Pooling And Servicing Agreement

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 ...

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, subst antially 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 Serv