Document:

EXHIBIT 4.1

 

NOMURA ASSET ACCEPTANCE CORPORATION,

Depositor

 

NOMURA CREDIT & CAPITAL, INC.,

Seller

 

GMAC MORTGAGE CORPORATION

Servicer

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

Master Servicer and Securities Administrator

and

 

HSBC BANK USA, NATIONAL ASSOCIATION

Trustee

	
             
 	
             
 	
             
 

 

 

POOLING AND SERVICING AGREEMENT

Dated as of September 1, 2005

	
             
 	
             
 	
             
 

 

NOMURA ASSET ACCEPTANCE CORPORATION

MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-AR5

 

 

 

TABLE OF CONTENTS

 

ARTICLE I

DEFINITIONS

	
            Section 1.01
 	
            Defined Terms.
 	
             

	
            Section 1.02
 	
            Allocation of Certain Interest Shortfalls.
 

ARTICLE II

CONVEYANCE OF TRUST FUND REPRESENTATIONS AND WARRANTIES

	
            Section 2.01
 	
            Conveyance of Trust Fund.
 	
             

	
            Section 2.02
 	
            Acceptance of the Mortgage Loans.
 	
             

	
            Section 2.03
 	
            Representations, Warranties and Covenants of the Servicer and the Seller.
 
	
            Section 2.04
 	
            Representations and Warranties of the Depositor.
 	
             

					

	
            Section 2.05
 	
            Delivery of Opinion of Counsel in Connection with Substitutions and Repurchases. 
 

	
            Section 2.06
 	
            Issuance of the REMIC I Regular Interests and the Class R Certificates.
 
	
            Section 2.07
 	
            Conveyance of the REMIC I Regular Interests.
 	
             

	
            Section 2.08
 	
            Issuance of Class R Certificates.
 	
             

	
            Section 2.09
 	
            Establishment of Trust.
 	
             

					

ARTICLE III

ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS; ACCOUNTS

	
            Section 3.01
 	
            The Servicer to act as Servicer of the Mortgage Loans.
 
	
            Section 3.02
 	
            Due-on-Sale Clauses; Assumption Agreements.
 	
             

	
            Section 3.03
 	
            Subservicers.
 	
             

				

	
            Section 3.04
 	
            Documents, Records and Funds in Possession of the Servicer To Be Held for Trustee. 
 

	
            Section 3.05
 	
            Maintenance of Hazard Insurance.
 	
             

	
            Section 3.06
 	
            Presentment of Claims and Collection of Proceeds.
 
	
            Section 3.07
 	
            Maintenance of Insurance Policies.
 	
             

	
            Section 3.08
 	
            Reserved.
 	
             

					

	
            Section 3.09
 	
            Realization Upon Defaulted Mortgage Loans; Determination of Excess Liquidation Proceeds and Realized Losses; Repurchases of Certain Mortgage Loans. 
 

	
            Section 3.10
 	
            Servicing Compensation.
 	
             

	
            Section 3.11
 	
            REO Property.
 	
             

	
            Section 3.12
 	
            Liquidation Reports.
 	
             

	
            Section 3.13
 	
            Annual Certificate as to Compliance.
 	
             

	
            Section 3.14
 	
            Annual Independent Certified Public Accountants’ Servicing Report.
 
	
            Section 3.15
 	
            Books and Records.
 	
             

	
            Section 3.16
 	
            The Trustee.
 	
             

	
            Section 3.17
 	
            REMIC-Related Covenants.
 	
             

	
            Section 3.18
 	
            [Reserved].
 	
             

	
            Section 3.19
 	
            Release of Mortgage Files.
 	
             

											

	
            Section 3.20
 	
            Documents, Records and Funds in Possession of the Servicer to be held for Trustee. 
 

	
            Section 3.21
 	
            Possession of Certain Insurance Policies and Documents.
 
	
            Section 3.22
 	
            [Reserved].
 	
             

 

 

 

	
            Section 3.23
 	
            UCC.
 	
             

	
            Section 3.24
 	
            Optional Purchase of Defaulted Mortgage Loans.
 	
             

	
            Section 3.25
 	
            Obligations of the Servicer Under Credit Risk Management Agreement.
 
	
            Section 3.26
 	
            Collection of Mortgage Loan Payments; Custodial Account.
 	
             

	
            Section 3.27
 	
            Permitted Withdrawals From the Custodial Account.
 	
             

	
            Section 3.28
 	
            Reports to Master Servicer.
 	
             

	
            Section 3.29
 	
            Collection of Taxes; Assessments and Similar Items; Escrow Accounts.
 
	
            Section 3.30
 	
            Adjustments to Mortgage Rate and Scheduled Payment.
 	
             

	
            Section 3.31
 	
            Distribution Account.
 	
             

	
            Section 3.32
 	
            Permitted Withdrawals and Transfers from the Distribution Account.
 	
             

	
            Section 3.33
 	
            Duties of the Credit Risk Manager; Termination.
 	
             

	
            Section 3.34
 	
            Limitation Upon Liability of the Credit Risk Manager.
 	
             

												

ARTICLE IV

ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE LOANS

	
            Section 4.01
 	
            The Master Servicer.
 	
             

	
            Section 4.02
 	
            Monitoring of Servicer.
 	
             

	
            Section 4.03
 	
            Fidelity Bond.
 	
             

	
            Section 4.04
 	
            Power to Act; Procedures.
 	
             

	
            Section 4.05
 	
            Due-on-Sale Clauses; Assumption Agreements.
 
						

	
            Section 4.06
 	
            Documents, Records and Funds in Possession of Master Servicer To Be Held for Trustee. 
 

	
            Section 4.07
 	
            Standard Hazard Insurance and Flood Insurance Policies.
 	
             

	
            Section 4.08
 	
            Presentment of Claims and Collection of Proceeds.
 	
             

	
            Section 4.09
 	
            Maintenance of the Primary Mortgage Insurance Policies.
 	
             

	
            Section 4.10
 	
            Trustee to Retain Possession of Certain Insurance Policies and Documents.
 	
             

	
            Section 4.11
 	
            Realization Upon Defaulted Loans.
 	
             

	
            Section 4.12
 	
            Compensation for the Master Servicer.
 	
             

	
            Section 4.13
 	
            REO Property.
 	
             

	
            Section 4.14
 	
            Annual Officer’s Certificate as to Compliance.
 	
             

	
            Section 4.15
 	
            Annual Independent Accountant’s Servicing Report.
 	
             

	
            Section 4.16
 	
            Reports Filed with Securities and Exchange Commission.
 	
             

	
            Section 4.17
 	
            [Reserved].
 	
             

	
            Section 4.18
 	
            Obligation of the Master Servicer in Respect of Prepayment Interest Shortfalls.
 
													

ARTICLE V

ADVANCES AND DISTRIBUTIONS

	
            Section 5.01
 	
            Advances; Advance Facility.
 	
             

	
            Section 5.02
 	
            Compensating Interest Payments.
 	
             

	
            Section 5.03
 	
            REMIC Distributions.
 	
             

	
            Section 5.04
 	
            Distributions.
 	
             

	
            Section 5.05
 	
            Allocation of Realized Losses.
 	
             

	
            Section 5.06
 	
            Monthly Statements to Certificateholders.
 	
             

	
            Section 5.07
 	
            REMIC Designations and REMIC I Allocations.
 
	
            Section 5.08
 	
            Prepayment Charges.
 	
             

	
            Section 5.09
 	
            Class P Certificate Account.
 	
             

	
            Section 5.10
 	
            Basis Risk Shortfall Reserve Fund.
 	
             

											

ARTICLE VI

THE CERTIFICATES

 

 

	
            Section 6.01
 	
            The Certificates.
 	
             

	
            Section 6.02
 	
            Certificate Register; Registration of Transfer and Exchange of Certificates.
 
	
            Section 6.03
 	
            Mutilated, Destroyed, Lost or Stolen Certificates.
 	
             

	
            Section 6.04
 	
            Persons Deemed Owners.
 	
             

	
            Section 6.05
 	
            Access to List of Certificateholders’ Names and Addresses.
 	
             

	
            Section 6.06
 	
            Book-Entry Certificates.
 	
             

	
            Section 6.07
 	
            Notices to Depository.
 	
             

	
            Section 6.08
 	
            Definitive Certificates.
 	
             

	
            Section 6.09
 	
            Maintenance of Office or Agency.
 	
             

										

ARTICLE VII

THE DEPOSITOR, THE SERVICER AND THE MASTER SERVICER

	
            Section 7.01
 	
            Liabilities of the Depositor, the Servicer and the Master Servicer.
 	
             

	
            Section 7.02
 	
            Merger or Consolidation of the Depositor, the Servicer or the Master Servicer.
 
	
            Section 7.03
 	
            Indemnification of Depositor and the Servicer.
 	
             

				

	
            Section 7.04
 	
            Limitations on Liability of the Depositor, Securities Administrator, Master Servicer, Servicer and Others. 
 

	
            Section 7.05
 	
            The Servicer Not to Resign.
 	
             

	
            Section 7.06
 	
            Termination of the Servicer Without Cause; Appointment of Special Servicer.
 
	
            Section 7.07
 	
            Limitation on Resignation of the Master Servicer.
 	
             

	
            Section 7.08
 	
            Assignment of Master Servicing.
 	
             

	
            Section 7.09
 	
            Rights of the Depositor in Respect of the Servicer and the Master Servicer.
 	
             

						

ARTICLE VIII

DEFAULT; TERMINATION OF SERVICER AND MASTER SERVICER

	
            Section 8.01
 	
            Events of Default.
 	
             

	
            Section 8.02
 	
            Master Servicer to Act; Appointment of Successor.
 	
             

	
            Section 8.03
 	
            Notification to Certificateholders.
 	
             

	
            Section 8.04
 	
            Waiver of Servicer Defaults and Master Servicer Defaults.
 
					

ARTICLE IX

CONCERNING THE TRUSTEE AND SECURITIES ADMINISTRATOR

	
            Section 9.01
 	
            Duties of Trustee and Securities Administrator.
 	
             

	
            Section 9.02
 	
            Certain Matters Affecting the Trustee and Securities Administrator.
 

	
            Section 9.03
 	
            Trustee and Securities Administrator not Liable for Certificates or Mortgage Loans. 
 

	
            Section 9.04
 	
            Trustee and Securities Administrator May Own Certificates.
 	
             

	
            Section 9.05
 	
            Fees and Expenses of Trustee and Securities Administrator.
 	
             

	
            Section 9.06
 	
            Eligibility Requirements for Trustee and Securities Administrator.
 	
             

	
            Section 9.07
 	
            Resignation and Removal of Trustee and Securities Administrator.
 
	
            Section 9.08
 	
            Successor Trustee or Securities Administrator.
 	
             

	
            Section 9.09
 	
            Merger or Consolidation of Trustee or Securities Administrator.
 	
             

	
            Section 9.10
 	
            Appointment of Co-Trustee or Separate Trustee.
 	
             

	
            Section 9.11
 	
            Appointment of Office or Agency.
 	
             

	
            Section 9.12
 	
            Representations and Warranties.
 	
             

	
            Section 9.13
 	
            Tax Matters.
 	
             

											

ARTICLE X

TERMINATION

	
            Section 10.01
 	
            Termination upon Liquidation or Repurchase of all Mortgage Loans.
 

 

 

 

	
            Section 10.02
 	
            Final Distribution on the Certificates.
 	
             

	
            Section 10.03
 	
            Additional Termination Requirements.
 

ARTICLE XI

MISCELLANEOUS PROVISIONS

	
            Section 11.01
 	
            Amendment.
 	
             

	
            Section 11.02
 	
            Recordation of Agreement; Counterparts.
 	
             

	
            Section 11.03
 	
            Governing Law.
 	
             

	
            Section 11.04
 	
            Intention of Parties.
 	
             

	
            Section 11.05
 	
            Notices.
 	
             

	
            Section 11.06
 	
            Severability of Provisions.
 	
             

	
            Section 11.07
 	
            Assignment.
 	
             

	
            Section 11.08
 	
            Limitation on Rights of Certificateholders.
 
	
            Section 11.09
 	
            Certificates Nonassessable and Fully Paid.
 	
             

										

 

 

 

Exhibits

	
            Exhibit A-1
 	
            Form of Class [I][II]-A-[1][2] Certificates
 	
             

	
            Exhibit A-2
 	
            Form of Class III-A-[1][2][3][4] Certificates
 	
             

	
            Exhibit A-3
 	
            Form of Class M-[1][2][3][4][5] Certificates
 	
             

	
            Exhibit A-4
 	
            Form of Class P Certificates
 	
             

	
            Exhibit A-5
 	
            Form of Class R Certificates
 	
             

	
            Exhibit A-6
 	
            Form of Class X Certificates
 	
             

	
            Exhibit B
 	
            Mortgage Loan Schedule
 	
             

	
            Exhibit C
 	
            [Reserved]
 	
             

	
            Exhibit D
 	
            Form of Transfer Affidavit
 	
             

	
            Exhibit E
 	
            Form of Transferor Certificate
 	
             

	
            Exhibit F
 	
            Form of Investment Letter (Non-Rule 144A)
 
	
            Exhibit G
 	
            Form of Rule 144A Investment Letter
 	
             

	
            Exhibit H
 	
            [Reserved]
 	
             

	
            Exhibit I
 	
            DTC Letter of Representations
 	
             

	
            Exhibit J
 	
            Form of Servicer’s Certification
 	
             

													

	
            Exhibit K
 	
            Appendix E of the Standard & Poor's Glossary For File Format For LEVELS® Version 5.6 Revised
 

	
            Exhibit X-1
 	
            Form of Schedule of Default Loan Data
 	
             

	
            Exhibit X-2
 	
            Form of Schedule of Realized Losses/Gains
 

 

 

 

POOLING AND SERVICING AGREEMENT, dated as of September 1, 2005, among NOMURA ASSET ACCEPTANCE CORPORATION, a Delaware corporation, as depositor (the “Depositor”), NOMURA CREDIT & CAPITAL, INC., a Delaware corporation, as seller (in such capacity, the “Seller”), WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as master servicer (the “Master Servicer”) and securities administrator (the “Securities Administrator”), GMAC MORTGAGE CORPORATION, a Pennsylvania corporation, as servicer (the “Servicer”) and HSBC BANK, USA, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity, but solely as trustee (the “Trustee”).

PRELIMINARY STATEMENT

The Depositor is the owner of the Trust Fund that is hereby conveyed to the Trustee in return for the Certificates.

REMIC I

As provided herein, the Trustee will make an election to treat the segregated pool of assets consisting of the Mortgage Loans and certain other related assets subject to this Agreement as a real estate mortgage investment conduit (a “REMIC”) for federal income tax purposes, and such segregated pool of assets will be designated as “REMIC I.” The R-I Interest will represent the sole class of “residual interests” in REMIC I for purposes of the REMIC Provisions (as defined herein) under federal income tax law. The following table irrevocably sets forth the designation, the Uncertificated REMIC I Pass-Through Rate, the Initial Uncertificated Principal Balance, and for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for each of the REMIC I Regular Interests. None of the REMIC I Regular
Interests will be certificated.

	
            
Designation
  
  	
            
Initial Uncertificated

Principal Balance
  
  	
            
Uncertificated

REMIC I

Pass-Through Rate
  
  	
            
Assumed Final Distribution Date(1)
  
  
	
            LTI-AA
 	
            $
 	
            267,145,609.10 
 	
            (2)
 	
            October 25, 2035
 
	
            LTI-IA1
 	
            $
 	
            189,215.00 
 	
            (2)
 	
            October 25, 2035
 
	
            LTI-IA2
 	
            $
 	
            21,610.00 
 	
            (2)
 	
            October 25, 2035
 
	
            LTI-IIA1
 	
            $
 	
            403,750.00 
 	
            (2)
 	
            October 25, 2035
 
	
            LTI-IIA2
 	
            $
 	
            71,255.00 
 	
            (2)
 	
            October 25, 2035
 
	
            LTI-IIIA1
 	
            $
 	
            500,000.00 
 	
            (2)
 	
            October 25, 2035
 
	
            LTI-IIIA2
 	
            $
 	
            958,675.00 
 	
            (2)
 	
            October 25, 2035
 
	
            LTI-IIIA3
 	
            $
 	
            119,845.00 
 	
            (2)
 	
            October 25, 2035
 
	
            LTI-IIIA4
 	
            $
 	
            175,395.00 
 	
            (2)
 	
            October 25, 2035
 
	
            LTI-M1
 	
            $
 	
            148,565.00 
 	
            (2)
 	
            October 25, 2035
 
	
            LTI-M2
 	
            $
 	
            44,980.00 
 	
            (2)
 	
            October 25, 2035
 
	
            LTI-M3
 	
            $
 	
            34,075.00 
 	
            (2)
 	
            October 25, 2035
 
	
            LTI-M4
 	
            $
 	
            16,355.00 
 	
            (2)
 	
            October 25, 2035
 
	
            LTI-M5
 	
            $
 	
            21,535.00 
 	
            (2)
 	
            October 25, 2035
 
	
            LTI-ZZ
 	
            $
 	
            2,746,696.21 
 	
            (2)
 	
            October 25, 2035
 
	
            LTI-P
 	
            $
 	
            100.00
 	
            (3)
 	
            October 25, 2035
 
	
            LTI-1SUB
 	
            $
 	
            494.73 
 	
            (2)
 	
            October 25, 2035
 

 

 

 

 

	
            LTI-1GRP
 	
            $
 	
            4,711.23 
 	
            (2)
 	
            October 25, 2035
 
	
            LTI-2SUB
 	
            $
 	
            1,114.62 
 	
            (2)
 	
            October 25, 2035
 
	
            LTI-2GRP
 	
            $
 	
            10,614.72 
 	
            (2)
 	
            October 25, 2035
 
	
            LTI-3SUB
 	
            $
 	
            4,115.26 
 	
            (2)
 	
            October 25, 2035
 
	
            LTI-3GRP
 	
            $
 	
            39,193.56 
 	
            (2)
 	
            October 25, 2035
 
	
            LTI-XX
 	
            $
 	
            272,537,316.18 
 	
            (2)
 	
            October 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 maturity date has been designated as the “latest possible maturity date” for each REMIC I Regular Interest.
 

	
            (2)
 	
            Calculated in accordance with the definition of “Uncertificated REMIC I Pass-Through Rate” herein.
 
	
            (3)
 	
            The REMIC I Regular Interest LTI-P will not be entitled to distributions of interest.
 	
             

 

REMIC II

As provided herein, the Trustee will make an election to treat the segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC for federal income tax purposes, and such segregated pool of assets will be designated as “REMIC II”. The R-II Interest will represent the sole class of “residual interests” in REMIC II 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 that represents one or more of the “regular interests” in REMIC II created hereunder:

	
            
Class Designation
 
 	
            
Initial Certificate

Principal Balance
 
 	
            
Pass-Through Rate
 
 	
            
Assumed Final Distribution Date(1)
 
 
	
            Class I-A-1
 	
            $
 	
            37,843,000.00 
 	
            Class I-A-1 Pass Through Rate
 	
            October 25, 2035
 
	
            Class I-A-2
 	
            $
 	
            4,322,000.00 
 	
            Class I-A-2 Pass Through Rate
 	
            October 25, 2035
 
	
            Class II-A-1
 	
            $
 	
            80,750,000.00 
 	
            Class II-A-1 Pass Through Rate
 	
            October 25, 2035
 
	
            Class II-A-2
 	
            $
 	
            14,251,000.00 
 	
            Class II-A-2 Pass Through Rate
 	
            October 25, 2035
 
	
            Class III-A-1
 	
            $
 	
            100,000,000.00 
 	
            Class III-A-1 Pass Through Rate
 	
            October 25, 2035
 
	
            Class III-A-2
 	
            $
 	
            191,735,000.00 
 	
            Class III-A-2 Pass Through Rate
 	
            October 25, 2035
 
	
            Class III-A-3
 	
            $
 	
            23,969,000.00 
 	
            Class III-A-3 Pass Through Rate
 	
            October 25, 2035
 
	
            Class III-A-4
 	
            $
 	
            35,079,000.00 
 	
            Class III-A-4 Pass Through Rate
 	
            October 25, 2035
 
	
            Class M-1
 	
            $
 	
            29,713,000.00 
 	
            Class M-1 Pass Through Rate
 	
            October 25, 2035
 
	
            Class M-2
 	
            $
 	
            8,996,000.00 
 	
            Class M-2 Pass-Through Rate
 	
            October 25, 2035
 
	
            Class M-3
 	
            $
 	
            6,815,000.00 
 	
            Class M-3 Pass Through Rate
 	
            October 25, 2035
 
	
            Class M-4
 	
            $
 	
            3,271,000.00 
 	
            Class M-4 Pass Through Rate
 	
            October 25, 2035
 
	
            Class M-5
 	
            $
 	
            4,307,000.00 
 	
            Class M-5 Pass Through Rate
 	
            October 25, 2035
 
	
            Class X(2)
 	
            $
 	
            4,144,120.61 
 	
            Class X Pass Through Rate
 	
            October 25, 2035
 
	
            Class P
 	
            $
 	
            100.00
 	
            N/A(3)
 	
            October 25, 2035
 

___________________

	
            (1)
 	
            For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution Date in the second month following the maturity date for the Mortgage Loan with the latest maturity date has been designated as the “latest possible maturity date” for each Class of Certificates.
 
	
            (2)
 	
            The Class X Certificates will not accrue interest on their Certificate Principal Balance, but will accrue interest at the Class X Pass-Through Rate on the Certificate Notional Balance of the Class X Certificates outstanding from time to time which shall equal the aggregate of the Uncertificated Principal Balances of the REMIC I Regular Interests (other than REMIC I Regular Interest LTI-P). 
 

 

 

 

	
            (3)
 	
            The Class P Certificates will not be entitled to distributions of interest.
 

 

 

 

In consideration of the mutual agreements herein contained, the Depositor, the Servicer, the Master Servicer, the Securities Administrator, the Seller and the Trustee agree as follows:

 

 

ARTICLE I

 

DEFINITIONS

	
            Section 1.01
 	
            Defined Terms.
 

In addition to those terms defined in Section 1.02, whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings:

Accepted Master Servicing Practices: With respect to any Mortgage Loan, as applicable, either (x) those customary mortgage master servicing practices of prudent mortgage servicing institutions that master service mortgage loans of the same type and quality as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located, to the extent applicable to the Master Servicer (except in its capacity as successor to the Servicer), or (y) as provided in Section 3.01 hereof, but in no event below the standard set forth in clause (x).

Accepted Servicing Practices: As defined in Section 3.01.

Account: Either the Distribution Account or the Custodial Account.

Accrual Period:  With respect to the Group I Certificates, Group II Certificates and Class X Certificates and any Distribution Date, the calendar month immediately preceding such Distribution Date. With respect to the Group III Certificates and Subordinate Certificates and any Distribution Date, the period commencing on the immediately preceding Distribution Date (or with respect to the first Accrual Period, the Closing Date) and ending on the day immediately preceding the related Distribution Date.  All calculations of interest on the Group I Certificates, Group II Certificates and Class X Certificates will be based on a 360-day year consisting of twelve 30-day months. All calculations of interest on the Group III Certificates and Subordinate Certificates will be made based on a 360-day year and the actual number of days elapsed in the related Accrual Period.

Adjustment Date:  With respect to each Mortgage Loan, the first day of the month in which the Mortgage Rate of the Mortgage Loan changes pursuant to the related Mortgage Note.  The first Adjustment Date following the Cut-Off Date as to each Mortgage Loan is set forth in the Loan Schedule.

Advance: An advance of delinquent payments of principal or interest in respect of a Mortgage Loan required to be made by the Servicer or by the Master Servicer pursuant to Section 5.01.

Advance Facility: As defined in Section 5.01(b)(i).

Advance Facility Notice: As defined in Section 5.01(b)(ii).

Advance Financing Person: As defined in Section 5.01(b)(i).

Advance Reimbursement Amount: As defined in Section 5.01(b)(ii).

 

 

Aggregate Loan Balance: With respect to the Mortgage Loans and any Distribution Date, the aggregate of the Stated Principal Balances of the Mortgage Loans as of the last day of the related Due Period.

Aggregate Loan Group Balance: With respect to a Loan Group and any Distribution Date, the aggregate of the Stated Principal Balances of the Mortgage Loans in such Loan Group as of the last day of the related Due Period.

Agreement: This Pooling and Servicing Agreement and any and all amendments or supplements hereto made in accordance with the terms herein.

Amount Held for Future Distribution: As to any Distribution Date, the aggregate amount held in the Servicer’s Custodial Account at the close of business on the immediately preceding Determination Date on account of (i) all Scheduled Payments or portions thereof received in respect of the Mortgage Loans due after the related Due Period and (ii) Principal Prepayments and Liquidation Proceeds received in respect of the Mortgage Loans after the last day of the related Prepayment Period.

Applied Loss Amount: With respect to the Publicly Offered Certificates and any Distribution Date, the excess of the aggregate Certificate Principal Balance of the Publicly Offered Certificates over the Aggregate Loan Balance of the Mortgage Loans after giving effect to all Realized Losses incurred with respect to the Mortgage Loans during the related Due Period and payments of principal to the Publicly Offered Certificates on such Distribution Date.

Appraised Value: With respect to any Mortgage Loan originated in connection with a refinancing, the appraised value of the Mortgaged Property based upon the appraisal made at the time of such refinancing or, with respect to any other Mortgage Loan, the lesser of (x) the appraised value of the Mortgaged Property based upon the appraisal made by a fee appraiser at the time of the origination of the Mortgage Loan, and (y) the sales price of the Mortgaged Property at the time of such origination.

Assumed Final Distribution Date: The Distribution Date in October 2035.

Authorized Servicer Representative:  Any officer of the Servicer involved in, or responsible for, the administration and servicing of the Mortgage Loans whose name and facsimile signature appear on a list of servicing officers furnished to the Trustee and the Master Servicer by the Servicer on the Closing Date, as such list may from time to time be amended.

Available Distribution Amount:  The sum of the Interest Remittance Amount and Principal Remittance Amount, exclusive of amounts pursuant to Section 5.04.

Bankruptcy Code: Title 11 of the United States Code.

Basis Risk Shortfall Reserve Fund: The segregated non-interest bearing trust account created and maintained by the Securities Administrator pursuant to Section 5.10 hereof.

Basis Risk Shortfall: With respect to any Class of Group III Certificates or Subordinate Certificates and any Distribution Date, the sum of (i) the excess, if any, of the related Current 

 

Interest (calculated without regard to the Net Funds Cap) over the related Current Interest (as it may have been limited by the applicable Net Funds Cap) for the applicable Distribution Date; (ii) any amount described in clause (i) remaining unpaid from prior Distribution Dates; and (iii) interest on the amount in clause (ii) for the related Accrual Period calculated on the basis of the least of (x) One Month LIBOR plus the applicable Certificate Margin, (y) the applicable Maximum Interest Rate and (z) the Cap Rate.

Book-Entry Certificates: Any of the Certificates that shall be registered in the name of the Depository or its nominee, the ownership of which is reflected on the books of the Depository or on the books of a person maintaining an account with the Depository (directly, as a “Depository Participant”, or indirectly, as an indirect participant in accordance with the rules of the Depository and as described in Section 6.06). As of the Closing Date, each Class of Publicly Offered Certificates constitutes a Class of Book-Entry Certificates.

Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a day on which banking institutions in The City of New York, New York, the Commonwealth of Pennsylvania, the State of Maryland, the State of Minnesota, the city in which any Corporate Trust Office of the Securities Administrator is located or the States in which the Servicer’s servicing operations are located are authorized or obligated by law or executive order to be closed.

Cap Contracts:  Shall mean (i) the cap contract between the Trustee and the Cap Provider, for the benefit of the Holders of the Class III-A-1 Certificates, (ii) the cap contract between the Trustee and the Cap Provider, for the benefit of the Holders of the Class III-A-2 Certificates and (iii) the cap contract between the Trustee and the Cap Provider, for the benefit of the Holders of the Class III-A-3 Certificates.

Cap Provider:  Nomura Global Financial Products, Inc., or any successor thereto.  

Cap Rate: With respect to the Group III Certificates and Subordinate Certificates, 11.00% per annum.

Carryforward Interest: With respect to any Class of Publicly Offered Certificates and any Distribution Date, the sum of (i) the amount, if any, by which (x) the sum of (A) Current Interest for that Class of Certificates for the immediately preceding Distribution Date and (B) any unpaid Carryforward Interest for such Class from previous Distribution Dates exceeds (y) the actual amount distributed on such Class in respect of interest on the immediately preceding Distribution Date and (ii) interest on such amount for the related Accrual Period at the applicable Pass-Through Rate.

Certificate: Any one of the certificates of any Class executed and authenticated by the Securities Administrator in substantially the forms attached hereto as Exhibits A-1 through A-6.

Certificate Margin: With respect to each Distribution Date on or prior to the first possible Optional Termination Date, 0.270%, 0.230%, 0.400%, 0.340%, 0.540%, 0.660%, 0.750%, 1.300%, and 1.800%, for the Class III-A-1, Class III-A-2, Class III-A-3, Class III-A-4, Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5 Certificates, respectively. With respect to each Distribution Date following the first possible Optional Termination Date, 0.540%, 0.460%, 0.800%, 0.680%, 1.040%, 1.160%, 1.250%, 1.800% and 2.300%, for the Class III-A-1, Class III-

 

A-2, Class III-A-3, Class III-A-4, Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5 Certificates, respectively.

Certificate Notional Balance: With respect to the Class X Certificates and any Distribution Date, the Uncertificated Principal Balance of the REMIC I Regular Interests (other than REMIC I Regular Interest I-LTP) for such Distribution Date.  As of the Closing Date, the Certificate Notional Balance of the Class X Certificates is equal to $545,195,120.61.

Certificate Owner: With respect to a Book-Entry Certificate, the Person that is the beneficial owner of such Book-Entry Certificate.

Certificate Principal Balance: As to any Publicly Offered Certificate or Class P Certificate and as of any Distribution Date, the Initial Certificate Principal Balance of such Certificate plus any Subsequent Recoveries added to the Certificate Principal Balance pursuant to Section 5.05(f) less (i) the sum of (a) all amounts distributed with respect to such Certificate in reduction of the Certificate Principal Balance thereof on previous Distribution Dates pursuant to Section 5.04 and (b) with respect to any Class I-A-2, Class II-A-2 or Class III-A-4 Certificate or any Class of Subordinate Certificates, any reductions in the Certificate Principal Balance of such Certificate deemed to have occurred in connection with the allocations of Realized Losses, if any, plus (ii) with respect to the Class I-A-2, Class II-A-2 or Class III-A-4 Certificates or
Subordinate Certificates, any Subsequent Recoveries added to the Certificate Principal Balance of any such Certificate pursuant to Section 5.05(d), in each case up to the amount of Applied Loss Amounts but only to the extent that any such Applied Loss Amount has not been paid to any Class of Certificates as a Deferred Amount.  With respect to the Class X Certificates and any date of determination, the excess, if any, of (i) the then Aggregate Loan Balance over (ii) the then aggregate Certificate Principal Balance of the Publicly Offered Certificates.  References herein to the Certificate Principal Balance of a Class of Certificates shall mean the Certificate Principal Balances of all Certificates in such Class.  

Certificate Register: The register maintained pursuant to Section 6.02.

Certificateholder or Holder: The person in whose name a Certificate is registered in the Certificate Register (initially, Cede & Co., as nominee for the Depository, in the case of any Book-Entry Certificates).

Class: All Certificates bearing the same Class designation as set forth in Section 6.01.

Class I-A-1 Certificate: Any Certificate designated as a “Class I-A-1 Certificate” on the face thereof, in the form of Exhibit A-1 hereto, representing the right to its Percentage Interest of distributions provided for the Class I-A-1 Certificates as set forth herein and evidencing a Regular Interest in REMIC II.

Class I-A-1 Pass-Through Rate: With respect to each Distribution Date, a per annum rate equal to the weighted average Net Mortgage Rate of the Group I Mortgage Loans minus 0.55% per annum.  For federal income tax purposes, the equivalent of the foregoing shall be expressed as the weighted average of the Uncertificated REMIC I Pass-Through Rate on REMIC I Regular Interest LTI-1GRP, weighted on the basis of the Uncertificated Principal Balance of such REMIC I Regular Interest minus 0.55%.

 

 

Class I-A-2 Certificate: Any Certificate designated as a “Class I-A-2 Certificate” on the face thereof, in the form of Exhibit A-1 hereto, representing the right to its Percentage Interest of distributions provided for the Class I-A-2 Certificates as set forth herein and evidencing a Regular Interest in REMIC II.

Class I-A-2 Pass-Through Rate: With respect to each Distribution Date, a per annum rate equal to the weighted average Net Mortgage Rate of the Group I Mortgage Loans.  For federal income tax purposes, the equivalent of the foregoing shall be expressed as the weighted average of the Uncertificated REMIC I Pass-Through Rate on REMIC I Regular Interest LTI-1GRP, weighted on the basis of the Uncertificated Principal Balance of such REMIC I Regular Interest.

Class II-A-1 Certificate: Any Certificate designated as a “Class II-A-1 Certificate” on the face thereof, in the form of Exhibit A-1 hereto, representing the right to its Percentage Interest of distributions provided for the Class II-A-1 Certificates as set forth herein and evidencing a Regular Interest in REMIC II.

Class II-A-1 Pass-Through Rate: With respect to each Distribution Date, a per annum rate equal (a) for the period to and including the Distribution Date in June 2010, the lesser of 5.05% and the weighted average of the Net Mortgage Rates of the Group II Mortgage Loans and (b) each Distribution Date thereafter, the weighted average of the Net Mortgage Rates of the Group II Mortgage Loans minus 0.60% per annum.  For federal income tax purposes, the equivalent of the foregoing shall be expressed as (a) for the period to and including the Distribution Date in June 2010, the lesser of 5.05% and the weighted average of the Uncertificated REMIC I Pass-Through Rate on REMIC I Regular Interest LT1-2GRP, weighted on the basis of the Uncertificated Principal Balance of such REMIC I Regular Interest and (b) each Distribution Date thereafter, the weighted average of the
Uncertificated REMIC I Pass-Through Rate on REMIC I Regular Interest LT1-2GRP, weighted on the basis of the Uncertificated Principal Balance of such REMIC I Regular Interest minus 0.60%.

Class II-A-2 Certificate: Any Certificate designated as a “Class II-A-2 Certificate” on the face thereof, in the form of Exhibit A-1 hereto, representing the right to its Percentage Interest of distributions provided for the Class II-A-2 Certificates as set forth herein and evidencing a Regular Interest in REMIC II.

Class II-A-2 Pass-Through Rate: With respect to each Distribution Date, a per annum rate equal to the weighted average Net Mortgage Rate of the Group II Mortgage Loans.  For federal income tax purposes, the equivalent of the foregoing shall be expressed as the weighted average of the Uncertificated REMIC I Pass-Through Rate on REMIC I Regular Interest LTI-2GRP, weighted on the basis of the Uncertificated Principal Balance of such REMIC I Regular Interest.

Class III-A-1 Certificate: Any Certificate designated as a “Class III-A-1 Certificate” on the face thereof, in the form of Exhibit A-2 hereto, representing the right to its Percentage Interest of distributions provided for the Class III-A-1 Certificates as set forth herein and evidencing a Regular Interest in REMIC II.

Class III-A-1 Pass-Through Rate: With respect to each Distribution Date, a per annum rate equal to the least of (i) the sum of One-Month LIBOR for that Distribution Date plus (A) on 

 

or prior to the first possible Optional Termination Date, 0.270% or (B) after the first possible Optional Termination Date, 0.540%, (ii) the applicable Net Funds Cap, (iii) the Maximum Interest Rate and (iv) the applicable Cap Rate.

Class III-A-2 Certificate: Any Certificate designated as a “Class III-A-2 Certificate” on the face thereof, in the form of Exhibit A-2 hereto, representing the right to its Percentage Interest of distributions provided for the Class III-A-2 Certificates as set forth herein and evidencing a Regular Interest in REMIC II.

Class III-A-2 Pass-Through Rate: With respect to each Distribution Date, a per annum rate equal to the least of (i) the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior to the first possible Optional Termination Date, 0.230% or (B) after the first possible Optional Termination Date, 0.460%, (ii) the applicable Net Funds Cap, (iii) the Maximum Interest Rate and (iv) the applicable Cap Rate.

Class III-A-3 Certificate: Any Certificate designated as a “Class III-A-3 Certificate” on the face thereof, in the form of Exhibit A-2 hereto, representing the right to its Percentage Interest of distributions provided for the Class III-A-3 Certificates as set forth herein and evidencing a Regular Interest in REMIC II.

Class III-A-3 Pass-Through Rate: With respect to each Distribution Date, a per annum rate equal to the least of (i) the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior to the first possible Optional Termination Date, 0.400% or (B) after the first possible Optional Termination Date, 0.800%, (ii) the applicable Net Funds Cap, (iii) the Maximum Interest Rate and (iv) the applicable Cap Rate.

Class III-A-4 Certificate: Any Certificate designated as a “Class III-A-4 Certificate” on the face thereof, in the form of Exhibit A-2 hereto, representing the right to its Percentage Interest of distributions provided for the Class III-A-4 Certificates as set forth herein and evidencing a Regular Interest in REMIC II.

Class III-A-4 Pass-Through Rate: With respect to each Distribution Date, a per annum rate equal to the least of (i) the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior to the first possible Optional Termination Date, 0.340% or (B) after the first possible Optional Termination Date, 0.680%, (ii) the applicable Net Funds Cap, (iii) the Maximum Interest Rate and (iv) the applicable Cap Rate.

Class M-1 Certificate: Any Certificate designated as a “Class M-1 Certificate” on the face thereof, in the form of Exhibit A-3 hereto, representing the right to its Percentage Interest of distributions provided for the Class M-1 Certificates as set forth herein and evidencing a Regular Interest in REMIC II.

Class M-1 Pass-Through Rate: With respect to each Distribution Date, a per annum rate equal to the least of (i) the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior to the first possible Optional Termination Date, 0.540% or (B) after the first possible Optional Termination Date, 1.040%, (ii) the applicable Net Funds Cap, (iii) the Maximum Interest Rate and (iv) the applicable Cap Rate.

 

 

Class M-1 Principal Payment Amount: With respect to any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect with respect to such Distribution Date, the amount, if any, by which (x) the sum of (i) the Certificate Principal Balances of the Senior Certificates, in each case, after giving effect to payments on such Distribution Date and (ii) the Certificate Principal Balance of the Class M-1 Certificates immediately prior to such Distribution Date exceeds (y) the lesser of (A) the product of (i) 89.90% and (ii) the Aggregate Loan Balance for such Distribution Date and (B) the amount, if any, by which (i) the Aggregate Loan Balance for such Distribution Date exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off Date.

Class M-2 Certificate: Any Certificate designated as a “Class M-2 Certificate” on the face thereof, in the form of Exhibit A-3 hereto, representing the right to its Percentage Interest of distributions provided for the Class M-2 Certificates as set forth herein and evidencing a Regular Interest in REMIC II.

Class M-2 Pass-Through Rate: With respect to each Distribution Date, a per annum rate equal to the least of (i) the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior to the first possible Optional Termination Date, 0.660% or (B) after the first possible Optional Termination Date, 1.160%, (ii) the applicable Net Funds Cap, (iii) the Maximum Interest Rate and (iv) the applicable Cap Rate.

Class M-2 Principal Payment Amount:  With respect to any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect with respect to such Distribution Date, the amount, if any, by which (x) the sum of (i) the Certificate Principal Balances of the Senior Certificates and the Class M-1 Certificates, in each case, after giving effect to payments on such Distribution Date and (ii) the Certificate Principal Balance of the Class M-2 Certificates immediately prior to such Distribution Date exceeds (y) the lesser of (A) the product of (i) 93.20% and (ii) the Aggregate Loan Balance for such Distribution Date and (B) the amount, if any, by which (i) the Aggregate Loan Balance for such Distribution Date exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off Date.

Class M-3 Certificate: Any Certificate designated as a “Class M-3 Certificate” on the face thereof, in the form of Exhibit A-3 hereto, representing the right to its Percentage Interest of distributions provided for the Class M-3 Certificates as set forth herein and evidencing a Regular Interest in REMIC II.

Class M-3 Pass-Through Rate:  With respect to each Distribution Date, a per annum rate equal to the least of (i) the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior to the first possible Optional Termination Date, 0.750% or (B) after the first possible Optional Termination Date, 1.250%, (ii) the applicable Net Funds Cap, (iii) the Maximum Interest Rate and (iv) the applicable Cap Rate.

Class M-3 Principal Payment Amount: With respect to any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect with respect to such Distribution Date, the amount, if any, by which (x) the sum of (i) the Certificate Principal Balances of the Senior Certificates, Class M-1 Certificates and Class M-2 Certificates, in each case, after giving effect to payments on such Distribution Date and (ii) the Certificate Principal 

 

Balance of the Class M-3 Certificates immediately prior to such Distribution Date exceeds (y) the lesser of (A) the product of (i) 95.70% and (ii) the Aggregate Loan Balance for such Distribution Date and (B) the amount, if any, by which (i) the Aggregate Loan Balance for such Distribution Date exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off Date.

Class M-4 Certificate:  Any Certificate designated as a “Class M-4 Certificate” on the face thereof, in the form of Exhibit A-3 hereto, representing the right to its Percentage Interest of distributions provided for the Class M-4 Certificates as set forth herein and evidencing a Regular Interest in REMIC II.

Class M-4 Pass-Through Rate:  With respect to each Distribution Date thereafter, a per annum rate equal to the least of (i) the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior to the first possible Optional Termination Date, 1.300% or (B) after the first possible Optional Termination Date, 1.800%, (ii) the applicable Net Funds Cap, (iii) the Maximum Interest Rate and (iv) the applicable Cap Rate.

Class M-4 Principal Payment Amount: With respect to any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect with respect to such Distribution Date, the amount, if any, by which (x) the sum of (i) the Certificate Principal Balances of the Senior Certificates, Class M-1 Certificates, Class M-2 Certificates and Class M-3 Certificates, in each case, after giving effect to payments on such Distribution Date and (ii) the Certificate Principal Balance of the Class M-4 Certificates immediately prior to such Distribution Date exceeds (y) the lesser of (A) the product of (i) 96.90% and (ii) the Aggregate Loan Balance for such Distribution Date and (B) the amount, if any, by which (i) the Aggregate Loan Balance for such Distribution Date exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off Date.

Class M-5 Certificate:  Any Certificate designated as a “Class M-5 Certificate” on the face thereof, in the form of Exhibit A-3 hereto, representing the right to its Percentage Interest of distributions provided for the Class M-5 Certificates as set forth herein and evidencing a Regular Interest in REMIC II.

Class M-5 Pass-Through Rate:  With respect to each Distribution Date thereafter, a per annum rate equal to the least of (i) the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior to the first possible Optional Termination Date, 1.800% or (B) after the first possible Optional Termination Date, 2.300%, (ii) the applicable Net Funds Cap, (iii) the Maximum Interest Rate and (iv) the applicable Cap Rate.

Class M-5 Principal Payment Amount: With respect to any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect with respect to such Distribution Date, the amount, if any, by which (x) the sum of (i) the Certificate Principal Balances of the Senior Certificates, Class M-1 Certificates, Class M-2 Certificates, Class M-3 Certificates and Class M-4 Certificates, in each case, after giving effect to payments on such Distribution Date and (ii) the Certificate Principal Balance of the Class M-5 Certificates immediately prior to such Distribution Date exceeds (y) the lesser of (A) the product of (i) 98.48% and (ii) the Aggregate Loan Balance for such Distribution Date and (B) the amount, if 

 

any, by which (i) the Aggregate Loan Balance for such Distribution Date exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off Date.

Class P Certificate: Any Certificate designated as a “Class P Certificate” on the face thereof, in the form of Exhibit A-5 hereto, representing the right to its Percentage Interest of distributions provided for the Class P Certificates as set forth herein and evidencing a Regular Interest in REMIC II.

Class P Certificate Account: The Eligible Account established and maintained by the Securities Administrator pursuant to Section 5.09.

Class R Certificate: Any Certificate designated as a “Class R” Certificate on the face thereof in the form of Exhibit A-5 hereto, representing the right to its Percentage Interest of distributions provided for the Class R Certificates as set forth herein and evidencing the Class R-I Interest and Class R-II Interest.

Class R-I Interest: The uncertificated residual interest in REMIC I.

Class R-II Interest: The uncertificated residual interest in REMIC II.

Class X Certificate: Any Certificate designated as a “Class X Certificate” on the face thereof, in the form of Exhibit A-6 hereto, representing the right to its Percentage Interest of distributions provided for the Class X Certificates as set forth herein and evidencing a Regular Interest in REMIC II.  

Class X Distribution Amount: With respect to any Distribution Date and the Class X Certificates, the sum of (i) the Excess Cap Payment, (ii) the Current Interest and Carryforward Interest and (iii) any Overcollateralization Release Amount for such Distribution Date remaining after payments pursuant to items 1 though 13 of Section 5.04(a)(iii); provided, however that on and after the Distribution Date on which the Certificate Principal Balances of the Publicly Offered Certificates have been reduced to zero, the Class X Distribution Amount shall include the Overcollateralization Amount. 

Class X Pass-Through Rate: On any Distribution Date, a per annum rate equal to the percentage equivalent of a fraction, the numerator of which is the sum of the amounts calculated pursuant to clauses (A) through (O) below, and the denominator of which is the aggregate of the Uncertificated Principal Balances of REMIC I Regular Interest LTI-AA, REMIC I Regular Interest LTI-IA1, REMIC I Regular Interest LTI-IA2, REMIC I Regular Interest LTI-IIA1, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIIA1, REMIC I Regular Interest LTI-IIIA2, REMIC I Regular Interest LTI-IIIA3, REMIC I Regular Interest LTI-IIIA4, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3, REMIC I Regular Interest LTI-M4, REMIC I Regular Interest LTI-M5 and REMIC I Regular Interest LTI-ZZ.  For purposes of calculating the
Pass-Through Rate for the Class X Certificates, the numerator is equal to the sum of the following components:

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

 

 

(B)        the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular Interest LTI-IA1 minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest LTI-IA1;

(C)       the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular Interest LTI-IA2 minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest LTI-IA2;

(D)       the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular Interest LTI-IIA1 minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest LTI-IIA1;

(E)        the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular Interest LTI-IIA2 minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest LTI-IIA2;

(F)        the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular Interest LTI-IIIA1, minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest LTI-IIIA1;

(G)       the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular Interest LTI-IIIA2, minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest LTI-IIIA2;

(H)       the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular Interest LTI-IIIA3, minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest LTI-IIIA3;

(I)         the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular Interest LTI-IIIA4, minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest LTI-IIIA4;

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

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

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

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

 

 

(N)       the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular Interest LTI-M5 minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest LTI-M5; and

(O)       the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular Interest LTI-ZZ minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest LTI-ZZ.

Cleanup Call:  As defined in Section 10.01.

Closing Date:  September 30, 2005.

Code: The Internal Revenue Code of 1986, including any successor or amendatory provisions.

Compensating Interest:  With respect to any Distribution Date, an amount to be deposited in the Distribution Account by the Servicer or the Master Servicer to offset a Prepayment Interest Shortfall on a Mortgage Loan in accordance with this Agreement; provided, however that the amount of Compensating Interest required to be paid in respect of the Mortgage Loans shall not exceed the Servicing Fee payable to the Servicer or, in the case of the Master Servicer, shall not exceed the Master Servicing Compensation payable to the Master Servicer with respect to the related Prepayment Period.

Corporate Trust Office: The principal corporate trust office of the Trustee which office at the date of the execution of this instrument is located at 452 Fifth Avenue, New York, New York 10018, Attention: Nomura Asset Acceptance Corp., 2005-AR5 or at such other address as the Trustee may designate from time to time by notice to the Certificateholders, the Depositor, the Master Servicer, the Securities Administrator and the Servicer. The office of the Securities Administrator, which for purposes of Certificate transfers and surrender is located at Wells Fargo Bank, N.A., Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479, Attention: Corporate Trust Services – Client Manager (NAAC 2005-AR5), and for all other purposes is located at Wells Fargo Bank, N.A., P.O. Box 98, Columbia, Maryland 21046, Attention: Corporate Trust Services – Client
Manager (NAAC 2005-AR5) (or for overnight deliveries, at 9062 Old Annapolis Road, Columbia, Maryland 21045, Attention: Corporate Trust Services – Client Manager (NAAC 2005-AR5)).

 

 

Corresponding Certificate: With respect to:

	
            (i)
 	
            REMIC I Regular Interest LTI-IA1, the Class I-A-1 Certificates;
 
	
            (ii)
 	
            REMIC I Regular Interest LTI-IA2, the Class I-A-2 Certificates;
 
	
            (iii)
 	
            REMIC I Regular Interest LTI-IIA1, the Class II-A-1 Certificates;
 
	
            (iv)
 	
            REMIC I Regular Interest LTI-IIA2, the Class II-A-2 Certificates;
 
	
            (v)
 	
            REMIC I Regular Interest LTI-IIIA1, the Class III-A-1 Certificates;
 
	
            (vi)
 	
            REMIC I Regular Interest LTI-IIIA2, the Class III-A-2 Certificates;
 
	
            (vii)
 	
            REMIC I Regular Interest LTI-IIIA3, the Class III-A-3 Certificates;
 
	
            (viii)
 	
            REMIC I Regular Interest LTI-IIIA4, the Class III-A-4 Certificates;
 
	
            (ix)
 	
            REMIC I Regular Interest LTI-M1, the Class M-1 Certificates;
 
	
            (x)
 	
            REMIC I Regular Interest LTI-M2, the Class M-2 Certificates;
 
	
            (xi)
 	
            REMIC I Regular Interest LTI-M3, the Class M-3 Certificates;
 
	
            (xii)
 	
            REMIC I Regular Interest LTI-M4, the Class M-4 Certificates; 
 
	
            (xiii)
 	
            REMIC I Regular Interest LTI-M5, the Class M-5 Certificates; and
 
	
            (xiv)
 	
            REMIC I Regular Interest LTI-P, the Class P Certificates.
 

 

Credit Risk Management Agreement:  The agreement between the Credit Risk Manager and the Servicer and/or Master Servicer, dated as of September 30, 2005.

Credit Risk Management Fee: As to each Mortgage Loan and any Distribution Date, an amount equal to 1/12th of the Credit Risk Management Fee Rate multiplied by the Stated Principal Balance of such Mortgage Loan as of the last day of the related Due Period. The Credit Risk Management Fee shall be payable to the Credit Risk Manager and/or the Seller pursuant to Section 3.32(a)(vii) and 3.33(b).

Credit Risk Management Fee Rate: 0.01% per annum.

Credit Risk Manager:  Risk Management Group, LLC, a New York limited liability company, and its successors and assigns.

Current Interest: With respect to any Class of Publicly Offered Certificates and any Distribution Date, the amount of interest accruing at the applicable Pass-Through Rate on the related Certificate Principal Balance during the related Accrual Period; provided, that as to each Class of Publicly Offered Certificates, the Current Interest will be reduced by a pro rata portion of any Net Interest Shortfalls to the extent not covered by excess interest.  No Current Interest will be payable with respect to any Class of Publicly Offered Certificates after the Distribution Date on which the outstanding Certificate Principal Balance of such Certificate has been reduced to zero.

Custodial Account: The account established and maintained by the Servicer with respect to receipts on the Mortgage Loans and related REO Properties in accordance with Section 3.26(b).

Custodial Agreements: The JPMorgan Custodial Agreement and the Wells Fargo Custodial Agreement.

Custodians:  JPMorgan and Wells Fargo.

 

 

Cut-off Date:  September 1, 2005.

Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid principal balance thereof as of the close of business on the Cut-off Date after application of all Principal Prepayments received prior to the Cut-off Date and scheduled payments of principal due on or before the Cut-off Date, whether or not received, but without giving effect to any installments of principal received in respect of Due Dates after the Cut-off Date.

Debt Service Reduction: With respect to any Mortgage Loan, a reduction by a court of competent jurisdiction in a proceeding under the Bankruptcy Code in the Scheduled Payment for such Mortgage Loan that became final and non-appealable, except such a reduction resulting from a Deficient Valuation or any other reduction that results in a permanent forgiveness of principal.

Deferred Amount: With respect to the Class I-A-2, Class II-A-2 or Class III-A-4 Certificates or any Class of Subordinate Certificates and any Distribution Date, the amount by which (x) the aggregate of the Applied Loss Amounts previously applied in reduction of the Certificate Principal Balance thereof exceeds (y) the aggregate of amounts previously paid in reimbursement thereof and the amount by which the Certificate Principal Balance of any such Class has been increased due to the collection of Subsequent Recoveries.

Deficient Valuation: With respect to any Mortgage Loan, a valuation by a court of competent jurisdiction of the Mortgaged Property in an amount less than the then outstanding indebtedness under such Mortgage Loan, or any reduction in the amount of principal to be paid in connection with any Scheduled Payment that results in a permanent forgiveness of principal, which valuation or reduction results from an order of such court that is final and non-appealable in a proceeding under the Bankruptcy Code.

Definitive Certificates: As defined in Section 6.06.

Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a Replacement Mortgage Loan.

Delinquency Rate: With respect to the Mortgage Loans and any calendar month will be, generally, the fraction, expressed as a percentage, the numerator of which is the Aggregate Loan Balance of all Mortgage Loans sixty (60) or more days delinquent (including all Mortgage Loans in bankruptcy or foreclosure and all REO Properties) as of the close of business on the last day of such month, and the denominator of which is the Aggregate Loan Balance as of the close of business on the last day of such month.

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.

 

 

Denomination: With respect to each Certificate, the amount set forth on the face thereof as the “Initial Certificate Principal Balance of this Certificate”.

Depositor: Nomura Asset Acceptance Corporation, a Delaware corporation, or its successor in interest.

Depository: The initial Depository shall be The Depository Trust Company (“DTC”), the nominee of which is Cede & Co., or any other organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act. The Depository shall initially be the registered Holder of the Book-Entry Certificates. The Depository shall at all times be a “clearing corporation” as defined in Section 8-102(a)(5) of the Uniform Commercial Code of the State of New York.

Depository Agreement: With respect to the Class of Book-Entry Certificates, the agreement among the Depositor, the Trustee and the initial Depository, dated as of the Closing Date, substantially in the form of Exhibit I.

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

Determination Date: With respect to any Distribution Date, the fifteenth (15th) day of the month of such Distribution Date or, if such day is not a Business Day, the immediately preceding Business Day.

Distribution Account: The separate Eligible Account created and maintained by the Securities Administrator pursuant to Section 3.31 in the name of the Trustee for the benefit of the Certificateholders and designated “HSBC Bank USA, National Association, in trust for registered holders of Nomura Asset Acceptance Corp., Mortgage Pass-Through Certificates, Series 2005-AR5”. Funds in the Distribution Account shall be held in trust for the Certificateholders for the uses and purposes set forth in this Agreement.

Distribution Date: The twenty-fifth (25th) day of each calendar month after the initial issuance of the Certificates, or if such day is not a Business Day, the next succeeding Business Day, commencing in October 2005.

Due Date: As to any Mortgage Loan, the date in each month on which the related Scheduled Payment is due, as set forth in the related Mortgage Note.

Due Period: With respect to any Distribution Date, the period from the second day of the calendar month preceding the calendar month in which such Distribution Date occurs through the close of business on the first day of the calendar month in which such Distribution Date occurs.

Eligible Account: Any of (i) an account or accounts maintained with a federal or state chartered depository institution or trust company, the long-term unsecured debt obligations and short-term unsecured debt obligations of which are rated by each Rating Agency in one of its two highest long-term and its highest short-term rating categories respectively, at the time any 

 

amounts are held on deposit therein, or (ii) an account or accounts in a depository institution or trust company in which such accounts are insured by the FDIC (to the limits established by the FDIC) and the uninsured deposits in which accounts are otherwise secured such that, as evidenced by an Opinion of Counsel delivered to the Trustee and to each Rating Agency, the Certificateholders have a claim with respect to the funds in such account or a perfected first priority security interest against any collateral (which shall be limited to Permitted Investments) securing such funds that is superior to claims of any other depositors or creditors of the depository institution or trust company in which such account is maintained, or (iii) a segregated, non-interest bearing trust account or accounts maintained with the corporate trust department of a federal or state chartered depository institution or trust
company having capital and surplus of not less than $50,000,000, acting in its fiduciary capacity or (iv) any other account acceptable to the Rating Agencies as evidenced in writing by the Rating Agencies. Eligible Accounts may bear interest, and may include, if otherwise qualified under this definition, accounts maintained with the Trustee or Securities Administrator.

Escrow Account: Shall mean the account or accounts maintained by the Servicer pursuant to Section 3.29.  Each Escrow Account shall be an Eligible Account.

ERISA: The Employee Retirement Income Security Act of 1974, as amended.

ERISA Restricted Certificate: Each of the Class X, Class P and Residual Certificates.

Excess Cap Payment:  With respect to any Distribution Date, the excess, if any, of (1) the cap payments made by the Cap Provider under the related Cap Contract, over (2) the amount of the Basis Risk Shortfalls attributable to the Class III-A-1, Class III-A-2 or Class III-A-3 Certificates, as applicable, for such Distribution Date.

Excess Liquidation Proceeds: To the extent not required by law to be paid to the related Mortgagor, the excess, if any, of any Liquidation Proceeds with respect to a Mortgage Loan over the Stated Principal Balance of such Mortgage Loan and accrued and unpaid interest at the related Mortgage Rate through the last day of the month in which the Mortgage Loan has been liquidated.

Exchange Act: Securities and Exchange Act of 1934, as amended.

Exemption: Prohibited Transaction Exemption 93-32, as amended from time to time.

Fannie Mae: Fannie Mae (formerly, Federal National Mortgage Association), or any successor thereto.

FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.

Final Recovery Determination: With respect to any defaulted Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property purchased by the Seller or the Master Servicer pursuant to or as contemplated by Section 2.03(c) or Section 10.01), a determination made by the Servicer pursuant to this Agreement that all Insurance Proceeds, Liquidation Proceeds and other payments or recoveries which the Servicer, in its reasonable good faith 

 

judgment, expects to be finally recoverable in respect thereof have been so recovered.  The Servicer shall maintain records of each Final Recovery Determination made thereby.

FIRREA: The Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended.

Fitch: Fitch Ratings.

Freddie Mac: Federal Home Loan Mortgage Corporation, or any successor thereto.

Gross Margin: With respect to each Mortgage Loan, the fixed percentage set forth in the related Mortgage Note that is added to the Index on each Adjustment Date in accordance with the terms of the related Mortgage Note used to determine the Mortgage Rate for such Mortgage Loan.

Group I Certificates: The Class I-A-1 Certificates and Class I-A-2 Certificates.

Group I Allocation Amount: With respect to any Distribution Date, the product of the Senior Principal Payment Amount for that Distribution Date and a fraction the numerator of which is the Principal Remittance Amount derived from the Group I Mortgage Loans and the denominator of which is the Principal Remittance Amount, in each case for that Distribution Date.

Group I Excess Interest Amount: With respect to any Distribution Date, the product of the Monthly Excess Interest required to be distributed on that Distribution Date pursuant to Section 5.04(iii)(1)(A) and a fraction the numerator of which is the Principal Remittance Amount derived from the Group I Mortgage Loans and the denominator of which is the Principal Remittance Amount, in each case for that Distribution Date.

Group I Mortgage Loans: Those Mortgage Loans identified on the Mortgage Loan Schedule as Group I Mortgage Loans.

Group II Certificates: The Class II-A-1 Certificates and Class II-A-2 Certificates.

Group II Allocation Amount: With respect to any Distribution Date, the product of the Senior Principal Payment Amount for that Distribution Date and a fraction the numerator of which is the Principal Remittance Amount derived from the Group II Mortgage Loans and the denominator of which is the Principal Remittance Amount, in each case for that Distribution Date.

Group II Excess Interest Amount: With respect to any Distribution Date, the product of the Monthly Excess Interest required to be distributed on that Distribution Date pursuant to Section 5.04(iii)(1)(A) and a fraction the numerator of which is the Principal Remittance Amount derived from the Group II Mortgage Loans and the denominator of which is the Principal Remittance Amount, in each case for that Distribution Date.

Group II Mortgage Loans: Those Mortgage Loans identified on the Mortgage Loan Schedule as Group II Mortgage Loans.

 

 

Group III Certificates: The Class III-A-1, Class III-A-2, Class III-A-3 and Class III-A-4 Certificates.

Group III Allocation Amount: With respect to any Distribution Date, the product of the Senior Principal Payment Amount for that Distribution Date and a fraction the numerator of which is the Principal Remittance Amount derived from the Group III Mortgage Loans and the denominator of which is the Principal Remittance Amount, in each case for that Distribution Date.

Group III Excess Interest Amount: With respect to any Distribution Date, the product of the Monthly Excess Interest required to be distributed on that Distribution Date pursuant to Section 5.04(iii)(1)(A) and a fraction the numerator of which is the Principal Remittance Amount derived from the Group III Mortgage Loans and the denominator of which is the Principal Remittance Amount, in each case for that Distribution Date.

Group III Mortgage Loans: Those Mortgage Loans identified on the Mortgage Loan Schedule as Group III Mortgage Loans.

Indemnified Persons: The Trustee, the Servicer (including any successor to the Servicer), the Master Servicer, the Securities Administrator, the Custodians, the Trust Fund and their officers, directors, agents and employees and, with respect to the Trustee, any separate co-trustee and its officers, directors, agents and employees.

Index: As of any Adjustment Date, the index applicable to the determination of the Mortgage Rate on each Mortgage Loan which will generally be based on One-Month LIBOR, Six-Month LIBOR or One-Year LIBOR.

Initial Certificate Principal Balance: With respect to any Certificate, the Certificate Principal Balance of such Certificate or any predecessor Certificate on the Closing Date.

Insurance Policy: With respect to any Mortgage Loan included in the Trust Fund, any insurance policy, including all riders and endorsements thereto in effect with respect to such Mortgage Loan, including any replacement policy or policies for any Insurance Policies.

Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans pursuant to any Insurance Policy or any other insurance policy covering a Mortgage Loan, to the extent such proceeds are payable to the mortgagee under the Mortgage, the Servicer or the trustee under the deed of trust and are not applied to the restoration of the related Mortgaged Property or released to the Mortgagor in accordance with the servicing standard set forth in Section 3.01 hereof, other than any amount included in such Insurance Proceeds in respect of Insured Expenses.

Insured Expenses: Expenses covered by any Insurance Policy with respect to the Mortgage Loans.

Interest Determination Date:  Shall mean the second LIBOR Business Day preceding the commencement of each Accrual Period.

 

 

Interest Remittance Amount: With respect to any Distribution Date, that portion of the Available Distribution Amount for such Distribution Date generally equal to (i) the sum, without duplication, of (a) all scheduled interest during the related Due Period with respect to the Mortgage Loans less the Servicing Fee, the Credit Risk Management Fee and the fee payable to any provider of lender-paid mortgage insurance, if any, (b) all Advances relating to interest with respect to the Mortgage Loans made on or prior to the related Remittance Date, (c) all Compensating Interest with respect to the Mortgage Loans and required to be remitted by the Servicer or the Master Servicer pursuant to this Agreement with respect to such Distribution Date, (d) Liquidation Proceeds and Subsequent Recoveries with respect to the Mortgage Loans collected during the related Prepayment
Period (to the extent such Liquidation Proceeds and Subsequent Recoveries relate to interest), (e) all amounts relating to interest with respect to each Mortgage Loan repurchased by the Seller pursuant to Sections 2.02 and 2.03 and (f) all amounts in respect of interest paid by the Master Servicer pursuant to Section 10.01 to the extent remitted by the Master Servicer to the Distribution Account pursuant to this Agreement or minus (ii) all amounts required to be reimbursed by the Trust pursuant to Section 3.32 or as otherwise set forth in this Agreement or any Custodial Agreement.

Interest Shortfall: With respect to any Distribution Date, the aggregate shortfall, if any, in collections of interest (adjusted to the related Net Mortgage Rates) on Mortgage Loans resulting from (a) Principal Prepayments in full received during the related Prepayment Period, (b) partial Principal Prepayments received during the related Prepayment Period to the extent applied prior to the Due Date in the month of the Distribution Date and (c) interest payments on certain of the Mortgage Loans being limited pursuant to the provisions of the Relief Act.

JPMorgan:  JPMorgan Chase Bank, N.A., a national banking association, in its capacity as a Custodian

JPMorgan Custodial Agreement: The Custodial Agreement dated as of September 1, 2005 among JPMorgan, the Servicer and the Trustee

Last Scheduled Distribution Date:  With respect to the Certificates, the Distribution Date in October 2035.

Latest Possible Maturity Date: The second Distribution Date following the final scheduled maturity date of the Mortgage Loan in the Trust Fund having the latest scheduled maturity date as of the Cut-off Date. For purposes of the Treasury Regulations under Code Section 860A through 860G, the latest possible maturity date of each regular interest issued by REMIC I and REMIC II shall be the Latest Possible Maturity Date.

LIBOR Business Day: Shall mean any day other than a Saturday or a Sunday or a day on which banking institutions in the State of New York or in the city of London, England are required or authorized by law to be closed.

LIBOR Determination Date: The second LIBOR Business Day before the first day of the related Accrual Period.

Liquidated Loan: With respect to any Distribution Date, a defaulted Mortgage Loan that has been liquidated through deed-in-lieu of foreclosure, foreclosure sale, trustee’s sale or other 

 

realization as provided by applicable law governing the real property subject to the related Mortgage and any security agreements and as to which the Servicer has certified in the related Prepayment Period in writing to the Securities Administrator that it has made a Final Recovery Determination.

Liquidation Proceeds: Amounts, other than Insurance Proceeds, received in connection with the partial or complete liquidation of a Mortgage Loan, whether through trustee’s sale, foreclosure sale or otherwise, or in connection with any condemnation or partial release of a Mortgaged Property and any other proceeds received with respect to an REO Property, less the sum of related unreimbursed Advances, Servicing Fees and Servicing Advances and all expenses of liquidation, including property protection expenses and foreclosure and sale costs, including court and reasonable attorneys fees.

Loan Group: Any of Loan Group I, Loan Group II, Loan Group III.  “Loan Group I” refers to the Group I Mortgage Loans, “Loan Group II” refers to the Group II Mortgage Loans and “Loan Group III” refers to the Group III Mortgage Loans.

Loan-to-Value Ratio: The fraction, expressed as a percentage, the numerator of which is the original principal balance of the Mortgage Loan and the denominator of which is the Appraised Value of the related Mortgaged Property.

Majority Class X Certificateholder: The Holder of a 50.01% or greater Percentage Interest in the Class X Certificates.

Marker Rate: With respect to the Offered Certificates and any Distribution Date, a per annum rate equal to two (2) times the weighted average of the Uncertificated REMIC I Pass-Through Rates for REMIC I Regular Interest LTI-IA1, REMIC I Regular Interest LTI-IA2, REMIC I Regular Interest LTI-IIA1, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIIA1, REMIC I Regular Interest LTI-IIIA2, REMIC I Regular Interest LTI-IIIA3, REMIC I Regular Interest LTI-IIIA4, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3, REMIC I Regular Interest LTI-M4, REMIC I Regular Interest LTI-M5 and REMIC I Regular Interest LTI-ZZ, with the per annum rate on each such REMIC I Regular Interest (other than REMIC I Regular Interest LTI-ZZ) subject to a cap equal to the Pass-Through Rate on the Corresponding Certificate for the
purpose of this calculation; and with the per annum rate on REMIC I Regular Interest LTI-ZZ subject to a cap of zero for the purpose of this calculation; provided, however, that for this purpose, the calculation of the Uncertificated REMIC I Pass-Through Rate and the related cap with respect to each such REMIC I Regular Interest (other than REMIC I Regular Interest LTI-IA1, REMIC I Regular Interest LTI-IA2, REMIC I Regular Interest LTI-IIA1, REMIC I Regular Interest LTI-IIA2 and REMIC I Regular Interest LTI-ZZ) shall be multiplied by a fraction, the numerator of which is the actual number of days in the Accrual Period and the denominator of which is thirty (30).

Master Servicer:  As of the Closing Date, Wells Fargo Bank, N.A. and thereafter, its respective successors in interest who meet the qualifications of this Agreement. The Master Servicer and the Securities Administrator shall at all times be the same Person or Affiliates.

 

 

Master Servicer Certification:  A written certification signed by an officer of the Master Servicer that complies with (i) the Sarbanes-Oxley Act of 2002, as amended from time to time, and (ii) the February 21, 2003 Statement by the Staff of the Division of Corporation Finance of the Securities and Exchange Commission Regarding Compliance by Asset-Backed Issuers with Exchange Act Rules 13a-14 and 15d-14, as in effect from time to time; provided that if, after the Closing Date (a) the Sarbanes-Oxley Act of 2002 is amended, (b) the Statement referred to in clause (ii) is modified or superseded by any subsequent statement, rule or regulation of the Securities and Exchange Commission or any statement of a division thereof, or (c) any future releases, rules and regulations are published by the Securities and Exchange Commission from time to time pursuant to the
Sarbanes-Oxley Act of 2002, which in any such case affects the form or substance of the required certification and results in the required certification being, in the reasonable judgment of the Master Servicer, materially more onerous than the form of the required certification as of the Closing Date, the Master Servicer Certification shall be as agreed to by the Master Servicer, the Depositor and the Seller following a negotiation in good faith to determine how to comply with any such new requirements.

Master Servicing Compensation: As defined in Section 4.12.

Master Servicer Default:  One or more of the events described in Section 8.01(b).

Maximum Interest Rate: With respect to any Distribution Date, the related Accrual Period and the Group III Certificates, an annual rate equal to the weighted average of the Maximum Mortgage Interest Rates of the Mortgage Loans in Loan Group III minus the weighted average expense fee rate of the Mortgage Loans in Loan Group III. With respect to any Distribution Date, the related Accrual Period and the Subordinate Certificates, an annual rate equal to the weighted average of the Maximum Mortgage Interest Rates of the Mortgage Loans minus the weighted average expense fee rate of the Mortgage Loans.  The calculation of the Maximum Interest Rate will be based on a 360-day year and the actual number of days elapsed during the related Accrual Period.

Maximum Mortgage Interest Rate: With respect to each Mortgage Loan, the percentage set forth in the related Mortgage Note as the maximum interest rate.

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

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

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

Minimum Mortgage Interest Rate: With respect to each Mortgage Loan, the percentage set forth in the related Mortgage Note as the minimum Mortgage Rate thereunder.

Minimum Servicing Requirements: With respect to a successor Servicer appointed pursuant to Section 7.06(a) hereunder:

 

 

(i)         the proposed successor Servicer is (1) an affiliate of the Master Servicer that services mortgage loans similar to the Mortgage Loans in the jurisdictions in which the related Mortgaged Properties are located or (2) the proposed successor Servicer has a rating of at least “Above Average” by S&P and either a rating of at least “RPS2” by Fitch or a rating of at least “SQ2” by Moody’s; and

	
            (ii)
 	
            the proposed successor Servicer has a net worth of at least $25,000,000.
 

MOM Loan: Any Mortgage Loan as to which MERS is 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 Excess Cashflow: With respect to any Distribution Date, means the sum of (a) the Monthly Excess Interest, (b) the Overcollateralization Release Amount, if any, for such Distribution Date, and (c) the Principal Remittance Amount remaining following payments of the Principal Payment Amount to the Senior Certificates and Subordinate Certificates.

Monthly Excess Interest: With respect to any Distribution Date, the excess of (x) the Interest Remittance Amount for such Distribution Date over (y) the sum of Current Interest and Carryforward Interest on the Senior Certificates and Subordinate Certificates for such Distribution Date.

Monthly Statement: The statement delivered to the Certificateholders pursuant to Section 5.06.

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

Mortgage: The mortgage, deed of trust or other instrument creating a first lien on or first priority ownership interest in an estate in fee simple in real property securing a Mortgage Note.

Mortgage File: The Mortgage Loan Documents pertaining to a particular Mortgage Loan and any additional documents delivered to the Trustee to be added to the Mortgage File pursuant to this Agreement .

Mortgage Loan Documents: As defined in Section 2.01.

Mortgage Loans: Such of the Mortgage Loans transferred and assigned to the Trustee pursuant to the provisions hereof, as from time to time are held as a part of the Trust Fund (including any REO Property), the mortgage loans so held being identified in the Mortgage Loan Schedule, notwithstanding foreclosure or other acquisition of title of the related Mortgaged Property.

Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement dated as of September 30, 2005, between the Seller, as seller and the Depositor, as purchaser.

Mortgage Loan Purchase Price: The price, calculated as set forth in Section 10.01, to be paid in connection with the purchase of the Mortgage Loans pursuant to Section 10.01.

 

 

Mortgage Loan Schedule: The list of Mortgage Loans (as from time to time amended by the Servicer to reflect the deletion of Deleted Mortgage Loans and the addition of Replacement Mortgage Loans pursuant to the provisions of this Agreement) transferred to the Trustee as part of the Trust Fund and from time to time subject to this Agreement, the initial Mortgage Loan Schedule being attached hereto as Exhibit B, setting forth the following information with respect to each Mortgage Loan:

	
            (i)
 	
            the loan number;
 	
             

	
            (iii)
 	
            the Mortgage Rate in effect as of the Cut-off Date;
 	
             

	
            (iv)
 	
            the Servicing Fee Rate;
 	
             

	
            (v)
 	
            the Net Mortgage Rate in effect as of the Cut-off Date;
 
	
            (vi)
 	
            the maturity date;
 	
             

	
            (vii)
 	
            the original principal balance;
 	
             

	
            (viii)
 	
            the Cut-off Date Principal Balance;
 	
             

	
            (ix)
 	
            the original term;
 	
             

	
            (x)
 	
            the remaining term;
 	
             

	
            (xi)
 	
            the property type;
 	
             

	
            (xii)
 	
            with respect to each MOM Loan, the related MIN;
 	
             

	
            (xiii)
 	
            the Custodian;
 	
             

													

(xiv)      a code indicating whether the Mortgage Loan is subject to a Prepayment Charge, the term of such Prepayment Charge and the amount of such Prepayment Charge; 

	
            (xv)
 	
            the first Adjustment Date;
 
	
            (xvi)
 	
            the Gross Margin;
 	
             

(xvii)     the Maximum Mortgage Interest Rate under the terms of the Mortgage Note;

(xviii)    the Minimum Mortgage Interest Rate under the terms of the Mortgage Note;

	
            (xix)
 	
            the Periodic Rate Cap;
 	
             

	
            (xx)
 	
            the first Adjustment Date immediately following the Cut-off Date;
 

 

 

 

	
            (xxi)
 	
            the Index;
 	
             

	
            (xxii)
 	
            the related Loan Group; and
 
	
            (xxiii)
 	
            the applicable Servicer.
 	
             

				

Such schedule shall also set forth the aggregate Cut-off Date Principal Balance for all of the Mortgage Loans.

Mortgage Note: The original executed note or other evidence of indebtedness of a Mortgagor under a Mortgage Loan.

Mortgage Rate: The annual rate of interest borne by a Mortgage Note which rate (A) as of any date of determination until the first Adjustment Date following the Cut-off Date shall be the rate set forth in the Loan Schedule as the Mortgage Rate in effect immediately following the Cut-off Date and (B) as of any date of determination thereafter shall be the rate as adjusted on the most recent Adjustment Date equal to the sum, rounded to the nearest 0.125% as provided in the Mortgage Note, of the Index, as most recently available as of a date prior to the Adjustment Date as set forth in the related Mortgage Note, plus the related Gross Margin; provided that the Mortgage Rate on such Mortgage Loan on any Adjustment Date shall never be more than the lesser of (i) the sum of the Mortgage Rate in effect immediately prior to the Adjustment Date plus the related Periodic
Rate Cap, if any, and (ii) the related Maximum Mortgage Interest Rate, and shall never be less than the greater of (i) the Mortgage Rate in effect immediately prior to the Adjustment Date less the Periodic Rate Cap, if any, and (ii) the related Minimum Mortgage Interest Rate. With respect to each Mortgage Loan that becomes an REO Property, as of any date of determination, the annual rate determined in accordance with the immediately preceding sentence as of the date such Mortgage Loan became an REO Property.

Mortgaged Property: The underlying property securing a Mortgage Loan.

Mortgagor: The obligor on a Mortgage Note.

Net Funds Cap: With respect to any Distribution Date for the Group III Certificates, (a) a fraction expressed as a percentage, the numerator of which is the product of (1) the Optimal Interest Remittance Amount for Loan Group III and such Distribution Date and (2) twelve (12), and the denominator of which is the Aggregate Loan Group Balance for Loan Group III for the immediately preceding Distribution Date, multiplied by (b) a fraction, expressed as a percentage, the numerator of which is thirty (30) and the denominator of which is the actual number of days elapsed in the immediately preceding Accrual Period. For federal income tax purposes, the equivalent of the foregoing shall be expressed as the weighted average of the Uncertificated REMIC I Pass-Through Rate on REMIC I Regular Interest LTI-3GRP, weighted on the basis of the Uncertificated Principal Balance
of such REMIC I Regular Interest. 

With respect to any Distribution Date and the Subordinate Certificates, (a) a fraction expressed as a percentage, the numerator of which is the product of (1) the Optimal Interest Remittance Amount for such Distribution Date and (2) twelve (12), and the denominator of which is the Aggregate Loan Group Balance of Loan Group I, Loan Group II and Loan Group III for the immediately preceding Distribution Date, weighted, in each case, on the basis of the 

 

Aggregate Loan Group Balance of Loan Group I, Loan Group II and Loan Group III for the immediately preceding Distribution Date, less the Certificate Principal Balance of the related Senior Certificates, multiplied by (b) a fraction, expressed as a percentage, the numerator of which is thirty (30) and the denominator of which is the actual number of days elapsed in the immediately preceding Accrual Period.  For federal income tax purposes, the equivalent of the foregoing shall be expressed as the weighted average of the Uncertificated REMIC I Pass-Through Rates on REMIC I Regular Interest LTI-1SUB, REMIC I Regular Interest LTI-2SUB and REMIC I Regular Interest LTI-3SUB in each case subject to a cap and a floor equal to the weighted average Net Mortgage Rate of the Group I Mortgage Loans, Group II Mortgage Loans and Group III Mortgage Loans, respectively, weighted in each case on the basis of the
Uncertificated Principal Balance of each such REMIC I Regular Interest.

Net Interest Shortfalls: Shall mean Interest Shortfalls net of payments by the Servicer or the Master Servicer in respect of Compensating Interest.

Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per annum rate equal to the related Mortgage Rate less the sum of (i) the Servicing Fee Rate, (ii) the Credit Risk Management Fee Rate and (iii) the rate at which the fee payable to any provider of lender-paid mortgage insurance is calculated, if applicable.

Non-Book-Entry Certificate: Any Certificate other than a Book-Entry Certificate.

Nonrecoverable Advance: Any portion of an Advance or Servicing Advance previously made or proposed to be made by the Servicer pursuant to this Agreement or the Master Servicer as Successor Servicer, that, in the good faith judgment of the Servicer or the Master Servicer as Successor Servicer, will not or, in the case of a proposed Advance or Servicing Advance, would not, be ultimately recoverable by it from the related Mortgagor, related Liquidation Proceeds, Insurance Proceeds or otherwise.

Officer’s Certificate: A certificate (i) signed by the Chairman of the Board, the Vice Chairman of the Board, the President, a Vice President (however denominated), an Assistant Vice President, the Treasurer, the Secretary, or one of the assistant treasurers or assistant secretaries of the Depositor or the Trustee (or any other officer customarily performing functions similar to those performed by any of the above designated officers and also to whom, with respect to a particular matter, such matter is referred because of such officer’s knowledge of and familiarity with a particular subject) or (ii), if provided for in this Agreement, signed by a Authorized Servicer Representative, as the case may be, and delivered to the Depositor, the Seller, the Master Servicer, the Securities Administrator and/or the Trustee, as the case may be, as required by this Agreement.

One-Month LIBOR: With respect to any Accrual Period (other than the first Accrual Period), the rate determined by the Securities Administrator on the related Interest Determination Date on the basis of the rate for U.S. dollar deposits for one month that appears on Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such Interest Determination Date. If such rate does not appear on such page (or such other page as may replace that page on that service, or if such service is no longer offered, such other service for displaying One-Month LIBOR or comparable rates as may be reasonably selected by the Securities Administrator), One-Month 

 

LIBOR for the applicable Accrual Period will be the Reference Bank Rate. If no such quotations can be obtained by the Securities Administrator and no Reference Bank Rate is available, One-Month LIBOR will be One-Month LIBOR applicable to the preceding Accrual Period.  The establishment of One-Month LIBOR on each Interest Determination Date by the Securities Administrator and the Securities Administrator’s calculation of the rate of interest applicable to the Group III Certificates and the Subordinate Certificates for the related Accrual Period shall, in the absence of manifest error, be final and binding.  With respect to the first Accrual period, One-Month LIBOR shall equal 3.84063% per annum.

One-Year LIBOR:  The  per annum rate equal to the average of interbank offered rates for one-year U.S. dollar-denominated deposits in the London market based on quotations of major banks as published in The Wall Street Journal and most recently available as of the time specified in the related Mortgage Note

Opinion of Counsel: A written opinion of counsel, who may be counsel for the Seller, the Master Servicer, the Depositor or the Servicer, reasonably acceptable to each addressee of such opinion; provided that with respect to Section 2.05, 7.05 or 11.01, or the interpretation or application of the REMIC Provisions, such counsel must (i) in fact be independent of the Seller, the Master Servicer Depositor and the Servicer, (ii) not have any direct financial interest in the Seller, the Depositor, the Master Servicer or the Servicer or in any affiliate of any of them, and (iii) not be connected with the Seller, the Depositor, the Master Servicer or the Servicer as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions.

Optimal Interest Remittance Amount:  With respect to any Distribution Date and (A) the Group III Certificates, will be equal to the excess of (i) the product of (1)(x) the weighted average Net Mortgage Rates of the Group III Mortgage Loans as of the first day of the related Due Period divided by (y) 12 and (2) the Aggregate Loan Balance of the Group III Mortgage Loans for the immediately preceding Distribution Date, over (ii) any expenses that reduce the Interest Remittance Amount that did not arise as a result of a default or delinquency of the Group III Mortgage Loans or were not taken into account in computing the expense fee rate, and (B) the Subordinate Certificates, will be equal to the excess of (i) the product of (1)(x) the weighted average Net Mortgage Rates of the Mortgage Loans as of the first day of the related Due Period divided by (y) 12 and (2)
the Aggregate Loan Balance of the Mortgage Loans for the immediately preceding Distribution Date, over (ii) any expenses that reduce the Interest Remittance Amount that did not arise as a result of a default or delinquency of the Mortgage Loans or were not taken into account in computing the expense fee rate.

Optional Termination: The termination of the Trust Fund created hereunder as a result of the purchase of all of the Mortgage Loans and any related REO Property pursuant to Section 10.01.

Optional Termination Date:  The first Distribution Date on which the Master Servicer may purchase, at its option, the Mortgage Loans and related REO Properties as described in Section 10.01.

OTS: The Office of Thrift Supervision or any successor thereto.

 

 

Outstanding: With respect to the Certificates as of any date of determination, all Certificates theretofore executed and authenticated under this Agreement except:

(a)        Certificates theretofore canceled by the Securities Administrator or delivered to the Securities Administrator for cancellation; and

(b)        Certificates in exchange for which or in lieu of which other Certificates have been executed and delivered by the Securities Administrator pursuant to this Agreement.

Outstanding Mortgage Loan: As of any date of determination, a Mortgage Loan with a Stated Principal Balance greater than zero that was not the subject of a Principal Prepayment in full, and that did not become a Liquidated Loan, prior to the end of the related Prepayment Period.

Overcollateralization Amount: With respect to any Distribution Date, the excess, if any, of (a) the Aggregate Loan Balance over (b) the aggregate Certificate Principal Balance of the Publicly Offered Certificates on such Distribution Date (after taking into account the payment of 100% of the Principal Remittance Amount on such Distribution Date).

Overcollateralization Deficiency Amount: With respect to any Distribution Date, the amount, if any, by which (x) the Targeted Overcollateralization Amount for such Distribution Date exceeds (y) the Overcollateralization Amount for such Distribution Date, calculated for this purpose after giving effect to the reduction on such Distribution Date of the aggregate Certificate Principal Balance of the Publicly Offered Certificates resulting from the payment of the Principal Remittance Amount on such Distribution Date, but prior to allocation of any Applied Loss Amount on such Distribution 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 amount, if any, by which (1) the Overcollateralization Amount for such date exceeds (2) the Targeted Overcollateralization Amount for such Distribution Date.

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

Pass-Through Rate: The Class I-A-1, Class I-A-2, Class II-A-1, Class II-A-2, Class III-A-1, Class III-A-2, Class III-A-3, Class III-A-4, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class X Pass-Through Rate, as applicable.

Payahead: Any Scheduled Payment intended by the related Mortgagor to be applied in a Due Period subsequent to the Due Period in which such payment was received.

Percentage Interest: With respect to any Certificate of a specified Class, the Percentage Interest set forth on the face thereof or the percentage obtained by dividing the Denomination of such Certificate by the aggregate of the Denominations of all Certificates of such Class.

 

 

Periodic Rate Cap: With respect the Adjustment Date for an Mortgage Loan, the fixed percentage set forth in the related Mortgage Note, which is the maximum amount by which the Mortgage Rate for such Mortgage Loan may increase or decrease (without regard to the Maximum Mortgage Interest Rate or the Minimum Mortgage Interest Rate) on such Adjustment Date from the Mortgage Rate in effect immediately prior to such Adjustment Date.

Permitted Investments: At any time, any one or more of the following obligations and securities:

(i)         direct obligations of, or obligations fully guaranteed as to timely payment of principal and interest by, the United States or any agency thereof, provided such obligations are unconditionally backed by the full faith and credit of the United States;

(ii)         general obligations of or obligations guaranteed by any state of the United States or the District of Columbia receiving the highest long-term debt rating of each Rating Agency, or such lower rating as will not result in the downgrading or withdrawal of the ratings then assigned to the Certificates by each Rating Agency, as evidenced by a signed writing delivered by each Rating Agency;

	
            (iii)
 	
            [Reserved];
 

(iv)        commercial or finance company paper which is then receiving the highest commercial or finance company paper rating of each Rating Agency, or such lower rating as will not result in the downgrading or withdrawal of the ratings then assigned to the Certificates by each Rating Agency, as evidenced by a signed writing delivered by each Rating Agency;

(v)        certificates of deposit, demand or time deposits, or bankers’ acceptances issued by any depository institution or trust company incorporated under the laws of the United States or of any state thereof and subject to supervision and examination by federal and/or state banking authorities (including the Trustee or the Master Servicer in its commercial banking capacity), provided that the commercial paper and/or long term unsecured debt obligations of such depository institution or trust company are then rated one of the two highest long-term and the highest short-term ratings of each such Rating Agency for such securities, or such lower ratings as will not result in the downgrading or withdrawal of the rating then assigned to the Certificates by any Rating Agency, as evidenced by a signed writing delivered by each Rating Agency;

(vi)        demand or time deposits or certificates of deposit issued by any bank or trust company or savings institution to the extent that such deposits are fully insured by the FDIC;

(vii)       guaranteed reinvestment agreements issued by any bank, insurance company or other corporation containing, at the time of the issuance of such agreements, such terms and conditions as will not result in the downgrading or withdrawal of the rating then assigned to the Certificates by any such Rating Agency, as evidenced by a signed writing delivered by each Rating Agency;

 

 

(viii)      repurchase obligations with respect to any security described in clauses (i) and (ii) above, in either case entered into with a depository institution or trust company (acting as principal) described in clause (v) above;

(ix)        securities (other than stripped bonds, stripped coupons or instruments sold at a purchase price in excess of 115% of the face amount thereof) bearing interest or sold at a discount issued by any corporation incorporated under the laws of the United States or any state thereof which, at the time of such investment, have one of the two highest long term ratings of each Rating Agency, or such lower rating as will not result in the downgrading or withdrawal of the rating then assigned to the Certificates by any Rating Agency, as evidenced by a signed writing delivered by each Rating Agency;

(x)        units of money market funds registered under the Investment Company Act of 1940 including funds managed or advised by the Trustee, the Master Servicer or an affiliate of either, having a rating by S&P of AAAm-G, AAA-m, or AA-m, and if rated by Moody’s, rated Aaa, Aa1 or Aa2;

(xi)        short term investment funds sponsored by any trust company or banking association incorporated under the laws of the United States or any state thereof (including any such fund managed or advised by the Trustee, the Master Servicer or any affiliate thereof) which on the date of acquisition has been rated by each Rating Agency in their respective highest applicable rating category or such lower rating as will not result in the downgrading or withdrawal of the ratings then assigned to the Certificates by each Rating Agency, as evidenced by a signed writing delivered by each Rating Agency; and

(xii)       such other investments having a specified stated maturity and bearing interest or sold at a discount acceptable to each Rating Agency as will not result in the downgrading or withdrawal of the rating then assigned to the Certificates by any Rating Agency, as evidenced by a signed writing delivered by each Rating Agency, as evidenced by a signed writing delivered by each Rating Agency;

provided, however, that no instrument described hereunder shall evidence either the right to receive (a) only interest with respect to the obligations underlying such instrument or (b) both principal and interest payments derived from obligations underlying such instrument and the interest and principal payments with respect to such instrument provide a yield to maturity at par greater than 120% of the yield to maturity at par of the underlying obligations.

Permitted Transferee: Any person other than (i) the United States, any State or political subdivision thereof, any possession of the United States or any agency or instrumentality of any of the foregoing, (ii) a foreign government, International Organization or any agency or instrumentality of either of the foregoing, (iii) an organization (except certain farmers’ cooperatives described in Section 521 of the Code) that is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on unrelated business taxable income) on any excess inclusions (as defined in Section 860E(c)(1) of the Code) with respect to any Residual Certificate, (iv) rural electric and telephone cooperatives described in Section 1381(a)(2)(C) of the Code, (v) a Person that is not a citizen or resident of the United 

 

States, a corporation, partnership (other than a partnership that has any direct or indirect foreign partners) or other entity (treated as a corporation or a partnership for federal income tax purposes), created or organized in or under the laws of the United States, any state thereof or the District of Columbia, an estate whose income from sources without the United States is includible in gross income for United States federal income tax purposes regardless of its connection with the conduct of a trade or business within the United States, or a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have authority to control all substantial decisions of the trustor and (vi) any other Person based upon an Opinion of Counsel (which shall not be an expense of the Trustee) that states that the Transfer of an
Ownership Interest in a Residual Certificate to such Person may cause any REMIC to fail to qualify as a REMIC at any time that any Certificates are Outstanding. The terms “United States,” “State” and “International Organization” shall have the meanings set forth in Section 7701 of the Code or successor provisions. A corporation will not be treated as an instrumentality of the United States or of any State or political subdivision thereof for these purposes if all of its activities are subject to tax and, with the exception of Freddie Mac, a majority of its board of directors is not selected by such government unit.

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

Prepayment Assumption: The assumed rate of prepayment, as described in the Prospectus Supplement relating to each Class of Publicly Offered Certificates.

Prepayment Charge: With respect to any Principal Prepayment, any prepayment premium, penalty or charge payable by a Mortgagor in connection with any Principal Prepayment on a Mortgage Loan pursuant to the terms of the related Mortgage Note (other than any Servicer Prepayment Charge Payment Amount) as shown on the Prepayment Charge Schedule.

Prepayment Charge Schedule:  As of any date, the list of Mortgage Loans providing for a Prepayment Charge included in the Trust Fund on such date (including the prepayment charge summary attached thereto).  The Depositor shall deliver or cause the delivery of the Prepayment Charge Schedule to the Servicer, the Master Servicer and the Trustee on the Closing Date. The Prepayment Charge Schedule shall set forth the following information with respect to each Prepayment Charge: 

	
            (i)
 	
            the Mortgage Loan identifying number;
 	
             

	
            (ii)
 	
            a code indicating the type of Prepayment Charge;
 

	
            (iii)
 	
            the date on which the first Monthly Payment was due on the related Mortgage Loan;
 

	
            (iv)
 	
            the term of the related Prepayment Charge;
 	
             

	
            (v)
 	
            the original Stated Principal Balance of the related Mortgage Loan; and
 

 

 

 

	
            (vi)
 	
            the Stated Principal Balance of the related Mortgage Loan as of the Cut-off Date.
 

Prepayment Interest Shortfall: With respect to any Distribution Date, for each Mortgage Loan that was the subject of a Principal Prepayment in full during the related Prepayment Period, (other than a Principal Prepayment in full resulting from the purchase of a Mortgage Loan pursuant to Section 2.02, 2.03, 3.24 or 10.01 hereof), the amount, if any, by which (i) one month’s interest at the applicable Net Mortgage Rate on the Stated Principal Balance of such Mortgage Loan immediately prior to such prepayment exceeds (ii) the amount of interest paid or collected in connection with such Principal Prepayment less the sum of (a) the related Servicing Fee, (b) the Credit Risk Management Fee and (c) the fee payable to any provider of lender-paid mortgage insurance, if any.

Prepayment Period: With respect to any Distribution Date, the calendar month immediately preceding the month in which such Distribution Date occurs.

Principal Payment Amount: With respect to each Distribution Date, the Principal Remittance Amount for such date minus the Overcollateralization Release Amount, if any, for such Distribution Date.

Principal Prepayment: Any Mortgagor payment or other recovery of (or proceeds with respect to) principal on a Mortgage Loan (including loans purchased or repurchased under Sections 2.02, 2.03, 3.26 and 10.01 hereof) that is received in advance of its scheduled Due Date and is not accompanied by an amount as to interest representing scheduled interest due on any Due Date in any month or months subsequent to the month of prepayment. Partial Principal Prepayments shall be applied by the Servicer in accordance with the terms of the related Mortgage Note.

Principal Remittance Amount: With respect to any Distribution Date, (i) the sum, without duplication, of (a) the principal portion of all Scheduled Payments on the Mortgage Loans due during the related Due Period whether or not received on or prior to the related Determination Date, (b) the principal portion of all unscheduled collections (other than Payaheads) including Insurance Proceeds, Condemnation Proceeds, Subsequent Recoveries and all full and partial Principal Prepayments exclusive of prepayment charges or penalties collected during the related Prepayment Period, to the extent applied as recoveries of principal on the Mortgage Loans, (c) the Stated Principal Balance of each Mortgage Loan that was repurchased by the Seller during the related Prepayment Period pursuant to Sections 2.02, 2.03 and 3.24, (d) the aggregate of all Substitution Adjustment
Amounts received during the related Prepayment Period for the related Determination Date in connection with the substitution of Mortgage Loans pursuant to Section 2.03(b), (e) amounts in respect of principal on the Mortgage Loans paid by the Master Servicer pursuant to Section 10.01, (f) all Liquidation Proceeds and Subsequent Recoveries with respect to the Mortgage Loans collected during the related Prepayment Period (to the extent such Liquidation Proceeds and Subsequent Recoveries relate to principal), in each case to the extent remitted by the Servicer to the Distribution Account pursuant to this Agreement and (g) the principal portion of Payaheads previously received of the Mortgage Loans and intended for application in the related Due Period minus (ii) all amounts required to be reimbursed by the Trust pursuant to Sections 4.02, 4.05, 4.07, 5.10 and 9.05 or as otherwise set forth in this Agreement or any Custodial Agreement.

 

 

Private Certificate: Each of the Class X, Class P and Class R Certificates.

Prospectus Supplement: The Prospectus Supplement dated September 29, 2005 relating to the offering of the Publicly Offered Certificates.

Publicly Offered Certificates: Any Certificates other than the Private Certificates.

PUD: A planned unit development.

Purchase Price: With respect to any Mortgage Loan required to be repurchased by the Seller pursuant to Section 2.02, 2.03 or 3,24 hereof and as confirmed by an Officer’s Certificate from the Seller to the Trustee, an amount equal to the sum of (i) 100% of the outstanding principal balance of the Mortgage Loan as of the date of such purchase plus, (ii) 30 days’ accrued interest thereon at the applicable Net Mortgage Rate, plus any portion of the Servicing Fee, Servicing Advances and Advances payable to the Servicer or Master Servicer, as applicable, with respect to such Mortgage Loan plus (iii) any costs and damages of the Trust Fund in connection with any violation by such Mortgage Loan of any abusive or predatory lending law, including any expenses incurred by the Trustee with respect to such Mortgage Loan prior to the purchase thereof.

Rating Agency: Each of Moody’s and S&P. If any such organization or its successor is no longer in existence, “Rating Agency” shall be a nationally recognized statistical rating organization, or other comparable Person, designated by the Depositor, notice of which designation shall be given to the Trustee.  References herein to a given rating category of a Rating Agency shall mean such rating category without giving effect to any modifiers.

Realized Loss: With respect to each Mortgage Loan as to which a Final Recovery Determination has been made, an amount (not less than zero) equal to (i) the Stated Principal Balance of such Mortgage Loan as of the commencement of the calendar month in which the Final Recovery Determination was made, plus (ii) accrued interest from the Due Date as to which interest was last paid by the Mortgagor through the end of the calendar month in which such Final Recovery Determination was made, calculated in the case of each calendar month during such period (A) at an annual rate equal to the annual rate at which interest was then accruing on such Mortgage Loan and (B) on a principal amount equal to the Stated Principal Balance of such Mortgage Loan as of the close of business on the Distribution Date during such calendar month, minus (iii) the proceeds, if any, received
in respect of such Mortgage Loan during the calendar month in which such Final Recovery Determination was made, net of amounts that are payable therefrom to the Servicer pursuant to this Agreement.  To the extent the 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 that Subsequent Recoveries are applied to reduce the Certificate Principal Balance of any Class of Certificates on any Distribution Date.

With respect to any REO Property as to which a Final Recovery Determination has been made, an amount (not less than zero) equal to (i) the Stated Principal Balance of the related Mortgage Loan as of the date of acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued interest from the Due Date as to which interest was last paid by the Mortgagor in 

 

respect of the related Mortgage Loan through the end of the calendar month immediately preceding the calendar month in which such REO Property was acquired, calculated in the case of each calendar month during such period (A) at an annual rate equal to the annual rate at which interest was then accruing on the related Mortgage Loan and (B) on a principal amount equal to the Stated Principal Balance of the related Mortgage Loan as of the close of business on the Distribution Date during such calendar month, minus (iii) the aggregate of all unreimbursed Advances and Servicing Advances.

With respect to each Mortgage Loan which has become the subject of a Deficient Valuation, the difference between the principal balance of the Mortgage Loan outstanding immediately prior to such Deficient Valuation and the principal balance of the Mortgage Loan as reduced by the Deficient Valuation.

With respect to each Mortgage Loan which has become the subject of a Debt Service Reduction, the portion, if any, of the reduction in each affected Monthly Payment attributable to a reduction in the Mortgage Rate imposed by a court of competent jurisdiction. Each such Realized Loss shall be deemed to have been incurred on the Due Date for each affected Monthly Payment.

In addition, to the extent the 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 Subsequent Recoveries are applied to reduce the Certificate Principal Balance of any Class of Certificates on any Distribution Date.

Record Date:  With respect to the Certificates (other than the Group III Certificates and the Subordinate Certificates) and any Distribution Date, the close of business on the last Business Day of the month preceding the month in which such Distribution Date occurs. With respect to the Group III Certificates and the Subordinate Certificates and any Distribution Date, so long as the such Certificates are Book-Entry Certificates, the Business Day preceding such Distribution Date, and otherwise, the close of business on the last Business Day of the month preceding the month in which such Distribution Date occurs.

Reference Banks: Shall mean leading banks selected by the Securities Administrator and engaged in transactions in Eurodollar deposits in the international Eurocurrency market (i) with an established place of business in London, (ii) which have been designated as such by the Securities Administrator and (iii) which are not controlling, controlled by, or under common control with, the Depositor, the Seller or the Servicer.

Reference Bank Rate: With respect to any Accrual Period shall mean the arithmetic mean, rounded upwards, if necessary, to the nearest whole multiple of 0.03125%, of the offered rates for United States dollar deposits for one month that are quoted by the Reference Banks as of 11:00 a.m., New York City time, on the related Interest Determination Date to prime banks in the London interbank market for a period of one month in an amount approximately equal to the aggregate Certificate Principal Balance of the Group III Certificates and Subordinate Certificates for such Accrual Period, provided that at least two such Reference Banks provide such rate. If fewer than two offered rates appear, the Reference Bank Rate will be the arithmetic mean, rounded upwards, if necessary, to the nearest whole multiple of 0.03125%, of the rates quoted by 

 

one or more major banks in New York City, selected by the Securities Administrator, as of 11:00 a.m., New York City time, on such date for loans in United States dollars to leading European banks for a period of one month in amounts approximately equal to the aggregate Certificate Principal Balance of the Group III Certificates and Subordinate Certificates for such Accrual Period.

Regular Certificate: Any Certificate other than a Residual Certificate.

Relief Act: The Servicemembers Civil Relief Act of 2003, as amended from time to time or similar state or local laws.

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

REMIC I: The segregated pool of assets subject hereto, constituting the primary trust created hereby and to be administered hereunder, with respect to which a REMIC election is to be made, consisting of (i) the Mortgage Loans and all interest accruing and principal due with respect thereto after the Cut-off Date to the extent not applied in computing the Cut-off Date Principal Balance thereof and all related Prepayment Charges; (ii) the related Mortgage Files, (iii) the Custodial Account (other than any amounts representing any Servicer Prepayment Charge Payment Amount), the Distribution Account, the Class P Certificate Account and such assets that are deposited therein from time to time, together with any and all income, proceeds and payments with respect thereto; (iv) property that secured a Mortgage Loan and has been acquired by foreclosure, deed in lieu of
foreclosure or otherwise; (v) the mortgagee’s rights under the Insurance Policies with respect to the Mortgage Loans; (vi) the rights under the Mortgage Loan Purchase Agreement, and (vii) all proceeds of the foregoing, including proceeds of conversion, voluntary or involuntary, of any of the foregoing into cash or other liquid property. Notwithstanding the foregoing, however, REMIC I specifically excludes (i) all payments and other collections of principal and interest due on the Mortgage Loans on or before the Cut-off Date, (ii) all Prepayment Charges payable in connection with Principal Prepayments on the Mortgage Loans made before the Cut-off Date, (iii) the Basis Risk Shortfall Reserve Fund and (iv) the Cap Contracts.

REMIC I Interest Loss Allocation Amount: With respect to any Distribution Date, an amount equal to (a) the product of (i) the aggregate Stated Principal Balance of the Mortgage Loans and REO Properties then outstanding and (ii) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular Interest LTI-AA minus the Marker Rate, divided by (b) 12.

REMIC I Marker Allocation Percentage: 0.50% of any amount payable or loss attributable from the Mortgage Loans, which shall be allocated to REMIC I Regular Interest LTI-AA, REMIC I Regular Interest LTI-IA1, REMIC I Regular Interest LTI-IA2, REMIC I Regular Interest LTI-IIA1, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIIA1, REMIC I Regular Interest LTI-IIIA2, REMIC I Regular Interest LTI-IIIA3, REMIC I Regular Interest LTI-IIIA4, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3, REMIC I Regular Interest LTI-M4, REMIC I Regular Interest LTI-M5 and REMIC I Regular Interest LTI-ZZ.

 

 

REMIC I Overcollateralization Amount: With respect to any date of determination, (i) 0.50% of the aggregate Uncertificated Principal Balances of the REMIC I Regular Interests minus (ii) the aggregate of the Uncertificated Principal Balances of REMIC I Regular Interest LTI-IA1, REMIC I Regular Interest LTI-IA2, REMIC I Regular Interest LTI-IIA1, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIIA1, REMIC I Regular Interest LTI-IIIA2, REMIC I Regular Interest LTI-IIIA3, REMIC I Regular Interest LTI-IIIA4, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3, REMIC I Regular Interest LTI-M4, REMIC I Regular Interest LTI-M5 and REMIC I Regular Interest LTI-P, in each case as of such date of determination.

REMIC I Principal Loss Allocation Amount: With respect to any Distribution Date, an amount equal to (a) the product of (i) 50% of the aggregate Stated Principal Balance of the Mortgage Loans and REO Properties then outstanding and (ii) 1 minus a fraction, the numerator of which is two times the aggregate of the Uncertificated Principal Balances of REMIC I Regular Interest LTI-IA1, REMIC I Regular Interest LTI-IA2, REMIC I Regular Interest LTI-IIA1, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIIA1, REMIC I Regular Interest LTI-IIIA2, REMIC I Regular Interest LTI-IIIA3, REMIC I Regular Interest LTI-IIIA4, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3, REMIC I Regular Interest LTI-M4 and REMIC I Regular Interest LTI-M5 and the denominator of which is the aggregate of the Uncertificated
Principal Balances of REMIC I Regular Interest LTI-IA1, REMIC I Regular Interest LTI-IA2, REMIC I Regular Interest LTI-IIA1, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIIA1, REMIC I Regular Interest LTI-IIIA2, REMIC I Regular Interest LTI-IIIA3, REMIC I Regular Interest LTI-IIIA4, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3, REMIC I Regular Interest LTI-M4, REMIC I Regular Interest LTI-M5 and REMIC I Regular Interest LTI-ZZ.

REMIC I Regular Interests:  REMIC I Regular Interest LTI-AA, REMIC I Regular Interest LTI-IA1, REMIC I Regular Interest LTI-IA2, REMIC I Regular Interest LTI-IIA1, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIIA1, REMIC I Regular Interest LTI-IIIA2, REMIC I Regular Interest LTI-IIIA3, REMIC I Regular Interest LTI-IIIA4, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3, REMIC I Regular Interest LTI-M4, REMIC I Regular Interest LTI-M5, REMIC I Regular Interest LTI-ZZ, REMIC I Regular Interest LTI-P, REMIC I Regular Interest LTI-1SUB, REMIC I Regular Interest LTI-1GRP, REMIC I Regular Interest LTI-2SUB, REMIC I Regular Interest LTI-2GRP, REMIC I Regular Interest LTI-3SUB, REMIC I Regular Interest LTI-3GRP and REMIC I Regular Interest LTI-XX.

REMIC I Regular Interest LTI-AA: One of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a Regular Interest in REMIC I.  REMIC I Regular Interest LTI-AA shall accrue interest at the related Uncertificated REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto.

REMIC I Regular Interest LTI-IA1:  One of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a Regular Interest in REMIC 

 

I.  REMIC I Regular Interest LTI-IA1 shall accrue interest at the related Uncertificated REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto.

REMIC I Regular Interest LTI-IA2:  One of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a Regular Interest in REMIC I.  REMIC I Regular Interest LTI-IA2 shall accrue interest at the related Uncertificated REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto.

REMIC I Regular Interest LTI-IIA1: One of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a Regular Interest in REMIC I.  REMIC I Regular Interest LTI-IIA1 shall accrue interest at the related Uncertificated REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto.

REMIC I Regular Interest LTI-IIA2: One of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a Regular Interest in REMIC I.  REMIC I Regular Interest LTI-IIA2 shall accrue interest at the related Uncertificated REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto.

REMIC I Regular Interest LTI-IIIA1: One of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a Regular Interest in REMIC I.  REMIC I Regular Interest LTI-IIIA1 shall accrue interest at the related Uncertificated REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto.

REMIC I Regular Interest LTI-IIIA2: One of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a Regular Interest in REMIC I.  REMIC I Regular Interest LTI-IIIA2 shall accrue interest at the related Uncertificated REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto.

REMIC I Regular Interest LTI-IIIA3: One of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a Regular Interest in REMIC I.  REMIC I Regular Interest LTI-IIIA3 shall accrue interest at the related Uncertificated REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto.

 

 

REMIC I Regular Interest LTI-IIIA4: One of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a Regular Interest in REMIC I.  REMIC I Regular Interest LTI-IIIA4 shall accrue interest at the related Uncertificated REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto.

REMIC I Regular Interest LTI-M1: One of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a Regular Interest in REMIC I. REMIC I Regular Interest LTI-M1 shall accrue interest at the related Uncertificated REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto.

REMIC I Regular Interest LTI-M2: One of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a Regular Interest in REMIC I. REMIC I Regular Interest LTI-M2 shall accrue interest at the related Uncertificated REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto.

REMIC I Regular Interest LTI-M3: One of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a Regular Interest in REMIC I. REMIC I Regular Interest LTI-M3 shall accrue interest at the related Uncertificated REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto.

REMIC I Regular Interest LTI-M4: One of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a Regular Interest in REMIC I. REMIC I Regular Interest LTI-M4 shall accrue interest at the related Uncertificated REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto.

REMIC I Regular Interest LTI-M5: One of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a Regular Interest in REMIC I. REMIC I Regular Interest LTI-M5 shall accrue interest at the related Uncertificated REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto.

REMIC I Regular Interest LTI-1SUB: One of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a Regular Interest in REMIC I. REMIC I Regular Interest LTI-1SUB shall accrue interest at the related Uncertificated REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal, 

 

subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto.

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

REMIC I Regular Interest LTI-2SUB: One of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a Regular Interest in REMIC I. REMIC I Regular Interest LTI-2SUB shall accrue interest at the related Uncertificated REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto.

REMIC I Regular Interest LTI-2GRP: One of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a Regular Interest in REMIC I. REMIC I Regular Interest LTI-2GRP shall accrue interest at the related Uncertificated REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto.

REMIC I Regular Interest LTI-3SUB: One of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a Regular Interest in REMIC I. REMIC I Regular Interest LTI-3SUB shall accrue interest at the related Uncertificated REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto.

REMIC I Regular Interest LTI-3GRP: One of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a Regular Interest in REMIC I. REMIC I Regular Interest LTI-3GRP shall accrue interest at the related Uncertificated REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto.

REMIC I Regular Interest LTI-P: One of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a Regular Interest in REMIC I. REMIC I Regular Interest LTI-P 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.

REMIC I Regular Interest LTI-XX: One of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a Regular Interest in REMIC I.  REMIC I Regular Interest LTI-XX shall accrue interest at the related Uncertificated REMIC I 

 

Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto.

REMIC I Regular Interest LTI-ZZ: One of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a Regular Interest in REMIC I.  REMIC I Regular Interest LTI-ZZ shall accrue interest at the related Uncertificated REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto.

REMIC I Regular Interest LTI-ZZ Maximum Interest Deferral Amount: With respect to any Distribution Date, the excess of (i) accrued interest at the Uncertificated REMIC I Pass-Through Rate applicable to REMIC I Regular Interest LTI-ZZ for such Distribution Date on a balance equal to the Uncertificated Principal Balance of REMIC I Regular Interest LTI-ZZ minus the REMIC I Overcollateralization Amount, in each case for such Distribution Date, over (ii) the Uncertificated Accrued Interest on REMIC I Regular Interest LTI-IA1, REMIC I Regular Interest LTI-IA2, REMIC I Regular Interest LTI-IIA1, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIIA1, REMIC I Regular Interest LTI-IIIA2, REMIC I Regular Interest LTI-IIIA3, REMIC I Regular Interest LTI-IIIA4, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3,
REMIC I Regular Interest LTI-M4 and REMIC I Regular Interest LTI-M5 for such Distribution Date, with the rate on each such REMIC I Regular Interest subject to a cap equal to the related Pass-Through Rate.

REMIC I Sub WAC Allocation Percentage: 0.50% of any amount payable or loss attributable from the Mortgage Loans, which shall be allocated to REMIC I Regular Interest LTI-1SUB, REMIC I Regular Interest LTI-1GRP, REMIC I Regular Interest LTI-2SUB, REMIC I Regular Interest LTI-2GRP, REMIC I Regular Interest LTI-3SUB, REMIC I Regular Interest LTI-3GRP and REMIC I Regular Interest LTI-XX.

REMIC I Subordinated Balance Ratio: The ratio among the Uncertificated Principal Balances of each REMIC I Regular Interest ending with the designation “SUB”, equal to the ratio between, with respect to each such REMIC I Regular Interest, the excess of (x) the aggregate Stated Principal Balance of the Group I Mortgage Loans, Group II Mortgage Loans or Group III Mortgage Loans, as applicable over (y) the current Certificate Principal Balance of the related Senior Certificates.

REMIC I Targeted Overcollateralization Amount: 0.50% of the Targeted Overcollateralization Amount.

REMIC II: The segregated pool of assets consisting of all of the REMIC I Regular Interests conveyed in trust to the Trustee, for the benefit of the REMIC II Certificateholders pursuant to Section 2.07, and all amounts deposited therein, with respect to which a separate REMIC election is to be made.

REMIC II Certificate: Any Regular Certificate or Class R Certificate.

REMIC II Certificateholder: The Holder of any REMIC II Certificate. 

 

 

REMIC Opinion: Shall mean an Opinion of Counsel to the effect that the proposed action will not have an adverse affect on any REMIC created hereunder.

REMIC Provisions: Provisions of the federal income tax law relating to real estate mortgage investment conduits, which appear at Sections 860A through 860G of 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 as well as provisions of applicable state laws.

REMIC Regular Interest: Any REMIC I Regular Interest or a Regular Certificate.

Remittance Date: Shall mean the eighteenth (18th) day of the month and if such day is not a Business Day, the immediately preceding Business Day.

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

Replacement Mortgage Loan: A Mortgage Loan or Mortgage Loans in the aggregate substituted by the Seller for a Deleted Mortgage Loan, which must, on the date of such substitution, as confirmed in a request for release in accordance with the terms of the related Custodial Agreement, (i) have a Stated Principal Balance, after deduction of the principal portion of the Scheduled Payment due in the month of substitution, not in excess of, and not less than 90% of, the Stated Principal Balance of the Deleted Mortgage Loan; (ii) have an adjustable Mortgage Rate not less than or more than 1% per annum higher than the Mortgage Rate of the Deleted Mortgage Loan; (iii) have the same or higher credit quality characteristics than that of the Deleted Mortgage Loan; (iv) have a Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan; (v) have a remaining term to
maturity no greater than (and not more than one year less than) that of the Deleted Mortgage Loan; (vi) be secured by a first lien on the related Mortgaged Property; (vii) constitute the same occupancy type as the Deleted Mortgage Loan or be owner occupied; (viii) have a Maximum Mortgage Interest Rate not less than the Maximum Mortgage Interest Rate on the Deleted Loan; (ix) have a Minimum Mortgage Interest Rate not less than the Minimum Mortgage Interest Rate of the Deleted Loan; (x) have a Gross Margin equal to the Gross Margin of the Deleted Loan; (xi) have a next Adjustment Date not more than two months later than the next Adjustment Date on the Deleted Loan; and (xii) comply with each representation and warranty set forth in the Mortgage Loan Purchase Agreement.

Required Insurance Policy: With respect to any Mortgage Loan, any insurance policy that is required to be maintained from time to time under this Agreement.

Residual Certificates: The Class R Certificates.

Responsible Officer: With respect to the Trustee and the Securities Administrator, any Vice President, any Assistant Vice President, the Secretary, any Assistant Secretary, any Trust Officer, any other officer customarily performing functions similar to those performed by any of the above designated officers or other officers of the Trustee or the Securities Administrator specified by the Trustee or the Securities Administrator, as the case may be, having direct responsibility over this Agreement and customarily performing functions similar to those performed by any one of the designated officers, as to whom, with respect to a particular matter, 

 

such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

Rolling Three Month Delinquency Rate: With respect to any Distribution Date and the Mortgage Loans will be the fraction, expressed as a percentage, equal to the average of the Delinquency Rates for each of the three (or one and two, in the case of the first and second Distribution Dates) immediately preceding months.

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

Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due on any Due Date allocable to principal and/or interest on such Mortgage Loan.

Securities Act: The Securities Act of 1933, as amended.

Securities Administrator:  As of the Closing Date, Wells Fargo Bank, N.A. and thereafter, its respective successors in interest that meet the qualifications of this Agreement. The Securities Administrator and the Master Servicer shall at all times be the same Person or Affiliates.

Seller: Nomura Credit & Capital, Inc., a Delaware corporation, and its successors and assigns, in its capacity as seller of the Mortgage Loans to the Depositor.

Senior Certificates: The Class I-A-1, Class I-A-2, Class II-A-1, Class II-A-2, Class III-A-1, Class III-A-2, Class III-A-3 and Class III-A-4 Certificates.

Senior Enhancement Percentage: With respect to any Distribution Date will be the fraction, expressed as a percentage, the numerator of which is the sum of the aggregate Certificate Principal Balance of the Subordinate Certificates and the Overcollateralization Amount, in each case after giving effect to payments on such Distribution Date (assuming no Trigger Event is in effect), and the denominator of which is the Aggregate Loan Balance for such Distribution Date.

Senior Principal Payment Amount: With respect to any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect with respect to such Distribution Date, the amount, if any, by which (x) the Certificate Principal Balances of the Senior Certificates, in each case, immediately prior to such Distribution Date exceed (y) the lesser of (A) the product of (i) 79.00% and (ii) the Aggregate Loan Balance for such Distribution Date and (B) the amount, if any, by which (i) the Aggregate Loan Balance for such Distribution Date exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off Date.

Servicer:  Shall mean GMAC Mortgage Corporation or any successor thereto appointed hereunder in connection with the servicing and administration of the Mortgage Loans.

Servicer Default: As defined in Section 8.01.

Servicer Prepayment Charge Payment Amount: The amount payable by the Servicer in respect of any waived Prepayment Charges pursuant to Section 3.01.

 

 

Servicer’s Assignee: As defined in Section 5.01(b)(ii)

Servicing Advances: All customary, reasonable and necessary “out of pocket” costs and expenses (including reasonable legal fees) incurred in the performance by the Servicer of its servicing obligations hereunder, including, but not limited to, the cost of (i) the preservation, restoration, inspection, valuation and protection of a Mortgaged Property, (ii) any enforcement or judicial proceedings, including foreclosures, and including any expenses incurred in relation to any such proceedings that result from the Mortgage Loan being registered in the MERS® System, (iii) the management and liquidation of any REO Property (including, without limitation, realtor’s commissions), (iv) compliance with any obligations under Section 3.07 hereof to cause insurance to be maintained and (v) payment of taxes.

Servicing Fee: As to each Mortgage Loan and any Distribution Date, an amount equal to 1/12th of the Servicing Fee Rate multiplied by the Stated Principal Balance of such Mortgage Loan as of the last day of the related Due Period or, in the event of any payment of interest that accompanies a Principal Prepayment in full during the related Due Period made by the Mortgagor immediately prior to such prepayment, interest at the Servicing Fee Rate on the same Stated Principal Balance of such Mortgage Loan used to calculate the payment of interest on such Mortgage Loan.

Servicing Fee Rate:  Either 0.25% per annum or 0.375% per annum per Mortgage Loan, as specifically provided on the Mortgage Loan Schedule.

Servicing Officer: Any officer of the Servicer involved in, or responsible for, the administration and the servicing of Mortgage Loans, whose name and specimen signature appear on a list of Servicing Officers furnished to the Master Servicer, the Securities Administrator the Trustee and the Depositor on the Closing Date, as such list may from time to time be amended.

Six-Month LIBOR:  The per annum rate equal to the average of interbank offered rates for Six-Month U.S. dollar-denominated deposits in the London market based on quotations of major banks as published in The Wall Street Journal and most recently available as of the time specified in the related Mortgage Note.

Startup Day: The Startup Day for each REMIC formed hereunder shall be the Closing Date.

Stated Principal Balance: With respect to any Mortgage Loan or related REO Property and any Distribution Date, the Cut-off Date Principal Balance thereof minus the sum of (i) the principal portion of the Scheduled Payments due with respect to such Mortgage Loan during each Due Period ending prior to such Distribution Date (and irrespective of any delinquency in their payment), (ii) all Principal Prepayments with respect to such Mortgage Loan received prior to or during the related Prepayment Period, and all Liquidation Proceeds to the extent applied by the Servicer as recoveries of principal in accordance with Section 3.09 of this Agreement with respect to such Mortgage Loan, that were received by the Servicer as of the close of business on the last day of the Prepayment Period related to such Distribution Date and (iii) any Realized Losses on such
Mortgage Loan incurred during the related Prepayment Period.  The Stated Principal Balance of a Liquidated Loan equals zero.

 

 

Stepdown Date: The later to occur of (x) the Distribution Date in October 2008 and (y) the first Distribution Date on which the Senior Enhancement Percentage (calculated for this purpose only after taking into account distributions of principal on the Mortgage Loans, but prior to any distributions to the holders of the Publicly Offered Certificates on such Distribution Date) is greater than or equal to 21.00%.

Subordinate Certificates: Shall mean, collectively, the Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5 Certificates.

Subsequent Recoveries: Shall mean all amounts in respect of principal received by a Servicer on a Mortgage Loan for which a Realized Loss was previously incurred.

Subservicing Agreement: Any agreement entered into between the Servicer and a subservicer with respect to the subservicing of any Mortgage Loan subject to this Agreement by such subservicer.

Substitution Adjustment Amount: The meaning ascribed to such term pursuant to Section 2.03(d).

Successor Servicer: The Master Servicer or any successor to the Servicer appointed pursuant to Section 8.02 of this Agreement after the occurrence of a Servicer Default or upon the resignation of the Servicer pursuant to this Agreement.

Targeted Overcollateralization Amount: With respect to any Distribution Date prior to the Stepdown Date, approximately 0.76% of the Aggregate Loan Balance as of the Cut-off Date; with respect to any distribution date on or after the Stepdown Date and with respect to which a Trigger Event is not in effect, the greater of (a) 1.52% of the Aggregate Loan Balance for such distribution date, or (b) 0.50% of the Aggregate Loan Balance as of the Cut-off Date; with respect to any distribution date on or after the Stepdown Date with respect to which a Trigger Event is in effect, the Targeted Overcollateralization Amount for such distribution date will be equal to the Targeted Overcollateralization Amount for the distribution date immediately preceding such distribution date.

Tax Matters Person: The person designated as “tax matters person” in the manner provided under Treasury regulation § 1.860F-4(d) and temporary Treasury regulation § 301.6231(a)(7)-1T. The holder of the greatest Percentage Interest in a Class of Residual Certificates shall be the Tax Matters Person for the related REMIC. The Securities Administrator, or any successor thereto or assignee thereof shall serve as tax administrator hereunder and as agent for the related Tax Matters Person.

Termination Price: The price, calculated as set forth in Section 10.01, to be paid in connection with the purchase of the Mortgage Loans pursuant to Section 10.01.

Transfer Affidavit: As defined in Section 6.02(c).

Transfer: Any direct or indirect transfer or sale of any Ownership Interest in a Certificate.

 

 

Trigger Event: With respect to any Distribution Date, a Trigger Event is in effect if either (i) the Rolling Three Month Delinquency Rate as of the last day of the related Due Period equals or exceeds 30.00% of the Senior Enhancement Percentage for such Distribution Date or (ii) the cumulative Realized Losses as a percentage of the original Aggregate Loan Balance on the Closing Date for such Distribution Date is greater than the percentage set forth in the following table:

	
            Distribution Date
 	
            Percentage
 
	
            October 2008 to September 2009                                                                                               
 	
            0.90%
 
	
            October 2009 to September 2010                                                                                               
 	
            1.35%
 
	
            October 2010 to September 2011                                                                                               
 	
            1.75%
 
	
            October 2011 and thereafter                                                                                                                                  
 	
            2.05%
 

 

*The cumulative loss percentages set forth above are applicable to the first Distribution Date in the corresponding range of Distribution Dates. The cumulative loss percentage for each succeeding Distribution Date in a range increases incrementally by 1/12 of the positive difference between the percentage applicable to the first Distribution Date in that range and the percentage applicable to the first Distribution Date in the succeeding range.

Trust Fund: Collectively, the assets of REMIC I, REMIC II, the Basis Risk Shortfall Reserve Fund and the Cap Contracts.

Trustee: HSBC Bank USA, National Association, a national banking association, not in its individual capacity, but solely in its capacity as trustee for the benefit of the Certificateholders under this Agreement, and any successor thereto, and any corporation or national banking association resulting from or surviving any consolidation or merger to which it or its successors may be a party and any successor trustee as may from time to time be serving as successor trustee hereunder.

Uncertificated Accrued Interest: With respect to each Uncertificated 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 of such REMIC Regular Interest. In each case, Uncertificated Accrued Interest will be reduced by any Prepayment Interest Shortfalls and shortfalls resulting from application of the Relief Act (allocated to such REMIC Regular Interests as set forth in Sections 1.02 and 5.07).

Uncertificated Principal Balance: With respect to each REMIC Regular Interest, 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 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 REMIC Regular Interest shall be reduced by all distributions of principal made on such REMIC Regular Interest on such Distribution Date pursuant to Section 5.07 and, if and to the extent necessary and appropriate, shall be further reduced on such Distribution Date by Realized Losses as provided in Section 5.07. The Uncertificated Principal Balance of each REMIC Regular Interest shall never be less than zero.

 

 

Uncertificated REMIC I Pass-Through Rate:  With respect to REMIC I Regular Interest LTI-AA, REMIC I Regular Interest LTI-IA1, REMIC I Regular Interest LTI-IA2, REMIC I Regular Interest LTI-IIA1, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIIA1, REMIC I Regular Interest LTI-IIIA2, REMIC I Regular Interest LTI-IIIA3, REMIC I Regular Interest LTI-IIIA4, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3, REMIC I Regular Interest LTI-M4, REMIC I Regular Interest LTI-M5, REMIC I Regular Interest LTI-ZZ, REMIC I Regular Interest LTI-1SUB, REMIC I Regular Interest LTI-2SUB, REMIC I Regular Interest LTI-3SUB and REMIC I Regular Interest LTI-XX, the weighted average Net Mortgage Rate of the Mortgage Loans. With respect to REMIC I Regular Interest LTI-1GRP, the weighted average Net Mortgage Rate of the
Group I Mortgage Loans. With respect to REMIC I Regular Interest LTI-2GRP, the weighted average Net Mortgage Rate of the Group II Mortgage Loans.  With respect to REMIC I Regular Interest LTI-3GRP, the weighted average Net Mortgage Rate of the Group III Mortgage Loans. 

Uncertificated REMIC Regular Interest: The REMIC I Regular Interests.

Voting Rights: The portion of the voting rights of all the Certificates that is allocated to any Certificate for purposes of the voting provisions hereunder. Voting Rights shall be allocated (i) 98% to the Certificates (other than the Class X, Class P and the Residual Certificates) and (ii) 1% to each of the Class X Certificates and Class P Certificates. Voting rights will be allocated among the Certificates of each such Class in accordance with their respective Percentage Interests.  The Residual Certificates will not be allocated any voting rights.

Wells Fargo: Wells Fargo Bank, N.A., in its capacity as a Custodian.

Wells Fargo Custodial Agreement: The Custodial Agreement dated as of September 1, 2005 among Wells Fargo, in its capacity as a Custodian, the Servicer and the Trustee

	
            Section 1.02
 	
            Allocation of Certain Interest Shortfalls.
 

For purposes of calculating the amount of the Interest Remittance Amount for any Distribution Date, (1) the aggregate amount of any Net Interest Shortfalls in respect of the Mortgage Loans for any Distribution Date shall reduce the Interest Remittance Amount 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 class of Publicly Offered Certificates and (2) the aggregate amount of any Realized Losses allocated to the Class I-A-2, Class II-A-2 and Class III-A-4 Certificates and Subordinate Certificates and Basis Risk Shortfalls allocated to the Publicly Offered Certificates for any Distribution Date shall be allocated to the Class X Certificates based on, and to the extent of, one month’s interest at the
then applicable respective Pass-Through Rate on the Certificate Principal Balance thereof on any Distribution Date.

For purposes of calculating the amount of Uncertificated Accrued Interest for the REMIC I Regular Interests for any Distribution Date: 

The REMIC I Marker Allocation Percentage of the aggregate amount of any Net Interest Shortfalls incurred in respect of the Mortgage Loans for any Distribution Date shall be allocated among REMIC I Regular Interest LTI-AA, REMIC I Regular Interest LTI-IA1, REMIC I 

 

Regular Interest LTI-IA2, REMIC I Regular Interest LTI-IIA1, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIIA1, REMIC I Regular Interest LTI-IIIA2, REMIC I Regular Interest LTI-IIIA3, REMIC I Regular Interest LTI-IIIA4, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3, REMIC I Regular Interest LTI-M4, REMIC I Regular Interest LTI-M5 and REMIC I Regular Interest LTI-ZZ, pro rata based on, and to the extent of, one month’s interest at the then applicable respective Uncertificated REMIC I Pass-Through Rate on the respective Uncertificated Principal Balance of each such REMIC I Regular Interest; and 

The REMIC I Sub WAC Allocation Percentage of the aggregate amount of any Net Interest Shortfalls incurred in respect of the Mortgage Loans for any Distribution Date shall be allocated to Uncertificated Accrued Interest payable to REMIC I Regular Interest LTI-1SUB, REMIC I Regular Interest LTI-1GRP, REMIC I Regular Interest LTI-2SUB, REMIC I Regular Interest LTI-2GRP, REMIC I Regular Interest LTI-3SUB, REMIC I Regular Interest LTI-3GRP and REMIC I Regular Interest LTI-XX, pro rata based on, and to the extent of, one month’s interest at the then applicable respective Uncertificated REMIC I Pass-Through Rate on the respective Uncertificated Principal Balance of each such REMIC I Regular Interest.

 

 

ARTICLE II

 

CONVEYANCE OF TRUST FUND

REPRESENTATIONS AND WARRANTIES

	
            Section 2.01
 	
            Conveyance of Trust Fund.
 

The Seller hereby sells, transfers, assigns, sets over and otherwise conveys to the Depositor, without recourse, all the right, title and interest of the Seller in and to the assets in the Trust Fund.

The Seller has entered into this Agreement in consideration for the purchase of the Mortgage Loans by the Depositor and has agreed to take the actions specified herein.

The Depositor, concurrently with the execution and delivery hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to the Trustee for the use and benefit of the Certificateholders, without recourse, all the right, title and interest of the Depositor in and to the Trust Fund.

Concurrently with the execution and delivery of this Agreement, the Depositor does hereby assign to the Trustee all of its rights and interest under the Mortgage Loan Purchase Agreement, to the extent of the Mortgage Loans sold under the Mortgage Loan Purchase Agreement.  The Trustee hereby accepts such assignment, and shall be entitled to exercise all rights of the Depositor under the Mortgage Loan Purchase Agreement as if, for such purpose, it were the Depositor.  The foregoing sale, transfer, assignment, set-over, deposit and conveyance does not and is not intended to result in creation or assumption by the Trustee of any obligation of the Depositor, the Seller or any other Person in connection with the Mortgage Loans or any other agreement or instrument relating thereto except as specifically set forth herein.

In connection with such sale, the Depositor does hereby deliver to, and deposit with the related Custodian pursuant to the related Custodial Agreement the documents with respect to each Mortgage Loan as described under Section 2 of the related Custodial Agreement (the “Mortgage Loan Documents”). In connection with such delivery and as further described in the related Custodial Agreement, the related Custodian will be required to review such Mortgage Loan Documents and deliver to the Trustee, the Depositor, the Servicer and the Seller certifications (in the forms attached to the related Custodial Agreement) with respect to such review with exceptions noted thereon.  In addition, under the related Custodial Agreement the Depositor will be required to cure certain defects with respect to the Mortgage Loan Documents for the related Mortgage Loans after the delivery thereof by
the Depositor to the related Custodian as more particularly set forth therein.

Notwithstanding anything to the contrary contained herein, the parties hereto acknowledge that the functions of the Trustee with respect to the custody, acceptance, inspection and release of the Mortgage Files and preparation and delivery of the certifications shall be performed by the related Custodian pursuant to the terms and conditions of the related Custodial Agreement.

 

 

The Depositor shall deliver or cause to be delivered to the Servicer copies of all trailing documents required to be included in the related Mortgage File at the same time the originals or certified copies thereof are delivered to the related Custodian, such documents including the mortgagee policy of title insurance and any Mortgage Loan Documents upon return from the recording office.  The Servicer shall not be responsible for any custodian fees or other costs incurred in obtaining such documents and the Depositor shall cause the Servicer to be reimbursed for any such costs the Servicer may incur in connection with performing its obligations under this Agreement.

The Mortgage Loans permitted by the terms of this Agreement to be included in the Trust are limited to (i) Mortgage Loans (which the Depositor acquired pursuant to the Mortgage Loan Purchase Agreement, which contains, among other representations and warranties, a representation and warranty of the Seller that no Mortgage Loan is a “High-Cost Home Loan” as defined in the New Jersey Home Ownership Act effective November 27, 2003, as defined in the New Mexico Home Loan Protection Act effective January 1, 2004) as defined in the Massachusetts Predatory Home Loan Practices Act, effective November 7, 2004 (Mass. Ann. Laws Ch. 183C) or as defined in the Indiana Home Loan Practices Act, effective January 1, 2005 (Ind. Code Ann. Sections 24-9-1 through 24-9-9) and (ii) Qualified Substitute Mortgage Loans (which, by definition as set forth herein and referred to in the Mortgage Loan
Purchase Agreement, are required to conform to, among other representations and warranties, the representation and warranty of the Seller that no Qualified Substitute Mortgage Loan is a “High-Cost Home Loan” as defined in the New Jersey Home Ownership Act effective November 27, 2003, as defined in the New Mexico Home Loan Protection Act effective January 1, 2004, as defined in the Massachusetts Predatory Home Loan Practices Act, effective November 7, 2004 (Mass. Ann. Laws Ch. 183C) or as defined in the Indiana Home Loan Practices Act, effective January 1, 2005 (Ind. Code Ann. Sections 24-9-1 through 24-9-9).  The Depositor and the Trustee on behalf of the Trust understand and agree that it is not intended that any mortgage loan be included in the Trust that is a “High-Cost Home Loan” as defined in the New Jersey Home Ownership Act effective November 27, 2003, as defined in the New Mexico Home Loan Protection Act effective January 1, 2004, as defined in the
Massachusetts Predatory Home Loan Practices Act, effective November 7, 2004 (Mass. Ann. Laws Ch. 183C) or as defined in the Indiana Home Loan Practices Act, effective January 1, 2005 (Ind. Code Ann. Sections 24-9-1 through 24-9-9).

	
            Section 2.02
 	
            Acceptance of the Mortgage Loans.
 

(a)        Based on the initial trust receipt received by it from the Custodian pursuant to the Custodial Agreement, the Trustee acknowledges receipt, subject to the provisions of Section 2.01 hereof and Section 2 of the Custodial Agreement, of the Mortgage Loan Documents and all other assets included in the definition of “REMIC I” under clauses (i), (ii) (iii), (v) and (vi) (to the extent of amounts deposited into the Distribution Account) and declares that it holds (or the Custodian on its behalf holds) and will hold such documents and the other documents delivered to it constituting a Mortgage Loan Document, and that it holds (or the Custodian on its behalf holds) or will hold all such assets and such other assets included in the definition of “REMIC I” in trust for the exclusive use and benefit of all present and
future Certificateholders.

 

 

(b)        In conducting the review of the Mortgage Files in accordance with the Custodial Agreement, the Custodian on the Trustee’s behalf will ascertain whether all required documents have been executed and received and whether those documents relate to the Mortgage Loans identified in Exhibit B to this Agreement, as supplemented. If the Custodian finds any document constituting part of the Mortgage File not to have been executed or received, or to be unrelated to the Mortgage Loans identified in Exhibit B, the Seller shall correct or cure any such defect or, if prior to the end of the second anniversary of the Closing Date, the Seller may substitute for the related Mortgage Loan a Replacement Mortgage Loan, which substitution shall be accomplished in the manner and subject to the conditions set forth in Section 2.03 or shall deliver to
the Trustee an Opinion of Counsel to the effect that such defect does not materially or adversely affect the interests of the Certificateholders in such Mortgage Loan within sixty (60) days from the date of notice from the Custodian of the defect and if the Seller fails to correct or cure the defect or deliver such opinion within such period, the Seller will, subject to Section 2.03, within ninety (90) days from the notification of the Custodian  purchase such Mortgage Loan at the Purchase Price; provided, however, that if such defect relates solely to the inability of the Seller to deliver the Mortgage, assignment thereof to the Custodian, or intervening assignments  thereof with evidence of recording thereon because such documents have been submitted for recording and have not been returned by the applicable jurisdiction, the Seller shall not be required to purchase such Mortgage Loan if the Seller delivers such documents promptly upon receipt, but in no event later than 360
days after the Closing Date.

(c)        No later than 180 days after the Closing Date, the Custodian on the Trustee’s behalf will review, for the benefit of the Certificateholders, the Mortgage Files and will execute and deliver or cause to be executed and delivered to the Seller and the Trustee, a final trust receipt substantially in the form annexed to the related Custodial Agreement. In conducting such review, the related Custodian on the Trustee’s behalf and in accordance with the terms of the related Custodial Agreement will ascertain whether each document required to be recorded has been returned from the recording office with evidence of recording thereon and the related Custodian on the Trustee’s behalf has received either an original or a copy thereof, as required in the Custodial Agreement. If the related Custodian finds that any document with respect
to a Mortgage Loan has not been received, or is unrelated to the Mortgage Loans identified in Exhibit B or appears to be defective on its face, the Custodian shall note such defect in the exception report attached the final trust receipt  issued pursuant to the Custodial Agreement and the Seller shall correct or cure any such defect or, if prior to the end of the second anniversary of the Closing Date, the Seller may substitute for the related Mortgage Loan a Replacement Mortgage Loan, which substitution shall be accomplished in the manner and subject to the conditions set forth in Section 2.03 or shall deliver to the Trustee an Opinion of Counsel to the effect that such defect does not materially or adversely affect the interests of Certificateholders in such Mortgage Loan within sixty (60) days from the date of notice from the Trustee of the defect and if the Seller is unable within such period to correct or cure such defect, or to substitute the related Mortgage Loan with a
Replacement Mortgage Loan or to deliver such opinion, the Seller shall, subject to Section 2.03, within ninety (90) days from the notification of the Trustee, purchase such Mortgage Loan at the Purchase Price; provided, however, that if such defect relates solely to the inability of the Seller to deliver the Mortgage, assignment thereof to the Trustee or intervening assignments thereof with evidence of recording thereon, because such documents have not been returned by the applicable jurisdiction, the Seller shall not be required to purchase 

 

such Mortgage Loan, if the Seller delivers such documents promptly upon receipt, but in no event later than 360 days after the Closing Date.

(d)        In the event that a Mortgage Loan is purchased by the Seller in accordance with subsections 2.02(a) or (b) above or Section 2.03, the Seller shall remit the applicable Purchase Price to the Servicer for deposit in the Custodial Account and shall provide written notice to the Securities Administrator detailing the components of the Purchase Price, signed by an authorized officer. Upon deposit of the Purchase Price in the Custodial Account and upon receipt of a request for release (in the form attached to the Custodial Agreement) with respect to such Mortgage Loan, the Custodian, on behalf of the Trustee, will release to the Seller the related Mortgage File and the Trustee shall execute and deliver all instruments of transfer or assignment, without recourse, furnished to it by the Seller, as are necessary to vest in the Seller title
to and rights under the Mortgage Loan. Such purchase shall be deemed to have occurred on the date on which the deposit into the Custodial Account was made. The Trustee shall promptly notify the Rating Agencies of such repurchase. The obligation of the Seller to cure, repurchase or substitute for any Mortgage Loan as to which a defect in a constituent document exists shall be the sole remedies respecting such defect available to the Certificateholders or to the Trustee on their behalf.  The Seller shall promptly reimburse the Trustee for any expenses incurred by the Trustee in respect of enforcing the remedies for such breach.

(e)        The Seller shall deliver to the Custodian the Mortgage Note and other documents constituting the Mortgage File with respect to any Replacement Mortgage Loan, which the Custodian will review as provided in the Custodial Agreement, provided, that the Closing Date referred to therein shall instead be the date of delivery of the Mortgage File with respect to each Replacement Mortgage Loan.

	
            Section 2.03
 	
            Representations, Warranties and Covenants of the Servicer and the Seller.
 

(a)        The Servicer hereby represents and warrants to, and covenants with, the Seller, the Depositor, the Master Servicer, the Securities Administrator and the Trustee as follows, as of the Closing Date:

(i)         It is duly organized and is validly existing and in good standing under the laws of the Commonwealth of Pennsylvania and is duly authorized and qualified to transact any and all business contemplated by this Agreement to be conducted by it in any state in which a Mortgaged Property is located or is otherwise not required under applicable law to effect such qualification and, in any event, is in compliance with the doing business laws of any such state, to the extent necessary to ensure its ability to service the Mortgage Loans in accordance with the terms of this Agreement and to perform any of its other obligations under this Agreement in accordance with the terms hereof.

(ii)         It has the full corporate power and authority to service each Mortgage Loan, and to execute, deliver and perform, and to enter into and consummate the transactions contemplated by this Agreement and has duly authorized by all necessary corporate action on its part the execution, delivery and performance of this Agreement; and this Agreement, assuming the due authorization, execution and delivery hereof by the 

 

other parties hereto, constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except that (a) the enforceability hereof may be limited by bankruptcy, insolvency, moratorium, receivership and other similar laws relating to creditors’ rights generally and (b) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought and further subject to public policy with respect to indemnity and contribution under applicable securities law.

(iii)        The execution and delivery of this Agreement by it, the servicing of the Mortgage Loans by it under this Agreement, the consummation of any other of the transactions contemplated by this Agreement, and the fulfillment of or compliance with the terms hereof are in its ordinary course of business and will not (A) result in a material breach of any term or provision of its charter or by-laws or (B) materially conflict with, result in a material breach, violation or acceleration of, or result in a material default under, the terms of any other material agreement or instrument to which it is a party or by which it may be bound, or (C) constitute a material violation of any statute, order or regulation applicable to it of any court, regulatory body, administrative agency or governmental body having jurisdiction over it;
and it is not in breach or violation of any material indenture or other material agreement or instrument, or in violation of any statute, order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over it which breach or violation may materially impair its ability to perform or meet any of its obligations under this Agreement.

(iv)        It is an approved servicer of conventional mortgage loans for Fannie Mae or Freddie Mac and is a mortgagee approved by the Secretary of Housing and Urban Development pursuant to sections 203 and 211 of the National Housing Act.

(v)        No litigation is pending or, to the best of its knowledge, threatened in writing, against it that would materially and adversely affect the execution, delivery or enforceability of this Agreement or its ability to service the Mortgage Loans or to perform any of its other obligations under this Agreement in accordance with the terms hereof.

(vi)        No consent, approval, authorization or order of any court or governmental agency or body is required for its execution, delivery and performance of, or compliance with, this Agreement or the consummation of the transactions contemplated hereby, or if any such consent, approval, authorization or order is required, it has obtained the same.

(vii)       The Servicer has accurately and fully reported, and will continue to accurately and fully report its borrower credit files to each of the credit repositories in a timely manner materially in accordance with the Fair Credit Reporting Act and its implementing legislation.

(viii)      The Servicer is a member of MERS in good standing, and will comply in all material respects with the rules and procedures of MERS in connection with the servicing of the Mortgage Loans that are registered with MERS.

 

 

(ix)        The Servicer will not waive any Prepayment Charge with respect to a Mortgage Loan unless it is waived in accordance with the standard set forth in Section 3.01.

If the covenant of the Servicer set forth in Section 2.03(a)(ix) above is breached by the Servicer, the Servicer will pay the amount of such waived Prepayment Charge, for the benefit of the Holders of the Class P Certificates, by depositing such amount into the Custodial Account within 90 days of the earlier of discovery by the Servicer or receipt of notice by Servicer of such breach.  Notwithstanding the foregoing, or anything to the contrary contained in this Agreement, the Servicer shall have no liability for a waiver of any Prepayment Charge in the event that the Servicer’s determination to make such a waiver was made by the Servicer in reliance on information properly received by the Servicer from any Person in accordance with the terms of this Agreement.

(b)        The Seller hereby represents and warrants to and covenants with, the Depositor, the Servicer, the Master Servicer, the Securities Administrator and the Trustee as follows, as of the Closing Date:

(i)         The Seller is duly organized, validly existing and in good standing under the laws of the State of Delaware and is duly authorized and qualified to transact any and all business contemplated by this Agreement to be conducted by the Seller in any state in which a Mortgaged Property is located or is otherwise not required under applicable law to effect such qualification and, in any event, is in compliance with the doing business laws of any such state, to the extent necessary to ensure its ability to enforce each Mortgage Loan, to sell the Mortgage Loans in accordance with the terms of this Agreement and to perform any of its other obligations under this Agreement in accordance with the terms hereof.

(ii)         The Seller has the full corporate power and authority to sell each Mortgage Loan, and to execute, deliver and perform, and to enter into and consummate the transactions contemplated by this Agreement and has duly authorized by all necessary corporate action on the part of the Seller the execution, delivery and performance of this Agreement; and this Agreement, assuming the due authorization, execution and delivery hereof by the other parties hereto, constitutes a legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, except that (a) the enforceability hereof may be limited by bankruptcy, insolvency, moratorium, receivership and other similar laws relating to creditors’ rights generally and (b) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought and further subject to public policy with respect to indemnity and contribution under applicable securities law.

(iii)        The execution and delivery of this Agreement by the Seller, the sale of the Mortgage Loans by the Seller under this Agreement, the consummation of any other of the transactions contemplated by this Agreement, and the fulfillment of or compliance with the terms hereof are in the ordinary course of business of the Seller and will not (A) result in a material breach of any term or provision of the charter or by-laws of the Seller 

 

or (B) materially conflict with, result in a material breach, violation or acceleration of, or result in a material default under, the terms of any other material agreement or instrument to which the Seller is a party or by which it may be bound, or (C) constitute a material violation of any statute, order or regulation applicable to the Seller of any court, regulatory body, administrative agency or governmental body having jurisdiction over the Seller; and the Seller is not in breach or violation of any material indenture or other material agreement or instrument, or in violation of any statute, order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over it which breach or violation may materially impair the Seller’s ability to perform or meet any of its obligations under this Agreement.

(iv)        The Seller is an approved seller of conventional mortgage loans for Fannie Mae or Freddie Mac and is a mortgagee approved by the Secretary of Housing and Urban Development pursuant to sections 203 and 211 of the National Housing Act.

(v)        No litigation is pending or, to the best of the Seller’s knowledge, threatened, against the Seller that would materially and adversely affect the execution, delivery or enforceability of this Agreement or the ability of the Seller to sell the Mortgage Loans or to perform any of its other obligations under this Agreement in accordance with the terms hereof.

(vi)        No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Seller of, or compliance by the Seller with, this Agreement or the consummation of the transactions contemplated hereby, or if any such consent, approval, authorization or order is required, the Seller has obtained the same.

(vii)       The representations and warranties set forth in Section 8 of the Mortgage Loan Purchase Agreement are true and correct as of the Closing Date.

(viii)      No Mortgage Loan is subject to the Home Ownership and Equity Protection Act of 1994 or any comparable law and no Mortgage Loan is classified and/or defined as a “high cost”, “covered”, “high risk home” or “predatory” loan under any other state, federal or local law or regulation or ordinance (or a similarly classified loan using different terminology under a law imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans having high interest rates, points and/or fees).

(ix)        No loan is a High Cost Loan or Covered Loan, as applicable (as such terms are defined in Appendix E of the Standard & Poor's Glossary For File Format For LEVELS® Version 5.6 Revised (attached hereto as Exhibit K) and no Mortgage Loan originated on or after October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending Act.

(x)        Any and all requirements of any federal, state or local law including, without limitation, usury, truth in lending, real estate settlement procedures, consumer credit protection, equal credit opportunity, fair housing, predatory, abusive lending or 

 

disclosure laws applicable to the origination and servicing of the Mortgage Loans have been complied with in all material respects.

(c)        Upon discovery by any of the parties hereto of a breach of a representation or warranty set forth in Section 2.03(b)(viii), (ix) and (x) and Section 8 of the Mortgage Loan Purchase Agreement that materially and adversely affects the interests of the Certificateholders in any Mortgage Loan, the party discovering such breach shall give prompt written notice thereof to the other parties. The Seller hereby covenants with respect to the representations and warranties set forth in Section 2.03(b)(viii), (ix) and (x) and Section 8 of the Mortgage Loan Purchase Agreement, that within ninety (90) days of the discovery of a breach of any representation or warranty set forth therein that materially and adversely affects the interests of the Certificateholders in any Mortgage Loan, it shall cure such breach in all material
respects and, if such breach is not so cured, (i) prior to the second anniversary of the Closing Date, remove such Mortgage Loan (a “Deleted Mortgage Loan”) from the Trust Fund and substitute in its place a Replacement Mortgage Loan, in the manner and subject to the conditions set forth in this Section; or (ii) repurchase the affected Mortgage Loan or Mortgage Loans from the Trustee at the Purchase Price in the manner set forth below; provided that any such substitution pursuant to (i) above or repurchase pursuant to (ii) above shall not be effected prior to the delivery to the Trustee of an Opinion of Counsel if required by Section 2.05 and any such substitution pursuant to (i) above shall not be effected prior to the additional delivery to the related Custodian of a request for release in accordance with the related Custodial Agreement. The Seller shall promptly reimburse the Trustee for any expenses reasonably incurred by the Trustee in respect of enforcing the
remedies for such breach. To enable the Servicer to amend the Mortgage Loan Schedule, the Seller shall, unless it cures such breach in a timely fashion pursuant to this Section 2.03, promptly notify the Trustee whether it intends either to repurchase, or to substitute for, the Mortgage Loan affected by such breach. With respect to the representations and warranties in Section 8 of the Mortgage Loan Purchase Agreement that are made to the best of the Seller’s knowledge, if it is discovered by any of the Depositor, the Seller or the Trustee that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan, notwithstanding the Seller’s lack of knowledge with respect to the substance of such representation or warranty, the Seller shall nevertheless be required to cure, substitute for or repurchase the affected Mortgage Loan in accordance with the foregoing.  Notwithstanding
the foregoing, any breach of a representation or warranty contained in clauses (xxxvii), (xxxviii), (xxxix), (xl) and/or (xlv) of Section 8 of the Mortgage Loan Purchase Agreement shall be automatically deemed to materially and adversely affect the interests of the Certificateholders.

With respect to any Replacement Mortgage Loan or Loans, the Seller shall deliver to the related Custodian for the benefit of the Certificateholders such documents and agreements as are required by Section 2 of the related Custodial Agreement. No substitution will be made in any calendar month after the Determination Date for such month. Scheduled Payments due with respect to Replacement Mortgage Loans in the Due Period related to the Distribution Date on which such proceeds are to be distributed shall not be part of the Trust Fund and will be retained by the Seller. For the month of substitution, distributions to Certificateholders will include the Scheduled Payment due on any Deleted Mortgage Loan for the related Due Period and thereafter the Seller shall be entitled to retain all amounts received in respect of such Deleted Mortgage Loan. The Servicer shall amend the Mortgage Loan
Schedule for the benefit of the 

 

Certificateholders to reflect the removal of such Deleted Mortgage Loan and the substitution of the Replacement Mortgage Loan or Loans and shall deliver the amended Mortgage Loan Schedule to the Trustee, the Master Servicer and the Securities Administrator. Upon such substitution, the Replacement Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the Seller shall be deemed to have made with respect to such Replacement Mortgage Loan or Loans, as of the date of substitution, the representations and warranties set forth in Section 8 of the Mortgage Loan Purchase Agreement with respect to such Mortgage Loan. Upon any such substitution and the deposit into the Custodial Account of the amount required to be deposited therein in connection with such substitution as described in the following paragraph and receipt by the related Custodian of a request for release for
such Mortgage Loan in accordance with the related Custodial Agreement, the related Custodian on behalf of the Trustee shall release to the Seller the Mortgage File relating to such Deleted Mortgage Loan and held for the benefit of the Certificateholders and the Trustee shall execute and deliver at the Seller’s direction such instruments of transfer or assignment as have been prepared by the Seller, in each case without recourse, as shall be necessary to vest in the Seller, or its respective designee, title to the Trustee’s interest in any Deleted Mortgage Loan substituted for pursuant to this Section 2.03.  Neither the Trustee nor the Custodian shall have any further responsibility with regard to such Mortgage File.

For any month in which the Seller substitutes one or more Replacement Mortgage Loans for a Deleted Mortgage Loan, the Securities Administrator will determine the amount (if any) by which the aggregate principal balance of all the Replacement Mortgage Loans as of the date of substitution is less than the Stated Principal Balance (after application of the principal portion of the Scheduled Payment due in the month of substitution) of such Deleted Mortgage Loan. An amount equal to the aggregate of such deficiencies, described in the preceding sentence for any Distribution Date (such amount, the “Substitution Adjustment Amount”) shall be remitted to the Servicer for deposit in the Custodial Account by the Seller delivering such Replacement Mortgage Loan on or before the Determination Date for the Distribution Date relating to the Prepayment Period during which the related Mortgage
Loan was required to be purchased or replaced hereunder.

In the event that the Seller shall be required to repurchase a Mortgage Loan, the Purchase Price therefor shall be remitted to the Servicer for deposit in the Custodial Account, on or before the Determination Date immediately following the date on which the Seller was required to repurchase such Mortgage Loan.  The Purchase Price shall be remitted by the Servicer to the Securities Administrator on the Remittance Date occurring in the month immediately following the month in which the Purchase Price was deposited in the Custodial Account. In addition, upon such deposit of the Purchase Price, the delivery of an Officer’s Certificate by the Servicer to the Trustee certifying that the Purchase Price has been deposited in the Custodial Account, the delivery of an Opinion of Counsel if required by Section 2.05 and the receipt of a Request for Release, the Trustee shall release the
related Mortgage File held for the benefit of the related Certificateholders to the Seller, and the Trustee shall execute and deliver at such Person’s direction the related instruments of transfer or assignment prepared by the Seller, in each case without recourse, as shall be necessary to transfer title from the Trustee for the benefit of the Certificateholders and transfer the Trustee’s interest to the Seller to any Mortgage Loan purchased pursuant to this Section 2.03.  It is understood and agreed that the obligation under this Agreement of the Seller to cure, repurchase or replace any Mortgage Loan as to which a 

 

breach has occurred or is continuing shall constitute the sole remedies against the Seller respecting such breach available to Certificateholder, the Depositor or the Trustee.

(d)        The Master Servicer hereby represents, warrants and covenants with the Servicer, Depositor and the Trustee as follows, as of the Closing Date:

(i)         The Master Servicer is a national banking association duly formed, validly existing and in good standing under the laws of the United States of America and is duly authorized and qualified to transact any and all business contemplated by this Agreement to be conducted by the Master Servicer;

(ii)         The Master Servicer has the full power and authority to conduct its business as presently conducted by it and to execute, deliver and perform, and to enter into and consummate, all transactions contemplated by this Agreement. The Master Servicer has duly authorized the execution, delivery and performance of this Agreement, has duly executed and delivered this Agreement, and this Agreement, assuming due authorization, execution and delivery by the other parties hereto, constitutes a legal, valid and binding obligation of the Master Servicer, enforceable against it in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity;

(iii)        The execution and delivery of this Agreement by the Master Servicer, the consummation by the Master Servicer of any other of the transactions herein contemplated, and the fulfillment of or compliance with the terms hereof are in the ordinary course of business of the Master Servicer and will not (A) result in a breach of any term or provision of charter and by-laws of the Master Servicer or (B) conflict with, result in a breach, violation or acceleration of, or result in a default under, the terms of any other material agreement or instrument to which the Master Servicer is a party or by which it may be bound, or any statute, order or regulation applicable to the Master Servicer of any court, regulatory body, administrative agency or governmental body having jurisdiction over the Master Servicer; and the Master
Servicer is not a party to, bound by, or in breach or violation of any indenture or other agreement or instrument, or subject to or in violation of any statute, order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over it, which materially and adversely affects or, to the Master Servicer’s knowledge, would in the future materially and adversely affect, (x) the ability of the Master Servicer to perform its obligations under this Agreement or (y) the business, operations, financial condition, properties or assets of the Master Servicer taken as a whole;

(iv)        The Master Servicer does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant made by it and contained in this Agreement;

(v)        No litigation is pending against the Master Servicer that would materially and adversely affect the execution, delivery or enforceability of this Agreement or the 

 

ability of the Master Servicer to perform any of its other obligations hereunder in accordance with the terms hereof,

(vi)        There are no actions or proceedings against, or investigations known to it of, the Master Servicer before any court, administrative or other tribunal (A) that might prohibit its entering into this Agreement, (B) seeking to prevent the consummation of the transactions contemplated by this Agreement or (C) that might prohibit or materially and adversely affect the performance by the Master Servicer of its obligations under, or validity or enforceability of, this Agreement; and

(vii)       No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Master Servicer of, or compliance by the Master Servicer with, this Agreement or the consummation by it of the transactions contemplated by this Agreement, except for such consents, approvals, authorizations or orders, if any, that have been obtained prior to the Closing Date.

(e)        The representations and warranties set forth in Section 2.03 shall survive delivery of the respective Mortgage Loans and Mortgage Files to the Trustee or the related Custodian for the benefit of the Certificateholders.

	
            Section 2.04
 	
            Representations and Warranties of the Depositor.
 

The Depositor hereby represents and warrants to, and covenants, with the Servicer, the Seller, the Master Servicer, the Securities Administrator and the Trustee as follows, as of the date hereof and as of the Closing Date:

(i)         The Depositor is duly organized and is validly existing as a corporation in good standing under the laws of the State of Delaware and has full power and authority (corporate and other) necessary to own or hold its properties and to conduct its business as now conducted by it and to enter into and perform its obligations under this Agreement.

(ii)         The Depositor has the full corporate power and authority to execute, deliver and perform, and to enter into and consummate the transactions contemplated by, this Agreement and has duly authorized, by all necessary corporate action on its part, the execution, delivery and performance of this Agreement; and this Agreement, assuming the due authorization, execution and delivery hereof by the other parties hereto, constitutes a legal, valid and binding obligation of the Depositor, enforceable against the Depositor in accordance with its terms, subject, as to enforceability, to (i) bankruptcy, insolvency, moratorium receivership and other similar laws relating to creditors’ rights generally and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor may be brought and further subject to public policy with respect to indemnity and contribution under applicable securities law.

(iii)        The execution and delivery of this Agreement by the Depositor, the consummation of the transactions contemplated by this Agreement, and the fulfillment of 

 

or compliance with the terms hereof are in the ordinary course of business of the Depositor and will not (A) result in a material breach of any term or provision of the charter or by-laws of the Depositor or (B) materially conflict with, result in a material breach, violation or acceleration of, or result in a material default under, the terms of any other material agreement or instrument to which the Depositor is a party or by which it may be bound or (C) constitute a material violation of any statute, order or regulation applicable to the Depositor of any court, regulatory body, administrative agency or governmental body having jurisdiction over the Depositor; and the Depositor is not in breach or violation of any material indenture or other material agreement or instrument, or in violation of any statute, order or regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it which breach or violation may materially impair the Depositor’s ability to perform or meet any of its obligations under this Agreement.

(iv)        No litigation is pending, or, to the best of the Depositor’s knowledge, threatened, against the Depositor that would materially and adversely affect the execution, delivery or enforceability of this Agreement or the ability of the Depositor to perform its obligations under this Agreement in accordance with the terms hereof.

(v)        No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Depositor of, or compliance by the Depositor with, this Agreement or the consummation of the transactions contemplated hereby, or if any such consent, approval, authorization or order is required, the Depositor has obtained the same.

The Depositor hereby represents and warrants to the Trustee as of the Closing Date, following the transfer of the Mortgage Loans to it by the Seller, the Depositor had good title to the Mortgage Loans and the related Mortgage Notes were subject to no offsets, claims, defenses or counterclaims.

It is understood and agreed that the representations and warranties set forth in this Section 2.04 shall survive delivery of the Mortgage Files to the Trustee or the related Custodian for the benefit of the Certificateholders. Upon discovery by the Depositor, the Servicer, the Master Servicer or the Trustee of a breach of such representations and warranties, the party discovering such breach shall give prompt written notice to the others and to each Rating Agency.

Section 2.05     Delivery of Opinion of Counsel in Connection with Substitutions and Repurchases.

(a)        Notwithstanding any contrary provision of this Agreement, with respect to any Mortgage Loan that is not in default or as to which default is not imminent, no repurchase or substitution pursuant to Sections 2.02 or 2.03 shall be made unless the Seller delivers to the Trustee an Opinion of Counsel, addressed to the Trustee, to the effect that such repurchase or substitution would not (i) result in the imposition of the tax on “prohibited transactions” of REMIC I or REMIC II or contributions after the Closing Date, as defined in sections 860F(a)(2) and 860G(d) of the Code, respectively or (ii) cause any of REMIC I or REMIC II to fail to 

 

qualify as a REMIC at any time that any Certificates are outstanding. Any Mortgage Loan as to which repurchase or substitution was delayed pursuant to this paragraph shall be repurchased or the substitution therefor shall occur (subject to compliance with Sections 2.02 or 2.03) upon the earlier of (a) the occurrence of a default or imminent default with respect to such Mortgage Loan and (b) receipt by the Trustee of an Opinion of Counsel to the effect that such repurchase or substitution, as applicable, will not result in the events described in clause (i) or clause (ii) of the preceding sentence.

(b)        Upon discovery by the Depositor or the Seller that any Mortgage Loan does not constitute a “qualified mortgage” within the meaning of section 860G(a)(3) of the Code, the party discovering such fact shall promptly (and in any event within five (5) Business Days of discovery) give written notice thereof to the other parties and the Trustee. In connection therewith, the Seller, at its option, shall either (i) substitute, if the conditions in Section 2.03(c) with respect to substitutions are satisfied, a Replacement Mortgage Loan for the affected Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within ninety (90) days of such discovery in the same manner as it would a Mortgage Loan for a breach of representation or warranty contained in Section 2.03. The Trustee shall reconvey to the Seller the Mortgage Loan
to be released pursuant hereto in the same manner, and on the same terms and conditions, as it would a Mortgage Loan repurchased for breach of a representation or warranty contained in Section 2.03.

	
            Section 2.06
 	
            Issuance of the REMIC I Regular Interests and the Class R Certificates.
 

The Trustee acknowledges the assignment to it of the Mortgage Loans and the delivery to the related Custodian on its behalf of the related Mortgage Files, subject to the provisions of Section 2.01 and Section 2.02, together with the assignment to it of all other assets included in REMIC I, the receipt of which is hereby acknowledged. The interests evidenced by the Class R-I Interest, together with the REMIC I Regular Interests, constitute the entire beneficial ownership interest in REMIC I. The rights of the Holders of the Class R-I Interest and REMIC I (as holder of the REMIC I Regular Interests) to receive distributions from the proceeds of REMIC I in respect of the Class R-I Interest and the REMIC I Regular Interests, respectively, and all ownership interests evidenced or constituted by the Class R-I Interest and the REMIC I Regular Interests, shall be as set forth in this Agreement.

	
            Section 2.07
 	
            Conveyance of the REMIC I Regular Interests.
 

The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey to the Trustee, without recourse all the right, title and interest of the Depositor in and to the REMIC I Regular Interests for the benefit of the Class R-II Interest and REMIC II (as holder of the REMIC I Regular Interests). The Trustee acknowledges receipt of the REMIC I Regular Interests and declares that it holds and will hold the same in trust for the exclusive use and benefit of all present and future Holders of the Class R-II Interest and REMIC II (as holder of the REMIC I Regular Interests). The rights of the Holder of the Class R-II Interest and REMIC II (as holder of the REMIC I Regular Interests) to receive distributions from the proceeds of REMIC II in respect of the Class R-II Interest and Regular Certificates, respectively, and all ownership
interests evidenced or constituted by the Class R-II Interest and 

 

the Regular Certificates, shall be as set forth in this Agreement. The Class R-II Interest and the Regular Certificates shall constitute the entire beneficial ownership interest in REMIC II.

	
            Section 2.08
 	
            Issuance of Class R Certificates.
 

The Trustee acknowledges the assignment to it of the REMIC I Regular Interests and, concurrently therewith and in exchange therefor, pursuant to the written request of the Depositor executed by an officer of the Depositor, the Securities Administrator has executed, authenticated and delivered to or upon the order of the Depositor, the Class R Certificates in authorized denominations. 

	
            Section 2.09
 	
            Establishment of Trust.
 

The Depositor does hereby establish, pursuant to the further provisions of this Agreement and the laws of the State of New York, an express trust to be known, for convenience, as “Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2005-AR5” and does hereby appoint HSBC Bank USA, National Association, as Trustee in accordance with the provisions of this Agreement.

 

 

ARTICLE III

 

ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS; ACCOUNTS

	
            Section 3.01
 	
            The Servicer to act as Servicer of the Mortgage Loans.
 

The Servicer shall service and administer the Mortgage Loans on behalf of the Trust and in the best interest of and for the benefit of the Certificateholders (as determined by the Servicer in its reasonable judgment) in accordance with the terms of this Agreement and the Mortgage Loans and to the extent consistent with such terms and in accordance with and exercising the same care in performing those practices that the Servicer customarily employs and exercises in servicing and administering mortgage loans for its own account (including, compliance with all applicable federal, state and local laws).

To the extent consistent with the foregoing, the Servicer shall seek the timely and complete recovery of principal and interest on the Mortgage Notes and shall waive a Prepayment Charge only under the following circumstances: (i) such waiver is standard and customary in servicing similar mortgage loans and (ii) either (A) such waiver is related to a default or reasonably foreseeable default and would, in the reasonable judgment of the Servicer, maximize recovery of total proceeds taking into account the value of such Prepayment Charge and the related Mortgage Loan and, if such waiver is made in connection with a refinancing of the related Mortgage Loan, such refinancing is related to a default or a reasonably foreseeable default or (B) such waiver is made in connection with a refinancing of the related Mortgage Loan unrelated to a default or a reasonably foreseeable default where (x) the
related Mortgagor has stated to the Servicer an intention to refinance the related Mortgage Loan and (y) the Servicer has concluded in its reasonable judgment that the waiver of such Prepayment Charge would induce such Mortgagor to refinance with the Servicer or (iii) the Servicer reasonably believes such Prepayment Charge is unenforceable in accordance with applicable law or the collection of such related Prepayment Charge would otherwise violate applicable law.  If a Prepayment Charge is waived as permitted by meeting both of the standards described in clauses (i) and (ii)(B) above, then Servicer is required to pay the amount of such waived Prepayment Charge (the “Servicer Prepayment Charge Payment Amount”), for the benefit of the Holders of the Class P Certificates, by depositing such amount into the Custodial Account within ninety (90) days of notice or discovery of such waiver meeting the standard set forth in both clauses (i) and (ii)(B) above; provided, however, that
the Servicer shall not waive more than 5% of the Prepayment Charges (by number of Prepayment Charges) set forth on the Prepayment Charge Schedule in accordance with clauses (i) and  (ii)(B) above.  Notwithstanding any other provisions of this Agreement, any payments made by the Servicer in respect of any waived Prepayment Charges pursuant to clauses (i) and (ii)(B) above and the preceding sentence shall be deemed to be paid outside of the Trust Fund.

Subject only to the above-described applicable servicing standards (the “Accepted Servicing Practices”) and the terms of this Agreement and of the respective Mortgage Loans, the Servicer shall have full power and authority, acting alone and/or through subservicers as provided in Section 3.03, to do or cause to be done any and all things that it may deem necessary or desirable in connection with such servicing and administration, including but not limited to, the power and authority, subject to the terms hereof (i) to execute and deliver, on behalf of the 

 

Certificateholders and the Trustee, customary consents or waivers and other instruments and documents, (ii) to consent to transfers of any related Mortgaged Property and assumptions of the Mortgage Notes and related Mortgages (but only in the manner provided herein), (iii) to collect any Insurance Proceeds and other Liquidation Proceeds, and (iv) subject to Section 3.09, to effectuate foreclosure or other conversion of the ownership of the Mortgaged Property securing any Mortgage Loan.

Without limiting the generality of the foregoing, the Servicer, in its own name or in the name of the Trust, the Depositor or the Trustee, is hereby authorized and empowered by the Trust, the Depositor and the Trustee, when the Servicer believes it appropriate in its reasonable judgment, to execute and deliver, on behalf of the Trustee, the Depositor, the Certificateholders or any of them, any and all instruments of satisfaction or cancellation, or of partial or full release or discharge and all other comparable instruments, with respect to the Mortgage Loans, and with respect to the related Mortgaged Properties held for the benefit of the Certificateholders. The Servicer shall prepare and deliver to the Depositor and/or the Trustee such documents requiring execution and delivery by any or all of them as are necessary or appropriate to enable the Servicer to service and administer the
Mortgage Loans. Upon receipt of such documents, the Depositor and/or the Trustee shall execute such documents and deliver them to the Servicer. In addition, the Trustee shall execute, at the written request of the Servicer, and furnish to the Servicer any special or limited powers of attorney agreeable to the Trustee and its counsel for each county in which a Mortgaged Property is located and other documents necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties hereunder, provided such limited powers of attorney or other documents shall be prepared by the Servicer and submitted to the Trustee for review prior to execution.

In accordance with the standards of the first paragraph of this Section 3.01, the Servicer shall advance or cause to be advanced funds as necessary for the purpose of effecting the payment of taxes and assessments on the Mortgaged Properties relating to the Mortgage Loans in order to preserve the lien on the Mortgaged Property, which advances shall be reimbursable in the first instance from related collections from the Mortgagors pursuant to Section 3.27, and further as provided in Section 3.32. All costs incurred by the Servicer, if any, in effecting the payments of such taxes and assessments on the related Mortgaged Properties and related insurance premiums shall not, for the purpose of calculating monthly distributions to the Certificateholders, be added to the Stated Principal Balance under the related Mortgage Loans, notwithstanding that the terms of such Mortgage Loans so permit.

	
            Section 3.02
 	
            Due-on-Sale Clauses; Assumption Agreements.
 

(a)        Except as otherwise provided in this Section 3.02, when any Mortgaged Property has been or is about to be conveyed by the Mortgagor, the Servicer shall to the extent that it has knowledge of such conveyance, enforce any due-on-sale clause contained in any Mortgage Note or Mortgage, to the extent permitted under applicable law and governmental regulations, but only to the extent that such enforcement will not adversely affect or jeopardize coverage under any Required Insurance Policy. Notwithstanding the foregoing, the Servicer shall not be required to exercise such rights with respect to a Mortgage Loan if the Person to whom the related Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the terms and conditions contained in the Mortgage Note and Mortgage related thereto and the consent of the 

 

mortgagee under such Mortgage Note or Mortgage is not otherwise so required under such Mortgage Note or Mortgage as a condition to such transfer. In the event that the Servicer is prohibited by law from enforcing any such due-on-sale clause, or if coverage under any Required Insurance Policy would be adversely affected, or if nonenforcement is otherwise permitted hereunder, the Servicer is authorized, subject to Section 3.02(b), to take or enter into an assumption and modification agreement from or with the person to whom such property has been or is about to be conveyed, pursuant to which such person becomes liable under the Mortgage Note and, unless prohibited by applicable state law, the Mortgagor remains liable thereon, provided that the related Mortgage Loan shall continue to be covered (if so covered before the Servicer enters such agreement) by the applicable Required Insurance Policies. The
Servicer, subject to Section 3.02(b), is also authorized with the prior approval of the insurers under any Required Insurance Policies to enter into a substitution of liability agreement with such Person, pursuant to which the original Mortgagor is released from liability and such Person is substituted as Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the foregoing, the Servicer shall not be deemed to be in default under this Section 3.02(a) by reason of any transfer or assumption that the Servicer reasonably believes it is restricted by law from preventing.

(b)        Subject to the Servicer’s duty to enforce any due-on-sale clause to the extent set forth in Section 3.02(a), in any case in which a Mortgaged Property has been conveyed to a Person by a Mortgagor, and such Person is to enter into an assumption agreement or modification agreement or supplement to the Mortgage Note or Mortgage that requires the signature of the Trustee, or if an instrument of release signed by the Trustee is required releasing the Mortgagor from liability on the related Mortgage Loan, the Servicer shall prepare and deliver or cause to be prepared and delivered to the Trustee for signature and shall direct, in writing, the Trustee to execute the assumption agreement with the Person to whom the Mortgaged Property is to be conveyed and such modification agreement or supplement to the Mortgage Note or Mortgage or
other instruments as are reasonable or necessary to carry out the terms of the Mortgage Note or Mortgage or otherwise to comply with any applicable laws regarding assumptions or the transfer of the Mortgaged Property to such Person. In connection with any such assumption, no material term of the Mortgage Note (including, but not limited to, the Mortgage Rate, the amount of the Scheduled Payment, the Index, Gross Margin, Periodic Rate Cap, Adjustment Date, Maximum Interest Rate or Minimum Mortgage Interest Rate, and any other term affecting the amount or timing of payment on the related Mortgage Loan) may be changed. In addition, the substitute Mortgagor and the Mortgaged Property must be acceptable to the Servicer in accordance with the servicing standard set forth in Section 3.01. The Servicer shall notify the Trustee that any such substitution or assumption agreement has been completed by forwarding to the related Custodian the original of such substitution or assumption
agreement, which in the case of the original shall be added to the related Mortgage File and shall, for all purposes, be considered a part of such Mortgage File to the same extent as all other documents and instruments constituting a part thereof. Any fee collected by the Servicer for entering into an assumption or substitution of liability agreement will be retained by the Servicer as additional servicing compensation.

	
            Section 3.03
 	
            Subservicers.
 

The Servicer shall perform all of its servicing responsibilities hereunder or may cause a subservicer to perform any such servicing responsibilities on its behalf, but the use by the 

 

Servicer of a subservicer shall not release the Servicer from any of its obligations hereunder with respect to the Mortgage Loans. The Servicer shall pay all fees of each of its subservicers from its own funds, and a subservicer’s fee shall not exceed the Servicing Fee payable to the Servicer hereunder.

At the cost and expense of the Servicer, without any right of reimbursement from its Custodial Account, the Servicer shall be entitled to terminate the rights and responsibilities of a subservicer and arrange for any servicing responsibilities to be performed by a successor subservicer; provided, however, that nothing contained herein shall be deemed to prevent or prohibit the Servicer, at its option, from electing to service the Mortgage Loans itself. In the event that the Servicer’s responsibilities and duties under this Agreement are terminated pursuant to Section 8.01, the Servicer shall at its own cost and expense terminate the rights and responsibilities of each subservicer with respect to the Mortgage Loans effective as of the date of the Servicer’s termination. The Servicer shall pay all fees, expenses or penalties necessary in order to terminate the rights and
responsibilities of each subservicer from the Servicer’s own funds without reimbursement from the Trust Fund.

Notwithstanding the foregoing, the Servicer shall not be relieved of its obligations hereunder with respect to the Mortgage Loans and shall be obligated to the same extent and under the same terms and conditions as if it alone were servicing and administering the Mortgage Loans. The Servicer shall be entitled to enter into an agreement with a subservicer for indemnification of the Servicer by the subservicer and nothing contained in this Agreement shall be deemed to limit or modify such indemnification.

Any subservicing agreement and any other transactions or services relating to the Mortgage Loans involving a subservicer shall be deemed to be between such subservicer and the Servicer alone, and neither the Master Servicer nor the Trustee shall have any obligations, duties or liabilities with respect to such subservicer including any obligation, duty or liability of the Master Servicer or the Trustee to pay such subservicer’s fees and expenses or any differential in the amount of the servicing fee paid hereunder and the amount necessary to induce any successor servicer to act as successor servicer under this Agreement and the transactions provided for in this Agreement. For purposes of remittances to the Securities Administrator pursuant to this Agreement, the Servicer shall be deemed to have received a payment on a Mortgage Loan when a subservicer has received such payment.

Section 3.04     Documents, Records and Funds in Possession of the Servicer To Be Held for Trustee.

Notwithstanding any other provisions of this Agreement, the Servicer shall transmit to the Trustee as required by this Agreement all documents and instruments in respect of a Mortgage Loan coming into the possession of the Servicer from time to time and shall account fully to the Securities Administrator for any funds received by the Servicer or that otherwise are collected by the Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any such Mortgage Loan.  All Mortgage Files and funds collected or held by, or under the control of, the Servicer in respect of any Mortgage Loans, whether from the collection of principal and interest payments or from Liquidation Proceeds, including but not limited to, any funds on deposit in the Custodial Account, shall be held by the Servicer for and on behalf of the Trustee and shall be and 

 

remain the sole and exclusive property of the Trustee, subject to the applicable provisions of this Agreement. The Servicer also agrees that it shall not create, incur or subject any Mortgage File or any funds that are deposited in the Custodial Account, the Distribution Account or in any Escrow Account, or any funds that otherwise are or may become due or payable to the Trustee for the benefit of the Certificateholders, to any claim, lien, security interest, judgment, levy, writ of attachment or other encumbrance, or assert by legal action or otherwise any claim or right of set off against any Mortgage File or any funds collected on, or in connection with, a Mortgage Loan, except, however, that the Servicer shall be entitled to set off against and deduct from any such funds any amounts that are properly due and payable to the Servicer under this Agreement.

	
            Section 3.05
 	
            Maintenance of Hazard Insurance.
 

(a)        The Servicer shall cause to be maintained for each Mortgage Loan hazard insurance with extended coverage on the Mortgaged Property in an amount which is at least equal to the lesser of (i) the Stated Principal Balance of such Mortgage Loan and (ii) the amount necessary to fully compensate for any damage or loss to the improvements that are a part of such property on a replacement cost basis, in each case in an amount not less than such amount as is necessary to avoid the application of any coinsurance clause contained in the related hazard insurance policy. The Servicer shall also cause to be maintained hazard insurance with extended coverage on each REO Property in an amount which is at least equal to the lesser of (i) the maximum insurable value of the improvements which are a part of such REO Property and (ii) the Stated Principal
Balance of the related Mortgage Loan at the time it became an REO Property. The Servicer will comply in the performance of this Agreement with all reasonable rules and requirements of each insurer under any such hazard policies. Any amounts collected by the Servicer under any such policies (other than amounts to be applied to the restoration or repair of the property subject to the related Mortgage or amounts to be released to the Mortgagor in accordance with the procedures that the Servicer would follow in servicing loans held for its own account, subject to the terms and conditions of the related Mortgage and Mortgage Note and in accordance with the servicing standard set forth in Section 3.01) shall be deposited in the Custodial Account, subject to withdrawal pursuant to Section 3.27. Any cost incurred by the Servicer in maintaining any such insurance shall not, for the purpose of calculating distributions to Certificateholders, be added to the Stated Principal Balance of
the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit. It is understood and agreed that no earthquake or other additional insurance is to be required of any Mortgagor other than pursuant to such applicable laws and regulations as shall at any time be in force and as shall require such additional insurance. If a Mortgaged Property or REO Property is at any time in an area identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards and flood insurance has been made available, the Servicer shall cause to be maintained a flood insurance policy in respect thereof. Such flood insurance shall be in an amount equal to the lesser of (i) the Stated Principal Balance of the related Mortgage Loan and (ii) the maximum amount of such insurance available for the related Mortgaged Property under the national flood insurance program (assuming that the area in which such Mortgaged Property is located is participating
in such program).

In the event that the Servicer shall obtain and maintain a blanket policy with an insurer having a General Policy Rating of B:VI or better in Best’s Key Rating Guide (or such other rating that is comparable to such rating) insuring against hazard losses on all of the Mortgage 

 

Loans, it shall conclusively be deemed to have satisfied its obligations as set forth in the first two sentences of this Section 3.05, it being understood and agreed that such policy may contain a deductible clause, in which case the Servicer shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property a policy complying with the first two sentences of this Section 3.05, and there shall have been one or more losses which would have been covered by such policy, deposit to the Custodial Account maintained by the Servicer from its own funds the amount not otherwise payable under the blanket policy because of such deductible clause. In connection with its activities as administrator and servicer of the Mortgage Loans, the Servicer agrees to prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket
policy in a timely fashion in accordance with the terms of such policy.

(b)        The Servicer shall keep in force during the term of this Agreement a policy or policies of insurance covering errors and omissions for failure in the performance of the Servicer’s obligations under this Agreement, which policy or policies shall be in such form and amount that would meet the requirements of Fannie Mae or Freddie Mac if it were the purchaser of the Mortgage Loans, unless the Servicer has obtained a waiver of such requirements from Fannie Mae or Freddie Mac. The Servicer shall provide the Master Servicer, upon request, with copies of such insurance policies and fidelity bond (or waiver thereof). The Servicer shall also maintain a fidelity bond in the form and amount that would meet the requirements of Fannie Mae or Freddie Mac, unless the Servicer has obtained a waiver of such requirements from Fannie Mae or Freddie
Mac. The Servicer shall be deemed to have complied with this provision if an Affiliate of the Servicer has such errors and omissions and fidelity bond coverage and, by the terms of such insurance policy or fidelity bond, the coverage afforded thereunder extends to the Servicer. Any such errors and omissions policy and fidelity bond shall by its terms not be cancelable without thirty days’ prior written notice to the Master Servicer. The Servicer shall also cause its subservicers to maintain a policy of insurance covering errors and omissions and a fidelity bond which would meet such requirements.

	
            Section 3.06
 	
            Presentment of Claims and Collection of Proceeds.
 

The Servicer shall 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 Insurance Policies. Any proceeds disbursed to the Servicer in respect of such Insurance Policies shall, within two Business Days of its receipt, be deposited in the Custodial Account, 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 3.07
 	
            Maintenance of Insurance Policies.
 

The Servicer shall not take any action that would result in noncoverage under any applicable Insurance Policy of any loss which, but for the actions of the Servicer would have been covered thereunder.  The Servicer shall use its best efforts to keep in force and effect (to the extent that the related Mortgage Loan requires the Mortgagor to maintain such insurance), any 

 

applicable Insurance Policy. The Servicer shall not cancel or refuse to renew any 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.

	
            Section 3.08
 	
            Reserved.
 

Section 3.09     Realization Upon Defaulted Mortgage Loans; Determination of Excess Liquidation Proceeds and Realized Losses; Repurchases of Certain Mortgage Loans.

(a)        The Servicer shall use reasonable efforts to foreclose upon or otherwise comparably convert the ownership of properties securing such of the Mortgage Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments. In connection with such foreclosure or other conversion, the Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities and the requirements of the insurer under any Required Insurance Policy; provided that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration of any property unless it shall determine (i) that such restoration and/or foreclosure will increase the proceeds of
liquidation of the related Mortgage Loan after reimbursement to itself of such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account). If the Servicer reasonably believes that Liquidation Proceeds with respect to any such Mortgage Loan would not be increased as a result of such foreclosure or other action, such Mortgage Loan will be charged-off and will become a Liquidated Loan. The Servicer will give notice of any such charge-off to the Securities Administrator. The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided that such costs and expenses shall be Servicing Advances and that it shall be entitled to reimbursement thereof from the proceeds of liquidation of the related Mortgaged Property, as contemplated in Section 3.27. If the Servicer has knowledge that a Mortgaged Property that
the Servicer is contemplating acquiring in foreclosure or by deed-in-lieu of foreclosure is located within a one-mile radius of any site with environmental or hazardous waste risks known to the Servicer, the Servicer shall, prior to acquiring the Mortgaged Property, consider such risks and only take action in accordance with its established environmental review procedures.

With respect to any REO Property, the deed or certificate of sale shall be taken in the name of the Trustee for the benefit of the Certificateholders (or the Trustee’s nominee on behalf of the Certificateholders). The Trustee’s name shall be placed on the title to such REO Property solely as the Trustee hereunder and not in its individual capacity. The Servicer shall ensure that the title to such REO Property references this Agreement and the Trustee’s capacity hereunder. Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such REO Property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as
the Servicer deems to be in the best interest of the Servicer and the Certificateholders for the period prior to the sale of such REO Property. The Servicer shall prepare for and deliver to the Securities Administrator a statement with respect to each REO Property that has been rented showing the aggregate rental income received and all expenses 

 

incurred in connection with the management and maintenance of such REO Property at such times as is necessary to enable the Securities Administrator to comply with the reporting requirements of the REMIC Provisions. The net monthly rental income, if any, from such REO Property shall be deposited in the Custodial Account no later than the close of business on each Determination Date. The Servicer shall perform the tax reporting and withholding related to foreclosures, abandonments and cancellation of indebtedness income as specified by Sections 6050H, 6050J and 6050P of the Code by preparing and filing such tax and information returns, as may be required.

In the event that the Trust Fund acquires any Mortgaged Property as aforesaid or otherwise in connection with a default or imminent default on a Mortgage Loan, the Servicer shall dispose of such Mortgaged Property prior to three years after its acquisition by the Trust Fund or, at the expense of the Trust Fund, request from the Internal Revenue Service more than 60 days prior to the day on which such three-year period would otherwise expire, an extension of the three-year grace period. The Trustee and the Securities Administrator shall be supplied with an Opinion of Counsel (such opinion not to be an expense of the Trustee, the Securities Administrator or the Trust Fund) to the effect that the holding by the Trust Fund of such Mortgaged Property subsequent to such three-year period will not result in the imposition of taxes on “prohibited transactions” of REMIC I or REMIC II as
defined in section 860F of the Code or cause either REMIC I or REMIC II to fail to qualify as a REMIC at any time that any Certificates are outstanding, in which case the Trust Fund may continue to hold such Mortgaged Property (subject to any conditions contained in such Opinion of Counsel). Notwithstanding any other provision of this Agreement, no Mortgaged Property acquired by the Trust Fund shall be rented (or allowed to continue to be rented) or otherwise used for the production of income by or on behalf of the Trust Fund in such a manner or pursuant to any terms that would (i) cause such Mortgaged Property to fail to qualify as “foreclosure property” within the meaning of section 860G(a)(8) of the Code or (ii) subject either REMIC I or REMIC II to the imposition of any federal, state or local income taxes on the income earned from such Mortgaged Property under section 860G(c) of the Code or otherwise, unless the Servicer has agreed to indemnify and hold harmless the
Trust Fund with respect to the imposition of any such taxes.

The decision of the Servicer to foreclose on a defaulted Mortgage Loan shall be subject to a determination by the Servicer that the proceeds of such foreclosure would exceed the costs and expenses of bringing such a proceeding. The income earned from the management of any Mortgaged Properties acquired through foreclosure or other judicial proceeding, net of reimbursement to the Servicer for expenses incurred (including any property or other taxes) in connection with such management and net of unreimbursed Servicing Fees, unreimbursed master servicing fees, Advances, Servicing Advances and any management fee paid or to be paid with respect to the management of such Mortgaged Property, shall be applied to the payment of principal of, and interest on, the defaulted Mortgage Loans (with interest accruing as though such Mortgage Loans were still current) and all such income shall be deemed,
for all purposes in the Agreement, to be payments on account of principal and interest on the related Mortgage Notes and shall be deposited into the Custodial Account. To the extent the income received during a Prepayment Period is in excess of the amount attributable to amortizing principal and accrued interest at the related Mortgage Rate on the Mortgage Loan, such excess shall be considered to be a partial Principal Prepayment for all purposes hereof.

 

 

The Liquidation Proceeds from any liquidation of a Mortgage Loan, net of any payment to the Servicer as provided above, shall be deposited in the Custodial Account on the next succeeding Determination Date following receipt thereof for distribution on the related Distribution Date, except that any Excess Liquidation Proceeds shall be retained by the Servicer as additional servicing compensation.

The proceeds of any Liquidated Loan, as well as any recovery resulting from a partial collection of Liquidation Proceeds or any income from an REO Property, shall be applied in the following order of priority: first, to reimburse the Servicer for any related unreimbursed Servicing Advances and Servicing Fees, pursuant to Section 3.27 or this Section 3.09; second, to reimburse the Servicer for any unreimbursed Advances, pursuant to Section 3.27 or this Section 3.09; third, to accrued and unpaid interest (to the extent no Advance has been made for such amount) on the Mortgage Loan or related REO Property, at the Net Mortgage Rate to the first day of the month in which such amounts are required to be distributed; and fourth, as a recovery of principal of the Mortgage Loan.

(b)        On each Determination Date, the Servicer shall determine the respective aggregate amounts of Excess Liquidation Proceeds and Realized Losses, if any, with respect to any Mortgage Loan for the related Prepayment Period and report the same to the Securities Administrator pursuant to Section 3.28.

(c)        The Servicer has no intent to foreclose on any Mortgage Loan based on the delinquency characteristics as of the Closing Date; provided, however, that the foregoing does not prevent the Servicer from initiating foreclosure proceedings on any date hereafter if the facts and circumstances of such Mortgage Loans including delinquency characteristics in the Servicer’s discretion so warrant such action.

	
            Section 3.10
 	
            Servicing Compensation.
 

As compensation for its activities hereunder, the Servicer shall be entitled to retain or withdraw from the Custodial Account out of each payment of interest on each Mortgage Loan included in the Trust Fund an amount equal to the Servicing Fee.  In addition, the Servicer shall be entitled to recover unpaid Servicing Fees out of Liquidation Proceeds, Insurance Proceeds or condemnation proceeds to the extent permitted by Section 3.27.

Additional servicing compensation with respect to Mortgage Loans in the form of any Excess Liquidation Proceeds, assumption fees, late payment charges, insufficient funds charges and ancillary income to the extent such fees or charges are received by the Servicer, all income and gain net of any losses realized from Permitted Investments with respect to funds in or credited to the Custodial Account shall be retained by the Servicer to the extent not required to be deposited in the Custodial Account pursuant to Section 3.27.  The Servicer shall be required to pay all expenses incurred by it in connection with its servicing activities hereunder (including payment of any premiums for hazard insurance, as required by Section 3.05 and maintenance of the other forms of insurance coverage required by Section 3.07 and shall not be entitled to reimbursement therefor except as
specifically provided in Section 3.27.

 

 

	
            Section 3.11
 	
            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 Servicer shall sell any REO Property as expeditiously as possible and in accordance with the provisions of this Agreement. Pursuant to its efforts to sell such REO Property, the Servicer shall protect and conserve such REO Property in the manner and to the extent required herein, in accordance with the REMIC Provisions.

(b)        The Servicer shall deposit all funds collected and received in connection with the operation of any REO Property into the Custodial Account.

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

	
            Section 3.12
 	
            Liquidation Reports.
 

Upon the foreclosure of any Mortgaged Property or the acquisition thereof by the Trust Fund pursuant to a deed-in-lieu of foreclosure, the Servicer shall submit a liquidation report to the Trustee containing such information as shall be mutually acceptable to the Servicer and the Trustee with respect to such Mortgaged Property.

	
            Section 3.13
 	
            Annual Certificate as to Compliance.
 

(a)        The Servicer shall deliver to the Depositor, the Master Servicer, the Securities Administrator and each Rating Agency not later than March 15th of each year commencing in 2006 (or, in each case, if such day is not a Business Day, the immediately preceding Business Day), a certificate of a Authorized Servicer Representative stating, as to each signatory thereof, that (i) a review of the activities of the Servicer during the preceding calendar year and of performance under this Agreement has been made under such officers’ supervision, and (ii) to the best of such officers’ knowledge, based on such review, the Servicer has fulfilled all of its obligations under this Agreement throughout such year, or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officers and the nature and status thereof except for such defaults as such officer in its good faith judgment believe to be immaterial.

(b)        (i)  The Servicer shall deliver to the Depositor, the Master Servicer, the Securities Administrator, on or before March 15th of each year commencing in 2006, a certification containing the information set forth in Exhibit J.  Such certification shall be signed by the senior officer in charge of servicing of the Servicer.  In addition, the Servicer shall provide such other information with respect to the  Mortgage Loans and the servicing and administration thereof within the control of the Servicer which shall be required to enable the Depositor and the Trustee to comply with the reporting requirements of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”).

 

 

(ii)         The Servicer shall indemnify and hold harmless the Depositor, the Master Servicer, the Securities Administrator and their respective officers, directors, agents and affiliates from and against any losses, damages, penalties, fines, forfeitures, reasonable legal fees and related costs, judgments and other costs and expenses to the extent arising out of or based upon a breach by the Servicer or any of its officers, directors, agents or affiliates of its obligations under this Section 3.13(b), or a breach in any of the representations in the certification delivered pursuant to clause (b)(i) above, or the Servicer’s gross negligence, bad faith or willful misconduct in connection therewith.  If the indemnification provided for herein is unavailable to the Depositor, the Master Servicer and the Securities
Administrator as a result of a court of law or other administrative or regulatory body with authority holding such indemnification void on the basis of public policy or similar reason or insufficient to hold harmless the Depositor, the Master Servicer or the Securities Administrator, then the Servicer agrees that it shall contribute to the amount paid or payable by the Depositor, the Master Servicer and the Securities Administrator as a result of the losses, claims, damages or liabilities of the Depositor or the Securities Administrator in such proportion as is appropriate to reflect the relative fault of the Securities Administrator or the Depositor on the one hand and the Servicer on the other in connection with a breach of the Servicer’s obligations under this Section 3.13(b) or the Servicer’s gross negligence, bad faith or willful misconduct in connection therewith or a breach of any of the representations in the certification delivered pursuant to clause (b)(i)
above with respect to the matters covered by this Section 3.13(b)(ii).

	
            Section 3.14
 	
            Annual Independent Certified Public Accountants’ Servicing Report.
 

Not later than March 15th of each year, commencing in 2006, the Servicer, at its expense, shall cause a nationally recognized firm of independent certified public accountants to furnish to the Servicer a report stating that (i) it has obtained a letter of representation regarding certain matters from the management of the Servicer which includes an assertion that the Servicer has complied with certain minimum residential mortgage loan servicing standards, identified in the Uniform Single Attestation Program for Mortgage Bankers established by the Mortgage Bankers Association of America, with respect to the servicing of residential mortgage loans during the most recently completed fiscal or calendar year and (ii) on the basis of an examination conducted by such firm in accordance with standards established by the American Institute of Certified Public Accountants, such representation is
fairly stated in all material respects, subject to such exceptions and other qualifications that may be appropriate. In rendering its report such firm may rely, as to matters relating to the direct servicing of residential mortgage loans by subservicers, upon comparable reports of firms of independent certified public accountants rendered on the basis of examinations conducted in accordance with the same standards (rendered within one year of such report) with respect to those subservicers. Promptly upon receipt of such report, the Servicer shall furnish a copy of such report to the Depositor, the Master Servicer, the Securities Administrator and each Rating Agency. Copies of such statement shall be provided by the Securities Administrator to any Certificateholder upon request at the Servicer’s expense, provided that such statement is delivered by the Servicer to the Securities Administrator.

 

 

	
            Section 3.15
 	
            Books and Records.
 

The Servicer shall be responsible for maintaining, and shall maintain, a complete set of books and records for the Mortgage Loans which shall be appropriately identified in the Servicer’s computer system to clearly reflect the ownership of the Mortgage Loans by the Trust.  In particular, the Servicer shall maintain in its possession, available for inspection by the Trustee and the Master Servicer and shall deliver to the Trustee or the Master Servicer upon reasonable prior request and during normal business hours, evidence of compliance with all federal, state and local laws, rules and regulations. To the extent that original documents are not required for purposes of realization of Liquidation Proceeds or Insurance Proceeds, documents maintained by the Servicer may be in the form of microfilm or microfiche or such other reliable means of recreating original documents, including,
but not limited to, optical imagery techniques so long as the Servicer complies with the requirements of Accepted Servicing Practices.

The Servicer shall maintain with respect to each Mortgage Loan and shall upon reasonable prior request and during normal business hours make available for inspection by the Trustee and the Master Servicer the related servicing file during the time such Mortgage Loan is subject to this Agreement and thereafter in accordance with applicable law.

	
            Section 3.16
 	
            The Trustee.
 

The Trustee shall furnish the Servicer with any powers of attorney and other documents prepared and submitted by the Servicer to the Trustee in a form as mutually agreed upon and necessary or appropriate to enable the Servicer to service and administer the related Mortgage Loans and REO Properties.

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 as directed in writing by the 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; (iii) obtain a deficiency judgment against the Mortgagor; or (iv) enforce any other rights or remedies provided by the Mortgage Note or otherwise available at law or equity.

	
            Section 3.17
 	
            REMIC-Related Covenants.
 

For as long as each REMIC shall exist, the Trustee and the Securities Administrator shall act in accordance herewith to treat each REMIC as a REMIC, and the Trustee and the Securities Administrator shall comply with any directions of the Seller, the Servicer or the Master Servicer 

 

with respect to such treatment. In particular, the Trustee shall not (a) knowingly 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 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.

	
            Section 3.18
 	
            [Reserved].
 	
             

	
            Section 3.19
 	
            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 (or if the Servicer does not, the Master Servicer may) promptly furnish to the Trustee and the related Custodian, on behalf of the Trustee, two copies of a request for release substantially in the form attached to the related Custodial Agreement signed by a Authorized Servicer Representative or in a mutually agreeable electronic format which will, in lieu of a signature on its face, originate from a Authorized Servicer Representative (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 Custodial Account pursuant to Article V have been or will be so deposited) and shall request that the related Custodian, on behalf of the Trustee, deliver to the Servicer the related Mortgage File. Within five (5) Business Days of receipt of such certification and request, the related Custodian, on behalf of the Trustee, shall release the related Mortgage File to the Servicer and the Trustee and the related 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 related 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 Custodial Account.

(b)        From time to time and as appropriate for the servicing or foreclosure of any Mortgage Loan and in accordance with this Agreement, the Trustee shall execute such documents as shall be prepared and furnished to the Trustee by the Servicer (in form reasonably acceptable to the Trustee) and as are necessary to the prosecution of any such proceedings. The Custodians, on behalf of the Trustee, shall, upon the written request of the Servicer, and delivery to the related Custodian, on behalf of the Trustee, of two copies of a request for release signed by a Authorized Servicer Representative substantially in the form attached to the related Custodial Agreement (or in a mutually agreeable electronic format which will, in lieu of a signature on its face, originate from a Authorized Servicer Representative), release the related Mortgage File held
in its possession or control to the Servicer. Such request for release shall obligate the Servicer to return the Mortgage File to the related Custodian on behalf of the Trustee, when the need therefor by such Person no longer exists unless the Mortgage Loan shall be liquidated, in 

 

which case, upon receipt of a certificate of a Authorized Servicer Representative similar to that hereinabove specified, the Mortgage File shall be released by the related Custodian, on behalf of the Trustee, to the Servicer.

Section 3.20     Documents, Records and Funds in Possession of the Servicer to be held for Trustee.

(a)        The Servicer (to the extent required by this Agreement) shall transmit to the Trustee or to related Custodian such documents and instruments coming into the possession of such Person from time to time as are required by the terms hereof to be delivered to the Trustee or the related Custodian. Any funds received by the Servicer in respect of any Mortgage Loan or which otherwise are collected by the Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any Mortgage Loan shall be held for the benefit of the Trustee and the Certificateholders subject to the right of the Servicer to retain its Servicing Fee and other amounts as provided in this Agreement.

	
            Section 3.21
 	
            Possession of Certain Insurance Policies and Documents.
 

The Servicer shall retain possession and custody of the originals (to the extent available) of any Insurance Policies, or certificate of insurance if applicable, and any certificates of renewal as to the foregoing as may be issued from time to time as contemplated by this Agreement. Until all amounts distributable in respect of the Certificates have been distributed in full, the Trustee (or the related Custodian, as directed by the Trustee) shall retain possession and custody of each Mortgage File in accordance with and subject to the terms and conditions of this Agreement.

	
            Section 3.22
 	
            [Reserved].
 
	
            Section 3.23
 	
            UCC.
 	
             

The Seller agrees to execute and file continuation statements for any Uniform Commercial Code financing statements which the Seller has informed the Trustee were filed on the Closing Date in connection with the Trust. The Seller shall file any financing statements or amendments and continuation statements thereto required by any change in the Uniform Commercial Code.

	
            Section 3.24
 	
            Optional Purchase of Defaulted Mortgage Loans.
 

With respect to any Mortgage Loan which is delinquent in payment by ninety-one (91) days or more or is an REO Property, the Seller shall have the right to purchase such Mortgage Loan or REO Property from the Trust at a price equal to the Purchase Price.  The Purchase Price shall be remitted to the Servicer for deposit in the Custodial Account and remitted by the Servicer to the Securities Administrator on the Servicer Remittance Date in the month immediately following the month in which the Purchase Price was deposited in the Custodial Account.

If at any time the Seller remits to the Servicer a payment for deposit in the Custodial Account covering the amount of the Purchase Price for such a Mortgage Loan and the Servicer delivers an Officer’s Certificate to the Trustee certifying that the Purchase Price has been 

 

deposited in the Custodial Account, the Trustee shall execute the assignment of such Mortgage Loan at the request of the Seller without recourse to the Seller which shall succeed to all the Trustee’s, right, title and interest in and to such Mortgage Loan, and all security and documents relative thereto.  Such assignment shall be an assignment outright and not for security.  The Seller will thereupon own such Mortgage, and all such security and documents, free of any further obligation to the Trustee or the Certificateholders with respect thereto.  The Seller shall be responsible for any transfer costs incurred with respect to a Mortgage Loan purchased pursuant to this Section 3.24.

	
            Section 3.25
 	
            Obligations of the Servicer Under Credit Risk Management Agreement.
 

Notwithstanding anything in this Agreement or the Credit Risk Management Agreements to the contrary, the Trustee shall not have any duty or obligation to enforce any Credit Risk Management Agreement or to supervise, monitor or oversee the activities of the Credit Risk Manager or the Servicer under the Credit Risk Management Agreements or this Agreement with respect to any action taken or not taken by the Servicer pursuant to a recommendation of the Credit Risk Manager or otherwise in connection with obligations of the Servicer under the related Credit Risk Management Agreement.

	
            Section 3.26
 	
            Collection of Mortgage Loan Payments; Custodial Account.
 

(a)        The Servicer shall make reasonable efforts in accordance with Accepted Servicing Practices to collect all payments called for under the terms and provisions of the Mortgage Loans to the extent such procedures shall be consistent with this Agreement and the terms and provisions of any related Required Insurance Policy. Consistent with the foregoing, the Servicer may in its discretion (i) waive any late payment charge and (ii) extend the due dates for payments due on a Mortgage Note for a Mortgage Loan for a period not greater than 180 days; provided, however no such extension shall be materially adverse to the Certificateholders. In the event of any such arrangement, the Servicer shall make Advances on the Mortgage Loan during the scheduled period in accordance with the amortization schedule of such Mortgage Loan without modification
thereof by reason of such arrangements, and shall be entitled to reimbursement therefor in accordance with Section 5.01. The Servicer shall not be required to institute or join in litigation with respect to collection of any payment (whether under a Mortgage, Mortgage Note or otherwise or against any public or governmental authority with respect to a taking or condemnation) if it reasonably believes that enforcing the provision of the Mortgage or other instrument pursuant to which such payment is required is prohibited by applicable law. In addition, if (x) a Mortgage Loan is in default or default is imminent or (y) the Servicer delivers to the Trustee and the Securities Administrator a REMIC Opinion, the Servicer may, (A) amend the related Mortgage Note to reduce the Mortgage Rate applicable thereto and (B) amend any Mortgage Note for a Mortgage Loan to extend the maturity thereof.

(b)        The Servicer shall establish and maintain a segregated Custodial Account (which shall at all times be an Eligible Account) with a depository institution in the name of the Servicer for the benefit of the Trustee on behalf of the Certificateholders and designated “HSBC USA, National Association, as trustee for registered holders of Nomura Asset Acceptance Corporation, Mortgage Pass-Through Certificates, Series 2005-AR5.”  On behalf of the Trust Fund, the Servicer shall deposit or cause to be deposited in the clearing account in which it customarily 

 

deposits payments and collection on mortgage loans in connection with its mortgage loan servicing activities on a daily basis and in no event more than one Business Day after the Servicer’s receipt thereof, and shall thereafter deposit in the Custodial Account, in no event more than two Business Days after the Servicer’s receipt thereof, except as otherwise specifically provided herein, the following payments and collections remitted by subservicers or received by it in respect of the Mortgage Loans subsequent to the Cut-off Date (other than in respect of principal and interest due on the Mortgage Loans on or before the Cut-off Date) and the following amounts required to be deposited hereunder:

(i)         all payments on account of principal, including Principal Prepayments and Subsequent Recoveries, on the Mortgage Loans;

(ii)         all payments on account of interest on the Mortgage Loans net of the Servicing Fee permitted under Section 3.10;

(iii)        all Liquidation Proceeds, Insurance Proceeds and condemnation proceeds with respect to the Mortgage Loans, other than proceeds to be applied to the restoration or repair of the related Mortgaged Properties or released to the Mortgagor in accordance with the Servicer’s normal servicing procedures;

(iv)        any amount required to be deposited by the Servicer pursuant to Section 3.26(c) in connection with any losses on Permitted Investments;

(v)        any amounts required to be deposited by the Servicer pursuant to Section 3.05;

(vi)        any amounts paid by an Advance Financing Person in respect of Advances or Servicing Advances;

(vii)       any Prepayment Charges collected by the Servicer in connection with the Principal Prepayment of any of the Mortgage Loans and any Servicer Prepayment Charge Payment Amounts;

(viii)      the Purchase Price with respect to any Mortgage Loans purchased by the Seller pursuant to Section 2.02 or 2.03, any amounts which are to be treated pursuant to Section 2.04 of this Agreement as the payment of such a Purchase Price and the Purchase Price with respect to any Mortgage Loans purchased by the Seller pursuant to Section 3.24; and

	
            (ix)
 	
            any other amounts required to be deposited hereunder.
 

The foregoing requirements for deposit by the Servicer into the Custodial Account shall be exclusive, it being understood and agreed that, without limiting the generality of the foregoing, payments in the nature of late payment charges or assumption fees, if collected, need not be deposited by the Servicer.  In the event that the Servicer shall deposit any amount not required to be deposited and not otherwise subject to withdrawal pursuant to Section 3.27, it may at any time withdraw or direct the institution maintaining the Custodial Account, to withdraw such amount from the Custodial Account, any provision herein to the contrary 

 

notwithstanding.  Such withdrawal or direction may be accomplished by delivering written notice thereof to the institution maintaining the Custodial Account, that describes the amounts deposited in error in the Custodial Account. The Servicer shall maintain adequate records with respect to all withdrawals made pursuant to this Section. All funds deposited in the Custodial Account shall be held in trust for the Certificateholders until withdrawn in accordance with Section 3.27.

(c)        The institution that maintains the Custodial Account with respect to the Mortgage Loans, or other authorized entity shall invest the funds in the Custodial Account, in the manner directed by the Servicer, in Permitted Investments which shall mature not later than the next succeeding Remittance Date and shall not be sold or disposed of prior to its maturity. All such Permitted Investments shall be made in the name of the Trustee, for the benefit of the Certificateholders. All income and gain net of any losses realized from any such investment shall be for the benefit of the Servicer as servicing compensation and shall be remitted to it monthly as provided herein. The amount of any losses incurred in the Servicer’s Custodial Account in respect of any such investments shall be deposited by the Servicer into the Custodial Account
immediately as realized, out of its own funds.

(d)        The Servicer shall give at least 30 days advance notice to the Trustee, the Securities Administrator, the Master Servicer the Seller, each Rating Agency and the Depositor of any proposed change of location of the Custodial Account relating to the Mortgage Loans prior to any change thereof.

	
            Section 3.27
 	
            Permitted Withdrawals From the Custodial Account.
 

(a)        The Servicer may from time to time make withdrawals from the Custodial Account for the following purposes:

(i)         to pay itself (to the extent not previously paid to or withheld by the Servicer), as servicing compensation in accordance with Section 3.10, that portion of any payment of interest that equals the Servicing Fee for the period with respect to which such interest payment was made, and, as additional servicing compensation, those other amounts set forth in Section 3.10;

(ii)         to reimburse the Servicer or an Advance Financing Person for (A) any unreimbursed Advances to the extent of amounts received which represent late recoveries of payments of principal and/or interest  (net of the related Servicing Fees), Liquidation Proceeds and Insurance Proceeds on the Mortgage Loans with respect to which such Advances were made in accordance with the provisions of Section 5.01; and (B) any unreimbursed Advances with respect to the final liquidation of a Mortgage Loan that are Nonrecoverable Advances, but only to the extent that late recoveries of payments of principal and/or interest, Liquidation Proceeds and Insurance Proceeds received with respect to such Mortgage Loan are insufficient to reimburse the Servicer or an Advance Financing Person for such unreimbursed Advances or (C) subject
to Section 3.27(b), any unreimbursed Advances to the extent of Amounts Held For Future Distribution funds held in the Custodial Account relating to the Mortgage Loans that were not included in the Available Distribution Amount for the preceding Distribution Date;

 

 

(iii)        to reimburse itself or an Advance Financing Person for any Nonrecoverable Advances;

(iv)        to reimburse itself from Insurance Proceeds for Insured Expenses covered by the related Insurance Policy;

(v)        to pay itself any unpaid Servicing Fees and to reimburse itself or any Advance Financing Person for any unreimbursed Servicing Advances, provided, however, that the Servicer’s or such Advance Financing Person’s right to reimbursement for Servicing Advances pursuant to this subclause (v) with respect to any Mortgage Loan shall be limited to amounts received on particular Mortgage Loan(s) (including, for this purpose, late recoveries of payments of principal and/or interest, Liquidation Proceeds, Insurance Proceeds, condemnation proceeds and purchase and repurchase proceeds) that represent late recoveries of the payments for which such Servicing Advances were made;

(vi)        to pay to the Seller or the Depositor with respect to each Mortgage Loan or property acquired in respect thereof that has been purchased pursuant to Section 2.02, 2.03 or 3.24, all amounts received thereon and not taken into account in determining the related Stated Principal Balance of such repurchased Mortgage Loan;

	
            (vii)
 	
            to pay any expenses recoverable by pursuant to Section 7.04;
 

(viii)      to withdraw any amount deposited in the Custodial Account relating to the Mortgage Loans and not required to be deposited therein; and

(ix)        to clear and terminate the Custodial Account relating to the Mortgage Loans upon termination of this Agreement pursuant to Section 10.01 hereof.

In addition, no later than noon Eastern time on the Remittance Date, the Servicer shall withdraw from the Custodial Account and remit to the Securities Administrator (a) all amounts deposited in the Custodial Account as of the close of business on the last day of the related Due Period (net of charges against or withdrawals from the Custodial Account pursuant to this Section 3.27(a)), plus (b) all Advances, if any, which the Servicer is obligated to make pursuant to Section 5.01, minus (c) any amounts attributable to Principal Prepayments, Liquidation Proceeds, Insurance Proceeds or condemnation proceeds received after the applicable Prepayment Period, which amounts shall be remitted on the following Remittance Date, together with any Compensating Interest required to be deposited in the Custodial Account in connection with such Principal Prepayment in accordance with
Section 5.02, and minus (d) any amounts attributable to Scheduled Payments collected but due on a Due Date or Due Dates subsequent to the first day of the month in which such Remittance Date occurs, which amounts shall be remitted on the Remittance Date next succeeding the Due Date related to such Scheduled Payment.

With respect to any remittance received by the Securities Administrator after the Business Day on which such payment was due, the Securities Administrator shall send written notice thereof to the Servicer.  The Servicer shall pay to the Securities Administrator interest on any such late payment by the Servicer at an annual rate equal to Prime Rate (as defined in The Wall Street Journal) plus one percentage point, but in no event greater than the maximum 

 

amount permitted by applicable law.  Such interest shall be paid by the Servicer to the Securities Administrator on the date such late payment is made and shall cover the period commencing with the day following the Business Day on which such payment was due and ending with the Business Day on which such payment is made, both inclusive.  The payment by the Servicer of any such interest, or the failure of the Securities Administrator to notify the Servicer of such interest, shall not be deemed an extension of time for payment or a waiver of any Servicer Default by the Servicer.

The Servicer shall keep and maintain separate accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from the Custodial Account pursuant to subclauses (i), (ii), (iv), (v) and (vi) above. Prior to making any withdrawal from the Custodial Account relating to the Mortgage Loans pursuant to subclause (iii), the Servicer shall deliver to the Master Servicer an Officer’s Certificate of a Authorized Servicer Representative indicating the amount of any previous Advance or Servicing Advance determined by the Servicer to be a Nonrecoverable Advance and identifying the related Mortgage Loan(s), and their respective portions of such Nonrecoverable Advance.

(b)        Notwithstanding the foregoing, any Amounts Held For Future Distribution withdrawn by the Servicer as permitted in Section 3.27(a)(ii) in reimbursement of Advances previously made by the Servicer shall be appropriately reflected in the Servicer’s records and replaced by the Servicer by deposit in the Custodial Account, no later than the close of business on any future Remittance Date on which the funds on deposit in the related Custodial Account shall be less than the amount required to be remitted to the Trust on such Remittance Date; provided, however that if the rating of the Servicer (including any Successor Servicer) is less than “BBB”, the Servicer shall be required to replace such funds by deposit to the Distribution Account, no later than the close of business on the Remittance Date immediately following the
Due Period or Prepayment Period for which such amounts relate.  The amount at any time credited to the Custodial Account may be invested by the Servicer in Permitted Investments.

	
            Section 3.28
 	
            Reports to Master Servicer.
 

Not later than the  tenth (10th) calendar day of each month (or if such tenth calendar day is not a Business Day, the immediately succeeding Business Day), the Servicer shall furnish to the Master Servicer (i) (a) monthly loan data in a mutually agreed-upon format, (b) default loan data in the format set forth in Exhibit X-1 hereto (or in such other format  mutually agreed-upon between the Servicer and the Master Servicer) and (c) information regarding realized losses and gains in the format set forth in Exhibit X-2 hereto (or in such other format mutually agreed between the Servicer and the Master Servicer), in each case relating to the period ending on the last day of the preceding calendar month, (ii) all such information required pursuant to clause (i)(a) above on a magnetic tape, electronic mail, or other similar media reasonably acceptable to the Master Servicer and (iii) all
supporting documentation with respect to the information required pursuant to clause (i)(c) above.

	
            Section 3.29
 	
            Collection of Taxes; Assessments and Similar Items; Escrow Accounts.
 

To the extent required by the Mortgage Note related to a Mortgage Loan, the Servicer shall establish and maintain one or more accounts (each, an “Escrow Account”) and deposit, 

 

promptly upon receipt, and retain therein all collections from the Mortgagors (or advances by the Servicer) for the payment of taxes, assessments, hazard insurance premiums or comparable items for the account of the Mortgagors. Nothing herein shall require the Servicer to compel a Mortgagor to establish an Escrow Account in violation of applicable law.

Withdrawals of amounts so collected from the Escrow Accounts may be made only to effect timely payment of taxes, assessments, hazard insurance premiums, condominium or PUD association dues, or comparable items, to reimburse the Servicer out of related collections for any payments made with respect to each Mortgage Loan pursuant to Section 3.01 (with respect to taxes and assessments and insurance premiums) and Section 3.05 (with respect to hazard insurance), to refund to any Mortgagors any sums as may be determined to be overages, to pay interest, if required by law or the terms of the related Mortgage or Mortgage Note, to such Mortgagors on balances in the Escrow Account, to remove amounts deposited in error or to clear and terminate the Escrow Account at the termination of this Agreement in accordance with Section 10.01 thereof. The Escrow Account shall not be a part of
the Trust Fund.

	
            Section 3.30
 	
            Adjustments to Mortgage Rate and Scheduled Payment.
 

On each applicable Adjustment Date, the Mortgage Rate with respect to each Mortgage Loan shall be adjusted, in compliance with the requirements of the related Mortgage and Mortgage Note, to equal the sum of the Index plus the Gross Margin (rounded in accordance with the related Mortgage Note) subject to the applicable Periodic Rate Cap, Maximum Mortgage Interest Rate and Minimum Mortgage Interest Rate, as set forth in the Mortgage Note.  The Servicer shall execute and deliver the notices required by each Mortgage and Mortgage Note, applicable laws and regulations regarding interest rate adjustments.  The Servicer shall also provide timely notification to the Master Servicer of all applicable data and information regarding such interest rate adjustments and the Servicer’s methods of implementing such interest rate adjustments.  Upon the discovery by the Servicer or the Master
Servicer that the Servicer has failed to adjust a Mortgage Rate or a Scheduled Payment pursuant to the terms of the related Mortgage Note and Mortgage, the Servicer shall immediately deposit in the Custodial Account from its own funds the amount of any interest loss caused thereby without reimbursement therefor.

	
            Section 3.31
 	
            Distribution Account.
 

(a)        The Securities Administrator shall establish and maintain in the name of the Trustee, for the benefit of the Certificateholders, the Distribution Account as a segregated non-interest bearing trust account or accounts. The Securities Administrator will deposit in the Distribution Account as identified by the Securities Administrator and as received by the Securities Administrator, the following amounts:

(i)         All payments and recoveries in respect of principal on the Mortgage Loans, including, without limitation, Principal Prepayments, Subsequent Recoveries, Liquidation Proceeds, Insurance Proceeds, condemnation proceeds and all payments and recoveries in respect of interest on the Mortgage Loans withdrawn by the Servicer from the Custodial Account and remitted by Servicer to the Securities Administrator;

 

 

	
            (ii)
 	
            Any Advance and any Compensating Interest Payments;
 

(iii)        Any Prepayment Charges collected by the Servicer in connection with the Principal Prepayment of any of the Mortgage Loans (including any Servicer Prepayment Charge Payment Amounts);

(iv)        Any Insurance Proceeds or Liquidation Proceeds received by or on behalf of the Securities Administrator or which were not deposited in a Custodial Account;

(v)        The Purchase Price with respect to any Mortgage Loans purchased by the Seller or Section 2.02 or 2.03, any amounts which are to be treated pursuant to Section 2.04 of this Agreement as the payment of such a Purchase Price, the Purchase Price with respect to any Mortgage Loans purchased by the Depositor pursuant to Section 3.24, and all proceeds of any Mortgage Loans or property acquired with respect thereto repurchased by the Master Servicer pursuant to Section 10.01;

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

(vii)       Any other amounts received by or on behalf of the Securities Administrator and required to be deposited in the Distribution Account pursuant to this Agreement.

(b)        All amounts deposited to the Distribution Account shall be held by the Securities Administrator in the name of the Trustee in trust for the benefit of the Certificateholders in accordance with the terms and provisions of this Agreement. The requirements for crediting the Distribution Account shall be exclusive, it being understood and agreed that, without limiting the generality of the foregoing, payments in the nature of late payment charges or assumption, tax service, statement account or payoff, substitution, satisfaction, release and other like fees and charges, need not be credited by the Securities Administrator to the Distribution Account.

(c)        The amount at any time credited to the Distribution Account may be invested by the Securities Administrator in Permitted Investments as directed by the Master Servicer.  All such investment income shall be for the benefit of the Master Servicer, and any losses incurred shall be deposited by the Master Servicer in the Distribution Account immediately as realized.

	
            Section 3.32
 	
            Permitted Withdrawals and Transfers from the Distribution Account.
 

(a)        The Securities Administrator will from time to time make or cause to be made such withdrawals or transfers from the Distribution Account pursuant to this Agreement for the following purposes:

(i)         to pay to the Trustee any expenses recoverable by the Trustee pursuant to this Agreement.

(ii)         to reimburse the Master Servicer as Successor Servicer or the Servicer for any Advance or Servicing Advance of its own funds, the right of the Master Servicer as Successor Servicer or the Servicer to reimbursement pursuant to this subclause (ii) being 

 

limited to amounts received on a particular Mortgage Loan (including, for this purpose, the Purchase Price therefor, Insurance Proceeds, Liquidation Proceeds and condemnation proceeds) which represent late payments or recoveries of the principal of or interest on such Mortgage Loan respecting which such Advance or Servicing Advance was made;

(iii)        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 as Successor 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;

(iv)        to reimburse the Master Servicer as Successor 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 as Successor Servicer or the Servicer from Liquidation Proceeds from a particular Mortgage Loan for Liquidation Expenses incurred with respect to such Mortgage Loan;

(v)        to reimburse the Master Servicer as Successor Servicer or the Servicer for advances of funds pursuant to this Agreement, and the right to reimbursement pursuant to this subclause being limited to amounts received on the related Mortgage Loan (including, for this purpose, the Purchase Price therefor, Insurance Proceeds, Liquidation Proceeds and condemnation proceeds) which represent late recoveries of the payments for which such advances were made;

(vi)        to reimburse the Master Servicer as Successor Servicer or the Servicer for any Advance or advance, after a Realized Loss has been allocated with respect to the related Mortgage Loan if the Advance or advance has not been reimbursed pursuant to clauses (ii) and (v);

(vii)       to pay the Credit Risk Management Fee to the Credit Risk Manager; provided, however, that upon the termination of the Credit Risk Manager pursuant to Section 3.33 hereof, the amount of the Credit Risk Management Fee (or any portion thereof) previously payable to the Credit Risk Manager as described herein shall be paid to the Seller;

(viii)      to reimburse the Trustee or the Securities Administrator for expenses, costs and liabilities incurred by and reimbursable to it pursuant to this Agreement (including the expenses of the Securities Administrator in connection with a tax audit in connection with the performance of its obligations pursuant to Section 9.13);

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

(x)        to reimburse or pay the Servicer any such amounts as are due thereto under this Agreement and have not been retained by or paid to the Servicer, to the extent provided herein or therein;

 

 

(xi)        to reimburse the Trustee for expenses incurred in the transfer of servicing responsibilities of the terminated Servicer after the occurrence and continuance of a Servicer Default to the extent not paid by the terminated Servicer;

(xii)       to reimburse the Master Servicer for any costs and expenses reimbursable to the Master Servicer pursuant to this Agreement;

(xiii)      to reimburse the related Custodian for expenses, costs and liabilities incurred or reimbursable to it pursuant to this Agreement or the related Custodial Agreement;

	
            (xiv)
 	
            to remove amounts deposited in error; and
 	
             

	
            (xv)
 	
            to clear and terminate the Distribution Account pursuant to Section 10.01.
 

(b)        The Securities Administrator shall keep and maintain separate accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any reimbursement from the Distribution Account pursuant to subclauses (ii) through (v), inclusive, and (vii) or with respect to any such amounts which would have been covered by such subclauses had the amounts not been retained by the Securities Administrator without being deposited in the Distribution Account under Section 3.31.

(c)        On each Distribution Date, the Securities Administrator shall distribute the Available Distribution Amount, to the extent of funds on deposit in the Distribution Account to the holders of the Certificates in accordance with Section 5.04.

	
            Section 3.33
 	
            Duties of the Credit Risk Manager; Termination.
 

(a)        The Depositor appoints Risk Management Group, LLC as Credit Risk Manager. For and on behalf of the Depositor, the Credit Risk Manager will provide reports and recommendations concerning the Mortgage Loans that are past due, as to which there has been commencement of foreclosure, as to which there has been forbearance in exercise of remedies which are in default, as to which a Mortgagor is the subject of bankruptcy, receivership, or an arrangement of creditors, or as to which have become REO Properties. Such reports and recommendations will be based upon information provided to the Credit Risk Manager pursuant to the related Credit Risk Management Agreement and the Credit Risk Manager shall look solely to the Servicer and/or Master Servicer for all information and data (including loss and delinquency information and data) and loan level
information and data relating to the servicing of the related Mortgage Loans. If the Credit Risk Manager is no longer able to perform its duties hereunder, the Credit Risk Manager may be terminated by the Depositor at the direction of Certificateholders evidencing not less than 66 2/3% of the Voting Rights. The Depositor may, at its option, cause the appointment of a successor Credit Risk Manager. Upon any termination of the Credit Risk Manager or the appointment of a successor Credit Risk Manager, the Depositor shall give written notice thereof to the Servicer, the Trustee, each Rating Agency and the Credit Risk Manager. Notwithstanding the foregoing, the termination of the Credit Risk Manager pursuant to Section 3.33(b) shall not become effective until the appointment of a successor Credit Risk Manager.

 

 

(b)        Within six months of the Closing Date, the Seller may, at its option, terminate the Credit Risk Manager if, in its reasonable judgment, (i) the value of the servicing rights with respect to the Mortgage Loans is adversely affected as a result of the presence of the Credit Risk Manager or (ii) the presence of the Credit Risk Manager impairs the ability of the Seller to transfer the servicing rights with respect to the Mortgage Loans as permitted by this Agreement. Upon the termination of the Credit Risk Manager, the Seller may, at its option, cause the Depositor to appoint a successor Credit Risk Manager. Notice of such termination shall be provided by the Seller to the Rating Agencies, the Trustee, the Securities Administrator, the Depositor, the Servicer and the Credit Risk Manager. Upon the appointment of a successor Credit Risk
Manager, the Depositor shall provide written notice thereof to each Rating Agency, the Trustee, the Servicer, the Securities Administrator and the Credit Risk Manager.

If the Credit Risk Manager is terminated pursuant to this Section 3.33(b), the Credit Risk Manager shall only be entitled to a fee equal to 0.0050% with respect to each Mortgage Loan for the one year period following such termination. After the expiration of such one year period, the Credit Risk Manager shall not be entitled to the Credit Risk Management Fee or any portion thereof with respect to any Mortgage Loan.  The excess of the Credit Risk Management Fee with respect to each Mortgage Loan over the amount payable to the Credit Risk Manager as described in this paragraph shall be paid to the Seller pursuant to Section 5.04(a).

	
            Section 3.34
 	
            Limitation Upon Liability of the Credit Risk Manager.
 

Neither the Credit Risk Manager, nor any of the directors, officers, employees or agents of the Credit Risk Manager, shall be under any liability to the Servicer, the Master Servicer, the Securities Administrator, the Trustee, the Certificateholders or the Depositor for any action taken or for refraining from the taking of any action in good faith pursuant to this Agreement, in reliance upon information provided by the Servicer and/or Master Servicer under the related Credit Risk Management Agreement or of errors in judgment; provided, however, that this provision shall not protect the Credit Risk Manager or any such person against liability that would otherwise be imposed by reason of willful malfeasance, bad faith or gross negligence in its performance of its duties under this Agreement or the Credit Risk Management Agreement. The Credit Risk Manager and any director, officer, employee
or agent of the Credit Risk Manager may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person respecting any matters arising hereunder, and may rely in good faith upon the accuracy of information furnished by the Servicer and/or Master Servicer pursuant to the Credit Risk Management Agreement in the performance of its duties thereunder and hereunder.

 

 

ARTICLE IV

 

ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE LOANS

	
            Section 4.01
 	
            The Master Servicer.
 

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 this 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 this Agreement.  The Master Servicer shall independently and separately monitor the Servicer’s servicing activities with respect to each 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, provide such information relating to the Mortgage Loans to the Securities Administrator as shall be necessary to enable it to prepare the statements specified in Section 5.06 and any other information and statements required to be provided by the Securities Administrator hereunder.  The Master Servicer shall reconcile the results of its Mortgage Loan monitoring with the actual remittances of the Servicer to the Distribution Account.

Notwithstanding anything in this Agreement to the contrary, the Master Servicer shall not have any duty or obligation to enforce any Credit Risk Management Agreement that the Servicer is a party to (the “Servicer Credit Risk Management Agreement”) or to supervise, monitor or oversee the activities of the Credit Risk Manager under the Servicer Credit Risk Management Agreement with respect to any action taken or not taken by the Servicer pursuant to a recommendation of the Credit Risk Manager.

The Trustee shall furnish the Servicer and the Master Servicer with any limited 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 or master service and administer the Mortgage Loans and REO Property.  The Trustee shall have no responsibility for any action of the Master Servicer or the Servicer pursuant to any such limited power of attorney and shall be indemnified by the Master Servicer or the Servicer for any cost, liability or expense arising from the misuse thereof by the Master Servicer or the Servicer.

The Trustee, the Custodians and the Securities Administrator shall provide access to the records and documentation in possession of the Trustee, the Custodians or the Securities Administrator regarding the Mortgage Loans and REO Property and the servicing thereof to the Certificateholders, the FDIC, and the supervisory agents and examiners of the FDIC, such access being afforded only upon reasonable prior written request and during normal business hours at the office of the Trustee, the Custodians or the Securities Administrator; provided, however, that, 

 

unless otherwise required by law, none of the Trustee, the Custodians or the Securities Administrator shall be required to provide access to such records and documentation if the provision thereof would violate the legal right to privacy of any Mortgagor.  The Trustee, the Custodians and the Securities Administrator shall allow representatives of the above entities to photocopy any of the records and documentation and shall provide equipment for that purpose at a charge that covers the Trustee’s, the Custodians’ or the Securities Administrator’s actual costs.

The Trustee shall execute and deliver to the Servicer or the Master Servicer upon request any court pleadings, requests for trustee’s sale or other documents necessary or desirable and, in each case, provided to the Trustee by the Servicer or the Master Servicer 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 any other Loan Document; (iii) obtain a deficiency judgment against the Mortgagor; or (iv) enforce any other rights or remedies provided by the Mortgage Note or any other Mortgage Loan Document or otherwise available at law or equity.

	
            Section 4.02
 	
            Monitoring of Servicer.
 

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

The Master Servicer, for the benefit of the Trustee and the Certificateholders, shall enforce the obligations of the Servicer under this Agreement, and shall, in the event that the Servicer fails to perform its obligations in accordance with the Servicing Agreement, subject to this Section and Article VIII, shall terminate the rights and obligations of the Servicer hereunder in accordance with the provisions of Article VIII .  The Master Servicer shall act as servicer of the Mortgage Loans or 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 the Master Servicer or such successor servicer.  Such enforcement, including, without
limitation, the legal prosecution of claims 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 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 indemnity reasonably acceptable to it for its costs and expenses in pursuing such action.

To the extent that the costs and expenses related to the termination of the Servicer, appointment of a successor servicer or the transfer and assumption of servicing by the Master 

 

Servicer (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 servicer to service the Mortgage Loans in accordance with this Agreement) are not fully and timely reimbursed by the terminated Servicer, the Master Servicer shall be entitled to reimbursement of such costs and expenses from the Distribution Account.

The Master Servicer shall require the Servicer to comply with the remittance requirements and other obligations set forth in this Agreement.

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

	
            Section 4.03
 	
            Fidelity Bond.  
 

The Master Servicer, at its expense, shall maintain in effect a blanket fidelity bond and an errors and omissions insurance policy that shall be in such form and amount generally acceptable for entities serving as master servicers or trustees, 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.  Any such errors and omissions policy and fidelity bond may not be cancelable without thirty (30) days’ prior written notice to the Trustee.

	
            Section 4.04
 	
            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 Section 9.13 hereof, to do any and all things that it may deem necessary or desirable in connection with the master servicing and administration of the Mortgage Loans, including but not limited to the power and authority (i) to execute and deliver, on behalf of the Certificateholders and the Trustee, customary consents or waivers and other instruments and documents, (ii) to consent to transfers of any Mortgaged Property and assumptions of the Mortgage Notes and related Mortgages, (iii) to collect any Insurance Proceeds and Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion of the ownership of the Mortgaged Property securing any Loan, in each case, in accordance with the provisions of this Agreement;
provided, however, that the Master Servicer shall not (and, consistent with its responsibilities under Section 4.02, 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 will 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 or an Authorized Servicer Representative, 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 this Agreement, and the Trustee shall execute and deliver such other documents, as the Master Servicer or the 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 the misuse of any such powers of attorney by the Master Servicer or the Servicer and shall be indemnified by the Master Servicer or the Servicer, as applicable, for any costs, liabilities or expenses incurred by the Trustee in connection with such misuse).  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 9.10 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 authorized pursuant to this Agreement to be taken by it in the name of the
Trustee, be deemed to be the agent of the Trustee.

	
            Section 4.05
 	
            Due-on-Sale Clauses; Assumption Agreements. 
 

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 this Agreement.  If applicable law prohibits the enforcement of a due-on-sale clause or such clause is otherwise not enforced in accordance with this Agreement, and, as a consequence, a Mortgage Loan is assumed, the original Mortgagor may be released from liability in accordance with this Agreement.

Section 4.06     Documents, Records and Funds in Possession of Master Servicer To Be Held for Trustee.

The Master Servicer shall transmit to the Trustee or Custodians such documents and instruments coming into the possession of the Master Servicer from time to time as are required by the terms hereof to be delivered to the Trustee or the related Custodian.  Any funds received by the Master Servicer in respect of any Mortgage Loan or which otherwise are collected by the Master 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 Distribution Account the Master Servicing Compensation and other amounts provided in this Agreement.  The Master Servicer, to the extent required by Article III, 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 OTS, 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 OTS 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.

All Mortgage Files and funds collected or held by, or under the control of, the Master Servicer, in respect of any Mortgage Loans, whether from the collection of principal and interest payments or from Liquidation Proceeds or Insurance Proceeds, shall be held by the Master Servicer for and on behalf of the Trustee and the Certificateholders and shall be and remain the sole and exclusive property of the Trustee; provided, however, that the Master Servicer 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.

	
            Section 4.07
 	
            Standard Hazard Insurance and Flood Insurance Policies.
 

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

Pursuant to Section 3.31, any amounts collected by the Master Servicer, under any insurance policies (other than amounts to be applied to the restoration or repair of the property subject to the related Mortgage or released to the Mortgagor in accordance with this Agreement) shall be deposited into the Distribution Account, subject to withdrawal pursuant to Section 3.32.

	
            Section 4.08
 	
            Presentment of Claims and Collection of Proceeds.  
 

The Master Servicer shall enforce the Servicer’s obligations to, prepare and present on behalf of the Trustee and the Certificateholders all claims under any 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 Distribution Account upon receipt, except that any amounts realized that are to be applied to the repair or restoration of the related Mortgaged Property as a condition precedent to the presentation of claims on the related Mortgage Loan to the insurer under any applicable insurance policy need not be so deposited (or remitted).

	
            Section 4.09
 	
            Maintenance of the Primary Mortgage Insurance Policies.
 

The Master Servicer shall not take, or (to the extent within its control) permit the Servicer (to the extent such action is prohibited under this Agreement) to take, any action that would 

 

result in noncoverage under any primary mortgage insurance policy or any loss which, but for the actions of such Master Servicer or the Servicer, would have been covered thereunder.  The Master Servicer shall use its best reasonable efforts to cause the Servicer 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.  The Master Servicer shall not, and (to the extent within its control) shall not permit the Servicer  to, cancel or refuse to renew any 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.

The Master Servicer agrees to cause the Servicer  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 3.31, any amounts collected by the Master Servicer or the Servicer under any primary mortgage insurance policies shall be deposited by the Servicer or by the Master Servicer in the Distribution Account, subject to withdrawal pursuant to Section 3.32.

Section 4.10     Trustee to Retain Possession of Certain Insurance Policies and Documents.

The Trustee or the related Custodian, 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 and the Servicer otherwise has fulfilled its obligations under this Agreement, the Trustee or the related Custodian shall also retain possession and custody of each Mortgage File in accordance with and subject to the terms and conditions of this Agreement and the related Custodial Agreement. The Master Servicer shall promptly deliver or cause to be delivered to the Trustee or the related Custodian, 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 Mortgage Loan Documents that come into the possession of the Master Servicer from time to time.

	
            Section 4.11
 	
            Realization Upon Defaulted Loans.  
 

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

	
            Section 4.12
 	
            Compensation for the Master Servicer.
 

As compensation for its services hereunder, the Master Servicer shall be entitled to receive all income and gain realized from any investment of funds in the Distribution Account (the “Master Servicing Compensation”).  The Master Servicer shall be required to pay all 

 

expenses incurred by it in connection with its activities hereunder and shall not be entitled to reimbursement therefor except as provided in this Agreement.

The amount of the Master Servicing Compensation payable to the Master Servicer in respect of any Distribution Date shall be reduced in accordance with Section 4.18.

	
            Section 4.13
 	
            REO Property.
 

In the event the Trust Fund acquires ownership of any REO Property in respect of any Mortgage Loan, the deed or certificate of sale shall be issued to the Trustee, or to its nominee, on behalf of the Certificateholders.  The Master Servicer shall cause the Servicer to sell, and the Servicer agrees to sell, any REO Property as expeditiously as possible and in accordance with the provisions of this Agreement.  Further, the Master Servicer shall cause the Servicer to sell any REO Property prior to three years after the end of the calendar year of its acquisition by REMIC I, unless (i) the Trustee and the Securities Administrator shall have been supplied with an Opinion of Counsel to the effect that the holding by the Trust Fund of such REO Property subsequent to such three-year period will not result in the imposition of taxes on “prohibited transactions” of any REMIC hereunder as
defined in Section 860F of the Code or cause any REMIC hereunder to fail to qualify as a REMIC at any time that any Certificates are outstanding, in which case the Trust Fund may continue to hold such Mortgaged Property (subject to any conditions contained in such Opinion of Counsel) or (ii) the Servicer shall have applied for, prior to the expiration of such three-year period, an extension of such three-year period in the manner contemplated by Section 856(e)(3) of the Code, in which case the three-year period shall be extended by the applicable extension period.  The Master Servicer shall cause the Servicer to protect and conserve, such REO Property in the manner and to the extent required by this 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.

The Master Servicer shall cause the Servicer to deposit all funds collected and received in connection with the operation of any REO Property in the Custodial Account.

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

	
            Section 4.14
 	
            Annual Officer’s Certificate as to Compliance.
 

The Master Servicer shall deliver to the Trustee and the Rating Agencies on or before March 15 of each year, commencing on March 15, 2006, an Officer’s Certificate signed by a Servicing Officer, 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 this 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.

Copies of such statements shall be provided to any related Certificateholder upon request, by the Master Servicer or by the Trustee at the Master Servicer’s expense if the Master Servicer failed to provide such copies (unless (i) the Master Servicer shall have failed to provide the Trustee with such statement or (ii) the Trustee shall be unaware of the Master Servicer’s failure to provide such statement).

	
            Section 4.15
 	
            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 Seller on or before March 15 of each year, 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 Trustee at the expense of the Master Servicer if the Master Servicer shall fail to provide such copies (unless (i) the Master Servicer shall have failed to provide the Trustee with such statement or (ii) the Trustee shall be unaware of the Master Servicer’s failure to provide such statement).  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 shall take prompt action to do so.

	
            Section 4.16
 	
            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 the Electronic Data Gathering and Retrieval System (“EDGAR”), a Form 8-K with a copy of the statement furnished by the Securities Administrator to the Certificateholders for such Distribution Date as an exhibit 

 

thereto.  Prior to January 30, 2006, the Securities Administrator shall, in accordance with industry standards, file a Form 15 Suspension Notice with respect to the Trust Fund, if applicable.  Prior to March 30, 2006 and annually thereafter (if required), the Securities Administrator shall file a Form 10-K, in substance conforming to industry standards, with respect to the Trust Fund.  Such Form 10-K shall include, to the extent available, as exhibits (i) the Servicer’s annual statement of compliance described under Section 3.13 of this Agreement, (ii) the Servicer’s accountant’s report described under Section 3.14 of this Agreement, (iii) the Master Servicer’s accountant’s report described in Section 4.15, if applicable, in each case to the extent timely delivered, if applicable, to the Master Servicer, and (iv) the Master Servicer Certification.  The Depositor
hereby grants to the Securities Administrator a limited power of attorney to execute and file each Form 8-K and Form 10-K on behalf of the Depositor.  Such power of attorney shall continue until either the earlier of (i) receipt by the Securities Administrator from the Depositor of written termination of such power of attorney and (ii) the termination of the Trust Fund.  The Depositor and the Trustee each agree to promptly furnish to the Securities Administrator, from time to time upon request, such further information, reports and financial statements within its control related to this Agreement 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 cooperate with the Depositor in connection with any additional filings with respect to the Trust Fund as the Depositor deems necessary under the Exchange Act.  Copies of all reports filed by the Securities
Administrator under the Exchange Act shall be sent to the Depositor.

The Securities Administrator shall indemnify and hold harmless the Depositor, the Trustee and their respective officers, directors and Affiliates from and against any losses, damages, penalties, fines, forfeitures, reasonable and necessary legal fees and related costs, judgments and other costs and expenses arising out of or based upon a breach of the Securities Administrator’s obligations under this Section 4.16 or the Securities Administrator’s negligence, bad faith or willful misconduct in connection therewith.  Fees and expenses incurred by the Securities Administrator in connection with this Section 4.16 shall not be reimbursable from the Trust Fund.

	
            Section 4.17
 	
            [Reserved].
 

Section 4.18     Obligation of the Master Servicer in Respect of Prepayment Interest Shortfalls.

The Master Servicer shall deposit in the Distribution Account not later than each Distribution Date an amount equal to the lesser of (i) the aggregate amounts required to be paid by the Servicer under this Agreement with respect to Prepayment Interest Shortfalls on the Mortgage Loans for the related Distribution Date, and not so paid by the Servicer and (ii) the Master Servicing Compensation for such Distribution Date without reimbursement therefor.

 

 

ARTICLE V

 

ADVANCES AND DISTRIBUTIONS

	
            Section 5.01
 	
            Advances; Advance Facility.
 

(a)        The Servicer shall make an Advance with respect to any Mortgage Loan and deposit such Advance in the Distribution Account no later than noon Eastern time on the Remittance Date in immediately available funds. The Servicer shall be obligated to make any such Advance only to the extent that such advance would not be a Nonrecoverable Advance. If the Servicer shall have determined that it has made a Nonrecoverable Advance or that a proposed Advance or a lesser portion of such Advance would constitute a Nonrecoverable Advance, the Servicer shall deliver (i) to the Securities Administrator for the benefit of the Certificateholders funds constituting the remaining portion of such Advance, if applicable, and (ii) to the Depositor, each Rating Agency and the Master Servicer an Officer’s Certificate setting forth the basis for such determination.

In lieu of making all or a portion of such Advance from its own funds, the Servicer may (i) cause to be made an appropriate entry in its records relating to the Custodial Account that any Amounts Held for Future Distribution has been used by the Servicer in discharge of its obligation to make any such Advance and (ii) transfer such funds from the Custodial Account to the Distribution Account.  Any funds so applied and transferred shall be replaced by the Servicer by deposit in the Distribution Account, no later than the close of business on any future Remittance Date on which the funds on deposit in the Custodial Account shall be less than the amount required to be remitted to the Securities Administrator on such Remittance Date; provided, however that if the rating of the Servicer (including any Successor Servicer) is less than “BBB”, the Servicer shall be required to replace
such funds by deposit to the Distribution Account, no later than the close of business on the Remittance Date immediately following the Due Period or Prepayment Period for which such amounts relate.

The Servicer shall be entitled to be reimbursed from the Custodial Account for all Advances of its own funds made pursuant to this Section as provided in Section 3.27. The obligation to make Advances with respect to any Mortgage Loan shall continue until such Mortgage Loan is paid in full or the related Mortgaged Property or related REO Property has been liquidated or until the purchase or repurchase thereof (or substitution therefor) from the Trust Fund pursuant to any applicable provision of this Agreement, except as otherwise provided in this Section 5.01.

Subject to and in accordance with the provisions of Article VIII hereof, in the event that the Servicer fails to make such Advance, then the Master Servicer, as a Successor Servicer, shall be obligated to make such Advance only to the extent such Advance, if made, would not constitute a Nonrecoverable Advance, subject to the provisions of Sections 5.01 and 8.02.

(b)        (i)  The Servicer is hereby authorized to enter into a financing or other facility (any such arrangement, an “Advance Facility”), the documentation for which complies with Section 5.01(b)(v) below, under which (1) the Servicer assigns or pledges its rights under this Agreement to be reimbursed for any or all Advances and/or Servicing Advances to (i) a Person, 

 

which may be a special-purpose bankruptcy-remote entity (an “SPV”), (ii) a Person, which may simultaneously assign or pledge such rights to an SPV or (iii) a lender (a “Lender”), which, in the case of any Person or SPV of the type described in either of the preceding clauses (i) or (ii), may directly or through other assignees and/or pledgees, assign or pledge such rights to a Person, which may include a trustee acting on behalf of holders of debt instruments (any such Person or any such Lender, an “Advance Financing Person”), and/or (2) an Advance Financing Person agrees to fund all the Advances and/or Servicing Advances required to be made by the Servicer pursuant to this Agreement.  No consent of the Trustee, the Securities Administrator, the Master Servicer, the Certificateholders or any other party shall be required before the Servicer may enter into an Advance Facility
nor shall the Trustee, the Securities Administrator, the Master Servicer or the Certificateholders be a third party beneficiary of any obligation of an Advance Financing Person to the Servicer. Notwithstanding the existence of any Advance Facility under which an Advance Financing Person agrees to fund Advances and/or Servicing Advances, (A) the Servicer (i) shall remain obligated pursuant to this Agreement to make Advances and/or Servicing Advances pursuant to and as required by this Agreement and (ii) shall not be relieved of such obligations by virtue of such Advance Facility and (B) neither the Advance Financing Person nor any Servicer Assignee (as hereinafter defined) shall have any right to proceed against or otherwise contact any Mortgagor for the purpose of collecting any payment that may be due with respect to any related Mortgage Loan or enforcing any covenant of such Mortgagor under the related Mortgage Loan documents. 

(ii)         If the Servicer enters into an Advance Facility, the Servicer and the related Advance Financing Person shall deliver to the Master Servicer and the Securities Administrator at the address set forth in Section 11.05 hereof no later than the Remittance Date immediately following the effective date of such Advance Facility a written notice (an “Advance Facility Notice”), stating (a) the identity of the Advance Financing Person and (b) the identity of the Person (the “Servicer’s Assignee”) that will, subject to Section 5.01(b)(iii) hereof, have the right to make withdrawals from the Custodial Account pursuant to Section 3.27 hereof to reimburse previously unreimbursed Advances and/or Servicing Advances (“Advance Reimbursement Amounts”).  Advance Reimbursement Amounts
(i) shall consist solely of amounts in respect of Advances and/or Servicing Advances for which the Servicer would be permitted to reimburse itself in accordance with Section 3.27 hereof, assuming the Servicer had made the related Advance(s) and/or Servicing Advance(s) and (ii) shall not consist of amounts payable to a successor Servicer in accordance with Section 3.27 hereof to the extent permitted under Section 5.01(b)(v) below.

(iii)        Notwithstanding the existence of an Advance Facility, the Servicer, on behalf of the Advance Financing Person and the Servicer’s Assignee, shall be entitled to receive reimbursements of Advances and/or Servicing Advances in accordance with Section 3.27 hereof, which entitlement may be terminated by the Advance Financing Person pursuant to a written notice to the Master Servicer and the Securities Administrator in the manner set forth in Section 11.05 hereof.  Upon receipt of such written notice, the Servicer shall no longer be entitled to receive reimbursement for any Advance Reimbursement Amounts and the Servicer’s Assignee shall immediately have the right to receive from the related Custodial Account all Advance Reimbursement Amounts.  Notwithstanding the foregoing, and for the avoidance of
doubt, (i) the Servicer 

 

and/or the Servicer’s Assignee shall only be entitled to reimbursement of Advance Reimbursement Amounts hereunder from withdrawals from the Custodial Account pursuant to Section 3.27 of this Agreement and shall not otherwise be entitled to make withdrawals or receive amounts that shall be deposited in the Distribution Account pursuant to Section 3.31 hereof, and (ii) none of the Trustee or the Certificateholders shall have any right to, or otherwise be entitled to, receive any Advance Reimbursement Amounts to which the Servicer or the Servicer’s Assignee, as applicable, shall be entitled pursuant to Section 3.27 hereof.  An Advance Facility may be terminated by the joint written direction of the Servicer and the related Advance Financing Person.  Written notice of such termination shall be delivered to the Trustee in the manner set forth in Section 11.05
hereof.  None of the Depositor, Master Servicer, the Securities Administrator or the Trustee shall, as a result of the existence of any Advance Facility, have any additional duty or liability with respect to the calculation or payment of any Advance Reimbursement Amount, nor, as a result of the existence of any Advance Facility, shall the Depositor, Master Servicer, the Securities Administrator or the Trustee have any additional responsibility to track or monitor the administration of the Advance Facility or the payment of Advance Reimbursement Amounts to the Servicer’s Assignee.  The Servicer shall indemnify the Master Servicer, the Securities Administrator, Depositor, the Trustee, any successor Servicer and the Trust Fund for any claim, loss, liability or damage resulting from any claim by the related Advancing Financing Person, except to the extent that such claim, loss, liability or damage resulted from or arose out of gross negligence, recklessness or willful misconduct on
the part of the Master Servicer, the Securities Administrator, Depositor, the Trustee or any successor Servicer, as the case may be.  The Servicer shall maintain and provide to any successor Servicer and, upon request, the Trustee a detailed accounting on a loan-by-loan basis as to amounts advanced by, pledged or assigned to, and reimbursed to any Advancing Financing Person. The successor Servicer shall be entitled to rely on any such information provided by the Servicer, and the successor Servicer shall not be liable for any errors in such information.

(iv)        An Advance Financing Person who receives an assignment or pledge of rights to receive Advance Reimbursement Amounts and/or whose obligations are limited to the funding of Advances and/or Servicing Advances pursuant to an Advance Facility shall not be required to meet the criteria for qualification as the Servicer.

(v)        As between the Servicer and its Advance Financing Person, on the one hand, and a successor Servicer and its Advance Financing Person, if any, on the other hand, Advance Reimbursement Amounts on a loan-by-loan basis with respect to each Mortgage Loan as to which an Advance and/or Servicing Advance shall have been made and be outstanding shall be allocated on a “first-in, first out” basis. In the event the Servicer’s Assignee shall have received some or all of an Advance Reimbursement Amount related to Advances and/or Servicing Advances that were made by a Person other than the Servicer or its related Advance Financing Person in error, then the Servicer’s Assignee shall be required to remit any portion of such Advance Reimbursement Amount to each Person entitled to such portion of such Advance
Reimbursement Amount.  Without limiting the generality of the foregoing, the Servicer shall remain entitled to be reimbursed by the Advance Financing Person for all Advances and/or Servicing Advances funded by the Servicer to the extent the related Advance 

 

Reimbursement Amounts have not been assigned or pledged to such Advance Financing Person or the Servicer’s  Assignee.

(vi)        For purposes of any Officer’s Certificate of the Servicer delivered pursuant to Section 5.01(a), any Nonrecoverable Advance referred to therein may have been made by the Servicer. In making its determination that any Advance or Servicing Advance theretofore made has become a Nonrecoverable Advance, the Servicer shall apply the same criteria in making such determination regardless of whether such Advance or Servicing Advance shall have been made by the Servicer.

(vii)       Any amendment to this Section 5.01(b) or to any other provision of this Agreement that may be necessary or appropriate to effect the terms of an Advance Facility as described generally in this Section 5.01(b), including amendments to add provisions relating to a successor Servicer, may be entered into by the Master Servicer, the Securities Administrator, the Trustee, the Depositor and the Servicer without the consent of any Certificateholder, provided such amendment complies with Section 11.01 hereof.  All reasonable costs and expenses (including attorneys’ fees) of each party hereto of any such amendment shall be borne solely by the Servicer.  The parties hereto hereby acknowledge and agree that:  (a) the Advances and/or Servicing Advances financed by and/or pledged to an Advance Financing Person under
any Advance Facility are obligations owed to the Servicer payable only from the cash flows and proceeds received under this Agreement for reimbursement of Advances and/or Servicing Advances only to the extent provided herein, and none of the Master Servicer, the Securities Administrator, the Trustee or the Trust are, as a result of the existence of any Advance Facility, obligated or liable to repay any Advances and/or Servicing Advances financed by the Advance Financing Person; (b) the Servicer will be responsible for remitting to the Advance Financing Person the applicable amounts collected by it as reimbursement for Advances and/or Servicing Advances funded by the Advance Financing Person, subject to the provisions of this Agreement; and (c) none of the Master Servicer, the Securities Administrator or the Trustee shall have any responsibility to track or monitor the administration of the financing arrangement between the Servicer and any Advance Financing Person.

	
            Section 5.02
 	
            Compensating Interest Payments.
 

In the event that there is a Prepayment Interest Shortfall arising from a voluntary Principal Prepayment in part or in full by the Mortgagor with respect to any Mortgage Loan, the Servicer shall, to the extent of the Servicing Fee for such Distribution Date, deposit into the Custodial Account, as a reduction of and to the extent of, the Servicing Fee for such Distribution Date, no later than the close of business on the Remittance Date immediately preceding such Distribution Date, an amount equal to the Prepayment Interest Shortfall; and in case of such deposit, the Servicer shall not be entitled to any recovery or reimbursement from the Depositor, the Trustee, the Seller, the Trust Fund, the Master Servicer or the Certificateholders.

 

 

	
            Section 5.03
 	
            REMIC Distributions.
 

On each Distribution Date the Securities Administrator, shall be deemed to allocate distributions to the REMIC I Regular Interests in accordance with Section 5.07 hereof.

	
            Section 5.04
 	
            Distributions.
 

(a)        On each Distribution Date, the Securities Administrator will withdraw funds on deposit in the Distribution Account and make distributions to the Certificateholders in accordance with the Remittance Report for such Distribution Date, in the following order of priority:

(i)         On each Distribution Date, the Interest Remittance Amount for such Distribution Date will be paid in the following order of priority:

(1)        from the Interest Remittance Amount for Loan Group I, Loan Group II and Loan Group III to the Senior Certificates, pro rata based on amounts due, Current Interest and any Carryforward Interest for each such Class and such Distribution Date, applied in accordance with the last paragraph of this Section 5.04;

(2)        first, from the Interest Remittance Amount for Loan Group III, then from the Interest Remittance Amount for Loan Group II and then from the Interest Remittance Amount for Loan Group I, to the Class M-1 Certificates, Current Interest and any Carryforward Interest for such Class and Distribution Date;

(3)        first, from the Interest Remittance Amount for Loan Group III, then from the Interest Remittance Amount for Loan Group II and then from the Interest Remittance Amount for Loan Group I, to the Class M-2 Certificates, Current Interest and any Carryforward Interest for such Class and Distribution Date;

(4)        first, from the Interest Remittance Amount for Loan Group III, then from the Interest Remittance Amount for Loan Group II and then from the Interest Remittance Amount for Loan Group I, to the Class M-3 Certificates, Current Interest and any Carryforward Interest for such Class and Distribution Date;

(5)        first, from the Interest Remittance Amount for Loan Group III, then from the Interest Remittance Amount for Loan Group II and then from the Interest Remittance Amount for Loan Group I, to the Class M-4 Certificates, Current Interest and any Carryforward Interest for such Class and Distribution Date; 

(6)        first, from the Interest Remittance Amount for Loan Group III, then from the Interest Remittance Amount for Loan Group II and then from the Interest Remittance Amount for Loan Group I, to the Class M-5 Certificates, 

 

Current Interest and any Carryforward Interest for such Class and Distribution Date; and

The Interest Remittance Amount for Loan Group I, Loan Group II and Loan Group III distributed pursuant to Section 5.04(i)(1) above will be applied to the Senior Certificates as follows: (a) the Interest Remittance Amount for Loan Group I will be distributed in the following order of priority: (x) first, concurrently, to the Class I-A-1 Certificates and Class I-A-2 Certificates, Current Interest and any Carryforward Interest for each such Class for such Distribution Date, on a pro rata basis based on the entitlement of each such Class; and then (y) concurrently, to the Class II-A-1, Class II-A-2, Class III-A-1, Class III-A-2, Class III-A-3 and Class III-A-4 Certificates, Current Interest and any Carryforward Interest for each such Class for such Distribution Date, on a pro rata basis based on the entitlement of each such Class, after taking into account the distribution of the
Interest Remittance Amount for Loan Group II and the Interest Remittance Amount for Loan Group III on such Distribution Date; (b) the Interest Remittance Amount for Loan Group II will be distributed in the following order of priority: (x) first, concurrently, to the Class II-A-1 Certificates and Class II-A-2 Certificates, Current Interest and any Carryforward Interest for each such Class for such Distribution Date, on a pro rata basis based on the entitlement of each such Class; and then (y) concurrently, to the Class I-A-1, Class I-A-2, Class III-A-1, Class III-A-2, Class III-A-3 and Class III-A-4 Certificates, Current Interest and any Carryforward Interest for each such Class for such Distribution Date, on a pro rata basis based on the entitlement of each such Class, after taking into account the distribution of the Interest Remittance Amount for Loan Group I and the Interest Remittance Amount for Loan Group III on such Distribution Date; (c) the Interest Remittance Amount for Loan
Group III will be distributed in the following order of priority: (x) first, concurrently to the Class III-A-1, Class III-A-2, Class III-A-3 and Class III-A-4 Certificates, Current Interest and any Carryforward Interest for each such Class for such Distribution Date, on a pro rata basis, based on the entitlement of each such Class; and then (y) concurrently, to the Class I-A-1, Class I-A-2, Class II-A-1 and Class II-A-2 Certificates, Current Interest and any Carryforward Interest for each such Class for such Distribution Date, on a pro rata basis based on the entitlement of each such Class, after taking into account the distribution of the Interest Remittance Amount for Loan Group I and the Interest Remittance Amount for Loan Group II on such Distribution Date.

(ii)         The Principal Payment Amount will be paid on each Distribution Date as follows:

I.          On each Distribution Date (a) prior to the Stepdown Date or (b) with respect to which a Trigger Event is in effect, the Principal Payment Amount will be paid in the following order of priority:

	
            (i)
 	
            (a)   from the Principal Payment Amount derived from the Group I Mortgage Loans, concurrently, to the Class I-A-1 Certificates and Class I-A-2 Certificates, on a pro rata basis, based on their respective Certificate Principal Balances, until the Certificate Principal Balance of each such Class has been reduced to zero;
 
	
             
 	
             
 

 

 

 

 

	
             
 	
            (b)   from the Principal Payment Amount derived from the Group II Mortgage Loans, concurrently, to the Class II-A-1 Certificates and Class II-A-2 Certificates, on a pro rata basis, based on their respective Certificate Principal Balances, until the Certificate Principal Balance of each such Class has been reduced to zero;
 
	
             
 	
             
 
	
             
 	
            (c)   from the Principal Payment Amount derived from the Group III Mortgage Loans, concurrently, to the Class III-A-1, Class III-A-2, Class III-A-3 and Class III-A-4 Certificates, on a pro rata basis, based on their respective Certificate Principal Balances, until the Certificate Principal Balance of each such Class has been reduced to zero; provided, however, that the pro rata allocation to the Class III-A-2 Certificates and Class III-A-3 Certificates pursuant to this clause shall be based on the total Certificate Principal Balance of the Class III-A-2 Certificates and Class III-A-3 Certificates, but shall be distributed sequentially to the Class III-A-2 Certificates and Class III-A-3 Certificates, in that order, until the Certificate Principal Balance of each such Class has been reduced to zero;
 
	
             
 	
             
 
	
            (ii)
 	
            (a)   from the Principal Payment Amount derived from the Group I Mortgage Loans remaining after the Certificate Principal Balances of the Class I-A-1 Certificates and Class I-A-2 Certificates have been reduced to zero, concurrently, to the Class II-A-1, Class II-A-2, Class III-A-1, Class III-A-2, Class III-A-3 and Class III-A-4 Certificates, on a pro rata basis, based on their respective Certificate Principal Balances remaining after payments pursuant to clause I(i) above, until the Certificate Principal Balance of each such Class has been reduced to zero; provided, however, that the pro rata allocation to the Class III-A-2 Certificates and Class III-A-3 Certificates pursuant to this clause shall be based on the total Certificate Principal Balance of the Class III-A-2 Certificates and Class III-A-3 Certificates, but
shall be distributed sequentially to the Class III-A-2 Certificates and Class III-A-3 Certificates, in that order, until the Certificate Principal Balance of each such Class has been reduced to zero;
 
	
             
 	
             
 

 

 

 

 

	
             
 	
            (b)   from the Principal Payment Amount derived from the Group II Mortgage Loans remaining after the Certificate Principal Balance of the Class II-A-1 Certificates and Class II-A-2 Certificates have been reduced to zero, concurrently, to the Class I-A-1, Class I-A-2, Class III-A-1, Class III-A-2, Class III-A-3 and Class III-A-4 Certificates, on a pro rata basis, based on their respective Certificate Principal Balances remaining after payments pursuant to clause I(i) above, until the Certificate Principal Balance of each such Class has been reduced to zero; provided, however, that the pro rata allocation to the Class III-A-2 Certificates and Class III-A-3 Certificates pursuant to this clause shall be based on the total Certificate Principal Balance of the Class III-A-2 Certificates and Class III-A-3 Certificates, but
shall be distributed sequentially to the Class III-A-2 Certificates and Class III-A-3 Certificates, in that order, until the Certificate Principal Balance of each such Class has been reduced to zero
 
	
             
 	
             
 
	
             
 	
            (c)   from the Principal Payment Amount derived from the Group III Mortgage Loans remaining after the Certificate Principal Balances of the Class III-A-1, Class III-A-2, Class III-A-3 and Class III-A-4 Certificates have been reduced to zero, concurrently, to the Class I-A-1, Class I-A-2, Class II-A-1 and Class II-A-2 Certificates, on a pro rata basis, based on their respective Certificate Principal Balances remaining after payments pursuant to clause I(i) above, until the Certificate Principal Balance of each such Class has been reduced to zero;
 
	
             
 	
             
 
	
            (iii)
 	
            to the Class M-1 Certificates, until its Certificate Principal Balance is reduced to zero;
 
	
             
 	
             
 
	
            (iv)
 	
            to the Class M-2 Certificates, until its Certificate Principal Balance is reduced to zero;
 
	
             
 	
             
 
	
            (v)
 	
            to the Class M-3 Certificates, until its Certificate Principal Balance is reduced to zero;
 
	
             
 	
             
 
	
            (vi)
 	
            to the Class M-4 Certificates, until its Certificate Principal Balance is reduced to zero;
 
	
             
 	
             
 
	
            (vii)
 	
            to the Class M-5 Certificates, until its Certificate Principal Balance is reduced to zero; and
 
	
             
 	
             
 
	
            (viii)
 	
            for application as part of Monthly Excess Cashflow for such Distribution Date pursuant to subclause (iii) below, any such Principal Payment Amount remaining after application pursuant to clauses I(i) through (vii) above..
 

 

 

 

II.         On each Distribution Date (a) on or after the Stepdown Date and (b) with respect to which a Trigger Event is not in effect, the Principal Payment Amount will be paid in the following order of priority:

	
            (i)
 	
            (a)                                                  from the Group I Allocation Amount, concurrently, to the Class I-A-1 Certificates and Class I-A-2 Certificates, on a pro rata basis, based on their respective Certificate Principal Balances, until the Certificate Principal Balance of each such Class has been reduced to zero;
 
	
             
 	
             
 
	
             
 	
            (b)  from the Group II Allocation Amount, concurrently, to the Class II-A-1 Certificates and Class II-A-2 Certificates, on a pro rata basis, based on their respective Certificate Principal Balances, until the Certificate Principal Balance of each such Class has been reduced to zero;
 
	
             
 	
             
 
	
             
 	
            (c)          from the Group III Allocation Amount, concurrently, to the Class III-A-1, Class III-A-2, Class III-A-3 and Class III-A-4 Certificates, on a pro rata basis, based on their respective Certificate Principal Balances, until the Certificate Principal Balance of each such Class has been reduced to zero; provided, however, that the pro rata allocation to the Class III-A-2 Certificates and Class III-A-3 Certificates pursuant to this clause shall be based on the total Certificate Principal Balance of the Class III-A-2 Certificates and Class III-A-3 Certificates, but shall be distributed sequentially to the Class III-A-2 Certificates and Class III-A-3 Certificates, in that order, until the Certificate Principal Balance of each such Class has been reduced to
zero;
 
	
             
 	
             
 
	
            (ii)
 	
            (a)     from the Group I Allocation Amount remaining after the Certificate Principal Balances of the Class I-A-1 Certificates and Class I-A-2 Certificates have been reduced to zero, concurrently, to the Class II-A-1, Class II-A-2, Class III-A-1, Class III-A-2, Class III-A-3 and Class III-A-4 Certificates, on a pro rata basis, based on their respective Certificate Principal Balances remaining after payments pursuant to clause II(i) above, until the Certificate Principal Balance of each such Class has been reduced to zero; provided, however, that the pro rata allocation to the Class III-A-2 Certificates and Class III-A-3 Certificates pursuant to this clause shall be based on the total Certificate Principal Balance of the Class III-A-2 Certificates and Class III-A-3 Certificates, but shall be
distributed sequentially to the Class III-A-2 Certificates and Class III-A-3 Certificates, in that order, until the Certificate Principal Balance of each such Class has been reduced to zero;
 
	
             
 	
             
 

 

 

 

 

	
             
 	
            (b)  from the Group II Allocation Amount remaining after the Certificate Principal Balances of the Class II-A-1 Certificates and Class II-A-2 Certificates have been reduced to zero, concurrently, to the Class I-A-1, Class I-A-2, Class III-A-1, Class III-A-2, Class III-A-3 and Class III-A-4 Certificates, on a pro rata basis, based on their respective Certificate Principal Balances remaining after payments pursuant to clause II(i) above, until the Certificate Principal Balance of each such Class has been reduced to zero; provided, however, that the pro rata allocation to the Class III-A-2 Certificates and Class III-A-3 Certificates pursuant to this clause shall be based on the total Certificate Principal Balance of the Class III-A-2 Certificates and Class III-A-3 Certificates, but shall be distributed sequentially to the
Class III-A-2 Certificates and Class III-A-3 Certificates, in that order, until the Certificate Principal Balance of each such Class has been reduced to zero;
 
	
             
 	
             
 
	
             
 	
            (c)  from the Group III Allocation Amount remaining after the Certificate Principal Balances of the Class III-A-1, Class III-A-2, Class III-A-3 and Class III-A-4 Certificates have been reduced to zero, concurrently, to the Class I-A-1, Class I-A-2, Class II-A-1 and Class II-A-2 Certificates, on a pro rata basis, based on their respective Certificate Principal Balances remaining after payments pursuant to clause II(i) above, until the Certificate Principal Balance of each such Class has been reduced to zero; 
 
	
             
 	
             
 
	
            (iii)
 	
            to the Class M-1 Certificates, the Class M-1 Principal Payment Amount for such Distribution Date, until its Certificate Principal Balance is reduced to zero;
 
	
             
 	
             
 
	
            (iv)
 	
            to the Class M-2 Certificates, the Class M-2 Principal Payment Amount for such Distribution Date, until its Certificate Principal Balance is reduced to zero;
 
	
             
 	
             
 
	
            (v)
 	
            to the Class M-3 Certificates, the Class M-3 Principal Payment Amount for such Distribution Date, until its Certificate Principal Balance is reduced to zero; 
 
	
             
 	
             
 
	
            (vi)
 	
            to the Class M-4 Certificates, the Class M-4 Principal Payment Amount for such Distribution Date, until its Certificate Principal Balance is reduced to zero;  
 
	
             
 	
             
 
	
            (vii)
 	
            to the Class M-5 Certificates, the Class M-5 Principal Payment Amount for such Distribution Date, until its Certificate Principal Balance is reduced to zero; and
 
	
             
 	
             
 

 

 

 

 

	
            (viii)
 	
            for application as part of Monthly Excess Cashflow for such Distribution Date pursuant to clause (iii) below, any such Principal Payment Amount remaining after application pursuant to clauses II(i) through (vii) above.
 
	
             
 	
             
 

(iii)        On each Distribution Date, the Monthly Excess Cashflow will be distributed in the following order of priority:

(1)(A)   until the aggregate Certificate Principal Balance of the Publicly Offered Certificates equals the Aggregate Loan Balance for such Distribution Date minus the Targeted Overcollateralization Amount for such Distribution Date, on each Distribution Date (a) prior to the Stepdown Date or (b) with respect to which a Trigger Event is in effect, to the extent of Monthly Excess Interest for such Distribution Date, to the Publicly Offered Certificates, in the following order of priority:

	
            (a) 
 	
            (i)  the Group I Excess Interest Amount in the following order of priority: (x) first, concurrently, to the Class I-A-1 Certificates and Class I-A-2 Certificates, on a pro rata basis based on their respective Certificate Principal Balances until the Certificate Principal Balance of each such Class has been reduced to zero; and then (y) concurrently, to the Class II-A-1, Class II-A-2, Class III-A-1, Class III-A-2, Class III-A-3 and Class III-A-4 Certificates, on a pro rata basis based on their respective Certificate Principal Balances after taking into account the distribution of the Group II Excess Interest Amount and the Group III Excess Interest Amount, as applicable, until the Certificate Principal Balance of each such Class has been reduced to zero; provided, however, that the pro rata allocation to the Class
III-A-2 Certificates and Class III-A-3 Certificates pursuant to this clause shall be based on the total Certificate Principal Balance of the Class III-A-2 Certificates and Class III-A-3 Certificates, but shall be distributed sequentially to the Class III-A-2 Certificates and Class III-A-3 Certificates, in that order, until the Certificate Principal Balance of each such class has been reduced to zero;
 
	
             
 	
             
 

 

 

 

 

	
             
 	
            (ii)  the Group II Excess Interest Amount in the following order of priority: (x) first, concurrently, to the Class II-A-1 Certificates and the Class II-A-2 Certificates, on a pro rata basis based on their respective Certificate Principal Balances until the Certificate Principal Balance of each such Class has been reduced to zero; and then (y) concurrently, to the Class I-A-1, Class I-A-2, Class III-A-1, Class III-A-2, Class III-A-3 and Class III-A-4 Certificates, on a pro rata basis based on their respective Certificate Principal Balances after taking into account the distribution of the Group I Excess Interest Amount and the Group III Excess Interest Amount, as applicable, until the Certificate Principal Balance of each such Class has been reduced to zero; provided, however, that the pro rata allocation to the Class
III-A-2 Certificates and Class III-A-3 Certificates pursuant to this clause shall be based on the total Certificate Principal Balance of the Class III-A-2 Certificates and Class III-A-3 Certificates, but shall be distributed sequentially to the Class III-A-2 Certificates and Class III-A-3 Certificates, in that order, until the Certificate Principal Balance of each such Class has been reduced to zero
 
	
             
 	
             
 
	
             
 	
            (iii)  the Group III Excess Interest Amount in the following order of priority: (x) first, concurrently, to the Class III-A-1, Class III-A-2, Class III-A-3 and Class III-A-4 Certificates, on a pro rata basis based on their respective Certificate Principal Balances until the Certificate Principal Balance of each such Class has been reduced to zero; provided, however, that the pro rata allocation to the Class III-A-2 Certificates and Class III-A-3 Certificates pursuant to this clause shall be based on the total Certificate Principal Balance of the Class III-A-2 Certificates and Class III-A-3 Certificates, but shall be distributed sequentially to the Class III-A-2 Certificates and Class III-A-3 Certificates, in that order, until the Certificate Principal Balance of each such Class has been reduced to zero; and then (y)
concurrently, to the Class I-A-1, Class I-A-2, Class II-A-1 and Class II-A-2 Certificates, on a pro rata basis based on their respective Certificate Principal Balances after taking into account the distribution of the Group I Excess Interest Amount and the Group II Excess Interest Amount, as applicable, until the Certificate Principal Balance of each such Class has been reduced to zero; 
 
	
             
 	
             
 
	
            (b) 
 	
            to the Class M-1 Certificates, until its Certificate Principal Balance is reduced to zero;
 
	
             
 	
             
 
	
            (c) 
 	
            to the Class M-2 Certificates, until its Certificate Principal Balance is reduced to zero;
 
	
             
 	
             
 
	
            (d) 
 	
            to the Class M-3 Certificates, until its Certificate Principal Balance is reduced to zero; 
 
	
             
 	
             
 
	
            (e) 
 	
            to the Class M-4 Certificates, until its Certificate Principal Balance is reduced to zero; and
 
	
             
 	
             
 

 

 

 

 

	
            (f)
 	
            to the Class M-5 Certificates, until its Certificate Principal Balance is reduced to zero;
 

 

(B)        on each Distribution Date on or after the Stepdown Date and with respect to which a Trigger Event is not in effect, to fund any principal distributions required to be made on such Distribution Date set forth in Section 5.04(ii)II after giving effect to the distribution of the Principal Payment Amount for such date, in accordance with the priorities set forth therein;

(2)        concurrently, to the Class I-A-2, Class II-A-2 and Class III-A-4 Certificates, any Deferred Amount for each such Class on a pro rata basis, based on the amount due with respect to each such Class;

	
            (3)
 	
            to the Class M-1 Certificates, any Deferred Amount for such Class;
 
	
            (4)
 	
            to the Class M-2 Certificates, any Deferred Amount for such Class;
 
	
            (5)
 	
            to the Class M-3 Certificates, any Deferred Amount for such Class;
 
	
            (6)
 	
            to the Class M-4 Certificates, any Deferred Amount for such Class;
 
	
            (7)
 	
            to the Class M-5 Certificates, any Deferred Amount for such Class;
 

(8)        to the Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve Fund to the Class III-A-1, Class III-A-2, Class III-A-3 and Class III-A-4 Certificates, concurrently any Basis Risk Shortfall for each such Class, on a pro rata basis based on the entitlement of each such Class; provided, however that any payments in respect of Basis Risk Shortfalls payable to the Class III-A-1, Class III-A-2 and Class III-A-3 Certificates pursuant to this clause shall be determined after taking into account payments made from the Cap Provider under the related Cap Contract;

(9)        to the Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve Fund to the Class M-1 Certificates, any Basis Risk Shortfall for such Class; 

(10)      to the Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve Fund to the Class M-2 Certificates, any Basis Risk Shortfall for such Class; 

(11)      to the Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve Fund to the Class M-3 Certificates, any Basis Risk Shortfall for such Class; 

(12)      to the Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve Fund to the Class M-4 Certificates, any Basis Risk Shortfall for such Class;

 

 

(13)      to the Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve Fund to the Class M-5 Certificates, any Basis Risk Shortfall for such Class;

	
            (14)
 	
            to the Class X Certificates, the Class X Distribution Amount; and
 

(15)      to the Class R Certificates, any remaining amount. It is not anticipated that any amounts will be distributed to the Class R Certificates under this clause (15).

Distributions pursuant to clauses (8) through (15) above on any Distribution Date will be made after giving effect to any withdrawals from the Basis Risk Shortfall Reserve Fund on such date to pay Basis Risk Shortfalls.  On each Distribution Date, the Securities Administrator, after making the required distributions of interest and principal to the Certificates as described in clauses (i) and (ii) above and after the distribution of the Monthly Excess Cashflow as described in clause (iii) above, will withdraw from the Basis Risk Shortfall Reserve Fund the amounts on deposit therein and distribute such amounts to the Publicly Offered Certificates (other than the Group I Certificates and Group II Certificates) in respect of any Basis Risk Shortfalls in the following manner and order of priority: first, concurrently to the Senior Certificates (other than the Group I
Certificates and Group II Certificates) on a pro rata basis, based on the entitlement of each such Class, the amount of any Basis Risk Shortfalls allocated to such Class for such Distribution Date; second, to the Class M-1 Certificates, the amount of any Basis Risk Shortfall allocated to such Class for such Distribution Date for such Class; third, to the Class M-2 Certificates, the amount of any Basis Risk Shortfall allocated to such Class for such Distribution Date for such Class; fourth, to the Class M-3 Certificates, the amount of any Basis Risk Shortfalls allocated to such Class for such Distribution Date for such Class; fifth, to the Class M-4 Certificates, the amount of any Basis Risk Shortfalls allocated to such Class for such Distribution Date, and sixth, to the Class M-5 Certificates, the amount of any Basis Risk Shortfalls allocated to such Class for such Distribution Date. 

(iv)        Subject to Section 10.02 hereof respecting the final distribution on a Class of Publicly Offered Certificates, on each Distribution Date the Securities Administrator shall make distributions to each Holder of a Publicly Offered Certificate of record on the preceding Record Date either by wire transfer in immediately available funds to the account of such holder at a bank or other entity having appropriate facilities therefor, if (i) such Holder has so notified the Securities Administrator at least five (5) Business Days prior to the related Record Date and (ii) such Holder shall hold Regular Certificates with aggregate principal denominations of not less than $1,000,000 or evidencing a Percentage Interest aggregating ten percent (10%) or more with respect to such Class or, if not, by check mailed by first class
mail to such Certificateholder at the address of such holder appearing in the Certificate Register. Notwithstanding the foregoing, but subject to Section 10.02 hereof respecting the final distribution, distributions with respect to Publicly Offered Certificates registered in the name of a Depository shall be made to such Depository in immediately available funds.

 

 

	
            Section 5.05
 	
            Allocation of Realized Losses.
 

(a)        On or prior to each Determination Date, the Securities Administrator shall determine the amount of any Realized Loss in respect of each Mortgage Loan that occurred during the immediately preceding calendar month, based solely on the reports delivered by the Servicer pursuant to this Agreement.

(b)        The interest portion of Realized Losses on the Mortgage Loans shall be allocated to the Certificates as described in Section 1.02 hereof.

(c)        The principal portion of all Realized Losses on the Mortgage Loans shall be allocated on each Distribution Date as follows: first, in reduction of the Monthly Excess Cashflow; second, to the Class X Certificates, until the Certificate Principal Balance thereof has been reduced to zero; third, to the Class M-5 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class M-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; seventh, to the Class M-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero;
eighth, with respect to Realized Losses on the Group I Mortgage Loans only, to the Class I-A-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; ninth, with respect to Realized Losses on the Group II Mortgage Loans only, to the Class II-A-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and tenth, with respect to Realized Losses on the Group III Mortgage Loans only, to the Class III-A-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero.  All such Realized Losses to be allocated to the Certificate Principal Balances of the Class I-A-2, Class II-A-2 and Class III-A-4 Certificates and all Classes of Subordinate Certificates 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 I-A-2, Class II-A-2, Class III-A-4 Certificates or any Class
of Subordinate 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 the principal portion of Realized Losses to a Class I-A-2, Class II-A-2 or Class III-A-4 Certificate or a Subordinate 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 X Certificate shall be made by reducing the amount otherwise payable in respect thereof pursuant to Section 5.04(iii)(14).  No allocations of any Realized Losses shall be made to the Certificate Principal Balances of the Class I-A-1, Class II-A-1, Class III-A-1, Class III-A-2, Class III-A-3 or Class P Certificates.

All such Realized Losses and all other losses allocated to a Class of Certificates hereunder will be allocated among the Certificates of such Class in proportion to the Percentage Interests evidenced thereby.

 

 

(d)        Notwithstanding anything to the contrary contained herein, if on any Distribution Date the Securities Administrator discovers, based solely on the reports delivered by the Servicer under this Agreement that any Subsequent Recoveries have been collected by the Servicer with respect to the Mortgage Loans, the amount of such Subsequent Recoveries will be applied to increase the Certificate Principal Balance of (i) the Class I-A-2 Certificates with respect to Subsequent Recoveries relating to the Group I Mortgage Loans, (ii) the Class II-A-2 Certificates with respect to Subsequent Recoveries relating to the Group II Mortgage Loans, (iii) the Class III-A-4 Certificates with respect to Subsequent Recoveries relating to the Group III Mortgage Loans and (iv) the Class of Subordinate Certificates with the highest payment priority to which
Realized Losses on the Mortgage Loans have been allocated, but not by more than the amount of Realized Losses previously allocated to the Class I-A-2, Class II-A-2 or Class III-A-4 Certificates or that Class of Subordinate Certificates pursuant to this Section 5.05.  After the Certificate Principal Balances of the Class I-A-2, Class II-A-2 and Class III-A-4 Certificates have been increased up to the amount of Realized Losses allocated thereto pursuant to this Section 5.05 to the extent that such Applied Loss Amounts have not been paid to such certificates as a Deferred Amount, any additional Subsequent Recoveries with respect to the Mortgage Loans will be applied to increase the Certificate Principal Balance of the Subordinate Certificates, beginning with the Class of Subordinate Certificates with the next highest payment priority, up to the amount of such Realized Losses previously allocated to such Class of Certificates pursuant to this Section 5.05 but only to the
extent that any such Applied Loss Amount has not been paid to any Class of Certificates as a Deferred Amount.  Holders of such Certificates will not be entitled to any payment in respect of current 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 Class I-A-2, Class II-A-2 or Class III-A-4 Certificate or each Subordinate Certificate of such Class in accordance with its respective Percentage Interest.  

(e)        The REMIC I Marker Allocation Percentage of all Realized Losses on the Mortgage Loans shall be allocated on each Distribution Date to the following REMIC I Regular Interests in the specified percentages, as follows: first, to Uncertificated Accrued Interest payable to the REMIC I Regular Interest LTI-AA and REMIC I Regular Interest LTI-ZZ up to an aggregate amount equal to the REMIC I Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the Uncertificated Principal Balances of REMIC I Regular Interest LTI-AA, REMIC I Regular Interest LTI-M5 and REMIC I Regular Interest LTI-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest LTI-M5 has been reduced to zero; third, to the Uncertificated Principal Balances of the REMIC I Regular Interest LTI-AA and REMIC I Regular
Interest LTI-ZZ up to an aggregate amount equal to the REMIC I Principal Loss Allocation Amount, 98% and 2%, respectively; fourth, to the Uncertificated Principal Balances of REMIC I Regular Interest LTI-AA, REMIC I Regular Interest LTI-M4 and REMIC I Regular Interest LTI-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest LTI-M4 has been reduced to zero; fifth, to the Uncertificated Principal Balances of REMIC I Regular Interest LTI-AA, REMIC I Regular Interest LTI-M3 and REMIC I Regular Interest LTI-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest LTI-M3 has been reduced to zero; sixth, to the Uncertificated Principal Balances of REMIC I Regular Interest LTI-AA, REMIC I Regular Interest LTI-M2 and REMIC I Regular Interest LTI-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest LTI-

 

M2 has been reduced to zero; seventh, to the Uncertificated Principal Balances of REMIC I Regular Interest LTI-AA, REMIC I Regular Interest LTI-M1 and REMIC I Regular Interest LTI-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest LTI-M1 has been reduced to zero; eighth, with respect to Realized Losses on the Group I Mortgage Loans only, to the Uncertificated Principal Balances of REMIC I Regular Interest LTI-AA, REMIC I Regular Interest LTI-IA2 and REMIC I Regular Interest LTI-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest LTI-IA2 has been reduced to zero; ninth, with respect to Realized Losses on the Group II Mortgage Loans only, to the Uncertificated Principal Balances of REMIC I Regular Interest LTI-AA, REMIC I Regular Interest LTI-IIA2 and REMIC I Regular Interest LTI-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest LTI-IIA2 has been reduced to zero; and tenth, with respect to Realized Losses on the Group III Mortgage Loans only, to the Uncertificated Principal Balances of REMIC I Regular Interest LTI-AA, REMIC I Regular Interest LTI-IIIA4 and REMIC I Regular Interest LTI-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest LTI-IIIA4 has been reduced to zero.

The REMIC I Sub WAC Allocation Percentage of all Realized Losses on the Mortgage Loans shall be applied after all distributions have been made on each Distribution Date first, so as to keep the Uncertificated Principal Balance of each REMIC I Regular Interest ending with the designation “GRP” equal to 0.01% of the aggregate Stated Principal Balance of the Mortgage Loans in the related Loan Group; second, to each REMIC I Regular Interest ending with the designation “SUB,” so that the Uncertificated Balance of each such REMIC I Regular Interest is equal to 0.01% of the excess of (x) the aggregate Stated Principal Balance of the Mortgage Loans in the related Loan Group over (y) the current Certificate Principal Balance of the Senior Certificate in the related Loan Group (except that if any such excess is a larger number than in the preceding distribution period, the
least amount of Realized Losses shall be applied to such REMIC I Regular Interests such that the REMIC I Subordinated Balance Ratio is maintained); and third, any remaining Realized Losses shall be allocated to REMIC I Regular Interest LTI-XX.

	
            Section 5.06
 	
            Monthly Statements to Certificateholders.
 

(a)        Not later than each Distribution Date, the Securities Administrator shall prepare and make available to each Holder of Certificates, the Depositor and the Credit Risk Manager via its website a statement setting forth the following information for the Certificates:

(i)         the amount of the related distribution to Holders of each Class allocable to principal, separately identifying (A) the aggregate amount of any Principal Prepayments included therein, (B) the aggregate of all scheduled payments of principal included therein, (C) the Monthly Excess Interest with respect to the Certificates (if any) and (D) the amount of Prepayment Charges distributed to the Class P Certificates;

(ii)         the amount of such distribution to Holders of each Class allocable to interest;

 

 

(iii)        the Certificate Principal Balance of each Class of Certificates, if applicable, after giving effect (i) to all distributions allocable to principal on such Distribution Date and (ii) the allocation of any Realized Losses for such Distribution Date;

(iv)        the aggregate of the Stated Principal Balances of all of the Mortgage Loans in each Loan Group and the aggregate Stated Principal Balance of the Mortgage Loans, in each case for the following Distribution Date;

(v)        the amount of the Servicing Fees paid to or retained by the Servicer for the related Due Period;

(vi)        the Pass-Through Rate for each Class of Certificates with respect to the current Accrual Period;

(vii)       the cumulative amount of Realized Losses to date and, in addition, if the Certificate Principal Balance of any Class of Certificates has been reduced to zero, the cumulative amount of any Realized Losses that have not been allocated to any Class of Certificates;

(viii)      the number and aggregate principal amounts of Mortgage Loans in each Loan Group and the Mortgage Loans in the aggregate, (A) Delinquent (exclusive of Mortgage Loans in foreclosure and bankruptcy) (1) 31 to 60 days, (2) 61 to 90 days and (3) 91 or more days, (B) in foreclosure and delinquent (1) 31 to 60 days, (2) 61 to 90 days and (3) 91 or more days and (C) in bankruptcy and delinquent (1) 31 to 60 days, (2) 61 to 90 days and (3) 91 or more days, in each case as of the close of business on the last day of the calendar month preceding such Distribution Date;

(ix)        with respect to any Mortgage Loan that was liquidated during the preceding calendar month, the loan number and the Stated Principal Balance of, and Realized Loss on, such Mortgage Loan as of the close of business on the Determination Date preceding such Distribution Date;

(x)        the total number and principal balance of any real estate owned or REO Properties in each Loan Group and the Mortgage Loans in the aggregate as of the close of business on the Determination Date preceding such Distribution Date;

(xi)        the three month rolling average of the percent equivalent of a fraction, the numerator of which is the Aggregate Loan Group Balance of the Mortgage Loans in a Loan Group that are sixty (60) days or more delinquent or are in bankruptcy or foreclosure or are REO Properties, and the denominator of which is the Aggregate Loan Group Balance of all of the Mortgage Loans in such Loan Group as of the last day of such Distribution Date; 

(xii)       the Realized Losses during the related Prepayment Period and the cumulative Realized Losses through the end of the preceding month; 

	
            (xiii)
 	
            the amount of any Basis Risk Shortfalls;
 

 

 

 

	
            (xiv)
 	
            amounts payable in respect of the Cap Contracts; and
 

(xv)       the amount of the Credit Risk Management Fees paid to the Credit Risk Manager and/or the Seller for such Distribution Date.

The Securities Administrator may make the foregoing monthly statement (and, at its option, any additional files containing the same information in an alternative format) available each month to Certificateholders via the Securities Administrator’s internet website. The Securities Administrator’s internet website shall initially be located at “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 options are entitled to have a paper copy mailed to them via first class mail by calling the customer service desk and indicating such. The Securities Administrator may change the way monthly statements are distributed in order to make such distributions more convenient or more accessible to the above parties.

The Securities Administrator shall be entitled to rely on but shall not be responsible for the content or accuracy of any information provided by third parties for purposes of preparing such statement and may affix thereto any disclaimer it deems appropriate in its reasonable discretion (without suggesting liability on the part of any other party hereto).

(b)        The Securities Administrator’s responsibility for making the above information available to the Certificateholders is limited to the availability, timeliness and accuracy of the information provided by the Servicer and the Cap Provider. The Securities Administrator will make available a copy of each statement provided pursuant to this Section 5.06 to each Rating Agency.

(c)        Within a reasonable period of time after the end of each calendar year, the Securities Administrator shall cause to be furnished upon written request to each Person who at any time during the calendar year was a Certificateholder, a statement containing the information set forth in clauses (a)(i) and (a)(ii) of this Section 5.06 aggregated for such calendar year or applicable portion thereof during which such Person was a Certificateholder. Such obligation of the Securities Administrator shall be deemed to have been satisfied to the extent that substantially comparable information shall be provided by the Securities Administrator pursuant to any requirements of the Code as from time to time in effect.

(d)        Upon filing with the Internal Revenue Service, the Securities Administrator shall furnish to the Holders of the Residual Certificates the applicable Form 1066 and each applicable Form 1066Q and shall respond promptly to written requests made not more frequently than quarterly by any Holder of a Residual Certificate with respect to the following matters:

(i)         The original projected principal and interest cash flows on the Closing Date on each Class of regular and residual interests created hereunder and on the Mortgage Loans, based on the Prepayment Assumption;

(ii)         The projected remaining principal and interest cash flows as of the end of any calendar quarter with respect to each Class of regular and residual interests created hereunder and the Mortgage Loans, based on the Prepayment Assumption;

 

 

(iii)        The applicable Prepayment Assumption and any interest rate assumptions used in determining the projected principal and interest cash flows described above;

(iv)        The original issue discount (or, in the case of the Mortgage Loans, market discount) or premium accrued or amortized through the end of such calendar quarter with respect to each Class of regular or residual interests created hereunder and to the Mortgage Loans, together with each constant yield to maturity used in computing the same;

(v)        The treatment of losses realized with respect to the Mortgage Loans or the regular interests created hereunder, including the timing and amount of any cancellation of indebtedness income of a REMIC with respect to such regular interests or bad debt deductions claimed with respect to the Mortgage Loans;

	
            (vi)
 	
            The amount and timing of any non-interest expenses of a REMIC; and
 

(vii)       Any taxes (including penalties and interest) imposed on the REMIC, including, without limitation, taxes on “prohibited transactions,” “contributions” or “net income from foreclosure property” or state or local income or franchise taxes.

The information pursuant to clauses (i), (ii), (iii) and (iv) above shall be provided by the Depositor pursuant to Section 9.13.

	
            Section 5.07
 	
            REMIC Designations and REMIC I Allocations.
 

(a)        The Trustee shall elect that each of REMIC I and REMIC II shall be treated as a REMIC under Section 860D of the Code. Any inconsistencies or ambiguities in this Agreement or in the administration of this Agreement shall be resolved in a manner that preserves the validity of such REMIC elections. The REMIC I Regular Interests shall constitute the assets of REMIC II.

(b)        On each Distribution Date, the following amounts, in the following order of priority and in accordance with the Remittance Report, shall be distributed by REMIC I to REMIC II on account of the REMIC I Regular Interests or withdrawn from the Distribution Account and distributed to the Holders of the Class R-I Interest, as the case may be:

(i)         first, to the Holders of REMIC I Regular Interest LTI-AA, REMIC I Regular Interest LTI-IA1, REMIC I Regular Interest LTI-IA2, REMIC I Regular Interest LTI-IIA1, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIIA1, REMIC I Regular Interest LTI-IIIA2, REMIC I Regular Interest LTI-IIIA3, REMIC I Regular Interest LTI-IIIA4, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3, REMIC I Regular Interest LTI-M4, REMIC I Regular Interest LTI-M5 and REMIC I Regular Interest LTI-ZZ, pro rata, in an amount equal to (A) the Uncertificated Accrued Interest for each such REMIC I Regular Interest for such Distribution Date, plus (B) any amounts in respect thereof remaining unpaid from previous Distribution Dates. Amounts payable as Uncertificated Accrued Interest in
respect of REMIC I Regular Interest LTI-ZZ shall be reduced and deferred when the REMIC I Overcollateralization Amount is less than the REMIC I Targeted 

 

Overcollateralization Amount, by the lesser of (x) the amount of such difference and (y) the REMIC I Regular Interest LTI-ZZ Maximum Interest Deferral Amount and such amount will be payable to the Holders of REMIC I Regular Interest LTI-IA1, REMIC I Regular Interest LTI-IA2, REMIC I Regular Interest LTI-IIA1, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIIA1, REMIC I Regular Interest LTI-IIIA2, REMIC I Regular Interest LTI-IIIA3, REMIC I Regular Interest LTI-IIIA4, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3, REMIC I Regular Interest LTI-M4 and REMIC I Regular Interest LTI-M5 in the same proportion as the Overcollateralization Deficiency is allocated to the Corresponding Certificates and the Uncertificated Principal Balance of REMIC I Regular Interest LTI-ZZ shall be increased by such amount;

(ii)         second, to the Holders of REMIC I Regular Interests, in an amount equal to the remainder of the REMIC I Marker Allocation Percentage of the Interest Remittance Amount and the Principal Payment Amount for such Distribution Date after the distributions made pursuant to clause (i) above, allocated as follows:

(A)       98.00% of such remainder (other than amounts payable under clause (C) below) to the Holders of REMIC I Regular Interest LTI-AA and REMIC I Regular Interest LTI-P, until the Uncertificated Principal Balance of such REMIC I Regular Interest is reduced to zero, provided, however, that the Uncertificated Principal Balance of REMIC I Regular Interest LTI-P shall not be reduced until the Distribution Date in September 2010 or any Distribution Date thereafter, at which point such amount shall be distributed to REMIC I Regular Interest LTI-P, until $100 has been distributed pursuant to this clause;

(B)        2.00% of such remainder, first, to the Holders REMIC I Regular Interest LTI-IA, REMIC I Regular Interest LTI-IA1, REMIC I Regular Interest LTI-IA2, REMIC I Regular Interest LTI-IIA1, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIIA1, REMIC I Regular Interest LTI-IIIA2, REMIC I Regular Interest LTI-IIIA3, REMIC I Regular Interest LTI-IIIA4, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3, REMIC I Regular Interest LTI-M4 and REMIC I Regular Interest LTI-M5, 1% in the same proportion as principal payments are allocated to the Corresponding Certificates, until the Uncertificated Principal Balances of such REMIC I Regular Interests are reduced to zero and second, to the Holders of REMIC I Regular Interest LTI-ZZ (other than amounts payable under the proviso
below), until the Uncertificated Principal Balance of such REMIC I Regular Interest is reduced to zero; and

(C)       any remaining amount to the Holders of the Class R Certificates (in respect of the Class R-I Interest).

provided, however, that (i) 98.00% and (ii) 2.00% of any principal payments that are attributable to an Overcollateralization Release Amount shall be allocated to Holders of (i) REMIC I Regular Interest LTI-AA and REMIC I Regular Interest LTI-P, in that order and (ii) REMIC I Regular Interest LTI-ZZ, respectively; provided that REMIC I Regular Interest LTI-P shall not be 

 

reduced until the Distribution Date in September 2010, at which point such amount shall be distributed to REMIC I Regular Interest LTI-P, until $100 has been distributed pursuant to this clause.

(iii)        third, to the Holders of REMIC I Regular Interest LTI-1SUB, REMIC I Regular Interest LTI-1GRP, REMIC I Regular Interest LTI-2SUB, REMIC I Regular Interest LTI-2GRP, REMIC I Regular Interest LTI-3SUB, REMIC I Regular Interest LTI-3GRP and REMIC I Regular Interest LTI-XX, pro rata, in an amount equal to (A) the Uncertificated Accrued Interest for each such REMIC I Regular Interest for such Distribution Date, plus (B) any amounts in respect thereof remaining unpaid from previous Distribution Dates; and

(iv)        fourth, to the Holders of REMIC I Regular Interests, in an amount equal to the remainder of the REMIC I Sub WAC Allocation Percentage of the Interest Remittance Amount and the Principal Payment Amount for such Distribution Date after the distributions made pursuant to clause (iii) above, such that distributions of principal shall be deemed to be made to the REMIC I Regular Interests first, so as to keep the Uncertificated Principal Balance of each REMIC I Regular Interest ending with the designation “GRP” equal to 0.01% of the aggregate Stated Principal Balance of the Mortgage Loans in the related Loan Group; second, to each REMIC I Regular Interest ending with the designation “SUB,” so that the Uncertificated Principal Balance of each such REMIC I Regular Interest is equal to 0.01% of the excess
of (x) the aggregate Stated Principal Balance of the Mortgage Loans in the related Loan Group over (y) the current Certificate Principal Balance of the Senior Certificates in the related Loan Group (except that if any such excess is a larger number than in the preceding distribution period, the least amount of principal shall be distributed to such REMIC I Regular Interests such that the REMIC I Subordinated Balance Ratio is maintained); and third, any remaining principal to REMIC I Regular Interest LTI-XX.

	
            Section 5.08
 	
            Prepayment Charges.
 

On each Distribution Date, all amounts representing Prepayment Charges in respect of the Mortgage Loans received during the related Prepayment Period and deposited in the Distribution Account will be withdrawn from the Distribution Account and distributed by the Securities Administrator in accordance with the Remittance Report to the Class P Certificates and shall not be available for distribution to the holders of any other Class of Certificates. The payment of such Prepayment Charges shall not reduce the Certificate Principal Balance of the Class P Certificates.

	
            Section 5.09
 	
            Class P Certificate Account.
 

The Securities Administrator shall establish and maintain with itself a separate, segregated trust account titled “HSBC Bank USA, National Association, for the benefit of Nomura Asset Acceptance Corporation, Alternative Loan Trust 2005-AR5 Class P Certificate Account”. On the Closing Date, the Depositor will deposit, or cause to be deposited in the Class P Certificate Account $100.00. The amount on deposit in the Class P Certificate Account shall be held uninvested. On the September 2010 Distribution Date, the Securities Administrator shall 

 

withdraw the amount on deposit in the Class P Certificate Account and remit such amount to the Holders of the Class P Certificates, in reduction of the Certificate Principal Balance thereof. 

	
            Section 5.10
 	
            Basis Risk Shortfall Reserve Fund.
 

(a)        The Securities Administrator shall establish a Basis Risk Shortfall Reserve Fund on behalf of the holders of the Publicly Offered Certificates (other than the Group I Certificates and Group II Certificates).  The Basic Risk Shortfall Reserve Fund must be an Eligible Account.  The Basis Risk Shortfall Reserve Fund shall be entitled “Basis Risk Shortfall Reserve Fund, HSBC Bank USA, National Association, as Trustee for the benefit of holders of Nomura Asset Acceptance Corporation, Mortgage Pass-Through Certificates, Series 2005-AR5, Class III-A-1, Class III-A-2, Class III-A-3, Class III-A-4, Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5”. Any payments received by the Securities Administrator under the Cap Contracts shall be deposited into the Basis Risk Shortfall Reserve Fund for the benefit of the Class III-A-1, Class
III-A-2 or Class III-A-3 Certificates; as applicable; provided that the amount of any Excess Cap Payments shall be held for the benefit of the Class X Certificates and payable as part of the Class X Distribution Amount for the related Distribution Date.  On each Distribution Date as to which there is a Basis Risk Shortfall payable to any Class of Certificates, the Securities Administrator shall deposit the amounts pursuant to paragraphs 8, 9, 10, 11, 12 and 13 of Section 5.04(a)(iii) into the Basis Risk Shortfall Reserve Fund and the Securities Administrator has been directed by the Class X Certificateholder to distribute such amounts to the Holders of the Publicly Offered Certificates (other than the Group I Certificates and Group II Certificates) in the amounts and priorities set forth in Section 5.04(a)(iii).

(b)        The Basis Risk Shortfall Reserve Fund is an “outside reserve fund” within the meaning of Treasury Regulation §1.860G-2(h) and shall be an asset of the Trust Fund but not an asset of any REMIC.  The Securities Administrator on behalf of the Trust shall be the nominal owner of the Basis Risk Shortfall Reserve Fund.  The Class X Certificateholders shall be the beneficial owners of the Basis Risk Shortfall Reserve Fund, subject to the power of the Trustee to transfer amounts under Section 5.04(a)(iii).  Amounts in the Basis Risk Shortfall Reserve Fund shall be held either uninvested in a trust or deposit account of the Securities Administrator with no liability for interest or other compensation thereof or, at the written direction of the Majority Class X Certificateholder, be invested in Permitted Investments that mature
no later than the Business Day prior to the next succeeding Distribution Date.  All net income and gain from such investments shall be distributed to the Majority Class X Certificateholder, not as a distribution in respect of any interest in any REMIC, on such Distribution Date.  All amounts earned on amounts on deposit in the Basis Risk Shortfall Reserve Fund shall be taxable to the Majority Class X Certificateholder.  Any losses on such investments shall be deposited in the Basis Risk Shortfall Reserve Fund by the Majority Class X Certificateholder out of its own funds immediately as realized. In the event that the Majority Class X Certificateholder shall fail to provide investment instructions to the Securities Administrator, the amounts on deposit in the Basis Risk Shortfall Reserve Fund shall be held uninvested.

(c)        For federal tax return and information reporting, the value of the right of the holders of the Class III-A-1, Class III-A-2 and Class III-A-3 Certificates to receive payments from the Basis Risk Shortfall Reserve Fund in respect of any Basis Risk Shortfall shall be $5,000, $5,000 and $3,000, respectively.  The value of such right with respect to the Publicly 

 

Offered Certificates (other than the Class III-A-4 Certificates and the Group I Certificates and Group II Certificates) shall be zero.

 

 

ARTICLE VI

 

THE CERTIFICATES

	
            Section 6.01
 	
            The Certificates.
 

(a)        The Certificates shall be substantially in the forms attached hereto as Exhibits A-1 through A-6. The Certificates shall be issuable in registered form, in the minimum dollar denominations, integral dollar multiples in excess thereof (except that one Certificate of each Class may be issued in a different amount which must be in excess of the applicable minimum dollar denomination) and aggregate dollar denominations as set forth in the following table:

 

	
            
Class
 
 	
            
Minimum Denomination
 
 	
            
Integral Multiple in Excess of Minimum
 
 	
            
Original Certificate Principal Balance
 
 	
            
Pass-Through Rate
 
 
	
            I-A-1
 	
            $100,000
 	
            $1
 	
            $    37,843,000.0.
 	
            Class I-A-1 Pass-Through Rate
 
	
            I-A-2
 	
            $100,000
 	
            $1
 	
            $       4,322,000.00
 	
            Class I-A-2 Pass-Through Rate
 
	
            II-A-1
 	
            $100,000
 	
            $1
 	
            $    80,750,000.00
 	
            Class II-A-1 Pass-Through Rate
 
	
            II-A-2
 	
            $100,000
 	
            $1
 	
            $    14,251,000.00
 	
            Class II-A-2 Pass-Through Rate
 
	
            III-A-1
 	
            $100,000
 	
            $1
 	
            $  100,000,000.00
 	
            Class III-A-1 Pass-Through Rate
 
	
            III-A-2
 	
            $100,000
 	
            $1
 	
            $  191,735,000.00
 	
            Class III-A-2 Pass-Through Rate
 
	
            III-A-3
 	
            $100,000
 	
            $1
 	
            $    23,969,000.00
 	
            Class III-A-3 Pass-Through Rate
 
	
            III-A-4
 	
            $100,000
 	
            $1
 	
            $    35,079,000.00
 	
            Class III-A-4 Pass-Through Rate
 
	
            M-1
 	
            $100,000
 	
            $1
 	
            $    29,713,000.00
 	
            Class M-1 Pass-Through Rate
 
	
            M-2
 	
            $100,000
 	
            $1
 	
            $       8,996,000.00
 	
            Class M-2 Pass-Through Rate
 
	
            M-3
 	
            $100,000
 	
            $1
 	
            $       6,815,000.00
 	
            Class M-3 Pass-Through Rate
 
	
            M-4
 	
            $100,000
 	
            $1
 	
            $       3,271,000.00
 	
            Class M-4 Pass-Through Rate
 
	
            M-5
 	
            $100,000
 	
            $1
 	
            $        4,307,000.00
 	
            Class M-5 Pass-Through Rate
 
	
            X
 	
            $1
 	
            $1
 	
            $  545,195,120.61*
 	
            Class X Pass-Through Rate
 
	
            P
 	
            $1
 	
            $1
 	
            $                  100.00
 	
            N/A
 
	
            R
 	
            N/A
 	
            N/A
 	
            N/A
 	
            N/A
 

* Initial notional amount.

Upon original issue, the Certificates shall be executed and authenticated by the Securities Administrator and delivered by the Trustee to and upon the written order of the Depositor. The Certificates shall be executed by manual or facsimile signature on behalf of the Trust by the Securities Administrator by an authorized signatory. Certificates bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Securities Administrator shall bind the Trust, 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 herein executed by the Securities Administrator by manual signature, and such certificate of authentication shall be conclusive evidence, and the 

 

only evidence, that such Certificate has been duly authenticated and delivered hereunder. All Certificates shall be dated the date of their authentication.

The Depositor shall provide, or cause to be provided, to the Securities Administrator on a continuous basis, an adequate inventory of Certificates to facilitate transfers.

(b)        The Class X Certificates and Class P Certificates offered and sold to Qualified Institutional Buyers in reliance on Rule 144A under the Securities Act (“Rule 144A”) will be issued in the form of Definitive Certificates.

Section 6.02     Certificate Register; Registration of Transfer and Exchange of Certificates.

(a)        The Securities Administrator shall maintain, or cause to be maintained in accordance with the provisions of Section 6.09, a Certificate Register for the Certificates in which, subject to the provisions of subsections (b) and (c) below and to such reasonable regulations as it may prescribe, the Securities Administrator shall provide for the registration of Certificates and of Transfers and exchanges of Certificates as herein provided. Upon surrender for registration of Transfer of any Certificate, the Securities Administrator shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Certificates of the same Class and of like aggregate Percentage Interest.

At the option of a Certificateholder, Certificates may be exchanged for other Certificates of the same Class in authorized denominations and evidencing the same aggregate Percentage Interest upon surrender of the Certificates to be exchanged at the office or agency of the Securities Administrator. Whenever any Certificates are so surrendered for exchange, the Securities Administrator shall execute, authenticate, and deliver the Certificates that the Certificateholder making the exchange is entitled to receive. Every Certificate presented or surrendered for registration of Transfer or exchange shall be accompanied by a written instrument of Transfer in form satisfactory to the Securities Administrator duly executed by the holder thereof or his attorney duly authorized in writing.

No service charge to the Certificateholders shall be made for any registration of Transfer or exchange of Certificates, but payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any Transfer or exchange of Certificates may be required.

All Certificates surrendered for registration of Transfer or exchange shall be canceled and subsequently destroyed by the Securities Administrator in accordance with the Securities Administrator’s customary procedures.

(b)        No Transfer of a Private Certificate shall be made unless such Transfer is made pursuant to an effective registration statement under the Securities Act and any applicable state securities laws or is exempt from the registration requirements under the Securities Act and such state securities laws. In the event that a Transfer is to be made in reliance upon an exemption from the Securities Act and such laws, in order to assure compliance with the Securities Act and such laws, the Certificateholder desiring to effect such Transfer and such Certificateholder’s prospective transferee shall each certify to the Securities Administrator in writing the facts 

 

surrounding the Transfer in substantially the forms set forth in Exhibit E (the “Transferor Certificate”) and (x) deliver a letter in substantially the form of either Exhibit F (the “Investment Letter”) or Exhibit G (the “Rule 144A Letter”) or (y) there shall be delivered to the Securities Administrator an Opinion of Counsel, at the expense of the transferor, that such Transfer may be made pursuant to an exemption from the Securities Act, which Opinion of Counsel shall not be an expense of the Depositor, the Seller, the Securities Administrator, the Trustee or the Trust Fund. The Depositor shall provide to any Holder of a Private Certificate and any prospective transferee designated by any such Holder, information regarding the related Certificates and the Mortgage Loans and such other information as shall be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for Transfer of any such Certificate without registration thereof under the Securities Act pursuant to the registration exemption provided by Rule 144A. The Securities Administrator shall cooperate with the Depositor in providing the Rule 144A information referenced in the preceding sentence, including providing to the Depositor such information regarding the Certificates, the Mortgage Loans and other matters regarding the Trust Fund as the Depositor shall reasonably request to meet its obligation under the preceding sentence. Each Holder of a Private Certificate desiring to effect such Transfer shall, and does hereby agree to, indemnify the Securities Administrator, the Depositor and the Seller against any liability that may result if the Transfer is not so exempt or is not made in accordance with such federal and state laws.

No Transfer of an ERISA Restricted Certificate shall be made unless the Securities Administrator shall have received either (i) a representation from the transferee of such Certificate acceptable to and in form and substance satisfactory to the Securities Administrator to the effect that such transferee is not an employee benefit plan subject to Section 406 of ERISA and/or a plan subject to Section 4975 of the Code, or a Person acting on behalf of any such plan or using the assets of any such plan, or (ii) in the case of any such ERISA Restricted Certificate presented for registration in the name of an employee benefit plan subject to ERISA, or a plan subject to Section 4975 of the Code (or comparable provisions of any subsequent enactments), or a trustee of any such plan or any other person acting on behalf of any such plan, an Opinion of Counsel satisfactory to the
Securities Administrator for the benefit of the Securities Administrator, the Depositor and the Servicer and on which they may rely to the effect that the purchase and holding of such ERISA Restricted Certificate is permissible under applicable law, will not result in any prohibited transactions under ERISA or Section 4975 of the Code and will not subject the Securities Administrator, the Depositor or any Servicer to any obligation in addition to those expressly undertaken in this Agreement, which Opinion of Counsel shall not be an expense of the Securities Administrator, the Depositor or any Servicer.  Notwithstanding anything else to the contrary herein, any purported transfer of an ERISA Restricted Certificate to or on behalf of an employee benefit plan subject to Section 406 of ERISA and/or a plan subject to Section 4975 of the Code other than in compliance with the foregoing shall be void and of no effect; provided that the restriction set forth in this sentence
shall not be applicable if there has been delivered to the Securities Administrator an Opinion of Counsel meeting the requirements of clause (ii) of the first sentence of this paragraph.  The Securities Administrator shall not be under any liability to any Person for any registration of transfer of any ERISA Restricted Certificate that is in fact not permitted by this Section 6.02(b) or for making any payments due on such Certificate to the Holder thereof or taking any other action with respect to such Holder under the provisions of this Agreement.  The Securities Administrator shall be entitled, but not obligated, to recover from any Holder of any ERISA Restricted Certificate that was in fact an 

 

employee benefit plan subject to Section 406 of ERISA or a plan subject to Section 4975 of the Code or a Person acting on behalf of any such plan at the time it became a Holder or, at such subsequent time as it became such a plan or Person acting on behalf of such a plan, all payments made on such ERISA Restricted Certificate at and after either such time. Any such payments so recovered by the Securities Administrator shall be paid and delivered by the Securities Administrator to the last preceding Holder of such Certificate that is not such a plan or Person acting on behalf of a plan.

Each beneficial owner of a Class M-1, Class M-2, Class M-3, Class M-4 or Class M-5 Certificate or any interest therein shall be deemed to have represented, by virtue of its acquisition or holding of that certificate or interest therein, that either (i) it is not a Plan or investing with “Plan Assets”, (ii) it has acquired and is holding such certificate in reliance on the Exemption, and that it understands that there are certain conditions to the availability of the Exemption, including that the certificate must be rated, at the time of purchase, not lower than “BBB-“ (or its equivalent) by S&P 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.

(c)        (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 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 Trustee shall require delivery to it, and shall not register the Transfer of any Residual Certificate until its receipt of, an affidavit and agreement (a “Transfer Affidavit and Agreement,” in the form attached hereto as Exhibit D) from the proposed Transferee, in form and substance satisfactory to the Securities Administrator, representing and warranting, among other things, that such Transferee 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 that 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 6.02(d) and agrees to be bound by them.

(C)       Notwithstanding the delivery of a Transfer Affidavit and Agreement by a proposed Transferee under clause (B) above, if an authorized officer of the Securities Administrator who is 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 Transferor Affidavit (in the form attached hereto as Exhibit E) to the Securities Administrator stating that, among other things, it has no actual knowledge that such other Person is not a Permitted Transferee.

(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 regulation Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring an Ownership Interest in a Residual Certificate, if it is, 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 and all of such other documents as shall have been reasonably required by the Securities Administrator as a condition to such registration. In addition, no Transfer of a Residual Certificate shall be made unless the Securities Administrator shall have received a representation letter from the Transferee of such Certificate to the effect that such Transferee is a Permitted Transferee.

(iii)        (A)  If any purported Transferee shall become a Holder of a Residual Certificate in violation of the provisions of this Section 6.02(d), then the last preceding Permitted Transferee shall be restored, to the extent permitted by law, to all rights as holder thereof retroactive to the date of registration of such Transfer of such Residual Certificate. 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 6.02(d) 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 6.02(d) 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 or any Affiliate of the Securities Administrator. The proceeds of such sale, net of the commissions (which may include commissions payable to the Securities Administrator or its Affiliates), 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 described in Treasury regulations sections 1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to the “excess inclusions” of such Residual Certificate 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 which is a
Disqualified Organization. Reasonable compensation for providing such information may be charged or collected by the Securities Administrator.

(v)        The provisions of this Section 6.02(d) set forth prior to this subsection (v) may be modified, added to or eliminated, provided that there shall have been delivered to the Securities Administrator at the expense of the party seeking to modify, add to or eliminate any such provision the following:

(A)       written notification from each Rating Agency to the effect that the modification, addition to or elimination of such provisions will not cause such Rating Agency to downgrade its then-current ratings of any Class of Certificates; and

(B)        an Opinion of Counsel, in form and substance satisfactory to the Securities Administrator, to the effect that such modification of, addition to or elimination of such provisions will not cause any Trust REMIC to cease to qualify as a REMIC and will not cause any Trust REMIC, as the case may be, to be subject to an entity-level tax caused by the Transfer of any Residual Certificate to a Person that is not a Permitted Transferee or a Person other than the prospective transferee to be subject to a REMIC-tax caused by the Transfer of a Residual Certificate to a Person that is not a Permitted Transferee.

(d)        Subject to the preceding subsections, upon surrender for registration of transfer of any Certificate at any office or agency of the Securities Administrator maintained for such purpose pursuant to Section 9.11, the Securities Administrator shall execute, 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.

(e)        At the option of the Holder thereof, any Certificate may be exchanged for other Certificates of the same Class with authorized denominations and a like aggregate Percentage Interest, upon surrender of such Certificate to be exchanged at any office or agency of the Securities Administrator maintained for such purpose pursuant to Section 9.11. 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 Securities Administrator) be duly endorsed by, or be accompanied by a written instrument of transfer in the form satisfactory to the Securities Administrator 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-I Interest and the Class R-II Interest, respectively, in each case that was evidenced by the Class R Certificate being exchanged.

(f)         No service charge to the Certificateholders shall be made 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.

(g)        The preparation and delivery of all certificates and opinions referred to above in this Section 6.02 shall not be an expense of the Trust Fund, the Securities Administrator, the Depositor or the Seller.

(h)        All Certificates surrendered for transfer and exchange shall be canceled and destroyed by the Securities Administrator in accordance with its customary procedures.

	
            Section 6.03
 	
            Mutilated, Destroyed, Lost or Stolen Certificates.
 

If (a) any mutilated Certificate is surrendered to the Securities Administrator, or the Securities Administrator receives evidence to its satisfaction of the destruction, loss or theft of any Certificate and of the ownership thereof and (b) there is delivered to the Securities Administrator such security or indemnity as may be required by them to save each of them 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 like Class, tenor and Percentage Interest. In connection with the issuance of any new Certificate under this Section 6.03, 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 6.03 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. All Certificates surrendered to the Securities Administrator under the terms of this 

 

Section 6.03 shall be canceled and destroyed by the Securities Administrator in accordance with its standard procedures without liability on its part.

	
            Section 6.04
 	
            Persons Deemed Owners.
 

The Depositor, the Servicer, the Trustee, the Master Servicer, the Securities Administrator and any of their agents may treat the person in whose name any Certificate is registered as the owner of such Certificate for the purpose of receiving distributions as provided in this Agreement and for all other purposes whatsoever, and none of the Depositor, the Servicer, the Trustee, the Master Servicer, the Securities Administrator nor any of their agents shall be affected by any notice to the contrary.

	
            Section 6.05
 	
            Access to List of Certificateholders’ Names and Addresses.
 

If three or more Certificateholders (a) request such information in writing from the Securities Administrator, (b) state that such Certificateholders desire to communicate with other Certificateholders with respect to their rights under this Agreement or under the Certificates, and (c) provide a copy of the communication that such Certificateholders propose to transmit or if the Depositor shall request such information in writing from the Securities Administrator, then the Securities Administrator shall, within ten Business Days after the receipt of such request, provide the Depositor or such Certificateholders at such recipients’ expense the most recent list of the Certificateholders of the Trust Fund held by the Securities Administrator, if any. The Depositor and every Certificateholder, by receiving and holding a Certificate, agree that the Securities Administrator shall not be
held accountable by reason of the disclosure of any such information as to the list of the Certificateholders hereunder, regardless of the source from which such information was derived.

	
            Section 6.06
 	
            Book-Entry Certificates.
 

The Regular Certificates, upon original issuance, shall be issued in the form of one or more typewritten Certificates representing the Book- Entry Certificates, to be delivered to the Depository by or on behalf of the Depositor. Such Certificates shall initially be registered on the Certificate Register in the name of the Depository or its nominee, and no Certificate Owner of such Certificates will receive a definitive certificate representing such Certificate Owner’s interest in such Certificates, except as provided in Section 6.08. Unless and until definitive, fully registered Certificates (“Definitive Certificates”) have been issued to the Certificate Owners of such Certificates pursuant to Section 6.08:

	
            (a)
 	
            the provisions of this Section shall be in full force and effect;
 

(b)        the Depositor and the Securities Administrator may deal with the Depository and the Depository Participants for all purposes (including the making of distributions) as the authorized representative of the respective Certificate Owners of such Certificates;

(c)        registration of the Book-Entry Certificates may not be transferred by the Securities Administrator except to another Depository;

 

 

(d)        the rights of the respective Certificate Owners of such Certificates shall be exercised only through the Depository and the Depository Participants and shall be limited to those established by law and agreements between the Owners of such Certificates and the Depository and/or the Depository Participants. Pursuant to the Depository Agreement, unless and until Definitive Certificates are issued pursuant to Section 6.08, the Depository will make book-entry transfers among the Depository Participants and receive and transmit distributions of principal and interest on the related Certificates to such Depository Participants;

(e)        the Depository may collect its usual and customary fees, charges and expenses from its Depository Participants;

(f)         the Depositor, the Servicer, the Trustee, the Master Servicer and the Securities Administrator may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its Depository Participants; and

(g)        to the extent that the provisions of this Section conflict with any other provisions of this Agreement, the provisions of this Section shall control.

For purposes of any provision of this Agreement requiring or permitting actions with the consent of, or at the direction of, Certificateholders evidencing a specified percentage of the aggregate unpaid principal amount of any Class of Certificates, such direction or consent may be given by Certificate Owners (acting through the Depository and the Depository Participants) owning Book-Entry Certificates evidencing the requisite percentage of principal amount of such Class of Certificates.

	
            Section 6.07
 	
            Notices to Depository.
 

Whenever any notice or other communication is required to be given to Certificateholders of a Class with respect to which Book-Entry Certificates have been issued, unless and until Definitive Certificates shall have been issued to the related Certificate Owners, the Securities Administrator shall give all such notices and communications to the Depository.

	
            Section 6.08
 	
            Definitive Certificates.
 

If, after Book-Entry Certificates have been issued with respect to any Certificates, (a) the Depositor or the Depository advises the Securities Administrator that the Depository is no longer willing or able to discharge properly its responsibilities under the Depository Agreement with respect to such Certificates and the Securities Administrator or the Depositor is unable to locate a qualified successor, (b) the Depositor, at its sole option, advises the Securities Administrator that it elects to terminate the book-entry system with respect to such Certificates through the Depository or (c) after the occurrence and continuation of either of the events described in clauses (a) or (b) above, Certificate Owners of such Book-Entry Certificates having not less than fifty one percent (51%) of the Voting Rights evidenced by any Class of Book-Entry Certificates advise the Securities
Administrator and the Depository in writing through the Depository Participants that the continuation of a book-entry system with respect to Certificates of such Class through the Depository (or its successor) is no longer in the best interests of the Certificate Owners of such Class, then the Securities Administrator shall notify all Certificate Owners of such Certificates, through the Depository, of the occurrence of any such event and of the 

 

availability of Definitive Certificates to applicable Certificate Owners requesting the same.  The Depositor shall provide the Securities Administrator with an adequate inventory of certificates to facilitate the issuance and transfer of Definitive Certificates. Upon surrender to the Securities Administrator of any such Certificates by the Depository, accompanied by registration instructions from the Depository for registration, the Securities Administrator shall countersign and deliver such Definitive Certificates. Neither the Depositor nor the Securities Administrator shall be liable for any delay in delivery of such instructions and each may conclusively rely on, and shall be protected in relying on, such instructions. Upon the issuance of such Definitive Certificates, all references herein to obligations imposed upon or to be performed by the Depository shall be deemed to be imposed upon and performed
by the Securities Administrator, to the extent applicable with respect to such Definitive Certificates and the Securities Administrator shall recognize the Holders of such Definitive Certificates as Certificateholders hereunder.

	
            Section 6.09
 	
            Maintenance of Office or Agency.
 

Certificates may be surrendered for registration of transfer or exchange at the applicable Corporate Trust Office of the Securities Administrator. The Securities Administrator will give prompt written notice to the Certificateholders of any change in such location of any such office or agency.

 

 

ARTICLE VII

 

THE DEPOSITOR, THE SERVICER AND THE MASTER SERVICER

	
            Section 7.01
 	
            Liabilities of the Depositor, the Servicer and the Master Servicer.
 

Each of the Depositor, the Servicer and the Master Servicer shall be liable in accordance herewith only to the extent of the obligations specifically imposed upon and undertaken by it herein.

Section 7.02     Merger or Consolidation of the Depositor, the Servicer or the Master Servicer.

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

(b)        The Depositor, the Servicer or the Master Servicer may be merged or consolidated, or any corporation resulting from any merger or consolidation to which the Depositor, the Servicer or the Master Servicer shall be a party, or any Person succeeding to the business of the Depositor, the Servicer or the Master Servicer shall be the successor of the Depositor, the Servicer or the Master Servicer hereunder, without the execution or filing of any paper or further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding, provided that any successor servicer shall have represented that it meets the eligibility criteria set forth in Section 8.02.

	
            Section 7.03
 	
            Indemnification of Depositor and the Servicer.
 

(a)        The Depositor agrees to indemnify the Indemnified Persons for, and to hold them harmless against, any loss, liability or expense (including reasonable legal fees and disbursements of counsel) incurred on their part that may be sustained in connection with, arising out of, or relating to, any claim or legal action (including any pending or threatened claim or legal action) relating to this Agreement or the Certificates (i) related to the Depositor’s failure to perform its duties in compliance with this Agreement (except as any such loss, liability or expense shall be otherwise reimbursable pursuant to this Agreement) or (ii) incurred by reason of the Depositor’s willful misfeasance, bad faith or gross negligence in the performance of duties hereunder or by reason of reckless disregard of obligations and duties hereunder. This
indemnity shall survive the resignation and the termination of this Agreement.

(b)        The Servicer agrees to indemnify the Indemnified Persons for, and to hold them harmless against, any loss, liability or expense (including reasonable legal fees and 

 

disbursements of counsel) incurred on their part that may be sustained in connection with, arising out of, or relating to, any claim or legal action (including any pending or threatened claim or legal action) relating to the Servicer’s gross negligence in the performance of its duties under this Agreement or failure to service the Mortgage Loans in material compliance with the terms of this Agreement and for a material breach of any representation, warranty or covenant of the Servicer contained herein.  The Servicer shall immediately notify the Trustee if a claim is made by a third party with respect to this Agreement or the Mortgage Loans, assume (with the consent of the Trustee and with counsel reasonably satisfactory to the Trustee) the defense of any such claim and pay all expenses in connection therewith, including counsel fees, and promptly appeal or pay, discharge and satisfy any judgment or
decree which may be entered against it or any Indemnified Person in respect of such claim, but failure to so notify the Servicer shall not limit its obligations hereunder.  The Servicer agrees that it will not enter into any settlement of any such claim without the consent of the Indemnified Persons unless such settlement includes an unconditional release of such Indemnified Persons from all liability that is the subject matter of such claim.  The provisions of this Section 7.03(b) shall survive termination of this Agreement.

Section 7.04     Limitations on Liability of the Depositor, Securities Administrator, Master Servicer, Servicer and Others.

Subject to the obligation of the Depositor and the Servicer to indemnify the Indemnified Persons pursuant to Section 7.03:

(a)        Neither the Depositor, the Securities Administrator, the Master Servicer nor any of the directors, officers, employees or agents of the Depositor, the Securities Administrator and the Master Servicer shall be under any liability to the Indemnified Persons, the Trust Fund or the Certificateholders for taking any action or for refraining from taking any action in good faith pursuant to this Agreement, or for errors in judgment; provided, however, that this provision shall not protect the Depositor, the Securities Administrator, the Master Servicer or any such Person against any breach of warranties, representations or covenants made herein or against any specific liability imposed on any such Person pursuant hereto or against any liability which would otherwise be imposed by reason of such Person’s willful misfeasance, bad faith or
gross negligence in the performance of duties or by reason of reckless disregard of obligations and duties hereunder.

(b)        The Depositor, the Securities Administrator, the Master Servicer and any director, officer, employee or agent of the Depositor, the Securities Administrator and the Master Servicer may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person respecting any matters arising hereunder.

(c)        The Depositor, the Securities Administrator, the Master Servicer, the Servicer, the Trustee, the Custodians and any director, officer, employee or agent of the Depositor, the Securities Administrator, the Master Servicer, the Servicer,  the Trustee or the Custodians shall be indemnified by the Trust Fund and held harmless thereby against any loss, liability or expense (including reasonable legal fees and disbursements of counsel) incurred on their part that may be sustained in connection with, arising out of, or relating to this Agreement, the Custodial Agreements or the Certificates (including any pending or threatened claim or legal action), other than (i) with respect to the Servicer, such loss, liability or expense related to the Servicer’s 

 

failure to perform its duties in compliance with this Agreement (except as any such loss, liability or expense shall be otherwise reimbursable pursuant to this Agreement) or, with respect to the each Custodian, to the related Custodian’s failure to perform its duties hereunder, (ii) with respect to the Servicer, any such loss, liability or expense incurred by reason of the Servicer’s willful misfeasance, bad faith or gross negligence in the performance of its duties hereunder or (iii) with respect to each Custodian, any such loss, liability or expense incurred by reason of the related Custodian’s willful misfeasance, bad faith or gross negligence in the performance of its duties hereunder.

(d)        The Depositor the Securities Administrator or the Master Servicer shall not be under any obligation to appear in, prosecute or defend any legal action that is not incidental to its duties under this Agreement and that in its opinion may involve it in any expense or liability; provided, however, that each of the Depositor, the Securities Administrator and the Master Servicer may in its discretion, undertake any such action which it may deem necessary or desirable with respect to this Agreement and the rights and duties of the parties hereto and the interests of the Certificateholders hereunder. In such event, the legal expenses and costs of such action and any liability resulting therefrom (except any loss, liability or expense incurred by reason of willful misfeasance, bad faith or gross negligence in the performance of duties hereunder
or by reason of reckless disregard of obligations and duties hereunder)  shall be expenses, costs and liabilities of the Trust Fund, and the Depositor, the Securities Administrator and the Master Servicer shall be entitled to be reimbursed therefor out of the Distribution Account as provided by Section 3.32. Nothing in this Subsection 7.04(d) shall affect the Master Servicer’s obligation to take such actions as are necessary to ensure the servicing and administration of the Mortgage Loans pursuant to this Agreement.

(e)        In taking or recommending any course of action pursuant to this Agreement, unless specifically required to do so pursuant to this Agreement, the Trustee shall not be required to investigate or make recommendations concerning potential liabilities which the Trust might incur as a result of such course of action by reason of the condition of the Mortgaged Properties.

(f)         The Trustee shall not be liable for any acts or omissions of the Servicer, the Depositor or the Custodians.

	
            Section 7.05
 	
            The Servicer Not to Resign.
 

(a)        The Servicer shall not resign from the obligations and duties hereby imposed on it except upon the determination that its duties hereunder are no longer permissible under applicable law or the performance of such duties are no longer possible in order to comply with applicable law and such incapacity or impossibility cannot be cured by the Servicer.  Any determination permitting the resignation of the Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to the Master Servicer which Opinion of Counsel shall be in form and substance acceptable to the Master Servicer.  No appointment of a successor to the Servicer shall be effective hereunder unless (a) the Rating Agencies have confirmed in writing that such appointment will not result in a downgrade, qualification or withdrawal of the then current ratings assigned to
the Certificates, (b) such successor shall have represented that it is meets the eligibility criteria set forth in Section 8.02 and (c) such successor has agreed in writing to assume the obligations of the Servicer hereunder.  The Servicer shall provide a copy of the 

 

written confirmation of the Rating Agencies and the agreement executed by such successor to the Master Servicer.  No such resignation shall become effective until a successor servicer or the Master Servicer shall have assumed the Servicer’s responsibilities and obligations hereunder. The Servicer shall notify the Master Servicer and the Rating Agencies of its resignation.

(b)        Except as expressly provided herein, the Servicer shall not assign or transfer any of its rights, benefits or privileges hereunder to any other Person, or delegate to or subcontract with, or authorize or appoint any other Person to perform any of the duties, covenants or obligations to be performed by the Servicer hereunder. The foregoing prohibition on assignment shall not prohibit the Servicer from designating a Sub-Servicer as payee of any indemnification amount payable to the Servicer hereunder; provided, however, that as provided in Section 3.03, no Sub-Servicer shall be a third-party beneficiary hereunder and the parties hereto shall not be required to recognize any Sub-Servicer as an indemnitee under this Agreement.

Section 7.06     Termination of the Servicer Without Cause; Appointment of Special Servicer.

(a)        For so long as the Seller retains ownership of the servicing rights with respect to any of the Mortgage Loans, the Seller may, at its option, terminate the servicing responsibilities of the Servicer hereunder with respect to such Mortgage Loans without cause. No such termination shall become effective unless and until a successor to such Servicer shall have been appointed to service and administer the related Mortgage Loans pursuant to the terms and conditions of this Agreement.  No appointment shall be effective unless (i) such successor servicer meets the eligibility criteria contained in Section 8.02, (ii) the Master Servicer shall have consented to such appointment, (iii) the Rating Agencies have been notified in writing of such appointment and such successor servicer meets the Minimum Servicing Requirements, (iv) such successor
has agreed to assume the obligations of the Servicer hereunder to the extent of the Mortgage Loans and (v) all amounts reimbursable to the Servicer pursuant to the terms of this Agreement shall have been paid to the Servicer by the successor appointed pursuant to the terms of this Section 7.06 or by the Seller including without limitation, all unreimbursed Advances and Servicing Advances made by the Servicer and all out-of-pocket expenses of the Servicer incurred in connection with the transfer of servicing to such successor.  The Seller shall provide a copy of the written confirmation of the Rating Agencies and the agreement executed by such successor to the Trustee and the Master Servicer.

The rights of the Seller to terminate the Servicer pursuant to this Section 7.06(a) will cease to exist if the Seller sells or otherwise divests itself of its ownership of the servicing rights with respect to the Mortgage Loans; provided, however, that this Section 7.06(a) will be operative at any time the Seller retains or comes into possession of such servicing rights.

(b)        In addition, the Seller may, at its option, appoint a special servicer with respect to certain of the Mortgage Loans. The Seller and GMAC Mortgage Corporation shall negotiate in good faith with any proposed special servicer with respect to the duties and obligations of such special servicer with respect to any such Mortgage Loan. Any subservicing agreement shall contain terms and provisions not inconsistent with this Agreement and shall obligate the special servicer to service such Mortgage Loans in accordance with Accepted Servicing Practices. The 

 

fee payable to the special servicer for the performance of such duties and obligations will paid from the Servicing Fee collected by GMAC Mortgage Corporation with respect to each such Mortgage Loan and will be remitted to such special servicer by GMAC Mortgage Corporation. 

	
            Section 7.07
 	
            Limitation on Resignation of the Master Servicer.
 

The Master Servicer shall not resign from the obligations and duties hereby imposed on it except upon determination that its duties hereunder are no longer permissible under applicable law. Any such determination pursuant to the preceding sentence permitting the resignation of the Master Servicer shall be evidenced by an Opinion of Counsel to such effect obtained at the expense of the Master Servicer and delivered to the Trustee and the Rating Agencies. No resignation of the Master Servicer shall become effective until the Trustee or a successor Master Servicer meeting the criteria specified in Section 7.08 shall have assumed the Master Servicer’s responsibilities, duties, liabilities (other than those liabilities arising prior to the appointment of such successor) and obligations under this Agreement.

	
            Section 7.08
 	
            Assignment of Master Servicing.
 

The Master Servicer may sell and assign its rights and delegate its duties and obligations in its entirety as Master Servicer under this Agreement; provided, however, that: (i) the purchaser or transferee accepting such assignment and delegation and assuming the obligations of the Master Servicer hereunder (a) shall have a net worth of not less than $15,000,000 (unless otherwise approved by each Rating Agency pursuant to clause (ii) below); (b) shall be reasonably satisfactory to the Trustee (as evidenced in a writing signed by the Trustee); and (c) shall execute and deliver to the Trustee an agreement, in form and substance reasonably satisfactory to the Trustee, which contains an assumption by such Person of the due and punctual performance and observance of each covenant and condition to be performed or observed by it as master servicer under this Agreement, any custodial agreement
from and after the effective date of such agreement; (ii) each Rating Agency shall be given prior written notice of the identity of the proposed successor to the Master Servicer and each Rating Agency’s rating of the Certificates in effect immediately prior to such assignment, sale and delegation will not be downgraded, qualified or withdrawn as a result of such assignment, sale and delegation, as evidenced by a letter to such effect delivered to the Master Servicer and the Trustee; and  (iii) the Master Servicer assigning the master servicing shall deliver to the Trustee an officer’s certificate and an Opinion of Independent counsel, each stating that all conditions precedent to such action under this Agreement have been completed and such action is permitted by and complies with the terms of this Agreement. No such assignment or delegation shall affect any liability of the Master Servicer arising out of acts or omissions prior to the effective date thereof.

	
            Section 7.09
 	
            Rights of the Depositor in Respect of the Servicer and the Master Servicer.
 

Each of the Master Servicer and the Servicer shall afford (and any Sub-Servicing Agreement shall provide that each Sub-Servicer shall afford) the Depositor and the Trustee, upon reasonable notice, during normal business hours, access to all records maintained by the Master Servicer or the Servicer (and any such Sub-Servicer) in respect of the Servicer’s rights and obligations hereunder and access to officers of the Master Servicer or the Servicer (and those of any such Sub-Servicer) responsible for such obligations, and the Master Servicer shall have 

 

access to all such records maintained by the Servicer and any Sub-Servicers. Upon request, each of the Master Servicer and the Servicer shall furnish to the Depositor and the Trustee its (and any such Sub-Servicer’s) most recent financial statements and such other information relating to the Master Servicer’s or the Servicer’s capacity to perform its obligations under this Agreement as it possesses (and that any such Sub-Servicer possesses). To the extent such information is not otherwise available to the public, the Depositor and the Trustee shall not disseminate any information obtained pursuant to the preceding two sentences without the Master Servicer’s or the Servicer’s written consent, except as required pursuant to this Agreement or to the extent that it is appropriate to do so (i) to its legal counsel, auditors, taxing authorities or other governmental agencies and the
Certificateholders, (ii) pursuant to any law, rule, regulation, order, judgment, writ, injunction or decree of any court or governmental authority having jurisdiction over the Depositor and the Trustee or the Trust Fund, and in any case, the Depositor or the Trustee, (iii) disclosure of any and all information that is or becomes publicly known, or information obtained by the Trustee from sources other than the Depositor, the Servicer or the Master Servicer, (iv) disclosure as required pursuant to this Agreement or (v) disclosure of any and all information (A) in any preliminary or final offering circular, registration statement or contract or other document pertaining to the transactions contemplated by the Agreement approved in advance by the Depositor, the Servicer or the Master Servicer or (B) to any affiliate, independent or internal auditor, agent, employee or attorney of the Trustee having a need to know the same, provided that the Trustee advises such recipient of the
confidential nature of the information being disclosed, shall use its best efforts to assure the confidentiality of any such disseminated non-public information. Nothing in this Section 7.09 shall limit the obligation of the Servicer to comply with any applicable law prohibiting disclosure of information regarding the Mortgagors and the failure of the Servicer to provide access as provided in this Section 7.09 as a result of such obligation shall not constitute a breach of this Section.  Nothing in this Section 7.09 shall require the Servicer to collect, create, collate or otherwise generate any information that it does not generate in its usual course of business.  The Servicer shall not be required to make copies of or ship documents to any party unless provisions have been made for the reimbursement of the costs thereof. The Depositor may, but is not obligated to, enforce the obligations of the Master Servicer and the Servicer under this Agreement and may, but is not
obligated to, perform, or cause a designee to perform, any defaulted obligation of the Master Servicer or the Servicer under this Agreement or exercise the rights of the Master Servicer or the Servicer under this Agreement; provided that neither the Master Servicer nor the Servicer shall be relieved of any of its obligations under this Agreement by virtue of such performance by the Depositor or its designee. The Depositor shall not have any responsibility or liability for any action or failure to act by the Master Servicer or the Servicer and is not obligated to supervise the performance of the Master Servicer or the Servicer under this Agreement or otherwise.

 

 

ARTICLE VIII

 

DEFAULT; TERMINATION OF SERVICER AND MASTER SERVICER

	
            Section 8.01
 	
            Events of Default.
 

(a)        In case one or more of the following events of default by the Servicer (each, a “Servicer Default”) shall occur and be continuing, that is to say:

(i)         any failure by the Servicer to remit to the Securities Administrator any payment required to be made under the terms of this Agreement which continues unremedied for a period of two  Business Days; or

(ii)         failure on the part of the Servicer to duly observe or perform in any material respect any other of the covenants or agreements on the part of the Servicer set forth in this Agreement (other than those described in (viii) and (ix) below), the breach of which has a material adverse effect and which continue unremedied for a period of thirty days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer by the Master Servicer or to the Servicer and the Master Servicer by the holders of Certificates evidencing not less than 25% of the Voting Rights evidenced by the Certificates; or

(iii)        a decree or order of a court or agency or supervisory authority having jurisdiction for the appointment of a conservator or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against the Servicer and such decree or order shall have remained in force undischarged or unstayed for a period of sixty days; or

(iv)        the Servicer shall consent to the appointment of a conservator or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of assets and liabilities or similar proceedings of or relating to the Servicer or of or relating to all or substantially all of its property; or

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

(vi)        the Servicer attempts to assign its right to servicing compensation hereunder (other than any payment by the Servicer to the Seller of any portion of the Servicing Fee payable to the Servicer as provided in a separate side letter between the Seller and the Servicer) or the Servicer attempts to sell or otherwise dispose of all or substantially all of its property or assets or to assign this Agreement or the servicing responsibilities hereunder or to delegate its duties hereunder or any portion thereof except, in each case as otherwise permitted herein; or

 

 

(vii)       the Servicer ceases to be qualified to transact business in any jurisdiction where it is currently so qualified, but only to the extent such non-qualification materially and adversely affects the Servicer’s ability to perform its obligations hereunder;

(viii)      any failure by the Servicer to duly perform, within the required time period, its obligation to provide the annual statements and the accountant’s report described in Sections 3.13 and 3.14 hereof, which failure continues unremedied for a period of ten (10) days after the date on which written notice of such failure, requiring the same to be remedied, has been given to the Servicer by the Master Servicer; or

(ix)        any failure by the Servicer to provide, within the required time period set forth in Section 4.03 hereof, any required reports or data pertaining to the Mortgage Loans, which failure continues unremedied for a period of thirty (30) days after the date on which written notice of such failure, requiring the same to be remedied, has been given to the Servicer by the Master Servicer;

then, and in each and every such case, so long as a Servicer Default shall not have been remedied, the Master Servicer, by notice in writing to the Servicer shall with respect to a payment default by the Servicer pursuant to Section 8.01(i) of this Agreement and, upon the occurrence and continuance of any other Servicer Default, may, and, at the written direction of Certificateholders evidencing not less than 25% of the Voting Rights shall, in addition to whatever rights the Trustee on behalf of the Certificateholders may have under Section 7.03 and at law or equity to damages, including injunctive relief and specific performance, terminate all the rights and obligations of the Servicer under this Agreement and in and to the Mortgage Loans and the proceeds thereof without compensating the Servicer for the same with respect to a default by the Servicer.  On or after the receipt by the Servicer of
such written notice, all authority and power of the Servicer under this Agreement whether with respect to the related Mortgage Loans or otherwise, shall pass to and be vested in the Master Servicer.  Upon written request from the Master Servicer, the Servicer shall prepare, execute and deliver, any and all documents and other instruments, place in the Trustee’s possession all Mortgage Files relating to the related Mortgage Loans, and do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and endorsement or assignment of the Mortgage Loans and related documents, or otherwise, at such Servicer’s sole expense.  The defaulting Servicer shall cooperate with the Master Servicer in effecting the termination of the Servicer’s responsibilities and rights hereunder including, without limitation, the transfer to such successor for administration by it of all cash amounts which shall
at the time be credited by the defaulting Servicer to the Custodial Account or Escrow Account or thereafter received with respect to the related Mortgage Loans or any related REO Property (provided, however, that the defaulting Servicer shall continue to be entitled to receive all amounts accrued or owing to it under this Agreement on or prior to the date of such termination, whether in respect of Advances, Servicing Advances, accrued and unpaid Servicing Fees or otherwise, and shall continue to be entitled to the benefits of Section 7.04, notwithstanding any such termination, with respect to events occurring prior to such termination).  The Master Servicer shall not have knowledge of a Servicer Default unless a Responsible Officer of the Master Servicer has actual knowledge or unless written notice of any Servicer Default is received by the Master Servicer at its address for notice and such notice references the Certificates, the Trust Fund or this Agreement.

 

 

(b)        In case one or more of the following events of default by the Master  Servicer (each, a “Master Servicer Default”) shall occur and be continuing, that is to say:

(i)         any failure on the part of the Master Servicer duly to observe or perform in any material respect any other of the covenants or agreements on the part of the Master Servicer contained in this Agreement, or the breach by the Master Servicer of any representation and warranty contained in Section 2.03, which continues unremedied for a period of thirty (30) days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Master Servicer by the Depositor or the Trustee or to the Master Servicer, the Depositor and the Trustee by the Holders of Certificates entitled to at least twenty-five percent (25%) of the Voting Rights; or

(ii)         a decree or order of a court or agency or supervisory authority having jurisdiction in the premises in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law or the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceeding, or for the winding-up or liquidation of its affairs, shall have been entered against the Master Servicer and such decree or order shall have remained in force undischarged or unstayed for a period of ninety (90) days; or

(iii)        the Master Servicer shall consent to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to it or of or relating to all or substantially all of its property; or

(iv)        the Master Servicer shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of any applicable insolvency or reorganization statute, make an assignment for the benefit of its creditors, or voluntarily suspend payment of its obligations.

If a Master Servicer Default shall occur, then, and in each and every such case, so long as such Master Servicer Default shall not have been remedied, the Depositor or the Trustee may, and at the written direction of the Holders of Certificates entitled to at least 51% of Voting Rights, the Trustee shall, by notice in writing to the Master Servicer (and to the Depositor if given by the Trustee or to the Trustee if given by the Depositor) with a copy to each Rating Agency, terminate all of the rights and obligations of the Master Servicer in its capacity as Master Servicer under this Agreement, to the extent permitted by law, and in and to the Mortgage Loans and the proceeds thereof. On or after the receipt by the Master Servicer of such written notice, all authority and power of the Master Servicer under this Agreement, whether with respect to the Certificates (other than as a Holder of
any Certificate) or the Mortgage Loans or otherwise including, without limitation, the compensation payable to the Master Servicer under this Agreement, shall pass to and be vested in the Trustee pursuant to and under this Section, and, without limitation, the Trustee is hereby authorized and empowered, as attorney-in-fact or otherwise, to execute and deliver, on behalf of and at the expense of the Master Servicer, any and all documents and other instruments and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and endorsement or assignment of the Mortgage Loans and related 

 

documents, or otherwise. The Master Servicer agrees promptly (and in any event no later than ten Business Days subsequent to such notice) to provide the Trustee with all documents and records requested by it to enable it to assume the Master Servicer’s functions under this Agreement, and to cooperate with the Trustee in effecting the termination of the Master Servicer’s responsibilities and rights under this Agreement (provided, however, that the Master Servicer shall continue to be entitled to receive all amounts accrued or owing to it under this Agreement on or prior to the date of such termination and shall continue to be entitled to the benefits of Section 7.03, notwithstanding any such termination, with respect to events occurring prior to such termination). For purposes of this Section 8.01, the Trustee shall not be deemed to have knowledge of a Master Servicer Default unless a
Responsible Officer of the Trustee assigned to and working in the Trustee’s Corporate Trust Office has actual knowledge thereof or unless written notice of any event which is in fact such a Master Servicer Default is received by the Trustee and such notice references the Certificates, the Trust or this Agreement. The Trustee shall promptly notify the Rating Agencies of the occurrence of a Master Servicer Default of which it has knowledge as provided above.

To the extent that the costs and expenses of the Trustee related to the termination of the Master Servicer, appointment of a successor Master Servicer or the transfer and assumption of the master servicing by the Trustee (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 Master Servicer as a result of a Master Servicer Default and (ii) all costs and expenses associated with the complete transfer of the master 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 Master Servicer to correct any errors or insufficiencies in the servicing data or otherwise to enable the successor Master Servicer to master service the Mortgage Loans in accordance with this
Agreement) are not fully and timely reimbursed by the terminated Master Servicer, the Trustee shall be entitled to reimbursement of such costs and expenses from the Distribution Account.

	
            Section 8.02
 	
            Master Servicer to Act; Appointment of Successor.
 

On and after the time the Servicer receives a notice of termination pursuant to Section 8.01, the Master Servicer shall become the successor to such Servicer with respect to the transactions set forth or provided for herein and after a transition period (not to exceed ninety (90) days), shall be subject to all the responsibilities, duties and liabilities relating thereto placed on the Servicer by the terms and provisions hereof, and applicable law including the obligation to make Advances pursuant to Article V hereof, except as otherwise provided herein; provided, however, that the Master Servicer’s obligation to make Advances in its capacity as Successor Servicer shall not be subject to such 90-day transition period and the Master Servicer will make any Advance required to be made by the terminated Servicer on the Distribution Date on which the terminated Servicer was required
to make such Advance. Effective on the date of such notice of termination, as compensation therefor, the Master Servicer shall be entitled to all fees, costs and expenses relating to the Mortgage Loans that the terminated Servicer would have been entitled to if it had continued to act hereunder, provided, however, that the Master Servicer shall not be (i) liable for any acts or omissions of the terminated Servicer, (ii) obligated to make Advances if it is prohibited from doing so under applicable law or determines that such Advance, if made, would constitute a Nonrecoverable Advance, (iii) responsible for expenses of the 

 

terminated Servicer pursuant to Section 2.03 or (iv) obligated to deposit losses on any Permitted Investment directed by the terminated Servicer.  Notwithstanding the foregoing, the Master Servicer may, if it shall be unwilling to so act, or shall, if it is prohibited by applicable law from making Advances pursuant to Article VI of this Agreement or if it is otherwise unable to so act, appoint, or petition a court of competent jurisdiction to appoint, any established mortgage loan servicing institution the appointment of which does not adversely affect the then current rating of the Certificates by each Rating Agency as the successor to the Servicer hereunder in the assumption of all or any part of the responsibilities, duties or liabilities of the Servicer hereunder. Any Successor Servicer shall (i) be an institution that is a Fannie Mae and Freddie Mac approved seller/servicer in good standing, that
has a net worth of at least $15,000,000 and (ii) be willing to act as successor servicer of the Mortgage Loans under this Agreement, and shall have executed and delivered to the Depositor and the Trustee an agreement accepting such delegation and assignment, that contains an assumption by such Person of the rights, powers, duties, responsibilities, obligations and liabilities of the terminated Servicer (other than any liabilities of the terminated Servicer hereof incurred prior to termination of the Servicer under Section 8.01), with like effect as if originally named as a party to this Agreement, provided that each Rating Agency shall have acknowledged in writing that its rating of the Certificates in effect immediately prior to such assignment and delegation will not be qualified or reduced as a result of such assignment and delegation. If the Master Servicer assumes the duties and responsibilities of the terminated Servicer in accordance with this Section 8.02, the Master
Servicer shall not resign as servicer until a Successor Servicer has been appointed and has accepted such appointment. Pending appointment of a successor to the terminated Servicer hereunder, the Master Servicer, unless the Master Servicer is prohibited by law from so acting, shall act in such capacity as hereinabove provided. In connection with such appointment and assumption, the Master Servicer may make such arrangements for the compensation of such successor out of payments on the Mortgage Loans or otherwise as it and such successor shall agree; provided that no such compensation shall be in excess of that permitted the terminated Servicer hereunder. The Master Servicer and such successor shall take such action, consistent with this Agreement, as shall be necessary to effectuate any such succession. Neither the Master Servicer nor any other Successor Servicer shall be deemed to be in default hereunder by reason of any failure to make, or any delay in making, any distribution
hereunder or any portion thereof or any failure to perform, or any delay in performing, any duties or responsibilities hereunder, in either case caused by the failure of the Servicer to deliver or provide, or any delay in delivering or providing, any cash, information, documents or records to it.

The costs and expenses of the Master Servicer in connection with the termination of the Servicer, appointment of a Successor Servicer and, if applicable, any transfer of servicing, including, without limitation, all costs and expenses associated with the complete transfer of all servicing data and the completion, correction or manipulation of such servicing data as may be required by the Master Servicer to correct any errors or insufficiencies in the servicing data or otherwise to enable the Master Servicer or the Successor Servicer to service the related Mortgage Loans properly and effectively, to the extent not paid by the terminated Servicer as may be required herein shall be payable to the Master Servicer from the Distribution Account pursuant to Section 3.32. Any successor to the terminated Servicer as successor servicer under this Agreement shall give notice to the applicable
Mortgagors of such change of servicer and shall, during the term of its service as successor servicer maintain in force the policy or policies that the terminated Servicer is required to maintain pursuant to Section 3.05.

 

 

	
            Section 8.03
 	
            Notification to Certificateholders.
 

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

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

	
            Section 8.04
 	
            Waiver of Servicer Defaults and Master Servicer Defaults.
 

The Trustee may waive only by written notice from Certificateholders evidencing 66-2/3% of the Voting Rights (unless such default materially and adversely affects all Certificateholders, in which case the written direction shall be from all of the Certificateholders) any default by the  Servicer or Master Servicer in the performance of its obligations hereunder and its consequences.  Upon any such waiver of a past default, such default shall cease to exist, and any Servicer Default or Master Servicer Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement.  No such waiver shall extend to any subsequent or other default or impair any right consequent thereon except to the extent expressly so waived in writing.

 

 

ARTICLE IX

 

CONCERNING THE TRUSTEE AND SECURITIES ADMINISTRATOR

	
            Section 9.01
 	
            Duties of Trustee and Securities Administrator.
 

(a)        The Trustee, prior to the occurrence of a Master Servicer Default, and after the curing or waiver of all Master Servicer Defaults, which may have occurred, and the Securities Administrator each undertake to perform such duties and only such duties as are specifically set forth in this Agreement as duties of the Trustee and the Securities Administrator, respectively. If a Master Servicer Default has occurred and has not been cured or waived, the Trustee shall exercise such of the rights and powers vested in it by this Agreement, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such Person’s own affairs.  Any permissive right of the Trustee enumerated in this Agreement shall not be construed as a duty.

(b)        Each of the Trustee and the Securities Administrator, upon receipt of all resolutions, certificates, statements, opinions, reports, documents, orders or other instruments  furnished to it, which are specifically required to be furnished pursuant to any provision of this Agreement, shall examine them to determine whether they conform to the requirements of this Agreement. If any such instrument is found not to conform to the requirements of this Agreement in a material manner, the Trustee or the Securities Administrator, as the case may be, shall take such action as it deems appropriate to have the instrument corrected, and if the instrument is not corrected to its satisfaction, the Securities Administrator will provide notice to the Trustee thereof and the Trustee will provide notice to the Certificateholders.

(c)        The Trustee shall promptly remit to the Servicer any complaint, claim, demand, notice or other document (collectively, the “Notices”) delivered to the Trustee as a consequence of the assignment of any Mortgage Loan hereunder and relating to the servicing of the Mortgage Loans; provided than any such notice (i) is delivered to the Trustee at its Corporate Trust Office, (ii) contains information sufficient to permit the Trustee to make a determination that the real property to which such document relates is a Mortgaged Property. The Trustee shall have no duty hereunder with respect to any Notice it may receive or which may be alleged to have been delivered to or served upon it unless such Notice is delivered to it or served upon it at its Corporate Trust Office and such Notice contains the information required pursuant to clause
(ii) of the preceding sentence.

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

(i)         Prior to the occurrence of a Master Servicer Default and after the curing or waiver of all such Master Servicer Defaults which may have occurred with respect to the Trustee and at all times with respect to the Securities Administrator, the duties and obligations of the Trustee and the Securities Administrator shall be determined solely by the express provisions of this Agreement, neither the Trustee nor the Securities Administrator shall be liable except for the performance of its duties and obligations as 

 

are specifically set forth in this Agreement, no implied covenants or obligations shall be read into this Agreement against the Trustee or the Securities Administrator and, in the absence of bad faith on the part of the Trustee or the Securities Administrator, respectively, the Trustee or the Securities Administrator, respectively, may conclusively rely and shall be fully protected in acting or refraining from acting, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee or the Securities Administrator, respectively, that conform to the requirements of this Agreement;

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

(iii)        Neither the Trustee nor the Securities Administrator shall be liable with respect to any action taken, suffered or omitted to be taken by it in good faith and believed by it to be authorized or within the rights or powers conferred upon it by this Agreement or in accordance with the directions of the Holders of Certificates evidencing not less than 25% of the aggregate Voting Rights of the Certificates, if such action or non-action relates to the time, method and place of conducting any proceeding for any remedy available to the Trustee or the Securities Administrator or exercising any trust or other power conferred upon the Trustee or the Securities Administrator under this Agreement;

(iv)        The Trustee shall not be required to take notice or be deemed to have notice or knowledge of any default or Master Servicer Default unless a Responsible Officer of the Trustee shall have actual knowledge thereof. In the absence of such notice, the Trustee may conclusively assume there is no such default or Master Servicer Default;

(v)        The Trustee shall not in any way be liable by reason of any insufficiency in any Account held by or in the name of Trustee unless it is determined by a court of competent jurisdiction that the Trustee’s gross negligence or willful misconduct was the primary cause of such insufficiency (except to the extent that the Trustee is obligor and has defaulted thereon);

(vi)        Anything in this Agreement to the contrary notwithstanding, in no event shall the Trustee or the Securities Administrator be liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Trustee or the Securities Administrator has been advised of the likelihood of such loss or damage and regardless of the form of action and whether or not any such damages were foreseeable or contemplated; and

(vii)       None of the Seller, the Depositor or the Trustee shall be responsible for the acts or omissions of the other, it being understood that this Agreement shall not be construed to render them partners, joint venturers or agents of one another.

 

 

Neither the Trustee nor the Securities Administrator shall be required to expend or risk its own funds or otherwise incur liability, financial or otherwise, in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if there is reasonable ground for believing that the repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it, and none of the provisions contained in this Agreement shall in any event require the Trustee or the Securities Administrator to perform, or be responsible for the manner of performance of, any of the obligations of the terminated Servicer hereunder.

(e)        All funds received by the Securities Administrator and required to be deposited in the Distribution Account pursuant to this Agreement will be promptly so deposited by the Securities Administrator.

	
            Section 9.02
 	
            Certain Matters Affecting the Trustee and Securities Administrator.
 
	
            (a)
 	
            Except as otherwise provided in Section 9.01:
 	
             

				

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

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

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

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

 

 

(v)        Prior to the occurrence of a Master Servicer Default hereunder and after the curing or waiver of all Master Servicer Defaults which may have occurred with respect to the Trustee and at all times with respect to the Securities Administrator, neither the Trustee nor the Securities Administrator shall be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document, unless requested in writing to do so by Holders of Certificates evidencing not less than twenty-five percent (25%) of the aggregate Voting Rights of the Certificates and provided that the payment within a reasonable time to the Trustee or the Securities Administrator of the costs, expenses or liabilities likely
to be incurred by it in the making of such investigation is, in the opinion of the Trustee or the Securities Administrator, as applicable, not reasonably assured to the Trustee or the Securities Administrator, as applicable,  by the security afforded to it by the terms of this Agreement, the Trustee or the Securities Administrator, as applicable, may require reasonable indemnity against such expense or liability as a condition to taking any such action. The reasonable expense of every such examination shall be paid by the Certificateholders requesting the investigation;

(vi)        The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or through Affiliates, nominees, custodians, agents or attorneys. The Trustee shall not be liable or responsible for the misconduct or negligence of any of the Trustee’s agents or attorneys or paying agent appointed hereunder by the Trustee with due care;

(vii)       Should the Trustee deem the nature of any action required on its part to be unclear, the Trustee may require prior to such action that it be provided by the Depositor with reasonable further instructions; the right of the Trustee to perform any discretionary act enumerated in this Agreement shall not be construed as a duty, and the Trustee shall not be accountable for other than its gross negligence or willful misconduct in the performance of any such act;

(viii)      The Trustee shall not be required to give any bond or surety with respect to the execution of the trust created hereby or the powers granted hereunder;

(ix)        The Trustee shall not have any duty to conduct any affirmative investigation as to the occurrence of any condition requiring the repurchase of any Mortgage Loan by any Person pursuant to this Agreement, or the eligibility of any Mortgage Loan for purposes of this Agreement;

(x)        The Trustee shall have no duty hereunder with respect to any complaint, claim, demand, notice or other document it may receive or which may be alleged to have been delivered or served upon it by the parties as a consequence of the assignment of any Mortgage Loan hereunder; provided, however that the Trustee shall promptly remit to the Servicer upon receipt any such complaint, claim, demand, notice or other document (i) which is delivered to the Trustee at is Corporate Trust Office, (ii) of which a Responsible Officer has actual knowledge or (iii) which contains information sufficient to permit the 

 

Trustee to make a determination that the real property to which such document relates is a Mortgaged Property; and

(xi)        The Trustee is hereby directed by the Depositor to execute the Cap Contracts on behalf of the Trust Fund in the form presented to it by the Depositor and shall have no responsibility for the contents of the Cap Contracts, including, without limitation, the representations and warranties contained therein. Any funds payable by the Trustee under the Cap Contracts at closing shall be paid by the Depositor. Notwithstanding anything to the contrary contained herein or in the Cap Contracts, the Trustee shall not be required to make any payments to the counterparty under the Cap Contracts.

(xii)       None of the Securities Administrator, the Master Servicer, the Servicer, the Seller, the Depositor, the Custodians or the Trustee shall be responsible for the acts or omissions of the others, it being understood that this Agreement shall not be construed to render them partners, joint venturers or agents of one another.

Section 9.03     Trustee and Securities Administrator not Liable for Certificates or Mortgage Loans.

The recitals contained herein and in the Certificates (other than the signature of the Securities Administrator, the authentication of the Securities Administrator on the Certificates, the acknowledgements of the Trustee contained in Article II and the representations and warranties of the Trustee in Section 9.12) shall be taken as the statements of the Depositor, and neither the Trustee nor the Securities Administrator assumes any responsibility for their correctness. Neither the Trustee nor the Securities Administrator makes any representations or warranties as to the validity or sufficiency (other than as specifically set forth in Section 9.12) of the Cap Contracts, the Certificates (other than the signature of the Securities Administrator and authentication of the Securities Administrator on the Certificates) or of any Mortgage Loan except as expressly provided in Sections
2.02. The Securities Administrator’s signature and authentication (or authentication of its agent) on the Certificates shall be solely in its capacity as Securities Administrator and shall not constitute the Certificates an obligation of the Securities Administrator in any other capacity. The Trustee and the Securities Administrator shall not be accountable for the use or application by the Depositor of any of the Certificates or of the proceeds of such Certificates, or for the use or application of any funds paid to the Depositor with respect to the Mortgage Loans.

	
            Section 9.04
 	
            Trustee and Securities Administrator May Own Certificates.
 

Each of the Trustee and the Securities Administrator in its individual capacity or in any other capacity other than as Trustee or Securities Administrator hereunder may become the owner or pledgee of any Certificates and may transact business with other interested parties and their Affiliates with the same rights it would have if it were not the Trustee or the Securities Administrator.

 

 

	
            Section 9.05
 	
            Fees and Expenses of Trustee and Securities Administrator.
 

The fees of the Trustee and the Securities Administrator hereunder shall be paid in accordance with a side letter agreement with the Master Servicer and at the sole expense of the Master Servicer. In addition, the Trustee, the Securities Administrator, the Custodians and any director, officer, employee or agent of the Trustee,  the Securities Administrator and the Custodians shall be indemnified by the Trust and held harmless against any loss, liability or expense (including reasonable attorney’s fees and expenses)  incurred by the Trustee, the Custodians or the Securities Administrator including any pending or threatened claim or legal action arising out of or in connection with the acceptance or administration of its respective obligations and duties under this Agreement, including the Cap Contracts and any and all other agreements related hereto, other than any loss, liability or
expense (i) for which the Trustee is indemnified by the Master Servicer or the Servicer, (ii) that constitutes a specific liability of the Trustee or the Securities Administrator pursuant to this Agreement or (iii) any loss, liability or expense incurred by reason of willful misfeasance, bad faith or negligence in the performance of duties hereunder by the Trustee or the Securities Administrator or by reason of reckless disregard of obligations and duties hereunder. In no event shall the Trustee or the Securities Administrator be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if it has been advised of the likelihood of such loss or damage and regardless of the form of action. The Master Servicer agrees to indemnify the Trustee, from, and hold the Trustee harmless against, any loss, liability or expense (including reasonable attorney’s fees and expenses) incurred by the Trustee by reason of the
Master Servicer’s willful misfeasance, bad faith or gross negligence in the performance of its duties under this Agreement or by reason of the Master Servicer’s reckless disregard of its obligations and duties under this Agreement. The indemnities in this Section 9.05 shall survive the termination or discharge of this Agreement and the resignation or removal of the Master Servicer, the Trustee, the Securities Administrator or the Custodians. Any payment hereunder made by the Master Servicer to the Trustee shall be from the Master Servicer’s own funds, without reimbursement from REMIC I therefor.

	
            Section 9.06
 	
            Eligibility Requirements for Trustee and Securities Administrator.
 

The Trustee and the Securities Administrator shall at all times be a corporation or an association (other than the Depositor, the Seller or any Affiliate of the foregoing) organized and doing business under the laws of any state or the United States of America, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000 (or a member of a bank holding company whose capital and surplus is at least $50,000,000) and subject to supervision or examination by federal or state authority. If such corporation or association publishes reports of conditions at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section the combined capital and surplus of such corporation or association shall be deemed to be its combined capital and surplus as set
forth in its most recent report of conditions so published. In case at any time the Trustee or the Securities Administrator, as applicable, shall cease to be eligible in accordance with the provisions of this Section, the Trustee or the Securities Administrator, as applicable, shall resign immediately in the manner and with the effect specified in Section 9.07.

 

 

Additionally, the Securities Administrator (i) may not be an originator, Master Servicer, Servicer, the Depositor or an affiliate of the Depositor unless the Securities Administrator is in an institutional trust department, (ii) must be authorized to exercise corporate trust powers under the laws of its jurisdiction of organization, and (iii) must be rated at least "A/F1" by Fitch, if Fitch is a Rating Agency, or the equivalent rating by S&P (or such rating acceptable to Fitch pursuant to a rating confirmation).  If no successor securities administrator shall have been appointed and shall have accepted appointment within sixty (60) days after Wells Fargo Bank, N.A., as Securities Administrator, ceases to be the securities administrator pursuant to this Section 9.06, then the Trustee shall perform the duties of the Securities Administrator pursuant to this Agreement. The Trustee shall
notify the Rating Agencies of any change of Securities Administrator.  Notwithstanding the above, the Trustee may, if it shall be unwilling to so act, or shall, if it is unable to so act, promptly appoint or petition a court of competent jurisdiction to appoint, a Person that satisfies the eligibility criteria set forth herein as the Trustee under this Agreement in the assumption of all or any part of the responsibilities, duties or liabilities of the Trustee under this Agreement.  Wells Fargo Bank, N.A. shall act as Securities Administrator for so long as it is Master Servicer under this Agreement.

	
            Section 9.07
 	
            Resignation and Removal of Trustee and Securities Administrator.
 

The Trustee and the Securities Administrator may at any time resign (including, without limitation, and in the case of the Securities Administrator, upon the resignation or removal of the Master Servicer) and be discharged from the trust hereby created by giving written notice thereof to the Depositor, to the Master Servicer, to the Securities Administrator (or the Trustee, if the Securities Administrator resigns) and to the Certificateholders. Upon receiving such notice of resignation, the Depositor shall promptly appoint a successor trustee or successor securities administrator by written instrument, in duplicate, which instrument shall be delivered to the resigning Trustee or Securities Administrator, as applicable, and to the successor trustee or successor securities administrator, as applicable. A copy of such instrument shall be delivered to the Certificateholders, the Trustee, the
Securities Administrator and the Master Servicer by the Depositor. If no successor trustee or successor securities administrator shall have been so appointed and have accepted appointment within thirty (30) days after the giving of such notice of resignation, the resigning Trustee or Securities Administrator, as the case may be, may, at the expense of the Trust Fund, petition any court of competent jurisdiction for the appointment of a successor trustee or successor securities administrator, as applicable.

If at any time the Trustee or the Securities Administrator shall cease to be eligible in accordance with the provisions of Section 9.06 and shall fail to resign after written request therefor by the Depositor, or if at any time the Trustee or the Securities Administrator shall become incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or the Securities Administrator or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or the Securities Administrator or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then the Depositor may remove the Trustee or the Securities Administrator, as applicable and appoint a successor trustee or successor securities administrator, as applicable, by written instrument, in duplicate, which instrument shall be delivered to
the Trustee or the Securities Administrator so removed and to the successor trustee or successor securities administrator. A copy of such instrument shall be 

 

delivered to the Certificateholders, the Trustee, the Securities Administrator and the Master Servicer by the Depositor.

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

Any resignation or removal of the Trustee or the Securities Administrator and appointment of a successor trustee or successor securities administrator pursuant to any of the provisions of this Section shall not become effective until acceptance of appointment by the successor trustee or successor securities administrator, as applicable, as provided in Section 9.08.

Notwithstanding anything to the contrary contained herein, the Master Servicer and the Securities Administrator shall at all times be the same Person.

	
            Section 9.08
 	
            Successor Trustee or Securities Administrator.
 

Any successor trustee or successor securities administrator appointed as provided in Section 9.07 hereof shall execute, acknowledge and deliver to the Depositor and to its predecessor trustee or predecessor securities administrator instrument accepting such appointment hereunder and thereupon the resignation or removal of the predecessor trustee or predecessor securities administrator shall become effective and such successor trustee or successor securities administrator, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties and obligations of its predecessor hereunder, with the like effect as if originally named as trustee or Securities Administrator herein. The predecessor trustee or predecessor securities administrator shall deliver to the successor trustee or successor securities administrator all Mortgage Loan Documents and
related documents and statements to the extent held by it hereunder, as well as all monies, held by it hereunder, and the Depositor and the predecessor trustee or predecessor securities administrator shall execute and deliver such instruments and do such other things as may reasonably be required for more fully and certainly vesting and confirming in the successor trustee or successor securities administrator all such rights, powers, duties and obligations.

No successor trustee or successor securities administrator shall accept appointment as provided in this Section 9.08 unless at the time of such acceptance such successor trustee or successor securities administrator shall be eligible under the provisions of Section 9.07 hereof and its appointment shall not adversely affect the then current rating of the Certificates.

Upon acceptance of appointment by a successor trustee or successor securities administrator as provided in this Section 9.08, the successor trustee or successor securities administrator shall mail notice of the succession of such trustee or securities administrator 

 

hereunder to all Holders of Certificates. If the successor trustee or successor securities administrator fails to mail such notice within ten days after acceptance of appointment, the Depositor shall cause such notice to be mailed at the expense of the Trust Fund.

	
            Section 9.09
 	
            Merger or Consolidation of Trustee or Securities Administrator.
 

Any corporation, state bank or national banking association into which the Trustee or Securities Administrator may be merged or converted or with which it may be consolidated or any corporation, state bank or national banking association resulting from any merger, conversion or consolidation to which the Trustee or the Securities Administrator shall be a party, or any corporation, state bank or national banking association succeeding to substantially all of the corporate trust business of the Trustee or Securities Administrator or shall be the successor of the Trustee or Securities Administrator hereunder, provided that such corporation shall be eligible under the provisions of Section 9.06 without the execution or filing of any paper or further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

	
            Section 9.10
 	
            Appointment of Co-Trustee or Separate Trustee.
 

Notwithstanding any other provisions hereof, at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any part of the REMIC I or property securing the same may at the time be located, the Trustee shall have the power and shall execute and deliver all instruments to appoint one or more Persons approved by the Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or separate trustee or separate trustees, of all or any part of REMIC I, and to vest in such Person or Persons, in such capacity, and for the benefit of the Holders of the Certificates, such title to REMIC I, or any part thereof, and, subject to the other provisions of this Section 9.10, such powers, duties, obligations, rights and trusts as the Trustee may consider necessary or desirable. No co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 9.06 hereunder and no notice to Holders of Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be required under Section 9.08 hereof.

In the case of any appointment of a co-trustee or separate trustee pursuant to this Section 9.10 all rights, powers, duties and obligations conferred or imposed upon the Trustee shall be conferred or imposed upon and exercised or performed by the Trustee and such separate trustee or co-trustee jointly, except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed by the Trustee (whether as Trustee hereunder or as successor to a defaulting Master Servicer hereunder), the Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to REMIC I or any portion thereof in any such jurisdiction) shall be exercised and performed by such separate trustee or co-trustee at the direction of the Trustee.

Any notice, request or other writing given to the Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article IX. Each separate trustee and co-trustee, upon its 

 

acceptance of the trust conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Trustee, or separately, as may be provided therein, subject to all the provisions of this Agreement, specifically including every provision of this Agreement relating to the conduct of, affecting the liability of, or affording protection to, the Trustee. Every such instrument shall be filed with the Trustee.

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

	
            Section 9.11
 	
            Appointment of Office or Agency.
 

The Certificates may be surrendered for registration of transfer or exchange at the Securities Administrator’s office initially located at Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479, and presented for final distribution at the Corporate Trust Office of the Securities Administrator where notices and demands to or upon the Securities Administrator in respect of the Certificates and this Agreement may be served.

	
            Section 9.12
 	
            Representations and Warranties.
 

The Trustee hereby represents and warrants to the Master Servicer, the Securities Administrator, the Servicer and the Depositor as applicable, as of the Closing Date, that:

(i)         It is a national banking association duly organized, validly existing and in good standing under the laws of the United States of America.

(ii)         The execution and delivery of this Agreement by it, and the performance and compliance with the terms of this Agreement by it, will not violate its articles of association 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)        It 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 other parties hereto, constitutes a valid, legal and binding obligation of it, enforceable against it in accordance with the terms hereof, subject to (A) applicable bankruptcy, insolvency, receivership, 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)        It 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, in its good faith and reasonable judgment, is likely to affect materially and adversely either the ability of it to perform its obligations under this Agreement or its financial condition.

No litigation is pending or, to the best of its knowledge, threatened against it, which would prohibit it from entering into this Agreement or, in its good faith reasonable judgment, is likely to materially and adversely affect either the ability of it to perform its obligations under this Agreement or its financial condition.

	
            Section 9.13
 	
            Tax Matters.
 

It is intended that the Trust Fund shall constitute, and that the affairs of the Trust Fund shall be conducted so that each REMIC formed hereunder qualifies as, a “real estate mortgage investment conduit” as defined in and in accordance with the REMIC Provisions. In furtherance of such intention, the Securities Administrator covenants and agrees that it shall act as agent (and the Securities Administrator is hereby appointed to act as agent) on behalf of the Trust Fund. The Securities Administrator, as agent on behalf of the Trust Fund, shall do or refrain from doing, as applicable, the following: (a) the Securities Administrator shall prepare and file, or cause to be prepared and filed, in a timely manner, U.S. Real Estate Mortgage Investment Conduit Income Tax Returns (Form 1066 or any successor form adopted by the Internal Revenue Service) and prepare and file or cause to be
prepared and filed with the Internal Revenue Service and applicable state or local tax authorities income tax or information returns for each taxable year with respect to each such REMIC containing such information and at the times and in the manner as may be required by the Code or state or local tax laws, regulations, or rules, and furnish or cause to be furnished to Certificateholders the schedules, statements or information at such times and in such manner as may be required thereby; (b) the Securities Administrator shall apply for an employer identification number with the Internal Revenue Service via a Form SS-4 or other comparable method for each REMIC that is or becomes a taxable entity, and within thirty days of the Closing Date, furnish or cause to be furnished to the Internal Revenue Service, on Forms 8811 or as otherwise may be required by the Code, the name, title, address, and telephone number of the person that the holders of the Certificates may contact for tax
information relating thereto, together with such additional information as may be required by such Form, and update such information at the time or times in the manner required by the Code for the Trust Fund; (c) the Securities Administrator shall make or cause to be made elections, on behalf of each REMIC formed hereunder to be treated as a REMIC on the federal tax return of such REMIC for its first taxable year (and, if necessary, under applicable state law); (d) the Securities Administrator shall prepare and forward, or cause to be prepared and forwarded, to the Certificateholders and to the Internal Revenue Service and, if necessary, state tax authorities, all information returns and reports as and when required to be provided to them in accordance with the REMIC Provisions, including without limitation, the calculation of any original issue discount using the Prepayment Assumption; (e) the Securities Administrator shall provide information necessary for the computation of tax
imposed on the transfer of a Residual Certificate to a Person that is not a Permitted Transferee, or an agent (including a broker, nominee or other middleman) of a Person 

 

that is not a Permitted Transferee, or a pass-through entity in which a Person that is not a Permitted Transferee is the record holder of an interest (the reasonable cost of computing and furnishing such information may be charged to the Person liable for such tax); (f) the Securities Administrator shall, to the extent under its control, conduct the affairs of the Trust Fund at all times that any Certificates are outstanding so as to maintain the status of each REMIC formed hereunder as a REMIC under the REMIC Provisions; (g) the Securities Administrator shall not knowingly or intentionally take any action or omit to take any action that would cause the termination of the REMIC status of any REMIC formed hereunder; (h) the Securities Administrator shall pay, from the sources specified in the last paragraph of this Section 9.12, the amount of any federal, state and local taxes, including prohibited
transaction taxes as described below, imposed on any REMIC formed hereunder prior to the termination of the Trust Fund when and as the same shall be due and payable (but such obligation shall not prevent the Securities Administrator or any other appropriate Person from contesting any such tax in appropriate proceedings and shall not prevent the Securities Administrator from withholding payment of such tax, if permitted by law, pending the outcome of such proceedings); (i) the Trustee shall sign or cause to be signed federal, state or local income tax or information returns or any other document prepared by the Securities Administrator pursuant to this Section 9.13 requiring a signature thereon by the Trustee; (j) the Securities Administrator shall maintain records relating to each REMIC formed hereunder including but not limited to the income, expenses, assets and liabilities of each such REMIC and adjusted basis of the Trust Fund property determined at such intervals as may be
required by the Code, as may be necessary to prepare the foregoing returns, schedules, statements or information; (k) the Securities Administrator shall, for federal income tax purposes, maintain books and records with respect to the REMICs on a calendar year and on an accrual basis; (l) the Securities Administrator shall not enter into any arrangement not otherwise provided for in this Agreement by which the REMICs will receive a fee or other compensation for services nor permit the REMICs to receive any income from assets other than “qualified mortgages” as defined in Section 860G(a)(3) of the Code or “permitted investments” as defined in Section 860G(a)(5) of the Code; and (m) as and when necessary and appropriate, the Securities Administrator shall represent the Trust Fund in any administrative or judicial proceedings relating to an examination or audit by any governmental taxing authority, request an administrative adjustment as to any taxable year
of any REMIC formed hereunder, enter into settlement agreements with any governmental taxing agency, extend any statute of limitations relating to any tax item of the Trust Fund, and otherwise act on behalf of each REMIC formed hereunder in relation to any tax matter involving any such REMIC.

In order to enable the Securities Administrator to perform its duties as set forth herein, the Depositor shall provide, or cause to be provided, to the Securities Administrator within 10 days after the Closing Date all information or data that the Securities Administrator requests in writing and determines to be relevant for tax purposes to the valuations and offering prices of the Certificates, including, without limitation, the price, yield, prepayment assumption and projected cash flows of the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide to the Securities Administrator promptly upon written request therefor, any such additional information or data that the Securities Administrator may, from time to time, request in order to enable the Securities Administrator to perform its duties as set forth herein. The Depositor hereby indemnifies the Securities
Administrator for any losses, liabilities, damages, claims or expenses of the Securities Administrator arising from any errors or miscalculations of the 

 

Securities Administrator that result from any failure of the Depositor to provide, or to cause to be provided, accurate information or data to the Securities Administrator on a timely basis.

In the event that any tax is imposed on “prohibited transactions” of any of REMIC I or REMIC II as defined in Section 860F(a)(2) of the Code, on the “net income from foreclosure property” of the Trust Fund as defined in Section 860G(c) of the Code, on any contribution to any of REMIC I or REMIC II after the startup day pursuant to Section 860G(d) of the Code, or any other tax is imposed, including, without limitation, any federal, state or local tax or minimum tax imposed upon any of REMIC I or REMIC II, and is not paid as otherwise provided for herein, such tax shall be paid by (i) the Securities Administrator, if any such other tax arises out of or results from a breach by the Securities Administrator of any of its obligations under this Section, (ii) any party hereto (other than the Securities Administrator) to the extent any such other tax arises
out of or results from a breach by such other party of any of its obligations under this Agreement or (iii) in all other cases, or in the event that any liable party hereto fails to honor its obligations under the preceding clauses (i) or (ii), any such tax will be paid first with amounts otherwise to be distributed to the Class R Certificateholders, and second with amounts otherwise to be distributed to all other Certificateholders in the following order of priority: first, to the Class M-5 Certificates, second, to the Class M-4 Certificates, third, to the Class M-3 Certificates, fourth, to the Class M-2 Certificates, fifth, to the Class M-1 Certificates, and sixth, to the Senior Certificates (pro rata based on the amounts to be distributed). Notwithstanding anything to the contrary contained herein, to the extent that such tax is payable by the Holder of any Certificates, the Securities Administrator is hereby authorized to retain on any Distribution Date, from the Holders of the
Class R Certificates (and, if necessary, second, from the Holders of the other Certificates in the priority specified in the preceding sentence), funds otherwise distributable to such Holders in an amount sufficient to pay such tax. The Securities Administrator  shall include in its monthly report to Certificateholders distributions to such parties taking into account the priorities described in the second preceding sentence. The Securities Administrator agrees to promptly notify in writing the party liable for any such tax of the amount thereof and the due date for the payment thereof.  Notwithstanding the foregoing, however, in no event shall the Securities Administrator have any liability (1) for any action or omission that is taken in accordance with and in compliance with the express terms of, or which is expressly permitted by the terms of this Agreement, (2) for any losses other than arising out of a grossly negligent performance by the Securities Administrator of its duties
and obligations set forth herein, and (3) for any special or consequential damages to Certificateholders (in addition to payment of principal and interest on the Certificates).

 

 

ARTICLE X

 

TERMINATION

	
            Section 10.01
 	
            Termination upon Liquidation or Repurchase of all Mortgage Loans.
 

Subject to Section 10.03, the obligations and responsibilities of the Depositor, the Seller, the Securities Administrator, the Master Servicer and the Trustee created hereby with respect to the Trust Fund shall terminate (other than the obligations of the Master Servicer to the Trustee pursuant to Section 9.05 and of the Securities Administrator to make payments in respect of the REMIC I Regular Interests or the Classes of Certificates as hereinafter set forth) upon the earlier of (a) the Master Servicer’s exercise of its optional right to purchase the Mortgage Loans and related REO Properties (the “Clean-up Call”) and (b) the later of (i) the maturity or other liquidation (or any Advance with respect thereto) of the last Mortgage Loan remaining in the Trust Fund and the disposition of all REO Property and (ii) the distribution to Certificateholders of all
amounts required to be distributed to them pursuant to this Agreement, as applicable. In no event shall the trusts created hereby continue beyond the earlier of (i) the expiration of twenty-one (21) years from the death of the last survivor of the descendants of Joseph P. Kennedy, the late Ambassador of the United States to the Court of St. James, living on the date hereof and (ii) the Latest Possible Maturity Date.

The Cleanup Call shall be exercisable at a price (the “Termination Price”) equal to the sum of (i) 100% of the Stated Principal Balance of Mortgage Loan, (ii) accrued interest thereon at the applicable Mortgage Rate to, but not including, the first day of the month of such purchase, (iii) the appraised value of any related REO Property (up to the Stated Principal Balance of the related Mortgage Loan), such appraisal to be conducted by an appraiser mutually agreed upon by the Master Servicer and the Trustee, (iv) unreimbursed out-of-pocket costs of the Securities Administrator, the Master Servicer, the Servicer or the Trustee, including unreimbursed servicing advances and the principal portion of any unreimbursed Advances, made on the related Mortgage Loans prior to the exercise of such repurchase right and (v) any other amounts due and owing to the Trustee, the Securities
Administrator, the Master Servicer and the Custodians payable pursuant to this Agreement or the Custodial Agreements.

The right to exercise the Cleanup Call pursuant to the preceding paragraph shall be exercisable if the Stated Principal Balance of all of the Mortgage Loans at the time of any such repurchase, is less than or equal to ten percent (10%) of the aggregate Cut-off Date Principal Balance of the Mortgage Loans.

	
            Section 10.02
 	
            Final Distribution on the Certificates.
 

If on any Determination Date, (i) the Securities Administrator determines based on the reports delivered by the Master Servicer under this Agreement that there are no Outstanding Mortgage Loans, and no other funds or assets in the Trust Fund other than the funds in the Distribution Account, the Securities Administrator shall notify the Trustee and send a final distribution notice promptly to each related Certificateholder or (ii) the Securities Administrator determines that a Class of Certificates shall be retired after a final distribution on such Class, the Securities Administrator shall notify the Trustee and the Certificateholders within five (5) 

 

Business Days after such Determination Date that the final distribution in retirement of such Class of Certificates is scheduled to be made on the immediately following Distribution Date. Any final distribution made pursuant to the immediately preceding sentence will be made only upon presentation and surrender of the related Certificates at the office of the Securities Administrator set forth herein. If the Master Servicer elects to terminate the Trust Fund pursuant to Section 10.01, at least twenty (20) days prior to the date notice is to be mailed to the Certificateholders, the Master Servicer shall notify the Securities Administrator and the Trustee of the date the Master Servicer intends to terminate the Trust Fund. The Master Servicer shall remit the Termination Price to the Securities Administrator on behalf of the Trust Fund on the Business Day prior to the Distribution Date for such Optional
Termination by the Master Servicer.

Notice of the exercise of the Cleanup Call, specifying the Distribution Date on which the Certificateholders may surrender their Certificates for payment of the final distribution and cancellation, shall be given promptly by the Securities Administrator by letter to the Certificateholders mailed no later than the fifteenth (15th) day of the month of such final distribution. Any such notice shall specify (a) the Distribution Date upon which final distribution on the Certificates will be made upon presentation and surrender of the Certificates at the office therein designated, (b) the amount of such final distribution, (c) the location of the office or agency at which such presentation and surrender must be made and (d) that the Record Date otherwise applicable to such Distribution Date is not applicable, distributions being made only upon presentation and surrender of the Certificates at
the office therein specified. The Securities Administrator will give such notice to each Rating Agency at the time such notice is given to the Certificateholders.

In the event such notice is given, the Master Servicer shall deposit in the Distribution Account on the Business Day prior to the applicable Distribution Date in an amount equal to the final distribution in respect of the Certificates. Upon certification to the Trustee by the Securities Administrator of the making of such final deposit, the Trustee shall promptly release or cause to be released to the Master Servicer the Mortgage Files for the remaining Mortgage Loans, and the Trustee shall execute all assignments, endorsements and other instruments delivered to it and necessary to effectuate such transfer.

Upon presentation and surrender of the related Certificates, the Securities Administrator shall cause to be distributed to Certificateholders of each Class the amounts allocable to such Certificates held in the Distribution Account in the order and priority set forth in Section 5.04 hereof on the final Distribution Date and in proportion to their respective Percentage Interests.

In the event that any affected Certificateholders shall not surrender Certificates for cancellation within six (6) months after the date specified in the above mentioned written notice, the Securities Administrator shall give a second written notice to the remaining affected Certificateholders to surrender their Certificates for cancellation and receive the final distribution with respect thereto. If within six (6) months after the second notice all the applicable Certificates shall not have been surrendered for cancellation, the Securities Administrator may take appropriate steps, or may appoint an agent to take appropriate steps, to contact the remaining affected Certificateholders concerning surrender of their Certificates, and the cost thereof shall be paid out of the funds and other assets that remain a part of the Trust Fund.  If 

 

within two (2) years after the second notice all affected Certificates shall not have been surrendered for cancellation, the related Residual Certificateholders shall be entitled to all unclaimed funds and other assets of the Trust Fund that remain subject hereto and the Securities Administrator shall release such funds upon written direction.

	
            Section 10.03
 	
            Additional Termination Requirements.
 

In the event of (i) the exercise by the Master Servicer of the Cleanup Call pursuant to the terms of this Agreement, or (ii) the final payment on or other liquidation of the last Mortgage Loan or REO Property in REMIC I pursuant to Section 10.01, the following additional requirements, unless the Trustee has been supplied with an Opinion of Counsel, at the expense of the Master Servicer (in the case of the exercise of the Cleanup Call) or the Depositor, to the effect that the failure of the Trust Fund to comply with the requirements of this Section 10.03 will not (i) result in the imposition of taxes on “prohibited transactions” of a REMIC, or (ii) cause any REMIC to fail to qualify as a REMIC at any time that any Certificates are outstanding:

	
            (1)
 	
            The Master Servicer (in the case of the exercise of the Cleanup Call) or the Depositor (in all other cases) shall establish a ninety-day liquidation period and notify the Trustee thereof, and the Trustee shall in turn specify the first day of such period in a statement attached to the tax return for each of REMIC I and REMIC II pursuant to Treasury Regulation Section 1.860F-1. The Master Servicer or the Depositor, as applicable, shall satisfy all the requirements of a qualified liquidation under Section 860F of the Code and any regulations thereunder, as evidenced by an Opinion of Counsel obtained at the expense of the Master Servicer or the Depositor, as applicable;
 
	
            (2)
 	
            During such ninety-day liquidation period, and at or prior to the time of making the final payment on the Certificates, the Master Servicer (in the case of the exercise of the Cleanup Call) or the Depositor (in all other cases) shall sell all of the assets of REMIC I for cash; and
 
	
            (3)
 	
            At the time of the making of the final payment on the Certificates, the Trustee shall distribute or credit, or cause to be distributed or credited, to the Holders of the related Residual Certificates all cash on hand in the Trust Fund (other than cash retained to meet claims), and the Trust Fund shall terminate at that time.
 

By their acceptance of the Certificates, the Holders thereof hereby authorize the Master Servicer (in the case of the exercise of the Cleanup Call) or the Depositor (in all other cases) to specify the ninety-day liquidation period for REMIC I and REMIC II, which authorization shall be binding upon all successor Certificateholders.

The Trustee as agent for each REMIC hereby agrees to adopt and sign such a plan of complete liquidation upon the written request of the Master Servicer or the Depositor, as applicable, and the receipt of the Opinion of Counsel referred to in Section 10.03(1) and to take 

 

such other action in connection therewith as may be reasonably requested by the Master Servicer or the Depositor, as applicable.

 

 

ARTICLE XI

 

MISCELLANEOUS PROVISIONS

	
            Section 11.01
 	
            Amendment.
 

This Agreement may be amended from time to time by parties hereto, without the consent of any of the Certificateholders to cure any ambiguity, to correct or supplement any provisions herein, to change the manner in which the Distribution Account maintained by the Securities Administrator or the Custodial Account maintained by the Servicer is maintained or to make such other provisions with respect to matters or questions arising under this Agreement as shall not be inconsistent with any other provisions herein if such action shall not, as evidenced by an Opinion of Counsel, adversely affect in any material respect the interests of any Certificateholder; provided that any such amendment shall be deemed not to adversely affect in any material respect the interests of the Certificateholders and no such Opinion of Counsel shall be required if the Person requesting such amendment obtains a
letter from each Rating Agency stating that such amendment would not result in the downgrading or withdrawal of the respective ratings then assigned to the Certificates.

Notwithstanding the foregoing, without the consent of the Certificateholders, the parties hereto may at any time and from time to time amend this Agreement to modify, eliminate or add to any of its provisions to such extent as shall be necessary or appropriate to maintain the qualification of each of REMIC I and REMIC II as a REMIC under the Code or to avoid or minimize the risk of the imposition of any tax on any of REMIC I or REMIC II pursuant to the Code that would be a claim against any of REMIC I or REMIC II at any time prior to the final redemption of the Certificates, provided that the Trustee has been provided an Opinion of Counsel, which opinion shall be an expense of the party requesting such opinion but in any case shall not be an expense of the Trustee or the Trust Fund, to the effect that such action is necessary or appropriate to maintain such qualification or to avoid or
minimize the risk of the imposition of such a tax.

This Agreement may also be amended from time to time by the parties hereto and the Holders of each Class of Certificates affected thereby evidencing over 50% of the Voting Rights of such Class or Classes for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Holders of Certificates; provided that no such amendment shall (i) reduce in any manner the amount of, or delay the timing of, payments required to be distributed on any Certificate without the consent of the Holder of such Certificate, (ii) cause any of REMIC I or REMIC II to cease to qualify as a REMIC or (iii) reduce the aforesaid percentages of Certificates of each Class the Holders of which are required to consent to any such amendment without the consent of the Holders of all Certificates of such Class then outstanding.

Notwithstanding any contrary provision of this Agreement, the Trustee shall not consent to any amendment to this Agreement unless it shall have first received an Opinion of Counsel, which opinion shall be an expense of the party requesting such amendment but in any case shall not be an expense of the Trustee, to the effect that such amendment will not (other than an amendment pursuant to clause (ii) of, and in accordance with, the preceding paragraph) cause the 

 

imposition of any tax on REMIC I or REMIC II or the Certificateholders or cause REMIC I or REMIC II to cease to qualify as a REMIC at any time that any Certificates are outstanding. Further, nothing in this Agreement shall require the Trustee to enter into an amendment without receiving an Opinion of Counsel, satisfactory to the Trustee that (i) such amendment is permitted and is not prohibited by this Agreement and (ii) that all requirements for amending this Agreement (including any consent of the applicable Certificateholders) have been complied with.

Promptly after the execution of any amendment to this Agreement requiring the consent of Certificateholders, the Trustee shall furnish written notification of the substance of such amendment to each Certificateholder and each Rating Agency.

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

	
            Section 11.02
 	
            Recordation of Agreement; Counterparts.
 

To the extent permitted by applicable law, this Agreement is subject to recordation in all appropriate public offices for real property records in all of the counties or other comparable jurisdictions in which any or all of the Mortgaged Properties are situated, and in any other appropriate public recording office or elsewhere. The Seller or the Depositor shall effect such recordation at the Trust’s expense upon the request in writing of a Certificateholder, but only if such direction is accompanied by an Opinion of Counsel (provided at the expense of the Certificateholder requesting recordation) to the effect that such recordation would materially and beneficially affect the interests of the Certificateholders or is required by law.

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

	
            Section 11.03
 	
            Governing Law.
 

THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF OTHER THAN THE PROVISIONS OF SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

	
            Section 11.04
 	
            Intention of Parties.
 

It is the express intent of the parties hereto that the conveyance of the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance policies and any modifications, extensions 

 

and/or assumption agreements and private mortgage insurance policies relating to the Mortgage Loans by the Seller to the Depositor, and by the Depositor to the Trust Fund be, and be construed as, an absolute sale thereof to the Depositor or the Trust Fund, as applicable. It is, further, not the intention of the parties that such conveyance be deemed a pledge thereof by the Seller to the Depositor, or by the Depositor to the Trust Fund. However, in the event that, notwithstanding the intent of the parties, such assets are held to be the property of the Seller or the Depositor, as applicable, or if for any other reason this Agreement is held or deemed to create a security interest in such assets, then (i) this Agreement shall be deemed to be a security agreement within the meaning of the Uniform Commercial Code of the State of New York and (ii) each conveyance provided for in this Agreement shall be deemed
to be an assignment and a grant by the Seller or the Depositor, as applicable, for the benefit of the Certificateholders, of a security interest in all of the assets that constitute the Trust Fund, whether now owned or hereafter acquired.

The Depositor for the benefit of the Certificateholders shall, to the extent consistent with this Agreement, take such actions as may be necessary to ensure that, if this Agreement were deemed to create a security interest in the assets of the Trust Fund, such security interest would be deemed to be a perfected security interest of first priority under applicable law and will be maintained as such throughout the term of the Agreement.

	
            Section 11.05
 	
            Notices.
 

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

	
            (i)
 	
            Any material change or amendment to this Agreement;
 

(ii)         The occurrence of any Servicer Default or Master Servicer Default that has not been cured;

(iii)        The resignation or termination of the Servicer, the Master Servicer or the Trustee and the appointment of any successor; and

	
            (iv)
 	
            The final payment to Certificateholders.
 

In addition, the Trustee shall promptly furnish to each Rating Agency copies of the following:

	
            (i)
 	
            Each annual statement as to compliance described in Section 4.14; and
 

(ii)         Each annual independent public accountants’ servicing report described in Section 4.15.

All directions, demands and notices hereunder shall be in writing and shall be deemed to have been duly given when delivered at or mailed by registered mail, return receipt requested, postage prepaid, or by recognized overnight courier, or by facsimile transmission to a number provided by the appropriate party if receipt of such transmission is confirmed to (i) in the case of the Depositor, Nomura Asset Acceptance Corp., 2 World Financial Center, Building B, New 

 

York, New York 10281 Attention: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2005-AR5; (ii) in the case of the Seller, Nomura Credit & Capital, Inc., 2 World Financial Center, Building B, New York, New York 10281, Attention: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2005-AR5 or such other address as may be hereafter furnished to the other parties hereto by the Seller in writing; (iii) in the case of the Servicer, GMAC Mortgage Corporation, 500 Enterprise Road Horsham, Pennsylvania 19044, Attention: Ken Perkins; (iv) in the case of the Trustee, at each Corporate Trust Office or such other address as the Trustee may hereafter furnish to the other parties hereto; (v) in the case of the JPMorgan, JPMorgan Chase Bank Mortgage Banking Custody Services, 1111 Fannin Street, 12th Floor, Houston, Texas 77002, (vi)
in the case of Wells Fargo Bank, National Association, as Custodian, 24 Executive Park, Suite 100, Irvine, California 92614, (vii) in the case of the Securities Administrator, its Corporate Trust Office; (viii) in the case of the Master Servicer, P.O. Box 98, Columbia, Maryland 21046 (or for overnight deliveries, 9062 Old Annapolis Road, Columbia, Maryland 21045, Attention Client Manager - NAAC 2005-AR5) and (ix) in the case of the Rating Agencies, (a) Standard & Poor’s, 55 Water Street, 41st Floor, New York, New York 10041, Attention: Mortgage Surveillance Group and (b) Moody’s Investors Service, Inc., 99 Church Street, New York, New York 10007, Attention: Home Equity Monitoring. Any notice delivered to the Seller or the Trustee under this Agreement shall be effective only upon receipt. Any notice required or permitted to be mailed to a Certificateholder, unless otherwise provided herein, shall be given by first-class
mail, postage prepaid, at the address of such Certificateholder as shown in the Certificate Register; any notice so mailed within the time prescribed in this Agreement shall be conclusively presumed to have been duly given, whether or not the Certificateholder receives such notice.

	
            Section 11.06
 	
            Severability of Provisions.
 

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

	
            Section 11.07
 	
            Assignment.
 

Notwithstanding anything to the contrary contained herein, except as provided pursuant to Section 7.02, this Agreement may not be assigned by the Seller or the Depositor.

	
            Section 11.08
 	
            Limitation on Rights of Certificateholders.
 

The death or incapacity of any Certificateholder shall not operate to terminate this Agreement or the Trust Fund, nor entitle such Certificateholder’s legal representative or heirs to claim an accounting or to take any action or commence any proceeding in any court for a petition or winding up of the Trust Fund, or otherwise affect the rights, obligations and liabilities of the parties hereto or any of them.

No Certificateholder shall have any right to vote (except as provided herein) or in any manner otherwise control the operation and management of the Trust Fund, or the obligations of 

 

the parties hereto, nor shall anything herein set forth or contained in the terms of the Certificates be construed so as to constitute the Certificateholders from time to time as partners or members of an association; nor shall any Certificateholder be under any liability to any third party by reason of any action taken by the parties to this Agreement pursuant to any provision hereof.

No Certificateholder shall have any right by virtue or by availing itself of any provisions of this Agreement to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Agreement, unless such Holder previously shall have given to the Trustee, a written notice of a Servicer Default and of the continuance thereof, as hereinbefore provided, the Holders of Certificates evidencing not less than twenty-five percent (25%) of the Voting Rights evidenced by the Certificates shall also have made written request to the Trustee to institute such action, suit or proceeding in its own name as Trustee, hereunder and shall have offered to the Trustee such indemnity satisfactory to it as it may require against the costs, expenses, and liabilities to be incurred therein or thereby, and the Trustee or for sixty (60) days after its receipt of such notice, request
and offer of indemnity shall have neglected or refused to institute any such action, suit or proceeding; it being understood and intended, and being expressly covenanted by each Certificateholder with every other Certificateholder and the Trustee, that no one or more Holders of Certificates shall have any right in any manner whatever by virtue or by availing itself or themselves of any provisions of this Agreement to affect, disturb or prejudice the rights of the Holders of any other of the Certificates, or to obtain or seek to obtain priority over or preference to any other such Holder or to enforce any right under this Agreement, except in the manner herein provided and for the common benefit of all Certificateholders. For the protection and enforcement of the provisions of this Section 11.08, each and every Certificateholder or the Trustee shall be entitled to such relief as can be given either at law or in equity.

	
            Section 11.09
 	
            Certificates Nonassessable and Fully Paid.
 

It is the intention of the Depositor that Certificateholders shall not be personally liable for obligations of the Trust Fund, that the interests in the Trust Fund represented by the Certificates shall be nonassessable for any reason whatsoever, and that the Certificates, upon due authentication thereof by the Trustee pursuant to this Agreement, are and shall be deemed fully paid.

 

 

 

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

 

	
            NOMURA ASSET ACCEPTANCE CORPORATION,
 
	
            as Depositor
 
	
            By: /s/ John P. Graham
 
	
            Name: John P. Graham
 
	
            Title:  Authorized Signatory
 
	
            NOMURA CREDIT & CAPITAL, INC.,
 
	
            as Seller
 
	
            By: /s/ Jeane Leschak             
 
	
            Name: Jeane Leschak
 
	
            Title: Vice President
 
	
            WELLS FARGO BANK, NATIONAL ASSOCIATION,
 
	
            as Master Servicer and Securities Administrator
 
	
            By: /s/ Darron C. Woodus
 
	
            Name: Darron C. Woodus
 
	
            Title: Assistant Vice President
 
	
            HSBC BANK USA, NATIONAL ASSOCIATION,
 
	
            as Trustee
 
	
            By: /s/ Elena Zheng
 
	
            Name: Elena Zheng
 
	
            Title: Assistant Vice President
 
	
            GMAC MORTGAGE CORPORATION,
 
	
            as Servicer
 
	
            By:  /s/ Wesley B. Howland
 
	
            Name: Wesley B. Howland
 
	
            Title: Vice President
 

 

 

 

 

	
            With respect to Sections 3.33 and 3.34
 
	
            RISK MANAGEMENT GROUP, LLC
 
	
            By: /s/ Charles Cacici              
 
	
            Name: Charles Cacici
 
	
            Title: President/Managing Member
 

 

 

 

	
            STATE OF NEW YORK
 	
            )
 
	
             
 	
            ) ss.:
 
	
            COUNTY OF NEW YORK
 	
            )
 

 

On this ___ day of September 2005, before me, a notary public in and for said State, appeared _____________, personally known to me on the basis of satisfactory evidence to be an authorized representative of Nomura Asset Acceptance Corporation, one of the corporations that executed the within instrument, and also known to me to be the person who executed it on behalf of such corporation and acknowledged to me that such corporation executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

	
            ____________________________
 
	
            Notary Public
 

[Notarial Seal]

 

 

 

	
            STATE OF NEW YORK
 	
            )
 
	
             
 	
            ) ss.:
 
	
            COUNTY OF NEW YORK
 	
            )
 

 

On this ____ day of September 2005 before me, a notary public in and for said State, appeared_______________, personally known to me on the basis of satisfactory evidence to be an authorized representative of Nomura Credit & Capital, Inc., that executed the within instrument, and also known to me to be the person who executed it on behalf of such corporation, and acknowledged to me that such corporation executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

	
            ____________________________
 
	
            Notary Public
 

[Notarial Seal]

 

 

 

	
            STATE OF IOWA
 	
            )
 
	
             
 	
            ) ss.:
 
	
            BLACK HAWK COUNTY
 	
            )
 

 

On this ____ day of September 2005, before me, a notary public in and for said State, appeared _________________, personally known to me on the basis of satisfactory evidence to be an authorized representative of GMAC Mortgage Corporation, one of the corporations that executed the within instrument, and also known to me to be the person who executed it on behalf of such corporation and acknowledged to me that such corporation executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

	
            ____________________________
 
	
            Notary Public
 

[Notarial Seal]

 

 

 

	
            STATE OF 
 	
            )
 
	
             
 	
            ) ss.:
 
	
            COUNTY OF 
 	
            )
 

 

On this ____ day of September 2005, before me, a notary public in and for said State, appeared _______________, personally known to me on the basis of satisfactory evidence to be an authorized representative of HSBC Bank USA, National Association that executed the within instrument, and also known to me to be the person who executed it on behalf of such corporation, and acknowledged to me that such corporation executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

	
            ____________________________
 
	
            Notary Public
 

[Notarial Seal]

 

 

 

	
            STATE OF 
 	
            )
 
	
             
 	
            ) ss.:
 
	
            COUNTY OF 
 	
            )
 

 

On this ____ day of September 2005, before me, a notary public in and for said State, appeared _______________, personally known to me on the basis of satisfactory evidence to be an authorized representative of Wells Fargo Bank, National Association that executed the within instrument, and also known to me to be the person who executed it on behalf of such corporation, and acknowledged to me that such corporation executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

	
            ____________________________
 
	
            Notary Public
 

[Notarial Seal]

 

 

 

EXHIBIT A-1

 

FORM OF CLASS [I][II]-A-[1][2] CERTIFICATE

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE “CODE”).

THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED BY THE PRINCIPAL PAYMENTS HEREON [CLASS I-A-2 AND II-A-2 CERTIFICATES ONLY] [AND REALIZED LOSSES ALLOCABLE HERETO]. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

 

 

	
            Certificate No. [__]
 	
            Pass-Through Rate:  Variable
 
	
             
 	
             
 
	
            Class [I][II]-A-[1][2] Senior
 	
             
 
	
             
 	
             
 
	
            Date of Pooling and Servicing Agreement
  and Cut-off Date: September 1, 2005

 
 	
            Aggregate Initial Certificate Principal Balance of the Class [I][II]-A-[1][2] Certificates as of the Cut-off Date:

$
 
	
            Trustee: HSBC Bank USA, National Association
 	
             
 
	
            First Distribution Date: October 25, 2005

 
 	
            Initial Certificate Principal Balance of this Certificate as of the Cut-off Date:

$
 
	
             
 	
            Master Servicer and Securities Administrator: Wells Fargo Bank, N.A.
 
	
            Assumed Final Distribution Date:

September 25, 2035
 	
            CUSIP: [______________]
 
	
             
 	
             
 

 

MORTGAGE PASS-THROUGH CERTIFICATE

SERIES 2005-AR5

evidencing a fractional undivided interest in the distributions allocable to the Class  [I][II]-A-[1][2] Certificates with respect to a Trust Fund consisting primarily of a pool of conventional one- to four-family adjustable rate mortgage loans sold by NOMURA ASSET ACCEPTANCE CORPORATION

This Certificate is payable solely from the assets of the Trust Fund, and does not represent an obligation of or interest in Nomura Asset Acceptance Corporation (“NAAC”) or  the Trustee or any of their affiliates or any other person. Neither this Certificate nor the underlying Mortgage Loans are guaranteed or insured by any governmental entity or by NAAC or the Trustee or any of their affiliates or any other person. None of NAAC, the Trustee or any of their affiliates will have any obligation with respect to any certificate or other obligation secured by or payable from payments on the Certificates.

This certifies that Cede & Co. is the registered owner of the Percentage Interest evidenced hereby in the beneficial ownership interest of Certificates of the same Class as this Certificate in a trust (the “Trust Fund”) generally consisting of conventional first lien, adjustable rate mortgage loans secured by one- to four- family residences, units in planned unit developments and individual condominium units (collectively, the “Mortgage Loans”) sold by NAAC. The Mortgage Loans were sold by Nomura Credit & Capital, Inc. (the “Seller”) to NAAC. The Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as of the Cut-off Date specified above (the “Agreement”), among NAAC, as depositor (the “Depositor”), the Seller, GMAC Mortgage Corporation, as servicer (the “Servicer”), Wells Fargo 

 

Bank, N.A. as master servicer (the “Master Servicer”) and securities administrator (the “Securities Administrator”) and HSBC Bank USA, National Association, as trustee (the “Trustee”), a summary of certain of the pertinent provisions of which is set forth hereafter. To the extent not defined herein, capitalized terms used herein shall have the meaning ascribed to them in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of its acceptance hereof assents and by which such Holder is bound.

Interest on this Certificate will accrue during the calendar month prior to the calendar month in which a Distribution Date (as hereinafter defined) occurs on the Certificate Principal Balance hereof at a per annum Pass-Through Rate equal to [for Class I-A-1 Certificates: the weighted average of the net mortgage rates of the Group I mortgage loans minus [____]% per annum] [for Class I-A-2 Certificates: the weighted average of the net mortgage rates of the Group I mortgage loans] [for Class II-A-1 Certificates: (a) for each Distribution Date from the distribution date in October 2005 to and including the Distribution Date in [June 2010], the lesser of [5.05]% and the weighted average of the net mortgage rates of the Group II mortgage loans and (b) for each Distribution Date thereafter, the weighted average of the net mortgage rates of the Group II mortgage loans minus [____]% per annum]
[for Class II-A-2 Certificates: the weighted average of the net mortgage rates of the Group II mortgage loans].  The Securities Administrator will distribute on the 25th day of each month, or, if such 25th day is not a Business Day, the immediately following Business Day (each, a “Distribution Date”), commencing on the First Distribution Date specified above, to the Person in whose name this Certificate is registered at the close of business on the last Business Day of the calendar month immediately preceding the month in which the Distribution Date occurs, an amount equal to the product of the Percentage Interest evidenced by this Certificate and the amount (of interest and principal, if any) required to be distributed to the Holders of Certificates of the same Class as this Certificate. The Assumed Final Distribution Date is the Distribution Date in the second month following the latest scheduled maturity date of any Mortgage Loan and is not likely to be the date on which
the Certificate Principal Balance of this Class of Certificates will be reduced to zero.

Distributions on this Certificate will be made by the Securities Administrator by check mailed to the address of the Person entitled thereto as such name and address shall appear on the Certificate Register or, if such Person so requests by notifying the Securities Administrator in writing as specified in the Agreement. Notwithstanding the above, the final distribution on this Certificate will be made after due notice by the Securities Administrator of the pendency of such distribution and only upon presentation and surrender of this Certificate at the office or agency appointed by the Securities Administrator for that purpose and designated in such notice. The initial Certificate Principal Balance of this Certificate is set forth above. The Certificate Principal Balance hereof will be reduced to the extent of distributions allocable to principal hereon [for Class I-A-2 Certificates only:
and Realized Losses on the Group I Mortgage Loans allocable to the Class I-A-2 Certificates] [for Class II-A-2 Certificates only: and Realized Losses on the Group II Mortgage Loans allocable to the Class II-A-2 Certificates].

This Certificate is one of a duly authorized issue of Certificates designated as set forth on the face hereof (the “Certificates”). The Certificates, in the aggregate, evidence the entire beneficial ownership interest in the Trust Fund formed pursuant to the Agreement.

 

 

The Certificateholder, by its acceptance of this Certificate, agrees that it will look solely to the Trust Fund for payment hereunder and that the Trustee is not liable to the Certificateholders for any amount payable under this Certificate or the Agreement or, except as expressly provided in the Agreement, subject to any liability under the Agreement.

This Certificate does not purport to summarize the Agreement and reference is made to the Agreement for the interests, rights and limitations of rights, benefits, obligations and duties evidenced hereby, and the rights, duties and immunities of the Securities Administrator.  The Certificates are limited in right of payment to certain collections and recoveries respecting the Mortgage Loans and other assets included in the Trust Fund, all as more specifically set forth in the Agreement.

The Agreement permits, with certain exceptions therein provided, the amendment thereof and the modification of the rights and obligations of the Depositor and the rights of the Certificateholders under the Agreement from time to time by the parties thereto with the consent of the Holders of the Class or Classes of Certificates affected thereby evidencing over 50% of the Voting Rights of such Class or Classes.  Any such consent by the Holder of this Certificate shall be conclusive and binding on such Holder and upon all future Holders of this Certificate and of any Certificate issued upon the transfer hereof or in lieu hereof whether or not notation of such consent is made upon this Certificate. The Agreement also permits the amendment thereof, in certain limited circumstances, without the consent of the Holders of any of the Certificates.

As provided in the Agreement and subject to certain limitations therein set forth, the transfer of this Certificate is registrable with the Securities Administrator upon surrender of this Certificate for registration of transfer at the offices or agencies maintained by the Securities Administrator for such purposes, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Securities Administrator duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Certificates in authorized denominations representing a like aggregate Percentage Interest will be issued to the designated transferee.

The Certificates are issuable only as registered Certificates without coupons in the Classes and denominations specified in the Agreement. As provided in the Agreement and subject to certain limitations therein set forth, this Certificate is exchangeable for one or more new Certificates evidencing the same Class and in the same aggregate Percentage Interest, as requested by the Holder surrendering the same.

No service charge will be made to the Certificateholders for any such registration of transfer, but the Securities Administrator may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Depositor, the Master Servicer, the Trustee, the Securities Administrator and any agent of any of them may treat the Person in whose name this Certificate is registered as the owner hereof for all purposes, and none of Depositor, the Master Servicer, the Trustee, the Securities Administrator or any such agent shall be affected by notice to the contrary.

The obligations created by the Agreement and the Trust Fund created thereby (other than the obligations to make payments to Certificateholders with respect to the termination 

 

of the Agreement) shall terminate upon the earlier of (i) the later of (A) the maturity or other liquidation (or Advance with respect thereto) of the last Mortgage Loan remaining in the Trust Fund and disposition of all property acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the remittance of all funds due under the Agreement, or (ii) the optional repurchase by the party named in the Agreement of all the Mortgage Loans and other assets of the Trust Fund in accordance with the terms of the Agreement. Such optional repurchase may be made only if on such Distribution Date the aggregate Stated Principal Balance of the Mortgage Loans is less than or equal to 10% of the aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date. The exercise of such right will effect the early retirement of the Certificates. In no event, however, will the Trust Fund
created by the Agreement continue beyond the earlier to occur of (i) expiration of 21 years after the death of certain persons identified in the Agreement and (ii) the Assumed Final Distribution Date.

Unless this Certificate has been countersigned by an authorized signatory of the Securities Administrator by manual signature, this Certificate shall not be entitled to any benefit under the Agreement, or be valid for any purpose.

 

 

IN WITNESS WHEREOF, the Securities Administrator has caused this Certificate to be duly executed.

 

	
            Dated:  September __, 2005
 	
             
 	
             
 	
            WELLS FARGO BANK, N.A.
 as Securities Administrator 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

CERTIFICATE OF AUTHENTICATION

This is one of the Class [I][II]-A-[1][2] Certificates referred to in the within-mentioned Agreement.

	
             
 	
             
 	
             
 	
            WELLS FARGO BANK, N.A.
 as Securities Administrator 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto __________________________________ (Please print or typewrite name and address including postal zip code of assignee) a Percentage Interest evidenced by the within Asset-Backed Certificate and hereby authorizes the transfer of registration of such interest to assignee on the Certificate Register of the Trust Fund.

I (We) further direct the Certificate Registrar to issue a new Certificate of a like denomination and Class, to the above named assignee and deliver such Certificate to the following address:

 

	
             
 	
             
 	
             
 
	
             
 	
             
 	
            .
 

 

	
            Dated:
 	
            _________________________________
 
	
             
 	
            Signature by or on behalf of assignor

 
 
	
             
 	
            _________________________________
 
	
             
 	
            Signature Guaranteed

 
 

 

 

DISTRIBUTION INSTRUCTIONS

The assignee should include the following for purposes of distribution:

	
            Distributions shall be made, by wire transfer or otherwise, in immediately available 
 
	
            funds to
 	
             
 
	
             
 
	
            for the account of
 	
             
 
	
            account number
 	
             
 	
            or, if mailed by check, to
 
	
             
 
	
            Applicable statements should be mailed to
 	
             
 
	
             
 
	
             
 
	
            This information is provided by
 	
             
 
	
            assignee named above, or
 	
             
 
	
            its agent.
 	
             
 
								

 

 

 

EXHIBIT A-2

 

FORM OF CLASS III-A-[1][2][3][4] CERTIFICATE

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE “CODE”).

THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED BY THE PRINCIPAL PAYMENTS HEREON [CLASS III-A-4 CERTIFICATES ONLY] [AND REALIZED LOSSES ALLOCABLE HERETO]. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

 

 

	
            Certificate No. [__]
 	
            Pass-Through Rate:  Floating
 
	
             
 	
             
 
	
            Class III-A-[1][2][3][4] Senior
 	
             
 
	
             
 	
             
 
	
            Date of Pooling and Servicing Agreement
  and Cut-off Date: September 1, 2005

 
 	
            Aggregate Initial Certificate Principal Balance of the Class III-A-[1][2][3][4] Certificates as of the Cut-off Date:

$
 
	
            Trustee: HSBC Bank USA, National Association
 	
             
 
	
            First Distribution Date: October 25, 2005

 
 	
            Initial Certificate Principal Balance of this Certificate as of the Cut-off Date:

$
 
	
             
 	
            Master Servicer and Securities Administrator: Wells Fargo Bank, N.A.
 
	
            Assumed Final Distribution Date:

September 25, 2035
 	
            CUSIP: [______________]
 
	
             
 	
             
 

 

MORTGAGE PASS-THROUGH CERTIFICATE

SERIES 2005-AR5

evidencing a fractional undivided interest in the distributions allocable to the Class III-A-[1][2][3][4] Certificates with respect to a Trust Fund consisting primarily of a pool of conventional one- to four-family adjustable rate mortgage loans sold by NOMURA ASSET ACCEPTANCE CORPORATION

This Certificate is payable solely from the assets of the Trust Fund, and does not represent an obligation of or interest in Nomura Asset Acceptance Corporation (“NAAC”) or  the Trustee or any of their affiliates or any other person. Neither this Certificate nor the underlying Mortgage Loans are guaranteed or insured by any governmental entity or by NAAC or the Trustee or any of their affiliates or any other person. None of NAAC, the Trustee or any of their affiliates will have any obligation with respect to any certificate or other obligation secured by or payable from payments on the Certificates.

This certifies that Cede & Co. is the registered owner of the Percentage Interest evidenced hereby in the beneficial ownership interest of Certificates of the same Class as this Certificate in a trust (the “Trust Fund”) generally consisting of conventional first lien, adjustable rate mortgage loans secured by one- to four- family residences, units in planned unit developments and individual condominium units (collectively, the “Mortgage Loans”) sold by NAAC. The Mortgage Loans were sold by Nomura Credit & Capital, Inc. (the “Seller”) to NAAC. The Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as of the Cut-off Date specified above (the “Agreement”), among NAAC, as depositor (the “Depositor”), the Seller, GMAC Mortgage Corporation, as servicer, (the “Servicer”), Wells 

 

Fargo Bank, N.A. as master servicer (the “Master Servicer”) and securities administrator (the “Securities Administrator”) and HSBC Bank USA, National Association, as trustee (the “Trustee”), a summary of certain of the pertinent provisions of which is set forth hereafter. To the extent not defined herein, capitalized terms used herein shall have the meaning ascribed to them in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of its acceptance hereof assents and by which such Holder is bound.

Interest on this Certificate will accrue during the period commencing on the immediately preceding Distribution Date (as hereinafter defined) (or with respect to the First Distribution Date, the Closing Date) and ending on the day immediately preceding the related Distribution Date on the Certificate Principal Balance hereof at a per annum Pass-Through Rate equal to the least of (i) the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior to the first possible Optional Termination Date, [___]% or (B) after the first possible Optional Termination Date, [__]%, (ii) the applicable Net Funds Cap, (iii) the applicable Cap Rate and (iv) the applicable Maximum Interest Rate.  The Securities Administrator will distribute on the 25th day of each month, or, if such 25th day is not a Business Day, the immediately following Business Day (each, a “Distribution Date”),
commencing on the First Distribution Date specified above, to the Person in whose name this Certificate is registered at the close of business on the Business Day immediately preceding such Distribution Date, an amount equal to the product of the Percentage Interest evidenced by this Certificate and the amount (of interest and principal, if any) required to be distributed to the Holders of Certificates of the same Class as this Certificate. The Assumed Final Distribution Date is the Distribution Date in the second month following the latest scheduled maturity date of any Mortgage Loan and is not likely to be the date on which the Certificate Principal Balance of this Class of Certificates will be reduced to zero.

Distributions on this Certificate will be made by the Securities Administrator by check mailed to the address of the Person entitled thereto as such name and address shall appear on the Certificate Register or, if such Person so requests by notifying the Securities Administrator in writing as specified in the Agreement. Notwithstanding the above, the final distribution on this Certificate will be made after due notice by the Securities Administrator of the pendency of such distribution and only upon presentation and surrender of this Certificate at the office or agency appointed by the Securities Administrator for that purpose and designated in such notice. The initial Certificate Principal Balance of this Certificate is set forth above. The Certificate Principal Balance hereof will be reduced to the extent of distributions allocable to principal hereon [for Class III-A-4 Certificates
only:  and Realized Losses on the Group III Mortgage Loans allocable to the Class III-A-4 Certificates].

This Certificate is one of a duly authorized issue of Certificates designated as set forth on the face hereof (the “Certificates”). The Certificates, in the aggregate, evidence the entire beneficial ownership interest in the Trust Fund formed pursuant to the Agreement.

The Certificateholder, by its acceptance of this Certificate, agrees that it will look solely to the Trust Fund for payment hereunder and that the Trustee is not liable to the Certificateholders for any amount payable under this Certificate or the Agreement or, except as expressly provided in the Agreement, subject to any liability under the Agreement.

 

 

This Certificate does not purport to summarize the Agreement and reference is made to the Agreement for the interests, rights and limitations of rights, benefits, obligations and duties evidenced hereby, and the rights, duties and immunities of the Securities Administrator.  The Certificates are limited in right of payment to certain collections and recoveries respecting the Mortgage Loans and other assets included in the Trust Fund, all as more specifically set forth in the Agreement.

The Agreement permits, with certain exceptions therein provided, the amendment thereof and the modification of the rights and obligations of the Depositor and the rights of the Certificateholders under the Agreement from time to time by the parties thereto with the consent of the Holders of the Class or Classes of Certificates affected thereby evidencing over 50% of the Voting Rights of such Class or Classes.  Any such consent by the Holder of this Certificate shall be conclusive and binding on such Holder and upon all future Holders of this Certificate and of any Certificate issued upon the transfer hereof or in lieu hereof whether or not notation of such consent is made upon this Certificate. The Agreement also permits the amendment thereof, in certain limited circumstances, without the consent of the Holders of any of the Certificates.

As provided in the Agreement and subject to certain limitations therein set forth, the transfer of this Certificate is registrable with the Securities Administrator upon surrender of this Certificate for registration of transfer at the offices or agencies maintained by the Securities Administrator for such purposes, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Securities Administrator duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Certificates in authorized denominations representing a like aggregate Percentage Interest will be issued to the designated transferee.

The Certificates are issuable only as registered Certificates without coupons in the Classes and denominations specified in the Agreement. As provided in the Agreement and subject to certain limitations therein set forth, this Certificate is exchangeable for one or more new Certificates evidencing the same Class and in the same aggregate Percentage Interest, as requested by the Holder surrendering the same.

No service charge will be made to the Certificateholders for any such registration of transfer, but the Securities Administrator may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Depositor, the Master Servicer, the Trustee, the Securities Administrator and any agent of any of them may treat the Person in whose name this Certificate is registered as the owner hereof for all purposes, and none of Depositor, the Master Servicer, the Trustee, the Securities Administrator or any such agent shall be affected by notice to the contrary.

The obligations created by the Agreement and the Trust Fund created thereby (other than the obligations to make payments to Certificateholders with respect to the termination of the Agreement) shall terminate upon the earlier of (i) the later of (A) the maturity or other liquidation (or Advance with respect thereto) of the last Mortgage Loan remaining in the Trust Fund and disposition of all property acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the remittance of all funds due under the Agreement, or (ii) the optional repurchase by the party named in the Agreement of all the Mortgage Loans and other 

 

assets of the Trust Fund in accordance with the terms of the Agreement. Such optional repurchase may be made only if on such Distribution Date the aggregate Stated Principal Balance of the Mortgage Loans is less than or equal to 10% of the aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date. The exercise of such right will effect the early retirement of the Certificates. In no event, however, will the Trust Fund created by the Agreement continue beyond the earlier to occur of (i) expiration of 21 years after the death of certain persons identified in the Agreement and (ii) the Assumed Final Distribution Date.

Unless this Certificate has been countersigned by an authorized signatory of the Securities Administrator by manual signature, this Certificate shall not be entitled to any benefit under the Agreement, or be valid for any purpose.

 

 

IN WITNESS WHEREOF, the Securities Administrator has caused this Certificate to be duly executed.

 

	
            Dated:  September __, 2005
 	
             
 	
             
 	
            WELLS FARGO BANK, N.A.
 as Securities Administrator 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 

 

CERTIFICATE OF AUTHENTICATION

This is one of the Class III-A-[1][2][3][4] Certificates referred to in the within-mentioned Agreement.

	
             
 	
             
 	
             
 	
            WELLS FARGO BANK, N.A.
 as Securities Administrator 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto __________________________________ (Please print or typewrite name and address including postal zip code of assignee) a Percentage Interest evidenced by the within Asset-Backed Certificate and hereby authorizes the transfer of registration of such interest to assignee on the Certificate Register of the Trust Fund.

I (We) further direct the Certificate Registrar to issue a new Certificate of a like denomination and Class, to the above named assignee and deliver such Certificate to the following address:

 

	
             
 	
             
 	
             
 
	
             
 	
             
 	
            .
 

 

	
            Dated:
 	
            _________________________________
 
	
             
 	
            Signature by or on behalf of assignor

 
 
	
             
 	
            _________________________________
 
	
             
 	
            Signature Guaranteed

 
 

 

 

DISTRIBUTION INSTRUCTIONS

The assignee should include the following for purposes of distribution:

	
            Distributions shall be made, by wire transfer or otherwise, in immediately available 
 
	
            funds to
 	
             
 
	
             
 
	
            for the account of
 	
             
 
	
            account number
 	
             
 	
            or, if mailed by check, to
 
	
             
 
	
            Applicable statements should be mailed to
 	
             
 
	
             
 
	
             
 
	
            This information is provided by
 	
             
 
	
            assignee named above, or
 	
             
 
	
            its agent.
 	
             
 
								

 

 

 

EXHIBIT A-3

FORM OF CLASS M-[1][2][3][4][5] CERTIFICATE

THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR CERTIFICATES [[AND ]THE CLASS M-1 CERTIFICATES] [[,/AND ]THE CLASS M-2 CERTIFICATES] [[AND ]THE CLASS M-3 CERTIFICATES] [[,]THE CLASS M-4 CERTIFICATES] AS DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE “CODE”).

THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED BY PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.

ANY TRANSFEREES OF THIS CERTIFICATE SHALL BE DEEMED TO MAKE THE REPRESENTATIONS SET FORTH IN SECTION 6.02(B) OF THE AGREEMENT.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

 

 

	

            Certificate No. [__]
 	
            Pass-Through Rate:  Floating
 
	
             
 	
             
 
	
            Class M-[1][2][3][4][5] Subordinate
 	
             
 
	
             
 	
             
 
	
            Date of Pooling and Servicing Agreement and Cut-off Date:

September 1, 2005
 	
            Aggregate Initial Certificate Principal Balance of the Class M-[1][2][3][4][5] Certificates as of the Cut-off Date:

$ 
 
	
            Trustee: HSBC Bank USA, National Association
 	
             
 
	
            First Distribution Date:

October 25, 2005
 	
            Initial Certificate Principal Balance of this Certificate as of the Cut-off Date:

$ 
 
	
             
 	
            Master Servicer and Securities Administrator: Wells Fargo Bank, N.A.
 
	
            Assumed Final Distribution Date:

September 25, 2035
 	
            CUSIP:   [__________________]
 
	
             
 	
             
 

 

MORTGAGE PASS-THROUGH CERTIFICATE

SERIES 2005-AR5

evidencing a fractional undivided interest in the distributions allocable to the Class M-[1][2][3][4][5] Certificates with respect to a Trust Fund consisting primarily of a pool of conventional one- to four-family adjustable rate mortgage loans sold by NOMURA ASSET ACCEPTANCE CORPORATION.

This Certificate is payable solely from the assets of the Trust Fund, and does not represent an obligation of or interest in Nomura Asset Acceptance Corporation (“NAAC”) or the Trustee or any of their affiliates or any other person. Neither this Certificate nor the underlying Mortgage Loans are guaranteed or insured by any governmental entity or by NAAC or the Trustee or any of their affiliates or any other person. None of NAAC, the Trustee or any of their affiliates will have any obligation with respect to any certificate or other obligation secured by or payable from payments on the Certificates.

This certifies that Cede & Co. is the registered owner of the Percentage Interest evidenced hereby in the beneficial ownership interest of Certificates of the same Class as this Certificate in a trust (the “Trust Fund”) generally consisting of conventional first lien, adjustable rate mortgage loans secured by one- to four- family residences, units in planned unit developments and individual condominium units (collectively, the “Mortgage Loans”) sold by NAAC. The Mortgage Loans were sold by Nomura Credit & Capital, Inc. (the “Seller”) to NAAC. The Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as of the Cut-off Date specified above (the “Agreement”), among NAAC, as depositor (the “Depositor”), the Seller, GMAC Mortgage Corporation, as servicer, (the “Servicer”), Wells Fargo Bank, N.A. as master
servicer (the “Master Servicer”) and securities administrator (the 

 

“Securities Administrator”) and HSBC Bank USA, National Association, as trustee (the “Trustee”), a summary of certain of the pertinent provisions of which is set forth hereafter. To the extent not defined herein, capitalized terms used herein shall have the meaning ascribed to them in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of its acceptance hereof assents and by which such Holder is bound.

Interest on this Certificate will accrue during the period commencing on the immediately preceding Distribution Date (as hereinafter defined) (or with respect to the First Distribution Date, the Closing Date) and ending on the day immediately preceding the related Distribution Date on the Certificate Principal Balance hereof at a per annum Pass-Through Rate equal to the least of (i) the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior to the first possible Optional Termination Date, [___]% or (B) after the first possible Optional Termination Date, [__]%, (ii) the applicable Net Funds Cap, (iii) the applicable Cap Rate and (iv) the applicable Maximum Interest Rate.  The Securities Administrator will distribute on the 25th day of each month, or, if such 25th day is not a Business Day, the immediately following Business Day (each, a “Distribution Date”),
commencing on the First Distribution Date specified above, to the Person in whose name this Certificate is registered at the close of business on the Business Day immediately preceding such Distribution Date, an amount equal to the product of the Percentage Interest evidenced by this Certificate and the amount (of interest and principal, if any) required to be distributed to the Holders of Certificates of the same Class as this Certificate. The Assumed Final Distribution Date is the Distribution Date in the month following the latest scheduled maturity date of any Mortgage Loan  and is not likely to be the date on which the Certificate Principal Balance of this Class of Certificates will be reduced to zero.

Distributions on this Certificate will be made by the Securities Administrator by check mailed to the address of the Person entitled thereto as such name and address shall appear on the Certificate Register or, if such Person so requests by notifying the Securities Administrator in writing as specified in the Agreement. Notwithstanding the above, the final distribution on this Certificate will be made after due notice by the Securities Administrator of the pendency of such distribution and only upon presentation and surrender of this Certificate at the office or agency appointed by the Securities Administrator for that purpose and designated in such notice. The initial Certificate Principal Balance of this Certificate is set forth above. The Certificate Principal Balance hereof will be reduced to the extent of distributions allocable to principal hereon and any Realized Losses allocable hereto.

This Certificate is one of a duly authorized issue of Certificates designated as set forth on the face hereof (the “Certificates”). The Certificates, in the aggregate, evidence the entire beneficial ownership interest in the Trust Fund formed pursuant to the Agreement.

The Certificateholder, by its acceptance of this Certificate, agrees that it will look solely to the Trust Fund for payment hereunder and that the Trustee is not liable to the Certificateholders for any amount payable under this Certificate or the Agreement or, except as expressly provided in the Agreement, subject to any liability under the Agreement.

 

 

This Certificate does not purport to summarize the Agreement and reference is made to the Agreement for the interests, rights and limitations of rights, benefits, obligations and duties evidenced hereby, and the rights, duties and immunities of the Securities Administrator.  The Certificates are limited in right of payment to certain collections and recoveries respecting the Mortgage Loans and other assets included in the Trust Fund, all as more specifically set forth in the Agreement.

The Agreement permits, with certain exceptions therein provided, the amendment thereof and the modification of the rights and obligations of the Depositor and the rights of the Certificateholders under the Agreement from time to time by the parties thereto with the consent of the Holders of the Class or Classes of Certificates affected thereby evidencing over 50% of the Voting Rights of such Class or Classes.  Any such consent by the Holder of this Certificate shall be conclusive and binding on such Holder and upon all future Holders of this Certificate and of any Certificate issued upon the transfer hereof or in lieu hereof whether or not notation of such consent is made upon this Certificate. The Agreement also permits the amendment thereof, in certain limited circumstances, without the consent of the Holders of any of the Certificates.

As provided in the Agreement and subject to certain limitations therein set forth, the transfer of this Certificate is registrable with the Securities Administrator upon surrender of this Certificate for registration of transfer at the offices or agencies maintained by the Securities Administrator for such purposes, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Securities Administrator duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Certificates in authorized denominations representing a like aggregate Percentage Interest will be issued to the designated transferee.

Any transferee of this Certificate shall be deemed to make the representations set forth in Section 6.02(b) of the Agreement.

The Certificates are issuable only as registered Certificates without coupons in the Classes and denominations specified in the Agreement. As provided in the Agreement and subject to certain limitations therein set forth, this Certificate is exchangeable for one or more new Certificates evidencing the same Class and in the same aggregate Percentage Interest, as requested by the Holder surrendering the same.

No service charge will be made to the Certificateholders for any such registration of transfer, but the Securities Administrator may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Depositor, the Master Servicer, the Trustee, the Securities Administrator and any agent of any of them may treat the Person in whose name this Certificate is registered as the owner hereof for all purposes, and none of Depositor, the Master Servicer, the Trustee, the Securities Administrator or any such agent shall be affected by notice to the contrary.

The obligations created by the Agreement and the Trust Fund created thereby (other than the obligations to make payments to Certificateholders with respect to the termination of the Agreement) shall terminate upon the earlier of (i) the later of (A) the maturity or other liquidation (or Advance with respect thereto) of the last Mortgage Loan remaining in the Trust 

 

Fund and disposition of all property acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the remittance of all funds due under the Agreement, or (ii) the optional repurchase by the party named in the Agreement of all the Mortgage Loans and other assets of the Trust Fund in accordance with the terms of the Agreement. Such optional repurchase may be made only if on such Distribution Date the aggregate Stated Principal Balance of the Mortgage Loans is less than or equal to 10% of the aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date. The exercise of such right will effect the early retirement of the Certificates. In no event, however, will the Trust Fund created by the Agreement continue beyond the earlier to occur of (i) expiration of 21 years after the death of certain persons identified in the Agreement and (ii) the Assumed Final Distribution Date.

Unless this Certificate has been countersigned by an authorized signatory of the Securities Administrator by manual signature, this Certificate shall not be entitled to any benefit under the Agreement, or be valid for any purpose.

 

 

IN WITNESS WHEREOF, the Securities Administrator has caused this Certificate to be duly executed.

 

	
            Dated:  September __, 2005
 	
             
 	
             
 	
            WELLS FARGO BANK, N.A.
 as Securities Administrator 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

CERTIFICATE OF AUTHENTICATION

This is one of the Class M-[1][2][3][4][5] Certificates referred to in the within-mentioned Agreement.

	
             
 	
             
 	
             
 	
            WELLS FARGO BANK, N.A.
 as Securities Administrator 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

 

 

ASSIGNMENT

 

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto __________________________________ (Please print or typewrite name and address including postal zip code of assignee) a Percentage Interest evidenced by the within Asset-Backed Certificate and hereby authorizes the transfer of registration of such interest to assignee on the Certificate Register of the Trust Fund.

I (We) further direct the Certificate Registrar to issue a new Certificate of a like denomination and Class, to the above named assignee and deliver such Certificate to the following address:

	
             
 	
             
 	
             
 
	
             
 	
             
 	
            .
 

 

 

	
            Dated:
 	
            _________________________________
 
	
             
 	
            Signature by or on behalf of assignor

 
 
	
             
 	
            _________________________________
 
	
             
 	
            Signature Guaranteed

 
 

 

 

DISTRIBUTION INSTRUCTIONS

The assignee should include the following for purposes of distribution:

	
            Distributions shall be made, by wire transfer or otherwise, in immediately available 
 
	
            funds to
 	
             
 
	
             
 
	
            for the account of
 	
             
 
	
            account number
 	
             
 	
            or, if mailed by check, to
 
	
             
 
	
            Applicable statements should be mailed to
 	
             
 
	
             
 
	
             
 
	
            This information is provided by
 	
             
 
	
            assignee named above, or
 	
             
 
	
            its agent.
 	
             
 
								

 

 

 

EXHIBIT A-4

FORM OF CLASS X CERTIFICATE

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE “CODE”).

THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES AND SUBORDINATE CERTIFICATES TO THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.

THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A “QIB”), PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN “INSTITUTIONAL ACCREDITED INVESTOR” WITHIN THE MEANING THEREOF IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY THE SECURITIES ADMINISTRATOR OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE SECURITIES ADMINISTRATOR THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION.

NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE PROVIDES A CERTIFICATE PURSUANT TO SECTION 6.02(b) OF THE AGREEMENT.

 

 

 

	
            Certificate No. [__]
 	
            Percentage Interest: [___]%
 
	
             
 	
             
 
	
            Class X
 	
            Variable Pass-Through Rate
 
	
             
 	
             
 
	
            Date of Pooling and Servicing Agreement and Cut-off Date:

September 1, 2005
 	
            Initial Certificate Notional Balance of this Certificate as of the Cut-off Date:

$ 
 
	
             
 	
             
 
	
            Trustee: HSBC Bank USA, National Association
 	
            Master Servicer and Securities Administrator: Wells Fargo Bank, N.A.
 
	
            First Distribution Date:

October 25, 2005
 	
             
 
	
             
 	
             
 
	
            Assumed Final Distribution Date:

September 25, 2035
 	
            CUSIP: [_____________]
 
	
             
 	
             
 

 

MORTGAGE PASS-THROUGH CERTIFICATE

SERIES 2005-AR5

evidencing a fractional undivided interest in the distributions allocable to the Class X Certificates with respect to a Trust Fund consisting primarily of a pool of conventional one- to four-family adjustable rate mortgage loans sold by NOMURA ASSET ACCEPTANCE CORPORATION

This Certificate is payable solely from the assets of the Trust Fund, and does not represent an obligation of or interest in Nomura Asset Acceptance Corporation (“NAAC”) or the Trustee referred to below or any of their affiliates or any other person. Neither this Certificate nor the underlying Mortgage Loans are guaranteed or insured by any governmental entity or by NAAC or the Trustee or any of their affiliates or any other person. None of NAAC, the Trustee or any of their affiliates will have any obligation with respect to any certificate or other obligation secured by or payable from payments on the Certificates.

This certifies that Nomura Securities International, Inc. is the registered owner of the Percentage Interest evidenced hereby in the beneficial ownership interest of Certificates of the same Class as this Certificate in a trust (the “Trust Fund”), generally consisting of conventional first lien, adjustable rate mortgage loans secured by one- to four- family residences, units in planned unit developments and individual condominium units (collectively, the “Mortgage Loans”) sold by NAAC. The Mortgage Loans were sold by Nomura Credit & Capital, Inc. (the “Seller”) to NAAC. The Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as of the Cut-off Date specified above (the “Agreement”), among NAAC, as depositor (the “Depositor”), the Seller, GMAC Mortgage Corporation, as servicer, (the “Servicer”), Wells
Fargo Bank, N.A. as master servicer (the “Master Servicer”) and securities administrator (the “Securities Administrator”) and HSBC Bank USA, National Association, as trustee (the “Trustee”), a summary of certain of the pertinent provisions of which is set forth 

 

hereafter. To the extent not defined herein, capitalized terms used herein shall have the meaning ascribed to them in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of its acceptance hereof assents and by which such Holder is bound.

Interest on this Certificate will accrue during the month prior to the month in which a Distribution Date (as hereinafter defined) occurs on the Certificate Notional Balance hereof at a per annum rate equal to the Class X Pass-Through Rate as set forth in the Agreement. The Securities Administrator will distribute on the 25th day of each month, or, if such 25th day is not a Business Day, the immediately following Business Day (each, a “Distribution Date”), commencing on the First Distribution Date specified above, to the Person in whose name this Certificate is registered at the close of business on the last day (or if such last day is not a Business Day, the Business Day immediately preceding such last day) of the calendar month immediately preceding the month in which the Distribution Date occurs, an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Certificates of the same Class as this Certificate. The Assumed Final Distribution Date is the Distribution Date in the month following the latest scheduled maturity date of any Mortgage Loan.

Distributions on this Certificate will be made by the Securities Administrator by check mailed to the address of the Person entitled thereto as such name and address shall appear on the Certificate Register or, if such Person so requests by notifying the Securities Administrator in writing as specified in the Agreement. Notwithstanding the above, the final distribution on this Certificate will be made after due notice by the Securities Administrator of the pendency of such distribution and only upon presentation and surrender of this Certificate at the office or agency appointed by the Securities Administrator for that purpose and designated in such notice.

No transfer of this Certificate shall be made unless the transfer is made pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “1933 Act”), and an effective registration or qualification under applicable state securities laws, or is made in a transaction that does not require such registration or qualification. In the event that such a transfer of this Certificate is to be made without registration or qualification, the Securities Administrator shall require receipt of (i) if such transfer is purportedly being made in reliance upon Rule 144A under the 1933 Act, written certifications from the Holder of the Certificate desiring to effect the transfer, and from such Holder’s prospective transferee, substantially in the forms attached to the Agreement as Exhibit E and either F or G, as applicable, and (ii) in all other cases, an
Opinion of Counsel satisfactory to it that such transfer may be made without such registration or qualification (which Opinion of Counsel shall not be an expense of the Trust Fund or of the Depositor, the Securities Administrator or the Trustee in their respective capacities as such), together with copies of the written certification(s) of the Holder of the Certificate desiring to effect the transfer and/or such Holder’s prospective transferee upon which such Opinion of Counsel is based. Neither the Depositor nor the Trustee is obligated to register or qualify the Class of Certificates specified on the face hereof under the 1933 Act or any other securities law or to take any action not otherwise required under the Agreement to permit the transfer of such Certificates without registration or qualification. Any Holder desiring to effect a transfer of this Certificate shall be required to indemnify the Trustee, 

 

the Securities Administrator, the Depositor and the Seller against any liability that may result if the transfer is not so exempt or is not made in accordance with such federal and state laws.

No transfer of this Certificate shall be made to any person unless the transferee provides a certification pursuant to Section 6.02(b) of the Agreement.

This Certificate is one of a duly authorized issue of Certificates designated as set forth on the face hereof (the “Certificates”). The Certificates, in the aggregate, evidence the entire beneficial ownership interest in the Trust Fund formed pursuant to the Agreement.

The Certificateholder, by its acceptance of this Certificate, agrees that it will look solely to the Trust Fund for payment hereunder and that the Securities Administrator is not liable to the Certificateholders for any amount payable under this Certificate or the Agreement or, except as expressly provided in the Agreement, subject to any liability under the Agreement.

This Certificate does not purport to summarize the Agreement and reference is made to the Agreement for the interests, rights and limitations of rights, benefits, obligations and duties evidenced hereby, and the rights, duties and immunities of the Securities Administrator.

The Agreement permits, with certain exceptions therein provided, the amendment thereof and the modification of the rights and obligations of the Depositor and the rights of the Certificateholders under the Agreement from time to time by the parties thereto with the consent of the Holders of the Class or Classes of Certificates affected thereby evidencing over 50% of the Voting Rights of such Class or Classes.  Any such consent by the Holder of this Certificate shall be conclusive and binding on such Holder and upon all future Holders of this Certificate and of any Certificate issued upon the transfer hereof or in lieu hereof whether or not notation of such consent is made upon this Certificate. The Agreement also permits the amendment thereof, in certain limited circumstances, without the consent of the Holders of any of the Certificates.

As provided in the Agreement and subject to certain limitations therein set forth, the transfer of this Certificate is registrable with the Securities Administrator upon surrender of this Certificate for registration of transfer at the offices or agencies maintained by the Securities Administrator for such purposes, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Securities Administrator duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Certificates in authorized denominations representing a like aggregate Percentage Interest will be issued to the designated transferee.

The Certificates are issuable only as registered Certificates without coupons in the Classes and denominations specified in the Agreement. As provided in the Agreement and subject to certain limitations therein set forth, this Certificate is exchangeable for one or more new Certificates evidencing the same Class and in the same aggregate Percentage Interest, as requested by the Holder surrendering the same.

No service charge will be made to the Certificateholders for any such registration of transfer, but the Securities Administrator may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Depositor, the Master Servicer, the Trustee, the Securities Administrator and any agent of any of them may 

 

treat the Person in whose name this Certificate is registered as the owner hereof for all purposes, and none of Depositor, the Master Servicer, the Trustee, the Securities Administrator or any such agent shall be affected by notice to the contrary.

The obligations created by the Agreement and the Trust Fund created thereby (other than the obligations to make payments to Certificateholders with respect to the termination of the Agreement) shall terminate upon the earlier of (i) the later of (A) the maturity or other liquidation (or Advance with respect thereto) of the last Mortgage Loan remaining in the Trust Fund and disposition of all property acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the remittance of all funds due under the Agreement, or (ii) the optional repurchase by the party named in the Agreement of all the Mortgage Loans and other assets of the Trust Fund in accordance with the terms of the Agreement. Such optional repurchase may be made only if on such Distribution Date the aggregate Stated Principal Balance of the Mortgage Loans is less than or equal to 10% of the aggregate
Stated Principal Balance of the Mortgage Loans at the Cut-off Date. The exercise of such right will effect the early retirement of the Certificates. In no event, however, will the Trust Fund created by the Agreement continue beyond the earlier to occur of (i) expiration of 21 years after the death of certain persons identified in the Agreement and (ii) the Assumed Final Distribution Date.

Unless this Certificate has been countersigned by an authorized signatory of the Securities Administrator by manual signature, this Certificate shall not be entitled to any benefit under the Agreement, or be valid for any purpose.

 

 

IN WITNESS WHEREOF, the Securities Administrator has caused this Certificate to be duly executed.

	
            Dated:  September __, 2005
 	
             
 	
             
 	
            WELLS FARGO BANK, N.A.
 as Securities Administrator 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

CERTIFICATE OF AUTHENTICATION

This is one of the Class X Certificates referred to in the within-mentioned Agreement.

	
             
 	
             
 	
             
 	
            WELLS FARGO BANK, N.A.
 as Securities Administrator 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

 

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto __________________________________ (Please print or typewrite name and address including postal zip code of assignee) a Percentage Interest evidenced by the within Asset-Backed Certificate and hereby authorizes the transfer of registration of such interest to assignee on the Certificate Register of the Trust Fund.

I (We) further direct the Certificate Registrar to issue a new Certificate of a like denomination and Class, to the above named assignee and deliver such Certificate to the following address:

 

	
             
 	
             
 	
             
 
	
             
 	
             
 	
            .
 

 

	
            Dated:
 	
            ______________________________________
 
	
             
 	
            Signature by or on behalf of assignor

 
 
	
             
 	
            ______________________________________
 
	
             
 	
            Signature Guaranteed

 
 

 

 

DISTRIBUTION INSTRUCTIONS

The assignee should include the following for purposes of distribution:

	
            Distributions shall be made, by wire transfer or otherwise, in immediately available 
 
	
            funds to
 	
             
 
	
             
 
	
            for the account of
 	
             
 
	
            account number
 	
             
 	
            or, if mailed by check, to
 
	
             
 
	
            Applicable statements should be mailed to
 	
             
 
	
             
 
	
             
 
	
            This information is provided by
 	
             
 
	
            assignee named above, or
 	
             
 
	
            its agent.
 	
             
 
								

 

 

 

EXHIBIT A-5

FORM OF CLASS P CERTIFICATE

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE “CODE”).

THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A “QIB”), PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN “INSTITUTIONAL ACCREDITED INVESTOR” WITHIN THE MEANING THEREOF IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY THE SECURITIES ADMINISTRATOR OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE SECURITIES ADMINISTRATOR OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION.

NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE PROVIDES A CERTIFICATE PURSUANT TO SECTION 6.02(b) OF THE AGREEMENT.

 

 

 

	
            Certificate No. [__]
 	
            Percentage Interest: 100%
 
	
             
 	
             
 
	
            Class P
 	
             
 
	
             
 	
             
 
	
            Date of Pooling and Servicing Agreement and Cut-off Date:

September 1, 2005
 	
            Aggregate Initial Certificate Principal Balance of the Class P Certificates as of the Cut-off Date:  $100
 
	
             
 	
             
 
	
            Trustee: HSBC Bank USA, National Association
 	
            Master Servicer and Securities Administrator: Wells Fargo Bank, N.A.
 
	
             
 	
             
 
	
            First Distribution Date:

October 25, 2005
 	
             
 
	
             
 	
             
 
	
            Assumed Final Distribution Date:

September 25, 2035
 	
            CUSIP:  [________________]
 
	
             
 	
             
 

 

MORTGAGE PASS-THROUGH CERTIFICATE

SERIES 2005-AR5

evidencing a fractional undivided interest in the distributions allocable to the Class P Certificates with respect to a Trust Fund consisting primarily of a pool of conventional one- to four-family adjustable rate mortgage loans sold by NOMURA ASSET ACCEPTANCE CORPORATION

This Certificate is payable solely from the assets of the Trust Fund, and does not represent an obligation of or interest in Nomura Asset Acceptance Corporation (“NAAC”) or the Trustee referred to below or any of their affiliates or any other person. Neither this Certificate nor the underlying Mortgage Loans are guaranteed or insured by any governmental entity or by NAAC or the Trustee or any of their affiliates or any other person. None of NAAC, the Trustee or any of their affiliates will have any obligation with respect to any certificate or other obligation secured by or payable from payments on the Certificates.

This certifies that Nomura Securities International, Inc. is the registered owner of the Percentage Interest evidenced hereby in the beneficial ownership interest of Certificates of the same Class as this Certificate in a trust (the “Trust Fund”), generally consisting of conventional first lien, adjustable rate mortgage loans secured by one- to four- family residences, units in planned unit developments and individual condominium units (collectively, the “Mortgage Loans”) sold by NAAC. The Mortgage Loans were sold by Nomura Credit & Capital, Inc. (the “Seller”) to NAAC. The Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as of the Cut-off Date specified above (the “Agreement”), among NAAC, as depositor (the “Depositor”), the Seller, GMAC Mortgage Corporation, as servicer, (the “Servicer”), Wells
Fargo Bank, N.A. as master servicer (the “Master Servicer”) and securities administrator (the “Securities Administrator”) and HSBC Bank USA, National Association, as 

 

trustee (the “Trustee”), a summary of certain of the pertinent provisions of which is set forth hereafter. To the extent not defined herein, capitalized terms used herein shall have the meaning ascribed to them in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of its acceptance hereof assents and by which such Holder is bound.

The Securities Administrator will distribute on the 25th day of each month, or, if such 25th day is not a Business Day, the immediately following Business Day (each, a “Distribution Date”), commencing on the First Distribution Date specified above, to the Person in whose name this Certificate is registered at the close of business on the last day (or if such last day is not a Business Day, the Business Day immediately preceding such last day) of the calendar month immediately preceding the month in which the Distribution Date occurs, an amount equal to the product of the Percentage Interest evidenced by this Certificate and the amount required to be distributed to the Holders of Certificates of the same Class as this Certificate. The Assumed Final Distribution Date is the Distribution Date in the month following the latest scheduled maturity date of any Mortgage Loan.

Distributions on this Certificate will be made by the Securities Administrator by check mailed to the address of the Person entitled thereto as such name and address shall appear on the Certificate Register or, if such Person so requests by notifying the Securities Administrator in writing as specified in the Agreement. Notwithstanding the above, the final distribution on this Certificate will be made after due notice by the Securities Administrator of the pendency of such distribution and only upon presentation and surrender of this Certificate at the office or agency appointed by the Securities Administrator for that purpose and designated in such notice.

No transfer of this Certificate shall be made unless the transfer is made pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “1933 Act”), and an effective registration or qualification under applicable state securities laws, or is made in a transaction that does not require such registration or qualification. In the event that such a transfer of this Certificate is to be made without registration or qualification, the Securities Administrator shall require receipt of (i) if such transfer is purportedly being made in reliance upon Rule 144A under the 1933 Act, written certifications from the Holder of the Certificate desiring to effect the transfer, and from such Holder’s prospective transferee, substantially in the forms attached to the Agreement as Exhibit E and either F or G, as applicable, and (ii) in all other cases, an
Opinion of Counsel satisfactory to it that such transfer may be made without such registration or qualification (which Opinion of Counsel shall not be an expense of the Trust Fund or of the Depositor, the Securities Administrator or the Trustee in their respective capacities as such), together with copies of the written certification(s) of the Holder of the Certificate desiring to effect the transfer and/or such Holder’s prospective transferee upon which such Opinion of Counsel is based. Neither the Depositor, the Securities Administrator nor the Trustee is obligated to register or qualify the Class of Certificates specified on the face hereof under the 1933 Act or any other securities law or to take any action not otherwise required under the Agreement to permit the transfer of such Certificates without registration or qualification. Any Holder desiring to effect a transfer of this Certificate shall be required to indemnify the Trustee, the Securities Administrator, the
Depositor and the Seller 

 

against any liability that may result if the transfer is not so exempt or is not made in accordance with such federal and state laws.

No transfer of this Certificate shall be made to any person unless the transferee provides a certification pursuant to Section 6.02(b) of the Agreement.

This Certificate is one of a duly authorized issue of Certificates designated as set forth on the face hereof (the “Certificates”). The Certificates, in the aggregate, evidence the entire beneficial ownership interest in the Trust Fund formed pursuant to the Agreement.

The Certificateholder, by its acceptance of this Certificate, agrees that it will look solely to the Trust Fund for payment hereunder and that the Securities Administrator is not liable to the Certificateholders for any amount payable under this Certificate or the Agreement or, except as expressly provided in the Agreement, subject to any liability under the Agreement.

This Certificate does not purport to summarize the Agreement and reference is made to the Agreement for the interests, rights and limitations of rights, benefits, obligations and duties evidenced hereby, and the rights, duties and immunities of the Securities Administrator.

The Agreement permits, with certain exceptions therein provided, the amendment thereof and the modification of the rights and obligations of the Depositor and the rights of the Certificateholders under the Agreement from time to time by the parties thereto with the consent of the Holders of the Class or Classes of Certificates affected thereby evidencing over 50% of the Voting Rights of such Class or Classes.  Any such consent by the Holder of this Certificate shall be conclusive and binding on such Holder and upon all future Holders of this Certificate and of any Certificate issued upon the transfer hereof or in lieu hereof whether or not notation of such consent is made upon this Certificate. The Agreement also permits the amendment thereof, in certain limited circumstances, without the consent of the Holders of any of the Certificates.

As provided in the Agreement and subject to certain limitations therein set forth, the transfer of this Certificate is registrable with the Securities Administrator upon surrender of this Certificate for registration of transfer at the offices or agencies maintained by the Securities Administrator for such purposes, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Securities Administrator duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Certificates in authorized denominations representing a like aggregate Percentage Interest will be issued to the designated transferee.

The Certificates are issuable only as registered Certificates without coupons in the Classes and denominations specified in the Agreement. As provided in the Agreement and subject to certain limitations therein set forth, this Certificate is exchangeable for one or more new Certificates evidencing the same Class and in the same aggregate Percentage Interest, as requested by the Holder surrendering the same.

No service charge will be made to the Certificateholders for any such registration of transfer, but the Securities Administrator may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Depositor, the Master Servicer, the Trustee, the Securities Administrator and any agent of any of them may 

 

treat the Person in whose name this Certificate is registered as the owner hereof for all purposes, and none of Depositor, the Master Servicer, the Trustee, the Securities Administrator or any such agent shall be affected by notice to the contrary.

The obligations created by the Agreement and the Trust Fund created thereby (other than the obligations to make payments to Certificateholders with respect to the termination of the Agreement) shall terminate upon the earlier of (i) the later of (A) the maturity or other liquidation (or Advance with respect thereto) of the last Mortgage Loan remaining in the Trust Fund and disposition of all property acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the remittance of all funds due under the Agreement, or (ii) the optional repurchase by the party named in the Agreement of all the Mortgage Loans and other assets of the Trust Fund in accordance with the terms of the Agreement. Such optional repurchase may be made only if on such Distribution Date the aggregate Stated Principal Balance of the Mortgage Loans is less than or equal to 10% of the aggregate
Stated Principal Balance of the Mortgage Loans at the Cut-off Date. The exercise of such right will effect the early retirement of the Certificates. In no event, however, will the Trust Fund created by the Agreement continue beyond the earlier to occur of (i) expiration of 21 years after the death of certain persons identified in the Agreement and (ii) the Assumed Final Distribution Date.

Unless this Certificate has been countersigned by an authorized signatory of the Securities Administrator by manual signature, this Certificate shall not be entitled to any benefit under the Agreement, or be valid for any purpose.

 

 

IN WITNESS WHEREOF, the Securities Administrator has caused this Certificate to be duly executed.

	
            Dated:  September __, 2005
 	
             
 	
             
 	
            WELLS FARGO BANK, N.A.
 as Securities Administrator 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

CERTIFICATE OF AUTHENTICATION

This is one of the Class P Certificates referred to in the within-mentioned Agreement.

	
             
 	
             
 	
             
 	
            WELLS FARGO BANK, N.A.
 as Securities Administrator 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto __________________________________ (Please print or typewrite name and address including postal zip code of assignee) a Percentage Interest evidenced by the within Asset-Backed Certificate and hereby authorizes the transfer of registration of such interest to assignee on the Certificate Register of the Trust Fund.

I (We) further direct the Certificate Registrar to issue a new Certificate of a like denomination and Class, to the above named assignee and deliver such Certificate to the following address:

 

	
             
 	
             
 	
             
 
	
             
 	
             
 	
            .
 

 

	
            Dated:
 	
            ______________________________________
 
	
             
 	
            Signature by or on behalf of assignor

 
 
	
             
 	
            ______________________________________
 
	
             
 	
            Signature Guaranteed

 
 

 

 

DISTRIBUTION INSTRUCTIONS

The assignee should include the following for purposes of distribution:

	
            Distributions shall be made, by wire transfer or otherwise, in immediately available 
 
	
            funds to
 	
             
 
	
             
 
	
            for the account of
 	
             
 
	
            account number
 	
             
 	
            or, if mailed by check, to
 
	
             
 
	
            Applicable statements should be mailed to
 	
             
 
	
             
 
	
             
 
	
            This information is provided by
 	
             
 
	
            assignee named above, or
 	
             
 
	
            its agent.
 	
             
 
								

 

 

 

EXHIBIT A-6

FORM OF CLASS R CERTIFICATE

THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED STATES PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “RESIDUAL INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE “CODE”).

NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE PROVIDES A CERTIFICATE PURSUANT TO SECTION 6.02(b) OF THE AGREEMENT.

ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY POSSESSION OF THE UNITED STATES, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN AN INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS ACTIVITIES ARE SUBJECT TO TAX AND EXCEPT FOR FREDDIE MAC, A MAJORITY OF ITS BOARD OF DIRECTORS IS NOT SELECTED BY SUCH GOVERNMENTAL UNIT), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C) ANY ORGANIZATION (OTHER THAN CERTAIN FARMERS’ COOPERATIVES DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY
SECTION 511 OF THE CODE (INCLUDING THE TAX IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS TAXABLE INCOME), (D) RURAL ELECTRIC AND TELEPHONE COOPERATIVES DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE, (E) AN ELECTING LARGE PARTNERSHIP UNDER SECTION 775(a) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B), (C), (D) OR (E) BEING HEREIN REFERRED TO AS A “DISQUALIFIED ORGANIZATION”), OR (F) AN AGENT OF A DISQUALIFIED ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE.  NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO 

 

LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE.  EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.

 

 

 

	
            Certificate No. [__]
 	
             
 
	
             
 	
             
 
	
            Class R
 	
            Percentage Interest: 100%
 
	
             
 	
             
 
	
            Date of Pooling and Servicing Agreement 
 and Cut-off Date: September 1, 2005

 
 	
             
 
	
             
 	
             
 
	
            Trustee: HSBC Bank USA, National Association 
 	
            Master Servicer and Securities Administrator: Wells Fargo Bank, N.A.
 
	
             
 	
             
 
	
            First Distribution Date:

October 25, 2005
 	
             
 
	
             
 	
             
 
	
            Assumed Final Distribution Date:

September 25, 2035
 	
            CUSIP:  [_______________]
 
	
             
 	
             
 

 

MORTGAGE PASS-THROUGH CERTIFICATE

SERIES 2005-AR5

evidencing a fractional undivided interest in the distributions allocable to the Class R Certificates with respect to a Trust Fund consisting primarily of a pool of conventional one- to four-family adjustable rate mortgage loans sold by NOMURA ASSET ACCEPTANCE CORPORATION.

This Certificate is payable solely from the assets of the Trust Fund, and does not represent an obligation of or interest in Nomura Asset Acceptance Corporation (“NAAC”) or the Trustee referred to below or any of their affiliates or any other person. Neither this Certificate nor the underlying Mortgage Loans are guaranteed or insured by any governmental entity or by NAAC or the Trustee or any of their affiliates or any other person. None of NAAC, the Trustee or any of their affiliates will have any obligation with respect to any certificate or other obligation secured by or payable from payments on the Certificates.

This certifies that Nomura Securities International, Inc. is the registered owner of the Percentage Interest evidenced hereby in the beneficial ownership interest of Certificates of the same Class as this Certificate in a trust (the “Trust Fund”), generally consisting of  conventional first lien, adjustable rate mortgage loans secured by one- to four- family residences, units in planned unit developments and individual condominium units (collectively, the “Mortgage Loans”) sold by NAAC. The Mortgage Loans were sold by Nomura Credit & Capital, Inc. (the “Seller”) to NAAC. The Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as of the Cut-off Date specified above (the “Agreement”), among NAAC, as depositor (the “Depositor”), the Seller, GMAC Mortgage Corporation, as servicer, (the “Servicer”), Wells
Fargo Bank, N.A. as master servicer (the “Master Servicer”) and securities administrator (the “Securities Administrator”) and HSBC Bank USA, National Association, as 

 

trustee (the “Trustee”), a summary of certain of the pertinent provisions of which is set forth hereafter. To the extent not defined herein, capitalized terms used herein shall have the meaning ascribed to them in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of its acceptance hereof assents and by which such Holder is bound.

Each Holder of this Certificate will be deemed to have agreed to be bound by the restrictions set forth in the Agreement to the effect that (i) each person holding or acquiring any Ownership Interest in this Certificate must be a United States Person and a Permitted Transferee, (ii) the transfer of any Ownership Interest in this Certificate will be conditioned upon the delivery to the Trustee of, among other things, an affidavit to the effect that it is a United States Person and Permitted Transferee, (iii) any attempted or purported transfer of any Ownership Interest in this Certificate in violation of such restrictions will be absolutely null and void and will vest no rights in the purported transferee, and (iv) if any person other than a United States Person and a Permitted Transferee acquires any Ownership Interest in this Certificate in violation of such restrictions, then the
Depositor will have the right, in its sole discretion and without notice to the Holder of this Certificate, to sell this Certificate to a purchaser selected by the Depositor, which purchaser may be the Depositor, or any affiliate of the Depositor, on such terms and conditions as the Depositor may choose.

The Securities Administrator will distribute on the 25th day of each month, or, if such 25th day is not a Business Day, the immediately following Business Day (each, a “Distribution Date”), commencing on the First Distribution Date specified above, to the Person in whose name this Certificate is registered at the close of business on the last day (or if such last day is not a Business Day, the Business Day immediately preceding such last day) of the calendar month immediately preceding the month in which the Distribution Date occurs, an amount equal to the product of the Percentage Interest evidenced by this Certificate and the amounts required to be distributed to the Holders of Certificates of the same Class as this Certificate. The Assumed Final Distribution Date is the Distribution Date in the month following the latest scheduled maturity date of any Mortgage Loan.

Distributions on this Certificate will be made by the Securities Administrator by check mailed to the address of the Person entitled thereto as such name and address shall appear on the Certificate Register or, if such Person so requests by notifying the Securities Administrator in writing as specified in the Agreement. Notwithstanding the above, the final distribution on this Certificate will be made after due notice by the Securities Administrator of the pendency of such distribution and only upon presentation and surrender of this Certificate at the office or agency appointed by the Securities Administrator for that purpose and designated in such notice.

No transfer of this Certificate shall be made to any person unless the transferee provides a certification pursuant to Section 6.02(b) of the Agreement.

This Certificate is one of a duly authorized issue of Certificates designated as set forth on the face hereof (the “Certificates”). The Certificates, in the aggregate, evidence the entire beneficial ownership interest in the Trust Fund formed pursuant to the Agreement.

 

 

The Certificateholder, by its acceptance of this Certificate, agrees that it will look solely to the Trust Fund for payment hereunder and that the Trustee is not liable to the Certificateholders for any amount payable under this Certificate or the Agreement or, except as expressly provided in the Agreement, subject to any liability under the Agreement.

This Certificate does not purport to summarize the Agreement and reference is made to the Agreement for the interests, rights and limitations of rights, benefits, obligations and duties evidenced hereby, and the rights, duties and immunities of the Securities Administrator.  The Certificates are limited in right of payment to certain collections and recoveries respecting the Mortgage Loans and other assets included in the Trust Fund, all as more specifically set forth in the Agreement.

The Agreement permits, with certain exceptions therein provided, the amendment thereof and the modification of the rights and obligations of the Depositor and the rights of the Certificateholders under the Agreement from time to time by the parties thereto with the consent of the Holders of the Class or Classes of Certificates affected thereby evidencing over 50% of the Voting Rights of such Class or Classes.  Any such consent by the Holder of this Certificate shall be conclusive and binding on such Holder and upon all future Holders of this Certificate and of any Certificate issued upon the transfer hereof or in lieu hereof whether or not notation of such consent is made upon this Certificate. The Agreement also permits the amendment thereof, in certain limited circumstances, without the consent of the Holders of any of the Certificates.

As provided in the Agreement and subject to certain limitations therein set forth, the transfer of this Certificate is registrable with the Securities Administrator upon surrender of this Certificate for registration of transfer at the offices or agencies maintained by the Securities Administrator for such purposes, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Securities Administrator duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Certificates in authorized denominations representing a like aggregate Percentage Interest will be issued to the designated transferee.

The Certificates are issuable only as registered Certificates without coupons in the Classes and denominations specified in the Agreement. As provided in the Agreement and subject to certain limitations therein set forth, this Certificate is exchangeable for one or more new Certificates evidencing the same Class and in the same aggregate Percentage Interest, as requested by the Holder surrendering the same.

No service charge will be made to the Certificateholders for any such registration of transfer, but the Securities Administrator may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Depositor, the Master Servicer, the Trustee, the Securities Administrator and any agent of any of them may treat the Person in whose name this Certificate is registered as the owner hereof for all purposes, and none of Depositor, the Master Servicer, the Trustee, the Securities Administrator or any such agent shall be affected by notice to the contrary.

The obligations created by the Agreement and the Trust Fund created thereby (other than the obligations to make payments to Certificateholders with respect to the termination 

 

of the Agreement) shall terminate upon the earlier of (i) the later of (A) the maturity or other liquidation (or Advance with respect thereto) of the last Mortgage Loan remaining in the Trust Fund and disposition of all property acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the remittance of all funds due under the Agreement, or (ii) the optional repurchase by the party named in the Agreement of all the Mortgage Loans and other assets of the Trust Fund in accordance with the terms of the Agreement. Such optional repurchase may be made only if on such Distribution Date the aggregate Stated Principal Balance of the Mortgage Loans is less than or equal to 10% of the aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date. The exercise of such right will effect the early retirement of the Certificates. In no event, however, will the Trust Fund
created by the Agreement continue beyond the earlier to occur of (i) expiration of 21 years after the death of certain persons identified in the Agreement and (ii) the Assumed Final Distribution Date.

Unless this Certificate has been countersigned by an authorized signatory of the Securities Administrator by manual signature, this Certificate shall not be entitled to any benefit under the Agreement, or be valid for any purpose.

 

 

IN WITNESS WHEREOF, the Securities Administrator has caused this Certificate to be duly executed.

 

	
            Dated:  September __, 2005
 	
             
 	
             
 	
            WELLS FARGO BANK, N.A.
 as Securities Administrator 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

CERTIFICATE OF AUTHENTICATION

This is one of the Class R Certificates referred to in the within-mentioned Agreement.

	
             
 	
             
 	
             
 	
            WELLS FARGO BANK, N.A.
 as Securities Administrator 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto __________________________________ (Please print or typewrite name and address including postal zip code of assignee) a Percentage Interest evidenced by the within Asset-Backed Certificate and hereby authorizes the transfer of registration of such interest to assignee on the Certificate Register of the Trust Fund.

I (We) further direct the Certificate Registrar to issue a new Certificate of a like denomination and Class, to the above named assignee and deliver such Certificate to the following address:

	
             
 	
             
 	
             
 
	
             
 	
             
 	
            .
 

 

	
            Dated:
 	
            ______________________________________
 
	
             
 	
            Signature by or on behalf of assignor

 
 
	
             
 	
            ______________________________________
 
	
             
 	
            Signature Guaranteed

 
 

 

 

DISTRIBUTION INSTRUCTIONS

The assignee should include the following for purposes of distribution:

	
            Distributions shall be made, by wire transfer or otherwise, in immediately available 
 
	
            funds to
 	
             
 
	
             
 
	
            for the account of
 	
             
 
	
            account number
 	
             
 	
            or, if mailed by check, to
 
	
             
 
	
            Applicable statements should be mailed to
 	
             
 
	
             
 
	
             
 
	
            This information is provided by
 	
             
 
	
            assignee named above, or
 	
             
 
	
            its agent.
 	
             
 
								

 

 

 

EXHIBIT B

MORTGAGE LOAN SCHEDULE

The Preliminary and Final Mortgage Loan Schedules shall set forth the following information with respect to each Mortgage Loan:

	
            (a)
 	
            the loan number;
 
	
            (b)
 	
            the Mortgage Rate in effect as of the Cut-off Date;
 
	
            (c)
 	
            the Servicing Fee Rate;
 
	
            (d)
 	
            the Net Mortgage Rate in effect as of the Cut-off Date;
 
	
            (e)
 	
            the maturity date;
 
	
            (f)
 	
            the original principal balance;
 
	
            (g)
 	
            the Cut-off Date Principal Balance;
 
	
            (h)
 	
            the original term;
 
	
            (i)
 	
            the remaining term;
 
	
            (j)
 	
            the property type;
 
	
            (k)
 	
            the MIN with respect to each Mortgage Loan;
 
	
            (l)
 	
            the Custodian; 
  
	
            m)
 	
            a code indicating whether the Mortgage Loan is subject to a Prepayment Charge, the term of such Prepayment Charge and the amount of such Prepayment Charge
 
	
            (n)
 	
            the first Adjustment Date
 
	
            (o)
 	
            the Gross Margin;
 
	
            (p)
 	
            the Maximum Mortgage Interest Rate under the terms of the Mortgage Note;
 
	
            (q)
 	
            the Minimum Mortgage Interest Rate under the terms of the Mortgage Note;
 
	
            (r)
 	
            the Periodic Rate Cap;
 
	
            (s)
 	
            the first Adjustment Date immediately following the Cut-off Date;
  
	
            (t)
 	
            the Index;
 
	
            (u)
 	
            the related Loan Group; and
 
	
            (v)
 	
            the applicable Servicer.
 

 

 

EXHIBIT C

[RESERVED]

 

 

EXHIBIT D

FORM OF TRANSFER AFFIDAVIT

Affidavit pursuant to Section 860E(e)(4) of the Internal Revenue Code of 1986, as amended, and for other purposes

	
            STATE OF
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF
 	
            )
 	
             
 

 

[NAME OF OFFICER], being first duly sworn, deposes and says:

1.          That he/she is [Title of Officer] of [Name of Investor] (the “Investor”), a [savings institution] [corporation] duly organized and existing under the laws of [the State of _____] [the United States], on behalf of which he makes this affidavit.

2.          That (i) the Investor is not a “disqualified organization” as defined in Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended (the “Code”), and will not be a disqualified organization as of [Closing Date] [date of purchase]; (ii) it is not acquiring the Nomura Asset Acceptance Corporation Alternative Loan Trust, Mortgage Pass Through Certificates, Series 2005-AR5, Class R Certificates (the “Residual Certificates”) for the account of a disqualified organization; (iii) it consents to any amendment of the Pooling and Servicing Agreement that shall be deemed necessary by Nomura Asset Acceptance Corporation (upon advice of counsel) to constitute a reasonable arrangement to ensure that the Residual Certificates will not be owned directly or indirectly by a disqualified organization; and
(iv) it will not transfer such Residual Certificates unless (a) it has received from the transferee an affidavit in substantially the same form as this affidavit containing these same four representations and (b) as of the time of the transfer, it does not have actual knowledge that such affidavit is false.

3.          That the Investor is one of the following: (i) a citizen or resident of the United States, (ii) a corporation or partnership (including an entity treated as a corporation or partnership for federal income tax purposes) created or organized in, or under the laws of, the United States or any state thereof or the District of Columbia (except, in the case of a partnership, to the extent provided in regulations), provided that no partnership or other entity treated as a partnership for United States federal income tax purposes shall be treated as a United States Person unless all persons that own an interest in such partnership either directly or through any entity that is not a corporation for United States federal income tax purposes are United States Persons, (iii) an estate whose income is subject to United States federal
income tax regardless of its source, or (iv) a trust other than a “foreign trust,” as defined in Section 7701 (a)(31) of the Code.

	
            4.
 	
            That the Investor’s taxpayer identification number is ______________________.
 

5.          That no purpose of the acquisition of the Residual Certificates is to avoid or impede the assessment or collection of tax.

 

 

6.          That the Investor understands that, as the holder of the Residual Certificates, the Investor may incur tax liabilities in excess of any cash flows generated by such Residual Certificates.

7.          That the Investor intends to pay taxes associated with holding the Residual Certificates as they become due.

IN WITNESS WHEREOF, the Investor has caused this instrument to be executed on its behalf, pursuant to authority of its Board of Directors, by its [Title of Officer] this ____ day of _________, 20__.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            [NAME OF INVESTOR]
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            [Name of Officer]
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            [Title of Officer]
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            [Address of Investor for receipt of distributions]

 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Address of Investor for receipt of tax information:

 
 

 

 

 

Personally appeared before me the above-named [Name of Officer], known or proved to me to be the same person who executed the foregoing instrument and to be the [Title of Officer] of the Investor, and acknowledged to me that he/she executed the same as his/her free act and deed and the free act and deed of the Investor.

Subscribed and sworn before me this ___ day of _________, 20___.

NOTARY PUBLIC

COUNTY OF

STATE OF

My commission expires the ___ day of ___________________, 20___.

 

 

EXHIBIT E

FORM OF TRANSFEROR CERTIFICATE

______________, 2005

Nomura Asset Acceptance Corporation

2 World Financial Center, Building B

New York, New York 10281

Wells Fargo Bank, N.A.

Sixth Street and Marquette Avenue

Minneapolis, Minnesota 55479

Attention: Nomura Asset Acceptance

Corporation, Alternative Loan Trust, Series 2005-AR5

	
            Re:
 	
            Nomura Asset Acceptance Corporation 
 Mortgage Pass-Through Certificates, Series 2005-AR5, Class_[_]
 

Ladies and Gentlemen:

In connection with the sale by ___________ (the “Seller”) to ________ (the “Purchaser”) of $_________ Initial Certificate Principal Balance of Mortgage Pass-Through Certificates, Series 2005-AR5, Class _____ (the “Certificates”), issued pursuant to the Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”), dated as of September 1, 2005, among Nomura Asset Acceptance Corporation, as depositor (the “Depositor”), Nomura Credit & Capital, Inc., as seller, GMAC Mortgage Corporation, as servicer, (the “Servicer”), Wells Fargo Bank, N.A. as master servicer (the “Master Servicer”) and securities administrator (the “Securities Administrator”) and HSBC Bank USA, National Association, as trustee (the “Trustee”).  The Seller hereby certifies, represents and warrants to, a covenants with,
the Depositor, the Securities Administrator and the Trustee that:

Neither the Seller nor anyone acting on its behalf has (a) offered, pledged, sold, disposed of or otherwise transferred any Certificate, any interest in any Certificate or any other similar security to any person in any manner, (b) has solicited any offer to buy or to accept a pledge, disposition or other transfer of any Certificate, any interest in any Certificate or any other similar security from any person in any manner, (c) has otherwise approached or negotiated with respect to any Certificate, any interest in any Certificate or any other similar security with any person in any manner, (d) has made any general solicitation by means of general advertising or in any other manner, or (e) has taken any other action, that (as to any of (a) through (e) above) would constitute a distribution of the Certificates under the Securities Act of 1933 (the “Act”), that would render the
disposition of any Certificate a violation of Section 5 of the Act or any state securities law, or that would require registration or qualification pursuant thereto. The Seller will not act in any manner set forth in the foregoing sentence with respect to any Certificate. The Seller has not and will not sell or otherwise transfer any of the Certificates, except in compliance with the provisions of the Pooling and Servicing Agreement.

 

 

 

 

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Very truly yours,
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            ___________________________________________
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            (Seller)
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
            
 
 
 

 

 

 

 

EXHIBIT F

FORM OF INVESTOR REPRESENTATION LETTER (NON-RULE 144A)

___________,2005

Nomura Asset Acceptance Corporation

2 World Financial Center

New York, New York 10281

Wells Fargo Bank, N.A.

Sixth Street and Marquette Avenue

Minneapolis, Minnesota 55479

Attention: Nomura Asset Acceptance

Corporation, Alternative Loan Trust, Series 2005-AR5

	
            Re:
 	
            Nomura Asset Acceptance Corporation, Alternative Loan Trust,Mortgage Pass-Through Certificates, Series 2005-AR5
 

Ladies and Gentlemen:

_______________ (the “Purchaser”) intends to purchase from ____________ (the “Seller”) $_________ Initial Certificate Principal Balance of Mortgage Pass-Through Certificates, Series 2005-AR5, Class _____ (the “Certificates”), issued pursuant to the Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”), dated as of September 1, 2005, among Nomura Asset Acceptance Corporation, as depositor (the “Depositor”), Nomura Credit & Capital, Inc., as seller, GMAC Mortgage Corporation, as servicer, (the “Servicer”), Wells Fargo Bank, N.A. as master servicer (the “Master Servicer”) and securities administrator (the “Securities Administrator”) and HSBC Bank USA, National Association, as trustee (the “Trustee”).  All terms used herein and not otherwise defined shall have the meanings set
forth in the Pooling and Servicing Agreement.  The Purchaser hereby certifies, represents and warrants to, and covenants with, the Depositor, the Securities Administrator and the Trustee that:

	
            1.
 	
            The Purchaser understands that (a) the Certificates have not been and will not be registered or qualified under the Securities Act of 1933, as amended (the “Act”) or any state securities law, (b) the Depositor is not required to so register or qualify the Certificates, (c) the Certificates may be resold only if registered and qualified pursuant to the provisions of the Act or any state securities law, or if an exemption from such registration and qualification is available, (d) the Pooling and Servicing Agreement contains restrictions regarding the transfer of the Certificates and (e) the Certificates will bear a legend to the foregoing effect.
 
	
            2.
 	
            The Purchaser is acquiring the Certificates for its own account for investment only and not with a view to or for sale in connection with any distribution thereof in any manner that would violate the Act or any applicable state securities laws.
 

 

 

 

 

	
            3.
 	
            The Purchaser is (a) a substantial, sophisticated institutional investor having such knowledge and experience in financial and business matters, and, in particular, in such matters related to securities similar to the Certificates, such that it is capable of evaluating the merits and risks of investment in the Certificates, (b) able to bear the economic risks of such an investment and (c) an “accredited investor” within the meaning of Rule 501 (a) promulgated pursuant to the Act.
 
	
            4.
 	
            The Purchaser has been furnished with, and has had an opportunity to review (a) a copy of the Pooling and Servicing Agreement and (b) such other information concerning the Certificates, the Mortgage Loans and the Depositor as has been requested by the Purchaser from the Depositor or the Seller and is relevant to the Purchaser’s decision to purchase the Certificates.  The Purchaser has had any questions arising from such review answered by the Depositor or the Seller to the satisfaction of the Purchaser.
 
	
            5.
 	
            The Purchaser has not and will not nor has it authorized or will it authorize any person to (a) offer, pledge, sell, dispose of or otherwise transfer any Certificate, any interest in any Certificate or any other similar security to any person in any manner, (b) solicit any offer to buy or to accept a pledge, disposition of other transfer of any Certificate, any interest in any Certificate or any other similar security from any person in any manner, (c) otherwise approach or negotiate with respect to any Certificate, any interest in any Certificate or any other similar security with any person in any manner, (d) make any general solicitation by means of general advertising or in any other manner or (e) take any other action, that (as to any of (a) through (e) above) would constitute a distribution of any Certificate
under the Act, that would render the disposition of any Certificate a violation of Section 5 of the Act or any state securities law, or that would require registration or qualification pursuant thereto. The Purchaser will not sell or otherwise transfer any of the Certificates, except in compliance with the provisions of the Pooling and Servicing Agreement.
 

 

 

 

 

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Very truly yours,
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            ___________________________________________
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            (Purchaser)
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
            
 
 
 

 

 

 

 

EXHIBIT G

FORM OF RULE 144A INVESTMENT LETTER

[Date]

Nomura Credit & Capital, Inc.

2 World Financial Center, Building B

New York, New York 10281

Nomura Asset Acceptance Corporation

2 World Financial Center

New York, New York 10281

Wells Fargo Bank, N.A.

Sixth Street and Marquette Avenue

Minneapolis, Minnesota 55479

	
            Re:
 	
            Nomura Asset Acceptance Corporation, Alternative Loan Trust, Mortgage Pass-Through Certificates, Series 2005-AR5 (the “Certificates”), including the Class Certificates (the “Private Certificates”)
 

Dear Ladies and Gentlemen:

In connection with our purchase of Private Certificates, we confirm that:

	
            (i)
 	
            we understand that the Private Certificates are not being registered under the Securities Act of 1933, as amended (the “Act”) or any applicable state securities or “Blue Sky” laws, and are being sold to us in a transaction that is exempt from the registration requirements of such laws;
 
	
            (ii)
 	
            any information we desired concerning the Certificates, including the Private Certificates, the trust in which the Certificates represent the entire beneficial ownership interest (the “Trust”) or any other matter we deemed relevant to our decision to purchase Private Certificates has been made available to us;
 
	
            (iii)
 	
            we are able to bear the economic risk of investment in Private Certificates; we are an institutional “accredited investor” as defined in Section 501(a) of Regulation D promulgated under the Act and a sophisticated institutional investor and we agree to obtain a representation from any transferee that such transferee is an institutional “accredited investor” so long as we are required to obtain a representation letter regarding compliance with the Act;
 

 

 

 

 

	
            (iv)
 	
            we are acquiring Private Certificates for our own account, not as nominee for any other person, and not with a present view to any distribution or other disposition of the Private Certificates;
 
	
            (v)
 	
            we agree the Private Certificates must be held indefinitely by us (and may not be sold, pledged, hypothecated or in any way disposed of) unless subsequently registered under the Act and any applicable state securities or “Blue Sky” laws or an exemption from the registration requirements of the Act and any applicable state securities or “Blue Sky” laws is available;
 
	
            (vi)
 	
            we agree that in the event that at some future time we wish to dispose of or exchange any of the Private Certificates (such disposition or exchange not being currently foreseen or contemplated), we will not transfer or exchange any of the Private Certificates unless:
 
	
             
 	
            (A) (1) the sale is to an Eligible Purchaser (as defined below), (2) if required by the Pooling and Servicing Agreement (as defined below) a letter to substantially the same effect as either this letter or, if the Eligible Purchaser is a Qualified Institutional Buyer as defined under Rule 144A of the Act, the Rule 144A and Related Matters Certificate in the form attached to the Pooling and Servicing Agreement (as defined below) (or such other documentation as may be acceptable to the Trustee) is executed promptly by the purchaser and delivered to the addressees hereof and (3) all offers or solicitations in connection with the sale, whether directly or through any agent acting on our behalf, are limited only to Eligible Purchasers and are not made by means of any form of general solicitation or general advertising
whatsoever; and

 
 
	
             
 	
            (B)         if the Private Certificate is not registered under the Act (as to which we acknowledge you have no obligation), the Private Certificate is sold in a transaction that does not require registration under the Act and any applicable state securities or “blue sky” laws and, if HSBC Bank USA, National Association, as trustee (the “Trustee”) so requests, a satisfactory Opinion of Counsel is furnished to such effect, which Opinion of Counsel shall be an expense of the transferor or the transferee;

 
 
	
            (vii)
 	
            we agree to be bound by all of the terms (including those relating to restrictions on transfer) of the Pooling and Servicing, pursuant to which the Trust was formed; we have reviewed carefully and understand the terms of the Pooling and Servicing Agreement;
 
	
            (viii)
 	
            we either: (i) are not acquiring the Privately Offered Certificate directly or indirectly by, or on behalf of, an employee benefit plan or other retirement arrangement which is subject to Title I of the Employee Retirement Income Security Act of 1974, as amended, and/or section 4975 of the Internal Revenue Code of 1986, as amended, or (ii) are providing the opinion of counsel specified in Section 6.02(b) of the Agreement.
 

 

 

 

 

	
            (ix)
 	
            we understand that each of the Class ___ Certificates bears, and will continue to bear, legends substantially to the following effect: “THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A “QIB”), PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE
HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN “INSTITUTIONAL ACCREDITED INVESTOR” WITHIN THE MEANING THEREOF IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY THE SECURITIES ADMINISTRATOR OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE SECURITIES ADMINISTRATOR OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE SECURITIES ADMINISTRATOR THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY
OTHER APPLICABLE JURISDICTION.
 

 

 

 

 

	
             
 	
            NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 6.02(b) OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE SECURITIES ADMINISTRATOR THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE SECURITIES ADMINISTRATOR, THE DEPOSITOR OR THE SERVICER TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT, ALL IN ACCORDANCE WITH SECTION 6.02(b) OF THE AGREEMENT.

 
 

“Eligible Purchaser” means a corporation, partnership or other entity which we have reasonable grounds to believe and do believe (i) can make representations with respect to itself to substantially the same effect as the representations set forth herein, and (ii) is either a Qualified Institutional Buyer as defined under Rule 144A of the Act or an institutional “Accredited Investor” as defined under Rule 501 of the Act.

Terms not otherwise defined herein shall have the meanings assigned to them in the Pooling and Servicing Agreement, dated as of September 1, 2005, between Nomura Asset Acceptance Corporation, as depositor, Nomura Credit & Capital, Inc., as seller, GMAC Mortgage Corporation, as servicer, (the “Servicer”), Wells Fargo Bank, N.A. as master servicer (the “Master Servicer”) and securities administrator (the “Securities Administrator”) and HSBC Bank USA, National Association, as trustee (the “Trustee”) (the “Pooling and Servicing Agreement’).

If the Purchaser proposes that its Certificates be registered in the name of a nominee on its behalf, the Purchaser has identified such nominee below, and has caused such nominee to complete the Nominee Acknowledgment at the end of this letter.

Name of Nominee (if any): _______________________________

 

 

IN WITNESS WHEREOF, this document has been executed by the undersigned who is duly authorized to do so on behalf of the undersigned Eligible Purchaser on the ___ day of ________, 20___.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Very truly yours,
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            [PURCHASER]
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            (Authorized Officer)
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            [By:________________________________________________________
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Attorney-in-fact]
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

Nominee Acknowledgment

The undersigned hereby acknowledges and agrees that as to the Certificates being registered in its name, the sole beneficial owner thereof is and shall be the Purchaser identified above, for whom the undersigned is acting as nominee.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            [NAME OF NOMINEE]
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            (Authorized Officer)
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            [By:________________________________________________________
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Attorney-in-fact]
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

 

EXHIBIT H

[RESERVED]

 

 

 

EXHIBIT I

DTC LETTER OF REPRESENTATIONS

[provided upon request]

 

 

EXHIBIT J

FORM OF SERVICER’S CERTIFICATION

	
            Re:
 	
            Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”), dated as of September 1, 2005, by and among Nomura Asset Acceptance Corporation, as depositor (the “Depositor”), Nomura Credit & Capital, Inc., as seller (the “Seller”), GMAC Mortgage Corporation, as servicer, (the “Servicer”), Wells Fargo Bank, N.A. as master servicer (the “Master Servicer”) and securities administrator (the “Securities Administrator”) and HSBC Bank USA, National Association, as trustee (the “Trustee”)
 

I, [identify the certifying individual], certify to the Depositor, the Master Servicer, the Securties Administrator and the Trustee, and their officers, directors and affiliates, and with the knowledge and intent that they will rely upon this certification, that:

	
            (i)
 	
            Based on my knowledge, the information in the Annual Statement of Compliance, the Annual Independent Public Accountant’s Servicing Report and all servicing reports, officer’s certificates and other information relating to the servicing of the Mortgage Loans submitted to the Master Servicer during the preceding calendar year taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading as of the date of this certification;
 
	
            (ii)
 	
            The servicing information required to be provided to the Master Servicer by the Servicer under the Pooling and Servicing Agreement has been provided to the Master Servicer;
 
	
            (iii)
 	
            I am responsible for reviewing the activities performed by the Servicer under the Pooling and Servicing Agreement and based upon the review required by the Pooling and Servicing Agreement, and except as disclosed in the Annual Statement of Compliance and the Annual Independent Public Accountant’s Servicing Report submitted to the Master Servicer, the Servicer has, as of the date of this certification, fulfilled its obligations under the Pooling and Servicing Agreement; and
 
	
            (iv)
 	
            I have disclosed to the Master Servicer all significant deficiencies relating to the Servicer’s compliance with the minimum servicing standards in accordance with a review conducted in compliance with the Uniform Single Attestation Program for Mortgage Bankers or similar standard as set forth in the Pooling and Servicing Agreement.
 

 

 

 

	
            Date:
 	
  _________________________
 

_______________________________

[Signature]

[Title]

 

 

EXHIBIT K

APPENDIX E – Standard & Poor’s Anti-Predatory Lending Categorization

Standard & Poor’s has categorized loans governed by anti-predatory lending laws in the Jurisdictions listed below into three categories based upon a combination of factors that include (a) the risk exposure associated with the assignee liability and (b) the tests and thresholds set forth in those laws. Note that certain loans classified by the relevant statute as Covered are included in Standard & Poor’s High Cost Loan Category because they included thresholds and tests that are typical of what is generally considered High Cost by the industry.

 

	
            Standard  & Poor’s High Cost Loan Categorization

  
	
            
State/Jurisdiction
  
  	
            
Name of Anti-Predatory Lending Law/Effective Date
  
  	
            
Category under Applicable Anti-Predatory Lending Law
  
  
	
            Arkansas
 	
            Arkansas Home Loan Protection Act, Ark. Code Ann. §§ 23-53-101 et seq.

Effective September 16, 2003
 	
            High Cost Home Loan
 
	
            Cleveland Heights, OH
 	
            Ordinance No. 72-2003 (PSH), Mun. Code §§ 757.01 et seq.

Effective June 2, 2003 
 	
            Covered Loan
 
	
            Colorado
 	
            Consumer Equity Protection, Colo. Stat. Ann. §§ 5-3.5-101 et seq.

Effective for covered loans offered or entered into on or after January 1, 2003. Other provisions of the Act took effect on June 7, 2002
 	
            Covered Loan
 
	
            Connecticut
 	
            Connecticut Abusive Home Loan Lending Practices Act, Conn. Gen. Stat. §§ 36a-746 et seq.

Effective October 1, 2001
 	
            High Cost Home Loan
 
	
            District of Columbia
 	
            Home Loan Protection Act, D.C. Code §§ 26-1151.01 et seq.

Effective for loans closed on or after January 28, 2003
 	
            Covered Loan
 
	
            Florida
 	
            Fair Lending Act, Fla. Stat. Ann. §§ 494.0078 et seq.

Effective October 2, 2002
 	
            High Cost Home Loan
 

 

 

 

 

	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003)
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq.

Effective October 1, 2002 – March 6, 2003
 	
            High Cost Home Loan
 
	
            Georgia as amended (Mar. 7, 2003 – current)
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq.

Effective for loans closed on or after March 7, 2003
 	
            High Cost Home Loan
 
	
            HOEPA Section 32
 	
            Home Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1639, 12 C.F.R. §§ 226.32 and 226.34

Effective October 1, 1995, amendments October 1, 2002
 	
            High Cost Loan
 
	
            Illinois
 	
            High Risk Home Loan Act, Ill. Comp. Stat. tit. 815, §§ 137/5 et seq.

Effective January 1, 2004 (prior to this date, regulations under Residential Mortgage License Act effective from May 14, 2001)
 	
            High Risk Home Loan 
 
	
            Kansas
 	
            Consumer Credit Code, Kan. Stat. Ann. §§ 16a-1-101 et seq.

Sections 16a-1-301 and 16a-3-207 became effective April 14, 1999; Section 16a-3-308a became effective September 1, 1999 
 	
            High Loan to Value Consumer Loan (id. § 16a-3-207) and;
 
	
            High APR Consumer Loan (id. § 16a-3-308a)
 
	
            Kentucky
 	
            2003 KY H.B. 287 – High Cost Home Loan Act, Ky. Rev. Stat. §§ 360.100 et seq.

Effective June 24, 2003
 	
            High Cost Home Loan
 
	
            Maine
 	
            Truth in Lending, Me. Rev. Stat. tit. 9-A, §§ 8-101 et seq.

Effective September 29, 1995 and as amended from time to time
 	
            High Rate High Fee Mortgage
 
	
            Massachusetts
 	
            Part 40 and Part 32, 209 C.M.R. §§ 32.00 et seq. and 209 C.M.R. §§ 40.01 et seq.

Effective March 22, 2001 and amended from time to time
 	
            High Cost Home Loan
 

 

 

 

 

	
            Nevada
 	
            Assembly Bill No. 284, Nev. Rev. Stat. §§ 598D.010 et seq.

Effective October 1, 2003
 	
            Home Loan
 
	
            New Jersey
 	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq.

Effective for loans closed on or after December 27, 2003
 	
            High Cost Home Loan
 
	
            New Mexico
 	
            Home Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq.

Effective as of January 1, 2004; Revised as of February 26, 2004
 	
            High Cost Home Loan
 
	
            New York
 	
            N.Y. Banking Law Article 6-l

Effective for applications made on or after April 1, 2003
 	
            High Cost Home Loan
 
	
            North Carolina
 	
            Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E et seq.

Effective September 1, 2000; amended October 1, 2003 (adding open-end lines of credit)
 	
            High Cost Home Loan
 
	
            Ohio
 	
            H.B. 386 (codified in various sections of the Ohio Code), Ohio Rev. Code Ann. §§ 1349.25 et seq.

Effective May 24, 2002
 	
            Covered Loan
 
	
            Oklahoma
 	
            Consumer Credit Code (codified in various sections of Title 14A)

Effective September 1, 2000; amended effective January 1, 2004
 	
            Subsection 10 Mortgage
 
	
            South Carolina
 	
            South Carolina High Cost and Consumer Home Loans Act, S.C. Code Ann. §§ 37-23-10 et seq.

Effective for loans taken on or after January 1, 2004
 	
            High Cost Home Loan
 

 

 

 

 

	
            West Virginia 
 	
            West Virginia Residential Mortgage Lender, Broker and Servicer Act, W. Va. Code Ann. §§ 31-17-1 et seq.

Effective June 5, 2002
 	
            West Virginia Mortgage Loan Act Loan
 

 

Standard & Poor’s Covered Loan Categorization

 

	
            
State/Jurisdiction
 
 	
            
Name of Anti-Predatory Lending Law/Effective Date
 
 	
            
Category under Applicable Anti-Predatory Lending Law
 
 
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003)
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq.

Effective October 1, 2002 – March 6, 2003
 	
            Covered Loan
 
	
            New Jersey
 	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq.

Effective December 27, 2003 – July 5, 2004
 	
            Covered Home Loan
 

 

	
            Standard  & Poor’s Home Loan Categorization

 
  
	
            
State/Jurisdiction
  
  	
            
Name  of Anti-Predatory Lending Law/Effective Date
  
  	
            
Category  under Applicable Anti-Predatory Lending Law
  
  
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003)
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq.

Effective October 1, 2002 – March 6, 2003
 	
            Home Loan
 
	
            New Jersey
 	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq.

Effective for loans closed on or after December 27, 2003
 	
            Home Loan
 
	
            New Mexico
 	
            Home Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq.

Effective as of January 1, 2004; Revised as of February 26, 2004
 	
            Home Loan
 

 

 

 

 

	
            North Carolina
 	
            Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E et seq.

Effective September 1, 2000; amended October 1, 2003 (adding open-end lines of credit)
 	
            Consumer Home Loan
 
	
            South Carolina
 	
            South Carolina High Cost and Consumer Home Loans Act, S.C. Code Ann. §§ 37-23-10 et seq.

Effective for loans taken on or after January 1, 2004
 	
            Consumer Home Loan
 

 

 

 

EXHIBIT X-1

 

Exhibit: Standard File Layout – Delinquency Reporting

 

	
            Column/Header Name
 	
            Description
 	
            Decimal
 	
            Format Comment
 
	
            SERVICER_LOAN_NBR
 	
            A unique number assigned to a loan by the Servicer.  This may be different than the LOAN_NBR
 	
             
 	
             
 
	
            LOAN_NBR
 	
            A unique identifier assigned to each loan by the originator.
 	
             
 	
             
 
	
            CLIENT_NBR
 	
            Servicer Client Number
 	
             
 	
             
 
	
            SERV_INVESTOR_NBR
 	
            Contains a unique number as assigned by an external servicer to identify a group of loans in their system.
 	
             
 	
             
 
	
            BORROWER_FIRST_NAME
 	
            First Name of the Borrower.
 	
             
 	
             
 
	
            BORROWER_LAST_NAME
 	
            Last name of the borrower.
 	
             
 	
             
 
	
            PROP_ADDRESS
 	
            Street Name and Number of Property
 	
             
 	
             
 
	
            PROP_STATE
 	
            The state where the  property located.
 	
             
 	
             
 
	
            PROP_ZIP
 	
            Zip code where the property is located.
 	
             
 	
             
 
	
            BORR_NEXT_PAY_DUE_DATE
 	
            The date that the borrower's next payment is due to the servicer at the end of processing cycle, as reported by Servicer.
 	
             
 	
            MM/DD/YYYY
 
	
            LOAN_TYPE
 	
            Loan Type (i.e. FHA, VA, Conv)
 	
             
 	
             
 
	
            BANKRUPTCY_FILED_DATE
 	
            The date a particular bankruptcy claim was filed.
 	
             
 	
            MM/DD/YYYY
 
	
            BANKRUPTCY_CHAPTER_CODE
 	
            The chapter under which the bankruptcy was filed.
 	
             
 	
             
 
	
            BANKRUPTCY_CASE_NBR
 	
            The case number assigned by the court to the bankruptcy filing.
 	
             
 	
             
 
	
            POST_PETITION_DUE_DATE
 	
            The payment due date once the bankruptcy has been approved by the courts
 	
             
 	
            MM/DD/YYYY
 
	
            BANKRUPTCY_DCHRG_DISM_DATE
 	
            The Date The Loan Is Removed From Bankruptcy. Either by Dismissal, Discharged and/or a Motion For Relief Was Granted. 
 	
             
 	
            MM/DD/YYYY
 
	
            LOSS_MIT_APPR_DATE
 	
            The Date The Loss Mitigation Was Approved By The Servicer
 	
             
 	
            MM/DD/YYYY
 
	
            LOSS_MIT_TYPE
 	
            The Type Of Loss Mitigation Approved For A Loan Such As;
 	
             
 	
             
 
	
            LOSS_MIT_EST_COMP_DATE
 	
            The Date The Loss Mitigation /Plan Is Scheduled To End/Close
 	
             
 	
            MM/DD/YYYY
 
	
            LOSS_MIT_ACT_COMP_DATE
 	
            The Date The Loss Mitigation Is Actually Completed
 	
             
 	
            MM/DD/YYYY
 
	
            FRCLSR_APPROVED_DATE
 	
            The date DA Admin sends a letter to the servicer with instructions to begin foreclosure proceedings.
 	
             
 	
            MM/DD/YYYY
 
	
            ATTORNEY_REFERRAL_DATE
 	
            Date File Was Referred To Attorney to Pursue Foreclosure
 	
             
 	
            MM/DD/YYYY
 
	
            FIRST_LEGAL_DATE
 	
            Notice of 1st legal filed by an Attorney in a Foreclosure Action
 	
             
 	
            MM/DD/YYYY
 
	
            FRCLSR_SALE_EXPECTED_DATE
 	
            The date by which a foreclosure sale is expected to occur.
 	
             
 	
            MM/DD/YYYY
 
	
            FRCLSR_SALE_DATE
 	
            The actual date of the foreclosure sale.
 	
             
 	
            MM/DD/YYYY
 
	
            FRCLSR_SALE_AMT
 	
            The amount a property sold for at the foreclosure sale.
 	
            2
 	
            No commas(,) or dollar signs ($)
 
	
            EVICTION_START_DATE
 	
            The date the servicer initiates eviction of the borrower.
 	
             
 	
            MM/DD/YYYY
 
	
            EVICTION_COMPLETED_DATE
 	
            The date the court revokes legal possession of the property from the borrower.
 	
             
 	
            MM/DD/YYYY
 
	
            LIST_PRICE
 	
            The price at which an REO property is marketed.
 	
            2
 	
            No commas(,) or dollar signs ($)
 
	
            LIST_DATE
 	
            The date an REO property is listed at a particular price.
 	
             
 	
            MM/DD/YYYY
 
	
            OFFER_AMT
 	
            The dollar value of an offer for an REO property.
 	
            2
 	
            No commas(,) or dollar signs ($)
 
	
            OFFER_DATE_TIME
 	
            The date an offer is received by DA Admin or by the Servicer.
 	
             
 	
            MM/DD/YYYY
 
	
            REO_CLOSING_DATE
 	
            The date the REO sale of the property is scheduled to close.
 	
             
 	
            MM/DD/YYYY
 
	
            REO_ACTUAL_CLOSING_DATE
 	
            Actual Date Of REO Sale
 	
             
 	
            MM/DD/YYYY
 
	
            OCCUPANT_CODE
 	
            Classification of how the property is occupied.
 	
             
 	
             
 
	
            PROP_CONDITION_CODE
 	
            A code that indicates the condition of the property.
 	
             
 	
             
 

 

 

 

 

	
            PROP_INSPECTION_DATE
 	
            The date a  property inspection is performed.
 	
             
 	
            MM/DD/YYYY
 
	
            APPRAISAL_DATE
 	
            The date the appraisal was done.
 	
             
 	
            MM/DD/YYYY
 
	
            CURR_PROP_VAL
 	
            The current "as is" value of the property based on brokers price opinion or appraisal.
 	
            2
 	
             
 
	
            REPAIRED_PROP_VAL
 	
            The amount the property would be worth if repairs are completed pursuant to a broker's price opinion or appraisal.
 	
            2
 	
             
 
	
            If applicable:
 	
             
 	
             
 	
             
 
	
            DELINQ_STATUS_CODE
 	
            FNMA Code Describing Status of Loan
 	
             
 	
             
 
	
            DELINQ_REASON_CODE
 	
            The circumstances which caused a borrower to stop paying on a loan.   Code indicates the reason why the loan is in default for this cycle.
 	
             
 	
             
 
	
            MI_CLAIM_FILED_DATE
 	
            Date Mortgage Insurance Claim Was Filed With Mortgage Insurance Company.
 	
             
 	
            MM/DD/YYYY
 
	
            MI_CLAIM_AMT
 	
            Amount of Mortgage Insurance Claim Filed
 	
             
 	
            No commas(,) or dollar signs ($)
 
	
            MI_CLAIM_PAID_DATE
 	
            Date Mortgage Insurance Company Disbursed Claim Payment
 	
             
 	
            MM/DD/YYYY
 
	
            MI_CLAIM_AMT_PAID
 	
            Amount Mortgage Insurance Company Paid On Claim
 	
            2
 	
            No commas(,) or dollar signs ($)
 
	
            POOL_CLAIM_FILED_DATE
 	
            Date Claim Was Filed With Pool Insurance Company
 	
             
 	
            MM/DD/YYYY
 
	
            POOL_CLAIM_AMT
 	
            Amount of Claim Filed With Pool Insurance Company
 	
            2
 	
            No commas(,) or dollar signs ($)
 
	
            POOL_CLAIM_PAID_DATE
 	
            Date Claim Was Settled and The Check Was Issued By The Pool Insurer
 	
             
 	
            MM/DD/YYYY
 
	
            POOL_CLAIM_AMT_PAID
 	
            Amount Paid On Claim By Pool Insurance Company
 	
            2
 	
            No commas(,) or dollar signs ($)
 
	
            FHA_PART_A_CLAIM_FILED_DATE
 	
            Date FHA Part A Claim Was Filed With HUD
 	
             
 	
            MM/DD/YYYY
 
	
            FHA_PART_A_CLAIM_AMT
 	
            Amount of FHA Part A Claim Filed
 	
            2
 	
            No commas(,) or dollar signs ($)
 
	
            FHA_PART_A_CLAIM_PAID_DATE
 	
            Date HUD Disbursed Part A Claim Payment
 	
             
 	
            MM/DD/YYYY
 
	
            FHA_PART_A_CLAIM_PAID_AMT
 	
            Amount HUD Paid on Part A Claim
 	
            2
 	
            No commas(,) or dollar signs ($)
 
	
            FHA_PART_B_CLAIM_FILED_DATE
 	
            Date FHA Part B Claim Was Filed With HUD
 	
             
 	
            MM/DD/YYYY
 
	
            FHA_PART_B_CLAIM_AMT
 	
            Amount of FHA Part B Claim Filed
 	
            2
 	
            No commas(,) or dollar signs ($)
 
	
            FHA_PART_B_CLAIM_PAID_DATE
 	
            Date HUD Disbursed Part B Claim Payment
 	
             
 	
            MM/DD/YYYY
 
	
            FHA_PART_B_CLAIM_PAID_AMT
 	
            Amount HUD Paid on Part B Claim
 	
            2
 	
            No commas(,) or dollar signs ($)
 
	
            VA_CLAIM_FILED_DATE
 	
            Date VA Claim Was Filed With the Veterans Admin
 	
             
 	
            MM/DD/YYYY
 
	
            VA_CLAIM_PAID_DATE
 	
            Date Veterans Admin. Disbursed VA Claim Payment
 	
             
 	
            MM/DD/YYYY
 
	
            VA_CLAIM_PAID_AMT
 	
            Amount Veterans Admin. Paid on VA Claim
 	
            2
 	
            No commas(,) or dollar signs ($)
 

                

 

 

EXHIBIT X-2

 

Exhibit 2: Standard File Codes – Delinquency Reporting

 

The Loss Mit Type field should show the approved Loss Mitigation Code as follows: 

	
            •
	
            ASUM-
 	
            Approved Assumption
 	
             

	
            •
 	
            BAP-
 	
            Borrower Assistance Program
 
	
            •
	
            CO-
 	
            Charge Off
 	
             

	
            •
 	
            DIL-
 	
            Deed-in-Lieu
 	
             

	
            •
	
            FFA-
 	
            Formal Forbearance Agreement
 	
             

	
            •
	
            MOD-
 	
            Loan Modification
 	
             

	
            •
 	
            PRE-
 	
            Pre-Sale
 	
             

	
            •
 	
            SS-
 	
            Short Sale
 	
             

	
            •
 	
            MISC-
 	
            Anything else approved by the PMI or Pool Insurer
 
														

 

NOTE: Wells Fargo Bank will accept alternative Loss Mitigation Types to those above, provided that they are consistent with industry standards.  If Loss Mitigation Types other than those above are used, the Servicer must supply Wells Fargo Bank with a description of each of the Loss Mitigation Types prior to sending the file.

 

The Occupant Code field should show the current status of the property code as follows:

	
            •
 	
            Mortgagor
 
	
            •
 	
            Tenant
 	
             

	
            •
 	
            Unknown
 	
             

	
            •
 	
            Vacant
 	
             

				

 

The Property Condition field should show the last reported condition of the property as follows: 

	
            •
 	
            Damaged
 	
             

	
            •
 	
            Excellent
 	
             

	
            •
 	
            Fair
 	
             

	
            •
 	
            Gone
 	
             

	
            •
 	
            Good
 	
             

	
            •
 	
            Poor
 	
             

	
            •
 	
            Special Hazard
 
	
            •
 	
            Unknown
 	
             

								

 

 

Exhibit 2: Standard File Codes – Delinquency Reporting, Continued

 

The FNMA Delinquent Reason Code field should show the Reason for Delinquency as follows: 

 

	
            
Delinquency Code
 
 	
            
Delinquency Description
 
 
	
            001
 	
            FNMA-Death of principal mortgagor
 
	
            002
 	
            FNMA-Illness of principal mortgagor
 
	
            003
 	
            FNMA-Illness of mortgagor’s family member
 
	
            004
 	
            FNMA-Death of mortgagor’s family member
 
	
            005
 	
            FNMA-Marital difficulties
 
	
            006
 	
            FNMA-Curtailment of income
 
	
            007
 	
            FNMA-Excessive Obligation
 
	
            008
 	
            FNMA-Abandonment of property
 
	
            009
 	
            FNMA-Distant employee transfer
 
	
            011
 	
            FNMA-Property problem
 
	
            012
 	
            FNMA-Inability to sell property
 
	
            013
 	
            FNMA-Inability to rent property
 
	
            014
 	
            FNMA-Military Service
 
	
            015
 	
            FNMA-Other
 
	
            016
 	
            FNMA-Unemployment
 
	
            017
 	
            FNMA-Business failure
 
	
            019
 	
            FNMA-Casualty loss
 
	
            022
 	
            FNMA-Energy environment costs
 
	
            023
 	
            FNMA-Servicing problems
 
	
            026
 	
            FNMA-Payment adjustment
 
	
            027
 	
            FNMA-Payment dispute
 
	
            029
 	
            FNMA-Transfer of ownership pending
 
	
            030
 	
            FNMA-Fraud
 
	
            031
 	
            FNMA-Unable to contact borrower
 
	
            INC
 	
            FNMA-Incarceration
 

 

 

 

Exhibit 2: Standard File Codes – Delinquency Reporting, Continued

 

The FNMA Delinquent Status Code field should show the Status of Default as follows: 

 

	
            
Status Code
 
 	
            
Status Description
 
 
	
            09
 	
            Forbearance
 
	
            17
 	
            Pre-foreclosure Sale Closing Plan Accepted
 
	
            24
 	
            Government Seizure
 
	
            26
 	
            Refinance
 
	
            27
 	
            Assumption
 
	
            28
 	
            Modification
 
	
            29
 	
            Charge-Off
 
	
            30
 	
            Third Party Sale
 
	
            31
 	
            Probate
 
	
            32
 	
            Military Indulgence
 
	
            43
 	
            Foreclosure Started
 
	
            44
 	
            Deed-in-Lieu Started
 
	
            49
 	
            Assignment Completed
 
	
            61
 	
            Second Lien Considerations
 
	
            62
 	
            Veteran’s Affairs-No Bid
 
	
            63
 	
            Veteran’s Affairs-Refund
 
	
            64
 	
            Veteran’s Affairs-Buydown
 
	
            65
 	
            Chapter 7 Bankruptcy
 
	
            66
 	
            Chapter 11 Bankruptcy
 
	
            67
 	
            Chapter 13 Bankruptcy
 

 

 

1.          The numbers on the form correspond with the numbers listed below.

Liquidation and Acquisition Expenses:

	
            1.
 	
            The Actual Unpaid Principal Balance of the Mortgage Loan.  For documentation, an Amortization Schedule from date of default through liquidation breaking out the net interest and servicing fees advanced is required.
 

 

	
            2.
 	
            The Total Interest Due less the aggregate amount of servicing fee that would have been earned if all delinquent payments had been made as agreed. For documentation, an Amortization Schedule from date of default through liquidation breaking out the net interest and servicing fees advanced is required.
 
	
            3.
 	
            Accrued Servicing Fees based upon the Scheduled Principal Balance of the Mortgage Loan as calculated on a monthly basis. For documentation, an Amortization Schedule from date of default through liquidation breaking out the net interest and servicing fees advanced is required.
 

 

 

 

	
            4-12.
 	
            Complete as applicable.  All line entries must be supported by copies of appropriate statements, vouchers, receipts, bills, canceled checks, etc., to document the expense.  Entries not properly documented will not be reimbursed to the Servicer.
 

	
            13.
 	
            The total of lines 1 through 12.
 

	
            2.
 	
            Credits:
 

	
            14-21.
 	
            Complete as applicable.  All line entries must be supported by copies of the appropriate claims forms, EOBs, HUD-1 and/or other proceeds verification, statements, payment checks, etc. to document the credit.  If the Mortgage Loan is subject to a Bankruptcy Deficiency, the difference between the Unpaid Principal Balance of the Note prior to the Bankruptcy Deficiency and the Unpaid Principal Balance as reduced by the Bankruptcy Deficiency should be input on line 20.
 

	
            22.
 	
            The total of lines 14 through 21.
 

 

Please note: For HUD/VA loans, use line (15) for Part A/Initial proceeds and line (16) for Part B/Supplemental proceeds.

	
            3.
 	
            Total Realized Loss (or Amount of Any Gain)
 

	
            23.
 	
            The total derived from subtracting line 22 from 13.  If the amount represents a realized gain, show the amount in parenthesis (   ).                 
 

 

 

CALCULATION OF REALIZED LOSS/GAIN

 

	
            Prepared by:  __________________
 	
            Date:  _______________
 	
             

	
            Phone:  ______________________  
 	
            Email Address:_____________________
 
				

 

	
            Servicer Loan No.

 

 
 	
             
 	
            Servicer Name

 

 
 	
             
 	
            Servicer Address 

 

 
 

 

WELLS FARGO BANK, N.A. Loan No._____________________________

Borrower's Name:________________________________________________________

Property Address:________________________________________________________________

Liquidation and Acquisition Expenses:

	
            (1)
 	
            Actual Unpaid Principal Balance of Mortgage Loan
 	
            $ ______________
 	
            (1)
 
	
            (2)
 	
            Interest accrued at Net Rate
 	
            ________________
 	
            (2)
 
	
            (3)
 	
            Accrued Servicing Fees
 	
            ________________
 	
            (3)
 
	
            (4)
 	
            Attorney's Fees
 	
            ________________
 	
            (4)
 
	
            (5)
 	
            Taxes
 	
            ________________
 	
            (5)
 
	
            (6)
 	
            Property Maintenance
 	
            ________________
 	
            (6)
 
	
            (7)
 	
            MI/Hazard Insurance Premiums
 	
            ________________
 	
            (7)
 
	
            (8)
 	
            Utility Expenses
 	
            ________________
 	
            (8)
 
	
            (9)
 	
            Appraisal/BPO
 	
            ________________
 	
            (9)
 
	
            (10)
 	
            Property Inspections
 	
            ________________
 	
            (10)
 
	
            (11)
 	
            FC Costs/Other Legal Expenses
 	
            ________________
 	
            (11)
 
	
            (12)
 	
            Other (itemize)
 	
            $________________
 	
            (12)
 

 

	
             
 	
            Cash for Keys__________________________
 	
            ________________
 
	
             
 	
            HOA/Condo Fees_______________________
 	
            ________________
 
	
             
 	
            ______________________________________
 	
            ________________
 
	
             
 	
            ______________________________________
 	
            ________________
 

 

	
             
 	
            Total Expenses
 	
            $ _______________
 	
            (13)
 

 

Credits:

	
            (14)
 	
            Escrow Balance
 	
            $ _______________
 	
            (14)
 
	
            (15)
 	
            HIP Refund
 	
            ________________
 	
            (15)
 
	
            (16)
 	
            Rental Receipts
 	
            ________________
 	
            (16)
 
	
            (17)
 	
            Hazard Loss Proceeds
 	
            ________________
 	
            (17)
 
	
            (18)
 	
            Primary Mortgage Insurance Proceeds
 	
            ________________
 	
            (18)
 
	
            (19)
 	
            Pool Insurance Proceeds
 	
            ________________
 	
            (19)
 
	
            (20)
 	
            Proceeds from Sale of Acquired Property
 	
            ________________
 	
            (20)
 
	
            (21)
 	
            Other (itemize)
 	
            ________________
 	
            (21)
 
	
             
	
            _________________________________________
 	
            _________________
 	
             

	
             
	
            _________________________________________
 	
            _________________
 	
             

	
             
 	
            Total Credits
 	
            $________________
 	
            (22)
 	
             

									

 

 

 

 

	
             
 	
             
 	
             
 	
             
 
	
             
 	
            Total Realized Loss (or Amount of Gain)
 	
            $________________
 	
            (23)IMPAC CMB TRUST SERIES 2005-7

Issuer

 

and

DEUTSCHE BANK NATIONAL TRUST COMPANY

Indenture Trustee

_______________________________

INDENTURE

Dated as of September 29, 2005

_______________________________

COLLATERALIZED ASSET-BACKED BONDS

__________________

 

 

 

TABLE OF CONTENTS

 

ARTICLE I

Definitions

	
            Section 1.01
 	
            Definitions
 	
             

	
            Section 1.02
 	
            Incorporation by Reference of Trust Indenture Act
 
	
            Section 1.03
 	
            Rules of Construction
 	
             

				

ARTICLE II

Original Issuance of Bonds

	
            Section 2.01
 	
            Form
 	
             

	
            Section 2.02
 	
            Execution, Authentication and Delivery
 	
             

	
            Section 2.03
 	
            Acceptance of Mortgage Loans by Indenture Trustee
 	
             

	
            Section 2.04
 	
            Acceptance of Derivative Contracts and Special Certificate Cap Contract by 

      Indenture Trustee
 
	
            Section 2.05
 	
            [Reserved].
 	
             

	
            Section 2.06
 	
            [Reserved].
 	
             

						

ARTICLE III

Covenants

	
            Section 3.01
 	
            Collection of Payments with respect to the Mortgage Loans
 	
             

	
            Section 3.02
 	
            Maintenance of Office or Agency
 	
             

	
            Section 3.03
 	
            Money for Payments To Be Held in Trust; Paying Agent
 	
             

	
            Section 3.04
 	
            Existence
 	
             

	
            Section 3.05
 	
            Payment of Principal and Interest
 	
             

	
            Section 3.06
 	
            Protection of Trust Estate
 	
             

	
            Section 3.07
 	
            Opinions as to Trust Estate
 	
             

	
            Section 3.08
 	
            Performance of Obligations
 	
             

	
            Section 3.09
 	
            Negative Covenants
 	
             

	
            Section 3.10
 	
            Annual Statement as to Compliance
 	
             

	
            Section 3.11
 	
            [Reserved].
 	
             

	
            Section 3.12
 	
            Representations and Warranties Concerning the Mortgage Loans
 
	
            Section 3.13
 	
            Amendments to Servicing Agreement
 	
             

	
            Section 3.14
 	
            Master Servicer as Agent and Bailee of the Indenture Trustee
 	
             

	
            Section 3.15
 	
            Investment Company Act
 	
             

	
            Section 3.16
 	
            Issuer May Consolidate, etc
 	
             

	
            Section 3.17
 	
            Successor or Transferee
 	
             

	
            Section 3.18
 	
            No Other Business
 	
             

	
            Section 3.19
 	
            No Borrowing
 	
             

	
            Section 3.20
 	
            Guarantees, Loans, Advances and Other Liabilities
 	
             

	
            Section 3.21
 	
            Capital Expenditures
 	
             

	
            Section 3.22
 	
            Determination of Bond Interest Rate
 	
             

	
            Section 3.23
 	
            Restricted Payments
 	
             

	
            Section 3.24
 	
            Notice of Events of Default
 	
             

	
            Section 3.25
 	
            Further Instruments and Acts
 	
             

	
            Section 3.26
 	
            Statements to Bondholders
 	
             

	
            Section 3.27
 	
            [Reserved].
 	
             

	
            Section 3.28
 	
            [Reserved].
 	
             

																									

 

 

 

	
            Section 3.29
 	
            Certain Representations Regarding the Trust Estate.
 
	
            Section 3.30
 	
            [Reserved].
 	
             

	
            Section 3.31
 	
            [Reserved].
 	
             

	
            Section 3.32
 	
            Replacement Derivative Contracts
 	
             

	
            Section 3.33
 	
            [Reserved].
 	
             

	
            Section 3.34
 	
            Allocation of Realized Losses
 	
             

	
            Section 3.35
 	
            [Reserved].
 	
             

	
            Section 3.36
 	
            [Reserved].
 	
             

					

ARTICLE IV

The Bonds; Satisfaction and Discharge of Indenture

	
            Section 4.01
 	
            The Bonds
 

	
            Section 4.02
 	
            Registration of and Limitations on Transfer and Exchange of Bonds; 

      Appointment of Bond Registrar and Certificate Registrar
 

	
            Section 4.03
 	
            Mutilated, Destroyed, Lost or Stolen Bonds
 	
             

	
            Section 4.04
 	
            Persons Deemed Owners
 	
             

	
            Section 4.05
 	
            Cancellation
 	
             

	
            Section 4.06
 	
            Book-Entry Bonds
 	
             

	
            Section 4.07
 	
            Notices to Depository
 	
             

	
            Section 4.08
 	
            Definitive Bonds
 	
             

	
            Section 4.09
 	
            Tax Treatment
 	
             

	
            Section 4.10
 	
            Satisfaction and Discharge of Indenture
 	
             

	
            Section 4.11
 	
            Application of Trust Money
 	
             

	
            Section 4.12
 	
            Repayment of Monies Held by Paying Agent
 
	
            Section 4.13
 	
            Temporary Bonds
 	
             

	
            Section 4.14
 	
            [Reserved]
 	
             

	
            Section 4.15
 	
            Representation Regarding ERISA
 	
             

														

ARTICLE V

Default and Remedies

	
            Section 5.01
 	
            Events of Default
 	
             

	
            Section 5.02
 	
            Acceleration of Maturity; Rescission and Annulment
 	
             

	
            Section 5.03
 	
            Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.
 
	
            Section 5.04
 	
            Remedies; Priorities
 	
             

	
            Section 5.05
 	
            Optional Preservation of the Trust Estate
 	
             

	
            Section 5.06
 	
            Limitation of Suits
 	
             

	
            Section 5.07
 	
            Unconditional Rights of Bondholders To Receive Principal and Interest
 	
             

	
            Section 5.08
 	
            Restoration of Rights and Remedies
 	
             

	
            Section 5.09
 	
            Rights and Remedies Cumulative
 	
             

	
            Section 5.10
 	
            Delay or Omission Not a Waiver
 	
             

	
            Section 5.11
 	
            Control By the Bond Insurer
 	
             

	
            Section 5.12
 	
            Waiver of Past Defaults
 	
             

	
            Section 5.13
 	
            Undertaking for Costs
 	
             

	
            Section 5.14
 	
            Waiver of Stay or Extension Laws
 	
             

	
            Section 5.15
 	
            Sale of Trust Estate
 	
             

	
            Section 5.16
 	
            Action on Bonds
 	
             

	
            Section 5.17
 	
            Performance and Enforcement of Certain Obligations
 	
             

																		

ARTICLE VI

The Indenture Trustee

 

 

	
            Section 6.01
 	
            Duties of Indenture Trustee
 	
             

	
            Section 6.02
 	
            Rights of Indenture Trustee
 	
             

	
            Section 6.03
 	
            Individual Rights of Indenture Trustee
 	
             

	
            Section 6.04
 	
            Indenture Trustee’s Disclaimer
 	
             

	
            Section 6.05
 	
            Notice of Event of Default
 	
             

	
            Section 6.06
 	
            Reports by Indenture Trustee to Bondholders and Tax Administration
 
	
            Section 6.07
 	
            Compensation and Indemnity
 	
             

	
            Section 6.08
 	
            Replacement of Indenture Trustee
 	
             

	
            Section 6.09
 	
            Successor Indenture Trustee by Merger
 	
             

	
            Section 6.10
 	
            Appointment of Co-Indenture Trustee or Separate Indenture Trustee
 	
             

	
            Section 6.11
 	
            Eligibility; Disqualification
 	
             

	
            Section 6.12
 	
            Preferential Collection of Claims Against Issuer
 	
             

	
            Section 6.13
 	
            Representations and Warranties
 	
             

	
            Section 6.14
 	
            Directions to Indenture Trustee
 	
             

	
            Section 6.15
 	
            The Agents
 	
             

	
            Section 6.16
 	
            Execution of Derivative Contracts
 	
             

															

ARTICLE VII

Bondholders’ Lists and Reports

	
            Section 7.01
 	
            Issuer To Furnish Indenture Trustee Names and Addresses of Bondholders
 
	
            Section 7.02
 	
            Preservation of Information; Communications to Bondholders
 	
             

	
            Section 7.03
 	
            Reports of Issuer
 	
             

	
            Section 7.04
 	
            Reports by Indenture Trustee
 	
             

	
            Section 7.05
 	
            Statements to Bondholders
 	
             

						

ARTICLE VIII

Accounts, Disbursements and Releases

	
            Section 8.01
 	
            Collection of Money
 	
             

	
            Section 8.02
 	
            Trust Accounts
 	
             

	
            Section 8.03
 	
            Officer’s Certificate
 	
             

	
            Section 8.04
 	
            Termination Upon Distribution to Bondholders
 
	
            Section 8.05
 	
            Release of Trust Estate
 	
             

	
            Section 8.06
 	
            Surrender of Bonds Upon Final Payment
 	
             

	
            Section 8.07
 	
            Optional Redemption of the Bonds
 	
             

								

ARTICLE IX

Supplemental Indentures

	
            Section 9.01
 	
            Supplemental Indentures Without Consent of Bondholders
 
	
            Section 9.02
 	
            Supplemental Indentures With Consent of Bondholders
 	
             

	
            Section 9.03
 	
            Execution of Supplemental Indentures
 	
             

	
            Section 9.04
 	
            Effect of Supplemental Indenture
 	
             

	
            Section 9.05
 	
            Conformity with Trust Indenture Act
 	
             

	
            Section 9.06
 	
            Reference in Bonds to Supplemental Indentures
 	
             

							

ARTICLE X

Miscellaneous

	
            Section 10.01
 	
            Compliance Certificates and Opinions, etc
 	
             

	
            Section 10.02
 	
            Form of Documents Delivered to Indenture Trustee
 	
             

	
            Section 10.03
 	
            Acts of Bondholders
 	
             

	
            Section 10.04
 	
            Notices etc., to Indenture Trustee, Issuer, Seller and Rating Agencies
 
	
            Section 10.05
 	
            Notices to Bondholders; Waiver
 	
             

						

 

 

 

	
            Section 10.06
 	
            Conflict with Trust Indenture Act
 
	
            Section 10.07
 	
            Effect of Headings
 	
             

	
            Section 10.08
 	
            Successors and Assigns
 	
             

	
            Section 10.09
 	
            Separability
 	
             

	
            Section 10.10
 	
            Legal Holidays
 	
             

	
            Section 10.11
 	
            Benefits of Indenture
 	
             

	
            Section 10.12
 	
            GOVERNING LAW
 	
             

	
            Section 10.13
 	
            Counterparts
 	
             

	
            Section 10.14
 	
            Recording of Indenture
 	
             

	
            Section 10.15
 	
            Issuer Obligation
 	
             

	
            Section 10.16
 	
            No Petition
 	
             

	
            Section 10.17
 	
            Inspection
 	
             

												

ARTICLE XI

Certain Matters Regarding the Bond Insurer

	
            Section 11.01
 	
            Rights of the Bond Insurer to Exercise the Rights of the Class A-1 Bondholders and Class A-2 Bondholders
 

	
            Section 11.02
 	
            Claims Upon the Bond Insurance Policy; Insurance Account
 
	
            Section 11.03
 	
            Effect of Payments by the Bond Insurer; Subrogation
 	
             

	
            Section 11.04
 	
            Notices and Information to the Bond Insurer
 	
             

	
            Section 11.05
 	
            Trustee to Hold Bond Insurance Policy
 	
             

					

 

 

 

EXHIBITS

	
            Exhibit A-1
 	
            —
 	
            Form of Class A-[_] Bonds
 	
             

	
            Exhibit A-2
 	
            —
 	
            Form of Class M-[_] Bonds
 	
             

	
            Exhibit A-3
 	
            —
 	
            Form of Class B Bonds
 	
             

	
            Exhibit B
 	
            —
 	
            Mortgage Loan Schedule
 	
             

	
            Exhibit C
 	
            —
 	
            Form of Initial Certification
 	
             

	
            Exhibit D
 	
            —
 	
            Form of Final Certification
 	
             

	
            Exhibit E
 	
            —
 	
            Derivative Contracts
 	
             

	
            Exhibit F
 	
            —
 	
            Special Certificate Cap Contract
 
	
            Exhibit G
 	
            —
 	
            [Reserved]
 	
             

	
            Exhibit H
 	
            —
 	
            [Reserved]
 	
             

	
            Exhibit I-1
 	
            —
 	
            [Reserved]
 	
             

	
            Exhibit I-2
 	
            —
 	
            [Reserved]
 	
             

	
            Exhibit J
 	
            —
 	
            [Reserved]
 	
             

	
            Appendix A
 	
            —
 	
            Definitions
 	
             

											

 

 

 

This Indenture, dated as of September 29, 2005, is entered into between Impac CMB Trust Series 2005-7, a Delaware statutory trust, as Issuer (the “Issuer”), and Deutsche Bank National Trust Company, a national banking association, as Indenture Trustee (the “Indenture Trustee”).

WITNESSETH THAT:

Each party hereto agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Issuer’s Collateralized Asset-Backed Bonds, Series 2005-7 (the “Bonds”).

GRANTING CLAUSE

The Issuer hereby Grants to the Indenture Trustee at the Closing Date, as trustee for the benefit of the Holders of the Bonds and the Bond Insurer, all of the Issuer’s right, title and interest in and to whether now existing or hereafter created by (a) the Mortgage Loans, Eligible Substitute Mortgage Loans and the proceeds thereof and all rights under the Related Documents; (b) all funds on deposit from time to time in the Collection Account allocable to the Mortgage Loans excluding any investment income from such funds; (c) all funds on deposit from time to time in the Payment Account and in all proceeds thereof; (d) all rights under (i) the Mortgage Loan Purchase Agreement as assigned to the Issuer, with respect to the Mortgage Loans, (ii) the Servicing Agreement and any Subservicing Agreements, (iii) any title, hazard and primary insurance policies with respect to the Mortgaged
Properties, (iv) the Custodial Agreement and (v) the rights with respect to the Derivative Contracts and the Special Certificate Cap Contract as assigned to the Issuer; (e) with respect to the Holders of the Class A Bonds, the Bond Insurance Policy and (f) all present and future claims, demands, causes and choses in action in respect of any or all of the foregoing and all payments on or under, and all proceeds of every kind and nature whatsoever in respect of, any or all of the foregoing and all payments on or under, and all proceeds of every kind and nature whatsoever in the conversion thereof, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, checks, deposit accounts, rights to payment of any and every kind, and other forms of obligations and receivables, instruments and other property which at any time constitute all or part of or are included in the proceeds of any of the foregoing
(collectively, the “Trust Estate” or the “Collateral”).

The foregoing Grant is made in trust to secure the payment of principal of and interest on, and any other amounts owing in respect of, the Bonds, equally and ratably without prejudice, priority or distinction, and to secure compliance with the provisions of this Indenture, all as provided in this Indenture.

The Indenture Trustee, as trustee on behalf of the Holders of the Bonds and the Bond Insurer, acknowledges such Grant, accepts the trust under this Indenture in accordance with the provisions hereof and agrees to perform its duties as Indenture Trustee as required herein.  The Indenture Trustee agrees that it will hold the Bond Insurance Policy in trust and that it will hold any proceeds of any claim made upon the Bond Insurance Policy solely for the use and benefit of the Holders of the Class A Bonds in accordance with the terms hereof and the terms of the Bond Insurance Policy.

 

 

ARTICLE I

 

Definitions

Section 1.01     Definitions.  For all purposes of this Indenture, except as otherwise expressly provided herein or unless the context otherwise requires, capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Definitions attached hereto as Appendix A which is incorporated by reference herein. All other capitalized terms used herein shall have the meanings specified herein.

Section 1.02     Incorporation by Reference of Trust Indenture Act.  Whenever this Indenture refers to a provision of the Trust Indenture Act (the “TIA”), the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings:

“Commission” means the Securities and Exchange Commission.

“indenture securities” means the Bonds.

“indenture security holder” means a Bondholder.

“indenture to be qualified” means this Indenture.

“indenture trustee” or “institutional trustee” means the Indenture Trustee.

“obligor” on the indenture securities means the Issuer and any other obligor on the indenture securities.

All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rules and have the meanings assigned to them by such definitions.

	
            Section 1.03
 	
            Rules of Construction.  Unless the context otherwise requires:
 
	
             
	
            (i)
 	
            a term has the meaning assigned to it;
 	
             

				

(ii)         an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles as in effect from time to time;

	
            (iii)
 	
            “or” is not exclusive;
 	
             

	
            (iv)
 	
            “including” means including without limitation;
 

(v)        words in the singular include the plural and words in the plural include the singular; and

(vi)        any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, 

 

instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; references to a Person are also to its permitted successors and assigns.

 

 

ARTICLE II

 

Original Issuance of Bonds

Section 2.01     Form.  The Class A, Class M and Class B Bonds, together with the Indenture Trustee’s certificate of authentication, shall be in substantially the form set forth in Exhibits A-1, A-2 and A-3 to this Indenture, respectively, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture.

The Bonds shall be typewritten, printed, lithographed or engraved or produced by any combination of these methods (with or without steel engraved borders).

The terms of the Bonds set forth in Exhibits A-1, A-2 and A-3 to this Indenture are part of the terms of this Indenture.

Section 2.02     Execution, Authentication and Delivery.  The Bonds shall be executed on behalf of the Issuer by any of its Authorized Officers. The signature of any such Authorized Officer on the Bonds may be manual or facsimile.

Bonds bearing the manual or facsimile signature of individuals who were at any time Authorized Officers of the Issuer shall bind the Issuer, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Bonds or did not hold such offices at the date of such Bonds.

The Indenture Trustee shall upon Issuer Request authenticate and deliver the Class A-1, Class A-2, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class B Bonds for original issue in an aggregate initial principal amount of $1,750,621,000. Each Class of Bonds shall be issued in the following aggregate initial principal amounts:

	
            
Class
 
 	
            
Aggregate Initial Principal Amount
 
 
	
            Class A-1                                               
 	
            $
 	
            1,294,370,000
 
	
            Class A-2                                               
 	
            $
 	
            100,000,000
 
	
            Class M-1                                            
 	
            $
 	
            127,795,000
 
	
            Class M-2                                            
 	
            $
 	
            34,137,000
 
	
            Class M-3                                            
 	
            $
 	
            50,768,000
 
	
            Class M-4                                            
 	
            $
 	
            56,019,000
 
	
            Class M-5                                            
 	
            $
 	
            33,261,000
 
	
            Class M-6                                            
 	
            $
 	
            35,887,000
 
	
            Class B                                                              
 	
            $
 	
            18,384,000
 

 

Each of the Bonds shall be dated the date of its authentication. The Bonds shall be issuable as registered Bonds and the Bonds shall be issuable in the minimum initial Bond Principal Balances of $100,000 and in integral multiples of $1 in excess thereof.

No Bond shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Bond a certificate of authentication substantially in the 

 

form provided for herein executed by the Indenture Trustee by the manual signature of one of its authorized signatories, and such certificate upon any Bond shall be conclusive evidence, and the only evidence, that such Bond has been duly authenticated and delivered hereunder.

Section 2.03       Acceptance of Mortgage Loans by Indenture Trustee.  (a) The Indenture Trustee acknowledges receipt of, subject to the exceptions it notes pursuant to the procedures described below, the documents (or certified copies thereof) referred to in Section 2.1(b) of the Mortgage Loan Purchase Agreement, with respect to the Mortgage Loans, and declares that it holds and will continue to hold those documents and any amendments, replacements or supplements thereto and all other assets of the Trust Estate as Indenture Trustee in trust for the use and benefit of all present and future Holders of the Bonds and the Bond Insurer. No later than 45 days after the Closing Date with respect to the Mortgage Loans, (or, with respect to any Eligible Substitute Mortgage Loan, within 5 days after the receipt by
the Indenture Trustee thereof and, with respect to any documents received beyond 45 days after the Closing Date, promptly thereafter), the Indenture Trustee agrees, for the benefit of the Bondholders and the Bond Insurer, to review each Mortgage File delivered to it and to execute and deliver, or cause to be executed and delivered, to the Seller, the Bond Insurer and the Master Servicer an Initial Certification in the form annexed hereto as Exhibit C.  In conducting such review, the Indenture Trustee will ascertain whether all required documents described in Section 2.1(b) of the Mortgage Loan Purchase Agreement, with respect to the Mortgage Loans, have been executed and received and whether those documents relate, determined on the basis of the Mortgagor name, original principal balance and loan number, to the Mortgage Loans it has received, as identified in Exhibit B to this Indenture, as supplemented (provided, however, that with
respect to those documents described in subclause (b)(vii) of such section, the Indenture Trustee’s obligations shall extend only to documents actually delivered pursuant to such subclause). In performing any such review, the Indenture Trustee may conclusively rely on the purported due execution and genuineness of any such document and on the purported genuineness of any signature thereon. If the Indenture Trustee finds any document constituting part of the Mortgage File not to have been executed or received, or to be unrelated to the Mortgage Loans identified in Exhibit B to this Indenture or to appear to be defective on its face, the Indenture Trustee shall promptly notify the Seller and the Bond Insurer of such finding and the Seller’s obligation to cure such defect or repurchase or substitute for the related Mortgage Loan. To the extent that the Indenture Trustee has not received a Mortgage File with respect to any of the Mortgage Loans by the Closing Date, the Indenture
Trustee shall not require the deposit of cash into the Payment Account or any other account to cover the amount of that Mortgage Loan and shall solely treat such Mortgage Loan as if it were in breach of a representation or warranty; provided that the aggregate Stated Principal Balance of such Mortgage Loans does not exceed 1% of the Cut-off Date Balance. 

(b)        No later than 180 days after the Closing Date, (with respect to the Mortgage Loans), the Indenture Trustee will review, for the benefit of the Bondholders and the Bond Insurer, the Mortgage Files and will execute and deliver or cause to be executed and delivered to the Seller, the Bond Insurer and the Master Servicer, a Final Certification in the form annexed hereto as Exhibit D. In conducting such review, the Indenture Trustee will ascertain whether an original of each document described in subclauses (b)(ii)-(iv) of Section 2.1 of the Mortgage Loan Purchase Agreement with respect to the Mortgage Loans, required to be recorded has been 

 

returned from the recording office with evidence of recording thereon or a certified copy has been obtained from the recording office. If the Indenture Trustee finds any document constituting part of the Mortgage File has not been received, or to be unrelated, determined on the basis of the Mortgagor name, original principal balance and loan number, to the Mortgage Loans identified in Exhibit B to this Indenture or to appear defective on its face, the Indenture Trustee shall promptly notify the Seller and the Bond Insurer.

(c)        Upon deposit of the Repurchase Price in the Payment Account, the Indenture Trustee shall release to the Seller the related Mortgage File and the Indenture Trustee shall execute and deliver all instruments of transfer or assignment, without recourse, furnished to it by the Seller as are necessary to vest in the Seller title to and rights under the related Mortgage Loan. Such purchase shall be deemed to have occurred on the date on which certification of the deposit of the Repurchase Price in the Payment Account was received by the Indenture Trustee. The Indenture Trustee shall amend the applicable Mortgage Loan Schedule to reflect such repurchase and shall promptly notify the Master Servicer, the Bond Insurer and the Rating Agencies of such amendment.

Section 2.04     Acceptance of Derivative Contracts and Special Certificate Cap Contract by Indenture Trustee.  The Indenture Trustee acknowledges receipt of the Derivative Contracts and the Special Certificate Cap Contract and declares that it holds and will continue to hold these documents and any amendments, replacements or supplements thereto and all other assets of the Trust Estate as Indenture Trustee in trust for the use and benefit of all present and future Holders of the Bonds. The Indenture Trustee shall enforce the Derivative Contracts and the Special Certificate Cap Contract in accordance with their terms.  The Issuer hereby directs the Indenture Trustee to execute, not in its individual capacity, but solely as Indenture Trustee on behalf of the Trust, and deliver the Derivative Contracts and the Special
Certificate Cap Contract.

	
            Section 2.05
 	
            [Reserved].
 	
             

	
            Section 2.06
 	
            [Reserved].
 
				

 

 

 

ARTICLE III

 

Covenants

Section 3.01     Collection of Payments with respect to the Mortgage Loans.  The Indenture Trustee shall establish and maintain an Eligible Account (the “Payment Account”) in which the Indenture Trustee shall, subject to the terms of this paragraph, deposit, on the same day as it is received from the Master Servicer, each remittance received by the Indenture Trustee with respect to the Mortgage Loans. The Indenture Trustee shall make all payments of principal of and interest on the Bonds, subject to Section 3.03 as provided in Section 3.05 herein from monies on deposit in the Payment Account.

Section 3.02     Maintenance of Office or Agency.  The Issuer will maintain an office or agency where, subject to satisfaction of conditions set forth herein, Bonds may be surrendered for registration of transfer or exchange, and where notices and demands to or upon the Issuer in respect of the Bonds and this Indenture may be served. The Issuer hereby initially appoints the Indenture Trustee to serve as its agent for the foregoing purposes. If at any time the Issuer shall fail to maintain any such office or agency or shall fail to furnish the Indenture Trustee with the address thereof, such surrenders may be made at the office of the Indenture Trustee located at DB Services Tennessee, 648 Grassmere Park Road, Nashville, TN 37211-3658, Attn: Transfer Unit, and notices and demands may be made or served at the Corporate
Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent to receive all such surrenders, notices and demands.

Section 3.03     Money for Payments To Be Held in Trust; Paying Agent.  (a)  As provided in Section 3.01, all payments of amounts due and payable with respect to any Bonds that are to be made from amounts withdrawn from the Payment Account pursuant to Section 3.01 shall be made on behalf of the Issuer by the Indenture Trustee or by the Paying Agent, and no amounts so withdrawn from the Payment Account for payments of Bonds shall be paid over to the Issuer except as provided in this Section 3.03. The Issuer hereby appoints the Indenture Trustee as its Paying Agent.

The Issuer will cause each Paying Agent other than the Indenture Trustee to execute and deliver to the Indenture Trustee an instrument in which such Paying Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts as Paying Agent it hereby so agrees), subject to the provisions of this Section 3.03, that such Paying Agent will:

(i)         hold all sums held by it for the payment of amounts due with respect to the Bonds in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided;

(ii)         give the Indenture Trustee and the Bond Insurer notice of any default by the Issuer of which it has actual knowledge in the making of any payment required to be made with respect to the Bonds;

 

 

(iii)        at any time during the continuance of any such default, upon the written request of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by such Paying Agent;

(iv)        immediately resign as Paying Agent and forthwith pay to the Indenture Trustee all sums held by it in trust for the payment of Bonds if at any time it ceases to meet the standards required to be met by a Paying Agent at the time of its appointment;

(v)        comply with all requirements of the Code with respect to the withholding from any payments made by it on any Bonds of any applicable withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith; and

(vi)        not commence a bankruptcy proceeding against the Issuer in connection with this Indenture.

The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, by Issuer Request direct any Paying Agent to pay to the Indenture Trustee all sums held in trust by such Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts as those upon which the sums were held by such Paying Agent; and upon such payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be released from all further liability with respect to such money.

Subject to applicable laws with respect to escheat of funds, any money held by the Indenture Trustee or any Paying Agent in trust for the payment of any amount due with respect to any Bond (other than amounts paid under the Bond Insurance Policy) and remaining unclaimed for one year after such amount has become due and payable shall be discharged from such trust and be paid to the Issuer on Issuer Request; and the Holder of such Bond shall thereafter, as an unsecured general creditor, look only to the Issuer for payment thereof (but only to the extent of the amounts so paid to the Issuer), and all liability of the Indenture Trustee or such Paying Agent with respect to such trust money shall thereupon cease; provided, however, that the Indenture Trustee or such Paying Agent, before being required to make any such repayment, shall at the
expense and direction of the Issuer cause to be published once, in an Authorized Newspaper published in the English language, notice that such money remains unclaimed and that, after a date specified therein which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Issuer. The Indenture Trustee, with the written consent of the Bond Insurer, so long as no Bond Insurer Default exists, may also adopt and employ, at the expense and direction of the Issuer, any other reasonable means of notification of such repayment (including, but not limited to, mailing notice of such repayment to Holders whose Bonds have been called but have not been surrendered for redemption or whose right to or interest in monies due and payable but not claimed is determinable from the records of the Indenture Trustee or of any Paying Agent, at the last address of record for each such Bondholder).

Section 3.04     Existence.  The Issuer will keep in full effect its existence, rights and franchises as a statutory trust under the laws of the State of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes, organized under the laws of any other state or of the 

 

United States of America, in which case the Issuer will keep in full effect its existence, rights and franchises under the laws of such other jurisdiction) and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Bonds, the Mortgage Loans and each other instrument or agreement included in the Trust Estate.

Section 3.05     Payment of Principal and Interest.  (a) On each Payment Date from amounts on deposit in the Payment Account in accordance with Section 8.02 hereof, the Indenture Trustee shall pay to the Persons specified below, to the extent provided therein, the Available Funds, any Insured Amount and the Class A-2 Derivative Payment for such Payment Date; provided, however, that (i) any amounts representing payments from the Bond Insurer shall only be used to pay interest and principal to the Class A-1 Bondholders and Class A-2 Bondholders pursuant to subsections (b) and (c) below and (ii) any Class A-2 Derivative Payment shall be used solely to make payments of Accrued Bond Interest on the Class A-2 Bonds pursuant to subsection (b) below.

(b)        On each Payment Date, the Available Funds, the Class A-2 Derivative Payment and the Insured Amount, if any, for such Payment Date shall be distributed in the following order of priority, (with any Class A-2 Derivative Payment used solely to make payments of Accrued Bond Interest on the Class A-2 Bonds for such Payment Date and the interest portion of any Insured Amount used to pay Accrued Bond Interest solely on the Class A Bonds) in each case to the extent of Available Funds, the Class A-2 Derivative Payment and the Insured Amount remaining for such Payment Date:

first, concurrently, to the Holders of the Class A-1 Bonds and Class A-2 Bonds, the related Accrued Bond Interest for such Classes for such Payment Date; and

second, sequentially, in each case to the extent of Available Funds remaining for such Payment Date, to the Holders of the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class B Bonds, any Accrued Bond Interest for such Classes for such Payment Date.

(c)        On each Payment Date, the Holders of the Bonds shall be entitled to receive payments in respect of principal equal to the Principal Distribution Amount for that Payment Date, allocated on a pro rata basis, based on the Bond Principal Balances thereof, in reduction of the Bond Principal Balances thereof, until reduced to zero.

(d)        On each Payment Date, any Net Monthly Excess Cashflow shall be paid as follows:

(i)         to the Bond Insurer, the aggregate of all payments, if any, made by the Bond Insurer under the Bond Insurance Policy with respect to the Class A-1 Bonds and Class A-2 Bonds, including interest thereon, to the extent not previously paid or reimbursed;

 

 

(ii)         to the Holders of the Bonds, pro rata, in an amount equal to any related Overcollateralization Increase Amount, payable to such Bondholders as part of the Principal Distribution Amount as described under Section 3.05(c) above;

(iii)        first, concurrently, to the Holders of the Class A-1 Bonds and Class A-2 Bonds and 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 and Class B Bonds, in that order, in an amount equal to the Allocated Realized Loss Amount for such Bonds;

(iv)        first, concurrently, to the Holders of the Class A-1 Bonds and Class A-2 Bonds and 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 and Class B Bonds, in that order, any Unpaid Interest Shortfall for such Bonds on such Payment Date, to the extent not previously reimbursed;

(v)        first, concurrently, to the Holders of the Class A-1 Bonds and Class A-2 Bonds and 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 and Class B Bonds, in that order, any related Basis Risk Shortfall Carry-Forward Amount for such Bonds on such Payment Date, to the extent not covered by the Basis Risk Derivative Contracts; provided, however, that any Basis Risk Shortfall Carry-Forward Amount on the Class A-2 Bonds (including any previously accrued but unpaid Basis Risk Shortfall Carry-Forward Amount relating to the Class A-2 Bonds that was owing the Class A-2 Derivative Contract Counterparty) shall be directed to the related Derivative Contract Counterparty unless a Class A-2 Derivative Contract Counterparty Termination Event is in effect; provided, however,
that in such event the Holder of the Class A-2 Bonds will be entitled to receive any Basis Risk Shortfall Carry-Forward Amounts that arise on and after the Payment Date when the Class A-2 Derivative Contract Counterparty Termination Event occurs; 

(vi)        to the Indenture Trustee for amounts owed the Indenture Trustee hereunder remaining unpaid; and

(vii)       any remaining amounts to the Certificate Paying Agent, as designee of the Issuer, for the benefit of the Holders of the Trust Certificates.

(e)        On each Payment Date all prepayment charges received on the Mortgage Loans shall be distributed to the Certificate Paying Agent, as designee of the Issuer, for the benefit of the Holders of the Trust Certificates.

(f)         On each Payment Date any amounts received in respect of the Special Certificate Cap Contract shall be distributed to the Certificate Paying Agent, as designee of the Issuer, for the benefit of the Holders of the Trust Certificates.

	
            (g)
 	
            [reserved]
 
	
            (h)
 	
            [reserved]
 
	
            (i)
 	
            [reserved]
 

 

 

 

(j)         With respect to the Basis Risk Derivative Contracts and on each Payment Date, the Basis Risk Net Derivative Contract Payment Amount with respect to such Payment Date shall be allocated to the Bonds in the following order of priority, in each case to the extent of amounts available:

(i)         to the Holders of the Class A-1 Bonds and Class A-2 Bonds, pro rata, based on their respective entitlement, any related Basis Risk Shortfall Carry-Forward Amount for such Payment Date; provided, however, that any Basis Risk Shortfall Carry-Forward Amount on the Class A-2 Bonds (including any previously accrued but unpaid Basis Risk Shortfall Carry-Forward Amount relating to the Class A-2 Bonds that was owing the Class A-2 Derivative Contract Counterparty) shall be directed to the Class A-2 Derivative Contract Counterparty unless a Class A-2 Derivative Contract Counterparty Termination Event is in effect; provided, further, that in such event the Holder of the Class A-2 Bonds will be entitled to receive any Basis Risk Shortfall Carry-Forward Amounts that arise on and after the Payment Date when the Class A-2
Derivative Contract Counterparty Termination Event occurs;

(ii)         sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class B Bonds, in that order, any related Basis Risk Shortfall Carry-Forward Amount for such Payment Date; and

(iii)        any remaining amounts shall be included in the Net Monthly Excess Cashflow and shall be used as described under Section 3.05(d) above.

(k)        With respect to the Class A-2 Derivative Contract, on each Payment Date, the Class A-2 Derivative Payment with respect to such Payment Date will be allocated to the Class A-2 Bonds as described in Section 3.05(b) above.

(l)         Each distribution with respect to a Book-Entry Bond shall be paid to the Depository, as Holder thereof, and the Depository shall be responsible for crediting the amount of such distribution to the accounts of its Depository Participants in accordance with its normal procedures. Each Depository Participant shall be responsible for disbursing such distribution to the Bond 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 Bond Owners that it represents. None of the Indenture Trustee, the Bond Registrar, the Paying Agent, the Depositor or the Master Servicer shall have any responsibility therefor except as otherwise provided by this Indenture
or applicable law.

(m)       On each Payment Date, the Certificate Paying Agent shall deposit in the Certificate Distribution Account all amounts it received pursuant to this Section 3.05 for the purpose of distributing such funds to the Certificateholders.

(n)        Any installment of interest or principal, if any, payable on any Bond that is punctually paid or duly provided for by the Issuer on the applicable Payment Date shall, if such Holder shall have so requested at least five Business Days prior to the related Record Date, be paid to each Bondholder of record on the preceding Record Date, by wire transfer to an account 

 

specified in writing by such Bondholder reasonably satisfactory to the Indenture Trustee as of the preceding Record Date or in all other cases or if no such instructions have been delivered to the Indenture Trustee, by check to such Bondholder mailed to such Bondholder’s address as it appears in the Bond Register in the amount required to be distributed to such Bondholder on such Payment Date pursuant to such Bondholder’s Bonds; provided, however, that the Indenture Trustee shall not pay to such Bondholders any amount required to be withheld from a payment to such Bondholder by the Code.

(o)        The principal of each Bond shall be due and payable in full on the Final Scheduled Payment Date for such Bond as provided in the forms of Bond set forth in Exhibits A-1, A-2 and A-3 to this Indenture. All principal payments on the Bonds shall be made to the Bondholders entitled thereto in accordance with the Percentage Interests represented by such Bonds. Upon notice to the Indenture Trustee by the Issuer, the Indenture Trustee shall notify the Person in whose name a Bond is registered at the close of business on the Record Date preceding the Final Scheduled Payment Date or other final Payment Date (including any final Payment Date resulting from any redemption pursuant to Section 8.07 hereof). Such notice shall to the extent practicable be mailed no later than five Business Days prior to such Final Scheduled Payment Date or other final
Payment Date and shall specify that payment of the principal amount and any interest due with respect to such Bond at the Final Scheduled Payment Date or other final Payment Date will be payable only upon presentation and surrender of such Bond and shall specify the place where such Bond may be presented and surrendered for such final payment. No interest shall accrue on the Bonds on or after the Final Scheduled Payment Date or any such other final Payment Date.

The Issuer hereby designates the Indenture Trustee its agent and attorney-in-fact to sign any financing statement, continuation statement or other instrument required to be signed pursuant to this Section 3.05 upon the Issuer’s preparation thereof and delivery to the Indenture Trustee.

Section 3.06     Protection of Trust Estate.  (a) The Issuer will from time to time prepare, execute and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments, and will take such other action necessary or advisable to:

(i)         maintain or preserve the lien and security interest (and the priority thereof) of this Indenture or carry out more effectively the purposes hereof;

(ii)         perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture;

(iii)        cause the Issuer or Master Servicer to enforce any of the rights to the Mortgage Loans; or

(iv)        preserve and defend title to the Trust Estate and the rights of the Indenture Trustee, the Bond Insurer and the Bondholders in such Trust Estate against the claims of all Persons and parties.

 

 

(b)        Except as otherwise provided in this Indenture, the Indenture Trustee shall not remove any portion of the Trust Estate that consists of money or is evidenced by an instrument, certificate or other writing from the jurisdiction in which it was held at the date of the most recent Opinion of Counsel delivered pursuant to Section 3.07 hereof (or from the jurisdiction in which it was held as described in the Opinion of Counsel delivered on the Closing Date pursuant to Section 3.07(a) hereof, or if no Opinion of Counsel has yet been delivered pursuant to Section 3.07(b) hereof, unless the Indenture Trustee shall have first received an Opinion of Counsel to the effect that the lien and security interest created by this Indenture with respect to such property will continue to be maintained after giving effect to such action or actions).

The Issuer hereby designates the Indenture Trustee its agent and attorney-in-fact to sign any financing statement, continuation statement or other instrument required to be signed pursuant to this Section 3.06 upon the Issuer’s preparation thereof and delivery to the Indenture Trustee.

Section 3.07     Opinions as to Trust Estate.  (a) On the Closing Date, the Issuer shall furnish to the Indenture Trustee, the Bond Insurer and the Owner Trustee an Opinion of Counsel either stating that, in the opinion of such counsel, such action has been taken with respect to the recording and filing of this Indenture, any indentures supplemental hereto, and any other requisite documents, and with respect to the execution and filing of any financing statements and continuation statements, as are necessary to perfect and make effective the lien and first priority security interest in the Collateral and reciting the details of such action, or stating that, in the opinion of such counsel, no such action is necessary to make such lien and first priority security interest effective.

(b)        On or before April 15 in each calendar year, beginning in 2006, the Issuer shall furnish to the Indenture Trustee and the Bond Insurer an Opinion of Counsel at the expense of the Issuer either stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and with respect to the execution and filing of any financing statements and continuation statements as is necessary to maintain the lien and first priority security interest in the Collateral and reciting the details of such action or stating that in the opinion of such counsel no such action is necessary to maintain such lien and security interest. Such Opinion of Counsel shall also describe the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and the execution and filing of any financing statements and continuation statements that will, in the opinion of such counsel, be required to maintain the lien and security interest in the Collateral until December 31 in the following calendar year.

Section 3.08     Performance of Obligations.  (a) The Issuer will punctually perform and observe all of its obligations and agreements contained in this Indenture, the Basic Documents and in the instruments and agreements included in the Trust Estate.

(b)        The Issuer, with the consent of the Bond Insurer so long as no Bond Insurer Default exists, may contract with other Persons to assist it in performing its duties under this Indenture, and any performance of such duties by a Person identified to the Indenture Trustee in an Officer’s Certificate of the Issuer shall be deemed to be action taken by the Issuer.

 

 

(c)        The Issuer will not take any action or permit any action to be taken by others which would release any Person from any of such Person’s covenants or obligations under any of the documents relating to the Mortgage Loans or under any instrument included in the Trust Estate, or which would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any of the documents relating to the Mortgage Loans or any such instrument, except such actions as the Master Servicer is expressly permitted to take in the Servicing Agreement. The Indenture Trustee, as pledgee of the Mortgage Loans, shall with the consent of, or direction of, the Bond Insurer, so long as no Bond Insurer Default exists, be able to exercise the rights of the Issuer to direct the actions of the Master
Servicer pursuant to the Servicing Agreement.

(d)        The Issuer may retain an administrator and may enter into contracts acceptable to the Bond Insurer with other Persons for the performance of the Issuer’s obligations hereunder, and performance of such obligations by such Persons shall be deemed to be performance of such obligations by the Issuer.

Section 3.09     Negative Covenants.  So long as any Bonds are Outstanding, the Issuer shall not:

(i)         except as expressly permitted by this Indenture, sell, transfer, exchange or otherwise dispose of the Trust Estate, unless directed to do so by the Bond Insurer or the Indenture Trustee with the consent of the Bond Insurer, so long as no Bond Insurer Default exists;

(ii)         claim any credit on, or make any deduction from the principal or interest payable in respect of, the Bonds (other than amounts properly withheld from such payments under the Code) or assert any claim against any present or former Bondholder by reason of the payment of the taxes levied or assessed upon any part of the Trust Estate;

(iii)        (A) permit the validity or effectiveness of this Indenture to be impaired, or permit the lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to the Bonds under this Indenture except as may be expressly permitted hereby, (B) permit any lien, charge, excise, claim, security interest, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the Trust Estate or any part thereof or any interest therein or the proceeds thereof or (C) permit the lien of this Indenture not to constitute a valid first priority security interest in the Trust Estate; or

(iv)        waive or impair, or fail to assert rights under, the Mortgage Loans, or impair or cause to be impaired the Issuer’s interest in the Mortgage Loans, the Mortgage Loan Purchase Agreement or in any Basic Document, if any such action would materially and adversely affect the interests of the Bondholders or the Bond Insurer.

Section 3.10     Annual Statement as to Compliance.  The Issuer will deliver to the Indenture Trustee and the Bond Insurer, by March 1 of each year commencing with the calendar 

 

year 2006, an Officer’s Certificate stating, as to the Authorized Officer signing such Officer’s Certificate, that:

(i)         a review of the activities of the Issuer during the previous calendar year and of its performance under this Indenture has been made under such Authorized Officer’s supervision; and

(ii)         to the best of such Authorized Officer’s knowledge, based on such review, the Issuer has complied with all conditions and covenants under this Indenture throughout such year, or, if there has been a default in its compliance with any such condition or covenant, specifying each such default known to such Authorized Officer and the nature and status thereof.

	
            Section 3.11
 	
            [Reserved].
 

Section 3.12     Representations and Warranties Concerning the Mortgage Loans.  The Indenture Trustee, as pledgee of the Mortgage Loans, has the benefit of the representations and warranties made by the Seller in the Mortgage Loan Purchase Agreement concerning the Seller and the Mortgage Loans to the same extent as though such representations and warranties were made directly to the Indenture Trustee. If a Responsible Officer of the Indenture Trustee has actual knowledge of any breach of any representation or warranty made by the Seller in the Mortgage Loan Purchase Agreement, the Indenture Trustee shall promptly notify the Seller and the Bond Insurer of such finding and the Seller’s obligation to cure such defect or repurchase or substitute for the related Mortgage Loan.

Section 3.13     Amendments to Servicing Agreement.  The Issuer covenants with the Indenture Trustee and the Bond Insurer that it will not enter into any amendment or supplement to the Servicing Agreement without the prior written consent of the Indenture Trustee and, so long as no Bond Insurer Default exists, the Bond Insurer.

Section 3.14     Master Servicer as Agent and Bailee of the Indenture Trustee.  Solely for purposes of perfection under Section 9-305 of the Uniform Commercial Code or other similar applicable law, rule or regulation of the state in which such property is held by the Master Servicer, the Issuer and the Indenture Trustee hereby acknowledge that the Master Servicer is acting as bailee of the Indenture Trustee in holding amounts on deposit in the Collection Account, as well as its bailee in holding any Related Documents released to the Master Servicer, and any other items constituting a part of the Trust Estate which from time to time come into the possession of the Master Servicer. It is intended that, by the Master Servicer’s acceptance of such bailee arrangement, the Indenture Trustee, as a secured party of the
Mortgage Loans, will be deemed to have possession of such Related Documents, such monies and such other items for purposes of Section 9-305 of the Uniform Commercial Code of the state in which such property is held by the Master Servicer. The Indenture Trustee shall not be liable with respect to such documents, monies or items while in possession of the Master Servicer.

Section 3.15     Investment Company Act.  The Issuer shall not become an “investment company” or be under the “control” of an “investment company” as such terms are defined in the Investment Company Act of 1940, as amended (or any successor or amendatory statute), and the 

 

rules and regulations thereunder (taking into account not only the general definition of the term “investment company” but also any available exceptions to such general definition); provided, however, that the Issuer shall be in compliance with this Section 3.15 if it shall have obtained an order exempting it from regulation as an “investment company” so long as it is in compliance with the conditions imposed in such order.

Section 3.16     Issuer May Consolidate, etc.  (a) The Issuer shall not consolidate or merge with or into any other Person, unless:

(i)         the Person (if other than the Issuer) formed by or surviving such consolidation or merger shall be a Person organized and existing under the laws of the United States of America or any state or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, in form reasonably satisfactory to the Indenture Trustee and the Bond Insurer, the due and punctual payment of the principal of and interest on all Bonds, and the payment of the Policy Premium Fee and all other amounts payable to the Bond Insurer, the Indenture Trustee and the Derivative Contract Counterparties, the payment to the Certificate Paying Agent of all amounts due to the Certificateholders, and the performance or observance of every agreement and covenant of this Indenture on
the part of the Issuer to be performed or observed, all as provided herein;

(ii)         immediately after giving effect to such transaction, no Event of Default shall have occurred and be continuing;

(iii)        the Rating Agencies shall have notified the Issuer that such transaction shall not cause the rating of the Bonds to be reduced, suspended or withdrawn or to be considered by either Rating Agency to be below investment grade;

(iv)        the Issuer and the Bond Insurer shall have received an Opinion of Counsel (and shall have delivered a copy thereof to the Indenture Trustee) to the effect that such transaction will not (A) result in a “substantial modification” of the Bonds under Treasury Regulation section 1.1001-3, or adversely affect the status of the Bonds as indebtedness for federal income tax purposes, or (B) if 100% of the Certificates are not owned by IMH Assets Corp., cause the Trust to be subject to an entity level tax for federal income tax purposes;

(v)        any action that is necessary to maintain the lien and security interest created by this Indenture shall have been taken; and

(vi)        the Issuer shall have delivered to the Indenture Trustee and the Bond Insurer an Officer’s Certificate and an Opinion of Counsel each stating that such consolidation or merger and such supplemental indenture comply with this Article III and that all conditions precedent herein provided for or relating to such transaction have been complied with (including any filing required by the Exchange Act), and that such supplemental indenture is enforceable; and

 

 

(vii)       the Bond Insurer, so long as no Bond Insurer Default exists, shall have given its prior written consent.

(b)        The Issuer shall not convey or transfer any of its properties or assets, including those included in the Trust Estate, to any Person, unless:

(i)         the Person that acquires by conveyance or transfer the properties and assets of the Issuer, the conveyance or transfer of which is hereby restricted, shall (A) be a United States citizen or a Person organized and existing under the laws of the United States of America or any state thereof, (B) expressly assume, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, in form satisfactory to the Indenture Trustee, the due and punctual payment of the principal of and interest on all Bonds and the payment of the Policy Premium Fee and all other amounts payable to the Bond Insurer and the Derivative Contract Counterparties and the performance or observance of every agreement and covenant of this Indenture on the part of the Issuer to be performed or observed, all as provided herein, (C)
expressly agree by means of such supplemental indenture that all right, title and interest so conveyed or transferred shall be subject and subordinate to the rights of the holders of the Bonds and the Bond Insurer, (D) unless otherwise provided in such supplemental indenture, expressly agree to indemnify, defend and hold harmless the Issuer and the Indenture Trustee and the Bond Insurer against and from any loss, liability or expense arising under or related to this Indenture and the Bonds and (E) expressly agree by means of such supplemental indenture that such Person (or if a group of Persons, then one specified Person) shall make all filings with the Commission (and any other appropriate Person) required by the Exchange Act in connection with the Bonds;

(ii)         immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;

(iii)        the Rating Agencies shall have notified the Issuer that such transaction shall not cause the rating of the Bonds to be reduced, suspended or withdrawn;

(iv)        the Issuer and the Bond Insurer shall have received an Opinion of Counsel (and shall have delivered a copy thereof to the Indenture Trustee) to the effect that such transaction will not (A) result in a “substantial modification” of the Bonds under Treasury Regulation section 1.1001-3, or adversely affect the status of the Bonds as indebtedness for federal income tax purposes, or (B) if 100% of the Certificates are not owned by IMH Assets Corp., cause the Trust to be subject to an entity level tax for federal income tax purposes;

(v)        any action that is necessary to maintain the lien and security interest created by this Indenture shall have been taken; 

(vi)        the Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel each stating that such conveyance or transfer and such supplemental indenture comply with this Article III and that all conditions precedent 

 

herein provided for relating to such transaction have been complied with (including any filing required by the Exchange Act); and

(vii)       the Bond Insurer, so long as no Bond Insurer Default exists, shall have given its prior written consent.

Section 3.17     Successor or Transferee.  (a) Upon any consolidation or merger of the Issuer in accordance with Section 3.16(a), the Person formed by or surviving such consolidation or merger (if other than the Issuer) shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect as if such Person had been named as the Issuer herein.

(b)        Upon a conveyance or transfer of all the assets and properties of the Issuer pursuant to Section 3.16(b), the Issuer will be released from every covenant and agreement of this Indenture to be observed or performed on the part of the Issuer with respect to the Bonds immediately upon the delivery of written notice to the Indenture Trustee and the Bond Insurer of such conveyance or transfer and approval of such transaction given by the Bond Insurer to the Indenture Trustee.

Section 3.18     No Other Business.  The Issuer shall not engage in any business other than financing, purchasing, owning and selling and managing the Mortgage Loans and the issuance of the Bonds and Certificates in the manner contemplated by this Indenture and the Basic Documents and all activities incidental thereto.

Section 3.19     No Borrowing.  The Issuer shall not issue, incur, assume, guarantee or otherwise become liable, directly or indirectly, for any indebtedness except for the Bonds and amounts due to the Bond Insurer under this Indenture and the Insurance Agreement.

Section 3.20     Guarantees, Loans, Advances and Other Liabilities.  Except as contemplated by this Indenture or the Basic Documents, the Issuer shall not make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another’s payment or performance on any obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any other Person.

Section 3.21     Capital Expenditures.  The Issuer shall not make any expenditure (by long-term or operating lease or otherwise) for capital assets (either realty or personalty).

Section 3.22     Determination of Bond Interest Rate.  On each Interest Determination Date the Indenture Trustee shall determine One-Month LIBOR and the related Bond Interest Rate for each Class of Bonds for the following Accrual Period and shall inform the Issuer, the Master Servicer, the Bond Insurer and the Depositor at their respective facsimile numbers given to the Indenture Trustee in writing thereof. The establishment of One-Month LIBOR on each Interest Determination Date by the Indenture Trustee and the Indenture Trustee’s calculation of 

 

the rate of interest applicable to each Class of Bonds for the related Accrual Period shall (in the absence of manifest error) be final and binding.

Section 3.23     Restricted Payments.  The Issuer shall not, directly or indirectly, (i) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, to the Owner Trustee or any owner of a beneficial interest in the Issuer or otherwise with respect to any ownership or equity interest or security in or of the Issuer, (ii) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or security or (iii) set aside or otherwise segregate any amounts for any such purpose; provided, however, that the Issuer may make, or cause to be made, (x) distributions and payments to the Owner Trustee, the Indenture Trustee, Bondholders and the Certificateholders as
contemplated by, and to the extent funds are available for such purpose under this Indenture and the Trust Agreement and (y) payments to the Master Servicer and the Subservicers pursuant to the terms of the Servicing Agreement. The Issuer will not, directly or indirectly, make payments to or distributions from the Collection Account except in accordance with this Indenture and the Basic Documents.

Section 3.24     Notice of Events of Default.  The Issuer shall give the Indenture Trustee, the Bond Insurer and the Rating Agencies prompt written notice of each Event of Default hereunder and under the Trust Agreement.

Section 3.25     Further Instruments and Acts.  Upon request of the Indenture Trustee or the Bond Insurer, the Issuer will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

Section 3.26     Statements to Bondholders.  On each Payment Date, the Indenture Trustee and the Certificate Registrar shall make available on the Indenture Trustee’s website, https://www.tss.db.com/invr, to the Bond Insurer and to each Bondholder and Certificateholder the most recent statement prepared by the Master Servicer pursuant to Section 4.01 of the Servicing Agreement.

	
            Section 3.27
 	
            [Reserved].
 	
             

	
            Section 3.28
 	
            [Reserved].
 	
             

	
            Section 3.29
 	
            Certain Representations Regarding the Trust Estate.
 

(a)        With respect to that portion of the Collateral described in clauses (a) through (f) of the definition of Trust Estate, the Issuer represents to the Indenture Trustee that:

(i)         This Indenture creates a valid and continuing security interest (as defined in the applicable UCC) in the Collateral in favor of the Indenture Trustee, as trustee for the Bondholders, which security interest is prior to all other liens, and is enforceable as such as against creditors of and purchasers from the Issuer.

 

 

(ii)         The Collateral constitutes “deposit accounts” or “instruments,” as applicable, within the meaning of the applicable UCC.

(iii)        The Issuer owns and has good and marketable title to the Collateral, free and clear of any lien, claim or encumbrance of any Person.

(iv)        The Issuer has taken all steps necessary to cause the Indenture Trustee to become the account holder of the Collateral.

(v)        Other than the security interest granted to the Indenture Trustee pursuant to this Indenture, the Issuer has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Collateral.

(vi)        The Collateral is not in the name of any Person other than the Issuer or the Indenture Trustee.  The Issuer has not consented to the bank maintaining the Collateral to comply with instructions of any Person other than the Indenture Trustee.

(b)        With respect to that portion of the Collateral described in clauses (e) and (f), the Issuer represents to the Indenture Trustee that:

(i)         This Indenture creates a valid and continuing security interest (as defined in the applicable UCC) in the Collateral in favor of the Indenture Trustee, as trustee for the Bondholders, which security interest is prior to all other liens, and is enforceable as such as against creditors of and purchasers from the Issuer.

(ii)         The Collateral constitutes “general intangibles” within the meaning of the applicable UCC.

(iii)        The Issuer owns and has good and marketable title to the Collateral, free and clear of any lien, claim or encumbrance of any Person.

(iv)        Other than the security interest granted to the Indenture Trustee pursuant to this Indenture, the Issuer has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Collateral.

(c)        With respect to any Collateral in which a security interest may be perfected by filing, the Issuer has not authorized the filing of, and is not aware of any financing statements against, the Issuer, that include a description of collateral covering such Collateral, other than any financing statement relating to the security interest granted to the Indenture Trustee hereunder or that has been terminated.  The Issuer is not aware of any judgment or tax lien filings against the Issuer.

(d)        The Issuer has caused or will have caused, within ten days, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest in all Collateral granted to the Indenture Trustee hereunder in which a security interest may be perfected by filing.  Any financing statement that is filed in connection with this Section 3.29 shall contain a statement that a 

 

purchase or security interest in any collateral described therein will violate the rights of the secured party named in such financing statement.

(e)        The foregoing representations may not be waived and shall survive the issuance of the Bonds.

	
            Section 3.30
 	
            [Reserved].
 	
             

	
            Section 3.31
 	
            [Reserved].
 
				

Section 3.32     Replacement Derivative Contracts.  In the event of a default by a related Derivative Contract Counterparty with respect to the related Derivative Contracts (a “Derivative Contract Default”), the Issuer, at its expense, may, but shall not be required to, substitute a new derivative contract for the existing Derivative Contracts or any other form of similar coverage for basis risk shortfalls; provided, however, that the timing and mechanism for receiving payments under such new derivative contracts shall be reasonably acceptable to the Indenture Trustee. It shall be a condition to substitution of any new derivative contracts that there be delivered to the Indenture Trustee an Opinion of Counsel to
the effect that such substitution would not (a) result in a “substantial modification” of the Bonds under Treasury Regulation section 1.1001-3, or adversely affect the status of the Bonds as indebtedness for federal income tax purposes, or (b) if 100% of the Certificates are not owned by IMH Assets Corp., cause the Trust to be subject to an entity level tax for federal income tax purposes.

	
            Section 3.33
 	
            [Reserved].
 

Section 3.34     Allocation of Realized Losses.  (a)  Prior to each Payment Date, the Master Servicer shall determine the total amount of Realized Losses that occurred during the related Prepayment Period. The amount of each Realized Loss shall be evidenced by an Officer’s Certificate delivered to the Indenture Trustee with the related Remittance Report.

(b)        On each Payment Date following the application of all amounts distributable on such date, to the extent the aggregate Stated Principal Balance of the Mortgage Loans is less than the aggregate Bond Principal Balances of the Bonds due to Realized Losses on the Mortgage Loans, Realized Losses will be allocated to reduce the Bond Principal Balances of the e Class B, Class M-6, Class M-5, Class M-4, Class M-3, Class M-2 and Class M-1, in that order, and then to the Class A-1 Bonds and Class A-2 Bonds, pro rata, based on the Bond Principal Balances thereof, until reduced to zero; provided that any Realized Losses allocable to the Class A Bonds will be covered by the Bond Insurance Policy. All Realized Losses allocated to a Class of Bonds will be allocated in proportion to the Percentage Interests evidenced thereby.

	
            Section 3.35
 	
            [Reserved].
 
	
            Section 3.36
 	
            [Reserved].
 

 

 

 

ARTICLE IV

 

The Bonds; Satisfaction and Discharge of Indenture

Section 4.01     The Bonds.  Each Class of Bonds shall be registered in the name of a nominee designated by the Depository. Beneficial Owners will hold interests in the Bonds through the book-entry facilities of the Depository in minimum initial Bond Principal Balances of $100,000 and integral multiples of $1 in excess thereof.

The Indenture Trustee may for all purposes (including the making of payments due on the Bonds) deal with the Depository as the authorized representative of the Beneficial Owners with respect to the Bonds for the purposes of exercising the rights of Holders of the Bonds hereunder. Except as provided in the next succeeding paragraph of this Section 4.01, the rights of Beneficial Owners with respect to the Bonds shall be limited to those established by law and agreements between such Beneficial Owners and the Depository and Depository Participants. Except as provided in Section 4.08 hereof, Beneficial Owners shall not be entitled to definitive certificates for the Bonds as to which they are the Beneficial Owners. Requests and directions from, and votes of, the Depository as Holder of the Bonds shall not be deemed inconsistent if they are made with respect to different Beneficial Owners. The
Indenture Trustee may establish a reasonable record date in connection with solicitations of consents from or voting by Bondholders and give notice to the Depository of such record date. Without the consent of the Issuer and the Indenture Trustee, no Bond may be transferred by the Depository except to a successor Depository that agrees to hold such Bond for the account of the Beneficial Owners.

In the event the Depository Trust Company resigns or is removed as Depository, the Indenture Trustee with the approval of the Issuer may appoint a successor Depository. If no successor Depository has been appointed within 30 days of the effective date of the Depository’s resignation or removal, each Beneficial Owner shall be entitled to certificates representing the Bonds it beneficially owns in the manner prescribed in Section 4.08.

The Bonds shall, on original issue, be executed on behalf of the Issuer by the Owner Trustee, not in its individual capacity but solely as Owner Trustee, authenticated by the Indenture Trustee and delivered by the Indenture Trustee to or upon the order of the Issuer.

Section 4.02     Registration of and Limitations on Transfer and Exchange of Bonds; Appointment of Bond Registrar and Certificate Registrar.  The Issuer shall cause to be kept at the Corporate Trust Office a Bond Register in which, subject to such reasonable regulations as it may prescribe, the Bond Registrar shall provide for the registration of Bonds and of transfers and exchanges of Bonds as herein provided.

Subject to the restrictions and limitations set forth below, upon surrender for registration of transfer of any Bond at the Corporate Trust Office, the Issuer shall execute and the Bond Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds in authorized initial Bond Principal Balances evidencing the same Class and aggregate Percentage Interests.

 

 

Subject to the foregoing, at the option of the Bondholders, Bonds may be exchanged for other Bonds of like tenor and in authorized initial Bond Principal Balances evidencing the same Class and aggregate Percentage Interests upon surrender of the Bonds to be exchanged at the Corporate Trust Office of the Bond Registrar. Whenever any Bonds are so surrendered for exchange, the Issuer shall execute and the Indenture Trustee shall authenticate and deliver the Bonds which the Bondholder making the exchange is entitled to receive. Each Bond presented or surrendered for registration of transfer or exchange shall (if so required by the Bond Registrar) be duly endorsed by, or be accompanied by a written instrument of transfer in form reasonably satisfactory to the Bond Registrar duly executed by the Holder thereof or his attorney duly authorized in writing with such signature guaranteed by a
commercial bank or trust company located or having a correspondent located in the city of New York. Bonds delivered upon any such transfer or exchange will evidence the same obligations, and will be entitled to the same rights and privileges, as the Bonds surrendered.

No service charge shall be made for any registration of transfer or exchange of Bonds, but the Bond Registrar shall require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any registration of transfer or exchange of Bonds.

The Issuer hereby appoints the Indenture Trustee as (i) Certificate Registrar to keep at its Corporate Trust Office a Certificate Register pursuant to Section 3.09 of the Trust Agreement in which, subject to such reasonable regulations as it may prescribe, the Certificate Registrar shall provide for the registration of Certificates and of transfers and exchanges thereof pursuant to Section 3.05 of the Trust Agreement and (ii) Bond Registrar under this Indenture. The Indenture Trustee hereby accepts such appointments.

Section 4.03     Mutilated, Destroyed, Lost or Stolen Bonds.  If (i) any mutilated Bond is surrendered to the Indenture Trustee, or the Indenture Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Bond, and (ii) there is delivered to the Indenture Trustee such security or indemnity as may be required by it to hold the Issuer, the Bond Insurer and the Indenture Trustee harmless, then, in the absence of notice to the Issuer, the Bond Registrar or the Indenture Trustee that such Bond has been acquired by a bona fide purchaser, and provided that the requirements of Section 8-405 of the UCC are met, the Issuer shall execute, and upon its request the Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Bond, a
replacement Bond; provided, however, that if any such destroyed, lost or stolen Bond, but not a mutilated Bond, shall have become or within seven days shall be due and payable, instead of issuing a replacement Bond, the Issuer may pay such destroyed, lost or stolen Bond when so due or payable without surrender thereof. If, after the delivery of such replacement Bond or payment of a destroyed, lost or stolen Bond pursuant to the proviso to the preceding sentence, a bona fide purchaser of the original Bond in lieu of which such replacement Bond was issued presents for payment such original Bond, the Issuer, the Bond Insurer and the Indenture Trustee shall be entitled to recover such replacement Bond (or such payment) from the Person to whom it was delivered or any Person taking such replacement Bond from such Person to whom such replacement Bond was delivered or any assignee of such Person,
except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of 

 

any loss, damage, cost or expense incurred by the Issuer, the Bond Insurer or the Indenture Trustee in connection therewith.

Upon the issuance of any replacement Bond under this Section 4.03, the Issuer may require the payment by the Holder of such Bond of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the Indenture Trustee) connected therewith.

Every replacement Bond issued pursuant to this Section 4.03 in replacement of any mutilated, destroyed, lost or stolen Bond shall constitute an original additional contractual obligation of the Issuer, whether or not the mutilated, destroyed, lost or stolen Bond shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Bonds duly issued hereunder.

The provisions of this Section 4.03 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Bonds.

Section 4.04     Persons Deemed Owners.  Prior to due presentment for registration of transfer of any Bond, the Issuer, the Bond Insurer, the Indenture Trustee, the Paying Agent and any agent of the Issuer, the Bond Insurer or the Indenture Trustee may treat the Person in whose name any Bond is registered (as of the day of determination) as the owner of such Bond for the purpose of receiving payments of principal of and interest, if any, on such Bond and for all other purposes whatsoever, whether or not such Bond be overdue, and neither the Issuer, the Bond Insurer, the Indenture Trustee, the Paying Agent nor any agent of the Issuer, the Bond Insurer or the Indenture Trustee shall be affected by notice to the contrary.

Section 4.05     Cancellation.  All Bonds surrendered for payment, registration of transfer, exchange or redemption shall, if surrendered to any Person other than the Indenture Trustee, be delivered to the Indenture Trustee and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any time deliver to the Indenture Trustee for cancellation any Bonds previously authenticated and delivered hereunder which the Issuer may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the Indenture Trustee. No Bonds shall be authenticated in lieu of or in exchange for any Bonds cancelled as provided in this Section 4.05, except as expressly permitted by this Indenture. All cancelled Bonds may be held or disposed of by the Indenture Trustee in accordance with its standard
retention or disposal policy as in effect at the time unless the Issuer shall direct by an Issuer Request that they be destroyed or returned to it; provided, however, that such Issuer Request is timely and the Bonds have not been previously disposed of by the Indenture Trustee.

Section 4.06     Book-Entry Bonds.  The Bonds, upon original issuance, will be issued in the form of typewritten Bonds representing the Book-Entry Bonds, to be delivered to The Depository Trust Company, the initial Depository, by, or on behalf of, the Issuer. The Bonds shall initially be registered on the Bond Register in the name of Cede & Co., the nominee of the initial Depository, and no Beneficial Owner will receive a Definitive Bond representing such Beneficial Owner’s interest in such Bond, except as provided in Section 4.08. With respect to 

 

such Bonds, unless and until definitive, fully registered Bonds (the “Definitive Bonds”) have been issued to Beneficial Owners pursuant to Section 4.08:

	
            (i)
 	
            the provisions of this Section 4.06 shall be in full force and effect;
 

(ii)         the Bond Registrar, the Paying Agent and the Indenture Trustee shall be entitled to deal with the Depository for all purposes of this Indenture (including the payment of principal of and interest on the Bonds and the giving of instructions or directions hereunder) as the sole Holder of the Bonds, and shall have no obligation to the Beneficial Owners of the Bonds;

(iii)        to the extent that the provisions of this Section 4.06 conflict with any other provisions of this Indenture, the provisions of this Section 4.06 shall control;

(iv)        the rights of Beneficial Owners shall be exercised only through the Depository and shall be limited to those established by law and agreements between such Owners of Bonds and the Depository and/or the Depository Participants. Unless and until Definitive Bonds are issued pursuant to Section 4.08, the initial Depository will make book-entry transfers among the Depository Participants and receive and transmit payments of principal of and interest on the Bonds to such Depository Participants; and

(v)        whenever this Indenture requires or permits actions to be taken based upon instructions or directions of Holders of Bonds evidencing a specified percentage of the Bond Principal Balances of the Bonds, the Depository shall be deemed to represent such percentage with respect to the Bonds only to the extent that it has received instructions to such effect from Beneficial Owners and/or Depository Participants owning or representing, respectively, such required percentage of the beneficial interest in the Bonds and has delivered such instructions to the Indenture Trustee.

Section 4.07     Notices to Depository.  Whenever a notice or other communication to the Bondholders is required under this Indenture, unless and until Definitive Bonds shall have been issued to Beneficial Owners pursuant to Section 4.08, the Indenture Trustee shall give all such notices and communications specified herein to be given to Holders of the Bonds to the Depository, and shall have no obligation to the Beneficial Owners.

Section 4.08    Definitive Bonds.  If (i) the Indenture Trustee determines that the Depository is no longer willing or able to properly discharge its responsibilities with respect to the Bonds and the Indenture Trustee is unable to locate a qualified successor, (ii) the Indenture Trustee elects to terminate the book-entry system through the Depository or (iii) after the occurrence of an Event of Default, Beneficial Owners of Bonds representing beneficial interests aggregating at least a majority of the Bond Principal Balances of the Bonds advise the Depository in writing that the continuation of a book-entry system through the Depository is no longer in the best interests of the Beneficial Owners, then the Depository shall notify all Beneficial Owners and the Indenture Trustee of the occurrence of any such event and of
the availability of Definitive Bonds to Beneficial Owners requesting the same. Upon surrender to the Indenture Trustee of the typewritten Bonds representing the Book-Entry Bonds by the Depository, accompanied by registration instructions, the Issuer shall execute and the Indenture 

 

Trustee shall authenticate the Definitive Bonds in accordance with the instructions of the Depository. None of the Issuer, the Bond Registrar or the Indenture Trustee shall be liable for 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 Bonds, the Indenture Trustee shall recognize the Holders of the Definitive Bonds as Bondholders.

Section 4.09     Tax Treatment.  The Issuer has entered into this Indenture, and the Bonds will be issued with the intention that, for federal, state and local income, single business and franchise tax purposes, the Bonds will qualify as indebtedness. The Issuer and the Indenture Trustee (in accordance with Section 6.06 hereof), by entering into this Indenture, and each Bondholder, by its acceptance of its Bond (and each Beneficial Owner by its acceptance of an interest in the applicable Book-Entry Bond), agree to treat the Bonds for federal, state and local income, single business and franchise tax purposes as indebtedness.

Section 4.10     Satisfaction and Discharge of Indenture.  This Indenture shall cease to be of further effect with respect to the Bonds except as to (i) rights of registration of transfer and exchange, (ii) substitution of mutilated, destroyed, lost or stolen Bonds, (iii) rights of Bondholders (and the Bond Insurer, as subrogee of the Class A-1 Bondholders and Class A-2 Bondholders) to receive payments of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09, 3.17, 3.19 and 3.20, (v) the rights and immunities of the Indenture Trustee hereunder including under Section 6.07 and the obligations of the Indenture Trustee under Section 4.11, (vi) the right of the related Derivative Contract Counterparty to receive the Basis Risk Net Derivative Fee and Class A-2 Derivative Fee, as applicable and (vii)
the rights of Bondholders as beneficiaries hereof with respect to the property so deposited with the Indenture Trustee payable to all or any of them, and the Indenture Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the Bonds and shall release and deliver the Collateral to or upon the order of the Issuer, when

	
            (A)
 	
            either
 

(1)        all Bonds theretofore authenticated and delivered (other than (i) Bonds that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 4.03 hereof and (ii) Bonds for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust, as provided in Section 3.03) have been delivered to the Indenture Trustee for cancellation; or

(2)        all Bonds not theretofore delivered to the Indenture Trustee for cancellation

	
            a.
 	
            have become due and payable,
 

	
            b.
 	
            will become due and payable at the Final Scheduled Payment Date within 

      one year, or
 

 

 

 

	
            c.
 	
            have been called for early redemption and the Trust has been terminated pursuant to Section 8.07 hereof,
 

and the Issuer, in the case of a. or b. above, has irrevocably deposited or caused to be irrevocably deposited with the Indenture Trustee cash or direct obligations of or obligations guaranteed by the United States of America (which will mature prior to the date such amounts are payable), in trust for such purpose, in an amount sufficient to pay and discharge the entire indebtedness on such Bonds then outstanding not theretofore delivered to the Indenture Trustee for cancellation when due on the Final Scheduled Payment Date or other final Payment Date and has delivered to the Indenture Trustee a verification report from a nationally recognized accounting firm certifying that the amounts deposited with the Indenture Trustee are sufficient to pay and discharge the entire indebtedness of such Bonds, or, in the case of c. above, the Issuer shall have complied with all requirements of Section 8.07 hereof, 

(B)        the Issuer has paid or caused to be paid all other sums payable hereunder; and

(C)       the Issuer has delivered to the Indenture Trustee and the Bond Insurer an Officer’s Certificate and an Opinion of Counsel, each meeting the applicable requirements of Section 10.01 hereof, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with and, if the Opinion of Counsel relates to a deposit made in connection with Section 4.10(A)(2)b. above, such opinion shall further be to the effect that such deposit will constitute an “in-substance defeasance” within the meaning of Revenue Ruling 85-42, 1985-1 C.B. 36, and in accordance therewith, the Issuer will be the owner of the assets deposited in trust for federal income tax purposes.

Section 4.11     Application of Trust Money.  All monies deposited with the Indenture Trustee pursuant to Section 4.10 hereof shall be held in trust and applied by it, in accordance with the provisions of the Bonds and this Indenture, to the payment, either directly or through any Paying Agent or the Issuer, Certificate Paying Agent as designee of the Issuer or the Bond Insurer, as the Indenture Trustee may determine, to the Holders of Securities, of all sums due and to become due thereon for principal and interest or otherwise; but such monies need not be segregated from other funds except to the extent required herein or required by law.

Section 4.12     Repayment of Monies Held by Paying Agent.  In connection with the satisfaction and discharge of this Indenture with respect to the Bonds, all monies then held by any Person other than the Indenture Trustee under the provisions of this Indenture with respect to such Bonds shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held and applied according to Section 3.05 and thereupon such Person shall be released from all further liability with respect to such monies.

Section 4.13     Temporary Bonds.  Pending the preparation of any Definitive Bonds, the Issuer may execute and upon its written direction, the Indenture Trustee may authenticate and make available for delivery, temporary Bonds that are printed, lithographed, typewritten, photocopied or otherwise produced, in any denomination, substantially of the tenor of the Definitive Bonds in lieu of which they are issued and with such appropriate insertions, 

 

omissions, substitutions and other variations as the officers executing such Bonds may determine, as evidenced by their execution of such Bonds.

If temporary Bonds are issued, the Issuer will cause Definitive Bonds to be prepared without unreasonable delay. After the preparation of the Definitive Bonds, the temporary Bonds shall be exchangeable for Definitive Bonds upon surrender of the temporary Bonds at the office of the Indenture Trustee’s agent located at DB Services Tennessee, 648 Grassmere Park Road, Nashville, TN 37211-3658, Attn: Transfer Unit, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Bonds, the Issuer shall execute and the Indenture Trustee shall authenticate and make available for delivery, in exchange therefor, Definitive Bonds of authorized denominations and of like tenor, class and aggregate principal amount. Until so exchanged, such temporary Bonds shall in all respects be entitled to the same benefits under this Indenture as Definitive Bonds.

	
            Section 4.14
 	
            [Reserved]
 

Section 4.15     Representation Regarding ERISA.  By acquiring a Bond or interest therein, each Holder of such Bond or Beneficial Owner of any such interest will be deemed to represent that either (1) it is not acquiring the Bond with Plan Assets or (2) (A) the acquisition, holding and transfer of such Bond will not give rise to a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code as a result of the Issuer, the Seller, the Depositor, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master Servicer, any Subservicer, any other servicer, any administrator, any provider of credit support, including the Derivative Contract Counterparties, any owner of the Certificates, or any of their Affiliates being a “Party in Interest” (within the meaning of ERISA) or
Disqualified Person (within the meaning of the Code) with respect to such holder or Beneficial Owner that is a Plan and (B) the Bonds are rated investment grade or better and such Person believes that the Bonds are properly treated as indebtedness without substantial equity features for purposes of the Department of Labor regulation 29 C.F.R. § 2510.3-101, and agrees to so treat the Bonds. Alternatively, regardless of the rating of the Bonds, such Person may provide the Indenture Trustee and the Owner Trustee with an opinion of counsel, which opinion of counsel will not be at the expense of the Issuer, the Seller, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master Servicer or any successor servicer which opines that the acquisition, holding and transfer of such Bond or interest therein is permissible under applicable law, will not constitute or result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code and will not subject the Issuer,
the Seller, the Depositor, any Underwriter, the Owner Trustee, the Indenture Trustee,  the Master Servicer or any successor servicer to any obligation in addition to those undertaken in the Indenture.

 

 

ARTICLE V

 

Default and Remedies

Section 5.01     Events of Default.  The Issuer shall deliver to the Indenture Trustee and the Bond Insurer, within five days after learning of the occurrence of an Event of Default, written notice in the form of an Officer’s Certificate of any event which with the giving of notice and the lapse of time would become an Event of Default under clause (iii) or (iv) of the definition of “Event of Default”, its status and what action the Issuer is taking or proposes to take with respect thereto. The Indenture Trustee shall not be deemed to have knowledge of any Event of Default unless a Responsible Officer has actual knowledge thereof or unless written notice of such Event of Default is received by a Responsible Officer and such notice references the Bonds, the Trust Estate or this Indenture.

Section 5.02     Acceleration of Maturity; Rescission and Annulment.  If an Event of Default should occur and be continuing, then and in every such case the Indenture Trustee at the written direction of the Holders of Bonds representing not less than a majority of the aggregate Bond Principal Balance of the Bonds may declare the Bonds to be immediately due and payable, by a notice in writing to the Issuer (and to the Indenture Trustee if such notice is given by the Bondholders), and upon any such declaration the unpaid Bond Principal Balance of the Bonds, together with accrued and unpaid interest thereon through the date of acceleration shall become immediately due and payable; provided, however, that for purposes of this sentence and for purposes of this Article V, unless a Bond Insurer Default exists, the Bond
Insurer may exercise the rights of all of the Holders of the Class A Bonds.

At any time after such declaration of acceleration of maturity with respect to an Event of Default has been made and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee as hereinafter in this Article V provided, the Holders of the Bonds representing not less than a majority of the aggregate Bond Principal Balance of the Bonds, by written notice to the Issuer and the Indenture Trustee, may waive the related Event of Default and rescind and annul such declaration and its consequences if

(i)         the Issuer or the Bond Insurer has paid or deposited with the Indenture Trustee a sum sufficient to pay:

	
            (A)
 	
            all payments of principal of and interest on the Bonds and all other amounts that would then be due hereunder or upon the Bonds if the Event of Default giving rise to such acceleration had not occurred;
 
	
            (B)
 	
            all sums paid or advanced by the Indenture Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and counsel; and
 

	
            (C)
 	
            all amounts owed to the Derivative Contract Counterparties;
 

 

 

 

(ii)         all Events of Default, other than the nonpayment of the principal of the Bonds that has become due solely by such acceleration, have been cured or waived as provided in Section 5.12.

No such rescission shall affect any subsequent default or impair any right consequent thereto.

Section 5.03     Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.

(a)        The Issuer covenants that if (i) default is made in the payment of any interest on any Bond when the same becomes due and payable, and such default continues for a period of five days, or (ii) default is made in the payment of the principal of or any installment of the principal of any Bond when the same becomes due and payable, the Issuer shall, upon demand of the Indenture Trustee, at the direction of the Bond Insurer, so long as no Bond Insurer Default exists, or if a Bond Insurer Default does exist, at the direction of the Holders of a majority of the aggregate Bond Principal Balances of the Bonds, pay to the Indenture Trustee, for the benefit of the Holders of Bonds, the whole amount then due and payable on the Bonds for principal and interest, with interest at the applicable Bond Interest Rate upon the overdue principal, and in
addition thereto such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and counsel.

(b)        In case the Issuer shall fail forthwith to pay such amounts upon such demand, the Indenture Trustee, in its own name and as trustee of an express trust, and at the direction of the Bond Insurer, so long as no Bond Insurer Default exists, subject to the provisions of Section 10.16 hereof may institute a Proceeding for the collection of the sums so due and unpaid, and may prosecute such Proceeding to judgment or final decree, and may enforce the same against the Issuer or other obligor upon the Bonds and collect in the manner provided by law out of the property of the Issuer or other obligor the Bonds, wherever situated, the monies adjudged or decreed to be payable.

(c)        If an Event of Default occurs and is continuing, the Indenture Trustee, at the direction of the Bond Insurer, so long as no Bond Insurer Default exists subject to the provisions of Section 10.16 hereof may, as more particularly provided in Section 5.04 hereof, in its discretion, proceed to protect and enforce its rights and the rights of the Bondholders and the Bond Insurer, by such appropriate Proceedings, as the Indenture Trustee shall be directed by the Bond Insurer, so long as no Bond Insurer Default exists, to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture or by law.

(d)        In case there shall be pending, relative to the Issuer or any other obligor upon the Bonds or any Person having or claiming an ownership interest in the Trust Estate, Proceedings under Title 11 of the United States Code or any other applicable federal or state bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuer or its property or such other obligor or Person, or in case of any other 

 

comparable judicial Proceedings relative to the Issuer or other obligor upon the Bonds, or to the creditors or property of the Issuer or such other obligor, the Indenture Trustee, at the direction of the Bond Insurer, so long as no Bond Insurer Default exists, irrespective of whether the principal of any Bonds shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any demand pursuant to the provisions of this Section, shall be entitled and empowered, by intervention in such Proceedings or otherwise:

(i)         to file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of the Bonds and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for reasonable compensation to the Indenture Trustee and each predecessor Indenture Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee, except as a result of negligence or bad faith), the Bond Insurer and of the Bondholders allowed in such Proceedings;

(ii)         unless prohibited by applicable law and regulations, to vote on behalf of the Holders of Bonds in any election of a trustee, a standby trustee or Person performing similar functions in any such Proceedings;

(iii)        to collect and receive any monies or other property payable or deliverable on any such claims and to distribute all amounts received with respect to the claims of the Bondholders, the Bond Insurer and of the Indenture Trustee on their behalf, and

(iv)        to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee, the Bond Insurer or the Holders of Bonds allowed in any judicial proceedings relative to the Issuer, its creditors and its property;

and any trustee, receiver, liquidator, custodian or other similar official in any such Proceeding is hereby authorized by each of such Bondholders to make payments to the Indenture Trustee with the consent of the Bond Insurer so long as no Bond Insurer Default exists and, in the event that the Indenture Trustee shall consent to the making of payments directly to such Bondholders, to pay to the Indenture Trustee such amounts as shall be sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee and all amounts due to the Bond Insurer.

(e)        Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Bondholder any plan of reorganization, arrangement, adjustment or composition affecting the Bonds or the rights of any Holder thereof or to authorize the Indenture Trustee to vote in respect of the claim of any Bondholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar Person.

 

 

(f)         All rights of action and of asserting claims under this Indenture, or under any of the Bonds, may be enforced by the Indenture Trustee without the possession of any of the Bonds or the production thereof in any trial or other Proceedings relative thereto, and any such action or proceedings instituted by the Indenture Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Indenture Trustee, each predecessor Indenture Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of the Bonds, subject to Section 5.05 hereof.

(g)        In any Proceedings brought by the Indenture Trustee with the consent of the Bond Insurer so long as no Bond Insurer Default exists (and also any Proceedings involving the interpretation of any provision of this Indenture to which the Indenture Trustee shall be a party), the Indenture Trustee shall be held to represent all the Holders of the Bonds, and it shall not be necessary to make any Bondholder a party to any such Proceedings.

Section 5.04     Remedies; Priorities.  (a) If an Event of Default shall have occurred and be continuing and if an acceleration has been declared and not rescinded pursuant to Section 5.02 hereof, the Indenture Trustee subject to the provisions of Section 10.16 hereof may with the consent of the Bond Insurer so long as no Bond Insurer Default exists, and shall, at the written direction of the Bond Insurer so long as no Bond Insurer Default exists, do one or more of the following (subject to Section 5.05 hereof):

(i)         institute Proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the Bonds or under this Indenture with respect thereto, whether by declaration or otherwise, and all amounts payable under the Insurance Agreement, enforce any judgment obtained, and collect from the Issuer and any other obligor upon such Bonds monies adjudged due;

(ii)         institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Trust Estate;

(iii)        exercise any remedies of a secured party under the UCC and take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee and the Holders of the Bonds and the Bond Insurer; and

(iv)        sell the Trust Estate or any portion thereof or rights or interest therein, at one or more public or private sales called and conducted in any manner permitted by law;

provided, however, that so long as a Bond Insurer Default exists the Indenture Trustee may not sell or otherwise liquidate the Trust Estate following an Event of Default, unless (A) the Indenture Trustee obtains the consent of the Holders of 100% of the aggregate Bond Principal Balance of the Bonds, (B) the proceeds of such sale or liquidation distributable to the Holders of the Bonds are sufficient to discharge in full all amounts then due and unpaid upon such Bonds for principal and interest and to reimburse the Bond Insurer for any amounts drawn under the Bond Insurance Policy and any other amounts due to the Bond Insurer under the Insurance Agreement or (C) the Indenture Trustee determines that the Mortgage Loans will not continue to provide sufficient funds for the payment of principal of and interest on the applicable Bonds as 

 

they would have become due if the Bonds had not been declared due and payable, and the Indenture Trustee obtains the consent of the Holders of a majority of the aggregate Bond Principal Balance of the Bonds. In determining such sufficiency or insufficiency with respect to clause (B) and (C), the Indenture Trustee may, but need not, obtain and rely upon an opinion (obtained at the expense of the Trust) of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Trust Estate for such purpose. Notwithstanding the foregoing, so long as an Event of Servicer Termination has not occurred, any Sale of the Trust Estate shall be made subject to the continued servicing of the Mortgage Loans by the Master Servicer as provided in the Servicing Agreement.

(b)        If the Indenture Trustee collects any money or property with respect to the Mortgage Loans pursuant to this Article V, it shall pay out the money or property in the following order; provided, however, that any amounts representing payments from the Bond Insurer shall only be used to pay interest and principal to the Class A-1 Bondholders and Class A-2 Bondholders pursuant to clauses FOURTH and FIFTH below:

FIRST: to the Indenture Trustee for amounts due under Section 6.07 hereof;

SECOND: to the related Derivative Contract Counterparty, any amounts owed under the Derivative Contracts, other than any Additional Derivative Contract Counterparty Payment;

THIRD: to the Bond Insurer, provided no Bond Insurer Default exists, with respect to any Policy Premium Fee then due to the extent unpaid pursuant to the Servicing Agreement;

FOURTH: to the Bondholders for amounts due and unpaid on the Bonds (including Unpaid Interest Shortfalls but not including any Basis Risk Shortfall Carry-Forward Amounts) with respect to interest, first, concurrently, to the Class A-1 Bonds and Class A-2 Bonds, on a pro rata basis, and second, sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class B Bonds, in that order, according to the amounts due and payable on the Bonds for interest;

FIFTH: to the Bondholders for amounts due and unpaid on the Bonds with respect to principal, and to each Bondholder, pro rata, without preference or priority of any kind, according to the amounts due and payable on such Bonds for principal, until the Bond Principal Balance of each such Class is reduced to zero;

SIXTH: to the payment of all amounts due and owing to the Bond Insurer under the Insurance Agreement (including any Premium Amount not paid pursuant to clause THIRD above);

SEVENTH: to the Bondholders, first, concurrently, to the Class A-1 Bonds and Class A-2 Bonds, on a pro rata basis, and second, sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class B Bonds, in that order, the amount of any related Allocated Realized Loss Amount not previously paid;

 

 

EIGHTH: to the Bondholders for amounts due and unpaid on the Bonds with respect to any related Unpaid Interest Shortfalls, first, concurrently, to the Class A-1 Bonds and Class A-2 Bonds, on a pro rata basis, and second, sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class B Bonds, in that order, according to the amounts due and payable on the Bonds with respect thereto, from amounts available in the Trust Estate for the Bondholders;

NINTH: to the Bondholders for amounts due and unpaid on the Bonds with respect to any related Basis Risk Shortfall Carry-Forward Amounts, first, concurrently, to the Class A-1 Bonds and Class A-2 Bonds, on a pro rata basis, and second, sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class B Bonds, in that order, according to the amounts due and payable on the Bonds with respect thereto, from amounts available in the Trust Estate for the Bondholders to the extent not covered by the Basis Risk Derivative Contracts; provided, however, that any Basis Risk Shortfall Carry-Forward Amount on the Class A-2 Bonds (including any previously accrued but unpaid Basis Risk Shortfall Carry-Forward Amount relating to the Class A-2 Bonds that was owing the Class A-2 Derivative Contract Counterparty) shall be directed to the related Derivative
Contract Counterparty unless a Class A-2 Derivative Contract Counterparty Termination Event is in effect; provided, however, that in such event the Holder of the Class A-2 Bonds will be entitled to receive any Basis Risk Shortfall Carry-Forward Amounts that arise on and after the Payment Date when the Class A-2 Derivative Contract Counterparty Termination Event occurs;

TENTH: to the related Derivative Contract Counterparty, any Additional Derivative Contract Counterparty Payment; and

ELEVENTH: to the payment of the remainder, if any to the Certificate Paying Agent on behalf of the Issuer or to any other person legally entitled thereto.

The Indenture Trustee may fix a record date and Payment Date for any payment to Bondholders pursuant to this Section 5.04. At least 15 days before such record date, the Indenture Trustee shall mail to each Bondholder a notice that states the record date, the Payment Date and the amount to be paid.

Section 5.05     Optional Preservation of the Trust Estate.  If the Bonds have been declared to be due and payable under Section 5.02 following an Event of Default and such declaration and its consequences have not been rescinded and annulled, the Indenture Trustee may with the consent of the Bond Insurer (which consent shall not be required if a Bond Insurer Default exists) and, shall, at the direction of the Bond Insurer so long as no Bond Insurer Default exists, elect to take and maintain possession of the Trust Estate. It is the desire of the parties hereto and the Bondholders that there be at all times sufficient funds for the payment of principal of and interest on the Bonds and other obligations of the Issuer, including payment to the Bond Insurer, and the Indenture Trustee, unless directed otherwise by the
Bond Insurer, shall take such desire into account when determining whether or not to take and maintain possession of the Trust Estate. In determining whether to take and maintain possession of the Trust Estate, the Indenture Trustee may, but need not, obtain and rely upon an opinion of an Independent investment 

 

banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Trust Estate for such purpose.

Section 5.06     Limitation of Suits.  No Bondholder of any Bond shall have any right to institute any Proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless and subject to the provisions of Section 10.16 hereof,

(i)         such Holder has previously given written notice to the Indenture Trustee of a continuing Event of Default;

(ii)         the Holders of not less than 25% of the aggregate Bond Principal Balances of the Bonds have made a written request to the Indenture Trustee to institute such Proceeding in respect of such Event of Default in its own name as Indenture Trustee hereunder;

(iii)        such Holder or Holders have offered to the Indenture Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in complying with such request;

(iv)        the Indenture Trustee for 60 days after its receipt of such notice of request and offer of indemnity has failed to institute such Proceedings; and

(v)        no direction inconsistent with such written request has been given to the Indenture Trustee during such 60-day period by the Holders of a majority of the Bond Principal Balances of the Bonds; and

(vi)        such Holder or Holders have the written consent of the Bond Insurer, unless a Bond Insurer Default exists.

It is understood and intended that no one or more Holders of Bonds shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders of Bonds or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided.

Subject to the last paragraph of Section 5.11 herein, in the event the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of Holders of Bonds, each representing less than a majority of the Bond Principal Balances of the Bonds, the Indenture Trustee in its sole discretion may determine what action, if any, shall be taken, notwithstanding any other provisions of this Indenture.

Section 5.07     Unconditional Rights of Bondholders To Receive Principal and Interest.  Notwithstanding any other provisions in this Indenture, the Holder of any Bond shall have the right, which is absolute and unconditional, to receive payment of the interest and, with respect to all of the Bonds, principal, if any, on such Bond on or after the respective due dates thereof 

 

expressed in such Bond or in this Indenture and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Bondholder.

Section 5.08     Restoration of Rights and Remedies.  If the Indenture Trustee or any Bondholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason or has been determined adversely to the Indenture Trustee, the Bond Insurer or to such Bondholder, then and in every such case the Issuer, the Indenture Trustee, the Bond Insurer and the Bondholders shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Indenture Trustee, the Bond Insurer and the Bondholders shall continue as though no such Proceeding had been instituted.

Section 5.09     Rights and Remedies Cumulative.  No right or remedy herein conferred upon or reserved to the Indenture Trustee, to the Bond Insurer or to the Bondholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 5.10     Delay or Omission Not a Waiver.  No delay or omission of the Indenture Trustee, the Bond Insurer or any Holder of any Bond to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article V or by law to the Indenture Trustee, the Bond Insurer or to the Bondholders may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee, by the Bond Insurer or by the Bondholders, as the case may be.

Section 5.11     Control By the Bond Insurer.  The Bond Insurer, unless a Bond Insurer Default exists, or the Holders of a majority of the aggregate Bond Principal Balances of the Bonds, if a Bond Insurer Default exists, shall have the right (subject to the provisions of Section 5.06) to direct the time, method and place of conducting any Proceeding for any remedy available to the Indenture Trustee with respect to the Bonds or exercising any trust or power conferred on the Indenture Trustee; provided that:

(i)         such direction shall not be in conflict with any rule of law or with this Indenture;

(ii)         if a Bond Insurer Default exists, any direction to the Indenture Trustee to sell or liquidate the Trust Estate shall be by Holders of Bonds representing not less than 100% of the Bond Principal Balances of the Bonds; 

(iii)        if the conditions set forth in Section 5.05 hereof have been satisfied and the Indenture Trustee, with the consent of the Bond Insurer (which consent shall not be required if a Bond Insurer Default exists), elects to retain, or at the direction of the Bond Insurer, retains the Trust Estate pursuant to such Section, then any direction to the Indenture Trustee by Holders of Bonds representing less than 100% of the Bond Principal 

 

Balances of the Bonds to sell or liquidate the Trust Estate shall be of no force and effect; and

(iv)        the Indenture Trustee may take any other action deemed proper by the Indenture Trustee that is not inconsistent with such direction of the Holders of Bonds representing a majority of the Bond Principal Balances of the Bonds.

Notwithstanding the rights of Bondholders set forth in this Section 5.11 the Indenture Trustee need not take any action that it determines might involve it in liability.

Section 5.12     Waiver of Past Defaults.  Prior to the declaration of the acceleration of the maturity of the Bonds as provided in Section 5.02 hereof, the Holders of Bonds representing not less than a majority of the aggregate Bond Principal Balance of the Bonds may waive any past Event of Default and its consequences except an Event of Default (a) with respect to payment of principal of or interest on any of the Bonds, (b) in respect of a covenant or provision hereof which cannot be modified or amended without the consent of the Holder of each Bond or (c) the waiver of which would materially and adversely affect the interests of the Bond Insurer or modify its obligations under the Bond Insurance Policy.  In the case of any such waiver, the Issuer, the Indenture Trustee and the Holders of the Bonds shall be
restored to their former positions and rights hereunder, respectively, but no such waiver shall extend to any subsequent or other Event of Default or impair any right consequent thereto.

Upon any such waiver, any Event of Default arising therefrom shall be deemed to have been cured and not to have occurred, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Event of Default or impair any right consequent thereto.

Section 5.13     Undertaking for Costs.  All parties to this Indenture agree, and each Holder of any Bond and each Beneficial Owner of any interest therein by such Holder’s or Beneficial Owner’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section 5.13 shall not apply to (a) any suit instituted by the Indenture Trustee, (b) any suit instituted by any Bondholder, or group of Bondholders, in each case holding in the aggregate more than 10% of the Bond Principal Balances of the Bonds or (c) any suit instituted by any Bondholder for the enforcement of the payment of principal of or interest on any Bond on or after the respective due dates expressed in such Bond and in this Indenture.

Section 5.14     Waiver of Stay or Extension Laws.  The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead or in any manner whatsoever, claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not hinder, delay or 

 

impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

Section 5.15     Sale of Trust Estate.  (a) The power to effect any sale or other disposition (a “Sale”) of any portion of the Trust Estate pursuant to Section 5.04 hereof is expressly subject to the provisions of Section 5.05 hereof and this Section 5.15. The power to effect any such Sale shall not be exhausted by any one or more Sales as to any portion of the Trust Estate remaining unsold, but shall continue unimpaired until the entire Trust Estate shall have been sold or all amounts payable on the Bonds and under this Indenture and under the Insurance Agreement shall have been paid. The Indenture Trustee with the consent of the Bond Insurer (which consent shall not be required if a Bond Insurer Default exists), may from time to time postpone any public Sale by public announcement made at the time and
place of such Sale. The Indenture Trustee hereby expressly waives its right to any amount fixed by law as compensation for any Sale.

(b)        The Indenture Trustee shall not in any private Sale sell the Trust Estate, or any portion thereof, unless

(1)        the Bond Insurer, unless a Bond Insurer Default exists, or the Holders of all Bonds if a Bond Insurer Default exists, consent to or direct the Indenture Trustee to make, such Sale, or

(2)        the proceeds of such Sale would be not less than the entire amount which would be payable to the Bondholders under the Bonds and the Bond Insurer in respect of amounts drawn under the Bond Insurance Policy and any other amounts due to the Bond Insurer under the Insurance Agreement, in full payment thereof in accordance with Section 5.02 hereof, on the Payment Date next succeeding the date of such Sale, or

(3)        the Indenture Trustee determines that the conditions for retention of the Trust Estate set forth in Section 5.05 hereof cannot be satisfied (in making any such determination, the Indenture Trustee may rely upon an opinion of an Independent investment banking firm obtained and delivered as provided in Section 5.05 hereof) and the Bond Insurer consents to such Sale, or if a Bond Insurer Default exists, the Holders of Bonds representing at least 100% of the Bond Principal Balances of the Bonds consent to such Sale.

The purchase by the Indenture Trustee of all or any portion of the Trust Estate at a private Sale shall not be deemed a Sale or other disposition thereof for purposes of this Section 5.15(b).

(c)        Unless the Bond Insurer, or if a Bond Insurer Default exists, the Holders representing at least 66-2/3% of the Bond Principal Balances of the Bonds have otherwise consented or directed the Indenture Trustee, at any public Sale of all or any portion of the Trust Estate at which a minimum bid equal to or greater than the amount described in paragraph (2) of subsection (b) of this Section 5.15 has not been established by the Indenture Trustee and no Person bids an amount equal to or greater than such amount, the Indenture Trustee, as trustee for the benefit of the Holders of the Bonds, shall bid an amount at least $1.00 more than the highest other bid.

 

 

	
            (d)
 	
            In connection with a Sale of all or any portion of the Trust Estate,
 

(1)        any Holder or Holders of Bonds may bid for and purchase the property offered for sale, and upon compliance with the terms of sale may hold, retain and possess and dispose of such property, without further accountability, and may, in paying the purchase money therefor, deliver any Bonds or claims for interest thereon in lieu of cash up to the amount which shall, upon distribution of the net proceeds of such Sale, be payable thereon, and such Bonds, in case the amounts so payable thereon shall be less than the amount due thereon, shall be returned to the Holders thereof after being appropriately stamped to show such partial payment;

(2)        the Indenture Trustee, with the consent of the Bond Insurer so long as no Bond Insurer Default exists, may bid for and acquire the property offered for Sale in connection with any Sale thereof, and, subject to any requirements of, and to the extent permitted by, applicable law in connection therewith, may purchase all or any portion of the Trust Estate in a private sale, and, in lieu of paying cash therefor, may make settlement for the purchase price by crediting the gross Sale price against the sum of (A) the amount which would be distributable to the Holders of the Bonds and Holders of Certificates and amounts distributable to the Bond Insurer as a result of such Sale in accordance with Section 5.04(b) hereof on the Payment Date next succeeding the date of such Sale and (B) the expenses of the Sale and of any
Proceedings in connection therewith which are reimbursable to it, without being required to produce the Bonds in order to complete any such Sale or in order for the net Sale price to be credited against such Bonds, and any property so acquired by the Indenture Trustee shall be held and dealt with by it in accordance with the provisions of this Indenture;

(3)        the Indenture Trustee shall execute and deliver an appropriate instrument of conveyance, prepared by the Issuer and satisfactory to the Indenture Trustee, transferring its interest in any portion of the Trust Estate in connection with a Sale thereof;

(4)        the Indenture Trustee is hereby irrevocably appointed the agent and attorney-in-fact of the Issuer to transfer and convey its interest in any portion of the Trust Estate in connection with a Sale thereof, and to take all action necessary to effect such Sale; and

(5)        no purchaser or transferee at such a Sale shall be bound to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any monies.

Section 5.16     Action on Bonds.  The Indenture Trustee’s right to seek and recover judgment on the Bonds or under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture. Neither the lien of this Indenture nor any rights or remedies of the Indenture Trustee or the Bondholders shall be impaired by the recovery of any judgment by the Indenture Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Trust Estate or upon any of 

 

the assets of the Issuer. Any money or property collected by the Indenture Trustee shall be applied in accordance with Section 5.04(b) hereof.

Section 5.17     Performance and Enforcement of Certain Obligations.  (a) Promptly following a request from the Indenture Trustee to do so, the Issuer in its capacity as Holder of the Mortgage Loans, shall take all such lawful action as the Indenture Trustee or the Bond Insurer may request to cause the Issuer to compel or secure the performance and observance by the Seller and the Master Servicer, as applicable, of each of their obligations to the Issuer under or in connection with the Mortgage Loan Purchase Agreement and the Servicing Agreement, and to exercise any and all rights, remedies, powers and privileges lawfully available to the Issuer under or in connection with the Mortgage Loan Purchase Agreement and the Servicing Agreement to the extent and in the manner directed by the Indenture Trustee, with the
consent of the Bond Insurer so long as no Bond Insurer Default exists, as pledgee of the Mortgage Loans, including the transmission of notices of default on the part of the Seller or the Master Servicer thereunder and the institution of legal or administrative actions or proceedings to compel or secure performance by the Seller or the Master Servicer of each of their obligations under the Mortgage Loan Purchase Agreement and the Servicing Agreement. So long as no Bond Insurer Default exists, the Bond Insurer shall have the right to approve or reject any proposed successor to the Master Servicer (other than the Indenture Trustee) under the Servicing Agreement. 

(b)        The Indenture Trustee, subject to the rights of the Bond Insurer under this Agreement and the Servicing Agreement, as pledgee of the Mortgage Loans may, and at the direction (which direction shall be in writing or by telephone (confirmed in writing promptly thereafter) of the Bond Insurer or if a Bond Insurer Default exists, of the Holders of 66-2/3% of the Bond Principal Balances of the Bonds, shall exercise all rights, remedies, powers, privileges and claims of the Issuer against the Seller or the Master Servicer under or in connection with the Mortgage Loan Purchase Agreement and the Servicing Agreement, including the right or power to take any action to compel or secure performance or observance by the Seller or the Master Servicer, as the case may be, of each of their obligations to the Issuer thereunder and to give any consent,
request, notice, direction, approval, extension or waiver under the Mortgage Loan Purchase Agreement and the Servicing Agreement, as the case may be, and any right of the Issuer to take such action shall not be suspended.

 

 

ARTICLE VI

 

The Indenture Trustee

Section 6.01     Duties of Indenture Trustee.  (a)  If an Event of Default has occurred and is continuing, the Indenture Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

	
            (b)
 	
            Except during the continuance of an Event of Default:
 

(i)         the Indenture Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee; and

(ii)         in the absence of bad faith on its part, the Indenture Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Indenture Trustee and conforming to the requirements of this Indenture; however, the Indenture Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.

(c)        The Indenture Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

(i)         this paragraph does not limit the effect of paragraph (b) of this Section 6.01;

(ii)         the Indenture Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer unless it is proved that the Indenture Trustee was negligent in ascertaining the pertinent facts; and

(iii)        the Indenture Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it (A) from Bondholders or from the Issuer, which they are entitled to give under the Basic Documents or (B) from the Bond Insurer, which it is entitled to give under the Basic Documents.

(d)        The Indenture Trustee shall not be liable for interest on any money received by it except as the Indenture Trustee may agree in writing with the Issuer.

(e)        Money held in trust by the Indenture Trustee need not be segregated from other trust funds except to the extent required by law or the terms of this Indenture or the Trust Agreement.

(f)         No provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to 

 

believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

(g)        Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Indenture Trustee shall be subject to the provisions of this Section and to the provisions of the TIA.

(h)        The Indenture Trustee shall act in accordance with Sections 6.03 and 6.04 of the Servicing Agreement and shall act as successor to the Master Servicer or appoint a successor Master Servicer in accordance with Section 6.02 of the Servicing Agreement.

Section 6.02     Rights of Indenture Trustee.  (a) The Indenture Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Indenture Trustee need not investigate any fact or matter stated in the document.

(b)        Before the Indenture Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel. The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on an Officer’s Certificate or Opinion of Counsel.

(c)        The Indenture Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or a custodian or nominee.

(d)        The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, however, that the Indenture Trustee’s conduct does not constitute willful misconduct, negligence or bad faith.

(e)        The Indenture Trustee may consult with counsel, and the advice or Opinion of Counsel with respect to legal matters relating to this Indenture and the Bonds shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

(f)         For the limited purpose of effecting any action to be undertaken by the Indenture Trustee, but not specifically as a duty of the Indenture Trustee in the Indenture, the Indenture Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder, either directly or by or through agents, attorneys, custodians or nominees appointed with due care, and shall not be responsible for any willful misconduct or negligence on the part of any agent, attorney, custodian or nominee so appointed.

(g)        The Indenture Trustee or its Affiliates are permitted to receive additional compensation that could be deemed to be in the Indenture Trustee’s economic self-interest for (i) serving as investment adviser, administrator, shareholder servicing agent, custodian or sub-custodian with respect to certain of the Eligible Investments, (ii) using Affiliates to effect transactions in certain Eligible Investments and (iii) effecting transactions in certain Eligible 

 

Investments. Such compensation shall not be considered an amount that is reimbursable or payable to the Indenture Trustee pursuant to Sections 3.05(d), 3.05(h), 5.04(b), 6.07 or 8.02(c) hereunder or (iii) out of Available Funds.

(h)        In order to comply with its duties under the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“U.S.A. Patriot Act”), the Indenture Trustee shall obtain and verify certain information and documentation from the other party to this Indenture, including, but not limited to, such party’s name, address, and other identifying information.

Section 6.03     Individual Rights of Indenture Trustee.  The Indenture Trustee in its individual or any other capacity may become the owner or pledgee of Bonds and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Indenture Trustee, subject to the requirements of the Trust Indenture Act. Any Bond Registrar, co-registrar or co-paying agent may do the same with like rights. However, the Indenture Trustee must comply with Sections 6.11 and 6.12 hereof.

Section 6.04     Indenture Trustee’s Disclaimer.  The Indenture Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Bonds, it shall not be accountable for the Issuer’s use of the proceeds from the Bonds, and it shall not be responsible for any statement of the Issuer in the Indenture or in any document issued in connection with the sale of the Bonds or in the Bonds other than the Indenture Trustee’s certificate of authentication.

Section 6.05     Notice of Event of Default.  Subject to Section 5.01, the Indenture Trustee shall promptly mail to each Bondholder and the Bond Insurer notice of the Event of Default after it is known to a Responsible Officer of the Indenture Trustee, unless such Event of Default shall have been waived or cured. Except in the case of an Event of Default in payment of principal of or interest on any Bond, the Indenture Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of Bondholders.

Section 6.06     Reports by Indenture Trustee to Bondholders and Tax Administration.  The Indenture Trustee shall deliver to each Bondholder such information as may be required to enable such Holder to prepare its federal and state income tax returns.

The Indenture Trustee shall prepare and file (or cause to be prepared and filed), on behalf of the Owner Trustee, all tax returns (if any) and information reports, tax elections and such annual or other reports of the Issuer as are necessary for preparation of tax returns and information reports as provided in Section 5.03 of the Trust Agreement, including without limitation Form 1099. All tax returns and information reports shall be signed by the Owner Trustee as provided in Section 5.03 of the Trust Agreement.

Section 6.07     Compensation and Indemnity.  The Issuer shall pay to the Indenture Trustee on each Payment Date reasonable compensation for its services. On each Payment Date, the Indenture Trustee shall pay itself from amounts available therefore on deposit in the Payment Account for such Payment Date all amounts owing to the Indenture Trustee hereunder (including 

 

amounts owing from the Issuer for indemnification and otherwise) as provided in Section 3.05(d)(vi), Section 5.04(b) and Section 8.02(c) hereof and Appendix A hereto. The Indenture Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall reimburse the Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to compensation for its services. Such expenses shall include reasonable compensation and expenses, disbursements and advances of the Indenture Trustee’s agents, counsel, accountants and experts. The Issuer shall indemnify the Indenture Trustee against any and all loss, liability or expense (including attorneys’ fees) incurred by it in connection with the administration of this Trust and the performance of its duties hereunder. The Indenture Trustee shall
notify the Issuer promptly of any claim for which it may seek indemnity. Failure by the Indenture Trustee to so notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall defend any such claim, and the Indenture Trustee may have separate counsel and the Issuer shall pay the fees and expenses of such counsel. The Issuer is not obligated to reimburse any expense or indemnify against any loss, liability or expense incurred by the Indenture Trustee through the Indenture Trustee’s own willful misconduct, negligence or bad faith.

The Issuer’s payment obligations to the Indenture Trustee pursuant to this Section 6.07 shall survive the discharge of this Indenture and the termination or resignation of the Indenture Trustee. When the Indenture Trustee incurs expenses after the occurrence of an Event of Default with respect to the Issuer, the expenses are intended to constitute expenses of administration under Title 11 of the United States Code or any other applicable federal or state bankruptcy, insolvency or similar law.

Section 6.08     Replacement of Indenture Trustee.  No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture Trustee shall become effective until the acceptance of appointment by the successor Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee may resign at any time by so notifying the Issuer and the Bond Insurer. The Bond Insurer or, if a Bond Insurer Default exists, the Holders of a majority of Bond Principal Balances of the Bonds may remove the Indenture Trustee by so notifying the Indenture Trustee and may appoint a successor Indenture Trustee. The Issuer shall, with the consent of the Bond Insurer so long as no Bond Insurer Default exists, remove the Indenture Trustee if:

	
            (i)
 	
            the Indenture Trustee fails to comply with Section 6.11 hereof;
 
	
            (ii)
 	
            the Indenture Trustee is adjudged a bankrupt or insolvent;
 	
             

(iii)        a receiver or other public officer takes charge of the Indenture Trustee or its property; or

	
            (iv)
 	
            the Indenture Trustee otherwise becomes incapable of acting.
 

If the Indenture Trustee resigns or is removed or if a vacancy exists in the office of the Indenture Trustee for any reason (the Indenture Trustee in such event being referred to herein as the retiring Indenture Trustee), the Issuer shall, with the consent of the Bond Insurer so long as no Bond Insurer Default exists, promptly appoint a successor Indenture Trustee.

 

 

A successor Indenture Trustee shall deliver a written acceptance of its appointment to the retiring Indenture Trustee, to the Bond Insurer and to the Issuer. Thereupon, the resignation or removal of the retiring Indenture Trustee shall become effective, and the successor Indenture Trustee shall have all the rights, powers and duties of the Indenture Trustee under this Indenture. The successor Indenture Trustee shall mail a notice of its succession to Bondholders. The retiring Indenture Trustee shall promptly transfer all property held by it as Indenture Trustee to the successor Indenture Trustee.

If a successor Indenture Trustee does not take office within 60 days after the retiring Indenture Trustee resigns or is removed, the retiring Indenture Trustee, the Issuer, the Bond Insurer or the Holders of a majority of Bond Principal Balances of the Bonds may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee.

Notwithstanding the replacement of the Indenture Trustee pursuant to this Section, the Issuer’s obligations under Section 6.07 shall continue for the benefit of the retiring Indenture Trustee.

Section 6.09     Successor Indenture Trustee by Merger.  If the Indenture Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation, without any further act, shall be the successor Indenture Trustee; provided, that such corporation or banking association shall be otherwise qualified and eligible under Section 6.11 hereof. The Indenture Trustee shall provide the Rating Agencies and the Bond Insurer with prior written notice of any such transaction.

If at the time such successor or successors by merger, conversion or consolidation to the Indenture Trustee shall succeed to the trusts created by this Indenture and any of the Bonds shall have been authenticated but not delivered, any such successor to the Indenture Trustee may adopt the certificate of authentication of any predecessor trustee and deliver such Bonds so authenticated; and if at that time any of the Bonds shall not have been authenticated, any successor to the Indenture Trustee may authenticate such Bonds either in the name of any predecessor hereunder or in the name of the successor to the Indenture Trustee; and in all such cases such certificates shall have the full force which it is in the Bonds or in this Indenture provided that the certificate of the Indenture Trustee shall have.

Section 6.10     Appointment of Co-Indenture Trustee or Separate Indenture Trustee.  (a)  Notwithstanding any other provisions of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the Trust Estate may at the time be located, the Indenture Trustee shall have the power and may execute and deliver all instruments to appoint one or more Persons to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part of the Trust Estate, and to vest in such Person or Persons, in such capacity and for the benefit of the Bondholders and the Bond Insurer, such title to the Trust Estate, or any part hereof, and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Indenture
Trustee or the Bond Insurer may consider necessary or desirable. No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 6.11 hereof and notice to the Bond Insurer but not to the Bondholders (unless a Bond Insurer Default exists, in which case notice 

 

will be sent to the Bondholders) of the appointment of any co-trustee or separate trustee shall be required under Section 6.08 hereof.

(b)        Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:

(i)         all rights, powers, duties and obligations conferred or imposed upon the Indenture Trustee shall be conferred or imposed upon and exercised or performed by the Indenture Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Indenture Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Indenture Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Trust Estate or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Indenture Trustee;

(ii)         no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and

(iii)        the Indenture Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee.

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

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

Section 6.11     Eligibility; Disqualification.  The Indenture Trustee shall at all times satisfy the requirements of TIA § 310(a). The Indenture Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition and it or its parent shall have a long-term debt rating of Baa3 or better by Moody’s and BBB or better by Standard & Poor’s. The Indenture Trustee shall comply with TIA § 310(b), including the optional provision permitted by the second sentence of TIA § 310(b)(9); provided, 

 

however, that there shall be excluded from the operation of TIA § 310(b)(1) any indenture or indentures under which other securities of the Issuer are outstanding if the requirements for such exclusion set forth in TIA § 310(b)(1) are met.

Section 6.12     Preferential Collection of Claims Against Issuer.  The Indenture Trustee shall comply with TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). An Indenture Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated.

Section 6.13     Representations and Warranties.  The Indenture Trustee hereby represents that:

(i)         The Indenture Trustee is duly organized and validly existing as an association in good standing under the laws of the United States with power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted;

(ii)         The Indenture Trustee has the power and authority to execute and deliver this Indenture and to carry out its terms; and the execution, delivery and performance of this Indenture have been duly authorized by the Indenture Trustee by all necessary corporate action;

(iii)        The consummation of the transactions contemplated by this Indenture and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the articles of incorporation or bylaws of the Indenture Trustee or any agreement or other instrument to which the Indenture Trustee is a party or by which it is bound; and

(iv)        To the Indenture Trustee’s knowledge, there are no proceedings or investigations pending or threatened before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Indenture Trustee or its properties: (A) asserting the invalidity of this Indenture (B) seeking to prevent the consummation of any of the transactions contemplated by this Indenture or (C) seeking any determination or ruling that might materially and adversely affect the performance by the Indenture Trustee of its obligations under, or the validity or enforceability of, this Indenture.

	
            Section 6.14
 	
            Directions to Indenture Trustee.  The Indenture Trustee is hereby directed:
 

(a)        to accept the pledge of the Mortgage Loans and hold the assets of the Trust Estate in trust for the Bondholders and the Bond Insurer;

(b)        to authenticate and deliver the Bonds substantially in the form prescribed by Exhibits A-1, A-2 and A-3 to this Indenture in accordance with the terms of this Indenture; and

(c)        to take all other actions as shall be required to be taken by the terms of this Indenture.

 

 

Section 6.15     The Agents.  The provisions of this Indenture relating to the limitations of the Indenture Trustee’s liability and to its indemnity, rights and protections shall inure also to the Paying Agent and Bond Registrar.

Section 6.16     Execution of Derivative Contracts.  The Issuer hereby directs the Indenture Trustee to enter into and execute the Derivative Contracts and the Special Certificate Cap Contract and make all representations and warranties contained therein on behalf of the Trust. The Indenture Trustee hereby acknowledges receipt by it of the Derivative Contracts and the Special Certificate Cap Contract.  Upon receipt thereof from the counterparty under the Derivative Contracts and the Special Certificate Cap Contract, the Indenture Trustee shall deposit into the Payment Account an amount equal to all amounts actually received under the Derivative Contracts and the Special Certificate Cap Contract and not previously deposited into the Payment Account.

 

 

 

ARTICLE VII

 

Bondholders’ Lists and Reports

Section 7.01     Issuer To Furnish Indenture Trustee Names and Addresses of Bondholders.  The Issuer will furnish or cause to be furnished to the Indenture Trustee (a) not more than five days after each Record Date, a list, in such form as the Indenture Trustee may reasonably require, of the names and addresses of the Holders of Bonds as of such Record Date, (b) at such other times as the Indenture Trustee and the Bond Insurer may request in writing, within 30 days after receipt by the Issuer of any such request, a list of similar form and content as of a date not more than 10 days prior to the time such list is furnished; provided, however, that so long as the Indenture Trustee is the Bond Registrar, no such list shall be
required to be furnished to the Indenture Trustee.

Section 7.02    Preservation of Information; Communications to Bondholders.  (a) The Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Holders of Bonds contained in the most recent list furnished to the Indenture Trustee as provided in Section 7.01 hereof and the names and addresses of Holders of Bonds received by the Indenture Trustee in its capacity as Bond Registrar. The Indenture Trustee may destroy any list furnished to it as provided in such Section 7.01 upon receipt of a new list so furnished.

(b)        Bondholders may communicate pursuant to TIA § 312(b) with other Bondholders with respect to their rights under this Indenture or under the Bonds.

(c)        The Issuer, the Indenture Trustee and the Bond Registrar shall have the protection of TIA § 312(c).

Section 7.03     Reports of Issuer.  (a)  Subject to Section 4.06 of the Servicing Agreement (i) The Indenture Trustee shall file with the Commission on behalf of the Issuer, with a copy to the Issuer and the Bond Insurer within 15 days before the Issuer is required to file the same with the Commission, the annual reports and the information, documents and other reports (or such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) that the Issuer may be required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act;

(ii)         The Indenture Trustee shall file with the Commission, on behalf of the Issuer, in accordance with rules and regulations prescribed from time to time by the Commission such additional information, documents and reports with respect to compliance by the Issuer with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and

(iii)        The Indenture Trustee shall supply (and the Indenture Trustee shall transmit by mail to all Bondholders described in TIA § 313(c)) such summaries of any information, documents and reports required to be filed by the Issuer pursuant to clauses (i) and (ii) of this Section 7.03(a) and by rules and regulations prescribed from time to time by the Commission.

 

 

(b)        Unless the Issuer otherwise determines, the fiscal year of the Issuer shall end on December 31 of each year.

Section 7.04     Reports by Indenture Trustee.  If required by TIA § 313(a), within 60 days after each January 30 beginning with March 31, 2006, the Indenture Trustee shall mail to each Bondholder as required by TIA § 313(c) and the Bond Insurer a brief report dated as of such date that complies with TIA § 313(a). The Indenture Trustee also shall comply with TIA § 313(b).

A copy of each report at the time of its mailing to Bondholders shall be filed by the Indenture Trustee with the Commission via EDGAR and each stock exchange, if any, on which the Bonds are listed. The Issuer shall notify the Indenture Trustee if and when the Bonds are listed on any stock exchange.

Section 7.05     Statements to Bondholders.  (a) With respect to each Payment Date, the Indenture Trustee shall make available via the Indenture Trustee’s website https://www.tss.db.com/invr or deliver at the recipient’s option to each Bondholder and each Certificateholder, the Derivative Contract Counterparties, the Depositor, the Owner Trustee, the Certificate Paying Agent, the Bond Insurer and each Rating Agency, a statement setting forth the following information as to the Bonds, to the extent applicable:

	
            (i)
 	
            the aggregate amount of collections with respect to the Mortgage Loans;
 

(ii)         the Available Funds and Net Monthly Excess Cash Flow, payable to each Class of Bondholders for such Payment Date, the Basis Risk Shortfall Carry-Forward Amount on each Class of Bonds for such Payment Date and the aggregate Unpaid Interest Shortfall on each Class of Bonds for such Payment Date;

(iii)        (a) the amount of such distribution to each Class of Bonds applied to reduce the Bond Principal Balance thereof, and (b) the aggregate amount included therein representing Principal Prepayments;

(iv)        the Insured Amount, if any, paid by the Bond Insurer under the Bond Insurance Policy for such Payment Date and the aggregate Insured Amounts for all prior Payment Dates paid by the Bond Insurer under the Bond Insurance Policy and not yet reimbursed;

(v)        the amount of such distribution to Holders of each Class of Bonds allocable to interest;

	
            (vi)
 	
            the amount of such distribution to the Certificates;
 

(vii)       if the distribution to the Holders of any Class of Bonds is less than the full amount that would be distributable to such Holders if there were sufficient funds available therefor, the amount of the shortfall;

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

 

 

(ix)        the aggregate Bond Principal Balance of each Class of Bonds, after giving effect to the amounts distributed on such Payment Date, separately identifying any reduction thereof due to Realized Losses other than pursuant to an actual distribution of principal and the aggregate Bond Principal Balance of all of the Bonds after giving effect to the distribution of principal on such Payment Date;

	
            (x)
 	
            [reserved]
 

(xi)        the number and aggregate Stated Principal Balances of Mortgage Loans (a) as to which the Monthly Payment is delinquent for 31-60 days, 61-90 days, 91 or more days, respectively, (b) in foreclosure and (c) that have become REO Property, in each case as of the end of the preceding calendar month;

	
            (xii)
 	
            the Basis Risk Net Derivative Contract Payment Amount;
 

(xiii)      the Overcollateralization Increase Amount, Overcollateralization Release Amount, Overcollateralization Target Amount and Overcollateralized Amount, if any, in each case as the end of the related Payment Date;

	
            (xiv)
 	
            the amount of any Advances and Compensating Interest payments;
 

(xv)       the aggregate Realized Losses with respect to the related Payment Date and cumulative Realized Losses since the Closing Date;

(xvi)      the number and aggregate Stated Principal Balance of Mortgage Loans repurchased pursuant to the Mortgage Loan Purchase Agreement for the related Payment Date and cumulatively since the Closing Date;

	
            (xvii)
 	
            [reserved]
 	
             

	
            (xviii)
 	
            the book value of any REO Property;
 

(xix)      the amount of any Prepayment Interest Shortfalls or Relief Act Shortfalls for such Payment Date; and

(xx)       the aggregate Stated Principal Balance of Mortgage Loans purchased pursuant to Section 3.18 of the Servicing Agreement for the related Payment Date and cumulatively since the Closing Date.

Items (iii) and (iv) above shall be presented on the basis of a Bond having a $1,000 denomination. In addition, by January 31 of each calendar year following any year during which the Bonds are outstanding, the Indenture Trustee shall furnish a report to each Bondholder of record if so requested in writing at any time during each calendar year as to the aggregate of amounts reported pursuant to (iii) and (iv) with respect to the Bonds for such calendar year.

The Indenture Trustee may conclusively rely upon the Remittance Report provided by the Master Servicer pursuant to Section 4.01 of the Servicing Agreement and on the amount of the 

 

Basis Risk Net Derivative Contract Payment Amount furnished to the Indenture Trustee pursuant to the Derivative Contracts in its preparation of its Statement to Bondholders.

The Indenture Trustee will make the monthly statements provided for in this section (and, at its option, any additional files containing the same information in an alternative format) available each month to Bondholders, other parties to this Agreement and any other interested parties via the Indenture Trustee’s website. The Indenture Trustee’s website shall initially be located at https://www.tss.db.com/invr. Assistance in using the website can be obtained by calling the Indenture Trustee’s customer service desk at (800) 735-7777. Parties that are unable to use the website are entitled to have a paper copy mailed to them via first class mail by calling the customer service desk and indicating such. With the consent of the Depositor, the Indenture Trustee may have the right to change the way the monthly statements are distributed in order to make such distribution more
convenient and/or more accessible to the above parties and the Indenture Trustee shall provide timely and adequate notification to all above parties regarding any such changes. The Indenture Trustee shall be entitled to rely on but shall not be responsible for the content or accuracy of any information provided by third parties for purposes of preparing the monthly statement, and may affix thereto any disclaimer it deems appropriate in its reasonable discretion (without suggesting liability on the part of any other party hereto).

 

 

 

ARTICLE VIII

 

Accounts, Disbursements and Releases

Section 8.01     Collection of Money.  Except as otherwise expressly provided herein, the Indenture Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture Trustee shall apply all such money received by it as provided in this Indenture. Except as otherwise expressly provided in this Indenture, if any default occurs in the making of any payment or performance under any agreement or instrument that is part of the Trust Estate, the Indenture Trustee may take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim a Default or Event of Default under this Indenture and any right to proceed thereafter as provided in Article V.

Section 8.02     Trust Accounts.  (a) On or prior to the Closing Date, the Issuer shall cause the Indenture Trustee to establish and maintain, in the name of the Indenture Trustee, for the benefit of the Bondholders, the Bond Insurer and the Derivative Contract Counterparties, the Payment Account as provided in Section 3.01 hereof. 

(b)        All monies deposited from time to time in the Payment Account and all deposits therein pursuant to this Indenture (other than deposits of any gain or income on investments thereof) are for the benefit of the Bondholders and the Bond Insurer. Any loss on any investment made by the Indenture Trustee with funds in the Payment Account shall be reimbursed immediately to the Trust Estate by the Master Servicer. All investments made with monies in the Payment Account and the Certificate Distribution Account including all income or other gain from such investments shall be for the benefit of and the risk of the Master Servicer.

(c)        On each Payment Date, the Indenture Trustee shall pay out of Available Funds the following: (i)  income earned on retention of amounts on deposit in the Payment Account for such Payment Date to itself and any other amounts payable to it hereunder, (ii)  the Policy Premium Fee to the Bond Insurer, (iii)  the Basis Risk Net Derivative Fee and Class A-2 Derivative Fee, as applicable, to the related Derivative Contract Counterparty, in each case excluding any Additional Derivative Contract Counterparty Payment, and  (iv) the Owner Trustee the Owner Trustee’s Fee.  The Indenture Trustee shall then distribute all remaining amounts on deposit in the Payment Account to the Bondholders in respect of the Bonds and to such other persons in the order of priority set forth in Section 3.05 hereof (except as otherwise provided in Section 5.04(b) hereof).

(d)        The Indenture Trustee shall invest any funds in the Payment Account, but only in Eligible Investments, as directed by the Master Servicer, maturing no later than the Business Day preceding each Payment Date and such Eligible Investments shall not be sold or disposed of prior to their maturity.  From the Business Day prior to the Payment Date until distributed, such funds shall be held uninvested and any income, gain or other benefit with respect thereto shall be for the benefit of the Indenture Trustee.

 

 

Section 8.03     Officer’s Certificate.  The Indenture Trustee shall receive at least seven Business Days’ notice when requested by the Issuer to take any action pursuant to Section 8.05(a) hereof, accompanied by copies of any instruments to be executed, and the Indenture Trustee shall also require, as a condition to such action, an Officer’s Certificate, in form and substance satisfactory to the Indenture Trustee, stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that all conditions precedent to the taking of such action have been complied with.

Section 8.04     Termination Upon Distribution to Bondholders.  This Indenture and the respective obligations and responsibilities of the Issuer and the Indenture Trustee created hereby shall terminate upon the distribution to Bondholders, the Bond Insurer, the Certificate Paying Agent on behalf of the Certificateholders and the Indenture Trustee of all amounts required to be distributed pursuant to Article III; provided, however, that in no event shall the trust created hereby continue beyond the expiration of 21 years from the death of the survivor of the descendants of Joseph P. Kennedy, the late ambassador of the United States to the Court of St. James, living on the date hereof.

Section 8.05     Release of Trust Estate.  (a) Subject to the payment of its fees and expenses, the Indenture Trustee may, and when required by the provisions of this Indenture shall, execute instruments to release property from the lien of this Indenture, or convey the Indenture Trustee’s interest in the same, in a manner and under circumstances that are not inconsistent with the provisions of this Indenture, including for the purposes of any repurchase by the Master Servicer of a Mortgage Loan pursuant to Section 3.18 of the Servicing Agreement. No party relying upon an instrument executed by the Indenture Trustee as provided in Article VIII hereunder shall be bound to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent, or see to the application of any monies.

(b)        The Indenture Trustee shall, at such time as (i) there are no Bonds outstanding, (ii) all sums due to the Indenture Trustee pursuant to this Indenture have been paid and (iii) all sums due to the Bond Insurer have been paid, release any remaining portion of the Trust Estate that secured the Bonds from the lien of this Indenture.

(c)        The Indenture Trustee shall release property from the lien of this Indenture pursuant to this Section 8.05 only upon receipt of a request from the Issuer accompanied by an Officers’ Certificate and an Opinion of Counsel stating that all applicable requirements have been satisfied, and a letter from the Bond Insurer stating that the Bond Insurer has no objection to such request from the Issuer, except as otherwise provided in clause (a).

Section 8.06     Surrender of Bonds Upon Final Payment.  By acceptance of any Bond, the Holder thereof agrees to surrender such Bond to the Indenture Trustee promptly, prior to such Bondholder’s receipt of the final payment thereon.

Section 8.07     Optional Redemption of the Bonds.  (a) The Majority Certificateholder shall have the option to redeem the Bonds in whole, but not in part, on any Payment Date on or after the earlier of (i) the Payment Date on which the aggregate Stated Principal Balance of the Mortgage Loans as of the end of the related Due Period is less than or equal to 20% of the aggregate Cut-off Date Balance and (ii) the Payment Date occurring in September 2015. The 

 

aggregate redemption price for the Bonds will be equal to the unpaid Bond Principal Balance of such Bonds as of the Payment Date on which the proposed redemption will take place in accordance with the foregoing, together with accrued and unpaid interest thereon at the applicable Bond Interest Rate through such Payment Date (including any related Unpaid Interest Shortfall and Basis Risk Shortfall Carry-Forward Amount), plus an amount sufficient to pay in full all amounts owing to the Bond Insurer and the Indenture Trustee under this Indenture and the Insurance Agreement (which amounts shall be specified in writing upon request of the Issuer by the Indenture Trustee and the Bond Insurer) and plus an amount equal to any amounts owing to the Derivative Contract Counterparties under the Derivative Contracts.

(b)        In order to exercise the foregoing option, the Issuer shall provide written notice of the Majority Certificateholder’s exercise of such option to the Indenture Trustee, the Bond Insurer, the Owner Trustee and the Master Servicer at least 15 days prior to its exercise. Following receipt of the notice, the Indenture Trustee shall provide notice to the Bondholders of the final payment on the Bonds. In addition, the Issuer shall, not less than one Business Day prior to the proposed Payment Date on which such redemption is to be made, deposit the aggregate redemption price specified in (a) above with the Indenture Trustee, who shall deposit the aggregate redemption price into the Payment Account and shall, on the Payment Date after receipt of the funds, apply such funds to make final payments of principal and interest on the Bonds in
accordance with Sections 3.05(b), (c) and (d) hereof and payment in full to the Bond Insurer for all amounts owing under the Insurance Agreement and payment in full to the Indenture Trustee for all amounts payable to it under this Indenture and this Indenture shall be discharged subject to the provisions of Section 4.10 hereof. If for any reason the amount deposited by the Issuer is not sufficient to make such redemption or such redemption cannot be completed for any reason, the amount so deposited by the Issuer with the Indenture Trustee shall be immediately returned to the Issuer in full and shall not be used for any other purpose or be deemed to be part of the Trust Estate.

 

 

ARTICLE IX

 

Supplemental Indentures

Section 9.01     Supplemental Indentures Without Consent of Bondholders.  (a) Without the consent of the Holders of any Bonds but with the prior written consent of the Bond Insurer and prior notice to the Rating Agencies and the Bond Insurer, the Issuer and the Indenture Trustee, when authorized by an Issuer Request, at any time and from time to time, may enter into one or more indentures supplemental hereto (which shall conform to the provisions of the TIA as in force at the date of the execution thereof), in form satisfactory to the Indenture Trustee, for any of the following purposes:

(i)         to correct or amplify the description of any property at any time subject to the lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subjected to the lien of this Indenture, or to subject to the lien of this Indenture additional property;

(ii)         to evidence the succession, in compliance with the applicable provisions hereof, of another Person to the Issuer, and the assumption by any such successor of the covenants of the Issuer herein and in the Bonds contained;

(iii)        to add to the covenants of the Issuer, for the benefit of the Holders of the Bonds, or to surrender any right or power herein conferred upon the Issuer;

(iv)        to convey, transfer, assign, mortgage or pledge any property to or with the Indenture Trustee;

(v)        to cure any ambiguity, to correct or supplement any provision herein or in any supplemental indenture that may be inconsistent with any other provision herein or in any supplemental indenture;

(vi)        to make any other provisions with respect to matters or questions arising under this Indenture or in any supplemental indenture; provided, that such action shall not materially and adversely affect the interests of the Holders of the Bonds;

(vii)       to evidence and provide for the acceptance of the appointment hereunder by a successor trustee with respect to the Bonds and to add to or change any of the provisions of this Indenture as shall be necessary to facilitate the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Article VI hereof; or

(viii)      to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of this Indenture under the TIA or under any similar federal statute hereafter enacted and to add to this Indenture such other provisions as may be expressly required by the TIA;

 

 

provided, however, that no such indenture supplements shall be entered into unless the Indenture Trustee shall have received an Opinion of Counsel as to the enforceability of any such indenture supplement and to the effect that (i) such indenture supplement is permitted hereunder and (ii) entering into such indenture supplement will not result in a “substantial modification” of the Bonds under Treasury Regulation Section 1.1001-3 or adversely affect the status of the Bonds as indebtedness for federal income tax purposes.

The Indenture Trustee is hereby authorized to join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations that may be therein contained.

(b)        The Issuer and the Indenture Trustee, when authorized by an Issuer Request, may, also without the consent of any of the Holders of the Bonds but with the prior written consent of the Bond Insurer and prior notice to the Rating Agencies, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Bonds under this Indenture; provided, however, that such action as evidenced by an Opinion of Counsel, (i) is permitted by this Indenture, and shall not (ii) adversely affect in any material respect the interests of any Bondholder or (iii) if 100% of the Certificates are not owned by IMH Assets Corp., cause the
Issuer to be subject to an entity level tax for federal income tax purposes.

Section 9.02     Supplemental Indentures With Consent of Bondholders.  The Issuer and the Indenture Trustee, when authorized by an Issuer Request, also may, with prior notice to the Rating Agencies and, with the prior written consent of the Bond Insurer and with the consent of the Holders of not less than a majority of the Bond Principal Balance of each Class of Bonds affected thereby, by Act (as defined in Section 10.03 hereof) of such Holders delivered to the Issuer and the Indenture Trustee, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Bonds under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the Holder of each Bond affected thereby:

(i)         change the date of payment of any installment of principal of or interest on any Bond, or reduce the principal amount thereof or the interest rate thereon, change the provisions of this Indenture relating to the application of collections on, or the proceeds of the sale of, the Trust Estate to payment of principal of or interest on the Bonds, or change any place of payment where, or the coin or currency in which, any Bond or the interest thereon is payable, or impair the right to institute suit for the enforcement of the provisions of this Indenture requiring the application of funds available therefor, as provided in Article V, to the payment of any such amount due on the Bonds on or after the respective due dates thereof;

(ii)         reduce the percentage of the Bond Principal Balances of the Bonds, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with certain 

 

provisions of this Indenture or certain defaults hereunder and their consequences provided for in this Indenture;

(iii)        modify or alter the provisions of the proviso to the definition of the term “Outstanding” or modify or alter the exception in the definition of the term “Bondholder”

(iv)        reduce the percentage of the Bond Principal Balances of the Bonds required to direct the Indenture Trustee to direct the Issuer to sell or liquidate the Trust Estate pursuant to Section 5.04 hereof;

(v)        modify any provision of this Section 9.02 except to increase any percentage specified herein or to provide that certain additional provisions of this Indenture or the Basic Documents cannot be modified or waived without the consent of the Holder of each Bond affected thereby;

(vi)        modify any of the provisions of this Indenture in such manner as to affect the calculation of the amount of any payment of interest or principal due on any Bond on any Payment Date (including the calculation of any of the individual components of such calculation); or

(vii)       permit the creation of any lien ranking prior to or on a parity with the lien of this Indenture with respect to any part of the Trust Estate or, except as otherwise permitted or contemplated herein, terminate the lien of this Indenture on any property at any time subject hereto or deprive the Holder of any Bond of the security provided by the lien of this Indenture;

and provided, further, that such action shall not, as evidenced by an Opinion of Counsel, cause the Issuer (if 100% of the Certificates are not owned by IMH Assets Corp.) to be subject to an entity level tax.

Any such action shall not adversely affect in any material respect the interest of any Bondholder (other than a Bondholder who shall consent to such supplemental indenture) as evidenced by an Opinion of Counsel (provided by the Person requesting such supplemental indenture) delivered to the Indenture Trustee.

No supplemental indenture adverse to the interests of the Derivative Contract Counterparties shall be entered into without the related Derivative Contract Counterparty’s written consent.

It shall not be necessary for any Act of Bondholders under this Section 9.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

Promptly after the execution by the Issuer and the Indenture Trustee of any supplemental indenture pursuant to this Section 9.02, the Indenture Trustee shall mail to the Holders of the Bonds to which such amendment or supplemental indenture relates a notice setting forth in 

 

general terms the substance of such supplemental indenture. Any failure of the Indenture Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

Section 9.03     Execution of Supplemental Indentures.  In executing, or permitting the additional trusts created by, any supplemental indenture permitted by this Article IX or the modification thereby of the trusts created by this Indenture, the Indenture Trustee shall be entitled to receive, and subject to Sections 6.01 and 6.02 hereof, shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Indenture Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Indenture Trustee’s own rights, duties, liabilities or immunities under this Indenture or otherwise.  

Section 9.04     Effect of Supplemental Indenture.  Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and shall be deemed to be modified and amended in accordance therewith with respect to the Bonds affected thereby, and the respective rights, limitations of rights, obligations, duties, liabilities and immunities under this Indenture of the Indenture Trustee, the Issuer and the Holders of the Bonds shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

Section 9.05     Conformity with Trust Indenture Act.  Every amendment of this Indenture and every supplemental indenture executed pursuant to this Article IX shall conform to the requirements of the Trust Indenture Act as then in effect so long as this Indenture shall then be qualified under the Trust Indenture Act.

Section 9.06     Reference in Bonds to Supplemental Indentures.  Bonds authenticated and delivered after the execution of any supplemental indenture pursuant to this Article IX may, and if required by the Indenture Trustee shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in such supplemental indenture. If the Issuer or the Indenture Trustee shall so determine, new Bonds so modified as to conform, in the opinion of the Indenture Trustee and the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Bonds.

 

 

ARTICLE X

 

Miscellaneous

Section 10.01   Compliance Certificates and Opinions, etc.  (a) Upon any application or request by the Issuer to the Indenture Trustee to take any action under any provision of this Indenture, the Issuer shall furnish to the Indenture Trustee and the Bond Insurer (i) an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and (ii) an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that, in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture, no additional certificate or opinion need be furnished.

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

(1)        a statement that each signatory of such certificate or opinion has read or has caused to be read such covenant or condition and the definitions herein relating thereto;

(2)        a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(3)        a statement that, in the opinion of each such signatory, such signatory has made such examination or investigation as is necessary to enable such signatory to express an informed opinion as to whether or not such covenant or condition has been complied with;

(4)        a statement as to whether, in the opinion of each such signatory, such condition or covenant has been complied with; and

(5)        if the signatory of such certificate or opinion is required to be Independent, the statement required by the definition of the term “Independent Certificate”.

(6)        (i)         Prior to the deposit of any Collateral or other property or securities with the Indenture Trustee that is to be made the basis for the release of any property or securities subject to the lien of this Indenture, the Issuer shall, in addition to any obligation imposed in Section 10.01 (a) or elsewhere in this Indenture, furnish to the Indenture Trustee and the Bond Insurer an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days prior to such deposit) to the Issuer of the Collateral or other property or securities to be so deposited and a report from a nationally recognized accounting firm verifying such value.

 

 

(ii)         Whenever the Issuer is required to furnish to the Indenture Trustee and the Bond Insurer an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (i) above, the Issuer shall also deliver to the Indenture Trustee an Independent Certificate from a nationally recognized accounting firm as to the same matters, if the fair value of the securities to be so deposited and of all other such securities made the basis of any such withdrawal or release since the commencement of the then current fiscal year of the Issuer, as set forth in the certificates delivered pursuant to clause (i) above and this clause (ii), is 10% or more of the Bond Principal Balances of the Bonds, but such a certificate need not be furnished with respect to any securities so
deposited, if the fair value thereof as set forth in the related Officer’s Certificate is less than $25,000 or less than one percent of the Bond Principal Balances of the Bonds.

(iii)        Whenever any property or securities are to be released from the lien of this Indenture, the Issuer shall also furnish to the Indenture Trustee and the Bond Insurer an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days prior to such release) of the property or securities proposed to be released and stating that in the opinion of such person the proposed release will not impair the security under this Indenture in contravention of the provisions hereof.

(iv)        Whenever the Issuer is required to furnish to the Indenture Trustee and the Bond Insurer an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (iii) above, the Issuer shall also furnish to the Indenture Trustee an Independent Certificate as to the same matters if the fair value of the property or securities and of all other property or securities released from the lien of this Indenture since the commencement of the then-current calendar year, as set forth in the certificates required by clause (iii) above and this clause (iv), equals 10% or more of the Bond Principal Balances of the Bonds, but such certificate need not be furnished in the case of any release of property or securities if the fair value thereof as set forth in the related
Officer’s Certificate is less than $25,000 or less than one percent of the then Bond Principal Balances of the Bonds.

Section 10.02   Form of Documents Delivered to Indenture Trustee.  In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an Authorized Officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or 

 

representations by, an officer or officers of the Seller or the Issuer, stating that the information with respect to such factual matters is in the possession of the Seller or the Issuer, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

Whenever in this Indenture, in connection with any application or certificate or report to the Indenture Trustee, it is provided that the Issuer shall deliver any document as a condition of the granting of such application, or as evidence of the Issuer’s compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Issuer to have such application granted or to the sufficiency of such certificate or report. The foregoing shall not, however, be construed to affect the Indenture Trustee’s right to rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Article VI.

Section 10.03   Acts of Bondholders.  (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Bondholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Bondholders in person or by agents duly appointed in writing; and except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee, and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Bondholders signing such instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.01 hereof) conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner provided in this Section 10.03 hereof.

(b)        The fact and date of the execution by any person of any such instrument or writing may be proved in any manner that the Indenture Trustee deems sufficient.

	
            (c)
 	
            The ownership of Bonds shall be proved by the Bond Registrar.
 

(d)        Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Bonds shall bind the Holder of every Bond issued upon the registration thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Bond.

Section 10.04   Notices etc., to Indenture Trustee, Issuer, Seller and Rating Agencies.  Any request, demand, authorization, direction, notice, consent, waiver or Act of Bondholders or other documents provided or permitted by this Indenture shall be in writing and if such request, 

 

demand, authorization, direction, notice, consent, waiver or act of Bondholders is to be made upon, given or furnished to or filed with:

(i)         the Indenture Trustee by any Bondholder or by the Issuer shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Indenture Trustee at the Corporate Trust Office. The Indenture Trustee shall promptly transmit any notice received by it from the Bondholders to the Issuer; or

(ii)         the Issuer by the Indenture Trustee or by any Bondholder shall be sufficient for every purpose hereunder if in writing and mailed first-class, postage prepaid to the Issuer addressed to: Impac CMB Trust Series 2005-7, in care of Wilmington Trust Company, Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19990-0001, Attention: Corporate Trust Administration, or at any other address previously furnished in writing to the Indenture Trustee by the Issuer. The Issuer shall promptly transmit any notice received by it from the Bondholders to the Indenture Trustee; or

(iii)        the Seller by the Indenture Trustee shall be sufficient for every purpose hereunder if in writing and mailed, first-class postage pre-paid, or personally delivered or telecopied to: Impac Mortgage Holdings, Inc., 1401 Dove Street, Newport Beach, California 92660, Attention: General Counsel; or

(iv)        the Bond Insurer by the Issuer, the Indenture Trustee or by any Bondholders shall be sufficient for every purpose hereunder if in writing and mailed, first-class postage pre-paid, or personally delivered or telecopied to: Ambac Assurance Corporation, One State Street Plaza, New York, New York 10004, Attention: Consumer Asset-Backed Securities Group, Telephone: (212) 208-3394, Telecopier: (212) 363-1459. The Bond Insurer shall promptly transmit any notice received by it from the Issuer, the Indenture Trustee or the Bondholders to the Issuer or Indenture Trustee, as the case may be.

Notices required to be given to the Rating Agencies by the Issuer, the Indenture Trustee or the Owner Trustee shall be in writing, mailed first-class postage pre-paid, to (i) in the case of Moody’s, at the following address: Moody’s Investors Service, Inc., Residential Mortgage Monitoring Department, 99 Church Street, New York, New York 10007 and (ii) in the case of Standard & Poor’s, at the following address: Standard & Poor’s, 55 Water Street, 41st Floor, New York, New York 10041, Attention of Asset Backed Surveillance Department; or as to each of the foregoing, at such other address as shall be designated by written notice to the other parties.

Section 10.05   Notices to Bondholders; Waiver.  Where this Indenture provides for notice to Bondholders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class, postage prepaid to each Bondholder affected by such event, at such Person’s address as it appears on the Bond Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Bondholders is given by mail, neither the failure to mail such notice nor any defect in any notice so mailed to any particular Bondholder shall affect the sufficiency of 

 

such notice with respect to other Bondholders, and any notice that is mailed in the manner herein provided shall conclusively be presumed to have been duly given regardless of whether such notice is in fact actually received.

Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Bondholders shall be filed with the Indenture Trustee but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such a waiver.

In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail notice of any event to Bondholders when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving of such notice.

Where this Indenture provides for notice to the Rating Agencies, failure to give such notice shall not affect any other rights or obligations created hereunder, and shall not under any circumstance constitute an Event of Default.

Section 10.06   Conflict with Trust Indenture Act.  If any provision hereof limits, qualifies or conflicts with another provision hereof that is required to be included in this Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control.

The provisions of TIA §§ 310 through 317 that impose duties on any Person (including the provisions automatically deemed included herein unless expressly excluded by this Indenture) are a part of and govern this Indenture, whether or not physically contained herein.

Section 10.07   Effect of Headings.  The Article and Section headings herein are for convenience only and shall not affect the construction hereof.

Section 10.08   Successors and Assigns.  All covenants and agreements in this Indenture and the Bonds by the Issuer shall bind its successors and assigns, whether so expressed or not. All agreements of the Indenture Trustee in this Indenture shall bind its successors, co-trustees and agents.

Section 10.09   Separability.  In case any provision in this Indenture or in the Bonds shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 10.10   Legal Holidays.  In any case where the date on which any payment is due shall not be a Business Day, then (notwithstanding any other provision of the Bonds or this Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date on which nominally due, and no interest shall accrue for the period from and after any such nominal date.

 

 

Section 10.11   Benefits of Indenture.  The Bond Insurer and its successors and assigns shall be a third-party beneficiary to the provisions of this Indenture. To the extent that this Indenture confers upon or gives or grants to the Bond Insurer any right, remedy or claim under or by reason of this Indenture, the Bond Insurer may enforce any such right, remedy or claim conferred, given or granted hereunder. Nothing in this Indenture or in the Bonds, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, and the Bondholders and the Bond Insurer, any benefit or any legal or equitable right, remedy or claim under this Indenture.

Section 10.12   GOVERNING LAW.  THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Section 10.13   Counterparts.  This Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

Section 10.14   Recording of Indenture.  If this Indenture is subject to recording in any appropriate public recording offices, such recording is to be effected by the Issuer and at its expense accompanied by an Opinion of Counsel at its expense (which may be counsel to the Indenture Trustee or any other counsel reasonably acceptable to the Indenture Trustee) to the effect that such recording is necessary either for the protection of the Bondholders or any other Person secured hereunder or for the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture.

Section 10.15   Issuer Obligation.  No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Bonds or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director, employee or agent of the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly
agreed (it being understood that the Indenture Trustee and the Owner Trustee have no such obligations in their individual capacity) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. For all purposes of this Indenture, in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.

Section 10.16   No Petition.  The Indenture Trustee, by entering into this Indenture, and each Bondholder, by accepting a Bond, hereby covenant and agree that they will not at any time prior to one year from the date of termination hereof, institute against the Depositor or the Issuer, 

 

or join in any institution against the Depositor or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Bonds, this Indenture or any of the Basic Documents.

Section 10.17   Inspection.  The Issuer agrees that, at its expense, on reasonable prior notice, it shall permit any representative of the Indenture Trustee and the Bond Insurer, during the Issuer’s normal business hours, to examine all the books of account, records, reports and other papers of the Issuer, to make copies and extracts therefrom, to cause such books to be audited by Independent certified public accountants, and to discuss the Issuer’s affairs, finances and accounts with the Issuer’s officers, employees, and Independent certified public accountants, all at such reasonable times and as often as may be reasonably requested. The Indenture Trustee shall cause its representatives to hold in confidence all such information except to the extent disclosure may be required by law (and all reasonable
applications for confidential treatment are unavailing) and except to the extent that the Indenture Trustee may reasonably determine that such disclosure is consistent with its obligations hereunder.

 

 

ARTICLE XI

 

Certain Matters Regarding the Bond Insurer

Section 11.01   Rights of the Bond Insurer to Exercise the Rights of the Class A-1 Bondholders and Class A-2 Bondholders.  By accepting its Bond, each Class A-1 Bondholder and Class A-2 Bondholder agrees that unless an Bond Insurer Default exists, the Bond Insurer shall have the right to exercise all consent, voting, direction and other control rights of the Class A-1 Bondholders and Class A-2 Bondholders under this Indenture without any further consent of the Class A-1 Bondholders and Class A-2 Bondholders.

Section 11.02   Claims Upon the Bond Insurance Policy; Insurance Account.  (a) If, on the Business Day next succeeding the Determination Date, the Master Servicer determines that (i) the funds that will be on deposit in the Payment Account on the third Business Day prior to the related Payment Date, to the extent payable to the Class A-1 Bondholders and Class A-2 Bondholders pursuant to Section 3.05, are insufficient to pay the Accrued Bond Interest on the Class A-1 Bonds and Class A-2 Bonds for such Payment Date, net of any Prepayment Interest Shortfalls, Relief Act Shortfalls or Basis Risk Shortfalls allocated to the Class A-1 Bonds and Class A-2 Bonds or (ii) the funds available in connection with an optional redemption of the Bonds pursuant to Section 8.07 or on the Final Scheduled Payment Date will be insufficient to
reduce the Bond Principal Balance of the Class A-1 Bonds and Class A-2 Bonds to zero, the Master Servicer shall deliver to the Indenture Trustee not later than 1:00 p.m. New York City time on the Business Day next succeeding the Determination Date a certificate signed by a Servicing Officer directing the Indenture Trustee to draw on the Bond Insurance Policy and stating the amount to be drawn and stating the Insured Amount for the Class A-1 Bonds and Class A-2 Bonds, and the Indenture Trustee shall give notice by telephone or telecopy of the aggregate amount of such deficiency, confirmed in writing in the form set forth as Exhibit A to the endorsement of the Bond Insurance Policy, to the Bond Insurer at or before 12:00 noon, New York City time, on the Business Day prior to such Payment Date.  If, subsequent to such notice, and prior to payment by the Bond Insurer pursuant to such notice, additional amounts are deposited in the Payment Account,  the Indenture Trustee shall reasonably
promptly notify the Bond Insurer and withdraw the notice or reduce the amount claimed, as appropriate.

(b)        The Indenture Trustee shall establish a separate special purpose non-interest bearing trust account for the benefit of Holders of the Class A-1 Bonds and Class A-2 Bonds and the Bond Insurer referred to herein as the “Insurance Account” over which the Indenture Trustee shall have exclusive control and sole right of withdrawal.  The Indenture Trustee shall deposit any amount paid to it under the Bond Insurance Policy in the Insurance Account and distribute such amount only for purposes of payment to Holders of Class A-1 Bonds and Class A-2 Bonds of the Insured Amount for which a claim was made.  Such amount may not be applied to satisfy any costs, expenses or liabilities of the Master Servicer, the Indenture Trustee or the Trust Estate.  Amounts paid under the Bond Insurance Policy shall be transferred to the Payment Account in
accordance with the next succeeding paragraph and disbursed by the Indenture Trustee to Holders of Class A-1 Bonds and Class A-2 Bonds in accordance with Section 3.05 or Section 8.04, as applicable.  It shall not be necessary for such payments to be made by checks or wire transfers separate from the checks or wire transfers used to pay the Insured Amount with other 

 

funds available to make such payment.  However, the amount of any payment of principal of or interest on the Class A-1 Bonds and Class A-2 Bonds to be paid from funds transferred from the Insurance Account shall be noted as provided in paragraph (c) below and in the statement to be furnished to Holders of the Bonds and Certificates pursuant to Section 3.25.  Funds held in the Insurance Account shall not be invested by the Master Servicer or the Indenture Trustee.

On any Payment Date with respect to which a claim has been made under the Bond Insurance Policy, the amount of any funds received by the Indenture Trustee as a result of any claim under the Bond Insurance Policy, to the extent required to pay the Insured Amount on such Payment Date, shall be withdrawn by the Indenture Trustee from the Insurance Account and deposited in the Payment Account and applied by the Indenture Trustee, together with the other funds to be distributed to the Class A-1 Bondholders and Class A-2 Bondholders pursuant to Section 3.05, directly to the payment in full of the Insured Amount due on the Class A-1 Bonds and Class A-2 Bonds.  Any funds remaining in the Insurance Account on the first Business Day following a Payment Date shall be remitted by the Indenture Trustee to the Bond Insurer, pursuant to the written instructions of the Bond Insurer, by the end of such Business Day.

(c)        The Indenture Trustee shall keep a complete and accurate record of the amount of interest and principal paid into the Insurance Account in respect of any Class A-1 Bonds and Class A-2 Bonds from moneys received by the Indenture Trustee under the Bond Insurance Policy.  The Bond Insurer shall have the right to inspect such records at reasonable times during normal business hours upon two Business Day’s prior written notice to the Indenture Trustee.

Section 11.03   Effect of Payments by the Bond Insurer; Subrogation.  Anything herein to the contrary notwithstanding, for purposes of this Section 11.03, any payment with respect to principal of or interest on the Class A-1 Bonds and Class A-2 Bonds which is made with monies received pursuant to the terms of the Bond Insurance Policy shall not be considered payment of the Class A-1 Bonds and Class A-2 Bonds from the Trust Estate.  The Master Servicer and the Indenture Trustee acknowledge, and each Holder by its acceptance of a Class A-1 Bond and Class A-2 Bond agrees, that without the need for any further action on the part of the Bond Insurer, the Master Servicer, the Indenture Trustee or the Certificate Registrar, to the extent the Bond Insurer makes payments, directly or indirectly, on account of principal of or
interest on the Class A-1 Bonds and Class A-2 Bonds to the Holders of such Bonds, the Bond Insurer will be fully subrogated to, and each Class A-1 Bondholder and Class A-2 Bondholder and the Indenture Trustee hereby delegate and assign to the Bond Insurer, to the fullest extent permitted by law, the rights of such Holders to receive such principal and interest from the Trust Estate; provided that the Bond Insurer shall be paid such amounts only from the sources and in the manner explicitly provided for herein.

The Indenture Trustee and the Master Servicer shall cooperate in all respects with any reasonable request by the Bond Insurer for action to preserve or enforce the Bond Insurer’s rights or interests under this Indenture without limiting the rights or affecting the interests of the Holders as otherwise set forth herein.

Section 11.04   Notices and Information to the Bond Insurer.  All notices, statements, reports, certificates or opinions required by this Indenture  to be sent or made available to any 

 

other party  hereto or to the Bondholders or Certificateholders shall also be sent or made available to the Bond Insurer.

Section 11.05   Trustee to Hold Bond Insurance Policy.  The Indenture Trustee will hold the Bond Insurance Policy in trust as agent for the Class A-1 Bondholders and Class A-2 Bondholders for the purpose of making claims thereon and distributing the proceeds thereof. Neither the Bond Insurance Policy, nor the amounts paid on the Bond Insurance Policy will constitute part of the Trust Estate.  Each Class A-1 Bondholder and Class A-2 Bondholder, by accepting its Bond, appoints the Indenture Trustee as attorney-in-fact for the purpose of making claims on the Bond Insurance Policy.  The Indenture Trustee shall surrender the Bond Insurance Policy to the Bond Insurer for cancellation upon the expiration of the term of the Bond Insurance Policy as provided in the Bond Insurance Policy following the retirement of the Class A-1 Bonds
and Class A-2 Bonds.

 

 

 

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

	
            IMPAC CMB TRUST SERIES 2005-7, as Issuer
 
	
             
 
	
            Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee
 
	
             
 
	
             
 
	
            By:  /s/ Michele C. Harra
 
	
            Name: Michele C. Hara 
 
	
            Title: Financial Services Officer
 
	
             
 
	
             
 
	
             
 
	
            DEUTSCHE BANK NATIONAL TRUST COMPANY, as Indenture Trustee
 
	
             
 
	
             
 
	
            By:  /s/ Marion Hogan 
 
	
            Name: Marion Hogan 
 
	
            Title: Associate  
 
	
             
 
	
            By:  /s/ Brent Hoyler
 
	
            Name: Brent Hoyler 
 
	
            Title: Associate  
 

 

Acknowledged and agreed with respect to Section 2.07 hereof:

 

IMPAC MORTGAGE HOLDINGS, INC.,

as Seller

 

	
            By:
 	
            /s/ Richard J. Johnson 
 

Name:  Richard J. Johnson

	
            Title:  
 	
            EVP, CFO
 

 

 

 

	
            STATE OF CALIFORNIA
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF___________
 	
            )
 	
             
 

 

On this ________________ day of September, 2005, before me personally appeared ______________________ to me known, who being by me duly sworn, did depose and say, that he is the ____________________ of the Indenture Trustee, one of the corporations described in and which executed the above instrument; and that he signed his name thereto by like order.

Notary Public

 

__________________________

NOTARY PUBLIC

[NOTARIAL SEAL]

 

 

 

 

	
            STATE OF DELAWARE
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF NEW CASTLE
 	
            )
 	
             
 

 

On this __________________ day of September, 2005, before me personally appeared _______________________ to me known, who being by me duly sworn, did depose and say, that she is a ____________________________ of the Owner Trustee, one of the entities described in and which executed the above instrument; and that she signed her name thereto by like order.

Notary Public

 

__________________________

NOTARY PUBLIC

[NOTARIAL SEAL]

 

 

 

	
            STATE OF CALIFORNIA
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF ORANGE
 	
            )
 	
             
 

 

On this ____________________ day of September, 2005, before me personally appeared _______________________ to me known, who being by me duly sworn, did depose and say, that he is a ____________________________ of the Seller, one of the entities described in and which executed the above instrument; and that she signed her name thereto by like order.

Notary Public

 

__________________________

NOTARY PUBLIC

[NOTARIAL SEAL]

 

 

   

 

EXHIBIT A-1FORM OF CLASS [_]-A-[_] BONDS

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.THE HOLDER OF THIS BOND OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED TO REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE INDENTURE.THIS BOND IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS BOND.

PRINCIPAL OF THIS BOND IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

 

 

IMPAC CMB TRUST SERIES 2005-7COLLATERALIZED ASSET-BACKED BONDS

CLASS [_]-A-[_]

	
            AGGREGATE [BOND PRINCIPALBALANCE]:

$[             ]
 	
            BOND INTEREST

RATE: [Adjustable Rate] [___%]
 
	
            INITIAL [BOND PRINCIPAL

BALANCE] OF THIS BOND: $[             ]
 	
            BOND NO. 1
 
	
            PERCENTAGE INTEREST: 100%
 	
            CUSIP NO. [             ]
 

 

Impac CMB Trust Series 2005-7 (the “Issuer”), a Delaware statutory trust, for value received, hereby promises to pay to Cede & Co. or registered assigns, [the principal sum of ($_________________) in monthly installments on the twenty-fifth day of each month or, if such day is not a Business Day, the next succeeding Business Day (each a “Payment Date”), commencing in October 2005 and ending on or before the Payment Date occurring in [_____________] (the “Final Scheduled Payment Date”) and to pay] interest on the Bond Principal Balance of this Bond (this “Bond”) outstanding from time to time as provided below.This Bond is one of a duly authorized issue of the Issuer’s Collateralized Asset-Backed Bonds, Series 2005-7 (the “Bonds”), issued under an Indenture dated as of September 29, 2005 (the “Indenture”), between the Issuer and Deutsche Bank National Trust Company, as indenture trustee (the “Indenture Trustee”, which term includes any successor Indenture Trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights thereunder of the Issuer, the Indenture Trustee, and the Holders of the Bonds and the terms upon which the Bonds are to be authenticated and delivered. All terms used in this Bond which are defined in the Indenture shall have the meanings assigned to them in the Indenture.Ambac Assurance Corporation (the “Bond Insurer”), in consideration of the payment of the premium and subject to the terms of the certificate guaranty insurance policy (the “Bond Insurance Policy”) issued thereby, has unconditionally and irrevocably guaranteed the payment of the Insured Amount with respect to the Class A-1 Bonds and Class A-2 Bonds with respect to each Payment Date. Such Bond Insurance Policy will not cover any Prepayment Interest Shortfalls, Relief Act Shortfalls or Basis Risk Shortfall Carry- Forward Amount.Payments of principal and interest on this Bond will be made on each Payment Date to the Bondholder of record as of the related Record Date. The “Bond Principal Balance” of a Bond as of any date of determination is equal to the initial Bond Principal Balance as stated on the face thereof, minus all amounts distributed in respect of principal with respect to such Bond on or prior to such date and, in the case of any Bond, the aggregate amount of any reductions in the Bond Principal Balance thereof deemed to have occurred in connection with allocations of Realized Losses on all prior Payment Dates; provided that, the Bond Principal Balance of any Class of Bonds with the highest payment priority to which Realized Losses have been allocated 

 

shall be increased by the amount of any Subsequent Recoveries on the Mortgage Loans not previously allocated, but not by more than the amount of Realized Losses previously allocated to reduce the Bond Principal Balance of that Class.

The principal of, and interest on, this Bond are due and payable as described in the Indenture, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. All payments made by the Issuer with respect to this Bond shall be equal to this Bond’s pro rata share of the aggregate payments on all Class [_]-A-[_] Bonds as described above, and shall be applied as between interest and principal as provided in the Indenture.All principal and interest accrued on the Bonds, if not previously paid, will become finally due and payable at the Final Scheduled Payment Date.The Bonds are subject to redemption in whole, but not in part, by the Majority Certificateholder, on or after the earlier of (i) the Payment Date on which the aggregate Stated Principal Balance of the Mortgage Loans as of the end of the related Due Period is less than or equal to 20% of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, and (ii) the Payment Date occurring in September 2015.The Issuer shall not be liable upon the indebtedness evidenced by the Bonds except to the extent of amounts available from the Trust Estate which constitutes security for the payment of the Bonds. The assets included in the Trust Estate will be the sole source of payments on the Class [_]-A-[_] Bonds, and each Holder hereof, by its acceptance of this Bond, agrees that (i) such Bond will be limited in right of payment to amounts available from the Trust Estate as provided in the Indenture and (ii) such Holder shall have no recourse to the Issuer, the Owner Trustee, the Indenture Trustee, IMH Assets Corp., Impac Mortgage Holdings, Inc., the Master Servicer or any of their respective affiliates, or to the assets of any of the foregoing entities, except the assets of the Issuer pledged to secure the Class [_]-A-[_] Bonds pursuant to the Indenture and the rights conveyed to the Issuer under the Indenture.Any payment of principal or interest payable on this Bond which is punctually paid on the applicable Payment Date shall be paid to the Person in whose name such Bond is registered at the close of business on the Record Date for such Payment Date by check mailed to such Person’s address as it appears in the Bond Register on such Record Date, except for the final installment of principal and interest payable with respect to such Bond, which shall be payable as provided below. Notwithstanding the foregoing, upon written request with appropriate instructions by the Holder of this Bond delivered to the Indenture Trustee at least five Business Days prior to the Record Date, any payment of principal or interest, other than the final installment of principal or interest, shall be made by wire transfer to an account in the United States designated by such Holder. All scheduled reductions in
the principal amount of a Bond (or one or more predecessor Bonds) effected by payments of principal made on any Payment Date shall be binding upon all Holders of this Bond and of any bond issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Bond. The final payment of this Bond shall be payable upon presentation and surrender thereof on or after the Payment Date thereof at the Corporate Trust Office or the office or agency of the Issuer maintained by it for such purpose pursuant to Section 3.02 of the Indenture.

 

 

Subject to the foregoing provisions, each Bond delivered under the Indenture, upon registration of transfer of or in exchange for or in lieu of any other Bond shall carry the right to unpaid principal and interest that were carried by such other Bond.If an Event of Default as defined in the Indenture shall occur and be continuing with respect to the Bonds, the Bonds may become or be declared due and payable in the manner and with the effect provided in the Indenture. If any such acceleration of maturity occurs prior to the payment of the entire unpaid Bond Principal Balance of the Bonds, the amount payable to the Holder of this Bond will be equal to the sum of the unpaid Bond Principal Balance of the Bonds, together with accrued and unpaid interest thereon as described in the Indenture. The Indenture provides that, notwithstanding the acceleration of the maturity of the Bonds, under certain circumstances specified therein, all amounts collected as proceeds of the Trust Estate securing the Bonds or otherwise shall continue to be applied to payments of principal of and interest on the Bonds as if they had not been declared due and payable.The failure to pay any Unpaid Interest Shortfall at any time when funds are not available to make such payment as provided in the Indenture shall not constitute an Event of Default under the Indenture.The Holder of this Bond or Beneficial Owner of any interest herein is deemed to represent that either (1) it is not acquiring the Bond with Plan Assets or (2) (A) the acquisition, holding and transfer of a Bond will not give rise to a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code as a result of the Issuer, the Seller, the Depositor, the Underwriters, the Owner Trustee, the Indenture Trustee, the Master Servicer, any Subservicer, any other servicer, any administrator, any provider of credit support, any owner of the Certificates, or any of their Affiliates being a “Party in Interest” (within the meaning of ERISA) or Disqualified Person (within the meaning of the Code) with respect to such Holder or Beneficial Owner that is a Plan and (B) the Bonds are rated investment grade or better and such person believes that the Bonds are properly
treated as indebtedness without substantial equity features for purposes of the DOL Regulations, and agrees to so treat the Bonds. Alternatively, regardless of the rating of the Bonds, such person may provide the Indenture Trustee and the Owner Trustee with an opinion of counsel, which opinion of counsel will not be at the expense of the Issuer, the Seller, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master Servicer or any successor servicer which opines that the acquisition, holding and transfer of such Bond or interest therein is permissible under applicable law, will not constitute or result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller, the Depositor, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master Servicer or any successor servicer to any obligation in addition to those undertaken in the Indenture.Pursuant to the Indenture, unless a Bond Insurer Default (as defined in the Indenture) exists (i) the Bond Insurer shall be deemed to be the holder of the Class A-1 Bonds and Class A-2 Bonds for certain purposes specified in the Indenture (other than with respect to payment on the Class A-1 Bonds and Class A-2 Bonds), and will be entitled to exercise all rights of the Bondholders thereunder, including the rights of Bondholders relating to the occurrence of, and the remedies with respect to, an Event of Default, without the consent of such Bondholders, and (ii) the Trustee may take actions which would otherwise be at its option or within its discretion, 

 

including actions relating to the occurrence of, and the remedies with respect to, an Event of Default, only at the direction, or with the consent, of the Bond Insurer.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Bond may be registered on the Bond Register of the Issuer. Upon surrender for registration of transfer of, or presentation of a written instrument of transfer for, this Bond at the office or agency designated by the Issuer pursuant to the Indenture, accompanied by proper instruments of assignment in form satisfactory to the Indenture Trustee, one or more new Bonds of any authorized denominations and of a like aggregate initial Bond Principal Balance, will be issued to the designated transferee or transferees.Prior to the due presentment for registration of transfer of this Bond, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Bond is registered as the owner of such Bond (i) on the applicable Record Date for the purpose of making payments and interest of such Bond, and (ii) on any other date for all other purposes whatsoever, as the owner hereof, whether or not this Bond be overdue, and neither the Issuer, the Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee shall be affected by notice to the contrary.The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Bonds under the Indenture at any time by the Issuer with the consent of the Bond Insurer and the Holders of a majority of all Bonds at the time outstanding. The Indenture also contains provisions permitting (i) the Bond Insurer or (ii) if the Bond Insurer defaults, the Holders of Bonds representing specified percentages of the aggregate Bond Principal Balance of the Bonds on behalf of the Holders of all the Bonds, to waive any past Default under the Indenture and its consequences. Any such waiver by the Holder, at the time of the giving thereof, of this Bond (or any one or more predecessor Bonds) shall bind the Holder of every Bond issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon such Bond. The Indenture also permits the Issuer and the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of the Holders of the Bonds issued thereunder.Initially, the Bonds will be registered in the name of Cede & Co. as nominee of DTC, acting in its capacity as the Depository for the Bonds. The Bonds will be delivered by the clearing agency in denominations as provided in the Indenture and subject to certain limitations therein set forth. The Bonds are exchangeable for a like aggregate initial Bond Principal Balance of Bonds of different authorized denominations, as requested by the Holder surrendering same.Unless the Certificate of Authentication hereon has been executed by the Indenture Trustee by manual signature, this Bond shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE CREATING THIS BOND SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

 

 

IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed by Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee.

	
            Dated: September 29, 2005
 	
             
 
	
             
 	
            IMPAC CMB TRUST SERIES 2005-7
 
	
             
 	
            BY: WILMINGTON TRUST COMPANY, not in its individual capacity but solely in its capacity as Owner Trustee
 
	
             
 	
            By:_______________________________________
 Authorized Signatory
 
	
             
 	
             
 

 

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Bonds referred to in the within-mentioned Indenture.

DEUTSCHE BANK NATIONAL TRUST COMPANY, as Indenture Trustee

 By:______________________________________

Authorized Signatory

 

 

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of the Bond, shall be construed as though they were written out in full according to applicable laws or regulations:

 

	
            TEN COM
 	
            --
 	
            as tenants in common
 
	
            TEN ENT
 	
            --
 	
            as tenants by the entireties
 
	
            JT TEN
 	
            --
 	
            as joint tenants with right of survivorship and not as tenants in common
 
	
            UNIF GIFT MIN ACT
 	
            --
 	
            __________ Custodian ______________________________

(Cust)                                          
   (Minor)

under Uniform Gifts to Minor Act _____________________

(State)
 

 

Additional abbreviations may also be used though not in the above list.

 

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

ASSIGNEE:

 

	
             
 
	
             
 
	
             
 

(Please print or typewrite name and address, including zip code, of assignee)

 

	
             
 

the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints ___________ attorney to transfer said Bond on the books kept for registration thereof, with full power of substitution in the premises.

	
            Dated: ______________
 	
            ____________________________________
 

Signature Guaranteed by ________________________________________

NOTICE: The signature(s) to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever. Signature(s) must be guaranteed by a commercial bank or by a member firm of the New York Stock Exchange or another national securities exchange. Notarized or witnessed signatures are not acceptable.

 

 

EXHIBIT A-2FORM OF CLASS [_]-M-[_] BONDS

THIS BOND IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS [_]-A-[_] BONDS [AND CLASS [_]-M-[_] BONDS] AS DESCRIBED IN THE INDENTURE.UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.THE HOLDER OF THIS BOND OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED TO REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE INDENTURE.THIS BOND IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AS PROVIDED IN THE INDENTURE REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS BOND.

PRINCIPAL OF THIS BOND IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

 

 

IMPAC CMB TRUST SERIES 2005-7COLLATERALIZED ASSET-BACKED BONDSCLASS [_]-M-[_]

 

	
            AGGREGATE BOND PRINCIPALBALANCE:

$[             ]
 	
            BOND INTEREST

RATE: Adjustable Rate
 
	
            INITIAL BOND PRINCIPAL

BALANCE OF THIS BOND: $[             ]
 	
            BOND NO. 1
 
	
            PERCENTAGE INTEREST: 100%
 	
            CUSIP NO. [             ]
 

 

Impac CMB Trust Series 2005-7 (the “Issuer”), a Delaware statutory trust, for value received, hereby promises to pay to Cede & Co. or registered assigns, the principal sum of _____________________________ ($___________) in monthly installments on the twenty-fifth day of each month or, if such day is not a Business Day, the next succeeding Business Day (each a “Payment Date”), commencing in October 2005 and ending on or before the Payment Date occurring in [_____________] (the “Final Scheduled Payment Date”) and to pay interest on the Bond Principal Balance of this Bond (this “Bond”) outstanding from time to time as provided below.This Bond is one of a duly authorized issue of the Issuer’s Collateralized Asset-Backed Bonds, Series 2005-7 (the “Bonds”), issued under an Indenture dated as of September 29, 2005 (the “Indenture”), between the Issuer and Deutsche Bank National Trust Company, as indenture trustee (the “Indenture Trustee”, which term includes any successor Indenture Trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights thereunder of the Issuer, the Indenture Trustee, and the Holders of the Bonds and the terms upon which the Bonds are to be authenticated and delivered. All terms used in this Bond which are defined in the Indenture shall have the meanings assigned to them in the Indenture.Payments of principal and interest on this Bond will be made on each Payment Date to the Bondholder of record as of the related Record Date. The “Bond Principal Balance” of a Bond as of any date of determination is equal to the initial Bond Principal Balance as stated on the face thereof, minus all amounts distributed in respect of principal with respect to such Bond on or prior to such date and, in the case of any Bond, the aggregate amount of any reductions in the Bond Principal Balance thereof deemed to have occurred in connection with allocations of Realized Losses on all prior Payment Dates; provided that, the Bond Principal Balance of any Class of Bonds with the highest payment priority to which Realized Losses have been allocated shall be increased by the amount of any Subsequent Recoveries on the Mortgage Loans not previously allocated, but not by more than the amount
of Realized Losses previously allocated to reduce the Bond Principal Balance of that Class.

 

 

The principal of, and interest on, this Bond are due and payable as described in the Indenture, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. All payments made by the Issuer with respect to this Bond shall be equal to this Bond’s pro rata share of the aggregate payments on all Class [_]-M-[_] Bonds as described above, and shall be applied as between interest and principal as provided in the Indenture.All principal and interest accrued on the Bonds, if not previously paid, will become finally due and payable at the Final Scheduled Payment Date.The Bonds are subject to redemption in whole, but not in part, by the Majority Certificateholder, on or after the earlier of (i) the Payment Date on which the aggregate Stated Principal Balance of the Mortgage Loans as of the end of the related Due Period is less than or equal to 20% of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, and (ii) the Payment Date occurring in September 2015.The Issuer shall not be liable upon the indebtedness evidenced by the Bonds except to the extent of amounts available from the Trust Estate which constitutes security for the payment of the Bonds. The assets included in the Trust Estate will be the sole source of payments on the Class [_]-M-[_] Bonds, and each Holder hereof, by its acceptance of this Bond, agrees that (i) such Bond will be limited in right of payment to amounts available from the Trust Estate as provided in the Indenture and (ii) such Holder shall have no recourse to the Issuer, the Owner Trustee, the Indenture Trustee, IMH Assets Corp., Impac Mortgage Holdings, Inc., the Master Servicer or any of their respective affiliates, or to the assets of any of the foregoing entities, except the assets of the Issuer pledged to secure the Class [_]-M-[_] Bonds pursuant to the Indenture and the rights conveyed to the Issuer under the Indenture.Any payment of principal or interest payable on this Bond which is punctually paid on the applicable Payment Date shall be paid to the Person in whose name such Bond is registered at the close of business on the Record Date for such Payment Date by check mailed to such Person’s address as it appears in the Bond Register on such Record Date, except for the final installment of principal and interest payable with respect to such Bond, which shall be payable as provided below. Notwithstanding the foregoing, upon written request with appropriate instructions by the Holder of this Bond delivered to the Indenture Trustee at least five Business Days prior to the Record Date, any payment of principal or interest, other than the final installment of principal or interest, shall be made by wire transfer to an account in the United States designated by such Holder. All reductions in the
principal amount of a Bond (or one or more predecessor Bonds) effected by payments of principal made on any Payment Date shall be binding upon all Holders of this Bond and of any bond issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Bond. The final payment of this Bond shall be payable upon presentation and surrender thereof on or after the Payment Date thereof at the Corporate Trust Office or the office or agency of the Issuer maintained by it for such purpose pursuant to Section 3.02 of the Indenture.Subject to the foregoing provisions, each Bond delivered under the Indenture, upon registration of transfer of or in exchange for or in lieu of any other Bond shall carry the right to unpaid principal and interest that were carried by such other Bond.

 

 

If an Event of Default as defined in the Indenture shall occur and be continuing with respect to the Bonds, the Bonds may become or be declared due and payable in the manner and with the effect provided in the Indenture. If any such acceleration of maturity occurs prior to the payment of the entire unpaid Bond Principal Balance of the Bonds, the amount payable to the Holder of this Bond will be equal to the sum of the unpaid Bond Principal Balance of the Bonds, together with accrued and unpaid interest thereon as described in the Indenture. The Indenture provides that, notwithstanding the acceleration of the maturity of the Bonds, under certain circumstances specified therein, all amounts collected as proceeds of the Trust Estate securing the Bonds or otherwise shall continue to be applied to payments of principal of and interest on the Bonds as if they had not been declared due and payable.The failure to pay any Unpaid Interest Shortfall at any time when funds are not available to make such payment as provided in the Indenture shall not constitute an Event of Default under the Indenture.The Holder of this Bond or Beneficial Owner of any interest herein is deemed to represent that either (1) it is not acquiring the Bond with Plan Assets or (2) (A) the acquisition, holding and transfer of a Bond will not give rise to a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code as a result of the Issuer, the Seller, the Depositor, the Underwriters, the Owner Trustee, the Indenture Trustee, the Master Servicer, any Subservicer, any other servicer, any administrator, any provider of credit support, any owner of the Certificates, or any of their Affiliates being a “Party in Interest” (within the meaning of ERISA) or Disqualified Person (within the meaning of the Code) with respect to such Holder or Beneficial Owner that is a Plan and (B) the Bonds are rated investment grade or better and such person believes that the Bonds are properly
treated as indebtedness without substantial equity features for purposes of the DOL Regulations, and agrees to so treat the Bonds. Alternatively, regardless of the rating of the Bonds, such person may provide the Indenture Trustee and the Owner Trustee with an opinion of counsel, which opinion of counsel will not be at the expense of the Issuer, the Seller, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master Servicer or any successor servicer which opines that the acquisition, holding and transfer of such Bond or interest therein is permissible under applicable law, will not constitute or result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller, the Depositor, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master Servicer or any successor servicer to any obligation in addition to those undertaken in the Indenture.As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Bond may be registered on the Bond Register of the Issuer. Upon surrender for registration of transfer of, or presentation of a written instrument of transfer for, this Bond at the office or agency designated by the Issuer pursuant to the Indenture, accompanied by proper instruments of assignment in form satisfactory to the Indenture Trustee, one or more new Bonds of any authorized denominations and of a like aggregate initial Bond Principal Balance, will be issued to the designated transferee or transferees.Prior to the due presentment for registration of transfer of this Bond, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Bond is registered as the owner of such Bond (i) on the applicable Record Date 

 

for the purpose of making payments and interest of such Bond, and (ii) on any other date for all other purposes whatsoever, as the owner hereof, whether or not this Bond be overdue, and neither the Issuer, the Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Bonds under the Indenture at any time by the Issuer with the consent of the Holders of a majority of all Bonds at the time outstanding. The Indenture also contains provisions permitting the Holders of Bonds representing specified percentages of the aggregate Bond Principal Balance of the Bonds on behalf of the Holders of all the Bonds, to waive any past Default under the Indenture and its consequences. Any such waiver by the Holder, at the time of the giving thereof, of this Bond (or any one or more predecessor Bonds) shall bind the Holder of every Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made
upon such Bond. The Indenture also permits the Issuer and the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of the Holders of the Bonds issued thereunder.Initially, the Bonds will be registered in the name of Cede & Co. as nominee of DTC, acting in its capacity as the Depository for the Bonds. The Bonds will be delivered by the clearing agency in denominations as provided in the Indenture and subject to certain limitations therein set forth. The Bonds are exchangeable for a like aggregate initial Bond Principal Balance of Bonds of different authorized denominations, as requested by the Holder surrendering same.Unless the Certificate of Authentication hereon has been executed by the Indenture Trustee by manual signature, this Bond shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE CREATING THIS BOND SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

 

 

IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed by Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee.

	
            Dated: September 29, 2005
 	
             
 
	
             
 	
            IMPAC CMB TRUST SERIES 2005-7
 
	
             
 	
            BY: WILMINGTON TRUST COMPANY, not in its individual capacity but solely in its capacity as Owner Trustee
 
	
             
 	
            By:_______________________________________
 Authorized Signatory
 
	
             
 	
             
 

 

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Bonds referred to in the within-mentioned Indenture.

DEUTSCHE BANK NATIONAL TRUST COMPANY, as Indenture Trustee

	
            By:
 	
            _________________________
 

Authorized Signatory

 

 

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of the Bond, shall be construed as though they were written out in full according to applicable laws or regulations:

 

	
            TEN COM
 	
            --
 	
            as tenants in common
 
	
            TEN ENT
 	
            --
 	
            as tenants by the entireties
 
	
            JT TEN
 	
            --
 	
            as joint tenants with right of survivorship and not as tenants in common
 
	
            UNIF GIFT MIN ACT
 	
            --
 	
            __________ Custodian ______________________________

(Cust)                                          
   (Minor)

under Uniform Gifts to Minor Act _____________________

(State)
 

 

Additional abbreviations may also be used though not in the above list.

 

 

ASSIGNMENT

FOR VALUE RECEIVED, THE UNDERSIGNED HEREBY SELLS, ASSIGNS AND TRANSFERS UNTO

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:

	
             
 
	
             
 
	
             
 

 

(Please print or typewrite name and address, including zip code, of assignee)

	
             
 

the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints ___________ attorney to transfer said Bond on the books kept for registration thereof, with full power of substitution in the premises.

	
            Dated: ______________
 	
            ____________________________________
 

Signature Guaranteed by ________________________________________

NOTICE: The signature(s) to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever. Signature(s) must be guaranteed by a commercial bank or by a member firm of the New York Stock Exchange or another national securities exchange. Notarized or witnessed signatures are not acceptable.

 

 

EXHIBIT A-3FORM OF CLASS [__]-B-[__] BONDS

THIS BOND IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A BONDS [,] [AND] CLASS M BONDS [AND CLASS [_]-B-[_] BONDS] AS DESCRIBED IN THE INDENTURE.UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.THE HOLDER OF THIS BOND OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED TO REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE INDENTURE.THIS BOND IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AS PROVIDED IN THE INDENTURE REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS BOND.

PRINCIPAL OF THIS BOND IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

 

 

IMPAC CMB TRUST SERIES 2005-7COLLATERALIZED ASSET-BACKED BONDSCLASS [_]-B-[_]

 

	
            AGGREGATE BOND PRINCIPALBALANCE:

$[             ]
 	
            BOND INTEREST

RATE: [Adjustable Rate]
 
	
            INITIAL BOND PRINCIPAL

BALANCE OF THIS BOND: $[             ]
 	
            BOND NO. 1
 
	
            PERCENTAGE INTEREST: 100%
 	
            CUSIP NO. [             ]
 

 

Impac CMB Trust Series 2005-7 (the “Issuer”), a Delaware statutory trust, for value received, hereby promises to pay to Cede & Co. or registered assigns, the principal sum of _____________________________ ($___________) in monthly installments on the twenty-fifth day of each month or, if such day is not a Business Day, the next succeeding Business Day (each a “Payment Date”), commencing in October 2005 and ending on or before the Payment Date occurring in [_____________] (the “Final Scheduled Payment Date”) and to pay interest on the Bond Principal Balance of this Bond (this “Bond”) outstanding from time to time as provided below.This Bond is one of a duly authorized issue of the Issuer’s Collateralized Asset-Backed Bonds, Series 2005-7 (the “Bonds”), issued under an Indenture dated as of September 29, 2005 (the “Indenture”), between the Issuer and Deutsche Bank National Trust Company, as indenture trustee (the “Indenture Trustee”, which term includes any successor Indenture Trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights thereunder of the Issuer, the Indenture Trustee, and the Holders of the Bonds and the terms upon which the Bonds are to be authenticated and delivered. All terms used in this Bond which are defined in the Indenture shall have the meanings assigned to them in the Indenture.Payments of principal and interest on this Bond will be made on each Payment Date to the Bondholder of record as of the related Record Date. The “Bond Principal Balance” of a Bond as of any date of determination is equal to the initial Bond Principal Balance as stated on the face thereof, minus all amounts distributed in respect of principal with respect to such Bond on or prior to such date and, in the case of any Bond, the aggregate amount of any reductions in the Bond Principal Balance thereof deemed to have occurred in connection with allocations of Realized Losses on all prior Payment Dates; provided that, the Bond Principal Balance of any Class of Bonds with the highest payment priority to which Realized Losses have been allocated shall be increased by the amount of any Subsequent Recoveries on the Mortgage Loans not previously allocated, but not by more than the amount
of Realized Losses previously allocated to reduce the Bond Principal Balance of that Class.

 

 

The principal of, and interest on, this Bond are due and payable as described in the Indenture, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. All payments made by the Issuer with respect to this Bond shall be equal to this Bond’s pro rata share of the aggregate payments on all Class [_]-B-[_] Bonds as described above, and shall be applied as between interest and principal as provided in the Indenture.All principal and interest accrued on the Bonds, if not previously paid, will become finally due and payable at the Final Scheduled Payment Date.The Bonds are subject to redemption in whole, but not in part, by the Majority Certificateholder, on or after the earlier of (i) the Payment Date on which the aggregate Stated Principal Balance of the Mortgage Loans as of the end of the related Due Period is less than or equal to 20% of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, and (ii) the Payment Date occurring in September 2015.The Issuer shall not be liable upon the indebtedness evidenced by the Bonds except to the extent of amounts available from the Trust Estate which constitutes security for the payment of the Bonds. The assets included in the Trust Estate will be the sole source of payments on the Class [_]-B-[_] Bonds, and each Holder hereof, by its acceptance of this Bond, agrees that (i) such Bond will be limited in right of payment to amounts available from the Trust Estate as provided in the Indenture and (ii) such Holder shall have no recourse to the Issuer, the Owner Trustee, the Indenture Trustee, IMH Assets Corp., Impac Mortgage Holdings, Inc., the Master Servicer or any of their respective affiliates, or to the assets of any of the foregoing entities, except the assets of the Issuer pledged to secure the Class [_]-B-[_] Bonds pursuant to the Indenture and the rights conveyed to the Issuer under the Indenture.Any payment of principal or interest payable on this Bond which is punctually paid on the applicable Payment Date shall be paid to the Person in whose name such Bond is registered at the close of business on the Record Date for such Payment Date by check mailed to such Person’s address as it appears in the Bond Register on such Record Date, except for the final installment of principal and interest payable with respect to such Bond, which shall be payable as provided below. Notwithstanding the foregoing, upon written request with appropriate instructions by the Holder of this Bond delivered to the Indenture Trustee at least five Business Days prior to the Record Date, any payment of principal or interest, other than the final installment of principal or interest, shall be made by wire transfer to an account in the United States designated by such Holder. All reductions in the
principal amount of a Bond (or one or more predecessor Bonds) effected by payments of principal made on any Payment Date shall be binding upon all Holders of this Bond and of any bond issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Bond. The final payment of this Bond shall be payable upon presentation and surrender thereof on or after the Payment Date thereof at the Corporate Trust Office or the office or agency of the Issuer maintained by it for such purpose pursuant to Section 3.02 of the Indenture.Subject to the foregoing provisions, each Bond delivered under the Indenture, upon registration of transfer of or in exchange for or in lieu of any other Bond shall carry the right to unpaid principal and interest that were carried by such other Bond.

 

 

If an Event of Default as defined in the Indenture shall occur and be continuing with respect to the Bonds, the Bonds may become or be declared due and payable in the manner and with the effect provided in the Indenture. If any such acceleration of maturity occurs prior to the payment of the entire unpaid Bond Principal Balance of the Bonds, the amount payable to the Holder of this Bond will be equal to the sum of the unpaid Bond Principal Balance of the Bonds, together with accrued and unpaid interest thereon as described in the Indenture. The Indenture provides that, notwithstanding the acceleration of the maturity of the Bonds, under certain circumstances specified therein, all amounts collected as proceeds of the Trust Estate securing the Bonds or otherwise shall continue to be applied to payments of principal of and interest on the Bonds as if they had not been declared due and payable.The failure to pay any Unpaid Interest Shortfall at any time when funds are not available to make such payment as provided in the Indenture shall not constitute an Event of Default under the Indenture.The Holder of this Bond or Beneficial Owner of any interest herein is deemed to represent that either (1) it is not acquiring the Bond with Plan Assets or (2) (A) the acquisition, holding and transfer of a Bond will not give rise to a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code as a result of the Issuer, the Seller, the Depositor, the Underwriters, the Owner Trustee, the Indenture Trustee, the Master Servicer, any Subservicer, any other servicer, any administrator, any provider of credit support, any owner of the Certificates, or any of their Affiliates being a “Party in Interest” (within the meaning of ERISA) or Disqualified Person (within the meaning of the Code) with respect to such Holder or Beneficial Owner that is a Plan and (B) the Bonds are rated investment grade or better and such person believes that the Bonds are properly
treated as indebtedness without substantial equity features for purposes of the DOL Regulations, and agrees to so treat the Bonds. Alternatively, regardless of the rating of the Bonds, such person may provide the Indenture Trustee and the Owner Trustee with an opinion of counsel, which opinion of counsel will not be at the expense of the Issuer, the Seller, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master Servicer or any successor servicer which opines that the acquisition, holding and transfer of such Bond or interest therein is permissible under applicable law, will not constitute or result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller, the Depositor, any Underwriter, the Owner Trustee, the Indenture Trustee,  the Master Servicer or any successor servicer to any obligation in addition to those undertaken in the Indenture.As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Bond may be registered on the Bond Register of the Issuer. Upon surrender for registration of transfer of, or presentation of a written instrument of transfer for, this Bond at the office or agency designated by the Issuer pursuant to the Indenture, accompanied by proper instruments of assignment in form satisfactory to the Indenture Trustee, one or more new Bonds of any authorized denominations and of a like aggregate initial Bond Principal Balance, will be issued to the designated transferee or transferees.Prior to the due presentment for registration of transfer of this Bond, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Bond is registered as the owner of such Bond (i) on the applicable Record Date 

 

for the purpose of making payments and interest of such Bond, and (ii) on any other date for all other purposes whatsoever, as the owner hereof, whether or not this Bond be overdue, and neither the Issuer, the Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Bonds under the Indenture at any time by the Issuer with the consent of the Holders of a majority of all Bonds at the time outstanding. The Indenture also contains provisions permitting the Holders of Bonds representing specified percentages of the aggregate Bond Principal Balance of the Bonds on behalf of the Holders of all the Bonds, to waive any past Default under the Indenture and its consequences. Any such waiver by the Holder, at the time of the giving thereof, of this Bond (or any one or more predecessor Bonds) shall bind the Holder of every Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made
upon such Bond. The Indenture also permits the Issuer and the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of the Holders of the Bonds issued thereunder.Initially, the Bonds will be registered in the name of Cede & Co. as nominee of DTC, acting in its capacity as the Depository for the Bonds. The Bonds will be delivered by the clearing agency in denominations as provided in the Indenture and subject to certain limitations therein set forth. The Bonds are exchangeable for a like aggregate initial Bond Principal Balance of Bonds of different authorized denominations, as requested by the Holder surrendering same.Unless the Certificate of Authentication hereon has been executed by the Indenture Trustee by manual signature, this Bond shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE CREATING THIS BOND SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

 

 

IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed by Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee.

	
            Dated: September 29, 2005
 	
             
 
	
             
 	
            IMPAC CMB TRUST SERIES 2005-7
 
	
             
 	
            BY: WILMINGTON TRUST COMPANY, not in its individual capacity but solely in its capacity as Owner Trustee
 
	
             
 	
            By:_______________________________________
 Authorized Signatory
 
	
             
 	
             
 

 

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Bonds referred to in the within-mentioned Indenture.

DEUTSCHE BANK NATIONAL TRUST COMPANY, as Indenture Trustee

 

	
            By:
 	
            ___________________________
 

Authorized Signatory

 

 

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of the Bond, shall be construed as though they were written out in full according to applicable laws or regulations:

 

	
            TEN COM
 	
            --
 	
            as tenants in common
 
	
            TEN ENT
 	
            --
 	
            as tenants by the entireties
 
	
            JT TEN
 	
            --
 	
            as joint tenants with right of survivorship and not as tenants in common
 
	
            UNIF GIFT MIN ACT
 	
            --
 	
            __________ Custodian ______________________________

(Cust)                                          
   (Minor)

under Uniform Gifts to Minor Act _____________________

(State)
 

 

Additional abbreviations may also be used though not in the above list.

 

 

ASSIGNMENT

FOR VALUE RECEIVED, THE UNDERSIGNED HEREBY SELLS, ASSIGNS AND TRANSFERS UNTO

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:

	
             
 
	
             
 
	
             
 

 

(Please print or typewrite name and address, including zip code, of assignee)

	
             
 

the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints ___________ attorney to transfer said Bond on the books kept for registration thereof, with full power of substitution in the premises.

	
            Dated: ______________
 	
            ____________________________________
 

Signature Guaranteed by ________________________________________

NOTICE: The signature(s) to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever. Signature(s) must be guaranteed by a commercial bank or by a member firm of the New York Stock Exchange or another national securities exchange. Notarized or witnessed signatures are not acceptable.

 

 

EXHIBIT BMORTGAGE LOAN SCHEDULE

(Filed Manually)

 

 

 

EXHIBIT C

FORM OF INITIAL CERTIFICATION

_______________, 200_

[Bond Insurer][Issuer]

[Master Servicer]

Attention:  Impac CMB Trust Series 2005-7

	
             
 	
            Re:
 	
            
Indenture dated as of September 29, 2005, between Impac CMB Trust Series 

  2005-7 and Deutsche Bank National Trust Company

          
 

 

Ladies and Gentlemen:

In accordance with Section 2.03(a) of the above-captioned Indenture, and Section 2.1(b)(i)-(v) of the Mortgage Loan Purchase Agreement, dated as of September 29, 2005 between Impac Mortgage Holdings, Inc. and Impac Funding Corporation (the “MLPA” and together with the Indenture, the “Agreements”), the undersigned, as Indenture Trustee, hereby certifies that as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on the exception report attached hereto) it has reviewed the Mortgage File and the Mortgage Loan Schedule and has determined that: (i) all documents required to be included in the Mortgage File are in its possession; (ii) such documents have been reviewed by it and appear regular on their face and relate to such Mortgage Loan; and (iii) based on examination by it, and only as to such documents, the
information set forth in items (iii) (solely to the extent of the original Mortgage Rate) and (v) of the definition or description of “Mortgage Loan Schedule” is correct.The Indenture Trustee has made no independent examination of any documents contained in each Mortgage File beyond the review specifically required in the above-referenced Agreements. The Indenture Trustee makes no representation that any documents specified in clause (v) of Section 2.1 (b) of the MLPA should be included in any Mortgage File. The Indenture Trustee makes no representations as to and shall not be responsible to verify: (i) the validity, legality, sufficiency, enforceability, due authorization, recordability or genuineness of any of the documents contained in each Mortgage File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the collectability, insurability, effectiveness or suitability of any such Mortgage Loan, or (iii) the existence of any assumption, modification, written assurance or substitution agreement with respect to any Mortgage File if
no such documents appear in the Mortgage File delivered to the Indenture Trustee.

 

 

Capitalized words and phrases used herein shall have the respective meanings assigned to them in the above-captioned Indenture.

	
             

             

             

             

             

             
 	
             
 	
            Deutsche Bank National Trust Company,
 as Indenture Trustee
 
	
             

             

             

             

             

             
 	
             
 	
             
 	
             
 	
             

             

             

             
 	
             
 
	
             

             

             

             

             

             
 	
             
 	
             
 	
             
 	
             

             

             

             
 	
             
 
	
             

             

             

             

             

             
 	
             
 	
            By:
 	
            
 
 
 
	
             

             

             

             

             

             
 	
             
 	
            Name:
 	
             
 
	
             

             

             

             

             

             
 	
             
 	
            Title:
 	
             
 
	

 

 

 

EXHIBIT DFORM OF FINAL CERTIFICATION

______________, 200__

[Bond Insurer][Issuer]

[Master Servicer]

Attention:  Impac CMB Trust Series 2005-7

	
             
 	
            Re:
 	
            
Indenture, dated as of September 29, 2005, between Impac CMB Trust 

  Series 2005-7 and Deutsche Bank National Trust Company

          
 

 

Ladies and Gentlemen:

In accordance with Section 2.03(b) of the above-captioned Indenture, and Section 2.1(b) of the Mortgage Loan Purchase Agreement, dated as of September 29, 2005, between Impac Mortgage Holdings, Inc. (formerly known as Imperial Credit Mortgage Holdings, Inc.) and Impac Funding Corporation (formerly known as ICI Funding Corporation) (the “MLPA” and together with the Indenture, the “Agreements”), the undersigned, as Indenture Trustee, hereby certifies that as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on the exception report attached hereto) it has received the documents set forth in Section 2.1(b) of the MLPA.The Indenture Trustee has made no independent examination of any documents contained in each Mortgage File beyond the review specifically required in the Agreements. The Indenture Trustee makes no representation that any documents specified in clause (v) of Section 2.1 (b) should be included in any Mortgage File. The Indenture Trustee makes no representations as to and shall not be responsible to verify: (i) the validity, legality, sufficiency, enforceability, due authorization, recordability or genuineness of any of the documents contained in each Mortgage File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the collectability, insurability, effectiveness or suitability of any such Mortgage Loan or (iii) the existence of any assumption, modification, written assurance or substitution agreement with respect to any Mortgage File if no such documents appear in the
Mortgage File delivered to the Indenture Trustee.

 

 

Capitalized words and phrases used herein shall have the respective meanings assigned to them in the above-captioned Indenture.

	
             

             

             

             

             

             
 	
             
 	
            Deutsche Bank National Trust Company,
 as Indenture Trustee
 
	
             

             

             

             

             

             
 	
             
 	
             
 	
             
 	
             

             

             

             
 	
             
 
	
             

             

             

             

             

             
 	
             
 	
             
 	
             
 	
             

             

             

             
 	
             
 
	
             

             

             

             

             

             
 	
             
 	
            By:
 	
            
 
 
 
	
             

             

             

             

             

             
 	
             
 	
            Name:
 	
             
 
	
             

             

             

             

             

             
 	
             
 	
            Title:
 	
             
 
	

 

 

 

EXHIBIT EDERIVATIVE CONTRACTS

(Provided Upon Request) 

 

   

 

EXHIBIT FSPECIAL CERTIFICATE CAP CONTRACT

(Provided Upon Request)

 

 

 

EXHIBIT G

[RESERVED] 

 

 

EXHIBIT H[RESERVED]

 

 

 

EXHIBIT I-1[RESERVED]

 

 

 

EXHIBIT I-2

[RESERVED] 

 

 

EXHIBIT J [RESERVED] 

   

 

APPENDIX A DEFINITIONS

       Accrual Period: With respect to any Payment Date and each Class of Bonds, the period from the preceding Payment Date (or in the case of the first Payment Date, from the Closing Date) through the day preceding such Payment Date.

       Accrued Bond Interest: With respect to any Payment Date and each Class of Bonds, interest accrued during the related Accrual Period at the then-applicable Bond Interest Rate on the related Bond Principal Balance thereof immediately prior to such Payment Date, less such Bonds’ Unpaid Interest Shortfall for such Payment Date, plus any Accrued Bond Interest remaining unpaid from any prior Payment Date with interest thereon at the related Bond Interest Rate. Accrued Bond Interest for each Class of Bonds shall be calculated on the basis of the actual number of days in the Accrual Period and a 360-day year.

       Additional Derivative Contract Counterparty Payment: With respect to any Payment Date, any termination payments payable to the related Derivative Contract Counterparty as a result of a default of the related Derivative Contract Counterparty under the related Derivative Contracts.Adjustment Date: As to each Mortgage Loan, each date set forth in the related Mortgage Note on which an adjustment to the interest rate on such Mortgage Loan becomes effective.

       Advance: As to any Mortgage Loan, any advance made by the Master Servicer pursuant to Section 4.04 of the Servicing Agreement or by a Subservicer in respect of delinquent Monthly Payments of principal and interest pursuant to the related Subservicing 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.

       Allocated Realized Loss Amount: With respect to any Class of Bonds and any Payment Date, an amount equal to the sum of any related Realized Loss allocated to reduce the Bond Principal Balance of that Class of Bonds on that Payment Date (other than, with respect to the Class A Bonds, a Realized Loss which was covered by the Bond Insurance Policy) and any Allocated Realized Loss Amount for that Class remaining unpaid from the previous Payment Date, less the amount of any Subsequent Recoveries added to the Bond Principal Balance of such Bond.

       Appraised 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 sale 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.

        

 

       Assignment of Mortgage: 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 of record the sale of the Mortgage, which assignment, notice of transfer or equivalent instrument may be in the form of one or more blanket assignments covering Mortgages secured by Mortgaged Properties located in the same county, if permitted by law.

       Authorized Newspaper: A newspaper of general circulation in the Borough of Manhattan, The City of New York, printed in the English language and customarily published on each Business Day, whether or not published on Saturdays, Sundays or holidays.

       Authorized Officer: With respect to the Issuer, any officer of the Owner Trustee who is authorized to act for the Owner Trustee in matters relating to the Issuer and who is identified on the list of Authorized Officers delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (such list may be modified or supplemented from time to time thereafter).

       Available Funds: For any Payment Date, an amount equal to the amount received by the Indenture Trustee and available in the Payment Account on that Payment Date in respect of the Mortgage Loans. Available Funds will generally be equal to (a) the sum of (1) the aggregate amount of scheduled payments on the Mortgage Loans received or advanced that were due during the related Due Period, (2) any unscheduled payments and receipts on the Mortgage Loans, including mortgagor prepayments on such Mortgage Loans, the proceeds of any repurchase of the Mortgage Loans by the Master Servicer or Seller, Insurance Proceeds (including amounts paid under the PMI Insurer Policy), Subsequent Recoveries and Liquidation Proceeds received during the related Prepayment Period, in each case net of amounts reimbursable therefrom to the Indenture Trustee, the Master Servicer and any
         subservicer and (3) any Compensating Interest paid by the Master Servicer in respect of the Mortgage Loans, reduced by (b) the sum of the (1) Master Servicing Fees, the Subservicing Fees, the Owner Trustee’s Fee, the Policy Premium Fee, the Lender-Paid PMI Insurer Fee, the Basis Risk Net Derivative Fee, if any, and the Class A-2 Derivative Fee and (2) certain amounts owed to the Master Servicer, the Depositor, the Indenture Trustee and the Owner Trustee in respect of the Mortgage Loans, as provided in the Agreements.

       Available Funds Rate: On any Payment Date and with respect to the Bonds, the per annum rate equal to the product of:

       	
                    

                   (i)
 	
                   (A) the product of:
 

       (1) the Net WAC Rate; and(2) an amount equal to the greater of (a) 1.0000 or (b) a fraction equal to

       (x) the aggregate Stated Principal Balance of the Mortgage Loans as of the beginning of the related Due Period divided by(y) the aggregate Bond Principal Balance of the Bonds immediately prior to such Payment Date, minus

        

 

       (B) on each Payment Date on which a Class A-2 Derivative Contract Counterparty Termination Event is not in effect, the product of:

       (1)  prior to the Step-Up Date, 0.200% per annum, and on or after the Step-Up Date, 0.400% per annum; and(2)  a fraction equal to

       (x)  the Bond Principal Balance of the Class A-2 Bonds immediately prior to such Payment Date divided by(y)  the aggregate Bond Principal Balance of the Bonds immediately prior to such Payment Date; minus

       (C) the Policy Premium Rate times a fraction equal to 

       (1)  the aggregate Bond Principal Balance of the Class A Bonds immediately prior to such Payment Date divided by(2)  the aggregate Bond Principal Balance of the Bonds immediately prior to such Payment Date, and

       (ii) a fraction equal to (x) 30 divided by (y) the number of days in the related Accrual Period.

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

       Basic Documents: The Trust Agreement, the Certificate of Trust, the Indenture, the Servicing Agreement, the Mortgage Loan Purchase Agreement, the Insurance Agreement, the Derivative Contracts, the Special Certificate Cap Contract and the other documents and certificates delivered in connection with any of the above.

       Basic Principal Distribution Amount: With respect to any Payment Date, the lesser of (a) the excess of (i) the Available Funds and the Class A Insured Amount, if any, for such Payment Date over (ii) the aggregate amount of Accrued Bond Interest for the Bonds for such Payment Date and (b) the excess of (i) the Principal Remittance Amount for such Payment Date over (ii) the Overcollateralization Release Amount, if any, for such Payment Date.

       Basis Risk Derivative Contracts: The confirmations together with the associated ISDA Master Agreement with respect to the six derivative contracts between the Seller and the related Derivative Contract Counterparty primarily for the benefit of the Bonds and the Certificates, set forth in Exhibit E of the Indenture.

       Basis Risk Net Derivative Contract Payment Amount: With respect to any Payment Date, the amount equal to the excess, if any, of (a) the aggregate amount payable on that Payment Date to the Issuer from the related Derivative Contract Counterparty pursuant to the Basis Risk Derivative Contracts, over (b) (i)the aggregate amount payable on that Payment Date to the 

        

related Derivative Contract Counterparty under the Basis Risk Derivative Contracts, in each case as described in Section 8.02(c) of the Indenture.

       Basis Risk Net Derivative Fee: With respect to any Payment Date, the amount equal to the excess, if any, of (a) the sum of (i) the aggregate amount payable on that Payment Date to the related Derivative Contract Counterparty (other than the Class A-2 Derivative Contract Counterparty) in respect of the Basis Risk Derivative Contracts, other than any Additional Derivative Contract Counterparty Payment, and (ii) any termination payments payable to the related Derivative Contract Counterparty for such Payment Date other than any Additional Derivative Contract Counterparty Payment over (b) the aggregate amount payable on that Payment Date to the Issuer from the related Derivative Contract Counterparty (other than the Class A-2 Derivative Contract Counterparty) pursuant to the Basis Risk Derivative Contracts.

       Basis Risk Net Derivative Fee Rate: With respect to any Payment Date, the fraction, expressed as a rate per annum, equal to (x) the Basis Risk Net Derivative Fee on such Payment Date over (y) the aggregate Stated Principal Balance of the Mortgage Loans as of the beginning of the related Due Period. 

       Basis Risk Shortfall: With respect to any Class of Bonds (other than the Class A-2 Bonds), on each Payment Date where clause (iii) of the definition of “Bond Interest Rate” is less than the lesser of clauses (i) and (ii) of the definition of “Bond Interest Rate,” the excess, if any, of (x) the Accrued Bond Interest thereon for such Payment Date calculated pursuant to the lesser of clauses (i) and (ii) of the definition of “Bond Interest Rate” over (y) the Accrued Bond Interest thereon for such Payment Date calculated at the Available Funds Rate. With respect to the Class A-2 Bonds, (A) on each Payment Date on which a Class A-2 Derivative Contract Counterparty Termination Event is in effect, where clause (b)(iii) of the definition of “Bond Interest Rate” is less than the lesser of clauses (b)(i) and (b)(ii) of the
           definition of “Bond Interest Rate,” the excess, if any, of (x) the Accrued Bond Interest thereon for such Payment Date calculated pursuant to the lesser of clause (b)(i) and (b)(ii) of the definition of “Bond Interest Rate” over (y) the Accrued Bond Interest thereon for such Payment Date calculated at the Available Funds Rate, or (B) on each Payment Date on which a Class A-2 Derivative Contract Counterparty Termination Event is not in effect, where clause (b)(iii) of the definition of “Bond Interest Rate” is less than the lesser of clauses (a) and (b)(ii) of the definition of “Bond Interest Rate,” the excess, if any, of (x) the lesser of (1) the Accrued Bond Interest thereon for such Payment Date calculated pursuant to clause (a) of the definition of “Bond Interest Rate” and (2) the Maximum Bond Interest Rate over (y) the Accrued Bond Interest thereon for such Payment Date calculated at the Available Funds Rate.

       Basis Risk Shortfall Carry-Forward Amount: With respect to each Class of Bonds and any Payment Date, as determined separately for each such Class of Bonds, an amount equal to the aggregate amount of Basis Risk Shortfall for such Bonds on such Payment Date, plus any unpaid Basis Risk Shortfall for such Class of Bonds from prior Payment Dates, plus interest thereon at the related Bond Interest Rate (without regard to the Available Funds Rate) for such Payment Date, to the extent previously unreimbursed by Net Monthly Excess Cashflow or the Basis Risk Derivative Contracts.

        

 

       Beneficial Owner: With respect to any Bond, the Person who is the beneficial owner of such Bond as reflected on the books of the Depository or on the books of a Person maintaining an account with such Depository (directly as a Depository Participant or indirectly through a Depository Participant, in accordance with the rules of such Depository).

       Bond: A Class A, Class M or Class B Bond.

       Bondholder or Holder: The Person in whose name a Bond is registered in the Bond Register, except that, any Bond registered in the name of the Depositor, the Issuer, the Indenture Trustee, the Seller or the Master Servicer or any Affiliate of any of them shall be deemed not to be a holder or holders, nor shall any so owned be considered outstanding, for purposes of giving any request, demand, authorization, direction, notice, consent or waiver under the Indenture or the Trust Agreement; provided that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bonds that a Responsible Officer of the Indenture Trustee or the Owner Trustee actually knows to be so owned shall be so disregarded. Owners of Bonds that have been pledged in good faith may be regarded
         as Holders if the pledgee establishes to the satisfaction of the Indenture Trustee or the Owner Trustee the pledgee’s right so to act with respect to such Bonds and that the pledgee is not the Issuer, any other obligor upon the Bonds or any Affiliate of any of the foregoing Persons.

       Bond Insurance Policy: The bond guaranty insurance policy issued by the Bond Insurer for the benefit of the Class A Bondholders.

       Bond Insurer: Ambac Assurance Corporation, a Wisconsin-domiciled stock insurance corporation, any successor thereto.

       Bond Insurer Default: The existence and continuance of any of the following: (a) a failure by the Bond Insurer to make a payment required under the Bond Insurance Policy in accordance with its terms; or (b)(i) the Bond Insurer (A) files any petition or commences any case or proceeding under any provision or chapter of the Bankruptcy Code or any other similar federal or state law relating to insolvency, bankruptcy, rehabilitation, liquidation or reorganization, (B) makes a general assignment for the benefit of its creditors, or (C) has an order for relief entered against it under the Bankruptcy Code or any other similar federal or state law relating to insolvency, bankruptcy, rehabilitation, liquidation or reorganization which is final and nonappealable; or (ii) a court of competent jurisdiction, the New York or Wisconsin Department of Insurance or other
             competent regulatory authority enters a final and nonappealable order, judgment or decree (A) appointing a custodian, trustee, agent or receiver for the Bond Insurer or for all or any material portion of its property or (B) authorizing the taking of possession by a custodian, trustee, agent or receiver of the Bond Insurer (or the taking of possession of all or any material portion of the property of the Bond Insurer).

       Bond Interest Rate: With respect to each Payment Date and each Class of Bonds (other than the Class A-2 Bonds), a floating rate equal to the least of (i) One-Month LIBOR plus the related Bond Margin, (ii) the Maximum Bond Interest Rate and (iii) the Available Funds Rate with respect to such Payment Date.  With respect to the Class A-2 Bonds, (a) with respect to each Payment Date on which a Class A-2 Derivative Contract Counterparty Termination Event is 

        

not in effect, a floating rate equal to One-Month LIBOR plus 0.140% per annum, initially, and, on or after the Step-Up Date, One-Month LIBOR plus 0.280% per annum and (b) with respect to each Payment Date on which a Class A-2 Derivative Contract Counterparty Termination Event is in effect, a floating rate equal to the least of (i) One-Month LIBOR plus 0.260% per annum, initially, and, on or after the Step-Up Date, One-Month LIBOR plus 0.520% per annum, (ii) the Maximum Bond Interest Rate and (iii) the Available Funds Rate with respect to such Payment Date.  

       Bond Margin: The Bond Margin for each Class of Bonds shall be as follows:

       	
                   Bond Margin
 
	
                   Class 
 	
                      (1)  
 	
                      (2)  
 
	
                   A-1                                                                                                                                                                              
 	
                   0.260%
 	
                   0.520%
 
	
                   M-1                                                                                                                                                                           
 	
                   0.480%
 	
                   0.720%
 
	
                   M-2                                                                                                                                                                           
 	
                   0.520%
 	
                   0.780%
 
	
                   M-3                                                                                                                                                                           
 	
                   0.620%
 	
                   0.930%
 
	
                   M-4                                                                                                                                                                           
 	
                   0.660%
 	
                   0.990%
 
	
                   M-5                                                                                                                                                                           
 	
                   0.730%
 	
                   1.095%
 
	
                   M-6                                                                                                                                                                           
 	
                   1.350%
 	
                   2.025%
 
	
                   B                                                                                                                                                                                             
 	
                   1.650%
 	
                   2.475%
 

       ______

       	
                    
 	
                   (1)
 	
                   On any Payment Date prior to the Step-Up Date.
 
	
                    
 	
                   (2)
 	
                   On and after the Step-Up Date.
 	
                    

       Bond Owner: The Beneficial Owner of a Bond.

       Bond Principal Balance: With respect to any Bond as of any date of determination, the initial Bond Principal Balance as stated on the face thereof, minus all amounts distributed in respect of principal with respect to such Bond on or prior to such date and, in the case of any Bond, the aggregate amount of any reductions in the Bond Principal Balance thereof deemed to have occurred in connection with allocations of Realized Losses on all prior Payment Dates; provided that, the Bond Principal Balance of any Class of Bonds with the highest payment priority to which Realized Losses have been allocated shall be increased by the amount of any Subsequent Recoveries on the related Mortgage Loans not previously allocated, but not by more than the amount of Realized Losses previously allocated to reduce the Bond Principal Balance of that Class

       .Bond Register: The register maintained by the Bond Registrar in which the Bond Registrar shall provide for the registration of Bonds and of transfers and exchanges of Bonds.

       Bond Registrar: The Indenture Trustee, in its capacity as Bond Registrar, or any successor to the Indenture Trustee in such capacity

       .Bondholder or Holder: The Person in whose name a Bond is registered in the Bond Register, except that, any Bond registered in the name of the Depositor, the Issuer, the Indenture 

        

Trustee, the Seller or the Master Servicer or any Affiliate of any of them shall be deemed not to be a holder or holders, nor shall any so owned be considered outstanding, for purposes of giving any request, demand, authorization, direction, notice, consent or waiver under the Indenture or the Trust Agreement; provided that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bonds that a Responsible Officer of the Indenture Trustee or the Owner Trustee actually knows to be so owned shall be so disregarded. Owners of Bonds that have been pledged in good faith may be regarded as Holders if the pledgee establishes to the satisfaction of the Indenture Trustee or the Owner Trustee the pledgee's right so to act with respect to such Bonds and that the pledgee is not the Issuer, any other obligor upon
       the Bonds or any Affiliate of any of the foregoing Persons. Any Bonds on which payments are made under the Bond Insurance Policy shall be deemed Outstanding until the Bond Insurer has been reimbursed with respect thereto and the Bond Insurer shall be deemed the Bondholder thereof to the extent of such unreimbursed payment.

       Book-Entry Bonds: Beneficial interests in the Bonds, ownership and transfers of which shall be made through book entries by the Depository as described in Section 4.06 of the Indenture.

       Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day on which banking institutions in the City of New York, Delaware, California, Minnesota and Maryland or in the city in which the corporate trust office of the Indenture Trustee is located, is required or authorized by law 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 Master Servicer evidenced in a certificate of a Servicing Officer that it has received all Insurance Proceeds, Liquidation Proceeds and other payments or cash recoveries which the Master Servicer reasonably and in good faith expects to be finally recoverable with respect to such Mortgage Loan.

       Certificate Distribution Account: The account or accounts created and maintained pursuant to Section 3.10(c) of the Trust Agreement. The Certificate Distribution Account shall be an Eligible Account.

       Certificate Paying Agent: The meaning specified in Section 3.10 of the Trust Agreement

       Certificate Percentage Interest: With respect to each Certificate, the Certificate Percentage Interest stated on the face thereof.

       Certificate Register: The register maintained by the Certificate Registrar in which the Certificate Registrar shall provide for the registration of Certificates and of transfers and exchanges of Certificates

       .Certificate Registrar: Initially, the Indenture Trustee, in its capacity as Certificate Registrar, or any successor to the Indenture Trustee in such capacity.

       Certificate of Trust: The Certificate of Trust filed for the Trust pursuant to Section 3810(a) of the Statutory Trust Statute.

        

 

       Certificates or Trust Certificates: The Impac CMB Trust Series 2005-7 Trust Certificates, Series 2005-7, evidencing the beneficial ownership interest in the Issuer and executed by the Owner Trustee in substantially the form set forth in Exhibit A to the Trust Agreement.

       Certificateholder or Holder:  The Person in whose name a Certificate is registered in the Certificate Register.  Owners of Certificates that have been pledged in good faith may be regarded as Holders if the pledgee establishes to the satisfaction of the Indenture Trustee or the Owner Trustee, as the case may be, the pledgee’s right so to act with respect to such Certificates and that the pledgee is not the Issuer, any other obligor upon the Certificates or any Affiliate of any of the foregoing Persons.

       Class: Any of the Class A Bonds, Class M Bonds or Class B Bonds.Class A Bonds: The Class A-1 Bonds and Class A-2 Bonds in the form attached as Exhibit A-1 to the Indenture.Class A Insured Amount: Draws on the Bond Insurance Policy to cover related Deficiency Amounts and Preference Amounts on the Class A Bonds.

       Class A-2 Derivative Contract: The derivative contract between the Seller and the Derivative Contract Counterparty priority for the benefit of the Class A-2 Bonds.

       Class A-2 Derivative Contract Counterparty: Bear Stearns Capital Markets Inc.

       Class A-2 Derivative Contract Counterparty Termination Event: As provided in the Class A-2 Derivative Contract, any default with respect to the Class A-2 Derivative Contract Counterparty with respect to the Class A-2 Derivative Contract where the Class A-2 Derivative Contract Counterparty is terminated and a new derivative contract counterparty is not found or the Class A-2 Derivative Contract Counterparty is unable to make payments.

       Class A-2 Derivative Fee: With respect to any Payment Date, (i) the amount payable on that Payment Date to the Class A-2 Derivative Contract Counterparty under the Class A-2 Derivative Contract at a rate equal to (a) prior to the Step-Up Date, 0.200% per annum, and (b) thereafter, 0.400% per annum, in each case based on a notional balance equal to the Bond Principal Balance of the Class A-2 Bonds immediately prior to that Payment Date and (ii) any termination payments payable to the related Derivative Contract Counterparty for such Payment Date other than any Additional Derivative Contract Counterparty Payment.

       Class A-2 Derivative Payment: With respect to any Payment Date, any amounts received with respect to the Class A-2 Derivative Contract.

       Class M Bonds: The Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class M-6 Bonds in the form attached as Exhibit A-2 to the Indenture.

       Closing Date: September 29, 2005.

       Code: The Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

        

 

       Collateral: The meaning specified in the Granting Clause of the Indenture.

       Collection Account: The account or accounts created and maintained pursuant to Section 3.06(d) of the Servicing Agreement. The Collection Account shall be an Eligible Account.

       Commission: The Securities and Exchange Commission.

       Compensating Interest: With respect to any Payment Date, the amount of any Prepayment Interest Shortfalls resulting from prepayments in full during the preceding calendar month on the Mortgage Loans, but only to the extent such Prepayment Interest Shortfalls do not exceed an amount equal to the lesser of (a) one-twelfth of 0.125% of the aggregate Stated Principal Balance of the Mortgage Loans immediately preceding such Payment Date and (b) the sum of the Master Servicing Fee and Subservicing Fee for such Payment Date for the Mortgage Loans.

       Corporate Trust Office: With respect to the Indenture Trustee, Certificate Registrar, Certificate Paying Agent and Paying Agent, the principal corporate trust office of the Indenture Trustee and Bond Registrar at which at any particular time its corporate trust business shall be administered, which office at the date of the execution of this instrument is located at, (A) for bond transfer and surrender purposes, DB Services Tennessee, 648 Grassmere Park Road, Nashville, TN 37211-3658, Attn: Transfer Unit, and for all other purposes, (B) 1761 East St. Andrew Place, Santa Ana, California 92705, Attention: Trust Administration – IM0507. With respect to the Owner Trustee, the principal corporate trust office of the Owner Trustee at which at any particular time its corporate trust business shall be administered, which office at the date of the execution of
               this Trust Agreement is located at Wilmington Trust Company, Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19801, Attention: Impac CMB Trust Series 2005-7 (IM0507).

       Countrywide: Countrywide Home Loans Servicing LP or its successor in interest.Cut-off Date: September 1, 2005.

       Cut-off Date Balance: The aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

       Cut-off Date Principal Balance: With respect to any Mortgage Loan, the unpaid principal balance thereof as of the Cut-off Date after applying the principal portion of Monthly Payments due on or before such date, whether or not received, and without regard to any payments due after such date.

       Debt Service Reduction: With respect to any Mortgage Loan, a reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of competent jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction constituting a Deficient Valuation or any reduction that results in a permanent forgiveness of principal.

       Default: Any occurrence which is or with notice or the lapse of time or both would become an Event of Default.

        

 

       Deficiency Amount: With respect to the Class A Bonds  and each Payment Date prior to the Final Scheduled Payment Date, an amount equal to the sum of (i) the excess, if any, of (a) the amount of Accrued Bond Interest on the Class A Bonds for that Payment Date over (b) the Available Funds for that Payment Date and (ii) the amount of any Realized Losses allocated to the Class A Bonds for that Payment Date. With respect to the Final Scheduled Payment Date and the Class A Bonds, an amount equal to the sum of (i) the excess, if any, of (a) the amount of Accrued Bond Interest on the Class A Bonds for that Payment Date over (b) the Available Funds for that Payment Date and (ii) the aggregate Bond Principal Balance of all outstanding Class A Bonds due on such Final Scheduled Payment Date to the extent not paid from Available Funds on that Payment Date. For the Class A
       Bonds and any date on which the acceleration of the Bonds has been directed or consented to by the Bond Insurer pursuant to the Indenture, the amount required to pay the Bond Principal Balances of the Class A Bonds in full, together with accrued and unpaid interest thereon through the date of payment of the Class A Bonds.

       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 Bonds: The meaning specified in Section 4.06 of the Indenture.

       Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced with an Eligible Substitute Mortgage Loan.

       Depositor: IMH Assets Corp., a California corporation, or its successor in interest.

       Depository or Depository Agency: The Depository Trust Company or a successor appointed by the Indenture Trustee. Any successor to the Depository shall be an organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act and the regulations of the Securities and Exchange Commission thereunder.

       Depository Participant: A Person for whom, from time to time, the Depository effects book-entry transfers and pledges of securities deposited with the Depository.

       Derivative Contracts: Any of the Basis Risk Derivative Contracts or the Class A-2 Derivative Contract, as applicable.

       Derivative Contract Counterparty: With respect to the Basis Risk Derivative Contracts, Barclays Bank PLC and with respect to the Class A-2 Derivative Contract, the Class A-2 Derivative Contract Counterparty.

       Determination Date: With respect to any Payment Date, the 15th day of the related month, or if the 15th day of such month is not a Business Day, the immediately preceding Business Day.

       Due Date: With respect to each Mortgage Loan, the day of the month on which each scheduled Monthly Payment is due.

        

 

       Due Period: With respect to any Payment Date and the Mortgage Loans, the period commencing on the second day of the month immediately preceding the month of such Payment 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 such Payment Date.

       Eligible Account: An account that is any of the following: (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) fully insured to the limits established by the FDIC, provided that any deposits not so insured shall, to the extent acceptable to the Bond Insurer and each Rating Agency, as evidenced in writing, be maintained such that (as evidenced by an Opinion of Counsel delivered to the Indenture Trustee, the Bond Insurer and each Rating Agency) the Indenture Trustee has a claim with respect to the funds in such account or a perfected first security interest against any collateral (which shall be limited to Eligible Investments)
         securing such funds that is superior to claims of any other depositors or 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) in the case of the Collection Account or Servicing Account, either (A) a trust account or accounts maintained at the corporate trust department of the Indenture Trustee or (B) an account or accounts maintained at the corporate trust department of the Indenture Trustee or the Subservicer (or an affiliate thereof), as long as their short term debt obligations are rated P-1 by Moody's and A-1+ by Standard & Poor's or better and their long term debt obligations are rated A2 by Moody's
         and AA- by Standard & Poor's or better, (iv) in the case of the Collection Account and the Payment Account, a trust account or accounts maintained in the corporate trust division of the Indenture Trustee, or (v) an account or accounts of a depository institution acceptable to each Rating Agency as evidenced in writing by each Rating Agency that use of any such account as the Collection Account or the Payment Account will not reduce the rating assigned to any of the Securities by such Rating Agency below investment grade without taking into account the Bond Insurance Policy and acceptable to the Bond Insurer as evidenced in writing.

       Eligible Investments: 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 Deutsche Bank National Trust Company or any affiliate thereof serves as an investment advisor, manager, administrator, shareholder, servicing agent, and/or custodian or sub-custodian;        

       (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 Bonds (without taking the Bond Insurance Policy into account) by such Rating Agency below the lower of the then-current rating or the rating assigned to such Bonds as of the Closing Date by such Rating Agency, as evidenced in writing; and

       (vii)       any investment approved in writing by each of the Rating Agencies and the Bond Insurer.The Indenture Trustee may purchase from or sell to itself or an affiliate, as principal or agent, the Eligible Investments listed above.provided, however, that each such instrument shall be acquired in an arm's length transaction and no such instrument shall be an Eligible 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; 

        

provided further, however, that each such instrument acquired shall not be acquired at a price in excess of par.

       Eligible Substitute Mortgage Loan: A Mortgage Loan substituted by the Seller for a Deleted Mortgage Loan which must, on the date of such substitution, as confirmed in an Officer's Certificate delivered to the Indenture 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 outstanding principal balance of the Deleted Mortgage Loan (the amount of any shortfall to be deposited by the Seller in the Collection Account in the month of substitution); (ii) comply with each non-statistical representation and warranty set forth in Section 3.1(b) of the Mortgage Loan Purchase Agreement as of the
       date of substitution; (iii) have a Mortgage Rate no lower than and not more than 1% per annum higher than the Mortgage Rate of the Deleted Mortgage Loan as of the date of substitution; (iv) 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; (v) have a remaining term to stated maturity not greater than (and not more than one year less than) that of the Deleted Mortgage Loan; (vi) not be 30 days or more delinquent; and (vii) be an adjustable-rate first lien mortgage loan, if being substituted for a Mortgage Loan secured by a first lien on the related Mortgaged Property.

       ERISA: The Employee Retirement Income Security Act of 1974, as amended.

       Event of Default: With respect to the Indenture, any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

       (i)           a failure by the Issuer to pay (a) Accrued Bond Interest on any Class of Bonds or the Principal Distribution Amount with respect to a Payment Date on such Payment Date or (b) the Unpaid Interest Shortfall with respect to any Class of Bonds, but only, with respect to clause (b), to the extent funds are available to make such payment as provided in the Indenture; or

       (ii)          the failure by the Issuer on the Final Scheduled Payment Date to reduce the Bond Principal Balance of any of the Class A Bonds, Class M Bonds or the Class B Bonds to zero; or

       (iii)        there occurs a default in the observance or performance of any covenant or agreement of the Issuer made in the Indenture, or any representation or warranty of the Issuer made in the Indenture or in any certificate or other writing delivered pursuant hereto or in connection herewith proving to have been incorrect in any material respect as of the time when the same shall have been made, and such default shall continue or not be cured, or the circumstance or condition in respect of which such representation or warranty was incorrect shall not have been eliminated or otherwise cured, for a period of 30 days after there shall have been given, by registered or certified mail, to the Issuer by the Indenture Trustee or to the Issuer and the Indenture Trustee by the Bond Insurer, or if a Bond Insurer Default exists, the
       Holders of at least 25% of the aggregate Bond Principal Balance of the Outstanding Bonds, a written notice 

        

specifying such default or incorrect representation or warranty and requiring it to be remedied and stating that such notice is a notice of default hereunder; or

       (iv)         there occurs the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of the Issuer or any substantial part of the Trust Estate in an involuntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Trust Estate, or ordering the winding-up or liquidation of the Issuer's affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or

       (v)          there occurs the commencement by the Issuer of a voluntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by the Issuer to the entry of an order for relief in an involuntary case under any such law, or the consent by the Issuer to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the assets of the Trust Estate, or the making by the Issuer of any general assignment for the benefit of creditors, or the failure by the Issuer generally to pay its debts as such debts become due, or the taking of any action by the Issuer in furtherance of any of the foregoing.

       Event of Servicer Termination: With respect to the Servicing Agreement, a Servicing Default as defined in Section 6.01 of the Servicing Agreement.

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

       Expense Fee Rate: With respect to each Mortgage Loan, the sum of the Master Servicing Fee Rate, the applicable Subservicing Fee Rate, the Owner Trustee's Fee Rate, the Lender-Paid PMI Insurer Fee Rate, if such Mortgage Loan is covered by a lender-paid primary mortgage insurance policy, and the Basis Risk Net Derivative Fee Rate.

       Expenses: The meaning specified in Section 7.02 of the Trust Agreement.

       Fannie Mae: Fannie Mae (formerly, the Federal National Mortgage Association), or any successor thereto.

       FDIC: The Federal Deposit Insurance Corporation or any successor thereto.

       Final Certification: The final certification delivered by the Indenture Trustee pursuant to Section 2.03(b) of the Indenture in the form attached hereto as Exhibit D.

       Final Scheduled Payment Date: With respect to each Class of Bonds, the Payment Date in November 2035.

       Fitch Ratings: Fitch, Inc., or its successor in interest.

        

 

       Foreclosure Profit: With respect to a Liquidated Mortgage Loan, the amount, if any, by which (i) the aggregate of its Net Liquidation Proceeds exceeds (ii) the related Stated Principal Balance (plus accrued and unpaid interest thereon at the applicable Mortgage Rate from the date interest was last paid through the date of receipt of the final Liquidation Proceeds) of such Liquidated Mortgage Loan immediately prior to the final recovery of its Liquidation Proceeds.

       Freddie Mac: Freddie Mac (formerly, the Federal Home Loan Mortgage Corporation), or any successor thereto.

       Grant: Pledge, bargain, sell, warrant, alienate, remise, release, convey, assign, transfer, create, and grant a lien upon and a security interest in and right of set-off against, deposit, set over and confirm pursuant to the Indenture. A Grant of the Collateral or of any other agreement or instrument shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for principal and interest payments in respect of such collateral or other agreement or instrument and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring proceedings in the name of the granting party or otherwise, and generally to do and receive
           anything that the granting party is or may be entitled to do or receive thereunder or with respect thereto.

       Gross Margin: With respect to any Mortgage Loan, the percentage set forth as the “Gross Margin” for such Mortgage Loan on the Mortgage Loan Schedule, as adjusted from time to time in accordance with the terms of the Servicing Agreement.

       Impac Holdings: Impac Mortgage Holdings, Inc., a Maryland corporation, and its successors and assigns.

       Indemnified Party: The meaning specified in Section 7.02 of the Trust Agreement.

       Indenture: The indenture dated as of September 29, 2005, between the Issuer and the Indenture Trustee, relating to the Impac CMB Trust Series 2005-7 Bonds.

       Indenture Trustee: Deutsche Bank National Trust Company, and its successors and assigns or any successor indenture trustee appointed pursuant to the terms of the Indenture.

       Independent: When used with respect to any specified Person, the Person (i) is in fact independent of the Issuer, any other obligor on the Bonds, the Seller, the Master Servicer, the Depositor and any Affiliate of any of the foregoing Persons, (ii) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, the Seller, the Master Servicer, the Depositor or any Affiliate of any of the foregoing Persons and (iii) is not connected with the Issuer, any such other obligor, the Seller, the Master Servicer, the Depositor or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions.

       Independent Certificate: A certificate or opinion to be delivered to the Indenture Trustee under the circumstances described in, and otherwise complying with, the applicable requirements of Section 10.01 of the Indenture, made by an independent appraiser or other expert appointed by 

        

an Issuer Request and approved by the Indenture Trustee in the exercise of reasonable care, and such opinion or certificate shall state that the signer has read the definition of “Independent” in this Indenture and that the signer is Independent within the meaning thereof.

       Index: With respect to any Mortgage Loan, the index for the adjustment of the Mortgage Rate set forth as such on the related Mortgage Note.

       Initial Certification: The initial certification delivered by the Indenture Trustee pursuant to Section 2.03(a) of the Indenture in the form attached to the Indenture.

       Initial Subservicers: Initially, with respect to substantially all of the Mortgage Loans, Countrywide Home Loans Servicing LP. On or about December 1, 2005, the subservicing with respect to substantially all of the Mortgage Loans will be transferred to GMAC Mortgage Corporation.

       Insurance Account: The account created and maintained pursuant to Section 11.02(b) of the Indenture.  The Insurance Account shall be an Eligible Account.

       Insurance Agreement:  The Insurance and Indemnity Agreement, dated as of September 29, 2005, among the Bond Insurer, the Master Servicer, the Seller, the Depositor, the Issuer and the Indenture Trustee, including any amendments and supplements thereto.

       Insurance Proceeds: Proceeds paid by any insurer pursuant to any insurance policy covering a Mortgage Loan which are required to be remitted to the Master Servicer, net of any component thereof (i) covering any expenses incurred by or on behalf of the Master Servicer in connection with obtaining such proceeds, (ii) that is applied to the restoration or repair of the related Mortgaged Property or (iii) released to the Mortgagor in accordance with the Master Servicer's normal servicing procedures.

       Insured Amount: Shall have the meaning assigned to the term “Insured Amount” in the Bond Insurance Policy

       Interest Determination Date: With respect to each Accrual Period (other than the first Accrual Period), the second LIBOR Business Day preceding the related Payment Date on which such Accrual Period commences.

       Investment Company Act: The Investment Company Act of 1940, as amended, and any amendments thereto.IRS: The Internal Revenue Service.

       Issuer: Impac CMB Trust Series 2005-7, a Delaware statutory trust, or its successor in interest.

       Issuer Request: A written order or request signed in the name of the Issuer by any one of its Authorized Officers and approved in writing by the Bond Insurer, so long as no Bond Insurer Default exists, and delivered to the Indenture Trustee.

        

 

       Lender-Paid PMI Insurer Fee: With respect to each Mortgage Loan covered by a lender-paid primary mortgage insurance policy and any Payment Date, the fee payable to the related insurer at a rate equal to 1/12th of the Lender-Paid PMI Insurer Fee Rate multiplied by the Stated Principal Balance of such Mortgage Loan as of the beginning of the related Due Period.

       Lender-Paid PMI Insurer Fee Rate: With respect to each Mortgage Loan covered by a lender-paid primary mortgage insurance policy, the per annum rate payable to the related insurer under the related policy.

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

       Lien: Any mortgage, deed of trust, pledge, conveyance, hypothecation, assignment, participation, deposit arrangement, encumbrance, lien (statutory or other), preference, priority right or interest or other security agreement or preferential arrangement of any kind or nature whatsoever, including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing and the filing of any financing statement under the UCC (other than any such financing statement filed for informational purposes only) or comparable law of any jurisdiction to evidence any of the foregoing; provided, however, that any assignment pursuant to Section 6.02 of the Servicing Agreement shall not be
             deemed to constitute a Lien.

       Lifetime Rate Cap: With respect to each Mortgage Loan with respect to which the related Mortgage Note provides for a lifetime rate cap, the maximum Mortgage Rate permitted over the life of such Mortgage Loan under the terms of such Mortgage Note, as set forth on the Mortgage Loan Schedule and initially as set forth on Exhibit A to the Servicing Agreement.

       Liquidated Mortgage Loan: With respect to any Payment Date, any Mortgage Loan in respect of which the Master Servicer has determined, in accordance with the servicing procedures specified in the Servicing Agreement, as of the end of the related Due Period that substantially all Liquidation Proceeds which it reasonably expects to recover with respect to the disposition of the related Mortgaged Property or REO Property have been recovered.

       Liquidation Expenses: Out-of-pocket expenses (exclusive of overhead) which are incurred by or on behalf of the Master Servicer, in connection with the liquidation of any Mortgage Loan and not recovered under any insurance policy, such expenses including, without limitation, legal fees and expenses, any unreimbursed amount expended (including, without limitation, amounts advanced to correct defaults on any Mortgage Loan which is senior to such Mortgage Loan, amounts advanced to keep current or pay off a Mortgage Loan that is senior to such Mortgage Loan and disposition fees) respecting the related Mortgage Loan and any related and unreimbursed expenditures for real estate property taxes or for property restoration, preservation or insurance against casualty loss or damage.

       Liquidation Proceeds: Proceeds (including Insurance Proceeds) received in connection with the liquidation of any Mortgage Loan or related REO Property, whether through trustee's sale, foreclosure sale or otherwise.

        

 

       Loan-to-Value Ratio: With respect to any Mortgage Loan, as of any date of determination, a fraction expressed as a percentage, the numerator of which is the then current principal amount of the Mortgage Loan, and the denominator of which is the Appraised Value of the related Mortgaged Property.

       Loan Year: With respect to any Mortgage Loan, the one-year period commencing on the day succeeding the origination of such Mortgage Loan and ending on the anniversary date of such Mortgage Loan, and each annual period thereafter.

       Lost Note Affidavit: With respect to any Mortgage Loan as to which the original Mortgage Note has been lost 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).

       Majority Certificateholder: A Holder of a 50.01% or greater Certificate Percentage Interest of the Certificates.

       Master Servicer: Impac Funding Corporation, a California corporation, and its successors and assigns.

       Master Servicing Fee: With respect to each Mortgage Loan and any Payment Date, the fee payable monthly to the Master Servicer in respect of master servicing compensation that accrues at an annual rate equal to the Master Servicing Fee Rate multiplied by the Stated Principal Balance of such Mortgage Loan as of the beginning of the related Due Period.

       Master Servicing Fee Rate: With respect to any Mortgage Loan, 0.03% per annum.

       Maximum Bond Interest Rate: With respect to each Class of Bonds, 11.500% per annum.

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

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

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

       Minimum Mortgage Rate: With respect to each Mortgage Loan, the minimum Mortgage Rate.

       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 (including any REO Property) and any Due Date, the payment of principal and interest due thereon in accordance with the amortization schedule at the time applicable thereto (after adjustment, if any, for partial Principal 

        

Prepayments and for Deficient Valuations occurring prior to such Due Date but before any adjustment to such amortization schedule by reason of any bankruptcy, other than a Deficient Valuation, 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 other instrument creating a first lien on an estate in fee simple interest in real property securing a Mortgage Loan.

       Mortgage File: The file containing the Related Documents pertaining to a particular Mortgage Loan and any additional documents required to be added to the Mortgage File pursuant to the Mortgage Loan Purchase Agreement or the Servicing Agreement.

       Mortgage Loans: The Mortgage Loans that will be transferred and assigned to the Trust pursuant to Section 2.03(a) of the Indenture, each Mortgage Loan so held being identified in the Mortgage Loan Schedule.  

       Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement, dated as of the Closing Date, between the Seller, as seller, and the Purchaser, as purchaser, relating to the sale, transfer and assignment of the Mortgage Loans.

       Mortgage Loan Schedule: With respect to any date, the schedule of Mortgage Loans held by the Issuer on such date. The schedule of Mortgage Loans as of the Cut-off Date is the schedule set forth in Exhibit B of the Indenture, which schedule sets forth as to each Mortgage Loan:

       	
                    

                   (i)
 	
                   the loan number and name of the Mortgagor;
 	
                    

	
                    

                   (ii)
 	
                   the street address, city, state and zip code of the Mortgaged Property;
 
	
                    

                   (iii)
 	
                   the original Mortgage Rate and current Mortgage Rate;
 	
                    

	
                    

                   (iv)
 	
                   the maturity date;
 	
                    

	
                    

                   (v)
 	
                   the original principal balance;
 	
                    

	
                    

                   (vi)
 	
                   the first Payment Date;
 	
                    

	
                    

                   (vii)
 	
                   the type of Mortgaged Property;
 	
                    

	
                    

                   (viii)
 	
                   the Monthly Payment in effect as of the Cut-off Date;
 	
                    

	
                    

                   (ix)
 	
                   the Cut-off Date Principal Balance;
 	
                    

	

       (x)          the Index, the Maximum Rate, Minimum Rate, Lifetime Cap and the Gross Margin, if applicable;

       	
                    

                   (xi)
 	
                   the Adjustment Date frequency and Payment Date frequency, if applicable;
 

        

        

 

       	
                    

                   (xii)
 	
                   the occupancy status;
 	
                    

	
                    

                   (xiii)
 	
                   the purpose of the Mortgage Loan;
 	
                    

	
                    

                   (xiv)
 	
                   the Appraised Value of the Mortgaged Property;
 
	

       (xv)        (A) the original term to maturity and (B) if such Mortgage Loan is a balloon loan, the amortization term thereof;

       	
                    

                   (xvi)
 	
                   the paid-through date of the Mortgage Loan;
 
	
                    

                   (xvii)
 	
                   the Loan-to-Value Ratio;
 	
                    

	
                    

                   (xviii)
 	
                   the Mortgagor credit score;
 	
                    

	
                    

                   (xix)
 	
                   the lien status
 	
                    

	
                    

                   (xx)
 	
                   the documentation program
 	
                    

	
                    

                   (xxi)
 	
                   the subordinate lien amount
 	
                    

	
                    

                   (xxii)
 	
                   the prepay penalty period
 	
                    

	
                    

                   (xxiii)
 	
                   the amortization term
 	
                    

	
                    

                   (xxiv)
 	
                   the Interest Only term
 	
                    

	
                    

                   (xxv)
 	
                   [reserved];
 	
                    

	

       (xxvi)    whether such Mortgage Loan is covered by a lender-paid primary insurance policy, and if so, the related Lender-Paid PMI Insurer Fee Rate; and(xxvii)   whether or not the Mortgage Loan was underwritten pursuant to a limited documentation program.

       The Mortgage Loan Schedule shall also set forth the total of the amounts described under (ix) above for all of the Mortgage Loans.

       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 and any date of determination, the annual rate at which interest accrues on such Mortgage Loan.

       Mortgaged Property: The underlying property, including real property and improvements thereon, securing a Mortgage Loan.

       Mortgagor: The obligor or obligors under a Mortgage Note.

        

 

       Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan, Liquidation Proceeds net of Liquidation Expenses.

       Net Monthly Excess Cash Flow: For any Payment Date, the sum of (a) any Overcollateralization Release Amount, (b) the excess of (x) the Available Funds and the Insured Amount, if any, for such Payment Date over (y) the sum for such Payment Date of (A) the aggregate amount of Accrued Bond Interest for the Bonds and (B) the Principal Remittance Amount and (c) any amounts payable from the Basis Risk Derivative Contracts as described in Section 3.05 of the Indenture.

       Net Mortgage Rate: With respect to each Mortgage Loans and any Payment Date, the then applicable Mortgage Rate thereon for the scheduled monthly payment thereon during the related Due Period, minus the sum of (1) the Master Servicing Fee Rate, (2) the Subservicing Fee Rate, (3) the Owner Trustee's Fee Rate, (4) the portion of the Basis Risk Net Derivative Fee Rate (if any) attributable to such Mortgage Loan, and (5) the related Lender-Paid PMI Insurer Fee Rate, if such Mortgage Loan is covered by a lender-paid primary mortgage insurance policy. 

       Net WAC Rate: The weighted average of the Net Mortgage Rates on the Mortgage Loans included in the Trust as of the beginning of the related Due Period, weighted on the basis of the Stated Principal Balances of the Mortgage Loans as of the beginning of the related Due Period.

       New Lease: Any lease of REO Property entered into on behalf of the Trust Fund, including any lease renewed or extended on behalf of the Trust Fund if the Trust Fund has the right to renegotiate the terms of such lease.

       Nonrecoverable Advance: Any advance (i) which was previously made or is proposed to be made by the Master Servicer; and (ii) which, in the good faith judgment of the Master Servicer, will not or, in the case of a proposed advance, would not, be ultimately recoverable by the Master Servicer from Liquidation Proceeds, Insurance Proceeds or future payments on any Mortgage Loan. The Indenture Trustee may conclusively rely on any determination of nonrecoverability made by the Master Servicer.

       Officer’s Certificate: With respect to the Master Servicer, a certificate signed by the President, Managing Director, a Director, a Vice President or an Assistant Vice President, of the Master Servicer and delivered to the Indenture Trustee. With respect to the Issuer, a certificate signed by any Authorized Officer of the Issuer, under the circumstances described in, and otherwise complying with, the applicable requirements of Section 10.01 of the Indenture, and delivered to the Indenture Trustee. Unless otherwise specified, any reference in the Indenture to an Officer's Certificate shall be to an Officer's Certificate of any Authorized Officer of the Issuer.

       One-Month LIBOR: With respect to any Accrual Period (other than the first Accrual Period), the rate determined by the Indenture Trustee on the related Interest Determination Date on the basis of the London interbank offered rate for one-month United States dollar deposits, as such rates appear on the Telerate Screen Page 3750, as of 11:00 a.m. (London time) on such Interest Determination Date.

        

 

       In the event that on any Interest Determination Date, Telerate Screen 3750 fails to indicate the London interbank offered rate for one-month United States dollar deposits, then One-Month LIBOR for the related Interest Accrual Period will be established by the Indenture Trustee as follows:

       (i)           If on such Interest Determination Date two or more Reference Banks provide such offered quotations, One-Month LIBOR for the related Accrual Period shall be the arithmetic mean of such offered quotations (rounded upwards if necessary to the nearest whole multiple of 1/16%).

       (ii)          If on such Interest Determination Date fewer than two Reference Banks provide such offered quotations, One-Month LIBOR for the related Accrual Period shall be the higher of (i) One-Month LIBOR as determined on the previous Interest Determination Date and (ii) the Reserve Interest Rate.

       The establishment of One-Month LIBOR on each Interest Determination Date by the Indenture Trustee and the Indenture Trustee's calculation of the rate of interest applicable for the related Accrual Period shall (in the absence of manifest error) be final and binding

       .Opinion of Counsel: A written opinion of counsel acceptable to the Indenture Trustee and/or the Bond Insurer, as applicable, in its reasonable discretion which counsel may be in-house counsel for the Master Servicer if acceptable to the Indenture Trustee, the Bond Insurer and the Rating Agencies or counsel for the Depositor, as the case may be.

       Original Value: Except in the case of a refinanced Mortgage Loan, the lesser of the Appraised Value or sales price of Mortgaged Property at the time a Mortgage Loan is closed, and for a refinanced Mortgage Loan, the Original Value is the value of such property at the time application is made for such refinancings as set forth in an appraisal acceptable to the Master Servicer.

       Outstanding: With respect to the Bonds, as of the date of determination, all Bonds theretofore executed, authenticated and delivered under this Indenture except:

       (i)           Bonds theretofore canceled by the Bond Registrar or delivered to the Indenture Trustee for cancellation; and

       (ii)          Bonds in exchange for or in lieu of which other Bonds have been executed, authenticated and delivered pursuant to the Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Bonds are held by a holder in due course.

       all Bonds that have been paid with funds provided under the Bond Insurance Policy shall be deemed to be Outstanding until the Bond Insurer has been reimbursed with respect thereto.

       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, deleted or substituted for prior to such Due Date pursuant to the Servicing Agreement.

        

 

       Overcollateralization Increase Amount: With respect to any Payment Date, the lesser of (i) the Net Monthly Excess Cashflow for such Payment Date and (ii) the excess, if any, of (a) the Overcollateralization Target Amount over (b) the Overcollateralized Amount on such Payment Date (after taking into account payments to the Bonds of the Principal Remittance Amount on such Payment Date).

       Overcollateralization Release Amount: With respect to any Payment Date, the lesser of (x) the Principal Remittance Amount for such Payment Date and (y) the excess, if any, of (i) the Overcollateralized Amount for such Payment Date (assuming that 100% of the Principal Remittance Amount is applied as a principal payment on such Payment Date) over (ii) the Overcollateralization Target Amount for such Payment Date

       .Overcollateralization Target Amount: With respect to (i) any Payment Date through and including the Payment Date in December 2005, zero and (ii) any Payment Date after the Payment Date in December 2005, 0.50% of the Cut-off Date Balance.

       Overcollateralized Amount: For any Payment 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, unscheduled collections of principal received during the related Prepayment Period and Realized Losses on the Mortgage Loans incurred during the related Prepayment Period) exceeds (ii) the aggregate Bond Principal Balance of the Bonds as of such Payment Date (assuming that 100% of the Principal Remittance Amount is applied as a principal payment on the Bonds on such Payment Date).

       Owner Trust Estate: The corpus of the Issuer created by the Trust Agreement which consists of items referred to in Section 3.01 of the Trust Agreement

       .Owner Trustee: Wilmington Trust Company and its successors and assigns or any successor owner trustee appointed pursuant to the terms of the Trust Agreement.

       Owner Trustee's Fee: With respect to any Payment Date the product of (i) the Owner Trustee's Fee Rate divided by 12 and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the first day of the related Due Period.

       Owner Trustee's Fee Rate: On each Mortgage Loan, a rate equal to 0.0017% per annum.

       Paying Agent: Any paying agent or co-paying agent appointed pursuant to Section 3.03 of the Indenture, which initially shall be the Indenture Trustee.

       Payment Account: The account established by the Indenture Trustee pursuant to Section 3.01 of the Indenture. The Payment Account shall be an Eligible Account.

       Payment Date: The 25th day of each month, or if such day is not a Business Day, then the next Business Day, beginning in October 2005.

        

 

       Percentage Interest: With respect to any Bond, the percentage obtained by dividing the Bond Principal Balance of such Bond by the aggregate Bond Principal Balances of all Bonds of that Class. With respect to any Certificate, the percentage as stated on the face thereof.

       Periodic Rate Cap: With respect to any Mortgage Loan, the maximum rate, if any, by which the Mortgage Rate on such Mortgage Loan can adjust on any Adjustment Date, as stated in the related Mortgage Note or Mortgage.

       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.

       Plan: Any employee benefit plan or certain other retirement plans and arrangements, including individual retirement accounts and annuities, Keogh plans and bank collective investment funds and insurance company general or separate accounts in which such plans, accounts or arrangements are invested, that are subject to ERISA or Section 4975 of the Code.

       Plan Assets: Assets of a Plan within the meaning of Department of Labor regulation 29 C.F.R. § 2510.3-101.

       PMI Insurer:  Radian Guaranty, Inc., or its successors or assigns.

       PMI Insurer Policy: A lender-paid primary mortgage insurance policy issued by Radian in accordance with a March 29, 2002 letter between the Seller and Radian

       PMI Mortgage Loan: Any Mortgage Loan covered by the PMI Insurer Policy, as indicated on the Mortgage Loan Schedule.

       Policy Premium Fee:  With respect to any Payment Date, the premium payable to the Bond Insurer at a rate equal to 1/12th of the Policy Premium Rate multiplied by the aggregate Bond Principal Balance of the Class A Bonds on such Payment Date (after giving effect to any distributions of principal to be made on such Payment Date).

       Policy Premium Rate: With respect to any Payment Date, the rate per annum specified in the Insurance Agreement.

       Pool Balance: With respect to any date of determination, the aggregate of the Stated Principal Balances of all Mortgage Loans as of such date.

       Preference Amount: With respect to the Class A Bonds, any amount previously distributed to a Class A Bondholder  that is recoverable and sought to be recovered as a voidable preference by a trustee in bankruptcy pursuant to the United States Bankruptcy Code (11 U.S.C.), as amended from time to time, in accordance with a final nonappealable order of a court having competent jurisdiction.

       Prepayment Interest Shortfall: As to any Payment 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 

        

interest accrued during the related Prepayment Period at the Net Mortgage Rate on the Stated Principal Balance of such Mortgage Loan over the sum of the amount of interest (less interest at the related Expense Fee Rate) paid by the Mortgagor for such Prepayment Period to the date of such Principal Prepayment in Full and any Advances made by the Master Servicer pursuant to Section 4.04 of the Servicing Agreement or (b) a partial Principal Prepayment during the related Prepayment Period, an amount equal to the interest at the Net Mortgage Rate during the related Prepayment Period on the amount of such partial Principal Prepayment.

       Prepayment Period: With respect to any Payment Date, the calendar month immediately preceding the month in which such Payment Date occurs.

       Primary Insurance Policy: Each primary policy of mortgage guaranty insurance issued by a Qualified Insurer or any replacement policy therefor, whether or not borrower-paid or lender-paid, including the PMI Insurer Policy.

       Principal Distribution Amount: For any Payment Date, the sum of (a) the Basic Principal Distribution Amount and (b) the Overcollateralization Increase Amount (to the extent available from Net Monthly Excess Cashflow pursuant to clause (ii) of Section 3.05(d)).

       Principal Prepayment: Any payment of principal or other recovery on a Mortgage Loan, including a recovery that takes the form of Liquidation Proceeds or Insurance Proceeds, which is received in advance of its scheduled Due Date and is not accompanied by an amount as to interest representing scheduled interest on such payment 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 principal balance of a Mortgage Loan.

       Principal Remittance Amount: For any Payment Date, the sum of

       (1)          the principal portion of all scheduled monthly payments on the Mortgage Loans due on the related Due Date, to the extent received or advanced;

       (2)          the principal portion of all proceeds of the repurchase of a Mortgage Loan (or, in the case of a substitution, certain amounts representing a principal adjustment) as required by the Servicing Agreement during the preceding calendar month; 

       (3)          the principal portion of all other unscheduled collections received during the preceding calendar month in respect of the Mortgage Loans, including full and partial prepayments, the proceeds of any repurchase of such Mortgage Loan by the Master Servicer or Seller, Liquidation Proceeds, Subsequent Recoveries and Insurance Proceeds (including amounts, if any, paid under the PMI Insurer Policy), in each case to the extent applied as recoveries of principal; and

       (4)          any portion of any Insured Amount for such Payment Date representing the amount of any Realized Losses allocated to the Class A Bonds for that Payment Date.

        

 

       Proceeding: Any suit in equity, action at law or other judicial or administrative proceeding.

       Prospectus: The Prospectus Supplement, dated September 26 2005, together with the attached Prospectus, dated September 8, 2005.

       Purchase Price: With respect to the Mortgage Loans, the meaning specified in Section 2.2(a) of the Mortgage Loan Purchase Agreement.

       Purchaser: IMH Assets Corp., a California corporation, and its successors and assigns.

       Qualified Insurer: A mortgage guaranty insurance company duly qualified as such under the laws of the state of its principal place of business and each state having jurisdiction over such insurer in connection with the insurance policy issued by such insurer, duly authorized and licensed in such states to transact a mortgage guaranty insurance business in such states and to write the insurance provided by the insurance policy issued by it, approved as an insurer by the Master Servicer and as a Fannie Mae-approved mortgage insurer.

       Rating Agency: Any nationally recognized statistical rating organization, or its successor, that rated the Bonds at the request of the Depositor at the time of the initial issuance of the Bonds. Initially, Standard & Poor's or Moody's. If such organization or a successor is no longer in existence, “Rating Agency” with respect to the Class A Bonds shall be such nationally recognized statistical rating organization, or other comparable Person, designated by the Bond Insurer so long as no Bond Insurer Default exists, notice of which designation shall be given to the Indenture Trustee and Master Servicer. References herein to the highest short term unsecured rating category of a Rating Agency shall mean A-1 or better in the case of Standard & Poor's and P-1 or better in the case of Moody's and in the case of any other Rating Agency shall mean
                 such equivalent ratings. References herein to the highest long-term rating category of a Rating Agency shall mean “AAA” in the case of Standard & Poor's and “Aaa” in the case of Moody's and in the case of any other Rating Agency, such equivalent rating.

       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 (or REO Property) 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 Bondholders up to the last day of the month in which the Cash Liquidation (or REO Disposition) occurred on the Stated Principal Balance of such Mortgage Loan (or REO Property) 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 any Subservicer with respect to related Advances or expenses as to which the Master Servicer or any Subservicer is entitled to reimbursement thereunder but which have not been 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. 

        

With respect to each Mortgage Loan which has become the object of a Debt Service Reduction, the amount of such Debt Service Reduction.

       Record Date: With respect to any Book-Entry Bonds and any Payment Date, the close of business on the Business Day immediately preceding such Payment Date.  With respect to any Bonds that are not Book-Entry Bonds, the close of business on the last Business Day of the calendar month preceding such Payment Date.  

       Reference Banks: Any leading banks engaged in transactions in Eurodollar deposits in the international Eurocurrency market (i) with an established place of business in London, (ii) whose quotations appear on the Telerate Screen Page 3750 on the Interest Determination Date in question, (iii) which have been designated as such by the Indenture Trustee after consultation with the Master Servicer and the Bond Insurer, and (iv) which are not Affiliates of the Depositor or the Seller.

       Registered Holder: The Person in whose name a Bond is registered in the Bond Register on the applicable Record Date.

       Related Documents: With respect to each Mortgage Loan, the documents specified in Section 2.1(b) of the Mortgage Loan Purchase Agreement and any documents required to be added to such documents pursuant to the Mortgage Loan Purchase Agreement, the Trust Agreement, Indenture or the Servicing Agreement.

       Relief Act: The Servicemembers Civil Relief Act.

       Relief Act Shortfall: As to any Payment Date and any Mortgage Loan (other than a Mortgage Loan relating to an REO Property), any shortfalls relating to the Relief Act or similar legislation or regulations.

       Remittance Report: The report prepared by the Master Servicer pursuant to Section 4.01 of the Servicing Agreement.

       REO Acquisition: The acquisition by the Master Servicer on behalf of the Indenture Trustee for the benefit of the Bondholders of any REO Property pursuant to Section 3.13 of the Servicing Agreement.

       REO Disposition: As to any REO Property, a determination by the Master Servicer that it has received substantially all Insurance Proceeds, Liquidation Proceeds, REO Proceeds and other payments and recoveries (including proceeds of a final sale) which the Master 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 Net 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 for such period as such balance is reduced pursuant to Section 3.13 of the Servicing Agreement by any income from the REO Property treated as a recovery of principal.

        

 

       REO Proceeds: Proceeds, net of expenses, received in respect of any REO Property (including, without limitation, proceeds from the rental of the related Mortgaged Property) which proceeds are required to be deposited into the Collection Account only upon the related REO Disposition.

       REO Property: A Mortgaged Property that is acquired by the Issuer by foreclosure or by deed in lieu of foreclosure.

       Repurchase Event: With respect to any Mortgage Loan, either (i) a discovery that, as of the Closing Date the related Mortgage was not a valid first lien or second lien (as applicable) on the related Mortgaged Property, subject to no other liens except (A) the lien of real property taxes and assessments not yet due and payable, (B) covenants, conditions, and restrictions, rights of way, easements and other matters of public record as of the date of recording of such Mortgage and such other permissible title exceptions as are permitted and (C) other matters to which like properties are commonly subject which do not materially adversely affect the value, use, enjoyment or marketability of the related Mortgaged Property or (ii) with respect to any Mortgage Loan as to which the Seller delivers an affidavit certifying that the original Mortgage Note has been lost or
           destroyed, a subsequent default on such Mortgage Loan if the enforcement thereof or of the related Mortgage is materially and adversely affected by the absence of such original Mortgage Note.

       Repurchase Price: With respect to any Mortgage Loan required to be repurchased on any date pursuant to the Mortgage Loan Purchase Agreement or purchased by the Master Servicer pursuant to the Servicing Agreement, an amount equal to the sum, without duplication, of (i) 100% of the Stated Principal Balance thereof (without reduction for any amounts charged off) and (ii) unpaid accrued interest at the Mortgage Rate on the outstanding principal balance thereof from the Due Date to which interest was last paid by the Mortgagor to the first day of the month following the month of purchase plus (iii) the amount of unreimbursed Advances or unreimbursed Servicing Advances made with respect to such Mortgage Loan plus (iv) any other amounts owed to the Master Servicer or any Subservicer pursuant to Section 3.07 of the Servicing Agreement and not included in clause (iii)
             of this definition plus (v) any costs and damages incurred by the Trust in connection with any violation by such Mortgage Loan of any predatory-lending law.

       Reserve Interest Rate: With respect to any Interest Determination Date, the rate per annum that the Indenture Trustee determines to be either (i) the arithmetic mean (rounded upwards if necessary to the nearest whole multiple of 0.0625%) of the one-month United States dollar lending rates which New York City banks selected by the Indenture Trustee are quoting on the relevant Interest Determination Date to the principal London offices of leading banks in the London interbank market or (ii) in the event that the Indenture Trustee can determine no such arithmetic mean, the lowest one-month United States dollar lending rate which New York City banks selected by the Indenture Trustee are quoting on such Interest Determination Date to leading European banks.

       Responsible Officer: With respect to the Indenture Trustee, any officer of the Indenture Trustee with direct responsibility for the administration of the Indenture and also, with respect to 

        

a particular matter, any other officer to whom such matter is referred because of such officer's knowledge of and familiarity with the particular subject.

       Securities Act: The Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

       Security: Any of the Certificates or Bonds.

       Securityholder or Holder: Any Bondholder or a Certificateholder.

       Security Instrument: A written instrument creating a valid first lien or second lien on a Mortgaged Property securing a Mortgage Note, which may be any applicable form of mortgage, deed of trust, deed to secure debt or security deed, including any riders or addenda thereto.

       Seller: Impac Mortgage Holdings, Inc., a Maryland corporation, and its successors and assigns.

       Servicing Account: The separate trust account created and maintained by the Master Servicer or each Subservicer with respect to the Mortgage Loans or REO Property, which shall be an Eligible Account, for collection of taxes, assessments, insurance premiums and comparable items as described in Section 3.08 of the Servicing Agreement.

       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 or any Subservicer of its servicing obligations, including, without duplication, but not limited to, the cost of (i) the preservation, restoration and protection of a Mortgaged Property, (ii) any enforcement or judicial proceedings, including foreclosures and 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 and (iv) compliance with the obligations under Sections 3.10, 3.11, 3.13 of the Servicing Agreement.

       Servicing Agreement: The Servicing Agreement dated as of September 29, 2005, among the Master Servicer, the Issuer and the Indenture Trustee

       .Servicing Certificate: A certificate completed and executed by a Servicing Officer on behalf of the Master Servicer in accordance with Section 4.01 of the Servicing Agreement.

       Servicing Default: The meaning assigned in Section 6.01 of the Servicing Agreement.

       Servicing Fee: The sum of the Master Servicing Fee and the Subservicing Fee.

       Servicing Fee Rate: The sum of the Master Servicing Fee Rate and the related Subservicing Fee Rate.

       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 Indenture Trustee by the Master Servicer, as such list may be amended from time to time.

       Special Certificate Cap Contract: The confirmation together with the associated ISDA Master Agreement, delivered to the Indenture Trustee on the Closing Date and attached to the Indenture as Exhibit F, for which amounts payable shall be distributed in accordance with Section 3.05(f) of the Indenture.

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

       .Stated Principal Balance: With respect to any Mortgage Loan or related REO Property as of any date of determination, (i) the principal balance of the Mortgage Loan outstanding as of the Cut-off Date, after application of all scheduled Monthly 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 prior to such date of determination which were received or with respect to which an Advance was made, (b) all Principal Prepayments with respect to such Mortgage Loan or REO Property, and all Insurance Proceeds, Liquidation Proceeds and REO Proceeds to the extent applied by the Master Servicer as recoveries of principal in accordance with Section 3.13 of the Servicing Agreement with respect to such Mortgage Loan
           or REO Property, which were distributed pursuant to Section 3.05 of the Indenture prior to such date of determination, and (c) the principal portion of any Realized Loss with respect thereto allocated pursuant to Section 3.33 of the Indenture prior to such date of determination.

       Statutory Trust Statute: Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code §§3801 et seq., as the same may be amended from time to time.

       Step-Up Date: With respect to the Bonds, the first Payment Date following the earlier of (i) the first Payment Date for which the aggregate Stated Principal Balance of the Mortgage Loans as of the end of the related Due Period has been reduced to 20% or less of the Cut-off Date Balance and (ii) the Payment Date occurring in September 2015.

       Subsequent Recoveries: Additional recoveries, net of reimbursable expenses, with respect to Mortgage Loans that have been previously liquidated and that resulted in a Realized Loss.

       Subservicer: Any Person with whom the Master Servicer has entered into a Subservicing Agreement as a Subservicer and acceptable to the Bond Insurer, including the Initial Subservicers.

       Subservicing Account: An Eligible Account established or maintained by a Subservicer as provided for in Section 3.06(e) of the Servicing Agreement.

       Subservicing Agreement: The written contract between the Master Servicer and any Subservicer relating to servicing and administration of certain Mortgage Loans as provided in Section 3.02 of the Servicing Agreement.

        

 

       Subservicing Fee: With respect to each Mortgage Loan and any Payment Date, the fee payable monthly to the related subservicer in respect of servicing compensation that accrues at an annual rate equal to the Subservicing Fee Rate multiplied by the Stated Principal Balance of such Mortgage Loan as of the beginning of the related Due Period.

       Subservicing Fee Rate: On each adjustable rate Mortgage Loan, a rate equal to 0.375% per annum.  On each fixed rate Mortgage Loan, a rate equal to 0.250% per annum.

       Substitution Adjustment Amount: With respect to any Eligible Substitute Mortgage Loan, the amount as defined in Section 2.03 of the Servicing Agreement.

       Telerate Screen Page 3750: 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).

       Treasury Regulations: Regulations, including proposed or temporary Regulations, promulgated under the Code. References herein to specific provisions of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations.

       Trust: The Impac CMB Trust Series 2005-7 to be created pursuant to the Trust Agreement.

       Trust Agreement: The Amended and Restated Trust Agreement dated as of September 29, 2005, among the Owner Trustee, the Depositor and Deutsche Bank National Trust Company, as Certificate Registrar and Certificate Paying Agent, relating to the Trust.

       Trust Estate: The meaning specified in the Granting Clause of the Indenture.

       Trust Indenture Act or TIA: The Trust Indenture Act of 1939, as amended from time to time, as in effect on any relevant date.

       UCC: The Uniform Commercial Code, as amended from time to time, as in effect in any specified jurisdiction.

       Underwriters: Countrywide Securities Corporation, Bear, Stearns & Co. Inc. and UBS Securities LLC.

       Uninsured Cause: Any cause of damage to property subject to a Mortgage that the complete restoration of such property is not fully reimbursable by the hazard insurance policies.

       Unpaid Interest Shortfall: For each Class of Bonds and any Payment Date, such Bonds’ pro rata share, based on the amount of Accrued Bond Interest otherwise payable on such Bond on such Payment Date, of (a) any Prepayment Interest Shortfalls on the Mortgage Loans, to the extent not covered by related Compensating Interest, and (b) any Relief Act Shortfalls on the Mortgage Loans, plus interest on the amount of previously allocated Unpaid Interest Shortfall on such Class of Bonds which remains unreimbursed, at the Bond Interest Rate for such Class for the related Accrual Period.

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