBOR”:  LIBOR as determined pursuant to the Swap Agreement.

“Swap Principal Payment Amount”:  With respect to each Distribution Date, the Swap Principal Payment Amount as defined in the Indenture.

“Swap Provider”:  The swap provider under the Swap Agreement either (a) entitled to receive payments from the Supplemental Interest Trust or (b) required to make payments to the Supplemental Interest Trust, in either case pursuant to the terms of the Swap Agreement, and any successor in interest or assign.  Initially, the Swap Provider shall be Bear Stearns Financial Products Inc.

“Swap Provider Trigger Event”:  A Swap Provider Trigger Event shall have occurred if any of an Event of Default (under the Swap Agreement) with respect to which the Swap Provider is a Defaulting Party, a Termination Event (under the Swap Agreement) with respect to which the Swap Provider is the sole Affected Party or an Additional Termination Event (under the Swap Agreement) with respect to which the Swap Provider is the sole Affected Party has occurred.

“Swap Termination Payment”:  Upon the designation of an “Early Termination Date” as defined in the Swap Agreement, the payment to be made by the Supplemental Interest Trust to the Swap Provider, or by the Swap Provider to the Supplemental Interest Trust, as applicable, pursuant to the terms of the Swap Agreement.

“Tax Returns”:  The federal income tax return on Internal Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed on behalf of each REMIC due to their classification as REMICs under the REMIC Provisions, together with any and all other information, reports or returns that may be required to be furnished to the Certificateholders or filed with the Internal Revenue Service or any other governmental taxing authority under any applicable provisions of federal, state or local tax laws.

“Transfer”:  Any direct or indirect transfer, sale, pledge, hypothecation or other form of assignment of any Ownership Interest in a Certificate.

“Transferor”:  Any Person who is disposing by Transfer of any Ownership Interest in a Certificate.

“Trigger Event”:  A Trigger Event is in effect with respect to any distribution date if:

(1)       the three-month rolling average of the aggregate principal balance of Mortgage Loans that are 60 or more days Delinquent (including for this purpose any such Mortgage Loans 

 

in foreclosure and Mortgage Loans with respect to which the related mortgaged property has been acquired by the trust) as of the close of business on the last day of the preceding calendar month equals or exceeds 35.00% of the Senior Enhancement Percentage; or

(2)        in the case of any Distribution Date after the 36th Distribution Date, the cumulative amount of Realized Losses incurred on the Mortgage Loans from the Cut-off Date through the end of the calendar month immediately preceding such Distribution Date exceeds the applicable percentage set forth below of the Aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date:

	
            Distribution Date 
 	
            Percentage
 
	
            July 2005 to June 2008
 	
            N/A
 
	
            July 2008 to June 2009
 	
            1.00%
 
	
            July 2009 to June 2010
 	
            1.50%
 
	
            July 2010 to June 2011
 	
            2.00%
 
	
            July 2011 and thereafter
 	
            2.25%
 

 

“Trust Fund”:  REMIC 1, REMIC 2, REMIC 3, the Basis Risk Shortfall Reserve Fund, the Custodial Account and the Certificate Account.

“Trust REMIC”:  Any of REMIC 1, REMIC 2 or REMIC 3.

“Trustee”:  HSBC Bank USA, National Association, or its successor in interest, or any successor trustee appointed as herein provided.

“Uncertificated Accrued Interest”:  With respect to each REMIC Regular Interest on each Distribution Date, an amount equal to one month’s interest at the related Uncertificated Pass-Through Rate on the Uncertificated Principal Balance or Uncertificated Notional Amount, as applicable, of such REMIC Regular Interest.  In each case, Uncertificated Accrued Interest will be reduced by any Net Prepayment Interest Shortfalls and Relief Act Interest Shortfalls (allocated to such REMIC Regular Interests as set forth in Section 1.03).

“Uncertificated Notional Amount”:  With respect to REMIC 2 Regular Interest LT-IO and each Distribution Date listed below, the aggregate Uncertificated Principal Balance of the REMIC 1 Regular Interests ending with the designation “A” listed below: 

	
            
Distribution Date
  
  	
            
REMIC 1 Regular Interests
  
  
	
            1
 	
            I-1-A through I-95-A 
 
	
            2
 	
            I-2-A through I-95-A 
 
	
            3
 	
            I-3-A through I-95-A 
 
	
            4
 	
            I-4-A through I-95-A 
 
	
            5
 	
            I-5-A through I-95-A 
 
	
            6
 	
            I-6-A through I-95-A 
 
	
            7
 	
            I-7-A through I-95-A 
 
	
            8
 	
            I-8-A through I-95-A 
 
	
            9
 	
            I-9-A through I-95-A 
 
	
            10
 	
            I-10-A through I-95-A 
 
	
            11
 	
            I-11-A through I-95-A 
 

 

 

 

 

	
            12
 	
            I-12-A through I-95-A 
 
	
            13
 	
            I-13-A through I-95-A 
 
	
            14
 	
            I-14-A through I-95-A 
 
	
            15
 	
            I-15-A through I-95-A 
 
	
            16
 	
            I-16-A through I-95-A 
 
	
            17
 	
            I-17-A through I-95-A 
 
	
            18
 	
            I-18-A through I-95-A 
 
	
            19
 	
            I-19-A through I-95-A 
 
	
            20
 	
            I-20-A through I-95-A 
 
	
            21
 	
            I-21-A through I-95-A 
 
	
            22
 	
            I-22-A through I-95-A 
 
	
            23
 	
            I-23-A through I-95-A 
 
	
            24
 	
            I-24-A through I-95-A 
 
	
            25
 	
            I-25-A through I-95-A 
 
	
            26
 	
            I-26-A through I-95-A 
 
	
            27
 	
            I-27-A through I-95-A 
 
	
            28
 	
            I-28-A through I-95-A 
 
	
            29
 	
            I-29-A through I-95-A 
 
	
            30
 	
            I-30-A through I-95-A 
 
	
            31
 	
            I-31-A through I-95-A 
 
	
            32
 	
            I-32-A through I-95-A 
 
	
            33
 	
            I-33-A through I-95-A 
 
	
            34
 	
            I-34-A through I-95-A 
 
	
            35
 	
            I-35-A through I-95-A 
 
	
            36
 	
            I-36-A through I-95-A 
 
	
            37
 	
            I-37-A through I-95-A 
 
	
            38
 	
            I-38-A through I-95-A 
 
	
            39
 	
            I-39-A through I-95-A 
 
	
            40
 	
            I-40-A through I-95-A 
 
	
            41
 	
            I-41-A through I-95-A 
 
	
            42
 	
            I-42-A through I-95-A 
 
	
            43
 	
            I-43-A through I-95-A 
 
	
            44
 	
            I-44-A through I-95-A 
 
	
            45
 	
            I-45-A through I-95-A 
 
	
            46
 	
            I-46-A through I-95-A 
 
	
            47
 	
            I-47-A through I-95-A 
 
	
            48
 	
            I-48-A through I-95-A 
 
	
            49
 	
            I-49-A through I-95-A 
 
	
            50
 	
            I-50-A through I-95-A 
 
	
            51
 	
            I-51-A through I-95-A 
 
	
            52
 	
            I-52-A through I-95-A 
 
	
            53
 	
            I-53-A through I-95-A 
 
	
            54
 	
            I-54-A through I-95-A 
 
	
            55
 	
            I-55-A through I-95-A 
 
	
            56
 	
            I-56-A through I-95-A 
 
	
            57
 	
            I-57-A through I-95-A 
 
	
            58
 	
            I-58-A through I-95-A 
 
	
            59
 	
            I-59-A through I-95-A 
 
	
            60
 	
            I-60-A through I-95-A 
 
	
            61
 	
            I-61-A through I-95-A 
 
	
            62
 	
            I-62-A through I-95-A 
 
	
            63
 	
            I-63-A through I-95-A 
 
	
            64
 	
            I-64-A through I-95-A
 
	
            65
 	
            I-65-A through I-95-A 
 
	
            66
 	
            I-66-A through I-95-A 
 

 

 

 

 

	
            67
 	
            I-67-A through I-95-A 
 
	
            68
 	
            I-68-A through I-95-A 
 
	
            69
 	
            I-69-A through I-95-A 
 
	
            70
 	
            I-70-A through I-95-A 
 
	
            71
 	
            I-71-A through I-95-A 
 
	
            72
 	
            I-72-A through I-95-A 
 
	
            73
 	
            I-73-A through I-95-A 
 
	
            74
 	
            I-74-A through I-95-A 
 
	
            75
 	
            I-75-A through I-95-A 
 
	
            76
 	
            I-76-A through I-95-A 
 
	
            77
 	
            I-77-A through I-95-A 
 
	
            78
 	
            I-78-A through I-95-A 
 
	
            79
 	
            I-79-A through I-95-A 
 
	
            80
 	
            I-80-A through I-95-A 
 
	
            81
 	
            I-81-A through I-95-A 
 
	
            82
 	
            I-82-A through I-95-A 
 
	
            83
 	
            I-83-A through I-95-A 
 
	
            84
 	
            I-84-A through I-95-A 
 
	
            85
 	
            I-85-A through I-95-A 
 
	
            86
 	
            I-86-A through I-95-A 
 
	
            87
 	
            I-87-A through I-95-A 
 
	
            88
 	
            I-88-A through I-95-A 
 
	
            89
 	
            I-89-A through I-95-A 
 
	
            90
 	
            I-90-A through I-95-A 
 
	
            91
 	
            I-91-A through I-95-A 
 
	
            92
 	
            I-92-A through I-95-A 
 
	
            93
 	
            I-93-A through I-95-A 
 
	
            94
 	
            I-94-A through I-95-A 
 
	
            95
 	
            I-95-A 
 
	
            thereafter
 	
            $0.00
 

 

With respect to the Class IO Interest and any Distribution Date, an amount equal to the Uncertificated Notional Amount of the REMIC 2 Regular Interest IO.  

“Uncertificated Principal Balance”:  With respect to each REMIC Regular Interest (other than REMIC 2 Regular Interest LT-IO), the principal amount of such REMIC Regular Interest outstanding as of any date of determination.  As of the Closing Date, the Uncertificated Principal Balance of each such REMIC Regular Interest shall equal the amount set forth in the Preliminary Statement hereto as its initial Uncertificated Principal Balance.  On each Distribution Date, the Uncertificated Principal Balance of each such REMIC 2 Regular Interest shall be reduced by all distributions of principal made on such REMIC 2 Regular Interest on such Distribution Date pursuant to Section 4.06 and, if and to the extent necessary and appropriate, shall be further reduced on such Distribution Date by Realized Losses as provided in Section 4.07.  The Uncertificated Principal Balance of REMIC 2 Regular
Interest LT-ZZ shall be increased by interest deferrals as provided in Section 4.06.  The Uncertificated Principal Balance of each REMIC Regular Interest shall never be less than zero.

“Uncertificated Pass-Through Rate”:  The Uncertificated REMIC 1 Pass-Through Rate or Uncertificated REMIC 2 Pass-Through Rate.

 

 

“Uncertificated REMIC 1 Pass-Through Rate”:  With respect to REMIC 1 Regular Interest I and REMIC 1 Regular Interest P, a per annum rate equal to the weighted average Net Mortgage Rate of the Mortgage Loans.  With respect to each REMIC 1 Regular Interest ending with the designation “A”, a per annum rate equal to the weighted average Net Mortgage Rate of the Mortgage Loans multiplied by 2, subject to a maximum rate of 8.574%.  With respect to each REMIC 1 Regular Interest ending with the designation “B”, the greater of (x) a per annum rate equal to the excess, if any, of (i) 2 multiplied by the weighted average Net Mortgage Rate of the Mortgage Loans over (ii) 8.574% and (y) 0.00%.  

“Uncertificated REMIC 2 Pass-Through Rate”:  With respect to REMIC 2 Regular Interest LT-AA, REMIC 2 Regular Interest LT-A1A, REMIC 2 Regular Interest LT-A1B, REMIC 2 Regular Interest LT-A1C, REMIC 2 Regular Interest LT-APT, REMIC 2 Regular Interest LT-A2, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9, REMIC 2 Regular Interest LT-M10, REMIC 2 Regular Interest LT-ZZ and REMIC 2 Regular Interest LT-P, a per annum rate (but not less than zero) equal to the weighted average of (w) with respect to REMIC 1 Regular Interest I and REMIC 1 Regular Interest P, the Uncertificated REMIC 1 Pass-Through Rate for such REMIC 1 Regular Interest for each such
Distribution Date, (x) with respect to REMIC 1 Regular Interests ending with the designation “B”, the weighted average of the Uncertificated REMIC 1 Pass-Through Rates for such REMIC 1 Regular Interests, weighted on the basis of the Uncertificated Principal Balance of such REMIC 1 Regular Interests for each such Distribution Date and (y) with respect to REMIC 1 Regular Interests ending with the designation “A”, for each Distribution Date listed below, the weighted average of the rates listed below for each such REMIC 1 Regular Interest listed below, weighted on the basis of the Uncertificated Principal Balance of each such REMIC 1 Regular Interest for each such Distribution Date:

 

 

 

	

            
Distribution Date
  
  	
            
REMIC 1 Regular Interest
  
  	
            
Rate
  
  
	
            1
 	
            I-1-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
            2
 	
            I-2-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            3
 	
            I-3-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A and I-2-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            4
 	
            I-4-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-3-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            5
 	
            I-5-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-4-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            6
 	
            I-6-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-5-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            7
 	
            I-7-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-6-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            8
 	
            I-8-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-7-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            9
 	
            I-9-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-8-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            10
 	
            I-10-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-9-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            11
 	
            I-11-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-10-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            12
 	
            I-12-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-11-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            13
 	
            I-13-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-12-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            14
 	
            I-14-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-13-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            15
 	
            I-15-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-14-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            16
 	
            I-16-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-15-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            17
 	
            I-17-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-16-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            18
 	
            I-18-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-17-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            19
 	
            I-19-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-18-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            20
 	
            I-20-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-19-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            21
 	
            I-21-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-20-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            22
 	
            I-22-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-21-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            23
 	
            I-23-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 

 

 

 

 

	
             
 	
            I-1-A through I-22-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            24
 	
            I-24-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-23-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            25
 	
            I-25-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-24-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            26
 	
            I-26-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-25-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            27
 	
            I-27-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-26-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            28
 	
            I-28-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-27-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            29
 	
            I-29-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-28-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            30
 	
            I-30-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-29-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            31
 	
            I-31-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-30-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            32
 	
            I-32-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-31-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            33
 	
            I-33-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-32-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            34
 	
            I-34-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-33-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            35
 	
            I-35-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-34-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            36
 	
            I-36-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-35-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            37
 	
            I-37-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-36-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            38
 	
            I-38-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-37-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            39
 	
            I-39-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-38-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            40
 	
            I-40-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-39-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            41
 	
            I-41-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-40-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            42
 	
            I-42-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-41-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            43
 	
            I-43-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-42-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            44
 	
            I-44-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-43-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            45
 	
            I-45-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-44-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 

 

 

 

 

	
            46
 	
            I-46-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-45-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            47
 	
            I-47-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-46-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            48
 	
            I-48-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-47-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            49
 	
            I-49-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-48-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            50
 	
            I-50-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-49-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            51
 	
            I-51-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-50-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            52
 	
            I-52-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-51-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            53
 	
            I-53-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-52-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            54
 	
            I-54-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-53-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            55
 	
            I-55-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-54-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            56
 	
            I-56-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-55-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            57
 	
            I-57-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-56-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            58
 	
            I-58-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-57-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            59
 	
            I-59-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-58-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            60
 	
            I-60-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-59-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            61
 	
            I-61-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-60-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            62
 	
            I-62-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-61-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            63
 	
            I-63-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-62-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            64
 	
            I-64-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-63-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            65
 	
            I-65-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-64-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            66
 	
            I-66-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-65-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            67
 	
            I-67-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-66-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            68
 	
            I-68-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-67-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 

 

 

 

 

	
            69
 	
            I-69-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-68-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            70
 	
            I-70-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-69-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            71
 	
            I-71-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-70-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            72
 	
            I-72-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-71-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            73
 	
            I-73-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-72-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            74
 	
            I-74-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-73-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            75
 	
            I-75-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-74-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            76
 	
            I-76-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-75-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            77
 	
            I-77-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-76-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            78
 	
            I-78-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-77-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            79
 	
            I-79-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-78-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            80
 	
            I-80-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-79-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            81
 	
            I-81-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-80-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            82
 	
            I-82-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-81-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            83
 	
            I-83-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-82-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            84
 	
            I-84-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-83-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            85
 	
            I-85-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-84-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            86
 	
            I-86-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-85-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            87
 	
            I-87-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-86-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            88
 	
            I-88-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-87-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            89
 	
            I-89-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-88-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            90
 	
            I-90-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-89-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            91
 	
            I-91-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 

 

 

 

 

	
             
 	
            I-1-A through I-90-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            92
 	
            I-92-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-91-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            93
 	
            I-93-A through I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-92-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            94
 	
            I-94-A and I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-93-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            95
 	
            I-95-A
 	
            2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
	
             
 	
            I-1-A through I-94-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 
	
            thereafter
 	
            I-1-A through I-95-A
 	
            Uncertificated REMIC 1 Pass-Through Rate
 

 

With respect to REMIC 2 Regular Interest LT-IO, the excess of (i) the weighted average of the Uncertificated REMIC 1 Pass-Through Rates for REMIC 1 Regular Interests ending with the designation “A”, over (ii) 2 multiplied by Swap LIBOR.

 

 

 

“Uninsured Cause”:  Any cause of damage to property subject to a Mortgage such that the complete restoration of such property is not fully reimbursable by the hazard insurance policies or flood insurance policies required to be maintained pursuant to Section 3.13.

“United States Person”:  A citizen or resident of the United States, a corporation or a partnership (including an entity treated as a corporation or partnership for United States federal income tax purposes) created or organized in, or under the laws of, the United States or any State thereof or the District of Columbia (except, in the case of a partnership, to the extent provided in regulations) provided that, for purposes solely of the restrictions on the transfer of Class R Certificates, no partnership or other entity treated as a partnership for United States federal income tax purposes shall be treated as a United States Person unless all persons that own an interest in such partnership either directly or through any entity that is not a corporation for United States federal income tax purposes are required by the applicable operative agreement to be United States Persons
or an estate whose income is subject to United States federal income tax regardless of its source, or a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more such United States Persons have the authority to control all substantial decisions of the trust.  To the extent prescribed in regulations by the Secretary of the Treasury, a trust which was in existence on August 20, 1996 (other than a trust treated as owned by the grantor under subpart E of part I of subchapter J of chapter 1 of the Code), and which was treated as a United States person on August 20, 1996 may elect to continue to be treated as a United States person notwithstanding the previous sentence.

“Voting Rights”:  The portion of the voting rights of all of the Certificates which is allocated to any Certificate.  At all times during the term of this Agreement, (i) 97% of all Voting Rights will be allocated among the Holders of the Class A Certificates and Class M Certificates in proportion to the then outstanding Certificate Principal Balances of their respective Certificates, (ii) 1% of all Voting Rights will be allocated to the Holders of the Class C Certificates, (iii) 1% of all Voting Rights will be allocated to the Holders of the Class P Certificates and (iv) 1% of all Voting Rights will be allocated to the Holders of the Class R Certificates.  The Voting Rights allocated to any Class of Certificates shall be allocated among all Holders of the Certificates of such Class in proportion to the outstanding Percentage Interests in such Class represented thereby.

“Weighted Average Net Mortgage Rate”:  The weighted average of the Net Mortgage Rates of the Mortgage Loans, weighted on the basis of the Stated Principal Balances thereof as of the close of business on the first day of the calendar month preceding the month in which such Distribution Date occurs.

	
            Section 1.02
 	
            Determination of LIBOR.
 

LIBOR applicable to the calculation of the Pass-Through Rate on the Class A Certificates and Class M Certificates for the Interest Determination Date for the initial Accrual Period shall be 3.24% per annum and for each subsequent Accrual Period will be determined on each subsequent Interest Determination Date.

 

 

 

On each Interest Determination Date following the initial Interest Determination Date, LIBOR shall be established by the Securities Administrator and, as to any Accrual Period, will equal the rate for one month United States dollar deposits that appears on the Telerate Screen Page 3750 as of 11:00 a.m., London time, on such Interest Determination Date.  “Telerate Screen Page 3750” means the display designated as page 3750 on the Telerate Service (or such other page as may replace page 3750 on that service for the purpose of displaying London interbank offered rates of major banks).  If such rate does not appear on such page (or such other page as may replace that page on that service, or if such service is no longer offered, LIBOR shall be so established by use of such other service for displaying LIBOR or comparable rates as may be selected by the Securities Administrator),
the rate will be the Reference Bank Rate.  The “Reference Bank Rate” will be determined on the basis of the rates at which deposits in U.S. Dollars are offered by the reference banks (which shall be any three major banks that are engaged in transactions in the London interbank market, selected by the Securities Administrator after consultation with the Master Servicer) as of 11:00 a.m., London time, on the Interest Determination Date to prime banks in the London interbank market for a period of one month in amounts approximately equal to the aggregate Certificate Principal Balance of the Class A Certificates and Class M Certificates then outstanding.  The Securities Administrator will request the principal London office of each of the reference banks to provide a quotation of its rate.  If at least two such quotations are provided, the rate will be the arithmetic mean of the quotations rounded up to the next multiple of 1/16%.  If on such date fewer than two quotations are
provided as requested, the rate will be the arithmetic mean of the rates quoted by one or more major banks in New York City, selected by the Securities Administrator, as of 11:00 a.m., New York City time, on such date for loans in U.S. Dollars to leading European banks for a period of one month in amounts approximately equal to the aggregate Certificate Principal Balance of the Class A Certificates and Class M Certificates then outstanding.  If no such quotations can be obtained, the rate will be LIBOR for the prior Distribution Date; provided however, if, under the priorities described above, LIBOR for a Distribution Date would be based on LIBOR for the previous Distribution Date for the third consecutive Distribution Date, the Securities Administrator shall select an alternative comparable index (over which the Securities Administrator has no control), used for determining one-month Eurodollar lending rates that is calculated and published (or otherwise made available) by an
independent party.

The establishment of LIBOR by the Securities Administrator on any Interest Determination Date and the Trustee’s subsequent calculation of the Pass-Through Rate applicable to the Class A Certificates and Class M Certificates for the relevant Accrual Period, in the absence of manifest error, will be final and binding.

The Securities Administrator will supply to any Certificateholder so requesting by telephone the Pass-Through Rate on the Class A Certificates and Class M Certificates for the current and the immediately preceding Accrual Period.

	
            Section 1.03
 	
            Allocation of Certain Interest Shortfalls.
 

For purposes of calculating the amount of the Accrued Certificate Interest for the Class A, Class M and Class C Certificates for any Distribution Date, the aggregate amount of any Net Prepayment Interest Shortfalls and any Relief Act Interest Shortfalls incurred in respect of the Mortgage Loans for any Distribution Date shall be allocated first, to the Class C Certificates to 

 

the extent of one month’s interest at the then applicable Pass-Through Rate on the Notional Amount of each such Certificate and, thereafter, among the Class A Certificates and Class M Certificates on a pro rata basis based on, and to the extent of, one month’s interest at the then applicable respective Pass-Through Rate on the respective Certificate Principal Balance of each such Certificate.  

For purposes of calculating the amount of Uncertificated Accrued Interest for the REMIC 1 Regular Interests for any Distribution Date the aggregate amount of any Net Prepayment Interest Shortfalls and any Relief Act Interest Shortfalls incurred in respect of the Mortgage Loans shall be allocated first, REMIC 1 Regular Interest I and to the REMIC 1 Regular Interests ending with the designation “B”, pro rata based on, and to the extent of, one month’s interest at the then applicable respective Uncertificated REMIC 1 Pass-Through Rates on the respective Uncertificated Principal Balances of each such REMIC 1 Regular Interest , and then, to REMIC 1 Regular Interests ending with the designation “A”, pro rata based on, and to the extent of, one month’s interest at the then applicable respective Uncertificated REMIC 1
Pass-Through Rates on the respective Uncertificated Principal Balances of each such REMIC 1 Regular Interest.

For purposes of calculating the amount of Uncertificated Accrued Interest for the REMIC 2 Regular Interests for any Distribution Date, the aggregate amount of any Net Prepayment Interest Shortfalls and any Relief Act Interest Shortfalls incurred in respect of the Mortgage Loans for any Distribution Date shall be allocated among REMIC 2 Regular Interest LT-AA, REMIC 2 Regular Interest LT-A1A, REMIC 2 Regular Interest LT-A1B, REMIC 2 Regular Interest LT-A1C, REMIC 2 Regular Interest LT-APT, REMIC 2 Regular Interest LT-A2, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9, REMIC 2 Regular Interest LT-M10 and REMIC 2 Regular Interest LT-ZZ, pro rata, based on, and to the extent of, one month’s interest at the then applicable respective Uncertificated REMIC 2 Pass-Through Rates on the respective Uncertificated Principal Balances of each such REMIC 2 Regular Interest.

 

 

ARTICLE II

 

CONVEYANCE OF MORTGAGE LOANS;

ORIGINAL ISSUANCE OF CERTIFICATES

	
            Section 2.01
 	
            Conveyance of Mortgage Loans.
 

The Company, as of the Closing Date, and concurrently with the execution and delivery hereof, does hereby assign, transfer, sell, set over and otherwise convey to the Trustee without recourse all the right, title and interest of the Company in and to (1) the Mortgage Loans identified on the Mortgage Loan Schedule (including any Prepayment Charges but exclusive of any late payment charges received thereon), (2) the rights with respect to the Servicing Agreement as assigned to the Trustee on behalf the Certificateholders by the Assignment Agreement and (3) all other assets included or to be included in the Trust Fund for the benefit of the Certificateholders. Such assignment includes all principal and interest due and received by the Servicer on or with respect to the Mortgage Loans (other than payment of principal and interest due on or before the Cut-off Date).

The Depositor, the Master Servicer and the Trustee agree that it is not intended that any mortgage loan be included in the Trust that is either (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 Practices Act effective November 7, 2004, or (iv) a “High-Cost Home Loan” as defined in the Indiana House Enrolled Act No. 1229, effective as of January 1, 2005.

In connection with such transfer and assignment, the Company has caused the Seller to deliver to, and deposit with the Custodian as agent for the Trustee, as described in the Mortgage Loan Purchase Agreement, with respect to each Mortgage Loan, the following documents or instruments:

(i)         the original Mortgage Note (including all riders thereto) bearing all intervening endorsements necessary to show a complete chain of endorsements from the original payee, endorsed “Pay to the order of _____without recourse”, via original signature, and, if previously endorsed, signed in the name of the last endorsee by a duly qualified officer of the last endorsee or, with respect to any Mortgage Loan as to which the original Mortgage Note has been permanently lost or destroyed and has not been replaced, a Lost Note Affidavit. If the Mortgage Loan was acquired by the last endorsee in a merger, the endorsement must be by “[name of last endorsee], successor by merger to [name of the predecessor].” If the Mortgage Loan was acquired or originated by the last endorsee while doing business under
another name, the endorsement must be by “[name of last endorsee], formerly known as [previous name].”  Within 45 days after the Closing Date, the Custodian shall endorse the Mortgage Note in the name of “HSBC Bank USA, National Association, as trustee under the Pooling and Servicing Agreement relating to Opteum Mortgage Acceptance Corporation, Asset-Backed Pass-Through Certificates, Series 2005-3” for each Mortgage Note;

 

 

(ii)         The original recorded Mortgage, noting the presence of the MIN of the Mortgage Loan and either language indicating that the Mortgage Loan is a MOM loan or if the Mortgage Loan was not a MOM loan at origination, the original Mortgage and the assignment thereof to MERS, with evidence of recording indicated thereon; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation or such office as a matter of policy does not return the original of such document or if such original Mortgage has been lost, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office, if available;

(iii)        the original Assignment of Mortgage in blank, in form and substance acceptable for recordation in the jurisdiction in which the related mortgage property is located and signed in the name of the Last Endorsee by an authorized officer; unless the Mortgage Loan is registered on the MERS system;

(iv)        The original intervening Assignments, if any, with evidence of recording thereon, showing an unbroken chain of title to the Mortgage from the originator thereof to Person assigning it to the Trustee (or to MERS, if the Mortgage Loan is registered on the MERS® System); provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation or such office as a matter of policy does not return the original of such document, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office, if available;

(v)        The originals of each assumption, modification or substitution agreement, if any, relating to the Mortgage Loan; and

(vi)        the original title insurance policy, or, if such policy has not been issued, any one of an original or a copy of the preliminary title report, title binder or title commitment on the Mortgaged Property with the original policy of the insurance to be delivered promptly following the receipt thereof.

Within 30 days after the Closing Date, the Company shall complete or cause to be completed the Assignments of Mortgage in the name of “HSBC Bank USA, National Association, as trustee under the Pooling and Servicing Agreement relating to Opteum Mortgage Acceptance Corporation, Asset-Backed Pass-Through Certificates, Series 2005-3” (or shall prepare or cause to be prepared new forms of Assignment of Mortgage so completed in the name of the Trustee) for each Mortgage Property in a state, if any, which is specifically excluded from the Opinion of Counsel delivered by the Company to the Trustee and the Custodian, each such assignment shall be recorded in the appropriate public office for real property records, and returned to the Custodian, at no expense to the Custodian.

The Seller is obligated as described in the Mortgage Loan Purchase Agreement, with respect to the Mortgage Loans, to deliver to the Custodian as agent for the Trustee:  (a) either the original recorded Mortgage, or in the event such original cannot be delivered by the Seller, a copy of such Mortgage certified as true and complete by the appropriate recording office, in those instances where a copy thereof certified by the Seller was delivered to the Custodian as 

 

agent for the Trustee pursuant to clause (ii) above; and (b) either the original Assignment or Assignments of the Mortgage, with evidence of recording thereon, showing an unbroken chain of assignment from the originator to the Seller, or in the event such original cannot be delivered by the Seller, a copy of such Assignment or Assignments certified as true and complete by the appropriate recording office, in those instances where copies thereof certified by the Seller were delivered to the Custodian as agent for the Trustee pursuant to clause (iv) above. However, pursuant to the Mortgage Loan Purchase Agreement, the Seller need not cause to be recorded any assignment in any jurisdiction under the laws of which, as evidenced by an Opinion of Counsel delivered by the Seller to the Trustee, the Custodian and the Rating Agencies, the recordation of such assignment is not necessary to protect the Trustee’s
interest in the related Mortgage Loan; provided, however, notwithstanding the delivery of any Opinion of Counsel, each assignment shall be submitted for recording by the Seller in the manner described above, at no expense to the Trust or the Trustee, upon the earliest to occur of:  (i) reasonable direction by the Holders of Certificates evidencing at least 25% of the Voting Rights, (ii) the occurrence of an Event of Default, (iii) the occurrence of a bankruptcy, insolvency or foreclosure relating to the Seller, (iv) the occurrence of a servicing transfer as described in Section 7.02 hereof and (v) if the Seller is not the Master Servicer and with respect to any one assignment, the occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor under the related Mortgage.

Notwithstanding anything to the contrary contained in this Section 2.01, in those instances where the public recording office retains the original Mortgage after it has been recorded, the Seller shall be deemed to have satisfied its obligations hereunder upon delivery to the Custodian as agent for the Trustee of a copy of such Mortgage certified by the public recording office to be a true and complete copy of the recorded original thereof.

If any Assignment is lost or returned unrecorded to the Custodian as agent for the Trustee because of any defect therein, the Seller is required, as described in the Mortgage Loan Purchase Agreement, to prepare a substitute Assignment or cure such defect, as the case may be, and the Seller shall cause such Assignment to be recorded in accordance with this section.

The Seller is required as described in the Mortgage Loan Purchase Agreement, with respect to the Mortgage Loans, to exercise its best reasonable efforts to deliver or cause to be delivered to the Custodian as agent for the Trustee within 120 days of the Closing Date, with respect to the Mortgage Loans, the original or a photocopy of the title insurance policy with respect to each such Mortgage Loan assigned to the Trustee pursuant to this Section 2.01.

In connection with the assignment of any Mortgage Loan registered on the MERS® System, the Seller further agrees that it will cause, at the Seller’s own expense, as of the Closing Date, the MERS® System to indicate that such Mortgage Loans have been assigned by the Seller to the Trustee in accordance with this Agreement for the benefit of the Certificateholders by including (or deleting, in the case of Mortgage Loans which are repurchased in accordance with this Agreement) in such computer files (a) the code in the field which identifies the specific Trustee and (b) the code in the field “Pool Field” which identifies the series of the Certificates issued in connection with such Mortgage Loans.  The Company further agrees that it will not, and will not permit the Servicer to alter the codes referenced in this paragraph with respect to any Mortgage Loan during the
term of this Agreement unless and until such Mortgage Loan is repurchased in accordance with the terms of this Agreement.

 

 

All original documents relating to the Mortgage Loans which are not delivered to the Custodian as agent for the Trustee are and shall be held by the Seller in trust for the benefit of the Trustee on behalf of the Certificateholders.

Except as may otherwise expressly be provided herein, none of the Company, the Custodian, the Master Servicer, or the Trustee shall (and the Master Servicer shall ensure that no Servicer shall) assign, sell, dispose of or transfer any interest in the Trust Fund or any portion thereof, or cause the Trust Fund or any portion thereof to be subject to any lien, claim, mortgage, security interest, pledge or other encumbrance.

It is intended that the conveyance of the Mortgage Loans by the Company to the Trustee as provided in this Section be, and be construed as, a sale of the Mortgage Loans as provided for in this Section 2.01 by the Company to the Trustee for the benefit of the Certificateholders.  It is, further, not intended that such conveyance be deemed a pledge of the Mortgage Loans by the Company to the Trustee to secure a debt or other obligation of the Company.  However, in the event that the Mortgage Loans are held to be property of the Company, or if for any reason this Agreement is held or deemed to create a security interest in the Mortgage Loans, then it is intended that, (a) this Agreement shall also be deemed to be a security agreement within the meaning of Articles 8 and 9 of the New York Uniform Commercial Code and the Uniform Commercial Code of any other applicable jurisdiction; (b) the
conveyance provided for in this Section shall be deemed to be (1) a grant by the Company to the Trustee of a security interest in all of the Company’s right (including the power to convey title thereto), title and interest, whether now owned or hereafter acquired, in and to (A) the Mortgage Loans, including the Mortgage Notes, the Mortgages, any related Insurance Policies and all other documents in the related Mortgage Files, (B) all amounts payable to the holders of the Mortgage Loans in accordance with the terms thereof and (C) all proceeds of the conversion, voluntary or involuntary, of the foregoing into cash, instruments, securities or other property, including without limitation all amounts from time to time held or invested in the Certificate Account or the Custodial Account, whether in the form of cash, instruments, securities or other property and (2) an assignment by the Company to the Trustee of any security interest in any and all of the Seller’s right (including
the power to convey title thereto), title and interest, whether now owned or hereafter acquired, in and to the property described in the foregoing clauses (1)(A) through (C); (c) the possession by the Custodian as agent for the Trustee or any other agent of the Trustee of Mortgage Notes and such other items of property as constitute instruments, money, negotiable documents or chattel paper shall be deemed to be “possession by the secured party” or possession by a purchaser or a person designated by such secured party, for purposes of perfecting the security interest pursuant to the New York Uniform Commercial Code and the Uniform Commercial Code of any other applicable jurisdiction (including, without limitation, Sections 9-115, 9-305, 8-102, 8-301, 8-501 and 8-503 thereof); and (d) notifications to persons holding such property, and acknowledgments, receipts or confirmations from persons holding such property, shall be deemed notifications to, or acknowledgments, receipts
or confirmations from, financial intermediaries, bailees or agents (as applicable) of the Trustee for the purpose of perfecting such security interest under applicable law.  The Company and the Trustee shall, to the extent consistent with this Agreement, take such actions as may be necessary to ensure that, if this Agreement were deemed to create a security interest in the Mortgage Loans and the REMIC 1 Regular Interests, such security interest would be deemed to be a perfected security 

 

interest of first priority under applicable law and will be maintained as such throughout the term of the Agreement.

Concurrently with the execution of this Agreement, the Swap Agreement shall be delivered to the Trustee.  In connection therewith, the Company hereby directs the Trustee (solely in its capacity as such) to execute and deliver the Swap Agreement.

	
            Section 2.02
 	
            Acceptance of the Trust Fund by the Trustee.
 

The Trustee acknowledges receipt (subject to any exceptions noted in the Initial Certification described below), of the documents referred to in Section 2.01 above and all other assets included in the definition of “Trust Fund” and declares that it (or the Custodian on its behalf) holds and will hold such documents and the other documents delivered to Custodian as agent for the Trustee constituting the Mortgage Files, and that it holds or will hold such other assets included in the definition of “Trust Fund” (to the extent delivered or assigned to the Custodian as agent for the Trustee), in trust for the exclusive use and benefit of all present and future Certificateholders.

The Trustee agrees that, for the benefit of the Certificateholders, the Custodian as agent for the Trustee will review each Mortgage File on or before the Closing Date to ascertain that all documents required to be delivered to it are in its possession, and the Custodian as agent for the Trustee agrees to execute and deliver, or cause to be executed and delivered, to the Company on the Closing Date, with respect to each Mortgage Loan, an Initial Certification in the form annexed hereto as Exhibit C to the effect that, as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan specifically identified in such certification as not covered by such certification), (i) all documents required to be delivered to it pursuant to this Agreement with respect to such Mortgage Loan are in its possession, and (ii) such documents have
been reviewed by it and appear regular on their face and relate to such Mortgage Loan.  Neither the Custodian, the Trustee or the Master Servicer shall be under any duty to determine whether any Mortgage File should include any of the documents specified in clauses (v) or (vi) of Section 2.01.  Neither the Custodian, the Trustee or the Master Servicer shall be under any duty or obligation to inspect, review or examine said documents, instruments, certificates or other papers to determine that the same are genuine, enforceable or appropriate for the represented purpose or that they have actually been recorded, or they are in recordable form or that they are other than what they purport to be on their face.

Within 180 days of the Closing Date, with respect to the Mortgage Loans, the Custodian as agent for the Trustee shall deliver to the Company a Final Certification in the form annexed hereto as Exhibit D evidencing the completeness of the Mortgage Files, with any applicable exceptions noted thereon.

If in the process of reviewing the Mortgage Files and preparing the certifications referred to above the Custodian as agent for the Trustee or the Master Servicer finds any document or documents constituting a part of a Mortgage File to be missing or defective in any material respect, the Custodian as agent for the Trustee shall promptly notify the Trustee, the Seller and the Company.  The Custodian as agent for the Trustee shall promptly notify the Seller and the Securities Administrator of such defect and request that the Seller cure any such defect within 60 

 

days from the date on which the Seller was notified of such defect, and if the Seller does not cure such defect in all material respects during such period, request on behalf of the Certificateholders that the Seller purchase such Mortgage Loan from the Trust Fund at the Purchase Price within 90 days after the date on which the Seller was notified of such defect; provided that if such defect would cause the Mortgage Loan to be other than a “qualified mortgage” as defined in Section 860G(a)(3) of the Code, any such cure or repurchase must occur within 90 days from the date such breach was discovered.  It is understood and agreed that the obligation of the Seller to cure a material defect in, or purchase any Mortgage Loan as to which a material defect in a constituent document exists shall constitute the sole remedy respecting such defect available to Certificateholders or the Trustee on behalf of
Certificateholders.  The Purchase Price for the purchased Mortgage Loan shall be deposited or caused to be deposited upon receipt by the Master Servicer in the Custodial Account and, upon receipt by the Custodian as agent for the Trustee and the Securities Administrator of written notification of such deposit signed by a Servicing Officer, the Custodian as agent for the Trustee shall release or cause to be released to the Seller the related Mortgage File and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as the Seller shall require as necessary to vest in the Seller ownership of any Mortgage Loan released pursuant hereto and at such time the Custodian as agent for the Trustee shall have no further responsibility with respect to the related Mortgage File. In furtherance of the foregoing, if the Seller is not a member of MERS and the Mortgage is registered on the MERS® System, the Trustee, at the Seller’s expense, shall
cause MERS to execute and deliver an assignment of the Mortgage in recordable form to transfer the Mortgage from MERS to the Seller and shall cause such Mortgage to be removed from registration on the MERS® System in accordance with MERS’ rules and regulations.

Section 2.03   Representations, Warranties and Covenants of the Master Servicer and the Company.

(a)        The Master Servicer hereby represents and warrants to and covenants with the Company for the benefit of Certificateholders and the Trustee that:

(i)         The Master Servicer is, and throughout the term hereof shall remain, a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation, the Master Servicer is, and shall remain, in compliance with the laws of each state in which any Mortgaged Property is located to the extent necessary to perform its obligations under this Agreement, and the Master Servicer or an affiliate is, and shall remain, approved to service mortgage loans for Fannie Mae and Freddie Mac;

(ii)         The execution and delivery of this Agreement by the Master Servicer, and the performance and compliance with the terms of this Agreement by the Master Servicer, will not violate the Master Servicer’s articles of incorporation or bylaws or constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in the breach of, any material agreement or other instrument to which it is a party or which is applicable to it or any of its assets;

(iii)        The Master Servicer has the full power and authority to enter into and consummate all transactions contemplated by this Agreement, has duly authorized the 

 

execution, delivery and performance of this Agreement, and has duly executed and delivered this Agreement;

(iv)        This Agreement, assuming due authorization, execution and delivery by the Company and the Trustee, constitutes a valid, legal and binding obligation of the Master Servicer, enforceable against the Master Servicer in accordance with the terms hereof, subject to (A) applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights generally, and (B) general principles of equity, regardless of whether such enforcement is considered in a proceeding in equity or at law;

(v)        The Master Servicer is not in violation of, and its execution and delivery of this Agreement and its performance and compliance with the terms of this Agreement will not constitute a violation of, any law, any order or decree of any court or arbiter, or any order, regulation or demand of any federal, state or local governmental or regulatory authority, which violation is likely to affect materially and adversely either the ability of the Master Servicer to perform its obligations under this Agreement or the financial condition of the Master Servicer;

(vi)        No litigation is 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 best of the Master Servicer’s knowledge, threatened against the Master Servicer which would prohibit its entering into this Agreement or performing its obligations under this Agreement or is likely to affect materially and adversely either the ability of the Master Servicer to perform its obligations under this Agreement or the financial condition of the Master Servicer;

(vii)       The Master Servicer will comply in all material respects in the performance of this Agreement with all reasonable rules and requirements of each insurer under each Insurance Policy;

(viii)      The execution of this Agreement and the performance of the Master Servicer’s obligations hereunder do not require any license, consent or approval of any state or federal court, agency, regulatory authority or other governmental body having jurisdiction over the Master Servicer, other than such as have been obtained; and

(ix)        No information, certificate of an officer, statement furnished in writing or report delivered to the Company, any affiliate of the Company or the Trustee by the Master Servicer in its capacity as Master Servicer, will, to the knowledge of the Master Servicer, contain any untrue statement of a material fact.

It is understood and agreed that the representations, warranties and covenants set forth in this Section 2.03(a) shall survive the execution and delivery of this Agreement, and shall inure to the benefit of the Company, the Trustee and the Certificateholders.  Upon discovery by any of the Company, the Trustee, the Securities Administrator or the Master Servicer of a breach of any of the foregoing representations, warranties and covenants that materially and adversely affects 

 

the interests of the Company or the Trustee or the value of any Mortgage Loan or Prepayment Charge, the party discovering such breach shall give prompt written notice to the other parties.

(b)        The Company hereby represents and warrants to the Master Servicer, the Securities Administrator and the Trustee for the benefit of Certificateholders that as of the Closing Date

(i)         the Company (a) is a corporation 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 corporation 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 Company’s business as presently conducted or on the Company’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(ii)         the Company 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 Company of this Agreement have been duly authorized by all necessary corporate action on the part of the Company; 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 Company or its properties or the articles of incorporation or by-laws of the Company, except those conflicts, breaches or defaults which would not reasonably be expected to have a material adverse effect on the Company’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(iv)        the execution, delivery and performance by the Company 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 Company and, assuming due authorization, execution and delivery by the other parties hereto, constitutes a valid and binding obligation of the Company 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 Company, threatened against the Company, before or by any court, administrative agency, arbitrator or governmental body (i) with respect to any of the transactions contemplated by this Agreement or (ii) with respect to any other matter which in the 

 

judgment of the Company will be determined adversely to the Company and will if determined adversely to the Company materially and adversely affect the Company’s ability to enter into this Agreement or perform its obligations under this Agreement; and the Company is not in default with respect to any order of any court, administrative agency, arbitrator or governmental body so as to materially and adversely affect the transactions contemplated by this Agreement; and

(vii)       immediately prior to the transfer and assignment to the Trustee, each Mortgage Note and each Mortgage were not subject to an assignment or pledge, and the Company had good and marketable title to and was the sole owner thereof and had full right to transfer and sell such Mortgage Loan to the Trustee free and clear of any encumbrance, equity, lien, pledge, charge, claim or security interest.

Upon discovery by either the Company, the Master Servicer, the Securities Administrator, the Custodian or the Trustee of a breach of any representation or warranty set forth in this Section 2.03 which materially and adversely affects the interests of the Certificateholders in any Mortgage Loan, the party discovering such breach shall give prompt written notice to the other parties.

	
            Section 2.04
 	
            Assignment of Interest in the Mortgage Loan Purchase Agreement.
 

The Company hereby assigns to the Trustee for the benefit of Certificateholders all of its rights (but none of its obligations) in, to and under the Mortgage Loan Purchase Agreement.  Insofar as the Mortgage Loan Purchase Agreement relates to such representations and warranties and any remedies provided thereunder for any breach of such representations and warranties, such right, title and interest may be enforced by the Trustee on behalf of the Certificateholders.  Upon the discovery by the Company, the Master Servicer, the Securities Administrator or the Trustee of a breach of any of the representations and warranties made in the Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which materially and adversely affects the value of a Mortgage Loan or the interests of the Certificateholders in such Mortgage Loan, the party discovering such breach shall give prompt written
notice to the other parties.  The Trustee shall promptly notify the Seller of such breach and request that the Seller shall, within 90 days from the date that the Seller was notified or otherwise obtained knowledge of such breach, either (i) cure such breach in all material respects or (ii) purchase such Mortgage Loan from the Trust Fund at the Purchase Price and in the manner set forth in Section 2.02; provided that if such breach would cause the Mortgage Loan to be other than a “qualified mortgage” as defined in Section 860G(a)(3) of the Code, any such cure or repurchase must occur within 90 days from the date such breach was discovered.  However, in the case of a breach under the Mortgage Loan Purchase Agreement, subject to the approval of the Company the Seller shall have the option to substitute a Qualified Substitute Mortgage Loan or Loans for such Mortgage Loan if such substitution occurs within two years following the Closing Date, except that if the breach would
cause the Mortgage Loan to be other than a “qualified mortgage” as defined in Section 860G(a)(3) of the Code, any such substitution must occur within 90 days from the date the breach was discovered if such 90 day period expires before two years following the Closing Date.  In the event that the Seller elects to substitute a Qualified Substitute Mortgage Loan or Loans for a Deleted Mortgage Loan pursuant to this Section 2.04, the Trustee shall enforce the obligation of the Seller under the Mortgage Loan Purchase Agreement to deliver to the 

 

Custodian as agent for the Trustee and the Master Servicer, as appropriate, with respect to such Qualified Substitute Mortgage Loan or Loans, the original Mortgage Note, the Mortgage, an Assignment of the Mortgage in recordable form, and such other documents and agreements as are required by Section 2.01, with the Mortgage Note endorsed as required by Section 2.01. No substitution will be made in any calendar month after the Determination Date for such month.  Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the month of substitution, to the extent received by the Master Servicer or any Subservicer, shall not be part of the Trust Fund and will be retained by the Master Servicer and remitted by the Master Servicer to the Seller on the next succeeding Distribution Date.  For the month of substitution, distributions to Certificateholders will include the Monthly Payment due on a
Deleted Mortgage Loan for such month and thereafter the Seller shall be entitled to retain all amounts received in respect of such Deleted Mortgage Loan.  The Company shall amend or cause to be amended the Mortgage Loan Schedule for the benefit of the Certificateholders to reflect the removal of such Deleted Mortgage Loan and the substitution of the Qualified Substitute Mortgage Loan or Loans and the Company shall deliver the amended Mortgage Loan Schedule to the Custodian as agent for the Trustee.  Upon such substitution, the Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, the Seller shall be deemed to have made the representations and warranties with respect to the Qualified Substitute Mortgage Loan contained in the Mortgage Loan Purchase Agreement as of the date of substitution, and the Company shall be deemed to have made with respect to any Qualified Substitute Mortgage Loan or Loans, as of the date of substitution, the
representations and warranties set forth in the Mortgage Loan Purchase Agreement (other than any statistical representations set forth therein).

In connection with the substitution of one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will determine the amount (the “Substitution Adjustment”), if any, by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution is less than the aggregate Stated Principal Balance of all such Deleted Mortgage Loans (in each case after application of the principal portion of the Monthly Payments due in the month of substitution that are to be distributed to Certificateholders in the month of substitution).  The Trustee shall enforce the obligation of the Seller under the Mortgage Loan Purchase Agreement to provide the Master Servicer on the day of substitution for immediate deposit into the Custodial Account the amount of such shortfall, without any reimbursement therefor. In
accordance with the Mortgage Loan Purchase Agreement, the Seller shall give notice in writing to the Trustee and the Custodian of such event, which notice shall be accompanied by an Officers’ Certificate as to the calculation of such shortfall and by an Opinion of Counsel to the effect that such substitution will not cause (a) any federal tax to be imposed on any Trust REMIC, including without limitation, any federal tax imposed on “prohibited transactions” under Section 860F(a)(1) of the Code or on “contributions after the startup date” under Section 860G(d)(1) of the Code or (b) any portion of any Trust REMIC to fail to qualify as a REMIC at any time that any Certificate is outstanding.  The costs of any substitution as described above, including any related assignments, opinions or other documentation in connection therewith shall be borne by the Seller.

Except as expressly set forth herein none of the Trustee, the Custodian, the Securities Administrator or the Master Servicer is under any obligation to discover any breach of the above-mentioned representations and warranties.  It is understood and agreed that the obligation of the Seller to cure such breach, purchase or to substitute for such Mortgage Loan as to which 

 

such a breach has occurred and is continuing shall constitute the sole remedy respecting such breach available to Certificateholders or the Trustee on behalf of Certificateholders.  Notwithstanding the foregoing, within 90 days of the earlier of discovery by the Seller or receipt of notice by the Seller of the breach of the representation or covenant of the Seller set forth in Section 3.1(b)(xxxvi) of the Mortgage Loan Purchase Agreement which materially and adversely affects the interests of the Holders of the Class P Certificates in any Prepayment Charge or if the Prepayment Charge is unenforceable due to subsequent changes in law, the Seller shall remedy such breach as set forth in Section 3.1(b)(xxxvi) of the Mortgage Loan Purchase Agreement.

Section 2.05   Issuance of Certificates; Conveyance of REMIC Regular Interests and Acceptance of REMIC 1, REMIC 2 and REMIC 3 by the Trustee.

(a)        The Trustee acknowledges the assignment to it of the Mortgage Loans and the delivery to the Custodian as agent for the Trustee of the Mortgage Files, subject to the provisions of Sections 2.01 and 2.02, together with the assignment to it of all other assets included in the Trust Fund, receipt of which is hereby acknowledged.  Concurrently with such assignment and delivery and in exchange therefor, the Trustee, pursuant to the written request of the Company executed by an officer of the Company, has executed, authenticated and delivered to or upon the order of the Company, the Certificates in authorized denominations.  The interests evidenced by the Certificates, constitute the entire beneficial ownership interest in the Trust Fund.

(b)        The Company, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey in trust to the Trustee without recourse all the right, title and interest of the Company in and to REMIC 1 for the benefit of the Holders of the REMIC 1 Regular Interests and Holders of the Class R Certificates (as Holders of the Class R-1 Interest).  The Trustee acknowledges receipt of REMIC 1 and declares that it holds and will hold the same in trust for the exclusive use and benefit of the Holders of the REMIC 1 Regular Interests and Holders of the Class R Certificates (as Holders of the Class R-1 Interest).  The interests evidenced by the Class R-1 Interest, together with the REMIC 1 Regular Interests, constitute the entire beneficial ownership interest in REMIC 1.

(c)        The Company, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey in trust to the Trustee without recourse all the right, title and interest of the Company in and to REMIC 1 Regular Interests (which are uncertificated) for the benefit of the Holders of the REMIC 1 Regular Interests and Holders of the Class R Certificates (as Holders of the Class R-2 Interest).  The Trustee acknowledges receipt of the REMIC 2 Regular Interests (which are uncertificated) and declares that it holds and will hold the same in trust for the exclusive use and benefit of the Holders of the REMIC 2 Regular Interests and Holders of the Class R Certificates (as Holders of the Class R-2 Interest).  The interests evidenced by the Class R-2 Interest, together with the REMIC 2 Regular Interests, constitute the
entire beneficial ownership interest in REMIC 2.

(d)        The Company, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey in trust to the Trustee without recourse all the right, title and interest of the Company in and to the REMIC 2 Regular Interests (which are uncertificated) for the benefit of the Holders of the Regular Certificates, the Class IO Interest and the Class R Certificates (in respect of the Class R-3 Interest).  The Trustee acknowledges receipt 

 

of the REMIC 2 Regular Interests and declares that it holds and will hold the same in trust for the exclusive use and benefit of the Holders of the Regular Certificates, the Class IO Interest and the Class R Certificates (in respect of the Class R-3 Interest). The interests evidenced by the Class R-3 Interest, together with the Regular Certificates, the Class IO Interest constitute the entire beneficial ownership interest in REMIC 3.

(e)        Concurrently with (i) the assignment and delivery to the Trustee of REMIC 1 and the acceptance by the Trustee thereof, pursuant to Section 2.01, Section 2.02 and subsection (b), (ii) the assignment and delivery to the Trustee of REMIC 2 (including the Residual Interest therein represented by the Class R-2 Interest) and the acceptance by the Trustee thereof, pursuant to subsection (c), (iii) the assignment and delivery to the Trustee of REMIC 3 (including the Residual Interest therein represented by the Class R-3 Interest) and the acceptance by the Trustee thereof, pursuant to subsection (d), the Trustee, pursuant to the written request of the Company executed by an officer of the Company, has executed, authenticated and delivered to or upon the order of the Company, the Class R Certificates in authorized denominations evidencing the
Class R-1 Interest, the Class R-2 Interest and the Class R-3 Interest.

	
            Section 2.06
 	
            Negative Covenants of the Trustee and Master Servicer.
 

Except as otherwise expressly permitted by this Agreement the Trustee and Master Servicer shall not cause the Trust Fund to:

(i)         sell, transfer, exchange or otherwise dispose of any of the assets of the Trust Fund;

(ii)        dissolve or liquidate the Trust Fund in whole or in part;

(iii)        engage, directly or indirectly, in any business other than that arising out of the issue of the Certificates, and the actions contemplated or required to be performed under this Agreement;

	
            (iv)
 	
            incur, create or assume any indebtedness for borrowed money;
 

(v)        voluntarily file a petition for bankruptcy, reorganization, assignment for the benefit of creditors or similar proceeding; or

	
            (vi)
 	
            merge, convert or consolidate with any other Person.
 

 

 

 

ARTICLE III

 

ADMINISTRATION AND SERVICING

OF THE TRUST FUND

	
            Section 3.01
 	
            Administration and Servicing of Mortgage Loans.
 

(a)        The Master Servicer shall supervise, monitor and oversee the obligation of the Servicer to service and administer the Mortgage Loans in accordance with the terms of the Servicing Agreement and shall have full power and authority to do any and all things which it may deem necessary or desirable in connection with such master servicing and administration. In performing its obligations hereunder, the Master Servicer shall act in a manner consistent with Accepted Master Servicing Practices. Furthermore, the Master Servicer shall oversee and consult with the Servicer as necessary from time-to-time to carry out the Master Servicer’s obligations hereunder, shall receive, review and evaluate all reports, information and other data provided to the Master Servicer by the Servicer and shall cause the Servicer to perform and observe the
covenants, obligations and conditions to be performed or observed by the Servicer under the applicable Servicing Agreement. The Master Servicer shall independently and separately monitor the Servicer’s servicing activities with respect to each related Mortgage Loan, reconcile the results of such monitoring with such information provided in the previous sentence on a monthly basis and coordinate corrective adjustments to the 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 4.03, 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 Mortgage Loan monitoring with the actual remittances of the Servicer to the Custodial Account pursuant to the applicable
Servicing Agreement.

The Trustee shall furnish the Servicer and the Master Servicer with any powers of attorney and other documents in form as provided to it necessary or appropriate to enable the Servicer and the Master Servicer to service and administer the related Mortgage Loans and REO Property.

The Trustee shall provide access to the records and documentation in possession of the Trustee regarding the related Mortgage Loans and REO Property and the servicing thereof to the Certificateholders, the FDIC, and the supervisory agents and examiners of the FDIC, such access being afforded only upon reasonable prior written request and during normal business hours at the office of the Trustee; provided, however, that, unless otherwise required by law, the Trustee shall not be required to provide access to such records and documentation if the provision thereof would violate the legal right to privacy of any Mortgagor. The Trustee shall allow representatives of the above entities to photocopy any of the records and documentation and shall provide equipment for that purpose at a charge that covers the Trustee’s actual costs.

The Trustee shall execute and deliver to the Servicer and the Master Servicer any court pleadings, requests for trustee’s sale or other documents necessary or desirable to (i) the foreclosure or trustee’s sale with respect to a Mortgaged Property; (ii) any legal action brought to obtain judgment against any Mortgagor on the Mortgage Note or Security Instrument; (iii) obtain 

 

a deficiency judgment against the Mortgagor; or (iv) enforce any other rights or remedies provided by the Mortgage Note or Security Instrument or otherwise available at law or equity.

(b)        Consistent with the terms of this Agreement, the Master Servicer may waive, modify or vary any term of any Mortgage Loan or consent to the postponement of strict compliance with any such term or in any manner grant indulgence to any Mortgagor if such waiver, modification, postponement or indulgence is in conformity with the Accepted Servicing Practices; provided, however, that:

(A)       the Master Servicer shall not make future advances (except as provided in Section 4.03);

(B)        the Master Servicer shall not permit any modification with respect to any Mortgage Loan that would change the Mortgage Rate, defer or forgive the payment of any principal or interest payments, reduce the outstanding Stated Principal Balance (except for reductions resulting from actual payments of principal) or extend the final maturity date on such Mortgage Loan (unless (i) the Mortgagor is in default with respect to the Mortgage Loan or (ii) such default is, in the judgment of the Master Servicer, reasonably foreseeable); and

(C)       the Master Servicer shall not consent to (i) partial releases of Mortgages, (ii) alterations, (iii) removal, demolition or division of properties subject to Mortgages, (iv) modification or (v) second mortgage subordination agreements with respect to any Mortgage Loan that would:  (i) affect adversely the status of any REMIC as a REMIC, (ii) cause any REMIC to be subject to a tax on “prohibited transactions” or “contributions” pursuant to the REMIC Provisions, or (iii) both (x) effect an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code (or Treasury regulations promulgated thereunder) and (y) cause any REMIC constituting part of the Trust Fund to fail to qualify as a REMIC under the Code or the imposition of any tax on “prohibited transactions” or “contributions” after the
Startup Day under the REMIC Provisions.

The provisions of this Section 3.01(b) shall apply to the exercise of such waiver, modification, postponement or indulgence rights by the Master Servicer in its capacity as such and shall not apply to the exercise of any similar rights by the Servicer, who shall instead by subject to the provisions of the Servicing Agreement. Such waiver, modification, postponement and indulgence rights of the Master Servicer set forth in this Section shall not be construed as a duty.

(c)        The Master Servicer shall enforce the obligation of the Servicer under the Servicing Agreement in connection with the waiver of Prepayment Charges in accordance with the criteria therein and to pay the amount of any waived Prepayment Charges.

	
            Section 3.02
 	
            REMIC-Related Covenants.
 

For as long as each REMIC shall exist, the Trustee, the Master Servicer and the Securities Administrator shall act in accordance herewith to assure continuing treatment of such REMIC as a REMIC, and the Trustee, the Master Servicer and the Securities Administrator shall comply with any directions of the Company, the Servicer or the Master Servicer to assure such continuing treatment. In particular, the Trustee shall not (a) sell or permit the sale of all or any portion of the Mortgage Loans or of any investment of deposits in an Account unless such sale is 

 

as a result of a repurchase of the Mortgage Loans pursuant to this Agreement or the Trustee has received a REMIC Opinion addressed to the Trustee prepared at the expense of the Trust Fund; and (b) other than with respect to a substitution pursuant to the Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as applicable, accept any contribution to any REMIC after the Startup Day without receipt of a REMIC Opinion addressed to the Trustee.

	
            Section 3.03
 	
            Monitoring of Servicer.
 

(a)        The Master Servicer shall be responsible for reporting to the Trustee and the Company the compliance by the Servicer with its duties under the Servicing Agreement. In the review of the Servicer’s activities, the Master Servicer may rely upon an officer’s certificate of the Servicer (or similar document signed by an officer of the Servicer) with regard to the Servicer’s compliance with the terms of its Servicing Agreement. In the event that the Master Servicer, in its judgment, determines that the Servicer should be terminated in accordance with its Servicing Agreement, or that a notice should be sent pursuant to such Servicing Agreement with respect to the occurrence of an event that, unless cured, would constitute grounds for such termination, the Master Servicer shall notify the Company and the Trustee thereof and the
Master Servicer shall issue such notice or take such other action as it deems appropriate.

(b)        The Master Servicer, for the benefit of the Trustee and the Certificateholders, shall enforce the obligations of the Servicer under the Servicing Agreement, and shall, in the event that the Servicer fails to perform its obligations in accordance with the Servicing Agreement, subject to the preceding paragraph, terminate the rights and obligations of the Servicer thereunder and act as servicer of the related Mortgage Loans or to cause the Trustee to enter in to a new Servicing Agreement with a successor Servicer selected by the Master Servicer; provided, however, it is understood and acknowledged by the parties hereto that there will be a period of transition (not to exceed 90 days) before the actual servicing functions can be fully transferred to such successor Servicer. Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Servicing Agreement and the pursuit of other appropriate remedies, shall be in such form and carried out to such an extent and at such time as the Master Servicer, in its good faith business judgment, would require were it the owner of the related Mortgage Loans. The Master Servicer shall pay the costs of such enforcement at its own expense, 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 Servicer, appointment of a successor Servicer or the transfer and assumption of servicing by the Master Servicer with respect to any Servicing Agreement (including, without limitation, (i) all legal costs and expenses and all due diligence costs and expenses associated with an evaluation of the potential termination of the Servicer as a result of an event of default by the 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 Mortgage Loans in accordance with the Servicing Agreement) are not fully and timely 

 

reimbursed by the terminated Servicer, the Master Servicer shall be entitled to reimbursement of such costs and expenses from the Custodial Account.

(d)        The Master Servicer shall require the Servicer to comply with the remittance requirements and other obligations set forth in the Servicing Agreement.

(e)        If the Master Servicer acts as Servicer, it will not assume liability for the representations and warranties of the Servicer, if any, that it replaces.

	
            Section 3.04
 	
            Fidelity Bond.
 

The Master Servicer, at its expense, shall maintain in effect a blanket fidelity bond and an errors and omissions insurance policy, affording coverage with respect to all directors, officers, employees and other Persons acting on such Master Servicer’s behalf, and covering errors and omissions in the performance of the Master Servicer’s obligations hereunder. The errors and omissions insurance policy and the fidelity bond shall be in such form and amount generally acceptable for entities serving as master servicers or trustees.

	
            Section 3.05
 	
            Power to Act; Procedures.
 

The Master Servicer shall master service the Mortgage Loans and shall have full power and authority, subject to the REMIC Provisions and the provisions of Article X hereof, to do any and all things that it may deem necessary or desirable in connection with the master servicing and administration of the Mortgage Loans, including but not limited to the power and authority (i) to execute and deliver, on behalf of the Certificateholders and the Trustee, customary consents or waivers and other instruments and documents, (ii) to consent to transfers of any Mortgaged Property and assumptions of the Mortgage Notes and related Mortgages, (iii) to collect any Insurance Proceeds, Liquidation Proceeds and Subsequent Recoveries, and (iv) to effectuate foreclosure or other conversion of the ownership of the Mortgaged Property securing any Mortgage Loan, in each case, in accordance with the provisions
of this Agreement and the Servicing Agreement, as applicable; provided, however, that the Master Servicer shall not (and, consistent with its responsibilities under Section 3.03, shall not permit the 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 any REMIC 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 would not cause any REMIC to fail to qualify as a REMIC or
result in the imposition of a tax upon any REMIC. The Trustee shall furnish the Master Servicer, upon written request from a Servicing Officer, with any powers of attorney empowering the Master Servicer or the Servicer to execute and deliver instruments of satisfaction or cancellation, or of partial or full release or discharge, and to foreclose upon or otherwise liquidate Mortgaged Property, and to appeal, prosecute or defend in any court action relating to the Mortgage Loans or the Mortgaged Property, in accordance with the applicable Servicing Agreement and this Agreement, and the Trustee shall execute and deliver such other 

 

documents, as the Master Servicer may request, to enable the Master Servicer to master service and administer the Mortgage Loans and carry out its duties hereunder, in each case in accordance with Accepted Master Servicing Practices (and the Trustee shall have no liability for misuse of any such powers of attorney by the Master Servicer or the Servicer). If the Master Servicer or the Trustee has been advised that it is likely that the laws of the state in which action is to be taken prohibit such action if taken in the name of the Trustee or that the Trustee would be adversely affected under the “doing business” or tax laws of such state if such action is taken in its name, the Master Servicer shall join with the Trustee in the appointment of a co-trustee pursuant to Section 8.10 hereof. In the performance of its duties hereunder, the Master Servicer shall be an independent contractor and shall
not, except in those instances where it is taking action in the name of the Trustee, be deemed to be the agent of the Trustee.

	
            Section 3.06
 	
            Due-on-Sale Clauses; Assumption Agreements.
 

To the extent provided in the applicable Servicing Agreement, to the extent Mortgage Loans contain enforceable due-on-sale clauses, the Master Servicer shall cause the Servicer to enforce such clauses in accordance with the applicable Servicing Agreement. If applicable law prohibits the enforcement of a due-on-sale clause or such clause is otherwise not enforced in accordance with the applicable Servicing Agreement, and, as a consequence, a Mortgage Loan is assumed, the original Mortgagor may be released from liability in accordance with the applicable Servicing Agreement.

	
            Section 3.07
 	
            Release of Mortgage Files.
 

(a)        Upon becoming aware of the payment in full of any Mortgage Loan, or the receipt by the Servicer of a notification that payment in full has been escrowed in a manner customary for such purposes for payment to Certificateholders on the next Distribution Date, the Servicer will, if required under the applicable Servicing Agreement (or if the Servicer does not, the Master Servicer may), promptly furnish to the Custodian, on behalf of the Trustee, two copies of a certification substantially in the form of Exhibit F hereto signed by an officer of the Servicer or in a mutually agreeable electronic format which will, in lieu of a signature on its face, originate from a Servicing Officer (which certification shall include a statement to the effect that all amounts received in connection with such payment that are required to be deposited in the
Protected Account maintained by the Servicer pursuant to Section 3.16 or by the Servicer pursuant to its Servicing Agreement have been or will be so deposited) and shall request that the Custodian, on behalf of the Trustee, deliver to the Servicer the related Mortgage File. Upon receipt of such certification and request, the Custodian, on behalf of the Trustee, shall promptly release the related Mortgage File to the Servicer and the Trustee and Custodian shall have no further responsibility with regard to such Mortgage File. Upon any such payment in full, the Servicer is authorized, to give, as agent for the Trustee, as the mortgagee under the Mortgage that secured the Mortgage Loan, an instrument of satisfaction (or assignment of mortgage without recourse) regarding the Mortgaged Property subject to the Mortgage, which instrument of satisfaction or assignment, as the case may be, shall be delivered to the Person or Persons entitled thereto against receipt therefor of such payment, it
being understood and agreed that no expenses incurred in connection with such instrument of satisfaction or assignment, as the case may be, shall be chargeable to the Protected Account.

 

 

(b)        From time to time and as appropriate for the servicing or foreclosure of any Mortgage Loan and in accordance with the applicable Servicing Agreement, the Trustee shall execute such documents as shall be prepared and furnished to the Trustee by the Servicer or the Master Servicer (in form reasonably acceptable to the Trustee) and as are necessary to the prosecution of any such proceedings. The Custodian, on behalf of the Trustee, shall, upon the request of the Servicer or the Master Servicer, and delivery to the Custodian, on behalf of the Trustee, of two copies of a request for release signed by a Servicing Officer substantially in the form of Exhibit F (or in a mutually agreeable electronic format which will, in lieu of a signature on its face, originate from a Servicing Officer), release the related Mortgage File held in its possession
or control to the Servicer or the Master Servicer, as applicable. Such trust receipt shall obligate the Servicer or the Master Servicer to return the Mortgage File to the Custodian on behalf of the Trustee, when the need therefor by the Servicer or the Master Servicer no longer exists unless the Mortgage Loan shall be liquidated, in which case, upon receipt of a certificate of a Servicing Officer similar to that hereinabove specified, the Mortgage File shall be released by the Custodian, on behalf of the Trustee, to the Servicer or the Master Servicer.

Section 3.08   Documents, Records and Funds in Possession of Master Servicer To Be Held for Trustee.

(a)        The Master Servicer shall transmit and the Servicer (to the extent required by the Servicing Agreement) shall transmit to the Trustee or Custodian such documents and instruments coming into the possession of the Master Servicer or the Servicer from time to time as are required by the terms hereof, or in the case of the Servicer, the applicable Servicing Agreement, to be delivered to the Trustee or Custodian. Any funds received by the Master Servicer or by the Servicer in respect of any Mortgage Loan or which otherwise are collected by the Master Servicer or by the Servicer as Liquidation Proceeds, Insurance Proceeds or Subsequent Recoveries in respect of any Mortgage Loan shall be held for the benefit of the Trustee and the Certificateholders subject to the Master Servicer’s right to retain or withdraw from the Custodial Account the
Master Servicing Compensation and other amounts provided in this Agreement, and to the right of the Servicer to retain its Servicing Fee and other amounts as provided in the applicable Servicing Agreement. The Master Servicer shall, and (to the extent provided in the applicable Servicing Agreement) shall cause the Servicer to, provide access to information and documentation regarding the Mortgage Loans to the Trustee, its agents and accountants at any time upon reasonable request and during normal business hours, and to Certificateholders that are savings and loan associations, banks or insurance companies, the Office of Thrift Supervision, the FDIC and the supervisory agents and examiners of such Office and Corporation or examiners of any other federal or state banking or insurance regulatory authority if so required by applicable regulations of the Office of Thrift Supervision or other regulatory authority, such access to be afforded without charge but only upon reasonable request
in writing and during normal business hours at the offices of the Master Servicer designated by it. In fulfilling such a request the Master Servicer shall not be responsible for determining the sufficiency of such information.

(b)        All Mortgage Files and funds collected or held by, or under the control of, the Master Servicer, in respect of any Mortgage Loans, whether from the collection of principal and interest payments or from Liquidation Proceeds, Insurance Proceeds or Subsequent Recoveries, shall be held by the Master Servicer for and on behalf of the Trustee and the Certificateholders 

 

and shall be and remain the sole and exclusive property of the Trustee; provided, however, that the Master Servicer and the Servicer shall be entitled to setoff against, and deduct from, any such funds any amounts that are properly due and payable to the Master Servicer or the Servicer under this Agreement or the applicable Servicing Agreement.

	
            Section 3.09
 	
            Standard Hazard Insurance and Flood Insurance Policies.
 

(a)        For each Mortgage Loan, the Master Servicer shall enforce any obligation of the Servicer under the Servicing Agreement to maintain or cause to be maintained standard fire and casualty insurance and, where applicable, flood insurance, all in accordance with the provisions of the Servicing Agreement. It is understood and agreed that such insurance shall be with insurers meeting the eligibility requirements set forth in the applicable Servicing Agreement and that no earthquake or other additional insurance is to be required of any Mortgagor or to be maintained on property acquired in respect of a defaulted loan, other than pursuant to such applicable laws and regulations as shall at any time be in force and as shall require such additional insurance.

(b)        Pursuant to Section 3.16 and 3.17, any amounts collected by the Servicer or the Master Servicer, or by the 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 applicable Servicing Agreement) shall be deposited into the Custodial Account, subject to withdrawal pursuant to Section 3.17 and 3.18. Any cost incurred by the Master Servicer or the Servicer in maintaining any such insurance if the Mortgagor defaults in its obligation to do so shall be added to the amount owing under the Mortgage Loan where the terms of the Mortgage Loan so permit; provided, however, that the addition of any such cost shall not be taken into account for purposes of calculating the distributions to be made to
Certificateholders and shall be recoverable by the Master Servicer or the Servicer pursuant to Section 3.17 and 3.18.

	
            Section 3.10
 	
            Presentment of Claims and Collection of Proceeds.
 

The Master Servicer shall (to the extent provided in the applicable Servicing Agreement) cause the Servicer to prepare and present on behalf of the Trustee and the Certificateholders all claims under the Insurance Policies and take such actions (including the negotiation, settlement, compromise or enforcement of the insured’s claim) as shall be necessary to realize recovery under such policies. Any proceeds disbursed to the Master Servicer (or disbursed to the Servicer and remitted to the Master Servicer) in respect of such policies, bonds or contracts shall be promptly deposited in the Custodial Account upon receipt, except that any amounts realized that are to be applied to the repair or restoration of the related Mortgaged Property as a condition precedent to the presentation of claims on the related Mortgage Loan to the insurer under any applicable Insurance Policy need not be
so deposited (or remitted).

	
            Section 3.11
 	
            Maintenance of the Primary Mortgage Insurance Policies.
 

(a)        The Master Servicer shall not take, or permit the Servicer (to the extent such action is prohibited under the applicable Servicing Agreement) to take, any action that would result in noncoverage under any applicable Primary Mortgage Insurance Policy of any loss 

 

which, but for the actions of the Master Servicer or the Servicer, would have been covered thereunder. The Master Servicer shall use its best reasonable efforts to cause the Servicer (to the extent required under the Servicing Agreement) to keep in force and effect (to the extent that the Mortgage Loan requires the Mortgagor to maintain such insurance), primary mortgage insurance applicable to each Mortgage Loan in accordance with the provisions of this Agreement and the Servicing Agreement, as applicable. The Master Servicer shall not, and shall not permit the Servicer (to the extent required under the Servicing Agreement) to, cancel or refuse to renew any such Primary Mortgage Insurance Policy that is in effect at the date of the initial issuance of the Mortgage Note and is required to be kept in force hereunder except in accordance with the provisions of this Agreement and the Servicing Agreement, as applicable.

(b)        The Master Servicer agrees to present, or to cause the Servicer (to the extent required under the Servicing Agreement) to present, on behalf of the Trustee and the Certificateholders, claims to the insurer under any Primary Mortgage Insurance Policies and, in this regard, to take such reasonable action as shall be necessary to permit recovery under any Primary Mortgage Insurance Policies respecting defaulted Mortgage Loans. Pursuant to Section 3.16 and 3.17, any amounts collected by the Master Servicer or the Servicer under any Primary Mortgage Insurance Policies shall be deposited in the Custodial Account, subject to withdrawal pursuant to Sections 3.17 and 3.18.

	
            Section 3.12  
 	
            Trustee to Retain Possession of Certain Insurance Policies and Documents.
 

The Trustee (or the Custodian, as directed by the Trustee), shall retain possession and custody of the originals (to the extent available) of any Primary Mortgage Insurance Policies, or certificate of insurance if applicable, and any certificates of renewal as to the foregoing as may be issued from time to time as contemplated by this Agreement. Until all amounts distributable in respect of the Certificates have been distributed in full and the Master Servicer otherwise has fulfilled its obligations under this Agreement, the Trustee (or its Custodian, if any, as directed by the Trustee) shall also retain possession and custody of each Mortgage File in accordance with and subject to the terms and conditions of this Agreement. The Master Servicer shall promptly deliver or cause to be delivered to the Trustee (or the Custodian, as directed by the Trustee), upon the execution or receipt
thereof the originals of any Primary Mortgage Insurance Policies, any certificates of renewal, and such other documents or instruments that constitute portions of the Mortgage File that come into the possession of the Master Servicer from time to time.

	
            Section 3.13
 	
            Realization Upon Defaulted Mortgage Loans.
 

The Master Servicer shall cause the Servicer (to the extent required under the Servicing Agreement) to foreclose upon, repossess or otherwise comparably convert the ownership of Mortgaged Properties securing such of the Mortgage Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments, all in accordance with the applicable Servicing Agreement.

 

 

	
            Section 3.14
 	
            Compensation for the Master Servicer.
 

The Master Servicer will be entitled to the Master Servicer Fee and any all income and gain realized from any investment of funds in the Certificate Account and the Custodial Account, pursuant to Article IV, for the performance of its activities hereunder.  Servicing compensation in the form of assumption fees, if any, late payment charges, as collected, if any, or otherwise (but not including any Prepayment Charge) shall be retained by the Servicer and shall not be deposited in the Protected Account. The Master Servicer shall be required to pay all expenses incurred by it in connection with its activities hereunder and shall not be entitled to reimbursement therefor except as provided in this Agreement.

	
            Section 3.15
 	
            REO Property.
 

(a)        In the event the Trust Fund acquires ownership of any REO Property in respect of any related Mortgage Loan, the deed or certificate of sale shall be issued to the Trustee, or to its nominee, on behalf of the related Certificateholders. The Master Servicer shall, to the extent provided in the applicable Servicing Agreement, cause the Servicer to sell any REO Property as expeditiously as possible and in accordance with the provisions of this Agreement and the Servicing Agreement, as applicable. Pursuant to its efforts to sell such REO Property, the Master Servicer shall cause the Servicer to protect and conserve, such REO Property in the manner and to the extent required by the applicable 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, cause the Servicer to deposit all funds collected and received in connection with the operation of any REO Property in the Protected Account.

(c)        The Master Servicer and the Servicer, upon the final disposition of any REO Property, shall be entitled to reimbursement for any related unreimbursed Monthly Advances and other unreimbursed advances as well as any unpaid Servicing Fees from Liquidation Proceeds received in connection with the final disposition of such REO Property; provided, that any such unreimbursed Monthly Advances as well as any unpaid Servicing Fees may be reimbursed or paid, as the case may be, prior to final disposition, out of any net rental income or other net amounts derived from such REO Property.

(d)        To the extent provided in the Servicing Agreement, the Liquidation Proceeds from the final disposition of the REO Property, net of any payment to the Master Servicer and the Servicer as provided above shall be deposited in the Protected Account on or prior to the Determination Date in the month following receipt thereof and be remitted by wire transfer in immediately available funds to the Master Servicer for deposit into the related Custodial Account on the next succeeding Servicer Remittance Date.

	
            Section 3.16
 	
            Protected Accounts.
 

(a)        The Master Servicer shall enforce the obligation of the Servicer to establish and maintain a Protected Account in accordance with the applicable Servicing Agreement, with 

 

records to be kept with respect thereto on a Mortgage Loan by Mortgage Loan basis, into which accounts shall be deposited within 48 hours (or as of such other time specified in the Servicing Agreement) of receipt, all collections of principal and interest on any Mortgage Loan and any REO Property received by the Servicer, including Principal Prepayments, Insurance Proceeds, Liquidation Proceeds, and advances made from the Servicer’s own funds (less servicing compensation as permitted by the applicable Servicing Agreement in the case of the Servicer) and all other amounts to be deposited in the Protected Account. The Servicer is hereby authorized to make withdrawals from and deposits to the related Protected Account for purposes required or permitted by this Agreement. To the extent provided in the Servicing Agreement, the Protected Account shall be held by a Designated Depository Institution and
segregated on the books of such institution in the name of the Trustee for the benefit of Certificateholders.

(b)        To the extent provided in the Servicing Agreement, amounts on deposit in a Protected Account may be invested in Permitted Investments in the name of the Trustee for the benefit of Certificateholders and, except as provided in the preceding paragraph, not commingled with any other funds.  Such Permitted Investments 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 Custodial Account, and shall be held until required for such deposit. The income earned from Permitted Investments made pursuant to this Section 3.16 shall be paid to the Servicer under the applicable Servicing Agreement, and the risk of loss of moneys required to be distributed to the Certificateholders resulting from such investments shall be borne by and be the risk of the
Servicer. The Servicer (to the extent provided in the Servicing Agreement) shall deposit the amount of any such loss in the Protected Account within two Business Days of receipt of notification of such loss but not later than the second Business Day prior to the Distribution Date on which the moneys so invested are required to be distributed to the Certificateholders.

(c)        To the extent provided in the Servicing Agreement and subject to this Article III, on or before each Servicer Remittance Date, the Servicer shall withdraw or shall cause to be withdrawn from its Protected Accounts and shall immediately deposit or cause to be deposited in the Custodial Account amounts representing the following collections and payments (other than with respect to principal of or interest on the Mortgage Loans due on or before the Cut-off Date):

(1)               Scheduled payments on the Mortgage Loans received or any related portion thereof advanced by the Servicer pursuant to its Servicing Agreement which were due on or before the related Due Date, net of the amount thereof comprising its Servicing Fee or any fees with respect to any lender-paid primary mortgage insurance policy;

(2)               Full Principal Prepayments and any Liquidation Proceeds received by the Servicer with respect to the Mortgage Loans in the related Prepayment Period, with interest to the date of prepayment or liquidation, net of the amount thereof comprising its Servicing Fee;

(3)               Partial Principal Prepayments received by the Servicer for the Mortgage Loans in the related Prepayment Period; and

 

 

	
            (4)
 	
            Any amount to be used as a Monthly Advance.
 

(d)        Withdrawals may be made from an Account only to make remittances as provided in the Servicing Agreement; to reimburse the Master Servicer or the Servicer for Monthly 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 this Agreement in accordance with Section 10.01. As provided in Sections 3.16(a) and 3.17(b) certain amounts otherwise due to the Servicer may be retained by them and need not be deposited in the Custodial Account.

	
            Section 3.17
 	
            Custodial Account.
 

(a)        The Master Servicer shall establish and maintain in the name of the Trustee, for the benefit of the Certificateholders, the Custodial Account as a segregated trust account or accounts. The Custodial Account shall be an Eligible Account. The Master Servicer will deposit in the Custodial Account as identified by the Master Servicer and as received by the Master Servicer from the Servicer, the following amounts:

	
            (1)
 	
            Any amounts withdrawn from a Protected Account;
 

(2)           Any Monthly Advance and any payments of Compensating Interest;

(3)           Any Insurance Proceeds, Net Liquidation Proceeds or Subsequent Recoveries received by or on behalf of the Servicer or Master Servicer or which were not deposited in a Protected Account;

(4)           The Purchase Price with respect to any Mortgage Loans purchased by the Seller 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 Purchase Price in connection with the tender of a Substitute Mortgage Loan by the Seller, the Purchase Price with respect to any Mortgage Loans purchased by the Company pursuant to Section 2.04, and all proceeds of any Mortgage Loans or property acquired with respect thereto repurchased by the Company or its designee pursuant to Section 10.01;

(5)           Any amounts required to be deposited with respect to losses on investments of deposits in an Account; and

(6)           Any other amounts received by or on behalf of the Master Servicer and required to be deposited in the Custodial Account pursuant to this Agreement.

(b)        All amounts deposited to the Custodial Account shall be held by the Master Servicer in the name of the Trustee in trust for the benefit of the Certificateholders in accordance with the terms and provisions of this Agreement. The requirements for crediting the Custodial 

 

Account or the Certificate 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 Subsection 3.20(a) need not be credited by the Master Servicer or the Servicer to the Certificate Account or the Custodial Account, as applicable. In the event that the Master Servicer shall deposit or cause to be deposited to the Custodial 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 Custodial Account may be invested, in the name of the Trustee, or its nominee, for the benefit of the Certificateholders, 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 Certificate Account Deposit Date. Any and all investment earnings on amounts on deposit in the Master Servicer 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 Account. The risk of loss of moneys required to be distributed to the Certificateholders resulting from such investments shall be borne by and be the
risk of the Master Servicer. The Master Servicer shall deposit the amount of any such loss in the Custodial Account within two Business Days of receipt of notification of such loss but not later than the second Business Day prior to the Distribution Date on which the moneys so invested are required to be distributed to the Certificateholders.

	
            Section 3.18
 	
            Permitted Withdrawals and Transfers from the Custodial Account.
 

(a)        The Master Servicer will, from time to time on demand of the Servicer or the Securities Administrator, make or cause to be made such withdrawals or transfers from the Custodial 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 Custodial Account pursuant to Section 10.01 and remove amounts from time to time deposited in error.

(b)        On an ongoing basis, the Master Servicer shall withdraw from the Custodial Account (i) any expenses recoverable by the Trustee, the Master Servicer or the Securities Administrator or the Custodian pursuant to Sections 3.03 and 6.03 and (ii) any amounts payable to the Master Servicer as set forth in Section 3.14.

(c)        In addition, on or before each Certificate Account Deposit Date, the Master Servicer shall deposit in the Certificate Account (or remit to the Securities Administrator for deposit therein) any Monthly Advances required to be made by the Master Servicer with respect to the Mortgage Loans.

(d)        No later than 3:00 p.m. New York time on each Certificate Account Deposit Date, the Master Servicer will transfer all Available Distribution Amount on deposit in the Custodial 

 

Account with respect to the related Distribution Date to the Securities Administrator for deposit in the Certificate Account.

	
            Section 3.19
 	
            Certificate Account.
 

(a)        The Securities Administrator shall establish and maintain in the name of the Trustee, for the benefit of the Certificateholders, the Certificate Account as a segregated trust account or accounts and it may be a sub-account of the Custodial Account.

(b)        All amounts deposited to the Certificate Account shall be held by the Trustee in the name of the Trustee in trust for the benefit of the Certificateholders in accordance with the terms and provisions of this Agreement.

(c)        The Certificate Account shall constitute a trust account of the Trust Fund segregated on the books of the Securities Administrator on behalf of the Trustee, and the Certificate Account and the funds deposited therein shall not be subject to, and shall be protected from, all claims, liens, and encumbrances of any creditors or depositors of the Trustee, the Securities Administrator or the Master Servicer (whether made directly, or indirectly through a liquidator or receiver of the Trustee or the Master Servicer). The Certificate Account shall be an Eligible Account.  The Certificate Account may be a sub-account of the Custodial Account and in such case any withdrawals from the Custodial Account and deposits into the Certificate Account shall be deemed to have been made.  The amount at any time credited to the Certificate Account shall be
(i) held in cash and fully insured by the FDIC to the maximum coverage provided thereby or (ii) invested in the name of the Trustee, in such Permitted Investments selected by the Securities Administrator or deposited in demand deposits with such depository institutions as selected by the Securities Administrator, provided that time deposits of such depository institutions would be a Permitted Investment. All Permitted Investments shall mature or be subject to redemption or withdrawal on or before, and shall be held until, the next succeeding Distribution Date if the obligor, manager or advisor for such Permitted Investment is an affiliate of the Securities Administrator or, if such obligor is any other Person, the Business Day preceding such Distribution Date. All investment earnings on amounts on deposit in the Certificate Account or benefit from funds uninvested therein from time to time shall be for the account of the Securities Administrator. The Securities Administrator shall be
permitted to withdraw or receive distribution of any and all investment earnings from the Certificate Account on each Distribution Date. If there is any loss on a Permitted Investment or demand deposit, the Securities Administrator shall deposit the amount of the loss to the Certificate Account. With respect to the Certificate Account and the funds deposited therein, the Master Servicer shall take such action as may be necessary to ensure that the Certificateholders shall be entitled to the priorities afforded to such a trust account (in addition to a claim against the estate of the Trustee) as provided by 12 U.S.C. § 92a(e), and applicable regulations pursuant thereto, if applicable, or any applicable comparable state statute applicable to state chartered banking corporations.

	
            Section 3.20
 	
            Permitted Withdrawals and Transfers from the Certificate Account.
 

(a)        The Securities Administrator will, from time to time, make or cause to be made such withdrawals or transfers from the Certificate Account as the Securities Administrator has 

 

designated for such transfer or withdrawal pursuant to this Agreement and the Servicing Agreement:

(1)               to reimburse the Master Servicer or the Servicer for any Monthly Advance of its own funds, the right of the Master Servicer or the Servicer to reimbursement pursuant to this subclause (i) being limited to amounts received on a particular Mortgage Loan (including, for this purpose, the Purchase Price therefor, Insurance Proceeds and Liquidation Proceeds) which represent late payments or recoveries of the principal of or interest on such Mortgage Loan respecting which such Monthly Advance was made;

(2)               to reimburse the Master Servicer or the Servicer from Insurance Proceeds or Liquidation Proceeds relating to a particular Mortgage Loan for amounts expended by the Master Servicer or the Servicer in good faith in connection with the restoration of the related Mortgaged Property which was damaged by an Uninsured Cause or in connection with the liquidation of such Mortgage Loan;

(3)               to reimburse the Master Servicer or the Servicer from Insurance Proceeds relating to a particular Mortgage Loan for insured expenses incurred with respect to such Mortgage Loan and to reimburse the Master Servicer or the Servicer from Liquidation Proceeds from a particular Mortgage Loan for Liquidation Expenses incurred with respect to such Mortgage Loan; provided that the Master Servicer shall not be entitled to reimbursement for Liquidation Expenses with respect to a Mortgage Loan to the extent that (i) any amounts with respect to such Mortgage Loan were paid as Excess Liquidation Proceeds pursuant to clause (xi) of this Subsection 3.20(a) to the Master Servicer; and (ii) such Liquidation Expenses were not included in the computation of such Excess
Liquidation Proceeds;

(4)               to reimburse the Master Servicer or the Servicer for advances of funds (other than Monthly Advances) made with respect to the Mortgage Loans, and the right to reimbursement pursuant to this subclause being limited to amounts received on the related Mortgage Loan (including, for this purpose, the Purchase Price therefor, Insurance Proceeds and Liquidation Proceeds) which represent late recoveries of the payments for which such advances were made;

(5)               to reimburse the Master Servicer or the Servicer for any Monthly Advance or advance, after a Realized Loss has been allocated with respect to the related Mortgage Loan if the Monthly Advance or advance has not been reimbursed pursuant to clauses (1) and (4);

	
            (6)
 	
            to pay the Master Servicer as set forth in Section 3.14;
 

 

 

 

(7)               to reimburse the Master Servicer for expenses, costs and liabilities incurred by and reimbursable to it pursuant to Sections 3.03 and 6.03;

(8)               to pay to the Master Servicer, as additional servicing compensation, any Excess Liquidation Proceeds to the extent not retained by the Servicer;

(9)               to reimburse or pay the Servicer any such amounts as are due thereto under the applicable Servicing Agreement and have not been retained by or paid to the Servicer, to the extent provided in the Servicing Agreement;

(10)            to reimburse the Trustee, the Securities Administrator or the Custodian for expenses, costs and liabilities incurred by or reimbursable to it pursuant to this Agreement;

	
            (11)
 	
            to remove amounts deposited in error; and
 

(12)            to clear and terminate the Certificate Account pursuant to Section 9.01.

(b)        The Master Servicer shall keep and maintain separate accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any reimbursement from the Certificate Account pursuant to subclauses (1) through (4) immediately above 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 Certificate Account under Section 3.18(b).

(c)        On each Distribution Date, the Securities Administrator shall distribute the Available Distribution Amount to the extent on deposit in the Certificate Account to the Holders of the Certificates and determined by the Securities Administrator.

	
            Section 3.21
 	
            Annual Officer’s Certificate as to Compliance.
 

(a)        The Master Servicer shall deliver to the Trustee and the Rating Agencies on or before March 1 of each year, commencing on March 1, 2006, an Officer’s Certificate, certifying that with respect to the period ending December 31 of the prior year:  (i) such Servicing Officer has reviewed the activities of such Master Servicer during the preceding calendar year or portion thereof and its performance under this Agreement, (ii) to the best of such Servicing Officer’s knowledge, based on such review, such Master Servicer has performed and fulfilled its duties, responsibilities and obligations under this Agreement in all material respects throughout such year, or, if there has been a default in the fulfillment of any such duties, responsibilities or obligations, specifying each such default known to such Servicing Officer and the nature
and status thereof, (iii) nothing has come to the attention of such Servicing Officer to lead such Servicing Officer to believe that the Servicer has failed to perform any of its duties, responsibilities and obligations under the Servicing Agreement in all material respects throughout such year, or, if there has been a material default in the performance or fulfillment of 

 

any such duties, responsibilities or obligations, specifying each such default known to such Servicing Officer and the nature and status thereof.

(b)        Copies of such statements shall be provided to any Certificateholder upon request, by the Master Servicer or by the Securities Administrator at the Master Servicer’s expense if the Master Servicer failed to provide such copies.

	
            Section 3.22
 	
            Annual Independent Accountant’s Servicing Report.
 

If the Master Servicer has, during the course of any fiscal year, directly serviced any of the Mortgage Loans, then the Master Servicer at its expense shall cause a nationally recognized firm of independent certified public accountants to furnish a statement to the Trustee, the Rating Agencies and the Company on or before March 1 of each year, commencing on March 1, 2006 to the effect that, with respect to the most recently ended fiscal year, such firm has examined certain records and documents relating to the Master Servicer’s performance of its servicing obligations under this Agreement and pooling and servicing and trust agreements in material respects similar to this Agreement and to each other and that, on the basis of such examination conducted substantially in compliance with the audit program for mortgages serviced for Freddie Mac or the Uniform Single Attestation Program
for Mortgage Bankers, such firm is of the opinion that the Master Servicer’s activities have been conducted in compliance with this Agreement, or that such examination has disclosed no material items of noncompliance except for (i) such exceptions as such firm believes to be immaterial, (ii) such other exceptions as are set forth in such statement and (iii) such exceptions that the Uniform Single Attestation Program for Mortgage Bankers or the Audit Program for Mortgages Serviced by Freddie Mac requires it to report. Copies of such statements shall be provided to any Certificateholder upon request by the Master Servicer, or by the Securities Administrator at the expense of the Master Servicer. If such report discloses exceptions that are material, the Master Servicer shall advise the Trustee whether such exceptions have been or are susceptible of cure, and will take prompt action to do so.

	
            Section 3.23
 	
            Reports Filed with Securities and Exchange Commission.
 

Within 15 days after each Distribution Date, the Securities Administrator shall, in accordance with industry standards, file with the Commission via EDGAR, a Form 8-K with a copy of the statement to the Certificateholders for such Distribution Date as an exhibit thereto.  Prior to January 30 in any year, the Securities Administrator shall, in accordance with industry standards and unless otherwise instructed by the Company, file a Form 15 Suspension Notice with respect to the Trust Fund, if applicable. Prior to (i) March 15, 2006 and (ii) unless and until a Form 15 Suspension Notice shall have been filed, prior to March 15 of each year thereafter, the Master Servicer shall provide the Securities Administrator with a Master Servicer Certification, together with a copy of the annual independent accountant’s servicing report and annual statement of compliance of the Servicer, in each
case, required to be delivered pursuant to the Servicing Agreement, and, if applicable, the annual statement of compliance, and the annual independent accountant’s servicing report to be delivered by the Master Servicer pursuant to Sections 3.21 and 3.22.  Prior to (i) March 31, 2006, or such earlier filing date as may be required by the Commission, and (ii) unless and until a Form 15 Suspension Notice shall have been filed, March 31 of each year thereafter, or such earlier filing date as may be required by the Commission, the Securities Administrator shall file a Form 10-K, in substance conforming to 

 

industry standards, with respect to the Trust. Such Form 10-K shall include the Master Servicer Certification and other documentation provided by the Master Servicer pursuant to the second preceding sentence. The Company hereby grants to the Securities Administrator a limited power of attorney to execute and file each such document on behalf of the Company. Such power of attorney shall continue until either the earlier of (i) receipt by the Securities Administrator from the Company of written termination of such power of attorney and (ii) the termination of the Trust Fund. The Company agrees to promptly furnish to the Securities Administrator, from time to time upon request, such further information, reports and financial statements within its control related to this Agreement and the Mortgage Loans as the Securities Administrator reasonably deems appropriate to prepare and file all necessary reports with
the Commission. The Securities Administrator shall have no responsibility to file any items other than those specified in this Section 3.23; provided, however, the Securities Administrator will cooperate with the Company in connection with any additional filings with respect to the Trust Fund as the Company deems necessary under the Exchange Act. Fees and expenses incurred by the Securities Administrator in connection with this Section 3.23 shall not be reimbursable from the Trust Fund.

	
            Section 3.24
 	
            UCC.
 

The Company shall inform the Trustee in writing of any Uniform Commercial Code financing statements that were filed on the Closing Date in connection with the Trust with stamped recorded copies of such financing statements to be delivered to the Trustee promptly upon receipt by the Company.  The Trustee agrees to monitor and notify the Company if any continuation statements for such Uniform Commercial Code financing statements need to be filed. If directed by the Company in writing, the Trustee will file any such continuation statements solely at the expense of the Company. The Company shall file any financing statements or amendments thereto required by any change in the Uniform Commercial Code.

	
            Section 3.25
 	
            Optional Purchase of Defaulted Mortgage Loans.
 

(a)        During the first full calendar month (but excluding the last Business Day thereof) following a Mortgage Loan or related REO Property becoming 90 days or more delinquent, the Seller shall have the option, but not the obligation to purchase from the Trust Fund any such Mortgage Loan or related REO Property that is then still 90 days or more delinquent, which the Seller determines in good faith will otherwise become subject to foreclosure proceedings (evidence of such determination to be delivered in writing to the Trustee prior to purchase), at a price equal to the Purchase Price.  The Purchase Price for any Mortgage Loan or related REO Property purchased hereunder shall be deposited in the Custodial Account, and the Trustee, upon written certification of such deposit, shall release or cause to be released to the Seller the related
Mortgage File and the Trustee shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as the Seller shall furnish and as shall be necessary to vest in the Seller title to any Mortgage Loan or related REO Property released pursuant hereto.

If with respect to any delinquent Mortgage Loan or related REO Property, the option of the Seller set forth in the preceding paragraph shall have arisen but the Seller shall have failed to exercise such option on or before the Business Day preceding the last Business Day of the calendar month following the calendar month during which such Mortgage Loan or related REO Property first became 90 days or more delinquent, then such option shall automatically expire; 

 

provided, however, that if any such Mortgage Loan or related REO Property shall cease to be 90 days or more delinquent but then subsequently shall again become 90 days or more delinquent, then the Seller shall be entitled to another repurchase option with respect to such Mortgage Loan or REO Property as provided in the preceding paragraph.

 

 

ARTICLE IV

 

PAYMENTS TO CERTIFICATEHOLDERS

	
            Section 4.01
 	
            Distributions.
 

(a)        On each Distribution Date the Securities Administrator shall distribute to each Certificateholder of record as of the next preceding Record Date (other than as provided in Section 9.01 respecting the final distribution) either in immediately available funds (by wire transfer or otherwise) to the account of such Certificateholder at a bank or other entity having appropriate facilities therefor, if such Certificateholder has so notified the Securities Administrator at least 5 Business Days prior to the related Record Date, or otherwise by check mailed to such Certificateholder at the address of such Holder appearing in the Certificate Register, such Certificateholder’s share (based on the aggregate of the Percentage Interests represented by Certificates of the applicable Class held by such Holder) of the amounts required to be
distributed to such Holder pursuant to this Section 4.01.

Net Swap Payments and Swap Termination Payments (other than Swap Termination Payments resulting from a Swap Provider Trigger Event) payable by the Supplemental Interest Trust to the Swap Provider pursuant to the Swap Agreement shall be deducted from Interest Remittance Amount, and to the extent of any such remaining amounts due, from Principal Remittance Amount, prior to any distributions to the Certificateholders. On each Distribution Date, such amounts will be remitted to the Supplemental Interest Trust, first to make any Net Swap Payment owed to the Swap Provider pursuant to the Swap Agreement for such Distribution Date, and second to make any Swap Termination Payment (not due to a Swap Provider Trigger Event) owed to the Swap Provider pursuant to the Swap Agreement for such Distribution Date.  Any Swap Termination Payment triggered by a Swap Provider Trigger Event owed to the Swap
Provider pursuant to the Swap Agreement will be subordinated to distributions to the Holders of the Offered Certificates and shall be paid as set forth in Section 4.01(c)(v).

On each Distribution Date, the Securities Administrator shall withdraw from the Certificate Account that portion of Available Distribution Amount for such Distribution Date consisting of the Interest Remittance Amount for such Distribution Date, and make the following disbursements and transfers in the order of priority described below, in each case to the extent of the Interest Remittance Amount remaining for such Class for such Distribution Date;

(i)         concurrently, on a pro rata basis, to the Holders of the Class A Certificates, the related Accrued Certificate Interest for such Class and any Interest Carry Forward Amount for such Class for such Distribution Date; and

(ii)         sequentially, to the Holders of the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates, in that order, the related Accrued Certificate Interest for such Class for such Distribution Date.

(b)               (i) On each Distribution Date (a) prior to the Stepdown Date or (b) on which a Trigger Event is in effect, the Holders of each Class of the Class A Certificates and 

 

Class M Certificates shall be entitled to receive distributions in respect of principal from that portion of Available Distribution Amount to the extent of the Principal Distribution Amount in the following order of priority:

(1)               to the Class A Certificates, in the order and priority set forth in clause (d) below, until the Certificate Principal Balances thereof have been reduced to zero; and

(2)               sequentially,  to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates, in that order, until the Certificate Principal Balance of each such Class is reduced to zero.

(ii)         On each Distribution Date (a) on or after the Stepdown Date and (b) on which a Trigger Event is not in effect, the Holders of each Class of the Class A Certificates and Class M Certificates shall be entitled to receive distributions in respect of principal from that portion of Available Distribution Amount to the extent of the Principal Distribution Amount in the following amounts and order of priority:

(1)               first, the Class A Principal Distribution Amount shall be distributed to the Holders of the Class A Certificates, in the order and priority set forth in clause (d) below, until the Certificate Principal Balances thereof have been reduced to zero;

(2)               second, to the Holders of the Class M-1 Certificates, the Class M-1 Principal Distribution Amount until the Certificate Principal Balance thereof has been reduced to zero;

(3)               third, to the Holders of the Class M-2 Certificates, the Class M-2 Principal Distribution Amount until the Certificate Principal Balance thereof has been reduced to zero;

(4)               fourth, to the Holders of the Class M-3 Certificates, the Class M-3 Principal Distribution Amount until the Certificate Principal Balance thereof has been reduced to zero;

(5)               fifth, to the Holders of the Class M-4 Certificates, the Class M-4 Principal Distribution Amount until the Certificate Principal Balance thereof has been reduced to zero;

(6)               sixth, to the Holders of the Class M-5 Certificates, the Class M-5 Principal Distribution Amount until the Certificate Principal Balance thereof has been reduced to zero;

(7)               seventh, to the Holders of the Class M-6 Certificates, the Class M-6 Principal Distribution Amount until the Certificate Principal Balance thereof has been reduced to zero;

 

 

(8)               eighth, to the Holders of the Class M-7 Certificates, the Class M-7 Principal Distribution Amount until the Certificate Principal Balance thereof has been reduced to zero;

(9)               ninth, to the Holders of the Class M-8 Certificates, the Class M-8 Principal Distribution Amount until the Certificate Principal Balance thereof has been reduced to zero;

(10)            tenth, to the Holders of the Class M-9 Certificates, the Class M-9 Principal Distribution Amount until the Certificate Principal Balance thereof has been reduced to zero; and

(11)            eleventh, to the Holders of the Class M-10 Certificates, the Class M-10 Principal Distribution Amount until the Certificate Principal Balance thereof has been reduced to zero.

(c)        On each Distribution Date, the Net Monthly Excess Cashflow shall be distributed in the following order of priority, in each case to the extent of the Net Monthly Excess Cashflow remaining for such Distribution Date:

(i)         first, to the Holders of the Class A Certificates and Class M Certificates then entitled to receive distributions in respect of principal, in an amount equal to any Extra Principal Distribution Amount, payable to such Holders as part of the Principal Distribution Amount as described under Section 4.01(b) above;

(ii)         second, sequentially to the Holders of the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates, in that order, in an amount equal to any Interest Carry Forward Amount for such Class or Classes;

(iii)        third, sequentially to the Holders of the Class A-2, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates, in that order, in an amount equal to any Allocated Realized Loss Amount for such Class or Classes;

(iv)        fourth, to the Basis Risk Shortfall Reserve Fund to pay the Class A Certificates and Class M Certificates as follows:  first, to the Class A Certificates, on a pro rata basis, based on the aggregate amount of Basis Risk Shortfall Carry-Forward Amounts for such Classes, and second, sequentially to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates, in that order, any related Basis Risk Shortfall Carry-Forward Amount for such Class or Classes on such Distribution Date;

(v)        fifth, to the Supplemental Interest Trust for payment to the Swap Provider any Swap Termination Payments owed to the Swap Provider due to a Swap Provider Trigger Event not previously paid;

 

 

(vi)        sixth, to the Holders of the Class C Certificates, the Accrued Certificate Interest for such Class and any Principal Remittance Amount not used to make payments pursuant to clauses (b) and (c)(i) through (iv) above and any Overcollateralization Release Amount for such Distribution Date;

(vii)       seventh, if such Distribution Date follows the Prepayment Period during which a Prepayment Charge may be required to be paid in respect of any Mortgage Loans, to the Holders of the Class P Certificates, in reduction of the Certificate Principal Balance thereof, until the Certificate Principal Balance thereof is reduced to zero;

(viii)      eighth, to the Master Servicer and the Securities Administrator any amounts payable pursuant to Section 6.03 which were not reimbursed because of the operation of the annual cap described in such Section; and

(ix)        ninth, any remaining amounts to the Holders of the Class R Certificates (in respect of the Class R-3 Interest).

Without limiting the provisions of Section 9.01, the Class R Certificateholders, by accepting the Class R Certificates, agree to pledge their rights to receive any amounts otherwise distributable on the Class R Certificates, and such rights are hereby assigned and pledged to the holders of the Class C Certificates.  Allocated Realized Loss Amounts and Basis Risk Shortfall Carry-Forward Amounts will be payable to each Class of the Class A Certificates and the Class M Certificates, as applicable, even after its Certificate Principal Balance has been reduced to zero.

(d)        On each Distribution Date, any Principal Distribution Amount payable to the Class A Certificates shall be distributed in the following manner and order of priority:

Concurrently on a pro rata basis, based on their respective aggregate Certificate Principal Balances, as follows: 

(1)            sequentially to the Class A-1A, Class A-1B and Class A-1C Certificates in that order, in each case until the Certificate Principal Balance thereof has been reduced to zero;

(2)           to the Class A-PT Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and

(3)           to the Class A-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero.

(e)        In addition to the foregoing distributions, with respect to any Subsequent Recoveries, the Master Servicer shall deposit such funds into the Custodial Account pursuant to Section 3.17. If, after taking into account such Subsequent Recoveries, the amount of a Realized Loss is reduced, the amount of such Subsequent Recoveries will be applied to increase the Certificate Principal Balance of the Class of Certificates with the highest payment priority to which Realized Losses have been allocated, but not by more than the amount of Realized Losses previously allocated to that Class of Certificates. The amount of any remaining Subsequent Recoveries will be applied to increase the Certificate Principal Balance of the Class of 

 

Certificates with the next highest payment priority, up to the amount of such Realized Losses previously allocated to that Class of Certificates, and so on. Holders of such Certificates will not be entitled to any payment in respect of Accrued Certificate Interest on the amount of such increases for any Accrual Period preceding the Distribution Date on which such increase occurs. Any such increases shall be applied to the Certificate Principal Balance of each Certificate of such Class in accordance with its respective Percentage Interest.

(f)         On each Distribution Date, all amounts representing Prepayment Charges in respect of the Mortgage Loans received during the related Prepayment Period will be withdrawn from the Certificate Account and distributed by the Securities Administrator to the Holders of the Class P Certificates and shall not be available for distribution to the Holders of any other Class of Certificates.  The payment of the foregoing amounts to the Holders of the Class P Certificates shall not reduce the Certificate Principal Balances thereof.

(g)        On each Distribution Date, the Securities Administrator shall distribute from the amounts received from the Swap Provider in respect of any Net Swap Payment then on deposit in the Supplemental Interest Trust the following amounts in the following order of priority:

(1)               to the Class A Certificates, pro rata, based on entitlement, in an amount equal to any Interest Carry Forward Amount for such Class or Classes to the extent not covered by the Interest Remittance Amount on that Distribution Date and solely to the extent the Interest Carry Forward Amount is a result of the interest portion of Realized Losses;

(2)               to the Class A Certificates and Class M Certificates, an amount equal to any Extra Principal Distribution Amount, to the extent not covered by the Net Monthly Excess Cashflow on that Distribution Date and solely to the extent the payment of the Extra Principal Distribution Amount is as a result of current or prior period Realized Losses, to be included in the Principal Distribution Amount for that Distribution Date and payable as provided under Sections 4.01(b), (c) and (d) above;

(3)               sequentially to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates, in that order, in an amount equal to any Interest Carry Forward Amount for such Class or Classes to the extent not covered by the Net Monthly Excess Cashflow on that Distribution Date and solely to the extent the Interest Carry Forward Amount is as a result of the interest portion of Realized Losses; 

(4)               sequentially to the Class A-2, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates, in that order, in an amount equal to any Allocated Realized Loss Amount for such Class or Classes, to the extent not covered by the Net Monthly Excess Cashflow on that Distribution Date; and

 

 

(5)               to the Basis Risk Shortfall Reserve Fund, to pay the Class A Certificates and Class M Certificates as follows: first, to the Class A Certificates, on a pro rata basis, based on the aggregate amount of Basis Risk Shortfall Carry-Forward Amounts for such Classes of Class A Certificates remaining unpaid, and second, sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates, in that order, any related Basis Risk Shortfall Carry-Forward Amount for such Class or Classes remaining unpaid on such Distribution Date, in each case to the extent not covered by the Net Monthly Excess Cashflow on that Distribution Date.

(h)        Each distribution with respect to a Book-Entry Certificate shall be paid to the Company, as Holder thereof, and the Company shall be responsible for crediting the amount of such distribution to the accounts of its Company Participants in accordance with its normal procedures.  Each Company Participant shall be responsible for disbursing such distribution to the Certificate Owners that it represents and to each indirect participating brokerage firm (a “brokerage firm” or “indirect participating firm”) for which it acts as agent.  Each brokerage firm shall be responsible for disbursing funds to the Certificate Owners that it represents.  None of the Trustee, the Securities Administrator the Company or the Master Servicer shall have any responsibility therefor except as otherwise provided by this Agreement or applicable law.

(i)         Except as otherwise provided in Section 9.01, if the Securities Administrator anticipates that a final distribution with respect to any Class of Certificates will be made on the next Distribution Date, the Securities Administrator shall, no later than two Business Days after the Determination Date in the month of such final distribution, mail on such date to each Holder of such Class of Certificates a notice to the effect that:  (i) the Securities Administrator anticipates that the final distribution with respect to such Class of Certificates will be made on such Distribution Date but only upon presentation and surrender of such Certificates at the office of the Securities Administrator or as otherwise specified therein, and (ii) no interest shall accrue on such Certificates from and after the end of the prior calendar month.

(j)         Any funds not distributed to any Holder or Holders of Certificates of such Class on such Distribution Date because of the failure of such Holder or Holders to tender their Certificates shall, on such date, be set aside and held in trust and credited to the account of the appropriate non-tendering Holder or Holders.  If any Certificates as to which notice has been given pursuant to this Section 4.01(j) shall not have been surrendered for cancellation within six months after the time specified in such notice, the Securities Administrator shall mail a second notice to the remaining non-tendering Certificateholders to surrender their Certificates for cancellation in order to receive the final distribution with respect thereto. If within six months after the second notice all such Certificates shall not have been surrendered for
cancellation, the Securities Administrator shall take reasonable steps as directed by the Company, or appoint an agent to take reasonable steps, to contact the remaining non-tendering Certificateholders concerning surrender of their Certificates. The costs and expenses of maintaining the funds in trust and of contacting such Certificateholders shall be paid out of the assets remaining in the Trust Fund. If within nine months after the second notice any such Certificates shall not have been surrendered for cancellation, the Class R Certificateholders shall be entitled to all 

 

unclaimed funds and other assets which remain subject hereto. No interest shall accrue or be payable to any Certificateholder on any amount held in trust as a result of such Certificateholder’s failure to surrender its Certificate(s) for final payment thereof in accordance with this Section 4.01(j).

(k)        On each Distribution Date, other than the final Distribution Date, the Securities Administrator shall distribute to each Certificateholder of record as of the immediately preceding Record Date the Certificateholder’s pro rata share of its Class (based on the aggregate Percentage Interest represented by such Holder’s Certificates) of all amounts required to be distributed on such Distribution Date to such Class. The Securities Administrator shall calculate the amount to be distributed to each Class and, based on such amounts, the Securities Administrator shall determine the amount to be distributed to each Certificateholder. All of the Securities Administrator’s calculations of payments shall be based solely on information provided to the Securities Administrator by the Master Servicer. The Securities Administrator shall
not be required to confirm, verify or recompute any such information but shall be entitled to rely conclusively on such information.

	
            Section 4.02
 	
            Statements to Certificateholders.
 

(a)        On each Distribution Date, based, as applicable, on information provided to it by the Master Servicer, the Securities Administrator shall prepare and make available on the Securities Administrator’s website as set forth below, to each Holder of the Regular Certificates, the Trustee, the Master Servicer and the Rating Agencies, a statement as to the distributions made on such Distribution Date setting forth:

(i)         (A) the amount of the distribution made on such Distribution Date to the Holders of each Class of Regular Certificates, separately identified, allocable to principal and (B) the amount of the distribution made on such Distribution Date to the Holders of the Class P Certificates allocable to Prepayment Charges;

(ii)         the amount of the distribution made on such Distribution Date to the Holders of each Class of Regular Certificates (other than the Class P Certificates) allocable to interest, separately identified;

(iii)        the Pass-Through Rate on each Class of Regular Certificates (other than the Class P Certificates) for such Distribution Date;

	
            (iv)
 	
            the aggregate amount of Advances for such Distribution Date;
 

(v)        the number and Aggregate Stated Principal Balance of the Mortgage Loans as of the end of the related Due Period;

(vi)        the Overcollateralized Amount, the Overcollateralization Deficiency Amount and the Overcollateralization Target Amount for such Distribution Date;

(vii)       the aggregate Certificate Principal Balance or Notional Amount, as applicable, of each Class of Regular Certificates after giving effect to the amounts distributed on such Distribution Date (in the case of each Class of the Class M 

 

Certificates, separately identifying any reduction thereof due to the allocation of Realized Losses thereto);

(viii)      the number and Aggregate Stated Principal Balance of Mortgage Loans (a) Delinquent 31 to 60 days, (b) Delinquent 61 to 90 days, (c) Delinquent 91 days or more, in each case as of the end of the calendar month prior to such Distribution Date;

(ix)        the number, aggregate principal balance and book value of any REO Properties as of the close of business on the last day of the calendar month preceding the month in which such Distribution Date occurs;

(x)        the weighted average remaining term to maturity, weighted average Mortgage Rate and weighted average Net Mortgage Rate of the Mortgage Loans as of the close of business on the first day of the calendar month in which such Distribution Date occurs;

(xi)        the aggregate amount of Principal Prepayments made during the related Prepayment Period;

(xii)       the aggregate amount of Realized Losses incurred during the related Prepayment Period and the cumulative amount of Realized Losses;

(xiii)      the aggregate amount of extraordinary Trust Fund expenses withdrawn from the Custodial Account or the Certificate Account for such Distribution Date;

(xiv)      the aggregate amount of any Prepayment Interest Shortfalls for such Distribution Date, to the extent not covered by payments by the Servicer or Master Servicer pursuant to Section 3.17, and the aggregate amount of Relief Act Interest Shortfalls for such Distribution Date;

(xv)       the Accrued Certificate Interest in respect of each Class of the Class A Certificates, Class M Certificates and Class C Certificates for such Distribution Date and the Unpaid Interest Shortfall Amount, if any, with respect to each Class of the Class A Certificates and Class M Certificates for such Distribution Date;

(xvi)      (A)  the Overcollateralization Target Amount, (B) the Overcollateralized Amount and (C) the amount, if any, by which the Overcollateralization Target Amount exceeds the Overcollateralized Amount, in each case after giving effect to the distribution made on the Regular Certificates on such Distribution Date;

(xvii)     the aggregate amount of the Master Servicer Fee received by the Master Servicer with respect to the related Due Period and such other customary information as the Securities Administrator deems necessary or desirable, or which a Certificateholder reasonably requests, to enable Certificateholders to prepare their tax returns;

(xviii)    the aggregate of any deposits to and withdrawals from the Basis Risk Shortfall Reserve Fund for such Distribution Date and the remaining amount on deposit in the Basis Risk Shortfall Reserve Fund after such deposits and withdrawals;

 

 

	
            (xix)
 	
            the Available Distribution Amount for such Distribution Date;
 

(xx)       the amount of any Net Swap Payment to the Supplemental Interest Trust made pursuant to Section 4.01(a), any Net Swap Payment to the Swap Provider made pursuant to Section 4.01(a), any Swap Termination Payment to the Supplemental Interest Trust made pursuant to Section 4.01(c), and any Swap Termination Payment to the Swap Provider made pursuant to Sections 4.01(c).

On each Distribution Date, the Securities Administrator shall provide Bloomberg Financial Markets, L.P. (“Bloomberg”) CUSIP level factors for each Class of Certificates as of such Distribution Date, using a format and media mutually acceptable to the Trustee and Bloomberg.

The information set forth above shall be calculated or reported, as the case may be, by the Securities Administrator, based solely on, and to the extent of, information provided to the Securities Administrator by the Master Servicer. The Securities Administrator may conclusively rely on such information and shall not be required to confirm, verify or recalculate any such information.

The Securities Administrator may make available each month, to any interested party, the monthly statement to Certificateholders via the Securities Administrator’s website initially located at “www.ctslink.com.” Assistance in using the website can be obtained by calling the Securities Administrator’s customer service desk at (301) 815-6600. Parties that are unable to use the above distribution option are entitled to have a paper copy mailed to them via first class mail by calling the Securities Administrator’s customer service desk and indicating such. The Securities Administrator shall have the right to change the way such reports are distributed in order to make such distribution more convenient and/or more accessible to the parties, and the Securities Administrator shall provide timely and adequate notification to all parties regarding any such change.

Within a reasonable period of time after the end of each calendar year, the Securities Administrator shall prepare and forward, to each Person who at any time during the calendar year was a Holder of a Certificate, a statement containing the information set forth in subclauses (i) and (ii) above, aggregated for such calendar year or applicable portion thereof during which such person was a Certificateholder.  Such obligation of the Securities Administrator shall be deemed to have been satisfied to the extent that substantially comparable information shall be provided by the Securities Administrator pursuant to any requirements of the Code and regulations thereunder as from time to time are in force.

Within a reasonable period of time after the end of each calendar year, the Securities Administrator shall prepare and forward, to each Person who at any time during the calendar year was a Holder of a Class R Certificate a statement containing the information provided pursuant to the previous paragraph aggregated for such calendar year or applicable portion thereof during which such Person was a Certificateholder.  Such obligation of the Securities Administrator shall be deemed to have been satisfied to the extent that substantially comparable information shall be provided by the Securities Administrator pursuant to any requirements of the Code as from time to time are in force.

 

 

	
            Section 4.03
 	
            Remittance Reports; Advances by the Master Servicer.
 

(a)        On the Business Day following each Determination Date but in no event later than the 20th day of each month (or if such 20th day is not a Business Day, the preceding Business Day), the Master Servicer shall deliver to the Securities Administrator a report, prepared as of the close of business on the Determination Date (the “Remittance Report”), in the form of an electronic format mutually acceptable to each party.  The Remittance Report and any written information supplemental thereto shall include such information with respect to the Mortgage Loans that is required by the Securities Administrator for purposes of making the calculations and preparing the statement described in Sections 4.01 and 4.02, as set forth in written
specifications or guidelines issued by the Securities Administrator from time to time.  The Trustee shall have no obligation to recompute, recalculate or verify any information provided to it by the Master Servicer.

(b)        If the scheduled payment on a Mortgage Loan that was due on a related Due Date is delinquent, other than as a result of application of the Relief Act, and for which the Servicer was required to make an advance pursuant to the Servicing Agreement exceeds the amount deposited in the Custodial Account which will be used for an advance with respect to such Mortgage Loan, the Master Servicer will deposit in the Custodial Account not later than the Certificate Account Deposit Date immediately preceding the related Distribution Date an amount equal to such deficiency, net of the Servicing Fee for such Mortgage Loan except to the extent the Master Servicer determines any such advance to be a Nonrecoverable Advance. Subject to the foregoing, the Master Servicer shall continue to make such advances through the date that the Servicer is required to
do so under its Servicing Agreement. If the Master Servicer deems an advance to be a Nonrecoverable Advance, on the Certificate Account Deposit Date, the Master Servicer shall present an Officer’s Certificate to the Trustee (i) stating that the Master Servicer elects not to make a Monthly Advance in a stated amount and (ii) detailing the reason it deems the advance to be a Nonrecoverable Advance.

(c)        The Master Servicer shall deposit in the Custodial Account not later than each Certificate Account Deposit Date an amount equal to the lesser of (i) the sum of the aggregate amounts required to be paid by the Servicer under the Servicing Agreement with respect to subclauses (a) and (b) of the definition of Interest Shortfall with respect to the Mortgage Loans for the related Distribution Date, and not so paid by the Servicer and (ii) the Master Servicer Fees for such Distribution Date (such amount, the “Compensating Interest Payment”). The Master Servicer shall not be entitled to any reimbursement of any Compensating Interest Payment.

	
            Section 4.04
 	
            Distributions on the REMIC Regular Interests.
 

(a)       (1) On each Distribution Date, the Securities Administrator shall cause the Available Distribution Amount with respect to the Mortgage Loans, in the following order of priority, to be distributed by REMIC 1 to REMIC 2 on account of the REMIC 1 Regular Interests or withdrawn from the Certificate Account and distributed to the Holders of the Class R Certificates (in respect of the Class R-1 Interest), as the case may be:

 

 

 

 

	
            (A)
 	
            to Holders of each of REMIC 1 Regular Interest I, REMIC I Regular Interest P and REMIC 1 Regular Interest I-1-A through I-95-B, pro rata, in an amount equal to (A) Uncertificated Accrued Interest for such REMIC 1 Regular Interests for such Distribution Date, plus (B) any amounts payable in respect thereof remaining unpaid from previous Distribution Dates; 
 
	
            (B)
 	
            to the extent of amounts remaining after the distributions made pursuant to clause (A) above, payments of principal shall be allocated as follows: first, to REMIC 1 Regular interests I-1-A through I-95-B starting with the lowest numerical denomination until the Uncertificated Principal Balance of each such REMIC 1 Regular Interest is reduced to zero, provided that, for REMIC 1 Regular Interests with the same numerical denomination, such payments of principal shall be allocated pro rata between such REMIC 1 Regular Interests, and second, to the extent of the Overcollateralization Release Amounts, to REMIC 1 Regular Interest I until the Uncertificated Principal Balance of such REMIC 1 Regular Interest is reduced to zero; and
 
	
            (C)
 	
            to the Holders of REMIC 1 Regular Interest P, (A) on each Distribution Date, 100% of the amount paid in respect of Prepayment Charges and (B) on the Distribution Date immediately following the expiration of the latest Prepayment Charge as identified on the Prepayment Charge Schedule or any Distribution Date thereafter until $100 has been distributed pursuant to this clause.
 

(2)        On each Distribution Date, the Securities Administrator shall cause the Available Distribution Amount, in the following order of priority, to be distributed by REMIC 2 to REMIC 3 on account of the REMIC 2 Regular Interests or withdrawn from the Certificate Account and distributed to the Holders of the Class R Certificates (in respect of the Class R-2 Interest), as the case may be:

 

	
            (A)
 	
            to the Holders of REMIC 2 Regular Interest IO, in an amount equal to (A) Uncertificated Accrued Interest for such REMIC 2 Regular Interest for such Distribution Date, plus (B) any amounts in respect thereof remaining unpaid from previous Distribution Dates.
 

             (i)        to Holders of REMIC 2 Regular Interest LT-AA, REMIC 2 Regular Interest LT-A1A, REMIC 2 Regular Interest LT-A1B, REMIC 2 Regular Interest LT-A1C, REMIC 2 Regular Interest LT-APT, REMIC 2 Regular Interest LT-A2, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9, REMIC 2 Regular Interest LT-M10 and REMIC 2 Regular Interest LT-ZZ and REMIC 2 Regular Interest LT-P, pro rata, in an amount equal to (A) the related Uncertificated Accrued Interest for such Distribution Date, plus (B) any amounts in respect thereof remaining unpaid from the previous Distribution Dates.

 

 

 

Amounts payable as Uncertificated Accrued Interest in respect of REMIC 2 Regular Interest LT-ZZ shall be reduced when the REMIC 2 Overcollateralized Amount is less than the REMIC 2 Overcollateralization Target Amount, by the lesser of (x) the amount of such difference and (y) the Maximum Uncertificated Accrued Interest Deferral Amount, and such amount will be payable to the Holders of REMIC 2 Regular Interest LT-A1A, REMIC 2 Regular Interest LT-A1B, REMIC 2 Regular Interest LT-A1C, REMIC 2 Regular Interest LT-APT, REMIC 2 Regular Interest LT-A2, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9 and REMIC 2 Regular Interest LT-M10 in the same proportion as
the Overcollateralization Deficiency Amount is allocated to the Corresponding Certificates, and the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-ZZ shall be increased by such amount;

 

 (ii)        to the Holders of REMIC 2 Regular Interest LT-P, (A) on each Distribution Date, 100% of the amount paid in respect of Prepayment Charges and (B) on the Distribution Date immediately following the expiration of the latest Prepayment Charge as identified on the Prepayment Charge Schedule or any Distribution Date thereafter until $100 has been distributed pursuant to this clause;

 

 (iii)       to the Holders of the REMIC 2 Regular Interests, in an amount equal to the remainder of the Available Funds for such Distribution Date after the distributions made pursuant to clauses (i) and (ii) above, allocated as follows:

 

	
            (A)
 	
            98% of such remainder to the Holders of REMIC 2 Regular Interest LT-AA, until the Uncertificated Principal Balance of such Uncertificated REMIC 2 Regular Interest is reduced to zero;
 
	
            (B)
 	
            2% of such remainder, first to the REMIC 2 Regular Interest LT-A1A, REMIC 2 Regular Interest LT-A1B, REMIC 2 Regular Interest LT-A1C, REMIC 2 Regular Interest LT-APT, REMIC 2 Regular Interest LT-A2, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9 and REMIC 2 Regular Interest LT-M10, 1% of and in the same proportion as principal payments are allocated to the Corresponding Certificates, until the Uncertificated Principal Balances of such REMIC 2 Regular Interests are reduced to zero and second, to the Holders of REMIC 2 Regular Interest LT-ZZ, until the Uncertificated Principal
Balance of such REMIC 2 Regular Interest is reduced to zero; and
 
	
            (C)
 	
            any remaining amount to the Holders of the Class R Certificates (in respect of the Class R-3 Interest);
 

provided, however, that 98% and 2% of any principal payments that are attributable to an Overcollateralization Release Amount shall be allocated to Holders of REMIC 2 Regular Interest LT-AA and REMIC 2 Regular Interest LT-ZZ, respectively, once the Uncertificated Principal 

 

Balances of REMIC 2 Regular Interest LT-A1A, REMIC 2 Regular Interest LT-A1B, REMIC 2 Regular Interest LT-A1C, REMIC 2 Regular Interest LT-APT, REMIC 2 Regular Interest LT-A2, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9 and REMIC 2 Regular Interest LT-M10 have been reduced to zero.

 

	
            Section 4.05
 	
            Allocation of Realized Losses.
 

All Realized Losses on the Mortgage Loans shall be allocated by the Securities Administrator on each Distribution Date as follows:  first, to Net Monthly Excess Cashflow, through a distribution of the Extra Principal Distribution Amount for that Distribution Date; second, to the Overcollateralized Amount by a reduction of the Certificate Principal Balance of the Class C Certificates, until the Certificate Principal Balance thereof has been reduced to zero; third, to the Class M-10 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class M-9 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class M-8 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class M-7 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero; seventh, to the Class M-6 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eighth, to the Class M-5 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; ninth, to the Class M-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; tenth, to the Class M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eleventh, to the Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; twelfth, to the Class M-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and thirteenth, to the Class A-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero. All Realized Losses to be allocated to the Certificate Principal Balances of all Classes on any Distribution Date shall be so allocated after the actual distributions to be made on
such date as provided above.  All references above to the Certificate Principal Balance of any Class of Certificates shall be to the Certificate Principal Balance of such Class immediately prior to the relevant Distribution Date, before reduction thereof by any Realized Losses, in each case to be allocated to such Class of Certificates, on such Distribution Date.

Any allocation of Realized Losses to a Class M Certificate on any Distribution Date shall be made by reducing the Certificate Principal Balance thereof by the amount so allocated.  Any allocation of Realized Losses to a Class C Certificate shall be made by (i) first, reducing the amount otherwise payable in respect thereof pursuant to Section 4.01(c)(vi), and (ii) second, by reducing the Certificate Principal Balance thereof by the amount so allocated. No allocations of any Realized Losses shall be made to the Certificate Principal Balances of the Class A or Class P Certificates.

With respect to the REMIC 1 Regular Interests, all Realized Losses on the Mortgage Loans shall be allocated shall be allocated by the Securities Administrator on each Distribution Date first, to REMIC 1 Regular Interest I until the Uncertificated Principal Balance has been reduced to zero, and second, to REMIC 1 Regular Interest I-1-A through REMIC 1 Regular 

 

Interest I-95-B, starting with the lowest numerical denomination until such REMIC 1 Regular Interest has been reduced to zero, provided that, for REMIC 1 Regular Interests with the same numerical denomination, such Realized Losses shall be allocated pro rata between such REMIC 1 Regular Interests.  

With respect to the REMIC 2 Regular Interests, all Realized Losses shall be allocated by the Securities Administrator on each Distribution Date first on each Distribution Date as follows:  first to Uncertificated Accrued Interest payable to the REMIC 2 Regular Interest LT-AA and REMIC 2 Regular Interest LT-ZZ up to an aggregate amount equal to the REMIC 2 Interest Loss Allocation Amount, 98% and 2% respectively; second, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LT-AA and REMIC 2 Regular Interest LT-ZZ up to an aggregate amount equal to the REMIC 2 Principal Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LT-AA, REMIC 2 Regular Interest LT-M10 and REMIC 2 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-M10
has been reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LT-AA, REMIC 2 Regular Interest LT-M9 and REMIC 2 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-M9 has been reduced to zero; fifth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LT-AA, REMIC 2 Regular Interest LT-M8 and REMIC 2 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-M8 has been reduced to zero; sixth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LT-AA, REMIC 2 Regular Interest LT-M7 and REMIC 2 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-M7 has been reduced to zero; seventh, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LT-AA, REMIC 2 Regular Interest LT-M6 and
REMIC 2 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-M6 has been reduced to zero; eighth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LT-AA, REMIC 2 Regular Interest LT-M5 and REMIC 2 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-M5 has been reduced to zero; ninth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LT-AA, REMIC 2 Regular Interest LT-M4 and REMIC 2 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-M4 has been reduced to zero; tenth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LT-AA, REMIC 2 Regular Interest LT-M3 and REMIC 2 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-M3 has been
reduced to zero; eleventh, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LT-AA, REMIC 2 Regular Interest LT-M2 and REMIC 2 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-M2 has been reduced to zero; twelfth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LT-AA, REMIC 2 Regular Interest LT-M1 and REMIC 2 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-M1 has been reduced to zero; and thirteenth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest LT-AA, REMIC 2 Regular Interest LT-A2 and REMIC 2 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-A2 has been reduced to zero.

 

 

	
            Section 4.06
 	
            Information Reports to Be Filed by the Servicer.
 

The Servicer shall file information reports with respect, to the extent set forth in the Servicing Agreement, to the receipt of mortgage interest received in a trade or business, foreclosures and abandonments of any Mortgaged Property and the information returns relating to cancellation of indebtedness income with respect to any Mortgaged Property required by Sections 6050H, 6050J and 6050P of the Code, respectively, and deliver to the Securities Administrator an Officers’ Certificate stating that such reports have been filed.  Such reports shall be in form and substance sufficient to meet the reporting requirements imposed by such Sections 6050H, 6050J and 6050P of the Code.

	
            Section 4.07
 	
            Compliance with Withholding Requirements.
 

Notwithstanding any other provision of this Agreement the Securities Administrator shall comply with all federal withholding requirements respecting payments to Certificateholders of interest or original issue discount on the Mortgage Loans, that the Securities Administrator reasonably believes are applicable under the Code.  The consent of Certificateholders shall not be required for such withholding.  In the event the Securities Administrator withholds any amount from interest or original issue discount payments or advances thereof to any Certificateholder pursuant to federal withholding requirements, the Securities Administrator shall, together with its monthly report to such Certificateholders pursuant to Section 4.02 hereof, indicate such amount withheld.

	
            Section 4.08
 	
            Basis Risk Shortfall Reserve Fund.
 

(a)        On the Closing Date, the Securities Administrator shall establish and maintain in its name, in trust for the benefit of the Class A Certificates and Class M Certificates, the Basis Risk Shortfall Reserve Fund.

(b)        On each Distribution Date, the Securities Administrator shall transfer from the Certificate Account to the Basis Risk Shortfall Reserve Fund the amounts specified pursuant to Sections 4.01(c)(v) and 4.01(g)(5). On each Distribution Date, to the extent required, the Securities Administrator shall make withdrawals from the Basis Risk Shortfall Reserve Fund and use the amounts in the Basis Risk Shortfall Reserve Fund to make distributions to the Class A Certificates and Class M Certificates in an amount equal to the amount of any Basis Risk Shortfall Carry-Forward Amount on such Certificates. Any such amounts from the Net Monthly Excess Cashflow shall be distributed first, concurrently to the Class A-1A, Class A-1B, Class A-1C, Class A-PT and Class A-2 Certificates, and second, sequentially to Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates, in that order, in each case until the related Basis Risk Shortfall Carry-Forward Amount has been reduced to zero.  Any such amounts transferred shall be treated for federal tax purposes as amounts distributed by REMIC 3 to the Holder of the Class C Certificates. On each Distribution Date, after the distributions described in the preceding sentence, the Securities Administrator shall withdraw from the Basis Risk Shortfall Reserve Fund (to the extent of funds available on deposit therein) any remaining amounts and distribute them to the Holders of the Class C Certificates, not in respect of any REMIC.

 

 

(c)        The Basis Risk Shortfall Reserve Fund shall be an Eligible Account. Amounts held in the Basis Risk Shortfall Reserve Fund from time to time shall continue to constitute assets of the Trust Fund, but not of the REMICs, until released from the Basis Risk Shortfall Reserve Fund pursuant to this Section 4.08. The Basis Risk Shortfall Reserve Fund constitutes an “outside reserve fund” within the meaning of Treasury Regulation § 1.860G-2(h) and is not an asset of any REMIC. The Holders of the Class C Certificates shall be the owner of the Basis Risk Shortfall Reserve Fund. The Securities Administrator shall keep records that accurately reflect the funds on deposit in the Basis Risk Shortfall Reserve Fund. The Securities Administrator shall, at the written direction of the holder of the Majority Class C Certificateholder, invest
amounts on deposit in the Basis Risk Shortfall Reserve Fund in Permitted Investments. In the absence of written direction to the Securities Administrator from the Majority Class C Certificateholder, all funds in the Basis Risk Shortfall Reserve Fund shall remain uninvested. On each Distribution Date, the Securities Administrator shall distribute, not in respect of any REMIC, any interest earned on the Basis Risk Shortfall Reserve Fund to the Holders of the Class C Certificates.

(d)        For federal tax return and information reporting, the right of the Holders of the Class A Certificates and the Class M Certificates to receive payments from the Basis Risk Shortfall Reserve Fund in respect of any Basis Risk Shortfall Carry-Forward Amount may have more than a de minimis value.

	
            Section 4.09
 	
            Supplemental Interest Trust.
 

(a)        On the Closing Date, the Securities Administrator shall establish and maintain in the name of the Trustee a separate trust for the benefit of the holders of the Class A Certificates and Class M Certificates (the “Supplemental Interest Trust”).  The Supplemental Interest Trust shall be an Eligible Account, and funds on deposit therein shall be held separate and apart from, and shall not be commingled with, any other moneys, including, without limitation, other moneys of the Trustee or of the Securities Administrator held pursuant to this Agreement.  

(b)        On each Distribution Date, the Securities Administrator shall deposit into the Supplemental Interest Trust amounts distributable to the Supplemental Interest Trust pursuant to Sections 4.01(a) (second paragraph) and 4.01(c)(v) of this Pooling and Servicing Agreement.  On each Distribution Date, the Securities Administrator shall distribute any such amounts to the Swap Provider pursuant to the Swap Agreement, first to pay any Net Swap Payment owed to the Swap Provider for such Distribution Date, and second to pay any Swap Termination Payment owed to the Swap Provider.

(c)        On each Distribution Date, the Securities Administrator shall deposit into the Supplemental Interest Trust amounts received from the Swap Provider.  On each Distribution Date, the Securities Administrator shall distribute from the Supplemental Interest Trust an amount equal to the amount of any Net Swap Payment received from the Swap Provider under the Swap Agreement, in the following order of priority:

(i)         first, an amount equal to the aggregate amount required under Section 4.01(g) to be distributed on such Distribution Date, to the Class A and Class M 

 

Certificateholders in accordance with Section 4.01(g) of this Pooling and Servicing Agreement, and 

(ii)         second, any remainder, but not in excess of the Swap Principal Payment Amount for such Distribution Date, to the Note Administrator for deposit into the Note Account in accordance with the Indenture.

(d)        The Supplemental Interest Trust constitutes an “outside reserve fund” within the meaning of Treasury Regulation § 1.860G-2(h) and is not an asset of any REMIC.  The Holders of the Class C Certificates shall be the beneficial owner of the Supplemental Interest Trust, subject to the power of the Securities Administrator to transfer amounts under this Agreement.  The Securities Administrator shall keep records that accurately reflect the funds on deposit in the Supplemental Interest Trust.  The Securities Administrator shall, at the written direction of the holder of the Majority Class C Certificateholder, invest amounts on deposit in the Supplemental Interest Trust in Permitted Investments. In the absence of written direction to the Securities Administrator from the Majority Class C Certificateholder, all funds in the
Supplemental Interest Trust shall remain uninvested. On each Distribution Date, the Securities Administrator shall distribute, not in respect of any REMIC, any interest earned on the Supplemental Interest Trust to the Holders of the Class C Certificates.

(e)        For federal income tax purposes, amounts paid to the Supplemental Interest Trust on each Distribution Date pursuant to Sections 4.01(a) (second paragraph) and 4.01(c)(v) shall first be deemed paid to the Supplemental Interest Trust in respect of Class IO Interest to the extent of the amount distributable on such Class IO Interest on such Distribution Date, and any remaining amount shall be deemed paid to the Supplemental Interest Trust in respect of  a Class IO Distribution Amount.  

(f)         The Securities Administrator shall treat the Holders of Certificates (other than the Class P, Class C and Class R Certificates) as having entered into a notional principal contract with respect to the Holders of the Class C Certificates.  Pursuant to each such notional principal contract, all Holders of Certificates (other than the Class P, Class C and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class C Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the REMIC 3 Regular Interest ownership of which is represented by such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”).  A Class IO
Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the amount of interest otherwise payable to such Certificates, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of such Certificates with an outstanding principal balance to the extent of such balance.  In addition, pursuant to such notional principal contract, the Holder of the Class C Certificates shall be treated as having agreed to pay Basis Risk Shortfall Carry Forward Amounts to the Holders of the Certificates (other than the Class C, Class P and Class R Certificates) in accordance with the terms of this Agreement.  Any payments to such Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a Regular Interest in a REMIC within the meaning of Code Section 860G(a)(1).  However, any payment from the Certificates (other than the
Class C, Class P and Class R Certificates) of a 

 

Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of the REMIC 3 Regular Interest ownership of which is represented by such Certificates, and as having been paid by such Holders to the Supplemental Interest Trust pursuant to the notional principal contract.  Thus, each Certificate (other than the Class P Certificates and Class R Certificates) shall be treated as representing not only ownership of a Regular Interest in REMIC 3, but also ownership of an interest in, and obligations with respect to, a notional principal contract.  

(g)        In the event that the Swap Agreement is terminated prior to the Distribution Date in March 2013, the Securities Administrator shall use reasonable efforts to appoint a successor swap provider using any Swap Termination Payments paid by the Swap Provider. If the Securities Administrator is unable to locate a qualified successor swap provider, any such Swap Termination Payments will be remitted to the Securities Administrator for payment to the holders of the Class A and Class M Certificates of amounts described in Section 4.09(c).

	
            Section 4.10
 	
            Tax Treatment of Swap Payments and Swap Termination Payments.
 

For federal income tax purposes, each holder of a Class A or Class M Certificate is deemed to own an undivided beneficial ownership interest in a REMIC regular interest and the right to receive payments from either the Basis Risk Shortfall Reserve Fund or the Supplemental Interest Trust in respect of any Basis Risk Shortfall Carry-Forward Amounts or the obligation to make payments to the Supplemental Interest Trust. For federal income tax purposes, the Securities Administrator will account for payments to each Class A and Class M Certificates as follows: each Class A and Class M Certificate will be treated as receiving their entire payment from REMIC 3 (regardless of any Swap Termination Payment or obligation under the Swap Agreement) and subsequently paying their portion of any Swap Termination Payment in respect of each such Class’ obligation under the Swap Agreement. In the event
that any such Class is resecuritized in a REMIC, the obligation under the Swap Agreement to pay any such Swap Termination Payment (or any shortfall in Swap Provider Fee), will be made by one or more of the REMIC Regular Interests issued by the resecuritization REMIC subsequent to such REMIC Regular Interest receiving its full payment from any such Class A or Class M Certificate. Resecuritization of any Class A or Class M Certificate in a REMIC will be permissible only if the Securities Administrator hereunder is the trustee/securities administrator in such  resecuritization.

 

The REMIC regular interest corresponding to a Class A or Class M Certificate will be entitled to receive interest and principal payments at the times and in the amounts equal to those made on the certificate to which it corresponds, except that (i) the maximum interest rate of that REMIC regular interest will equal the Net WAC Rate computed for this purpose by limiting the Notional Amount of the Swap Agreement to the aggregate principal balance of the Mortgage Loans and (ii) any Swap Termination Payment will be treated as being payable solely from Net Monthly Excess Cashflow. As a result of the foregoing, the amount of distributions and taxable income on the REMIC regular interest corresponding to a Class A or Class M Certificate may exceed the actual amount of distributions on the Class A or Class M Certificate.

 

 

 

ARTICLE V

 

THE CERTIFICATES

	
            Section 5.01
 	
            The Certificates.
 

(a)        The Certificates will be substantially in the respective forms annexed hereto as Exhibits A and B-1 through B-4.  The Certificates will be issuable in registered form only.  The Certificates (other than the Class P Certificates, the Class C Certificates and the Residual Certificates) will be issued in minimum denominations of $25,000 Initial Certificate Principal Balance and integral multiples of $1 in excess thereof.  The Class C Certificates will be issued in minimum denominations of $1.00 Initial Notional Amount and integral multiples of $1.00 in excess thereof.  The Class P Certificates and the Residual Certificates will each be issuable in minimum denominations of any Percentage Interest representing 20.00% and multiples of 0.01% in excess thereof.

Upon original issue, the Certificates shall, upon the written request of the Company executed by an officer of the Company, be executed and delivered by the Securities Administrator, authenticated by the Securities Administrator and delivered to or upon the order of the Company upon receipt by the Securities Administrator of the documents specified in Section 2.01.  The Certificates shall be executed by manual or facsimile signature on behalf of the Securities Administrator by a Responsible Officer.  Certificates bearing the manual or facsimile signatures of individuals who were at the time they signed the proper officers of the Securities Administrator shall bind the Securities Administrator, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Certificates or did not hold such offices at the date of such
Certificates.  No Certificate shall be entitled to any benefit under this Agreement, or be valid for any purpose, unless there appears on such Certificate a certificate of authentication substantially in the form provided for herein executed by the Securities Administrator by manual signature, and such certificate upon any Certificate shall be conclusive evidence, and the only evidence, that such Certificate has been duly authenticated and delivered hereunder.  All Certificates issued on the Closing Date shall be dated the Closing Date and any Certificates delivered thereafter shall be dated the date of their authentication.

(b)        The Class A Certificates and the Class M Certificates shall initially be issued as one or more Certificates registered in the name of the Company or its nominee and, except as provided below, registration of such Certificates may not be transferred by the Securities Administrator except to another Company that agrees to hold such Certificates for the respective Certificate Owners with Ownership Interests therein.  The Certificate Owners shall hold their respective Ownership Interests in and to each of such Book-Entry Certificates through the book-entry facilities of the Company and, except as provided below, shall not be entitled to Definitive Certificates in respect of such Ownership Interests.  All transfers by Certificate Owners of their respective Ownership Interests in the Book-Entry Certificates shall be made in accordance with the
procedures established by the Company Participant or brokerage firm representing such Certificate Owner.  Each Company Participant shall transfer the Ownership Interests only in the Book-Entry Certificates of Certificate Owners it represents or of brokerage firms for which it acts as agent in accordance with the Company’s normal procedures. The Securities 

 

Administrator shall not be required to monitor, determine or inquire as to compliance with the transfer restrictions with respect to the Book-Entry Certificates, and the Securities Administrator shall have no liability for transfers of Ownership Interests in the Book Entry Certificates made through the book-entry facilities of the Depositary or between or among Depositary Participants or Certificate Owners, made in violation of the applicable restrictions.

The Trustee, the Securities Administrator, the Master Servicer and the Company may for all purposes (including the making of payments due on the respective Classes of Book-Entry Certificates) deal with the Company as the authorized representative of the Certificate Owners with respect to the respective Classes of Book-Entry Certificates for the purposes of exercising the rights of Certificateholders hereunder.  The rights of Certificate Owners with respect to the respective Classes of Book-Entry Certificates shall be limited to those established by law and agreements between such Certificate Owners and the Company Participants and brokerage firms representing such Certificate Owners.  Multiple requests and directions from, and votes of, the Company as Holder of any Class of Book-Entry Certificates with respect to any particular matter shall not be deemed inconsistent if they are made
with respect to different Certificate Owners.  The Securities Administrator may establish a reasonable record date in connection with solicitations of consents from or voting by Certificateholders and shall give notice to the Company of such record date.

If (i)(A) the Company advises the Securities Administrator in writing that the Company is no longer willing or able to properly discharge its responsibilities as Company and (B) the Company is unable to locate a qualified successor or (ii) the Company, with the consent of Certificate Owners, advises the Securities Administrator in writing that it elects to terminate the book-entry system through the Company, the Securities Administrator shall notify all Certificate Owners, through the Company, of the occurrence of any such event and of the availability of Definitive Certificates to Certificate Owners requesting the same.  Upon surrender to the Securities Administrator of the Book-Entry Certificates by the Company, accompanied by registration instructions from the Company for registration of transfer, the Securities Administrator shall, at the expense of the Company, issue the Definitive
Certificates.  Neither the Company, the Master Servicer nor the Securities Administrator shall be liable for any actions taken by the Company or its nominee, including, without limitation, any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions.  Upon the issuance of Definitive Certificates the Trustee, the Securities Administrator and the Master Servicer shall recognize the Holders of the Definitive Certificates as Certificateholders hereunder.

(c)        Each Certificate is intended to be a “security” governed by Article 8 of the Uniform Commercial Code as in effect in the State of New York and any other applicable jurisdiction, to the extent that any of such laws may be applicable.

	
            Section 5.02
 	
            Registration of Transfer and Exchange of Certificates.
 

(a)        The Securities Administrator shall maintain a Certificate Register in which, subject to such reasonable regulations as it may prescribe, the Securities Administrator shall provide for the registration of Certificates and of transfers and exchanges of Certificates as herein provided.

 

 

(b)        Except as provided in Section 5.02(c), no transfer, sale, pledge or other disposition of a Class M-10, Class P, Class C or Residual Certificate shall be made unless such transfer, sale, pledge or other disposition is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Act”), and any applicable state securities laws or is made in accordance with said Act and laws.  In the event that a transfer of a
Class M-10, Class P, Class C or Residual Certificate is to be made under this Section 5.02(b), (i) the Securities Administrator shall require an Opinion of Counsel acceptable to and in form and substance satisfactory to the Securities Administrator that such transfer shall be made pursuant to an exemption, describing the applicable exemption and the basis therefor, from said Act and laws or is being made pursuant to said Act and laws, which Opinion of Counsel shall not be an expense of the Securities Administrator, the Trustee, the Company or the Master Servicer, provided that such Opinion of Counsel will not be required in connection with the initial transfer of any such Certificate by the Company or any affiliate thereof, to a non-affiliate of the Company and (ii) the Securities Administrator shall require the transferee to execute a representation letter, substantially in the form of Exhibit G-1 hereto, and the Securities Administrator shall require the transferor to execute a representation letter, substantially in the form of Exhibit G-2 hereto, each acceptable to and in form and substance satisfactory to the Securities Administrator certifying to the Company and the Securities Administrator the facts surrounding such transfer, which representation letters shall not be an expense of the Securities Administrator, the Trustee, the Company or the Master Servicer; provided, however, that such representation letters will not be required in connection with any transfer of any such Certificate by the Company to an affiliate of the Company and the Securities Administrator shall be entitled to conclusively rely upon a representation (which, upon the request of the Securities Administrator, shall be a written representation) from the Company of the status of such transferee as an affiliate of the Company.  Any such Certificateholder desiring to effect such transfer shall, and does hereby agree to, indemnify the Securities Administrator, the Trustee, the Company and the Master Servicer against any liability that may result if the transfer is not so exempt or is not made in accordance with such applicable federal and state laws.

(c)        Notwithstanding the requirements of Section 5.02(b), transfers of Class M-10, Class P, Class C and Residual Certificates may be made in accordance with this Section 5.02(c) if the prospective transferee of a Certificate provides the Securities Administrator and the Company with an investment letter substantially in the form of Exhibit G-3 attached hereto, which investment letter shall not be an expense of the Securities Administrator, the Trustee, the Company or the Master Servicer, and which investment letter states that, among other things, such transferee is a “qualified institutional buyer” as defined under Rule 144A, provided that, in the case of any Book-Entry Certificate, such transferee shall be deemed to have made such representations and warranties contained in such investment letter.  Such transfers shall be deemed to have complied with the requirements of Section 5.02(b) hereof; provided, however, that no
Transfer of any of the Class P Certificates, Class C Certificates or Residual Certificates may be made pursuant to this Section 5.02(c) by the Company.  Any such Certificateholder desiring to effect such transfer shall, and does hereby agree to, indemnify the Securities Administrator, the Trustee, the Company and the Master Servicer against any liability that may result if the transfer is not so exempt or is not made in accordance with such applicable federal and state laws.

The Securities Administrator shall require an Opinion of Counsel, on which the Securities Administrator, the Trustee, the Company or the Master Servicer may rely, from a prospective transferee prior to the transfer of any ERISA Restricted Certificate to any employee benefit plan or other retirement arrangement, including an individual retirement account or 

 

Keogh plan, that is subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or Section 4975 of the Code (any of the foregoing, a “Plan”), to a trustee or other Person acting on behalf of any Plan, or to any other person who is using “plan assets” of any Plan to effect such acquisition (including any insurance company using funds in its general or separate accounts that may constitute “plan assets”).  Such Opinion of Counsel must establish to the satisfaction of the Securities Administrator that such transfer is permissible under applicable law, will not constitute or result in a prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, and will not subject the Securities Administrator, the Trustee, the Master Servicer or the Company to any obligation in addition to those undertaken in this Agreement.  None of the
Company, the Master Servicer, the Securities Administrator or the Trustee will be required to obtain such Opinion of Counsel on behalf of any prospective transferee.  A purchaser of an ERISA Restricted Certificate shall be deemed to represent to the Securities Administrator, the Trustee, the Master Servicer and the Company that it is not a Plan or using assets of a Plan if it does not provide such an Opinion of Counsel.

Each beneficial owner of a Class M Certificate or any interest therein that is acquired after the termination of the Supplemental Interest Trust shall be deemed to have represented, by virtue of its acquisition or holding of that certificate or interest therein, that either (i) it is not a Plan or a trustee or other Person acting on behalf of a Plan or using “plan assets” of a Plan to effect such acquisition (including any insurance company using funds in its general or separate accounts that may constitute “plan assets”), (ii) in the case of Certificates other than the Class M-10 Certificates, it has acquired and is holding such certificate in reliance on Prohibited Transaction Exemption 2002-41 as amended from time to time (the “Exemption”), and that it understands that there are certain conditions to the availability of the Exemption, including that the
certificate must be rated, at the time of purchase, not lower than “BBB-”(or its equivalent) by S&P, Fitch or Moody’s, and the certificate is so rated or (iii) (1) it is an insurance company, (2) the source of funds used to acquire or hold the certificate or interest therein is an “insurance company general account,” as such term is defined in Prohibited Transaction Class Exemption (“PTCE”) 95-60, and (3) the conditions in Sections I and III of PTCE 95-60 have been satisfied.  In lieu of such a representation, a beneficial owner of a Class M-10 Certificate Certificate may provide the Opinion of Counsel in the immediately preceding paragraph.

	
            (d)
 	
            [Reserved]
 

(e)        (i)  Each Person who has or who acquires any Ownership Interest in a Residual Certificate shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the following provisions and to have irrevocably authorized the Trustee or its designee under clause (iii)(A) below to deliver payments to a Person other than such Person and to negotiate the terms of any mandatory sale under clause (iii)(B) below and to execute all instruments of transfer and to do all other things necessary in connection with any such sale.  The rights of each Person acquiring any Ownership Interest in a Residual Certificate are expressly subject to the following provisions:

	
            (A)
 	
            Each Person holding or acquiring any Ownership Interest in a Residual Certificate shall be a Permitted Transferee and shall promptly notify the Securities Administrator of any change or impending change in its status as a Permitted Transferee.
 

 

 

 

 

	
            (B)
 	
            In connection with any proposed Transfer of any Ownership Interest in a Residual Certificate, the Securities Administrator shall require delivery to it, and shall not register the Transfer of any Residual Certificate until its receipt of (I) an affidavit and agreement (a “Transfer Affidavit and Agreement” in the form attached hereto as Exhibit G-5) from the proposed Transferee, in form and substance satisfactory to the Securities Administrator representing and warranting, among other things, that it is a Permitted Transferee, that it is not acquiring its Ownership Interest in the Residual Certificate that is the subject of the proposed Transfer as a nominee, trustee or agent for any Person who is not a Permitted Transferee, that for so long as it retains its Ownership Interest in a Residual Certificate, it
will endeavor to remain a Permitted Transferee, and that it has reviewed the provisions of this Section 5.02 and agrees to be bound by them, and (II) a certificate, in the form attached hereto as Exhibit G-4, from the Holder wishing to transfer the Residual Certificate, in form and substance satisfactory to the Securities Administrator representing and warranting, among other things, that no purpose of the proposed Transfer is to impede the assessment or collection of tax.
 
	
            (C)
 	
            Notwithstanding the delivery of a Transfer Affidavit and Agreement by a proposed Transferee under clause (B) above, if a Responsible Officer of the Securities Administrator assigned to this transaction has actual knowledge that the proposed Transferee is not a Permitted Transferee, no Transfer of an Ownership Interest in a Residual Certificate to such proposed Transferee shall be effected.
 
	
            (D)
 	
            Each Person holding or acquiring any Ownership Interest in a Residual Certificate shall agree (x) to require a Transfer Affidavit and Agreement from any other Person to whom such Person attempts to transfer its Ownership Interest in a Residual Certificate and (y) not to transfer its Ownership Interest unless it provides a certificate to the Securities Administrator in the form attached hereto as Exhibit G-4.
 
	
            (E)
 	
            Each Person holding or acquiring an Ownership Interest in a Residual Certificate, by purchasing an Ownership Interest in such Certificate, agrees to give the Securities Administrator written notice that it is a “pass-through interest holder” within the meaning of Temporary Treasury Regulations Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring an Ownership Interest in a Residual Certificate, if it is “a pass-through interest holder”, or is holding an Ownership Interest in a Residual Certificate on behalf of a “pass-through interest holder.”
 

(ii)         The Securities Administrator will register the Transfer of any Residual Certificate only if it shall have received the Transfer Affidavit and Agreement in the form attached hereto as Exhibit G-5, a certificate of the Holder requesting such transfer in the form attached hereto as Exhibit G-4 and all of such other documents as shall have been reasonably required by the Securities Administrator as a condition to such registration.  Transfers of the Residual Certificates other than to Permitted Transferees are prohibited.

 

 

(iii)        (A)      If any Person other than a Permitted Transferee shall become a Holder of a Residual Certificate, then the last preceding Permitted Transferee shall be restored, to the extent permitted by law, to all rights and obligations as Holder thereof retroactive to the date of registration of such Transfer of such Residual Certificate.  If a Non-United States Person shall become a Holder of a Residual Certificate, then the last preceding Permitted Transferee shall be restored, to the extent permitted by law, to all rights and obligations as Holder thereof retroactive to the date of registration of such Transfer of such Residual Certificate.  If a transfer of a Residual Certificate is disregarded pursuant to the provisions of Treasury Regulations Section 1.860E-1 or Section 1.860G-3, then the
last preceding Permitted Transferee shall be restored, to the extent permitted by law, to all rights and obligations as Holder thereof retroactive to the date of registration of such transfer of such Residual Certificate. The prior Holder shall be entitled to recover from any purported Holder of a Residual Certificate that was in fact not a Permitted Transferee under this Section 5.05(b) at the time it became a Holder all payments made on such Residual Certificate.  Each Holder of a Residual Certificate, by acceptance thereof, shall be deemed for all purposes to have consented to the provisions of this clause (b) and to any amendment of this Agreement deemed necessary (whether as a result of new legislation or otherwise) by counsel of the Company to ensure that the Residual Certificates are not transferred to any Person who is not a Permitted Transferee and that any transfer of such Residual Certificates will not cause the imposition of a tax upon the Trust or cause any such REMIC to
fail to qualify as a REMIC.  The Securities Administrator shall be under no liability to any Person for any registration of Transfer of a Residual Certificate that is in fact not permitted by this Section 5.02 or for making any payments due on such Certificate to the Holder thereof or for taking any other action with respect to such Holder under the provisions of this Agreement.

(B)       If any purported Transferee shall become a Holder of a Residual Certificate in violation of the restrictions in this Section 5.02 and to the extent that the retroactive restoration of the rights of the Holder of such Residual Certificate as described in clause (iii)(A) above shall be invalid, illegal or unenforceable, then the Securities Administrator shall have the right, without notice to the Holder or any prior Holder of such Residual Certificate, to sell such Residual Certificate to a purchaser selected by the Securities Administrator on such terms as the Securities Administrator may choose.  Such purported Transferee shall promptly endorse and deliver each Residual Certificate in accordance with the instructions of the Securities Administrator.  Such purchaser may be the Securities Administrator itself.  The proceeds of such
sale, net of the commissions (which may include commissions payable to the Securities Administrator), expenses and taxes due, if any, will be remitted by the Securities Administrator to such purported Transferee.  The terms and conditions of any sale under this clause (iii)(B) shall be determined in the sole discretion of the Securities Administrator, and the Securities Administrator shall not be liable to any Person having an Ownership Interest in a Residual Certificate as a result of its exercise of such discretion.

(iv)        The Securities Administrator shall make available to the Internal Revenue Service and those Persons specified by the REMIC Provisions, all information necessary to compute any tax imposed (A) as a result of the transfer of an ownership interest in a 

 

Residual Certificate to any Person who is a Disqualified Organization, including the information regarding “excess inclusions” of such Residual Certificates required to be provided to the Internal Revenue Service and certain Persons as described in Treasury Regulations Sections 1.860D-1(b)(5) and 1.860E-2(a)(5), and (B) as a result of any regulated investment company, real estate investment trust, common trust fund, partnership, trust, estate or organization described in Section 1381 of the Code that holds an Ownership Interest in a Residual Certificate having as among its record Holders at any time any Person who is a Disqualified Organization.  The Securities Administrator may charge and shall be entitled to reasonable compensation for providing such information as may be required from those Persons which may have had a tax imposed upon them as specified in clauses (A) and
(B) of this paragraph for providing such information.

(v)        Subject to the preceding paragraphs, upon surrender for registration of transfer of any Certificate at the office of the Securities Administrator maintained for such purpose, the Securities Administrator shall execute and the Securities Administrator shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Certificates of the same Class of a like aggregate Percentage Interest.  Every Certificate surrendered for transfer shall be accompanied by notification of the account of the designated transferee or transferees for the purpose of receiving distributions pursuant to Section 4.01 by wire transfer, if any such transferee desires and is eligible for distribution by wire transfer.

(vi)        At the option of the Certificateholders, Certificates may be exchanged for other Certificates of authorized denominations of the same Class of a like aggregate Percentage Interest, upon surrender of the Certificates to be exchanged at the office of the Securities Administrator. Whenever any Certificates are so surrendered for exchange the Securities Administrator shall execute, authenticate and deliver the Certificates which the Certificateholder making the exchange is entitled to receive.  Every Certificate presented or surrendered for transfer or exchange shall (if so required by the Trustee) be duly endorsed by, or be accompanied by a written instrument of transfer in the form satisfactory to the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing.  In addition, with respect to
each Class R Certificate, the Holder thereof may exchange, in the manner described above, such Class R Certificate for three separate Certificates, each representing such Holder’s respective Percentage Interest in the Class R-1, Class R-2 and Class R-3 Interest, respectively, in each case that was evidenced by the Class R Certificate being exchanged.

(vii)       No service charge shall be made to the Certificateholders for any transfer or exchange of Certificates, but the Securities Administrator may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Certificates.

(viii)      All Certificates surrendered for transfer and exchange shall be canceled and retained by the Securities Administrator in accordance with the Securities Administrator’s standard procedures.

 

 

	
            Section 5.03
 	
            Mutilated, Destroyed, Lost or Stolen Certificates.
 

If (i) any mutilated Certificate is surrendered to the Securities Administrator and the Securities Administrator receives evidence to its satisfaction of the destruction, loss or theft of any Certificate, and (ii) there is delivered to the Securities Administrator such security or indemnity as may be required by it to save it harmless, then, in the absence of notice to the Securities Administrator that such Certificate has been acquired by a bona fide purchaser, the Securities Administrator shall execute, authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of the same Class and Percentage Interest.  Upon the issuance of any new Certificate under this Section 5.03, the Securities Administrator may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the Securities Administrator) connected therewith.  Any replacement Certificate issued pursuant to this Section shall constitute complete and indefeasible evidence of ownership in the Trust Fund, as if originally issued, whether or not the lost, stolen or destroyed Certificate shall be found at any time.

	
            Section 5.04
 	
            Persons Deemed Owners.
 

The Company, the Master Servicer, Securities Administrator the Trustee and any agent of any of them may treat the person in whose name any Certificate is registered as the owner of such Certificate for the purpose of receiving distributions pursuant to Section 4.01 and for all other purposes whatsoever, and neither the Company, the Master Servicer, the Trustee nor any agent of any of them shall be affected by notice to the contrary.

	
            Section 5.05
 	
            Rule 144A Information.
 

For so long as any Class M-10, Class P, Class C and Residual Certificates are outstanding and are “restricted securities” within the meaning of Rule 144(a)(3) of the Securities Act, (1) the Company will provide or cause to be provided to any Holder of such Certificates and any prospective purchaser thereof designated by such a Holder, upon the request of such Holder or prospective purchaser, the information required to be provided to such Holder or prospective purchaser by Rule 144A(d)(4) under the Securities Act; and (2) the Company shall update such information from time to time in order to prevent such information from becoming false and misleading and will take such other actions as are necessary to ensure that the safe harbor exemption from the registration requirements of the Securities Act under Rule 144A is and will be available for resales of such Certificates conducted in
accordance with Rule 144A.  The Master Servicer shall cooperate with the Company and furnish the Company such information in the Master Servicer’s possession as the Company may reasonably request.

 

 

ARTICLE VI

 

THE COMPANY AND THE MASTER SERVICER

	
            Section 6.01
 	
            Liability of the Company and the Master Servicer.
 

The Company and the Master Servicer each shall be liable in accordance herewith only to the extent of the obligations specifically imposed upon and undertaken by the Company and the Master Servicer herein.  Only the Master Servicer, any successor Master Servicer or the Trustee acting as Master Servicer shall be liable with respect to the master servicing of the Mortgage Loans and the REO Property for actions taken by any such Person in contravention of the Master Servicer’s duties hereunder.

Section 6.02   Merger, Consolidation or Conversion of the Company or the Master Servicer.

The Company and the Master Servicer each will keep in full effect its existence, rights and franchises as a corporation under the laws of the state of its incorporation, and each will obtain and preserve its qualification to do business as a foreign corporation in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Agreement, the Certificates or any of the Mortgage Loans and to perform its respective duties under this Agreement.

Any Person into which the Company or the Master Servicer may be merged, consolidated or converted, or any corporation resulting from any merger or consolidation to which the Company or the Master Servicer shall be a party, or any Person succeeding to the business of the Company or the Master Servicer, shall be the successor of the Company or the Master Servicer, as the case may be, hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding; provided, however, that the successor or surviving Person to the Master Servicer or an affiliate thereof shall be qualified to service mortgage loans for Fannie Mae or Freddie Mac.

Section 6.03   Limitation on Liability of the Company, the Master Servicer, the Securities Administrator and Others.

Neither the Company, the Master Servicer nor any of the directors, officers, employees or agents of the Company or the Master Servicer shall be under any liability to the Trust Fund or the Certificateholders for any action taken or for refraining from the taking of any action in good faith pursuant to this Agreement, or for errors in judgment; provided, however, that this provision shall not protect the Company or the Master Servicer (but this provision shall protect the above described persons) against any breach of warranties or representations made herein, or against any specific liability imposed on the Master Servicer pursuant to Section 3.01 or any other Section hereof; and provided further that this provision shall not protect the Company, the Master Servicer or any such person, against any liability which would otherwise be imposed by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties or by reason of reckless disregard of obligations and duties hereunder.  The Company, the Master Servicer and any director, officer, employee or agent of the Company or the Master Servicer may 

 

rely in good faith on any document of any kind prima facie properly executed and submitted by any Person respecting any matters arising hereunder.  The Company, the Custodian, the Master Servicer, the Securities Administrator and any director, officer, employee or agent of the Company, the Custodian, the Master Servicer or the Securities Administrator shall be indemnified and held harmless by the Trust Fund (with respect to the Master Servicer, Custodian and Securities Administrator, in the aggregate up to a limit of $500,000 per calendar year), against any loss, liability or expense incurred in connection with this Agreement, the Custodial Agreement or the Certificates or the Mortgage Loans (including, without limitation, reasonable legal fees and disbursements of counsel), other than (a) any loss, liability or expense related to the Master Servicer’s
failure to perform its master servicing obligations with respect to any specific Mortgage Loan or Mortgage Loans (except as any such loss, liability or expense shall be otherwise reimbursable pursuant to this Agreement) or related to the Master Servicer’s obligations under Section 3.01, or to the Custodian’s failure to perform its duties under the Custodial Agreement, respectively, or (b) any loss, liability or expense incurred by reason of willful misfeasance, bad faith or gross negligence in the performance of duties hereunder or by reason of reckless disregard of obligations and duties hereunder.  None of the Company, the Master Servicer, the Custodian or the Securities Administrator shall be under any obligation to appear in, prosecute or defend any legal action which is not incidental to its respective duties under this Agreement and which in its opinion may involve it in any expense or liability; provided, however, that the Company, the Master Servicer, the Custodian or the Securities Administrator may in its sole discretion undertake any such action which it may deem necessary or desirable with respect to this Agreement and the rights and duties of the parties hereto and the interests of the Certificateholders hereunder.  In such event, the legal expenses and costs of such action and any liability resulting therefrom (except any action or liability related to the Master Servicer’s obligations under Section 3.01) shall be expenses, costs and liabilities of the Trust Fund, and the Company, the Custodian, the Master Servicer and the Securities Administrator shall be entitled to be reimbursed therefor from the Certificate Account as provided in Section 3.18, any such right of reimbursement being prior to the rights of Certificateholders to receive any amount in the Certificate Account.

	
            Section 6.04
 	
            Limitation on Resignation of the Master Servicer.
 

The Master Servicer shall not resign from the obligations and duties hereby imposed on it except (a) upon appointment of a successor master servicer reasonably acceptable to the Trustee upon receipt by the Trustee of a letter from each Rating Agency (obtained by the Master Servicer and at its expense) that such a resignation and appointment will not, in and of itself, result in a downgrading of the Certificates or (b) upon determination that its duties hereunder are no longer permissible under applicable law.  Any such determination described in (b) above permitting the resignation of the Master Servicer shall be evidenced by an Opinion of Counsel (at the expense of the resigning Master Servicer) to such effect delivered to the Trustee.  No such resignation shall become effective until the Trustee or a successor servicer shall have assumed the Master Servicer’s responsibilities,
duties, liabilities and obligations hereunder.  Any resignation of the Master Servicer shall result in the automatic resignation of the Securities Administrator.

 

 

	
            Section 6.05
 	
            Sale and Assignment of Master Servicing.
 

The Master Servicer may sell and assign its rights and delegate its duties and obligations in their entirety as Master Servicer under this Agreement; provided, however, that:  (i) the purchaser or transferee accepting such assignment and delegation (a) shall be a Person which shall be qualified to service mortgage loans for Fannie Mae or Freddie Mac; (b) shall, in the case of successor master servicers only, have a net worth of not less than $10,000,000 (unless otherwise approved by each Rating Agency pursuant to clause (ii) below); (c) shall be reasonably satisfactory to the Trustee (as evidenced in a writing signed by the Trustee) as having a comparable master servicing ability to that of the Master Servicer on the Closing Date; (d) shall execute and deliver to the Trustee an agreement, in form
and substance reasonably satisfactory to the Trustee, which contains an assumption by such Person of the due and punctual performance and observance of each covenant and condition to be performed or observed by it as master servicer under this Agreement and any custodial agreement, from and after the effective date of such agreement; (ii) each Rating Agency shall be given prior written notice of the identity of the proposed successor to the Master Servicer and each Rating Agency’s rating of the Certificates in effect immediately prior to such assignment, sale and delegation will not be downgraded or withdrawn as a result of such assignment, sale and delegation, as evidenced by a letter to such effect obtained by the Master Servicer at its expense and delivered to the Trustee; and (iii) the Master Servicer assigning and selling the master servicing shall deliver to the Trustee an Officer’s Certificate and an Opinion of Counsel (at the expense of the Master Servicer), each
stating that all conditions precedent to such action under this Agreement have been completed and such action is permitted by and complies with the terms of this Agreement. No such assignment or delegation shall affect any liability of the Master Servicer arising prior to the effective date thereof.

 

 

ARTICLE VII

 

DEFAULT

	
            Section 7.01
 	
            Events of Default.
 

“Event of Default”, wherever used herein, means any one of the following events:

(i)         any failure by the Master Servicer to deposit into the Certificate Account on each Certificate Account Deposit Date the amounts required to be deposited therein (other than an Advance) under the terms of this Agreement which continues unremedied for one (1) Business Day after such amount was required to be remitted; or

(ii)         any failure on the part of the Master Servicer duly to observe or perform in any material respect any other of the covenants or agreements on the part of the Master Servicer contained in the Certificates or in this Agreement (including any breach of the Master Servicer’s representations and warranties pursuant to Section 2.03(a) which materially and adversely affects the interests of the Certificateholders) which continues unremedied for a period of 60 days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Master Servicer by the Trustee or to the Master Servicer and the Trustee by the Holders of Certificates entitled to at least 25% of the Voting Rights; or

(iii)        a decree or order of a court or agency or supervisory authority having jurisdiction in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law or the appointment of a conservator or 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, shall have been entered against the Master Servicer and such decree or order shall have remained in force undischarged or unstayed for a period of 60 consecutive days; or

(iv)        the Master Servicer shall consent to the appointment of a 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 of or relating to all or substantially all of its property; or

(v)        the Master Servicer shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of or otherwise voluntarily commence a case or proceeding under any applicable bankruptcy, insolvency, reorganization or other similar statute, make an assignment for the benefit of its creditors, or voluntarily suspend payment of its obligations; or

(vi)        the Master Servicer shall fail to deposit in the Certificate Account on any Certificate Account Deposit Date an amount equal to any required Advance which continues unremedied for a period of one (1) Business Day after the Business Day immediately preceding the related Distribution Date.

 

 

If an Event of Default described in clauses (i) - (vi) of this Section shall occur, then, and in each and every such case, so long as such Event of Default shall not have been remedied, the Trustee or the Holders of Certificates entitled to at least 51% of the Voting Rights, by notice in writing to the Master Servicer (and to the Trustee if given by such Holders of Certificates), with a copy to the Rating Agencies, may terminate all of the rights and obligations (but not the liabilities) of the Master Servicer under this Agreement and in and to the Trust Fund, other than its rights as a Certificateholder hereunder; provided, however, that the successor to the Master Servicer appointed pursuant to Section 7.02 shall have accepted the duties of Master Servicer effective upon the resignation or
termination of the Master Servicer.  On or after the receipt by the Master Servicer of such notice, all authority and power of the Master Servicer under this Agreement, whether with respect to the Certificates (other than as a Holder thereof) or the Mortgage Loans or otherwise, shall pass to and be vested in the Trustee pursuant to and under this Section, and, without limitation, the 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 Mortgage Loans and related documents, or otherwise at the expense of the Master Servicer. The Master Servicer agrees to cooperate with (and pay any related costs and expenses of) the Trustee in effecting the termination of the Master
Servicer’s responsibilities and rights hereunder, including, without limitation, the transfer to the Trustee or the successor Master Servicer for administration by it of (i) the property and amounts which are then or should be part of the Trust Fund or which thereafter become part of the Trust Fund; (ii) originals or copies of all documents of the Master Servicer reasonably requested by the Trustee to enable it to assume the Master Servicer’s duties thereunder; (iii) the rights and obligations of the Master Servicer under the Subservicing Agreement with respect to the Mortgage Loans; and (iv) all cash amounts which shall at the time be deposited by the Master Servicer or should have been deposited to the Custodial or the Certificate Account or thereafter be received with respect to the Mortgage Loans.  The Trustee shall not be deemed to have breached any obligation hereunder as a result of a failure to make or delay in making any distribution as and when required hereunder
caused by the failure of the Master Servicer to remit any amounts received by it or to deliver any documents held by it with respect to the Mortgage Loans.  For purposes of this Section 7.01, the Trustee shall not be deemed to have knowledge of an Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless notice of any event which is in fact such an Event of Default is received by the Trustee as provided in Section 11.05 and such notice references the Certificates, the Trust Fund or this Agreement.

	
            Section 7.02
 	
            Trustee to Act; Appointment of Successor.
 

Within 90 days of the time the Master Servicer receives a notice of termination pursuant to Section 7.01(i) - (vi), the Trustee or its appointed agent shall be the successor in all respects to the Master Servicer in its capacity as Master Servicer under this Agreement and the transactions set forth or provided for herein and shall be subject thereafter to all the responsibilities, duties and liabilities relating thereto placed on the Master Servicer including the obligation to make Advances which have been or will be required to be made (except for the responsibilities, duties and liabilities contained in Section 2.03 and its obligations to deposit amounts in respect of losses pursuant to 4.01(i)) by the terms and provisions hereof; and provided further, that any failure to perform such duties or responsibilities caused by the Master Servicer’s failure to 

 

provide information required by Section 4.03 shall not be considered a default by the Trustee hereunder.  As compensation therefor, the Trustee shall be entitled to all funds relating to the Mortgage Loans which the Master Servicer would have been entitled to charge to the Custodial Account and the Certificate Account if the Master Servicer had continued to act hereunder.  If the Trustee has become the successor to the Master Servicer in accordance with Section 6.04 or Section 7.02, then notwithstanding the above, if the Trustee shall be unwilling to so act, or shall be unable to so act, the Trustee may appoint, or petition a court of competent jurisdiction to appoint, any established housing and home finance institution, which is also a Fannie Mae- or Freddie Mac-approved mortgage servicing institution, having a net worth of not less than $10,000,000 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. Pending appointment of a successor to the Master Servicer hereunder, the Trustee shall act in such capacity as herein above provided.  In connection with such appointment and assumption, the Trustee may make such arrangements for the compensation of such successor out of payments on Mortgage Loans as it and such successor shall agree; provided, however, that no such compensation shall be in excess of that permitted the Master Servicer hereunder.  Each of the Company, the Trustee and such successor shall take such action, consistent with this Agreement, as shall be necessary to effectuate any such succession.  In no event shall the successor Master Servicer be liable for the acts or omissions of the predecessor Master Servicer.

In connection with the termination or resignation of the Master Servicer hereunder, either (i) the successor Master Servicer, including the Trustee if the Trustee is acting as successor Master Servicer, shall represent and warrant that it is a member of MERS in good standing and shall agree to comply in all material respects with the rules and procedures of MERS in connection with the servicing of the Mortgage Loans that are registered with MERS, in which case the predecessor Master Servicer shall cooperate with the successor Master Servicer in causing MERS to revise its records to reflect the transfer of servicing to the successor Master Servicer as necessary under MERS’ rules and regulations, or (ii) the predecessor Master Servicer shall cooperate with the successor Master Servicer in causing MERS to execute and deliver an assignment of Mortgage in recordable form to transfer the
Mortgage from MERS to the Trustee and to execute and deliver such other notices, documents and other instruments as may be necessary or desirable to effect a transfer of such Mortgage Loan or servicing of such Mortgage Loan on the MERS® System to the successor Master Servicer.  The predecessor Master Servicer shall file or cause to be filed any such assignment in the appropriate recording office.  The predecessor Master Servicer shall bear any and all fees of MERS, costs of preparing any assignments of Mortgage, and fees and costs of filing any assignments of Mortgage that may be required under this Section 7.02. The successor Master Servicer shall cause such assignment to be delivered to the Trustee promptly upon receipt of the original with evidence of recording thereon or a copy certified by the public recording office in which such assignment was recorded.

Any successor, including the Trustee, to the Master Servicer shall maintain in force during its term as master servicer hereunder policies and fidelity bonds to the same extent as the Master Servicer is so required pursuant to Section 3.18.

Notwithstanding anything else herein to the contrary, in no event shall the Trustee be liable for any Master Servicing Fee or for any differential in the amount of the Master Servicing 

 

Fee paid hereunder and the amount necessary to induce any successor Master Servicer to act as successor Master Servicer under this Agreement and the transactions set forth or provided for herein.

	
            Section 7.03
 	
            Notification to Certificateholders.
 

(a)        Upon any such termination or appointment of a successor to the Master Servicer, the Trustee shall give prompt notice thereof to Certificateholders and to the Rating Agencies.

(b)        Within 60 days after the occurrence of any Event of Default, the Trustee shall transmit by mail to all Holders of Certificates notice of each such Event of Default hereunder known to the Trustee, unless such Event of Default shall have been cured or waived.

	
            Section 7.04
 	
            Waiver of Events of Default.
 

The Holders representing at least 51% of the Voting Rights of Certificates affected by a default or Event of Default hereunder, may waive such default or Event of Default (other than an Event of Default set forth in Section 7.01(vi)); provided, however, that (a) a default or Event of Default under clause (i) of Section 7.01 may be waived only by all of the Holders of Certificates affected by such default or Event of Default and (b) no waiver pursuant to this Section 7.04 shall affect the Holders of Certificates in the manner set forth in the second paragraph of Section 11.01 or materially adversely affect any non-consenting Certificateholder.  Upon any such waiver of a default or Event of Default by the Holders representing the requisite percentage of Voting Rights of Certificates affected by
such default or Event of Default, such default or Event of Default shall cease to exist and shall be deemed to have been remedied for every purpose hereunder.  No such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon except to the extent expressly so waived.  The Master Servicer shall give notice of any such waiver to the Rating Agencies.

	
            Section 7.05
 	
            List of Certificateholders.
 

Upon written request of three or more Certificateholders of record, for purposes of communicating with other Certificateholders with respect to their rights under this Agreement, the Securities Administrator will afford such Certificateholders access during business hours to the most recent list of Certificateholders held by the Securities Administrator.

 

 

ARTICLE VIII

 

CONCERNING THE TRUSTEE AND SECURITIES ADMINISTRATOR

	
            Section 8.01
 	
            Duties of Trustee and the Securities Administrator.
 

The Trustee, prior to the occurrence of an Event of Default and after the curing or waiver of all Events of Default which may have occurred, and the Securities Administrator each undertake to perform such duties and only such duties as are specifically set forth in this Agreement as duties of the Trustee and the Securities Administrator, respectively.  If an Event of Default occurs, is continuing and has not been waived, the Trustee shall exercise such of the rights and powers vested in it by this Agreement, and use the same degree of care and skill in their exercise as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.  Any permissive right of the Trustee enumerated in this Agreement shall not be construed as a duty.

The Trustee and the Securities Administrator, upon receipt of all resolutions, certificates, statements, opinions, reports, documents, orders or other instruments furnished to the Trustee and the Securities Administrator which are specifically required to be furnished pursuant to any provision of this Agreement to the Trustee and the Securities Administrator, respectively, shall examine them in accordance with the requirements of this Agreement.  If any such instrument is found not to conform to the requirements of this Agreement in a material manner, the Trustee or the Securities Administrator, as applicable, shall take such action as it deems appropriate to have the instrument corrected, and if the instrument is not corrected to the Trustee’s or the Securities Administrator’s, as applicable, satisfaction, the Trustee or the Securities Administrator, as applicable, will
provide notice thereof to the Certificateholders. Notwithstanding the foregoing, neither the Trustee nor the Securities Administrator shall be responsible for the accuracy or content of any resolution, certificate, statement, opinion, report, document, order or other instrument furnished by the Master Servicer hereunder or any Opinion of Counsel required hereunder.

The Securities Administrator shall prepare and file or cause to be filed on behalf of the Trust Fund any tax return that is required with respect to any Trust REMIC pursuant to applicable federal, state or local tax laws.

The Securities Administrator covenants and agrees that it shall perform its obligations hereunder in a manner so as to maintain the status of any Trust REMIC under the REMIC Provisions and to prevent the imposition of any federal, state or local income, prohibited transaction, contribution or other tax on any of any Trust REMIC to the extent that maintaining such status and avoiding such taxes are within the control of the Securities Administrator and are reasonably within the scope of its duties under this Agreement.

 

 

No provision of this Agreement shall be construed to relieve the Trustee or the Securities Administrator from liability for its own negligent action, its own negligent failure to act or its own willful misconduct; provided, however, that:

(i)         The duties and obligations of the Trustee prior to the occurrence of an Event of Default, and after the curing or waiver of all such Events of Default which may have occurred and of the Securities Administrator, at all times, shall be determined solely by the express provisions of this Agreement.  Neither the Trustee nor the Securities Administrator shall be liable except for the performance of such duties and obligations as are specifically set forth in this Agreement, no implied covenants or obligations shall be read into this Agreement against the Trustee or the Securities Administrator and, in the absence of bad faith on the part of the Trustee or the Securities Administrator, respectively, the Trustee or the Securities Administrator may conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee or the Securities Administrator and conforming to the requirements of this Agreement;

(ii)         Neither the Trustee nor the Securities Administrator shall be liable for an error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee or of the Securities Administrator, as applicable, unless it shall be proved that the Trustee or Securities Administrator, respectively, was negligent in ascertaining the pertinent facts; and

(iii)        Neither the Trustee nor the Securities Administrator shall be liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with the direction of the Holders of Certificates entitled to at least 25% of the Voting Rights relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee or the Securities Administrator, respectively, or exercising any trust or power conferred upon the Trustee or the Securities Administrator, respectively, under this Agreement.

	
            Section 8.02
 	
            Certain Matters Affecting the Trustee and the Securities Administrator.
 

Except as otherwise provided in Section 8.01:

(a)        The Trustee and the Securities Administrator may conclusively rely upon and shall be fully protected in acting or refraining from acting in reliance upon any resolution, Officers’ Certificate, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond or other paper or document reasonably believed by it to be genuine and to have been signed or presented by the proper party or parties;

(b)        The Trustee and the Securities Administrator may consult with counsel and any written advice or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by it hereunder in good faith and in accordance therewith;

 

 

(c)        Neither the Trustee nor the Securities Administrator shall be under any obligation to exercise any of the trusts or powers vested in it by this Agreement, other than its obligation to give notice pursuant to this Agreement, or to institute, conduct or defend any litigation hereunder or in relation hereto at the request, order or direction of any of the Certificateholders, pursuant to the provisions of this Agreement, unless such Certificateholders shall have offered to the Trustee or Securities Administrator security or indemnity satisfactory to it against the costs, expenses and liabilities which may be incurred therein or thereby; nothing contained herein shall, however, relieve the Trustee of the obligation, upon the occurrence of an Event of Default of which a Responsible Officer of the Trustee’s corporate trust department has
actual knowledge (which has not been waived or cured), to exercise such of the rights and powers vested in it by this Agreement, and to use the same degree of care and skill in their exercise as a prudent man would exercise or use under the circumstances in the conduct of his own affairs;

(d)        Neither the Trustee nor the Securities Administrator shall be liable for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Agreement;

(e)        Neither the Trustee prior to the occurrence of an Event of Default hereunder and after the curing or waiver of all Events of Default which may have occurred, nor the Securities Administrator, at any time, shall be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document, unless requested in writing to do so by the Holders of Certificates entitled to at least 25% of the Voting Rights; provided, however, that if the payment within a reasonable time to the Trustee or Securities Administrator, as applicable, of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee or Securities Administrator, as applicable,
reasonably assured to the Trustee or the Securities Administrator, as applicable, by the security afforded to it by the terms of this Agreement reasonable expense of every such examination shall be paid by the Certificateholders requesting the investigation;

(f)         The Trustee and the Securities Administrator may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, nominees, custodians or attorneys appointed with due care, and shall not be responsible for any willful misconduct or negligence on the part of any agent, attorney, custodian or nominee so appointed;

(g)        Neither the Trustee nor the Securities Administrator shall be required to give any bond or surety with respect to the execution of the trust created hereby or the powers granted hereunder; and

(h)        Whenever in the administration of the provisions of this Agreement the Trustee and the Securities Administrator shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action to be taken hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of gross negligence or bad faith on the part of the Trustee or the Securities Administrator, as applicable, be deemed to be conclusively proved and established by a certificate signed and delivered to the Trustee or Securities Administrator, as applicable, and such certificate, in the absence of gross 

 

negligence or bad faith on the part of the Trustee or Securities Administrator, as applicable, shall be full warrant to the Trustee or Securities Administrator, as applicable, for any action taken, suffered or omitted by it under the provisions of this Agreement upon the faith thereof.

Neither the Trustee nor the Securities Administrator shall have any obligation to invest and reinvest any cash held.  The Trustee and the Securities Administrator shall have no liability in respect of losses incurred as a result of the liquidation of any investment incurred as a result of the liquidation of any investment prior to its stated maturity.

Section 8.03   Trustee and Securities Administrator Not Liable for Certificates or Mortgage Loans.

The recitals contained herein and in the Certificates (other than the signature of the Securities Administrator, the authentication of the Securities Administrator on the Certificates, the acknowledgments of the Securities Administrator contained in Article II) shall be taken as the statements of the Company and neither the Trustee nor the Securities Administrator assumes any responsibility for their correctness.  Neither the Trustee nor the Securities Administrator makes any representations or warranties as to the validity or sufficiency of this Agreement or of the Certificates (other than the signature and authentication of the Trustee on the Certificates) or of any Mortgage Loan or related document, or of MERS or the MERS® System.  Neither the Trustee nor the Securities Administrator shall be accountable for the use or application by the Company of any of the Certificates or of
the proceeds of such Certificates, or for the use or application of any funds paid to the Company or the Master Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the Custodial Account by the Master Servicer.

	
            Section 8.04
 	
            Trustee and Securities Administrator May Own Certificates.
 

Each of the Trustee and the Securities Administrator in its individual or any other capacity (other than as Trustee hereunder) may become the owner or pledgee of Certificates with the same rights it would have if it were not Trustee or the Securities Administrator, as applicable, and may otherwise deal with the parties hereto.

	
            Section 8.05
 	
            Trustee’s and Securities Administrator’s Fees.
 

Each of the Trustee and Securities Administrator shall be compensated by the Master Servicer.  Such compensation (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) shall be paid to each of the Trustee and the Securities Administrator for all services rendered by it in the execution of the trusts hereby created and in the exercise and performance of any of the powers and duties hereunder or of the Trustee and the Securities Administrator.  Except as otherwise provided in this Agreement, the Trustee and any director, officer, employee or agent of the Trustee shall be indemnified and held harmless by the Trust Fund against any claim, loss, liability, fee or expense incurred in connection with any Event of Default, any breach of this Agreement or any claim or legal action (including any pending or threatened claim or legal
action) relating to its acceptance or administration of the trusts hereunder or the Trustee’s performance under the Certificates, other than any claim, loss, liability or expense (i) sustained in connection with this Agreement related to the willful misfeasance, bad faith or negligence of the Master Servicer in the performance of 

 

its duties hereunder or (ii) incurred in connection with a breach constituting willful misfeasance, bad faith or negligence of the Trustee in the performance of its duties hereunder or by reason of reckless disregard of its obligations and duties hereunder.

The Master Servicer shall indemnify the Company, the Trustee and the Securities Administrator and any director, officer, employee or agent of the Company, the Trustee or the Securities Administrator against any such claim or legal action (including any pending or threatened claim or legal action), loss, liability, fee or expense that may be sustained in connection with this Agreement related to the willful misfeasance, bad faith, or negligence in the performance of the Master Servicer’s duties hereunder.

The provisions of this Section 8.05 shall survive the resignation or removal of the Trustee or the Securities Administrator or the termination of this Agreement.

	
            Section 8.06
 	
            Eligibility Requirements for Trustee and the Securities Administrator.
 

The Trustee and the Securities Administrator hereunder shall at all times be a corporation or a national banking association organized and doing business under the laws of any state or the United States of America or the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by federal or state authority.  In addition, the Trustee and the Securities Administrator shall at all times be acceptable to the Rating Agency rating the Certificates.  If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.  In case at any time the Trustee or the Securities Administrator shall cease to be eligible in accordance with the provisions of this Section, the Trustee or the Securities Administrator, as applicable, shall resign immediately in the manner and with the effect specified in Section 8.07.  The corporation or national banking association serving as Trustee or Securities Administrator may have normal banking and trust relationships with the Seller and their affiliates or the Master Servicer and its affiliates.

	
            Section 8.07
 	
            Resignation and Removal of the Trustee and the Securities Administrator.
 

The Trustee and the Securities Administrator may at any time resign and be discharged from the trusts hereby created by giving written notice thereof to the Master Servicer; with a copy to the Rating Agencies; provided, that such resignation shall not be effective until a successor trustee is appointed and accepts appointment in accordance with the following provisions; provided, however, that the resigning Trustee or Securities Administrator, as applicable, shall not resign and be discharged from the trusts hereby created until such time as the Rating Agency rating the Certificates approves the successor trustee or successor securities administrator.  Any resignation or removal of the Securities Administrator shall result in the automatic removal
of the Master Servicer to the extent that Wells Fargo Bank, N.A. is both the Securities Administrator and the Master Servicer.  Upon receiving such notice of resignation of the Trustee, the Master Servicer shall promptly appoint a successor trustee who meets the eligibility requirements of Section 8.06 by written instrument, in triplicate, one copy of which 

 

instrument shall be delivered to the resigning Trustee, and to the successor trustee.  Upon receiving notice of the resignation of the Securities Administrator, the Trustee shall promptly appoint a successor securities administrator who meets the eligibility requirements of Section 8.06 by written instrument, in triplicate, copies of which instrument shall be delivered to the resigning securities administrator and the successor securities administrator.  If no successor trustee or successor securities administrator shall have been so appointed and have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Trustee or resigning Securities Administrator, as applicable may petition any court of competent jurisdiction for the appointment of a successor trustee or successor securities administrator, as applicable.

If at any time the Trustee or the Securities Administrator shall cease to be eligible in accordance with the provisions of Section 8.06 and shall fail to resign after written request therefor by the Master Servicer, or if at any time the Trustee or the Securities Administrator shall become incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or Securities Administrator, as applicable, or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or Securities Administrator, as applicable, or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, the Master Servicer may remove the Trustee, or the Trustee shall remove the Securities Administrator, as applicable, and appoint a successor trustee or successor securities administrator, as applicable, who meets the eligibility
requirements of Section 8.06 by written instrument, in triplicate, which instrument shall be delivered to the Trustee or Securities Administrator, as applicable, so removed and to the successor trustee or successor securities administrator, as applicable.

The Holders of Certificates entitled to at least 51% of the Voting Rights may at any time remove the Trustee or Securities Administrator and appoint a successor trustee or successor securities administrator by written instrument or instruments, in triplicate, signed by such Holders or their attorneys-in-fact duly authorized, one complete set of which instruments shall be delivered to the Master Servicer (if the Trustee is removed), the Securities Administrator (if the Trustee is removed), and the Trustee (if the Securities Administrator is removed), one complete set to the Trustee or Securities Administrator so removed and one complete set to the successor so appointed.  A copy of such instrument shall be delivered to the Certificateholders and the Company by the Master Servicer (if the Trustee is removed) and by the Trustee (if the Securities Administrator is removed).

Any resignation or removal of the Trustee or Securities Administrator and appointment of a successor trustee or successor securities administrator pursuant to any of the provisions of this Section shall not become effective until acceptance of appointment by the successor trustee or successor securities administrator as provided in Section 8.08.

	
            Section 8.08
 	
            Successor Trustee and Successor Securities Administrator.
 

Any successor trustee or successor securities administrator appointed as provided in Section 8.07 shall execute, acknowledge and deliver to the Master Servicer and to its predecessor trustee or predecessor securities administrator an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee or predecessor 

 

securities administrator shall become effective and such successor trustee or successor securities administrator, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties and obligations of its predecessor hereunder, with the like effect as if originally named as trustee herein.  The predecessor trustee or predecessor securities administrator shall after payment of its outstanding fees and expenses, promptly deliver to the successor trustee or successor securities administrator all assets and records of the Trust Fund held by it hereunder, and the Master Servicer and the predecessor trustee or predecessor securities administrator shall execute and deliver all such instruments and do such other things as may reasonably be required for more fully and certainly vesting and confirming in the successor trustee or successor securities administrator all such
rights, powers, duties and obligations.

No successor trustee or successor securities administrator shall accept appointment as provided in this Section unless at the time of such acceptance such successor trustee or successor securities administrator shall be eligible under the provisions of Section 8.06.

Upon acceptance of appointment by a successor trustee or successor securities administrator as provided in this Section, the Master Servicer (in the case of a successor trustee) and the Trustee (in the case of a successor securities administrator) shall mail notice of the succession of such trustee or securities administrator hereunder to all Holders of Certificates at their addresses as shown in the Certificate Register.  If the Master Servicer (in the case of a successor trustee) and the Trustee (in the case of a successor securities administrator) fails to mail such notice within ten days after acceptance of appointment by the successor trustee successor securities administrator, the successor trustee successor securities administrator shall cause such notice to be mailed at the expense of the Master Servicer or Trustee, as the case may be.

	
            Section 8.09
 	
            Merger or Consolidation of Trustee or Securities Administrator.
 

Any state bank or trust company or corporation or national banking association into which the Trustee or Securities Administrator may be merged or converted or with which it may be consolidated or any state bank or trust company or national banking association resulting from any merger, conversion or consolidation to which the Trustee or Securities Administrator shall be a party, or any state bank or trust company or corporation or national banking association succeeding to all or substantially all of the corporate trust business of the Trustee or Securities Administrator, shall be the successor of the Trustee or Securities Administrator hereunder, provided such state bank or trust company or corporation or national banking association shall be eligible under the provisions of Section 8.06 without the execution or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.

	
            Section 8.10
 	
            Appointment of Co-Trustee or Separate Trustee.
 

Notwithstanding any other provisions hereof, at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any part of the Trust Fund or property securing the same may at the time be located, the Master Servicer and the Trustee acting jointly shall have the power and shall execute and deliver all instruments to appoint one or more Persons approved by the Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or separate trustee or 

 

separate trustees, of all or any part of the Trust Fund, and to vest in such Person or Persons, in such capacity, such title to the Trust Fund, or any part thereof, and, subject to the other provisions of this Section 8.10, such powers, duties, obligations, rights and trusts as the Master Servicer and the Trustee may consider necessary or desirable.  If the Master Servicer shall not have joined in such appointment within 15 days after the receipt by it of a request so to do, or in case an Event of Default shall have occurred and be continuing, the Trustee alone shall have the power to make such appointment without the Master Servicer.  No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 8.06 hereunder and no notice to Holders of Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.

In the case of any appointment of a co-trustee or separate trustee pursuant to this Section 8.10, all rights, powers, duties and obligations conferred or imposed upon the Trustee and required to be conferred or such co-trustee shall be conferred or imposed upon and exercised or performed by the Trustee and such separate trustee or co-trustee jointly, except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed (whether as Trustee hereunder or as successor to the Master Servicer hereunder), the Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Trust Fund or any portion thereof in any such jurisdiction) shall be exercised and performed by such separate trustee or co-trustee at the direction of the Trustee.

Any notice, request or other writing given to the Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them.  Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article VIII.  Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Trustee or separately, as may be provided therein, subject to all the provisions of this Agreement, specifically including every provision of this Agreement relating to the conduct of, affecting the liability of, or affording protection to, the Trustee.  Every such instrument shall be filed with the Trustee.

Any separate trustee or co-trustee may, at any time, constitute the Trustee, its agent or attorney-in-fact, with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Agreement on its behalf and in its name.  If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.

 

 

ARTICLE IX

 

TERMINATION

Section 9.01   Termination Upon Repurchase or Liquidation of All Mortgage Loans or upon Purchase of Certificates.

Subject to Section 9.03, the respective obligations and responsibilities of the Company, the Master Servicer, the Securities Administrator and the Trustee created hereby (other than the obligations of the Master Servicer to the Trustee pursuant to Section 8.05 and of the Master Servicer to provide for and the Securities Administrator to make payments to Certificateholders as hereafter set forth) shall terminate upon payment (net of any amount due the Master Servicer) to the Certificateholders of all amounts held by or on behalf of the Trustee and required to be paid to them hereunder following the earlier to occur of (i) the repurchase by the Servicer, or its designee (or if the Servicer fails to exercise such option, the Master Servicer) of all Mortgage Loans and each REO Property in respect thereof remaining in the Trust Fund at a price equal to (a) 100% of the unpaid principal balance
of each Mortgage Loan (other than one as to which a REO Property was acquired) on the day of repurchase together with accrued interest on such unpaid principal balance at the Net Mortgage Rate to the first day of the month in which the proceeds of such repurchase are to be distributed, plus (b) the appraised value of any REO Property (but not more than the unpaid principal balance of the related Mortgage Loan, together with accrued interest on that balance at the Net Mortgage Rate to the first day of the month such repurchase price is distributed) less the good faith estimate of the Servicer or the Master Servicer, as applicable, of liquidation expenses to be incurred in connection with its disposal thereof, such appraisal to be conducted by an appraiser mutually agreed upon by the Servicer or the Master Servicer, as applicable, and the Master Servicer on behalf of the Trustee at the expense of the terminating party, and (ii) the final payment or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or the disposition of all REO Property in respect thereof); provided, however, that in no event shall the trust created hereby continue beyond the earlier of (i) the Distribution Date occurring in July 2035 and (ii) the expiration of 21 years from the death of the last survivor of the descendants of Joseph P. Kennedy, the late ambassador of the United States to the Court of St. James, living on the date hereof, and provided further, that the purchase price set forth above shall be increased as is necessary, as determined by the Servicer or the Master Servicer, as applicable, to avoid disqualification of any of any Trust REMIC as a REMIC.  In the case of any repurchase by the Servicer or the Master Servicer, as applicable,
pursuant to clause (i), the Master Servicer shall exercise reasonable efforts to cooperate fully with the Trustee in effecting such repurchase and the transfer of the Mortgage Loans and related Mortgage Files and related records to the Servicer or the Master Servicer, as applicable; provided, however, such option may only be exercised if (i) the purchase price is sufficient to pay all interest accrued on, as well as amounts necessary to retire the principal balance of, each class of notes secured primarily by the Class C Certificates and the Class P Certificates.  In addition, any Swap Termination Payment payable to the Swap Provider then due but unpaid or which is the result of such termination shall be paid.

The right of the Servicer or its designee to repurchase all Mortgage Loans pursuant to (i) above shall be conditioned upon the Aggregate Stated Principal Balance of such Mortgage Loans at the time of any such repurchase aggregating an amount equal to or less than 10% of the 

 

Aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.  If such right is exercised, the Servicer upon such repurchase shall provide to the Trustee and Securities Administrator, notice of such exercise prior to the Determination Date in the month preceding the month of purchase.

The right of the Master Servicer, or its designee to repurchase all Mortgage Loans pursuant to (i) in the second preceding paragraph shall be conditioned upon the Aggregate Stated Principal Balance of such Mortgage Loans at the time of any such repurchase aggregating an amount equal to or less than 5% of the Aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.  If such right is exercised, the Master Servicer, upon such repurchase shall provide to the Trustee and Securities Administrator, notice of such exercise prior to the Determination Date in the month preceding the month of purchase.

Written notice of any termination, specifying the Distribution Date upon which the Certificateholders may surrender their Certificates to the Securities Administrator for payment of the final distribution and cancellation, shall be given promptly by the Securities Administrator by letter to the Certificateholders mailed (a) in the event such notice is given in connection with the Servicer’s or the Master Servicer’s, as applicable, election to repurchase, not earlier than the 15th day and not later than the 25th day of the month next preceding the month of such final distribution or (b) otherwise during the month of such final distribution on or before the Determination Date in such month, in each case specifying (i) the Distribution Date upon which final payment of the Certificates will be made upon presentation and surrender of Certificates at the office of the Securities
Administrator therein designated, (ii) the amount of any such final payment and (iii) that the Record Date otherwise applicable to such Distribution Date is not applicable, payments being made only upon presentation and surrender of the Certificates at the office of the Securities Administrator therein specified.  In the event such notice is given in connection with the Servicer or the Master Servicer, as applicable, or its designee’s election to repurchase, the Servicer or the Master Servicer, as applicable, or its designee shall deliver to the Securities Administrator for deposit in the Certificate Account on the Business Day immediately preceding the Distribution Date specified in such notice an amount equal to the above-described repurchase price payable out of its own funds.  Upon presentation and surrender of the Certificates by the Certificateholders, the Securities Administrator shall first pay any amounts owing to the Trustee, Master Servicer, Custodian, Servicer and
Securities Administrator, as applicable, under this Agreement, and second, distribute to the Certificateholders (i) the amount otherwise distributable on such Distribution Date, if not in connection with the Servicer’s or  the Master Servicer’s, as applicable, election to repurchase, or (ii) if the Servicer or the Master Servicer, as applicable, elected to so repurchase, an amount determined as follows:  with respect to each Regular Certificate, the outstanding Certificate Principal Balance thereof, plus with respect to each Class A, Class M or Class C Certificate, one month’s interest thereon at the applicable Pass-Through Rate, plus any previously accrued but unpaid Accrued Certificate Interest, plus with respect to the Class A-2 Certificates and each Class M Certificate, any unpaid Allocated Realized Loss Amount; and with respect to each Class R Certificate, the Percentage Interest evidenced thereby multiplied by the difference, if any, between the above described
repurchase price and the aggregate amount to be distributed to the Holders of the Regular Certificates, subject to the priorities set forth in Section 4.01.  Notwithstanding the foregoing, by acceptance of the Class R Certificates, the Holders of such Certificates agree, in connection with any termination hereunder, to assign and transfer any amounts received in respect of such 

 

termination to the Holders of the Class C Certificates and to pay any such amounts to the Holders of the Class C Certificates.  Upon certification to the Custodian by a Servicing Officer, following such final deposit, the Custodian shall promptly release the Mortgage Files as directed by the Servicer or the Master Servicer, as applicable, for the remaining Mortgage Loans, and the Trustee shall execute all assignments, endorsements and other instruments required by the Servicer or the Master Servicer, as applicable, as being necessary to effectuate such transfer.

In the event that all of the Certificateholders shall not surrender their Certificates for cancellation within six months after the time specified in the above-mentioned notice, the Securities Administrator shall give a second notice to the remaining Certificateholders to surrender their Certificates for cancellation and receive the final distribution with respect thereto.  If within six months after the second notice all of the Certificates shall not have been surrendered for cancellation, the Securities Administrator shall take reasonable steps as directed by the Company in writing, or appoint an agent to take reasonable steps, to contact the remaining Certificateholders concerning surrender of their Certificates, and the cost thereof shall be paid out of the funds and other assets which remain subject hereto.  If within nine months after the second notice all the Certificates shall
not have been surrendered for cancellation, the Class R Certificateholders shall be entitled to all unclaimed funds and other assets which remain subject hereto.

	
            Section 9.02
 	
            Termination of REMIC 2, and REMIC 3.
 

REMIC 2 and REMIC 3 shall be terminated on the earlier of the Final Distribution Date and the date on which it is deemed to receive the last deemed distributions on the REMIC 1 Regular Interests and the last distribution due on the Regular Certificates and the Class R Certificates (in respect of the Class R-2 and Class R-3) is made.

	
            Section 9.03
 	
            Additional Termination Requirements.
 

(a)        In the event the Servicer or the Master Servicer, as applicable, repurchases the Mortgage Loans as provided in Section 9.01, the Trust Fund shall be terminated in accordance with the following additional requirements, unless the Servicer or the Master Servicer, as applicable, at its own expense, obtains for the Trustee and the Securities Administrator an Opinion of Counsel to the effect that the failure of the Trust Fund to comply with the requirements of this Section 9.03 will not (i) result in the imposition on the Trust of taxes on “prohibited transactions,” as described in Section 860F of the Code, or (ii) cause either any Trust REMIC to fail to qualify as a REMIC at any time that any Certificate is outstanding:

(i)         The Securities Administrator shall establish a 90-day liquidation period for each Trust REMIC, as the case may be, and specify the first day of such period in a statement attached to the Trust Fund’s final Tax Return pursuant to Treasury regulations Section 1.860F-1.  The Securities Administrator also shall satisfy all of the requirements of a qualified liquidation for each Trust REMIC, as the case may be, under Section 860F of the Code and regulations thereunder; and

(ii)         The Servicer shall notify the Trustee and the Securities Administrator at the commencement of such 90-day liquidation period and, at or prior to the time of 

 

making of the final payment on the Certificates, the Trustee shall sell or otherwise dispose of all of the remaining assets of the Trust Fund in accordance with the terms hereof.

(b)        Each Holder of a Certificate and the Trustee hereby irrevocably approves and appoints the Securities Administrator as its attorney-in-fact to adopt a plan of complete liquidation for each Trust REMIC at the expense of the Trust Fund in accordance with the terms and conditions of this Agreement.

 

 

ARTICLE X

 

REMIC PROVISIONS

	
            Section 10.01
 	
            REMIC Administration.
 

(a)        The Securities Administrator shall make an election to treat the Trust Fund as three REMICs under the Code and, if necessary, under applicable state law.  Each such election will be made on Form 1066 or other appropriate federal tax or information return (including Form 8811) or any appropriate state return for the taxable year ending on the last day of the calendar year in which the Certificates are issued.  For the purposes of the REMIC elections in respect of the Trust Fund, (i) the REMIC 1 Regular Interests will represent the “regular interests” in REMIC 1, the Class R-1 Interest will constitute the sole class of “residual interests” in REMIC 1, (ii) the REMIC 2 Regular Interests will represent the “regular interests” in REMIC 2, the Class R-2 Interest will constitute the sole class of “residual
interests” in REMIC 2 and (iii) the Class A and Class M Certificates (exclusive of any right to receive payments in respect of the Basis Risk Shortfall Carry-Forward Amounts and the obligation to pay any Class IO Distribution Amount), the Class IO Interest, the Class C Certificates and the Class P Certificates shall be designated as the “regular interests” in REMIC 3 and the Class R-3 Interest will constitute the sole class of “residual interests” in REMIC 3. The Securities Administrator and the Trustee shall not permit the creation of any “interests” (within the meaning of Section 860G of the Code) in any REMIC created hereunder other than the REMIC 1 Regular Interests, the REMIC 2 Regular Interests, the REMIC 3 Regular Interests the ownership of which is represented by the Class A and Class M Certificates, the Class IO Interest, the Class C Certificates, the Class P Certificates, the Class R-1 Interest, the Class R-2 Interest and the Class R-3
Interest.  The Securities Administrator will apply for an Employee Identification Number from the IRS via form SS-4 or any other acceptable method for each Trust REMIC.

(b)        The Closing Date is hereby designated as the “startup day” of the Trust Fund within the meaning of Section 860G(a)(9) of the Code.

(c)        The Securities Administrator shall pay out of its own funds, without any right of reimbursement, any and all expenses relating to any tax audit of the REMICs (including, but not limited to, any professional fees or any administrative or judicial proceedings with respect to the REMICs that involve the Internal Revenue Service or state tax authorities), other than the expense of obtaining any tax-related Opinion of Counsel except as specified herein.  The Securities Administrator, as agent for the REMICs’ tax matters person, shall (i) act on behalf of the REMICs in relation to any tax matter or controversy involving the Trust Fund and (ii) represent the Trust Fund in any administrative or judicial proceeding relating to an examination or audit by any governmental taxing authority with respect thereto.  By their acceptance thereof, the
Holder of the largest Percentage Interest of the Class R Certificates hereby agrees to irrevocably appoint the Securities Administrator or an Affiliate as its agent to perform all of the duties of the tax matters person for the REMICs.

(d)        The Securities Administrator shall prepare and file or cause to be filed, and the Trustee shall sign, all of the Tax Returns (including Form 8811, which must be filed within 30 days of the Closing Date) in respect of the REMICs created hereunder.  The expenses of 

 

preparing and filing such returns shall be borne by the Securities Administrator without any right of reimbursement therefor.  The Master Servicer shall provide on a timely basis to the Securities Administrator or its designee such information with respect to the assets of the REMICs as is in its possession and reasonably required by the Securities Administrator to enable it to perform its obligations under this Article X.

(e)        The Securities Administrator shall perform on behalf of the REMICs and the Supplemental Interest Trust all reporting and other tax compliance duties that are the responsibility of the REMICs and the Supplemental Interest Trust under the Code, the REMIC Provisions or other compliance guidance issued by the Internal Revenue Service or any state or local taxing authority.  Among its other duties, as required by the Code, the REMIC Provisions or other such compliance guidance, the Securities Administrator shall provide (i) to any Transferor of a Class R Certificate such information as is necessary for the application of any tax relating to the transfer of a Class R Certificate to any Person who is not a Permitted Transferee, (ii) to the Certificateholders such information or reports as are required by the Code or the REMIC Provisions
including reports relating to interest, original issue discount and market discount or premium (using the Prepayment Assumption as required) and (iii) to the Internal Revenue Service the name, title, address and telephone number of the person who will serve as the representative of the REMICs.  The Master Servicer shall provide on a timely basis to the Securities Administrator such information with respect to the assets of the REMICs, including, without limitation, the Mortgage Loans, as is in its possession and reasonably required by the Securities Administrator to enable it to perform its obligations under this subsection.  In addition, the Company shall provide or cause to be provided to the Securities Administrator, within ten (10) days after the Closing Date, all information or data that the Securities Administrator reasonably determines to be relevant for tax purposes as to the valuations and issue prices of the Certificates, including, without limitation, the price, yield,
prepayment assumption and projected cash flow of the Certificates.

(f)         The Securities Administrator shall take such action and shall cause the REMICs created hereunder to take such action as shall be necessary to create or maintain the status thereof as REMICs under the REMIC Provisions (and the Master Servicer shall assist it, to the extent reasonably requested by it).  The Securities Administrator shall not take any action, cause the Trust Fund to take any action or fail to take (or fail to cause to be taken) any action that, under the REMIC Provisions, if taken or not taken, as the case may be, could (i) endanger the status of any Trust REMIC as REMICs or (ii) result in the imposition of a tax upon the REMICs (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)
(either such event, an “Adverse REMIC Event”) unless the Securities Administrator has received an Opinion of Counsel, addressed to the Securities Administrator (at the expense of the party seeking to take such action but in no event at the expense of the Securities Administrator) to the effect that the contemplated action will not, with respect to the REMICs created hereunder, endanger such status or result in the imposition of such a tax, nor shall the Master Servicer take or fail to take any action (whether or not authorized hereunder) as to which the Securities Administrator has advised it in writing that each has received an Opinion of Counsel to the effect that an Adverse REMIC Event could occur with respect to such action.  In addition, prior to taking any action with respect to the REMICs or the assets of the REMICs, or causing the REMICs to take any action, which is not contemplated under the terms of this Agreement, the 

 

Master Servicer will consult with the Securities Administrator or its designee, in writing, with respect to whether such action could cause an Adverse REMIC Event to occur with respect to the Trust Fund, and the Master Servicer shall not take any such action or cause the Trust Fund to take any such action as to which the Securities Administrator has advised it in writing that an Adverse REMIC Event could occur.  The Securities Administrator may consult with counsel to make such written advice, and the cost of same shall be borne by the party seeking to take the action not permitted by this Agreement, but in no event shall such cost be an expense of the Securities Administrator.  At all times as may be required by the Code, the Securities Administrator will ensure that substantially all of the assets of the REMICs created hereunder will consist of “qualified mortgages” as defined in Section
860G(a)(3) of the Code and “permitted investments” as defined in Section 860G(a)(5) of the Code.

(g)        In the event that any tax is imposed on “prohibited transactions” of the REMICs created hereunder as defined in Section 860F(a)(2) of the Code, on the “net income from foreclosure property” of the REMICs as defined in Section 860G(c) of the Code, on any contributions to the REMICs after the Startup Day therefor pursuant to Section 860G(d) of the Code, or any other tax is imposed by the Code or any applicable provisions of state or local tax laws, such tax shall be charged (i) to the Securities Administrator pursuant to Section 10.03 hereof, if such tax arises out of or results from a breach by the Securities Administrator of any of its obligations under this Article X, (ii) to the Master Servicer pursuant to Section 10.03 hereof, if such tax arises out of or results from a breach by the Master Servicer of any of its
obligations under Article III or this Article X, or otherwise, (iii) to the Master Servicer as provided in Section 3.05, if applicable, (iv) to the Class R Certificateholder to the extent of any funds distributed to such Certificateholder, (v) otherwise against amounts on deposit in the Certificate Account and shall be paid by withdrawal therefrom to the extent not required to be paid by the Master Servicer, the Securities Administrator  or the Class R Certificateholder pursuant to another provision of this Agreement.

(h)        On or before April 15 of each calendar year, commencing April 15, 2006, the Securities Administrator shall deliver to the Master Servicer and the Rating Agency a Certificate from a Responsible Officer of the Securities Administrator stating the Securities Administrator’s compliance with its obligations under this Article X.

(i)         The Securities Administrator shall, for federal income tax purposes, maintain books and records with respect to the REMICs on a calendar year and on an accrual basis.

(j)         Following the Startup Day, the Securities Administrator shall not accept any contributions of assets to the REMICs other than in connection with any Qualified Substitute Mortgage Loan delivered in accordance with Section 2.04 unless it shall have received an Opinion of Counsel to the effect that the inclusion of such assets in the REMICs will not cause any Trust REMIC to fail to qualify as REMICs at any time that any Certificates are outstanding or subject any Trust REMIC to any tax under the REMIC Provisions or other applicable provisions of federal, state and local law or ordinances.

(k)        Neither the Securities Administrator nor the Master Servicer shall enter into any arrangement by which the REMICs will receive a fee or other compensation for services nor permit the REMICs to receive any income from assets other than “qualified mortgages” as 

 

defined in Section 860G(a)(3) of the Code or “permitted investments” as defined in Section 860G(a)(5) of the Code.

(l)         The Securities Administrator shall treat the rights of the Certificateholders (other than the Class P Certificateholders and Residual Certificateholders) to receive payments from the Basis Risk Shortfall Reserve Fund as a notional principal contract between the Holders of the Class C Certificates, as owner of the Basis Risk Shortfall Reserve Fund and the Holders of the Class A Certificates and Class M Certificates). For federal tax return and information reporting, the right of the Holders of the Class A and Class M Certificates to receive payments from the Basis Risk Shortfall Reserve Fund in respect of any Basis Risk Carry-Forward Amount may be obtained from the Securities Administrator upon request.

	
            Section 10.02
 	
            Prohibited Transactions and Activities.
 

None of the Company, the Master Servicer, the Securities Administrator or the Trustee shall sell, dispose of or substitute for any of the Mortgage Loans (except in connection with (i) the foreclosure of a Mortgage Loan, including but not limited to, the acquisition or sale of a Mortgaged Property acquired by deed in lieu of foreclosure, (ii) the bankruptcy of the Trust Fund, (iii) the termination of any Trust REMIC pursuant to Article IX of this Agreement, (iv) a substitution pursuant to Article II of this Agreement or (v) a purchase of Mortgage Loans pursuant to Article II or III of this Agreement), nor acquire any assets for the Trust Fund (other than REO Property acquired in respect of a defaulted Mortgage Loan), nor sell or dispose of any investments in the Custodial Account or the Certificate Account for gain, nor accept any contributions to the REMICs after the Closing Date (other
than a Qualified Substitute Mortgage Loan delivered in accordance with Section 2.04), unless each such party has received an Opinion of Counsel, addressed to the Trustee and Securities Administrator (at the expense of the party seeking to cause such sale, disposition, substitution, acquisition or contribution but in no event at the expense of the Trustee) that such sale, disposition, substitution, acquisition or contribution will not (a) affect adversely the status of any Trust REMIC as REMICs or (b) cause the Trust Fund to be subject to a tax on “prohibited transactions” or “contributions” pursuant to the REMIC Provisions.

	
            Section 10.03
 	
            Master Servicer, Securities Administrator and Trustee Indemnification.
 

(a)        The Securities Administrator agrees to indemnify the Trust Fund, the Company and the Master Servicer for any taxes and costs including, without limitation, any reasonable attorneys’ fees imposed on or incurred by the Trust Fund, the Company or the Master Servicer, as a result of (i) a breach of the Securities Administrator’s covenants set forth in this Article X or (ii) any state, local or franchise taxes imposed upon the Trust Fund as a result of the location of the Securities Administrator.

(b)        The Master Servicer agrees to indemnify the Trust Fund, the Company and the Trustee for any taxes and costs including, without limitation, any reasonable attorneys’ fees imposed on or incurred by the Trust Fund, the Company or the Trustee, as a result of (i) a breach of the Master Servicer’s covenants set forth in Article III or this Article X with respect to compliance with the REMIC Provisions or (ii) any state, local or franchise taxes imposed upon the Trust Fund as a result of the location of the Master Servicer.

 

 

(c)        The Seller agrees to indemnify the Trust Fund and the Company for any taxes and costs including, without limitation, any reasonable attorneys’ fees imposed on or incurred by the Trust Fund or the Company, as a result of any state, local or franchise taxes imposed upon the Trust Fund as a result of the location of the Trustee, the Servicer or the Subservicer.

 

 

ARTICLE XI

 

MISCELLANEOUS PROVISIONS

	
            Section 11.01
 	
            Amendment.
 

This Agreement may be amended from time to time by the Company, the Master Servicer, the Securities Administrator and the Trustee, without the consent of any of the Certificateholders or the Swap Provider, (i) to cure any ambiguity, (ii) to correct or supplement any provisions herein which may be defective or inconsistent with any other provisions herein or to correct any error, (iii) to amend this Agreement in any respect subject to the provisions in clauses (A) and (B) below, or (iv) if such amendment, as evidenced by an Opinion of Counsel (provided by the Person requesting such amendment) delivered to the Trustee, is reasonably necessary to comply with any requirements imposed by the Code or any successor or amendatory statute or any temporary or final regulation, revenue ruling, revenue procedure or other written official announcement or interpretation relating to federal income tax
laws or any proposed such action which, if made effective, would apply retroactively to the Trust Fund at least from the effective date of such amendment; provided that such action (except any amendment described in (iv) above) shall not adversely affect in any material respect the interests of any Certificateholder (other than Certificateholders who shall consent to such amendment), as evidenced by (A) an Opinion of Counsel (provided by the Person requesting such amendment) delivered to the Trustee, and (B) a letter from each Rating Agency, confirming that such amendment shall not cause it to lower its rating on any of the Certificates.

This Agreement may also be amended from time to time by the Company, the Master Servicer, the Securities Administrator and the Trustee with the consent of the Holders of Certificates entitled to at least 66-2/3% of the Voting Rights for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Holders of Certificates; provided, however, that no such amendment shall (i) reduce in any manner the amount of, or delay the timing of, payments received on Mortgage Loans which are required to be distributed on any Certificate without the consent of the Holder of such Certificate, (ii) adversely affect in any material respect the interests of the Holders of any Class of Certificates in a manner
other than as described in (i), without the consent of the Holders of Certificates of such Class evidencing at least 66-2/3% of the Voting Rights of such Class, or (iii) reduce the aforesaid percentage of Certificates the Holders of which are required to consent to any such amendment, without the consent of the Holders of all Certificates then outstanding.  Notwithstanding any other provision of this Agreement, for purposes of the giving or withholding of consents pursuant to this Section 11.01, Certificates registered in the name of the Seller, the Trustee, the Securities Administrator or the Master Servicer or any affiliate thereof shall be entitled to Voting Rights with respect to matters described in (i), (ii) and (iii) of this paragraph.

Notwithstanding any contrary provision of this Agreement, the Trustee shall not consent to any amendment to this Agreement unless it shall have first received an Opinion of Counsel (provided by the Person requesting such amendment) and addressed to the Trustee and the Securities Administrator to the effect that such amendment will not result in the imposition of 

 

any tax on any Trust REMIC pursuant to the REMIC Provisions or cause any Trust REMIC to fail to qualify as a REMIC at any time that any Certificates are outstanding.

Notwithstanding any of the other provisions of this Section 11.01, none of the Company, the Master Servicer, the Securities Administrator or the Trustee shall enter into any amendment to the second paragraph of Section 4.01(a), Section 4.01(c)(v) or Section 4.09 of this Agreement without the prior written consent of the Swap Provider.

Promptly after the execution of any such amendment the Trustee shall furnish a copy of such amendment or a written statement describing the amendment to each Certificateholder, with a copy to the Rating Agencies.

It shall not be necessary for the consent of Certificateholders under this Section 11.01 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent shall approve the substance thereof.  The manner of obtaining such consents and of evidencing the authorization of the execution thereof by Certificateholders shall be subject to such reasonable regulations as the Trustee may prescribe.

Prior to executing any amendment pursuant to this Section, the Trustee shall be entitled to receive an Opinion of Counsel (provided by the Person requesting such amendment) to the effect that such amendment is authorized or permitted by this Agreement.  The cost of any Opinion of Counsel delivered pursuant to this Section 11.01 shall be an expense of the party requesting such amendment, but in any case shall not be an expense of the Trustee.

Each of the Trustee and the Securities Administrator may, but shall not be obligated to, enter into any amendment pursuant to this Section that affects its rights, duties and immunities under this Agreement or otherwise.

	
            Section 11.02
 	
            Recordation of Agreement; Counterparts.
 

To the extent permitted by applicable law, this Agreement is subject to recordation in all appropriate public offices for real property records in all the counties or other comparable jurisdictions in which any or all of the properties subject to the Mortgages are situated, and in any other appropriate public recording office or elsewhere, such recordation to be effected by the Master Servicer at the expense of the Certificateholders, but only upon direction of the Company accompanied by an Opinion of Counsel to the effect that such recordation materially and beneficially affects the interests of the Certificateholders.

For the purpose of facilitating the recordation of this Agreement as herein provided and for other purposes, this Agreement may be executed simultaneously in any number of counterparts, each of which counterparts shall be deemed to be an original, and such counterparts shall constitute but one and the same instrument.

	
            Section 11.03
 	
            Limitation on Rights of Certificateholders.
 

The death or incapacity of any Certificateholder shall not operate to terminate this Agreement or the Trust Fund, nor entitle such Certificateholder’s legal representatives or heirs to claim an accounting or to take any action or proceeding in any court for a partition or winding up 

 

of the Trust Fund, nor otherwise affect the rights, obligations and liabilities of the parties hereto or any of them.

No Certificateholder shall have any right to vote (except as expressly provided for herein) or in any manner otherwise control the operation and management of the Trust Fund, or the obligations of the parties hereto, nor shall anything herein set forth, or contained in the terms of the Certificates, be construed so as to constitute the Certificateholders from time to time as partners or members of an association; nor shall any Certificateholder be under any liability to any third party by reason of any action taken by the parties to this Agreement pursuant to any provision hereof.

No Certificateholder shall have any right by virtue of any provision of this Agreement to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Agreement, unless such Holder previously shall have given to the Trustee a notice of an Event of Default, or of a default by the Seller or the Trustee in the performance of any obligation hereunder, and of the continuance thereof, as hereinbefore provided, and unless also the Holders of Certificates entitled to at least 51% of the Voting Rights shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder and shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee, for 60 days after its receipt of such notice, request
and offer of indemnity, shall have neglected or refused to institute any such action, suit or proceeding.  It is understood and intended, and expressly covenanted by each Certificateholder with every other Certificateholder and the Trustee, that no one or more Holders of Certificates shall have any right in any manner whatever by virtue of any provision of this Agreement to affect, disturb or prejudice the rights of the Holders of any other of such Certificates, or to obtain or seek to obtain priority over or preference to any other such Holder, or to enforce any right under this Agreement, except in the manner herein provided and for the equal, ratable and common benefit of all Certificateholders.  For the protection and enforcement of the provisions of this Section, each and every Certificateholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.

	
            Section 11.04
 	
            Governing Law.
 

This Agreement and the Certificates shall be construed in accordance with the laws of the State of New York and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.

	
            Section 11.05
 	
            Notices.
 

All demands, notices and direction hereunder shall be in writing and shall be deemed effective upon receipt when delivered to (a) in the case of the Company, Opteum Mortgage Acceptance Corporation, W. 115 Century Road, Paramus, New Jersey 07652, Attention:  General Counsel, or such other address as may hereafter be furnished to the other parties hereto in writing; (b) in the case of Master Servicer, Wells Fargo Bank, N.A., P.O. Box 98, Columbia Maryland 21046 (or, in the case of overnight deliveries, 9062 Old Annapolis Road, Columbia, Maryland 21045) (Attention:  Corporate Trust Services – Opteum 2005-3), facsimile no.:  (410) 715-2380, or such other address as may hereafter be furnished to the other parties hereto in 

 

writing; (c) in the case of the securities administrator, the Corporate Trust Office; (d) in the case of the Trustee, to its Corporate Trust Office, or such other address as may hereafter be furnished to the other parties hereto in writing; (e) in the case of the Rating Agencies, Standard & Poor’s, 55 Water Street, 41st Floor, New York, NY  10041, Attention:  Asset Backed Surveillance Department; and Moody’s, Moody’s Investors Service, Inc., Residential Mortgage Monitoring Department, 99 Church Street, New York, New York 10007; or (f) in the case of the Swap Provider, Bear Stearns Financial Products, Inc., 383 Madison Avenue, New York, New York 10179.  Any notice required or permitted to be mailed to a Certificateholder shall be given by first class mail, postage prepaid, at the address of such Holder as shown in the Certificate
Register.  Any notice so mailed within the time prescribed in this Agreement shall be conclusively presumed to have been duly given, whether or not the Certificateholder receives such notice.

	
            Section 11.06
 	
            Severability of Provisions.
 

If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement or of the Certificates or the rights of the Holders thereof.

	
            Section 11.07
 	
            Successors and Assigns.
 

The provisions of this Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of the parties hereto, and all such provisions shall inure to the benefit of the Trustee and the Certificateholders.

	
            Section 11.08
 	
            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 11.09
 	
            Notice to Rating Agencies.
 

The Trustee shall use its best efforts to promptly provide notice to each Rating Agency referred to below with respect to each of the following of which it has actual knowledge:

	
            1.
 	
            Any material change or amendment to this Agreement;
 
	
            2.
 	
            The occurrence of any Event of Default that has not been cured;
 
	
            3.
 	
            The resignation or termination of the Master Servicer, the Securities Administrator or the Trustee;
 
	
            4.
 	
            The repurchase or substitution of Mortgage Loans pursuant to Section 2.04;
 
	
            5.
 	
            The final payment to Certificateholders; and
 
	
            6.
 	
            Any change in the location of the Custodial Account or the Certificate Account.
 

 

 

 

In addition, the Trustee shall promptly furnish to the Rating Agency copies of each report to Certificateholders described in Section 4.02; and the Master Servicer shall promptly furnish to the Rating Agency copies of each annual independent public accountants’ servicing report received as described in Section 3.20.

Any such notice pursuant to this Section 11.09 shall be in writing and shall be deemed to have been duly given if personally delivered or mailed by first class mail, postage prepaid, or by express delivery service to (i) in the case of Standard & Poor’s, 55 Water Street, 41st Floor, New York, New York 10041, Attention:  Asset Backed Surveillance Department and (ii) in the case of Moody’s, Residential Mortgage Monitoring Department, 99 Church Street, New York, New York 10007, or, in each case, such other address as either such Rating Agency may designate in writing to the parties thereto.

	
            Section 11.10
 	
            Third Party Rights.
 

The Seller shall be deemed a third-party beneficiary of Section 3.25 this Agreement to the same extent as if it were a party hereto, and shall have the right to enforce the provisions of such Section.  The Servicer shall be deemed a third-party beneficiary of Section 3.25 of this Agreement to the same extent as if it were a party hereto, and shall have the right to enforce the provisions of such Section.

 

 

IN WITNESS WHEREOF, the Company, the Master Servicer and the Trustee have caused their names to be signed hereto by their respective officers thereunto duly authorized all as of the day and year first above written.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            OPTEUM MORTGAGE ACCEPTANCE CORPORATION,
 Company
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 /s/ Frank Plenskofski
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
      Frank Plenskofski 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
            Vice President/Treasurer 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            WELLS FARGO BANK, N.A.,
 Master Servicer
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
/s/ Stacey Taylor 

            
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
            Stacey Taylor 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
            Vice President 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            HSBC BANK USA, NATIONAL ASSOCIATION
 Trustee
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
/s/ Susie Moy 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
            Susie Moy 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
            Vice President 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            WELLS FARGO BANK, N.A.,
 Securities Administrator
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
/s/ Stacey Taylor 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
            Stacey Taylor 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
            Vice President 
 

 

 

 

 

	
            STATE OF NEW JERSEY
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF BERGEN
 	
            )
 	
             
 

 

On the _____ day of ________________, 2005, before me, a notary public in and for said State, personally appeared __________________, known to me to be the _____________ of Opteum Mortgage Acceptance Corporation, one of the corporations that executed the within instrument, and also known to me to be the person who executed it on behalf of said corporation, and acknowledged to me that such corporation executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

______________________________

Notary Public

[Notarial Seal]

 

 

 

	
            STATE OF MARYLAND
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF HOWARD
 	
            )
 	
             
 

 

On the _____ day of _____________, 2005, before me, a notary public in and for said State, personally appeared ________________, known to me to be a _____________ of Wells Fargo Bank, N.A., the entity that executed the within instrument, and also known to me to be the person who executed it on behalf of said entity, and acknowledged to me that such entity executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

______________________________

Notary Public

[Notarial Seal]

 

 

 

	
            STATE OF NEW YORK
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF NEW YORK
 	
            )
 	
             
 

 

On the  _____ day of ________________, 2005, before me, a notary public in and for said State, personally appeared _____________________, known to me to be a ________________ of HSBC Bank USA, National Association, the entity that executed the within instrument, and also known to me to be the person who executed it on behalf of said entity, and acknowledged to me that such entity executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

______________________________

Notary Public

[Notarial Seal]

	
            STATE OF MARYLAND
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF HOWARD
 	
            )
 	
             
 

 

On the  _______ day of _______________, 2005, before me, a notary public in and for said State, personally appeared ______________, known to me to be a _____________ of Wells Fargo Bank, N.A., the entity that executed the within instrument, and also known to me to be the person who executed it on behalf of said entity, and acknowledged to me that such entity executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

______________________________

Notary Public

[Notarial Seal]

 

 

 

 

 

EXHIBIT A

FORM OF CLASS A-[_] CERTIFICATE

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE “CODE”).

THIS CERTIFICATE SHALL INITIALLY BE ISSUED AS ONE OR MORE CERTIFICATES REGISTERED IN THE NAME OF THE DEPOSITORY OR ITS NOMINEE AND, EXCEPT AS PROVIDED BELOW, REGISTRATION OF SUCH CERTIFICATES MAY NOT BE TRANSFERRED BY THE TRUSTEE EXCEPT TO ANOTHER DEPOSITORY THAT AGREES TO HOLD SUCH CERTIFICATES FOR THE RESPECTIVE CERTIFICATE OWNERS WITH OWNERSHIP INTERESTS THEREIN. THE CERTIFICATE OWNERS SHALL HOLD THEIR RESPECTIVE OWNERSHIP INTERESTS IN AND TO EACH OF SUCH BOOK-ENTRY CERTIFICATES THROUGH THE BOOK-ENTRY FACILITIES OF THE DEPOSITORY AND, EXCEPT AS PROVIDED BELOW, SHALL NOT BE ENTITLED TO DEFINITIVE CERTIFICATES IN RESPECT OF SUCH OWNERSHIP INTERESTS. ALL TRANSFERS BY CERTIFICATE OWNERS OF THEIR RESPECTIVE OWNERSHIP IN THE BOOK-ENTRY CERTIFICATES SHALL BE MADE IN ACCORDANCE WITH THE PROCEDURES ESTABLISHED BY THE DEPOSITORY PARTICIPANT OR BROKERAGE FIRM REPRESENTING SUCH CERTIFICATE OWNER. EACH DEPOSITORY
PARTICIPANT SHALL TRANSFER THE OWNERSHIP INTERESTS ONLY IN THE BOOK-ENTRY CERTIFICATES OF CERTIFICATE OWNERS IT REPRESENTS OR OF BROKERAGE FIRMS FOR WHICH IT ACTS AS AGENT IN ACCORDANCE WITH THE DEPOSITORY’S NORMAL PROCEDURES. THE TRUSTEE SHALL NOT BE REQUIRED TO MONITOR, DETERMINE OR INQUIRE AS TO COMPLIANCE WITH THE TRANSFER RESTRICTIONS WITH RESPECT TO THE BOOK-ENTRY CERTIFICATES, AND THE TRUSTEE SHALL HAVE NO LIABILITY FOR TRANSFERS OF OWNERSHIP INTERESTS IN THE BOOK-ENTRY CERTIFICATES MADE THROUGH THE BOOK-ENTRY FACILITIES OF THE DEPOSITORY OR BETWEEN OR AMONG DEPOSITORY PARTICIPANTS OR CERTIFICATE OWNERS, MADE IN VIOLATION OF THE APPLICABLE RESTRICTIONS.

UNTIL TERMINATION OF THE SUPPLEMENTAL INTEREST TRUST, THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, ON BEHALF OF, OR WITH PLAN ASSETS OF AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT THAT IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED UNLESS AN OPINION OF COUNSEL IS PROVIDED.

 

 

 

	
            Certificate No. 1

Class A-[_][_]
 	
            Adjustable Pass-Through Rate
 
	
            Date of Pooling and Servicing

Agreement and Cut-off Date:

June 1, 2005
 	
            Percentage Interest: 100%
 
	
            First Distribution Date:

July 25, 2005
 	
            Aggregate Initial Certificate Principal Balance

of the Class A-[_][_] Certificates:$_____________
 
	
            Master Servicer:

Wells Fargo Bank, National Association
 	
            Initial Certificate Principal

Balance of this Certificate:

$______________
 
	
            Assumed Final

Distribution Date:

[____________, ____]
 	
            CUSIP:__________
 

 

ASSET-BACKED PASS-THROUGH CERTIFICATE

SERIES 2005-3

evidencing a percentage interest in the distributions allocable to the Class A-[_][_] Certificates with respect to a Trust Fund consisting primarily of a pool of one- to four-family adjustable and fixed-rate first lien and second lien mortgage loans formed and sold by OPTEUM MORTGAGE ACCEPTANCE CORPORATION

This Certificate is payable solely from the assets of the Trust Fund, and does not represent an obligation of or interest in Opteum Mortgage Acceptance Corporation, the Master Servicer, the Securities Administrator or the Trustee referred to below or any of their affiliates.  Neither this Certificate nor the underlying Mortgage Loans are guaranteed or insured by any governmental agency or instrumentality or by Opteum Mortgage Acceptance Corporation, the Master Servicer, the Securities Administrator, the Trustee or any of their affiliates.  None of the Company, the Master Servicer, the Securities Administrator or any of their affiliates will have any obligation with respect to any certificate or other obligation secured by or payable from payments on the Certificates.

This certifies that Cede & Co. is the registered owner of the Percentage Interest evidenced by this Certificate (obtained by dividing the Initial Certificate Principal Balance of this Certificate by the aggregate Initial Certificate Principal Balance of all Class A-[_][_] Certificates, both as specified above) in certain distributions with respect to the Trust Fund consisting primarily of an interest in a pool of one- to four-family fixed-rate and adjustable-rate first lien and second lien mortgage loans (the “Mortgage Loans”), sold by Opteum Mortgage Acceptance Corporation (hereinafter called the “Company,” which term includes any successor entity under the Agreement referred to 

 

below). The Trust Fund was created pursuant to a Pooling and Servicing Agreement dated as specified above (the “Agreement”) among the Company, the Master Servicer, the Securities Administrator and HSBC Bank USA, National Association, as trustee (the “Trustee”), a summary of certain of the pertinent provisions of which is set forth hereafter. To the extent not defined herein, the capitalized terms used herein have the meanings assigned in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of the acceptance hereof assents and by which such Holder is bound.

Pursuant to the terms of the Agreement, a distribution will be made on the 25th day of each month or, if such 25th day is not a Business Day, the Business Day immediately following (the Distribution Date”), commencing as described in the Agreement, to the Person in whose name this Certificate is registered at the close of business on the last Business Day of the month immediately preceding the month of such Distribution Date (the “Record Date”), from the Available Distribution Amount in an amount equal to the product of the Percentage Interest evidenced by this Certificate and the amount of interest and principal, if any, required to be distributed to Holders of Class A-[_][_] Certificates on such Distribution Date.

Distributions on this Certificate will be made by the Securities Administrator either in immediately available funds (by wire transfer or otherwise) for the account of the Person entitled thereto if such Person shall have so notified the Securities Administrator and the Trustee at least 5 Business Days prior to the related Record Date, or by check mailed to the address of the Person entitled thereto, as such name and address shall appear on the Certificate Register.

Any transferee shall be deemed to have made the representation set forth in Section 5.02(c) of the Agreement.

Notwithstanding the above, the final distribution on this Certificate will be made after due notice of the pendency of such distribution and only upon presentation and surrender of this Certificate at the office or agency appointed by the Securities Administrator for that purpose in the City of Minneapolis and State of Minnesota. The Initial Certificate Principal Balance of this Certificate is set forth above. The Certificate Principal Balance hereof will be reduced to the extent of distributions allocable to principal.

This Certificate is one of a duly authorized issue of Certificates issued in several Classes designated as Asset-Backed Pass-Through Certificates of the Series specified hereon (herein collectively called the “Certificates”).

The Certificates are limited in right of payment to certain collections and recoveries respecting the Mortgage Loans, all as more specifically set forth herein and in the Agreement. In the event Master Servicer funds are advanced with respect to any Mortgage Loan, such advance is reimbursable to the Master Servicer, to the extent provided in the Agreement, from related recoveries on such Mortgage Loan or from other cash that would have been distributable to Certificateholders.

 

 

As provided in the Agreement, withdrawals from the Custodial Account and/or the Certificate Account created for the benefit of Certificateholders may be made by the Master Servicer from time to time for purposes other than distributions to Certificateholders, such purposes including without limitation reimbursement to the Trustee, the Company and the Master Servicer of advances made, or certain expenses incurred, by either of them.

No transfer of this Certificate to a Plan subject to ERISA or Section 4975 of the Code, any Person acting, directly or indirectly, on behalf of any such Plan or any person using Plan Assets to acquire this Certificate shall be made until the termination of the Supplemental Interest Trust unless an opinion of counsel is provided.

The Agreement permits, with certain exceptions therein provided, the amendment of the Agreement and the modification of the rights and obligations of the Company, the Master Servicer, the Securities Administrator and the Trustee and the rights of the Certificateholders under the Agreement at any time by the Company, the Master Servicer, the Securities Administrator and the Trustee with the consent of the Holders of Certificates evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of each Class of Certificates affected thereby.  Any such consent by the Holder of this Certificate shall be conclusive and binding on such Holder and upon all future holders of this Certificate and of any Certificate issued upon the transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent is made upon the Certificate.  The Agreement also permits
the amendment thereof in certain circumstances without the consent of the Holders of any of the Certificates and, in certain additional circumstances, without the consent of the Holders of certain Classes of Certificates.

As provided in the Agreement and subject to certain limitations therein set forth, the transfer  of this Certificate is registrable with the Securities Administrator upon surrender of this Certificate for registration of transfer at the offices or agencies maintained by the Securities Administrator, duly endorsed by, or accompanied by an assignment in the form below or other written instrument of transfer in form satisfactory to the Trustee and the Securities Administrator duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Certificates of authorized denominations evidencing the same Class and aggregate Percentage Interest will be issued to the designated transferee or transferees.

The Certificates are issuable only as registered Certificates without coupons in Classes and in denominations specified in the Agreement.  As provided in the Agreement and subject to certain limitations therein set forth, Certificates are exchangeable for new Certificates of authorized denominations evidencing the same Class and aggregate Percentage Interest, as requested by the Holder surrendering the same.

No service charge will be made for any such registration of transfer or exchange, but the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

The Company, the Master Servicer, the Securities Administrator, the Servicer and the Trustee and any agent of the Company, the Master Servicer, the Securities Administrator, the 

 

Servicer or the Trustee may treat the Person in whose name this Certificate is registered as the owner hereof for all purposes, and neither the Company, the Master Servicer, the Securities Administrator, the Servicer, the Trustee nor any such agent shall be affected by notice to the contrary.

This Certificate shall be governed by and construed in accordance with the laws of the State of New York.

The obligations created by the Agreement in respect of the Certificates and the Trust Fund created thereby shall terminate upon the payment to Certificateholders of all amounts held by or on behalf of the Trustee and required to be paid to them pursuant to the Agreement following the earlier of (i) the purchase by the Servicer or its designee or the Master Servicer from the Trust Fund of all remaining Mortgage Loans and each REO Property in respect thereof remaining in the Trust Fund, thereby effecting early retirement of the Certificates and (ii) the final payment or other liquidation (or any Advance with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or the disposition of all REO Property in respect thereof).  The Agreement permits, but does not require, the Servicer, or, if the Servicer does not exercise this right the Master Servicer to purchase at a price
determined as provided in the Agreement all remaining Mortgage Loans and all REO Property; provided, that any such option may only be exercised on or after the first Distribution Date on which the aggregate unpaid balance of the Mortgage Loans is less than or equal to ten percent of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date with respect to a purchase by the Servicer, or on or after the first Distribution Date on which the aggregate unpaid principal balance of the Mortgage Loans is less than or equal to five percent of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date with respect to a purchase by the Master Servicer.

Unless the certificate of authentication hereon has been executed by the Securities Administrator, by manual signature, this Certificate shall not be entitled to any benefit under the Agreement or be valid for any purpose.

 

 

IN WITNESS WHEREOF, the Securities Administrator has caused this Certificate to be duly executed.

 

	
            Dated: June 17, 2005
 	
            WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Securities Administrator
 
	
             
 	
            By:
 	
            ______________________________
 
	
             
 	
            Authorized Signatory
 

 

CERTIFICATE OF AUTHENTICATION

This is one of the Certificates referred to in the within-mentioned Agreement.

 

	
             
 	
            WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Securities Administrator
 
	
             
 	
            By:
 	
            ______________________________
 
	
             
 	
            Authorized Signatory
 

 

 

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto _____________________________________ (Please print or typewrite name and address including postal zip code of assignee) a Percentage Interest evidenced by the within Asset-Backed Pass-Through Certificate and hereby authorizes the transfer of registration of such interest to assignee on the Certificate Register of the Trust Fund.

I (We) further direct the Certificate Registrar to issue a new Certificate of a like denomination and Class, to the above named assignee and deliver such Certificate to the following address

	
             
 	
             
 	
             
 

 

	
            Dated:
 	
            
 
 
 
	
             
 	
            Signature by or on behalf of assignor
 
	
             
 	
             
 
	
             
 	
            
 
 
 
	
             
 	
            Signature Guaranteed
 

 

 

 

DISTRIBUTION INSTRUCTIONS

The assignee should include the following for purposes of distribution:

	
            Distributions shall be made, by wire transfer or otherwise, in immediately available 
 
	
            funds to
 	
             
 
	
             
 
	
            for the account of
 	
             
 
	
            Account number
 	
             
 	
            or, if mailed by check, to
 
	
             
 
	
            Applicable statements should be mailed to
 	
             
 
	
             
 
	
             
 
	
            This information is provided by
 	
             
 
	
            assignee named above, or
 	
             
 
	
            its agent.
 	
             
 
								

 

 

 

 

EXHIBIT B-1

FORM OF CLASS M CERTIFICATE

THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR CERTIFICATES, [THE CLASS M-1 CERTIFICATES] [AND THE CLASS M-2 CERTIFICATES] [AND THE CLASS M-3 CERTIFICATES] [AND THE CLASS M-4 CERTIFICATES] [AND THE CLASS M-5 CERTIFICATES] [AND THE CLASS M-6 CERTIFICATES] [AND THE CLASS M-7 CERTIFICATES] [AND THE CLASS M-8 CERTIFICATES] [AND THE CLASS M-9 CERTIFICATES] AS DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).

THIS CERTIFICATE SHALL INITIALLY BE ISSUED AS ONE OR MORE CERTIFICATES REGISTERED IN THE NAME OF THE DEPOSITORY OR ITS NOMINEE AND, EXCEPT AS PROVIDED BELOW, REGISTRATION OF SUCH CERTIFICATES MAY NOT BE TRANSFERRED BY THE TRUSTEE EXCEPT TO ANOTHER DEPOSITORY THAT AGREES TO HOLD SUCH CERTIFICATES FOR THE RESPECTIVE CERTIFICATE OWNERS WITH OWNERSHIP INTERESTS THEREIN. THE CERTIFICATE OWNERS SHALL HOLD THEIR RESPECTIVE OWNERSHIP INTERESTS IN AND TO EACH OF SUCH BOOK-ENTRY CERTIFICATES THROUGH THE BOOK-ENTRY FACILITIES OF THE DEPOSITORY AND, EXCEPT AS PROVIDED BELOW, SHALL NOT BE ENTITLED TO DEFINITIVE CERTIFICATES IN RESPECT OF SUCH OWNERSHIP INTERESTS.  ALL TRANSFERS BY CERTIFICATE OWNERS OF THEIR RESPECTIVE OWNERSHIP IN THE BOOK-ENTRY CERTIFICATES SHALL BE MADE IN ACCORDANCE WITH THE PROCEDURES ESTABLISHED BY THE DEPOSITORY PARTICIPANT OR BROKERAGE FIRM REPRESENTING SUCH CERTIFICATE OWNER.  EACH
DEPOSITORY PARTICIPANT SHALL TRANSFER THE OWNERSHIP INTERESTS ONLY IN THE BOOK-ENTRY CERTIFICATES OF CERTIFICATE OWNERS IT REPRESENTS OR OF BROKERAGE FIRMS FOR WHICH IT ACTS AS AGENT IN ACCORDANCE WITH THE DEPOSITORY’S NORMAL PROCEDURES.  THE TRUSTEE SHALL NOT BE REQUIRED TO MONITOR, DETERMINE OR INQUIRE AS TO COMPLIANCE WITH THE TRANSFER RESTRICTIONS WITH RESPECT TO THE BOOK-ENTRY CERTIFICATES, AND THE TRUSTEE SHALL HAVE NO LIABILITY FOR TRANSFERS OF OWNERSHIP INTERESTS IN THE BOOK-ENTRY CERTIFICATES MADE THROUGH THE BOOK-ENTRY FACILITIES OF THE DEPOSITORY OR BETWEEN OR AMONG DEPOSITORY PARTICIPANTS OR CERTIFICATE OWNERS, MADE IN VIOLATION OF THE APPLICABLE RESTRICTIONS.

UNTIL TERMINATION OF THE SUPPLEMENTAL INTEREST TRUST, THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, ON BEHALF OF, OR WITH PLAN ASSETS OF AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT THAT IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR 

 

SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED UNLESS AN OPINION OF COUNSEL IS PROVIDED.

SUBSEQUENT TO THE TERMINATION OF THE SUPPLEMENTAL INTEREST TRUST, THE TRANSFEREE SHALL BE DEEMED TO HAVE MADE THE REPRESENTATION SET FORTH IN SECTION 5.02(C) OF THE POOLING AND SERVICING AGREEMENT.

 

 

 

	
            Certificate No.______
 	
            Adjustable Pass-Through Rate
 
	
            Class [M-__][Mezzanine]
 	
            Aggregate Initial Certificate Principal

Balance of the Class [M-__]

Certificates: $____________
 
	
            Date of Pooling and Servicing

Agreement and Cut-off Date:

June 1, 2005
 	
            Initial Certificate Principal Balance of this Certificate:

$__________________
 
	
            First Distribution Date:

July 25, 2005
 	
            CUSIP:______________
 
	
            Master Servicer:

Wells Fargo Bank, National Association
 	
             
 
	
            Assumed Final Distribution Date:

[__________] 2035
 	
             
 

 

ASSET-BACKED PASS-THROUGH CERTIFICATE

SERIES 2005-3

evidencing a percentage interest in any distributions allocable to the Class M-__  Certificates with respect to the Trust Fund consisting primarily of a pool of one- to four-family fixed-rate and adjustable-rate first lien and second lien mortgage loans formed and sold by OPTEUM MORTGAGE ACCEPTANCE CORPORATION

This Certificate is payable solely from the assets of the Trust Fund, and does not represent an obligation of or interest in Opteum Mortgage Acceptance Corporation, the Master Servicer, the Servicer, the Seller, the Securities Administrator or the Trustee referred to below or any of their affiliates. Neither this Certificate nor the underlying Mortgage Loans are guaranteed or insured by any governmental agency or instrumentality or by Opteum Mortgage Acceptance Corporation, the Master Servicer, the Servicer, the Seller, the Securities Administrator, the Trustee or any of their affiliates. None of Opteum Mortgage Acceptance Corporation, the Master Servicer, the Servicer, the Seller, the Securities Administrator or any of their affiliates will have any obligation with respect to any certificate or other obligation secured by or payable from payments on the Certificates.

This certifies that Cede & Co. is the registered owner of the Percentage Interest evidenced by this Certificate (obtained by dividing the Initial Certificate Principal Balance of this Certificate by the aggregate Initial Certificate Principal Balance of all Class M-__ Certificates, both as specified above) in certain distributions with respect to the Trust Fund consisting primarily of an interest in a pool of one- to four-family fixed-rate and adjustable-rate first lien and second lien mortgage loans (the “Mortgage Loans”), sold by Opteum Mortgage Acceptance Corporation (hereinafter called the “Company,” which term includes any successor entity under the Agreement referred to below). The Trust Fund was created pursuant to a Pooling and Servicing 

 

Agreement dated as specified above (the “Agreement”) among the Company, the Master Servicer, the Securities Administrator and HSBC Bank USA, National Association, as trustee (the “Trustee”), a summary of certain of the pertinent provisions of which is set forth hereafter. To the extent not defined herein, the capitalized terms used herein have the meanings assigned in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of the acceptance hereof assents and by which such Holder is bound.

Pursuant to the terms of the Agreement, a distribution will be made on the 25th day of each month or, if such 25th day is not a Business Day, the Business Day immediately following (the Distribution Date”), commencing as described in the Agreement, to the Person in whose name this Certificate is registered at the close of business on the last Business Day of the month immediately preceding the month of such Distribution Date (the “Record Date”), from the Available Distribution Amount in an amount equal to the product of the Percentage Interest evidenced by this Certificate and the amount of interest and principal, if any , required to be distributed to Holders of Class M-__ Certificates on such Distribution Date.

Distributions on this Certificate will be made by the Securities Administrator either in immediately available funds (by wire transfer or otherwise) for the account of the Person entitled thereto if such Person shall have so notified the Securities Administrator and the Trustee at least 5 Business Days prior to the related Record Date, or by check mailed to the address of the Person entitled thereto, as such name and address shall appear on the Certificate Register.

Any transferee shall be deemed to have made the representation set forth in Section 5.02(c) of the Agreement.

Notwithstanding the above, the final distribution on this Certificate will be made after due notice of the pendency of such distribution and only upon presentation and surrender of this Certificate at the office or agency appointed by the Securities Administrator for that purpose in the City of Minneapolis and State of Minnesota. The Initial Certificate Principal Balance of this Certificate is set forth above. The Certificate Principal Balance hereof will be reduced to the extent of distributions allocable to principal.

This Certificate is one of a duly authorized issue of Certificates issued in several Classes designated as Asset-Backed Pass-Through Certificates of the Series specified hereon (herein collectively called the “Certificates”).

The Certificates are limited in right of payment to certain collections and recoveries respecting the Mortgage Loans, all as more specifically set forth herein and in the Agreement. In the event Master Servicer funds are advanced with respect to any Mortgage Loan, such advance is reimbursable to the Master Servicer, to the extent provided in the Agreement, from related recoveries on such Mortgage Loan or from other cash that would have been distributable to Certificateholders.

 

 

As provided in the Agreement, withdrawals from the Custodial Account and/or the Certificate Account created for the benefit of Certificateholders may be made by the Master Servicer from time to time for purposes other than distributions to Certificateholders, such purposes including without limitation reimbursement to the Trustee, the Company and the Master Servicer of advances made, or certain expenses incurred, by either of them.

The Agreement permits, with certain exceptions therein provided, the amendment of the Agreement and the modification of the rights and obligations of the Company, the Master Servicer, the Securities Administrator, the Trustee and the rights of the Certificateholders under the Agreement at any time by the Company, the Master Servicer, the Securities Administrator and the Trustee with the consent of the Holders of Certificates evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of each Class of Certificates affected thereby.  Any such consent by the Holder of this Certificate shall be conclusive and binding on such Holder and upon all future holders of this Certificate and of any Certificate issued upon the transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent is made upon the Certificate.  The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of any of the Certificates and, in certain additional circumstances, without the consent of the Holders of certain Classes of Certificates.

No transfer of this Certificate to a Plan subject to ERISA or Section 4975 of the Code, any Person acting, directly or indirectly, on behalf of any such Plan or any person using Plan Assets to acquire this Certificate shall be made until the termination of the Supplemental Interest Trust and except in accordance with Section 5.02(c) of the Agreement unless an opinion of counsel is provided.  Subsequent to the termination of the Subsequent Interest Trust, the transferee shall be deemed to have made the representation set forth in section 5.02(c) of the Agreement.

As provided in the Agreement and subject to certain limitations therein set forth, the transfer of this Certificate is registrable with the Securities Administrator upon surrender of this Certificate for registration of transfer at the offices or agencies maintained by the Securities Administrator, duly endorsed by, or accompanied by an assignment in the form below or other written instrument of transfer in form satisfactory to the Trustee and the Securities Administrator duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Certificates of authorized denominations evidencing the same Class and aggregate Percentage Interest will be issued to the designated transferee or transferees.

The Certificates are issuable only as registered Certificates without coupons in Classes and in denominations specified in the Agreement.  As provided in the Agreement and subject to certain limitations therein set forth, Certificates are exchangeable for new Certificates of authorized denominations evidencing the same Class and aggregate Percentage Interest, as requested by the Holder surrendering the same.

No service charge will be made for any such registration of transfer or exchange, but the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

 

The Company, the Master Servicer, the Securities Administrator, the Servicer and the Trustee and any agent of the Company, the Master Servicer, the Securities Administrator, the Servicer or the Trustee may treat the Person in whose name this Certificate is registered as the owner hereof for all purposes, and neither the Company, the Master Servicer, the Securities Administrator, the Servicer, the Trustee nor any such agent shall be affected by notice to the contrary.

This Certificate shall be governed by and construed in accordance with the laws of the State of New York.

The obligations created by the Agreement in respect of the Certificates and the Trust Fund created thereby shall terminate upon the payment to Certificateholders of all amounts held by or on behalf of the Trustee and required to be paid to them pursuant to the Agreement following the earlier of (i) the purchase by the Servicer or its designee or the Master Servicer from the Trust Fund of all remaining Mortgage Loans and each REO Property in respect thereof remaining in the Trust Fund, thereby effecting early retirement of the Certificates and (ii) the final payment or other liquidation (or any Advance with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or the disposition of all REO Property in respect thereof).  The Agreement permits, but does not require, the Servicer, or, if the Servicer does not exercise this right the Master Servicer to purchase at a price
determined as provided in the Agreement all remaining Mortgage Loans and all REO Property; provided, that any such option may only be exercised on or after the first Distribution Date on which the aggregate unpaid balance of the Mortgage Loans is less than or equal to ten percent of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date with respect to a purchase by the Servicer, or on or after the first Distribution Date on which the aggregate unpaid principal balance of the Mortgage Loans is less than or equal to five percent of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date with respect to a purchase by the Master Servicer.

Unless the certificate of authentication hereon has been executed by the Securities Administrator, by manual  signature, this Certificate shall not be entitled to any benefit under the Agreement or be valid for any purpose.

 

 

IN WITNESS WHEREOF, the Securities Administrator has caused this Certificate to be duly executed.

	
            Dated:  June 17, 2005
 	
             
 	
             
 	
            WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Securities Administrator
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

CERTIFICATE OF AUTHENTICATION

This is one of the Certificates referred to in the within-mentioned Agreement.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Securities Administrator
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

 

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto _____________________________________  (Please print or typewrite name and address including postal zip code of assignee) a Percentage  Interest evidenced by the within Asset-Backed Pass-Through Certificate and hereby authorizes the  transfer of registration of such interest to assignee on the Certificate Register of the Trust Fund.

I (We) further direct the Certificate Registrar to issue a new Certificate of a like denomination and Class, to the above named assignee and deliver such Certificate to the following address:  

	
             
 	
             
 	
            .
 
	
             
 	
             
 	
             
 

 

	
            Dated:
 	
            
 
 
 
	
             
 	
            Signature by or on behalf of assignor
 
	
             
 	
             
 
	
             
 	
            
 
 
 
	
             
 	
            Signature Guaranteed
 

 

 

 

DISTRIBUTION INSTRUCTIONS

The assignee should include the following for purposes of distribution:

	
            Distributions shall be made, by wire transfer or otherwise, in immediately available 
 
	
            funds to
 	
             
 
	
             
 
	
            for the account of
 	
             
 
	
            account number
 	
             
 	
            or, if mailed by check, to
 
	
             
 
	
            Applicable statements should be mailed to
 	
             
 
	
             
 
	
             
 
	
            This information is provided by
 	
             
 
	
            assignee named above, or
 	
             
 
	
            its agent.
 	
             
 
								

 

 

 

 

EXHIBIT B-2

FORM OF CLASS C CERTIFICATES

THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A-[_], AND CLASS M CERTIFICATES AS DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE  INTERNAL REVENUE CODE OF 1986 (THE “CODE”).

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).  ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT (EACH A “PLAN”) SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

 

 

 

	
            Certificate No. 1
 	
             
 
	
            Class C
 	
            Aggregate Initial Notional Amount of the

Class C Certificates:

$_________________
 
	
            Date of Pooling and Servicing

Agreement and Cut-off Date:

June 1, 2005
 	
            Initial Notional Amount

of this Certificate (“Denomination”):

$______________
 
	
            First Distribution Date:

July 25, 2005
 	
            Initial Certificate Principal Balance of

this Certificate (“Denomination”):

$______________
 
	
            Master Servicer:

Wells Fargo Bank, National Association
 	
             
 
	
            Assumed Final Distribution Date:

[______________]
 	
             
 

 

ASSET-BACKED PASS-THROUGH CERTIFICATE

SERIES 2005-3

evidencing percentage interest in the distributions allocable to the Class C  Certificates with respect to a Trust Fund consisting primarily of a pool of one- to four- family fixed-rate and adjustable-rate first lien and seond lien mortgage loans formed and sold by OPTEUM MORTGAGE ACCEPTANCE CORPORATION

This Certificate is payable solely from the assets of the Trust Fund, and does not represent an obligation of or interest in Opteum Mortgage Acceptance Corporation, the Master Servicer, the Servicer, the Seller, the Securities Administrator or the Trustee referred to below or any of their affiliates. Neither this Certificate nor the underlying Mortgage Loans are guaranteed or insured by any governmental agency or instrumentality or by Opteum Mortgage Acceptance Corporation, the Master Servicer, the Servicer, the Seller, the Securities Administrator, the Trustee or any of their affiliates. None of Opteum Mortgage Acceptance Corporation, the Master Servicer, the Servicer, the Seller, the Securities Administrator or any of their affiliates will have any obligation with respect to any certificate or other obligation secured by or payable from payments on the Certificates.

This certifies that ___________________ is the registered owner of the Percentage Interest evidenced by this Certificate (obtained by dividing the Original Class C Certificate by the Original Class Certificate Principal Balance) in certain distributions with respect to the Trust Fund consisting primarily of an interest in a pool of one- to four-family fixed-rate and adjustable-rate first lien and second lien mortgage loans (the “Mortgage Loans”), sold by Opteum Mortgage Acceptance Corporation (hereinafter called the “Company,” which term includes any successor entity under the Agreement referred to below). The Trust Fund was created pursuant to a Pooling and Servicing Agreement dated as specified above (the “Agreement”) among the Company, the 

 

Master Servicer, the Securities Administrator and HSBC Bank USA, National Association, as trustee (the “Trustee”), a summary of certain of the pertinent provisions of which is set forth hereafter. To the extent not defined herein, the capitalized terms used herein have the meanings assigned in the Agreement. This Class C Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of the acceptance hereof assents and by which such Holder is bound.

Pursuant to the terms of the Agreement, a distribution will be made on the 25th day of each month or, if such 25th day is not a Business Day, the Business Day immediately following (the Distribution Date”), commencing as described in the Agreement, to the Person in whose name this Certificate is registered at the close of business on the last Business Day of the month immediately preceding the month of such Distribution Date (the “Record Date”), from the Available Distribution Amount in an amount equal to the product of the Percentage Interest evidenced by this Certificate and the amount of interest and principal, if any , required to be distributed to Holders of Class C Certificates on such Distribution Date.

Distributions on this Certificate will be made by the Securities Administrator either in immediately available funds (by wire transfer or otherwise) for the account of the Person entitled thereto if such Person shall have so notified the Securities Administrator and the Trustee at least 5 Business Days prior to the related Record Date, or by check mailed to the address of the Person entitled thereto, as such name and address shall appear on the Certificate Register.

Notwithstanding the above, the final distribution on this Certificate will be made after due notice of the pendency of such distribution and only upon presentation and surrender of this Certificate at the office or agency appointed by the Securities Administrator for that purpose in the City of Minneapolis and State of Minnesota.

This Certificate is one of a duly authorized issue of Certificates issued in several Classes designated as Asset-Backed Pass-Through Certificates of the Series specified hereon (herein collectively called the “Certificates”).

The Certificates are limited in right of payment to certain collections and recoveries respecting the Mortgage Loans, all as more specifically set forth herein and in the Agreement. In the event Master Servicer funds are advanced with respect to any Mortgage Loan, such advance is reimbursable to the Master Servicer, to the extent provided in the Agreement, from related recoveries on such Mortgage Loan or from other cash that would have been distributable to Certificateholders.

As provided in the Agreement, withdrawals from the Custodial Account and/or the Certificate Account created for the benefit of Certificateholders may be made by the Master Servicer from time to time for purposes other than distributions to Certificateholders, such purposes including without limitation reimbursement to the Trustee, the Company and the Master Servicer of advances made, or certain expenses incurred, by either of them.

No transfer of a Certificate of this Class shall be made unless such transfer is made pursuant to an effective registration statement under the Act and any applicable state securities 

 

laws or is exempt from the registration requirements under said Act and such laws.  In the event that a transfer is to be made in reliance upon an exemption from the Act and such laws, in order to assure compliance with the act and such laws, the Certificateholder desiring to effect such transfer and such Certificateholder’s prospective transferee shall each certify to the Trustee and the Company in writing the facts surrounding the transfer.  In the event that such a transfer is not to be made pursuant to Rule 144A of the act, there shall be delivered to the Trustee and the Company of an Opinion of Counsel that such transfer may be made pursuant to an exemption from the Act, which Opinion of Counsel shall not be obtained at the expense of the Trustee, the Master Servicer or the Company; or there shall be delivered to the Trustee and the Company a transferor certificate by the transferor and an
investment letter shall be executed by the transferee.  The Holder hereof desiring to effect such transfer shall, and does hereby agree to, indemnify the Trustee and the Company against any liability that may result if the transfer is not so exempt or is not made in accordance with such federal and state laws.

No transfer of this Certificate to a Plan subject to ERISA or Section 4975 of the Code, any Person acting, directly or indirectly, on behalf of any such Plan or any person using Plan Assets to acquire this Certificate shall be made except in accordance with Section 5.02(c) of the Agreement.

The Agreement permits, with certain exceptions therein provided, the amendment of the Agreement and the modification of the rights and obligations of the Company, the Master Servicer, the Securities Administrator, the Trustee and the rights of the Certificateholders under the Agreement at any time by the Company, the Master Servicer, the Securities Administrator and the Trustee with the consent of the Holders of Certificates evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of each Class of Certificates affected thereby.  Any such consent by the Holder of this Certificate shall be conclusive and binding on such Holder and upon all future holders of this Certificate and of any Certificate issued upon the transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent is made upon the Certificate.  The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of any of the Certificates and, in certain additional circumstances, without the consent of the Holders of certain Classes of Certificates.

As provided in the Agreement and subject to certain limitations therein set forth, the transfer  of this Certificate is registrable with the Securities Administrator upon surrender of this Certificate for registration of transfer at the offices or agencies maintained by the Securities Administrator, duly endorsed by, or accompanied by an assignment in the form below or other written instrument of transfer in form satisfactory to the Trustee and the Securities Administrator duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Certificates of authorized denominations evidencing the same Class and aggregate Percentage Interest will be issued to the designated transferee or transferees.

The Certificates are issuable only as registered Certificates without coupons in Classes and in denominations specified in the Agreement.  As provided in the Agreement and subject to certain limitations therein set forth, Certificates are exchangeable for new Certificates of authorized denominations evidencing the same Class and aggregate Percentage Interest, as requested by the Holder surrendering the same.

 

 

No service charge will be made for any such registration of transfer or exchange, but the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

The Company, the Master Servicer, the Securities Administrator, the Servicer and the Trustee and any agent of the Company, the Master Servicer, the Securities Administrator, the Servicer or the Trustee may treat the Person in whose name this Certificate is registered as the owner hereof for all purposes, and neither the Company, the Master Servicer, the Securities Administrator, the Servicer, the Trustee nor any such agent shall be affected by notice to the contrary.

This Certificate shall be governed by and construed in accordance with the laws of the State of New York.

The obligations created by the Agreement in respect of the Certificates and the Trust Fund created thereby shall terminate upon the payment to Certificateholders of all amounts held by or on behalf of the Trustee and required to be paid to them pursuant to the Agreement following the earlier of (i) the purchase by the Servicer or its designee or the Master Servicer from the Trust Fund of all remaining Mortgage Loans and each REO Property in respect thereof remaining in the Trust Fund, thereby effecting early retirement of the Certificates and (ii) the final payment or other liquidation (or any Advance with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or the disposition of all REO Property in respect thereof).  The Agreement permits, but does not require, the Servicer, or, of the Servicer does not exercise this right, the Master Servicer to purchase at a price
determined as provided in the Agreement all remaining Mortgage Loans and all REO Property; provided, that any such option may only be exercised on or after the first Distribution Date on which the aggregate unpaid balance of the Mortgage Loans is less than or equal to ten percent of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date with respect to a purchase by the Servicer, or on or after the first Distribution Date on which the aggregate unpaid principal balance of the Mortgage Loans is less than or equal to five percent of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date with respect to a purchase by the Master Servicer.

Unless the certificate of authentication hereon has been executed by the Securities Administrator, by manual  signature, this Certificate shall not be entitled to any benefit under the Agreement or be valid for any purpose.

 

 

IN WITNESS WHEREOF, the Securities Administrator has caused this Certificate to be duly executed.

	
            Dated:  June 17, 2005
 	
             
 	
             
 	
            WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Securities Administrator
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

CERTIFICATE OF AUTHENTICATION

This is one of the Certificates referred to in the within-mentioned Agreement.

	
             
 	
             
 	
             
 	
            WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Securities Administrator
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

 

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto _____________________________________  (Please print or typewrite name and address including postal zip code of assignee) a Percentage  Interest evidenced by the within Asset-Backed Pass-Through Certificate and hereby authorizes the  transfer of registration of such interest to assignee on the Certificate Register of the Trust Fund.

I (We) further direct the Certificate Registrar to issue a new Certificate of a like denomination and Class, to the above named assignee and deliver such Certificate to the following address:  

	
             
 	
             
 	
            .
 

 

 

	
            Dated:
 	
            
 
 
 
	
             
 	
            Signature by or on behalf of assignor
 
	
             
 	
             
 
	
             
 	
            
 
 
 
	
             
 	
            Signature Guaranteed
 

 

 

 

DISTRIBUTION INSTRUCTIONS

The assignee should include the following for purposes of distribution:

	
            Distributions shall be made, by wire transfer or otherwise, in immediately available 
 
	
            funds to
 	
             
 
	
             
 
	
            for the account of
 	
             
 
	
            account number
 	
             
 	
            or, if mailed by check, to
 
	
             
 
	
            Applicable statements should be mailed to
 	
             
 
	
             
 
	
             
 
	
            This information is provided by
 	
             
 
	
            assignee named above, or
 	
             
 
	
            its agent.
 	
             
 
								

 

 

 

 

EXHIBIT B-3

FORM OF CLASS P CERTIFICATE

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”).

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).  ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT (EACH A “PLAN”) SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

 

 

 

	
            Certificate No. 1
 	
             
 
	
            Class P
 	
            Aggregate Initial Certificate Principal

Balance of the Class P Certificates:

$100.00
 
	
            Date of Pooling and Servicing

Agreement and Cut-off Date:

June 1, 2005
 	
            Initial Certificate Principal Balance

of this Certificate (“Denomination”):

$100.00
 
	
            First Distribution Date:

July 25, 2005
 	
            Percentage Interest of this Certificate:

100.00%
 
	
            Master Servicer:

Wells Fargo Bank, National Association
 	
             
 
	
            Assumed Final Distribution Date:

[_______________]
 	
             
 

 

ASSET-BACKED PASS-THROUGH CERTIFICATE

SERIES 2005-3

evidencing a percentage interest in any distributions allocable to the Class P Certificates with respect to the Trust Fund consisting primarily of a pool of one- to four-family fixed-rate and adjustable-rate first lien and second lien mortgage loans sold by OPTEUM MORTGAGE ACCEPTANCE CORPORATION

This Certificate is payable solely from the assets of the Trust Fund, and does not represent an obligation of or interest in Opteum Mortgage Acceptance Corporation, the Master Servicer, the Servicer, the Seller, the Securities Administrator or the Trustee referred to below or any of their affiliates. Neither this Certificate nor the underlying Mortgage Loans are guaranteed or insured by any governmental agency or instrumentality or by Opteum Mortgage Acceptance Corporation, the Master Servicer, the Servicer, the Seller, the Securities Administrator, the Trustee or any of their affiliates. None of Opteum Mortgage Acceptance Corporation, the Master Servicer, the Servicer, the Seller, the Securities Administrator or any of their affiliates will have any obligation with respect to any certificate or other obligation secured by or payable from payments on the Certificates.

This certifies that ___________________ is the registered owner of the Percentage Interest evidenced by this Class P Certificate (obtained by dividing the Denomination of this Class P Certificate by the Original Class Certificate Principal Balance) in certain distributions with respect to the Trust Fund consisting primarily of an interest in a pool of one- to four-family fixed-rate and adjustable-rate first lien and second lien mortgage loans (the “Mortgage Loans”), sold by Opteum Mortgage Acceptance Corporation (hereinafter called the “Company,” which term includes any successor entity under the Agreement referred to below). The Trust Fund was created pursuant to a Pooling and Servicing Agreement dated as specified above (the 

 

“Agreement”) among the Company, the Master Servicer, the Securities Administrator and HSBC Bank USA, National Association, as trustee (the “Trustee”), a summary of certain of the pertinent provisions of which is set forth hereafter. To the extent not defined herein, the capitalized terms used herein have the meanings assigned in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of the acceptance hereof assents and by which such Holder is bound.

Pursuant to the terms of the Agreement, a distribution will be made on the 25th day of each month or, if such 25th day is not a Business Day, the Business Day immediately following (the Distribution Date”), commencing as described in the Agreement, to the Person in whose name this Certificate is registered at the close of business on the last Business Day of the month immediately preceding the month of such Distribution Date (the “Record Date”), from the Available Distribution Amount in an amount equal to the product of the Percentage Interest evidenced by this Certificate and the amount of interest and principal, if any , required to be distributed to Holders of Class P Certificates on such Distribution Date.

Distributions on this Certificate will be made by the Securities Administrator either in immediately available funds (by wire transfer or otherwise) for the account of the Person entitled thereto if such Person shall have so notified the Securities Administrator and the Trustee at least 5 Business Days prior to the related Record Date, or by check mailed to the address of the Person entitled thereto, as such name and address shall appear on the Certificate Register.

Notwithstanding the above, the final distribution on this Certificate will be made after due notice of the pendency of such distribution and only upon presentation and surrender of this Certificate at the office or agency appointed by the Securities Administrator for that purpose in the City of Minneapolis and State of Minnesota. The Initial Certificate Principal Balance of this Certificate is set forth above. The Certificate Principal Balance hereof will be reduced to the extent of distributions allocable to principal.  This Certificate is one of a duly authorized issue of Certificates issued in several Classes designated as Asset-Backed Pass-Through Certificates of the Series specified hereon (herein collectively called the “Certificates”).

The Certificates are limited in right of payment to certain collections and recoveries respecting the Mortgage Loans, all as more specifically set forth herein and in the Agreement. In the event Master Servicer funds are advanced with respect to any Mortgage Loan, such advance is reimbursable to the Master Servicer, to the extent provided in the Agreement, from related recoveries on such Mortgage Loan or from other cash that would have been distributable to Certificateholders.

As provided in the Agreement, withdrawals from the Custodial Account and/or the Certificate Account created for the benefit of Certificateholders may be made by the Master Servicer from time to time for purposes other than distributions to Certificateholders, such purposes including without limitation reimbursement to the Trustee, the Company and the Master Servicer of advances made, or certain expenses incurred, by either of them.

 

 

No transfer of a Certificate of this Class shall be made unless such transfer is made pursuant to an effective registration statement under the Act and any applicable state securities laws or is exempt from the registration requirements under said Act and such laws.  In the event that a transfer is to be made in reliance upon an exemption from the Act and such laws, in order to assure compliance with the Act and such laws, the Certificateholder desiring to effect such transfer and such Certificateholder’s prospective transferee shall each certify to the Trustee and the Company in writing the facts surrounding the transfer.  In the event that such a transfer is not to be made pursuant to Rule 144A of the Act, there shall be delivered to the Trustee and the Company of an Opinion of Counsel that such transfer may be made pursuant to an exemption from the Act, which Opinion of Counsel
shall not be obtained at the expense of the Trustee, the Master Servicer or the Company; or there shall be delivered to the Trustee and the Company a transferor certificate by the transferor and an investment letter shall be executed by the transferee.  The Holder hereof desiring to effect such transfer shall, and does hereby agree to, indemnify the Trustee and the Company against any liability that may result if the transfer is not so exempt or is not made in accordance with such federal and state laws.

No transfer of this Certificate to a Plan subject to ERISA or Section 4975 of the Code, any Person acting, directly or indirectly, on behalf of any such Plan or any person using Plan Assets to acquire this Certificate shall be made except in accordance with Section 5.02(c) of the Agreement.

The Agreement permits, with certain exceptions therein provided, the amendment of the Agreement and the modification of the rights and obligations of the Company, the Master Servicer, the Trustee and the rights of the Certificateholders under the Agreement at any time by the Company, the Master Servicer and the Trustee with the consent of the Holders of Certificates evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of each Class of Certificates affected thereby.  Any such consent by the Holder of this Certificate shall be conclusive and binding on such Holder and upon all future holders of this Certificate and of any Certificate issued upon the transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent is made upon the Certificate.  The Agreement also permits the amendment thereof in certain circumstances without the
consent of the Holders of any of the Certificates and, in certain additional circumstances, without the consent of the Holders of certain Classes of Certificates.

As provided in the Agreement and subject to certain limitations therein set forth, the transfer  of this Certificate is registrable with the Securities Administrator upon surrender of this Certificate for registration of transfer at the offices or agencies maintained by the Securities Administrator, duly endorsed by, or accompanied by an assignment in the form below or other written instrument of transfer in form satisfactory to the Trustee and the Securities Administrator duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Certificates of authorized denominations evidencing the same Class and aggregate Percentage Interest will be issued to the designated transferee or transferees.

The Certificates are issuable only as registered Certificates without coupons in Classes and in denominations specified in the Agreement.  As provided in the Agreement and subject to 

 

certain limitations therein set forth, Certificates are exchangeable for new Certificates of authorized denominations evidencing the same Class and aggregate Percentage Interest, as requested by the Holder surrendering the same.

No service charge will be made for any such registration of transfer or exchange, but the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

The Company, the Master Servicer, the Securities Administrator, the Servicer and the Trustee and any agent of the Company, the Master Servicer, the Securities Administrator, the Servicer or the Trustee may treat the Person in whose name this Certificate is registered as the owner hereof for all purposes, and neither the Company, the Master Servicer, the Securities Administrator, the Servicer, the Trustee nor any such agent shall be affected by notice to the contrary.

This Certificate shall be governed by and construed in accordance with the laws of the State of New York.

The obligations created by the Agreement in respect of the Certificates and the Trust Fund created thereby shall terminate upon the payment to Certificateholders of all amounts held by or on behalf of the Trustee and required to be paid to them pursuant to the Agreement following the earlier of (i) the purchase by the Servicer or its designee or the Master Servicer from the Trust Fund of all remaining Mortgage Loans and each REO Property in respect thereof remaining in the Trust Fund, thereby effecting early retirement of the Certificates and (ii) the final payment or other liquidation (or any Advance with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or the disposition of all REO Property in respect thereof).  The Agreement permits, but does not require, the Servicer, or, if the Servicer does not exercise this right, the Master Servicer to purchase at a price
determined as provided in the Agreement all remaining Mortgage Loans and all REO Property; provided, that any such option may only be exercised on or after the first Distribution Date on which the aggregate unpaid balance of the Mortgage Loans is less than or equal to ten percent of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date with respect to a purchase by the Servicer, or on or after the first Distribution Date on which the aggregate unpaid principal balance of the Mortgage Loans is less than or equal to five percent of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date with respect to a purchase by the Master Servicer.

Unless the certificate of authentication hereon has been executed by the Securities Administrator, by manual  signature, this Certificate shall not be entitled to any benefit under the Agreement or be valid for any purpose.

 

 

IN WITNESS WHEREOF, the Securities Administrator has caused this Certificate to be duly executed.

 

	
            Dated:  June 17, 2005
 	
             
 	
             
 	
            WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Securities Administrator
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

CERTIFICATE OF AUTHENTICATION

This is one of the Certificates referred to in the within-mentioned Agreement.

 

	
             
 	
             
 	
             
 	
            WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Securities Administrator
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

 

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

	
             
 	
             
 	
            .
 
	
             
 	
             
 	
             
 

 (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE)

a Percentage Interest evidenced by the within Asset-Backed Pass-Through Certificate and hereby authorizes the transfer of registration of such interest to assignee on the Certificate Register of the Trust Fund.

I (We) further direct the Certificate Registrar to issue a new Certificate of a like denomination and Class, to the above named assignee and deliver such Certificate to the following address:        

 

	
             
 	
             
 	
             
 

 

	
            Dated:
 	
            
 
 
 
	
             
 	
            Signature by or on behalf of assignor
 
	
             
 	
             
 
	
             
 	
            
 
 
 
	
             
 	
            Signature Guaranteed
 

 

 

 

DISTRIBUTION INSTRUCTIONS

The assignee should include the following for purposes of distribution:

	
            Distributions shall be made, by wire transfer or otherwise, in immediately available 
 
	
            funds to
 	
             
 
	
             
 
	
            for the account of
 	
             
 
	
            account number
 	
             
 	
            or, if mailed by check, to
 
	
             
 
	
            Applicable statements should be mailed to
 	
             
 
	
             
 
	
             
 
	
            This information is provided by
 	
             
 
	
            assignee named above, or
 	
             
 
	
            its agent.
 	
             
 
								

 

 

 

 

EXHIBIT B-4

FORM OF CLASS R CERTIFICATE

THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED STATES PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A “RESIDUAL INTEREST” IN ONE OR MORE “REAL ESTATE MORTGAGE INVESTMENT CONDUITS” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE “CODE”).

NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(c) OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE COMPANY AND THE TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE COMPANY OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE POOLING AND SERVICING AGREEMENT (THE “AGREEMENT”).

THIS CLASS R CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.

ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE, (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING HEREIN REFERRED TO AS A 

 

“DISQUALIFIED ORGANIZATION”) OR (D) AN AGENT OF A DISQUALIFIED ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE.  NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.

 

 

 

	
            Certificate No. 1
 	
             
 
	
             
 	
             
 
	
            Class R
 	
             
 
	
             
 	
             
 
	
            Date of Pooling and, Servicing

Agreement and Cut-off Date:

June 1, 2005
 	
            Percentage Interest:  100%
 
	
             
 	
             
 
	
            First Distribution Date:

July 25, 2005
 	
             
 
	
             
 	
             
 
	
            Master Servicer:

Wells Fargo Bank, National Association
 	
             
 
	
             
 	
             
 
	
            Assumed Final Distribution Date:

July 25, 2035
 	
             
 

 

ASSET-BACKED PASS-THROUGH CERTIFICATE

SERIES 2005-3

evidencing a percentage interest in any distributions allocable to the Class R Certificates with respect to the Trust Fund consisting primarily of a pool of one- to four-family fixed-rate and adjustable-rate first lien mortgage loans sold by OPTEUM MORTGAGE ACCEPTANCE CORPORATION

This Certificate is payable solely from the assets of the Trust Fund, and does not represent an obligation of or interest in Opteum Mortgage Acceptance Corporation, the Master Servicer, the Servicer, the Seller, the Securities Administrator, the Trustee referred to below or any of their affiliates. Neither this Certificate nor the underlying Mortgage Loans are guaranteed or insured by any governmental agency or instrumentality or by Opteum Mortgage Acceptance Corporation, the Master Servicer, the Servicer, the Seller, the Securities Administrator, the Trustee or any of their affiliates. None of Opteum Mortgage Acceptance Corporation, the Master Servicer, the Servicer, the Seller, the Securities Administrator or any of their affiliates will have any obligation with respect to any certificate or other obligation secured by or payable from payments on the Certificates.

 

 

This certifies that ___________________ is the registered owner of the Percentage Interest evidenced by this Certificate in certain distributions with respect to the Trust Fund consisting primarily of an interest in a pool of one- to four-family fixed-rate and adjustable-rate first lien mortgage loans (the “Mortgage Loans”), sold by Opteum Mortgage Acceptance Corporation (hereinafter called the “Company,” which term includes any successor entity under the Agreement referred to below). The Trust Fund was created pursuant to a Pooling and Servicing Agreement dated as specified above (the “Agreement”) among the Company, the Master Servicer, the Securities Administrator and HSBC Bank USA, National Association, as trustee (the “Trustee”), a summary of certain of the pertinent provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of the acceptance hereof assents and by which such Holder is bound.

Pursuant to the terms of the Agreement, a distribution will be made on the 25th day of each month or, if such 25th day is not a Business Day, the Business Day immediately following (the Distribution Date”), commencing as described in the Agreement, to the Person in whose name this Certificate is registered at the close of business on the last Business Day of the month immediately preceding the month of such Distribution Date (the “Record Date”), from the Available Distribution Amount in an amount equal to the product of the Percentage Interest evidenced by this Certificate and the amount of interest and principal, if any , required to be distributed to Holders of Class R Certificates on such Distribution Date.

Each Holder of this Certificate will be deemed to have agreed to be bound by the restrictions set forth in the Agreement to the effect that (i) each person holding or acquiring any Ownership Interest in this Certificate must be a United States Person and a Permitted Transferee, (ii) the transfer of any Ownership Interest in this Certificate will be conditioned upon the delivery to the Trustee of, among other things, an affidavit to the effect that it is a United States Person and Permitted Transferee, (iii) any attempted or purported transfer of any Ownership Interest in this Certificate in violation of such restrictions will be absolutely null and void and will vest no rights in the purported transferee, and (iv) if any person other than a United States Person and a Permitted Transferee acquires any Ownership Interest in this Certificate in violation of such restrictions, then the
Company will have the right, in its sole discretion and without notice to the Holder of this Certificate, to sell this Certificate to a purchaser selected by the Company, which purchaser may be the Company, or any affiliate of the Company, on such terms and conditions as the Company may choose.

Notwithstanding the above, the final distribution on this Certificate will be made after due notice of the pendency of such distribution and only upon presentation and surrender of this Certificate at the office or agency appointed by the Securities Administrator for that purpose in the City of Minneapolis and State of Minnesota.

In connection with any transfer of this Certificate, the Trustee will also require either (i) an opinion of counsel acceptable to and in form and substance satisfactory to the Trustee with 

 

respect to the permissibility of such transfer under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and Section 4975 of the Internal Revenue Code (the “Code”) and stating, among other things, that the transferee’s acquisition of a Class R Certificate will not constitute or result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or (ii) a representation letter, in the form as described by the Agreement, stating that the transferee is not an employee benefit or other plan subject to the prohibited transaction provisions of ERISA or Section 4975 of the Code (a “Plan”), or any other person (including an investment manager, a named fiduciary or a trustee of any Plan) acting, directly or indirectly, on behalf of or purchasing any Certificate with “plan assets” of any Plan.

This Certificate is one of a duly authorized issue of Certificates issued in several Classes designated as Asset-Backed Pass-Through Certificates of the Series specified hereon (herein collectively called the “Certificates”).

The Certificates are limited in right of payment to certain collections and recoveries respecting the Mortgage Loans, all as more specifically set forth herein and in the Agreement. In the event Master Servicer funds are advanced with respect to any Mortgage Loan, such advance is reimbursable to the Master Servicer, to the extent provided in the Agreement, from related recoveries on such Mortgage Loan or from other cash that would have been distributable to Certificateholders.

As provided in the Agreement, withdrawals from the Custodial Account and/or the Certificate Account created for the benefit of Certificateholders may be made by the Master Servicer from time to time for purposes other than distributions to Certificateholders, such purposes including without limitation reimbursement to the Trustee, the Company and the Master Servicer of advances made, or certain expenses incurred, by either of them.

The Agreement permits, with certain exceptions therein provided, the amendment of the Agreement and the modification of the rights and obligations of the Company, the Master Servicer, the Securities Administrator, the Trustee and the rights of the Certificateholders under the Agreement at any time by the Company, the Master Servicer, the Securities Administrator and the Trustee with the consent of the Holders of Certificates evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of each Class of Certificates affected thereby.  Any such consent by the Holder of this Certificate shall be conclusive and binding on such Holder and upon all future holders of this Certificate and of any Certificate issued upon the transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent is made upon the Certificate.  The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of any of the Certificates and, in certain additional circumstances, without the consent of the Holders of certain Classes of Certificates.

As provided in the Agreement and subject to certain limitations therein set forth, the transfer  of this Certificate is registrable with the Securities Administrator upon surrender of this Certificate for registration of transfer at the offices or agencies maintained by the Securities Administrator, duly endorsed by, or accompanied by an assignment in the form below or other written instrument of transfer in form satisfactory to the Trustee and the Securities Administrator 

 

duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Certificates of authorized denominations evidencing the same Class and aggregate Percentage Interest will be issued to the designated transferee or transferees.

The Certificates are issuable only as registered Certificates without coupons in Classes and in denominations specified in the Agreement.  As provided in the Agreement and subject to certain limitations therein set forth, Certificates are exchangeable for new Certificates of authorized denominations evidencing the same Class and aggregate Percentage Interest, as requested by the Holder surrendering the same.

No service charge will be made for any such registration of transfer or exchange, but the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

The Company, the Master Servicer, the Securities Administrator, the Servicer and the Trustee and any agent of the Company, the Master Servicer, the Securities Administrator, the Servicer or the Trustee may treat the Person in whose name this Certificate is registered as the owner hereof for all purposes, and neither the Company, the Master Servicer, the Securities Administrator, the Servicer, the Trustee nor any such agent shall be affected by notice to the contrary.

This Certificate shall be governed by and construed in accordance with the laws of the State of New York.

The obligations created by the Agreement in respect of the Certificates and the Trust Fund created thereby shall terminate upon the payment to Certificateholders of all amounts held by or on behalf of the Trustee and required to be paid to them pursuant to the Agreement following the earlier of (i) the purchase by the Servicer or its designee or the Master Servicer from the Trust Fund of all remaining Mortgage Loans and each REO Property in respect thereof remaining in the Trust Fund, thereby effecting early retirement of the Certificates and (ii) the final payment or other liquidation (or any Advance with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or the disposition of all REO Property in respect thereof).  The Agreement permits, but does not require, the Servicer, or, if the Servicer does not exercise this right, or the Master Servicer to purchase at a
price determined as provided in the Agreement all remaining Mortgage Loans and all REO Property; provided, that any such option may only be exercised on or after the first Distribution Date on which the aggregate unpaid balance of the Mortgage Loans is less than or equal to ten percent of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date with respect to a purchase by the Servicer, or on or after the first Distribution Date on which the aggregate unpaid principal balance of the Mortgage Loans is less than or equal to five percent of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date with respect to a purchase by the Master Servicer.

Reference is hereby made to the further provisions of this Certificate set forth on the reverse hereof, which further provisions shall for all purpose have the same effect as if set forth at this place.

 

 

Unless the certificate of authentication hereon has been executed by the Securities Administrator, by manual  signature, this Certificate shall not be entitled to any benefit under the Agreement or be valid for any purpose.

 

 

IN WITNESS WHEREOF, the Securities Administrator has caused this Certificate to be duly executed.

	
            Dated:  June 17, 2005
 	
             
 	
             
 	
            WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Securities Administrator
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

CERTIFICATE OF AUTHENTICATION

This is one of the Certificates referred to in the within-mentioned Agreement.

 

	
             
 	
             
 	
             
 	
            WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Securities Administrator
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

 

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

 

	
             
 	
             
 	
            .
 

 

	
             
 	
             
 	
            .
 

 (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE)

a Percentage Interest evidenced by the within Asset-Backed Pass-Through Certificate and hereby authorizes the transfer of registration of such interest to assignee on the Certificate Register of the Trust Fund.

I (We) further direct the Certificate Registrar to issue a new Certificate of a like denomination and Class, to the above named assignee and deliver such Certificate to the following address: 

 

	
             
 	
             
 	
            .
 

 

	
            Dated:
 	
            
 
 
 
	
             
 	
            Signature by or on behalf of assignor
 
	
             
 	
             
 

 

 

 

DISTRIBUTION INSTRUCTIONS

The assignee should include the following for purposes of distribution:

	
            Distributions shall be made, by wire transfer or otherwise, in immediately available 
 
	
            funds to
 	
             
 
	
             
 
	
            for the account of
 	
             
 
	
            account number
 	
             
 	
            or, if mailed by check, to
 
	
             
 
	
            Applicable statements should be mailed to
 	
             
 
	
             
 
	
             
 
	
            This information is provided by
 	
             
 
	
            assignee named above, or
 	
             
 
	
            its agent.
 	
             
 
								

 

 

 

 

EXHIBIT C

FORM OF CUSTODIAN INITIAL CERTIFICATION

June 17, 2005

 

	
            HSBC Bank USA, National Association

452 Fifth Avenue

New York, New York 10018
 	
            Opteum Mortgage Acceptance Corporation

W. 115 Century Road

Paramus, New Jersey 07652
 

 

Attention: Opteum Mortgage Acceptance Corporation,

OMAC Mortgage Trust 2005-3, Asset-Backed Pass-Through Certificates, Series 2005-3

	
            Re:
 	
            Custodial Agreement, dated as of June 17, 2005, by and among HSBC Bank USA, National Association, Opteum Mortgage Acceptance Corporation and Wells Fargo Bank, National Association relating to OMAC Mortgage Trust 2005-3, Asset-Backed Pass-Through Certificates, Series 2005-3
 

 

Ladies and Gentlemen:

In accordance with Section 2.3 of the above-captioned Custodial Agreement and subject to Section 2.02 of the Pooling and Servicing Agreement, dated as of June 1, 2005 among Opteum Mortgage Acceptance Corporation, HSBC Bank USA, National Association and Wells Fargo Bank, National Association, the undersigned, as custodian (the “Custodian”), hereby certifies that as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on the attachment hereto) it has reviewed the Mortgage File, and has determined that: (1) all documents required to be included in the Mortgage File are in its possession and (2) such documents have been reviewed by it and appear regular on their face and relate to such Mortgage Loan.

The Custodian has made no independent examination of any documents contained in each Mortgage File beyond the review specifically required in the above-referenced Custodial and Pooling and Servicing Agreements. The Custodian makes no representations as to and shall not be responsible to verify: (i) the validity, legality, sufficiency, enforceability, due authorization, recordability or genuineness of any of the documents contained in each Mortgage File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the collectability, insurability, effectiveness or suitability of any such Mortgage Loan, or (iii) the existence of any assumption, modification, written assurance or substitution agreement with respect to any Mortgage File if no such documents appear in the Mortgage File delivered to the Custodian.

 

 

Capitalized words and phrases used herein shall have the respective meanings assigned to them in the above-captioned Custodial Agreement.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            WELLS FARGO BANK, NATIONAL ASSOCIATION, as Custodian
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
             
 

 

 

 

 

EXHIBIT D

FORM OF CUSTODIAN FINAL CERTIFICATION

_____________, 20__

 

	
            HSBC Bank USA, National Association

452 Fifth Avenue

New York, New York 10018
 	
            Opteum Mortgage Acceptance Corporation

W. 115 Century Road

Paramus, New Jersey 07652
 

 

Attention: Opteum Mortgage Acceptance Corporation,

OMAC  Mortgage Trust 2005-3, Asset-Backed Pass-Through Certificates, Series 2005-3

	
            Re:
 	
            Custodial Agreement, dated as of June 17, 2005, by and among HSBC Bank USA, National Association, Opteum Mortgage Acceptance Corporation and Wells Fargo Bank, National Association relating to OMAC  Mortgage Trust 2005-3, Asset-Backed Pass-Through Certificates, Series 2005-3
 

 

Ladies and Gentlemen:

In accordance with Section 2.3 of the above-captioned Custodial Agreement and subject to Section 2.02 of the Pooling and Servicing Agreement, the undersigned, as Custodian, hereby certifies that it has received a Mortgage File with respect to each Mortgage Loan listed in the Mortgage Loan Schedule containing with respect to each Mortgage Loan:

(i)         the original Mortgage Note (including all riders thereto) bearing all intervening endorsements necessary to show a complete chain of endorsements from the original payee, endorsed “Pay to the order of HSBC Bank USA, National Association without recourse”, via original signature, and, if previously endorsed, signed in the name of the last endorsee by a duly qualified officer of the last endorsee. If the Mortgage Loan was acquired by the last endorsee in a merger, the endorsement must be by “[name of last endorsee], successor by merger to [name of the predecessor].” If the Mortgage Loan was acquired or originated by the last endorsee while doing business under another name, the endorsement must be by “[name of last endorsee], formerly known as [previous name].”

(ii)         The original recorded Mortgage, noting the presence of the MIN of the Mortgage Loan and either language indicating that the Mortgage Loan is a MOM loan or if the Mortgage Loan was not a MOM loan at origination, the original Mortgage and the assignment thereof to MERS, with evidence of recording indicated thereon; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation or such office as a matter of policy does not return the original of such document or if such original Mortgage has been lost, the 

 

Seller shall include or cause to be included a copy thereof certified by the appropriate recording office, if available;

(iii)        the original Assignment of Mortgage in blank, in form and substance acceptable for recordation in the jurisdiction in which the related mortgage property is located and signed in the name of the Last Endorsee by an authorized officer; unless the Mortgage Loan is registered on the MERS system;

(iv)        The original intervening Assignments, if any and if available, with evidence of recording thereon, showing an unbroken chain of title to the Mortgage from the originator thereof to Person assigning it to the Trustee (or to MERS, if the Mortgage Loan is registered on the MERS® System); provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation or such office as a matter of policy does not return the original of such document, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office, if available;

(v)        The originals of each assumption, modification or substitution agreement, if any and if available, relating to the Mortgage Loan; and

(vi)        the original title insurance policy, or, if such policy has not been issued, any one of an original or a copy of the preliminary title report, title binder or title commitment on the Mortgaged Property with the original policy of the insurance to be delivered promptly following the receipt thereof;

Capitalized words and phrases used herein shall have the respective meanings assigned to them in the above-captioned Custodial Agreement or in the Pooling and Servicing Agreement, as applicable.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            WELLS FARGO BANK, NATIONAL ASSOCIATION, 
 as Custodian
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
            
 
 
 

 

 

 

EXHIBIT E

FORM OF REMITTANCE REPORT

(PROVIDED UPON REQUEST)

 

 

EXHIBIT F

FORM OF REQUEST FOR RELEASE OF DOCUMENTS

	
            To:
 	
            HSBC Bank USA, National Association
 

452 Fifth Avenue

New York, New York 10018

	
            Re:
 	
            Pooling and Servicing Agreement, dated as of June 1, 2005, by and among HSBC Bank USA, National Association, Opteum Mortgage Acceptance Corporation and Wells Fargo Bank, National Association relating to OMAC  Mortgage Trust 2005-3, Asset-Backed Pass-Through Certificates, Series 2005-3
 

 

In connection with the administration of the Mortgage Loans held by you pursuant to the above-captioned Pooling and Servicing Agreement, we request the release, and hereby acknowledge receipt, of the Mortgage File for the Mortgage Loan described below, for the reason indicated.

Mortgage Loan Number:

Mortgagor Name, Address & Zip Code:

Reason for Requesting Documents (check one):

	
            _____
 	
            1.
 	
            Mortgage Paid in Full and proceeds have been deposited into the Custodial Account
 
	
            _____
 	
            2.
 	
            Foreclosure
 	
             
 	
             
 
	
            _____
 	
            3.
 	
            Substitution
 	
             
 	
             
 
	
            _____
 	
            4.
 	
            Other Liquidation
 	
             
 	
             
 
	
            _____
 	
            5.
 	
            Nonliquidation
 	
            Reason:
 	
            _________________________
 
	
            _____
 	
            6.
 	
            California Mortgage Loan paid in full
 

 

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            (authorized signer)

 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Issuer:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Address:
 	
            
 
 
 

 

 

 

 

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Date:
 	
            
 
 
 

 

 

 

EXHIBIT G-1

FORM OF INVESTOR REPRESENTATION LETTER

_____________,200__

Opteum Mortgage Acceptance Corporation

W. 115 Century Road

Paramus, New Jersey 07652

HSBC Bank USA, National Association

452 Fifth Avenue

New York, New York 10018

Attention: Opteum Mortgage Acceptance Corporation Series 2005-3

	
            Re:
 	
            Opteum Mortgage Acceptance Corporation Asset-Backed Pass-Through Certificates Series 2005-3, Class [___]
 

 

Ladies and Gentlemen:

______________ (the “Purchaser”) intends to purchase from ______________ (the “Seller”) $_________ Initial Certificate Principal Balance of Asset-Backed Pass-Through Certificates, Series 2005-3, Class _____ (the “Certificates”), issued pursuant to the Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”), dated as of June 1, 2005 among Opteum Mortgage Acceptance Corporation, as company (the “Company”), Wells Fargo Bank, National Association, as master servicer (in such capacity, the “Master Servicer”) and as securities administrator (in such capacity, the “Securities Administrator”) and HSBC Bank USA, National Association, as trustee (the “Trustee”).  All terms used herein and not otherwise defined shall have the meanings set forth in the Pooling and Servicing Agreement.  The Purchaser
hereby certifies, represents and warrants to, and covenants with, the Company and the Trustee that:

1.          The Purchaser understands that (a) the Certificates have not been and will not be registered or qualified under the Securities Act of 1933, as amended (the “Act”) or any state securities law, (b) the Company is not required to so register or qualify the Certificates, (c) the Certificates may be resold only if registered and qualified pursuant to the provisions of the Act or any state securities law, or if an exemption from such registration and qualification is available, (d) the Pooling and Servicing Agreement contains restrictions regarding the transfer of the Certificates and (e) the Certificates will bear a legend to the foregoing effect.

2.          The Purchaser is acquiring the Certificates for its own account for investment only and not with a view to or for sale in connection with any distribution thereof in any manner that would violate the Act or any applicable state securities laws.

 

 

3.          The Purchaser is (a) a substantial, sophisticated institutional investor having such knowledge and experience in financial and business matters, and, in particular, in such matters related to securities similar to the Certificates, such that it is capable of evaluating the merits and risks of investment in the Certificates, (b) able to bear the economic risks of such an investment and (c) an “accredited investor” within the meaning of Rule 501 (a) promulgated pursuant to the Act.

4.          The Purchaser has been furnished with, and has had an opportunity to review a copy of the Pooling and Servicing Agreement and such other information concerning the Certificates, the Mortgage Loans and the Company as has been requested by the Purchaser from the Company or the Seller and is relevant to the Purchaser’s decision to purchase the Certificates.  The Purchaser has had any questions arising from such review answered by the Company or the Seller to the satisfaction of the Purchaser.

5.          The Purchaser has not and will not nor has it authorized or will it authorize any person to (a) offer, pledge, sell, dispose of or otherwise transfer any Certificate, any interest in any Certificate or any other similar security to any person in any manner, (b) solicit any offer to buy or to accept a pledge, disposition of other transfer of any Certificate, any interest in any Certificate or any other similar security from any person in any manner, (c) otherwise approach or negotiate with respect to any Certificate, any interest in any Certificate or any other similar security with any person in any manner, (d) make any general solicitation by means of general advertising or in any other manner or (e) take any other action, that (as to any of (a) through (e) above) would constitute a distribution of any
Certificate under the Act, that would render the disposition of any Certificate a violation of Section 5 of the Act or any state securities law, or that would require registration or qualification pursuant thereto. The Purchaser will not sell or otherwise transfer any of the Certificates, except in compliance with the provisions of the Pooling and Servicing Agreement.

 

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Very truly yours,

 

 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            (Purchaser)
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
             
 

 

 

 

 

EXHIBIT G-2

FORM OF TRANSFEROR REPRESENTATION LETTER

______________,200___

Opteum Mortgage Acceptance Corporation

W. 115 Century Road

Paramus, New Jersey 07652

HSBC Bank USA, National Association

452 Fifth Avenue

New York, New York 10018

Attention: Opteum Mortgage Acceptance Corporation Series 2005-3

	
            Re:
 	
            Opteum Mortgage Acceptance Corporation Asset-Backed Pass-Through Certificates, Series 2005-3, Class
 

 

Ladies and Gentlemen:

In connection with the sale by ___________ (the “Seller”) to ________ (the “Purchaser”) of $_________ Initial Certificate Principal Balance of Asset-Backed Pass-Through Certificates, Series 2005-3, Class _____ (the “Certificates”), issued pursuant to the Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”), dated as of June 1, 2005 among Opteum Mortgage Acceptance Corporation, as company (the “Company”), Wells Fargo Bank, National Association, as master servicer (in such capacity, the “Master Servicer”) and as securities administrator (in such capacity, the “Securities Administrator”) and HSBC Bank USA, National Association, as trustee (the “Trustee”).  The Seller hereby certifies, represents and warrants to, and covenants with, the Company and the Trustee that:

Neither the Seller nor anyone acting on its behalf has (a) offered, pledged, sold, disposed of or otherwise transferred any Certificate, any interest in any Certificate or any other similar security to any person in any manner, (b) has solicited any offer to buy or to accept a pledge, disposition or other transfer of any Certificate, any interest in any Certificate or any other similar security from any person in any manner, (c) has otherwise approached or negotiated with respect to any Certificate, any interest in any Certificate or any other similar security with any person in any manner, (d) has made any general solicitation by means of general advertising or in any other manner, or (e) has taken any other action, that (as to any of (a) through (e) above) would constitute a distribution of the Certificates under the Securities Act of 1933 (the “Act”), that would render the
disposition of any Certificate a violation of Section 5 of the Act or any state securities law, or that would require registration or qualification pursuant thereto. The Seller will not act in any manner set forth in the foregoing sentence with respect to any Certificate. The Seller has not and will not sell or otherwise transfer any of the Certificates, except in compliance with the provisions of the Pooling and Servicing Agreement.

 

 

 

 

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Very truly yours,

 

 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            (Seller)

 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
             
 

 

 

 

 

EXHIBIT G-3

FORM OF RULE 144A INVESTMENT REPRESENTATION

DESCRIPTION OF RULE 144A SECURITIES, INCLUDING NUMBERS:

Opteum Mortgage Acceptance Corporation

Asset-Backed Pass-Through Certificates

SERIES 2005-3, CLASS ____, NO. ____

The undersigned seller, as registered holder (the “Transferor”), intends to transfer the Rule 144A Securities described above to the undersigned buyer (the “Buyer”).

1. In connection with such transfer and in accordance with the agreements pursuant to which the Rule 144A Securities were issued, the Transferor hereby certifies the following facts: Neither the Transferor nor anyone acting on its behalf has offered, transferred, pledged, sold or otherwise disposed of the Rule 144A Securities, any interest in the Rule 144A Securities or any other similar security to, or solicited any offer to buy or accept a transfer, pledge or other disposition of the Rule 144A Securities, or otherwise approached or negotiated with respect to the Rule 144A Securities, any interest in the Rule 144A Securities or any other similar security with, any person in any manner, or made any general solicitation by means of general advertising or in any other manner, or taken any other action, which would constitute a distribution of the Rule 144A Securities under the Securities Act
of 1933, as amended (the “1933 Act”), or which would render the disposition of the Rule 144A Securities a violation of Section 5 of the 1933 Act or require registration pursuant thereto, and that the Transferor has not offered the Rule 144A Securities to any person other than the Buyer or another “qualified institutional buyer” as defined in Rule 144A under the 1933 Act.

2. The Buyer warrants and represents to, and covenants with, the Transferor, the Trustee and the Master Servicer pursuant to Section 5.02 of the Pooling and Servicing Agreement as follows:

a. The Buyer understands that the Rule 144A Securities have not been registered under the 1933 Act or the securities laws of any state.

b. The Buyer considers itself a substantial, sophisticated institutional investor having such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of investment in the Rule 144A Securities.

c. The Buyer has been furnished with all information regarding the Rule 144A Securities that it has requested from the Transferor, the Trustee or the Master Servicer.

d. Neither the Buyer nor anyone acting on its behalf has offered, transferred,  pledged, sold or otherwise disposed of the Rule 144A Securities, any 

 

interest in the Rule 144A Securities or any other similar security to, or solicited any offer to buy or accept a transfer, pledge or other disposition of the Rule 144A Securities, any interest in the Rule 144A Securities or any other similar security from, or otherwise approached or negotiated with respect to the Rule 144A Securities, any interest in the Rule 144A Securities or any other similar security with, any person in any manner, or made any general solicitation by means of general advertising or in any other manner, or taken any other action, that would constitute a distribution of the Rule 144A Securities under the 1933 Act or that would render the disposition of the Rule 144A Securities a violation of Section 5 of the 1933 Act or require registration pursuant thereto, nor will it act, nor has it authorized or will it authorize any person to act, in such manner with respect to the
Rule 144A Securities.

e. The Buyer is a “qualified institutional buyer” as that term is defined  in Rule 144 under the 1933 Act and has completed either of the forms of certification to that effect attached hereto as Annex 1 or Annex 2.  The Buyer is aware that the sale to it is being made in reliance on Rule 144A.  The Buyer is acquiring the Rule 144A Securities for its own account or the account of other qualified institutional buyers, understands that such Rule 144 Securities may be resold, pledged or transferred only (i) to a person reasonably believed to be a qualified institutional buyer that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A, or (ii) pursuant to another exemption from registration under the 1933 Act.

3. The Buyer warrants and represents to, and covenants with, the Transferor, the Servicer and the Company that either (1) the Buyer is not an employee benefit plan within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) (“Plan”), or a plan within the meaning of Section 4975(e)(1) of the Internal Revenue Code of 1986 (the “Code”) (also a “Plan”), and the Buyer is not directly or indirectly purchasing the Rule 144A Securities on behalf of, as investment manager of, as named fiduciary of, as trustee of, or with assets of a Plan, or (2) the Buyer has provided the Trustee with the opinion letter required by section 5.02(c) of the Pooling and Servicing Agreement.

4. This document may be executed in one or more counterparts and by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed to be an original; such counterparts, together, shall constitute one and the same document.

 

 

IN WITNESS WHEREOF, each of the parties has executed this document as of the date set forth below.

 

	
            _____________________________________

Print Name of Transferor
 	
            _____________________________________

Print Name of Buyer
 
	
             
 	
             
 
	
            By: _________________________________

Name:

Title:
 	
            By: _________________________________

Name:

Title:
 
	
             
 	
             
 
	
            Taxpayer Identification:

No.__________________________________

Date: ________________________________

 
 	
            Taxpayer Identification:

No. _________________________________

Date: ________________________________

 
 

 

 

 

ANNEX 1 TO EXHIBIT G-3

QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

[FOR BUYERS OTHER THAN REGISTERED INVESTMENT COMPANIES]

The undersigned hereby certifies as follows in connection with the Rule 144A Investment Representation to which this Certification is attached:

1. As indicated below, the undersigned is the President, Chief Financial Officer, Senior Vice President or other executive officer of the Buyer.

2. In connection with purchases by the Buyer, the Buyer is a “qualified institutional buyer” as that term is defined in Rule 144A under the Securities Act of 1933 (“Rule 144A”) because (i) the Buyer owned and/or invested on a discretionary basis $____________________1 in securities (except for the excluded securities referred to below) as of the end of the Buyer’s most recent fiscal year (such amount being calculated in accordance with Rule 144A) and (ii) the Buyer satisfies the criteria in the category marked below.

	
            ____
 	
            Corporation, etc.  The Buyer is a corporation (other than a bank, savings and loan association or similar institution), Massachusetts or similar business trust, partnership, or charitable organization described in Section 501(c)(3) of the Internal Revenue Code.
 
	
            ____
 	
            Bank.  The Buyer (a) is a national bank or banking institution organized under the laws of any State, territory or the District of Columbia, the business of which is substantially confined to banking and is supervised by the State or territorial banking commission or similar official or is a foreign bank or equivalent institution, and (b) has an audited net worth of at least $25,000,000 as demonstrated in its latest annual financial statement, a copy of which is attached hereto.
 
	
            ____
 	
            Savings and Loan.  The Buyer (a) is a savings and loan association, building and loan association, cooperative bank, homestead association or similar institution, which is supervised and examined by a State or Federal authority having supervision over any such institutions or is a foreign savings and loan association or equivalent institution and (b) has an audited net worth of at least $25,000,000 as demonstrated in its latest annual financial statements.
 

 

 

 

 

_________________________

1      Buyer must own and/or invest on a discretionary basis at least $100,000,000 in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or invest on a discretionary basis at least $10,000,000 in securities.

 

	
            ____
 	
            Broker-dealer.  The Buyer is a dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934.
 
	
            ____
 	
            Insurance Company.  The Buyer is an insurance company whose primary and predominant business activity is the writing of insurance or the reinsuring of risks underwritten by insurance companies and which is subject to supervision by the insurance commissioner or a similar official or agency of a State, territory or the District of Columbia.
 
	
            ____
 	
            State or Local Plan.  The Buyer is a plan established and maintained by a State, its political subdivisions, or any agency or instrumentality of the State or its political subdivisions, for the benefit of its employees.
 
	
            ____
 	
            ERISA Plan.  The Buyer is an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974.
 
	
            ____
 	
            Investment Adviser.  The Buyer is an investment adviser registered under the Investment Advisers Act of 1940.
 
	
            ____
 	
            SBIC.  The Buyer is a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958.
 
	
            ____
 	
            Business Development Company.  The Buyer is a business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940.
 
	
            ____
 	
            Trust Fund.  The Buyer is a trust fund whose trustee is a bank or trust company and whose participants are exclusively (a) plans established and maintained by a State, its political subdivisions, or any agency or instrumentality of the State or its political subdivisions, for the benefit of its employees, or (b) employee benefit plans within the meaning of Title I of the Employee Retirement Income Security Act of 1974, but is not a trust fund that includes as participants individual retirement accounts or H.R. 10 plans.
 

3. The term “securities” as used herein does not include (i) securities of issuers that are affiliated with the Buyer, (ii) securities that are part of an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan participations, (v) repurchase agreements, (vi) securities owned but subject to a repurchase agreement and (vii) currency, interest rate and commodity swaps.

4. For purposes of determining the aggregate amount of securities owned and/or invested on a discretionary basis by the Buyer, the Buyer used the cost of such securities to the Buyer and did not include any of the securities referred to in the preceding paragraph.  Further, in determining such aggregate amount, the Buyer may have included securities owned by subsidiaries of the Buyer, but only if such subsidiaries are consolidated with the Buyer in its financial statements prepared in accordance with generally accepted accounting principles and if the investments of such subsidiaries are managed under the Buyer’s direction.  However, such 

 

securities were not included if the Buyer is a majority-owned, consolidated subsidiary of another enterprise and the Buyer is not itself a reporting company under the Securities Exchange Act of 1934.

5. The Buyer acknowledges that it is familiar with Rule 144A and understands that the seller to it and other parties related to the Certificates are relying and will continue to rely on the statements made herein because one or more sales to the Buyer may be in reliance on Rule 144A.

	
            ___
 	
            ___
 	
            Will the Buyer be purchasing the Rule 144A
 
	
            Yes
 	
            No
 	
            Securities only for the Buyer’s own account?
 

6. If the answer to the foregoing question is “no”, the Buyer agrees that, in connection with any purchase of securities sold to the Buyer for the account of a third party (including any separate account) in reliance on Rule 144A, the Buyer will only purchase for the account of a third party that at the time is a “qualified institutional buyer” within the meaning of Rule 144A.  In addition, the Buyer agrees that the Buyer will not purchase securities for a third party unless the Buyer has obtained a current representation letter from such third party or taken other appropriate steps contemplated by Rule 144A to conclude that such third party independently meets the definition of “qualified institutional buyer” set forth in Rule 144A.

7. The Buyer will notify each of the parties to which this certification is made of any changes in the information and conclusions herein.  Until such notice is given, the Buyer’s purchase of Rule 144A Securities will constitute a reaffirmation of this certification as of the date of such purchase.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Print Name of Buyer 

 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
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            Date:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            
 
 
 

 

 

 

 

ANNEX 2 TO EXHIBIT G-3

QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

[FOR BUYERS THAT ARE REGISTERED INVESTMENT COMPANIES]

The undersigned hereby certifies as follows in connection with the Rule 144A Investment Representation to which this Certification is attached:

1. As indicated below, the undersigned is the President, Chief Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a “qualified institutional buyer” as that term is defined in Rule 144A under the Securities Act of 1933 (“Rule 144A”) because Buyer is part of a Family of Investment Companies (as defined below), is such an officer of the Adviser.

2. In connection with purchases by Buyer, the Buyer is a “qualified institutional buyer” as defined in SEC Rule 144A because (i) the Buyer is an investment company registered under the Investment Company Act of 1940, and (ii) as marked below, the Buyer alone, or the Buyer’s Family of Investment Companies, owned at least $100,000,000 in securities (other than the excluded securities referred to below) as of the end of the Buyer’s most recent fiscal year.  For purposes of determining the amount of securities owned by the Buyer or the Buyer’s Family of Investment Companies, the cost of such securities was used.

	
            ____
 	
            The Buyer owned $_______________ in securities (other than the excluded securities referred to below) as of the end of the Buyer’s most recent fiscal year (such amount being calculated in accordance with Rule 144A).
 
	
            ____
 	
            The Buyer is part of a Family of Investment Companies which owned in the aggregate $____________ in securities (other than the excluded securities referred to below) as of the end of the Buyer’s most recent fiscal year (such amount being calculated in accordance with Rule 144A).
 

3. The term “Family of Investment Companies” as used herein means two or more registered investment companies (or series thereof) that have the same investment adviser or investment advisers that are affiliated (by virtue of being majority owned subsidiaries of the same parent or because one investment adviser is a majority owned subsidiary of the other).

4. The term “securities” as used herein does not include (i) securities of issuers that are affiliated with the Buyer or are part of the Buyer’s Family of Investment Companies, (ii) bank deposit notes and certificates of deposit, (iii) loan participations, (iv) repurchase agreements, (v) securities owned but subject to a repurchase agreement and (vi) currency, interest rate and commodity swaps.

5. The Buyer is familiar with Rule 144A and understands that each of the parties to which this certification is made are relying and will continue to rely on the statements made 

 

herein because one or more sales to the Buyer will be in reliance on Rule 144A.  In addition, the Buyer will only purchase for the Buyer’s own account.

6. The undersigned will notify each of the parties to which this certification is made of any changes in the information and conclusions herein.  Until such notice, the Buyer’s purchase of Rule 144A Securities will constitute a reaffirmation of this certification by the undersigned as of the date of such purchase.

 

 

 

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Print Name of Buyer
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            IF AN ADVISER:
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Print Name of Buyer
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Date:
 	
            
 
 
 

 

 

 

 

 

EXHIBIT G-4

FORM OF TRANSFEROR CERTIFICATE

______________, 200__

Opteum Mortgage Acceptance Corporation

W. 115 Century Road

Paramus, New Jersey 07652

HSBC Bank USA, National Association

452 Fifth Avenue

New York, New York 10018

Attention: Opteum Mortgage Acceptance Corporation Series 2005-3

	
            Re:
 	
            Opteum Mortgage Acceptance Corporation Asset-Backed Pass-Through Certificates Series 2005-3, Class R
 

 

Ladies and Gentlemen:

This letter is delivered to you in connection with the sale by ________________________  (the “Seller”) to __________________________________________ (the “Purchaser”) of a ____% Percentage Interest in the Asset-Backed Pass-Through Certificates, Series 2005-3, Class R Certificates (the “Certificates”), issued pursuant to Section 5.02 of the Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”) dated as of June 1, 2005, among Opteum Mortgage Acceptance Corporation, as company (the “Company”), Wells Fargo Bank, National Association, as master servicer (in such capacity, the “Master Servicer”) and as securities administrator (in such capacity, the “Securities Administrator”) and HSBC Bank USA, National Association, as trustee (the “Trustee”).  All terms used herein and not otherwise defined shall
have the meaning set forth in the Pooling and Servicing Agreement.  The Seller hereby certifies, represents and warrants to, and covenants with, the Company and the Trustee that:

1.          No purpose of the Seller relating to the sale of the Certificates by the Seller to the Purchaser is or will be to impede the assessment or collection of any tax.

2.          The Seller understands that the Purchaser has delivered to the Trustee and the Master Servicer a transfer affidavit and agreement in the form attached to the Pooling and Servicing Agreement as Exhibit E-5.  The Seller does not know or believe that any representation contained therein is false.

3.          The Seller has at the time of the transfer conducted a reasonable investigation of the financial condition of the Purchaser as contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result of that investigation, the Seller has determined that the Purchaser has historically paid its debts as they have become due and has found no significant evidence to indicate that the Purchaser will not continue to pay its debts as they become due in the future.  The Seller understands that the transfer of the Certificates may not be respected for United 

 

States income tax purposes (and the Seller may continue to be liable for United States income taxes associated therewith) unless the Seller has conducted such an investigation.

4.          The Seller has no actual knowledge that the proposed Transferee is a Disqualified Organization, an agent of a Disqualified Organization or a Non-United States Person.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Very truly yours,

 

 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            (Seller)

 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
             
 

 

 

 

 

EXHIBIT G-5

FORM OF TRANSFER AFFIDAVIT AND AGREEMENT

	
            STATE OF
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF
 	
            )
 	
             
 

 

___________________, being first duly sworn, deposes, represents and warrants:

1.          That he/she is [Title of Officer] of [Name of Owner], a [savings institution] [corporation] duly organized and existing under the laws of [the State of __________] [the United States], (the “Owner”), (record or beneficial owner of the Class R Certificates (the “Class R Certificates”) on behalf of which he/she makes this affidavit and agreement). This Class R Certificates were issued pursuant to the Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”) dated as of June 1, 2005 among Opteum Mortgage Acceptance Corporation, as company, Wells Fargo Bank, National Association, as master servicer (in such capacity, the “Master Servicer”) and as securities administrator (in such capacity, the “Securities Administrator”), and HSBC Bank USA, National Association, as
trustee (the “Trustee”).

2.          That the Owner (i) is not and will not be a “disqualified organization” as of _____________ [date of transfer] within the meaning of Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended (the “Code”), (ii) will endeavor to remain other than a disqualified organization for so long as it retains its ownership interest in the Class R Certificates, and (iii) is acquiring the Class R Certificates for its own account or for the account of another Owner from which it has received an affidavit and agreement in substantially the same form as this affidavit and agreement.  (For this purpose, a “disqualified organization” means the United States, any state or political subdivision thereof, any agency or instrumentality of any of the foregoing (other than an instrumentality all of the activities
of which are subject to tax and, except for Freddie Mac, a majority of whose board of directors is not selected by any such governmental entity) or any foreign government, international organization or any agency or instrumentality of such foreign government or organization, any rural electric or telephone cooperative, or any organization (other than certain farmers’ cooperatives) that is generally exempt from federal income tax unless such organization is subject to the tax on unrelated business taxable income).

3.          That the Owner is aware (i) of the tax that would be imposed on transfers of Class  R Certificates to disqualified organizations under the Code, that applies to all transfers of Class R  Certificates after March 31, 1988; (ii) that such tax would be on the transferor, or, if such transfer  is through an agent (which person includes a broker, nominee or middleman) for a disqualified  organization, on the agent; (iii) that the person otherwise liable for the tax shall be relieved of liability for the tax if the transferee furnishes to such person an affidavit that the transferee is not a disqualified organization and, at the time of transfer, such person does not have actual knowledge that the affidavit is false; and (iv) that the Class R Certificates may be “noneconomic residual interests” within the meaning of
Treasury regulations promulgated pursuant to the Code and that the transferor of a noneconomic residual interest will remain liable for any taxes due with respect 

 

to the income on such residual interest, unless no significant purpose of the transfer was to impede the assessment or collection of tax.

4.          That the Owner is aware of the tax imposed on a “pass-through entity” holding Class R Certificates if at any time during the taxable year of the pass-through entity a disqualified organization is the record holder of an interest in such entity.  (For this purpose, a “pass through entity” includes a regulated investment company, a real estate investment trust or common trust fund, a partnership, trust or estate, and certain cooperatives.)

5.          That the Owner is aware that the Trustee will not register the transfer of any Class R Certificates unless the transferee, or the transferee’s agent, delivers to it an affidavit and agreement, among other things, in substantially the same form as this affidavit and agreement.  The Owner expressly agrees that it will not consummate any such transfer if it knows or believes that any of the representations contained in such affidavit and agreement are false.

6.          That the Owner has reviewed the restrictions set forth on the face of the Class R Certificates and the provisions of Section 5.02(f) of the Pooling and Servicing Agreement under which the Class R Certificates were issued (in particular, clause (iii)(A) and (iii)(B) of Section 5.02(f) which authorize the Trustee to deliver payments to a person other than the Owner and negotiate a mandatory sale by the Trustee in the event the Owner holds such Certificates in violation of Section 5.02(f)).  The Owner expressly agrees to be bound by and to comply with such restrictions and provisions.

7.          That the Owner consents to any additional restrictions or arrangements that shall be deemed necessary upon advice of counsel to constitute a reasonable arrangement to ensure that the Class R Certificates will only be owned, directly or indirectly, by an Owner that is not a disqualified organization.

	
            8.
 	
            The Owner’s Taxpayer Identification Number is _____________________.
 

9.          This affidavit and agreement relates only to the Class R Certificates held by the owner and not to any other holder of the Class R Certificates.  The Owner understands that the liabilities described herein relate only to the Class R Certificates.

10.        That no purpose of the Owner relating to the transfer of any of the Class R Certificates by the Owner is or will be to impede the assessment or collection of any tax.

11.        That the Owner has no present knowledge or expectation that it will be unable to pay any United States taxes owed by it so long as any of the Certificates remain outstanding.  In this regard, the Owner hereby represents to and for the benefit of the person from whom it acquired the Class R Certificate that the Owner intends to pay taxes associated with holding such Class R Certificate as they become due, fully understanding that it may incur tax liabilities in excess of any cash flows generated by the Class R Certificate.

 

 

12.        That the Owner has no present knowledge or expectation that it will become insolvent or subject to a bankruptcy proceeding for so long as any of the Class R Certificates remain outstanding.

13.        The Owner is a citizen or resident of the United States, a corporation, partnership or other entity created or organized in, or under the laws of, the United States or any political subdivision thereof, provided that with respect to any partnership or other entity treated as a partnership for United States federal income tax purposes, all persons that own an interest in such partnership either directly or through any entity that is not a corporation for United States federal income tax purposes are required by the applicable operative agreement to be United States Persons, or an estate or trust whose income from sources without the United States is includible in gross income for United States federal income tax purposes regardless of its connection with the conduct of a trade or business within the United States.

14.        (a) The Certificates (i) are not being acquired by, and will not be transferred to, any employee benefit plan within the meaning of section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) or other retirement arrangement, including individual retirement accounts and annuities, Keogh plans and bank collective investment funds and insurance company general or separate accounts in which such plans, accounts or arrangements are invested, that is subject to ERISA or Section 4975 of the Internal Revenue Code of 1986 (the “Code”) (any of the foregoing, a “Plan”), (ii) are not being acquired with “plan assets” of a Plan within the meaning of the Department of Labor (“DOL”) regulation, 29 C.F.R. § 2510.3-101 or otherwise under ERISA, and (iii) will not be
transferred to any entity that is deemed to be investing in plan assets within the meaning of the DOL regulation, 29 C.F.R. § 2510.3-101 or otherwise under ERISA; or

(b) The Owner will provide the Trustee with an opinion of counsel, as specified in Section 5.02(c) of the Pooling and Servicing Agreement, acceptable to and in form and substance satisfactory to the Trustee to the effect that the purchase of Certificates is permissible under applicable law, will not constitute or result in any non-exempt prohibited transaction under ERISA or Section 4975 of the Code and will not subject the Trustee, the Company, the Securities Administrator or the Master Servicer to any obligation or liability (including obligations or liabilities under ERISA or Section 4975 of the Code) in addition to those undertaken in the Pooling and Servicing Agreement.

In addition, the Owner hereby certifies, represents and warrants to, and covenants with, the Company, the Trustee, the Securities Administrator and the Master Servicer that the Owner will not transfer such Certificates to any Plan or person unless either such Plan or person meets the requirements set forth in either (a) or (b) above.

Capitalized terms used but not defined herein shall have the meanings assigned in the Pooling and Servicing Agreement.

 

 

IN WITNESS WHEREOF, the Owner has caused this instrument to be executed on its behalf, by its [Title of Officer] and its corporate seal to be hereunto attached, attested by its [Assistant] Secretary, this ______ day of _____________, _____.

 

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            [NAME OF OWNER]
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            [Name of Officer]
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            [Title of Officer]
 

 

	
             
 	
             
 
	
            [Corporate Seal]

ATTEST:

____________________________________

[Assistant] Secretary
 	
             
 

 

Personally appeared before me the above-named [Name of Officer], known or proved to me to be the same person who executed the foregoing instrument and to be the [Title of Officer] of the Owner, and acknowledged to me that such person executed the same as such person’s free act and deed and the free act and deed of the Owner.

Subscribed and sworn before me this ____ day of ___________, 200__.

 

	
             
 	
            
 
 
 
	
             
 	
            Notary Public
 
	
             
 	
             
 
	
             
 	
            COUNTY OF_________________________
 
	
             
 	
            STATE OF___________________________
 
	
             
 	
            My Commission expires the ____ day of __________, 200__.

 
 

 

 

 

 

EXHIBIT H

MORTGAGE LOAN SCHEDULE

(FILED MANUALLY)

(In accordance with Rule 202 of Regulation S-T, this Mortgage Loan Schedule, is being filed in paper pursuant to a continuing hardship exemption.)

 

 

EXHIBIT I

[RESERVED]

 

 

EXHIBIT J

[RESERVED]

 

 

EXHIBIT K

FORM OF ASSIGNMENT AGREEMENT

This Assignment, Assumption and Recognition Agreement (the “AAR Agreement”) is made and entered into as of June 17, 2005 (the “Closing Date”), among Opteum Acceptance Corporation (the “Assignor”), HSBC Bank USA, National Association, as trustee for the holders of Opteum Mortgage Acceptance Corporation, Asset-Backed Pass-Through Certificates, Series 2005-3 (the “Assignee”) and Opteum Financial Services, LLC, f/k/a Home Star Mortgage Services, LLC (the “Company”).

 

Whereas, Wells Fargo Bank, N.A. (the “Master Servicer”) and the Company entered into that certain Servicing Agreement, dated as of March 5, 2004 (the “Cenlar Servicing Agreement”), pursuant to which the Company agreed to service certain mortgage loans (the “Cenlar Mortgage Loans”) for the benefit of the Assignee; and 

 

Whereas, the Assignor and the Company entered into that certain Servicing Agreement, dated as of March 5, 2004 (the “Option One Servicing Agreement”, together with the Cenlar Servicing Agreement, the “Servicing Agreements”), pursuant to which the Company agreed to service certain other mortgage loans (the “Option One Mortgage Loans”, together with the Cenlar Mortgage Loans, the “Mortgage Loans”) on behalf of the Assignor. 

 

In consideration of the mutual promises and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Mortgage Loans listed on Attachment 1 annexed hereto (the “Assigned Loans”) shall be subject to the terms of this AAR Agreement.  Any capitalized term used and not otherwise defined herein shall have the meaning assigned to such term in the Servicing Agreements or the Pooling and Servicing Agreement (as defined below).

 

Assignment and Assumption

1.          Except as expressly provided for herein, the Assignor hereby grants, transfers and assigns to the Assignee all of its right, title and interest as in, to and under the Assigned Loans, and as they relate to the Assigned Loans, the Servicing Agreements.  Notwithstanding anything to the contrary contained herein, the Assignor is not assigning to the Assignee any of its right, title and interest, to and under the Servicing Agreements with respect to any other mortgage loan other than the Assigned Loans.  Except as is otherwise expressly provided herein, the Assignor makes no representations, warranties or covenants to the Assignee and the Assignee acknowledges that the Assignor has no obligations to the Assignee under the terms of the Servicing Agreements or otherwise relating to the transaction contemplated herein (including, but
not limited to, any obligation to indemnify the Assignee).  

Assignor acknowledges and agrees that upon execution of this Agreement, with respect to the Assigned Loans, all representations, warranties and covenants by the Company under the Servicing Agreements shall accrue to Assignee by virtue of this Agreement.

Representations, Warranties and Covenants

 

 

2.          Assignor warrants and represents to, and covenants with, Assignee and Company as of the date hereof that:

	
            a.
 	
            Attached hereto as Attachment 2 are true and correct copies of the Servicing Agreements, which Servicing Agreements are in full force and effect as of the date hereof and the provisions of which have not been waived, amended or modified in any respect, nor has any notice of termination been given thereunder;
 
	
            b.
 	
            Assignor was the lawful owner of the Assigned Loans with full right to transfer the Assigned Loans and any and all of its interests, rights and obligations under the Servicing Agreements as they relate to the Assigned Loans, free and clear from any and all claims and encumbrances; and upon the transfer of the Assigned Loans to Assignee as contemplated herein, Assignee shall have good title to each and every Assigned Loan, as well as any and all of Assignee’s interests, rights and obligations under the Servicing Agreements as they relate to the Assigned Loans, free and clear of any and all liens, claims and encumbrances;
 
	
            c.
 	
            There are no offsets, counterclaims or other defenses available to the Company with respect to the Servicing Agreements;
 
	
            d.
 	
            Assignor has no knowledge of, and has not received notice of, any waivers under, or any modification of, any Assigned Loan;
 
	
            e.
 	
            Assignor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has all requisite power and authority to acquire, own and sell the Assigned Loans;
 
	
            f.
 	
            Assignor has full corporate power and authority to execute, deliver and perform its obligations under this AAR Agreement, and to consummate the transactions set forth herein. The consummation of the transactions contemplated by this AAR Agreement is in the ordinary course of Assignor’s business and will not conflict with, or result in a breach of, any of the terms, conditions or provisions of Assignor’s charter or by-laws or any legal restriction, or any material agreement or instrument to which Assignor is now a party or by which it is bound, or result in the violation of any law, rule, regulation, order, judgment or decree to which Assignor or its property is subject. The execution, delivery and performance by Assignor of this AAR Agreement and the consummation by it of the transactions contemplated hereby,
have been duly authorized by all necessary corporate action on part of Assignor. This AAR Agreement has been duly executed and delivered by Assignor and, upon the due authorization, execution and delivery by Assignee and the parties hereto, will constitute the valid and legally binding obligation of Assignor enforceable against Assignor in accordance with its terms except as enforceability may be limited by bankruptcy, reorganization, insolvency, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally, and by general principles of equity regardless of whether enforceability is considered in a proceeding in equity or at law; 
 

 

 

 

 

	
            g.
 	
            No consent, approval, order or authorization of, or declaration, filing or registration with, any governmental entity is required to be obtained or made by Assignor in connection with the execution, delivery or performance by Assignor of this AAR Agreement, or the consummation by it of the transactions contemplated hereby. Neither Assignor nor anyone acting on its behalf has offered, transferred, pledged, sold or otherwise disposed of the Assigned Loans or any interest in the Assigned Loans, or solicited any offer to buy or accept a transfer, pledge or other disposition of the Assigned Loans, or any interest in the Assigned Loans or otherwise approached or negotiated with respect to the Assigned Loans, or any interest in the Assigned Loans with any Person in any manner, or made any general solicitation by means of
general advertising or in any other manner, or taken any other action which would constitute a distribution of the Assigned Loans under the Securities Act of 1933, as amended (the “1933 Act”) or which would render the disposition of the Assigned Loans a violation of Section 5 of the 1933 Act or require registration pursuant thereto; and
 
	
            h.
 	
            There is no action, suit, proceeding, investigation or litigation pending or, to Assignor's knowledge, threatened, which either in any instance or in the aggregate, if determined adversely to Assignor, would adversely affect Assignor's execution or delivery of, or the enforceability of, this AAR Agreement, or the Assignor's ability to perform its obligations under this AAR Agreement.
 

3.          The Assignee warrants and represents to, and covenants with, the Assignor and the Company as of the date hereof that:

	
            a.
 	
            Assignee is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power and authority to hold the Assigned Loans as trustee on behalf of the holders of Opteum Mortgage Acceptance Corporation, Asset-Backed Pass-Through Certificates, Series 2005-3;
 

 

 

 

 

	
            Bc
 	
            Assignee has full power and authority to execute, deliver and perform its obligations under this AAR Agreement, and to consummate the transactions set forth herein. The consummation of the transactions contemplated by this AAR Agreement is in the ordinary course of Assignee’s business and will not conflict with, or result in a breach of, any of the terms, conditions or provisions of Assignee’s charter or by-laws or any legal restriction, or any material agreement or instrument to which Assignee is now a party or by which it is bound, or result in the violation of any law, rule, regulation, order, judgment or decree to which Assignee or its property is subject. The execution, delivery and performance by Assignee of this AAR Agreement and the consummation by it of the transactions contemplated hereby, have been
duly authorized by all necessary corporate action on part of Assignee. This AAR Agreement has been duly executed and delivered by Assignee and, upon the due authorization, execution and delivery by Assignor and the parties hereto, will constitute the valid and legally binding obligation of Assignee enforceable against Assignee in accordance with its terms except as enforceability may be limited by bankruptcy, reorganization, insolvency, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally, and by general principles of equity regardless of whether enforceability is considered in a proceeding in equity or at law;
 
	
            c.
 	
            No consent, approval, order or authorization of, or declaration, filing or registration with, any governmental entity is required to be obtained or made by Assignee in connection with the execution, delivery or performance by Assignee of this AAR Agreement, or the consummation by it of the transactions contemplated hereby; 
 
	
            d.
 	
            There is no action, suit, proceeding, investigation or litigation pending or, to Assignee's knowledge, threatened, which either in any instance or in the aggregate, if determined adversely to Assignee, would adversely affect Assignee's execution or delivery of, or the enforceability of, this AAR Agreement, or the Assignee's ability to perform its obligations under this AAR Agreement; and
 
	
            e.
 	
            Assignee assumes for the benefit of each of Assignor and Company all of Assignor’s rights under the Servicing Agreements but solely with respect to the Assigned Loans.
 

4.          Company warrants and represents to, and covenants with, Assignee and Assignor, as of the date hereof, that:

	
            a.
 	
            Attached hereto as Attachment 2 are true and accurate copies of the Servicing Agreements, which agreements are in full force and effect as of the date hereof and the provisions of which have not been waived, amended or modified in any respect, nor has any notice of termination been given thereunder;
 
	
            b.
 	
            Company is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, and has all requisite power and authority to service the Assigned Loans and otherwise to perform its obligations under the Servicing Agreements;
 

 

 

 

 

	
            c.
 	
            Company has full power and authority to execute, deliver and perform its obligations under this AAR Agreement, and to consummate the transactions set forth herein. The consummation of the transactions contemplated by this AAR Agreement is in the ordinary course of Company’s business and will not conflict with, or result in a breach of, any of the terms, conditions or provisions of Company’s charter or by-laws or any legal restriction, or any material agreement or instrument to which Company is now a party or by which it is bound, or result in the violation of any law, rule, regulation, order, judgment or decree to which Company or its property is subject. The execution, delivery and performance by Company of this AAR Agreement and the consummation by it of the transactions contemplated hereby, have been
duly authorized by all necessary corporate action on part of Company. This AAR Agreement has been duly executed and delivered by Company, and, upon the due authorization, execution and delivery by Assignor and Assignee, will constitute the valid and legally binding obligation of Company, enforceable against Company in accordance with its terms except as enforceability may be limited by bankruptcy, reorganization, insolvency, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally, and by general principles of equity regardless of whether enforceability is considered in a proceeding in equity or at law;
 
	
            d.
 	
            No consent, approval, order or authorization of, or declaration, filing or registration with, any governmental entity is required to be obtained or made by Company in connection with the execution, delivery or performance by Company of this AAR Agreement, or the consummation by it of the transactions contemplated hereby; 
 
	
            e.
 	
            Company shall establish a Custodial Account and an Escrow Account under the Servicing Agreements in favor of Assignee with respect to the Assigned Loans separate from the Custodial Account and Escrow Account previously established under the Servicing Agreements in favor of Assignor; 
 
	
            f.
 	
            Pursuant to Section 6.01 of the Cenlar Servicing Agreement, the Company hereby restates the representations and warranties set forth in Section 6.01 of the Cenlar Servicing Agreement with respect to the Company; and
 
	
            g.
 	
            Neither this AAR Agreement nor any certification, statement, report or other agreement, document or instrument furnished or to be furnished by the Company pursuant to this AAR Agreement contains or will contain any materially untrue statement of fact or omits or will omit to state a fact necessary to make the statements contained therein not misleading.
 

5.          Assignor hereby agrees to indemnify and hold the Assignee (and its successors and assigns) harmless against any and all claims, losses, penalties, fines, forfeitures, legal fees and related costs, judgments, and any other costs, fees and expenses that Assignee (and its successors and assigns) may sustain in any way related to any breach of the representations or warranties of Assignor set forth in this AAR Agreement or the breach of any covenant or condition contained herein.

Recognition of Assignee

6.          From and after the date hereof, Company shall recognize Assignee as owner of the Assigned Loans, and acknowledges that the Assigned Loans will be part of a REMIC, and will service the Assigned Loans in accordance with the Servicing Agreements but in no event in a manner that would (i) cause any REMIC to fail to qualify as a REMIC or (ii) result in the imposition of a tax upon any REMIC (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). It is the intention of Assignor, Company and Assignee that this AAR Agreement shall be binding upon and for the benefit of the respective successors and assigns of the parties hereto. Neither Company nor Assignor shall amend or agree to amend, modify,
waiver, or otherwise alter any of the terms or provisions of the Servicing 

 

Agreements which amendment, modification, waiver or other alteration would in any way affect the Assigned Loans without the prior written consent of Assignee.

	
            7.
 	
            Modification of Servicing Agreements:
 

The Company and Assignor hereby amend the Option One Servicing Agreement as follows:

a.          The definition of “Custodial Account” shall be deleted and replaced with the following definition: 

Custodial Account:                 The separate demand account or accounts created and maintained pursuant to Section 4.04 which shall be entitled “Opteum Financial Services, LLC Custodial Account in trust for HSBC Bank USA, National Association, as trustee for the holders of Opteum Mortgage Acceptance Corporation, Asset-Backed Pass-Through Certificates, Series 2005-3” and shall be established at a Qualified Depository.

b.          The definition of “Custodial Agreement” shall be amended by deleting the date “March 1, 2004” and replacing it with the date “June 1, 2005”.  

c.          The definition of “Effective Date”shall be amended by deleting the date “March 5, 2004” and replacing it with the date “June 17, 2005”.

d.          The definition of “Escrow Account” shall be deleted and replaced with the following definition:

Escrow Account:                     The separate trust account or accounts created and maintained pursuant to Section 4.06 which shall be entitled “Opteum Financial Services, LLC Escrow Account in trust for HSBC Bank USA, National Association, as trustee for the holders of Opteum Mortgage Acceptance Corporation, Asset-Backed Pass-Through Certificates, Series 2005-3” and shall be established at a Qualified Depository.

e.          The definition of “Mortgage Loan Schedule” shall be deleted and replaced with the following definition:

Mortgage Loan Schedule:                The schedule of Mortgage Loans attached as Attachment 1 to the Assignment, Assumption and Recognition Agreement, dated as of June 17, 2005, among Opteum Mortgage Acceptance Corp., HSBC Bank USA, National Association, as trustee for the holders of Opteum Mortgage Acceptance Corporation, Asset-Backed Pass-Through Certificates, Series 2005-3 and Opteum Financial Services, LLC.

f.           The definition of “Remittance Date” shall be amended by deleting the date “April 16, 2004” and replacing it with the date “May 18, 2005”.

g.          The following definitions shall be added to Section 1.01 of the Option One Servicing Agreement:

 

 

Balloon Mortgage Loan:  A Mortgage Loan that provides for the payment of the unamortized principal balance of such Mortgage Loan in a single payment at the maturity of such Mortgage Loan that is substantially greater than the preceding monthly payment.

Balloon Payment:  A payment of the unamortized principal balance of a Mortgage Loan in a single payment at the maturity of such Mortgage Loan that is substantially greater than the preceding Monthly Payment.

h.          The following sentence shall be added following the first sentence in Section 5.03 of the Option One Servicing Agreement:

For purposes of the preceding sentence, the Monthly Payment on each Balloon Mortgage Loan with a delinquent Balloon Payment is equal to the assumed monthly payment that would have been due on the related Due Date based on the original principal amortization schedule for the such Balloon Mortgage Loan.  

i.           Section 10.02 of the Option One Servicing Agreement shall be deleted in its entirety.

	
            The Company and Assignor hereby amend the Cenlar Servicing Agreement as follows:
 

a.          The following sentence shall be added following the first sentence in Section 4.03 of the Cenlar Servicing Agreement:

For purposes of the preceding sentence, the Monthly Payment on each Balloon Securitized Loan with a delinquent Balloon Payment is equal to the assumed monthly payment that would have been due on the related Due Date based on the original principal amortization schedule for the such Balloon Securitized Loan.  

b.         Subsection 7.04(d) of the Cenlar Servicing Agreement shall be deleted in its entirety.

 

Miscellaneous

8.          All demands, notices and communications related to the Assigned Loans, the Servicing Agreements and this AAR Agreement shall be in writing and shall be deemed to have been duly given if personally delivered at or mailed by registered mail, postage prepaid, as follows:

	
            a.
 	
            In the case of Company,
 	
             
 
	
             
 	
             
 	
            Opteum Financial Services, LLC
 
	
             
 	
             
 	
            W. 115 Century Road
 
	
             
 	
             
 	
            Paramus, New Jersey 07652
 
	
             
 	
             
 	
             
 
	
            b.
 	
            In the case of Assignor,
 	
             
 
	
             
 	
             
 	
            Opteum Mortgage Acceptance Corporation
 
	
             
 	
             
 	
            W. 115 Century Road
 
				

 

 

 

 

	
             
 	
             
 	
            Paramus, New Jersey 07652
 
	
             
 	
             
 	
             
 
	
            c.
 	
            In the case of Assignee,
 	
             
 
	
             
 	
             
 	
            HSBC Bank USA, National Association
 
	
             
 	
             
 	
            as Trustee
 
	
             
 	
             
 	
            452 Fifth Avenue
 
	
             
 	
             
 	
            New York, New York 10018
 
	
             
 	
             
 	
            Attention: OMAC 2005-3
 
	
             
 	
             
 	
            Telecopier No.:  (212) 525-1300
 
				

 

9.          The Company hereby acknowledges that Wells Fargo Bank, N.A. (the “Master Servicer”) has been appointed as the master servicer of the Assigned Loans pursuant to the Pooling and Servicing Agreement, dated as of June 1, 2005, among the Assignor, the Assignee and the Master Servicer, and therefor has the right to enforce all obligations of the Company, as they relate to the Assigned Loans, under the Servicing Agreements.  Each reference to the Owner in the Option One Servicing Agreement shall be a reference to the Assignee.  Such right will include, without limitation, the right to terminate the Company under the Servicing Agreements upon the occurrence of an event of default thereunder, the right to receive all remittances required to be made by the Company under the Servicing Agreements, the right to receive all monthly
reports and other data required to be delivered by the Company under the Servicing Agreements, the right to examine the books and records of the Company, indemnification rights, and the right to exercise certain rights of consent and approval relating to actions taken by the Company.  The Company shall make all distributions under the Servicing Agreements, as they relate to the Assigned Loans, to the Master Servicer by wire transfer of immediately available funds to:

 

OMAC Trust 2005-3

Wells Fargo Bank, N.A.

ABA# 121000248

SAS Clearing 

Account # 3970771416

For Further Credit to: OMAC 2005-3, Account # _________

 

and the Company shall deliver all reports required to be delivered under the Servicing Agreements, as they relate to the Assigned Loans, to the Assignee at the address set forth in Section 8 herein and to the Master Servicer at:

	
             
 	
             
 	
            Wells Fargo Bank, N.A.
 
	
             
 	
             
 	
            9062 Old Annapolis Road
 
	
             
 	
             
 	
            Columbia, Maryland 21045
 
	
             
 	
             
 	
            Attention: OMAC 2005-3
 

10.        THIS AAR AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE 

 

PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

11.        No term or provision of this AAR Agreement may be waived or modified unless such waiver or modification is in writing and signed by the party against whom such waiver or modification is sought to be enforced.

12.        This AAR Agreement shall inure to the benefit of the successors and assigns of the parties hereto. Any entity into which Assignor, Assignee or Company may be merged or consolidated shall, without the requirement for any further writing, be deemed Assignor, Assignee or Company, respectively, hereunder.

13.        This AAR Agreement shall survive the conveyance of the Assigned Loans, the assignment of the Servicing Agreements to the extent of the Assigned Loans by Assignor to Assignee and the termination of the Servicing Agreements.

14.        This AAR Agreement may be executed simultaneously in any number of counterparts. Each counterpart shall be deemed to be an original and all such counterparts shall constitute one and the same instrument.

15.        In the event that any provision of this AAR Agreement conflicts with any provision of the Servicing Agreements with respect to the Assigned Loans, the terms of this AAR Agreement shall control.

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this AAR Agreement on the date first above written.

 

	
             

OPTEUM MORTGAGE ACCEPTANCE CORPORATION, the Assignor
 	
             

HSBC BANK USA, NATIONAL ASSOCIATION, as trustee for the holders of Opteum Mortgage Acceptance Corporation, Asset-Backed Pass-Through Certificates, Series 2005-3,
 
	
             
 	
            the Assignee
 
	
            By:___________________________________
 	
            By: ___________________________________
 
	
            Its: ___________________________________
 	
            Its: ___________________________________
 
	
             
 	
             
 
	
            OPTEUM FINANCIAL SERVICES, LLC,

the Company
 	
             
 
	
             
 	
             
 
	
            By: __________________________________
 	
             
 
	
            Its: __________________________________
 	
             
 
	
             
 	
             

	
            Acknowledged and Agreed:

WELLS FARGO BANK, N.A.

 
 	
             

	
            By: __________________________________
 	
             

	
            Its: __________________________________
 	
             

 

 

 

Attachment I

 

Assigned Loans

 

 

Attachment II

 

Servicing Agreements

 

 

EXHIBIT L-1

FORM CERTIFICATION TO BE PROVIDED BY THE MASTER SERVICER

WITH FORM 10-K

	
            Re:
 	
            Opteum Mortgage Acceptance Corporation, 
 Asset-Backed Pass-Through Certificates, Series 2005-3
 

 

I, [Identify the certifying individual], certify that:

1.          I have reviewed this annual report on Form 10-K, and all reports on Form 8-K containing distribution or servicing reports filed in respect of periods included in the year covered by this annual report, of Opteum Mortgage Acceptance Corporation;

2.          Based on my knowledge, the information in these reports, taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading as of the last day of the period covered by this annual report;

3.          Based on my knowledge, the distribution or servicing information required to be provided to the trustee by the servicer under the pooling and servicing, or similar, agreement, for inclusion in these reports is included in these reports;

4.          I am responsible for reviewing the activities performed by the servicer under the pooling and servicing, or similar, agreement and based upon my knowledge and the annual compliance review required under that agreement, and except as disclosed in the reports, the servicer has fulfilled its obligations under that agreement; and

5.          The reports disclose all significant deficiencies relating to the servicer’s compliance with the minimum servicing standards based upon the report provided by an independent public accountant, after conducting a review in compliance with the Uniform Single Attestation Program for Mortgage Bankers or similar procedure, as set forth in the pooling and servicing, or similar, agreement, that is included in these reports.

In giving the certifications above, I have reasonably relied on information provided to me by the following unaffiliated parties: [the Trustee and Sub-Servicers]

Date: __________________

_______________________

[Signature]

[Title]

[Company]

 

 

EXHIBIT L-2

FORM CERTIFICATION TO BE

PROVIDED TO MASTER SERVICER BY THE TRUSTEE

	
            Re:
 	
            Opteum Mortgage Acceptance Corporation, 
 Asset-Backed Pass-Through Certificates, Series 2005-3
 

 

I, [Identify the certifying individual], a [______________] of HSBC Bank USA, National Association, as Trustee, hereby certify to Wells Fargo Bank, National Association and its officers, directors and affiliates, and with the knowledge and intent that they will rely upon this certification, that:

1.          I have reviewed the annual report on Form 10-K for the fiscal year [__], and all reports on Form 8-K containing distribution reports filed in respect of periods included in the year covered by that annual report, of the Issuer relating to the above-referenced trust;

2.          Based on my knowledge, the information in these distribution reports prepared by the Trustee, taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading as of the last day of the period covered by that annual report; and

3.          Based on my knowledge, the distribution information required to be provided by the Trustee under the Agreement is included in these distribution reports.

Capitalized terms used but not defined herein have the meanings ascribed to them in the Pooling and Servicing Agreement, dated June 1, 2005 (the “Agreement”), among Opteum Mortgage Acceptance Corporation, as Company, Wells Fargo Bank, National Association, (in such capacity, the “Master Servicer”) and as securities administrator (in such capacity, the “Securities Administrator”), and HSBC Bank USA, National Association, as Trustee.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            HSBC Bank USA, National Association, as Trustee
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Date:
 	
             
 

 

 

 

EXHIBIT L-3

FORM CERTIFICATION TO BE

PROVIDED TO THE TRUSTEE BY THE MASTER SERVICER

	
            Re:
 	
            Opteum Mortgage Acceptance Corporation, 
 Asset-Backed Pass-Through Certificates, Series 2005-3
 

 

I, [Identify the certifying individual], a [_________________] of Wells Fargo Bank, National Association, as Master Servicer, hereby certify to HSBC Bank USA, National Association and its officers, directors and affiliates, and with the knowledge and intent that they will rely upon this certification, that:

1.          Based on my knowledge, the distribution information required to be provided by the Trustee under the Agreement is included in these distribution reports.

Capitalized terms used but not defined herein have the meanings ascribed to them in the Pooling and Servicing Agreement, dated June 1, 2005 (the “Agreement”), among Opteum Mortgage Acceptance Corporation, as Company, Wells Fargo Bank, National Association,  (in such capacity, the “Master Servicer”) and as securities administrator (in such capacity, the “Securities Administrator”), and HSBC Bank USA, National Association, as Trustee.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Wells Fargo Bank, National Association, as Master Servicer

 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Date:
 	
             
 

 

 

EXHIBIT M-1

CENLAR SERVICING AGREEMENT

SERVICING AGREEMENT FOR ALT-A LOANS

THIS SERVICING AGREEMENT (this “Agreement”), entered into as of the 5th day of March, 2004, by and among HOME STAR MORTGAGE SERVICES, LLC, a Delaware corporation (“Home Star”), in its capacity as seller (the “Seller”), Home Star, in its capacity as servicer (the “Servicer”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, as master servicer (the “Master Servicer”), recites and provides as follows:

RECITALS

WHEREAS, Home Star owns and services certain residential Mortgage Loans (the “Mortgage Loans”);

WHEREAS, CENLAR FSB, a federal savings bank (the “Sub-Servicer”) sub-services certain of the Mortgage Loans for Home Star pursuant to that certain Sub-Servicing Agreement, dated as of March 1, 2004, by and between Home Star and the Sub-Servicer, (the “Superseded Sub-Servicing Agreement”);

WHEREAS, Home Star, as Seller, from time to time may convey certain of the Mortgage Loans, on a servicing-retained basis, to one or more Trusts, as defined herein, under one or more Trust Agreements, as defined herein, in connection with a Pass-Through Transfer, as defined herein, with Wells Fargo Bank, National Association as the Master Servicer;

WHEREAS, upon the Effective Date, as defined herein, of any such Pass-Through Transfer, the Mortgage Loans shall become Securitized Loans, as defined herein;

WHEREAS, in connection with any such Pass-Through Transfer, the Seller and the Master Servicer desire that the Servicer service any Securitized Loans pursuant to this Agreement, and the Servicer has agreed to do so, subject to the rights of the Seller and the Master Servicer to terminate the rights and obligations of the Servicer hereunder as provided herein;

WHEREAS, the Master Servicer shall be obligated under each Trust Agreement, among other things, to supervise the servicing of the Securitized Loans subject to the Trust Agreement on behalf of the related Trust, and shall have the right to terminate the rights and obligations of the Servicer under this Agreement or under the Agreement relating to specified Securitized Loans upon the occurrence and continuance of an Event of Default as provided herein;

WHEREAS, the Seller, the Servicer and the Master Servicer intend that the NIMs Insurer and each Trustee be a third party beneficiary of this Agreement;

WHEREAS, the Seller and the Servicer acknowledge and agree that the Seller will assign all of its rights and delegate all of its obligations hereunder with regard to specified Securitized 

 

Loans (exclusive of the Seller’s rights and obligations as owner of the servicing rights relating to such Securitized Loans) to the related Trust or Trustee, and that each reference herein to the Seller with regard to specified Securitized Loans is intended, unless otherwise specified, to mean the Seller or such Trust or Trustee, as assignee of the specified Securitized Loans;

WHEREAS, this Agreement shall supersede the Superseded Sub-Servicing Agreement in its entirety with respect to any Securitized Loans;

WHEREAS, the parties hereto mutually acknowledge and agree that, pursuant to Section 7.04 of this Agreement, the Sub-Servicer will contemporaneously herewith enter into a Sub-Servicing Acknowledgment Agreement (the “Sub-Servicing Agreement”) of even date herewith, pursuant to which the Sub-Servicer will sub-service the Securitized Loans on behalf of the Servicer in accordance with the terms of this Agreement and will have the benefit of certain rights of the Servicer under this Agreement, other than those under Section 7.04 hereof.

NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Master Servicer, the Seller and the Servicer hereby agree as follows:

ARTICLE I.

DEFINITIONS

The following terms are defined as follows (except as otherwise agreed in writing by the parties):

Accepted Servicing Practices:  With respect to any Securitized Loan, those mortgage servicing practices that prudent mortgage lending institutions would employ in servicing their own portfolio of mortgage loans of the same type as the Securitized Loans in the jurisdiction where the related Mortgaged Property is located, giving due consideration to customary and usual standards of practice of mortgage lenders and loan servicers administering similar mortgage loans.

Adjustable Rate Securitized Loan:  A Securitized Loan under which the Mortgage Interest Rate is adjusted from time to time in accordance with the terms and provisions of the related Mortgage Note.

Adverse REMIC Event: Taking (or causing to be taken) any action, or failure to take (or failure to cause to be taken) any action, that, under the REMIC Provisions, if taken or not taken, as the case may be, could (i) endanger the status of such REMIC as a REMIC or (ii) result in the imposition of a tax upon such REMIC (including but not limited to the tax on prohibited transactions as defined in Section 860F(a)(2) of the Code and the tax on prohibited contributions set forth on Section 860G(d) of the Code).

Advancing Person:  As defined in Section 4.03 hereof.

 

 

Agreement:  This Servicing Agreement and all amendments hereof and supplements hereto.

Ancillary Income:  All income derived from the Securitized Loans (other than the (i) Servicing Fee or (ii) Prepayment Charges or Servicer Prepayment Charge Payment Amounts attributable to the Securitized Loans), including but not limited to late charges, penalty interest, any interest paid on funds deposited in the Custodial Account and Escrow Account (other than interest on escrowed funds required by law to be paid to the Mortgagor), fees received with respect to checks or bank drafts returned by the related bank for non-sufficient funds, assumption fees, modification fees, optional insurance administrative fees and all other incidental fees and charges.

Assignment of Mortgage:  An assignment of a Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the transfer of such Mortgage to the party indicated therein, which assignment, notice of transfer or equivalent instrument may be in the form of one or more blanket assignments covering the Securitized Loans secured by Mortgaged Properties located in the same jurisdiction, if permitted by law.

Balloon Securitized Loan:  Any Securitized Loan that by its original terms or by virtue of any modification provides for an amortization schedule extending beyond its originally scheduled Maturity Date and which has a final scheduled payment that is proportionately large in comparison to other scheduled payments.

Balloon Payment:  The final scheduled payment in respect of a Balloon Securitized Loan.

Business Day:  Any day other than (i) a Saturday or Sunday or (ii) a day on which banking and savings and loan institutions in the States of New York, Maryland, Minnesota and, with respect to any Trust, the jurisdiction in which the related Trustee conducts its trust business, are authorized or obligated by law or executive order to be closed.

Certificates:  Any or all of the certificates or other securities issued pursuant to a Trust Agreement.

Certificate Registrar:  The registrar appointed pursuant to the Trust Agreement.

Closing Date:  The actual date of closing of any Pass-Through Transfer, without regard to the Effective Date thereof.

Code:  The Internal Revenue Code of 1986, as it may be amended from time to time or any successor statute thereto, and applicable U.S. Department of the Treasury regulations issued pursuant thereto.

Condemnation Proceeds:  All awards of settlements in respect of a Mortgaged Property, whether permanent or temporary, partial or entire, by exercise of the power of eminent domain or 

 

condemnation, to the extent not required to be released to a Mortgagor in accordance with the terms of the related Securitized Loan documents.

Conventional Loan:  A conventional residential first or second lien fixed or adjustable rate Securitized Loan that is neither FHA insured nor VA guaranteed.

Costs:  For any Person, any claims, losses, damages, penalties, fines, forfeitures, reasonable and necessary legal fees and related costs, judgments, and other costs and expenses of such Person.

Credit Risk Manager:  With respect to Securitized Loans covered by a Trust Agreement, any credit risk manager or loss mitigation advisor under such Trust Agreement.

Custodial Account:  The account created and maintained by the Servicer pursuant to Section 3.03.

Custodial Agreement:  With respect to Securitized Loans covered by a Trust Agreement, the custodial agreement relating to custody of such Securitized Loans between a Custodian and the related Trustee, as acknowledged by the Servicer, dated as of the related Effective Date.

Custodian:  A custodian of Securitized Loans under any Custodial Agreement.

Delinquent:  For reporting purposes, a Securitized Loan is “delinquent” when any payment contractually due thereon has not been made by the close of business on the Due Date therefor.  Such Securitized Loan is “30 days Delinquent” if such payment has not been received by the close of business on the corresponding day of the month immediately succeeding the month in which such payment was first due, or, if there is not such corresponding day (e.g., as when a 30-day month follows a 31-day month in which a payment was due on the 31st day of such month), then on the last day of such immediately succeeding month.  Similarly for “60 days Delinquent” and the second immediately succeeding month and “90 days Delinquent” and the third immediately succeeding month.

Determination Date:  With respect to each Remittance Date, the 15th day of the month in which such Remittance Date occurs, or, if such 15th day is not a Business Day, the immediately preceding Business Day.

Depositor: With respect to Securitized Loans covered by a Trust Agreement , the Person to which the Seller transfers Mortgage Loans, or any successor in interest to such Person, which Person in turn transfers such Mortgage Loans to a Trustee in a Pass-Through Transfer.

Distressed Securitized Loan:  As of any Effective Date, any related Securitized Loan that was Delinquent in payment for a period of 90 days or more as of the first calendar day of the month in which such Effective Date occurs, without giving effect to any grace period permitted by the related Mortgage Note or for which the Servicer has accepted a deed in lieu of foreclosure.  

 

No Securitized Loan shall be considered delinquent for the purpose of this definition by virtue of the related Mortgagor having made payment to the prior servicer.

Due Date:  The day of the calendar month on which the Monthly Payment is due on a Securitized Loan, exclusive of any days of grace.  With respect to the Securitized Loans for which payment from the Mortgagor is due on a day other than the first day of the calendar month, such Securitized Loans will be treated as if the Monthly Payment is due on the first day of the immediately succeeding month.

Due Period:  With respect to each Remittance Date, the period commencing on the second day of the month immediately preceding the month of the Remittance Date and ending on the first day of the month of the Remittance Date.

Effective Date:  The effective date of any Pass-Through Transfer as set forth in the Transfer Notice.

Eligible Investments:  Any one or more of the obligations and securities listed below which investment provides for a date of maturity not later than the Determination Date in each month:

(i)         direct obligations of, and obligations fully guaranteed as to timely payment of principal and interest by, the United States of America or any agency or instrumentality of the United States of America the obligations of which are backed by the full faith and credit of the United States of America, including Federal Housing Administration debentures, but excluding any of such securities whose terms do not provide for a payment of a fixed dollar amount upon maturity or call for redemption (“Direct Obligations”) and Freddie Mac senior debt obligations;

(ii)        federal funds, or demand and time deposits in, certificates of deposits of, or bankers’ acceptances issued by, any depository institution or trust company (including U.S. subsidiaries of foreign depositories, a Trustee, the Master Servicer or any agent of a Trustee or the Master Servicer, acting in its respective commercial capacity) incorporated or organized under the laws of the United States of America or any state thereof and subject to supervision and examination by federal or state banking authorities, so long as at the time of investment or the contractual commitment providing for such investment the commercial paper or other short term debt obligations of such depository institution or trust company (or, in the case of a depository institution or trust company which is the principal subsidiary of a holding company, the commercial
paper or other short term debt or deposit obligations of such holding company or deposit institution, as the case may be) have been rated by each related Rating Agency in its highest short-term rating category or one of its two highest long-term rating categories;

(iii)        repurchase agreements collateralized by direct obligations of, or securities guaranteed by, Ginnie Mae or Freddie Mac with any registered broker/dealer subject to Securities Investors’ Protection Corporation jurisdiction or any commercial bank insured by the FDIC, if such broker/dealer or bank has an uninsured, unsecured and unguaranteed obligation rated by each related Rating Agency in its highest short-term rating category;

 

 

(iv)       securities bearing interest or sold at a discount issued by any corporation incorporated under the laws of the United States of America or any state thereof which have a credit rating from each related Rating Agency, at the time of investment or the contractual commitment providing for such investment, at least equal to one of the two highest long term credit rating categories of each related Rating Agency; provided, however, that securities issued by any particular corporation will not be Eligible Investments to the extent that investment therein will cause the then outstanding principal amount of securities issued by such corporation and held as part of the Custodial Account to exceed 20% of the aggregate principal amount of all Eligible Investments in the Custodial Account; provided, further, that such securities will not be Eligible Investments
if they are published as being under review with negative implications from any Rating Agency;

(v)        commercial paper (including both non-interest-bearing discount obligations and interest bearing obligations payable on demand or on a specified date not more than 180 days after the date of issuance thereof) rated by each related Rating Agency in its highest short-term rating category;

	
            (vi)
 	
            a Qualified GIC (as defined in the Trust Agreement);
 

(vii)       certificates or receipts representing direct ownership interests in future interest or principal payments on obligations of the United States of America or its agencies or instrumentalities (which obligations are backed by the full faith and credit of the United States of America) held by a custodian in safekeeping on behalf of the holders of such receipts; and

(viii)      any other demand, money market, common trust fund or time deposit or obligation, or interest bearing or other security or investment, rated in the highest rating category by each related Rating Agency.  Such investments in this subsection (viii) may include money market mutual funds or common trust funds, including any fund for which a Trustee, the Master Servicer or any affiliate thereof serves as an investment advisor, administrator, shareholder servicing agent, and/or custodian or subcustodian, notwithstanding that (x) the related Trustee, the Master Servicer or any affiliate thereof charges and collects fees and expenses from such funds for services rendered, (y) a Trustee, the Master Servicer or any affiliate thereof charges and collects fees and expenses for services rendered pursuant to this Agreement or a Trust Agreement, and (z) services
performed for such funds and pursuant to this Agreement may converge at any time;

provided, however, that no such instrument shall be an Eligible Investment if such instrument evidences either (i) a right to receive only interest payments with respect to the obligations underlying such instrument, or (ii) both principal and interest payments derived from obligations underlying such instrument and the principal and interest payments with respect to such instrument provide a yield to maturity of greater than 120% of the yield to maturity at par of such underlying obligations.

Errors and Omissions Insurance:  Errors and Omissions Insurance to be maintained by the Servicer in accordance with the Master Servicing Guide.

 

 

Escrow Account:  The separate account or accounts created and maintained pursuant to Section 3.05.

Escrow Payments:  With respect to any Securitized Loan, the amounts constituting ground rents, taxes, assessments, water rates, sewer rents, municipal charges, mortgage insurance premiums, fire and hazard insurance premiums, condominium charges, and any other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.

Event of Default:  Any of the events which may result in a termination for cause set forth in Section 8.01.

Fannie Mae:  The Federal National Mortgage Association, or any successor thereto.

FDIC:  The Federal Deposit Insurance Corporation, or any successor thereto.

FHA:  The Federal Housing Administration, an agency within HUD or any successor thereto and including the Federal Housing Commissioner and the Secretary of HUD where appropriate under the FHA Regulation.

Fidelity Bond:  A fidelity bond to be maintained by the Servicer in accordance with the Master Servicing Guide.

Fixed Rate Securitized Loan:  Any Securitized Loan as to which the Mortgage Interest Rate set forth in the Mortgage Note is fixed for the term of such Securitized Loan.

Final Recovery Determination:  With respect to any defaulted Securitized Loan or any REO Property (other than any Securitized Loan or REO Property repurchased from the Trust), a determination made by the Servicer that all Insurance Proceeds, Liquidation Proceeds and other payments or recoveries which the Servicer, in its reasonable good faith judgment, expect to be finally recoverable in respect thereof have been so recovered.

Fitch:  Fitch, Inc., or any successor in interest.

Freddie Mac:  The Federal Home Loan Mortgage Corporation, or any successor thereto.

Ginnie Mae:  The Government National Mortgage Association, or any successor thereto.

Holder or Certificateholder:  The registered owner of any Certificate as recorded on the books of the Certificate Registrar provided for in the related Trust Agreement.

Home Star:  As defined in the first paragraph of this Agreement.

Homestar Mortgage Securities Trusts:  One or more trusts to be formed by a Trust Agreement as part of a Pass-Through Transfer, pursuant to each of which a numbered series of Certificates will be issued.

 

 

HUD:  The Department of Housing and Urban Development, or any federal agency or official thereof which may from time to time succeed to the functions thereof with regard to FHA Mortgage Insurance.  The term “HUD,” for purposes of this Agreement, is also deemed to include subdivisions thereof such as the FHA and Ginnie Mae.

Insurance Proceeds:  With respect to each Securitized Loan, proceeds of insurance policies insuring the Securitized Loan or the related Mortgaged Property, including, but not limited to, proceeds from any PMI Policy, to the extent any such proceeds are not to be applied to the restoration and repair of the related Mortgaged Property or released to the Mortgagor in accordance with the procedures that the Servicer would follow in servicing mortgage loans for its own account, subject to the terms and conditions of the related Mortgage Note and Mortgage.

Issuer:  The issuer of any Certificates pursuant to the Trust Agreement.

LIBOR:  The three-month London InterBank Offered Rate as published in the Wall Street Journal on the first Business Day of the month of any Remittance Date.

Liquidation Proceeds:  Cash received in connection with the liquidation of a defaulted Securitized Loan, whether through the sale or assignment of such Securitized Loan, trustee’s sale, foreclosure sale or otherwise, or the sale of the related REO Property, if the Mortgaged Property is acquired in satisfaction of the Securitized Loan.

Master Servicer:  With respect to each Trust Agreement, Wells Fargo Bank, National Association, or any successor in interest, or if any successor Master Servicer shall be appointed as provided in such Trust Agreement, then such successor Master Servicer.

Master Servicing Guide:  The Wells Fargo Bank, N.A. Master Servicing Guide, original dated January, 1997, as amended July, 2001, and all amendments or additions thereto, including as amended hereby.

MERS:  Mortgage Electronic Registration Systems, Inc., a Delaware corporation, or any successor in interest thereto.

MERS Eligible Securitized Loan:  Any Securitized Loan that has been designated by the Servicer as recordable in the name of MERS, as nominee.

MERS Securitized Loan:  Any Securitized Loan as to which the related Mortgage, or an Assignment of Mortgage, has been or will be recorded in the name of MERS, as nominee for the holder from time to time of the related Mortgage Note.

Monthly Advance:  With respect to each Remittance Date and each Securitized Loan, an amount equal to the Monthly Payment (with the interest portion of such Monthly Payment adjusted to the Securitized Loan Remittance Rate) that was due on the Securitized Loan, and that was Delinquent at the close of business on the first day of the month in which such Remittance Date occurs, but only to the extent that such amount is expected, in the reasonable judgment of 

 

the Servicer, to be recoverable from collections or other recoveries (including Liquidation Proceeds and Insurance Proceeds) in respect of such Securitized Loan.  To the extent that the Servicer determines that any such amount is not recoverable from collections or other recoveries in respect of such Securitized Loan, such determination shall be evidenced by a certificate of a Servicing Officer delivered to the Master Servicer setting forth such determination and the procedures and considerations of the Servicer forming the basis of such determination.

Monthly Payment:  The scheduled monthly payment of principal and interest on a Securitized Loan.

Moody’s:  Moody’s Investors Service, Inc. or any successor in interest.

Mortgage:  The mortgage, deed of trust or other instrument securing a Mortgage Note, which creates a first or second lien on a fee simple estate in real property securing the Mortgage Note.

Mortgage Interest Rate:  The annual rate of interest borne on a Mortgage Note net of any Relief Act Reduction.

Mortgage Note:  The original, executed note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage.

Mortgaged Property:  The real property securing repayment of the debt evidenced by a Mortgage Note.

Mortgagor:  The obligor on a Mortgage Note.

Net Sale Proceeds:  The proceeds from the sale of REO Property, net of all expenses and advances incurred by the Servicer in connection with such sale, including, without limitation, legal fees and expenses, referral fees, brokerage commissions, conveyance taxes and any other related expense.

Non-MERS Eligible Securitized Loan:  Any Securitized Loan other than a MERS Eligible Securitized Loan.

Non-MERS Securitized Loan:  Any Securitized Loan other than a MERS Securitized Loan.

Officer’s Certificate:  A certificate signed by the Chairman of the Board, the President or a vice president (however denominated), and by the Treasurer, the Secretary, or one of the assistant treasurers or assistant secretaries of the Servicer, the Master Servicer or the Seller, as applicable.

Opinion of Counsel:  A written opinion of counsel, who may be an employee of the Servicer, reasonably acceptable to the related Trustee, the Master Servicer, and the Seller, provided that any Opinion of Counsel relating to qualification of the Securitized Loans in a REMIC or compliance with the REMIC Provisions must be an opinion of counsel acceptable to 

 

the related Trustee, the Master Servicer,  and the Seller, who (i) is in fact independent of the Seller and the Servicer, (ii) does not have any material direct or indirect financial interest in either the Seller or the Servicer or any affiliate of any such entity and (iii) is not connected with either the Seller or the Servicer as an officer, employee, director or person performing similar functions.

Pass-Through Transfer:  The sale or transfer by Home Star of some or all of the Securitized Loans to a Depositor for transfer to a Trust to be formed as part of a publicly-issued and/or privately placed, rated or unrated, mortgage pass-through transaction or similar transaction, in each case in which Home Star is retained as a Servicer thereunder, with Wells Fargo Bank, National Association as the Master Servicer.

Person:  Any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof.

PMI Insurer:  Any Qualified Insurer issuing a PMI Policy with respect to a Securitized Loan.

PMI Policy:  A policy of primary mortgage guaranty insurance issued by a Qualified Insurer, as required by this Agreement and the Trust Agreement with respect to certain Securitized Loans.

Prepayment Charge:  With respect to any Securitized Loan and Remittance Date, the charges or premiums, as specified in the Prepayment Charge Schedule, if any, due in connection with a full or partial prepayment of such Securitized Loan during the immediately preceding Prepayment Period in accordance with the terms thereof (but excluding any Servicer Prepayment Charge Payment Amount).

Prepayment Charge Schedule:  A data field in the schedule of Securitized Loans to be attached to the Transfer Notice, the form of which is attached hereto as Exhibit A, which sets forth the amount of the Prepayment Charge and the term during which the Prepayment Charge is imposed with respect to a Securitized Loan.

Prepayment Interest Shortfall Amount:  With respect to any Securitized Loan that was subject to a Principal Prepayment in full or in part during any Due Period, which Principal Prepayment was applied to such Securitized Loan prior to such Securitized Loan’s Due Date in such Due Period, the amount of interest that would have accrued on the amount of such Principal Prepayment during the period commencing on the date as of which such Principal Prepayment was applied to such Securitized Loan and ending on the day immediately preceding such Due Date, inclusive.

Prepayment Period:  With respect to each Remittance Date and any full or partial Principal Prepayments, the calendar month immediately preceding the month in which the related Remittance Date occurs.

 

 

Principal Prepayment:  Any payment by a Mortgagor of principal (other than a Balloon Payment) or other recovery of principal on a Securitized Loan that is recognized as having been received or recovered in advance of its scheduled Due Date and applied to reduce the principal balance of the Securitized Loan in accordance with the terms of the Mortgage Note.

Qualified Depository:  With respect to each Pass-Through Transfer, any of (i) a depository the accounts of which are insured by the FDIC (to the limits established by such corporation) and the debt obligations of which are rated P-1 (or its equivalent) or better by each Rating Agency rating the related Certificates; or (ii) the corporate trust department of any bank the debt obligations of which are rated A-2 (or its equivalent) or better by each such Rating Agency.

Qualified Insurer:  A mortgage guaranty insurance company duly authorized and licensed where required by law to transact mortgage guaranty insurance business and approved as an insurer by Freddie Mac and Fannie Mae.

Qualifying Substitute Mortgage Loan:  A mortgage loan permitted under the terms of a Trust Agreement to be substituted for a related Securitized Loan.

Rating Agency:  With respect to Certificates issued by or in connection with a Trust, any of Fitch, Moody’s or S&P which assigns a rating to such Certificates, and their successors.  If such agencies or their successors are no longer in existence, “Rating Agencies” shall be such nationally recognized statistical rating agencies, or other comparable Person, designated by the Seller, written notice of which designation shall be given to the related Trustee, the Master Servicer and the Servicer.

Relief Act Reduction:  With respect to any Securitized Loan as to which there has been a reduction in the amount of the interest collectible thereon as a result of the application of the Servicemembers Civil Relief Act, any amount by which interest collectible on such Securitized Loan for the Due Date in the related Due Period is less than the interest accrued thereon for the applicable one-month period at the Mortgage Interest Rate without giving effect to such reduction.

REMIC:  A “real estate mortgage investment conduit” within the meaning of Section 860D of the Code.

Remittance Date:  The 18th day (or if such 18th day is not a Business Day, the first Business Day immediately preceding Business Day) of any calendar month.

REO Disposition:  The final sale or other disposition by the Servicer of any REO Property.

REO Disposition Proceeds:  All amounts received with respect to an REO Disposition pursuant to Section 3.12.

 

 

REO Property:  A Mortgaged Property acquired by the Servicer on behalf of the Trust through foreclosure or by deed in lieu of foreclosure pursuant to Section 3.12 hereof.

Residual Certificate:  Any residual certificate or “Class R” Certificate issued under any Trust Agreement.

S&P:  Standard & Poor’s Rating Services, a division of The McGraw Hill Companies, Inc., or any successor in interest.

Securitized Loan:  An individual Mortgage Loan that from time to time becomes subject to this Agreement pursuant to a Pass-Through Transfer, each Securitized Loan subject to this Agreement being identified on a schedule to the Transfer Notice, the form of which is attached as Exhibit A hereto, which Securitized Loan includes without limitation the Securitized Loan documents, the Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds, and all other rights, benefits, proceeds and obligations arising from or in connection with such Securitized Loan.

Securitized Loan Remittance Rate:  With respect to each Securitized Loan, the annual rate of interest remitted to the Master Servicer, which shall be equal to the Mortgage Interest Rate minus the Servicing Fee Rate.

Securitized Loan Schedule:  The schedule of Securitized Loans to be attached to the Transfer Notice, a form of which is attached hereto as Exhibit A, setting forth information with respect to such Securitized Loans as agreed to by the Seller, the Servicer and the Master Servicer, including, but not limited to (i)  any MERS identification number (if available) with respect to each MERS Securitized Loan or MERS Eligible Securitized Loan, (ii) a data field indicating whether such Securitized Loan is insured under a PMI Policy and identifying the related Qualified Insurer, (iii) a Prepayment Charge Schedule and (iv) the Servicing Fee Rate.

Servicer:  Home Star or its successor in interest or assigns or any successor to the Servicer under this Agreement as herein provided.

Servicer Prepayment Charge Payment Amount:  The amount payable by the Servicer in respect of any waived Prepayment Charges pursuant to Section 3.15 hereof.

Servicing Advances:  All customary, reasonable and necessary “out of pocket” costs and expenses other than Monthly Advances (including reasonable attorneys’ fees and disbursements) incurred in the performance by the Servicer of its servicing obligations, including, but not limited to, the cost of (a) the preservation, inspection, restoration and protection of the Mortgaged Property, (b) any enforcement of administrative or judicial proceedings, including foreclosures, (c) the management and liquidation of the Mortgaged Property (including costs incurred in connection with environmental inspections or other related costs of foreclosure of Mortgaged Property potentially contaminated by hazardous or toxic substance or wastes in accordance with Section 3.12 hereof) if the Mortgaged Property is acquired in satisfaction of the Mortgage, (d) taxes, assessments, water rates, sewer
rents and other charges which are or may become a lien 

 

upon the Mortgaged Property, and PMI Policy premiums and fire and hazard insurance coverage and (e) any losses sustained by the Servicer with respect to the liquidation of the Mortgaged Property.

Servicing Fee:  With respect to each Due Period and any Securitized Loan, an amount equal to one-twelfth the product of (i) the Servicing Fee Rate and (ii) the Scheduled Balance of such Securitized Loan as of the related Determination Date.  The obligation of the Trustee to pay the Servicing Fee is limited to, and the Servicing Fee is payable solely from, the interest portion (including recoveries with respect to interest from Liquidation Proceeds to the extent permitted by Section 3.02 of this Agreement) of such Monthly Payments collected by the Servicer, or as otherwise provided under this Agreement, and the Servicing Fee is subject to reduction for compensating interest under Section 4.04 hereof.

Servicing Fee Rate:  The servicing fee rate, stated as either a number of basis points or as a percentage, for each Securitized Loan, as reflected in the schedule of Securitized Loans to be attached to the Transfer Notice, the form of which is attached hereto as Exhibit A.

Servicing File:  The items pertaining to a particular Securitized Loan including, but not limited to, the computer files, data disks, books, records, data tapes, notes, and all additional documents generated as a result of or utilized in originating and/or servicing each Securitized Loan, which are held in trust for the related Trust by the Servicer.

Servicing Officer:  Any officer of the Servicer involved in or responsible for, the administration and servicing of the Securitized Loans whose name appears on a list of servicing officers furnished by the Servicer to the Master Servicer upon request, as such list may from time to time be amended.

Sub-Servicer:  Cenlar FSB, a federal savings bank, pursuant to the Sub-Servicing Agreement, or its successor in interest.

Sub-Servicing Agreement:  That certain Sub-Servicing Acknowledgment Agreement of even date with this Agreement, by and between the Servicer and the Sub-Servicer.

Superseded Sub-Servicing Agreement:  That certain Sub-Servicing Agreement, dated as of March 1, 2004, by and between Home Star and the Sub-Servicer.

Transfer Notice:  The Transfer Notice referred to in Section 2.01 hereof, in the form attached hereto as Exhibit A.

Trust:  The trust established by the Trust Agreement, the assets of which consist of the transferred Securitized Loans and any other assets provided for in the related Trust Agreement.

Trust Agreement:  Any trust agreement, pooling and servicing agreement, indenture or comparable documents by and among some or all of the Issuer, the Master Servicer, the Depositor 

 

and a Trustee (and which may include other parties) creating a Trust and/or otherwise effectuating a Pass-Through Transfer.

Trustee:  Any trustee or trust with respect to the transferred Securitized Loans in any Pass-Through Transfer, or any successor in interest, or if any successor trustee or co-trustee shall be appointed as provided in the Trust Agreement, then such successor trustee or such co-trustee, as the case may be.

VA:  The Veterans Administration, an agency of the United States of America, or any successor thereto, including the Administration of Veterans Affairs.

Any capitalized terms used and not defined in this Agreement shall have the meanings ascribed to such terms in the related Trust Agreement specified in the Transfer Notice.

 

 

ARTICLE II.

PASS- THROUGH TRANSFERS; SELLER’S ENGAGEMENT OF SERVICER TO

PERFORM SERVICING RESPONSIBILITIES

	
            Section 2.01
 	
            Pass-Through Transfers.
 

(a)        The Seller and the Servicer agree that from time to time the Seller shall effect the sale or transfer of some or all of the Mortgage Loans to a Trust to be formed as part of a Pass-Through Transfer.  The Servicer shall cooperate with the Seller in connection with any Pass-Through Transfer contemplated by the Seller pursuant to this Section 2.01, including without limitation providing requested information and reports to, and otherwise cooperating with, any Credit Risk Manager.  In connection therewith, the Servicer shall provide to the Seller and any Trustee, Trust, Depositor, underwriter, initial purchaser, NIMs Insurer or Credit Risk Manager in connection with a Pass-Through Transfer, as the case may be: (i) any and all information and appropriate verification of information which may be reasonably available to the Servicer, including the
Servicer’s foreclosure, delinquency experience and the Servicer’s underwriting standards, whether through letters of its auditors and counsel or otherwise, as such parties shall reasonably request; and (ii) such additional representations, warranties, covenants, opinions of counsel, letters from auditors, and certificates of public officials or officers of the Servicer as are reasonably believed necessary by the Seller and any Trustee, Trust, Depositor, underwriter, initial purchaser, NIMs Insurer or Credit Risk Manager, as the case may be, in connection with such Pass-Through Transfer.  The Servicer shall indemnify the Depositor for any material misstatements or omissions or alleged material misstatements or omissions contained in the information provided pursuant to this Section 2.01(a). The Seller shall provide the Servicer with a Transfer Notice with respect to any such Pass-Through Transfer, including a schedule of Mortgage Loans which have been transferred, the
Effective Date of the Pass-Through Transfer and the name and address of the related Trustee.  Upon the Effective Date of such a Pass-Through Transfer, (A) the Servicer and the Seller agree that the provisions of this Agreement shall go into effect with respect to the Securitized Loans to which the Transfer Notice relates, and (B) the Servicer agrees to recognize the Trustee and Trust with respect to the transferred Mortgage Loans in the Pass-Through Transfer, or the Master Servicer acting on their behalf, as having the same rights under this Agreement as the Seller with respect to such transferred Mortgage Loans, including without limitation the right to terminate the Servicer under this Agreement.

	
            Section 2.02
 	
            Contract for Servicing; Possession of Servicing Files.
 

The Seller, by execution and delivery of this Agreement, does hereby contract with the Servicer, subject to the terms of this Agreement, for the servicing of the Securitized Loans.  On or before each Closing Date, the Seller shall cause to be delivered to the Servicer or to the Sub-Servicer the Servicing Files with respect to the Securitized Loans listed in the schedule attached to the applicable Transfer Notice.  Each Servicing File delivered to the Servicer shall be held in trust by the Servicer for the benefit of the Trust; provided, however, that the Servicer shall have no liability for any Servicing Files (or portions thereof) not delivered by the Seller.  The Servicer’s possession of any portion of the Securitized Loan documents shall be on behalf of the 

 

Trust for the sole purpose of facilitating servicing of the related Securitized Loan pursuant to this Agreement, and such retention and possession by the Servicer shall be in a custodial capacity only.  The ownership of each Mortgage Note, Mortgage, and the contents of the Servicing File shall be vested in the Trust and the ownership of all records and documents with respect to the related Securitized Loan prepared by or which come into the possession of the Servicer shall immediately vest in the Trust and shall be retained and maintained, in trust, by the Servicer on behalf of the Trust in such custodial capacity only.  The portion of each Servicing File retained by the Servicer pursuant to this Agreement shall be segregated from the other books and records of the Servicer and shall be appropriately marked to clearly reflect the ownership of the related Securitized Loan by the Trust.  The Servicer shall
release from its custody the contents of any Servicing File retained by it only in accordance with this Agreement.

	
            Section 2.03
 	
            Books and Records.
 

(a)        Subject to Section 3.01(a) hereof, as soon as practicable after the Closing Date or the date on which a Qualifying Substitute Mortgage Loan is delivered pursuant to a Trust Agreement, as applicable (but in no event more than 90 days thereafter except to the extent delays are caused by the applicable recording office), the Servicer, at the expense of the Seller, shall cause the Mortgage or Assignment of Mortgage, as applicable, with respect to each related MERS Eligible Securitized Loan, to be properly recorded in the name of MERS in the public recording office in the applicable jurisdiction, or shall ascertain that such have previously been so recorded.

(b)       Subject to Section 3.01(a) hereof, an Assignment of Mortgage in favor of the Trustee on behalf of the Trust shall be recorded as to each Non-MERS Securitized Loan, unless instructions to the contrary are delivered to the Servicer, in writing, by the Trustee, or the Servicer obtains an Opinion of Counsel that recordation of such Assignment of Mortgage is not required.  Subject to the preceding sentence, as soon as practicable after the Closing Date (but in no event more than 90 days thereafter except to the extent delays are caused by the applicable recording office), the Servicer, at the expense of the Seller, shall cause such related Assignment of Mortgage to be properly recorded in each public recording office where such Non-MERS Eligible Securitized Loans are recorded, unless the Servicer obtains an Opinion of Counsel that recordation of such an
Assignment of Mortgage is not required.

(c)        Additionally, the Servicer shall prepare and execute, at the direction of the Trustee, any note endorsements relating to any of the related Non-MERS Securitized Loans.

(d)       All rights arising out of the Securitized Loans shall be vested in the related Trust, subject to the Servicer’s right to service and administer the Securitized Loans hereunder in accordance with the terms of this Agreement.  All funds received on or in connection with a Securitized Loan, other than the Servicing Fee and other compensation to which the Servicer is entitled as set forth herein, including but not limited to that compensation as set forth in Section 5.01 below, shall be received and held by the Servicer in trust for the benefit of the related Trust pursuant to the terms of this Agreement.

 

 

(e)        Any out-of-pocket costs incurred by the Servicer pursuant to this Section 2.03 and Section 3.01(a), including any recording or other fees in connection with the Servicer’s obtaining the necessary powers of attorney (and which are specified herein to be an expense of the Seller), shall be reimbursed to the Servicer by the Seller within five (5) Business Days of receipt by the Seller of an invoice for reimbursement.  The Trust shall not reimburse the Seller for any such reimbursement to the Servicer.

ARTICLE III.

SERVICING OF THE SECURITIZED LOANS

	
            Section 3.01
 	
            Servicer to Service.
 

The Servicer, as an independent contractor, shall service and administer the Securitized Loans from and after the Closing Date and shall have full power and authority, acting alone, to do any and all things in connection with such servicing and administration which the Servicer may deem necessary or desirable, consistent with the terms of this Agreement and with Accepted Servicing Practices.  The Servicer may designate the sub-servicer to perform the obligations hereunder, provided that such designation shall not relieve the Servicer of such obligations.

The Seller  and the Servicer additionally agree as follows:

(a)        The Servicer shall (A) record or cause to be recorded the Mortgage or the Assignment of Mortgage, as applicable, with respect to all MERS Eligible Securitized Loans, in the name of MERS, or shall ascertain that such have previously been so recorded; (B) prepare or cause to be prepared all Assignments of Mortgage with respect to all Non-MERS Eligible Securitized Loans; (C) prepare for recording or cause to be recorded, subject to Section 2.03(b) hereof, all Assignments of Mortgage with respect to Non-MERS Securitized Loans in the name of the related Trust; (D) pay the recording costs pursuant to Section 2.03 hereof; and/or (E) track such Mortgages and Assignments of Mortgage to ensure they have been recorded.  The Servicer shall be entitled to be paid by the Seller its out-of-pocket costs for the preparation and recordation of the Mortgages
and Assignments of Mortgage.  After the expenses of such recording costs pursuant to Section 2.03 hereof shall have been paid by the Servicer, the Servicer shall submit to the Seller a reasonably detailed invoice for reimbursement of recording costs it incurred hereunder.

(b)        If applicable, the Servicer shall, in accordance with the relevant provisions of the Cranston-Gonzales National Affordable Housing Act of 1990, as the same may be amended from time to time, and the regulations provided in accordance with the Real Estate Settlement Procedures Act, provide notice to the Mortgagor of each Securitized Loan of the transfer of the servicing thereto to the Servicer.

(c)        The Servicer shall be responsible for the preparation of and costs associated with notifications to Mortgagors of the assumption of servicing by the Servicer.

 

 

Consistent with the terms of this Agreement and except as provided in Section 3.15 hereof, the Servicer may waive any late payment charge, assumption fee or other fee (other than a Prepayment Charge) that may be collected in the ordinary course of servicing the Securitized Loans.  The Servicer shall not make any future advances to any Mortgagor under any Securitized Loan, and (unless the Mortgagor is in default with respect to the Securitized Loan or such default is, in the judgment of the Servicer, reasonably foreseeable) the Servicer shall not permit any modification of any material term of any Securitized Loan, including any modification that would change the Mortgage Interest Rate, defer or forgive the payment of principal or interest, reduce or increase the outstanding principal balance (except for actual payments of principal) or change the final maturity date on such Securitized
Loan.  The NIMs Insurer’s prior written consent shall be required for any modification, waiver or amendment if the aggregate number of outstanding Securitized Loans which have been modified, waived or amended exceeds 5% of the number of Securitized Loans in the related Trust as of the Effective Date.  In the event of any such modification which permits the deferral of interest or principal payments on any Securitized Loan, the Servicer shall, on the Business Day immediately preceding the Remittance Date in any month in which any such principal or interest payment has been deferred, make a Monthly Advance in accordance with Section 4.03, in an amount equal to the difference between (a) such month’s principal and one month’s interest at the Securitized Loan Remittance Rate on the unpaid principal balance of such Securitized Loan and (b) the amount paid by the Mortgagor.  The Servicer shall be entitled to reimbursement for such advances to the same extent as for all other
advances made pursuant to Section 4.03.  The Servicer may permit modifications to a Securitized Loan, with the consent of the NIMs Insurer, which are authorized by the express terms of either an allonge to the related Mortgage Note or an addendum to the related Mortgage in existence as of the Effective Date. If Home Star wishes to make a modification to a Securitized Loan which is not permitted under this Section 3.01, then Home Star must repurchase such Securitized Loan from the related Trust on the terms and conditions provided in the Trust Agreement.  Without limiting the generality of the foregoing, the Servicer shall continue, and is hereby authorized and empowered, to execute and deliver on behalf of itself and the related Trust, all instruments of satisfaction or cancellation, or of partial or full release, discharge and all other comparable instruments, with respect to the Securitized Loans and with respect to the Mortgaged Properties.  Upon the written request of the
Servicer, the Trustee shall execute and deliver to the Servicer, within the later of fifteen days from the Closing Date or within fifteen days of such Servicer request, any powers of attorney (one for each county in which any of the Mortgaged Properties are located) and other documents, furnished to it by the Servicer and reasonably satisfactory to the Trustee, necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties under this Agreement.

Notwithstanding anything in this Agreement to the contrary, the Servicer (a) shall not permit any modification with respect to any Mortgage Loan that would change the Mortgage Interest Rate and (b) shall not (unless the Mortgagor is in default with respect to the Mortgage Loan or such default is, in the judgment of the Servicer, reasonably foreseeable) make or permit any modification, waiver or amendment of any term of any Mortgage Loan that would both (i) effect an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code (or Treasury regulations promulgated thereunder) and (ii) cause the Trust Fund 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.

Prior to taking any action with respect to the Mortgage Loans which is not contemplated under the terms of this Agreement, the Servicer will obtain an Opinion of Counsel acceptable to the NIMs Insurer and the Trustee or the Master Servicer on its behalf with respect to whether such action could result in the imposition of a tax upon the REMIC (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) (either such event, an “Adverse REMIC Event”), and the Servicer shall not take any such action or cause the Trust Fund to take any such action as to which it has been advised that an Adverse REMIC Event could occur.

The Servicer shall not permit the creation of any “interests” (within the meaning of Section 860G of the Code) in the REMIC. The Servicer shall not enter into any arrangement by which the REMIC will receive a fee or other compensation for services nor permit the REMIC to receive any income from assets other than “qualified mortgages” as defined in Section 860G(a)(3) of the Code or “permitted investments” as defined in Section 860G(a)(5) of the Code.

	
            Section 3.02
 	
            Collection of Securitized Loan Payments.
 

Continuously from the Closing Date until the date each Securitized Loan ceases to be subject to this Agreement, the Servicer shall proceed diligently to collect all payments due under each of the Securitized Loans when the same shall become due and payable and shall take special care in ascertaining and estimating Escrow Payments and all other charges that will become due and payable with respect to the Securitized Loans and each related Mortgaged Property, to the end that the installments payable by the Mortgagors will be sufficient to pay such charges as and when they become due and payable.

	
            Section 3.03
 	
            Establishment of and Deposits to Custodial Account.
 

(a)        The Servicer shall segregate and hold all funds collected and received pursuant to the Securitized Loans separate and apart from any of its own funds and general assets and shall establish and maintain for each related Trust a Custodial Account, in the form of a time deposit or demand account, titled “Home Star Mortgage Services, LLC in trust for [Name of Trust].”  The Custodial Account shall be established with a Qualified Depository.  Any funds deposited in the Custodial Account may be invested in Eligible Investments subject to the provisions of Section 3.11 hereof.  Funds deposited in the Custodial Account may be drawn on by the Servicer in accordance with Section 3.04 hereof.  The creation of the Custodial Account shall be evidenced by a letter agreement in the form of Exhibit B.  A copy of such letter agreement shall be
furnished to each Trustee, each NIMS Insurer and the Master Servicer.  The NIMs Insurer and the Trustee shall also be notified of any change in the location of the Custodial Account.

 

 

(b)       The Servicer shall deposit in the Custodial Account on a daily basis, and retain therein, the following collections received by the Servicer and payments made by the Servicer after the Closing Date:

(i)         all payments on account of principal received on the Securitized Loans, including all Principal Prepayments;

(ii)         all payments on account of interest received on the Securitized Loans adjusted to the applicable Securitized Loan Remittance Rate;

(iii)        all Prepayment Charges received or any Servicer Prepayment Charge Payment Amounts to be paid by the Servicer to the related Trust;

	
            (iv)
 	
            all Liquidation Proceeds;
 

(v)        all Insurance Proceeds (other than any amounts immediately applied to the restoration or repair of the Mortgaged Property or immediately released to the Mortgagor);

(vi)        all Condemnation Proceeds that are not applied to the restoration or repair of the Mortgaged Property or released to the Mortgagor;

(vii)       any Prepayment Interest Shortfall Amount required to be paid by the Servicer pursuant to Section 4.04;

(viii)      all Monthly Advances made by the Servicer or an Advancing Person pursuant to Section 4.03;

(ix)        any amounts required to be deposited by the Servicer in connection with the deductible clause in any blanket hazard insurance policy;

(x)        any amounts received with respect to or related to any REO Property or REO Disposition Proceeds;

(xi)       any amounts required to be deposited pursuant to Section 3.11 in connection with any losses realized on Eligible Investments with respect to funds held in the Custodial Account;

(xii)       any amounts required to be deposited by the Servicer pursuant to Section 3.16(a) in connection with any unpaid claims that are a result of a breach by the Servicer or any sub-servicer of its obligations hereunder or under a PMI Policy;

	
            (xiii)
 	
            any amounts received by it under any PMI Policy; and
 

(xiv)      any other amount required hereunder to be deposited by the Servicer in the Custodial Account.

 

 

Notwithstanding the foregoing clause (viii), no Monthly Advances or Servicing Advances shall be required to be made by the Servicer if such Monthly Advance or Servicing Advance would, if made, be, in the Servicer’s reasonable judgment, nonrecoverable.  The determination by the Servicer that it has made a nonrecoverable Monthly Advance or Servicing Advance, or that any proposed Monthly Advance or Servicing Advance would be a nonrecoverable advance, shall be evidenced by an Officer’s Certificate of the Servicer delivered to the Master Servicer and the NIMs Insurer.

The foregoing requirements for deposit into the Custodial Account shall be exclusive, it being understood and agreed that, without limiting the generality of the foregoing, payments in the nature of (i) late payment charges, penalty interest and insufficient fund charges, (ii) assumption and modification fees, (iii) other Ancillary Income and (iv) the Servicing Fee need not be deposited by the Servicer into the Custodial Account.

Any interest paid on funds deposited in the Custodial Account by the depository institution shall accrue to the benefit of the Servicer as additional servicing compensation and the Servicer shall be entitled to retain and withdraw such interest from the Custodial Account pursuant to Section 3.04 of this Agreement.  Additionally, any other benefit derived from the Custodial Account associated with the receipt, disbursement and accumulation of principal, interest, taxes, hazard insurance, mortgage insurance, etc. shall accrue for the benefit of the Servicer.

	
            Section 3.04
 	
            Permitted Withdrawals From Custodial Account.
 

The Servicer shall, from time to time, withdraw funds from the Custodial Account for the following purposes:

(i)         to make payments to the Master Servicer in the amounts and in the manner provided for in Section 4.01;

(ii)        in the event the Servicer has elected not to retain the Servicing Fee out of any Mortgagor payments on account of interest or other recovery of interest with respect to a particular Securitized Loan (including late collections of interest on such Securitized Loan, or interest portions of Insurance Proceeds, Liquidation Proceeds or Condemnation Proceeds) prior to the deposit of such Mortgagor payment or recovery in the Custodial Account, to pay to itself the related Servicing Fee from all such Mortgagor payments on account of interest or other such recovery for interest with respect to that Securitized Loan;

(iii)        to pay itself investment earnings on funds deposited in the Custodial Account;

(iv)        to transfer funds to another Qualified Depository in accordance with Section 3.11 hereof;

 

 

(v)        to invest funds in certain Eligible Investments in accordance with Section 3.11 hereof;

(vi)       to reimburse itself to the extent of funds held in the Custodial Account for Monthly Advances of the Servicer’s funds made pursuant to Section 4.03.  The Servicer’s right to reimburse itself pursuant to this subclause (vi) with respect to any Securitized Loan shall be limited to amounts received on or in respect of the related Securitized Loan which represent late recoveries of payments of principal or interest with respect to which a Monthly Advance was made, it being understood that in the case of any such reimbursement the Servicer’s right thereto shall be prior to the rights of the related Trust; provided, however, that following the final liquidation of a Securitized Loan, the Servicer may reimburse itself for previously unreimbursed Monthly Advances in excess of Liquidation Proceeds or Insurance Proceeds with respect to such
Securitized Loan from any funds in the Custodial Account relating to Securitized Loans in the same Trust, it being understood, in the case of any such reimbursement, that the Servicer’s right thereto shall be prior to the rights of the related Trust.  The Servicer may recover at any time from amounts on deposit in the Custodial Account with respect to Securitized Loans in the same Trust the amount of any Monthly Advances that the Servicer deems nonrecoverable or that remain unreimbursed to the Servicer from related Liquidation Proceeds after the final liquidation of the related Securitized Loan.  In addition, the Servicer may, at any time, withdraw from the Custodial Account funds that are held for future distribution (i.e., were not included in the principal and interest for the preceding Remittance Date) to reimburse itself for Monthly Advances previously made by the Servicer;

(vii)       to reimburse itself for unreimbursed Servicing Advances, and for any unpaid Servicing Fees, the Servicer’s right to reimburse itself pursuant to this subclause (vii) with respect to any Securitized Loan being limited to related Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds and other amounts received in respect of the related REO Property, and such other amounts as may be collected by the Servicer from the Mortgagor or otherwise relating to the Securitized Loan, it being understood that, in the case of any such reimbursement, the Servicer’s right thereto shall be prior to the rights of the related Trust;

(viii)      to reimburse the Servicer for expenses incurred by, and reimbursable to, the Servicer pursuant to Section 6.03, but only to extent such amounts are determined to be reimbursable by the related Trust pursuant to Section 6.03;

(ix)       to reimburse itself for expenses incurred or reimbursable to the Servicer pursuant to Section 3.12 from funds with respect to Securitized Loans in the same Trust to the extent not previously reimbursed under clause (vii) of this Section 3.04;

(x)        to withdraw funds with respect to Securitized Loans in the same Trust necessary for the operation, management and maintenance of any REO related property to the extent not previously reimbursed under clause (vii) of this Section 3.04;

	
            (xi)
 	
            to withdraw any funds deposited to the Custodial Account in error; and,
 

 

 

 

(xii)       to clear and terminate the Custodial Account upon the termination of this Agreement;

(xiii)      to reimburse the Trustee or the NIMs Insurer for enforcement expenses incurred in respect of a breach of a representation or warranty.

	
            Section 3.05
 	
            Establishment of and Deposits to Escrow Account.
 

The Servicer shall segregate and hold all funds collected and received pursuant to a Securitized Loan constituting Escrow Payments separate and apart from any of its own funds and general assets and shall establish and maintain an Escrow Account, in the form of a time deposit or demand account, titled “Home Star Mortgage Services, LLC in trust for one or more Homestar Mortgage Securities Trusts.”  The Escrow Account shall be established with a Qualified Depository in a manner that shall provide maximum available insurance thereunder.  Funds deposited in the Escrow Account may be drawn on by the Servicer in accordance with Section 3.06.  The creation of the Escrow Account shall be evidenced by a letter agreement in the form of Exhibit C.  A copy of such certification or letter agreement shall be furnished to each Trustee and the Master Servicer.

The Servicer shall deposit in the Escrow Account or Accounts on a daily basis, and retain therein:

(i)         all Escrow Payments collected on account of the Securitized Loans, for the purpose of effecting timely payment of any such items as required under the terms of this Agreement; and

(ii)        all amounts representing Insurance Proceeds or Condemnation Proceeds that are to be applied to the restoration or repair of any Mortgaged Property.

The Servicer shall make withdrawals from the Escrow Account only to effect such payments as are required under this Agreement, as set forth in Section 3.06.  The Servicer shall retain any interest paid on funds deposited in the Escrow Account by the depository institution, other than interest on escrowed funds required by law to be paid to the related Mortgagor.  Additionally, any other benefit derived from the Escrow Account associated with the receipt, disbursement and accumulation of principal, interest, taxes, hazard insurance, mortgage insurance, etc. shall accrue to the Servicer.  To the extent required by law, the Servicer shall pay interest on escrowed funds to the related Mortgagor notwithstanding that the Escrow Account may be non-interest bearing or that interest paid thereon is insufficient for such purposes.

	
            Section 3.06
 	
            Permitted Withdrawals From Escrow Account.
 

Withdrawals from the Escrow Account or Accounts may be made by the Servicer only:

 

 

(i)         to effect payments of ground rents, taxes, assessments, water rates, sewer rents, mortgage insurance premiums, condominium charges, fire and hazard insurance premiums or other items constituting Escrow Payments for the related Mortgage;

(ii)         to refund to any related Mortgagor any funds found to be in excess of the amounts required under the terms of the related Securitized Loan;

(iii)       as permitted by applicable state law, for transfer to the Custodial Account and application to reduce the principal balance of the related Securitized Loan in accordance with the terms of the related Mortgage and Mortgage Note;

(iv)        for application to restore or repair the related Mortgaged Property in accordance with the Master Servicing Guide;

(v)        to pay to the Servicer, or the related Mortgagor to the extent required by law, any interest paid on the funds with respect to a Securitized Loan deposited in the Escrow Account; and

(vi)       to reimburse itself for any Servicing Advances made with respect to Escrow Payments for a Securitized Loan or the related Mortgaged Properties, but only from amounts received on the related Securitized Loan which represent late collections of Escrow Payments thereunder;

	
            (vii)
 	
            to withdraw any funds deposited into the Escrow Account in error; and
 

(viii)      to clear and terminate the Escrow Account on the termination of this Agreement.

The Servicer will be responsible for the administration of the Escrow Accounts and will be obligated to make Servicing Advances to the Escrow Account in respect of its obligations under this Section 3.06, reimbursable from the Escrow Accounts or Custodial Account to the extent not collected from a Mortgagor, anything to the contrary notwithstanding, when and as necessary to avoid the lapse of insurance coverage on the related Mortgaged Property, or which the Servicer knows, or in the exercise of the required standard of care of the Servicer hereunder should know, is necessary to avoid the loss of such Mortgaged Property due to a tax sale or the foreclosure as a result of a tax lien.  If any such payment has not been made and the Servicer receives notice of a tax lien with respect to such Mortgaged Property being imposed, the Servicer will, within ten (10) Business Days of such notice,
advance or cause to be advanced funds necessary to discharge such lien on such Mortgaged Property.

	
            Section 3.07
 	
            Restoration of Mortgaged Property.
 

The Servicer need not obtain the approval of the Master Servicer prior to releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be applied to the restoration or repair of the related Mortgaged Property if such release is in accordance with Accepted 

 

Servicing Practices.  At a minimum, with respect to claims of $10,000 or more, the Servicer shall comply with the following conditions in connection with any such release of Insurance Proceeds or Condemnation Proceeds:

(i)         the Servicer shall receive satisfactory independent verification of completion of repairs and issuance of any required approvals with respect thereto;

(ii)        the Servicer shall take all steps necessary to preserve the priority of the lien of the Mortgage, including, but not limited to requiring waivers with respect to mechanics’ and materialmen’s liens.

(iii)        the Servicer shall verify that the Securitized Loan is not 60 or more days delinquent; and

(iv)        pending repairs or restoration, the Servicer shall place the Insurance Proceeds or Condemnation Proceeds in the Escrow Account.

With respect to claims of less than $10,000, the Servicer shall comply with the following conditions in connection with any such release of Insurance Proceeds or Condemnation Proceeds:

(v)        the related Mortgagor shall provide an affidavit verifying the completion of repairs and issuance of any required approvals with respect thereto;

(vi)        the Servicer shall verify the total amount of the claim with the applicable insurance company; and

(vii)       pending repairs or restoration, the Servicer shall place the Insurance Proceeds or Condemnation Proceeds in the Escrow Account.

If the Trustee is named as an additional loss payee, the Servicer is hereby empowered to endorse any loss draft issued in respect of such a claim in the name of the related Trust.

	
            Section 3.08
 	
            Fidelity Bond and Errors and Omissions Insurance.
 

The Servicer shall keep in force and shall cause each sub-servicer to keep in force during the term of this Agreement a Fidelity Bond and Errors and Omissions Insurance the minimum coverage of which shall be at least equal to the coverage required by the Master Servicer in the Master Servicing Guide (unless a waiver of such requirement has been obtained by the Servicer from the Master Servicer and NIMs Insurer).  Such Fidelity Bond and Errors and Omissions Insurance shall be maintained with recognized insurers, shall be in such form and amount as would permit the Servicer to be qualified with the Master Servicer as a servicer, and shall by its terms not be cancelable without thirty days’ prior written notice to the Trustee, the NIMs Insurer and the Master Servicer.  The Servicer and each sub-servicer shall be deemed to have complied with this provision if an affiliate of the
Servicer has such errors and omissions and fidelity bond coverage and, by the terms of such insurance policy or fidelity bond, the coverage afforded 

 

thereunder extends to the Servicer.  The Servicer shall furnish and shall cause each sub-servicer to furnish to the Trustee, each NIMs Insurer (upon reasonable request) and the Master Servicer a copy of each such bond and insurance policy upon their request.

	
            Section 3.09
 	
            Notification of Adjustments.
 

With respect to each Adjustable Rate Securitized Loan, the Servicer shall adjust the Mortgage Interest Rate on the related interest rate adjustment date and shall adjust the Monthly Payment on the related mortgage payment adjustment date, if applicable, in compliance with the requirements of applicable law and the related Mortgage and Mortgage Note.  The Servicer shall execute and deliver any and all necessary notices required under applicable law and the terms of the related Mortgage Note and Mortgage regarding the Mortgage Interest Rate and Monthly Payment adjustments.  The Servicer shall promptly, upon written request therefor, deliver to the Master Servicer such notifications and any additional applicable data regarding such adjustments and the methods used to calculate and implement such adjustments.  Upon the discovery by the Servicer or the receipt of notice from the Master
Servicer that the Servicer has failed to adjust a Mortgage Interest Rate or Monthly Payment in accordance with the terms of the related Mortgage Note, the Servicer shall immediately deposit in the Custodial Account from its own funds the amount of any interest loss or deferral caused thereby and shall indemnify the Trust in respect of any liability as a result of such shortfall.

	
            Section 3.10
 	
            Payment of Taxes, Insurance and Other Charges.
 

With respect to each Securitized Loan, the Servicer shall maintain accurate records reflecting the status of ground rents, taxes, assessments, water rates and other charges which are or may become a lien upon the Mortgaged Property and the status of fire and hazard insurance coverage and shall obtain, from time to time, all bills for the payment of such charges (including renewal premiums) and shall effect payment thereof prior to the applicable penalty or termination date and at a time appropriate for securing maximum discounts allowable, employing for such purpose deposits of the Mortgagor in the Escrow Account which shall have been estimated and accumulated by the Servicer in amounts sufficient for such purposes, as allowed under the terms of the Mortgage or applicable regulations.  The Servicer assumes full responsibility for the payment of all such bills and shall effect payments of
all such bills irrespective of the Mortgagor’s faithful performance in the payment of same or the making of the Escrow Payments and shall make advances from its own funds to effect such payments.  The Servicer shall employ Accepted Servicing Practices to ensure that the related Mortgaged Property is not subjected to a tax lien as a result of nonpayment and that such Mortgaged Property is not left uninsured.

	
            Section 3.11
 	
            Protection of Accounts.
 

The Servicer may transfer the Custodial Account or the Escrow Account to a different Qualified Depository from time to time.  The Servicer shall give written notice to the Trustee and the NIMs Insurer and the Master Servicer of the location of the Custodial Account maintained by it with respect to the Securitized Loans when established and prior to any change thereof.

 

 

The Servicer shall bear any expenses, losses or damages sustained by the Trustee or the Master Servicer if the Custodial Account and/or the Escrow Account are not demand deposit accounts.

Amounts on deposit in the Custodial Account and the Escrow Account may at the option of the Servicer be invested in Eligible Investments; provided that in the event that amounts on deposit in the Custodial Account or the Escrow Account exceed the amount fully insured by the FDIC (the “Insured Amount”), the Servicer shall be obligated to invest the excess amount over the Insured Amount in Eligible Investments on the same Business Day as such excess amount becomes present in the Custodial Account or the Escrow Account.  Any such Eligible Investment shall mature no later than the Business Day immediately preceding the related Remittance Date or other date on which funds are needed to be disbursed.  Any such Eligible Investment shall be made in the name of the Servicer in trust for the benefit of one or more Homestar Mortgage Securities Trusts, as their interests may appear.  All
income on or gain realized from any such Eligible Investment shall be for the benefit of the Servicer and may be withdrawn at any time by the Servicer.  Any losses incurred in respect of any such investment shall be deposited in the Custodial Account or the Escrow Account by the Servicer out of its own funds immediately as realized.

	
            Section 3.12
 	
            Title, Management and Disposition of REO Property.
 

In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be taken in the name of the related Trust, or in the event the related Trust is not authorized or permitted to hold title to real property in the state where the REO Property is located, or would be adversely affected under the “doing business” or tax laws of such state by so holding title, the deed or certificate of sale shall be taken in the name of such Person or Persons as shall be consistent with an Opinion of Counsel obtained by the Servicer from any attorney duly licensed to practice law in the state where the REO Property is located.  The Person or Persons holding such title other than the related Trust shall acknowledge in writing that such title is being held as nominee for the related Trust.

The Servicer shall manage, conserve, protect and operate each REO Property for the related Trust solely for the purpose of its prompt disposition and sale.  The Servicer, either itself or through an agent selected by the Servicer, shall manage, conserve, protect and operate such REO Property in the same manner that it manages, conserves, protects and operates other foreclosed property for its own account, and in the same manner that similar property in the same locality as the REO Property is managed.  The Servicer shall attempt to sell the same (and may temporarily rent the same for a period not greater than one year, except as otherwise provided below) on such terms and conditions as the Servicer deems to be in the best interest of the related  Trust.

Notwithstanding anything to the contrary contained in this Section 3.12, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Master Servicer otherwise requests, an environmental inspection or 

 

review of such Mortgaged Property to be conducted by a qualified inspector shall be arranged by the Servicer.  Upon completion of the inspection, the Servicer shall provide the Master Servicer and the NIMs Insurer with a written report of such environmental inspection.  In the event that the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes, the Servicer shall not proceed with foreclosure or acceptance of a deed in lieu of foreclosure.  In the event that the environmental inspection report is inconclusive as to the whether or not the Mortgaged Property is contaminated by hazardous or toxic substances or wastes, the Servicer shall not, without the prior written approval of the Master Servicer and the NIMs Insurer, proceed with foreclosure or acceptance of a deed in lieu of foreclosure.  The Servicer shall be reimbursed for all
Servicing Advances made pursuant to this paragraph with respect to the related Mortgaged Property from the amounts on deposit in the Custodial Account with respect to Securitized Loans in the same Trust.

In the event that a Trust which has made one or more REMIC elections acquires any REO Property in connection with a default or imminent default on a Securitized Loan, the Servicer shall dispose of such REO Property not later than the end of the third taxable year after the year of its acquisition by the related Trust unless the Servicer has applied for and received a grant of extension from the Internal Revenue Service (and provides a copy of the same to the Master Servicer) to the effect that, under the REMIC Provisions and any relevant proposed legislation and under applicable state law, a REMIC elected by such Trust may hold REO Property for a longer period without adversely affecting the REMIC status of such REMIC or causing the imposition of a federal or state tax upon such REMIC.  If the Servicer has received such an extension (and provided a copy of the same to the Master
Servicer), then the Servicer shall continue to attempt to sell the REO Property for its fair market value for such period longer than three years as such extension permits (the “Extended Period”).  If the Servicer has not received such an extension, and the Servicer is unable to sell the REO Property within the period ending 3 months before the end of such third taxable year after its acquisition by the related Trust or if the Servicer has received such an extension, and the Servicer is unable to sell the REO Property within the period ending three months before the close of the Extended Period, the Servicer shall, before the end of the three-year period or the Extended Period, as applicable, (i) purchase such REO Property at a price equal to the REO Property’s fair market value or (ii) auction the REO Property to the highest bidder (which may be the Servicer) in an auction reasonably designed to produce a fair price prior to the expiration of the three-year period or
the Extended Period, as the case may be.  The related Trustee shall sign any document or take any other action reasonably requested by the Servicer which would enable the Servicer, on behalf of the related Trust, to request such grant of extension.

Notwithstanding any other provisions of this Agreement, no REO Property acquired by a Trust shall be rented (or allowed to continue to be rented) or otherwise used by or on behalf of such Trust in such a manner or pursuant to any terms that would:  (i) cause such REO Property to fail to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code; or (ii) subject any REMIC elected by such Trust to the imposition of any federal income taxes on the income earned from such REO Property, including any taxes imposed by reason of Sections 860F 

 

or 860G(c) of the Code, unless the Servicer has agreed to indemnify and hold harmless such Trust with respect to the imposition of any such taxes.

The Servicer shall also maintain on each REO Property hazard insurance with extended coverage in an amount which is at least equal to the lesser of (i) the maximum insurable value of the improvements which are a part of such property and (ii) the outstanding Principal Balance of the Securitized Loan at the time it becomes REO Property, to the extent required and available under the Flood Disaster Protection Act of 1973, as amended, flood insurance in the amount required above.

The disposition of REO Property shall be carried out by the Servicer at such price, and upon such terms and conditions, as the Servicer deems to be in the best interests of the related Trust.  The proceeds of sale of the REO Property shall be promptly deposited in the Custodial Account.  After the expenses of such disposition shall have been paid, the Servicer shall reimburse itself pursuant to Section 3.04 hereof for any Servicing Advances it incurred with respect to such REO Property.

The Servicer shall withdraw from the amounts on deposit in the Custodial Account with respect to Securitized Loans in the same Trust funds necessary for the proper operation, management and maintenance of the REO Property, including the cost of maintaining any hazard insurance pursuant to the Master Servicing Guide.  The Servicer shall make monthly distributions on each Remittance Date to the Trustee of the net cash flow from the REO Property (which shall equal the revenues from such REO Property net of the expenses described in this Section 3.12 and of any reserves reasonably required from time to time to be maintained to satisfy anticipated liabilities for such expenses).

	
            Section 3.13
 	
            Real Estate Owned Reports.
 

Together with the statement furnished pursuant to Section 4.02, the Servicer shall furnish by electronic transmission to the Master Servicer and the NIMs Insurer on or before the Remittance Date each month a statement with respect to any REO Property covering the operation of such REO Property for the previous month and the Servicer’s efforts in connection with the sale of such REO Property and any rental of such REO Property incidental to the sale thereof for the previous month.  That statement shall be accompanied by such other information as the Master Servicer shall reasonably request.

	
            Section 3.14
 	
            MERS.
 

(a)        The Servicer shall take such actions as are necessary to cause the related Trust to be clearly identified as the owner of each MERS Securitized Loan on the records of MERS for purposes of the system of recording transfers of beneficial ownership of mortgages maintained by MERS.

 

 

(b)        The Servicer shall maintain in good standing its membership in MERS.  In addition, the Servicer shall comply with all rules, policies and procedures of MERS, including the Rules of Membership, as amended, and the MERS Procedures Manual, as amended.

(c)        With respect to all MERS Securitized Loans serviced hereunder, the Servicer shall promptly notify MERS as to any transfer of beneficial ownership or release of any security interest in such Securitized Loans.

(d)        With respect to all MERS Securitized Loans serviced hereunder, the Servicer shall notify MERS as to any transfer of servicing pursuant to Section 9.01 within 10 Business Days of such transfer of servicing.  The Servicer shall cooperate with each Trustee and any successor servicer to the extent necessary to ensure that such transfer of servicing is appropriately reflected on the MERS system.

	
            Section 3.15
 	
            Waiver of Prepayment Penalties.
 

Except as provided below, the Servicer or any designee of the Servicer shall not waive any Prepayment Charge with respect to any Securitized Loan.  If the Servicer or its designee fails to collect a Prepayment Charge at the time of the related prepayment of any Securitized Loan subject to such Prepayment Charge, the Servicer shall pay to the Trust at such time (by deposit to the Custodial Account) an amount equal to the amount of the Prepayment Charge not collected.  The Seller warrants that the schedule of Prepayment Charges listed in each Transfer Notice shall be complete, true and accurate and may be relied on by the Servicer in its calculation of Prepayment Charges.  Notwithstanding the above, the Servicer or its designee may waive a Prepayment Charge only if (i) the related prepayment is not the result of a refinancing by the Servicer or its designee, (ii) such waiver relates to a
defaulted Securitized Loan or a reasonably foreseeable default, (iii) such waiver is standard and customary in servicing similar mortgage loans to the Securitized Loans, and (iv) such waiver, in the reasonable judgment of the Servicer, would maximize recovery of total proceeds from the Securitized Loan, taking into account the amount of such Prepayment Charge and the related Securitized Loan.  If a Prepayment Charge is waived as permitted by meeting the standards described above, then the Servicer is required to pay the amount of such waived Prepayment Charge, for the benefit of the holders of the Class P Certificates (as defined in the related Trust Agreement), by depositing such amount into the Custodial Account together with and at the time that the amount prepaid on the related Securitized Loan is required to be deposited into the Custodial Account.

Within 90 days of the earlier of discovery by the Servicer or receipt of notice by the Servicer of the breach of the representation or covenant of the Servicer set forth in this Section 3.15 which materially and adversely affects the interests of the Holders of the Class P Certificates in any Prepayment Charge, the Servicer shall remedy such breach as follows: if any of the covenants made by the Servicer in this Section 3.15 is breached, the Servicer must pay the amount of such waived Prepayment Charge, for the benefit of the Holders of the Class P Certificates, by depositing such amount into the Custodial Account.

	
            Section 3.16
 	
            Servicing and Administration of PMI Policies.
 

 

 

 

(a)        The Servicer shall take all such actions on behalf of the Trustee as are necessary to service, maintain and administer PMI Policies and to perform and enforce the rights under such Policies for the benefit of the related Trust.  Except as expressly set forth herein, the Servicer shall have full authority on behalf of the related Trust to do anything it reasonably deems appropriate or desirable in connection with the servicing, maintenance and administration of the PMI Policies.  The Servicer shall not take, or permit any sub-servicer to modify or assume a Securitized Loan covered by a PMI Policy or take any other action with respect to such Securitized Loan which would result in non-coverage under any PMI Policy of any loss which, but for the actions of the Servicer or the Sub-Servicer, would have been covered thereunder.  If a PMI Insurer
fails to pay a claim under a PMI Policy as a result of breach by the Servicer or a sub-servicer of its obligations hereunder or under a PMI Policy, the Servicer shall be required to deposit in the Custodial Account on or prior to the next succeeding Remittance Date an amount equal to such unpaid claim from its own funds without any right to reimbursement from the related Trust.  To the extent coverage is available, the Servicer shall keep or cause to be kept in full force and effect the Insurance Policies for as long as any Certificates issued by the related Trust are outstanding.  The Servicer shall cooperate with each PMI Insurer and shall use its best efforts to furnish all reasonable aid, evidence and information in the possession of the Servicer to which the Servicer has access with respect to any Securitized Loan; provided, however, notwithstanding anything to the contrary contained in a PMI Policy, the Servicer shall not be required to submit any reports to a PMI Insurer until
a reporting date that is at least 15 days after the Servicer has received sufficient loan level information from the Seller to appropriately code its servicing system in accordance with such PMI Insurer’s requirements.

(b)        The Servicer shall deposit into the Custodial Account pursuant to Section 3.03(xiii) hereof all Insurance Proceeds received from the PMI Insurer under the terms of a PMI Policy.

(c)        Notwithstanding the provisions of (a) and (b) above, the Servicer shall not take any action in regard to any PMI Policy inconsistent with the interests of the related Trust or the related Certificateholders or with the rights and interests of the related Trust or the related Certificateholders under this Agreement.

(d)        The related Trustee shall furnish the Servicer with any powers of attorney and other documents (within fifteen (15) days upon request from the Servicer) in form as provided to it necessary or appropriate to enable the Servicer to service and administer any PMI Policy; provided, however, that the related Trustee shall not be liable for the actions of the Servicer under such powers of attorney.

	
            Section 3.17
 	
            Maintenance of Hazard Insurance.
 

The Servicer shall cause to be maintained for each Securitized Loan hazard insurance such that all buildings upon the related Mortgaged Property are insured by a generally acceptable insurer against loss by fire, hazards of extended coverage and such other hazards as are customary in the area where such Mortgaged Property is located in an amount which is at least equal to the lesser of (i) the current principal balance of such Securitized Loan and (ii) the amount necessary 

 

to fully compensate for any damage or loss to the improvements that are a part of such property on a replacement cost basis, in each case in an amount not less than the amount as is necessary to avoid the application of any co-insurance clause contained in the related hazard insurance policy.

Any payments by the Servicer for hazard insurance, other than as set forth in the last paragraph of this Section 3.17, shall be deemed Servicing Advances, reimbursable in accordance with Section 3.04(vii) or (x), to the extent not collected from the related Mortgagor.  The Servicer will comply in the performance of this Agreement with all reasonable rules and requirements of each insurer under any such hazard policies.  Any amounts to be collected by the Servicer under any such policies (other than amounts to be applied to the restoration or repair of the property or amounts to be released to the Mortgagor subject to the terms and conditions of the related Mortgage and Mortgage Note) shall be deposited in the Custodial Account, subject to withdrawal pursuant to Section 3.04, if received in respect of a Securitized Loan.  Any cost incurred by the Servicer in maintaining any such insurance
shall not, for the purpose of calculating distributions to Certificateholders, be added to the unpaid principal balance of the related Securitized Loan, notwithstanding that the terms of such Securitized Loan so permit.  It is understood and agreed that no earthquake or other additional insurance is to be required of any Mortgagor 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 a Mortgaged Property or REO Property is at any time in an area identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards and flood insurance has been made available, the Servicer will cause to be maintained a flood insurance policy in respect thereof.  Such flood insurance shall be in an amount equal to the lesser of (i) the unpaid principal balance of the related Securitized Loan and (ii) the maximum amount of such insurance available for the related Mortgaged
Property under the national flood insurance program (assuming that the area in which such Mortgaged Property is located is participating in such program).

In the event that the Servicer or the Sub-Servicer shall obtain and maintain a blanket policy with an insurer having a General Policy Rating of B:III or better in Best’s Key Rating Guide (or such other rating that is comparable to such rating) insuring against hazard losses on all of the Securitized Loans in a Trust, it shall conclusively be deemed to have satisfied its obligations as set forth in the first two sentences of this Section 3.17 with respect to the Securitized Loans in such Trust, it being understood and agreed that such policy may contain a deductible clause, in which case the Servicer shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property a policy complying with the first two sentences of this Section 3.17, and there shall have been one or more losses which would have been covered by such policy, deposit to the
Custodial Account from its own funds without right of reimbursement the amount not otherwise payable under the blanket policy because of such deductible clause for the benefit of the related Trust.  In connection with its activities as administrator and servicer of the Securitized Loans, the Servicer agrees to prepare and present, on behalf of itself, the Trust and the Certificateholders, claims under any such blanket policy in a timely fashion in accordance with the terms of such policy.  Copies of such claims shall be provided to the NIMs Insurer.

 

 

	
            Section 3.18
 	
            Realization Upon Defaulted Securitized Loans.
 

(a)        The Servicer shall use its best efforts and, consistent with Accepted Servicing Practices, foreclose upon or otherwise comparably convert the ownership of properties securing such of the Securitized Loans (including selling any such Securitized Loans other than converting the ownership of the related properties) as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments.  The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings; provided, however, that such costs and expenses will be recoverable as Servicing Advances by the Servicer as contemplated in Section 3.04.  The foregoing is subject to the provision that, in any case in which a Mortgaged Property shall have suffered damage from an uninsured cause, the Servicer shall not
be required to expend its own funds toward the restoration of such Mortgaged Property unless it has determined that such restoration will increase the proceeds of liquidation of the related Securitized Loan after reimbursement to itself for such expenses.  In instituting foreclosures or other similar proceedings, the Servicer shall institute such proceedings in its own name on behalf of the related Trust, unless otherwise required by applicable law or otherwise appropriate.

(b)        If the Servicer determines that it is in the best economic interest of a Trust and the Certificateholders to sell a Distressed Securitized Loan rather than foreclosing, the Servicer may effect such a sale.  The net proceeds of such sale shall be Liquidation Proceeds.

(c)        Proceeds received in connection with any Final Recovery Determination, as well as any recovery resulting from a partial collection of Insurance Proceeds, Liquidation Proceeds or Condemnation Proceeds, in respect of any Securitized Loan, will be applied in the following order of priority:  first, to unpaid Servicing Fees; second, to reimburse the Servicer or any sub-servicer for any related unreimbursed Servicing Advances and  Monthly Advances pursuant to Section 3.04; third, to accrued and unpaid interest on the Securitized Loan, to the date of the Final Recovery Determination, or to the Due Date prior to the Remittance Date on which such amounts are to be remitted to the Master Servicer if not in connection with a Final Recovery Determination; and fourth, as a recovery of principal of the Securitized Loan.  The portion of the recovery so
allocated to any unpaid Servicing Fee shall be reimbursed to the Servicer or any sub-servicer pursuant to Section 3.04.

	
            Section 3.19
 	
            Enforcement of Due-On-Sale Clauses; Assumption Agreement.
 

The Servicer will, to the extent it has knowledge of any conveyance or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by absolute conveyance or contract of sale, and whether or not the Mortgagor remains or is to remain liable under the Mortgage Note and/or the Mortgage), exercise its rights to accelerate the maturity of such Securitized Loan under the “due-on-sale” clause, if any, applicable thereto; provided, however, that the Servicer shall not be required to take such action if in its sole business judgment the Servicer believes it is not in the best interests of the related Trust and shall not exercise any such rights if prohibited by law from doing so. If the Servicer reasonably believes it is unable under applicable law to enforce such “due-on-sale” clause, or if any of the other conditions set forth in 

 

the proviso to the preceding sentence apply, the Servicer will enter into an assumption and modification agreement from or with the person to whom such property has been conveyed or is proposed to be conveyed, pursuant to which such person becomes liable under the Mortgage Note and, to the extent permitted by applicable state law, the Mortgagor remains liable thereon. The Servicer is also authorized 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 the Mortgagor and becomes liable under the Mortgage Note, provided that no such substitution shall be effective unless such person satisfies the underwriting criteria of the Servicer and has a credit risk rating at least equal to that of the original Mortgagor. In connection with any assumption or substitution, the Servicer shall apply such
underwriting standards and follow such practices and procedures as shall be normal and usual in its general mortgage servicing activities and as it applies to other mortgage loans owned solely by it.  The Servicer shall not take or enter into any assumption and modification agreement, however, unless (to the extent practicable in the circumstances) it shall have received confirmation, in writing, of the continued effectiveness of any applicable hazard insurance policy.  Any fee collected by the Servicer in respect of an assumption, modification or substitution of liability agreement shall be retained by the Servicer as additional servicing compensation.  In connection with any such assumption, no material term of the Mortgage Note (including but not limited to the related Mortgage Interest Rate and the amount of the Monthly Payment) may be amended or modified, except as otherwise required pursuant to the terms thereof.  The Servicer shall notify the related Trustee that any such
substitution, modification or assumption agreement has been completed by the Servicer, and the Servicer shall deliver to the Custodian the executed original of such substitution, modification or assumption agreement, which document 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, and the Servicer shall also deliver to the Trustee a copy of the executed substitution, modification or assumption agreement.

Notwithstanding the foregoing paragraph or any other provision of this Agreement, the Servicer shall not be deemed to be in default, breach or any other violation of its obligations hereunder by reason of any assumption of a Securitized Loan by operation of law or by the terms of the Mortgage Note or any assumption which the Servicer may be restricted by law from preventing, for any reason whatever.  For purposes of this Section 3.19, the term “assumption” is deemed to also include a sale (of the Mortgaged Property) subject to the Mortgage that is not accompanied by an assumption or substitution of liability agreement.

	
            Section 3.20
 	
            Credit Risk Manager.
 

The Servicer acknowledges and agrees that, under any Trust Agreement, a Credit Risk Manager may be required to provide certain credit risk management services as provided therein.  If so, the Servicer hereby agrees to cooperate with the Credit Risk Manager in connection with all reasonable requests made by the Credit Risk Manager, including, without limitation, promptly providing copies of any servicing reports and remittance advices required under this Agreement to the Credit Risk Manager.

 

 

Section 3.21  Compliance with Applicable Laws.

All requirements of any federal, state or local law (including usury, truth in lending, real estate settlement procedures, consumer credit protection, equal credit opportunity, disclosure or recording, predatory and abusive lending laws) applicable to the servicing of the Mortgage Loans will be complied with by the Servicer in all material respects.

 

 

ARTICLE IV.

PAYMENTS TO MASTER SERVICER

	
            Section 4.01
 	
            Remittances.
 

On each Remittance Date, no later than 3:00 p.m. New York City time, the Servicer shall remit on a scheduled/scheduled basis by wire transfer of immediately available funds to the Master Servicer (a) all amounts deposited in the Custodial Account as of the close of business on the Determination Date (net of charges against or withdrawals from the Custodial Account pursuant to Section 3.04), plus (b) all Monthly Advances, if any, which the Servicer or other Advancing Person is obligated to make pursuant to Section 4.03, minus (c) any amounts attributable to Principal Prepayments, Liquidation Proceeds, Insurance Proceeds, Condemnation Proceeds or REO Disposition Proceeds received after the applicable Due Period, which amounts shall be remitted on the following Remittance Date, together with any additional interest required to be deposited in the Custodial Account in connection with such
Principal Prepayment in accordance with Section 3.03 (iii) and (vii), and minus (d) any amounts attributable to Monthly Payments collected but due on a Due Date or Due Dates subsequent to the first day of the month in which such Remittance Date occurs, which amounts shall be remitted on the Remittance Date next succeeding the Due Date related to such Monthly Payment.

With respect to any remittance received by the Master Servicer after the Business Day on which such payment was due, the Servicer shall pay to the Master Servicer interest on any such late payment at an annual rate equal to LIBOR, adjusted as of the date of each change, plus four (4) percentage points, but in no event greater than the maximum amount permitted by applicable law.  Such interest shall be deposited in the Custodial Account by the Servicer on the date such late payment is made and shall cover the period commencing with the day following the Remittance Date and ending with the Business Day on which such payment is made, both inclusive.  Such interest shall be remitted along with the distribution payable on the next succeeding Remittance Date.  The payment by the Servicer of any such interest shall not be deemed an extension of time for payment or a waiver of any Event of
Default by the Master Servicer or any applicable Trustee.

All remittances required to be made to the Master Servicer shall be made on a scheduled/scheduled basis to the following wire account or to such other account as may be specified by the Master Servicer from time to time:

Wells Fargo Bank, National Association

Minneapolis, Minnesota

ABA# 121000248

Account Name:  SAS Clearing 3970771416

For further credit to:  Collection Account No. 18150300

 

 

	
            Section 4.02
 	
            Statements to Master Servicer.
 

Not later than the 10th calendar day of each month (or if such calendar day is not a Business Day, the immediately succeeding Business Day), the Servicer shall furnish to the Master Servicer and the NIMs Insurer with respect to each related Trust, or as the Servicer and the Master Servicer may otherwise agree (a) a monthly remittance advice in the format set forth at Exhibit D hereto with regard to monthly loan remittance data, Exhibit E with regard to default mortgage loans, and Exhibit F with regard to realized losses or gains for the period ending on the first day of such calendar month (i.e., the Due Period) and (b) all such information required pursuant to clause (a) above in an electronic file or other similar media reasonably acceptable to the Master Servicer.  The Servicer shall also furnish to the Master Servicer and the NIMs Insurer (in such format mutually agreed to by the
Servicer and the Master Servicer) a monthly report detailing loan level Prepayment Charges collected and/or waived by the Servicer in accordance with Section 3.15.

Such monthly remittance advice shall also be accompanied with a supplemental report provided to the Master Servicer which includes on an aggregate basis for the previous Due Period (i) the amount of claims filed, (ii) the amount of any claim payments made, (iii) the amount of claims denied or curtailed and (iv) policies cancelled with respect to those Securitized Loans covered by any PMI Policy or any other provider of primary mortgage insurance purchased by the Trust.  Notwithstanding anything to the contrary contained in a PMI Policy, the Servicer shall not be required to submit any supplemental reports including the foregoing data with respect to a PMI Policy until a reporting date that is at least 15 days after the Servicer has received sufficient loan level information from the Seller  to appropriately code its servicing system in accordance with requirements.

In addition, not more than 60 days after the end of each calendar year, commencing December 31, 2004, the Servicer shall provide (as such information becomes reasonably available to the Servicer) to the Master Servicer such information concerning the Securitized Loans and annual remittances to the Master Servicer with respect to the Securitized Loans in each Trust as is necessary for each Certificateholder and the NIMs Insurer to prepare its federal income tax return.  Such obligation of the Servicer shall be deemed to have been satisfied to the extent that substantially comparable information shall be provided by the Servicer to the Master Servicer and pursuant to any requirements of the Code as from time to time are in force.

Beginning with calendar year 2004, the Servicer shall provide the Master Servicer and each Trustee with such information concerning the related Securitized Loans as is necessary for such Trustee to prepare the related Trust’s federal income tax return and for any investor in the related Certificates to prepare any required tax return.

	
            Section 4.03
 	
            Monthly Advances by Servicer.
 

On the Business Day immediately preceding each Remittance Date, the Servicer shall deposit in the Custodial Account from its own funds or from amounts held for future distribution, or both, an amount equal to the aggregate of all Monthly Advances relating to Monthly Payments 

 

which were due on the Securitized Loans during the applicable Due Period and which were delinquent at the close of business on the immediately preceding Determination Date.  Any amounts held for future distribution and so used shall be replaced by the Servicer by deposit in the Custodial Account on or before any future Remittance Date if funds in the Custodial Account on such Remittance Date shall be less than remittances to the Master Servicer required to be made on such Remittance Date.  The Servicer shall keep appropriate records of such amounts and will provide such records to the Master Servicer upon request.  No provision in this Agreement shall be construed as limiting the Servicer’s right to (i) pass through late collections on the related Securitized Loans in lieu of making Monthly Advances (ii) reimburse itself for such Monthly Advances from late collections on the related Securitized Loans
or (iii) utilize an Advancing Person (as defined below).

The Servicer’s obligation to make such Monthly Advances as to any Mortgage Loan will continue through the last Monthly Payment due prior to the payment in full of the Mortgage Loan, or through the last Remittance Date prior to the Remittance Date for the distribution of all Liquidation Proceeds and other payments or recoveries (including REO Disposition Proceeds, Insurance Proceeds and Condemnation Proceeds) with respect to the Mortgage Loan; provided, however, that such obligation shall cease if the Servicer determines, in its sole reasonable opinion, that advances with respect to such Mortgage Loan are non-recoverable by the Servicer from Liquidation Proceeds, Insurance Proceeds, Condemnation Proceeds, or otherwise with respect to a particular Mortgage Loan.

The Servicer, with the consent of the NIMs Insurer, may enter into a facility with any person including the Sub-Servicer which provides that such person (an “Advancing Person”) may fund Monthly Advances required under this Section 4.03 and/or Servicing Advances, although no such facility shall reduce or otherwise affect the Servicer’s obligation to fund such Monthly Advances and/or Servicing Advances.  Any Monthly Advances and/or Servicing Advances made by an Advancing Person shall be reimbursed to the Advancing Person in the same manner as reimbursements would be made to the Servicer under Section 3.04 if such Monthly Advances or Servicing Advance were funded by the Servicer.

	
            Section 4.04
 	
            Compensating Interest.
 

The Servicer shall be required to deposit in the Custodial Account, and retain therein with respect to each Principal Prepayment, the Prepayment Interest Shortfall Amount, if any, for the related Due Period.  Such deposit shall be made from the Servicer’s own funds, without reimbursement therefor, up to an amount equal to the lesser of with respect to the Securitized Loans in each Trust (i) the Prepayment Interest Shortfall Amount or (ii) the Servicing Fee, in each case, with respect to the Securitized Loans in such Trust.  The Servicer shall not be obligated to pay any Prepayment Interest Shortfall Amount with respect to any Relief Act Reduction or bankruptcy.

	
            Section 4.05
 	
            Credit Reporting.
 

 

 

 

For each Securitized Loan, in accordance with its current servicing practices, the Servicer will accurately and fully report its underlying borrower credit files to each of the following credit repositories or their successors:  Equifax Credit Information Services, Inc., Trans Union, LLC and Experian Information Solution, Inc., on a monthly basis in a timely manner.

 

 

ARTICLE V.

GENERAL SERVICING PROCEDURES

	
            Section 5.01
 	
            Servicing Compensation.
 

As consideration for servicing the Securitized Loans subject to this Agreement, the Servicer shall retain (a) the Servicing Fee for each Securitized Loan remaining subject to this Agreement during any month and (b) Ancillary Income.  The Servicing Fee shall be payable monthly.

The aggregate of the Servicing Fees for any month with respect to the Securitized Loans in a Trust shall be reduced by any Prepayment Interest Shortfall Amount with respect to the Securitized Loans in such Trust with respect to such month.    The Servicer shall be entitled to recover any unpaid Servicing Fee out of Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds to the extent permitted in Section 3.04 and out of amounts derived from the operation and sale of an REO Property to the extent permitted by Section 3.12.

Additional servicing compensation in the form of Ancillary Income shall be retained by the Servicer only to the extent such fees or charges are received by the Servicer.  The Servicer shall also be entitled pursuant to Section 3.04 and Section 3.06 to withdraw from the Custodial Account and Escrow Account, respectively, as additional servicing compensation, interest or other income earned on deposits therein, subject to Section 3.11.

The Servicer shall be required to pay all expenses incurred by it in connection with its servicing activities hereunder, including any fees due to sub-servicers, and shall not be entitled to reimbursement thereof except as specifically provided for herein.

	
            Section 5.02
 	
            Annual Audit Report.
 

The Servicer shall, at its own expense, using its best efforts by February 28 of each year, but in no event later than March 1 of each year, cause a firm of independent public accountants (who may also render other services to Servicer), which is a member of the American Institute of Certified Public Accountants, to furnish to the Seller and the Master Servicer (i) year-end audited (if available) financial statements of the Servicer and (ii) a statement to the effect that such firm has examined certain documents and records for the preceding fiscal year (or during the period from the date of commencement of such Servicer’s duties hereunder until the end of such preceding fiscal year in the case of the first such certificate) and that, on the basis of such examination conducted substantially in compliance with the Uniform Single Attestation Program for Mortgage Bankers, such firm is
of the opinion that Servicer’s overall servicing operations have been conducted in compliance with the Uniform Single Attestation Program for Mortgage Bankers except for such exceptions that, in the opinion of such firm, the Uniform Single Attestation Program for Mortgage Bankers requires it to report, in which case such exceptions shall be set forth in such statement.

 

 

	
            Section 5.03
 	
            Annual Officer’s Certificate.
 

The Servicer, at its own expense, will, using its best efforts by February 28 of each year, but in no event later than March 1 of each year, deliver to the Seller and the Master Servicer a Servicing Officer’s certificate stating, as to each signer thereof, that (i) a review of the activities of the Servicer during such preceding fiscal year and of performance under this Agreement has been made under such officers’ supervision, and (ii) to the best of such officers’ knowledge, based on such review, the Servicer has fulfilled all its obligations under this Agreement for such year, or, if there has been a default in the fulfillment of all such obligations, specifying each such default known to such officers and the nature and status thereof including the steps being taken by the Servicer to remedy such default.

	
            Section 5.04.
 	
            Servicer’s Certification.
 

(a)        An officer of the Servicer shall, using its best efforts by February 28 of each year, but no later than March 1 of each year, (or if not a Business Day, the immediately preceding Business Day), or at any other time upon thirty (30) days written request, execute and deliver an Officer’s Certificate to the Master Servicer for the benefit of such Master Servicer and its officers, directors, agents and affiliates, certifying as to the following matters:

(i)         Based on my knowledge, the information in the annual statement of compliance furnished pursuant to Section 5.03, the annual independent public accountant’s servicing report furnished pursuant to Section 5.02 and all servicing reports, officer’s certificates and other information relating to the servicing of the Securitized Loans submitted to the Master Servicer taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading as of the date of this certification;

(ii)         The servicing information required to be provided to the Master Servicer by the Servicer under this Agreement has been provided to the Master Servicer;

(iii)        I am responsible for reviewing the activities performed by the Servicer under the Agreement and based upon the review required by the Agreement, and except as disclosed in the annual statement of compliance, the annual independent public accountant’s servicing report and all servicing reports, officer’s certificates and other information relating to the servicing of the Securitized Loans submitted to the Master Servicer, the Servicer has, as of the date of this certification fulfilled its obligations under the Agreement; and

(iv)        I have disclosed to the Master Servicer all significant deficiencies relating to the Servicer’s compliance with the minimum servicing standards in accordance with a review conducted in compliance with the Uniform Single Attestation Program for Mortgage Bankers or similar standard as set forth in the Agreement.

(b)        The Servicer shall indemnify and hold harmless the Master Servicer and its officers, directors, agents and affiliates from and against any losses, damages, penalties, fines, 

 

forfeitures, reasonable legal fees and related costs, judgments and other costs and expenses arising out of or based upon a breach by the Servicer or any of its officers, directors, agents or affiliates of its obligations under Sections 5.02, 5.03 or 5.04 or the negligence, bad faith or willful misconduct of the Servicer in connection therewith.  If the indemnification provided for herein is unavailable or insufficient to hold harmless the Master Servicer, then the Servicer agrees that it shall contribute to the amount paid or payable by the Master Servicer as a result of losses, claims, damages or liabilities of the Master Servicer in such proportion as is appropriate to reflect the relative fault of the Master Servicer on the one hand and the Servicer on the other in connection with a breach of the Servicer’s obligations under Sections 5.02, 5.03 or 5.04 or the Servicer’s negligence, bad faith
or willful misconduct in connection therewith.

Section 5.05  Access to Servicer Records.

The Seller or the NIMs Insurer shall have the right to examine and audit, at its expense, upon reasonable notice to the Servicer, during business hours or at such other times as might be reasonable under applicable circumstances, any and all of the books, records, documentation or other information of the Servicer, or held by another for the Servicer or on its behalf or otherwise, which relate to the performance or observance by the Servicer of the terms, covenants or conditions of this Agreement.

The Servicer shall provide to the Seller, the NIMs Insurer and any supervisory agents or examiners representing a state or federal governmental agency having jurisdiction over the Seller access to any documentation regarding the Mortgage Loans in the possession of the Servicer which may be required by any applicable regulations.  Such access shall be afforded without charge, upon reasonable request, during normal business hours and at the offices of the Servicer, and in accordance with the applicable federal or state government regulations.

 

 

ARTICLE VI.

REPRESENTATIONS, WARRANTIES

AND AGREEMENTS

	
            Section 6.01
 	
            Representations, Warranties and Agreements of the Servicer.
 

The Servicer, as a condition to the consummation of the transactions contemplated hereby, hereby makes the following representations and warranties to the Seller, the Depositor, the Trustee and the Master Servicer as of the Closing Date:

(a)        Due Organization and Authority.  The Servicer is duly organized, validly existing and in good standing under the laws of the State of Delaware and has all licenses necessary to carry on its business as now being conducted and either it or its designated sub-servicer is licensed, qualified and in good standing in each state where a Mortgaged Property is located if the laws of such state require licensing or qualification in order to conduct a servicing business of the type provided for herein, and in any event the Servicer or its designated sub-servicer is in compliance with the laws of any such state to the extent necessary to ensure the enforceability of the terms of this Agreement; the Servicer has the full power and authority to execute and deliver this Agreement and, together with such sub-servicer, to perform in accordance herewith; the
execution, delivery and performance of this Agreement (including all instruments of transfer to be delivered pursuant to this Agreement) by the Servicer and the consummation of the transactions contemplated hereby have been duly and validly authorized; this Agreement evidences the valid, binding and enforceable obligation of the Servicer and all requisite action has been taken by the Servicer to make this Agreement valid and binding upon the Servicer in accordance with its terms;

(b)       Ordinary Course of Business.  The consummation of the transactions contemplated by this Agreement, taking into account the role of its sub-servicer, is in the ordinary course of business of the Servicer;

(c)       No Conflicts.  Neither the execution and delivery of this Agreement, the acquisition of the servicing responsibilities by the Servicer or the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement, will conflict with or result in a breach of any of the terms, conditions or provisions of the Servicer’s organizational documents or any legal restriction or any agreement or instrument to which the Servicer is now a party or by which it is bound, or constitute a default or result in an acceleration under any of the foregoing, or, taking into account the role of its designated sub-servicer, result in the violation of any law, rule, regulation, order, judgment or decree to which the Servicer or its property is subject, or impair the ability of the Servicer to service the Securitized
Loans, or impair the value of the Securitized Loans;

(d)        Ability to Perform.  The Servicer does not believe, nor does it have any reason or cause to believe, that it, together with the Sub-Servicer, cannot perform each and every covenant contained in this Agreement;

 

 

(e)        No Litigation Pending.  There is no action, suit, proceeding or investigation pending or, to the best of our knowledge, threatened against the Servicer which, either in any one instance or in the aggregate, may result in any material adverse change in the business, operations, financial condition, properties or assets of the Servicer, or in any material impairment of the right or ability of the Servicer to carry on its business substantially as now conducted, or in any material liability on the part of the Servicer, or which would draw into question the validity of this Agreement or of any action taken or to be taken in connection with the obligations of the Servicer contemplated herein, or which would be likely to impair materially the ability of the Servicer together with the Sub-Servicer to perform under the terms of this Agreement;

(f)         No Consent Required.  No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Servicer together with the Sub-Servicer of or compliance by the Servicer together with the Sub-Servicer with this Agreement;

(g)        Ability to Service.  The Servicer is an approved seller/servicer of conventional residential Securitized Loans for Fannie Mae and Freddie Mac, and, together with those of its designated sub-servicer, shall ensure that there are the facilities, procedures, and experienced personnel necessary for the sound servicing of the Securitized Loans.  The Servicer is in good standing to service Securitized Loans for Freddie Mac.  The Servicer is a member in good standing of the MERS system, if applicable;

(h)        No Untrue Information.  Neither this Agreement nor any statement, report or other document furnished or to be furnished by the Servicer pursuant to this Agreement or in connection with the transactions contemplated hereby contains any untrue material statement of fact or omits to state a material fact necessary to make the statements contained therein not misleading;

(i)         No Commissions to Third Parties.  The Servicer has not dealt with any broker or agent or anyone else, other than the Sub-Servicer, who might be entitled to a fee or commission in connection with this transaction other than the Seller; and

(j)         No Waiver of Prepayment Charges.  The Servicer will not waive any Prepayment Charge unless it is waived in accordance with the standard set forth in Section 3.15.

	
            Section 6.02
 	
            Remedies for Breach of Representations and Warranties of the Servicer.
 

It is understood and agreed that the representations and warranties set forth in Section 6.01 shall survive the engagement of the Servicer to perform the servicing responsibilities as of any Closing Date hereunder and the delivery of the Servicing Files to the Servicer and shall inure to the benefit of the Seller, any Depositor, the Master Servicer and each Trust, NIMs Insurer and Trustee.  Upon discovery by any of the Servicer, the Master Servicer, the Trustee, NIMs Insurer, any Depositor or the Seller of a breach of any of the foregoing representations and warranties which materially and adversely affects the ability of the Servicer, together with its designated sub-servicer, to perform its duties and obligations under this Agreement or otherwise materially 

 

and adversely affects the value of the Securitized Loans, the Mortgaged Property, the priority of the security interest on such Mortgaged Property or the interest of the Seller, any Depositor, the Master Servicer, NIMs Insurer, the related Trust or the related Trustee, the party discovering such breach shall give prompt written notice to the others.

Within 60 days of the earlier of either discovery by or notice to the Servicer of a breach of a representation or warranty set forth in Section 6.01 which materially and adversely affects the ability of the Servicer, together with its designated sub-servicer, to perform its duties and obligations under this Agreement or otherwise materially and adversely affects the value of the Securitized Loans, the Mortgaged Property or the priority of the security interest on such Mortgaged Property, the Servicer shall use its best efforts promptly to cure such breach in all material respects and, if such breach cannot be cured, the Servicer shall, at the option of the Trustee, assign the Servicer’s rights and obligations under this Agreement (or respecting the affected Securitized Loans) with respect to a Trust to a successor servicer selected by the related Trustee with the prior consent and
approval of the Master Servicer.  Such assignment shall be made in accordance with Section 9.01 and 9.02.

In addition, the Servicer shall indemnify the Seller, the Master Servicer, NIMs Insurer, any Depositor and each Trustee and hold each of them harmless against any Costs resulting from any claim, demand, defense or assertion based on or grounded upon, or resulting from, a breach of the Servicer’s representations and warranties contained in this Agreement.  It is understood and agreed that the remedies set forth in this Section 6.02 constitute the sole remedies of the Seller, the Master Servicer, any Depositor, and each Trust and Trustee hereunder respecting a breach of the foregoing representations and warranties.

Any cause of action against the Servicer relating to or arising out of the breach of any representations and warranties made in Section 6.01 shall accrue upon (i) discovery of such breach by the Servicer or notice thereof by the Seller, the Master Servicer, NIMs Insurer, any Depositor or a Trustee to the Servicer, (ii) failure by the Servicer to cure such breach within the applicable cure period, and (iii) demand upon the Servicer by the Seller, any Depositor, NIMs Insurer, the Master Servicer or a Trustee for compliance with this Agreement.

	
            Section 6.03
 	
            Additional Indemnification by the Servicer; Third Party Claims.
 

The Servicer shall indemnify the Seller, any Depositor, NIMs Insurer, each Trustee, the Master Servicer and each Trust and hold them harmless against any and all Costs that any such indemnified party may sustain in any way related to (i) the failure of the Servicer to perform its duties and service the related Securitized Loans in material compliance with the terms of this Agreement or (ii) the failure of the Servicer to cause any event to occur which would have occurred if the Servicer were applying Accepted Servicing Practices under this Agreement.  The Servicer shall immediately notify the Seller, any related Depositor, NIMs Insurer, the Master Servicer, the related Trustee or any other relevant party if a claim is made by a third party with respect to this Agreement or the related Securitized Loans, assume (with the prior written consent of the indemnified party) the defense of any
such claim and pay all expenses in connection therewith, including counsel fees, promptly pay, discharge and satisfy any judgment or decree 

 

which may be entered against it or any indemnified party in respect of such claim and follow any written instructions received from such indemnified party in connection with such claim.  The Servicer shall be promptly reimbursed by the related Trust or Trusts for all amounts advanced by it pursuant to the preceding sentence except when the claim is in any way related to the Servicer’s indemnification pursuant to Section 6.02, or the failure of the Servicer, together with its designated sub-servicer, to service and administer the Securitized Loans in material compliance with the terms of this Agreement.  In the event a dispute arises between an indemnified party and the Servicer with respect to any of the rights and obligations of the parties pursuant to this Agreement, and such dispute is adjudicated in a court of law, by an arbitration panel or any other judicial process, then the losing party shall
indemnify and reimburse the winning party for all attorneys’ fees and other costs and expenses related to the adjudication of said dispute.

	
            Section 6.04
 	
            Indemnification with Respect to Certain Taxes and Loss of REMIC Status.
 

In the event that any REMIC elected by a Trust fails to qualify as a REMIC, loses its status as a REMIC, or incurs federal, state or local taxes as a result of a prohibited transaction or prohibited contribution under the REMIC Provisions due to the negligent performance by the Servicer of its duties and obligations set forth herein, the Servicer shall indemnify the Holder of the related Residual Certificate, the Master Servicer, the related Trustee and the related Trust against any and all losses, claims, damages, liabilities or expenses (“Losses”) resulting from such negligence; provided, however, that the Servicer shall not be liable for any such Losses attributable to the action or inaction of the related Trustee, any related Depositor, the Master Servicer or the Holder of such Residual Certificate, as applicable, nor for any such Losses resulting from misinformation
provided by the Holder of such Residual Certificate or any such other party on which the Servicer has relied.  The foregoing shall not be deemed to limit or restrict the rights and remedies of the Holder of such Residual Certificate or the related Trust now or hereafter existing at law or in equity or otherwise.  Notwithstanding the foregoing, however, in no event shall the Servicer have any liability (1) for any action or omission that is taken in accordance with and in compliance with the express terms of, or which is expressly permitted by the terms of, this Agreement, (2) for any Losses other than arising out of a negligent performance by the Servicer of its duties and obligations set forth herein, and (3) for any special or consequential damages to the related Certificateholders.

 

 

ARTICLE VII.

THE SERVICER

	
            Section 7.01
 	
            Merger or Consolidation of the Servicer.
 

The Servicer shall keep in full effect its existence, rights and franchises as a limited liability company, and shall obtain and preserve its qualification to do business as a foreign entity in each jurisdiction in which such qualification is or shall be necessary to perform its obligations as contemplated by this Agreement.

Any Person into which the Servicer may be merged or consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Servicer shall be a party, or any Person succeeding to the business of the Servicer, shall, with the prior written consent of the Master Servicer, be the successor of the Servicer hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding; provided, however, that the successor or surviving Person shall be an institution (i) having a net worth of not less than $25,000,000, and (ii) which is a Freddie Mac-approved or Fannie Mae-approved servicer in good standing.

	
            Section 7.02
 	
            Limitation on Liability of the Servicer and Others.
 

Neither the Servicer nor any of the directors, officers, employees or agents of the Servicer shall be under any liability to the Seller, the Master Servicer, any Depositor, any Trust or any Trustee hereunder for any action taken or for refraining from the taking of any action in good faith pursuant to this Agreement, or for errors in judgment; provided, however, that this provision shall not protect the Servicer or any such person against any breach of warranties or representations made herein, or failure to perform its obligations in strict compliance with any standard of care set forth in this Agreement, or any liability which would otherwise be imposed by reason of any breach of the terms and conditions of this Agreement. The Servicer and any director, officer, employee or agent of the Servicer may rely in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder.  The Servicer shall not be under any obligation to appear in, prosecute or defend any legal action which is not incidental to its duties to service the Securitized Loans in accordance with this Agreement and which in its opinion may involve it in any expense or liability; provided, however, that the Servicer may, with the consent of the related Trustee, NIMs Insurer and the Master Servicer, undertake any such action which it deems necessary or desirable in respect of this Agreement and the rights and duties of the parties hereto.  In such event, the Servicer shall be entitled to reimbursement from the related Trust for the reasonable legal expenses and costs of such action.

	
            Section 7.03
 	
            Limitation on Resignation and Assignment by the Servicer.
 

The Servicer shall neither assign its rights under this Agreement or the servicing hereunder nor delegate its duties hereunder or any portion thereof, or sell or otherwise dispose of 

 

all or substantially all of its property or assets without, in each case, the prior written consent of the Seller, the Master Servicer and the related Trustee and the NIMs Insurer, which consent, in the case of an assignment of rights or delegation of duties, shall be granted or withheld in the discretion of the Seller, the Master Servicer and the related Trustee, and which consent, in the case of a sale or disposition of all or substantially all of the property or assets of the Servicer, shall not be unreasonably withheld; provided, that in each case, there must be delivered to the Seller, the Master Servicer and the related Trustee and NIMs Insurer a letter from the applicable Rating Agency or Rating Agencies to the effect that such transfer of servicing or sale or disposition of assets will not result in a qualification, withdrawal or downgrade of the then-current rating of any of the Certificates, and
provided further, without any consent or notice the Servicer may delegate its servicing duties hereunder to the Sub-Servicer pursuant to the Sub-Servicing Agreement.  Notwithstanding the foregoing, the Servicer, without the consent of the Seller, the Master Servicer and the related Trustee, may retain third-party contractors to perform certain servicing and loan administration functions, including without limitation, hazard insurance administration, tax payment and administration, flood certification and administration, collection services and similar functions; provided, however, that the retention of such contractors by Servicer shall not limit the obligation of the Servicer to service the Securitized Loans pursuant to the terms and conditions of this Agreement.

The Servicer shall not resign from the obligations and duties hereby imposed on it with respect to the Securitized Loans in a Trust except by mutual consent of the Seller, the Master Servicer and the related Trustee, with the consent of the NIMs Insurer, or upon the determination that its duties hereunder are no longer permissible under applicable law and such incapacity cannot be cured by the Servicer.  Any such determination permitting the resignation of the Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to the Seller, the Master Servicer and the related Trustee and NIMs Insurer which Opinion of Counsel shall be in form and substance acceptable to the Seller, the Master Servicer and the related Trustee and NIMs Insurer.  No such resignation shall become effective until a successor acceptable to the Master Servicer shall have assumed the Servicer’s
responsibilities and obligations hereunder in the manner provided in Section 9.01.

Without in any way limiting the generality of this Section 7.03, in the event that the Servicer either shall assign this Agreement or the servicing responsibilities hereunder or delegate its duties hereunder or any portion thereof or sell or otherwise dispose of all or substantially all of its property or assets, without the prior written consent of the Seller, the Master Servicer and the Trustee and NIMs Insurer (except as provided by the first paragraph of this Section 7.03 and Section 7.04), then such parties shall have the right to terminate this Agreement upon notice given as set forth in Section 8.01, without any payment of any penalty or damages and without any liability whatsoever to the Servicer or any third party.

Section 7.04     Sub-Servicing Agreements; Sub-Servicing Acknowledgment Agreement; Successor Sub-Servicer.

 

 

(a)        The Servicer may enter into sub-servicing agreements, with the consent of the NIMs Insurer, for any servicing and administration of the Securitized Loans with any institution which (i) is an approved Fannie Mae or Freddie Mac Seller/Servicer as indicated in writing, and (ii) represents and warrants that it is in compliance with the laws of each state as necessary to enable it to perform its obligations under such sub-servicing agreement.  For this purpose, sub-servicing shall not be deemed to include the use of a tax service, or services for reconveyance, insurance or brokering REO Property.  The Servicer shall give prior written notice to the Master Servicer, the Trustee and NIMs Insurer of the appointment of any sub-servicer and shall furnish to the Master Servicer, the Trustee and NIMs Insurer a copy of such sub-servicing agreement.  For
purposes of this Agreement, the Servicer shall be deemed to have received payments on Securitized Loans immediately upon receipt by any sub-servicer of such payments.  Any such sub-servicing agreement shall be acceptable to the Master Servicer and the related Trustee and NIMs Insurer and shall be consistent with and not violate the provisions of this Agreement.  Each sub-servicing agreement shall provide that a successor servicer shall have the option to terminate such agreement without payment of any fees if the predecessor Servicer is terminated or resigns.

(b)        The Servicer, with the consent of the NIMs Insurer, may terminate any sub-servicing agreement to which it is a party in accordance with the terms and conditions of such sub-servicing agreement and either itself directly service the related Securitized Loans or enter into a sub-servicing agreement with a successor sub-servicer that qualifies under Section 7.04(a).

(c)        Notwithstanding any sub-servicing agreement or the provisions of this Agreement relating to agreements or arrangements between the Servicer and a sub-servicer or reference to actions taken through a sub-servicer or otherwise, the Servicer shall remain obligated and primarily liable to the Trustee, the Master Servicer, the Trust and the Certificateholders for the servicing and administering of the Securitized Loans in accordance with the provisions hereof without diminution of such obligation or liability by virtue of such sub-servicing agreements or arrangements or by virtue of indemnification from the sub-servicer and to the same extent and under the same terms and conditions as if the Servicer alone were servicing and administering the Securitized Loans.  The Servicer shall be entitled to enter into any agreement with a sub-servicer for
indemnification of the Servicer by such sub-servicer and nothing contained in this Agreement shall be deemed to limit or modify such indemnification.

(d)       In the event of a Subservicer Termination Trigger, the Servicer shall terminate the related Subservicer at the direction of the NIMS Insurer.  Following such termination, the Servicer shall have the right to service such Securitized Loans without the use of a Subservicer or to engage a new Subservicer acceptable to the NIMS Insurer pursuant to a Subservicing Agreement, which is not in conflict with the terms of this Agreement.  Notwithstanding the foregoing, the Servicer shall retain the ownership of all servicing rights with respect to the related Securitized Loans and no such direction of termination of a Subservicer shall be deemed to diminish such ownership.

	
            Section 7.05
 	
            Inspection.
 

 

 

 

The Servicer shall offer each Trustee, NIMs Insurer and the Master Servicer, upon reasonable advance notice, during normal business hours, access to all records maintained by the Servicer in respect of its rights and obligations hereunder and access to officers of the Servicer responsible for such obligations.  Upon request, the Servicer shall furnish to each Trustee, NIMs Insurer and the Master Servicer its most recent publicly available financial statements and such other information relating to its capacity to perform its obligations under this Agreement.

 

 

ARTICLE VIII.

TERMINATION

	
            Section 8.01
 	
            Termination for Cause.
 

This Agreement shall be terminable at the option of the Master Servicer or the related Trustee if any of the following events of default exist on the part of the Servicer:

(i)         any failure by the Servicer to remit to the Master Servicer any payment required to be made under the terms of this Agreement which 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 received by the Servicer from the Master Servicer, the NIMs Insurer or a related Trustee; or

(ii)        failure by the Servicer duly to observe or perform in any material respect any other of the covenants or agreements on the part of the Servicer set forth in this Agreement (except with respect to its obligations under Section 5.02, 5.03 or 5.04) which continues unremedied for a period of 15 days following the Servicer’s receipt of written notice of such failure from the Master Servicer, the NIMs Insurer or a related Trustee; or

(iii)        failure by the Servicer to maintain its license or to cause its designated sub-servicer to do business or service residential Securitized Loans in any jurisdiction, if required by such jurisdiction, where a Mortgaged Property is located; or

(iv)       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, readjustment of debt, including bankruptcy, marshaling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against the Servicer and such decree or order shall have remained in force undischarged or unstayed for a period of 60 days; or

(v)        the Servicer shall consent 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 Servicer or of or relating to all or substantially all of its property; or

(vi)       the Servicer 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, bankruptcy or reorganization statute, make an assignment for the benefit of its creditors, voluntarily suspend payment of its obligations or cease its normal business operations for three Business Days; or

(vii)      the Servicer ceases to meet or to cause its designated sub-servicer to meet the qualifications of a Fannie Mae or Freddie Mac seller/servicer; or

 

 

(viii)     the Servicer attempts to assign the servicing of the Securitized Loans or its right to servicing compensation hereunder or the Servicer 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, in each case without complying fully with the provisions of Section 7.03 or Section 7.04; or

(ix)       failure by the Servicer to duly perform, within the required time period, its obligations under Sections 5.02, 5.03 or 5.04 which failure continues unremedied for a period of fifteen (15) days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer by any party to this Servicing Agreement, by the NIMs Insurer or by any master servicer responsible for master servicing the Securitized Loans pursuant to a securitization of such Securitized Loans.

In each and every such case, so long as an event of default shall not have been remedied within the applicable cure period, in addition to whatever rights the Master Servicer or a related Trustee may have at law or equity to damages, including injunctive relief and specific performance, the Trustee or the Master Servicer, by notice in writing to the Servicer, and with the consent of the other party, may (and, at the request of the NIMs Insurer, shall) terminate all the rights and obligations of the Servicer under this Agreement and in and to the servicing contract established hereby and the proceeds thereof.

Upon receipt by the Servicer of such written notice, all authority and power of the Servicer under this Agreement, whether with respect to the Securitized Loans or otherwise, shall pass to and be vested in a successor servicer appointed by the Trustee or the Master Servicer, as the case may be, with the consent of the other party and the NIMs Insurer.  Upon written request from the Master Servicer, the Servicer shall prepare, execute and deliver to the successor servicer or the Trustee any and all documents and other instruments, place in such successor’s possession all Servicing Files, and do or cause to be done all other acts or things necessary or appropriate to effect the purposes of such notice of termination, including but not limited to the transfer and endorsement or assignment of the Securitized Loans and related documents, at the Servicer’s sole expense.  The Servicer
shall cooperate with the Master Servicer and such successor in effecting the termination of the Servicer’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 Servicer to the Custodial Account or Escrow Account or thereafter received with respect to the Securitized Loans.

By a written notice, the Trustee or the Master Servicer, with the consent of the other parties and the NIMs Insurer, may waive any default by the Servicer in the performance of its obligations hereunder and its consequences.  Upon any waiver of a past default, such default shall cease to exist, and any Event of 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.

	
            Section 8.02
 	
            Termination Without Cause.
 

 

 

 

(a)        This Agreement shall terminate upon:  (i) the later of (a) the distribution of the final payment or liquidation proceeds on the last Securitized Loan to the Master Servicer or the Trust, and (b) the disposition of all REO Property acquired upon foreclosure of the last Securitized Loan and the remittance of all funds due hereunder or (ii) mutual consent of the Servicer and the Master Servicer in writing, provided such termination is also acceptable to the applicable Rating Agency or Rating Agencies and the NIMs Insurer.  In addition, with the prior written consent of the Master Servicer and the NIMs Insurer, the Seller or its designee may terminate this Agreement with respect to all of the Securitized Loans, without cause, provided, that the Seller or its designee gives the Servicer 30 days’ notice.  Any such notice of termination shall
be in writing and delivered to the Servicer, NIMs Insurer and the Master Servicer by registered mail to the address set forth in Section 9.03.  The Seller or its designee and the Servicer shall comply with the termination procedures set forth in Section 9.01 hereof.  All unreimbursed Servicing Fees, Servicing Advances and Monthly Advances still owing the Servicer shall be paid by the Seller or its designee or the successor servicer from its own funds within 5 Business Days of the date of such termination without right of reimbursement from the Trust.  In connection with any termination pursuant to clause (ii) of the first sentence of this Section 8.02(a), all unreimbursed Servicing Fees, Servicing Advances and Monthly Advances still owing the Servicer shall be paid at the time of such termination by the Trust.

Upon a termination of the Servicer for cause pursuant to Section 8.01, all unreimbursed Servicing Fees, Servicing Advances and Monthly Advances still owing the Servicer shall be paid by the Trust as such amounts are received from the related Securitized Loans.  In connection with any termination pursuant to the second sentence of this Section 8.02(a), the Seller or its designee or the successor servicer will be responsible for reimbursing the Servicer for all unreimbursed out-of-pocket Servicing Advances, Monthly Advances and Servicing Fees and other reasonable and necessary out-of-pocket costs associated with any transfer of servicing at the time of such transfer of servicing.  Any invoices received by the Servicer after termination will be forwarded to the Seller or its designee, and the Seller or its designee or the successor servicer shall pay such invoices within five (5) Business
Days upon receipt from the Servicer.

(b)        In the event that the Servicer decides to terminate its obligations under this Agreement as set forth in clause (ii) of Section 8.02(a), the Servicer agrees that it will continue to service the Securitized Loans beyond the prescribed termination date until such time as the Trustee, using reasonable commercial efforts, is able to appoint, with the consent of the NIMs Insurer, a successor servicer acceptable to the NIMs Insurer and the Master Servicer and otherwise meeting the characteristics of Sections 7.01 and 9.01.

 

 

ARTICLE IX.

MISCELLANEOUS PROVISIONS

	
            Section 9.01
 	
            Successor to the Servicer.
 

Simultaneously with the termination of the Servicer’s responsibilities and duties under this Agreement (a) pursuant to Sections 6.02, 7.03, 8.01 or 8.02(a)(ii), the Master Servicer shall (i) within 90 days of the Servicer’s receipt of notice of such termination, succeed to and assume all of the Servicer’s responsibilities, rights, duties and obligations under this Agreement (except that the Master Servicer shall immediately assume all of the obligations of the Servicer to make Monthly Advances), or (ii) appoint a successor acceptable to the NIMs Insurer having the characteristics set forth in clauses (i) and (ii) of Section 7.01 and which shall succeed to all rights and assume all of the responsibilities, duties and liabilities of the Servicer under this Agreement simultaneously with the termination of the Servicer’s responsibilities, duties and liabilities under this
Agreement; or (b) as a result of termination of the Servicer without cause by the Seller pursuant to Section 8.02 hereof, the Seller shall appoint a successor acceptable to the NIMs Insurer having the characteristics set forth in clauses (i) and (ii) of Section 7.01 and which shall succeed to all rights and assume all of the responsibilities, duties and liabilities of the Servicer under this Agreement simultaneously with the termination of the Servicer’s responsibilities, duties and liabilities under this Agreement.  If the NIMs Insurer requests, the Master Servicer shall appoint a successor servicer as provided in the preceding sentence.  Any successor to the Servicer shall be subject to the approval of the Master Servicer and the Trustee and, to the extent required by the Trust Agreement, shall be a member in good standing of the MERS system (if any of the Securitized Loans are MERS Eligible Securitized Loans, unless such Securitized Loans are withdrawn from MERS and
Assignments of Mortgage are recorded in favor of the Trust at the expense of the successor servicer).  The final approval of a successor servicer shall be conditioned upon the receipt by the Trustee, the Master Servicer, NIMs Insurer and the Seller of a letter from the applicable Rating Agency or Rating Agencies to the effect that such transfer of servicing will not result in a qualification, withdrawal or downgrade of the then-current rating of any of the Certificates.  In connection with such appointment and assumption, the Master Servicer or the Seller, as applicable, may make such arrangements for the compensation of such successor out of payments on Securitized Loans as it and such successor shall agree, provided, however, that no such compensation shall be in excess of the Servicing Fee permitted under this Agreement.  In the event that the Servicer’s duties, responsibilities and liabilities under this Agreement should be terminated pursuant to the aforementioned sections,
the Servicer shall discharge such duties and responsibilities during the period from the date it acquires knowledge of such termination until the effective date thereof with the same degree of diligence and prudence which it is obligated to exercise under this Agreement, and shall take no action whatsoever that might impair or prejudice the rights or financial condition of its successor.  The resignation or removal of the Servicer pursuant to the aforementioned sections shall not become effective until a successor servicer shall be appointed pursuant to this Section 9.01, or until the Master Servicer succeeds to and assumes all of the Servicer’s responsibilities, rights, duties and obligations pursuant to this Section 9.01, and shall in no event relieve the Servicer of the representations and warranties made pursuant to 

 

Section 6.01 and the remedies available to the Trustee, the Trust, the Master Servicer, NIMs Insurer and the Seller under Section 6.02 and 6.03, it being understood and agreed that the provisions of such Sections 6.01, 6.02 and 6.03 shall be applicable not only to such successor servicer but also to the Servicer notwithstanding any such resignation or termination of the Servicer, or the termination of this Agreement.  Notwithstanding the foregoing, the Master Servicer, in its capacity as successor servicer, shall not be responsible for the lack of information and/or documents that it cannot obtain through reasonable efforts.

Within a reasonable period of time, but in no event longer than 30 days after the appointment of a successor entity, the Servicer shall prepare, execute and deliver to the successor entity any and all documents and other instruments, place in such successor’s possession all Servicing Files, and do or cause to be done all other acts or things necessary or appropriate to effect the purposes of such notice of termination, including but not limited to the transfer and endorsement of the Mortgage Notes and related documents, and the preparation and recordation of Assignments of Mortgage.  The Servicer shall cooperate with the Master Servicer or the Seller, as applicable, and such successor in effecting the termination of the Servicer’s responsibilities and rights hereunder and the transfer of servicing responsibilities to the successor servicer, 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 Servicer to the Custodial Account or Escrow Account or thereafter received with respect to the Securitized Loans.

Any successor servicer appointed as provided herein shall execute, acknowledge and deliver to the Trustee, the Servicer, the Master Servicer, NIMs Insurer and the Seller  an instrument (i) accepting such appointment, wherein the successor shall make the representations and warranties set forth in Section 6.01 (including a representation that the successor servicer is a member of MERS, unless none of the Securitized Loans are MERS Securitized Loans or MERS Eligible Securitized Loans or any such Securitized Loans have been withdrawn from MERS and Assignments of Mortgage are recorded in favor of the Trust) and provide for the same remedies set forth in Section 6.02 and Section 6.03 herein (ii) an assumption of the due and punctual performance and observance of each covenant and condition to be performed and observed by the Servicer under this Agreement, whereupon such successor servicer
shall become fully vested with all the rights, powers, duties, responsibilities, obligations and liabilities of the Servicer, with like effect as if originally named as a party to this Agreement.  Any termination or resignation of the Servicer or termination of this Agreement pursuant to Sections 6.02, 7.03, 8.01 or 8.02 shall not affect any claims that the Seller, the Depositor, the Master Servicer, NIMs Insurer or the Trustee may have against the Servicer arising out of the Servicer’s actions or failure to act prior to any such termination or resignation.  In addition, in the event any successor servicer is appointed pursuant to Section 8.03 of this Agreement, such successor servicer must satisfy the conditions relating to the transfer of servicing set forth in the Trust Agreement.

The Servicer shall deliver promptly to the successor servicer the funds in the Custodial Account and Escrow Account and all Securitized Loan documents and related documents and statements held by it hereunder and the Servicer shall account for all funds and shall execute and deliver such instruments and do such other things as may reasonably be required to more fully 

 

and definitively vest in the successor all such rights, powers, duties, responsibilities, obligations and liabilities of the Servicer.

Upon a successor’s acceptance of appointment as such, the Servicer shall notify the Trustee, the Master Servicer, NIMs Insurer, the Seller and the Depositor of such appointment in accordance with the procedures set forth in Section 9.03.

	
            Section 9.02
 	
            Costs.
 

The Seller shall pay any legal fees and expenses of its attorneys.  Costs and expenses incurred in connection with the transfer of the servicing responsibilities pursuant to Section 9.01 or pursuant to any other provision of this Agreement, including fees for delivering Servicing Files, shall be paid by the Seller.  Subject to Sections 2.03 and 3.01(a), the Seller shall pay the costs associated with the preparation, delivery and recording of Assignments of Mortgages.

	
            Section 9.03
 	
            Notices.
 

All demands, notices, consents, reports, directions, instructions, statements and other communications hereunder shall be in writing and shall be deemed to have been duly given if sent by facsimile or mailed by overnight courier, addressed as follows (or such other address as may hereafter be furnished to the other parties by like notice):

	
            (i)
 	
            if to the Seller:
 
	
             
 	
            Home Star Mortgage Services, LLC
 
	
             
 	
            W. 115 Century Road
 
	
             
 	
            Paramus, New Jersey  07652
 
	
             
 	
            Attention: Frank Plenskofski
 
	
             
 	
            Facsimile: (201) 225-2878
 
	
            (ii)
 	
            if to the Servicer:
 
	
             
 	
            Home Star Mortgage Services, LLC
 
	
             
 	
            W. 115 Century Road
 
	
             
 	
            Paramus, New Jersey  07652
 
	
             
 	
            Attention: Frank Plenskofski
 
	
             
 	
            Facsimile: (201) 225-2878
 
	
            (iii)
 	
            if to the Master Servicer:
 
	
             
 	
            Wells Fargo Bank,
 
	
             
 	
            National Association
 
	
             
 	
            9062 Old Annapolis Road
 
	
             
 	
            Columbia, Maryland  21045
 
	
             
 	
            Attention:  Corporate Trust Services — Home Star Master Servicing
 
	
             
 	
            Facsimile: (410) 884-2360
 
	
            (iv)
 	
            if to the Trustee:
 

 

 

 

 

	
             
 	
            The address shown in the Transfer Notice
 

Any such communication hereunder shall be deemed to have been received on the date delivered to or received at the premises of the addressee.

	
            Section 9.04
 	
            Severability Clause.
 

Any part, provision, representation or warranty of this Agreement which is prohibited or which is held to be void or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof.  Any part, provision, representation or warranty of this Agreement which is prohibited or unenforceable or is held to be void or unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction as to any Securitized Loan shall not invalidate or render unenforceable such provision in any other jurisdiction.  To the extent permitted by applicable law, the parties hereto waive any provision of law which prohibits or renders void or unenforceable any
provision hereof.  If the invalidity of any part, provision, representation or warranty of this Agreement shall deprive any party of the economic benefit intended to be conferred by this Agreement, the parties shall negotiate, in good-faith, to develop a structure the economic effect of which is as close as possible to the economic effect of this Agreement without regard to such invalidity.

	
            Section 9.05
 	
            No Personal Solicitation.
 

From and after the related Closing Date, the Servicer hereby agrees that it will not take any action or permit or cause any action to be taken by any of its agents or affiliates, or by any independent contractors or independent mortgage brokerage companies on the Servicer’s behalf, to personally, by telephone or mail, solicit the Mortgagor under any Securitized Loan for the purpose of refinancing such Securitized Loan; provided, that the Servicer may solicit any Mortgagor for whom the Servicer has received a request for verification of mortgage status, a request for demand for payoff, a mortgagor initiated written or verbal communication indicating a desire to prepay the related Securitized Loan, or the mortgagor initiates a title search, provided further, it is understood and agreed that promotions undertaken by the Servicer or any of its affiliates which (i) concern optional
insurance products or other additional projects or (ii) are directed to mailing lists or customers of affiliated companies or the general public at large, including without limitation, mass mailings based on commercially acquired mailing lists, newspaper, radio and television advertisements shall not constitute solicitation under this Section 9.05 nor is the Servicer prohibited from responding to unsolicited requests or inquiries made by a Mortgagor or an agent of a Mortgagor.

	
            Section 9.06
 	
            Counterparts.
 

This Agreement may be executed simultaneously in any number of counterparts.  Each counterpart shall be deemed to be an original, and all such counterparts shall constitute one and the same instrument.

 

 

	
            Section 9.07
 	
            Place of Delivery and Governing Law.
 

THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, NOTWITHSTANDING NEW YORK OR OTHER CHOICE OF LAW RULES TO THE CONTRARY.

	
            Section 9.08
 	
            Further Agreements.
 

The Seller  and the Servicer each agree to execute and deliver to the other such reasonable and appropriate additional documents, instruments or agreements as may be necessary or appropriate to effectuate the purposes of this Agreement.

	
            Section 9.09
 	
            Intention of the Parties.
 

It is the intention of the parties that the Seller  is conveying, and the Servicer is receiving, only a contract for servicing the Securitized Loans.  Accordingly, the parties hereby acknowledge that each Trust remains the sole and absolute owner of the related Securitized Loans and all rights (other than the servicing rights) related thereto.

	
            Section 9.10
 	
            Successors and Assigns; Assignment of Servicing Agreement.
 

This Agreement shall bind and inure to the benefit of and be enforceable by the Servicer, the Seller , each Trustee (with respect to related Securitized Loans), the NIMs Insurer and the Master Servicer and their respective successors and assigns.  This Agreement shall not be assigned, pledged or hypothecated by the Servicer to a third party except in accordance with Section 7.03 and shall not be assigned, pledged or hypothecated by the Seller except as and to the extent provided in Section 9.11.

	
            Section 9.11
 	
            Assignment by Seller.
 

The Seller shall have the right, with the consent of the NIMs Insurer, upon notice to but without the consent of the Servicer, to assign, in whole or in part (but exclusive of such Seller’s rights and obligations as owner of the servicing rights relating to Securitized Loans), its interest under this Agreement with respect to Securitized Loans which will be owned by the related Trust to the related Depositor, which in turn shall assign such rights to such Trust, and such Trust then shall succeed to all such rights of the Seller under this Agreement.  All references to the Seller in this Agreement shall be deemed to include its assignee or designee and any subsequent assignee or designee, specifically including, with respect to each Securitized Loan, the related Trust and the related Trustee.

	
            Section 9.12
 	
            Amendment.
 

 

 

 

This Agreement may be amended in writing from time to time by the parties, with the prior written consent of the Trustee and the NIMs Insurer; provided that the party requesting such amendment shall, at its own expense, provide the other parties and such Trustee and the NIMs Insurer with an Opinion of Counsel that (i)such amendment is permitted under the terms of this Agreement, (ii) the Servicer has complied with all applicable requirements of this Agreement, and (iii)) such amendment will not materially adversely affect the interest of any Trust or the related Certificateholders in the Securitized Loans.

Any such amendment shall be deemed not to adversely affect in any material respect any of the interest of Certificateholders in the Securitized Loans if each related Trustee and the NIMs Insurer receives written confirmation from the applicable Rating Agency or Rating Agencies that such amendment will not cause such Rating Agency or Rating Agencies to reduce, qualify or withdraw the then current rating assigned to the related Certificates (and any Opinion of Counsel requested by a party in connection with any such amendment may rely expressly on such confirmation as the basis therefor).

	
            Section 9.13
 	
            Waivers.
 

No term or provision of this Agreement may be waived or modified unless such waiver or modification is in writing, signed by the party against whom such waiver or modification is sought to be enforced.

	
            Section 9.14
 	
            Exhibits.
 

The exhibits to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement.

	
            Section 9.15
 	
            Intended Third Party Beneficiary.
 

Notwithstanding any provision herein to the contrary, the parties to this Agreement agree that it is appropriate, in furtherance of the intent of such parties as set forth herein, that each Trustee, each Trust and each NIMs Insurer receive the benefit of the provisions of this Agreement as an intended third party beneficiary of this Agreement to the extent of such provisions with respect to the related Securitized Loans.  The Servicer shall have the same obligations to the related Trustee, the related Trust and the related NIMs Insurer as if it were a party to this Agreement, and each Trustee, Trust and NIMs Insurer shall have the same rights and remedies to enforce the provisions of this Agreement as if it were a party to this Agreement.  The Servicer shall only take direction from the Master Servicer or NIMs Insurer (if direction by the Master Servicer or NIMs Insurer, as applicable,
is required under this Agreement) unless otherwise directed by this Agreement.  Notwithstanding the foregoing, all rights and obligations of a Trust, the related Trustee, the related NIMs Insurer and the Master Servicer hereunder (other than the right to indemnification) with respect to the related Securitized Loans shall terminate upon the termination of such Trust pursuant to the related Trust Agreement.

	
            Section 9.16
 	
            Confidentiality.
 

 

 

 

The Trustee and the Master Servicer hereby agree to hold and treat all Confidential Information (as defined below) in confidence and in accordance with this Section 9.16.  Such Confidential Information will not, without the prior written consent of the Servicer, be disclosed or used by any Trustee or the Master Servicer or by its subsidiaries, affiliates, directors, officers, employees, agents or controlling persons (collectively, the “Information Recipients”) other than for the purposes of this Agreement or for the purposes specified in the related Trust Agreement.  Disclosure that is not in violation of the Right to Financial Privacy Act of 1978, as amended, the Gramm-Leach-Bliley Act of 1999 (the “G-L-B Act”) or other applicable law by the Trustee or the Master Servicer of any Confidential Information at the request of its outside auditors or governmental
regulatory authorities in connection with an examination of any Trustee or the Master Servicer by any such authority or for the purposes specified in any Trust Agreement or this Agreement shall not constitute a breach of its obligations under this Section 9.19, and shall not require the prior consent of the Servicer.

As used herein, “Confidential Information” means non-public personal information (as defined in the G-L-B Act and its enabling regulations issued by the Federal Trade Commission) regarding borrowers.  Confidential  Information shall not include information which (i) is or becomes generally available to the public other than as a result of disclosure by a Trustee or the Master Servicer or any of its Information Recipients; (ii) was available to the related Trustee or the Master Servicer on a non-confidential basis from a person or entity other than the Servicer prior to its disclosure by the Servicer to such Trustee; (iii) is required to be disclosed by a governmental authority or related governmental agencies or as otherwise required by law; (iv) becomes available to the related Trustee or the Master Servicer on a non-confidential basis from a person or entity other than the
Servicer who, to the best knowledge of the related Trustee or the Master Servicer, is not otherwise bound by a confidentiality agreement with the Servicer, and is not otherwise prohibited from transmitting the information to such Trustee or the Master Servicer, or (v) is released pursuant to the Trust Agreement or this Agreement.

	
            Section 9.17
 	
            General Interpretive Principles.
 

For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

(a)        the terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;

(b)        accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles;

(c)        references herein to “Articles”, “Sections”, “Subsections”, “Paragraphs”, and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;

 

 

(d)        a reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;

(e)        the words “herein”, “hereof”, “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular provision;

	
            (f)
 	
            the term “include” or “including” shall mean by reason of enumeration; and
 

(g)        this Agreement shall be construed as a separate agreement with respect to the Securitized Loans held by each Trust, and references to the rights of the Master Servicer, Trustee or any NIMs Insurer shall apply separately with respect to each Trust.

	
            Section 9.18
 	
            Reproduction of Documents.
 

This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications which may hereafter be executed, (b) documents received by any party at the closing, and (c) financial statements, certificates and other information previously or hereafter furnished, may be reproduced by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process.  The parties agree that any such reproduction shall be as admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.

 

 

IN WITNESS WHEREOF, the parties hereto have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the date first above written.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            HOME STAR MORTGAGE SERVICES, LLC,

as Seller
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            HOME STAR MORTGAGE SERVICES, LLC,

as Servicer
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Master Servicer
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
             
 

 

 

 

EXHIBIT A

FORM OF TRANSFER NOTICE

[DATE]

Home Star Mortgage Services, LLC, as Servicer

W. 115 Century Road

Paramus, New Jersey  07652

Cenlar FSB, as Sub-Servicer

P.O. Box 77400

425 Phillips Boulevard

Trenton, New Jersey 08628

You are hereby notified that as of [date] (the “Effective Date”), the undersigned has transferred the Securitized Loans listed on the attached schedule (the “Securitized Loans”) to Homestar Mortgage Securities Trust 200_ - __ (the “Trust”).  The attached schedule also contains a field which sets forth the Servicing Fee Rate(s) and the Prepayment Charge Schedule.  You agree to service such Securitized Loans as Securitized Loans under that certain Servicing Agreement dated as of March 5, 2004 (the “Servicing Agreement”), by and among Home Star Mortgage Services, LLC (“Home Star”), as servicer (the “Servicer”), Home Star, as seller (the “Seller”) and Wells Fargo Bank, National Association, as master servicer (the “Master Servicer”), and that certain Sub-Servicing Acknowledgment Agreement dated of even date therewith (the
“Sub-Servicing Agreement”), by and between the Servicer and Cenlar FSB (the “Sub-Servicer”).  In addition, you shall recognize the Trust or the Master Servicer or ____________________ (the “Trustee”), acting as agents for the Trust, as having the same rights as Home Star as Seller under the Servicng Agreement with respect to such transferred Securitized Loans.  The address for notice for the Trustee for these Securitized Loans is __________________________________.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            HOME STAR MORTGAGE SERVICES, LLC, as

Seller

 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 

 

Acknowledged by:

HOME STAR MORTGAGE SERVICES, LLC, as Servicer

By:

Name:

Title:

 

 

CENLAR FSB, as Sub-Servicer

By:

Name:

Title:

 

 

EXHIBIT B

CUSTODIAL ACCOUNT LETTER AGREEMENT

	
             
	
            _______ __, 20__
 
	
            To:
 	
            ___________________________
 	
             

				

___________________________

___________________________

(the “Depository”)

As Servicer under the Servicing Agreement, dated as of March 5, 2004, by and among Home Star Mortgage Services, LLC (“Home Star”), as servicer (the “Servicer”), Home Star, as seller (the “Seller”) and Wells Fargo Bank, National Association, as master servicer (the “Master Servicer”) (the “Agreement”), we hereby authorize and request you to establish an account as the Custodial Account pursuant to Section 3.03 of the Agreement, to be designated as “Home Star Mortgage Services, LLC, as Servicer for Wells Fargo Bank, National Association, as Master Servicer, and in trust for one or more Homestar Mortgage Securities Trusts.” All deposits in the account shall be subject to withdrawal therefrom by order signed by the Servicer.  This letter is submitted to you in duplicate.  Please execute and return one original to us.

 

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            HOME STAR MORTGAGE SERVICES, LLC, as Servicer
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
             
 

 

 

The undersigned, as Depository, hereby certifies that the above described account has been established under Account Number __________, at the office of the Depository indicated above, and agrees to honor withdrawals on such account as provided above.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Depository
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Date:
 	
             
 

 

 

 

EXHIBIT C

ESCROW ACCOUNT LETTER AGREEMENT

	
             
	
            _______ __, 20__
 
	
            To:
 	
            ___________________________
 	
             

				

___________________________

___________________________

(the “Depository”)

As Servicer under the Servicing Agreement, dated as of March 5, 2004, by and among Home Star Mortgage Services, LLC (“Home Star”), as servicer (the “Servicer”), Home Star, as seller (the “Seller”) and Wells Fargo Bank, National Association, as master servicer (the “Master Servicer”) (the “Agreement”), we hereby authorize and request you to establish an account as the Escrow Account pursuant to Section 3.05 of the Agreement, to be designated as “Home Star Mortgage Services, LLC, as Servicer for Wells Fargo Bank, National Association, as Master Servicer, and in trust for one or more Homestar Mortgage Securities Trusts.” All deposits in the account shall be subject to withdrawal therefrom by order signed by the Servicer.  This letter is submitted to you in duplicate.  Please execute and return one original to us.

 

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            HOME STAR MORTGAGE SERVICES, LLC, as Servicer
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
             
 

 

 

The undersigned, as Depository, hereby certifies that the above described account has been established under Account Number __________, at the office of the Depository indicated above, and agrees to honor withdrawals on such account as provided above.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Depository
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Date:
 	
             
 

 

 

 

 

EXHIBIT D

MONTHLY SERVICER REPORTING FORMAT

The format should be:

1. Record length of 240

2. ASCII

3. All dates should have DD of “01”.

COBOL

	
            #
 	
            M/O
 	
            Field Name
 	
            Position
 	
            Length
 	
            “Picture”
 	
            Justify
 
	
            1.
 	
            O
 	
            Master Servicer No.
 	
            001-002
 	
            2
 	
             
 	
             
 
	
            2.
 	
            O
 	
            Unit Code
 	
            003-004
 	
            2
 	
             
 	
             
 
	
            3.
 	
            M
 	
            Loan Number
 	
            005-014
 	
            10
 	
            X(10)
 	
             
 
	
            4.
 	
            O
 	
            Borrower Name
 	
            015-034
 	
            20
 	
            X(20)
 	
             
 
	
            5.
 	
            O
 	
            Old Payment Amount
 	
            035-045
 	
            11
 	
            S(9)V9(02)
 	
             
 
	
            6.
 	
            O
 	
            Old Loan Rate
 	
            046-051
 	
            6
 	
            9(2)V9(04)
 	
             
 
	
            7.
 	
            O
 	
            Servicer Fee Rate
 	
            052-057
 	
            6
 	
            9(2)V9(04)
 	
             
 
	
            8.
 	
            M
 	
            Servicer Ending Balance
 	
            058-068
 	
            11
 	
            S9(9)V9(02)
 	
             
 
	
            9.
 	
            M
 	
            Servicer Next Due Date
 	
            069-076
 	
            8
 	
            CCYYMMDD
 	
             
 
	
            10.
 	
            O
 	
            Curtail Amt 1 - Before
 	
            077-087
 	
            11
 	
            S9(9)V9(02)
 	
             
 
	
            11.
 	
            O
 	
            Curtail Date 1
 	
            088-095
 	
            8
 	
            CCYYMMDD
 	
             
 
	
            12.
 	
            O
 	
            Curtail Amt 1 - After
 	
            096-106
 	
            11
 	
            S9(9)V9(02)
 	
             
 
	
            13
 	
            O
 	
            Curtail Amt 2 - Before
 	
            107-117
 	
            11
 	
            S9(9)V9(02)
 	
             
 
	
            14.
 	
            O
 	
            Curtail Date
 	
            118-125
 	
            8
 	
            CCYYMMDD
 	
             
 
	
            15.
 	
            O
 	
            Curtail Amt 2 - After
 	
            126-136
 	
            11
 	
            9(9)V9(02)
 	
             
 
	
            16.
 	
            O
 	
            Curtail Amt 3 - Before
 	
            137-147
 	
            11
 	
            9(9)V9(02)
 	
             
 
	
            17.
 	
            O
 	
            Curtail Date
 	
            148-155
 	
            8
 	
            CCYYMMDD
 	
             
 
	
            18
 	
            O
 	
            Curtail Amt 3 - After
 	
            156-166
 	
            11
 	
            9(9)V9(02)
 	
             
 
	
            19
 	
            O
 	
            New Payment Amount
 	
            167-177
 	
            11
 	
            9(9)V9(02)
 	
             
 
	
            20.
 	
            O
 	
            New Loan Rate
 	
            178-183
 	
            6
 	
            (2)V9(04)
 	
             
 
	
            21.
 	
            O
 	
            Index Rate
 	
            184-189
 	
            6
 	
            (2)V9(04)
 	
             
 
	
            22.
 	
            O
 	
            Remaining Term
 	
            190-192
 	
            3
 	
            (3)
 	
             
 
	
            23.
 	
            O
 	
            Liquidation Amount
 	
            193-203
 	
            11
 	
            9(9)V9(02)
 	
             
 
	
            24.
 	
            O
 	
            Action Code
 	
            204-205
 	
            2
 	
            (02)
 	
             
 
	
            25.
 	
            O
 	
            Scheduled Principal
 	
            206-216
 	
            11
 	
            9(9)V9(02)
 	
             
 
	
            26.
 	
            O
 	
            Scheduled Interest
 	
            217-227
 	
            11
 	
            9(9)V9(02)
 	
             
 
	
            27.
 	
            O
 	
            Scheduled Ending Balance
 	
            228-238
 	
            11
 	
            9(9)V9(02)
 	
             
 
	
            28.
 	
            O
 	
            FILLER
 	
            239-240
 	
            2
 	
            (02)
 	
             
 

Trailer Record

	
            1.
 	
            O
 	
            Number of Records
 	
            001-006
 	
            6
 	
            9(06)
 
	
            2.
 	
            O
 	
            FILLER
 	
            007-240
 	
            234
 	
            X(234)
 

 

 

 

Field Names and Descriptions:

	
            Field Name
 	
            Description
 	
             

	
            Master Servicer No.
 	
            Hard code as “01” used internally
 	
             

	
            Unit Code
 	
            Hard code as “  “ used internally
 	
             

	
            Loan Number
 	
            Investor’s loan number
 	
             

	
            Borrower Name
 	
            Last name of borrower
 	
             

	
            Old Payment Amount
 	
            P&I amount used for the applied payment
 	
             

	
            Old Loan Rate
 	
            Gross interest rate used for the applied payment
 	
             

	
            Servicer Fee Rate
 	
            Servicer’s fee rate
 	
             

	
            Servicer Ending Balance
 	
            Ending actual balance after a payment has been applied
 	
             

	
            Servicer Next Due Date
 	
            Borrower’s next due date for a payment
 	
             

	
            Curtailment Amount 1 - Before
 	
            Amount of curtailment applied before the payment
 
															

	
            Curtailment Date 1 
 	
            Date of curtailment should coincide with the payment date applicable to the curtailment
 

	
            Curtailment Amount 1 - After
 	
            Amount of curtailment applied after the payment
 	
             

	
            Curtailment Amount 2 - Before
 	
            Amount of curtailment applied before the payment
 
				

	
            Curtailment Date 2 
 	
            Date of curtailment should coincide with the payment date applicable to the curtailment
 

	
            Curtailment Amount 2 - After
 	
            Amount of curtailment applied after the payment
 	
             

	
            Curtailment Amount 3 - Before
 	
            Amount of curtailment applied before the payment
 
				

	
            Curtailment Date 3 
 	
            Date of curtailment should coincide with the payment date applicable to the curtailment
 

	
            Curtailment Amount 3 - After
 	
            Amount of curtailment applied after the payment
 

	
            New Payment Amount
 	
            For ARM, Equal, or Buydown loans, when a payment change occurs, this is the scheduled payment
 

 

 

 

	
            New Loan Rate
 	
            For ARM loans, when the gross interest rate change occurs, this is the scheduled rate
 
	
            Index Rate
 	
            For ARM loans, the index rate used in calculating the new gross interest rate
 
	
            Remaining Term
 	
            For ARM loans, the number of months left on the loan used  to determine the new P&I amount
 

	
            Liquidation Amount
 	
            The payoff amount of the loan
 
	
            Action Code
 	
            For delinquent loans:
 	
             

				

12 — Relief Provisions

15 — Bankruptcy/Litigation

20 — Referred for Deed-in-lieu, short sale

30 — Referred to attorney to begin foreclosure 60 — Loan Paid in full

70 — Real Estate Owned

	
            Scheduled Principal
 	
            Amount of principal from borrower payment due to  bondholder
 

	
            Scheduled Interest
 	
            Amount of interest from borrower payment due to bondholder
 
	
            Scheduled Ending Balance
 	
            Ending scheduled balance of loan
 	
             

				

FILLER                Should be filled with spaces

 

 

EXHIBIT E

Wells Fargo Bank Master Servicing Default Reporting

DATA FIELD REQUIREMENTS

Data must be submitted to Wells Fargo Bank in an Excel spreadsheet format with fixed field names and data type. The Excel spreadsheet should be used as a template consistently every month when submitting data.

Table: Delinquency

	
            Name
 	
            Type
 	
            Character Size
 
	
            Servicer Loan #
 	
            Number (Double) 
 	
            10
 
	
            Investor Loan # 
 	
            Number (Double) 
 	
            10
 
	
            Servicer Investor # 
 	
            Text 
 	
            3
 
	
            Borrower Name 
 	
            Text 
 	
            20
 
	
            Address 
 	
            Text 
 	
            30
 
	
            State 
 	
            Text 
 	
            2
 
	
            Zip 
 	
            Text 
 	
            10
 
	
            Due Date 
 	
            Date/Time
 	
            8
 
	
            Wells Fargo Action Code 
 	
            Text
 	
            2
 
	
            FC Approval Date 
 	
            Date/Time
 	
            8
 
	
            File Referred to Attorney 
 	
            Date/Time
 	
            8
 
	
            NOD 
 	
            Date/Time
 	
            8
 
	
            Complaint Filed 
 	
            Date/Time
 	
            8
 
	
            Sale Published 
 	
            Date/Time
 	
            8
 
	
            Target Sale Date 
 	
            Date/Time
 	
            8
 
	
            Actual Sale Date 
 	
            Date/Time
 	
            8
 
	
            Loss Mit Approval Date 
 	
            Date/Time
 	
            8
 
	
            Loss Mit Type 
 	
            Text
 	
            5
 
	
            Loss Mit Code 
 	
            Number
 	
            2
 
	
            Loss Mit Estimated Completion Date 
 	
            Date/Time
 	
            8
 
	
            Loss Mit Actual Completion Date 
 	
            Date/Time
 	
            8
 
	
            Loss Mit Broken Plan Date 
 	
            Date/Time
 	
            8
 
	
            BK Chapter 
 	
            Text
 	
            6
 
	
            BK Filed Date 
 	
            Date/Time
 	
            8
 
	
            Post Petition Due 
 	
            Date/Time
 	
            8
 
	
            Motion for Relief 
 	
            Date/Time
 	
            8
 
	
            Lift of Stay 
 	
            Date/Time
 	
            8
 
	
            Reason For Delinquency 
 	
            Text
 	
            10
 
	
            Occupant Code 
 	
            Text
 	
            10
 
	
            Eviction Start Date 
 	
            Date/Time
 	
            8
 
	
            Eviction Completed Date 
 	
            Date/Time
 	
            8
 

 

 

 

 

	
            List Price 
 	
            Currency
 	
            8
 
	
            List Date 
 	
            Date/Time
 	
            8
 
	
            Accepted Offer Price 
 	
            Currency
 	
            8
 
	
            Accepted Offer Date 
 	
            Date/Time
 	
            8
 
	
            Estimated REO Effective Date
 	
            Date/Time
 	
            8
 
	
            Actual REO Sale Date 
 	
            Date/Time
 	
            8
 
	
            Servicer Comments 
 	
            Text
 	
            200
 
	
            Modification Exp. Date 
 	
            Date/Time
 	
            8
 
	
            Fannie Mae Del. Status Code 
 	
            Text
 	
            2
 
	
            Fannie Mae Del. Reason Code 
 	
            Text
 	
            2
 
	
            BK Discharge/Dismissal Date 
 	
            Date/Time
 	
            8
 
	
            Property Damage Date 
 	
            Date/Time
 	
            8
 
	
            Property Repair Amount 
 	
            Currency
 	
            8
 
	
            BK Hearing Date 
 	
            Date/Time
 	
            8
 
	
            POC Date 
 	
            Date/Time 
 	
            8
 
	
            POC Amount 
 	
            Currency
 	
            8
 
	
            BK Case Number 
 	
            Text
 	
            30 Maximum
 
	
            F/C Sale Amount 
 	
            Currency
 	
            8
 
	
            Redemption Exp. Date 
 	
            Date/Time
 	
            8
 
	
            Property Value Date 
 	
            Date/Time
 	
            8
 
	
            Current Property Value 
 	
            Currency
 	
            8
 
	
            Repaired Property Value 
 	
            Currency
 	
            8
 
	
            BPO Y/N 
 	
            Text
 	
            1
 
	
            Current LTV 
 	
            Currency
 	
            8
 
	
            Property Condition Code 
 	
            Text
 	
            2
 
	
            Property Inspection Date 
 	
            Date/Time 
 	
            8
 
	
            MI Cancellation Date 
 	
            Date/Time 
 	
            8
 
	
            MI Claim Filed Date 
 	
            Date/Time 
 	
            8
 
	
            MI Claim Amount 
 	
            Currency
 	
            8
 
	
            MI Claim Reject Date 
 	
            Date/Time 
 	
            8
 
	
            MI Claim Resubmit Date 
 	
            Date/Time
 	
            8
 
	
            MI Claim Paid Date 
 	
            Date/Time
 	
            8
 
	
            MI Claim Amount Paid 
 	
            Currency
 	
            8
 
	
            Pool Claim Filed Date 
 	
            Date/Time
 	
            8
 
	
            Pool Claim Amount 
 	
            Currency
 	
            8
 
	
            Pool Claim Reject Date 
 	
            Date/Time
 	
            8
 
	
            Pool Claim Paid Date 
 	
            Date/Time
 	
            8
 
	
            Pool Claim Amount Paid 
 	
            Currency
 	
            8
 
	
            Pool Claim Resubmit Date 
 	
            Date/Time 
 	
            8
 
	
            FHA Part A Claim Filed Date 
 	
            Date/Time 
 	
            8
 
	
            FHA Part A Claim Amount 
 	
            Currency
 	
            8
 
	
            FHA Part A Claim Paid Date 
 	
            Date/Time
 	
            8
 
	
            FHA Part A Claim Paid Amount 
 	
            Currency
 	
            8
 
	
            FHA Part B Claim Filed Date 
 	
            Date/Time
 	
            8
 

 

 

 

 

	
            FHA Part B Claim Amount 
 	
            Currency
 	
            8
 
	
            FHA Part B Paid Date 
 	
            Date/Time
 	
            8
 
	
            FHA Part B Claim Paid Amount 
 	
            Currency
 	
            8
 
	
            V A Claim Filed Date 
 	
            Date/Time
 	
            8
 
	
            V A Claim Paid Date 
 	
            Date/Time
 	
            8
 
	
            V A Claim Paid Amount 
 	
            Currency
 	
            8
 

The Action Code Field should show the applicable numeric code to indicate that a special action is being taken.  The Action Codes are the following:

12-Relief Provisions (i.e. Sailors & Soldiers Relief Act)

15-Bankruptcy/Litigation

20-Loss Mitigation-Workout

30-Referred for Foreclosure

60-Payoff

65-Repurchase

70-REO-Held for Sale

71- Third Party Sale/Condemnation

72-REO-Pending Conveyance-Pool Insurance claim filed

Wells Fargo Bank will accept alternative Action Codes to those above, provided that the Codes are consistent with industry standards. If Action Codes other than those above are used, the Servicer must supply Wells Fargo Bank with a description of each of the Action Codes prior to sending the file.

Description of Action Codes:

Action Code 12- To report a Securitized Loan for which the Borrower has been granted relief for curing a delinquency.

Action Code 15 - To report a borrower filing bankruptcy and for all active bankruptcies.

Action Code 20 - To report that the Borrower has agreed to some form of loss mitigation/workout.  Examples of these include Short Sale, Deed-in-Lieu of Foreclosure, Formal Forbearance Agreements, Modifications, etc.

Action Code 30 - To report a loan that has been referred to attorney for foreclosure.

Action Code 60 - To report that a Securitized Loan has been paid in full either at, or prior to, maturity.

Action Code 65- To report that the Servicer is repurchasing the Securitized Loan.

 

 

Action Code 70 -To report that a Securitized Loan has been foreclosed or a deed-in-lieu of foreclosure has been accepted, and the Servicer, on behalf of the owner of the Securitized Loan, has acquired the property and may dispose of it.

Action Code 71 -To report that a Securitized Loan has been foreclosed and a third party acquired the property, or a total condemnation of the property has occurred.

Action Code 72 -To report that a Securitized Loan has been foreclosed, or a deed-in-lieu has been accepted, and the property may be conveyed to the mortgage insurer and the pool insurance claim has been filed.  Also to be used for completed HUDNA foreclosures where the property is pending conveyance to HUDNA.

The Loss Mit Type field should show the approved Loss Mitigation arrangement. The following are acceptable:

*******

	
            l
 	
            ASU M - Approved Assumption
 
	
            l
 	
            BAP - Borrower Assistance Program
 
	
            l
 	
            CO - Charge Off
 
	
            l
 	
            DIL - Deed-in-Lieu
 
	
            l
 	
            FFA - Formal Forbearance Agreement
 
	
            l
 	
            MOD - Loan Modification
 
	
            l
 	
            PRE - Pre-Sale
 
	
            l
 	
            SS - Short Sale
 
	
            l
 	
            MISC- Anything else approved by the PMI or Pool Insurer
 

Wells Fargo Bank will accept alternative Loss Mitigation Types to those above, provided that they are consistent with industry standards. If Loss Mitigation Types other than those above are used, the Servicer must supply Wells Fargo Bank with a description of each of the Loss Mitigation Types prior to sending the file.

The Occupant Code field should show the current status of the property. The acceptable codes are:

	
            l
 	
            Mortgagor
 
	
            l
 	
            Tenant
 
	
            l
 	
            Unknown
 
	
            l
 	
            Vacant
 

 

 

The RFD field should show the Reason for Default. The acceptable codes are below, or we can accept Fannie Mae Delinquency Reason Codes.

	
            Delinquency Code 
 	
            Delinquency Description
 
	
            AB 
 	
            Abandonment of property
 
	
            AA 
 	
            Arm Adjustment Problem
 
	
            BK 
 	
            Bankruptcy
 
	
            06 
 	
            Borrower Complaint
 
	
            BOC 
 	
            Borrower Out of Country
 
	
            BU 
 	
            Business Failure
 
	
            CL 
 	
            Casualty Loss
 
	
            JC 
 	
            Change in Job
 
	
            CD 
 	
            Chronic Delinquent
 
	
            CSP 
 	
            Chronic Slow Pay
 
	
            CI 
 	
            Commission Income
 
	
            DIF 
 	
            Death in Family
 
	
            08 
 	
            Deceased
 
	
            00 
 	
            Defective Loan
 
	
            DT 
 	
            Delinquent Property Tax
 
	
            FIRE 
 	
            Disability
 
	
            DS 
 	
            Disregard
 
	
            Dl 
 	
            Divorce
 
	
            DD 
 	
            Domestic Difficulties
 
	
            EA 
 	
            Earthquake
 
	
            ENV 
 	
            Environmental
 
	
            ECO 
 	
            Excessive Credit Obligation
 
	
            FA 
 	
            Family Death
 
	
            FE 
 	
            Family Emergency
 
	
            FI 
 	
            Family Illness
 
	
            FD 
 	
            Financial Difficulty
 
	
            05 
 	
            Foreclosure or Borrower moved or skipped
 
	
            FFP 
 	
            Formal Forbearance Plan
 
	
            FR 
 	
            Fraud
 
	
            G 
 	
            Garnishment
 
	
            HU 
 	
            Hurricane
 
	
            IT 
 	
            Illegal Transfer
 
	
            B1 
 	
            Illness of Borrower
 
	
            IP 
 	
            Inability to Sell Property
 
	
            IC 
 	
            Incarcerated
 
	
            IN 
 	
            Income Reduction
 
	
            LIT 
 	
            Involved in Litigation
 
	
            IRS 
 	
            IRS Lien
 
	
            JD 
 	
            Judgment
 
	
            LB 
 	
            Language Barrier
 

 

 

 

 

	
            LM 
 	
            Legal Matter
 
	
            LS 
 	
            Legal Separation
 
	
            MA 
 	
            Marital Difficulties
 
	
            ME 
 	
            Medical
 
	
            03 
 	
            Medical/Illness in Family
 
	
            MD 
 	
            Mortgagor Death
 
	
            ND 
 	
            Natural Disaster
 
	
            NC 
 	
            No Contact with borrower
 
	
            NSF 
 	
            Non Sufficient Funds
 
	
            09 
 	
            Other
 
	
            01 
 	
            Over Obligated
 
	
            OV 
 	
            Overextended
 
	

            PAD 
 	
            Payment Dispute
 
	
            PP 
 	
            Payment Plan Established
 
	
            POP 
 	
            Payoff Pending
 
	
            PE 
 	
            Pending Sale
 
	
            PS 
 	
            Previous Servicer Problem
 
	
            PB 
 	
            Promise to Pay Broken
 
	
            PR 
 	
            Property Damage
 
	
            PD 
 	
            Property Devaluation
 
	
            REFI 
 	
            Refinance Pending
 
	
            RELO 
 	
            Relocation (Job Related)
 
	
            JRP 
 	
            Relocation (Personal)l
 
	
            RE 
 	
            Rental
 
	
            10 
 	
            REO
 
	
            SI 
 	
            Seasonal Income
 
	
            SE 
 	
            Self Employed
 
	
            SP 
 	
            Servicing Problems
 
	
            SR 
 	
            Slow Receivables
 
	
            02 
 	
            Unemployed/Reduced Income
 
	
            UE 
 	
            Unemployment
 
	
            UK 
 	
            Unknown
 
	
            UTP 
 	
            Unwilling to Pay
 

 

 

EXHIBIT F

WELLS FARGO BANK, N.A.

Form 332

Calculation of Realized Loss

Purpose

To provide the Servicer with a form for the calculation of any Realized Loss (or gain) as a result of a Securitized Loan having been foreclosed and Liquidated.

Distribution

The Servicer will prepare the form in duplicate and send the original together with evidence of conveyance of title and appropriate supporting documentation to the Master Servicer with the Monthly Accounting Reports which supports the Securitized Loan’s removal from the Securitized Loan Activity Report.  The Servicer will retain the duplicate for its own records.

Due Date

With respect to any liquidated Securitized Loan, the form will be submitted to the Master Servicer no later than the date on which statements are due to the Master Servicer under Section 4.02 of this Agreement (the “Statement Date”) in the month following receipt of final liquidation proceeds and supporting documentation relating to such liquidated Securitized Loan; provided, that if such Statement Date is not at least 30 days after receipt of final liquidation proceeds and supporting documentation relating to such liquidated Securitized Loan, then the form will be submitted on the first Statement Date occurring after the 30th day following receipt of final liquidation proceeds and supporting documentation.

Preparation Instructions

The numbers on the form correspond with the numbers listed below.

	
            1.
 	
            The actual Unpaid Principal Balance of the Securitized Loan.
 
	
            2.
 	
            The Total Interest Due less the aggregate amount of servicing fee that would have been earned if all delinquent payments had been made as agreed.
 
	
            3-7.
 	
            Complete as necessary.  All line entries must be supported by copies of appropriate statements, vouchers, receipts, canceled checks, etc., to document the expense.  Entries not properly documented will not be reimbursed to the Servicer.
 
	
            8.
 	
            Accrued Servicing Fees based upon the Scheduled Principal Balance of the Securitized Loan as calculated on a monthly basis.
 
	
            10.
 	
            The total of lines 1 through 9.
 

Credits

 

 

 

	
            11-17.
 	
            Complete as necessary.  All line entries must be supported by copies of the appropriate claims forms, statements, payment checks, etc.  to document the credit.  If the Securitized Loan is subject to a Bankruptcy Deficiency, the difference between the Unpaid Principal Balance of the Note prior to the Bankruptcy Deficiency and the Unpaid Principal Balance as reduced by the Bankruptcy Deficiency should be input on line 16.
 
	
            18.
 	
            The total of lines 11 through 17.
 

Total Realized Loss (or Amount of Any Gain)

	
            19.
 	
            The total derived from subtracting line 18 from 10.  If the amount represents a realized gain, show the amount in parenthesis (   )
 

 

 

WELLS FARGO BANK, N.A.

CALCULATION OF REALIZED LOSS

WELLS FARGO BANK, N.A. Trust:  ___________________________

	
            Prepared by:  __________________
 	
            Date:  _______________
 

Phone:  ______________________

	
            Servicer Loan No.
 	
            Servicer Name
 	
            Servicer Address
 

WELLS FARGO BANK, N.A.

Loan No._____________________________

Borrower’s Name:________________________________________________________

Property

Address:________________________________________________________________

Liquidation and Acquisition Expenses:

	
            Actual Unpaid Principal Balance of Securitized Loan
 	
            $ _______________(1)
 
	
            Interest accrued at Net Rate
 	
            ________________(2)
 	
             

	
            Attorney’s Fees
 	
            ________________(3)
 	
             

	
            Taxes
 	
            ________________(4)
 	
             

	
            Property Maintenance
 	
            ________________(5)
 	
             

	
            MI/Hazard Insurance Premiums
 	
            ________________(6)
 	
             

	
            Hazard Loss Expenses
 	
            ________________(7)
 	
             

	
            Accrued Servicing Fees
 	
            ________________(8)
 	
             

	
            Other (itemize)
 	
            ________________(9)
 	
             

	
            _________________________________________
 	
            $ _________________
 	
             

	
            _________________________________________
 	
            __________________
 	
             

	
            _________________________________________
 	
            __________________
 	
             

	
            _________________________________________
 	
            __________________
 	
             

	
            Total Expenses
 	
            $ ______________(10)
 	
             

															

Credits:

	
            Escrow Balance
 	
            $ ______________(11)
 	
             

	
            HIP Refund
 	
            ________________(12)
 	
             

	
            Rental Receipts
 	
            ________________(13)
 	
             

	
            Hazard Loss Proceeds
 	
            ________________(14)
 	
             

	
            Primary Mortgage Insurance Proceeds
 	
            ________________(15)
 	
             

	
            Proceeds from Sale of Acquired Property
 	
            ________________(16)
 	
             

	
            Other (itemize)
 	
            ________________(17)
 	
             

	
            _________________________________________
 	
            ___________________
 
	
            _________________________________________
 	
            ___________________
 
	
            Total Credits
 	
            $________________(18)
 	
             

										

Total Realized Loss (or Amount of Gain)                   $________________(19)

 

 

EXHIBIT M-2

SERVICING AGREEMENT FOR SUBPRIME LOANS

THIS IS A SERVICING AGREEMENT, dated as of March 5, 2004 (the “Agreement”), and is executed between Homestar Mortgage Acceptance Corp. (the “Owner”) and Home Star Mortgage Services LLC (the “Servicer”).

W I T N E S S E T H:

WHEREAS, the Owner and the Servicer desire that, from and after the Effective Date, the Mortgage Loans which are subject to this Agreement will be serviced by the Servicer on behalf of the Owner in accordance with the terms and provisions of this Agreement.

NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Owner and the Servicer agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01. Defined Terms.

Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings:

Accepted Servicing Practices:  With respect to any Mortgage Loan, all applicable federal, state and local laws and regulations and the standards employed by the Servicer in servicing similar mortgage loans for its own account, giving due consideration to those mortgage servicing practices and procedures (including collection practices and procedures) of mortgage banking institutions which service mortgage loans of the same type as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located, giving due consideration to customary and usual standards of practice of mortgage lenders and loan servicers administering similar mortgage loans.

Adjustment Date:  As to each ARM Loan, the date on which the Mortgage Interest Rate is adjusted in accordance with the terms of the related Mortgage Note and Mortgage.

Agreement:  This Servicing Agreement including all exhibits hereto, amendments hereof and supplements hereto.

Ancillary Income:          All income derived from the Mortgage Loans (other than the (i) Servicing Fee or (ii) prepayment charges attributable to the Mortgage Loans), including but not limited to late charges, any interest paid on funds deposited in the Custodial Account and Escrow Account (other than interest on escrowed funds required by law to be paid to the Mortgagor), fees received with respect to checks or bank drafts returned by the related bank for non-sufficient 

 

funds, assumption fees, optional insurance administrative fees and all other incidental fees and charges.

ARM Loan: A first lien, conventional, 1-4 family residential Mortgage Loan with an interest rate which adjusts from time to time in accordance with the related Index and is subject to a Periodic Rate Cap and a Lifetime Rate Cap and which may permit conversion to a fixed interest rate.

Business Day:   Any day other than (i) a Saturday or Sunday, or (ii) a legal holiday in the State of New York or the jurisdiction in which the Servicer conducts its servicing activities, or (iii) a day on which banking and savings and loan institutions in the State of New York or the jurisdiction in which the Servicer conducts its servicing activities are authorized or obligated by law or executive order to be closed.

Code:  The Internal Revenue Code of 1986, as it may be amended from time to time, or any successor statute thereto, and applicable U.S. Department of the Treasury regulations issued pursuant thereto.

Condemnation Proceeds:  All awards or settlements in respect of a Mortgaged Property, whether permanent or temporary, partial or entire, by exercise of the power of eminent domain or condemnation, to the extent not required to be released to a Mortgagor in accordance with the terms of the related Mortgage Loan Documents.

Custodial Account:  The separate demand account or accounts created and maintained pursuant to Section 4.04 which shall be entitled “HMAC 2004-1 Custodial Account in trust for [Owner], Owner of Whole Loan Mortgages” and shall be established at a Qualified Depository.

Custodial Agreement:  The Custodial Agreement dated as of March 1, 2004 among HSBC Bank (USA), the Owner and Wells Fargo Bank, N.A., providing for the custody of Mortgage Loan Documents.

Custodian:  Wells Fargo Bank, N.A, or such other Custodian as the Owner shall designate.

Determination Date: The 15th day of any month, or if such 15th day is not a Business Day, the first Business Day immediately preceding such 15th day.

Due Date:   With respect to any Mortgage Loan, each day on which payments of principal and interest are required to be paid in accordance with the terms of the related Mortgage Note, exclusive of any days of grace.

Due Period:   With respect to each Remittance Date, the period commencing on the second day of the month preceding the month of such Remittance Date and ending on the first day of the month of such Remittance Date.

Effective Date:  March 5, 2004.

 

 

Escrow Account:   The separate trust account or accounts created and maintained pursuant to Section 4.06 which shall be entitled “HMAC 2004-1 Escrow Account, in trust for [Owner], Owner of Whole Loan Mortgages and various Mortgagors” and shall be established at a Qualified Depository.

Escrow Payments:   With respect to any Mortgage Loan, the amounts constituting ground rents, taxes, assessments, water rates, sewer rents, municipal charges, mortgage insurance premiums, fire and hazard insurance premiums, condominium charges, and any other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any other related Mortgage Loan Document.

Escrow Mortgage Loan:  The Mortgage Loans for which the Servicer has established an Escrow Account for items constituting Escrow Payments.

Event of Default:   Any one of the conditions or circumstances enumerated in Section 9.01.

Fannie Mae:  Fannie Mae, or any successor thereto.

Fannie Mae Guide:   The Fannie Mae Selling Guide and the Fannie Mae Servicing Guide and all amendments or additions thereto.

Fidelity Bond:  A fidelity bond to be maintained by the Servicer pursuant to Section 4.12.

Freddie Mac:  The Federal Home Loan Mortgage Corporation, or any successor thereto.

Freddie Mac Guide:   The Freddie Mac Selling Guide and the Freddie Mac Servicing Guide and all amendments or additions thereto.

Full Principal Prepayment:  A Principal Prepayment made by a Mortgagor of the entire principal balance of a Mortgage Loan.

GAAP: Generally accepted accounting principles and procedures, consistently applied.

HUD:   The United States Department of Housing and Urban Development or any successor thereto.

Index:  With respect to each ARM Loan, the index, as specified in the related Mortgage Note, used to determine the Mortgage Interest Rate on each Adjustment Date on such ARM Loan.

Index Rate:  With respect to each ARM Loan, on each Adjustment Date, the rate per annum equal to the Index, calculated as provided in the related Mortgage Note.

Insurance Proceeds:   With respect to each Mortgage Loan, proceeds of insurance policies insuring the Mortgage Loan or the related Mortgaged Property.

 

 

Lifetime Rate Cap:   With respect to each ARM Loan, the maximum Mortgage Interest Rate over the term of such Mortgage Loan, as specified in the related Mortgage Note.

Liquidation Proceeds:   Cash received in connection with the liquidation of a defaulted Mortgage Loan, whether through the sale or assignment of such Mortgage Loan, trustee’s sale, foreclosure sale or otherwise, other than amounts received following the acquisition of an REO Property pursuant to Section 4.13.

Margin:  With respect to each ARM Loan, the fixed percentage amount set forth in the related Mortgage Note which is added to the Index in order to determine the related Mortgage Interest Rate.

MERS:  Mortgage Electronic Registration Systems, Inc., a Delaware corporation, or any successor in interest thereto.

MERS Mortgage Loan: Any Mortgage Loan as to which the related Mortgage, or an Assignment of Mortgage, has been or will be recorded in the name of MERS, as nominee for the holder from time to time of the related Mortgage Note.

Monthly Advance:   The portion of each Monthly Payment that is delinquent with respect to each Mortgage Loan at the close of business on the Determination Date required to be advanced by the Servicer pursuant to Section 5.03 on the Business Day immediately preceding the Remittance Date of the related month.

Monthly Payment:   With respect to each Mortgage Loan, the scheduled monthly payment of principal and interest thereon which is payable by the related Mortgagor under the related Mortgage Note.

Mortgage:  The mortgage, deed of trust or other instrument securing a Mortgage Note, which creates a lien on real property securing the Mortgage Note.

Mortgage Interest Rate:  The annual rate at which interest accrues on any Mortgage Loan in accordance with the provisions of the related Mortgage Note, and in the case of an ARM Loan, as adjusted from time to time on each Adjustment Date for such Mortgage Loan to equal the Index Rate for such Mortgage Loan plus the Margin for such Mortgage Loan, and subject to the limitations on such interest rate imposed by the Periodic Rate Cap and the Lifetime Rate Cap.

Mortgage Loan:  An individual Mortgage Loan described herein and as further identified on the Mortgage Loan Schedule, which Mortgage Loan includes without limitation the Mortgage Loan Documents, the Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds and all other rights, benefits, proceeds and obligations arising from or in connection with such Mortgage Loan.

Mortgage Loan Documents:  With respect to each Mortgage Loan, the original mortgage loan legal documents held by the Owner or by a Custodian on the Owner’s behalf.

 

 

Mortgage Loan Remittance Rate:  With respect to each Mortgage Loan, the annual rate of interest remitted to the Owner, which shall be equal to the related Mortgage Interest Rate minus the Servicing Fee Rate.

Mortgage Loan Schedule:  The schedule of Mortgage Loans attached hereto as Exhibit A.

Mortgage Note:  The note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage.

Mortgaged Property:  The underlying real property securing repayment of the debt evidenced by a Mortgage Note.

Mortgagor:  The obligor on a Mortgage Note.

Non-Escrow Mortgage Loan:  Any Mortgage Loan which is not an Escrow Mortgage Loan.

Nonrecoverable Advance:  Any Monthly Advance previously made by the Servicer pursuant to Section 5.03 or any Servicing Advance which, in the good faith judgment of the Servicer, will not be ultimately recoverable by the Servicer from Liquidation Proceeds or other proceeds of the related Mortgage Loan.  The determination by the Servicer that is has made a Nonrecoverable Advance, shall be evidenced by an Officer’s Certificate of the Servicer delivered to the Owner and the NIMs Insurer and detailing the reasons for such determination.

Officers’ Certificate:  A certificate signed by the Chairman of the Board, the Vice Chairman of the Board, the President, a Vice President or an Assistant Vice President or by the Treasurer or the Secretary or one of the Assistant Treasurers or Assistant Secretaries of the Servicer, and delivered to the Owner as required by this Agreement.

Opinion of Counsel:  A written opinion of counsel, who may be an employee of the party on behalf of whom the opinion is being given, reasonably acceptable to the other party.

Owner: Homestar Mortgage Acceptance Corp., its successors in interest and assigns.

Partial Principal Prepayment:  A Principal Prepayment by a Mortgagor in part but not in full of the outstanding principal balance of a Mortgage Loan.

Periodic Rate Cap:  With respect to each ARM Loan, the maximum number of percentage points by which the Mortgage Interest Rate may increase or decrease on any Adjustment Date.

Permitted Investments:  Any one or more of the following obligations or securities:

(i)         direct obligations of, and obligations the timely payment of which are fully guaranteed by the United States of America or any agency or instrumentality of the United States of America the obligations of which are backed by the full faith and credit of the United States of America;

 

 

(ii)         (a) demand or time deposits, federal funds or bankers’ acceptances issued by any depository institution or trust company incorporated under the laws of the United States of America or any state thereof and subject to supervision and examination by federal and/or state banking authorities, provided that the commercial paper and/or the short-term deposit rating and/or the long-term unsecured debt obligations or deposits of such depository institution or trust company at the time of such investment or contractual commitment providing for such investment are rated in one of the two highest rating categories by each Rating Agency and (b) any other demand or time deposit or certificate of deposit that is fully insured by the FDIC;

(iii)        repurchase obligations with respect to (a) any security described in clause (i) above or (b) any other security issued or guaranteed by an agency or instrumentality of the United States of America, the obligations of which are backed by the full faith and credit of the United States of America, in either case entered into with a depository institution or trust company (acting as principal) described in clause (ii)(a) above;

(iv)        securities bearing interest or sold at a discount issued by any corporation incorporated under the laws of the United States of America or any state thereof that are rated in the highest rating categories by each Rating Agency at the time of such investment or contractual commitment providing for such investment; provided, however, that securities issued by any particular corporation will not be Permitted Investments to the extent that investments therein will cause the then outstanding principal amount of securities issued by such corporation and held as Permitted Investments to exceed 10% of the aggregate outstanding principal balances and amounts of all the Permitted Investments;

(v)        commercial paper (including both non-interest-bearing discount obligations and interest-bearing obligations payable on demand or on a specified date not more than one year after the date of issuance thereof) which are rated in the highest rating categories by each Rating Agency at the time of such investment;

(vi)        any other demand, money market or time deposit, obligation, security or investment as may be acceptable to each Rating Agency and the NIMs Insurer; and

(vii)       any money market funds the collateral of which consists of obligations fully guaranteed by the United States of America or any agency or instrumentality of the United States of America the obligations of which are backed by the full faith and credit of the United States of America (which may include repurchase obligations secured by collateral described in clause (i)) and which money market funds are rated in one of the two highest rating categories by each Rating Agency;

provided, however, that no instrument or security shall be a Permitted Investment if such instrument or security evidences a right to receive only interest payments with respect to the obligations underlying such instrument or if such security provides for payment of both principal and interest with a yield to maturity in excess of 120% of the yield to maturity at par; and provided further that any such instrument or security must be payable on demand or on a 

 

specified date not later than the Remittance Date on which amounts held therein are required to be distributed.

Person:  Any individual, corporation, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization, government or any agency or political subdivision thereof.

Prepayment Interest Shortfall: With respect to any Mortgage Loan that was subject to a Full Principal Prepayment or Partial Principal Prepayment during any Due Period, which Full Principal Prepayment or Partial Principal Prepayment was applied to such Mortgage Loan prior to such Mortgage Loan’s Due Date in such Due Period, the amount of interest  (adjusted to the applicable Mortgage Loan Remittance Rate) that would have accrued on the amount of such Full Principal Prepayment or Partial Principal Prepayment during the period commencing on the date as of which such Full Principal Prepayment or Partial Principal Prepayment was applied to such Mortgage Loan and ending on the day immediately preceding such Due Date, inclusive.

Primary Mortgage Insurance Policy:   Each primary policy of mortgage insurance, or any replacement policy therefor obtained by the Servicer pursuant to Section 4.08.

Prime Rate: The prime rate of U.S. money center banks as published from time to time in The Wall Street Journal.

Principal Prepayment:  Any payment or other recovery of principal on a Mortgage Loan, full or partial, which is received in advance of its scheduled Due Date, including any prepayment charge or premium thereon, and which is not accompanied by an amount of interest representing scheduled interest due on any date or dates in any month or months subsequent to the month of prepayment.

Qualified Depository:  A deposit account or accounts maintained with a federal or state chartered depository institution the deposits in which are insured by the FDIC to the applicable limits and the short-term unsecured debt obligations of which (or, in the case of a depository institution that is a subsidiary of a holding company, the short-term unsecured debt obligations of such holding company) are rated A-2 by Standard & Poor’s Ratings Services or Prime-1 by Moody’s Investors Service, Inc. (or a comparable rating if another rating agency is specified by the Owner by written notice to the Servicer) at the time any deposits are held on deposit therein.

Qualified Insurer:  An insurance company duly qualified as such under the laws of the states in which the Mortgaged Properties are located, duly authorized and licensed in such states to transact the applicable insurance business and to write the insurance provided.

Rating Agency:  Standard & Poor’s Ratings Service, a division of The McGraw Hill Companies Inc., Moody’s Investors Service, Inc. or Fitch, Inc.

REMIC:  A “real estate mortgage investment conduit” within the meaning of Section 860D of the Code.

 

 

REMIC Provisions:  The provisions of the federal income tax law relating to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter 1, Subtitle A of the Code, and related provisions, and regulations, rulings or pronouncements promulgated thereunder, as the foregoing may be in effect from time to time.

Remittance Date:  The 18th day of any month, or if such 18th day is not a Business Day, the first Business Day immediately preceding such 18th day.  The first Remittance Date shall occur on April 16, 2004.

REO Disposition:  The final sale by the Servicer of any REO Property.

REO Disposition Proceeds:  Amounts received by the Servicer in connection with a related REO Disposition.

REO Property:  A Mortgaged Property acquired by the Servicer on behalf of the Owner as described in Section 4.13.

Servicer:  Home Star Mortgage Services LLC, or any of its successors in interest or any successor under this Agreement appointed as herein provided.

Servicing Advances:  All customary, reasonable and necessary “out-of-pocket” costs and expenses (including reasonable attorneys’ fees and disbursements) incurred in the performance by the Servicer of its servicing obligations relating to each Mortgage Loan, including the cost of (a) the inspection, preservation, restoration and protection of the Mortgaged Property, (b) any enforcement, administrative or judicial proceedings, or any legal work or advice specifically related to servicing the Mortgage Loans, including foreclosures, bankruptcies, condemnations, drug seizures, elections, foreclosures by subordinate or superior lienholders, and other legal actions incidental to the servicing of the Mortgage Loans (provided that such expenses are reasonable and that the Servicer specifies the Mortgage Loan(s) to which such expenses relate), (c) the management and liquidation of
the Mortgaged Property if the Mortgaged Property is acquired in full or partial satisfaction of the Mortgage, (d) taxes, assessments, water rates, sewer rates and other charges which are or may become a lien upon the Mortgaged Property, and Primary Mortgage Insurance Policy premiums and fire and hazard insurance coverage and (e) compliance with the obligations under Section 4.08.

Servicing Fee:  With respect to each Mortgage Loan, the amount of the annual fee the Owner shall pay to the Servicer, which shall, for a period of one full month, be equal to one-twelfth of the product of (a) the applicable Servicing Fee Rate and (b) the outstanding principal balance of such Mortgage Loan.  Such fee shall be payable monthly, computed on the basis of the same principal amount and period respecting which any related interest payment on a Mortgage Loan is computed.  The obligation of the Owner to pay the Servicing Fee is limited to, and the Servicing Fee is payable from the interest portion of such Monthly Payments, Liquidation Proceeds, Insurance Proceeds, REO Disposition Proceeds and Condemnation Proceeds collected by the Servicer or as otherwise provided under Section 4.05.

 

 

Servicing Fee Rate:  0.50%.

Servicing File:  The documents, records and other items pertaining to a particular Mortgage Loan, and any additional documents relating to such Mortgage Loan as are in, or as may from time to time come into, the Servicer’s possession.

Servicing Officer:  Any officer of the Servicer involved in, or responsible for, the administration and servicing of the Mortgage Loans whose name appears on a list of servicing officers furnished by the Servicer to the Owner upon request, as such list may from time to time be amended.

Trust Agreement:  Any trust agreement, pooling and servicing agreement, indenture or comparable documents by and among some or all of the Owner, the Master Servicer and a Trustee (and which may include other parties) creating a trust and/or otherwise effectuating a pass-through transfer.

Any capitalized terms used and not defined herein shall have the meanings ascribed to such terms in the related Trust Agreement.

 

 

ARTICLE II

SERVICING OF MORTGAGE LOANS; POSSESSION OF SERVICING FILES; BOOKS

AND RECORDS; DELIVERY OF MORTGAGE LOAN DOCUMENTS

Section 2.01  Servicing of Mortgage Loans.

The Servicer does hereby agree to service the Mortgage Loans, from and after the Effective Date, pursuant to the terms of this Agreement.  The Mortgage Loans subject to this Agreement are described in the Mortgage Loan Schedule attached hereto.

Section 2.02  Maintenance of Servicing Files.

The Servicer shall maintain a Servicing File consisting of all documents necessary to service the Mortgage Loans.  The possession of each Servicing File by the Servicer is for the sole purpose of servicing the related Mortgage Loan, and such retention and possession by the Servicer is in a custodial capacity only.  The Servicer acknowledges that the ownership of each Mortgage Loan is vested in the Owner.  All rights arising out of the Mortgage Loans including all funds received on or in connection with the Mortgage Loans and all records or documents with respect to the Mortgage Loans prepared by or which come into the possession of the Servicer shall be received and held by the Servicer for the sole purpose of servicing the Mortgage Loans and such retention and possession by the Servicer is in a custodial capacity only in trust for the exclusive benefit of the Owner as the owner of the
related Mortgage Loans.  Any portion of the related Servicing Files retained by the Servicer shall be appropriately identified in the Servicer’s computer system to reflect clearly the ownership of the related Mortgage Loans by the Owner.  The Servicer shall release its custody of the contents of the related Servicing Files only in accordance with written instructions of the Owner, except when such release is required as incidental to the Servicer’s servicing of the Mortgage Loans, such written instructions shall not be required.

Section 2.03  Books and Records.

The Servicer shall be responsible for maintaining, and shall maintain, a complete set of books and records for the Mortgage Loans which shall be appropriately identified in the Servicer’s computer system to clearly reflect the ownership of the Mortgage Loan by the Owner.  In particular, the Servicer shall maintain in its possession, available for inspection by the Owner, or its designee and shall deliver to the Owner upon demand, evidence of compliance with all federal, state and local laws, rules and regulations, and requirements of Fannie Mae and Freddie Mac, as applicable, including documentation as to the method used in determining the applicability of the provisions of the Flood Disaster Protection Act of 1973, as amended, to the Mortgaged Property, documentation evidencing insurance coverage and eligibility of any condominium project for approval by Fannie Mae and periodic
inspection reports as required by Section 4.13. To the extent that original documents are not required for purposes of realization of Liquidation Proceeds or Insurance Proceeds, documents maintained by the Servicer may be in the form of microfilm or microfiche or such other reliable means of recreating original documents, including optical imagery techniques .

 

 

The Servicer shall maintain with respect to each Mortgage Loan and shall make available for inspection by the Owner or its designee, upon reasonable prior notice, the related Servicing File (or copies thereof) during the time the Owner retains ownership of a Mortgage Loan and thereafter in accordance with applicable laws and regulations.

Section 2.04  Transfer of Mortgage Loans.

No transfer of a Mortgage Loan may be made unless such transfer is in compliance with the terms hereof. For the purposes of this Agreement, the Servicer shall be under no obligation to deal with any person with respect to this Agreement or any Mortgage Loan unless a notice of the transfer of such Mortgage Loan has been delivered to the Servicer in accordance with this Section 2.04.  The Owner may, subject to the terms of this Agreement, sell and transfer one or more of the Mortgage Loans in accordance with Section 11.10; provided, however, that the transferee will not be deemed to be an Owner hereunder binding upon the Servicer unless such transferee shall agree in writing to be bound by the terms of this Agreement and an assignment and assumption of this Agreement reasonably acceptable to the Servicer.  The Owner also shall advise the Servicer in writing of the transfer.  Upon receipt
of notice of the permitted transfer, the Servicer shall mark its books and records to reflect such assignee’s ownership of the related Mortgage Loans, and the previous Owner shall be deemed released from its obligations hereunder with respect to such Mortgage Loans from and after the date of such sale or transfer without the necessity of any action on the part of the Servicer.  If the Servicer receives notification of a transfer, including a final loan schedule, less than five (5) Business Days before the last Business Day of the month, the Servicer’s duties to remit and report as required by Section 5 shall begin with the next Due Period.

Section 2.05  Delivery of Mortgage Loan Documents.

The Servicer shall forward to the Custodian on behalf of the Owner original documents evidencing an assumption, modification, consolidation or extension of any Mortgage Loan entered into in accordance with Section 4.01 or 6.01 promptly after their execution; provided, however, that the Servicer shall provide the Custodian on behalf of the Owner with a certified true copy of any such document submitted for recordation promptly after its execution, and shall provide the original of any document submitted for recordation or a copy of such document certified by the appropriate public recording office to be a true and complete copy of the original promptly after receipt thereof, but in no event later than 240 days after its execution, provided, however, that if delivery is not completed within 240 days solely due to delays in making such delivery by reason of the fact that such documents
shall not have been returned by the appropriate recording office, the Servicer shall continue to use its best efforts to obtain such documents and effect delivery as soon as possible after its receipt thereof.

From time to time the Servicer may have a need for Mortgage Loan Documents to be released by the Custodian.  If the Servicer shall require any of the Mortgage Loan Documents, the Servicer shall notify the Custodian in writing of such request in the form of the request for release attached hereto as Exhibit D. During the time that any such documentation is held by the Servicer, such possession is in trust for the benefit of the Owner, and the Servicer shall return such 

 

documentation to the Custodian upon the request of the Owner or when the Servicer’s need therefore no longer exists.

Section 2.06  Tax Service Contracts.

In the event that a Mortgage Loan is not subject to a fully assignable life of loan tax servicer contract with Fidelity National Real Estate Tax Service which is assignable to the Servicer or any subsequent Servicer without the payment of any cost or fee, the Servicer shall acquire a tax service contract for any such Mortgage Loan.  The Servicer shall deliver an invoice to the Owner with respect to the costs of acquiring such tax service contracts, and Owner shall remit the cost of such tax service contracts to the Servicer within ten business days of receipt of invoice.

 

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE SERVICER AND THE OWNER

Section 3.01  Representations of the Servicer.

The Servicer hereby represents, warrants and covenants to the Owner that, as of the Effective Date:

(a)        The Servicer is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all licenses necessary to carry on its business as now being conducted and is licensed, qualified and in good standing in each state where a Mortgaged Property is located if the laws of such state require licensing or qualification in order to conduct business of the type conducted by the Servicer, and in any event the Servicer is in compliance with the laws of any such state to the extent necessary to ensure the enforceability of the related Mortgage Loan and the servicing of such Mortgage Loan in accordance with the terms of this Agreement; the Servicer has the full corporate power and authority to execute and deliver this Agreement and to perform in accordance herewith; the execution, delivery and
performance of this Agreement (including all instruments of transfer to be delivered pursuant to this Agreement) by the Servicer and the consummation of the transactions contemplated hereby have been duly and validly authorized; this Agreement evidences the valid, binding and enforceable obligation of the Servicer; and all requisite corporate action has been taken by the Servicer to make this Agreement valid and binding upon the Servicer in accordance with its terms;

(b)        The consummation of the transactions contemplated by this Agreement are in the ordinary course of business of the Servicer, who is in the business of servicing loans;

(c)        There is no action, suit, proceeding or investigation pending or threatened against the Servicer which, either in any one instance or in the aggregate, may result in any material adverse change in the business, operations, financial condition, properties or assets of the Servicer, or in any material impairment of the right or ability of the Servicer to carry on its business substantially as now conducted, or in any material liability on the part of the Servicer, or which would draw into question the validity of this Agreement or the Mortgage Loans or of any action taken or to be contemplated herein, or which would be likely to impair materially the ability of the Servicer to perform under the terms of this Agreement;

(d)        No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Servicer of or compliance by the Servicer with this Agreement, or if required, such approval has been obtained prior to the Effective Date;

(e)        The Servicer is an approved seller/servicer of conventional residential mortgage loans for Fannie Mae or Freddie Mac, with the facilities, procedures, and experienced personnel necessary for the sound servicing of mortgage loans of the same type as the Mortgage Loans.  The Servicer is a HUD approved mortgagee and is in good standing to service mortgage loans for Fannie Mae or Freddie Mac, and no event has occurred, including but not limited to a change in 

 

insurance coverage, which would make the Servicer unable to comply with Fannie Mae or Freddie Mac eligibility requirements or which would require notification to either Fannie Mae or Freddie Mac;

(f)         Neither this Agreement nor any statement, report or other document furnished or to be furnished pursuant to this Agreement or in connection with the transactions contemplated hereby contains any untrue statement of fact or omits to state a fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading; and

 (g)         No Waiver of prepayment charges.  The Servicer will not waive any prepayment charge unless it is waived in accordance with the standard set forth in Section 4.16.

	
            Section 3.02
 	
            Representations of the Owner.
 

The Owner represents, warrants and covenants to the Servicer as of the Effective Date:

(a)        The Owner is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization;

(b)        The Owner has the full power and authority to execute and deliver this Agreement and to perform in accordance herewith; the execution, delivery and performance of this Agreement (including all instruments of transfer to be delivered pursuant to this Agreement) by the Owner and the consummation of the transactions contemplated hereby have been duly and validly authorized; this Agreement evidences the valid, binding and enforceable obligation of the Owner; and all requisite action has been taken by the Owner to make this Agreement valid and binding upon the Owner in accordance with its terms; and

(c)        The Owner holds the entire legal and beneficial title to each Mortgage Loan.  The information provided to Servicer by Owner, and each Mortgage File, is complete, true and accurate in all material respects.

 

 

ARTICLE IV

ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

Section 4.01  Servicer to Act as Servicer.

The Servicer, as independent contract servicer, shall service and administer the Mortgage Loans in accordance with this Agreement and with Accepted Servicing Practices (giving due consideration to the Owner’s reliance on the Servicer), and shall have full power and authority, acting alone, to do or cause to be done any and all things in connection with such servicing and administration which the Servicer may deem necessary or desirable and consistent with the terms of this Agreement and with Accepted Servicing Practices.  If reasonably required by the Servicer, the Owner shall furnish the Servicer with any powers of attorney and other documents necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties under this Agreement.

Consistent with the terms of this Agreement, the Servicer may, with the consent of the NIMs Insurer, waive, modify or vary any term of any Mortgage Loan or consent to the postponement of any such term or in any manner grant indulgence to any Mortgagor if in the Servicer’s reasonable and prudent determination such waiver, modification, postponement or indulgence is not materially adverse to the Owner; provided, however, that unless the related Mortgagor is in default with respect to the Mortgage Loan or such default is, in the judgment of the Servicer, reasonably foreseeable,  the Servicer shall not permit any modification with respect to any Mortgage Loan that would change the Mortgage Interest Rate, forgive the payment of principal or interest, reduce or increase the outstanding principal balance (except for actual payments of principal) or change the final maturity date on such
Mortgage Loan, and, provided further, that the NIMs Insurer’s prior written consent shall be required for any modification, waiver or amendment if the aggregate number of outstanding Mortgage Loans which have been modified, waived or amended exceeds 5% of the number of Mortgage Loans subject to this Agreement as of the Effective Date.  In the event of any such modification which permits the deferral of interest or principal payments on any Mortgage Loan, the Servicer shall, on the Business Day immediately preceding the related Remittance Date in any month in which any such principal or interest payment has been deferred, deposit in the Custodial Account from its own funds, in accordance with Section 4.04 and Section 5.03, the difference between (a) such month’s principal and one month’s interest at the related Mortgage Loan Remittance Rate on the unpaid principal balance of such Mortgage Loan and (b) the amount paid by the Mortgagor.  The Servicer shall be entitled to
reimbursement for such advances to the same extent as for all other advances pursuant to Section 4.05. Without limiting the generality of the foregoing, the Servicer shall continue, and is hereby authorized and empowered, to prepare, execute and deliver, all instruments of satisfaction or cancellation, or of partial or full release, discharge and all other comparable instruments, with respect to the Mortgage Loans and with respect to the Mortgaged Properties.

Notwithstanding anything in this Agreement to the contrary, if a REMIC election is made, the Servicer shall not (unless the related Mortgagor is in default with respect to the Mortgage 

 

Loan or such default is, in the judgment of the Servicer, reasonably foreseeable) make or permit any modification, waiver or amendment of any term of any Mortgage Loan that would both (i) effect an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code (or Treasury regulations promulgated thereunder) and (ii) cause the related REMIC 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” of such REMIC under the REMIC Provisions.

The Servicer shall perform all of its servicing responsibilities hereunder or may, with the consent of the NIMs Insurer, cause a subservicer to perform any such servicing responsibilities on its behalf, but the use by the Servicer of a subservicer shall not release the Servicer from any of its obligations hereunder and the Servicer shall remain responsible hereunder for all acts and omissions of each subservicer as fully as if such acts and omissions were those of the Servicer.  Any such subservicer must be a Fannie Mae approved seller/servicer or a Freddie Mac approved seller/servicer in good standing  and no event shall have occurred, including but not limited to, a change in insurance coverage, which would make it unable to comply with the eligibility requirements for seller/servicers imposed by Fannie Mae or Freddie Mac, or which would require notification to Fannie Mae or Freddie
Mac.  The Servicer shall pay all fees and expenses of each subservicer from its own funds, and a subservicer’s fee shall not exceed the Servicing Fee.

At the cost and expense of the Servicer, without any right of reimbursement from the Custodial Account, with the consent of the NIMs Insurer, the Servicer shall be entitled to terminate the rights and responsibilities of a subservicer and arrange for any servicing responsibilities to be performed by a successor subservicer meeting the requirements in the preceding paragraph; provided, however, that nothing contained herein shall be deemed to prevent or prohibit the Servicer, at the Servicer’s option, with the consent of the NIMs Insurer, from electing to service the related Mortgage Loans itself.  In the event that the Servicer’s responsibilities and duties under this Agreement are terminated pursuant to Section 8.04, 9.01 or 10.01, and if requested to do so by the Owner or the NIMs Insurer, the Servicer shall at its own cost and expense terminate the rights and
responsibilities of each subservicer effective as of the date of termination of the Servicer.  The Servicer shall pay all fees, expenses or penalties necessary in order to terminate the rights and responsibilities of each subservicer from the Servicer’s own funds without reimbursement from the Owner.  Each subservicing agreement shall provide that a successor servicer shall have the option to terminate such agreement with payment of any fees if the predecessor Servicer is terminated or resigns.

Notwithstanding any of the provisions of this Agreement relating to agreements or arrangements between the Servicer and a subservicer or any reference herein to actions taken through a subservicer or otherwise, the Servicer shall not be relieved of its obligations to the Owner and shall be obligated to the same extent and under the same terms and conditions as if it alone were servicing and administering the Mortgage Loans.  The Servicer shall be entitled to enter into an agreement with a subservicer for indemnification of the Servicer by the subservicer and nothing contained in this Agreement shall be deemed to limit or modify such indemnification.

 

 

Any subservicing agreement and any other transactions or services relating to the Mortgage Loans involving a subservicer shall be deemed to be between such subservicer and Servicer alone, and the Owner shall have no obligations, duties or liabilities with respect to such Subservicer including no obligation, duty or liability of Owner to pay such subservicer’s fees and expenses.  For purposes of distributions and advances by the Servicer pursuant to this Agreement, the Servicer shall be deemed to have received a payment on a Mortgage Loan when a subservicer has received such payment.

Section 4.02  Collection of Mortgage Loan Payments.

Continually from the date hereof until the date each Mortgage Loan ceases to be subject to this Agreement, the Servicer shall proceed with reasonable diligence and in accordance with Accepted Servicing Practices, to collect all payments due under each Mortgage Loan when the same shall become due and payable.  Further, the Servicer shall take reasonable care in ascertaining and estimating annual ground rents, taxes, assessments, water rates, fire and hazard insurance premiums, mortgage insurance premiums, and all other charges that, as provided in the Mortgage Loan Documents, will become due and payable to the end that the installments payable by the Mortgagors will be sufficient to pay such charges as and when they become due and payable.

Section 4.03  Realization Upon Defaulted Mortgage Loans.

The Servicer shall use its reasonable efforts, consistent with Accepted Servicing Practices, to foreclose upon or otherwise comparably convert the ownership of properties securing such of the Mortgage Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 4.01. The Servicer shall use its reasonable efforts to realize upon defaulted Mortgage Loans in such manner as will maximize the receipt of principal and interest by the Owner, taking into account, among other things, the timing of foreclosure proceedings.  The foregoing is subject to the provisions that, in any case in which any Mortgaged Property shall have suffered damage, the Servicer shall not be required to expend its own funds toward the restoration of such property unless it shall determine in its discretion (i) that such
restoration will increase the proceeds of liquidation of the related Mortgage Loan to the Owner after reimbursement to itself for such expenses, and (ii) that such expenses will be recoverable by the Servicer through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property, as contemplated in Section 4.05.  The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions as Servicing Advances; provided, however, that it shall be entitled to reimbursement therefor as provided in Section 4.05.  Notwithstanding anything to the contrary contained herein, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Owner otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be
conducted by a qualified inspector.  Upon completion of the inspection, the Servicer shall promptly provide the Owner and the NIMs Insurer with a written report of the environmental inspection.  After 

 

reviewing the environmental inspection report, the Owner (with the consent of the NIMs Insurer) shall direct the Servicer as to how the Servicer shall proceed with respect to the Mortgaged Property, and the Servicer shall follow the Owner’s directions with respect thereto.

	
            Section 4.04
 	
            Establishment of Custodial Accounts; Deposits in Custodial Accounts.
 

The Servicer shall segregate and hold all funds collected and received pursuant to each Mortgage Loan separate and apart from any of its own funds and general assets and shall establish and maintain one or more Custodial Accounts.  Any funds in a Custodial Account may be invested in Permitted Investments for the benefit of the Owner (with any income earned thereon for the benefit of the Servicer), provided that in the event that amounts on deposit in the Custodial Account exceed the amount fully insured by the FDIC (the “Insured Amount”), the Servicer shall be obligated to invest the excess amount over the Insured Amount in Permitted Investments on the same Business Day as such excess amount becomes present in the Custodial Account.  Any such Permitted Investment shall mature no later than the Business Day immediately preceding the related Remittance Date.  Funds deposited in
the Custodial Account may be drawn on by the Servicer only in accordance with Section 4.05.  The creation of any Custodial Account shall be evidenced by an account certification in the form shown in Exhibit B hereto.  The original of such account certification shall be furnished to the Owner, or a copy to the NIMs Insurer, upon reasonable request. The NIMs Insurer, Master Servicer and the Trustee shall be notified of any change in the location of the Custodial Account.  The Servicer acknowledges and agrees that the Servicer shall bear any losses incurred with respect to Permitted Investments.  The amount of any such losses shall be immediately deposited by the Servicer in the Custodial Account, out of the Servicer’s own funds, with no right to reimbursement therefor.

The Servicer shall deposit in the Custodial Account within two (2) Business Days of Servicer’s receipt, and retain therein, the following collections:

(i)         all payments on account of principal, including Principal Prepayments, on the Mortgage Loans;

(ii)         all payments on account of interest on the Mortgage Loans adjusted to the related Mortgage Loan Remittance Rate;

	
            (iii)
 	
            all Liquidation Proceeds;
 

(iv)        any net amounts received by the Servicer in connection with any REO Property pursuant to Section 4.13;

(v)        all Insurance Proceeds including amounts required to be deposited pursuant to Sections 4.08, 4.10 and 4.11, other than proceeds to be held in a restricted escrow account and applied to the restoration or repair of the Mortgaged Property or released to the Mortgagor in accordance with Accepted Servicing Practices, the Mortgage Loan Documents or applicable law;

 

 

(vi)        all Condemnation Proceeds affecting any Mortgaged Property other than proceeds to be held in a restricted escrow account and applied to the restoration or repair of the Mortgaged Property or released to the Mortgagor in accordance with Accepted Servicing Practices, the Mortgage Loan Documents or applicable law;

	
            (vii)
 	
            any Monthly Advances as provided in Section 5.03;
 

(viii)      any amounts required to be deposited in the Custodial Account pursuant to Sections 4.01, 4.14, 6.01 and 6.02; and

(ix)        with respect to each Full Principal Prepayment or Partial Principal Prepayment, any Prepayment Interest Shortfall, to the extent of the Servicer’s aggregate Servicing Fee received with respect to the related Due Period (the “Compensating Interest Amount”).

The foregoing requirements for deposit in the Custodial Account shall be exclusive, it being understood and agreed that, without limiting the generality of the foregoing, payments in the nature of Servicing Fees and Ancillary Income need not be deposited by the Servicer in the Custodial Account and may be retained by the Servicer as compensation.

Section 4.05  Permitted Withdrawals From the Custodial Account.

The Servicer may, from time to time, make withdrawals from the Custodial Account for the following purposes:

(i)         to make payments to the Owner in the amounts and in the manner provided for in Section 5.01;

(ii)         to reimburse itself for Monthly Advances, the Servicer’s right to reimburse itself pursuant to this subclause (ii) being limited to amounts received on the related Mortgage Loan which represent late collections (net of the related Servicing Fees) of principal and/or interest respecting which any such Monthly Advance was made;

(iii)        to reimburse itself for unreimbursed Servicing Advances and Monthly Advances and unpaid Servicing Fees, the Servicer’s right to reimburse itself pursuant to this subclause (iii) with respect to any Mortgage Loan being limited to Liquidation Proceeds, Condemnation Proceeds, and Insurance Proceeds and REO Disposition Proceeds related to such Mortgage Loan;

(iv)        to pay to itself as servicing compensation (a) any interest earned on funds in the Custodial Account (all such interest to be withdrawn monthly not later than each Remittance Date) and (b) any Servicing Fee to which the Servicer is entitled in accordance with the terms hereof to the extent such Servicing Fee has not been paid to or retained by the Servicer;

	
            (v)
 	
            to reimburse itself for any Nonrecoverable Advances;
 

(vi)        to transfer funds to another Qualified Depository in accordance with Section 4.09 hereof;

 

 

	
            (vii)
 	
            to remove funds deposited in the Custodial Account in error by the Servicer; and
 

(viii)      to clear and terminate the Custodial Account upon the termination of this Agreement.

Section 4.06  Establishment of Escrow Accounts; Deposits in Escrow Accounts.

The Servicer shall segregate and hold all funds collected and received pursuant to each Mortgage Loan which constitute Escrow Payments separate and apart from any of its own funds and general assets and shall establish and maintain one or more Escrow Accounts.  Any funds deposited in an Escrow Account may be invested in Permitted Investments.  Funds deposited in an Escrow Account may be drawn on by the Servicer in accordance with Section 4.07.  The creation of any Escrow Account shall be evidenced by an account certification in the form shown in Exhibit C. The original of such account certification shall be furnished to the Owner upon request.  The Servicer acknowledges and agrees that the Servicer shall bear any losses incurred with respect to Permitted Investments.  The amount of any such losses shall be immediately deposited by the Servicer in the Escrow Account out of the
Servicer’s own funds, with no right to reimbursement therefor.

The Servicer shall deposit in the Escrow Account or Accounts within two (2) Business Days of Servicer’s receipt, and retain therein:

(i)         all Escrow Payments collected on account of the Mortgage Loans, for the purpose of effecting timely payment of any items as are required under the terms of this Agreement; and

(ii)         all Servicing Advances for Mortgagors whose Escrow Payments are insufficient to cover escrow disbursements.

The Servicer shall make withdrawals from an Escrow Account only to effect such payments as are required under this Agreement, and for such other purposes as shall be as set forth in and in accordance with Section 4.07.  Except as provided in Section 4.07, the Servicer shall be entitled to retain any interest paid on funds deposited in an Escrow Account by the Qualified Depository.

Section 4.07  Permitted Withdrawals From Escrow Account.

Withdrawals from the Escrow Account may be made by the Servicer only:

(i)         to effect timely payments of ground rents, taxes, assessments, water rates, fire and hazard insurance premiums, Primary Mortgage Insurance Policy premiums, if applicable, and comparable items;

(ii)         to reimburse the Servicer for any Servicing Advance made by the Servicer with respect to a related Mortgage Loan but only from amounts received on the related Mortgage Loan which represent late payments or collections of Escrow Payments thereunder;

 

 

	
            (iii)
 	
            to refund to the Mortgagor any funds as may be determined to be overages;
 

(iv)        for transfer to the Custodial Account in connection with the liquidation of a Mortgage Loan or an acquisition of REO Property;

(v)        to pay to the Servicer, or to the Mortgagor to the extent required by law, any interest paid on the funds deposited in the Escrow Account;

	
            (vi)
 	
            to remove funds placed in an Escrow Account in error by the Servicer; and
 	
             

	
            (vii)
 	
            to clear and terminate the Escrow Account on the termination of this Agreement.
 

As part of its servicing duties, the Servicer shall pay to the Mortgagors interest on funds in an Escrow Account, to the extent required by law, and to the extent that interest earned on funds in the Escrow Account is insufficient, shall pay such interest from its own funds, without any reimbursement therefor.

Section 4.08  Payment of Taxes, Insurance and Other Charges, Maintenance of Primary Mortgage Insurance Policies, Collections Thereunder.

With respect to each Mortgage Loan, the Servicer shall maintain accurate records reflecting the status of ground rents, taxes, assessments, water rates and other charges which are or may become a lien upon the Mortgaged Property and the status of Primary Mortgage Insurance Policy premiums and fire and hazard insurance coverage and, with regard to Escrow Mortgage Loans, shall obtain, from time to time, all bills for the payment of such charges, including renewal premiums and shall effect payment thereof prior to the applicable penalty or termination date and at a time appropriate for securing maximum discounts allowable, employing for such purpose deposits of the Mortgagor in the Escrow Account which shall have been estimated and accumulated by the Servicer in amounts sufficient for such purposes, as allowed under the terms of the Mortgage or applicable law.  To the extent that the
Mortgage does not provide for Escrow Payments, the Servicer shall use commercially reasonable efforts consistent with Accepted Servicing Practices to determine that any such payments are made by the Mortgagor when due.  With regard to Escrow Mortgage Loans, the Servicer assumes full responsibility for the timely payment of all such bills and shall effect timely payments of all such bills irrespective of the Mortgagor’s faithful performance in the payment of same or the making of the Escrow Payments and shall make advances from its own funds to effect such payments. With regard to Non-Escrow Mortgage Loans, the Servicer shall make Servicing Advances to effect such payments within such time period as to avoid the loss of the related Mortgaged Property by foreclosure of a tax or other lien and to ensure that the Mortgaged Property is not uninsured for any reason.

The Servicer shall maintain in full force and effect each Primary Mortgage Insurance Policy, that as of the Effective Date, was in full force and effect with respect to any Mortgage Loan.  Such coverage will be maintained and will not be waived by the Servicer except in accordance with applicable law.  The Servicer shall not cancel, except in accordance with applicable law, or refuse to renew any Primary Mortgage Insurance Policy that is in force as of 

 

the Effective Date unless a replacement Primary Mortgage Insurance Policy for such canceled or nonrenewed policy is obtained from and maintained with a Qualified Insurer.  The Servicer shall not take any action which would result in noncoverage under any applicable Primary Mortgage Insurance Policy of any loss which, but for the actions of the Servicer would have been covered thereunder.  In connection with any assumption or substitution agreement entered into or to be entered into pursuant to Section 6.01, the Servicer shall promptly notify the insurer under the related Primary Mortgage Insurance Policy, if any, of such assumption or substitution of liability in accordance with the terms of such policy and shall take all actions which may be required by such insurer as a condition to the continuation of coverage under the Primary Mortgage Insurance Policy.  If such Primary Mortgage Insurance Policy is
terminated as a result of such assumption or substitution of liability, the Servicer shall obtain a replacement Primary Mortgage Insurance Policy as provided above.

In connection with its activities as servicer, the Servicer agrees to prepare and present, on behalf of itself and the Owner, claims to the insurer under any Private Mortgage Insurance Policy in a timely fashion in accordance with the terms of such Primary Mortgage Insurance Policy and, in this regard, to take such action as shall be necessary to permit recovery under any Primary Mortgage Insurance Policy respecting a defaulted Mortgage Loan.  Pursuant to Section 4.04, any amounts collected by the Servicer under any Primary Mortgage Insurance Policy shall be deposited in the Custodial Account, subject to withdrawal pursuant to Section 4.05.

Section 4.09  Transfer of Accounts.

The Servicer may transfer the Custodial Account or the Escrow Account to a different Qualified Depository from time to time.  The Servicer shall notify the Owner and the NIMs Insurer of any such transfer.

Section 4.10  Maintenance of Hazard Insurance.

The Servicer shall cause to be maintained for each Mortgage Loan fire and hazard insurance with extended coverage as is customary in the area where the Mortgaged Property is located in an amount which is equal to the lesser of (i) the maximum insurable value of the improvements securing such Mortgage Loan and (ii) the greater of (a) the outstanding principal balance of the Mortgage Loan, and (b) the percentage such that the proceeds thereof shall be sufficient to prevent the Mortgagor and/or the mortgagee from becoming a co-insurer.  If the Mortgaged Property is in an area identified in the Federal Register by the Federal Emergency Management Agency as being a special flood hazard area that has federally-mandated flood insurance requirements, the Servicer will cause to be maintained a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance
Administration with a generally acceptable insurance carrier, in an amount representing coverage not less than the least of (i) the outstanding principal balance of the Mortgage Loan, (ii) the maximum insurable value of the improvements securing such Mortgage Loan and (iii) the maximum amount of insurance which is available under the Flood Disaster Protection Act of 1973, as amended.  The Servicer shall also maintain on each REO Property, fire and hazard insurance with extended coverage in an amount which is at least equal to the maximum insurable value of the improvements which are a 

 

part of such property, liability insurance and, to the extent required and available under the Flood Disaster Protection Act of 1973, as amended, flood insurance in an amount as provided above.  Any amounts collected by the Servicer under any such policies other than amounts to be deposited in a restricted escrow account and applied to the restoration or repair of the Mortgaged Property or REO Property, or released to the Mortgagor in accordance with the Servicer’s normal servicing procedures, shall be deposited in the Custodial Account, subject to withdrawal pursuant to Section 4.05.  It is understood and agreed that no other additional insurance need be required by the Servicer or the Mortgagor or maintained on property acquired in respect of the Mortgage Loans, other than as provided for under applicable state or federal laws and regulations as shall at any time be in force and as shall require
such additional insurance.  All such policies shall be endorsed with standard mortgagee clauses with loss payable to the Servicer and its successors and/or assigns and shall provide for at least thirty days prior written notice of any cancellation, reduction in the amount or material change in coverage to the Servicer.  The Servicer shall not interfere with the Mortgagor’s freedom of choice in selecting either his insurance carrier or agent; provided, however, that the Servicer shall not accept any such insurance policies from insurance companies unless such companies currently reflect a General Policy Rating in Best’s Key Rating Guide of B:III or better and are licensed to do business in the state wherein the property subject to the policy is located.  All insurance policies maintained pursuant to this Section 4.10 shall be maintained with a Qualified Insurer.

Section 4.11  Blanket Hazard Insurance.

In the event that the Servicer shall obtain and maintain a blanket policy with a Qualified Insurer insuring against fire and hazards of extended coverage on all of the Mortgage Loans and provides coverage in an amount equal to the amount required under Section 4.10, and otherwise complies with the requirements of Section 4.10, the Servicer shall be deemed conclusively to have satisfied its obligations under Section 4.10, it being understood and agreed that such blanket policy may contain a deductible clause, in which case the Servicer shall, in the event that there shall not have been maintained on the related Mortgaged Property a policy complying with Section 4.10, and there shall have been a loss which would have been covered by such policy, deposit in the Custodial Account the difference, if any, between the amount that would have been payable under a policy complying with Section
4.10 and the amount paid under such blanket policy.  Upon the request of the Owner, the Servicer shall cause to be delivered to the Owner a certified true copy of such policy and a statement from the insurer thereunder that such policy shall in no event be terminated or materially modified without 30 days prior written notice to the Owner.

Section 4.12  Fidelity Bond, Errors and Omissions Insurance.

The Servicer shall maintain, at its own expense, with a Qualified Insurer, a blanket Fidelity Bond and an errors and omissions insurance policy, with broad coverage with responsible companies that meet the requirements of Fannie Mae on all officers, employees and other persons acting in any capacity with regard to the Mortgage Loans and who handle funds, money, documents and papers relating to the Mortgage Loans.  The Fidelity Bond and errors and 

 

omissions insurance shall be in the form of the Mortgage Banker’s Blanket Bond and shall protect and insure the Servicer against losses, including forgery, theft, embezzlement, fraud, errors and omissions and negligent acts of such persons.  Such Fidelity Bond and errors and omissions insurance shall also protect and insure the Servicer against losses in connection with the failure to maintain any insurance policies required pursuant to this Agreement and the release or satisfaction of a Mortgage Loan without having obtained payment in full of the indebtedness secured thereby.  No provision of this Section 4.12 requiring the Fidelity Bond and errors and omissions insurance shall diminish or relieve the Servicer from its duties and obligations as set forth in this Agreement.  The minimum coverage under any such Fidelity Bond and insurance policy shall be at least equal to the corresponding amounts
acceptable to Fannie Mae in the Fannie Mae Guide or by Freddie Mac in the Freddie Mac Guide.  The Servicer shall, upon request of Owner and the NIMs Insurer, deliver to the Owner and the NIMs Insurer 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 Owner and the NIMs Insurer.  The Servicer shall notify the Owner and the NIMs Insurer within five Business Days of receipt of notice that such Fidelity Bond or insurance policy will be, or has been, materially modified or terminated.

Section 4.13  Title, Management and Disposition of REO Property.

In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be taken in the name of the Owner or its designee.  Any such Person or Persons holding such title other than the Owner shall acknowledge in writing that such title is being held as nominee for the benefit of the Owner.

The Servicer shall assume the responsibility for marketing each REO Property in accordance with Accepted Servicing Practices. Thereafter, the Servicer shall continue to provide certain administrative services to the Owner relating to such REO Property as set forth in this Section 4.13. The REO Property must be sold within three years following the end of the calendar year of the date of acquisition if a REMIC election has been made with respect to the arrangement under which the Mortgage Loans and REO Property are held, unless (i) the Servicer shall have delivered to the Owner an Opinion of Counsel acceptable to the Owner and the NIMs Insurer, to the effect that the holding by the related trust of such Mortgaged Property subsequent to such three-year period (and specifying the period beyond such three-year period for which the Mortgaged Property may be held) will not result in the
imposition of taxes on “prohibited transactions” of the related trust as defined in Section 860F of the Code, or cause the related REMIC to fail to qualify as a REMIC, in which case the related trust may continue to hold such Mortgaged Property (subject to any conditions contained in such Opinion of Counsel), or (ii) the Servicer shall have applied for, prior to the expiration of such three-year period, an extension of such three-year period in the manner contemplated by Section 856(e)(3) of the Code, in which case the three-year period shall be extended by the applicable period.  If a period longer than three years is permitted under the foregoing sentence and is necessary to sell any REO Property, the 

 

Servicer shall report monthly to the Owner as to progress being made in selling such REO Property.

Notwithstanding any other provision of this Agreement, if a REMIC election has been made, no Mortgaged Property held by a REMIC shall be rented (or allowed to continue to be rented) or otherwise used for the production of income by or on behalf of the related trust or sold in such a manner or pursuant to any terms that would (i) cause such Mortgaged Property to fail to qualify at any time as “foreclosure property” within a meaning of Section 860G(a)(8) of the Code, (ii) subject the related trust to the imposition of any federal or state income taxes on “net income from foreclosure property” with respect to such Mortgaged Property within the meaning of Section 860G(c) of the Code, or (iii) cause the sale of such Mortgaged Property to result in the receipt by the related trust or any income from non-permitted assets as described in Section 860F(a) (2)(B) of the Code,
unless the Servicer has agreed to indemnify and hold harmless the related trust with respect to the imposition of any such taxes.

The Servicer shall, either itself or through an agent selected by the Servicer and in accordance with Accepted Servicing Practices, manage, conserve, protect and operate each REO Property. Each REO Disposition shall be carried out by the Servicer at such price and upon such terms and conditions as the Servicer deems to be in the best interest of the Owner and the related terms and conditions are results of arm’s-length negotiation.  The REO Disposition Proceeds from the sale of the REO Property shall be promptly deposited in the Custodial Account.  As soon as practical thereafter, the expenses of such sale shall be paid and the Servicer shall reimburse itself for any related Servicing Advances, Monthly Advances, made pursuant to Section 5.03, and unpaid Servicing Fees.

The Servicer shall cause each REO Property to be inspected promptly upon the acquisition of title thereto and shall cause each REO Property to be inspected at a frequency consistent with Accepted Servicing Practices. The Servicer shall make or cause the inspector to make a written report of each such inspection.  Such reports shall be retained in the Servicing File and copies thereof shall, upon reasonable request, be forwarded by the Servicer to the Owner.

Section 4.14  Notification of Adjustments.

With respect to each Mortgage Loan, the Servicer shall adjust the Mortgage Interest Rate on the related Interest Rate Adjustment Date in compliance with requirements of applicable law and the related electronic data received on the Mortgage and Mortgage Note.  The Servicer shall execute and deliver any and all necessary notices required under applicable law and the terms of the related electronic data received on the Mortgage Note and Mortgage regarding the Mortgage Interest Rate adjustments.  The Servicer shall promptly, upon written request by the Owner, deliver to the Owner such notifications and any additional applicable data regarding such adjustments and the methods used to calculate and implement such adjustments.  Upon the discovery by the Servicer or the receipt of notice from the Owner that the Servicer has failed to adjust a Mortgage Interest Rate in accordance with the terms
of the related Mortgage Note and Mortgage, the Servicer shall immediately deposit in the Custodial Account from its own funds the amount of any interest loss or deferral caused to the Owner thereby and shall indemnify the 

 

Owner in respect of any liability as a result of such shortfall; provided, however, that the Servicer shall not have an obligation to pay any interest loss if the failure to appropriately adjust such Mortgage Interest Rate is the direct result of inaccurate or incomplete information in the electronic file provided in accordance with Section 2.01(iii) hereof.

Section 4.15  Compliance with Applicable Laws.

All requirements of any federal, state or local law  applicable to the servicing of the Mortgage Loans will be complied with by the Servicer in all material respects.

Section 4.16  Waiver of Prepayment Penalties.

Except as provided below, the Servicer or any designee of the Servicer shall not waive any prepayment charge with respect to any Mortgage Loan.  If the Servicer or its designee fails to collect a prepayment charge at the time of the related prepayment of any Mortgage Loan subject to such prepayment charge, the Servicer shall pay to the Owner at such time (by deposit to the Custodial Account) an amount equal to the amount of the prepayment charge not collected.  The Owner warrants that the schedule of prepayment charges provided to the Servicer shall be complete, true and accurate and may be relied on by the Servicer in its calculation of prepayment charges.  Notwithstanding the above, the Servicer or its designee may waive a prepayment charge only if (i) the related prepayment is not the result of a refinancing by the Servicer or its designee, (ii) such waiver relates to a defaulted
Mortgage Loan or a reasonably foreseeable default, (iii) such waiver is standard and customary in servicing similar mortgage loans to the Mortgage Loans, and (iv) such waiver, in the reasonable judgment of the Servicer, would maximize recovery of total proceeds from the Mortgage Loan, taking into account the amount of such prepayment charge and the related Mortgage Loan.  If a prepayment charge is waived as permitted by meeting the standards described above, then the Servicer is required to pay the amount of such waived prepayment charge, for the benefit of the holders of the Class P Certificates (as defined in the related Trust Agreement), by depositing such amount into the Custodial Account together with and at the time that the amount prepaid on the related Mortgage Loan is required to be deposited into the Custodial Account.

Within 90 days of the earlier of discovery by the Servicer or receipt of notice by the Servicer of the breach of the representation or covenant of the Servicer set forth in this Section 4.16 which materially and adversely affects the interests of the Holders of the Class P Certificates in any prepayment charge, the Servicer shall remedy such breach as follows: if any of the covenants made by the Servicer in this Section 4.16 is breached, the Servicer must pay the amount of such waived prepayment charge, for the benefit of the Holders of the Class P Certificates, by depositing such amount into the Custodial Account.

 

 

ARTICLE V

PAYMENTS TO THE OWNER

Section 5.01  Remittances.

On each Remittance Date the Servicer shall remit, by wire transfer of immediately available funds, to the Owner (a) all amounts deposited in the Custodial Account as of the close of business on the Determination Date (net of charges against or withdrawals from the Custodial Account pursuant to Section 4.05), plus (b) all amounts, if any, which the Servicer is obligated to distribute pursuant to Section 5.03, minus (c) any amounts attributable to Principal Prepayments received after the end of the preceding month which amounts shall be remitted on the following Remittance Date, together with the Compensating Interest Amount required to be deposited in the Custodial Account in connection with such Principal Prepayment in accordance with Section 4.04(ix); minus (d) any amounts attributable to Monthly Payments collected but due on a Due Date or Dates subsequent to the first day of the month
of the Remittance Date, which amounts shall be remitted on the related

Remittance Date next succeeding the Due Period for such amounts.

With respect to any remittance received by the Owner after the Business Day on which such payment was due, the Servicer shall pay to the Owner 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 than the maximum amount permitted by applicable law.  Such interest shall be deposited in the Custodial Account by the Servicer on the date such late payment is made and shall cover the period commencing with the day following such Business Day and ending with the Business Day on which such payment is made, both inclusive.  Such interest shall be remitted along with the distribution payable on the next succeeding related Remittance Date.  The payment by the Servicer of any such interest shall not be deemed an extension of time for payment or a waiver of any Event of Default by the Servicer.

Section 5.02  Statements to the Owner.

Not later than the tenth (10) calendar day, or if such day is not a Business Day, the first Business Day immediately preceding the tenth calendar day of the month of the related Remittance Date, the Servicer shall furnish to the Owner and the NIMs Insurer, a monthly remittance advice in the format set forth in Exhibit F attached hereto (or in such other electronic format mutually agreed to by the Servicer and Owner), with regard to monthly loan remittance data and Exhibit G (or in such other electronic format mutually agreed to by the Servicer and Owner) with respect to defaulted mortgage loans, with a trial balance report attached thereto, and such other loan level information reasonably available to the Servicer and requested by the Owner.  The Servicer shall also furnish to the Owner and the NIMs Insurer (in such format mutually agreed to by the Servicer and the Owner) a monthly
report detailing loan level prepayment charge collected and/or waived by the Servicer in accordance with Section 4.16.

Section 5.03  Monthly Advances by the Servicer.

 

 

On the Business Day immediately preceding each Remittance Date, the Servicer shall deposit in the Custodial Account from its own funds or from amounts held for future distribution an amount equal to all Monthly Payments (with interest adjusted to the Mortgage Loan Remittance Rate) which were due on the Mortgage Loans during the applicable Due Period and which were delinquent at the close of business on the immediately preceding Determination Date or which were deferred pursuant to Section 4.01.  Any amounts held for future distribution and so used shall be replaced by the Servicer by deposit in the Custodial Account on or before any future Remittance Date if funds in the Custodial Account on such Remittance Date shall be less than payments to the Owner required to be made on such Remittance Date.  The Servicer’s obligation to make such Monthly Advances as to any Mortgage Loan will
continue through the last Monthly Payment due prior to the payment in full of the Mortgage Loan, or through the last Remittance Date prior to the Remittance Date for the distribution of all Liquidation Proceeds and other payments or recoveries (including REO Disposition Proceeds, Insurance Proceeds and Condemnation Proceeds) with respect to the Mortgage Loan; provided, however, that such obligation shall cease if the Servicer determines, in its sole reasonable opinion, that advances with respect to such Mortgage Loan are non-recoverable by the Servicer from Liquidation Proceeds, Insurance Proceeds, Condemnation Proceeds, or otherwise with respect to a particular Mortgage Loan.  In the event that the Servicer determines that any such advances are non-recoverable, the Servicer shall provide the Owner with a certificate signed by an officer of the Servicer evidencing such determination.

Section 5.04  Liquidation Reports.

Upon the foreclosure sale of any Mortgaged Property or the acquisition thereof by the Owner pursuant to a deed-in-lieu of foreclosure, the Servicer shall submit to the Owner and the NIMs Insurer a liquidation report in the format set forth in Exhibit H attached hereto (or in such other format mutually agreed to by the Servicer and Owner) with respect to such Mortgaged Property.  The Servicer shall also provide reports on the status of REO Property containing such information as Owner may reasonably require.

 

 

ARTICLE VI

GENERAL SERVICING PROCEDURES

Section 6.01  Assumption Agreements.

The Servicer shall, to the extent it has knowledge of any conveyance or prospective conveyance by any Mortgagor of a Mortgaged Property (whether by absolute conveyance or by contract of, sale, and whether or not the Mortgagor remains or is to remain liable under the Mortgage Note and/or the Mortgage), exercise its rights to accelerate the maturity of such Mortgage Loan under any “due-on-sale” clause to the extent permitted by law; provided, however, that the Servicer shall not exercise any such rights if prohibited by law or the terms of the Mortgage Note from doing so or if the exercise of such rights would impair or threaten to impair any recovery under the related Primary Mortgage Insurance Policy, if any.  If the Servicer reasonably believes it is unable under applicable law to enforce such “due-on-sale” clause, the Servicer shall enter into an assumption
agreement with the person to whom the Mortgaged Property has been conveyed or is proposed to be conveyed, pursuant to which such person becomes liable under the Mortgage Note and, to the extent permitted by applicable state law, the Mortgagor remains liable thereon.  If an assumption is allowed pursuant to this Section 6.01, the Servicer, with the prior consent of the primary mortgage insurer, if any, is authorized to enter into a substitution of liability agreement with the person to whom the Mortgaged Property has been conveyed or is proposed to be conveyed pursuant to which the original mortgagor is released from liability and such Person is substituted as mortgagor and becomes liable under the related Mortgage Note.  Any such substitution of liability agreement shall be in lieu of an assumption agreement.

In connection with any such assumption or substitution of liability, the Servicer shall follow its underwriting practices and procedures.  With respect to an assumption or substitution of liability, the Mortgage Interest Rate borne by the related Mortgage Note and the amount of the Monthly Payment may not be changed.  The Servicer shall notify the Owner that any such substitution of liability or assumption agreement has been completed by forwarding to the Owner the original of any such substitution of liability or assumption agreement, which document shall be added to the related Mortgage Loan Documents and shall, for all purposes, be considered a part of such related mortgage file to the same extent as all other documents and instruments constituting a part thereof.  All fees collected by the Servicer for entering into an assumption or substitution of liability agreement shall belong to
the Servicer.

Notwithstanding the foregoing paragraphs of this section or any other provision of this Agreement, the Servicer shall not be deemed to be in default, breach or any other violation of its obligations hereunder by reason of any assumption of a Mortgage Loan by operation of law or any assumption which the Servicer may be restricted by law from preventing, for any reason whatsoever.  For purposes of this Section 6.01, the term “assumption” is deemed to also include a sale of the Mortgaged Property subject to the Mortgage that is not accompanied by an assumption or substitution of liability agreement.

Section 6.02  Satisfaction of Mortgages and Release of Mortgage Loan Documents.

 

 

Upon the payment in full of any Mortgage Loan, the Servicer will immediately notify the Custodian with a certification and request for release by a Servicing Officer, which certification shall include a statement to the effect that all amounts received in connection with such payment which are required to be deposited in the Custodial Account pursuant to Section 4.04 have been so deposited, and a request for delivery to the Servicer of the portion of the Mortgage Loan Documents held by the Custodian.  Upon receipt of such certification and request, the Owner shall, or shall cause, the Custodian to release, in accordance with the terms of the Custodial Agreement, the related Mortgage Loan Documents to the Servicer and the Servicer shall prepare and execute under the authority of a power of attorney delivered to the Servicer by the Owner any satisfaction or release.  No expense incurred in
connection with any instrument of satisfaction or deed of reconveyance shall be chargeable to the Custodial Account.

In the event the Servicer satisfies or releases a Mortgage without having obtained payment in full of the indebtedness secured by the Mortgage or should it otherwise prejudice any right the Owner may have under the mortgage instruments, the Servicer, upon written demand, shall remit to the Owner within two Business Days the then outstanding principal balance of the related Mortgage Loan by deposit thereof in the Custodial Account.  The Servicer shall maintain the Fidelity Bond and errors and omissions insurance insuring the Servicer against any loss it may sustain with respect to any Mortgage Loan not satisfied in accordance with the procedures set forth herein.

From time to time and as appropriate for the servicing or foreclosure of the Mortgage Loans, including for the purpose of collection under any Primary Mortgage Insurance Policy, upon request of the Servicer and delivery to the Custodian of a servicing receipt signed by a Servicing Officer, all as provided in the Custodial Agreement, the Servicer may request the Custodian to release to the Servicer the portion of the Mortgage Loan Documents held by the Custodian to the Servicer. Such servicing receipt shall obligate the Servicer to promptly return the related Mortgage Loan Documents to the Custodian, when the need therefor by the Servicer no longer exists, unless the Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been deposited in the Custodial Account or such documents have been delivered to an attorney, or to a public trustee or other
public official as required by law, for purposes of initiating or pursuing legal action or other proceedings for the foreclosure of the Mortgaged Property either judicially or non-judicially, and the Servicer has promptly delivered to the Owner or the Custodian a certificate of a Servicing Officer certifying as to the name and address of the Person to which such documents were delivered and the purpose or purposes of such delivery.

Section 6.03  Servicing Compensation.

As compensation for its services hereunder, the Servicer shall be entitled to withdraw from the Custodial Account or to retain from interest payments on the Mortgage Loans the amounts provided for as the Servicer’s Servicing Fee.  Additional servicing compensation in the form of Ancillary Income shall be retained by the Servicer.  The Servicer shall be required to pay 

 

all expenses incurred by it in connection with its servicing activities hereunder and shall not be entitled to reimbursement therefor except as specifically provided for.

Section 6.04  Annual Statement as to Compliance.

The Servicer shall deliver to the Owner and the Master Servicer, on or before May 15, each year beginning May 15, 2005, an Officer’s Certificate, stating that (i) a review of the activities of the Servicer during the preceding calendar year and of performance under this Agreement or similar agreements has been made under such officer’s supervision, and (ii) to the best of such officer’s knowledge, based on such review, the Servicer has fulfilled all its responsibilities and obligations under this Agreement throughout such year, or, if there has been a default in the fulfillment of any such responsibilities and obligation, specifying each such default known to such officer and the nature and status thereof and the action being taken by the Servicer to cure such default.

Section 6.05  Annual Independent Certified Public Accountants’ Servicing Report.

On or before [May 15th of each year beginning May 15, 2005], the Servicer shall, or shall cause each related subservicer to, at its expense, cause a firm of independent public accountants which is a member of the American Institute of Certified Public Accountants to furnish a statement to the Owner to the effect that such firm has examined certain documents and records relating to the servicing of the mortgage loans similar in nature and that such firm is of the opinion that the provisions of this or similar Agreements have been complied with, and that, on the basis of such examination conducted in compliance with the Uniform Single Attestation Program for Mortgage Bankers, nothing has come to their attention which would indicate that such servicing has not been conducted in compliance therewith, except for (i) such exceptions as such firm shall believe to be immaterial, and (ii) such
other exceptions as shall be set forth in such statement.  By providing Owner and the Master Servicer a copy of a Uniform Single Attestation Program Report from their independent public accountant’s on an annual basis, Servicer shall be considered to have fulfilled its obligations under this Section 6.05.

Section 6.06  Owner’s Right to Examine Servicer Records.

The Owner or the NIMs Insurer shall have the right to examine and audit, at its expense, upon reasonable notice to the Servicer, during business hours or at such other times as might be reasonable under applicable circumstances, any and all of the books, records, documentation or other information of the Servicer, or held by another for the Servicer or on its behalf or otherwise, which relate to the performance or observance by the Servicer of the terms, covenants or conditions of this Agreement.

The Servicer shall provide to the Owner, the NIMs Insurer and any supervisory agents or examiners representing a state or federal governmental agency having jurisdiction over the Owner access to any documentation regarding the Mortgage Loans in the possession of the Servicer which may be required by any applicable regulations.  Such access shall be afforded without 

 

charge, upon reasonable request, during normal business hours and at the offices of the Servicer, and in accordance with the applicable federal or state government regulations.

Section 6.07  Compliance with REMIC Provisions.

If a REMIC election has been made with respect to the arrangement under which the Mortgage Loans and REO Property are held, the Servicer shall not take any action, cause the REMIC to take any action or fail to take (or fail to cause to be taken) any action that, under the REMIC Provisions, if taken or not taken, as the case may be, could (i) endanger the status of the REMIC as a REMIC or (ii) result in the imposition of a tax upon the REMIC (including but not limited to the tax on “prohibited transactions” as defined in Section 860F(a)(2) of the Code and the tax on “contribution” to a REMIC set forth in Section 860G(d) of the Code unless the Servicer has received an Opinion of Counsel (at the expense of the party seeking to take such actions) to the effect that the contemplated action will not endanger such REMIC status or result in the imposition of any such tax.

Section 6.08  Non-solicitation.

The Servicer shall not conduct any solicitation targeted to the Mortgagors for the purpose of inducing or encouraging the early prepayment or refinancing of the related Mortgage Loans.  It is understood and agreed that promotions undertaken by the Servicer or any agent or affiliate of the Servicer which are directed to the general public at large, including mass mailings based on commercially acquired mailing lists, newspaper, radio and television advertisements, shall not constitute solicitation under this Section 6.08 nor is the Servicer prohibited from responding to unsolicited requests or inquiries made by a Mortgagor or an agent of a Mortgagor.

	
            Section 6.09
 	
            Annual Certification and Indemnification.
 

(a)        With respect to any Mortgage Loans that are subject to a pass-through transfer or other securitization (a “Securitization”) in which the filing of a Sarbanes-Oxley Certification directly with the Securities and Exchange Commission is required, by May 15th of each year or in connection with any additional Sarbanes-Oxley Certification required to be filed upon thirty (30) days written request, an officer of the Servicer shall execute and deliver an Officer’s Certification substantially in the form attached hereto as Exhibit E, to the entity filing the Sarbanes-Oxley Certification directly with the Securities and Exchange Commission (the “Sarbanes Certifying Party”) for the benefit of such entity and such entity’s affiliates and the officers, directors and
agents of such entity.

(b)        The Servicer shall indemnify and hold harmless the Sarbanes Certifying Party and its officers, directors, agents and affiliates from and against any losses, damages, penalties, fines, forfeitures, reasonable legal fees and related costs, judgments and other costs and expenses arising out of or based upon a breach by the Servicer or any of its officers, directors, agents or affiliates of its obligations under Sections 6.04, 6.05 and 6.09 or the negligence, bad faith or willful misconduct of the Servicer in connection therewith. If the indemnification provided for herein is unavailable or insufficient to hold harmless the Sarbanes Certifying Party, then the Servicer 

 

agrees that it shall contribute to the amount paid or payable by the Sarbanes Certifying Party as a result of the losses, claims, damages or liabilities of the Sarbanes Certifying Party in such proportion as is appropriate to reflect the relative fault of the Sarbanes Certifying Party on the one hand and the Servicer on the other in connection with a breach of the Servicer’s obligations under Sections 6.04, 6.05 and 6.09 or the Servicer’s negligence, bad faith or willful misconduct in connection therewith.

 

 

ARTICLE VII

REPORTS TO BE PREPARED BY SERVICER

Section 7.01  Servicer Shall Provide Information as Reasonably Required.

The Servicer shall furnish to the Owner or the NIMs Insurer upon reasonable request, during the term of this Agreement, such periodic, special or other reports or information, whether or not provided for herein, as shall be necessary, reasonable or appropriate with respect to the purposes of this Agreement.  The Servicer may negotiate with the Owner or the NIMs Insurer for a reasonable fee for providing such report or information, unless (i) the Servicer is required to supply such report or information pursuant to any other section of this Agreement, or (ii) the report or information has been requested in connection with Internal Revenue Service or other regulatory agency requirements.  All such reports or information shall be provided by and in accordance with all reasonable instructions and directions given by the Owner or the NIMs Insurer.  The Servicer agrees to execute and deliver
all such instruments and take all such action as the Owner, or the NIMs Insurer, from time to time, may reasonably request in order to effectuate the purpose and to carry out the terms of this Agreement.

 

 

ARTICLE VIII

THE SERVICER

Section 8.01  Indemnification; Third Party Claims.

The Servicer agrees to indemnify the Owner, its successors and assigns, and any agent of the Owner, and the NIMs Insurer (each an “Indemnified Person”) and hold each such Indemnified Person 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 such Indemnified Person may sustain in any way related to the failure of the Servicer to perform its duties and service the Mortgage Loans in strict compliance with the terms of this Agreement and for breach of any representation, warranty or covenant of the Servicer contained herein.  The Servicer shall notify the Owner and the NIMs Insurer in accordance with Section 11.04 herein of any claim made by a third party against the Servicer, the Owner or both, with respect to this Agreement, the Mortgage Loans and/or any
alleged act by Owner. The Owner shall assume the defense of any such claim and pay all costs and expenses (including reasonable legal fees and expenses) of defending the Servicer and itself against any such claim other than (i) any loss, liability or expense related to the Servicer’s failure to perform Servicer’s duties in strict compliance with this Agreement; and (ii) any loss, liability or expense incurred by reason of the Servicer’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 Owner shall promptly pay, discharge and satisfy any judgment or decree that may be entered against it in respect of such claim. If in any event, the Servicer incurred any expenses or fees related to the above, the Owner shall reimburse the Servicer within thirty (30) Business Days upon receipt of an invoice from the Servicer of all amounts advanced by the Servicer pursuant
to the preceding sentence.

Section 8.02  Merger or Consolidation of the Servicer.

The Servicer shall keep in full effect its existence, rights and franchises as a corporation under the laws of the state of its incorporation except as permitted herein, 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 or any of the Mortgage Loans and to perform its duties under this Agreement.

Any Person into which the Servicer may be merged or consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Servicer shall be a party, or any Person succeeding to the business of the Servicer whether or not related to loan servicing, shall be the successor of the Servicer hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding; provided, however, that the successor or surviving Person shall be an institution (i) having a GAAP net worth of not less than $25,000,000, (ii) the deposits of which are insured by the FDIC, or which is a HUD-approved mortgagee whose primary business is in origination and servicing of first lien 1-4 family mortgage loans, and (iii) which is a Fannie Mae or Freddie Mac approved seller/servicer in good standing.
Furthermore, in the event the Servicer transfers or 

 

otherwise disposes of all or substantially all of its assets to an affiliate of the Servicer, such affiliate shall satisfy the condition above, and shall also be fully liable to the Owner for all of the Servicer’s obligations and liabilities hereunder.

Section 8.03  Limitation on Liability of the Servicer and Others.

Neither the Servicer nor any of the directors, officers, employees or agents of the Servicer shall be under any liability to the Owner for any action taken or for refraining from the taking of any action in good faith pursuant to this Agreement, or for errors in judgment made in good faith; provided, however, that this provision shall not protect the Servicer or any such person against any breach of warranties or representations made herein, or failure to perform its obligations in compliance with any standard of care set forth in this Agreement, or any liability which would otherwise be imposed under this Agreement.  The Servicer and any director, officer, employee or agent of the Servicer may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person respecting any matters arising hereunder.  The Servicer shall not be under any obligation
to appear in, prosecute or defend any legal action which is not incidental to its duties to service the Mortgage Loans in accordance with this Agreement and which in its opinion may involve it in any expenses or liability; provided, however, that the Servicer may, with the consent of the Owner and the NIMs Insurer, undertake any such action which it may deem necessary or desirable with respect to this Agreement and the rights and duties of the parties hereto.  In such event, the reasonable legal expenses and costs of such action and any liability resulting therefrom shall be expenses, costs and liabilities for which the Owner will be liable, the Owner shall reimburse the Servicer within thirty days of receipt by the Owner of a billing statement from the Servicer providing reasonable detail with respect thereto, unless the Owner is disputing such charges, in which event the Owner shall reimburse the Company as promptly as feasible upon resolution of such dispute.

Section 8.04  Servicer Not to Resign.

The Servicer shall not assign this Agreement or resign from the obligations and duties hereby imposed on it except by mutual consent of the Servicer and the Owner, with the consent of the NIMs Insurer or upon the determination that its duties hereunder are no longer permissible under applicable law and such incapacity cannot be cured by the Servicer.  Any such determination permitting the resignation of the Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to the Owner and the NIMs Insurer which Opinion of Counsel shall be in form and substance acceptable to the Owner and the NIMs Insurer.  No such resignation shall become effective until a successor shall have assumed the Servicer’s responsibilities and obligations hereunder in the manner provided in Section 11.01. Notwithstanding the foregoing, the Servicer, without the consent of the Owner, may retain
third-party contractors to perform certain servicing and loan administration functions, including without limitation hazard insurance administration, tax payment and administration, flood certification and administration, collection services and similar functions, provided, however, that the retention of such contractors by Servicer shall not limit the obligation of the Servicer to service the Mortgage Loans pursuant to the terms and conditions of this Agreement.

 

 

Section 8.05  No Transfer of Servicing.

With respect to the retention of the Servicer to service the Mortgage Loans hereunder, the Servicer acknowledges that the Owner and the NIMs Insurer have in reliance upon the Servicer’s independent status, the adequacy of its servicing facilities, plan, personnel, records and procedures, its integrity, reputation and financial standing and the continuance thereof.  Without in any way limiting the generality of this section, the Servicer shall not either assign this Agreement or the servicing hereunder or delegate its rights or duties hereunder or any portion thereof, or sell or otherwise dispose of all or substantially all of its property or assets, without the prior written approval of the Owner and the NIMs Insurer.

 

 

ARTICLE IX

DEFAULT

Section 9.01  Events of Default.

Each of the following shall constitute an Event of Default on the part of the Servicer:

(i)         any failure by the Servicer to remit to the Owner any payment required to be made under the terms of this Agreement which continues unremedied for a period of two (2) Business Days after written notice thereof from the Owner or the NIMs Insurer (it being understood that this subparagraph shall not affect Servicer’s obligation pursuant to Section 5.01 to pay default interest on any remittance received by the Owner after the Business Day on which such payment was due); or

(ii)         any failure by the Servicer duly to observe or perform in any material respect any other of the covenants or agreements on the part of the Servicer set forth in this Agreement (other than with respect to Sections, 6.04, 6.05 and 6.09), 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 Servicer by the Owner or the NIMs Insurer; 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 Servicer and such decree or order shall have remained in force undischarged or unstayed for a period of sixty days; or

(iv)        the Servicer 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 Servicer or of or relating to all or substantially all of its property; or

(v)        the Servicer 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, bankruptcy or reorganization statute, make an assignment for the benefit of its creditors, voluntarily suspend payment of its obligations or cease its normal business operations for two Business Days; or

(vi)        the Servicer ceases to meet the qualifications of a Fannie Mae or Freddie Mac servicer; or

(vii)       the Servicer attempts to assign its right to servicing compensation hereunder or the Servicer attempts, without the consent of the Owner and the NIMs Insurer, 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;

(viii)      the Servicer 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 Servicer’s ability to perform its obligations hereunder; or

(ix)       failure by the Servicer to duly perform, within the required time period, its obligations under Section 6.04, Section 6.05 or Section 6.09 of this Agreement which failure continues unremedied for a period of fifteen (15) days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer by any party to this Agreement, the NIMs Insurer or by any master servicer responsible for master servicing the Mortgage Loans pursuant to a securitization of such Mortgage Loans.

In each and every such case, so long as an Event of Default shall not have been remedied, the Owner with the consent of the NIMs Insurer, by notice in writing to the Servicer may (and at the request of the NIMs Insurer, shall), in addition to whatever rights the Owner may have under Section 8.01 and at law or equity to damages, including injunctive relief and specific performance, terminate all the rights and obligations of the Servicer under this Agreement and in and to the Mortgage Loans and the proceeds thereof without compensating the Servicer for the same.

From and after the receipt by the Servicer of such written notice, all authority and power of the Servicer under this Agreement, whether with respect to the Mortgage Loans or otherwise, shall pass to and be vested in the successor appointed pursuant to Section 11.01.  Upon written request from the Owner, the Servicer shall prepare, execute and deliver, any and all documents and other instruments, place in such successor’s possession all Servicing Files, and do or accomplish all other acts or things reasonably necessary or appropriate to effect the purposes of such notice of termination, including, but not limited to, notification to MERS at the Servicer’s sole expense.  The Servicer agrees to cooperate with the Owner and such successor in effecting the termination of the Servicer’s responsibilities and rights hereunder, including, without limitation, the transfer to such
successor for administration by it of all cash amounts, net of unreimbursed Servicing Advances and Monthly Advances, which shall at the time be credited by the Servicer to the Custodial Account or Escrow Account or thereafter received with respect to the Mortgage Loans.

Section 9.02  Waiver of Defaults.

The Owner with the consent of the NIMs Insurer may waive, only by written notice, any default by the Servicer 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 Event of Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement.  No such waiver shall extend to any subsequent or other default or impair any right consequent thereon except to the extent expressly so waived in writing.

 

 

ARTICLE X

TERMINATION

Section 10.01  Termination.

The respective obligations and responsibilities of the Servicer shall terminate upon the earliest to occur of the following: (i) the later of the final payment or other liquidation (or any advance with respect thereto) of the last Mortgage Loan or the disposition of any REO Property and the remittance of all funds due hereunder; (ii) by 30 days’ written mutual consent of the Servicer and the Owner with the consent of the NIMs Insurer; (iii) termination by the Owner pursuant to Section 9.01; and (iv) upon resignation of the Servicer in accordance with Section 8.04;.  Simultaneously with any such termination and, in the case of (ii), (iii) or (iv) of the preceding sentence, the transfer of servicing hereunder, the Servicer shall be entitled to be reimbursed for any outstanding Servicing Advances and Monthly Advances as such amounts are received from the related Mortgage Loans or as
otherwise provided herein for a servicer that has not been terminated.  In no event shall the Servicer be entitled to any termination fee or other compensation with respect to any termination of this Agreement or the Servicer’s rights hereunder, in whole or in part.

Section 10.02  Subservicing Termination Trigger.

In the event of a Subservicer Termination Trigger (as defined in the related Trust Agreement), the Servicer shall terminate the related Subservicer at the direction of the NIMS Insurer.  Following such termination, the Servicer shall have the right to service such Mortgage Loans without the use of a Subservicer or to engage a new Subservicer acceptable to the NIMS Insurer pursuant to a Subservicing Agreement, which is not in conflict with the terms of this Agreement.  Notwithstanding the foregoing, the Servicer shall retain the ownership of all servicing rights with respect to the related Mortgage Loans and no such direction of termination of a Subservicer shall be deemed to diminish such ownership.

 

 

ARTICLE XI

MISCELLANEOUS PROVISIONS

Section 11.01  Successor to the Servicer.

Upon termination of the Servicer’s responsibilities and duties under this Agreement pursuant to Sections 8.04, 8.05 or 9.01, the Owner shall (i) succeed to and assume all of the Servicer’s responsibilities, rights, duties and obligations under this Agreement, or (ii) appoint a successor acceptable to the NIMs Insurer having the characteristics set forth in Section 8.02 and which shall succeed to all rights and assume all of the responsibilities, duties and liabilities of the Servicer under this Agreement prior to the termination of the Servicer’s responsibilities, duties and liabilities under this Agreement.  If the NIMs Insurer requests, the Master Servicer shall appoint a successor servicer as provided in the preceding sentence.  In connection with such appointment and assumption, the Owner may make such arrangements for the compensation of such successor out of payments
on Mortgage Loans as the Owner with the consent of the NIMs Insurer and such successor shall agree.  In the event that the Servicer’s duties, responsibilities and liabilities under this Agreement should be terminated pursuant to the aforementioned sections, the Servicer shall discharge such duties and responsibilities during the period from the date it acquires knowledge of such termination until the effective date thereof with the same degree of diligence and prudence which it is obligated to exercise under this Agreement, and shall take no action whatsoever that might impair or prejudice the rights or financial condition of its successor.  The resignation or removal of the Servicer pursuant to the aforementioned sections shall not become effective until a successor shall be appointed pursuant to this section and shall in no event relieve the Servicer of the representations and warranties made pursuant to Article III and the remedies available to the Owner under Section 8.01, it
being understood and agreed that the provisions of such Article III and Section 8.01 shall be applicable to the Servicer notwithstanding any such resignation or termination of the Servicer, or the termination of this Agreement.

Any successor appointed as provided herein shall execute, acknowledge and deliver to the Servicer and to the Owner an instrument accepting such appointment, whereupon such successor shall become fully vested with all the rights, powers, duties, responsibilities, obligations and liabilities of the Servicer, with like effect as if originally named as a party to this Agreement.  Any termination or resignation of the Servicer or termination of this Agreement pursuant to Section 8.04, 8.05 or 9.01 shall not affect any claims that the Owner may have against the Servicer arising prior to any such termination or resignation.

The Servicer shall promptly deliver to the successor the funds in the Custodial Account and the Escrow Account and the Servicing Files and related documents and statements held by it hereunder and the Servicer shall account for all funds.  All unreimbursed Monthly Advances and Servicing Advances shall be paid by the Owner to the replaced servicer as such amounts are received from the related Mortgage Loans or are otherwise reimbursable hereunder.  The Servicer shall execute and deliver such instruments and do such other things as may reasonably be required to more fully and definitely vest and confirm in the successor all such rights, powers, duties, responsibilities, obligations and liabilities of the Servicer.  In addition, the Servicer shall promptly 

 

take all other actions reasonably requested by Owner or the NIMs Insurer with respect to MERS Mortgage Loans and MERS to effectuate and evidence the transfer of servicing and/or ownership thereof in accordance with the terms of this Agreement.

Upon a successor’s acceptance of appointment as such, the Owner shall notify the Servicer of such appointment.

Section 11.02  Amendment.

This Agreement may be amended from time to time by the Servicer and the Owner, with the consent of the NIMs Insurer, by written agreement signed by the Servicer and the Owner.

Section 11.03  Governing Law.

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS.  THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Section 11.04  Notices.

Any demands, notices or other communications permitted or required hereunder shall be in writing and shall be deemed to have been duly given if personally delivered at or mailed by registered mail, postage prepaid, and return receipt requested or transmitted by telecopier and confirmed by a similar mailed writing, as follows:

	
            (i)
 	
            if to the Servicer with respect to servicing issues:
 
	
             
 	
            Home Star Mortgage Services LLC
 
	
             
 	
            W. 115 Century Road
 
	
             
 	
            Paramus, New Jersey 07652
 
	
             
 	
            Attention:
 
	
            (ii)
 	
            if to the Owner:
 
	
             
 	
            Homestar Mortgage Acceptance Corp.
 
	
             
 	
            W. 115 Century Road
 
	
             
 	
            Paramus, New Jersey 07652
 
	
             
 	
            Attention:
 

or such other address as may hereafter be furnished to the other party by like notice.  Any such demand, notice, or communication hereunder shall be deemed to have been received on the date delivered to or received at the premises of the address (as evidenced, in the case of registered or certified mail, by the date noted on the return receipt).

 

 

Section 11.05  Severability of Provisions.

If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be held invalid for any reason whatsoever, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement.

Section 11.06  Exhibits and Schedules.

The exhibits, schedules and other addenda and supplements to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement.

Section 11.07  General Interpretive Principles.

For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

(i)         the terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;

(ii)         accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles;

(iii)        references herein to “Articles,” “Sections,” “Subsections,” “Paragraphs,” and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;

(iv)        a reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;

(v)        the words “herein,” “hereof,” “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular provision;

(vi)        the term “include” or “including” shall mean without limitation by reason of enumeration; and

(vii)       to the extent that some, but not all, of the Mortgage Loans are transferred pursuant to Section 11.10 hereof, this Agreement shall be construed as a separate agreement with respect to such Mortgage Loans and references to the rights of the Owner shall apply separately with respect to each Owner.

Section 11.08  Reproduction of Documents.

 

 

This Agreement and all documents relating hereto, including, without limitation, (i) consents, waivers and modifications which may hereafter be executed, (ii) documents received by any party at the closing, and (iii) financial statements, certificates and other information previously or hereafter furnished, may be reproduced by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process.  The parties agree that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.

Section 11.09  Confidentiality of Information.

Each party recognizes that, in connection with this Agreement, it may become privy to non-public information regarding the financial condition, operations and prospects of the other party.  Except as required to be disclosed by law, each party agrees to keep all non-public information regarding the other party strictly confidential, and to use all such information solely in order to effectuate the purpose of this Agreement. Additionally, with respect to each Mortgage Loan and the related Mortgagor, the Servicer and the Owner shall comply with Title V of the Gramm Leach Bliley Act of 1999 and all applicable regulations promulgated thereunder.

Section 11.10  Assignment by the Owner.

The Owner shall have the right, with the consent of the NIMs Insurer, without the consent of the Servicer but subject to the limits set forth in this Agreement hereof, to assign its interest under this Agreement with respect to some or all of the Mortgage Loans, and designate any person to exercise any rights of the Owner hereunder and the assignee or designee shall accede to the rights and obligations hereunder of the Owner with respect to such Mortgage Loans.  The Servicer shall not be obligated to recognize any such assignee or designee unless such person executes an assignment and assumption agreement reasonably acceptable to the Servicer.  All references to the Owner in this Agreement shall be deemed to include its assignees or designees.

Section 11.11  No Partnership.

Nothing herein contained shall be deemed or construed to create a co-partnership or joint venture between the parties hereto and the services of the Servicer shall be rendered as an independent contractor and not as agent for Owner.

Section 11.12  Counterparts; Successors and Assigns.

This Agreement may be executed in one or more counterparts and by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed to be an original; such counterparts, together, shall constitute one and the same agreement.  Subject to Section 8.05, this Agreement shall inure to the benefit of and be binding upon the Servicer, the NIMs Insurer and the Owner and their respective successors and assigns.

 

 

Section 11.13  Entire Agreement.

Each of the Servicer and the Owner acknowledges that no representations, agreements or promises were made to it by the other party or any of its employees other than those representations, agreements or promises specifically contained herein.  This Agreement sets forth the entire understanding between the parties hereto with respect to the matters set forth herein, and shall be binding upon all successors of both parties.

Section 11.14  Further Agreements.

The Servicer and the Owner each agrees to execute and deliver to the other such reasonable and appropriate additional documents, instruments or agreements as may be necessary or appropriate to effectuate the purpose of this Agreement.

	
            Section 11.15
 	
            Third Party Beneficiary.
 

For purposes of this Agreement, any Master Servicer and the NIMs Insurer shall be considered a third party beneficiary to this Agreement entitled to all the rights and benefits accruing to any Master Servicer and the NIMs Insurer herein as if it were a direct party to this Agreement.

 

 

IN WITNESS WHEREOF, the Servicer and the Owner have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the date and year first above written.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            HOMESTAR MORTGAGE ACCEPTANCE CORP.
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            HOMESTAR MORTGAGE SERVICES, LLC
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
             
 

 

 

 

EXHIBIT A

MORTGAGE LOAN SCHEDULE

AVAILABLE UPON REQUEST

 

 

EXHIBIT B

FORMS OF CUSTODIAL ACCOUNT CERTIFICATIONS

CUSTODIAL ACCOUNT CERTIFICATION

, 20

Home Star Mortgage Services LLC hereby certifies that it has established the account described below as a Custodial Account pursuant to Section 4.04 of the Servicing Agreement, dated as of March 5, 2004.

	
            Title of Account:
 	
            HMAC 2004-_ in trust for the Purchaser and/or subsequent purchasers of Mortgage Loans, and various Mortgagors - P & I
 

Address of office or branch

of the Servicer at which

Account is maintained:

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            HOME STAR MORTGAGE SERVICES LLC

Servicer
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
             
 

 

 

 

 

EXHIBIT C

FORMS OF ESCROW ACCOUNT CERTIFICATIONS

ESCROW ACCOUNT CERTIFICATION

, 20

Home Star Mortgage Services LLC hereby certifies that it has established the account described below as an Escrow Account pursuant to Section 4.06 of the Servicing Agreement, dated as of March 5, 2004.

Title of Account:            HMAC 2004-_ in trust for the Purchaser and/or subsequent purchasers of Mortgage Loans, and various Mortgagors - T & I

Address of office or branch

of the Servicer at which

Account is maintained:

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            HOME STAR MORTGAGE SERVICES LLC

Servicer
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
             
 

 

 

EXHIBIT D

REQUEST FOR RELEASE OF DOCUMENTS

	
            To:
 	
            Wells Fargo Bank, N.A.
 

1015 10th Avenue S.E.

Mpls., MN  55414

Attn:  ________________

	
            Re:
 	
            Custodial Agreement dated as of October 1, 2004, among HSBC Bank (USA), Homestar Mortgage Acceptance Corp. and Wells Fargo Bank, N.A., as Custodian
 

In connection with the administration of the Mortgage Loans held by you as Custodian for the Owner pursuant to the above-captioned Custody Agreement, we request the release, and hereby acknowledge receipt, of the Custodian’s Mortgage File for the Mortgage Loan described below, for the reason indicated.

Mortgage Loan Number:

Mortgagor Name, Address & Zip Code:

Reason for Requesting Documents (check one):

	
            _______
 	
            1.
 	
            Mortgage Paid in Full
 
	
            _______
 	
            2.
 	
            Foreclosure
 
	
            _______
 	
            3.  
 	
            Substitution
 
	
            _______
 	
            4.
 	
            Other Liquidation (Repurchases, etc.)
 
	
            _______
 	
            5.
 	
            Nonliquidation  [Reason:______________________________]
 

Address to which Custodian should

	
            Deliver the Custodian’s Mortgage File:
 	
             

	
             
	
             
 
	
             
	
             
 
	
             
	
             
 
	
             
	
            By:
 	
             
 
	
             
	
             
 	
            (authorized signer)

 
 
				

 

Issuer:_____________________________________

Address:___________________________________

___________________________________

Date:______________________________________

Custodian

 

 

Wells Fargo Bank, N.A.

Please acknowledge the execution of the above request by your signature and date below:

	
            ____________________________________
 	
            _________________
 
	
            Signature
 	
            Date
 

Documents returned to Custodian:

	
            ____________________________________
 	
            _________________
 

Custodian

 

 

EXHIBIT E

FORM OF SARBANES-OXLEY CERTIFICATION

I, __________________________, certify to Wells Fargo Bank, N.A., and its officers, directors, agents and affiliates (the “Sarbanes Certifying Party”), and with the knowledge and intent that they will rely upon this certification, that:

(i)         Based on my knowledge, the information relating to the Mortgage Loans and the servicing thereof submitted by the Servicer to the Sarbanes Certifying Party which is used in connection with preparation of the reports on Form 8-K and the annual report on Form 10-K filed with the Securities and Exchange Commission with respect to the Securitization, taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading as of the date of this certification;

(ii)         The servicing information required to be provided to the Sarbanes Certifying Party by the Servicer under the Agreement has been provided to the Sarbanes Certifying Party;

(iii)        I am responsible for reviewing the activities performed by the Servicer and by each related subservicer under the Agreement and based upon the review required by the Agreement, and except as disclosed in the Annual Statement of Compliance, the Annual Independent Public Accountant’s Servicing Report and all servicing reports, officer’s certificates and other information relating to the servicing of the Mortgage Loans submitted to the Sarbanes Certifying Party, the Servicer and each related subservicer has, as of the date of this certification, fulfilled its obligations under the Agreement; and

(iv)        I have disclosed to the Sarbanes Certifying Party all significant deficiencies relating to the Servicer’s and/or each related subservicer’s compliance with the minimum servicing standards in accordance with a review conducted in compliance with the Uniform Single Attestation Program for Mortgage Bankers or similar standard as set forth in the Agreement.

Capitalized words not otherwise defined herein have the meaning assigned to them in the Servicing Agreement dated March 5, 2004 by and between Homestar Mortgage Acceptance Corp. as Owner and Home Star Mortgage Services LLC as Servicer.

IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of the Servicer.

 

	
            Dated:  
 	
            By:
 
	
            Name:
 	
             
 
	
            Title:
 	
             
 

 

 

 

 

 

EXHIBIT F

MONTHLY SERVICER REPORTING FORMAT

(RYLAND) FORMAT, SERVICER PERIOD REPORTING

The format should be:

1. Record length of 240

2. ASCII

3. All dates should have DD of “01”.

COBOL

	
            #
 	
            M/O
 	
            Field Name
 	
            Position
 	
            Length
 	
            “Picture”
 	
            Justify
 
	
            1.
 	
            O
 	
            Master Servicer No.
 	
            001-002
 	
            2
 	
             
 	
             
 
	
            2.
 	
            O
 	
            Unit Code
 	
            003-004
 	
            2
 	
             
 	
             
 
	
            3.
 	
            M
 	
            Loan Number
 	
            005-014
 	
            10
 	
            X(10)
 	
             
 
	
            4.
 	
            O
 	
            Borrower Name
 	
            015-034
 	
            20
 	
            X(20)
 	
             
 
	
            5.
 	
            O
 	
            Old Payment Amount
 	
            035-045
 	
            11
 	
            S(9)V9(02)
 	
             
 
	
            6.
 	
            O
 	
            Old Loan Rate
 	
            046-051
 	
            6
 	
            9(2)V9(04)
 	
             
 
	
            7.
 	
            O
 	
            Servicer Fee Rate
 	
            052-057
 	
            6
 	
            9(2)V9(04)
 	
             
 
	
            8.
 	
            M
 	
            Servicer Ending Balance
 	
            058-068
 	
            11
 	
            S9(9)V9(02)
 	
             
 
	
            9.
 	
            M
 	
            Servicer Next Due Date
 	
            069-076
 	
            8
 	
            CCYYMMDD
 	
             
 
	
            10.
 	
            O
 	
            Curtail Amt 1 - Before
 	
            077-087
 	
            11
 	
            S9(9)V9(02)
 	
             
 
	
            11.
 	
            O
 	
            Curtail Date 1
 	
            088-095
 	
            8
 	
            CCYYMMDD
 	
             
 
	
            12.
 	
            O
 	
            Curtail Amt 1 - After
 	
            096-106
 	
            11
 	
            S9(9)V9(02)
 	
             
 
	
            13
 	
            O
 	
            Curtail Amt 2 - Before
 	
            107-117
 	
            11
 	
            S9(9)V9(02)
 	
             
 
	
            14.
 	
            O
 	
            Curtail Date
 	
            118-125
 	
            8
 	
            CCYYMMDD
 	
             
 
	
            15.
 	
            O
 	
            Curtail Amt 2 - After
 	
            126-136
 	
            11
 	
            9(9)V9(02)
 	
             
 
	
            16.
 	
            O
 	
            Curtail Amt 3 - Before
 	
            137-147
 	
            11
 	
            9(9)V9(02)
 	
             
 
	
            17.
 	
            O
 	
            Curtail Date
 	
            148-155
 	
            8
 	
            CCYYMMDD
 	
             
 
	
            18
 	
            O
 	
            Curtail Amt 3 - After
 	
            156-166
 	
            11
 	
            9(9)V9(02)
 	
             
 
	
            19
 	
            O
 	
            New Payment Amount
 	
            167-177
 	
            11
 	
            9(9)V9(02)
 	
             
 
	
            20.
 	
            O
 	
            New Loan Rate
 	
            178-183
 	
            6
 	
            (2)V9(04)
 	
             
 
	
            21.
 	
            O
 	
            Index Rate
 	
            184-189
 	
            6
 	
            (2)V9(04)
 	
             
 
	
            22.
 	
            O
 	
            Remaining Term
 	
            190-192
 	
            3
 	
            (3)
 	
             
 
	
            23.
 	
            O
 	
            Liquidation Amount
 	
            193-203
 	
            11
 	
            9(9)V9(02)
 	
             
 
	
            24.
 	
            O
 	
            Action Code
 	
            204-205
 	
            2
 	
            (02)
 	
             
 
	
            25.
 	
            O
 	
            Scheduled Principal
 	
            206-216
 	
            11
 	
            9(9)V9(02)
 	
             
 
	
            26.
 	
            O
 	
            Scheduled Interest
 	
            217-227
 	
            11
 	
            9(9)V9(02)
 	
             
 
	
            27.
 	
            O
 	
            Scheduled Ending Balance
 	
            228-238
 	
            11
 	
            9(9)V9(02)
 	
             
 
	
            28.
 	
            O
 	
            FILLER
 	
            239-240
 	
            2
 	
            (02)
 	
             
 

Trailer Record

	
            1.
 	
            O
 	
            Number of Records
 	
            001-006
 	
            6
 	
            9(06)
 

 

 

 

 

	
            2.
 	
            O
 	
            FILLER
 	
            007-240
 	
            234
 	
            X(234)
 

Field Names and Descriptions:

	
            Field Name
 	
            Description
 	
             

	
            Master Servicer No.
 	
            Hard code as “01” used internally
 	
             

	
            Unit Code
 	
            Hard code as “  “ used internally
 	
             

	
            Loan Number
 	
            Investor’s loan number
 	
             

	
            Borrower Name
 	
            Last name of borrower
 	
             

	
            Old Payment Amount
 	
            P&I amount used for the applied payment
 	
             

	
            Old Loan Rate
 	
            Gross interest rate used for the applied payment
 	
             

	
            Servicer Fee Rate
 	
            Servicer’s fee rate
 	
             

	
            Servicer Ending Balance
 	
            Ending actual balance after a payment has been applied
 	
             

	
            Servicer Next Due Date
 	
            Borrower’s next due date for a payment
 	
             

	
            Curtailment Amount 1 - Before
 	
            Amount of curtailment applied before the payment
 
															

	
            Curtailment Date 1 
 	
            Date of curtailment should coincide with the payment date applicable to the curtailment
 

	
            Curtailment Amount 1 - After
 	
            Amount of curtailment applied after the payment
 	
             

	
            Curtailment Amount 2 - Before
 	
            Amount of curtailment applied before the payment
 
				

	
            Curtailment Date 2 
 	
            Date of curtailment should coincide with the payment date applicable to the curtailment
 

	
            Curtailment Amount 2 - After
 	
            Amount of curtailment applied after the payment
 	
             

	
            Curtailment Amount 3 - Before
 	
            Amount of curtailment applied before the payment
 
				

	
            Curtailment Date 3 
 	
            Date of curtailment should coincide with the payment date applicable to the curtailment
 

	
            Curtailment Amount 3 - After
 	
            Amount of curtailment applied after the payment
 

 

 

 

	
            New Payment Amount
 	
            For ARM, Equal, or Buydown loans, when a payment change occurs, this is the scheduled payment
 
	
            New Loan Rate
 	
            For ARM loans, when the gross interest rate change occurs, this is the scheduled rate
 
	
            Index Rate
 	
            For ARM loans, the index rate used in calculating the new gross interest rate
 
	
            Remaining Term
 	
            For ARM loans, the number of months left on the loan used to determine the new P&I amount
 

	
            Liquidation Amount
 	
            The payoff amount of the loan
 
	
            Action Code
 	
            For delinquent loans:
 	
             

				

12 — Relief Provisions

15 — Bankruptcy/Litigation

20 — Referred for Deed-in-lieu, short sale

30 — Referred to attorney to begin foreclosure 60 — Loan Paid in full

70 — Real Estate Owned

	
            Scheduled Principal
 	
            Amount of principal from borrower payment due to bondholder
 
	
            Scheduled Interest
 	
            Amount of interest from borrower payment due to bondholder
 

	
            Scheduled Ending Balance
 	
            Ending scheduled balance of loan
 

FILLER
            Should be filled with spaces

 

 

EXHIBIT G

Data must be submitted to Wells Fargo Bank in an Excel spreadsheet format with fixed field names and data type.  The Excel spreadsheet should be used as a template consistently every month when submitting data for all loans that are 60 days + delinquent and/or in bankruptcy, foreclosure or REO.

Table: Delinquency

	
            Name
 	
            Type
 	
            Max Character Size
 
	
            Servicer Loan #
 	
            Number
 	
            10
 
	
            Investor Loan #
 	
            Number 
 	
            10
 
	
            Servicer Investor #
 	
            Text
 	
            3
 
	
            Borrower Name
 	
            Text
 	
            20
 
	
            Address
 	
            Text
 	
            30
 
	
            State
 	
            Text
 	
            2
 
	
            Zip
 	
            Text
 	
            5
 
	
            Due Date
 	
            Date/Time
 	
            8
 
	
            Loan Type
 	
            Text
 	
            8
 
	
            BK Filed Date
 	
            Date/Time
 	
            8
 
	
            BK Chapter
 	
            Text
 	
            6
 
	
            BK Case Number
 	
            Text
 	
            30 Maximum
 
	
            Post Petition Due
 	
            Date/Time
 	
            8
 
	
            Motion for Relief
 	
            Date/Time
 	
            8
 
	
            Lift of Stay
 	
            Date/Time
 	
            8
 
	
            BK Discharge/Dismissal Date
 	
            Date/Time
 	
            8
 
	
            Loss Mit Approval Date
 	
            Date/Time
 	
            8
 
	
            Loss Mit Type
 	
            Text
 	
            5
 
	
            Loss Mit Code
 	
            Number
 	
            2
 
	
            Loss Mit Estimated Completion Date
 	
            Date/Time
 	
            8
 
	
            Loss Mit Actual Completion Date
 	
            Date/Time
 	
            8
 
	
            FC Approval Date
 	
            Date/Time
 	
            8
 
	
            File Referred to Attorney
 	
            Date/Time
 	
            8
 
	
            NOD
 	
            Date/Time
 	
            8
 
	
            Complaint Filed
 	
            Date/Time
 	
            8
 
	
            Scheduled Sale Date
 	
            Date/Time
 	
            8
 
	
            Actual Sale Date
 	
            Date/Time
 	
            8
 
	
            F/C Sale Amount
 	
            Currency
 	
            8
 
	
            Eviction Start Date
 	
            Date/Time
 	
            8
 
	
            Eviction Completed Date
 	
            Date/Time
 	
            8
 
	
            List Price
 	
            Currency
 	
            8
 
	
            List Date
 	
            Date/Time
 	
            8
 
	
            Accepted Offer Price
 	
            Currency
 	
            8
 
	
            Accepted Offer Date
 	
            Date/Time
 	
            8
 

 

 

 

 

	
            Estimated REO Closing Date
 	
            Date/Time
 	
            8
 
	
            Actual REO Sale Date
 	
            Date/Time
 	
            8
 
	
            Occupant Code
 	
            Text
 	
            10
 
	
            Property Condition Code
 	
            Text
 	
            2
 
	
            Property Inspection Date
 	
            Date/Time
 	
            8
 
	
            Property Value Date
 	
            Date/Time
 	
            8
 
	
            Current Property Value
 	
            Currency
 	
            8
 
	
            Repaired Property Value
 	
            Currency
 	
            8
 
	
            Current LTV
 	
            Currency
 	
            8
 
	
            FNMA Delinquent Status Code
 	
            Text
 	
            2
 
	
            FNMA Delinquent Reason Code
 	
            Text
 	
            3
 

If applicable:

	
            MI Cancellation Date
 	
            Date/Time
 	
            8
 
	
            MI Claim Filed Date
 	
            Date/Time
 	
            8
 
	
            MI Claim Amount
 	
            Currency
 	
            8
 
	
            MI Claim Reject Date
 	
            Date/Time
 	
            8
 
	
            MI Claim Resubmit Date
 	
            Date/Time
 	
            8
 
	
            MI Claim Paid Date
 	
            Date/Time
 	
            8
 
	
            MI Claim Amount Paid
 	
            Currency
 	
            8
 
	
            Pool Claim Filed Date
 	
            Date/Time
 	
            8
 
	
            Pool Claim Amount
 	
            Currency
 	
            8
 
	
            Pool Claim Reject Date
 	
            Date/Time
 	
            8
 
	
            Pool Claim Paid Date
 	
            Date/Time
 	
            8
 
	
            Pool Claim Amount Paid
 	
            Currency
 	
            8
 
	
            Pool Claim Resubmit Date
 	
            Date/Time
 	
            8
 
	
            FHA Part A Claim Filed Date
 	
            Date/Time
 	
            8
 
	
            FHA Part A Claim Amount
 	
            Currency
 	
            8
 
	
            FHA Part A Claim Paid Date
 	
            Date/Time
 	
            8
 
	
            FHA Part A Claim Paid Amount
 	
            Currency
 	
            8
 
	
            FHA Part B Claim Filed Date
 	
            Date/Time
 	
            8
 
	
            FHA Part B Claim Amount
 	
            Currency
 	
            8
 
	
            FHA Part B Claim Paid Date
 	
            Date/Time
 	
            8
 
	
            FHA Part B Claim Paid Amount
 	
            Currency
 	
            8
 
	
            VA Claim Filed Date
 	
            Date/Time
 	
            8
 
	
            VA Claim Paid Date
 	
            Date/Time
 	
            8
 
	
            VA Claim Paid Amount
 	
            Currency
 	
            8
 

 

 

The Loss Mit Type field should show the approved Loss Mitigation arrangement.  The following are acceptable:

	
            l
 	
            ASUM-
 	
            Approved Assumption
 
	
            l
 	
            BAP-
 	
            Borrower Assistance Program
 
	
            l
 	
            CO-
 	
            Charge Off
 
	
            l
 	
            DIL-
 	
            Deed-in-Lieu
 
	
            l
 	
            FFA-
 	
            Formal Forbearance Agreement
 
	
            l
 	
            MOD-
 	
            Loan Modification
 
	
            l
 	
            PRE-
 	
            Pre-Sale
 
	
            l
 	
            SS-
 	
            Short Sale
 
	
            l
 	
            MISC-
 	
            Anything else approved by the PMI or Pool Insurer
 

Wells Fargo Bank will accept alternative Loss Mitigation Types to those above, provided that they are consistent with industry standards.  If Loss Mitigation Types other than those above are used, the Servicer must supply Wells Fargo Bank with a description of each of the Loss Mitigation Types prior to sending the file.

The Occupant Code field should show the current status of the property.  The acceptable codes are:

	
            l
 	
            Mortgagor
 
	
            l
 	
            Tenant
 
	
            l
 	
            Unknown
 
	
            l
 	
            Vacant
 

The Property Condition field should show the last reported condition of the property.  The acceptable codes are:

	
            l
 	
            Damaged
 
	
            l
 	
            Excellent
 
	
            l
 	
            Fair
 
	
            l
 	
            Gone
 
	
            l
 	
            Good
 
	
            l
 	
            Poor
 
	
            l
 	
            Special Hazard
 
	
            l
 	
            Unknown
 

 

 

The FNMA Delinquent Reason Code field should show the Reason for Default.   The following FNMA Delinquency Reason Codes to be used are below.

	
            Delinquency Code
 	
            Delinquency Description
 
	
            001
 	
            FNMA-Death of principal mortgagor
 
	
            002
 	
            FNMA-Illness of principal mortgagor
 
	
            003
 	
            FNMA-Illness of mortgagor’s family member
 
	
            004
 	
            FNMA-Death of mortgagor’s family member
 
	
            005
 	
            FNMA-Marital difficulties
 
	
            006
 	
            FNMA-Curtailment of income
 
	
            007
 	
            FNMA-Excessive Obligation
 
	
            008
 	
            FNMA-Abandonment of property
 
	
            009
 	
            FNMA-Distant employee transfer
 
	
            011
 	
            FNMA-Property problem
 
	
            012
 	
            FNMA-Inability to sell property
 
	
            013
 	
            FNMA-Inability to rent property
 
	
            014
 	
            FNMA-Military Service
 
	
            015
 	
            FNMA-Other
 
	
            016
 	
            FNMA-Unemployment
 
	
            017
 	
            FNMA-Business failure
 
	
            019
 	
            FNMA-Casualty loss
 
	
            022
 	
            FNMA-Energy environment costs
 
	
            023
 	
            FNMA-Servicing problems
 
	
            026
 	
            FNMA-Payment adjustment
 
	
            027
 	
            FNMA-Payment dispute
 
	
            029
 	
            FNMA-Transfer of ownership pending
 
	
            030
 	
            FNMA-Fraud
 
	
            031
 	
            FNMA-Unable to contact borrower
 
	
            INC
 	
            FNMA-Incarceration
 

 

 

The FNMA Delinquent Status Code field should show the Status of Default.   The following FNMA Delinquency Status Codes to be used are below.

	
            Status Code
 	
            Status Description
 
	
            09
 	
            Forbearance
 
	
            17
 	
            Pre-foreclosure Sale Closing Plan Accepted
 
	
            24
 	
            Government Seizure
 
	
            26
 	
            Refinance
 
	
            27
 	
            Assumption
 
	
            28
 	
            Modification
 
	
            29
 	
            Charge-Off
 
	
            30
 	
            Third Party Sale
 
	
            31
 	
            Probate
 
	
            32
 	
            Military Indulgence
 
	
            43
 	
            Foreclosure Started
 
	
            44
 	
            Deed-in-Lieu Started
 
	
            49
 	
            Assignment Completed
 
	
            61
 	
            Second Lien Considerations
 
	
            62
 	
            Veteran’s Affairs-No Bid
 
	
            63
 	
            Veteran’s Affairs-Refund
 
	
            64
 	
            Veteran’s Affairs-Buydown
 
	
            65
 	
            Chapter 7 Bankruptcy
 
	
            66
 	
            Chapter 11 Bankruptcy
 
	
            67
 	
            Chapter 13 Bankruptcy
 

 

 

EXHIBIT H

WELLS FARGO BANK,  N.A.

Form 332

Calculation of Realized Loss

Purpose

To provide the Servicer with a form for the calculation of any Realized Loss (or gain) as a result of a Mortgage Loan having been foreclosed and Liquidated.

Distribution

The Servicer will prepare the form in duplicate and send the original together with evidence of conveyance of title and appropriate supporting documentation to the Master Servicer with the Monthly Accounting Reports which supports the Mortgage Loan’s removal from the Mortgage Loan Activity Report.  The Servicer will retain the duplicate for its own records.

Due Date

With respect to any liquidated Mortgage Loan, the form will be submitted to the Master Servicer no later than the date on which statements are due to the Master Servicer under Section 4.02 of this Agreement (the “Statement Date”) in the month following receipt of final liquidation proceeds and supporting documentation relating to such liquidated Mortgage Loan; provided, that if such Statement Date is not at least 30 days after receipt of final liquidation proceeds and supporting documentation relating to such liquidated Mortgage Loan, then the form will be submitted on the first Statement Date occurring after the 30th day following receipt of final liquidation proceeds and supporting documentation.

Preparation Instructions

The numbers on the form correspond with the numbers listed below.

	
            1.
 	
            The actual Unpaid Principal Balance of the Mortgage Loan.
 
	
            2.
 	
            The Total Interest Due less the aggregate amount of servicing fee that would have been earned if all delinquent payments had been made as agreed.
 
	
            3-7.
 	
            Complete as necessary.  All line entries must be supported by copies of appropriate statements, vouchers, receipts, canceled checks, etc., to document the expense.  Entries not properly documented will not be reimbursed to the Servicer.
 
	
            8.
 	
            Accrued Servicing Fees based upon the Scheduled Principal Balance of the Mortgage Loan as calculated on a monthly basis.
 
	
            10.
 	
            The total of lines 1 through 9.
 

Credits

 

 

 

	
            11-17.
 	
            Complete as necessary.  All line entries must be supported by copies of the appropriate claims forms, statements, payment checks, etc.  to document the credit.  If the Mortgage Loan is subject to a Bankruptcy Deficiency, the difference between the Unpaid Principal Balance of the Note prior to the Bankruptcy Deficiency and the Unpaid Principal Balance as reduced by the Bankruptcy Deficiency should be input on line 16.
 
	
            18.
 	
            The total of lines 11 through 17.
 

Total Realized Loss (or Amount of Any Gain)

	
            19.
 	
            The total derived from subtracting line 18 from 10.  If the amount represents a realized gain, show the amount in parenthesis (   ).
 

 

 

WELLS FARGO BANK,  N.A.

CALCULATION OF REALIZED LOSS

WELLS FARGO BANK,  N.A. Trust:  ___________________________

	
            Prepared by:  __________________
 	
            Date:  _______________
 

Phone:  ______________________

	
            Servicer Loan No.
 	
            Servicer Name
 	
            Servicer Address
 

WELLS FARGO BANK, N.A.

Loan No._____________________________

Borrower’s Name:________________________________________________________

Property

Address:________________________________________________________________

Liquidation and Acquisition Expenses:

	
            Actual Unpaid Principal Balance of Mortgage Loan
 	
            $ _______________(1)
 
	
            Interest accrued at Net Rate
 	
            ________________(2)
 	
             

	
            Attorney’s Fees
 	
            ________________(3)
 	
             

	
            Taxes
 	
            ________________(4)
 	
             

	
            Property Maintenance
 	
            ________________(5)
 	
             

	
            MI/Hazard Insurance Premiums
 	
            ________________(6)
 	
             

	
            Hazard Loss Expenses
 	
            ________________(7)
 	
             

	
            Accrued Servicing Fees
 	
            ________________(8)
 	
             

	
            Other (itemize)
 	
            ________________(9)
 	
             

	
            _________________________________________
 	
            $ _________________
 	
             

	
            _________________________________________
 	
            __________________
 	
             

	
            _________________________________________
 	
            __________________
 	
             

	
            _________________________________________
 	
            __________________
 	
             

	
            Total Expenses
 	
            $ ______________(10)
 	
             

														

Credits:

	
            Escrow Balance
 	
            $ ______________(11)
 	
             

	
            HIP Refund
 	
            ________________(12)
 	
             

	
            Rental Receipts
 	
            ________________(13)
 	
             

	
            Hazard Loss Proceeds
 	
            ________________(14)
 	
             

	
            Primary Mortgage Insurance Proceeds
 	
            ________________(15)
 	
             

	
            Proceeds from Sale of Acquired Property
 	
            ________________(16)
 	
             

	
            Other (itemize)
 	
            ________________(17)
 	
             

	
            _________________________________________
 	
            ___________________
 
	
            _________________________________________
 	
            ___________________
 
	
            Total Credits
 	
            $________________(18)
 	
             

										

Total Realized Loss (or Amount of Gain)                   $________________(19)

 

 

EXHIBIT N

CUSTODIAL AGREEMENT

THIS CUSTODIAL AGREEMENT (as amended and supplemented from time to time, the “Agreement”), dated as of June 17, 2005, by and among HSBC BANK USA, NATIONAL ASSOCIATION, not individually but solely as trustee under the Pooling and Servicing Agreement defined below (including its successors under the Pooling and Servicing Agreement defined below, the “Trustee”), OPTEUM MORTGAGE ACCEPTANCE CORPORATION, as depositor (together with any successor in interest, the “Company”), WELLS FARGO BANK, N.A., as master servicer and securities administrator (together with any successor in interest or successor under the Pooling and Servicing Agreement referred to below, the “Master Servicer”) and WELLS FARGO BANK, N.A., as custodian (together with any successor in interest or any successor appointed hereunder, the “Custodian”).

WITNESSETH THAT:

WHEREAS, the Company, the Master Servicer, the Securities Administrator and the Trustee have entered into a Pooling and Servicing Agreement, dated as of June 1, 2005, relating to the issuance of OMAC  Mortgage  Trust 2005-3, Asset-Backed Pass-Through Certificates, Series 2005-3 (as in effect on the date of this Agreement, the “Original Pooling and Servicing Agreement,” and as amended and supplemented from time to time, the “Pooling and Servicing Agreement’); and

WHEREAS, the Custodian has agreed to act as agent for the Trustee for the purposes of receiving and holding certain documents and other instruments delivered by the Company or the Master Servicer under the Pooling and Servicing Agreement, all upon the terms and conditions and subject to the limitations hereinafter set forth;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter set forth, the Trustee, the Company, the Master Servicer, the Securities Administrator and the Custodian hereby agree as follows:

SECTION 1.

DEFINITIONS

1.1        Capitalized terms used in this Agreement and not defined herein shall have the meanings assigned in the Original Pooling and Servicing Agreement, unless otherwise required by the context herein.

SECTION 2.

CUSTODY OF MORTGAGE DOCUMENTS

 

 

2.1        Custodian to Act as Agent: Acceptance of Mortgage Files.  The  Custodian, as the duly appointed custodial agent of the Trustee for these purposes, acknowledges (subject to any exceptions noted in the Initial Certification referred to in Section 2.3(a)), receipt of the Mortgage Files relating to the Mortgage Loans identified on the schedule attached hereto (the “Mortgage Files”) and declares that it holds and will hold such Mortgage Files as agent for the Trustee, in trust, for the use and benefit of all present and future Certificateholders.

2.2        Recordation of Assignments. Within 30 days after the Closing Date, the Company shall complete or cause to be completed the Assignments in the name of “HSBC Bank USA, National Association, as trustee under the Pooling and Servicing Agreement relating to Opteum Mortgage Acceptance Corporation, Asset-Backed Pass-Through Certificates, Series 2005-3” (or shall prepare or cause to be prepared new forms of Assignment in the name of the Trustee).  For each Mortgaged Property in a state, if any, which is specifically excluded from the Opinion of Counsel delivered by the Company to the Trustee and the Custodian, each such Assignment shall be recorded in the appropriate public office for real property records, and returned to the Custodian, at no expense to the Custodian.

	
            2.3
 	
            Review of Mortgage Files.
 

(a)        On or prior to the Closing Date, in accordance with Section 2.02 of the Pooling and Servicing Agreement, the Custodian shall deliver to the Trustee an Initial Certification in the form annexed hereto as Exhibit One evidencing receipt (subject to any exceptions noted therein) of a Mortgage File for each of the Mortgage Loans listed on the Schedule attached hereto (the “Mortgage Loan Schedule”).

(b)        Not later than 180 days after the Closing Date, the Custodian shall review the Mortgage Files as provided in Section 2.02 of the Pooling and Servicing Agreement and deliver to the Company and the Trustee a Final Certification in the form annexed hereto as Exhibit Two evidencing the completeness of the Mortgage Files.

(c)        In reviewing the Mortgage Files as provided herein and in the Pooling and Servicing Agreement, the Custodian shall make no representation as to and shall not be responsible to verify (i) the validity, legality, enforceability, due authorization, recordability, sufficiency or genuineness of any of the documents included in any Mortgage File or (ii) the collectibility, insurability, effectiveness or suitability of any of the documents in any Mortgage File.

Upon receipt of written request from the Trustee, the Custodian shall as soon as practicable supply the Trustee with a list of all of the documents relating to the Mortgage Loans missing from  the Mortgage Files.

2.4        Custodian to Cooperate: Release of Mortgage Files. Upon receipt of notice from the Trustee or the Master Servicer of a repurchase of a Mortgage Loan pursuant to the Mortgage Loan Purchase Agreement or the Pooling and Servicing Agreement, and that the purchase price therefore has been deposited in the Custodial Account or the Certificate Account, 

 

then the Custodian agrees to promptly release the related Mortgage File to the Seller or other party at the direction of the Trustee.

Upon the Custodian’s receipt of a request for release (a “Request for Release”) substantially in the form of Exhibit F to the Pooling and Servicing Agreement signed by a servicing officer of the Servicer or a Servicing Officer of the Master Servicer stating that it has received payment in full of a Mortgage Loan or that payment in full will be escrowed in a manner customary for such purposes, the Custodian agrees promptly to release to the Servicer or the Master Servicer the related Mortgage File. The Company shall deliver to the Custodian and the Custodian agrees to accept the Mortgage Note and other documents constituting the Mortgage File with respect to any Substitute Mortgage Loan.

From time to time as is appropriate for the servicing or foreclosure of any Mortgage Loan, including, for this purpose, collection under any Primary Insurance Policy, the Servicer (or if the Servicer does not, the Master Servicer) shall deliver to the Custodian a Request for Release signed by a Servicing Officer requesting that possession of the Mortgage File be released to the Servicer and certifying as to the reason for such release and that such release will not invalidate any insurance coverage provided in respect of the Mortgage Loan under any of the Insurance Policies. Upon receipt of the foregoing, the Custodian shall deliver the Mortgage File to the Servicer. The Servicer shall cause the Mortgage File or any document therein so released to be returned to the Custodian when the need therefore by the Servicer no longer exists, unless (i) the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the Custodial Account or the Certificate Account or (ii) the Mortgage File or such document has been delivered to an attorney, or to a public trustee or other public official as required by law, for purposes of initiating or pursuing legal action or other proceedings for the foreclosure of the Mortgaged Property either judicially or non-judicially, and the Servicer has delivered to the Custodian a certificate of a servicing officer certifying as to the name and address of the Person to which such Mortgage File or such document was delivered and the purpose or purposes of such delivery.

At any time that the Servicer is required to deliver to the Custodian a Request for Release, the Servicer shall deliver two copies of the Request for Release if delivered in hard copy or the Servicer may furnish such Request for Release electronically in a form acceptable to the Custodian, in which event the servicing officer transmitting the same shall be deemed to have signed the Request for Release. In connection with any Request for Release of a Mortgage File because of a repurchase of a Mortgage Loan, such Request for Release shall be followed by an assignment of mortgage, without recourse, representation or warranty from the Trustee to the Seller and the related Mortgage Note shall be endorsed without recourse by the Trustee and be returned to the Seller. In connection with any Request for Release of a Mortgage File because of the payment in full of a Mortgage Loan, such Request for
Release shall be accompanied by a certificate of satisfaction or other similar instrument to be executed by or on behalf of the Trustee and returned to the Servicer.

 

 

2.5        Assumption Agreements. In the event that any assumption agreement, substitution of liability agreement or sale of servicing agreement is entered into with respect to any Mortgage Loan subject to this Agreement in accordance with the terms and provisions of the Pooling and Servicing Agreement, the Master Servicer, to the extent provided in the Servicing Agreement, shall enforce the obligation of the Servicer to notify the Custodian that such assumption or substitution agreement has been completed by forwarding to the Custodian the original of such assumption or substitution agreement, which shall be added to the related Mortgage File and, for all purposes, shall be considered a part of such Mortgage File to the same extent as all other documents and instruments constituting parts thereof.

2.6        Endorsement of Mortgage Notes. Within 45 days after the Closing Date, the Custodian shall endorse each Mortgage Note in the name of “HSBC Bank USA, National Association, as trustee under the Pooling and Servicing Agreement relating to Opteum Mortgage Acceptance Corporation, Asset-Backed Pass-Through Certificates, Series 2005-3”.

SECTION 3.

CONCERNING THE CUSTODIAN

3.1        Custodian as Bailee and Agent of the Trustee. With respect to each Mortgage Note, Mortgage and other documents constituting each Mortgage File which are delivered to the Custodian, the Custodian is exclusively the bailee and custodial agent of the Trustee and has no instructions to hold any Mortgage Note or Mortgage for the benefit of any person other than the Trustee and the Certificateholders and undertakes to perform such duties and only such duties as are specifically set forth in this Agreement and in the Pooling and Servicing Agreement. Except upon compliance with the provisions of Section 2.4 of this Agreement, no Mortgage Note, Mortgage or Mortgage File shall be delivered by the Custodian to the Company, the Servicer or the Master Servicer or otherwise released from the possession of the Custodian.

3.2        Custodian May Own Certificates.  The Custodian in its individual or any other capacity may become the owner or pledgee of Certificates with the same rights it would have if it were not Custodian.

3.3        Master Servicer to Pay Custodian’s Fees and Expenses. The Master Servicer covenants and agrees to pay to the Custodian from time to time, and the Custodian shall be entitled to, reasonable compensation for all services rendered by it in the exercise and performance of any of the powers and duties hereunder of the Custodian, and the Master Servicer will pay or reimburse the Custodian upon its request for all reasonable expenses, disbursements and advances incurred or made by the Custodian in accordance with any of the provisions of this Agreement (including the reasonable compensation and the expenses and disbursements of its counsel and of all persons not regularly in its employ), except any such expense, disbursement or advance as may arise from its negligence or bad faith or to the
extent that such cost or expense is indemnified by the Trust Fund pursuant to the Pooling and Servicing Agreement.

 

 

3.4        Custodian May Resign; Trustee May Remove Custodian. The Custodian may resign from the obligations and duties hereby imposed upon it as such obligations and duties relate to its acting as Custodian of the Mortgage Loans. Upon receiving such written notice of resignation, the Trustee shall either take custody of the Mortgage Files itself and give prompt written notice thereof to the Company, the Master Servicer, the Securities Administrator and the Custodian, or promptly appoint a successor Custodian by written instrument, in duplicate, one copy of which instrument shall be delivered to the resigning Custodian and one copy to the successor Custodian. If the Trustee shall not have taken custody of the Mortgage Files and no successor Custodian shall have been so appointed and have accepted
appointment within 30 days after the giving of such written notice of resignation, the resigning Custodian may petition any court of competent jurisdiction for the appointment of a successor Custodian.

The Trustee may, with or without cause, upon at least 60 days notice remove and discharge the Custodian from the performance of its duties with the consent of the Master Servicer. In such event, the Trustee shall appoint, or petition a court of competent jurisdiction to appoint, a successor Custodian hereunder. Any successor Custodian shall be a depository institution subject to supervision or examination by federal or state authority, shall be able to satisfy the other requirements contained in Section 3.6 hereof and shall be unaffiliated with the Servicer or the Company.

Any resignation or removal of the Custodian and appointment of a successor Custodian pursuant to any of the provisions of this Section 3.4 shall become effective upon acceptance of appointment by the successor Custodian. The Trustee shall give prompt notice to the Company and the Master Servicer of the appointment of any successor Custodian. No successor Custodian shall be appointed by the Trustee without the prior approval of the Company and the Master Servicer.

3.5        Merger or Consolidation of Custodian. Any Person into which the Custodian may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Custodian shall be a party, or any Person succeeding to the business of the Custodian, shall be the successor of the Custodian hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

3.6        Representations of the Custodian. The Custodian hereby represents that it is a depository institution subject to supervision or examination by a federal or state authority, has a combined capital and surplus of at least $15,000,000 and is qualified to do business in the jurisdictions in which it will hold any Mortgage File.

3.7        Standard of Care; Indemnification. Neither the Custodian nor any parent, affiliate, subsidiaries, directors, officers, agents or employees shall have any liability arising from or related to this Custodial Agreement or any related document or agreement, except for any such liability resulting from the Custodian’s negligence or willful misconduct. The Custodian shall be indemnified and held harmless from the Trust Fund to the extent provided in Section 6.03 of the Pooling and Servicing Agreement.

 

 

3.8        Reliance; Limitation of Custodian’s Duties.       The Custodian shall have no duties or obligations other than those specifically set forth herein or as may subsequently be agreed to in writing by the parties hereto. The Custodian: (a) may consult with counsel and any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with such Opinion of Counsel; and shall not be liable for any error of judgment, or for any act done or step taken or omitted by it, in good faith, except for any such liability resulting from the Custodian’s negligence or willful misconduct; (b) shall use the same degree of care and skill as is reasonably
expected of financial institutions acting in comparable capacities, provided that this subsection shall not be interpreted to impose upon the Custodian a higher standard of care than that set forth above; (c) will be regarded as making no representations and having no responsibilities (except as expressly set forth herein) as to the validity, sufficiency, value, genuineness, ownership or transferability of the Mortgage Loans, and will not be required to and will not make any representations as to the validity, value, genuineness, ownership or transferability of the Mortgage Loans; (d) may rely on and shall be protected in acting upon any certificate, instrument, opinion, notice, letter, telegram, facsimile or other document delivered to it and in good faith believed by it to be genuine and to have been signed by the proper party or parties; and (e) may rely on and shall be protected in acting upon the written instructions of the Company or the Trustee and such employees and
representatives of the Company or the Trustee as the Company or the Trustee may hereinafter designate in writing.

Section 4.

MISCELLANEOUS PROVISIONS

4.1.       Notices.  All notices, requests, consents and demands and other communications required under this Agreement or pursuant to any other instrument or document delivered hereunder shall be in writing and, unless otherwise specifically provided, may be delivered personally, by telegram or telex, or by registered or certified mail, postage prepaid, return receipt requested, at the addresses specified on the signature page hereof (unless changed by the particular party whose address is stated herein by similar notice in writing), in which case the notice will be deemed delivered when received.

4.2.       Amendments.   No modification or amendment of or supplement to this Agreement shall be valid or effective unless the same is in writing and signed by all parties hereto, and neither the Company, the Master Servicer, the Securities Administrator, nor the Trustee shall enter into any amendment hereof except as permitted by the Pooling and Servicing Agreement. The Trustee shall give prompt notice to the Custodian of any amendment or supplement to the Pooling and Servicing Agreement and furnish the Custodian with written copies thereof.

4.3.       GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

 

 

4.4.       Recordation of Agreement. To the extent permitted by applicable law, this Agreement is subject to recordation in all appropriate public offices for real property records in all the counties or other comparable jurisdictions in which any or all of the properties subject to the Mortgages are situated, and in any other appropriate public recording office or elsewhere, such recordation to be effected by the Company and at the Trust’s expense, but only upon direction accompanied by an Opinion of Counsel reasonably satisfactory to the Company to the effect that the failure to effect such recordation is likely to materially and adversely affect the interests of the Certificateholders.

For the purpose of facilitating the recordation of this Agreement as herein provided and for other purposes, this Agreement may be executed simultaneously in any number of counterparts, each of which counterparts shall be deemed to be an original, and such counterparts shall constitute but one and the same instrument.

4.5        Severability of Provisions.  If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement or of the Certificates or the rights of the holders thereof.

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, this Agreement is executed as of the date first above written.

 

	
            Address:

452 Fifth Avenue

New York, New York 10018

Attention:

Telecopy:

Confirmation:
 	
            HSBC Bank USA, National Association, not individually but solely as Trustee

By:__________________________________

Name:

Title:  
 
	
            Address:

W. 115 Century Road

Paramus, New Jersey 07652
 	
            OPTEUM MORTGAGE ACCEPTANCE CORPORATION

By:__________________________________

Name:

Title:

 
 
	
            Address:

9062 Old Annapolis Road

Columbia, Maryland 21045

 
 	
            WELLS FARGO BANK, N.A., as Master Servicer

By:__________________________________

Name:

Title:

 
 
	
            Address:

9062 Old Annapolis Road

Columbia, Maryland 21045

 
 	
            WELLS FARGO BANK, N.A., as Custodian

By:__________________________________

Name:

Title:                   
 

 

 

 

 

	
            STATE OF NEW YORK
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF NEW YORK
 	
            )
 	
             
 

 

On the  ___ day of June 2005 before me, a notary public in and for said State, personally appeared ____________________, known to me to be a _______________ of HSBC  Bank USA, National Association, a national banking association that executed the within instrument, and also known to me to be the person who executed it on behalf of said corporation and acknowledged to me that such corporation executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

	
             
 	
            
 
 
 
	
             
 	
            Notary Public
 

 

 [SEAL]

 

 

 

	
            STATE OF MARYLAND
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF HOWARD
 	
            )
 	
             
 

 

On the ___ day of June 2005 before me, a notary public in and for said State, personally appeared ______________, known to me to be an ___________________ of Wells Fargo Bank, N.A., a national banking association that executed the within instrument, and also known to me to be the person who executed it on behalf of said national banking association, and acknowledged to me that such national banking association executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

	
             
 	
            
 
 
 
	
             
 	
            Notary Public
 

 

 [SEAL]

 

 

 

	
            STATE OF NEW JERSEY
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF BERGEN
 	
            )
 	
             
 

 

On the ___ day of June 2005 before me, a notary public in and for said State, personally appeared _______________, known to me to be a _____________ of Opteum Mortgage Acceptance Corporation, one of the corporations that executed the within instrument, and also known to me to be the person who executed it on behalf of said corporation, and acknowledged to me that such corporation executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

	
             
 	
            
 
 
 
	
             
 	
            Notary Public
 

 

 [Notarial Seal]

 

 

 

	
            STATE OF MARYLAND
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF HOWARD
 	
            )
 	
             
 

 

On the ___ day of June 2005 before me, a notary public in and for said State, personally appeared ______________, known to me to be an ___________________ of Wells Fargo Bank, N.A., a national banking association that executed the within instrument, and also known to me to be the person who executed it on behalf of said national banking association, and acknowledged to me that such national banking association executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

	
             
 	
            
 
 
 
	
             
 	
            Notary Public
 

 

 [Notarial Seal]

 

 

EXHIBIT ONE

FORM OF INITIAL CERTIFICATION

June 17, 2005

 

	
            HSBC Bank USA, National Association

452 Fifth Avenue

New York, New York 10018
 	
            Opteum Mortgage Acceptance Corporation

W. 115 Century Road

Paramus, New Jersey 07652
 

 

Attention: Opteum Mortgage Acceptance Corporation,

OMAC  Mortgage Trust 2005-3, Asset-Backed Pass-Through Certificates, Series 2005-3

	
            Re:
 	
            Custodial Agreement, dated as of June 17, 2005, by and among HSBC Bank USA, National Association, Opteum Mortgage Acceptance Corporation and Wells Fargo Bank, N.A. relating to OMAC  Mortgage Trust 2005-3, Asset-Backed Pass-Through Certificates, Series 2005-3 
 

 

Ladies and Gentlemen:

In accordance with Section 2.3 of the above-captioned Custodial Agreement and subject to Section 2.02 of the Pooling and Servicing Agreement, dated as of June 1, 2005 among Opteum Mortgage Acceptance Corporation, HSBC Bank USA, National Association, and Wells Fargo Bank, N.A., the undersigned, as custodian (the “Custodian”), hereby certifies that as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on the attachment hereto) it has reviewed the Mortgage File, and has determined that: (1) all documents required to be included in the Mortgage File are in its possession and (2) such documents have been reviewed by it and appear regular on their face and relate to such Mortgage Loan.

The Custodian has made no independent examination of any documents contained in each Mortgage File beyond the review specifically required in the above-referenced Custodial and Pooling and Servicing Agreements. The Custodian makes no representations as to and shall not be responsible to verify: (i) the validity, legality, sufficiency, enforceability, due authorization, recordability or genuineness of any of the documents contained in each Mortgage File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the collectability, insurability, effectiveness or suitability of any such Mortgage Loan, or (iii) the existence of any assumption, modification, written assurance or substitution agreement with respect to any Mortgage File if no such documents appear in the Mortgage File delivered to the Custodian.

Capitalized words and phrases used herein shall have the respective meanings assigned to them in the above-captioned Custodial Agreement.

 

 

 

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            WELLS FARGO BANK, N.A., as Custodian

 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
             
 

 

 

EXHIBIT TWO

FORM OF FINAL CERTIFICATION

__________, 20__

 

	
            HSBC Bank USA, National Association

452 Fifth Avenue

New York, New York 10018
 	
            Opteum Mortgage Acceptance Corporation

W. 115 Century Road

Paramus, New Jersey 07652
 

 

Attention: Opteum Mortgage Acceptance Corporation,

OMAC  Mortgage Trust 2005-3, Asset-Backed Pass-Through Certificates, Series 2005-3

	
            Re:
 	
            Custodial Agreement, dated as of June 17, 2005, by and among HSBC Bank USA, National Association, Opteum Mortgage Acceptance Corporation and Wells Fargo Bank, N.A. relating to OMAC  Mortgage Trust 2005-3, Asset-Backed Pass-Through Certificates, Series 2005-3
 

 

Ladies and Gentlemen:

In accordance with Section 2.3 of the above-captioned Custodial Agreement and subject to Section 2.02 of the Pooling and Servicing Agreement, the undersigned, as Custodian, hereby certifies that it has received a Mortgage File with respect to each Mortgage Loan listed in the Mortgage Loan Schedule containing with respect to each Mortgage Loan:

(i)         the original Mortgage Note (including all riders thereto) bearing all intervening endorsements necessary to show a complete chain of endorsements from the original payee, endorsed “Pay to the order of _____without recourse”, via original signature, and, if previously endorsed, signed in the name of the last endorsee by a duly qualified officer of the last endorsee or, with respect to any Mortgage Loan as to which the original Mortgage Note has been permanently lost or destroyed and has not been replaced, a Lost Note Affidavit. If the Mortgage Loan was acquired by the last endorsee in a merger, the endorsement must be by “[name of last endorsee], successor by merger to [name of the predecessor].” If the Mortgage Loan was acquired or originated by the last endorsee while doing business under
another name, the endorsement must be by “[name of last endorsee], formerly known as [previous name].” The Custodian has endorsed the Mortgage Note in the name of “HSBC Bank USA, National Association, as trustee under the Pooling and Servicing Agreement relating to Opteum Mortgage Acceptance Corporation, Asset-Backed Pass-Through Certificates, Series 2005-3” for each Mortgage Note;

(ii)         The original recorded Mortgage, noting the presence of the MIN of the Mortgage Loan and either language indicating that the Mortgage Loan is a MOM loan or 

 

if the Mortgage Loan was not a MOM loan at origination, the original Mortgage and the assignment thereof to MERS, with evidence of recording indicated thereon; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation or such office as a matter of policy does not return the original of such document or if such original Mortgage has been lost, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office, if available;

(iii)        the original Assignment of Mortgage in blank, in form and substance acceptable for recordation in the jurisdiction in which the related mortgage property is located and signed in the name of the Last Endorsee by an authorized officer; unless the Mortgage Loan is registered on the MERS system;

(iv)        The original intervening Assignments, if any and if available, with evidence of recording thereon, showing an unbroken chain of title to the Mortgage from the originator thereof to Person assigning it to the Trustee (or to MERS, if the Mortgage Loan is registered on the MERS® System); provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation or such office as a matter of policy does not return the original of such document, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office, if available;

(v)        The originals of each assumption, modification or substitution agreement, if any and if available, relating to the Mortgage Loan; and

(vi)        the original title insurance policy, or, if such policy has not been issued, any one of an original or a copy of the preliminary title report, title binder or title commitment on the Mortgaged Property with the original policy of the insurance to be delivered promptly following the receipt thereof;

Capitalized words and phrases used herein shall have the respective meanings assigned to them in the above-captioned Custodial Agreement or in the Pooling and Servicing Agreement, as applicable.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            WELLS FARGO BANK, N.A., as Custodian

 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
            
 
 
 

 

 

EXHIBIT O

 

INTEREST RATE SWAP AGREEMENT

(Available Upon Request)

 

 

EXHIBIT P

FORM OF MORTGAGE LOAN PURCHASE AGREEMENT

T his MORTGAGE LOAN PURCHASE AGREEMENT (this “Agreement”), dated as of June 1, 2005 (the “Cut-off Date”), is made between Opteum Financial Services, LLC (the “Seller”) and Opteum Mortgage Acceptance Corporation (the “Purchaser”).

W I T N E S S E T H:

WHEREAS, the Seller owns the Mortgage Loans indicated on the Mortgage Loan Schedule attached as Exhibit 1 hereto (the “Mortgage Loans”), including rights to (a) any property acquired by foreclosure or deed in lieu of foreclosure or otherwise, and (b) the proceeds of any insurance policies covering the Mortgage Loans;

WHEREAS, the parties hereto desire that the Seller sell the Mortgage Loans to the Purchaser (other than the servicing rights with respect thereto), and that the Seller make certain representations and warranties and undertake certain obligations with respect to the Mortgage Loans;

WHEREAS, pursuant to the terms of a Pooling and Servicing Agreement, to be dated as of the Cut-off Date (the “Pooling and Servicing Agreement”), among the Purchaser, as seller, HSBC Bank USA, National Association, as trustee (the “Trustee”) and Wells Fargo Bank, N.A., as master servicer and securities administrator (the “Master Servicer”), the Purchaser will issue Asset-Backed Pass-Through Certificates, Series 2005-3 (the “Certificates”);

NOW, THEREFORE, inconsideration of the mutual covenants herein contained, the parties hereto agree as follows:

 

 

 

 

ARTICLE I

 

DEFINITIONS

Section 1.01           Definitions.  For all purposes of this Mortgage Loan Purchase Agreement, except as otherwise expressly provided herein or unless the context otherwise requires, capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Pooling and Servicing Agreement. All other capitalized terms used herein shall have the meanings specified herein.

 

 

ARTICLE II

 

SALE OF MORTGAGE LOANS AND RELATED PROVISIONS

	
            Section 2.01
 	
            Sale of Mortgage Loans.  
 

(a)          The Seller, by the execution and delivery of this Agreement, does hereby sell, assign, set over, and otherwise convey to the Purchaser, without recourse but subject to the terms of this Agreement, (i) all of its right, title and interest in the Mortgage Loans identified on Exhibit 1 as of the Closing Date, including the related Cut-off Date Principal Balance, all interest accruing thereon on and after the Cut-off Date, and all collections of interest and principal due after the Cut-off Date, other than the servicing rights with respect thereto, (ii) the Seller’s interest in any insurance policies and (iii) all proceeds of the foregoing.

(b)         In connection with any transfer pursuant to this Section 2.1, the Seller agrees (i) to cause the books and records of the Seller to indicate that the Mortgage Loans have been sold to the Purchaser pursuant to this Agreement and (ii) to deliver to the Purchaser the Mortgage Loan Schedule which is attached as Exhibit 1 to this Agreement, and to the Pooling and Servicing Agreement, as which is incorporated by reference herein.

(c)          In connection with such conveyances by the Seller, the Seller shall on behalf of the Purchaser deliver to, and deposit with the Trustee, on or before the Closing Date, the following documents or instruments with respect to each Mortgage Loan:

(i)           the original Mortgage Note (including all riders thereto) bearing all intervening endorsements necessary to show a complete chain of endorsements from the original payee, endorsed “Pay to the order of _____without recourse”, via original signature, and, if previously endorsed, signed in the name of the last endorsee by a duly qualified officer of the last endorsee or, with respect to any Mortgage Loan as to which the original Mortgage Note has been permanently lost or destroyed and has not been replaced, a Lost Note Affidavit with indemnity. If the Mortgage Loan was acquired by the last endorsee in a merger, the endorsement must be by “[name of last endorsee], successor by merger to [name of the predecessor].” If the Mortgage Loan was acquired or originated by the last endorsee
while doing business under another name, the endorsement must be by “[name of last endorsee], formerly known as [previous name].”  Within 45 days after the Closing Date, the Seller shall endorse or cause to be endorsed the Mortgage Note in the name of “HSBC Bank USA, National Association, as trustee under the Pooling and Servicing Agreement relating to Opteum Mortgage Acceptance Corporation, Asset-Backed Pass-Through Certificates, Series 2005-3” for each Mortgage Note;

(ii)              The original recorded Mortgage, noting the presence of the MIN of the Mortgage Loan and language indicating that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM Loan, with evidence of recording indicated thereon; provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation or 

 

such office as a matter of policy does not return the original of such document or if such original Mortgage has been lost, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office, if available;

(iii)              unless the Mortgage Loan is registered on the MERS® System, an original duly executed Assignment of the Mortgage in recordable form from the Seller or the originator, as applicable, to “HSBC Bank USA, National Association, as trustee under the Pooling and Servicing Agreement relating to Opteum Mortgage Acceptance Corporation, Asset-Backed Pass-Through Certificates, Series 2005-3” for each Mortgage Note;

(iv)             The original intervening Assignments, if any and if available, with evidence of recording thereon, showing an unbroken chain of title to the Mortgage from the originator thereof to Person assigning it to the Trustee (or to MERS, if the Mortgage Loan is registered on the MERS® System and noting the presence of a MIN); provided that if such document is not included because of a delay by the public recording office where such document has been delivered for recordation or such office as a matter of policy does not return the original of such document, the Seller shall include or cause to be included a copy thereof certified by the appropriate recording office, if available;

(v)              The originals of each assumption, modification or substitution agreement, if any and if available, relating to the Mortgage Loan; and

(vi)             the original title insurance policy, or, if such policy has not been issued, any one of an original or a copy of the preliminary title report, title binder or title commitment on the Mortgaged Property with the original policy of the insurance to be delivered promptly following the receipt thereof;

The Seller need not cause to be recorded any Assignment in any jurisdiction under the laws of which, as evidenced by an Opinion of Counsel delivered by the Seller to the Trustee and the Rating Agencies, the recordation of such Assignment is not necessary to protect the Trustee’s interest in the related Mortgage Loan; provided, however, notwithstanding the delivery of any Opinion of Counsel, each Assignment shall be submitted for recording by the Seller, at no expense to the Trust or the Trustee, upon the earliest to occur of: (i) reasonable direction by the Holders of Certificates evidencing at least 25% of the Voting Rights, (ii) the occurrence of a Event of Default under the Pooling and Servicing Agreement, (iii) the occurrence of a bankruptcy, insolvency or foreclosure relating to the
Seller, (iv) the occurrence of a servicing transfer as described in Section 7.02 of the Pooling and Servicing Agreement and (v) if the Seller is not the Master Servicer, the occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor under the related Mortgage.  Upon receipt of written notice from the Trustee that recording of the Assignments is required pursuant to one or more of the conditions set forth in the preceding sentence, the Seller shall be required to deliver such Assignments for recording as provided above, promptly and in any event within 30 days following receipt of such notice.  The Seller shall furnish the Trustee, or its designated agent, with a copy of each Assignment submitted for recording.  In the event that any such Assignment is lost or returned unrecorded because of a defect therein, the Seller shall promptly have a 

 

substitute Assignment prepared or have such defect cured, as the case may be, and thereafter cause each such Assignment to be duly recorded.

To the extent an Assignment referred to in clause (c)(iii) above is required to be recorded (including, without limitation, Assignments for states which are not covered by the Opinion of Counsel in the prior paragraph), the Seller at its own expense shall complete and submit it for recording in the appropriate public office for real property records, with such Assignment completed in favor of the Trustee. While such Assignment to be recorded is being recorded, the Trustee shall retain a photocopy of such Assignment. If any Assignment is lost or returned unrecorded to the Trustee because of any defect therein, the Seller is required to prepare a substitute Assignment or cure such defect, as the case may be, and the Seller shall cause such substitute Assignment to be recorded in accordance with this paragraph.

Notwithstanding anything to the contrary contained in this Section 2.1, in those instances where the public recording office retains the original Mortgage after it has been recorded, the Seller shall be deemed to have satisfied its obligations hereunder upon delivery to the Trustee of a copy of such Mortgage certified by the public recording office to be a true and complete copy of the recorded original thereof.

If any Assignment is lost or returned unrecorded to the Trustee because of any defect therein, the Seller shall prepare a substitute Assignment or cure such defect, as the case may be, and the Seller shall cause such Assignment to be recorded in accordance with this Section 2.1.

If a defect in any Mortgage File is discovered which materially and adversely affects the value of the related Mortgage Loan, or the interests of the Certificateholders in such Mortgage Loan, including if any document required to be delivered to the Trustee has not been delivered (provided that a Mortgage File will not be deemed to contain a defect for an unrecorded Assignment under clause (c) (iii) above if the Seller has submitted such Assignment for recording pursuant to the terms of the following paragraph), the Seller shall either (i) purchase such Mortgage Loan from the Trust Fund at the Purchase Price within 90 days after the date on which the Seller was notified of such defect; provided, that if such defect would cause the Mortgage Loan to be other than a “qualified mortgage” as defined in Section 860G(a)(3) of the Code, any such cure or repurchase must occur within 90
days from the date such breach was discovered, or cure such defect, or (ii) substitute a Qualified Substitute Mortgage Loan for the related Mortgage Loan upon the same terms and conditions set forth in Section 3.1 hereof for substitutions.

The Seller shall exercise its best reasonable efforts to deliver or cause to be delivered to the Custodian on behalf of the Trustee within 120 days of the Closing Date, with respect to the Mortgage Loans, the original or a photocopy of the title insurance policy with respect to each such Mortgage Loan assigned to the Purchaser pursuant to this Section 2.1.

In connection with the assignment of any Mortgage Loan registered on the MERS® System, the Seller further agrees that it will cause, at the Seller’s own expense, as of the Closing Date, the MERS® System to indicate that such Mortgage Loans have been assigned by the Seller to the Trustee in accordance with this Agreement for the benefit of the 

 

Certificateholders by including (or deleting, in the case of Mortgage Loans which are repurchased in accordance with this Agreement) in such computer files (a) the code in the field which identifies the specific Trustee and (b) the code in the field “Pool Field” which  identifies the series of the Certificates issued in connection with such Mortgage Loans.  The Seller and the Purchaser further agree that they will not, and will not permit the Master Servicer to, alter the codes referenced in this paragraph with respect to any Mortgage Loan during the term of this Agreement unless and until such Mortgage Loan is repurchased in accordance with the terms of this Agreement.

The Purchaser hereby acknowledges its acceptance of all right, title and interest to the Mortgage Loans and other property, now existing and hereafter created, conveyed to it pursuant to this Section 2.1, other than with respect to servicing rights with respect to the Mortgage Loans.  In addition to the foregoing, on the Closing Date the Seller assigns to the Purchaser all of its right, title and interest in the Servicing Agreements.

(d)         The parties hereto intend that the transaction set forth herein constitutes a sale by the Seller to the Purchaser of all the Seller’s right, title and interest in and to the Mortgage Loans (other than with respect to the related servicing rights) and other property as and to the extent described above. In the event the transaction set forth herein is deemed not to be a sale, the Seller hereby grants to the Purchaser a security interest in (i) all of the Seller’s right, title and interest in, to and under the Mortgage Loans (other than with respect to the related servicing rights), (ii) all of Seller’s interest in any insurance policies and (iii) all proceeds of the foregoing and such other property, to secure all of the Seller’s obligations hereunder, and this Agreement shall constitute a security agreement
under applicable law. The Seller agrees to take or cause to be taken such actions and to execute such documents, including without limitation the filing of all necessary UCC-1 financing statements filed in the State of Delaware (which shall have been submitted for filing as of the Closing Date with respect to the aggregate Stated Principal Balance of the Mortgage Loans), any continuation statements with respect thereto and any amendments thereto required to reflect a change in the name or corporate structure of the Seller or the filing of any additional UCC-1 financing statements due to the change in the principal office of the Seller, as are necessary to perfect and protect the Purchaser’s interests in each Mortgage Loan and the proceeds thereof.

	
            Section 2.02
 	
            Payment of Purchase Price for the Mortgage Loans.  
 

(a)          The purchase price for the Mortgage Loans (other than with respect to the servicing rights thereto) shall be the sum of (1) $937,114,436.60 and (2) a 100% Percentage Interest in the Class P, Class C and Class R Certificates.

(b)        In consideration of the sale of the Mortgage Loans from the Seller to the Purchaser on the Closing Date, the Purchaser shall (1) pay to the Seller on the Closing Date by wire transfer of immediately available funds to a bank account designated by the Seller, the amount specified above in clause (a)(1) and (2) cause the transfer to the Seller of the Certificates in clause (a)(2).

 

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES;

REMEDIES FOR BREACH

Section 3.01           Seller Representations and Warranties.  The Seller hereby represents and warrants to the Purchaser as of the Closing Date (or if otherwise specified below, as of the date so specified) that:

	
            (a)
 	
            with respect to the Seller:
 

(i)               the Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware;

(ii)              the Seller 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 Seller of this Agreement have been duly authorized by all necessary corporate action on the part of the Seller; and neither the execution and delivery of this Agreement, nor the consummation of the transactions herein contemplated hereby, 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 Seller or its properties or the certificate of incorporation or by-laws of the Seller, except those conflicts, breaches or defaults which would not reasonably be expected to have a material adverse effect on the Seller’s ability to enter into this Agreement and to consummate the
transactions contemplated hereby;

(iv)             the execution, delivery and performance by the Seller of this Agreement and the consummation of the transactions contemplated hereby do not require the consent or approval of, the giving of notice to, the registration with, or the taking of any other action in respect of, any state, federal or other governmental authority or agency, except those consents, approvals, notices, registrations or other actions as have already been obtained, given or made and, in connection with the recordation of the Mortgages, powers of attorney or assignments of Mortgages not yet completed;

(v)              this Agreement has been duly executed and delivered by the Seller and, assuming due authorization, execution and delivery by the Purchaser, constitutes a valid and binding obligation of the Seller enforceable against it in accordance with its terms (subject to applicable bankruptcy and insolvency laws and other similar laws affecting the enforcement of the rights of creditors generally);

(vi)             to the best of the Seller’s knowledge, there are no actions, litigation, suits or proceedings pending or threatened against the Seller before or by 

 

any court, administrative agency, arbitrator or governmental body (i) with respect to any of the transactions contemplated by this Agreement or (ii) with respect to any other matter which in the judgment of the Seller if determined adversely to the Seller would reasonably be expected to materially and adversely affect the Seller’s ability to perform its obligations under this Agreement; and the Seller is not in default with respect to any order of any court, administrative agency, arbitrator or governmental body so as to materially and adversely affect the transactions contemplated by this Agreement; and

(vii)             the Seller’s chief executive office and principal place of business are located in the County of Bergen in the State of New Jersey.

	
            (b)
 	
            with respect to the Mortgage Loans:
 

(i)               as of the Cut-off Date, the information set forth in the Mortgage Loan Schedule hereto is true and correct in all material respects;

(ii)              immediately prior to the transfer to the Purchaser, the Seller was the sole owner of beneficial title and holder of, and had good title to, each Mortgage and Mortgage Note relating to the Mortgage Loans and is conveying the same free and clear of any and all liens, claims, encumbrances, participation interests, equities, pledges, charges or security interests of any nature and the Seller has full right and authority to sell or assign the same pursuant to this Agreement;

(iii)              no selection procedure reasonably believed by the Seller to be adverse to the interests of the Certificateholders or the Trust was utilized in selecting the Mortgage Loans;

(iv)             each Mortgage Loan constitutes a “qualified mortgage” under Section 860G(a)(3)(A) of the Code and Treasury Regulation Section 1.860G-2(a)(1);

(v)              the information set forth under the caption “The Mortgage Pool—General” and “—Mortgage Loan Characteristics” in the Prospectus Supplement is true and correct in all material respects;

(vi)             as of the Cut-off Date, no Mortgage Loan is 30 or more days past due. The Seller has not advanced funds, or induced, solicited or knowingly received any advance of funds from a party other than the owner of the related Mortgaged Property, directly or indirectly, for the payment of any amount required by the Mortgage Note or Mortgage;

(vii)             there are no delinquent taxes or assessment liens against the related Mortgaged Property;

(viii)            no default, breach, violation or waiver exists under the mortgage documents, and no modifications to the mortgage documents have been made that have not been reflected in the Mortgage Loan Schedule;

 

 

(ix)             all buildings upon, or comprising part of, the Mortgaged Property are insured by an insurer acceptable to Fannie Mae and Freddie Mac against loss by fire, hazards of extended coverage and such other hazards as are customary in the area where the Mortgaged Property is located, and such insurer is licensed to do business in the state where the Mortgaged Property is located. All such insurance policies contain a standard mortgagee clause naming the originator, its successors and assigns as mortgagee and Seller has received no notice that all premiums thereon have not been paid. The amount of the Mortgage Loan covered by these insurance policies is in accordance with the standards of Fannie Mae or Freddie Mac.  If upon origination of the Mortgage Loan, the Mortgaged Property was, or was
subsequently deemed to be, in an area identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards (and such flood insurance has been made available), which require under applicable law that a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration (or any successor thereto) be obtained, such flood insurance policy is in effect which policy is with a generally acceptable carrier in an amount representing coverage not less than the least of (A) the principal balance of the related Mortgage Loan, (B) the minimum amount required to compensate for damage or loss on a replacement cost basis, or (C) the maximum amount of insurance that is available under the Flood Disaster Protection Act of 1973. The Mortgage obligates the Mortgagor thereunder to maintain all such insurance at Mortgagor’s cost and expense and, on the Mortgagor’s failure to do so, authorizes the holder of the
Mortgage to maintain such insurance at Mortgagor’s cost and expense and to obtain reimbursement therefor from the Mortgagor;

(x)              all parties which have had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or during the period in which they held and disposed of such interest, were) in compliance with any and all applicable “doing business” and licensing requirements of the state wherein the Mortgaged Property is located;

(xi)             as of the Closing Date, there is no mechanics’ lien or claim for work, labor or material affecting the Mortgaged Property except those which are insured against by the title insurance policy;

(xii)             as of the Closing Date, there is no valid offset, defense or counterclaim to any Mortgage Note or Mortgage, and, to the best of the Seller’s knowledge or the knowledge of the related servicer, no such offset, defense or counterclaim has been asserted with respect thereto;

(xiii)            as of the Closing Date, the physical property subject to any Mortgage is free of material damage and is in good repair and, to the best of the Seller’s knowledge or the knowledge of the related servicer, there is no proceeding for the total or partial condemnation thereof;

 

 

(xiv)            all improvements which were considered in determining the appraised value of the related Mortgaged Property lay wholly within the boundaries and building restriction lines of the Mortgaged Property, and no improvements on adjoining properties encroach upon the Mortgaged Property;

(xv)            at the time of origination, no improvement located on or being part of the Mortgaged Property was in violation of any applicable zoning and subdivision laws or ordinances;

(xvi)            to the best of the Seller’s knowledge, all inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy, have been made or obtained from the appropriate authorities;

(xvii)           as of the origination date of each Mortgage Loan, the related Mortgaged Property is lawfully permitted to be occupied under applicable law;

(xviii)          each Mortgage Loan is and will be a mortgage loan arising out of the originator’s practice in accordance with the underwriting guidelines of the related originator.  The Seller has no knowledge of any fact that should have led it to expect at the time of the initial creation of an interest in the Mortgage Loan that such Mortgage Loan would not be paid in full when due;

(xix)            each original Mortgage has been recorded or is in the process of being recorded in the appropriate jurisdictions wherein such recordation is required to perfect the lien thereof for the benefit of the Trust Fund;

(xx)            if an Assignment is included in the Mortgage File, such Assignment is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is located;

(xxi)            the related Mortgage File contains each of the documents and instruments specified;

(xxii)           to the best of the Seller’s knowledge, the Mortgage Loans are being serviced according to the guidelines of the applicable servicer and the related Mortgage Loan;

(xxiii)          the Mortgage Note and the Mortgage have not been altered or modified in any material respect, except by a written instrument which has been recorded, and the substance of any such alteration or modification has been approved by the title insurer, to the extent required by the related policy.  No instrument of alteration or modification has been executed by the Seller or any other person in the chain of title from the Seller, and no Mortgagor has been released, in whole or in part, except in connection with an assumption agreement approved by the title insurer;

 

 

(xxiv)          the Mortgage has not been satisfied, subordinated, rescinded or canceled, in whole or in part, and the Mortgaged Property has not been released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would effect any such satisfaction, subordination, rescission, cancellation or release;

(xxv)           a lender’s title policy or binder, or other assurance of title insurance customary in a form acceptable to Fannie Mae or Freddie Mac was issued at origination and each policy or binder is valid and remains in full force and effect;

(xxvi)          the Mortgaged Property consists of a contiguous parcel of real property with single-family residence erected thereon, or a two- to four- family dwelling, or an individual condominium unit, or an individual unit in a planned unit development or a de minimis planned unit development.  To the best of the Seller’s knowledge, the Mortgaged Property does not consist of any of the following property types: (a) co-operative units, (b) mobile homes and (c) manufactured homes (as defined in the Fannie Mae Originator-Servicer’s Guide), except when the appraisal indicates that the home is of comparable construction to a stick or beam construction home, is readily marketable, has been permanently affixed to the site and is not in a mobile home
“park.”  The Mortgaged Property is either a fee simple estate or a residential lease.  If any of the Mortgage Loans are secured by a leasehold interest, with respect to each leasehold interest: the use of leasehold estates for residential properties is an accepted practice in the area where the related Mortgaged Property is located; residential property in such area consisting of leasehold estates is readily marketable; the lease is recorded and no party is in any way in breach of any provision of such lease; the leasehold is in full force and effect and is not subject to any prior lien or encumbrance by which the leasehold could be terminated or subject to any charge or penalty; and the remaining term of the lease does not terminate less than ten years after the maturity date of such Mortgage Loan;

(xxvii)         the Mortgage File contains an appraisal of the related Mortgaged Property which satisfied the standards of Fannie Mae and Freddie Mac and was made and signed, prior to the approval of the Mortgage Loan application, by a qualified appraiser, duly appointed by the Seller, who had no interest, direct or indirect in the Mortgaged Property or in any loan made on the security thereof, whose compensation is not affected by the approval or disapproval of the Mortgage Loan and who met the minimum qualifications of Fannie Mae and Freddie Mac. Each appraisal of the Mortgage Loan was made in accordance with the relevant provisions of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989;

(xxviii)        in the event the Mortgage constitutes a deed of trust, a trustee, duly qualified under applicable law to serve as such, has been properly designated and currently so serves and is named in the Mortgage, and no fees or expenses are 

 

or will become payable by the Purchaser to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the Mortgagor;

(xxix)          none of the Mortgage Loans are “buydown” mortgage loans or graduated payment mortgage loans;

(xxx)           the Mortgage is a legal, valid, existing and enforceable first lien on the Mortgaged Property, including all improvements on the Mortgaged Property, if any, subject only to (1) the lien of current real property taxes and assessments not yet due and payable, (2) covenants, conditions and restrictions, rights of way, easements and other matters of the public record as of the date of recording being acceptable to mortgage lending institutions generally and specifically referred to in the lender’s title insurance policy delivered to the originator of the Mortgage Loan and which do not materially and adversely affect the Appraised Value of the Mortgaged Property and (3) other matters to which like properties are commonly subject which do not materially and adversely affect the benefits of the
security intended to be provided by the Mortgage. The Seller has full right to sell and assign the Mortgage to the Purchaser;

(xxxi)          each Mortgagor who is a party to the Mortgage Note is a natural person;

(xxxii)         all requirements of any federal, state or local law (including usury, truth in lending, real estate settlement procedures, consumer credit protection, equal credit opportunity, disclosure or recording, predatory and abusive lending laws) applicable to the acquisition, origination and servicing of such Mortgage Loan have been complied with in all material respects;

(xxxiii)        none of the Mortgage Loans are (a) loans subject to 12 CFR Part 226.31, 12 CFR Part 226.32 or 12 CFR Part 226.34 of Regulation Z, the regulation implementing TILA, which implements the Home Ownership and Equity Protection Act of 1994, as amended (“HOEPA”), (b) loans subject to, or in violation of, any applicable state or local law, ordinance or regulation similar to HOEPA or (c) classified and/or defined as a “high cost home loan” under any federal, state or local law;

(xxxiv)        none of the Mortgage Loans secured by Mortgaged Property in the States of Georgia, New York, Arkansas, Kentucky and Florida is a “high cost home loan” as defined in the Georgia Fair Lending Act, as amended (the “Georgia Act”), the Arkansas Home Loan Protection Act, as amended (the “Arkansas Act”), Kentucky Revised Statutes §360.100, as amended (the “Kentucky Act”), the Florida Home Loan Protection Act §494.007 (the “Florida Act”), and the New York Predatory Lending Law, codified as N.Y. Banking Law §6-I, N.Y. Gen. Bus. Law §771-a, and N.Y. Real Prop. Acts Law §1302 (together, the “New York Act”), respectively;

 

 

(xxxv)         none of the Mortgage Loans are subject to the New York Act; none of the Mortgage Loans secured by Mortgaged Property in the District of Columbia is a “covered loan” as defined in the District of Columbia Home Loan Protection Act §26-1151.01 (the “D.C. Act”); none of the Mortgage Loans secured by Mortgaged Property in Maine is a “high-rate, high-fee mortgage” as defined in Maine Consumer Credit Code — Truth In Lending §8-103 (the “Maine Act”); none of the Mortgage Loans secured by Mortgaged Property in Nevada is a “home loan” as defined in Nevada Revised Statutes title 52, as amended by Assembly Bill No. 284, 72nd Session (Nevada 2003) (the “Nevada Act”); and all the Mortgage Loans that are subject to the Georgia Act, the New York Act,
the Arkansas Act, the Kentucky Act, the Florida Act, the D.C. Act, the Maine Act and the Nevada Act comply with the requirements of each such legislation;

(xxxvi)        each Prepayment Charge is enforceable and was originated in compliance with all applicable federal, state, and local laws; 

(xxxvii)       Each Mortgage Loan was originated by a savings and loan association, savings bank, commercial bank, credit union, insurance company, or similar institution which is supervised and examined by a federal or state authority, or by a mortgagee approved by the Secretary of Housing and Urban Development pursuant to sections 203 and 211 of the National Housing Act, all within the meaning of Section 3(a)(41) of the Securities Exchange Act of 1934, as amended.

(xxxviii)       no Mortgage Loan is a High Cost Loan or Covered Loan, as applicable (as such terms are defined in the then current Standard & Poor’s LEVELS® Glossary, which is now Version 5.6b Revised, Appendix E, attached hereto as Exhibit 2) and no Mortgage Loan originated on or after October 1, 2002 through March 7, 2003 is governed by the “Georgia Fair Lending Act”

(xxxix)        to the best of the Seller’s knowledge, there is no breach, default, violation or event of acceleration existing under the Mortgage or the Mortgage Note and no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration;

(xl)             the related Mortgage Note and Mortgage are genuine and each is the legal, valid and binding obligation of the maker thereof, enforceable in accordance with its terms except as such enforcement may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and by general equity principles (regardless of whether such enforcement is considered in a proceeding in equity or at law).  To the best of Seller’s knowledge, all parties to the Mortgage Note and Mortgage had legal capacity to execute the Mortgage Note and Mortgage and each Mortgage Note and Mortgage have been duly and properly executed by such parties; 

 

 

(xli)              the proceeds of each Mortgage Loan have been fully disbursed, and except with respect to any escrow holdbacks as set forth in the underwriting guidelines of the related originator, there is no requirement for future advances thereunder and any and all requirements as to completion of any on-site or off-site improvements and as to disbursement from any escrow funds therefore have been complied with;

(xlii)            the related Mortgage contains customary and enforceable provisions which render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property of the benefits of the security, including (1) in the case of Mortgage designated as a deed of trust, by trustee’s sale, and (2) otherwise by judicial foreclosure;

(xliii)           the Mortgage contains an enforceable provision for the acceleration of the payment of the unpaid principal balance of the Mortgage Loan in the event that the Mortgaged Property is sold or transferred without the prior written consent of the mortgagee thereunder, except as may be limited by applicable law;

(xliv)           with respect to each adjustable-rate Mortgage Loan, all adjustments to the Mortgage Rate and monthly payment have been done in accordance with the terms of the related Mortgage Note; 

(xlv)            the information set forth in the Mortgage Loan Schedule with respect to the Prepayment Charges is true and correct in all material respects;

(xlvi)           no foreclosure proceedings are pending against the Mortgaged Property and the Mortgage Loan is not subject to any pending bankruptcy or insolvency proceeding, and to the best of the Seller’s knowledge or the knowledge of the related servicer, no material litigation or lawsuit relating to the Mortgage Loan is pending;

It is understood and agreed that the representations and warranties set forth in this Section 3.1 shall survive the sale of the Mortgage Loans from the Seller to the Purchaser and shall  inure to the benefit of the Purchaser, its successors and assigns, notwithstanding any restrictive or qualified endorsement on any Mortgage Note or assignment of Mortgage or the examination of any Mortgage File.  It is understood by the parties hereto that a breach of the representations and warranties made Section 3.1(b) (xxxii), (xxxiii), (xxxiv), (xxxv), (xxxvi), (xxxvii), (xxxviii) and (xlv) will be deemed to materially and adversely affect the value of the related Mortgage Loan or the interest of the Purchaser.

Upon discovery or receipt of notice by the Seller, the Purchaser or the Trustee of a breach of any representation or warranty of the Seller set forth in clause (b) above which breach materially and adversely affects the value of the Mortgage Loans or the interests of the Purchaser, the Certificateholders or the Trustee in any of the Mortgage Loans delivered to the Purchaser pursuant to this Agreement, the party discovering or receiving notice of such breach shall give prompt written notice to the others. In the case of any such breach of a representation 

 

or warranty set forth in clause (b) above, the Seller shall, within 90 days from the date that the Seller was notified or otherwise obtained knowledge of such breach, either (i) cure such breach in all material respects or (ii) purchase such Mortgage Loan from the Trust Fund at the Purchase Price; provided that if such breach would cause the Mortgage Loan to be other than a “qualified mortgage” as defined in Section 860G(a)(3) of the Code, any such cure or repurchase must occur within 90 days from the date such breach was discovered; and provided, further, that (A) in the case of a breach of the representation and warranty concerning the Mortgage Loan Schedule contained in clause (b)(i), if such breach relates to any field on the Mortgage Loan Schedule which identifies any Prepayment Charge or (B) in the case of a breach of representation (xxxvi) or the unenforceability of any Prepayment Charge
due to subsequent changes in law, then, in each case, in lieu of purchasing such Mortgage Loan from the Trust Fund at the Purchase Price, the Seller shall pay the amount of the Prepayment Charge (net of any amount previously collected by or paid to the Trust Fund in respect of such Prepayment Charge), and the Seller shall have no right to repurchase (or, as detailed below, substitute for) such Mortgage Loan. However, subject to the approval of the Purchaser and except as specified above, the Seller shall have the option to substitute a Qualified Substitute Mortgage Loan or Loans for such Mortgage Loan if such substitution occurs within two years following the Closing Date, except that if the breach would cause the Mortgage Loan to be other than a “qualified mortgage” as defined in Section 860G(a)(3) of the Code, any such substitution must occur within 90 days from the date the breach was discovered if such 90 day period expires before two years following the Closing Date. If
the breach of representation and warranty that gave rise to the obligation to repurchase or substitute a Mortgage Loan pursuant to this Section 3.1 was the representation set forth in clause (xxxii), (xxxiii), (xxxiv), (xxxv), (xxxvi), (xxxvii), (xxxviii) or (xlv) of this Section 3.1(b), then the Seller shall pay to the Trust Fund, concurrently with and in addition to the remedies provided in the third preceding sentence, an amount equal to any liability, penalty or the expense that was actually incurred and paid out of or on behalf of the Trust Fund, and that directly resulted from such breach, or if incurred and paid by the Trust Fund thereafter, concurrently with such payment. The obligations of the Seller to cure, purchase or substitute a Qualified Substitute Mortgage Loan shall constitute the Purchaser’s, the Trustee’s and the Certificateholders’ sole and exclusive remedy under this Agreement or otherwise respecting a breach of representations or warranties
hereunder with respect to the Mortgage Loans.

In the event that the Seller elects to substitute a Qualified Substitute Mortgage Loan or Loans for a Deleted Mortgage Loan pursuant to this Section 3.1(b), the Seller shall deliver to the Trustee and the Master Servicer, as appropriate, with respect to such Qualified Substitute Mortgage Loan or Loans, the original Mortgage Note, the Mortgage, an Assignment of the Mortgage in recordable form, and such other documents and agreements as are required by Section 2.1, with the Mortgage Note endorsed as required by Section 2.1. No substitution will be made in any calendar month after the Determination Date for such month. Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the month of substitution, to the extent received by the Master Servicer, will be retained by the Master Servicer and remitted by the Master Servicer to the Seller on the next succeeding Distribution
Date.  After the month of substitution, the Seller shall be entitled to retain all amounts received in respect of such Deleted Mortgage Loan. Upon such substitution, the Mortgage Loan Schedule shall be amended to reflect the addition of the Qualified Substituted Mortgage Loan or Loans, the Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the Seller shall be deemed to have made the non-statistical representations and 

 

warranties with respect to the Qualified Substitute Mortgage Loan contained in Section 3.1(b) as of the date of substitution.

In connection with the substitution of one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution is less than the aggregate Stated Principal Balance of all such Deleted Mortgage Loans (in each case after application of the principal portion of the Monthly Payments due in the month of substitution that are to be distributed to Certificateholders in the month of substitution). The Seller shall provide the Master Servicer on the day of substitution for immediate deposit into the Custodial Account the amount of such shortfall, without any reimbursement therefor. The Seller shall give notice in writing to the Trustee of such event, which notice shall be accompanied by an Officer’s
Certificate as to the calculation of such shortfall and by an Opinion of Counsel to the effect that such substitution will not cause (a) any federal tax to be imposed on any REMIC created pursuant to the Pooling and Servicing Agreement, including without limitation, any federal tax imposed on “prohibited transactions” under Section 860F(a)(1) of the Code or on “contributions after the startup date” under Section 860G(d)(1) of the Code or (b) any portion of any REMIC created pursuant to the Pooling and Servicing Agreement to fail to qualify as a REMIC at any time that any Certificate is outstanding. The costs of any substitution as described above, including any related assignments, opinions or other documentation in connection therewith shall be borne by the Seller.

Any cause of action against the Seller or relating to or arising out of a breach by the Seller of any representations and warranties made in clause (b) above shall accrue as to any Mortgage Loan upon (i) discovery of such breach by the Seller or notice thereof by the party discovering such breach and (ii) failure by the Seller to cure such breach, purchase such Mortgage Loan or substitute a Qualified Substitute Mortgage Loan pursuant to the terms hereof.

Section 3.02           The Purchaser’s Representations and Warranties.  The Purchaser hereby represents and warrants to the Seller as of the Closing Date (or if otherwise specified below, as of the date so specified) that:

(a)          the Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware;

(b)        the Purchaser 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;

(c)          the execution and delivery by the Purchaser of this Agreement have been duly authorized by all necessary corporate action on the part of the Purchaser; and neither the execution and delivery of this Agreement, nor the consummation of the transactions herein contemplated hereby, nor compliance with the provisions hereof, will conflict with or result in a breach of, or constitute a default under, any of the provisions of any law, governmental rule, regulation, judgment, decree or order binding on the Purchaser or its properties or the certificate of incorporation or by-laws of the Purchaser, except those conflicts, breaches or defaults which would not reasonably be expected to have a material adverse effect on the Purchaser’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

 

 

(d)         the execution, delivery and performance by the Purchaser of this Agreement and the consummation of the transactions contemplated hereby do not require the consent or approval of, the giving of notice to, the registration with, or the taking of any other action in respect of, any state, federal or other governmental authority or agency, except those consents, approvals, notices, registrations or other actions as have already been obtained, given or made and, in connection with the recordation of the Mortgages, powers of attorney or assignments of Mortgages not yet completed;

(e)          this Agreement has been duly executed and delivered by the Purchaser and, assuming due authorization, execution and delivery by the Purchaser, constitutes a valid and binding obligation of the Purchaser enforceable against it in accordance with its terms (subject to applicable bankruptcy and insolvency laws and other similar laws affecting the enforcement of the rights of creditors generally); and

(f)          except as previously disclosed to the Purchaser in the Prospectus Supplement, there are no actions, suits or proceedings pending or, to the best of the Purchaser’s knowledge, threatened against the Purchaser, before or by any court, administrative agency, arbitrator or governmental body (i) with respect to any of the transactions contemplated by this Agreement or (ii) with respect to any other matter which in the judgment of the Purchaser if determined adversely to the Purchaser or would reasonably be expected to materially and adversely affect the Purchaser’s ability to perform its obligations under this Agreement; and the Purchaser is not in default with respect to any order of any court, administrative agency, arbitrator or governmental body so as to materially and adversely affect the transactions contemplated
by this Agreement.

 

 

ARTICLE IV

 

SELLER’S COVENANTS

Section 4.01           Covenants of the Seller.  The Seller hereby covenants that, except for the transfer hereunder with respect to the Mortgage Loans, the Seller will not sell, pledge, assign or transfer to any other Person, or grant, create, incur or assume any Lien on, any Mortgage Loan, whether now existing or hereafter created, or any interest therein (other than the servicing rights with respect thereto); the Seller will notify the Trustee, as assignee of the Purchaser, of the existence of any Lien (other than as provided above) on any Mortgage Loan immediately upon discovery thereof; and the Seller will defend the right, title and interest of the Trustee, on behalf of the Trust Fund, in, to and under the Mortgage Loans, whether now existing or hereafter created, against all claims
of third parties claiming through or under the Seller.

 

 

ARTICLE V

 

LIMITATION ON LIABILITY OF THE SELLER

Section 5.01           Limitation on Liability of the Seller.  None of the directors, officers, employees or agents of the Seller shall be under any liability to the Purchaser hereunder, it being expressly understood that all such liability is expressly waived and released as a condition of, and as consideration for, the execution of this Agreement. Except as and to the extent expressly provided in the Pooling and Servicing Agreement, the Custodial Agreement and this Agreement, the Seller shall not be under any liability to the Trust Fund, the Trustee or the Certificateholders thereunder. The Seller and any director, officer, employee or agent of the Seller 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.

 

 

ARTICLE VI

 

TERMINATION

Section 6.01           Termination.  The respective obligations and responsibilities of the Seller and the Purchaser created hereby shall terminate upon the termination of the Trust Fund pursuant to the terms of the Pooling and Servicing Agreement.

 

 

ARTICLE VII

 

MISCELLANEOUS PROVISIONS

Section 7.01           Amendment.  This Agreement may be amended from time to time by the Seller and the Purchaser, by written agreement signed by the Seller and the Purchaser.

Section 7.02           Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.

Section 7.03           Notices.  All demands, notices and communications hereunder shall be in writing and shall be deemed to have been duly given if personally delivered at or mailed by registered mail, postage prepaid, addressed as follows:

	
            (i)
 	
            if to the Seller:

 
 
	
             
 	
            Opteum Financial Services, LLC
 
	
             
 	
            W. 115 Century Road
 
	
             
 	
            Paramus, New Jersey 07652
 
	
             
 	
            Attention: General Counsel
 

or, such other address as may hereafter be furnished to the Purchaser in writing by the Seller.

	
             
	
            (ii)
 	
            if to the Purchaser:

 
 
	
             
	
             
 	
            Opteum Mortgage Acceptance Corporation
 
	
             
	
             
 	
            W. 115 Century Road
 
	
             
	
             
 	
            Paramus, New Jersey 07652
 
	
             
	
             
 	
            Attention: General Counsel
 
	
            or such other address
 	
            as may hereafter be furnished to the Seller in writing by the Purchaser.
 	
             

					

Section 7.04           Severability of Provisions.  If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be held invalid for any reason whatsoever then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement.

Section 7.05           Relationship of Parties.  Nothing herein contained shall be deemed or construed to create a partnership or joint venture between the parties hereto, and the services of the Seller shall be rendered as an independent contractor and not as agent for the Purchaser.

Section 7.06           Counterparts.  This Agreement may be executed in two or more counterparts and by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed to be an original and such counterparts together shall constitute one and the same Agreement.

 

 

Section 7.07           Survival.  The representations and warranties made herein by the Seller and the provisions of Article V hereof shall survive the purchase of the Mortgage Loans hereunder.

Section 7.08           Further Agreements.  The Purchaser and the Seller each agree to execute and deliver to the other such additional documents, instruments or agreements as may be necessary or appropriate to effectuate the purposes of this Agreement. Each of the Purchaser and the Seller agrees to use its best reasonable efforts to take all actions necessary to be taken by it to cause the Certificates to be issued and rated in the highest rating category by each of the Rating Agencies, with the Certificates to be offered pursuant to the Purchaser’s shelf registration statement, and each party will cooperate with the other in connection therewith.

Section 7.09           Intention of the Parties.  It is the intention of the parties that the Purchaser is purchasing, and the Seller is selling, the Mortgage Loans (other than the servicing rights with respect thereto), rather than a loan by the Purchaser to the Seller secured by the Mortgage Loans. Accordingly, the parties hereto each intend to treat this transaction with respect to the Mortgage Loans for federal income tax purposes as a sale by the Seller, and a purchase by the Purchaser, of the Mortgage Loans (other than the servicing rights with respect thereto). The Purchaser will have the right to review the Mortgage Loans and the Related Documents to determine the characteristics of the Mortgage Loans which will affect the federal income tax consequences of owning the Mortgage
Loans and the Seller will cooperate with all reasonable requests made by the Purchaser in the course of such review.

Section 7.10           Successors and Assigns; Assignment of Purchase Agreement.  This Agreement shall bind and inure to the benefit of and be enforceable by the Seller, the Purchaser, and their respective successors and assigns. The obligations of the Seller under this Agreement cannot be assigned or delegated to a third party without the consent of the Purchaser, which consent shall be at the Purchaser’s sole discretion. The parties hereto acknowledge that the Purchaser is acquiring the Mortgage Loans for the purpose of assigning the Mortgage Loans to the Trustee, on behalf of the Trust Fund, for the benefit of the Certificateholders. As an inducement to the Purchaser to purchase the Mortgage Loans, the Seller acknowledges and consents to the assignment by the Purchaser to the
Trustee, on behalf of the Trust Fund of all of the Purchaser’s rights against the Seller pursuant to this Agreement and to the enforcement or exercise of any right or remedy against the Seller pursuant to this Agreement by the Purchaser. Such enforcement of a right or remedy by the Trustee, on behalf of the Trust Fund, shall have the same force and effect as if the right or remedy had been enforced or exercised by the Purchaser directly.

[Signature Page Follows]

 

 

 

IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names to be signed to this Mortgage Loan Purchase Agreement by their respective officers thereunto duly authorized as of the day and year first above written.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            OPTEUM MORTGAGE ACCEPTANCE CORPORATION

as Purchaser
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            OPTEUM FINANCIAL SERVICES, LLC
 as Seller
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
             
 

 

 

 

 

EXHIBIT 1

MORTGAGE LOAN SCHEDULE

 

 

EXHIBIT 2

REVISED February 07, 2005

 

APPENDIX E – Standard & Poor’s Anti-Predatory Lending Categorization

 

Standard & Poor’s has categorized loans governed by anti-predatory lending laws in the Jurisdictions listed below into three categories based upon a combination of factors that include (a) the risk exposure associated with the assignee liability and (b) the tests and thresholds set forth in those laws. Note that certain loans classified by the relevant statute as Covered are included in Standard & Poor’s High Cost Loan Category because they included thresholds and tests that are typical of what is generally considered High Cost by the industry. 

 

	
            Standard & Poor’s High Cost Loan Categorization

 
  
	
            State/Jurisdiction
  	
            Name of Anti-Predatory Lending Law/Effective Date
  	
            Category under Applicable Anti-Predatory Lending  Law
  
	
            Arkansas
 	
            Arkansas Home Loan Protection Act, Ark. Code Ann. §§ 23-53-101 et seq.

Effective July 16, 2003
 	
            High Cost Home Loan
 
	
            Cleveland Heights, OH
 	
            Ordinance No. 72-2003 (PSH), Mun. Code §§ 757.01 et seq.

Effective June 2, 2003 
 	
            Covered Loan
 
	
            Colorado
 	
            Consumer Equity Protection, Colo. Stat. Ann. §§ 5-3.5-101 et seq.

Effective for covered loans offered or entered into on or after January 1, 2003. Other provisions of the Act took effect on June 7, 2002
 	
            Covered Loan
 
	
            Connecticut
 	
            Connecticut Abusive Home Loan Lending Practices Act, Conn. Gen. Stat. §§ 36a-746 et seq. 

Effective October 1, 2001
 	
            High Cost Home Loan
 
	
            District of Columbia
 	
            Home Loan Protection Act, D.C. Code §§ 26-1151.01 et seq.

Effective for loans closed on or after January 28, 2003
 	
            Covered Loan
 

 

 

 

 

	
            Florida
 	
            Fair Lending Act, Fla. Stat. Ann. §§ 494.0078 et seq.

Effective October 2, 2002
 	
            High Cost Home Loan
 
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003)
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq.

Effective October 1, 2002 – March 6, 2003
 	
            High Cost Home Loan
 
	
            Georgia as amended (Mar. 7, 2003 – current)
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq.

Effective for loans closed on or after March 7, 2003
 	
            High Cost Home Loan
 
	
            HOEPA Section 32
 	
            Home Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1639, 12 C.F.R. §§ 226.32 and 226.34

Effective October 1, 1995, amendments October 1, 2002
 	
            High Cost Loan
 
	
            Illinois
 	
            High Risk Home Loan Act, Ill. Comp. Stat. tit. 815, §§ 137/5 et seq.

Effective January 1, 2004 (prior to this date, regulations under Residential Mortgage License Act effective from May 14, 2001)
 	
            High Risk Home Loan 
 
	
            Indiana
 	
            Indiana Home Loan Practices Act, Ind. Code Ann. §§ 24-9-1-1 et seq. 

Effective for loans originated on or after January 1, 2005.
 	
            High Cost Home Loan
 
	
            Kansas
 	
            Consumer Credit Code, Kan. Stat. Ann. §§ 16a-1-101 et seq.

Sections 16a-1-301 and 16a-3-207 became effective April 14, 1999; Section 16a-3-308a became effective July 1, 1999 
 	
            High Loan to Value Consumer Loan (id. § 16a-3-207) and;
 
	
            High APR Consumer Loan (id. § 16a-3-308a)
 
	
            Kentucky
 	
            2003 KY H.B. 287 – High Cost Home Loan Act, Ky. Rev. Stat. §§ 360.100 et seq.

Effective June 24, 2003
 	
            High Cost Home Loan
 

 

 

 

 

	
            Maine
 	
            Truth in Lending, Me. Rev. Stat. tit. 9-A, §§ 8-101 et seq.

Effective September 29, 1995 and as amended from time to time
 	
            High Rate High Fee Mortgage
 
	
            Massachusetts
 	
            Part 40 and Part 32, 209 C.M.R. §§ 32.00 et seq. and 209 C.M.R. §§ 40.01 et seq.

Effective March 22, 2001 and amended from time to time
 	
            High Cost Home Loan
 
	
             
 	
            Massachusetts Predatory Home Loan Practices Act

Mass. Gen. Laws ch. 183C,  §§ 1 et seq.

Effective November 7, 2004
 	
            High Cost Home Mortgage Loan
 
	
            Nevada
 	
            Assembly Bill No. 284, Nev. Rev. Stat. §§ 598D.010 et seq.

Effective October 1, 2003
 	
            Home Loan
 
	
            New Jersey
 	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq.

Effective for loans closed on or after November 27, 2003
 	
            High Cost Home Loan
 
	
            New Mexico
 	
            Home Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq.

Effective as of January 1, 2004; Revised as of February 26, 2004
 	
            High Cost Home Loan
 
	
            New York
 	
            N.Y. Banking Law Article 6-l

Effective for applications made on or after April 1, 2003
 	
            High Cost Home Loan
 
	
            North Carolina
 	
            Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E et seq.

Effective July 1, 2000; amended October 1, 2003 (adding open-end lines of credit)
 	
            High Cost Home Loan
 

 

 

 

 

	
            Ohio
 	
            H.B. 386 (codified in various sections of the Ohio Code), Ohio Rev. Code Ann. §§ 1349.25 et seq.

Effective May 24, 2002
 	
            Covered Loan
 
	
            Oklahoma
 	
            Consumer Credit Code (codified in various sections of Title 14A)

Effective July 1, 2000; amended effective January 1, 2004
 	
            Subsection 10 Mortgage
 
	
            South Carolina
 	
            South Carolina High Cost and Consumer Home Loans Act, S.C. Code Ann. §§ 37-23-10 et seq.

Effective for loans taken on or after January 1, 2004
 	
            High Cost Home Loan
 
	
            West Virginia 
 	
            West Virginia Residential Mortgage Lender, Broker and Servicer Act, W. Va. Code Ann. §§ 31-17-1 et seq.

Effective June 5, 2002
 	
            West Virginia Mortgage Loan Act Loan
 

 

Standard & Poor’s Covered Loan Categorization

 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003)
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq.

Effective October 1, 2002 – March 6, 2003
 	
            Covered Loan
 
	
            New Jersey
 	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq.

Effective November 27, 2003 – July 5, 2004
 	
            Covered Home Loan
 

 

	
            Standard & Poor’s Home Loan Categorization

 
  
	
            State/Jurisdiction
  	
            Name of Anti-Predatory Lending Law/Effective Date
  	
            Category under Applicable Anti-Predatory Lending  Law
  

 

 

 

 

	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003)
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq.

Effective October 1, 2002 – March 6, 2003
 	
            Home Loan
 
	
            New Jersey
 	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq.

Effective for loans closed on or after November 27, 2003
 	
            Home Loan
 
	
            New Mexico
 	
            Home Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq.

Effective as of January 1, 2004; Revised as of February 26, 2004
 	
            Home Loan
 
	
            North Carolina
 	
            Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E et seq.

Effective July 1, 2000; amended October 1, 2003 (adding open-end lines of credit)
 	
            Consumer Home Loan
 
	
            South Carolina
 	
            South Carolina High Cost and Consumer Home Loans Act, S.C. Code Ann. §§ 37-23-10 et seq.

Effective for loans taken on or after January 1, 2004
 	
            Consumer Home LoanExhibit 10.1

                            364-DAY CREDIT AGREEMENT

                            Dated as of June 30, 2005

      OMNICOM  FINANCE INC., a Delaware  corporation  ("OFI"),  OMNICOM  CAPITAL
INC., a Connecticut  corporation ("OCI"), and OMNICOM FINANCE PLC, a corporation
organized under the laws of England and Wales ("OFP";  OFI, OCI and OFP are each
a "Borrower" and collectively, the "Borrowers"),  OMNICOM GROUP INC., a New York
corporation  (the  "Guarantor"),  the banks,  financial  institutions  and other
institutional  lenders (the "Initial  Lenders")  listed on the  signature  pages
hereof,  CITIGROUP GLOBAL MARKETS INC. and J.P. MORGAN  SECURITIES INC., as lead
arrangers and book managers,  ABN AMRO BANK N.V., as syndication agent, JPMORGAN
CHASE BANK, N.A., BANK OF AMERICA, N.A. and BANCO BILBAO VIZCAYA ARGENTARIA,  as
documentation agents, and CITIBANK,  N.A. ("Citibank"),  as administrative agent
(the "Agent") for the Lenders (as hereinafter defined), agree as follows:

                                    ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

      SECTION  1.01.  Certain  Defined  Terms.  As used in this  Agreement,  the
following  terms shall have the following  meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

            "Advance"  means an advance  by a Lender to a Borrower  as part of a
      Borrowing  and refers to a Base Rate Advance or a Eurodollar  Rate Advance
      (each of which shall be a "Type" of Advance).

            "Affiliate" means, as to any Person, any other Person (other than an
      individual) that, directly or indirectly, controls, is controlled by or is
      under  common  control with such Person;  provided  that,  for purposes of
      Section 5.01(h),  an Affiliate of a Borrower shall include any Person that
      (x) is a director  or officer  of such  Person or (y) has the  possession,
      direct or indirect, of the power to vote 5% or more of the Voting Stock of
      such Person.  A Person shall be deemed to control  another  Person if such
      Person possesses, directly or indirectly, the power to direct or cause the
      direction of the management and policies of such Person,  whether  through
      the ownership of Voting Stock, by contract or otherwise.

            "Agent's  Account" means the account of the Agent  maintained by the
      Agent at Citibank at its office at 388  Greenwich  Street,  New York,  New
      York 10013, Account No. 36852248, Attention: Bank Loan Syndications.

            "Applicable Lending Office" means, with respect to each Lender, such
      Lender's  Domestic  Lending  Office in the case of a Base Rate Advance and
      such Lender's  Eurodollar  Lending Office in the case of a Eurodollar Rate
      Advance.

            "Applicable  Margin" means (a) for Base Rate Advances,  0% per annum
      and (b) for  Eurodollar  Rate  Advances,  as of any date, a percentage per
      annum  determined by reference to the Public Debt Rating in effect on such
      date as set forth below:

      --------------------------------------------------------------------------
                              Applicable Margin for      Applicable Margin for
                            Eurodollar Rate Advances   Eurodollar Rate Advances
      Public Debt Rating     Prior to the Term Loan   On and After the Term Loan
          S&P/Moody's           Conversion Date             Conversion Date
      --------------------------------------------------------------------------
      Level 1
      A+ or A1 or above              0.165%                     0.625%
      --------------------------------------------------------------------------

<PAGE>

      --------------------------------------------------------------------------
      Level 2
      A or A2                        0.275%                     0.750%
      --------------------------------------------------------------------------
      Level 3
      A- or A3                       0.390%                     0.875%
      --------------------------------------------------------------------------
      Level 4
      BBB+ or Baa1                   0.500%                     1.000%
      --------------------------------------------------------------------------
      Level 5
      BBB or Baa2                    0.725%                     1.250%
      --------------------------------------------------------------------------
      Level 6
      Lower than Level 5             0.800%                     1.500%
      --------------------------------------------------------------------------

            "Applicable Percentage" means, as of any date prior to the Term Loan
      Conversion  Date, a percentage  per annum  determined  by reference to the
      Public Debt Rating in effect on such date as set forth below:

             -----------------------------------------------------
                   Public Debt Rating                Applicable
                       S&P/Moody's                   Percentage
             -----------------------------------------------------
             Level 1
             A+ or A1 or above                         0.085%
             -----------------------------------------------------
             Level 2
             A or A2                                   0.100%
             -----------------------------------------------------
             Level 3
             A- or A3                                  0.110%
             -----------------------------------------------------
             Level 4
             BBB+ or Baa1                              0.125%
             -----------------------------------------------------
             Level 5
             BBB or Baa2                               0.150%
             -----------------------------------------------------
             Level 6
             Lower than Level 5                        0.200%
             -----------------------------------------------------

            "Applicable Utilization Fee" means, as of any date prior to the Term
      Loan  Conversion  Date  that  the  aggregate  Advances  exceed  50% of the
      aggregate  Commitments,  a percentage per annum determined by reference to
      the Public Debt Rating in effect on such date as set forth below:

             -----------------------------------------------------
                   Public Debt Rating              Applicable
                       S&P/Moody's              Utilization Fee
             -----------------------------------------------------
             Level 1
             A+ or A1 or above                       0.125%
             -----------------------------------------------------
             Level 2
             A or A2                                 0.125%
             -----------------------------------------------------
             Level 3
             A- or A3                                0.125%
             -----------------------------------------------------
             Level 4
             BBB+ or Baa1                            0.125%
             -----------------------------------------------------
             Level 5
             BBB or Baa2                             0.125%
             -----------------------------------------------------
             Level 6
             Lower than Level 5                      0.250%
             -----------------------------------------------------

                                       2
<PAGE>

            "Assignment  and  Acceptance"  means an  assignment  and  acceptance
      entered  into by a Lender and an Eligible  Assignee,  and  accepted by the
      Agent, in substantially the form of Exhibit C hereto.

            "Bankruptcy  Law" means Title 11, U.S. Code, or any similar foreign,
      federal or state law for the relief of debtors.

            "Base Rate" means a  fluctuating  interest  rate per annum in effect
      from time to time, which rate per annum shall at all times be equal to the
      highest of:

                  (a) the rate of interest announced publicly by Citibank in New
            York, New York, from time to time, as Citibank's base rate;

                  (b) the sum (adjusted to the nearest 1/4 of 1% or, if there is
            no nearest 1/4 of 1%, to the next higher 1/4 of 1%) of (i) 1/2 of 1%
            per annum,  plus (ii) the rate  obtained by dividing  (A) the latest
            three-week moving average of secondary market morning offering rates
            in the United  States  for  three-month  certificates  of deposit of
            major United  States  money market  banks,  such  three-week  moving
            average  (adjusted  to the  basis  of a  year  of  360  days)  being
            determined  weekly on each Monday (or, if such day is not a Business
            Day, on the next succeeding  Business Day) for the three-week period
            ending on the previous Friday by Citibank on the basis of such rates
            reported by certificate  of deposit  dealers to and published by the
            Federal  Reserve Bank of New York or, if such  publication  shall be
            suspended or  terminated,  on the basis of quotations for such rates
            received  by  Citibank  from three New York  certificate  of deposit
            dealers  of  recognized  standing  selected  by  Citibank,  by (B) a
            percentage equal to 100% minus the average of the daily  percentages
            specified during such three-week period by the Board of Governors of
            the Federal  Reserve System (or any successor) for  determining  the
            maximum  reserve  requirement  (including,  but not  limited to, any
            emergency,  supplemental or other marginal reserve  requirement) for
            Citibank  with  respect to  liabilities  consisting  of or including
            (among other liabilities)  three-month U.S. dollar non-personal time
            deposits in the United  States,  plus (iii) the average  during such
            three-week  period  of the  annual  assessment  rates  estimated  by
            Citibank for determining the then current annual assessment  payable
            by Citibank to the Federal  Deposit  Insurance  Corporation  (or any
            successor)  for  insuring  U.S.  dollar  deposits of Citibank in the
            United States; and

                  (c) 1/2 of one percent per annum above the Federal Funds Rate.

            "Base Rate Advance" means an Advance that bears interest as provided
      in Section 2.06(a)(i).

            "Borrowing"  means (a) with  respect  to the making of  Advances,  a
      borrowing  consisting  of  simultaneous  Advances of the same Type made by
      each of the Lenders  pursuant to Section 2.01;  and (b) in other  contexts
      (i) that portion of the Advances  comprised of all  outstanding  Base Rate
      Advances and (ii) that portion of Advances  converted  into,  or continued
      as, Eurodollar Rate Advances having the same Interest Period.

            "Business  Day"  means a day of the  year  on  which  banks  are not
      required  or  authorized  by law to  close in New York  City  and,  if the
      applicable Business Day relates to any Eurodollar Rate Advances,  on which
      dealings are carried on in the London interbank market.

            "Commitment"  means  as to any  Lender  (a)  the  amount  set  forth
      opposite such  Lender's name on the signature  pages hereof or (b) if such
      Lender has entered  into any  Assignment  and  Acceptance,  the amount set
      forth for such Lender in the Register  maintained by the Agent pursuant to
      Section 9.07(d), as such amount may be reduced pursuant to Section 2.04.

                                       3
<PAGE>

            "Confidential  Information"  means  information  that a  Loan  Party
      furnishes  to  the  Agent  or  any  Lender  in  a  writing  designated  as
      confidential, but does not include any such information that is or becomes
      generally  available to the public or that is or becomes  available to the
      Agent or such Lender from a source other than a Loan Party.

            "Consolidated" refers to the consolidation of accounts in accordance
      with GAAP.

            "Convert",  "Conversion" and "Converted" each refers to a conversion
      of  Advances  of one Type into  Advances  of the other  Type  pursuant  to
      Section 2.07 or 2.08.

            "Debt"  of  any  Person   means,   without   duplication,   (a)  all
      indebtedness  of such Person for borrowed  money,  (b) all  obligations of
      such Person for the deferred purchase price of property or services (other
      than earn-out  payment  obligations of such Person in connection  with the
      purchase of property or services to the extent they are still contingent),
      (c) all obligations of such Person evidenced by notes,  bonds,  debentures
      or other similar  instruments,  (d) all obligations of such Person created
      or arising under any conditional  sale or other title retention  agreement
      with  respect to property  acquired by such Person (even though the rights
      and remedies of the seller or lender under such  agreement in the event of
      default are limited to  repossession  or sale of such  property),  (e) all
      obligations of such Person as lessee under leases that have been or should
      be,  in  accordance  with  GAAP,  recorded  as  capital  leases,  (f)  all
      obligations,  contingent  or  otherwise,  of such  Person  in  respect  of
      acceptances,  letters of credit or similar  extensions of credit,  (g) all
      obligations of such Person in respect of Hedge Agreements, (h) all Debt of
      others  referred  to in clauses  (a) through (g) above or clause (i) below
      and other  payment  obligations  guaranteed  directly or indirectly in any
      manner by such Person, or in effect  guaranteed  directly or indirectly by
      such Person  through an agreement  (1) to pay or purchase  such Debt or to
      advance or supply  funds for the payment or purchase of such Debt,  (2) to
      purchase,  sell or lease (as lessee or lessor) property, or to purchase or
      sell  services,  primarily  for the purpose of enabling the debtor to make
      payment of such Debt or to assure the  holder of such Debt  against  loss,
      (3) to  supply  funds  to or in any  other  manner  invest  in the  debtor
      (including any agreement to pay for property or services  irrespective  of
      whether such  property is received or such  services are  rendered) or (4)
      otherwise to assure a creditor  against loss, and (i) all Debt referred to
      in clauses (a)  through  (h) above  secured by (or for which the holder of
      such Debt has an existing  right,  contingent or otherwise,  to be secured
      by) any Lien on property  (including,  without  limitation,  accounts  and
      contract  rights)  owned by such  Person,  even though such Person has not
      assumed or become liable for the payment of such Debt.

            "Debt for  Borrowed  Money" of any Person  means all items that,  in
      accordance   with  GAAP,   would  be  classified  as   indebtedness  on  a
      Consolidated balance sheet of such Person.

            "Default"  means  any  Event of  Default  or any  event  that  would
      constitute  an Event of Default  but for the  requirement  that  notice be
      given or time elapse or both.

            "Disclosed Litigation" has the meaning specified in Section 3.01(b).

            "Domestic  Lending  Office" means,  with respect to any Lender,  the
      office of such Lender specified as its "Domestic  Lending Office" opposite
      its name on Schedule I hereto or in the Assignment and Acceptance pursuant
      to which it became a Lender,  or such other  office of such Lender as such
      Lender may from time to time specify to the Borrowers and the Agent.

            "EBITDA"  means,  for any period,  net income (or net loss) plus the
      sum of (a) net interest expense,  (b) income tax expense, (c) depreciation
      expense  and  (d)  amortization   expense,  in  each  case  determined  in
      accordance with GAAP for such period.

            "Effective Date" has the meaning specified in Section 3.01.

            "Eligible  Assignee"  means (i) a  Lender;  (ii) an  Affiliate  of a
      Lender;  and (iii) any other Person  approved by the Agent and,  unless an
      Event of Default has occurred and is continuing at the time any

                                       4
<PAGE>

      assignment is effected in accordance  with Section  9.07,  the  Guarantor,
      such  approval  not to be  unreasonably  withheld  or  delayed;  provided,
      however,  that neither the  Guarantor  nor an  Affiliate of the  Guarantor
      shall qualify as an Eligible Assignee.

            "Environmental  Action"  means  any  action,  suit,  demand,  demand
      letter, claim, notice of non-compliance or violation,  notice of liability
      or  potential  liability,  investigation,  proceeding,  consent  order  or
      consent  agreement   relating  in  any  way  to  any  Environmental   Law,
      Environmental Permit or hazardous materials or arising from alleged injury
      or  threat  of injury to  health,  safety or the  environment,  including,
      without  limitation,  (a) by any governmental or regulatory  authority for
      enforcement,  cleanup,  removal,  response,  remedial or other  actions or
      damages and (b) by any  governmental or regulatory  authority or any third
      party  for  damages,   contribution,   indemnification,   cost   recovery,
      compensation or injunctive relief.

            "Environmental  Law"  means any  federal,  state,  local or  foreign
      statute, law, ordinance,  rule, regulation,  code, order, judgment, decree
      or  judicial  or agency  interpretation,  policy or  guidance  relating to
      pollution or  protection  of the  environment,  health,  safety or natural
      resources,  including,  without  limitation,  those  relating  to the use,
      handling,   transportation,   treatment,  storage,  disposal,  release  or
      discharge of hazardous materials.

            "Environmental  Permit" means any permit,  approval,  identification
      number,  license or other  authorization  required under any Environmental
      Law.

            "ERISA" means the Employee  Retirement  Income Security Act of 1974,
      as amended from time to time, and the regulations  promulgated and rulings
      issued thereunder.

            "ERISA  Affiliate" means any Person that for purposes of Title IV of
      ERISA is a member of the  Guarantor's  controlled  group,  or under common
      control  with the  Guarantor,  within the  meaning  of Section  414 of the
      Internal Revenue Code.

            "ERISA Event" means (a) (i) the  occurrence  of a reportable  event,
      within  the  meaning of Section  4043 of ERISA,  with  respect to any Plan
      unless the 30-day notice  requirement  with respect to such event has been
      waived by the PBGC, or (ii) the  requirements of subsection (1) of Section
      4043(b) of ERISA  (without  regard to subsection  (2) of such Section) are
      met  with  respect  to a  contributing  sponsor,  as  defined  in  Section
      4001(a)(13) of ERISA,  of a Plan, and an event described in paragraph (9),
      (10),  (11),  (12) or (13) of  Section  4043(c)  of  ERISA  is  reasonably
      expected to occur with respect to such Plan within the  following 30 days;
      (b) the  application  for a minimum funding waiver with respect to a Plan;
      (c) the provision by the  administrator  of any Plan of a notice of intent
      to terminate such Plan pursuant to Section  4041(a)(2) of ERISA (including
      any such notice with  respect to a plan  amendment  referred to in Section
      4041(e) of ERISA);  (d) the  cessation of  operations at a facility of the
      Guarantor or any ERISA Affiliate in the circumstances described in Section
      4062(e)  of  ERISA;  (e) the  withdrawal  by the  Guarantor  or any  ERISA
      Affiliate  from a Multiple  Employer  Plan during a plan year for which it
      was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (f)
      the  conditions for the imposition of a lien under Section 302(f) of ERISA
      shall  have been met with  respect  to any Plan;  (g) the  adoption  of an
      amendment  to a Plan  requiring  the  provision  of  security to such Plan
      pursuant to Section 307 of ERISA;  or (h) the  institution  by the PBGC of
      proceedings to terminate a Plan pursuant to Section 4042 of ERISA,  or the
      occurrence  of any event or  condition  described in Section 4042 of ERISA
      that  constitutes  grounds for the termination of, or the appointment of a
      trustee to administer, a Plan.

            "Eurocurrency  Liabilities" has the meaning assigned to that term in
      Regulation D of the Board of Governors of the Federal Reserve  System,  as
      in effect from time to time.

            "Eurodollar  Lending Office" means, with respect to any Lender,  the
      office  of  such  Lender  specified  as its  "Eurodollar  Lending  Office"
      opposite its name on Schedule I hereto or in the Assignment and Acceptance
      pursuant to which it became a Lender (or, if no such office is  specified,
      its Domestic

                                       5
<PAGE>

      Lending  Office),  or such other  office of such Lender as such Lender may
      from time to time specify to the Borrowers and the Agent.

            "Eurodollar Rate" means, for any Interest Period for each Eurodollar
      Rate Advance  comprising part of the same Borrowing,  an interest rate per
      annum equal to the rate per annum  obtained  by dividing  (a) the rate per
      annum  (rounded  upward to the  nearest  whole  multiple of 1/16 of 1% per
      annum)  appearing on Telerate Markets Page 3750 (or any successor page) as
      the  London  interbank  offered  rate  for  deposits  in U.S.  dollars  at
      approximately  11:00 A.M.  (London  time) two  Business  Days prior to the
      first day of such Interest  Period for a term  comparable to such Interest
      Period or, if for any reason such rate is not  available  (but  subject to
      the  provisions  of Section  2.07),  the  average  (rounded  upward to the
      nearest  whole  multiple of 1/16 of 1% per annum,  if such  average is not
      such a multiple) of the rate per annum at which  deposits in U.S.  dollars
      are  offered by the  principal  office of each of the  Reference  Banks in
      London,  England to prime  banks in the London  interbank  market at 11:00
      A.M. (London time) two Business Days before the first day of such Interest
      Period  in  an  amount   substantially  equal  to  such  Reference  Bank's
      Eurodollar   Rate  Advance   comprising  part  of  such  Borrowing  to  be
      outstanding  during such  Interest  Period and for a period  equal to such
      Interest  Period by (b) a  percentage  equal to 100% minus the  Eurodollar
      Rate Reserve Percentage for such Interest Period.

            "Eurodollar  Rate Advance"  means an Advance that bears  interest as
      provided in Section 2.06(a)(ii).

            "Eurodollar Rate Reserve Percentage" for any Interest Period for all
      Eurodollar  Rate Advances  comprising part of the same Borrowing means the
      reserve  percentage  applicable  two Business Days before the first day of
      such  Interest  Period under  regulations  issued from time to time by the
      Board of Governors of the Federal  Reserve  System (or any  successor) for
      determining   the  maximum   reserve   requirement   (including,   without
      limitation,   any  emergency,   supplemental  or  other  marginal  reserve
      requirement)  for a member bank of the Federal  Reserve System in New York
      City with  respect to  liabilities  or assets  consisting  of or including
      Eurocurrency  Liabilities  (or  with  respect  to any  other  category  of
      liabilities that includes deposits by reference to which the interest rate
      on  Eurodollar  Rate Advances is  determined)  having a term equal to such
      Interest Period.

            "Events of Default" has the meaning specified in Section 6.01.

            "Federal Funds Rate" means, for any period,  a fluctuating  interest
      rate per  annum  equal for each day  during  such  period to the  weighted
      average of the rates on overnight Federal funds  transactions with members
      of the Federal  Reserve  System  arranged  by Federal  funds  brokers,  as
      published  for such day (or,  if such day is not a Business  Day,  for the
      next preceding  Business Day) by the Federal Reserve Bank of New York, or,
      if such rate is not so published  for any day that is a Business  Day, the
      average of the  quotations for such day on such  transactions  received by
      the Agent from three Federal funds brokers of recognized standing selected
      by it.

            "GAAP" has the meaning specified in Section 1.03.

            "Guaranteed Obligations" has the meaning specified in Section 7.01.

            "Guaranty" means the provisions of Article VII.

            "Hedge   Agreements"   means  interest  rate  swap,  cap  or  collar
      agreements,  interest  rate  future or  option  contracts,  currency  swap
      agreements,   currency  future  or  option  contracts  and  other  similar
      agreements.

            "Information  Memorandum"  means the  information  memorandum  dated
      April 18, 2005 used by the Agent in connection with the syndication of the
      Commitments.

                                       6
<PAGE>

            "Interest Period" means, for each Eurodollar Rate Advance comprising
      part of the same  Borrowing,  the  period  commencing  on the date of such
      Eurodollar  Rate  Advance or the date of the  Conversion  of any Base Rate
      Advance  into such  Eurodollar  Rate Advance and ending on the last day of
      the period selected by the applicable  Borrower pursuant to the provisions
      below and,  thereafter,  with respect to Eurodollar  Rate  Advances,  each
      subsequent period commencing on the last day of the immediately  preceding
      Interest  Period and ending on the last day of the period selected by such
      Borrower  pursuant  to the  provisions  below.  The  duration of each such
      Interest  Period shall be one,  two,  three or six months,  and subject to
      clause (c) of this  definition,  nine months,  as the applicable  Borrower
      may, upon notice received by the Agent not later than 11:00 A.M. (New York
      City  time) on the  third  Business  Day  prior to the  first  day of such
      Interest Period, select; provided, however, that:

                  (a) the Borrowers may not select any Interest Period that ends
            after the  Termination  Date or, if the Advances have been converted
            to a term loan  pursuant  to Section  2.05 prior to such  selection,
            that ends after the Maturity Date;

                  (b)  Interest   Periods   commencing  on  the  same  date  for
            Eurodollar Rate Advances comprising part of the same Borrowing shall
            be of the same duration;

                  (c) in the case of any such Borrowing, the Borrowers shall not
            be  entitled to select an Interest  Period  having  duration of nine
            months  unless,  by 2:00  P.M.  (New  York  City  time) on the third
            Business Day prior to the first day of such  Interest  Period,  each
            Lender notifies the Agent that such Lender will be providing funding
            for such  Borrowing  with such  Interest  Period (the failure of any
            Lender to so respond by such time being  deemed for all  purposes of
            this  Agreement  as an  objection  by such  Lender to the  requested
            duration of such Interest  Period);  provided that, if any or all of
            the  Lenders  object  to the  requested  duration  of such  Interest
            Period, the duration of the Interest Period for such Borrowing shall
            be one,  two,  three or six months,  as  specified  by the  Borrower
            requesting  such Borrowing in the applicable  Notice of Borrowing as
            the desired alternative to an Interest Period of nine months;

                  (d)  whenever  the  last  day of  any  Interest  Period  would
            otherwise  occur on a day other than a Business Day, the last day of
            such  Interest  Period  shall  be  extended  to  occur  on the  next
            succeeding Business Day, provided,  however, that, if such extension
            would  cause  the last day of such  Interest  Period to occur in the
            next following  calendar month, the last day of such Interest Period
            shall occur on the next preceding Business Day; and

                  (e) whenever the first day of any Interest  Period occurs on a
            day of an initial  calendar  month for which there is no numerically
            corresponding  day in the calendar  month that succeeds such initial
            calendar month by the number of months in such Interest Period, such
            Interest  Period  shall  end  on  the  last  Business  Day  of  such
            succeeding calendar month.

            "Internal  Revenue Code" means the Internal Revenue Code of 1986, as
      amended from time to time,  and the  regulations  promulgated  and rulings
      issued thereunder.

            "Lenders"  means the  Initial  Lenders  and each  Person  that shall
      become a party hereto pursuant to Section 9.07.

            "Lien"  means  any  lien,  security  interest  or  other  charge  or
      encumbrance  of any kind,  or any other type of  preferential  arrangement
      intended  to  provide  security  for  the  payment  or  performance  of an
      obligation,  including,  without limitation, the lien or retained security
      title of a  conditional  vendor  and any  easement,  right of way or other
      encumbrance on title to real property.

            "Loan Party" means each Borrower and the Guarantor.

                                       7
<PAGE>

            "Material  Adverse Change" means any material  adverse change in the
      business, condition (financial or otherwise),  operations,  performance or
      properties of the Guarantor or the Guarantor and its Subsidiaries taken as
      a whole.

            "Material Adverse Effect" means a material adverse effect on (a) the
      business, condition (financial or otherwise),  operations,  performance or
      properties of the Guarantor or the Guarantor and its Subsidiaries taken as
      a whole, (b) the rights and remedies of the Agent or any Lender under this
      Agreement  or any Note or (c) the ability of any Loan Party to perform its
      obligations under this Agreement or any Note.

            "Maturity  Date" means the earlier of (a) the first  anniversary  of
      the  Termination  Date  and (b) the  date of  termination  in whole of the
      aggregate Commitments pursuant to Section 2.04 or 6.01.

            "Moody's" means Moody's Investors Service, Inc.

            "Multiemployer  Plan"  means a  multiemployer  plan,  as  defined in
      Section 4001(a)(3) of ERISA, to which the Guarantor or any ERISA Affiliate
      is making or accruing an obligation to make  contributions,  or has within
      any of the preceding five plan years made or accrued an obligation to make
      contributions.

            "Multiple Employer Plan" means a single employer plan, as defined in
      Section  4001(a)(15) of ERISA, that (a) is maintained for employees of the
      Guarantor  or any ERISA  Affiliate  and at least one Person other than the
      Guarantor and the ERISA Affiliates or (b) was so maintained and in respect
      of which the Guarantor or any ERISA  Affiliate  could have liability under
      Section  4064 or 4069 of ERISA in the event  such plan has been or were to
      be terminated.

            "Note" means a promissory note of a Borrower payable to the order of
      any Lender,  delivered  pursuant to a request  made under  Section 2.15 in
      substantially  the form of  Exhibit A  hereto,  evidencing  the  aggregate
      indebtedness  of such Borrower to such Lender  resulting from the Advances
      made by such Lender to such Borrower.

            "Notice of Borrowing" has the meaning specified in Section 2.02(a).

            "PBGC"  means  the  Pension  Benefit  Guaranty  Corporation  (or any
      successor).

            "Permitted  Liens"  means  such  of the  following  as to  which  no
      enforcement,  collection,  execution, levy or foreclosure proceeding shall
      have been commenced:  (a) Liens for taxes,  assessments  and  governmental
      charges  or levies to the  extent not  required  to be paid under  Section
      5.01(b)  hereof;   (b)  Liens  imposed  by  law,  such  as  materialmen's,
      mechanics',  carriers',  workmen's and repairmen's Liens and other similar
      Liens arising in the ordinary course of business securing obligations that
      are not  overdue  for a  period  of more  than 30 days or that  are  being
      contested in good faith and by  appropriate  proceedings  that prevent the
      forfeiture  or sale of the assets  subject to such  Lien;  (c)  pledges or
      deposits to secure obligations under workers' compensation laws or similar
      legislation or to secure public or statutory  obligations  or, in any such
      case, to secure reimbursement obligations under letters of credit or bonds
      issued to support such obligations;  and (d) easements,  rights of way and
      other  encumbrances  on title to real property that do not render title to
      the property  encumbered  thereby  unmarketable  or  materially  adversely
      affect the use of such property for its present purposes.

            "Person" means an individual, partnership,  corporation (including a
      business trust), joint stock company, trust,  unincorporated  association,
      joint venture,  limited liability company or other entity, or a government
      or any political subdivision or agency thereof.

            "Plan" means a Single Employer Plan or a Multiple Employer Plan.

            "Post-Petition Interest" has the meaning specified in Section 7.05.

                                       8
<PAGE>

            "PTR Scheme"  shall mean the  Provisional  Treaty  Relief  Scheme as
      described in Inland Revenue Guidelines dated July 1999 and administered by
      the Inland Revenue's Centre for Non-Residents.

            "Public Debt Rating" means, as of any date, the rating that has been
      most recently announced by either S&P or Moody's,  as the case may be, for
      any class of non-credit enhanced long-term senior unsecured debt issued by
      the Guarantor or, if either such rating agency shall have issued more than
      one such rating,  the lowest such rating issued by such rating agency. For
      purposes of the  foregoing,  (a) if only one of S&P and Moody's shall have
      in effect a Public Debt Rating,  the  Applicable  Margin,  the  Applicable
      Percentage  and the  Applicable  Utilization  Fee shall be  determined  by
      reference to the  available  rating;  (b) if neither S&P nor Moody's shall
      have in effect a Public Debt Rating, the Applicable Margin, the Applicable
      Percentage  and the Applicable  Utilization  Fee will be set in accordance
      with Level 6 under the  definition  of  "Applicable  Margin",  "Applicable
      Percentage"  or "Applicable  Utilization  Fee", as the case may be; (c) if
      the ratings  established  by S&P and Moody's  shall fall within  different
      levels,  the  Applicable   Margin,  the  Applicable   Percentage  and  the
      Applicable  Utilization  Fee shall be based upon the higher  rating unless
      such rating  differs by two or more levels,  in which case the  applicable
      level will be deemed to be one level above the lower of such  levels;  (d)
      if any rating established by S&P or Moody's shall be changed,  such change
      shall be effective as of the date on which such change is first  announced
      publicly  by the  rating  agency  making  such  change;  and (e) if S&P or
      Moody's  shall  change the basis on which  ratings are  established,  each
      reference to the Public Debt Rating  announced  by S&P or Moody's,  as the
      case may be, shall refer to the then equivalent  rating by S&P or Moody's,
      as the case may be.

            "Reference Banks" means Citibank, ABN AMRO Bank N.V., JPMorgan Chase
      Bank, N.A., Bank of America, N.A. and Banco Bilbao Vizcaya Argentaria.

            "Register" has the meaning specified in Section 9.07(d).

            "Required  Lenders"  means  at any  time  Lenders  owed  at  least a
      majority in interest of the then aggregate  unpaid principal amount of the
      Advances  owing  to  Lenders,  or,  if no such  principal  amount  is then
      outstanding,  Lenders  having  at  least a  majority  in  interest  of the
      Commitments.

            "S&P"  means  Standard  &  Poor's,  a  division  of The  McGraw-Hill
      Companies, Inc.

            "Single  Employer Plan" means a single  employer plan, as defined in
      Section  4001(a)(15) of ERISA, that (a) is maintained for employees of the
      Guarantor or any ERISA  Affiliate  and no Person other than the  Guarantor
      and the ERISA  Affiliates or (b) was so maintained and in respect of which
      the Guarantor or any ERISA  Affiliate  could have liability  under Section
      4069 of ERISA in the event such plan has been or were to be terminated.

            "Subordinated  Obligations"  has the  meaning  specified  in Section
      7.05.

            "Subsidiary" of any Person means any corporation, partnership, joint
      venture, limited liability company, trust or estate of which (or in which)
      more  than 50% of (a) the  issued  and  outstanding  Voting  Stock of such
      Person,  (b) the  interest  in the  capital  or  profits  of such  limited
      liability  company,  partnership  or joint  venture or (c) the  beneficial
      interest  in such trust or estate is at the time  directly  or  indirectly
      owned or controlled by such Person,  by such Person and one or more of its
      other Subsidiaries or by one or more of such Person's other Subsidiaries.

            "Term Loan Conversion  Date" means the Termination Date on which all
      Advances  outstanding on such date are converted into a term loan pursuant
      to Section 2.05.

            "Term Loan Election" has the meaning specified in Section 2.05.

            "Termination  Date"  means the  earlier of (a) June 29, 2006 and (b)
      the date of  termination in whole of the  Commitments  pursuant to Section
      2.04 or 6.01.

                                       9
<PAGE>

            "Voting  Stock"  means  capital  stock issued by a  corporation,  or
      equivalent  interests  in any  other  Person,  the  holders  of which  are
      ordinarily,  in the  absence of  contingencies,  entitled  to vote for the
      election of directors (or persons  performing  similar  functions) of such
      Person,  even if the right so to vote has been  suspended by the happening
      of such a contingency.

      SECTION  1.02.  Computation  of Time  Periods.  In this  Agreement  in the
computation of periods of time from a specified date to a later  specified date,
the word "from" means "from and  including"  and the words "to" and "until" each
mean "to but excluding".

      SECTION 1.03.  Accounting  Terms.  All accounting  terms not  specifically
defined  herein  shall  be  construed  in  accordance  with  generally  accepted
accounting  principles  consistent  with those applied in the preparation of the
financial statements referred to in Section 4.01(e) ("GAAP").

                                   ARTICLE II

                        AMOUNTS AND TERMS OF THE ADVANCES

      SECTION 2.01. The Advances. Each Lender severally agrees, on the terms and
conditions hereinafter set forth, to make Advances to the Borrowers from time to
time on any  Business  Day during the period from the  Effective  Date until the
Termination  Date in an aggregate  amount not to exceed at any time  outstanding
such Lender's  Commitment.  Each  Borrowing  shall be in an aggregate  amount of
$10,000,000  or an integral  multiple of $1,000,000 in excess  thereof and shall
consist of Advances of the same Type made on the same day by the Lenders ratably
according to their  respective  Commitments.  Within the limits of each Lender's
Commitment, the Borrowers may borrow under this Section 2.01, prepay pursuant to
Section 2.09 and reborrow under this Section 2.01.

      SECTION 2.02.  Making the Advances.  (a) Each  Borrowing  shall be made on
notice,  given not later than (x) 11:00  A.M.  (New York City time) on the third
Business  Day  prior  to the  date of the  proposed  Borrowing  in the case of a
Borrowing  consisting  of  Eurodollar  Rate Advances or (y) 11:00 A.M. (New York
City  time) on the date of the  proposed  Borrowing  in the case of a  Borrowing
consisting of Base Rate Advances, by the applicable Borrower to the Agent, which
shall give to each Lender prompt notice thereof by telecopier.  Each such notice
of a  Borrowing  (a  "Notice of  Borrowing")  shall be by  telephone,  confirmed
immediately  in writing,  or telecopier in  substantially  the form of Exhibit B
hereto,  specifying therein the requested (i) date of such Borrowing,  (ii) Type
of Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing,
and (iv) in the case of a Borrowing  consisting  of  Eurodollar  Rate  Advances,
initial  Interest Period for each such Advance.  Each Lender shall,  before 1:00
P.M. (New York City time) on the date of such  Borrowing  make available for the
account of its Applicable Lending Office to the Agent at the Agent's Account, in
same day funds,  such  Lender's  ratable  portion of such  Borrowing.  After the
Agent's receipt of such funds and upon fulfillment of the applicable  conditions
set forth in  Article  III,  the Agent  will make such  funds  available  to the
Borrower at the Agent's address referred to in Section 9.02.

      (b) Anything in subsection (a) above to the contrary notwithstanding,  (i)
the Borrowers may not select  Eurodollar  Rate Advances for any Borrowing if the
aggregate amount of such Borrowing is less than $10,000,000 or if the obligation
of the Lenders to make Eurodollar Rate Advances shall then be suspended pursuant
to  Section  2.07 or 2.11 and  (ii)  the  Eurodollar  Rate  Advances  may not be
outstanding as part of more than six separate Borrowings.

      (c) Each  Notice of  Borrowing  shall be  irrevocable  and  binding on the
Borrower  requesting  such  Borrowing.  In the  case of any  Borrowing  that the
related  Notice of Borrowing  specifies is to be  comprised of  Eurodollar  Rate
Advances,  the applicable Borrower shall indemnify each Lender against any loss,
cost or expense incurred by such Lender as a result of any failure to fulfill on
or before the date  specified in such Notice of Borrowing for such Borrowing the
applicable  conditions set forth in Article III, including,  without limitation,
any loss (including loss of anticipated  profits),  cost or expense  incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such  Lender  to fund  the  Advance  to be made by such  Lender  as part of such
Borrowing  when such Advance,  as a result of such failure,  is not made on such
date.

                                       10
<PAGE>

      (d) Unless the Agent shall have received notice from a Lender prior to the
time of any Borrowing that such Lender will not make available to the Agent such
Lender's  ratable  portion of such  Borrowing,  the Agent may  assume  that such
Lender  has  made  such  portion  available  to the  Agent  on the  date of such
Borrowing in accordance  with  subsection (a) of this Section 2.02 and the Agent
may, in reliance upon such assumption, make available to the applicable Borrower
on such date a corresponding amount. If and to the extent that such Lender shall
not have so made such ratable  portion  available to the Agent,  such Lender and
such  Borrower  severally  agree to repay to the Agent  forthwith on demand such
corresponding  amount together with interest thereon, for each day from the date
such amount is made  available  to such  Borrower  until the date such amount is
repaid  to the  Agent,  at (i) in the  case of a  Borrower,  the  interest  rate
applicable  at the time to Advances  comprising  such  Borrowing and (ii) in the
case of such Lender,  the Federal  Funds Rate. If such Lender shall repay to the
Agent such  corresponding  amount,  such amount so repaid shall  constitute such
Lender's Advance as part of such Borrowing for purposes of this Agreement.

      (e) The failure of any Lender to make the Advance to be made by it as part
of any Borrowing shall not relieve any other Lender of its  obligation,  if any,
hereunder to make its Advance on the date of such Borrowing, but no Lender shall
be  responsible  for the  failure of any other  Lender to make the Advance to be
made by such other Lender on the date of any Borrowing.

      SECTION 2.03.  Fees.  (a) Facility Fee. The Borrowers  agree to pay to the
Agent for the account of each Lender a facility fee on the  aggregate  amount of
such Lender's  Commitment  from the  Effective  Date in the case of each Initial
Lender and from the effective  date  specified in the  Assignment and Acceptance
pursuant to which it became a Lender in the case of each other  Lender until the
Termination  Date at a rate per  annum  equal to the  Applicable  Percentage  in
effect from time to time,  payable in arrears  quarterly on the last day of each
March, June,  September and December,  commencing September 30, 2005, and on the
Termination Date.

      (b) Agent's Fees. The Borrowers shall pay to the Agent for its own account
such fees as may from  time to time be  agreed  between  the  Guarantor  and the
Agent.

      SECTION 2.04.  Termination or Reduction of the Commitments.  (a) Optional.
The Borrowers shall have the right,  upon at least five Business Days' notice to
the Agent,  to  terminate  in whole or  permanently  reduce  ratably in part the
unused portions of the respective Commitments of the Lenders, provided that each
partial reduction shall be in the aggregate amount of $10,000,000 or an integral
multiple of $1,000,000 in excess thereof.

      (b)  Mandatory.  On the  Termination  Date, if the Borrowers have made the
Term Loan Election in accordance  with Section 2.05 prior to such date, and from
time to time thereafter upon each prepayment of the Advances, the Commitments of
the Lenders shall be automatically  and permanently  reduced on a pro rata basis
by an  amount  equal  to the  amount  by  which  (i) the  aggregate  Commitments
immediately  prior to such reduction exceeds (ii) the aggregate unpaid principal
amount of all Advances outstanding at such time.

      SECTION 2.05.  Repayment of Advances.  The Borrowers shall, subject to the
next  succeeding  sentence,  repay to the Agent for the  ratable  account of the
Lenders on the Termination  Date the aggregate  principal amount of the Advances
then  outstanding.  The Borrowers may, upon not less than 15 days' notice to the
Agent,  elect  (the  "Term  Loan  Election")  to  convert  all of  the  Advances
outstanding  on the  Termination  Date in  effect  at such time into a term loan
which the  Borrowers  shall repay in full ratably to the Lenders on the Maturity
Date; provided that the Term Loan Election may not be exercised if a Default has
occurred and is continuing on the date of notice of the Term Loan Election or on
the date on  which  the Term  Loan  Election  is to be  effected.  All  Advances
converted  into a term loan  pursuant  to this  Section  2.05 shall  continue to
constitute  Advances  except that the  Borrowers  may not  reborrow  pursuant to
Section  2.01  after all or any  portion  of such  Advances  have  been  prepaid
pursuant to Section 2.09.

      SECTION 2.06. Interest on Advances.  (a) Scheduled Interest. The Borrowers
shall pay interest on the unpaid  principal amount of each Advance owing to each
Lender from the date of such Advance until such  principal  amount shall be paid
in full, at the following rates per annum:

                                       11
<PAGE>

            (i) Base Rate  Advances.  During such  periods as such  Advance is a
      Base Rate  Advance,  a rate per annum equal at all times to the sum of (x)
      the Base Rate in effect from time to time plus (y) the  Applicable  Margin
      in effect from time to time plus (z) the  Applicable  Utilization  Fee, if
      any, in effect from time to time, payable in arrears quarterly on the last
      day of each March, June, September and December during such periods and on
      the date such Base Rate Advance shall be Converted or paid in full.

            (ii) Eurodollar  Rate Advances.  During such periods as such Advance
      is a Eurodollar  Rate Advance,  a rate per annum equal at all times during
      each  Interest  Period for such  Advance to the sum of (x) the  Eurodollar
      Rate for such  Interest  Period for such Advance  plus (y) the  Applicable
      Margin in effect  from  time to time plus (z) the  Applicable  Utilization
      Fee, if any,  in effect from time to time,  payable in arrears on the last
      day of such Interest Period and, if such Interest Period has a duration of
      more than three  months,  on each day that  occurs  during  such  Interest
      Period every three months from the first day of such  Interest  Period and
      on the date such  Eurodollar  Rate  Advance  shall be Converted or paid in
      full.

      (b) Default Interest. Upon the occurrence and during the continuance of an
Event of Default under Section  6.01(a),  the Agent may, and upon the request of
the Required  Lenders  shall,  require the  Borrowers to pay interest  ("Default
Interest")  on (i) the unpaid  principal  amount of each  Advance  owing to each
Lender,  payable in arrears on the dates referred to in clause (a)(i) or (a)(ii)
above, at a rate per annum equal at all times to 2% per annum above the rate per
annum  required to be paid on such Advance  pursuant to clause (a)(i) or (a)(ii)
above  and (ii) to the  fullest  extent  permitted  by law,  the  amount  of any
interest,  fee or other amount payable hereunder that is not paid when due, from
the date such  amount  shall be due  until  such  amount  shall be paid in full,
payable in arrears on the date such amount  shall be paid in full and on demand,
at a rate per annum  equal at all times to 2% per annum above the rate per annum
required  to be paid on Base Rate  Advances  pursuant  to clause  (a)(i)  above;
provided,  however,  that  following  acceleration  of the Advances  pursuant to
Section 6.01,  Default Interest shall accrue and be payable hereunder whether or
not previously required by the Agent.

      SECTION 2.07. Interest Rate Determination.  (a) Each Reference Bank agrees
to furnish to the Agent timely  information for the purpose of determining  each
Eurodollar  Rate.  If any one or more of the  Reference  Banks shall not furnish
such timely  information  to the Agent for the purpose of  determining  any such
interest  rate,  the Agent shall  determine  such  interest rate on the basis of
timely information  furnished by the remaining  Reference Banks. The Agent shall
give prompt notice to the applicable  Borrower and the Lenders of the applicable
interest  rate  determined  by the Agent for purposes of Section  2.06(a)(i)  or
(ii), and the rate, if any,  furnished by each Reference Bank for the purpose of
determining the interest rate under Section 2.06(a)(ii).

      (b) If, with respect to any Eurodollar Rate Advances, the Required Lenders
notify  the Agent  that the  Eurodollar  Rate for any  Interest  Period for such
Advances  will not  adequately  reflect  the cost to such  Required  Lenders  of
making,  funding or maintaining  their  respective  Eurodollar Rate Advances for
such  Interest  Period,  the Agent  shall  forthwith  so notify  the  applicable
Borrower  and the  Lenders,  whereupon  (i) each  Eurodollar  Rate  Advance will
automatically,  on the last day of the then existing  Interest Period  therefor,
Convert  into a Base Rate  Advance,  and (ii) the  obligation  of the Lenders to
make, or to Convert  Advances into,  Eurodollar Rate Advances shall be suspended
until  the  Agent  shall  notify  the   Borrowers   and  the  Lenders  that  the
circumstances causing such suspension no longer exist.

      (c) If any  Borrower  shall fail to select the  duration  of any  Interest
Period for any  Eurodollar  Rate  Advances  in  accordance  with the  provisions
contained in the definition of "Interest Period" in Section 1.01, the Agent will
forthwith  so notify  such  Borrower  and the  Lenders  and such  Advances  will
automatically,  on the last day of the then existing  Interest Period  therefor,
Convert into Base Rate Advances.

      (d) On the  date  on  which  the  aggregate  unpaid  principal  amount  of
Eurodollar Rate Advances  comprising any Borrowing shall be reduced,  by payment
or prepayment  or  otherwise,  to less than  $10,000,000,  such  Advances  shall
automatically Convert into Base Rate Advances.

      (e) Upon the occurrence and during the continuance of any Event of Default
under Section 6.01(a),  (i) each Eurodollar Rate Advance will automatically,  on
the last day of the then existing Interest

                                       12
<PAGE>

Period therefor, Convert into a Base Rate Advance and (ii) the obligation of the
Lenders to make, or to Convert Advances into,  Eurodollar Rate Advances shall be
suspended.

      (f) If  Telerate  Markets  Page 3750 is  unavailable  and  fewer  than two
Reference  Banks furnish  timely  information to the Agent for  determining  the
Eurodollar Rate for any Eurodollar Rate Advances,

            (i) the Agent shall  forthwith  notify the Borrowers and the Lenders
      that the  interest  rate cannot be  determined  for such  Eurodollar  Rate
      Advances,

            (ii) with respect to  Eurodollar  Rate  Advances,  each such Advance
      will  automatically,  on the last day of the then existing Interest Period
      therefor,  Convert  into a Base Rate Advance (or if such Advance is then a
      Base Rate Advance, will continue as a Base Rate Advance), and

            (iii) the obligation of the Lenders to make Eurodollar Rate Advances
      or to Convert  Advances into  Eurodollar  Rate Advances shall be suspended
      until the Agent  shall  notify  the  Borrowers  and the  Lenders  that the
      circumstances causing such suspension no longer exist.

      SECTION 2.08.  Optional  Conversion of Advances.  Each Borrower may on any
Business Day, upon notice given to the Agent not later than 11:00 A.M. (New York
City  time)  on the  third  Business  Day  prior  to the  date  of the  proposed
Conversion and subject to the provisions of Sections 2.07 and 2.11,  Convert all
or any portion of the Advances of one Type  comprising  the same  Borrowing into
Advances of the other Type; provided, however, that any Conversion of Eurodollar
Rate Advances  into Base Rate Advances  shall be made only on the last day of an
Interest Period for such  Eurodollar Rate Advances,  any Conversion of Base Rate
Advances into  Eurodollar  Rate Advances shall be in an amount not less than the
minimum  amount  specified in Section  2.02(b) and no Conversion of any Advances
shall result in more separate  Borrowings than permitted under Section  2.02(b).
Each such notice of a Conversion shall, within the restrictions specified above,
specify (i) the date of such Conversion,  (ii) the Advances to be Converted, and
(iii) if such Conversion is into  Eurodollar Rate Advances,  the duration of the
initial  Interest Period for each such Advance.  Each notice of Conversion shall
be irrevocable and binding on the applicable Borrower.

      SECTION 2.09.  Prepayments of Advances.  Each Borrower may, upon notice at
least two Business  Days' prior to the date of such  prepayment,  in the case of
Eurodollar Rate Advances,  and not later than 11:00 A.M. (New York City time) on
the date of such  prepayment,  in the case of Base Rate  Advances,  to the Agent
stating the proposed date and aggregate principal amount of the prepayment,  and
if such  notice is given the  Borrower  giving  such  notice  shall,  prepay the
outstanding  principal  amount  of the  Advances  comprising  part  of the  same
Borrowing in whole or ratably in part,  together  with  accrued  interest to the
date of such prepayment on the principal amount prepaid; provided, however, that
(x)  each  partial  prepayment  shall be in an  aggregate  principal  amount  of
$10,000,000  or an integral  multiple of $1,000,000 in excess thereof and (y) in
the event of any such  prepayment of a Eurodollar  Rate  Advance,  such Borrower
shall be  obligated  to  reimburse  the Lenders in respect  thereof  pursuant to
Section 9.04(c).

      SECTION 2.10.  Increased Costs. (a) If, due to either (i) the introduction
of or any change in or in the  interpretation of any law or regulation after the
date hereof,  or (ii) the compliance  with any guideline or request issued after
the date hereof from any central bank or other governmental authority including,
without  limitation,  any agency of the  European  Union or similar  monetary or
multinational authority (whether or not having the force of law), there shall be
any increase in the cost to any Lender of agreeing to make or making, funding or
maintaining  Eurodollar  Rate Advances  (excluding  for purposes of this Section
2.10 any such  increased  costs  resulting  from (i) Taxes or Other Taxes (as to
which  Section  2.13 shall  govern) and (ii) changes in the basis of taxation of
overall  net  income or  overall  gross  income by the  United  States or by the
foreign  jurisdiction  or state under the laws of which such Lender is organized
or has its Applicable Lending Office or any political subdivision thereof), then
the Borrowers  shall from time to time,  upon demand by such Lender (with a copy
of such  demand to the  Agent),  pay to the Agent for the account of such Lender
additional amounts sufficient to compensate such Lender for such increased cost;
provided, however, that before making any such demand, each Lender agrees to use
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different  Applicable  Lending Office if the making
of such a designation would avoid the need for, or reduce the amount of,

                                       13
<PAGE>

such increased cost and would not, in the reasonable judgment of such Lender, be
otherwise disadvantageous to such Lender. A certificate as to the amount of such
increased cost,  submitted to the Borrowers and the Agent by such Lender,  shall
be conclusive and binding for all purposes, absent manifest error.

      (b) If any Lender determines that compliance with any law or regulation or
any guideline or request  taking effect or issued after the date hereof from any
central bank or other governmental authority (whether or not having the force of
law)  affects or would  affect the amount of capital  required or expected to be
maintained by such Lender or any  corporation  controlling  such Lender and that
the amount of such capital is  increased by or based upon the  existence of such
Lender's  commitment to lend hereunder and other commitments of this type, then,
upon  demand  by such  Lender  (with a copy of such  demand to the  Agent),  the
Borrowers  shall pay to the Agent for the account of such  Lender,  from time to
time as specified by such Lender,  additional  amounts  sufficient to compensate
such  Lender  or such  corporation  in the light of such  circumstances,  to the
extent that such Lender  reasonably  determines  such  increase in capital to be
allocable to the existence of such  Lender's  commitment  to lend  hereunder.  A
certificate as to such amounts  submitted to the Borrowers and the Agent by such
Lender shall be conclusive and binding for all purposes, absent manifest error.

      (c)  Failure  or delay on the part of any  Lender to  demand  compensation
pursuant to this Section shall not constitute a waiver of such Lender's right to
demand such  compensation;  provided that the Borrowers shall not be required to
compensate  a  Lender  pursuant  to this  Section  for any  increased  costs  or
reductions  incurred  more than six  months  prior to the date that such  Lender
notifies the Borrowers of the circumstances  giving rise to such increased costs
or reductions  and of such Lender's  intention to claim  compensation  therefor;
provided further that, if the circumstances  giving rise to such increased costs
or reductions  cause such increased costs or reductions to be retroactive,  then
the six-month  period  referred to above shall be extended to include the period
of retroactive effect thereof.

      SECTION  2.11.  Illegality.  Notwithstanding  any other  provision of this
Agreement,  if any Lender shall notify the Agent that the introduction of or any
change in or in the  interpretation  of any law or regulation makes it unlawful,
or any central bank or other governmental authority asserts that it is unlawful,
for any  Lender or its  Eurodollar  Lending  Office to perform  its  obligations
hereunder to make  Eurodollar  Rate  Advances or to fund or maintain  Eurodollar
Rate Advances  hereunder,  (a) each Eurodollar Rate Advance will  automatically,
upon such demand, Convert into a Base Rate Advance and (b) the obligation of the
Lenders to make Eurodollar Rate Advances or to Convert  Advances into Eurodollar
Rate Advances shall be suspended  until the Agent shall notify the Borrowers and
the Lenders that the  circumstances  causing such  suspension  no longer  exist;
provided, however, that before making any such demand, each Lender agrees to use
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different  Eurodollar  Lending Office if the making
of such a designation  would allow such Lender or its Eurodollar  Lending Office
to continue to perform its  obligations to make  Eurodollar  Rate Advances or to
continue  to fund or maintain  Eurodollar  Rate  Advances  and would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.

      SECTION 2.12. Payments and Computations. (a) The Borrowers shall make each
payment  hereunder,  irrespective of any right of  counterclaim or set-off,  not
later than 11:00 A.M.  (New York City time) on the day when due in U.S.  dollars
to the Agent at the Agent's  Account in same day funds.  The Agent will promptly
thereafter  cause to be  distributed  like  funds  relating  to the  payment  of
principal  or interest or facility  fees  ratably  (other than  amounts  payable
pursuant  to Section  2.10,  2.13 or  9.04(c)) to the Lenders for the account of
their  respective  Applicable  Lending  Offices,  and like funds relating to the
payment of any other amount payable to any Lender to such Lender for the account
of its Applicable  Lending Office, in each case to be applied in accordance with
the terms of this Agreement. Upon its acceptance of an Assignment and Acceptance
and recording of the information  contained  therein in the Register pursuant to
Section 9.07(c),  from and after the effective date specified in such Assignment
and Acceptance,  the Agent shall make all payments hereunder and under any Notes
in respect of the interest  assigned thereby to the Lender assignee  thereunder,
and the parties to such  Assignment  and Acceptance  shall make all  appropriate
adjustments  in such payments for periods prior to such  effective date directly
between themselves.

      (b) Each  Borrower  hereby  authorizes  each Lender,  if and to the extent
payment  owed to such  Lender is not made when due  hereunder  or under the Note
held by such  Lender,  to charge  from time to time  against  any or all of such
Borrower's accounts with such Lender any amount so due.

                                       14
<PAGE>

      (c) All  computations  of interest based on the Base Rate shall be made by
the Agent on the basis of a year of 365 or 366 days, as the case may be, and all
computations  of interest based on the Eurodollar Rate or the Federal Funds Rate
and of fees  shall be made by the Agent on the  basis of a year of 360 days,  in
each case for the actual number of days  (including  the first day but excluding
the last day)  occurring  in the  period  for which  such  interest  or fees are
payable.  Each determination by the Agent of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.

      (d) Whenever  any payment  hereunder or under the Notes shall be stated to
be due on a day other than a Business  Day,  such  payment  shall be made on the
next  succeeding  Business Day, and such extension of time shall in such case be
included in the  computation of payment of interest or facility fee, as the case
may be;  provided,  however,  that,  if such  extension  would cause  payment of
interest on or  principal  of  Eurodollar  Rate  Advances to be made in the next
following  calendar  month,  such  payment  shall be made on the next  preceding
Business Day.

      (e)  Unless the Agent  shall  have  received  notice  from the  applicable
Borrower prior to the date on which any payment is due to the Lenders  hereunder
that such Borrower will not make such payment in full, the Agent may assume that
such  Borrower  has made such  payment in full to the Agent on such date and the
Agent may, in reliance upon such  assumption,  cause to be  distributed  to each
Lender on such due date an amount equal to the amount then due such  Lender.  If
and to the extent the applicable Borrower shall not have so made such payment in
full to the Agent, each Lender shall repay to the Agent forthwith on demand such
amount  distributed to such Lender together with interest thereon,  for each day
from the date such  amount is  distributed  to such  Lender  until the date such
Lender repays such amount to the Agent, at the Federal Funds Rate.

      SECTION 2.13.  Taxes. (a) Any and all payments by any Loan Party to or for
the account of any Lender or the Agent hereunder or under the Notes or any other
documents to be delivered  hereunder  shall be made, in accordance  with Section
2.12 or the applicable provisions of such other documents, free and clear of and
without  deduction  for any and all present or future  taxes,  levies,  imposts,
deductions,  charges or withholdings,  and all liabilities with respect thereto,
excluding,  in the case of each  Lender  and the  Agent,  taxes  imposed  on its
overall  net income,  and  franchise  taxes  imposed on it in lieu of net income
taxes, by the jurisdiction  under the laws of which such Lender or the Agent (as
the case may be) is organized or any political  subdivision  thereof and, in the
case of each  Lender,  taxes  imposed on its overall net income,  and  franchise
taxes imposed on it in lieu of net income  taxes,  by the  jurisdiction  of such
Lender's  Applicable  Lending  Office or any political  subdivision  thereof and
excluding  such taxes  imposed by the United  States  that are payable as of the
date  such  Lender  or the  Agent  became a party to this  Agreement  (all  such
non-excluded  taxes,  levies,  imposts,  deductions,  charges,  withholdings and
liabilities  in  respect  of  payments   hereunder  or  under  the  Notes  being
hereinafter referred to as "Taxes").  If any Loan Party shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder or under any
Note or any other  documents  to be  delivered  hereunder  to any  Lender or the
Agent,  (i) the sum payable shall be increased as may be necessary so that after
making all required deductions  (including  deductions  applicable to additional
sums payable  under this Section 2.13) such Lender or the Agent (as the case may
be)  receives  an amount  equal to the sum it would  have  received  had no such
deductions  been made, (ii) such Loan Party shall make such deductions and (iii)
such Loan Party shall pay the full  amount  deducted  to the  relevant  taxation
authority or other authority in accordance with applicable law.

      (b) In addition,  the  Borrowers  shall pay any present or future stamp or
documentary  taxes or any other  excise or  property  taxes,  charges or similar
levies  that arise from any  payment  made  hereunder  or under the Notes or any
other  documents to be delivered  hereunder or from the  execution,  delivery or
registration of,  performing under, or otherwise with respect to, this Agreement
or the Notes or any  other  documents  to be  delivered  hereunder  (hereinafter
referred to as "Other Taxes").

      (c) The Borrowers  shall  indemnify each Lender and the Agent for and hold
it harmless against the full amount of Taxes or Other Taxes (including,  without
limitation, taxes of any kind imposed or asserted by any jurisdiction on amounts
payable  under this Section 2.13) imposed on or paid by such Lender or the Agent
(as the  case  may be) and any  liability  (including  penalties,  interest  and
expenses) arising therefrom or with respect thereto.  This indemnification shall
be made  within 30 days from the date such  Lender or the Agent (as the case may
be) makes written demand therefor.

                                       15
<PAGE>

      (d) Within 45 days after the date of any payment of Taxes,  the applicable
Loan Party shall  furnish to the Agent,  at its  address  referred to in Section
9.02, the original or a certified copy of a receipt  evidencing  such payment to
the extent such a receipt is issued therefor,  or other written proof of payment
thereof that is reasonably satisfactory to the Agent. In the case of any payment
hereunder or under the Notes or any other documents to be delivered hereunder by
or on behalf of any Loan  Party  (other  than OFP)  through an account or branch
outside the United  States or by or on behalf of any Loan Party (other than OFP)
by a payor that is not a United  States  person,  if such Loan Party  determines
that no Taxes are payable in respect thereof,  such Loan Party shall furnish, or
shall cause such payor to furnish,  to the Agent, at such address, an opinion of
counsel  acceptable to the Agent stating that such payment is exempt from Taxes.
For  purposes of this  subsection  (d) and  subsection  (e),  the terms  "United
States" and "United States person" shall have the meanings  specified in Section
7701 of the Internal Revenue Code.

      (e) Each Lender  organized  under the laws of a  jurisdiction  outside the
United  States,  on or prior to the date of its  execution  and delivery of this
Agreement in the case of each Initial  Lender and on the date of the  Assignment
and  Acceptance  pursuant to which it becomes a Lender in the case of each other
Lender,  and from time to time thereafter as reasonably  requested in writing by
OFI and OCI (but only so long as such Lender  remains  lawfully  able to do so),
shall provide each of the Agent OFI and OCI with two original  Internal  Revenue
Service forms W-8BEN or W-8ECI,  as appropriate,  or any successor or other form
prescribed  by the  Internal  Revenue  Service,  certifying  that such Lender is
exempt from or entitled to a reduced rate of United  States  withholding  tax on
payments  made by OFI and OCI pursuant to this  Agreement  or the Notes.  If the
form  provided by a Lender at the time such Lender first becomes a party to this
Agreement  indicates a United States interest  withholding tax rate in excess of
zero,  withholding  tax at such rate  shall be  considered  excluded  from Taxes
unless and until such Lender  provides the appropriate  forms  certifying that a
lesser rate applies, whereupon withholding tax at such lesser rate only shall be
considered  excluded  from Taxes for periods  governed  by such form;  provided,
however, that, if at the date of the Assignment and Acceptance pursuant to which
a Lender  assignee  becomes a party to this  Agreement,  the Lender assignor was
entitled  to  payments  under   subsection  (a)  in  respect  of  United  States
withholding  tax with  respect  to  interest  paid at such date,  then,  to such
extent,  the term Taxes shall include (in addition to withholding taxes that may
be imposed in the future or other amounts otherwise  includable in Taxes) United
States  withholding tax, if any,  applicable with respect to the Lender assignee
on such  date.  If any  form or  document  referred  to in this  subsection  (e)
requires the  disclosure of  information,  other than  information  necessary to
compute the tax payable and information  required on the date hereof by Internal
Revenue Service form W-8BEN or W-8ECI,  that the Lender reasonably  considers to
be  confidential,  the Lender shall give notice thereof to OFI and OCI and shall
not be  obligated  to  include  in  such  form  or  document  such  confidential
information.

      (f) For any  period  with  respect to which a Lender has failed to provide
OFI and OCI with the appropriate form,  certificate or other document  described
in Section  2.13(e) (other than if such failure is due to a change in law, or in
the interpretation or application  thereof,  occurring subsequent to the date on
which a form,  certificate  or other  document  originally  was  required  to be
provided,  or if such  form,  certificate  or other  document  otherwise  is not
required  under  subsection  (e) above),  such  Lender  shall not be entitled to
indemnification  under  Section  2.13(a) or (c) with respect to Taxes imposed by
the United States by reason of such failure;  provided,  however,  that should a
Lender  become  subject  to Taxes  because  of its  failure  to  deliver a form,
certificate or other document required hereunder,  the Borrowers shall take such
steps as the  Lender  shall  reasonably  request to assist the Lender to recover
such Taxes.

      (g) In  respect  of  Advances  to OFP,  each  Lender  shall  designate  an
Applicable  Lending Office that is beneficially  entitled to interest under such
Advances and that,  on the date of this  Agreement or (in the case of any Person
that  becomes a Lender  hereunder  by means of an  assignment)  on the date such
Lender  becomes a party hereto is either (i) within the charge to United Kingdom
corporation tax in respect of interest in respect of an advance by a person that
was a bank (for the  purposes  of Section 349 Income and  Corporation  Taxes Act
1988) at the time the advance was made; or (ii) resident in a country with which
the United Kingdom has a double  taxation  agreement  which makes  provision for
full exemption from United Kingdom  taxation on interest payable by OFP pursuant
to this Agreement and does not carry on business in the United Kingdom through a
permanent  establishment  with which the payment is effectively  connected (each
such Person which is so resident being hereinafter in this Section 2.13 referred
to as a "Treaty Lender");  or (iii) a company resident in the United Kingdom, or
a partnership  each member of which is a company  resident in the United Kingdom
for United Kingdom tax purposes; or (iv) a company not so resident in the United
Kingdom which carries on a trade in the United Kingdom

                                       16
<PAGE>

through a permanent  establishment  and which is required to bring into  account
interest  payable to it by OFP  pursuant  to this  Agreement  in  computing  its
chargeable  profits  for  the  purposes  of  Section  11(2)  of the  Income  and
Corporation  Taxes Act 1988.  If any  Lender  does not or ceases to comply  with
clause (i),  (ii),  (iii) or (iv) above other than by reason of any change after
the  date of this  Agreement  in (or in the  interpretation,  administration  or
application of) any law or double taxation  agreement or any published  practice
or  concession of any relevant  taxing  authority,  the  Borrowers  shall not be
required to  compensate  such Lender  under  Section  2.13(a) or 2.13(c) for the
amount of Taxes imposed by the United Kingdom in consequence. Any Lender to whom
clause (ii) above is relevant and OFP shall cooperate in promptly completing any
procedural  formalities  necessary  for  OFP to  obtain  authorization  to  make
interest  payments without  deduction for UK income tax. The Borrowers shall not
be required to compensate any Lender to whom clause (ii) above is relevant under
Section  2.13(a) or 2.13(c) for any  deduction  for UK income tax from  interest
payments if such deduction is required as a result of the failure of such Lender
to comply with its  obligations in the preceding  sentence (other than a failure
that is attributable to the failure by OFP to comply with its obligations in the
preceding sentence).

      (h) Each Treaty Lender irrevocably  appoints the Agent to act as syndicate
manager  under,  and  authorizes  the  Agent to  operate,  and  take any  action
necessary or desirable  under,  the PTR Scheme in connection  with any Borrowing
hereunder.  Each Treaty Lender shall  cooperate with the Agent in completing any
procedural formalities necessary under the PTR Scheme, and shall promptly supply
to the Agent such  information  as the Agent may request in connection  with the
operation of the PTR Scheme.  Each Treaty Lender without  limiting the liability
of any  Borrower  under this  Agreement,  shall,  within five  Business  Days of
demand, indemnify the Agent for any liability or loss incurred by the Agent as a
result  of the  Agent  acting  as  syndicate  manager  under  the PTR  Scheme in
connection with the Treaty Lender's  participation  in any Borrowing  (except to
the extent that the  liability or loss arises  directly  from the Agent's  gross
negligence  or willful  misconduct).  Each  Treaty  Lender  shall,  within  five
Business Days of demand, indemnify each Borrower for any Tax which such Borrower
becomes  liable to pay in respect of any  payments  made to such  Treaty  Lender
arising as a result of any incorrect  information supplied by such Treaty Lender
which results in a provisional  authority  issued by the UK Inland Revenue under
the PTR Scheme being  withdrawn.  Each  Borrower  acknowledges  that it is fully
aware of its contingent  obligations under the PTR Scheme and shall (i) promptly
inform the Agent of all actions  required to be performed by the Agent under the
PTR Scheme,  (ii) promptly supply to the Agent such information as the Agent may
request in  connection  with the  operation of the PTR Scheme;  and (iii) act in
accordance with any provisional notice issued by the UK Inland Revenue under the
PTR Scheme. The Agent agrees to provide,  as soon as reasonably  practicable,  a
copy  of any  provisional  authority  issued  to it  under  the  PTR  Scheme  in
connection with any Borrowing to those Borrowers  specified in such  provisional
authority.  Each of the Borrowers, the Treaty Lenders and the Agent acknowledges
that the Agent: (i) is entitled to rely completely upon information  provided to
it in connection with this clause;  (ii) is not obliged to undertake any inquiry
into the accuracy of such  information  nor into the status of the Treaty Lender
or, as the case may be,  Borrower  providing such  information;  and (iii) shall
have no liability to any person for the accuracy of any  information  it submits
to the UK Inland Revenue in connection with this clause.

      (i) Any Lender claiming any additional  amounts  payable  pursuant to this
Section  2.13 agrees to use  reasonable  efforts  (consistent  with its internal
policy and legal and regulatory  restrictions) to change the jurisdiction of its
Eurodollar  Lending  Office if the making of such a change  would avoid the need
for, or reduce the amount of, any such  additional  amounts that may  thereafter
accrue and would not, in the  reasonable  judgment of such Lender,  be otherwise
disadvantageous to such Lender.

      SECTION  2.14.  Sharing of  Payments,  Etc. If any Lender shall obtain any
payment (whether  voluntary,  involuntary,  through the exercise of any right of
set-off,  or  otherwise)  on account  of the  Advances  owing to it (other  than
pursuant to Section  2.10,  2.13 or  9.04(c)) in excess of its ratable  share of
payments on account of the  Advances  obtained by all the  Lenders,  such Lender
shall  forthwith  purchase  from the other  Lenders such  participations  in the
Advances owing to them as shall be necessary to cause such purchasing  Lender to
share the excess payment ratably with each of them; provided,  however,  that if
all or any  portion of such excess  payment is  thereafter  recovered  from such
purchasing  Lender,  such  purchase from each Lender shall be rescinded and such
Lender shall repay to the purchasing  Lender the purchase price to the extent of
such  recovery  together  with an amount equal to such  Lender's  ratable  share
(according  to the  proportion  of (i)  the  amount  of such  Lender's  required
repayment to (ii) the total amount so recovered from the  purchasing  Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total  amount so  recovered.  Each  Borrower  agrees  that any  Lender so
purchasing a  participation  from another  Lender  pursuant to this Section 2.14
may, to the fullest extent

                                       17
<PAGE>

permitted  by law,  exercise all its rights of payment  (including  the right of
set-off) with respect to such  participation as fully as if such Lender were the
direct creditor of such Borrower in the amount of such participation.

      SECTION  2.15.  Evidence  of  Debt.  (a) Each  Lender  shall  maintain  in
accordance  with its usual  practice  an  account  or  accounts  evidencing  the
indebtedness  of each Borrower to such Lender  resulting from each Advance owing
to such  Lender  from time to time,  including  the  amounts  of  principal  and
interest  payable and paid to such Lender from time to time hereunder in respect
of Advances made to such Borrower.  The Borrowers  agree that upon notice by any
Lender to the Borrowers  (with a copy of such notice to the Agent) to the effect
that a Note is  required  or  appropriate  in order for such  Lender to evidence
(whether for purposes of pledge,  enforcement  or otherwise)  the Advances owing
to, or to be made by, such Lender,  the  Borrowers  shall  promptly  execute and
deliver to such Lender a Note payable to the order of such Lender in a principal
amount up to the Commitment of such Lender.

      (b) The Register maintained by the Agent pursuant to Section 9.07(d) shall
include a control account,  and a subsidiary  account for each Lender,  in which
accounts  (taken  together)  shall be  recorded  (i) the date and amount of each
Borrowing made hereunder, the Type of Advances comprising such Borrowing and, if
appropriate,  the Interest  Period  applicable  thereto,  (ii) the terms of each
Assignment and  Acceptance  delivered to and accepted by it, (iii) the amount of
any principal or interest due and payable or to become due and payable from each
Borrower to each Lender hereunder and (iv) the amount of any sum received by the
Agent from each Borrower hereunder and each Lender's share thereof.

      (c) Entries  made in good faith by the Agent in the  Register  pursuant to
subsection (b) above, and by each Lender in its account or accounts  pursuant to
subsection  (a) above,  shall be prima facie evidence of the amount of principal
and interest due and payable or to become due and payable from each Borrower to,
in the case of the  Register,  each Lender  and, in the case of such  account or
accounts,  such Lender, under this Agreement,  absent manifest error;  provided,
however,  that the failure of the Agent or such Lender to make an entry,  or any
finding that an entry is incorrect,  in the Register or such account or accounts
shall not limit or otherwise  affect the  obligations of any Borrower under this
Agreement.

      SECTION  2.16.  Use of Proceeds.  The  proceeds of the  Advances  shall be
available (and each Borrower agrees that it shall use such proceeds)  solely for
general corporate purposes of the Borrowers and their  Subsidiaries,  including,
without limitation, to fund acquisitions otherwise not prohibited hereunder.

                                   ARTICLE III

                     CONDITIONS TO EFFECTIVENESS AND LENDING

      SECTION  3.01.  Conditions  Precedent to  Effectiveness  of Section  2.01.
Section 2.01 of this  Agreement  shall  become  effective on and as of the first
date (the  "Effective  Date") on which the following  conditions  precedent have
been satisfied:

            (a) There  shall have  occurred  no Material  Adverse  Change  since
      December 31, 2004.

            (b) There shall exist no action, suit, investigation,  litigation or
      proceeding  affecting the Guarantor or any of its Subsidiaries  pending or
      threatened  before any court,  governmental  agency or arbitrator that (i)
      could be reasonably  likely to have a Material  Adverse  Effect other than
      the  matters   described  on  Schedule   3.01(b)  hereto  (the  "Disclosed
      Litigation")  or  (ii)  purports  to  affect  the  legality,  validity  or
      enforceability  of this Agreement or any Note or the  consummation  of the
      transactions  contemplated  hereby,  and there  shall have been no adverse
      change in the status,  or financial  effect on the Guarantor or any of its
      Subsidiaries,  of the Disclosed Litigation from that described on Schedule
      3.01(b) hereto.

            (c) Nothing shall have come to the  attention of the Lenders  during
      the course of their due  diligence  investigation  to lead them to believe
      that the Information Memorandum was or has become misleading, incorrect or
      incomplete in any material respect; without limiting the generality of the

                                       18
<PAGE>

      foregoing,   the  Lenders  shall  have  been  given  such  access  to  the
      management,  records,  books of account,  contracts and  properties of the
      Guarantor and its Subsidiaries as they shall have requested.

            (d)  All   governmental  and  third  party  consents  and  approvals
      necessary in connection with the  transactions  contemplated  hereby shall
      have been obtained  (without the imposition of any conditions that are not
      acceptable  to the  Lenders)  and shall  remain in  effect,  and no law or
      regulation  shall be applicable in the reasonable  judgment of the Lenders
      that restrains, prevents or imposes materially adverse conditions upon the
      transactions contemplated hereby.

            (e) The  Borrowers  shall have notified each Lender and the Agent in
      writing as to the proposed Effective Date.

            (f) The  Borrowers  shall have paid all accrued fees and expenses of
      the Agent and the  Lenders  (including  the accrued  fees and  expenses of
      counsel to the Agent).

            (g) On the Effective  Date, the following  statements  shall be true
      and the  Agent  shall  have  received  for the  account  of each  Lender a
      certificate  signed by a duly authorized  officer of the Guarantor,  dated
      the Effective Date, stating that:

                  (i) The  representations  and warranties  contained in Section
            4.01 are correct on and as of the Effective Date, and

                  (ii) No event has occurred and is continuing that  constitutes
            a Default.

            (h) The Agent shall have  received on or before the  Effective  Date
      the following,  each dated such day, in form and substance satisfactory to
      the Agent and (except for the Notes) in sufficient copies for each Lender:

                  (i) The  Notes  to the  order  of the  Lenders  to the  extent
            requested by any Lender pursuant to Section 2.15.

                  (ii)  Certified  copies  of the  resolutions  of the  Board of
            Directors of each Loan Party  approving this Agreement and the Notes
            to  which  it is a  party,  and of all  documents  evidencing  other
            necessary corporate action and governmental  approvals, if any, with
            respect to this Agreement and the Notes to which it is a party.

                  (iii) A certificate of the Secretary or an Assistant Secretary
            of each Loan Party  certifying the names and true  signatures of the
            officers of such Loan Party  authorized  to sign this  Agreement and
            the  Notes to  which it is a party  and the  other  documents  to be
            delivered by it hereunder.

                  (iv) A favorable  opinion of Dewey  Ballantine  LLP,  New York
            counsel for the Loan Parties,  and MacFarlanes,  English counsel for
            OFP,  substantially  in the  form of  Exhibits  D-1 and D-2  hereto,
            respectively, and as to such other matters as any Lender through the
            Agent may reasonably request.

                  (v) A favorable  opinion of Shearman & Sterling  LLP,  counsel
            for the Agent, in form and substance satisfactory to the Agent.

      SECTION 3.02.  Conditions  Precedent to Each Borrowing.  The obligation of
each  Lender to make an  Advance  on the  occasion  of each  Borrowing  shall be
subject to the conditions  precedent that the Effective Date shall have occurred
and on the date of such  Borrowing  (a) the following  statements  shall be true
(and each of the giving of the applicable Notice of Borrowing and the acceptance
by a Borrower of the proceeds of such

                                       19
<PAGE>

Borrowing shall constitute a  representation  and warranty by such Borrower that
on the date of such Borrowing such statements are true):

            (i) the  representations  and  warranties  contained in Section 4.01
      (except, in the case of a Borrowing,  the representations set forth in the
      last sentence of subsection (e) thereof and in subsection  (f)(i) thereof)
      are correct on and as of such date, before and after giving effect to such
      Borrowing and to the application of the proceeds therefrom, as though made
      on and as of such date, and

            (ii) no event has occurred and is  continuing,  or would result from
      such  Borrowing or from the  application of the proceeds  therefrom,  that
      constitutes a Default;

and (b) the  Agent  shall  have  received  such  other  approvals,  opinions  or
documents as any Lender through the Agent may reasonably request.

      SECTION  3.03.   Determinations   Under  Section  3.01.  For  purposes  of
determining  compliance  with the  conditions  specified in Section  3.01,  each
Lender  shall be deemed to have  consented  to,  approved  or  accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Agent  responsible  for the  transactions  contemplated by this Agreement
shall  have  received  notice  from  such  Lender  prior  to the  date  that the
Borrowers,  by notice to the Lenders,  designate as the proposed Effective Date,
specifying its objection thereto. The Agent shall promptly notify the Lenders of
the occurrence of the Effective Date.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

      SECTION  4.01.  Representations  and  Warranties  of  the  Guarantor.  The
Guarantor represents and warrants as follows:

            (a)  Each  Loan  Party  is a  corporation  duly  organized,  validly
      existing and in good standing  under the laws of the  jurisdiction  of its
      organization.

            (b) The  execution,  delivery and  performance by each Loan Party of
      this  Agreement and the Notes to be delivered by it, and the  consummation
      of the transactions  contemplated hereby, are within the such Loan Party's
      corporate  powers,  have been duly  authorized by all necessary  corporate
      action, and do not contravene (i) the such Loan Party's charter or by-laws
      or  other  organizational   documents  or  (ii)  law  or  any  contractual
      restriction binding on or affecting any Loan Party.

            (c) No  authorization  or approval or other action by, and no notice
      to or filing with, any  governmental  authority or regulatory  body or any
      other  third  party  is  required  for the  due  execution,  delivery  and
      performance  by the any Loan  Party of this  Agreement  or the Notes to be
      delivered by it.

            (d) This  Agreement has been,  and each of the Notes to be delivered
      by it when delivered hereunder will have been, duly executed and delivered
      by each Loan Party party thereto. This Agreement is, and each of the Notes
      when delivered  hereunder will be, the legal, valid and binding obligation
      of each Loan Party party  thereto  enforceable  against such Loan Party in
      accordance with their respective terms.

            (e)  The  Consolidated  balance  sheet  of  the  Guarantor  and  its
      Subsidiaries  as at  December  31,  2004,  and  the  related  Consolidated
      statements of income and cash flows of the Guarantor and its  Subsidiaries
      for the fiscal  year then  ended,  accompanied  by an opinion of KPMG LLP,
      independent public accountants,  and the Consolidated balance sheet of the
      Guarantor  and its  Subsidiaries  as at March 31,  2005,  and the  related
      Consolidated  statements of income and cash flows of the Guarantor and its
      Subsidiaries for the three months then ended,  duly certified by the chief
      financial officer of the Guarantor, copies of which have been furnished to
      each Lender, fairly present, subject, in the case of said balance sheet as
      at March 31,

                                       20
<PAGE>

      2005,  and said  statements  of income and cash flows for the three months
      then ended,  to year-end audit  adjustments,  the  Consolidated  financial
      condition of the Guarantor and its  Subsidiaries  as at such dates and the
      Consolidated   results  of  the   operations  of  the  Guarantor  and  its
      Subsidiaries  for the periods ended on such dates,  all in accordance with
      generally  accepted  accounting  principles  consistently  applied.  Since
      December 31, 2004, there has been no Material Adverse Change.

            (f) There is no  pending  or,  to the  knowledge  of the  Guarantor,
      threatened  action,   suit,   investigation,   litigation  or  proceeding,
      including,  without limitation,  any Environmental  Action,  affecting the
      Guarantor or any of its Subsidiaries before any court, governmental agency
      or  arbitrator  that (i) could be  reasonably  likely  to have a  Material
      Adverse Effect (other than the Disclosed  Litigation),  and there has been
      no adverse change in the status,  or financial  effect on the Guarantor or
      any of its Subsidiaries,  of the Disclosed  Litigation from that described
      on  Schedule  3.01(b)  hereto or (ii)  purports  to affect  the  legality,
      validity  or   enforceability  of  this  Agreement  or  any  Note  or  the
      consummation of the transactions contemplated hereby.

            (g) No Loan Party is engaged in the business of extending credit for
      the purpose of purchasing or carrying  margin stock (within the meaning of
      Regulation  U issued  by the Board of  Governors  of the  Federal  Reserve
      System),  and no proceeds of any Advance will be used to purchase or carry
      any  margin  stock or to  extend  credit  to  others  for the  purpose  of
      purchasing or carrying any margin stock.

            (h)  No  Loan  Party  is  an  "investment  company",  or  a  company
      "controlled"  by an  "investment  company",  within  the  meaning  of  the
      Investment Company Act of 1940, as amended.

            (i)  All  factual  information  (taken  as a  whole)  heretofore  or
      contemporaneously  furnished  by or on behalf of any Loan Party in writing
      to any Lender (including, without limitation, all information contained in
      this  Agreement)  for purposes of or in connection  with this Agreement or
      any  transaction  contemplated  herein  is,  and all  other  such  factual
      information (taken as a whole) hereafter furnished by or on behalf of such
      Loan  Party in writing to any Lender  will be,  true and  accurate  in all
      material  respects  on the date as of which such  information  is dated or
      certified  and does not or will not omit to state  any fact  necessary  to
      make such  information  (taken as a whole) not  misleading in any material
      respect  at such  time in  light of the  circumstances  under  which  such
      information was provided.

                                    ARTICLE V

                           COVENANTS OF THE GUARANTOR

      SECTION 5.01. Affirmative  Covenants.  So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, the Guarantor will:

            (a)  Compliance  with  Laws,  Etc.  Comply,  and  cause  each of its
      Subsidiaries to comply with all applicable  laws,  rules,  regulations and
      orders, such compliance to include,  without  limitation,  compliance with
      ERISA and  Environmental  Laws  except,  in each case,  to the extent that
      failure to comply  would not  reasonably  be  expected  to have a Material
      Adverse Effect.

            (b) Payment of Taxes, Etc. Pay and discharge,  and cause each of its
      Subsidiaries   to  pay  and  discharge,   before  the  same  shall  become
      delinquent,  (i) all taxes, assessments and governmental charges or levies
      imposed upon it or upon its property and (ii) all lawful  claims that,  if
      unpaid, might by law become a Lien upon its property;  provided,  however,
      that neither the Guarantor nor any of its  Subsidiaries  shall be required
      to pay or  discharge  any such tax,  assessment,  charge or claim  that is
      being  contested in good faith and by proper  proceedings  and as to which
      appropriate reserves are being maintained.

                                       21
<PAGE>

            (c)  Maintenance  of  Insurance.  Maintain,  and  cause  each of its
      Subsidiaries  to  maintain,   insurance  with  responsible  and  reputable
      insurance  companies or  associations  in such  amounts and covering  such
      risks as is usually carried by companies engaged in similar businesses and
      owning similar properties in the same general areas in which the Guarantor
      or such Subsidiary operates.

            (d) Preservation of Corporate Existence, Etc. Preserve and maintain,
      and cause each of its Subsidiaries to preserve and maintain, its corporate
      existence,  rights  (charter  and  statutory)  and  franchises;  provided,
      however, that the Guarantor and its Subsidiaries may consummate any merger
      or consolidation permitted under Section 5.02(b) and provided further that
      neither the  Guarantor  nor any of its  Subsidiaries  shall be required to
      preserve any right or franchise, or the existence of any Subsidiary of the
      Guarantor  that  is not a  Borrower,  if the  Board  of  Directors  of the
      Guarantor or the Borrower that is the corporate  parent of such Subsidiary
      shall determine that the  preservation  thereof is no longer  desirable in
      the conduct of the business of the Guarantor or such Borrower, as the case
      may be, and that the loss thereof is not  disadvantageous  in any material
      respect to the Guarantor, such Borrower or the Lenders.

            (e) Visitation Rights. At any reasonable time and from time to time,
      permit the Agent or any of the  Lenders  or any agents or  representatives
      thereof,  to examine and make copies of and abstracts from the records and
      books of account of, and visit the properties of, the Guarantor and any of
      its Subsidiaries, and to discuss the affairs, finances and accounts of the
      Guarantor  and any of its  Subsidiaries  with  any of  their  officers  or
      directors and with their independent certified public accountants.

            (f) Keeping of Books.  Keep, and cause each of its  Subsidiaries  to
      keep,  proper  books of record  and  account,  in which  full and  correct
      entries  shall be made of all  financial  transactions  and the assets and
      business of the  Guarantor and each such  Subsidiary  in  accordance  with
      generally accepted accounting principles in effect from time to time.

            (g) Maintenance of Properties, Etc. Maintain and preserve, and cause
      each of its  Subsidiaries to maintain and preserve,  all of its properties
      that are used or useful in the  conduct of its  business  in good  working
      order and condition, ordinary wear and tear excepted.

            (h)  Transactions  with Affiliates.  Conduct,  and cause each of its
      Subsidiaries to conduct,  all transactions  otherwise permitted under this
      Agreement  with  any of  their  Affiliates  on  terms  that  are  fair and
      reasonable and no less favorable to the Guarantor or such  Subsidiary than
      it would obtain in a comparable arm's-length transaction with a Person not
      an Affiliate.

            (i) Reporting Requirements. Furnish to the Lenders:

                  (i) as soon as available and in any event within 50 days after
            the end of each of the first  three  quarters of each fiscal year of
            the Guarantor,  the Consolidated  balance sheet of the Guarantor and
            its  Subsidiaries  as of the end of such  quarter  and  Consolidated
            statements  of  income  and  cash  flows  of the  Guarantor  and its
            Subsidiaries  for the period  commencing  at the end of the previous
            fiscal year and ending with the end of such quarter,  duly certified
            (subject  to  year-end  audit  adjustments)  by the chief  financial
            officer of the Guarantor as having been prepared in accordance  with
            generally  accepted  accounting  principles and  certificates of the
            chief  financial  officer of the Guarantor as to compliance with the
            terms of this  Agreement and setting forth in reasonable  detail the
            calculations  necessary to demonstrate compliance with Section 5.03,
            provided  that in the  event of any  change  in  generally  accepted
            accounting  principles  used in the  preparation  of such  financial
            statements,  the Guarantor shall also provide,  if necessary for the
            determination  of  compliance  with  Section  5.03,  a statement  of
            reconciliation conforming such financial statements to GAAP;

                  (ii) as soon as  available  and in any  event  within  95 days
            after the end of each  fiscal year of the  Guarantor,  a copy of the
            annual  audit  report  for  such  year  for  the  Guarantor  and its
            Subsidiaries,  containing  the  Consolidated  balance  sheet  of the
            Guarantor and its Subsidiaries as of

                                       22
<PAGE>

            the end of such fiscal year and  Consolidated  statements  of income
            and cash flows of the Guarantor and its Subsidiaries for such fiscal
            year,  in each case  accompanied  by an  opinion  acceptable  to the
            Required Lenders by KPMG LLP or other independent public accountants
            acceptable  to the Required  Lenders and  certificates  of the chief
            financial  officer of the Guarantor as to compliance  with the terms
            of this  Agreement  and  setting  forth  in  reasonable  detail  the
            calculations  necessary to demonstrate compliance with Section 5.03,
            provided  that in the  event of any  change  in  generally  accepted
            accounting  principles  used in the  preparation  of such  financial
            statements,  the Guarantor shall also provide,  if necessary for the
            determination  of  compliance  with  Section  5.03,  a statement  of
            reconciliation conforming such financial statements to GAAP;

                  (iii) as soon as  possible  and in any event  within five days
            after any senior  officer  of the  Guarantor  or a Borrower  becomes
            aware or should have become aware of the  occurrence of any Default,
            the  occurrence  of  each  Default  continuing  on the  date of such
            statement,  a  statement  of  the  chief  financial  officer  of the
            Guarantor  setting forth details of such Default and the action that
            the Guarantor has taken and proposes to take with respect thereto;

                  (iv) promptly after the sending or filing  thereof,  copies of
            all reports that the Guarantor sends to any of its  securityholders,
            and  copies of all  reports  and  registration  statements  that the
            Guarantor or any  Subsidiary  files with the Securities and Exchange
            Commission or any national securities exchange;

                  (v) promptly  after the  commencement  thereof,  notice of all
            actions and  proceedings  before any court,  governmental  agency or
            arbitrator affecting the Guarantor or any of its Subsidiaries of the
            type described in Section 4.01(f); and

                  (vi) such other information respecting the Guarantor or any of
            its  Subsidiaries  as any Lender  through the Agent may from time to
            time reasonably request.

            Reports and  financial  statements  required to be  delivered by the
      Guarantor  pursuant to paragraphs  (i), (ii), (iv) and (v) of this Section
      5.01(i)  shall be deemed to have  been  delivered  on the date on which it
      posts such reports,  or reports containing such financial  statements,  on
      its website on the Internet at  www.omnicomgroup.com or when such reports,
      or reports  containing  such financial  statements are posted on the SEC's
      website at  www.sec.gov;  provided that it shall deliver  notice that such
      reports and financial  statements are so available and shall deliver paper
      copies of the reports and financial  statements  referred to in paragraphs
      (i), (ii), (iv) and (v) of this Section 5.01(i) to the Agent or any Lender
      who requests it to deliver such paper copies until written notice to cease
      delivering paper copies is given by the Agent or such Lender.

      SECTION  5.02.  Negative  Covenants.  So long as any Advance  shall remain
unpaid or any Lender shall have any  Commitment  hereunder,  the Guarantor  will
not:

            (a)  Liens,  Etc.  Create or suffer to exist,  or permit  any of its
      Subsidiaries to create or suffer to exist,  any Lien on or with respect to
      any of its properties, whether now owned or hereafter acquired, or assign,
      or permit any of its Subsidiaries to assign,  any right to receive income,
      other than:

                  (i) Permitted Liens,

                  (ii)  purchase  money  Liens upon or in any real  property  or
            equipment acquired or held by the Guarantor or any Subsidiary in the
            ordinary  course of  business to secure the  purchase  price of such
            property  or  equipment  or to secure Debt  incurred  solely for the
            purpose of financing the  acquisition of such property or equipment,
            or Liens  existing on such  property or equipment at the time of its
            acquisition  (other than any such Liens created in  contemplation of
            such  acquisition  that were not incurred to finance the acquisition
            of such property) or extensions,  renewals or replacements of any of
            the foregoing for the same or a lesser  amount,  provided,  however,
            that no

                                       23
<PAGE>

            such Lien shall extend to or cover any  properties  of any character
            other than the real property or equipment  being  acquired and fixed
            improvements  thereon or accessions thereto,  and no such extension,
            renewal or  replacement  shall extend to or cover any properties not
            theretofore subject to the Lien being extended, renewed or replaced,

                  (iii) the Liens  existing on the Effective  Date and described
            on Schedule 5.02(a) hereto,

                  (iv) Liens on property  of a Person  existing at the time such
            Person is merged  into or  consolidated  with the  Guarantor  or any
            Subsidiary   of  the  Guarantor  or  becomes  a  Subsidiary  of  the
            Guarantor;   provided   that  such   Liens   were  not   created  in
            contemplation  of such merger,  consolidation  or acquisition and do
            not  extend to any  assets  other than those of the Person so merged
            into or  consolidated  with  the  Guarantor  or such  Subsidiary  or
            acquired by the Guarantor or such Subsidiary,

                  (v) Liens securing Debt permitted by Section 5.02(d)(vii),

                  (vi) Liens granted by  Subsidiaries  of the  Guarantor  (other
            than the Borrowers) to secure Debt permitted by Section 5.02(d)(iv),
            and

                  (vii) other Liens securing  Debt,  provided that the aggregate
            principal  amount of such  secured  Debt shall not exceed 15% of the
            Consolidated  net worth of the Guarantor and its Subsidiaries at any
            time.

            (b) Mergers,  Etc.  Merge or  consolidate  with or into,  or convey,
      transfer,  lease or otherwise dispose of (whether in one transaction or in
      a series of transactions)  all or substantially all of its assets (whether
      now owned or  hereafter  acquired)  to, any  Person,  or permit any of the
      Borrowers to do so.

            (c)  Accounting  Changes.  Make  or  permit,  or  permit  any of its
      Subsidiaries  to make or permit,  any  change in  accounting  policies  or
      reporting practices, except as required or permitted by generally accepted
      accounting principles.

            (d) Subsidiary  Debt.  Permit any of its  Subsidiaries  to create or
      suffer to exist,  any Debt other than:  (i) Debt existing on the Effective
      Date and described on Schedule 5.02(d) hereto (the "Existing  Debt"),  and
      any Debt extending the maturity of, or refunding or refinancing,  in whole
      or in part, the Existing Debt,  provided that the principal amount of such
      Existing Debt shall not be increased  above the principal  amount  thereof
      outstanding immediately prior to such extension,  refunding or refinancing
      plus any capitalized fees incurred in connection therewith, and the direct
      and  contingent  obligors  therefor  shall not be changed  (other  than to
      release any contingent obligor), as a result of or in connection with such
      extension, refunding or refinancing,

                  (ii)  accrued  expenses  and trade  payables  incurred  in the
            ordinary course of business,  and obligations under trade letters of
            credit incurred in the ordinary course of business,  which are to be
            repaid in full not more than one year  after the date on which  such
            Debt is originally incurred to finance the purchase of goods by such
            Subsidiary,

                  (iii)  obligations  under  letters  of credit or surety  bonds
            incurred  in  the   ordinary   course  of  business  in  support  of
            obligations   incurred   in   connection   with   leases,   worker's
            compensation,  unemployment  insurance  and  other  social  security
            legislation,

                  (iv)  Debt  owed  to  the  Guarantor  or  to  a  wholly  owned
            Subsidiary of the Guarantor,

                                       24
<PAGE>

                  (v) Debt of the Borrowers,

                  (vi) other Debt of Subsidiaries of the Guarantor which are not
            organized under the laws of the United States of America, a State of
            the  United  States of  America  or the  District  of  Columbia  and
            substantially  all of whose  assets  and  business  are  located  or
            conducted outside the United States of America,

                  (vii)  Debt of a Person  existing  at the time such  Person is
            merged into or consolidated  with the Guarantor or any Subsidiary of
            the  Guarantor or becomes a Subsidiary  of the  Guarantor;  provided
            that such Debt was not  created  in  contemplation  of such  merger,
            consolidation  or acquisition,  provided  further that the aggregate
            principal  amount of the Debt  referred to in this clause (iv) shall
            not exceed $50,000,000 at any time outstanding,

                  (viii)  (x)  Debt  consisting  of  any  guaranty  made  by any
            Subsidiary  of the  Guarantor  in respect of Debt of any Loan Party,
            provided that such Subsidiary  shall have entered into a guaranty of
            the Debt of the Guarantor under this Agreement in form and substance
            reasonably  satisfactory  to  the  Required  Lenders  and  (y)  Debt
            constituting  guaranties  of the Debt of the  Guarantor  under  this
            Agreement, and

                  (ix)  indorsement  of  negotiable  instruments  for deposit or
            collection  or  similar  transactions  in  the  ordinary  course  of
            business.

            (e)  Change in  Nature  of  Business.  Make,  or  permit  any of its
      Subsidiaries to make, any material change in the nature of its business as
      carried on at the date hereof and other reasonably  related  businesses or
      businesses reasonably incidental thereto.

            (f)  Payment  Restrictions  Affecting   Subsidiaries.   Directly  or
      indirectly,  enter  into  or  suffer  to  exist,  or  permit  any  of  its
      Subsidiaries  to  enter  into  or  suffer  to  exist,   any  agreement  or
      arrangement  limiting  the ability or any of its  Subsidiaries  to (i) pay
      dividends  or make any other  distributions  on its  capital  stock or any
      other interest or  participation  in its profits owned by the Guarantor or
      any of its  Subsidiaries,  or pay any Debt owed to the Guarantor or any of
      its  Subsidiaries,  (ii) make loans or advances to the  Guarantor or (iii)
      transfer any of its properties or assets to the Guarantor, except for such
      agreements or  arrangements  existing under or by reason of (x) applicable
      law,  (y)  this  Agreement  and  (z)  customary   provisions   restricting
      subletting or assignment of any lease governing a leasehold  interest of a
      Subsidiary of the Guarantor.

      SECTION  5.03.  Financial  Covenants.  So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, the Guarantor will:

            (a)  Leverage  Ratio.  Maintain  a ratio  of  Consolidated  Debt for
      Borrowed  Money of the  Guarantor  and its  Subsidiaries  to  Consolidated
      EBITDA of the  Guarantor and its  Subsidiaries  for the four quarters most
      recently ended of not greater than 3.0 to 1.

            (b) Interest Coverage Ratio. Maintain a ratio of Consolidated EBITDA
      of the Guarantor and its  Subsidiaries for the four quarters most recently
      ended to interest payable on, and amortization of debt discount in respect
      of, all Debt during such period by the Guarantor and its  Subsidiaries  of
      not less than 5.0 to 1.

                                   ARTICLE VI

                                EVENTS OF DEFAULT

      SECTION 6.01.  Events of Default.  If any of the following events ("Events
of Default") shall occur and be continuing:

                                       25
<PAGE>

            (a) Any Borrower shall fail to pay any principal of any Advance when
      the same  becomes due and payable;  or any Borrower  shall fail to pay any
      interest on any Advance or make any other payment of fees or other amounts
      payable under this  Agreement or any Note within three Business Days after
      the same becomes due and payable; or

            (b) Any  representation  or warranty made by the Guarantor herein or
      by any  Loan  Party  (or any of its  officers)  in  connection  with  this
      Agreement shall prove to have been incorrect in any material  respect when
      made; or

            (c) (i) The  Guarantor  shall fail to  perform or observe  any term,
      covenant or agreement contained in Section 5.01(d),  (e), (h) or (i), 5.02
      or 5.03, or (ii) any Loan Party shall fail to perform or observe any other
      term,  covenant or agreement contained in this Agreement on its part to be
      performed or observed if such failure shall remain  unremedied for 30 days
      after written notice thereof shall have been given to the Guarantor by the
      Agent or any Lender; or

            (d) The Guarantor or any of its  Subsidiaries  shall fail to pay any
      principal of or premium or interest on any Debt that is  outstanding  in a
      principal or notional  amount of at least  $100,000,000  in the  aggregate
      (but  excluding  Debt  outstanding  hereunder)  of the  Guarantor  or such
      Subsidiary  (as the case may be),  when the same  becomes  due and payable
      (whether by scheduled maturity, required prepayment,  acceleration, demand
      or otherwise),  and such failure shall continue after the applicable grace
      period, if any, specified in the agreement or instrument  relating to such
      Debt;  or any other event shall occur or  condition  shall exist under any
      agreement or instrument relating to any such Debt and shall continue after
      the  applicable  grace  period,  if any,  specified  in such  agreement or
      instrument,  if the effect of such event or condition is to accelerate, or
      to permit the acceleration of, the maturity of such Debt; or any such Debt
      shall be  declared  to be due and  payable,  or  required to be prepaid or
      redeemed  (other  than by a regularly  scheduled  required  prepayment  or
      redemption),  purchased  or  defeased,  or an  offer  to  prepay,  redeem,
      purchase or defease  such Debt shall be required to be made,  in each case
      prior to the stated maturity thereof; or

            (e) The Guarantor or any of its Subsidiaries shall generally not pay
      its  debts as such  debts  become  due,  or shall  admit  in  writing  its
      inability to pay its debts generally,  or shall make a general  assignment
      for the benefit of creditors;  or any proceeding shall be instituted by or
      against the Guarantor or any of its Subsidiaries  seeking to adjudicate it
      a  bankrupt   or   insolvent,   or  seeking   liquidation,   winding   up,
      reorganization,    arrangement,   adjustment,   protection,   relief,   or
      composition  of it or its debts  under  any law  relating  to  bankruptcy,
      insolvency or reorganization or relief of debtors, or seeking the entry of
      an order for relief or the appointment of a receiver,  trustee,  custodian
      or  other  similar  official  for it or for  any  substantial  part of its
      property  and, in the case of any such  proceeding  instituted  against it
      (but  not  instituted  by  it),  either  such   proceeding   shall  remain
      undismissed  or  unstayed  for a period of 60 days,  or any of the actions
      sought in such proceeding (including,  without limitation, the entry of an
      order for relief  against,  or the  appointment  of a  receiver,  trustee,
      custodian or other similar official for, it or for any substantial part of
      its property)  shall occur;  or the  Guarantor or any of its  Subsidiaries
      shall take any corporate  action to authorize any of the actions set forth
      above in this subsection (e); or

            (f)  Judgments  or  orders  for the  payment  of money in  excess of
      $100,000,000 in the aggregate  shall be rendered  against the Guarantor or
      any of its Subsidiaries and either (i) enforcement  proceedings shall have
      been  commenced by any creditor  upon such judgment or order or (ii) there
      shall  be any  period  of 60  consecutive  days  during  which  a stay  of
      enforcement  of such judgment or order,  by reason of a pending  appeal or
      otherwise,  shall  not be in  effect;  provided,  however,  that  any such
      judgment  or order  shall not be an Event of Default  under  this  Section
      6.01(f) if and for so long as (i) the amount of such  judgment or order is
      covered by a valid and binding  policy of insurance  between the defendant
      and the insurer  covering  payment  thereof and (ii) such  insurer,  which
      shall be rated at least "A" by A.M.  Best  Company,  has been notified of,
      and has not  disputed  the claim made for  payment  of, the amount of such
      judgment or order; or

                                       26
<PAGE>

            (g) (i) Any Person or two or more  Persons  acting in concert  shall
      have acquired  beneficial  ownership  (within the meaning of Rule 13d-3 of
      the Securities and Exchange  Commission under the Securities  Exchange Act
      of 1934),  directly or  indirectly,  of Voting Stock of the  Guarantor (or
      other securities  convertible into such Voting Stock)  representing 30% or
      more of the combined voting power of all Voting Stock of the Guarantor; or
      (ii) during any period of up to 12 consecutive  months,  commencing  after
      the  date of this  Agreement,  individuals  who at the  beginning  of such
      12-month period were directors of the Guarantor shall cease for any reason
      to  constitute a majority of the board of directors of the  Guarantor;  or
      (iii) the  Guarantor  shall  cease  for any  reason  to own,  directly  or
      indirectly, 100% of the Voting Stock of each of the Borrowers; or

            (h) Any material  provision of the Guaranty  shall cease to be valid
      and binding on or  enforceable  against the  Guarantor,  or the  Guarantor
      shall so state in writing; or

            (i) The  Guarantor or any of its ERISA  Affiliates  shall incur,  or
      shall be reasonably likely to incur liability in excess of $100,000,000 in
      the  aggregate  as a  result  of one or  more  of the  following:  (i) the
      occurrence of any ERISA Event; (ii) the partial or complete  withdrawal of
      the Guarantor or any of its ERISA Affiliates from a Multiemployer Plan; or
      (iii) the reorganization or termination of a Multiemployer Plan;

then, and in any such event, the Agent (i) shall at the request, or may with the
consent,  of the  Required  Lenders,  by notice to the  Borrowers,  declare  the
obligation of each Lender to make Advances to be terminated,  whereupon the same
shall  forthwith  terminate,  and  (ii)  shall at the  request,  or may with the
consent,  of the  Required  Lenders,  by notice to the  Borrowers,  declare  the
Advances,  all  interest  thereon  and all  other  amounts  payable  under  this
Agreement to be forthwith  due and payable,  whereupon  the  Advances,  all such
interest  and all such amounts  shall  become and be forthwith  due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly  waived by each Borrower;  provided,  however,  that in the
event of an actual or deemed  entry of an order for relief  with  respect to any
Loan Party under the Federal  Bankruptcy Code, (A) the obligation of each Lender
to make Advances shall  automatically  be terminated  and (B) the Advances,  all
such  interest and all such amounts  shall  automatically  become and be due and
payable, without presentment,  demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrowers.

                                   ARTICLE VII

                                    GUARANTY

      SECTION 7.01. Guaranty.  The Guarantor hereby absolutely,  unconditionally
and irrevocably  guarantees the punctual  payment when due, whether at scheduled
maturity or on any date of a required  prepayment or by acceleration,  demand or
otherwise, of all obligations of each other Loan Party now or hereafter existing
under or in  respect of the this  Agreement  and the Notes  (including,  without
limitation, any extensions, modifications, substitutions, amendments or renewals
of any  or  all of the  foregoing  obligations),  whether  direct  or  indirect,
absolute or contingent,  and whether for principal,  interest,  premiums,  fees,
indemnities,  contract  causes of action,  costs,  expenses or  otherwise  (such
obligations being the "Guaranteed  Obligations"),  and agrees to pay any and all
expenses  (including,  without limitation,  fees and expenses of outside counsel
and the allocated costs and expenses of in-house  counsel) incurred by the Agent
or any Lender in enforcing any rights under this Agreement. Without limiting the
generality  of the  foregoing,  the  Guarantor's  liability  shall extend to all
amounts that constitute part of the Guaranteed  Obligations and would be owed by
any other  Loan  Party to the Agent or any  Lender  under or in  respect of this
Agreement  and the Notes but for the fact  that  they are  unenforceable  or not
allowable  due to the  existence  of a  bankruptcy,  reorganization  or  similar
proceeding involving such other Loan Party.

      SECTION  7.02.  Guaranty  Absolute.  The  Guarantor  guarantees  that  the
Guaranteed  Obligations  will be paid strictly in  accordance  with the terms of
this Agreement and the Notes,  regardless of any law, regulation or order now or
hereafter  in  effect in any  jurisdiction  affecting  any of such  terms or the
rights of the Agent or any Lender  with  respect  thereto.  This  Guaranty is an
absolute and unconditional  guaranty of payment when due, and not of collection,
by the Guarantor of the Guaranteed Obligations. The obligations of the Guarantor
under  or in  respect  of  this  Guaranty  are  independent  of  the  Guaranteed
Obligations or any other obligations of any other Loan Party

                                       27
<PAGE>

under or in respect of this  Agreement and the Notes,  and a separate  action or
actions may be brought and  prosecuted  against the  Guarantor  to enforce  this
Guaranty,  irrespective of whether any action is brought against any Borrower or
whether any Borrower is joined in any such action or actions.  The  liability of
the  Guarantor   under  this  Guaranty  shall  be   irrevocable,   absolute  and
unconditional  irrespective of, and the Guarantor hereby  irrevocably waives any
defenses it may now have or hereafter acquire in any way relating to, any or all
of the following:

            (a) any lack of validity or  enforceability of any provision of this
      Agreement or any Note or any agreement or instrument relating thereto;

            (b) any change in the time, manner or place of payment of, or in any
      other  term of,  all or any of the  Guaranteed  Obligations  or any  other
      obligations  of any Borrower  under or in respect of this Agreement or the
      Notes,  or any other  amendment  or waiver of or any consent to  departure
      from this  Agreement  or the Notes,  including,  without  limitation,  any
      increase in the  Guaranteed  Obligations  resulting  from the extension of
      additional credit to any Borrower or any of its Subsidiaries or otherwise;

            (c)  any  taking,   exchange,   release  or  non-perfection  of  any
      collateral,  or any taking,  release or amendment or waiver of, or consent
      to departure  from, any other  guaranty,  for all or any of the Guaranteed
      Obligations;

            (d) any manner of application of collateral, or proceeds thereof, to
      all or any of the Guaranteed  Obligations,  or any manner of sale or other
      disposition of any collateral for all or any of the Guaranteed Obligations
      or any other  obligations  of any Loan Party under this  Agreement  or the
      Notes or any other assets of any Borrower or any of its Subsidiaries;

            (e)  any  change,  restructuring  or  termination  of the  corporate
      structure or existence of any Borrower or any of its Subsidiaries;

            (f) any  failure  of the  Agent or any  Lender  to  disclose  to the
      Guarantor any information  relating to the business,  condition (financial
      or  otherwise),  operations,  performance,  properties or prospects of any
      Borrower now or hereafter known to the Agent or such Lender (the Guarantor
      waiving any duty on the part of the Agent and the Lenders to disclose such
      information);

            (g) the failure of any other  Person to execute or deliver any other
      guaranty or  agreement  or the release or  reduction  of  liability of the
      Guarantor  or other  guarantor  or surety with  respect to the  Guaranteed
      Obligations; or

            (h) any  other  circumstance  (including,  without  limitation,  any
      statute  of   limitations)   or  any  existence  of  or  reliance  on  any
      representation by the Agent or any Lender that might otherwise  constitute
      a defense  available  to, or a  discharge  of, any Loan Party or any other
      guarantor or surety.

This Guaranty shall  continue to be effective or be reinstated,  as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must  otherwise  be returned  by the Agent or any Lender or any other  Person
upon the insolvency,  bankruptcy or reorganization of any Borrower or otherwise,
all as though such payment had not been made.

      SECTION  7.03.  Waivers  and  Acknowledgments.  (a) The  Guarantor  hereby
unconditionally  and  irrevocably  waives  promptness,   diligence,   notice  of
acceptance,  presentment,  demand  for  performance,  notice of  nonperformance,
default, acceleration,  protest or dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that the
Agent or any Lender protect,  secure, perfect or insure any Lien or any property
subject  thereto or exhaust any right or take any action  against any Loan Party
or any other Person or any collateral.

                                       28
<PAGE>

            (b) The Guarantor hereby  unconditionally and irrevocably waives any
      right to revoke  this  Guaranty  and  acknowledges  that this  Guaranty is
      continuing in nature and applies to all  Guaranteed  Obligations,  whether
      existing now or in the future.

            (c) The Guarantor hereby  unconditionally and irrevocably waives (i)
      any  defense  arising  by  reason of any claim or  defense  based  upon an
      election  of  remedies  by the  Agent  or any  Lender  that in any  manner
      impairs, reduces, releases or otherwise adversely affects the subrogation,
      reimbursement,  exoneration, contribution or indemnification rights of the
      Guarantor or other rights of the  Guarantor to proceed  against any of the
      other  Loan  Parties,  any  other  guarantor  or any  other  Person or any
      collateral  and  (ii)  any  defense  based  on any  right  of  set-off  or
      counterclaim  against or in respect of the  obligations  of the  Guarantor
      hereunder.

            (d) The Guarantor hereby  unconditionally and irrevocably waives any
      duty on the part of the Agent or any Lender to disclose  to the  Guarantor
      any matter, fact or thing relating to the business,  condition  (financial
      or  otherwise),  operations,  performance,  properties or prospects of any
      other Loan Party or any of its  Subsidiaries now or hereafter known by the
      Agent or such Lender.

            (e) The  Guarantor  acknowledges  that it will  receive  substantial
      direct and indirect benefits from the financing arrangements  contemplated
      by this  Agreement and that the waivers set forth in Section 7.02 and this
      Section 7.03 are knowingly made in contemplation of such benefits.

      SECTION  7.04.  Subrogation.  The  Guarantor  hereby  unconditionally  and
irrevocably  agrees not to exercise any rights that it may now have or hereafter
acquire against any Borrower or any other insider  guarantor that arise from the
existence,  payment,  performance or enforcement of the Guarantor's  obligations
under or in respect of this Guaranty,  including,  without limitation, any right
of subrogation, reimbursement,  exoneration, contribution or indemnification and
any right to  participate  in any  claim or  remedy  of the Agent or any  Lender
against any Borrower or any other insider  guarantor or any collateral,  whether
or not such claim,  remedy or right arises in equity or under contract,  statute
or common law, including,  without limitation, the right to take or receive from
any Borrower or any other insider guarantor,  directly or indirectly, in cash or
other  property  or by set-off or in any other  manner,  payment or  security on
account of such claim,  remedy or right,  unless and until all of the Guaranteed
Obligations  and all other amounts  payable under this Guaranty  shall have been
paid in full in cash and the Commitments  shall have expired or been terminated.
If any amount shall be paid to the  Guarantor  in  violation of the  immediately
preceding sentence at any time prior to the later of the payment in full in cash
of the Guaranteed  Obligations and all other amounts payable under this Guaranty
and the  Termination  Date,  such amount shall be received and held in trust for
the benefit of Agent and the Lenders,  shall be segregated  from other  property
and funds of the Guarantor and shall forthwith be paid or delivered to the Agent
in the same form as so received  (with any necessary  endorsement or assignment)
to be credited and applied to the Guaranteed  Obligations  and all other amounts
payable under this Guaranty,  whether  matured or unmatured,  in accordance with
the terms of this  Agreement,  or to be held as  collateral  for any  Guaranteed
Obligations or other amounts payable under this Guaranty  thereafter arising. If
(i) the  Guarantor  shall make  payment to the Agent or any Lender of all or any
part of the Guaranteed  Obligations,  (ii) all of the Guaranteed Obligations and
all other amounts  payable  under this Guaranty  shall have been paid in full in
cash and (iii) the  Termination  Date shall have  occurred  with  respect to all
Lenders, the Agent and the Lenders will, at the Guarantor's request and expense,
execute and deliver to the Guarantor appropriate documents, without recourse and
without  representation  or  warranty,  necessary  to evidence  the  transfer by
subrogation  to the  Guarantor  of an  interest  in the  Guaranteed  Obligations
resulting from such payment made by the Guarantor pursuant to this Guaranty.

      SECTION 7.05. Subordination. The Guarantor hereby subordinates any and all
debts,  liabilities  and other  obligations  owed to the Guarantor by each other
Loan Party (the "Subordinated Obligations") to the Guaranteed Obligations to the
extent and in the manner hereinafter set forth in this Section 7.05:

            (a) Prior Payment of Guaranteed Obligations. In any proceeding under
      any Bankruptcy Law relating to any other Loan Party,  the Guarantor agrees
      that the Agent and the Lenders  shall be  entitled  to receive  payment in
      full in cash of all  Guaranteed  Obligations  (including  all interest and
      expenses  accruing  after  the  commencement  of a  proceeding  under  any
      Bankruptcy Law, whether or not constituting an

                                       29
<PAGE>

      allowed claim in such proceeding  ("Post Petition  Interest"))  before the
      Guarantor receives payment of any Subordinated Obligations.

            (b) Turn-Over.  After the  occurrence and during the  continuance of
      any Event of Default under Section  6.01(e),  the Guarantor  shall, if the
      Agent so requests, collect, enforce and receive payments on account of the
      Subordinated  Obligations  as trustee  for the Agent and the  Lenders  and
      deliver  such  payments  to  the  Agent  on  account  of  the   Guaranteed
      Obligations  (including  all Post  Petition  Interest),  together with any
      necessary  endorsements  or other  instruments  of  transfer,  but without
      reducing or affecting in any manner the liability of the  Guarantor  under
      the other provisions of this Guaranty.

            (c)  Agent  Authorization.  After  the  occurrence  and  during  the
      continuance  of any Event of Default under Section  6.01(e),  the Agent is
      authorized  and  empowered  (but without any  obligation to so do), in its
      discretion,  (i) in the name of the Guarantor, to collect and enforce, and
      to submit claims in respect of, Subordinated  Obligations and to apply any
      amounts received thereon to the Guaranteed  Obligations (including any and
      all Post  Petition  Interest),  and (ii) to require the  Guarantor  (A) to
      collect and  enforce,  and to submit  claims in respect  of,  Subordinated
      Obligations and (B) to pay any amounts received on such obligations to the
      Agent for application to the Guaranteed Obligations (including any and all
      Post Petition Interest).

      SECTION  7.06.  Continuing  Guaranty;  Assignments.  This  Guaranty  is  a
continuing  guaranty  and shall (a) remain in full  force and  effect  until the
later of the payment in full in cash of the Guaranteed Obligations and all other
amounts  payable under this Guaranty and the  Termination  Date,  (b) be binding
upon the  Guarantor,  its successors and assigns and (c) inure to the benefit of
and  be  enforceable  by  the  Agent  and  the  Lenders  and  their  successors,
transferees  and assigns.  Without  limiting the generality of clause (c) of the
immediately preceding sentence,  any Lender may assign or otherwise transfer all
or any portion of its rights and  obligations  under this Agreement  (including,
without limitation, all or any portion of its Commitments, the Advances owing to
it and the Note or Notes held by it) to any other Person,  and such other Person
shall  thereupon  become vested with all the benefits in respect thereof granted
to such Lender herein or otherwise,  in each case as and to the extent  provided
in Section  9.07.  The  Guarantor  shall not have the right to assign its rights
hereunder or any interest  herein  without the prior written  consent of each of
the Lenders.

                                  ARTICLE VIII

                                    THE AGENT

      SECTION 8.01.  Authorization  and Action.  Each Lender hereby appoints and
authorizes  the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement as are delegated to the Agent by
the terms  hereof,  together with such powers and  discretion as are  reasonably
incidental  thereto.  As to any  matters  not  expressly  provided  for by  this
Agreement  (including,  without  limitation,  enforcement  or  collection of the
Notes),  the Agent shall not be required to exercise any  discretion or take any
action,  but shall be  required  to act or to refrain  from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders,  and such  instructions  shall be binding upon all Lenders
and all  holders  of  Notes;  provided,  however,  that the  Agent  shall not be
required to take any action that exposes the Agent to personal liability or that
is contrary to this  Agreement  or  applicable  law. The Agent agrees to give to
each Lender prompt notice of each notice given to it by any Loan Party  pursuant
to the terms of this Agreement.

      SECTION  8.02.  Agent's  Reliance,  Etc.  Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in  connection  with this  Agreement,
except  for its or their own gross  negligence  or willful  misconduct.  Without
limitation of the  generality  of the  foregoing,  the Agent:  (i) may treat the
Lender that made any Advance as the holder of the Debt resulting therefrom until
the Agent receives and accepts an Assignment and Acceptance entered into by such
Lender,  as assignor,  and an Eligible  Assignee,  as  assignee,  as provided in
Section  9.07;  (ii) may consult with legal counsel  (including  counsel for the
Loan Parties),  independent  public accountants and other experts selected by it
and shall not be liable  for any  action  taken or  omitted  to be taken in good
faith by it in accordance with the advice of such

                                       30
<PAGE>

counsel,  accountants or experts;  (iii) makes no warranty or  representation to
any  Lender  and shall not be  responsible  to any  Lender  for any  statements,
warranties or representations (whether written or oral) made in or in connection
with this Agreement;  (iv) shall not have any duty to ascertain or to inquire as
to the performance, observance or satisfaction of any of the terms, covenants or
conditions  of this  Agreement on the part of any Loan Party or the existence at
any time of any  Default or to inspect  the  property  (including  the books and
records) of any Loan Party;  (v) shall not be  responsible to any Lender for the
due execution, legality, validity, enforceability,  genuineness,  sufficiency or
value of this Agreement or any other instrument or document  furnished  pursuant
hereto;  and (vi) shall incur no liability under or in respect of this Agreement
by acting upon any notice,  consent,  certificate or other instrument or writing
(which may be by telecopier or telegram) believed by it to be genuine and signed
or sent by the proper party or parties.

      SECTION 8.03. Citibank and Affiliates. With respect to its Commitment, the
Advances  made by it and any Note  issued to it,  Citibank  shall  have the same
rights and powers under this  Agreement as any other Lender and may exercise the
same as though it were not the Agent;  and the term "Lender" or "Lenders" shall,
unless  otherwise  expressly  indicated,  include  Citibank  in  its  individual
capacity.  Citibank and its Affiliates may accept  deposits from, lend money to,
act as trustee under indentures of, accept investment  banking  engagements from
and generally  engage in any kind of business with,  the  Guarantor,  any of its
Subsidiaries  and any Person who may do business  with or own  securities of the
Guarantor  or any such  Subsidiary,  all as if  Citibank  were not the Agent and
without  any duty to account  therefor to the  Lenders.  The Agent shall have no
duty to disclose information obtained or received by it or any of its Affiliates
relating to the Guarantor or its Subsidiaries to the extent such information was
obtained or received in any capacity other than as Agent.

      SECTION 8.04.  Lender Credit Decision.  Each Lender  acknowledges  that it
has,  independently  and without reliance upon the Agent or any other Lender and
based on the  financial  statements  referred to in Section  4.01 and such other
documents  and  information  as it has deemed  appropriate,  made its own credit
analysis  and  decision  to  enter  into  this   Agreement.   Each  Lender  also
acknowledges that it will,  independently and without reliance upon the Agent or
any other Lender and based on such  documents and  information  as it shall deem
appropriate at the time,  continue to make its own credit decisions in taking or
not taking action under this Agreement.

      SECTION  8.05.  Indemnification.  The Lenders agree to indemnify the Agent
(to the  extent not  reimbursed  by the  Borrowers),  ratably  according  to the
respective principal amounts of the Advances then owed to each of them (or if no
Advances  are at the  time  outstanding,  ratably  according  to the  respective
amounts  of  their  Commitments),  from  and  against  any and all  liabilities,
obligations,  losses,  damages,  penalties,  actions,  judgments,  suits, costs,
expenses or disbursements  of any kind or nature  whatsoever that may be imposed
on, incurred by, or asserted against the Agent in any way relating to or arising
out of this  Agreement  or any action  taken or omitted by the Agent  under this
Agreement (collectively, the "Indemnified Costs"), provided that no Lender shall
be liable for any portion of the  Indemnified  Costs  resulting from the Agent's
gross  negligence or willful  misconduct.  Without  limitation of the foregoing,
each Lender agrees to reimburse  the Agent  promptly upon demand for its ratable
share of any out-of-pocket expenses (including reasonable counsel fees) incurred
by  the  Agent  in  connection  with  the  preparation,   execution,   delivery,
administration,   modification,   amendment  or  enforcement   (whether  through
negotiations,  legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities  under, this Agreement,  to the extent that the Agent
is not  reimbursed  for  such  expenses  by the  Borrowers.  In the  case of any
investigation,  litigation or proceeding  giving rise to any Indemnified  Costs,
this  Section  8.05  applies  whether  any  such  investigation,  litigation  or
proceeding  is  brought by the Agent,  any  Lender or a third  party.  The Agent
agrees to return to the Lenders their  respective  ratable shares of any amounts
paid under this Section 8.05 that are subsequently  reimbursed by the Borrowers,
together with interest to the extent recovered from the Borrowers.

      SECTION 8.06.  Successor Agent. The Agent may resign at any time by giving
written  notice  thereof to the Lenders and the  Borrowers and may be removed at
any  time  with  or  without  cause  by the  Required  Lenders.  Upon  any  such
resignation or removal,  the Required  Lenders shall have the right to appoint a
successor Agent from among the Lenders with the consent,  so long as no Event of
Default has occurred and is continuing, of the Guarantor, which consent will not
be  unreasonably  withheld or delayed.  If no successor Agent shall have been so
appointed by the Required  Lenders,  and shall have accepted  such  appointment,
within 30 days after the retiring Agent's giving of notice of resignation or the
Required Lenders' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Lenders,  appoint a successor Agent,  which shall be a Lender that
is a commercial bank

                                       31
<PAGE>

organized under the laws of the United States of America or of any State thereof
and having a combined  capital  and surplus of at least  $500,000,000.  Upon the
acceptance of any  appointment  as Agent  hereunder by a successor  Agent,  such
successor  Agent  shall  thereupon  succeed  to and become  vested  with all the
rights, powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged  from its duties and  obligations  under this
Agreement. After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Article VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.

      SECTION 8.07. Other Agents.  Each Lender hereby  acknowledges that none of
the syndication  agent, any documentation  agent nor any other Lender designated
as any  "Agent" on the  signature  pages  hereof  (other than the Agent) has any
liability hereunder other than in its capacity as a Lender.

                                   ARTICLE IX

                                  MISCELLANEOUS

      SECTION 9.01. Amendments,  Etc. No amendment or waiver of any provision of
this  Agreement  or the Notes,  nor consent to any  departure  by any Loan Party
therefrom,  shall in any event be effective  unless the same shall be in writing
and signed by the  Required  Lenders  and (except for waivers or consents by any
Lender)  each of the Loan  Parties,  and then such  waiver or  consent  shall be
effective only in the specific  instance and for the specific  purpose for which
given; provided,  however, that no amendment, waiver or consent shall, unless in
writing and signed by all the Lenders, do any of the following: (a) waive any of
the conditions  specified in Section 3.01,  (b) increase the  Commitments of the
Lenders,  (c) reduce the  principal of, or interest on, the Advances or any fees
or other amounts payable hereunder,  (d) postpone any date fixed for any payment
of  principal  of, or interest  on, the  Advances  or any fees or other  amounts
payable  hereunder,  (e)  change the  percentage  of the  Commitments  or of the
aggregate  unpaid  principal  amount of the Advances,  or the number of Lenders,
that  shall  be  required  for the  Lenders  or any of them to take  any  action
hereunder,  (f) reduce or limit the  obligations of the Guarantor  under Section
7.01 or release the Guarantor or otherwise limit the Guarantor's  liability with
respect to the obligations  owing to the Agent and the Lenders under Article VII
or (g) amend this Section 9.01; and provided  further that no amendment,  waiver
or consent  shall,  unless in writing and signed by the Agent in addition to the
Lenders  required above to take such action,  affect the rights or duties of the
Agent under this Agreement or any Note.

      SECTION  9.02.  Notices,  Etc.  (a) All notices  and other  communications
provided for hereunder shall be either (x) in writing  (including  telecopier or
telegraphic communication) and mailed, telecopied,  telegraphed or delivered, or
(y) as and to the  extent  set  forth in  Section  9.02(b)  and (c),  if to Loan
Parties,  at the address of the Guarantor at One East Weaver Street,  Greenwich,
Connecticut  06831,  Attention:  Eric Huttner;  if to any Initial Lender, at its
Domestic Lending Office specified  opposite its name on Schedule I hereto; if to
any other Lender, at its Domestic Lending Office specified in the Assignment and
Acceptance  pursuant  to which it became a Lender;  and if to the Agent,  at its
address at Two Penns Way,  New  Castle,  Delaware  19720,  Attention:  Bank Loan
Syndications  Department;  or, as to any Loan Party or the Agent,  at such other
address as shall be  designated  by such party in a written  notice to the other
parties  and,  as to each  other  party,  at such  other  address  as  shall  be
designated  by such party in a written  notice to the  Borrowers  and the Agent,
provided  that  materials   required  to  be  delivered   pursuant  to  Sections
5.01(i)(i),  (ii),  (iv) and (v) shall be delivered to the Agent as specified in
Section  9.02(b).  All such  notices  and  communications  shall,  when  mailed,
telecopied or telegraphed,  be effective when deposited in the mails, telecopied
or delivered to the  telegraph  company,  respectively,  except that notices and
communications  to the Agent  pursuant  to Article  II, III or VIII shall not be
effective  until  received by the Agent.  Delivery by  telecopier of an executed
counterpart of any amendment or waiver of any provision of this Agreement or the
Notes or of any Exhibit hereto to be executed and delivered  hereunder  shall be
effective as delivery of a manually executed counterpart thereof.

      (b) So long as Citibank or any of its  Affiliates is the Agent,  materials
required to be delivered pursuant to Sections 5.01(i)(i), (ii), (iv) and (v) may
be delivered to the Agent in an electronic  medium in a format acceptable to the
Agent and the Lenders by e-mail at oploanswebadmin@citigroup.com.  The Guarantor
agrees  that the  Agent may make such  materials,  as well as any other  written
information,   documents,   instruments  and  other  material  relating  to  the
Guarantor, any of its Subsidiaries or any other materials or matters relating to
this Agreement,  the Notes or any of the transactions  contemplated  hereby, but
not including any notices under Article II

                                       32
<PAGE>

(collectively,  the  "Communications")  available to the Lenders by posting such
notices  on  Intralinks  or  a  substantially  similar  electronic  system  (the
"Platform").  The Guarantor  acknowledges  that (i) the distribution of material
through  an  electronic  medium is not  necessarily  secure  and that  there are
confidentiality  and other risks  associated  with such  distribution,  (ii) the
Platform is provided "as is" and "as  available" and (iii) neither the Agent nor
any of its Affiliates  warrants the accuracy,  adequacy or  completeness  of the
Communications or the Platform and each expressly disclaims liability for errors
or omissions in the  Communications  or the  Platform.  No warranty of any kind,
express, implied or statutory,  including,  without limitation,  any warranty of
merchantability,  fitness for a particular  purpose,  non-infringement  of third
party rights or freedom from viruses or other code defects, is made by the Agent
or any of its Affiliates in connection with the Platform.

      (c)  Each  Lender  agrees  that  notice  to it (as  provided  in the  next
sentence) (a "Notice")  specifying that any  Communications  have been posted to
the Platform shall constitute effective delivery of such information,  documents
or other materials to such Lender for purposes of this Agreement;  provided that
if requested by any Lender the Agent shall deliver a copy of the  Communications
to such  Lender by email or  telecopier.  Each  Lender  agrees (i) to notify the
Agent in writing of such Lender's  e-mail  address to which a Notice may be sent
by electronic transmission (including by electronic  communication) on or before
the date such Lender  becomes a party to this  Agreement  (and from time to time
thereafter  to ensure that the Agent has on record an effective  e-mail  address
for such Lender) and (ii) that any Notice may be sent to such e-mail address.

      SECTION 9.03. No Waiver; Remedies. No failure on the part of any Lender or
the Agent to exercise, and no delay in exercising,  any right hereunder or under
any Note  shall  operate  as a waiver  thereof;  nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

      SECTION 9.04. Costs and Expenses. (a) The Borrowers agree to pay on demand
all  costs  and  expenses  of the  Agent in  connection  with  the  preparation,
execution,  delivery,   administration,   modification  and  amendment  of  this
Agreement,  the  Notes  and  the  other  documents  to be  delivered  hereunder,
including,  without limitation,  (A) all due diligence,  syndication  (including
printing,   distribution   and   bank   meetings),   transportation,   computer,
duplication,  appraisal,  consultant,  and audit expenses and (B) the reasonable
fees and expenses of counsel for the Agent with respect thereto and with respect
to  advising  the  Agent  as to  its  rights  and  responsibilities  under  this
Agreement.  The Borrowers  further agree to pay on demand all costs and expenses
of the Agent and the Lenders, if any (including, without limitation,  reasonable
fees and  expenses of outside  counsel and the  allocated  costs and expenses of
in-house  counsel),   in  connection  with  the  enforcement   (whether  through
negotiations,  legal proceedings or otherwise) of this Agreement,  the Notes and
the other documents to be delivered  hereunder,  including,  without limitation,
reasonable  fees and  expenses  of  counsel  for the  Agent  and each  Lender in
connection with the enforcement of rights under this Section 9.04(a).

      (b) The Borrowers  agree to indemnify and hold harmless the Agent and each
Lender and each of their  Affiliates and their officers,  directors,  employees,
agents and advisors (each, an "Indemnified  Party") from and against any and all
claims,   damages,   losses,   liabilities  and  expenses  (including,   without
limitation,  reasonable fees and expenses of counsel) incurred by or asserted or
awarded  against  any  Indemnified  Party,  in each  case  arising  out of or in
connection with or by reason of (including,  without  limitation,  in connection
with any investigation,  litigation or proceeding or preparation of a defense in
connection  therewith) (i) the Notes,  this Agreement,  any of the  transactions
contemplated  herein  or the  actual  or  proposed  use of the  proceeds  of the
Advances or (ii) the actual or alleged  presence of  hazardous  materials on any
property of the Guarantor or any of its Subsidiaries or any Environmental Action
relating in any way to the Guarantor or any of its  Subsidiaries,  except to the
extent  such  claim,  damage,  loss,  liability  or expense is found in a final,
non-appealable  judgment by a court of competent  jurisdiction  to have resulted
from such  Indemnified  Party's gross negligence or willful  misconduct.  In the
case of an investigation,  litigation or other proceeding to which the indemnity
in this Section 9.04(b)  applies,  such indemnity shall be effective  whether or
not such  investigation,  litigation or proceeding is brought by any Loan Party,
its directors,  equityholders or creditors or an Indemnified  Party or any other
Person,  whether or not any  Indemnified  Party is otherwise a party thereto and
whether or not the transactions  contemplated  hereby are consummated.  The Loan
Parties also agree not to assert any claim for special, indirect,  consequential
or punitive damages against the Agent, any Lender,  any of their Affiliates,  or
any of their respective directors, officers, employees, attorneys and agents, on
any theory of liability, arising out of or otherwise relating to the Notes, this
Agreement, any of the transactions contemplated herein or the actual or proposed
use of the proceeds of the Advances.

                                       33
<PAGE>

      (c) If any payment of principal of, or Conversion of, any Eurodollar  Rate
Advance is made by any Borrower to or for the account of a Lender (i) other than
on the last  day of the  Interest  Period  for such  Advance,  as a result  of a
payment or Conversion  pursuant to Section 2.07,  2.09 or 2.11,  acceleration of
the maturity of the Notes  pursuant to Section 6.01 or for any other reason,  or
by an Eligible  Assignee to a Lender  other than on the last day of the Interest
Period for such Advance upon an assignment of rights and obligations  under this
Agreement  pursuant  to  Section  9.07 as a result of a demand by the  Guarantor
pursuant  to  Section  9.07(a)  or (ii) as a result of a payment  or  Conversion
pursuant to Section 2.07, 2.09 or 2.11, the Borrower of such Advance shall, upon
demand by such  Lender  (with a copy of such  demand to the  Agent),  pay to the
Agent for the  account of such Lender any amounts  required to  compensate  such
Lender for any additional losses, costs or expenses that it may reasonably incur
as a result of such payment or Conversion,  including,  without limitation,  any
loss (including loss of anticipated profits), cost or expense incurred by reason
of the  liquidation or  reemployment  of deposits or other funds acquired by any
Lender to fund or maintain such Advance.

      (d)  Without  prejudice  to the  survival  of any other  agreement  of the
Borrowers  hereunder,  the agreements and obligations of the Borrowers contained
in Sections 2.10,  2.13 and 9.04 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under the Notes.

      SECTION 9.05.  Right of Set-off.  Upon (i) the  occurrence  and during the
continuance  of any Event of Default  and (ii) the making of the  request or the
granting of the consent  specified  by Section  6.01 to  authorize  the Agent to
declare the Notes due and payable  pursuant to the  provisions  of Section 6.01,
each Lender and each of its Affiliates is hereby authorized at any time and from
time to time, to the fullest  extent  permitted by law, to set off and apply any
and all deposits (general or special,  time or demand,  provisional or final) at
any time held and other  indebtedness  at any time owing by such  Lender or such
Affiliate to or for the credit or the account of any Loan Party  against any and
all of the  obligations of such Loan Party now or hereafter  existing under this
Agreement  and any Note held by such  Lender,  whether or not such Lender  shall
have  made any  demand  under  this  Agreement  or such Note and  although  such
obligations  may be  unmatured.  Each  Lender  agrees  promptly  to  notify  the
applicable Loan Party after any such set-off and application,  provided that the
failure to give such notice  shall not affect the  validity of such  set-off and
application. The rights of each Lender and its Affiliates under this Section are
in addition to other rights and remedies (including,  without limitation,  other
rights of set-off) that such Lender and its Affiliates may have.

      SECTION 9.06. Binding Effect. This Agreement shall become effective (other
than Section 2.01,  which shall only become  effective upon  satisfaction of the
conditions precedent set forth in Section 3.01) when it shall have been executed
by each Loan Party and the Agent and when the Agent shall have been  notified by
each  Initial  Lender that such Initial  Lender has  executed it and  thereafter
shall be binding  upon and inure to the benefit of the Loan  Parties,  the Agent
and each Lender and their respective successors and assigns and each Indemnified
Party,  except  that no Loan  Party  shall  have the right to assign  its rights
hereunder or any interest  herein  without the prior written  consent of each of
the Lenders.

      SECTION 9.07. Assignments and Participations.  (a) Each Lender may and, if
demanded by the Guarantor (following a demand by such Lender pursuant to Section
2.10 or 2.13) upon at least five  Business  Days'  notice to such Lender and the
Agent,  will  assign to one or more  Persons  all or a portion of its rights and
obligations  under  this  Agreement  (including,  without  limitation,  all or a
portion of its  Commitment,  the Advances owing to it and the Note or Notes held
by it); provided, however, that (i) each such assignment shall be of a constant,
and  not a  varying,  percentage  of  all  rights  and  obligations  under  this
Agreement,  (ii)  except  in  the  case  of  an  assignment  to a  Person  that,
immediately prior to such assignment,  was a Lender or an assignment of all of a
Lender's  rights  and  obligations  under  this  Agreement,  the  amount  of the
Commitment  of the  assigning  Lender  being  assigned  pursuant  to  each  such
assignment  (determined as of the date of the  Assignment  and  Acceptance  with
respect to such  assignment)  shall in no event be less than  $10,000,000  or an
integral  multiple of $1,000,000 in excess  thereof unless the Guarantor and the
Agent  otherwise  agree,  (iii)  each such  assignment  shall be to an  Eligible
Assignee,  (iv)  each  such  assignment  made as a  result  of a  demand  by the
Guarantor  pursuant to this Section  9.07(a)  shall be arranged by the Guarantor
after  consultation  with the Agent and shall be either an  assignment of all of
the rights and  obligations  of the assigning  Lender under this Agreement or an
assignment of a portion of such rights and obligations  made  concurrently  with
another such assignment or other such assignments that together cover all of the
rights and  obligations  of the assigning  Lender under this  Agreement,  (v) no
Lender shall be obligated to make any such assignment as a result of a demand by
the Guarantor pursuant to this Section 9.07(a) unless and until such Lender

                                       34
<PAGE>

shall have  received one or more  payments  from either the  Borrowers or one or
more Eligible  Assignees in an aggregate  amount at least equal to the aggregate
outstanding principal amount of the Advances owing to such Lender, together with
accrued interest thereon to the date of payment of such principal amount and all
other amounts  payable to such Lender under this  Agreement and (vi) the parties
to each  such  assignment  shall  execute  and  deliver  to the  Agent,  for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Note subject to such assignment and a processing and recordation fee of
$3,500, payable by the parties to each such assignment,  provided, however, that
in the case of each  assignment  made as a result of a demand by the  Guarantor,
such  recordation  fee shall be payable  by the  Guarantor  except  that no such
recordation  fee  shall  be  payable  in the case of an  assignment  made at the
request of the  Guarantor to an Eligible  Assignee  that is an existing  Lender.
Upon such  execution,  delivery,  acceptance and  recording,  from and after the
effective date specified in each  Assignment  and  Acceptance,  (x) the assignee
thereunder  shall  be a  party  hereto  and,  to  the  extent  that  rights  and
obligations  hereunder have been assigned to it pursuant to such  Assignment and
Acceptance,  have the rights and  obligations of a Lender  hereunder and (y) the
Lender  assignor  thereunder  shall,  to the extent that rights and  obligations
hereunder have been assigned by it pursuant to such  Assignment and  Acceptance,
relinquish  its rights (other than its rights under Section 2.10,  2.13 and 9.04
to the  extent  any claim  thereunder  relates  to an event  arising  prior such
assignment)  and be released from its  obligations  (other than its  obligations
under  Section  8.05 to the  extent  any claim  thereunder  relates  to an event
arising prior to such  assignment)  under this Agreement (and, in the case of an
Assignment and Acceptance  covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).

      (b) By executing and delivering an Assignment and  Acceptance,  the Lender
assignor  thereunder and the assignee  thereunder confirm to and agree with each
other and the other  parties  hereto as  follows:  (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty  and  assumes  no  responsibility   with  respect  to  any  statements,
warranties or  representations  made in or in connection  with this Agreement or
the execution, legality, validity, enforceability,  genuineness,  sufficiency or
value of this Agreement or any other instrument or document  furnished  pursuant
hereto;  (ii) such  assigning  Lender  makes no  representation  or warranty and
assumes no  responsibility  with respect to the financial  condition of any Loan
Party  or  the  performance  or  observance  by  any  Loan  Party  of any of its
obligations  under this Agreement or any other instrument or document  furnished
pursuant  hereto;  (iii) such  assignee  confirms that it has received a copy of
this Agreement,  together with copies of the financial statements referred to in
Section  4.01  and  such  other  documents  and  information  as it  has  deemed
appropriate  to make its own credit  analysis  and  decision  to enter into such
Assignment and Acceptance;  (iv) such assignee will,  independently  and without
reliance upon the Agent,  such assigning Lender or any other Lender and based on
such  documents  and  information  as it shall  deem  appropriate  at the  time,
continue to make its own credit  decisions in taking or not taking  action under
this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi)
such assignee  appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers and  discretion  under this  Agreement as
are  delegated to the Agent by the terms  hereof,  together with such powers and
discretion as are reasonably  incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations  that
by the terms of this Agreement are required to be performed by it as a Lender.

      (c) Upon its  receipt  of an  Assignment  and  Acceptance  executed  by an
assigning Lender and an assignee  representing that it is an Eligible  Assignee,
together with any Note or Notes subject to such assignment,  the Agent shall, if
such  Assignment and Acceptance has been completed and is in  substantially  the
form of Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record
the information  contained  therein in the Register and (iii) give prompt notice
thereof to the Borrowers.

      (d) The Agent shall maintain at its address  referred to in Section 9.02 a
copy of each  Assignment  and  Acceptance  delivered to and accepted by it and a
register for the  recordation  of the names and addresses of the Lenders and the
Commitment  of, and principal  amount of the Advances owing to, each Lender from
time to time (the  "Register").  The entries in the Register shall be conclusive
and binding for all purposes,  absent manifest error,  and each Loan Party,  the
Agent and the  Lenders  may treat  each  Person  whose name is  recorded  in the
Register as a Lender hereunder for all purposes of this Agreement.  The Register
shall be  available  for  inspection  by any Loan  Party  or any  Lender  at any
reasonable time and from time to time upon reasonable prior notice.

      (e) Each  Lender  may sell  participations  to one or more  banks or other
entities  (other than the Guarantor or any of its  Affiliates) in or to all or a
portion of its rights and obligations under this Agreement

                                       35
<PAGE>

(including, without limitation, all or a portion of its Commitment, the Advances
owing to it and any Note or Notes held by it); provided,  however, that (i) such
Lender's obligations under this Agreement  (including,  without limitation,  its
Commitment to the Borrowers hereunder) shall remain unchanged,  (ii) such Lender
shall remain solely  responsible to the other parties hereto for the performance
of such obligations,  (iii) such Lender shall remain the holder of any such Note
for all purposes of this Agreement,  (iv) the Borrowers, the Agent and the other
Lenders  shall  continue  to deal  solely  and  directly  with  such  Lender  in
connection with such Lender's  rights and  obligations  under this Agreement and
(v) no participant under any such participation  shall have any right to approve
any amendment or waiver of any  provision of this  Agreement or any Note, or any
consent to any departure by any Loan Party therefrom,  except to the extent that
such amendment, waiver or consent would reduce the principal of, or interest on,
the Advances or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation, or postpone any date fixed for any payment
of  principal  of, or interest  on, the  Advances  or any fees or other  amounts
payable hereunder, in each case to the extent subject to such participation,  or
reduce or limit the  obligations of the Guarantor  under Section 7.01 or release
the Guarantor from its obligations under Article VII.

      (f) Any Lender may, in connection with any assignment or  participation or
proposed assignment or participation  pursuant to this Section 9.07, disclose to
the assignee or participant or proposed assignee or participant, any information
relating  to the  Guarantor  furnished  to such  Lender  by or on  behalf of the
Guarantor;  provided  that,  prior  to any  such  disclosure,  the  assignee  or
participant  or proposed  assignee or  participant  shall agree to preserve  the
confidentiality  of any  Confidential  Information  relating  to  the  Guarantor
received by it from such Lender.

      (g) Notwithstanding  any other provision set forth in this Agreement,  any
Lender may at any time  create a security  interest in all or any portion of its
rights under this Agreement (including,  without limitation,  the Advances owing
to it and any Note or Notes held by it) in favor of any Federal  Reserve Bank in
accordance  with  Regulation A of the Board of Governors of the Federal  Reserve
System.

      SECTION  9.08.  Confidentiality.  Neither  the Agent nor any Lender  shall
disclose any Confidential Information to any other Person without the consent of
the  Guarantor,  other than (a) to the Agent's or such Lender's  Affiliates  and
their officers,  directors,  employees, agents and advisors and, as contemplated
by Section 9.07(f), to actual or prospective  assignees and participants,  or to
any direct,  indirect,  actual or prospective  counterparty (and its advisor) to
any swap,  derivative or securitization  transaction  relating to the Borrowers'
obligations hereunder, and then only on a confidential basis, (b) as required by
any law, rule or regulation or judicial process, (c) as requested or required by
any state,  federal or foreign authority or examiner regulating banks or banking
and (d) in connection  with the exercise of any remedies  hereunder or any suit,
action or proceeding  relating to this  Agreement or the  enforcement  of rights
hereunder.

      SECTION  9.09.  Governing  Law.  This  Agreement  and the  Notes  shall be
governed by, and  construed  in  accordance  with,  the laws of the State of New
York.

      SECTION 9.10. Execution in Counterparts. This Agreement may be executed in
any  number  of  counterparts  and  by  different  parties  hereto  in  separate
counterparts,  each of which when so executed  shall be deemed to be an original
and all of which taken  together shall  constitute  one and the same  agreement.
Delivery of an executed  counterpart  of a signature  page to this  Agreement by
telecopier shall be effective as delivery of a manually executed  counterpart of
this Agreement.

      SECTION  9.11.  Jurisdiction,  Etc. (a) Each of the parties  hereto hereby
irrevocably and  unconditionally  submits,  for itself and its property,  to the
nonexclusive  jurisdiction  of any New York State court or federal  court of the
United States of America  sitting in New York City, and any appellate court from
any  thereof,  in any action or  proceeding  arising  out of or relating to this
Agreement or the Notes, or for  recognition or enforcement of any judgment,  and
each of the parties hereto hereby  irrevocably and  unconditionally  agrees that
all  claims  in  respect  of any such  action  or  proceeding  may be heard  and
determined in any such New York State court or, to the extent  permitted by law,
in such federal court.  The Loan Parties hereby agree that service of process in
any such action or proceeding brought in the any such New York State court or in
such  federal  court may be made upon the  Guarantor  at its offices at One East
Weaver Street, Greenwich,  Connecticut 06831 Attention:  General Counsel and the
Loan Parties hereby  irrevocably  appoint the Guarantor its authorized  agent to
accept such service of process,  and agrees that the failure of the Guarantor to
give any notice of any such service shall not impair or affect the validity

                                       36
<PAGE>

of such service or of any judgment  rendered in any action or  proceeding  based
thereon.  Each Loan Party hereby further irrevocably  consents to the service of
process in any action or proceeding in such courts by the mailing thereof by any
parties hereto by registered or certified mail,  postage  prepaid,  to such Loan
Party at its address  specified  pursuant to Section  9.02.  Each of the parties
hereto agrees that a final  judgment in any such action or  proceeding  shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.  Nothing in this Agreement shall affect any
right  that any  party may  otherwise  have to bring  any  action or  proceeding
relating to this Agreement or the Notes in the courts of any jurisdiction.

      (b) Each of the parties hereto irrevocably and unconditionally  waives, to
the fullest  extent it may legally and  effectively do so, any objection that it
may now or  hereafter  have to the  laying  of  venue  of any  suit,  action  or
proceeding  arising out of or relating to this Agreement or the Notes in any New
York State or federal  court.  Each of the  parties  hereto  hereby  irrevocably
waives,  to the fullest extent  permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

      SECTION 9.12.  Judgment.  (a) If for the purposes of obtaining judgment in
any court it is  necessary to convert a sum due  hereunder in U.S.  dollars into
another currency,  the parties hereto agree, to the fullest extent that they may
effectively  do so,  that the rate of  exchange  used  shall be that at which in
accordance with normal banking  procedures the Agent could purchase U.S. dollars
with such other currency at Citibank's  principal office in London at 11:00 A.M.
(London  time) on the Business  Day  preceding  that on which final  judgment is
given.

      (b) The  obligation  of any  Borrower in respect of any sum due from it in
any  currency  (the  "Primary  Currency")  to any Lender or the Agent  hereunder
shall, notwithstanding any judgment in any other currency, be discharged only to
the extent  that on the  Business  Day  following  receipt by such Lender or the
Agent  (as the case  may be),  of any sum  adjudged  to be so due in such  other
currency,  such Lender or the Agent (as the case may be) may in accordance  with
normal banking  procedures  purchase the applicable  Primary  Currency with such
other currency; if the amount of the applicable Primary Currency so purchased is
less than  such sum due to such  Lender or the Agent (as the case may be) in the
applicable Primary Currency,  each Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such Lender or the Agent (as the
case may be)  against  such loss,  and if the amount of the  applicable  Primary
Currency so  purchased  exceeds  such sum due to any Lender or the Agent (as the
case may be) in the applicable  Primary  Currency,  such Lender or the Agent (as
the case may be) agrees to remit to such Borrower such excess.

      SECTION 9.13.  Patriot Act. Each Lender hereby  notifies the Guarantor and
each the  Borrower  that  pursuant  to the  requirements  of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Act"), it
is  required  to obtain,  verify and record  information  that  identifies  each
borrower,  guarantor or grantor (the "Loan Parties"), which information includes
the name and  address of each Loan Party and other  information  that will allow
such Lender to identify such Loan Party in accordance with the Act.

                                       37
<PAGE>

      SECTION 9.14.  Waiver of Jury Trial.  Each of the Loan Parties,  the Agent
and the  Lenders  hereby  irrevocably  waives  all right to trial by jury in any
action,   proceeding  or  counterclaim  (whether  based  on  contract,  tort  or
otherwise)  arising  out of or relating  to this  Agreement  or the Notes or the
actions  of  the  Agent  or  any  Lender  in  the  negotiation,  administration,
performance or enforcement thereof.

      IN WITNESS  WHEREOF,  the parties  hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized,  as of the date
first above written.

                                       OMNICOM FINANCE INC., as Borrower

                                       By: /s/ Dennis E. Hewitt
                                           -------------------------------------
                                           Dennis E. Hewitt
                                           Treasurer

                                       OMNICOM CAPITAL INC., as Borrower

                                       By: /s/ Dennis E. Hewitt
                                           -------------------------------------
                                           Dennis E. Hewitt
                                           President and Chief Executive Officer

                                       OMNICOM FINANCE PLC, as Borrower

                                       By: /s/ Dennis E. Hewitt
                                           -------------------------------------
                                           Dennis E. Hewitt
                                           Director

                                       OMNICOM GROUP INC., as Guarantor

                                       By: /s/ Dennis E. Hewitt
                                           -------------------------------------
                                           Dennis E. Hewitt
                                           Treasurer

                                       CITIBANK, N.A., as Agent

                                       By: /s/ Carolyn A. Kee
                                           -------------------------------------
                                       Name:   Carolyn A. Kee
                                       Title:  Vice President

                                       38
<PAGE>

                                 Initial Lenders

Commitment

$80,000,000                            CITIBANK, N.A.

                                       By: /s/ Carolyn A. Kee
                                           -------------------------------------
                                       Name:   Carolyn A. Kee
                                       Title:  Vice President

$80,000,000                            JPMORGAN CHASE BANK, N.A.

                                       By: /s/ James L. Stone
                                           -------------------------------------
                                       Name:   James L. Stone
                                       Title:  Managing Director

$43,000,000                            ABN AMRO BANK N.V.

                                       By: /s/ David Carrington
                                           -------------------------------------
                                       Name:   David Carrington
                                       Title:  Director

                                       By: /s/ Shilpa Parandekar
                                           -------------------------------------
                                       Name:   Shilpa Parandekar
                                       Title:  Vice President

$43,000,000                            BANK OF AMERICA, N.A.

                                       By: /s/ Amy Peden
                                           -------------------------------------
                                       Name:   Amy Peden
                                       Title:  Vice President

$43,000,000                            BANCO BILBAO VIZCAYA ARGENTARIA

                                       By: /s/ Juan Urquiola
                                           -------------------------------------
                                       Name:   Juan Urquiola
                                       Title:  Senior Vice President

                                       By: /s/ Giampaolo Consigliere
                                           -------------------------------------
                                       Name:   Giampaolo Consigliere
                                       Title:  Vice President

$43,000,000                            BARCLAYS BANK PLC

                                       By: /s/ David Barton
                                           -------------------------------------
                                       Name:   David Barton
                                       Title:  Associate Director

$43,000,000                            HSBC BANK USA, N.A.

                                       By: /s/ Robert Elms
                                           -------------------------------------
                                       Name:   Robert Elms
                                       Title:  Vice President

                                       39
<PAGE>

$25,000,000                            ROYAL BANK OF CANADA

                                       By: /s/ Dustin Craven
                                           -------------------------------------
                                       Name:   Dustin Craven
                                       Title:  Attorney in Fact

$400,000,000 Total of the Commitments

                                       40
<PAGE>

                                                                      SCHEDULE I
                                                                   OMNICOM GROUP
                                                        364-DAY CREDIT AGREEMENT
                                                      APPLICABLE LENDING OFFICES

                                                      APPLICABLE LENDING OFFICES
--------------------------------------------------------------------------------
Name of Initial Lender   Domestic Lending Office      Eurodollar Lending Office
--------------------------------------------------------------------------------
ABN Amro Bank N.V.     540 W. Madison                540 W. Madison
                       Suite 2621                    Suite 2621
                       Chicago, IL  60620            Chicago, IL  60620
                       Attn: Stefanie Newell         Attn: Stefanie Newell
                       T: 312 992-5113               T: 312 992-5113
                       F: 312 992-5111               F: 312 992-5111
--------------------------------------------------------------------------------
Banco Bilbao
  Vizcaya Argentaria   1345 Avenue of the Americas   1345 Avenue of the Americas
                       45th Floor                    45th Floor
                       New York, NY  10105           New York, NY  10105
                       Attn: Hector Villegas         Attn: Hector Villegas
                       T: 212 728-1513               T: 212 728-1513
                       F: 212 333-2904               F: 212 333-2904
--------------------------------------------------------------------------------
Bank of America, N.A.  1850 Gateway Blvd.,           1850 Gateway Blvd.,
                       5th Floor                     5th Floor
                       Concord, CA                   Concord, CA
                       Attn: Vilma Tang              Attn: Vilma Tang
                       T: 925 675-7336               T: 925 675-7336
                       F: 888 969-9285               F: 888 969-9285
--------------------------------------------------------------------------------
Barclays Bank PLC      200 Park Avenue               200 Park Avenue
                       New York, NY  10163           New York, NY  10163
                       Attn: Rosanna Pernice         Attn: Rosanna Pernice
                       T: 973 576-3728               T: 973 576-3728
                       F: 973 576-3014               F: 973 576-3014
--------------------------------------------------------------------------------
Citibank, N.A.         Two Penns Way                 Two Penns Way
                       New Castle, DE  19720         New Castle, DE  19720
                       Attn: Timothy Smith           Attn: Timothy Smith
                       T: 302 894-6059               T: 302 894-6059
                       F: 212 994-0961               F: 212 994-0961
--------------------------------------------------------------------------------
HSBC Bank USA, N.A.    One HSBC Center 26th Floor    One HSBC Center 26th Floor
                       Buffalo, NY  14203            Buffalo, NY  14203
                       Attn: Donna L. Riley          Attn: Donna L. Riley
                       T: 716 841-4178               T: 716 841-4178
                       F: 716 841-0269               F: 716 841-0269
--------------------------------------------------------------------------------
JPMorgan Chase
  Bank, N.A.           One Chase Manhattan Plaza     One Chase Manhattan Plaza
                       New York, NY  10081           New York, NY  10081
                       Attn: Donna Montgomery        Attn: Donna Montgomery
                       T: 212 522-7477               T: 212 522-7477
                       F: 212 552-5700               F: 212 552-5700
--------------------------------------------------------------------------------
Royal Bank of Canada
--------------------------------------------------------------------------------

                                       1
<PAGE>

                                SCHEDULE 3.01(b)

                              DISCLOSED LITIGATION

Beginning on June 13, 2002, several proposed class actions were filed against
Omnicom Group Inc. ("OGI") and certain of OGI's senior executives in the United
States District Court for the Southern District of New York. The actions have
since been consolidated under the caption In re Omnicom Group Inc. Securities
Litigation, No. 02-CV4483 (RCC) on behalf of a proposed class of purchasers of
OGI's common stock between February 20, 2001 and June 11, 2002. The consolidated
complaint filed alleges among other things that OGI's public filings and other
public statements during that period contained false and misleading statements
or omitted to state material information relating to (1) OGI's calculation of
the organic growth component of period-to-period revenue growth, (2) OGI's
valuation of certain internet investments made by OGI's Communicade Group, which
OGI contributed to Seneca Investments LLC in 2001 (the "Seneca Transaction"),
and (3) the existence and amount of certain contingent future obligations in
respect of acquisitions. The complaint seeks an unspecified amount of
compensatory damages plus costs and attorneys' fees. Defendants moved to dismiss
the complaint and on March 28, 2005, the court issued a decision ordering the
dismissal of the claims related to organic growth calculation and related to the
contingent future obligations in respect of acquisitions. The court did not
dismiss the claim related to the Seneca Transaction and ordered the defendants
to file an answer to the complaint by April 29, 2005. The court imposed a
six-month schedule for completing all discovery which is under way.

In addition to the proceedings described above, a shareholder derivative action
was filed on June 28, 2002 in New York State Court in New York City by a
plaintiff shareholder, purportedly on OGI's behalf. The action is pending before
Justice Karla Moskowitz. The complaint alleges, among other things, breaches of
fiduciary duty, disclosure failures, abuse of control and gross mismanagement in
connection with the formation of Seneca Investments LLC by certain current and
former directors of OGI. On February 18, 2005, a second shareholder derivative
action, again purportedly brought on behalf of OGI and making similar claims was
filed in New York State Court in New York City. During a status conference on
April 20, 2005, Justice Moskowitz and the parties agreed that the two derivative
actions should be consolidated and proceed before her. The parties are drafting
a proposed order that would consolidate the actions and set a schedule for
further litigation of this matter. Pursuant to the proposed schedule, plaintiffs
would file an amended consolidated compliant twenty days after the actions are
consolidated and the defendants will move to dismiss or will otherwise respond
to the amended complaint forty-five days thereafter. The defendants presently
intend to move to dismiss the amended complaint. Discovery would be stayed while
any such motion to dismiss was pending.

Management presently expects to defend these cases vigorously. Currently, OGI is
unable to determine the outcome of these cases and the effect on OGI's financial
position or results of operations. The outcome of any of these matters is
inherently uncertain and may be affected by future events.

<PAGE>

                          SCHEDULES 5.02(a) AND 5.02(d)

                        EXISTING LIENS AND EXISTING DEBT

                                                 Amount Due Each
                                                 ---------------
Subsidiary Borrower         Lender(s)                     Lender      Total Debt
-------------------         ---------                     ------      ----------

DAS Fleishman-Hillard       Pitney Bowes                  31,583
                            Avaya                          6,661
                            SBC                            2,784          41,028
DAS National In-Store       USBancorp                     25,615
                            Safeline                       2,000          27,615
DAS Porter Novelli          Steelcase                     15,109
                            NEC Leasing                   10,163          25,272
DAS TPG                     Newcourt Leasing               5,982
                            Copelco Capital                1,694
                            Citicorp                       1,422           9,098
DAS TPN                     GMAC                          26,651          26,651
Cardinia Real Estate        Osprey House              16,879,463      16,879,463
                                                      ----------      ----------

                                                      ----------      ----------
                                                      17,009,127      17,009,127
                                                      ==========      ==========

Omnicom Group Inc. has three zero coupon convertible bonds outstanding maturing
in 2031, 2032 and 2033. The principal amounts outstanding for each of these
bonds are $847,031,000, $892,273,000 and $600,000,000, respectively. In
addition, Omnicom Group Inc. has a 5.20% Euro-denominated note with a principal
amount outstanding of (euro)152,449,017.

<PAGE>

                                                             EXHIBIT A - FORM OF
                                                                 PROMISSORY NOTE

U.S.$_______________                               Dated:  _______________, 200_

      FOR VALUE RECEIVED,  the  undersigned,  [OMNICOM  FINANCE INC., a Delaware
corporation][OMNICOM  CAPITAL INC., a Connecticut  corporation][OMNICOM  FINANCE
PLC,  a  corporation  organized  under  the laws of  England  and  Wales],  (the
"Borrower"),  HEREBY  PROMISES TO PAY to the order of  _________________________
(the "Lender") for the account of its Applicable  Lending Office on the later of
the  Termination  Date and the date  designated  pursuant to Section 2.05 of the
Credit Agreement (each as defined in the Credit Agreement referred to below) the
principal  sum of  U.S.$[amount  of the Lender's  Commitment  in figures] or, if
less, the aggregate  principal  amount of the Advances made by the Lender to the
Borrower  pursuant to the  364-Day  Credit  Agreement  dated as of June 30, 2005
among the Borrowers referred to therein (including the undersigned),  the Lender
and certain other lenders  parties  thereto,  Citigroup  Global Markets Inc. and
J.P. Morgan Securities Inc., as lead arrangers and book managers,  ABN AMRO Bank
N.V., as syndication agent, JPMorgan Chase Bank, N.A., Bank of America, N.A. and
Banco Bilbao Vizcaya Argentaria, as documentation agents, and Citibank, N.A., as
Agent for the Lender and such other lenders (as amended or modified from time to
time,  the "Credit  Agreement";  the terms defined  therein being used herein as
therein defined) outstanding on such date.

      The Borrower  promises to pay interest on the unpaid  principal  amount of
each Advance from the date of such Advance until such  principal  amount is paid
in full,  at such  interest  rates,  and at such times,  as are specified in the
Credit Agreement.

      Both  principal  and  interest  are payable in lawful  money of the United
States of America to Citibank,  as Agent, at 388 Greenwich Street, New York, New
York 10013, in same day funds.  Each Advance owing to the Lender by the Borrower
pursuant to the Credit Agreement,  and all payments made on account of principal
thereof,  shall be  recorded by the Lender and,  prior to any  transfer  hereof,
endorsed on the grid attached hereto which is part of this Promissory Note.

      This  Promissory  Note shall be governed by, and  construed in  accordance
with, the laws of the State of New York.

      This  Promissory  Note is one of the Notes referred to in, and is entitled
to the  benefits of, the Credit  Agreement.  The Credit  Agreement,  among other
things,  (i)  provides  for the making of Advances by the Lender to the Borrower
from time to time in an aggregate  amount not to exceed at any time  outstanding
the U.S. dollar amount first above  mentioned,  the indebtedness of the Borrower
resulting  from each such Advance being  evidenced by this  Promissory  Note and
(ii)  contains  provisions  for  acceleration  of the  maturity  hereof upon the
happening  of  certain  stated  events  and also for  prepayments  on account of
principal  hereof  prior to the  maturity  hereof upon the terms and  conditions
therein specified.

                                                  [OMNICOM FINANCE INC.]
                                                  [OMNICOM CAPITAL INC.]
                                                  [OMNICOM FINANCE PLC]

                                                  By ___________________
                                                     Title:
<PAGE>

                       ADVANCES AND PAYMENTS OF PRINCIPAL

--------------------------------------------------------------------------------
                               Amount of
               Amount of    Principal Paid     Unpaid Principal      Notation
   Date         Advance       or Prepaid           Balance            Made By
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

                                       2
<PAGE>

                                                   EXHIBIT B - FORM OF NOTICE OF
                                                                       BORROWING

Citibank, N.A., as Agent
  for the Lenders parties
  to the Credit Agreement
  referred to below
  Two Penns Way
  New Castle, Delaware 19720

                                             [Date]

      Attention: Bank Loan Syndications Department

Ladies and Gentlemen:

      The undersigned,  [Omnicom  Finance  Inc.][Omnicom  Capital  Inc.][Omnicom
Finance plc], (the "Borrower"), refers to the 364-Day Credit Agreement, dated as
of June 30,  2005 (as  amended  or  modified  from  time to  time,  the  "Credit
Agreement",  the terms defined  therein  being used herein as therein  defined),
among the Borrowers  referred to therein  (including the  undersigned),  certain
Lenders  parties  thereto,   Citigroup  Global  Markets  Inc.  and  J.P.  Morgan
Securities  Inc., as lead  arrangers and book  managers,  ABN AMRO Bank N.V., as
syndication  agent,  JPMorgan Chase Bank, N.A., Bank of America,  N.A. and Banco
Bilbao Vizcaya Argentaria, as documentation agents, and Citibank, N.A., as Agent
for said Lenders, and hereby gives you notice, irrevocably,  pursuant to Section
2.02 of the Credit  Agreement that the  undersigned  hereby requests a Borrowing
under  the  Credit  Agreement,  and in that  connection  sets  forth  below  the
information relating to such Borrowing (the "Proposed Borrowing") as required by
Section 2.02(a) of the Credit Agreement:

            (i) The Business Day of the Proposed  Borrowing is  _______________,
      200_.

            (ii) The Type of Advances comprising the Proposed Borrowing is [Base
      Rate Advances] [Eurodollar Rate Advances].

            (iii)  The   aggregate   amount  of  the   Proposed   Borrowing   is
      $_______________.

            [(iv) The initial  Interest  Period for each Eurodollar Rate Advance
      made as part of the  Proposed  Borrowing  is _____  month[s].  [If nine is
      selected,  specify  alternate  Interest  Period of one, two,  three or six
      months.]]

      The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Borrowing:

            (A) the representations and warranties  contained in Section 4.01 of
      the Credit  Agreement  (except the  representations  set forth in the last
      sentence of subsection (e) thereof and in subsection  (f)(i)  thereof) are
      correct,  before and after giving effect to the Proposed  Borrowing and to
      the  application  of the proceeds  therefrom,  as though made on and as of
      such date; and

<PAGE>

            (B) no event has  occurred and is  continuing,  or would result from
      such Proposed Borrowing or from the application of the proceeds therefrom,
      that constitutes a Default.

                                                  Very truly yours,

                                                  [OMNICOM FINANCE INC.]
                                                  [OMNICOM CAPITAL INC.]
                                                  [OMNICOM FINANCE PLC]

                                                  By ___________________
                                                     Title:

                                       2
<PAGE>

                                                             EXHIBIT C - FORM OF
                                                       ASSIGNMENT AND ACCEPTANCE

      Reference  is made to the 364-Day  Credit  Agreement  dated as of June 30,
2005 (as amended or modified from time to time,  the "Credit  Agreement")  among
Omnicom  Finance  Inc.,  Omnicom  Capital  Inc.  and  Omnicom  Finance  plc (the
"Borrowers"),  Omnicom Group Inc. (the "Guarantor"),  the Lenders (as defined in
the Credit Agreement),  Citigroup Global Markets Inc. and J.P. Morgan Securities
Inc., as lead  arrangers and book  managers,  ABN AMRO Bank N.V., as syndication
agent, JPMorgan Chase Bank, N.A., Bank of America, N.A. and Banco Bilbao Vizcaya
Argentaria,  as  documentation  agents,  and  Citibank,  N.A.,  as agent for the
Lenders (the  "Agent").  Terms  defined in the Credit  Agreement are used herein
with the same meaning.

      The "Assignor"  and the "Assignee"  referred to on Schedule I hereto agree
as follows:

      1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby  purchases  and  assumes  from the  Assignor,  an  interest in and to the
Assignor's  rights and  obligations  under the Credit  Agreement  as of the date
hereof equal to the  percentage  interest  specified on Schedule 1 hereto of all
outstanding  rights and  obligations  under the Credit  Agreement.  After giving
effect to such sale and assignment,  the Assignee's Commitment and the amount of
the Advances owing to the Assignee will be as set forth on Schedule 1 hereto.

      2. The  Assignor  (i)  represents  and  warrants  that it is the legal and
beneficial  owner of the interest  being  assigned by it hereunder and that such
interest is free and clear of any adverse claim  created by the  Assignor;  (ii)
makes no representation  or warranty and assumes no responsibility  with respect
to any statements,  warranties or representations  made in or in connection with
the Credit  Agreement  or the  execution,  legality,  validity,  enforceability,
genuineness,  sufficiency  or  value  of  the  Credit  Agreement  or  any  other
instrument or document furnished pursuant thereto; (iii) makes no representation
or  warranty  and  assumes  no  responsibility  with  respect  to the  financial
condition of any Loan Party or the  performance  or observance by any Loan Party
of any of its obligations  under the Credit Agreement or any other instrument or
document furnished  pursuant thereto;  and (iv) attaches the Note[, if any] held
by the Assignor [and  requests that the Agent  exchange such Note for a new Note
payable  to the  order of [the  Assignee  in an amount  equal to the  Commitment
assumed by the Assignee pursuant hereto or new Notes payable to the order of the
Assignee in an amount equal to the Commitment  assumed by the Assignee  pursuant
hereto and] the  Assignor in an amount equal to the  Commitment  retained by the
Assignor under the Credit Agreement,  [respectively,] as specified on Schedule 1
hereto.

      3. The  Assignee  (i)  confirms  that it has received a copy of the Credit
Agreement,  together  with  copies of the  financial  statements  referred to in
Section 4.01 thereof and such other  documents and  information as it has deemed
appropriate  to make its own credit  analysis  and  decision  to enter into this
Assignment and Acceptance;  (ii) agrees that it will,  independently and without
reliance  upon the Agent,  the  Assignor  or any other  Lender and based on such
documents and information as it shall deem appropriate at the time,  continue to
make its own credit  decisions  in taking or not taking  action under the Credit
Agreement;  (iii)  confirms that it is an Eligible  Assignee;  (iv) appoints and
authorizes  the Agent to take such action as agent on its behalf and to exercise
such powers and  discretion  under the Credit  Agreement as are delegated to the
Agent by the terms  thereof,  together  with such powers and  discretion  as are
reasonably  incidental  thereto;  (v) agrees that it will perform in  accordance
with  their  terms  all of the  obligations  that  by the  terms  of the  Credit
Agreement are required to be performed by it as a Lender;  and (vi) attaches any
U.S.  Internal  Revenue  Service or U.K.  Inland  Revenue forms  required  under
Section 2.13 of the Credit Agreement.

      4. Following the execution of this Assignment and  Acceptance,  it will be
delivered to the Agent for acceptance and recording by the Agent.  The effective
date for this Assignment and Acceptance (the "Effective Date") shall be the date
of  acceptance  hereof by the Agent,  unless  otherwise  specified on Schedule 1
hereto.

      5. Upon such  acceptance  and recording by the Agent,  as of the Effective
Date,  (i) the  Assignee  shall be a party to the Credit  Agreement  and, to the
extent provided in this Assignment and Acceptance,

<PAGE>

have the rights and  obligations  of a Lender  thereunder  and (ii) the Assignor
shall, to the extent provided in this Assignment and Acceptance,  relinquish its
rights and be released from its obligations under the Credit Agreement.

      6. Upon such  acceptance  and  recording by the Agent,  from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the  Notes in  respect  of the  interest  assigned  hereby  (including,  without
limitation,  all payments of principal,  interest and facility fees with respect
thereto) to the Assignee.  The Assignor and Assignee shall make all  appropriate
adjustments  in payments  under the Credit  Agreement  and the Notes for periods
prior to the Effective Date directly between themselves.

      7. This  Assignment and Acceptance  shall be governed by, and construed in
accordance with, the laws of the State of New York.

      8.  This  Assignment  and  Acceptance  may be  executed  in any  number of
counterparts and by different parties hereto in separate  counterparts,  each of
which when so executed  shall be deemed to be an original and all of which taken
together shall  constitute one and the same  agreement.  Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier  shall
be effective as delivery of a manually  executed  counterpart of this Assignment
and Acceptance.

      IN WITNESS  WHEREOF,  the Assignor and the Assignee have caused Schedule 1
to this  Assignment and  Acceptance to be executed by their  officers  thereunto
duly authorized as of the date specified thereon.

                                       2
<PAGE>

                                   Schedule 1
                                       to
                            Assignment and Acceptance

Percentage interest assigned:                                             _____%

Assignee's Commitment:                                                    $_____

Aggregate outstanding principal amount of Advances assigned:              $_____

Principal amount of Note payable to Assignee:                             $_____

Principal amount of Note payable to Assignor:                             $_____

Effective Date*:  _______________, 200_

                                         [NAME OF ASSIGNOR], as Assignor

                                         By __________________________
                                         Title:

                                         Dated:  _______________, 200_

                                         [NAME OF ASSIGNEE], as Assignee

                                         By __________________________
                                         Title:

                                         Dated:  _______________, 200_

                                         Domestic Lending Office:
                                                  [Address]

                                         Eurodollar Lending Office:
                                                  [Address]

----------
*     This date should be no earlier than five  Business Days after the delivery
      of this Assignment and Acceptance to the Agent.

                                       3
<PAGE>

Accepted [and Approved]** this
__________ day of _______________, 200_

CITIBANK, N.A., as Agent

By ___________________________________
   Title:

[Approved this __________ day
of _______________, 200_

OMNICOM GROUP INC.

By ___________________________________]*
   Title:

----------
**    Required  if the  Assignee  is an  Eligible  Assignee  solely by reason of
      clause (iii) of the definition of "Eligible Assignee".

*     Required  if the  Assignee  is an  Eligible  Assignee  solely by reason of
      clause (iii) of the definition of "Eligible Assignee".

                                       4
<PAGE>

                                                           EXHIBIT D-1 - FORM OF
                                                     OPINION OF NEW YORK COUNSEL
                                                               FOR THE BORROWERS

                                             ________, 2005

To each of the Lenders parties
  to the 364-Day Credit Agreement referred to below

       Omnicom Finance Inc., Omnicom Capital Inc. and Omnicom Finance plc

Ladies and Gentlemen:

      This opinion is furnished  to you pursuant to Section  3.01(h)(iv)  of the
364-Day Credit Agreement, dated as of June 30, 2005 (the "Credit Agreement"), by
and among  Omnicom  Finance Inc.  ("OFI"),  Omnicom  Capital Inc.  ("OCI"),  and
Omnicom  Finance  plc  ("OFP",   and,   collectively   with  OFI  and  OCI,  the
"Borrowers"),  Omnicom  Group  Inc.  (the  "Guarantor"),  the  banks,  financial
institutions and other institutional lenders and initial issuing banks listed on
the signature  pages  thereof,  Citigroup  Global  Markets Inc. and J.P.  Morgan
Securities Inc., as joint lead arrangers and book managers,  ABN AMRO Bank N.V.,
as syndication agent, JPMorgan Chase Bank, N.A., Bank of America, N.A. and Banco
Bilbao Vizcaya  Argentaria,  as  documentation  agents,  and Citibank,  N.A., as
administrative  agent (the  "Agent")  for the  Lenders.  Capitalized  terms used
herein without definition are used as defined in the Credit Agreement.

      We have acted as New York counsel for the Loan Parties in connection  with
the preparation, execution and delivery of the Credit Agreement.

      In  connection  with this opinion,  we have  examined  originals or copies
(including conformed copies) of the following documents:

            (1) The Credit Agreement.

            (2) The documents  furnished by the Loan Parties pursuant to Article
      III of the  Credit  Agreement  (together  with the Credit  Agreement,  the
      "Credit Documents").

            (3) The Certificate of Incorporation and all amendments thereto (the
      "Charter")  of each of OFI, OCI and the Guarantor  (collectively,  the "US
      Loan  Parties"),  as certified as of a recent date by a public official of
      the state of its incorporation.

            (4) The by-laws and all amendments  thereto (the  "By-laws") of each
      US Loan Party, as certified to us by each US Loan Party.

            (5) A  certificate  of the  Secretary  of State of  Delaware,  dated
      __________,  2005, attesting to the continued corporate existence and good
      standing of OFI in that State as of the date thereof.

            (6) A certificate  of the Secretary of State of  Connecticut,  dated
      __________,  2005, attesting to the continued corporate existence and good
      standing of OCI in that State as of the date thereof.

<PAGE>

            (7) A  certificate  of the  Secretary  of State of New  York,  dated
      __________,  2005, attesting to the continued corporate existence and good
      standing of the Guarantor in that State as of the date thereof.

      In addition, we have examined originals or copies,  certified or otherwise
identified  to  our  satisfaction,   of  such  records,  instruments  and  other
documents,  and have made such other investigations,  as we have deemed relevant
and necessary as a basis for the opinions hereinafter set forth.

      For the purposes hereof, we have assumed, with your permission and without
independent verification of any kind: (a) that the signatures of persons signing
all documents in connection with which this opinion is rendered are genuine; (b)
the legal capacity of all natural persons;  (c) that all documents  submitted to
us as originals or duplicate originals are authentic; and (d) that all documents
submitted  to us as copies,  whether  certified  or not,  conform  to  authentic
original  documents.  As to questions of fact relevant to this opinion,  we have
assumed,  without  independent  investigation  or  verification of any kind, the
accuracy of the representations and warranties of the Loan Parties in the Credit
Agreement and have relied upon  certificates and oral or written  statements and
other information of public officials,  and officers and  representatives of the
Loan Parties.  For purposes of the opinion set forth in the paragraph numbered 1
below,  we have  relied  solely  upon copies of good  standing  certificates  as
certified by public officials as of the dates and in the jurisdictions listed on
Annex I hereto.

      In rendering the opinions  expressed  below,  we have  assumed,  with your
permission and without any  independent  investigation  or  verification  of any
kind,  that: (i) OFP has been duly organized and is validly existing and in good
standing  under  the  laws  of its  jurisdiction  of  incorporation  and is duly
qualified in each other jurisdiction in which the conduct of its business or the
ownership of its property makes such qualification necessary;  (ii) OFP has full
power and  authority  to execute,  deliver and perform the Credit  Documents  to
which it is a party; (iii) the execution, delivery and performance of the Credit
Documents by OFP have been duly authorized by all requisite  corporate action on
the part of OFP; (iv) the Credit Documents have been duly executed and delivered
by OFP; and (v) the execution,  delivery and performance of the Credit Documents
by OFP do not and will not violate the Charter,  By-laws or other organizational
documents of OFP. We have further assumed,  with your permission and without any
independent investigation or verification of any kind, that the Credit Agreement
constitutes  the valid and  legally  binding  obligation  of each  Person  party
thereto  (other than the US Loan  Parties  and OFP),  enforceable  against  such
Person in  accordance  with its terms.  Furthermore,  in giving the opinions set
forth in paragraphs numbered 4, 5 and 6 below, we express no opinion as to state
securities or blue sky laws.

      Based upon the foregoing, and subject to the limitations set forth herein,
we are of the opinion that:

      1.  Each US Loan  Party  (i) is a  validly  existing  corporation  in good
standing under the laws of the jurisdiction of its incorporation listed on Annex
I hereto and (ii) has the corporate  power and authority to own its property and
assets and to transact the business in which it is engaged.

      2. Each US Loan Party has the  corporate  power to  execute,  deliver  and
perform the terms and  provisions  of the Credit  Agreement  and the Notes to be
delivered by it and has taken all  necessary  corporate  action to authorize the
execution,  delivery and performance of the Credit Agreement and the Notes to be
delivered by it. Each US Loan Party has duly  executed and  delivered the Credit
Agreement and the Notes delivered by it on the date hereof.

      3.  The  Credit  Agreement   constitutes  the  legal,  valid  and  binding
obligation of each Loan Party enforceable  against such Loan Party in accordance
with  its  terms.  Each  Note to be  delivered  by a Loan  Party,  assuming  due
execution and delivery  thereof by such Loan Party,  will  constitute the legal,
valid and binding  obligation of such Loan Party  enforceable  against such Loan
Party in accordance with its terms.

                                       2
<PAGE>

      4. Neither the execution and delivery, nor the performance, by any US Loan
Party of the Credit Agreement or the Notes to be delivered by it, nor compliance
by such US Loan Party with the terms and provisions thereof, (i) will contravene
any  provision  of any law,  statute,  rule or  regulation  (including,  without
limitation,  Regulation  X of the  Board of  Governors  of the  Federal  Reserve
System) of the United  States of America or the State of New York  applicable to
such US Loan Party or (ii) will violate any  provision of the Charter or By-Laws
of such US Loan Party.

      5. Neither the execution and delivery, nor the performance,  by OFP of the
Credit  Agreement and the Notes to be delivered by it, nor compliance by it with
the terms and  provisions  thereof,  will  contravene  any provision of any law,
statute, rule or regulation (including, without limitation,  Regulation X of the
Board of  Governors  of the  Federal  Reserve  System) of the  United  States of
America or the State of New York applicable to OFP.

      6. No order, consent, approval,  license,  authorization or validation of,
or filing,  recording or registration with (except as have been obtained or made
on or prior to the date  hereof),  or exemption by, any  governmental  or public
body or  authority  of the United  States of America,  or the State of New York,
applicable  to any Loan  Party is  required  to  authorize,  or is  required  in
connection  with, (i) the execution,  delivery and performance by any Loan Party
of the  Credit  Agreement  and the  Notes  to be  delivered  by it or  (ii)  the
enforceability  of the Credit  Agreement  and the Notes to be delivered by it in
accordance with their terms against such Loan Party.

      7. The choice of New York law as the governing law of the Credit Agreement
and the Notes is,  under  the laws of the State of New York,  a valid  choice of
law.

      8. The consent by each Loan Party in Section 9.11 of the Credit  Agreement
to the  jurisdiction  of  courts  sitting  in the  State  of New York is a valid
consent to the jurisdiction of such courts.

      Our opinions are subject to the qualifications that:

      A. The  enforceability of the Credit Agreement and the Notes is subject to
and  may  be  limited  by  bankruptcy,  insolvency,  reorganization,  fraudulent
conveyance,  moratorium,  or other  similar laws  relating to or  affecting  the
rights of  creditors  generally  (including  such as may deny  giving  effect to
waivers of debtors'  or  guarantors'  rights),  and the  application  of general
principles of equity (regardless of whether considered in a proceeding in equity
or at law), including,  without limitation,  (i) the possible  unavailability of
specific  performance,  injunctive relief or any other equitable remedy and (ii)
concepts  of   materiality,   reasonableness,   good  faith  and  fair  dealing.
Accordingly,  no opinion is given herein as to (i) the availability of the right
to accelerate  any obligation  and certain  remedies  provided for in the Credit
Agreement in the event of a nonmaterial  default,  or (ii) the enforceability of
any  provision of the Credit  Agreement  relating to  cumulation  of remedies or
waiving the remedy of specific performance, or the waiver of debtors' rights.

      B. We  express  no opinion  as to the  enforceability  of any  contractual
provision  in  the  Credit  Agreement  as to  waiver  of any  procedural  right,
including,  without limitation, (i) the first sentence of Section 9.11(a) of the
Credit  Agreement  insofar  as  such  sentence  relates  to the  subject  matter
jurisdiction  of a federal court of the United States of America  sitting in New
York City to adjudicate any controversy  related to any of the Credit Documents,
and (ii) the waiver of  inconvenient  forum set forth in Section  9.11(b) of the
Credit  Agreement  with respect to  proceedings in a federal court of the United
States of America sitting in New York City.

      C. We  express  no opinion  as to the  enforceability  of any  contractual
provision  in the  Credit  Documents  relating  to  indemnification,  including,
without  limitation,  with respect to the  enforceability of Section 9.04 of the
Credit  Agreement,  to the extent  that these may be limited  (i) in the case of
litigation  against  any Loan  Party  which is decided  adversely  to the person
claiming  indemnification or in a case involving a claim of indemnification  for
attorneys' fees, (ii) by laws rendering unenforceable  indemnification  contrary
to federal or state securities laws and the public policy  underlying such laws,
or (iii) by laws  limiting  the  enforceability  of  provisions  exculpating  or
exempting a party, or requiring

                                       3
<PAGE>

indemnification of a party, for liability for its own action or inaction, to the
extent the action or inaction involves gross negligence,  recklessness,  willful
misconduct or unlawful conduct.

            D. Furthermore, no opinion is given herein as to:

            (i)  Section  7.02 of the Credit  Agreement,  to the extent  that it
      relates to action  contemplated by Section 7.02(b) of the Credit Agreement
      taken without the Guarantor's consent, which may not be enforceable to the
      extent that the Guaranteed Obligations are materially altered; or

            (ii)  Section  7.02(h)  of the  Credit  Agreement,  to the extent it
      relates to any waiver of an applicable statute of limitations; or

            (iii) the  enforceability  of the right of  setoff  provided  for in
      Section 9.05 of the Credit  Agreement (A) in respect of an interest  under
      the Credit  Agreement  purchased  by a Lender  pursuant to Section 2.14 or
      9.07 of the Credit Agreement, to the extent the relevant purchase does not
      give rise to a direct  obligation  of any Borrower to such Lender,  or (B)
      insofar as that right relates to setoff of unmatured obligations under the
      Credit  Agreement or of obligations owed to any Loan Party by an Affiliate
      of a Lender or by an Affiliate of the Agent.

      We are  members of the Bar of the State of New York and express no opinion
as to the laws of any jurisdiction  other than those of the laws of the State of
New York, the General  Corporation  Law of the State of Delaware and the federal
laws of the  United  States of  America.  Our  opinions  set forth in  paragraph
numbers 1, 2 and 4(ii)  above,  as they apply to OCI, are based on our review of
the Connecticut Business Corporation Act as reported by 33 Conn. Gen. Stat. Ann.
ss. 33-600 et seq.  (West 1997,  2004 supp.) to be in effect on the date of this
opinion letter.

      This  opinion is rendered  solely to you by us as New York counsel for the
Loan Parties in  connection  with the  transactions  contemplated  by the Credit
Agreement and the Notes. Each Lender (and its successors and permitted  assigns)
may rely upon this opinion in connection with those  transactions.  This opinion
may not be  relied  upon  in any  other  manner  or for any  other  purpose,  or
furnished or relied upon by any other person, without our prior written consent.
The  information  set  forth  herein  is as of the date of this  letter,  and we
disclaim  any  undertaking  to advise you of  changes  which  thereafter  may be
brought to our attention.

                                                Very truly yours,

                                       4
<PAGE>

                                                                         ANNEX I

                                                       Type and Date of
     Name and Jurisdiction                       Certificate in Jurisdiction
       of Incorporation                               of Incorporation
----------------------------------            ----------------------------------
Omnicom Finance Inc. (Delaware)               Good Standing - __________, 2005
Omnicom Capital Inc. (Connecticut)            Legal Existence - __________, 2005
Omnicom Group Inc. (New York)                 Subsisting - __________, 2005

<PAGE>

                                                           EXHIBIT D-2 - FORM OF
                                                              OPINION OF ENGLISH
                                                                 COUNSEL FOR OFP

To each of the Lenders parties to the Credit Agreement
referred to below and to Citibank, N.A. as Agent

Our Ref

      [DATE]

Dear Sirs

Omnicom Finance plc

1       Introduction

        We have acted as special  English  lawyers  for Omnicom  Finance  plc, a
        company  incorporated  and existing  under the laws of England and Wales
        ("OFP"),  in  connection  with its  authorisation  of the  execution and
        delivery of the following documents (together, the "Credit Documents"):

1.1     the  364-Day  Credit  Agreement  dated as of June 30,  2005  made  among
        Omnicom Finance Inc.,  Omnicom Capital Inc. and OFP  (collectively,  the
        "Borrowers"), Omnicom Group Inc. as Guarantor, the Initial Lenders named
        therein,  Citigroup Global Markets Inc. and J.P. Morgan Securities Inc.,
        as lead arrangers and book  managers,  ABN AMRO Bank N.V. as syndication
        agent,  J.P. Morgan Chase Bank,  N.A.,  Bank of America,  N.A. and Banco
        Bilbao Vizcaya Argentaria,  as documentation agents, and Citibank,  N.A.
        as Administrative Agent for the Lenders (the "Credit Agreement"); and

1.2     the Notes of OFP, if any, to be delivered pursuant to Section 2.15(a) of
        the Credit Agreement.

        We have been asked by OFP to give you this  opinion for the  purposes of
        Section   3.01(h)(iv)  of  the  Credit   Agreement  and  we  have  taken
        instructions  in this regard  solely from OFP.  You should be aware that
        our sole  involvement  with this  transaction  has been in  giving  this
        opinion and we have not been involved in the  negotiation  of the Credit
        Documents or in any other aspect of the transaction.

        Terms defined in the Credit  Agreement  have the same meanings when used
        in this opinion.

<PAGE>

2       English law opinion

        This opinion is limited to English law as applied by the English  courts
        as at the date of this  letter and is given on the basis that it will be
        governed by and construed in  accordance  with English law. We have made
        no  investigation  of the laws of any  jurisdiction  other than those of
        England and we do not express or imply any opinion as to the laws of any
        jurisdiction  other than those of England.  The  opinions  given in this
        letter  are  strictly  limited  to the  matters  stated in  paragraph  6
        (Opinion) and do not extend to any other matters or any matters of fact.

3       Documents examined

        For  the  purpose  of  this  opinion  we  have  examined  the  following
        documents:

3.1     a copy of the Credit Agreement  (including the Exhibits thereto) bearing
        a signature  on behalf of OFP which is stated  therein to be that of one
        of the persons  identified in the  certificate  referred to at paragraph
        3.2 below as a Director of OFP;

3.2     a copy of the certificate given by OFP pursuant to Section 3.01 (h) (ii)
        and (iii) of the Credit  Agreement and having  attached  thereto,  inter
        alia:

3.2.1   copies of the certificate of  incorporation  and Memorandum and Articles
        of Association  of OFP, each certified as true,  complete and up-to-date
        as at the date hereof by a Director of OFP; and

3.2.2   certified  extracts  from  the  minutes  of a  meeting  of the  Board of
        Directors of OFP held on [ May 2005],  the  resolutions  set out in such
        extracts  having been certified as true,  complete and still in force as
        at the date hereof by a Director of OFP; and

3.3     a further certificate  addressed to us from a director of OFP, a copy of
        which is attached hereto (the "Certificate").

4       Enquiries made

        For the purpose of giving this opinion, we have:

4.1     made an oral enquiry by telephone of the Central  Registry of Winding Up
        Petitions in respect of OFP on __________ 2005; and

4.2     arranged for a review of the copy  documents  relating to OFP  available
        from the Companies House website on __________ 2005.

        Except for the  documents  listed in  paragraph  3 above and the matters
        referred to in this  paragraph 4, we have not examined any  contracts or
        other  documents  entered into by or  affecting  any party to the Credit
        Documents  nor any  corporate  records  of OFP and we have  not made any
        other enquiries or searches concerning OFP.

                                       2
<PAGE>

5       Assumptions

        In examining the documents  referred to in paragraph 3 above,  in making
        the  enquiries  referred  to in  paragraph  4 above and in  giving  this
        opinion we have assumed without further enquiry:

5.1     the genuineness of all signatures and seals on documents, the conformity
        to the  originals  of all  documents  supplied  to us as copies  and the
        authenticity of the originals of such documents;

5.2     any  Notes  which  are  executed  by OFP  will be in the form set out in
        Exhibit A to the Credit Agreement;

5.3     that the  information  disclosed  by our  oral  enquiry  at the  Central
        Registry of Winding-up Petitions was then accurate and that such enquiry
        did not fail to disclose any matters which it should have  disclosed and
        which are  relevant  for the purposes of this opinion and since the time
        of such enquiry  there has been no alteration in the status or condition
        of OFP as represented by the Clerk at the Registry;

5.4     that  the file of  records  available  for  public  inspection  from the
        website of Companies  House  concerning  OFP was complete,  accurate and
        up-to-date at the time of the review  referred to in paragraph 4.2 above
        and that there has been no  alteration in the status or condition of OFP
        as represented thereby;

5.5     that OFP has not passed a voluntary  winding-up  resolution  and that no
        petition  has  been  presented  to or  order  made  by a  court  for the
        winding-up or dissolution of OFP or the appointment of an  administrator
        of OFP and that no receiver,  administrative  receiver, or administrator
        has been  appointed  in respect of OFP or any of its assets which in any
        such  case  has  not  been  revealed  by the  enquiries  referred  to in
        paragraph 4 above;

5.6     that OFP (i) is not  unable  to pay its  debts  within  the  meaning  of
        section 123 of the Insolvency Act 1986 at the time of its entry into the
        Credit  Documents,  and/or  (ii) will not as a  consequence  thereof  be
        unable to pay its debts within the meaning of that section;

5.7     (in  relation  to  paragraph  6.7 only,  if  relevant)  that each of the
        parties to the Credit Documents (other than OFP) is in existence and has
        full corporate capacity, right, power and authority to enter into and to
        exercise  its  rights  and  perform  its  obligations  under the  Credit
        Documents;

5.8     (in relation to paragraph 6.7 only, if relevant)  that under the laws of
        the State of New York,  USA,  each of the Credit  Documents  constitutes
        valid,  legally  binding  and  enforceable  obligations  of the  parties
        thereto, including OFP;

5.9     that none of the  parties  to the Credit  Documents  (i) is subject to a
        court   injunction  or  order  which  affects  its  performance  of  its
        obligations under the Credit Documents,  or (ii) has entered into any of
        the Credit  Documents  under duress,  undue influence or as a mistake in
        connection with money laundering or any other unlawful activity;

5.10    each of the parties to the Credit  Documents (other than OFP) is dealing
        with OFP in good faith and has no knowledge of any  irregularity  in the
        corporate procedure followed by

                                       3
<PAGE>

        OFP or its directors  (including,  without limitation,  any exceeding of
        the powers of, or any limitation imposed on, OFP or its directors or any
        breach by such directors of their fiduciary duties);

5.11    each of the Credit  Documents  has been  entered  into for the bona fide
        commercial  reasons  of OFP and on  arm's  length  terms  by each of the
        parties  thereto;  and the  directors of OFP have acted in good faith in
        the interests of OFP in respect of the Credit Documents.

5.12    that any copies  certified and all documents dated earlier than the date
        of this  letter on which we have  expressed  reliance  remain  accurate,
        complete and in full force and effect at the date of this letter;

5.13    that there are no provisions of the laws of any applicable  jurisdiction
        outside England which would be contravened by the execution and delivery
        of the Credit  Documents and that,  insofar as any obligation  under the
        Credit Documents is to be performed in any jurisdiction outside England,
        its  performance  will not be illegal or  contrary  to public  policy by
        virtue of the laws of that jurisdiction;

5.14    the accuracy of the statements contained in the Certificate;

5.15    (as  regards  our  opinions  in  paragraphs  6.5 and 6.6 below) that all
        Advances  made to OFP pursuant to the Credit  Agreement  will be made by
        persons  who are (i)  authorised  persons  (within  the  meaning  of the
        Financial  Services and Markets Act 2000) who have  permission to accept
        deposits  or to effect  or carry out  contracts  of  insurance,  or (ii)
        acting in the course of carrying on a business consisting wholly or to a
        significant  extent of lending money,  or (iii)  otherwise  described in
        paragraph 6(1) of the Financial Services and Markets Act 2000 (Regulated
        Activities) Order 2001; and

5.16    as regards  execution of any Notes,  our opinion in paragraph  6.4 below
        assumes that there will not have been, after the date of the Certificate
        and  prior  to  the  time  of  such  execution,  any  revocation  of the
        resolutions set out in the Minutes  referred to in paragraph 3.2.2 above
        or any amendment to such resolutions or to the Memorandum or Articles of
        Association of OFP which in either case is material to that opinion.

6       Opinion

        Based  upon  and   subject  to  the   foregoing,   and  subject  to  the
        qualifications  and reservations  mentioned below and to any matters not
        disclosed to us, we are of the following opinion.

6.1     OFP (i) is duly  incorporated  and validly  existing as a public limited
        company  under the laws of  England  and  Wales;  (ii) has the power and
        authority to own its property and assets and to transact the business in
        which it is engaged (as such property, assets and business are described
        in the  Certificate);  and (iii) is not  required to be  qualified  as a
        "foreign corporation" in order to do business within England and Wales.

6.2     The enquiry and review  referred to in  paragraph 4 above did not reveal
        any appointment of, or resolution or petition to appoint,  a liquidator,
        administrator  or  administrative  receiver  of  OFP,  or  that  OFP  is
        delinquent  in  filing  its  statutory  annual   directors'  report  and
        accounts, or any notification by the Registrar of Companies of intention
        to strike OFP's name off the Register of Companies.

                                       4
<PAGE>

6.3     OFP has the  corporate  power to execute,  deliver and perform the terms
        and provisions of each of the Credit  Documents to which it is expressed
        to be a party and to borrow under the Credit Agreement and has taken all
        necessary  corporate  action to authorise  the  execution,  delivery and
        performance  by it of each of such Credit  Documents and borrowing by it
        under the Credit Agreement.

6.4     OFP has validly executed the Credit Agreement. When the Notes are signed
        by one of the  Directors  of OFP,  such  Notes  will have  been  validly
        executed by OFP.

6.5     The execution,  delivery and performance by OFP of the Credit  Documents
        to which it is expressed to be a party,  the  compliance  by it with the
        terms and  provisions  thereof and the  borrowing by it under the Credit
        Agreement  will not (i)  contravene  any provision of any law,  statute,
        rule or regulation of England and Wales or (ii) violate any provision of
        the memorandum and articles of association of OFP as currently in force.

6.6     Under English law, no order, consent, approval,  licence,  authorisation
        or  validation  of,  or  filing,  recording  or  registration  with,  or
        exemption  by, any  governmental  or public body or  authority  of or in
        England and Wales  (except  such as have been  obtained or made prior to
        the date hereof) is required to authorise,  or is required in connection
        with, (i) the execution,  delivery and  performance by OFP of any Credit
        Document to which OFP is expressed to be a party,  (ii) the borrowing by
        OFP under the Credit Agreement or (iii) the  enforceability  of any such
        Credit Document against OFP.

6.7     The English courts would  recognize and give effect to the choice of the
        laws of the State of New York,  USA, as the  governing law of the Credit
        Documents.

6.8     The  submission  to the  jurisdiction  of the courts of the State of New
        York, USA, by OFP in the Credit Documents is within the corporate powers
        of OFP and does not contravene any law of England.

6.9     A  judgment  rendered  by a court in the  United  States  has no  direct
        operation in England but may be enforceable  by a claim or  counterclaim
        or be  recognised  by the  English  courts as a defence to a claim or as
        conclusive of an issue in an action.  For a judgment rendered by a court
        in the United  States to be enforced  by the English  courts it would be
        necessary to prove to the satisfaction of the English court that:-

        (i)     the United States court had jurisdiction; and

        (ii)    the judgment is final and conclusive on the merits; and

        (iii)   the  judgment  is for a debt or a  fixed  sum  (not  being a sum
                payable in respect of taxes or other charges of a like nature or
                in respect of a fine or other penalty).

        For a  defendant  to such a claim to have a good  defence  to a claim or
        counterclaim  to enforce such a judgment,  it would be necessary for him
        to prove that:-

        (1)     the judgment was obtained by fraud; or

                                       5
<PAGE>

        (2)     the judgment is contrary to English public policy; or

        (3)     the judgment  involves the enforcement of foreign public,  penal
                or revenue laws; or

        (4)     enforcement  would be contrary to section 5 of the Protection of
                Trading  Interests Act 1980 (which  prohibits the enforcement of
                (a) judgments  for multiple  damages;  (b) judgments  based on a
                provision or rule of law  specified by the Secretary of State as
                being   concerned   with  the   prohibition   or  regulation  of
                anti-competitive   arrangements   or  with  the   promotion   of
                competition; and (c) a judgment on a claim for a contribution in
                respect of damages awarded under (a) or (b)); or

        (5)     the judgment  was  obtained in a manner  opposed to the rules of
                natural justice; or

        (6)     the  judgment  involves  a matter  previously  determined  by an
                English court; or

        (7)     Recognition  of the judgment is denied  under  section 32 of the
                Civil  Judgment and  Jurisdiction  Act 1982.  Under section 32 a
                judgment in a United  States  action shall not be  recognised by
                the English Courts if:

                        (a)     the United States action is brought in breach of
                                a valid  agreement  under  which the  dispute in
                                question  was to be  settled  otherwise  than by
                                proceedings in the United States; and

                        (b)     the United  States  action was not brought by or
                                with the agreement  of, the person  against whom
                                the judgment was given; and

                        (c)     that person did not  counterclaim  in the United
                                States   action  or  otherwise   submit  to  the
                                jurisdiction of the United States court;

                Except that section 32 does not apply where the agreement  under
                which the  dispute in  question  was to be  settled is  illegal,
                void,  unenforceable or incapable of being performed for reasons
                not attributable to the fault of the party bringing the action.

        The question of whether enforcement of a judgment is contrary to English
        public  policy  (see (2)  above)  depends  on the  circumstances  of the
        transaction as a whole and the  subsequent  conduct of the litigation in
        the United  States and English  proceedings.  Solely on the basis of our
        examination  of  the  documents  referred  to in  paragraphs  3.1 to 3.3
        (inclusive)  above,  we are not aware of any reason why

                                       6
<PAGE>

        enforcement  of a  judgment  to pay a sum of money due under the  Credit
        Agreement  would be contrary to English  public policy as at the date of
        this letter.

7       Qualifications and reservations

        Our opinion is subject to the following qualifications and reservations.

7.1     The  opinions  in this  letter  are  subject  to all  laws  relating  to
        winding-up,   administration,   bankruptcy,   insolvency,   liquidation,
        reorganisation,  moratorium or similar laws affecting  creditors' rights
        generally.

7.2     We express no opinion on the  effectiveness or  enforceability of any of
        the provisions of the Credit  Documents,  since the Credit Documents are
        governed by New York law.

7.3     The obligations of OFP under the Credit Documents will be subject to any
        laws from time to time in effect relating to insolvency, administration,
        bankruptcy,  liquidation,  reorganisation,  moratorium  or similar  laws
        affecting  creditors' rights generally and we express no opinion on such
        laws.

7.4     The enquiry at the Central Registry of Winding-up  Petitions referred to
        in paragraph  4.1 above relates only to a compulsory  winding-up  and is
        not  conclusively  capable  of  revealing  whether  or not a  winding-up
        petition in respect of a compulsory  winding-up has been presented since
        details of the  petition may not have been entered on the records of the
        Central Registry of Winding-up Petitions  immediately or, in the case of
        a petition  presented to a County  Court,  may not have been notified to
        the  Central  Registry  and  entered  on such  records  at all,  and the
        response to an enquiry only relates to the period of six months prior to
        the date when the enquiry was made.

7.5     The search of the Companies  House website  referred to in paragraph 4.2
        above is not  conclusively  capable of revealing  whether or not certain
        events have occurred,  including the  commencement  of winding up or the
        making of an  administration  order or the  appointment  of a  receiver,
        administrative receiver, administrator or liquidator, as notice of these
        matters may not be filed with  Companies  House  immediately  and,  when
        filed, may not be available from such website immediately.

7.6     The choice of a particular  law to govern an agreement or document would
        not be recognised  or upheld by the English  Courts if the choice of law
        was not bona fide and legal or if there were  reasons for  avoiding  the
        choice  of law  on  the  grounds  of  public  policy.  The  choice  of a
        particular law would not be upheld, for example, if it was made with the
        intention of evading the law of the jurisdiction with which the contract
        had its most  substantial  connection  and which,  in the absence of the
        chosen law,  would have  invalidated  the contract or been  inconsistent
        with it. We have not made any  investigation  into the bona fides of the
        parties to the Credit Documents;  however we are not aware of any reason
        for an  English  Court to find that the choice of New York law to govern
        the Credit  Documents is not bona fide or not legal, nor are we aware of
        any English  public policy that would be violated by the  enforcement of
        the Credit Documents in accordance with their respective terms.

7.7     We have not considered the particular  circumstances of any party to the
        Credit Documents (save OFP to the extent expressly stated herein) or the
        effect of such

                                       7
<PAGE>

        particular  circumstances  on the Credit  Documents or the  transactions
        contemplated thereby.

7.8     English  courts can, in their  discretion,  give judgments in a currency
        other than sterling if they consider that it is the currency  which most
        fairly expresses the plaintiff's loss but the judgment may require to be
        converted into sterling for enforcement purposes.

7.9     If OFP is required to deposit cash  collateral into the L/C Cash Deposit
        Account in accordance with Section 6.02 of the Credit Agreement, then it
        may be necessary or advisable to arrange for a  registration  to be made
        at Companies House to note the security interest in such funds.

7.10    Any  undertaking  or indemnity to assume  liability for  non-payment  or
        insufficiency  of United  Kingdom  stamp duty on any  instrument is void
        under section 117 of the Stamp Act 1891.

7.11    An English court will not necessarily  grant any remedy the availability
        of which is subject to equitable considerations or which is otherwise in
        the  discretion  of  the  court;  in  particular,  orders  for  specific
        performance  and  injunctions  are, in general,  discretionary  remedies
        under  English  law and neither  remedy is  ordinarily  available  where
        damages  are  considered  by the  court  to be an  adequate  alternative
        remedy.

7.12    An  English  court has power to stay an  action  where it is shown  that
        there is some other forum, having competent jurisdiction,  which is more
        appropriate  for the trial of the  action,  in other  words in which the
        case can be tried more suitably for the interests of all the parties and
        the ends of justice,  or where  staying  the action is not  inconsistent
        with the EU  Council  Regulation  no  44/2001  on  Jurisdiction  and the
        Enforcement of Judgments in Civil and  Commercial  Matters as applied by
        virtue of the Civil Jurisdiction and Judgments Order 2001.

8       Reliance

        This  opinion may be relied on solely by the  addressees  and may not be
        regarded  as  addressed  to or capable  of being  relied on by any other
        person (save the addressees'  successors and assigns)  without our prior
        written consent. It is strictly limited to the matters stated herein and
        does not extend to, and is not to be read as  extending  by  implication
        to, any other matter in connection with the Credit Documents.

Yours faithfully

Macfarlanes

                                       8
<PAGE>

                                                                  EXECUTION COPY

                                U.S. $400,000,000

                            364-DAY CREDIT AGREEMENT

                            Dated as of June 30, 2005

                                      Among

                              OMNICOM FINANCE INC.
                              OMNICOM CAPITAL INC.
                                       and
                               OMNICOM FINANCE PLC
                                  as Borrowers

                               OMNICOM GROUP INC.
                                  as Guarantor

                                       and

                        THE INITIAL LENDERS NAMED HEREIN

                               as Initial Lenders

                                       and

                          CITIGROUP GLOBAL MARKETS INC.
                                       and
                           J.P. MORGAN SECURITIES INC.
                       as Lead Arrangers and Book Managers

                               ABN AMRO BANK N.V.
                              as Syndication Agent

                            JPMORGAN CHASE BANK, N.A.
                              BANK OF AMERICA, N.A.
                                       and
                         BANCO BILBAO VIZCAYA ARGENTARIA
                             as Documentation Agents

                                       and

                                 CITIBANK, N.A.
                             as Administrative Agent

<PAGE>

                                TABLE OF CONTENTS

ARTICLE I

    SECTION 1.01.  Certain Defined Terms                                       1

    SECTION 1.02.  Computation of Time Periods                                10

    SECTION 1.03.  Accounting Terms                                           10

ARTICLE II

    SECTION 2.01.  The Advances                                               10

    SECTION 2.02.  Making the Advances                                        10

    SECTION 2.03.  Fees                                                       11

    SECTION 2.04.  Termination or Reduction of the Commitments                11

    SECTION 2.05.  Repayment of Advances                                      11

    SECTION 2.06.  Interest on Advances                                       11

    SECTION 2.07.  Interest Rate Determination                                12

    SECTION 2.08.  Optional Conversion of Advances                            13

    SECTION 2.09. Prepayments of Advances                                     13

    SECTION 2.10.  Increased Costs                                            13

    SECTION 2.11.  Illegality                                                 14

    SECTION 2.12.  Payments and Computations                                  14

    SECTION 2.13.  Taxes                                                      15

    SECTION 2.14.  Sharing of Payments, Etc.                                  17

    SECTION 2.15.  Evidence of Debt                                           18

    SECTION 2.16.  Use of Proceeds                                            18

ARTICLE III

    SECTION 3.01.  Conditions Precedent to Effectiveness
                      of Section 2.01                                         18

                                        i
<PAGE>

    SECTION 3.02.  Conditions Precedent to Each Borrowing.                    19

    SECTION 3.03.  Determinations Under Section 3.01                          20

ARTICLE IV

   SECTION 4.01.  Representations and Warranties of the Guarantor             20

ARTICLE V

    SECTION 5.01.  Affirmative Covenants                                      21

    SECTION 5.02.  Negative Covenants                                         23

    SECTION 5.03.  Financial Covenants                                        25

ARTICLE VI

    SECTION 6.01.  Events of Default                                          25

ARTICLE VII

    SECTION 7.01.  Guaranty                                                   27

    SECTION 7.02.  Guaranty Absolute                                          27

    SECTION 7.03.  Waivers and Acknowledgements                               28

    SECTION 7.04.  Subrogation                                                29

    SECTION 7.05.  Subordination                                              29

    SECTION 7.06.  Continuing Guaranty; Assignments                           30

ARTICLE VIII

    SECTION 8.01.  Authorization and Action                                   30

    SECTION 8.02.  Agent's Reliance, Etc.                                     30

    SECTION 8.03.  Citibank and Affiliates                                    31

    SECTION 8.04.  Lender Credit Decision                                     31

    SECTION 8.05.  Indemnification                                            31

    SECTION 8.06.  Successor Agent                                            31

                                       ii
<PAGE>

    SECTION 8.07.  Other Agents.                                              32

ARTICLE IX

    SECTION 9.01.  Amendments, Etc.                                           32

    SECTION 9.02.  Notices, Etc.                                              32

    SECTION 9.03.  No Waiver; Remedies                                        33

    SECTION 9.04.  Costs and Expenses                                         33

    SECTION 9.05.  Right of Set-off                                           34

    SECTION 9.06.  Binding Effect                                             34

    SECTION 9.07.  Assignments and Participations                             34

    SECTION 9.08.  Confidentiality                                            36

    SECTION 9.09.  Governing Law                                              36

    SECTION 9.10.  Execution in Counterparts                                  36

    SECTION 9.11.  Jurisdiction, Etc.                                         36

    SECTION 9.12.  Judgment                                                   37

    SECTION 9.13.  Patriot Act                                                37

    SECTION 9.14.  Waiver of Jury Trial                                       38

                                       iii
<PAGE>

Schedules

Schedule I - List of Applicable Lending Offices

Schedule 3.01(b) - Disclosed Litigation

Schedule 5.02(a) - Existing Liens

Schedule 5.02(d) - Existing Debt

Exhibits

Exhibit A     -   Form of Note

Exhibit B     -   Form of Notice of Borrowing

Exhibit C     -   Form of Assignment and Acceptance

Exhibit D-1   -   Form of Opinion of New York Counsel for the Loan Parties

Exhibit D-2   -   Form of Opinion of English Counsel for OFP

                                       iv

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